Agreements

1
Chapter 9

• Agreements

2
Objectives

• Understand the functions, types and operation of
  agreements in contemporary Australian industrial
  relations
• Explain how federal agreements are made,
  approved, varied and terminated
• Appreciate the concepts of level of bargaining
  and dimensions of bargaining
• Explain the way awards and agreements can
  interact to form a layered system of employment
  regulation
• Analyse the roles, functions and outcomes of
  collective and individual agreements in
  Australia.

3
Agreements

• Agreement-making has always been a feature of
  Australian IR
• consent awards
• over-award agreements
• 1993 Reform Act gave the AIRC powers to
• certify both union and non-union collective
  agreements
• administer the No Disadvantage Test (NDT) before
  certifying agreements

4
Agreements (contd)

• WorkChoices Act and agreements
• under the WR Act 1996 the parties needed to
  initiate a bargaining period, have the
  prospective agreement approved by a valid
  majority of employees to be covered by the
  agreement (if a collective agreement), pass the
  NDT, and then be certified by the AIRC (or OEA if
  an AWA)
• under WorkChoices most of the these procedural
  steps were eliminated (initiation of the
  bargaining period still remained and permitted
  the parties to engage in lawful protected
  industrial action), and the agreement came into
  force once lodged with the OEA (i.e. NDT
  abolished)

5
Australian Workplace Agreements

• AWAs were introduced by the WR Act 1996 to permit
  an informal agreement between an individual
  employee and an employer to have legal force
  (i.e. not be inconsistent with the relevant
  federal or State award).

6
Australian Workplace Agreements (contd)

• Expectation was that AWAs would be used by
  smaller enterprises because of the widespread use
  of informal agreements in these workplaces that
  are technically a breach of the award
• however, many large employers (e.g. the
  Australian Public Service, the Commonwealth Bank
  of Australia, and mining corporations) sought to
  use AWAs as a substitute for collective
  agreements
• it could be argued that an explicit objective of
  AWAs was to de-collectivise Australian IR,
  because these AWAs were often a form of pattern
  bargaining by the employer, and not truly
  individual agreements tailored to meet the
  specific needs of an individual employee

7
Interaction of Awards and Agreements

• Collective agreements can be read subject to
  certain award conditions or totally displace the
  award
• AWAs could be read subject to certain collective
  agreement conditions or totally displace the
  collective agreement (or award)
• Pre-WorkChoices
• the particular agreement that was first in time
  applied to the exclusion of any subsequent
  agreement if it has not passed its nominal expiry
  date and there is any inconsistency between the
  two agreements
• Under WorkChoices
• a new AWA excluded all other agreements even if
  their nominal expiry date has not passed

8
AWAs protected conditions
9
Forward with Fairness Transition Act 2008

• The Act amends the Workplace Relations Act 1996
  (Cth) in the following areas
• AWAs
• no new AWAs
• existing AWAs continue to operate until
  terminated or replaced
• employees on existing AWAs that have passed their
  nominal expiry date are able to make and approve
  proposed collective agreements and are eligible
  to take part in ballots for protected industrial
  action

10
Transition Act

• Individual Transitional Employment Agreements
  (ITEAs)
• new statutory individual agreements between an
  employer and employee, but ITEAs expire by no
  later than 31 December 2009
• ITEAs for new employees commence operation when
  lodged with the Workplace Authority Director but
  will cease to operate if they later fail the
  new no-disadvantage test
• ITEAs for existing employees and collective
  agreements commence operation only after the
  Workplace Authority Director has approved them on
  the basis they pass the no-disadvantage test

11
Transition Act (contd)

• No-Disadvantage Test (NDT)
• replaces the fairness test using as a
  comparator any applicable collective agreement or
  award and the AFPCS (Standard) or if there is no
  such instrument, a designated award
• NDT administered by the Workplace Authority
  Director who must be satisfied that a workplace
  agreement would not reduce an employees overall
  terms and conditions of employment
• NDT also applies to any variations made to both
  existing and new agreements

