Friday, 14 July 2023

Fair Work Commission Decision Clarifies Good Faith Bargaining Requirements

In the recent case before the Fair Work Commission (FWC) of Construction, Forestry, Maritime, Mining and Energy Union v MSS Strategic Medical and Rescue Pty Ltd [2023] FWC 655, the FWC refused to make a bargaining order preventing a vote for an enterprise agreement from occurring.

The CFMMEU had made an application under the Fair Work Act 2009 (Cth) (FW Act), seeking the FWC make orders to stop the vote from occurring, alleging the employer, MSS Strategy Medical and Rescue Pty Ltd (MSS) breached good faith bargaining requirements. However, the FWC ultimately held that MSS had met its good faith bargaining obligations under the FW Act. 

Good Faith Bargaining Requirements

Under the FW Act, all bargaining representatives for an enterprise agreement must meet the following good faith bargaining requirements: 

  • attending, and participating in, meetings at reasonable times;
  • disclosing relevant information in a timely manner;
  • responding to proposals made by other bargaining representatives for the agreement in a timely manner;
  • giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;
  • refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining; and
  • recognising and bargaining with the other bargaining representatives for the agreement.

The FWC may make a bargaining order if it is satisfied that a bargaining representative has not met the good faith bargaining requirements.

The Case 

The CFMMEU and MSS commenced bargaining for a new enterprise agreement in May 2022 covering 23 employees working as part of a contract with AGL to provide medical and emergency services at a Loy Yang site. 

Over a period of nine months, the parties met twelve times, with the CFMMEU rejecting four offers made by MSS without providing feedback or reasons for doing so. After having made concessions in respect of their position during the bargaining process, MSS declared that bargaining had reached an impasse, and put the agreement to a vote, which was ultimately rejected by employees.

Employees provided feedback to MSS which indicated that their concerns with the enterprise agreement related to how personal leave and annual leave were dealt. MSS subsequently amended its proposed agreement to address these issues, and intended to put the agreement out for another vote. However, the CFMMEU refused to support the agreement and agitated for further negotiations. 

The CFMMEU then sought bargaining orders to stop MSS from putting a proposed enterprise agreement to its employees to second vote, and instead sought an order from the FWC to compel MSS to participate in additional negotiation meetings on the basis that MSS had breached its good faith bargaining requirements. 

The CFMMEU accused MSS of failing to meet five good faith bargaining requirements including by:

  • refusing to attend bargaining meetings with the CFMMEU after 16 December 2022;
  • submitting its revised deal for a vote without first meeting with the CFMMEU to discuss their compromise offer, genuinely considering the offer or giving reasons for rejecting it;
  • proceeding to a ballot without discussing in depth the scope of the agreement with the CFMMEU and the conditions relating to certain matters;
  • failing to discuss the revised agreement with the CFMMEU before conducting the ballot; and
  • putting the revised deal unilaterally to a vote when bargaining had not reached an impasse, stalemate, or deadlock.

The FWC stated that the mere fact one party believes bargaining is at an ‘impasse’ does not necessarily mean that this is objectively true. However, in this case, the FWC held that the parties had genuinely reached an impasse in negotiations, noting that good faith bargaining requirements do not require a bargaining representative to make concessions or to reach agreement. 

Finding that there was no breach of good faith bargaining requirements, the FWC held there was no power to make a bargaining order and allowed MSS’ second vote to proceed.

Takeaways for Employers

Importantly, in its decision, the FWC clarified that:

  • there is no requirement to make concessions during bargaining, nor do the good faith bargaining requirements require the parties to reach an agreement; 
  • employers can directly speak with employees during bargaining and do not have to only communicate through a bargaining representative (such as a union); and 
  • bargaining does not need to be at an impasse, in order for an employer to decide to put it to a vote. 

This decision is important in the current industrial landscape where we have observed increased bargaining activity and an increased number of agreements being put to vote ‘unilaterally’, without the union’s support. 

Please contact HR Legal if you require any assistance with enterprise bargaining and disputes. 

Construction, Forestry, Maritime, Mining and Energy Union v MSS Strategic Medical and Rescue Pty Ltd [2023] FWC 655


This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.