12
Transition Act (contd)

• Termination of Agreements
• collective agreements can only be terminated if
  the parties to it agree or by application to the
  AIRC, if it is satisfied that the termination
  would not be contrary to the public interest
• if terminated, employees will be entitled to
  whatever award or workplace agreement that would
  have applied to them but for the terminated
  agreement (e.g. AWA is terminated, the employee
  will be covered by a relevant collective
  agreement operating in the workplace or, if there
  is no such collective agreement, the full award)
• AWAs which have passed their nominal expiry date
  can continue to be unilaterally terminated
• Expiry date for NAPSAs extended to 31 Dec 2009

13
Agreements Fair Work Act

• Collective bargaining (enterprise) agreements
• employer a union
• employer and employees who are not union members
• multi-employer collective agreements for
  industries historically not had access to
  collective bargaining
• FWA better off overall test
• if the proposed collective agreement satisfies
  the federal safety net the entitlements
  contained in the National Employment Standards
  and the relevant modern award

14
Agreements Fair Work Act (contd)

• Flexible common law contracts of employment
• high income earning employees can negotiate their
  own pay and conditions without reference to
  awards
• prior to this industrial award provisions
  prevailed over common law contracts of
  employment, regardless of the terms of the
  contract
• calculation of the earnings threshold is an
  employees guaranteed ordinary earnings

15
Agreements Fair Work Act (contd)

• Individual Flexibility Arrangements (IFAs) can be
  made with reference to either a modern award or
  an enterprise agreement
• Award based IFA
• will vary the operation of a modern award
• considered to be a term of the modern award (this
  means that an IFA is enforceable as a term of the
  award)
• does not change the effect the modern award has
  in relation to any other employee
• must result in the employee being better off
  overall than the employee would have been if no
  IFA were agreed to

16
Agreements Fair Work Act (contd)

• Enterprise agreement based IFA
• if no flexibility term in an enterprise
  agreement, the respective model term prescribed
  by the regulations is taken to be a term of the
  agreement (based upon the model flexibility term
  developed by the AIRC for inclusion in the
  relevant modern award)
• must only be about matters that would be
  permitted matters if the IFA were an enterprise
  agreement
• flexibility term must specify which terms of an
  enterprise agreement that can be varied by an IFA
  
• the employee to be better off overall than the
  employee would have been under the enterprise
  agreement if no IFA were agreed to taken to be
  a term of the enterprise agreement (i.e. would
  not have any effect as a contract in its own
  right or as a variation to an employees contract
  of employment)

17
Good faith bargaining

• Fair Work Acts GFB obligations
• attend and participate in meetings at reasonable
  times
• disclose relevant information in a timely manner,
  subject to appropriate protection for
  commercial-in-confidence information
• respond to proposals made by a party in a timely
  fashion
• give genuine consideration to the needs of the
  other parties, and provide reasons for their
  responses and
• refrain from impulsive or unfair conduct, or
  conduct that undermines freedom of association or
  collective bargaining.
• parties are not compelled to reach an agreement
• they can agree to walk away and allow the
  existing industrial regulatory arrangements to
  continue

18
Levels and Dimensions of Bargaining

• The level of bargaining is important to
  understand IR because a change in the level is
  usually accompanied with changes in the other
  dimensions of bargaining
• In theory, decentralised bargaining can have
  advantages for both employers and employees by
  expanding the scope of bargaining to meet the
  parties specific needs
• this is only likely to occur if the bargaining
  power of the parties is more or less equal

19
Levels and Dimensions of Bargaining (contd)

• Non-union bargaining agents for employees are
  likely to have less knowledge of the bargaining
  process and bargaining strategies
• hence the bargaining outcome is more likely to be
  one-sided
• With awards coverage of bargaining was the main
  variation
• As WorkChoices demonstrated, all 5 dimensions of
  bargaining are important to both the theory and
  practice of industrial relations