Insights & News

December 1, 2023

The NSW Government has introduced significant amendments to state industrial relations legislation. Those amendments follow significant promises the Government made to the Union movement prior to its election, and the recommendations made to the Government by the Industrial Relations Taskforce it established shortly after its election. This week, the Industrial Relations Amendment Bill 2023 (NSW) (Bill) passed through both houses of parliament, and it is expected to soon receive royal assent and come into effect. Our summary of the key changes is below.

Wages Cap Repealed

The Bill repeals the provision of the Industrial Relations Act 1996 (NSW) which requires the Commission to give effect to the Government’s declared wages policy. This wages cap has been seen as a restriction on the Commission’s ability to exercise its discretion taking into account all factors relevant to a dispute in circumstances the resolution of a dispute would lead to increased employee-related costs which were not offset by employee-related costs savings. The repeal of this provision was foreshadowed before the election and was a core commitment that was made by the new Government. The removal of this limitation on the Commission’s powers is likely to lead to additional claims by unions in respect of public sector conditions of employment.

The apparent trade-off for this amendment is the inclusion of the fiscal position and outlook of the Government as a mandatory consideration for the Commission in respect of the Commission’s function in determining public sector conditions of employment. It is not yet know what comparative weight will be given to this factor by the Commission, amongst the various factors in any given dispute.

Mutual Gains Bargaining

The Bill introduces the new concept of ‘mutual gains bargaining’ in respect of public sector and local government employers. Where a union and employer agree to engage in mutual gains bargaining, the Industrial Relations Commission will be required to act as a facilitator of these bargaining processes unless the parties appoint an alternative third party facilitator. The bargaining is underpinned by principles of collaboration and identification of areas of mutual need and desire and aims to build consensus. The process is underpinned by good faith bargaining obligations. This is similar to the federal system.

The facilitator or any party to the bargaining may declare the bargaining unresolved and give a report to the Commission regarding the conduct of the parties during bargaining and the outstanding issues. This will be treated by the Commission as a notice of dispute and will proceed through the Commission’s ordinary processes. Any arbitration following this process will take into account the parties’ conduct during mutual gains bargaining.

Reintroduction of the Industrial Court

In a change which has the potential to affect both public sector and private sector employers across the state, the Bill re-establishes the Industrial Relations Commission in Court Session, also known as the Industrial Court. The Industrial Court will resume its pre-2016 jurisdiction, and will have broad power to:

1. deal with offences and civil contraventions under work health and safety, worker’s compensation, workplace surveillance and explosives legislation;
2. make declarations and award remedies in respect of unfair contracts of employment;
3. make declaration of law in respect of any matters over which the Industrial Relations Commission has jurisdiction;
4. deal with appeals in accordance with certain superannuation legislation; and
5. make orders in respect of underpayment claims in excess of the small claims limit.

These changes consolidate in the Industrial Court work-related enforcement mechanisms which were previously allocated variously to the District Court and Supreme Court. The Industrial Court will be a superior court of record with equivalent status to the Supreme Court.

Reintroduction of Regional Allocations for the Industrial Relations Commission

The Bill reintroduces the practice of allocating members of the Industrial Relations Commission to particular regional areas of responsibility. This allows a greater level of local knowledge in respect of peculiarly regional matters to be relied upon.

November 27, 2023

Restrictions on the use of fixed and maximum term contracts were one of the significant and well-publicised reforms introduced by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (Amendment Act) in late 2022 which are set to commence in just a week’s time, from next Wednesday 6 December 2023.

Throughout 2023, employers across Australia have been taking steps to review their hiring practices and existing workforce composition to ensure compliance with the new provisions on and from 6 December. These reforms have a particular impact on employers with uncertain funding arrangements, particularly in the tertiary education and not-for-profit sectors.

Last Friday afternoon, Minister Burke introduced the Fair Work Amendment (Fixed Term Contracts) Regulations 2023 (Regulations), which create further exceptions for the purposes of the limitation on fixed term contracts provisions which apply in respect of organised sports, live performance industry employees, philanthropic entities and – as anticipated – higher education employees.

In effect, the Regulation essentially operates as a ‘stay’ of the commencement of the application of the new restrictions for fixed term contracts in the abovementioned areas for a limited period of 6 months – that is, until 1 July 2024. However, only contracts entered into on or after next Wednesday 6 December 2023 (and before 1 July 2024) will be exempted from the restrictions.

The challenge that the Regulations respond to is that employers in these sectors are typically (significantly) dependent on government or other funding to operate their core functions. In relation to tertiary education, the current manner in which funding is allocated creates significant difficulties in applying the new provisions of the FW Act relating to fixed term contracts. For example, where funding is allocated to particular projects under largely recurrent government schemes, but in variable amounts, or where the funding is allocated on an annualised basis, the exceptions to the restrictions introduced by the Amendment Act are unlikely to apply. This creates a difficulty which would appear to require employers to engage employees on ongoing contracts, despite not having certainty from Government that the positions will, in fact, be funded on an ongoing basis.

While the tertiary education sector provides a particularly sharp example of this issue, it is not alone. In the not-for-profit sector, projects are often funded by recurrent short-term government grants, with employment contracts fixed to a duration reflecting the funding. These recurring grants cause the same issue as those faced in the community sector.

The purpose of the Regulations is to allow for additional time for relevant employers to continue discussions with DEWR in relation to the application of the fixed term contract limitations, and it remains to be seen what will emerge from those discussions in the lead up to 1 July 2024 – importantly, whether any new (permanent) exceptions will be introduced.

For comprehensive discussion of the reforms introduced under the Amendment Act, including but not limited to the new limitations on fixed and maximum term contracts, please see our Insight here.

As we communicated last week (in a separate Insight article looking at recent developments arising in respect of the Government’s Closing Loopholes Bill), Minister Burke has now agreed to certain amendments in respect of the Bill’s gig-economy provisions as well as the “same job, same pay” provisions. A revised Bill reflecting certain amendments to these provisions (arising whilst the Senate inquiry into the Bill continues) is expected to be tabled in the House of Representatives this week.

To understand whether your organisation may be able to take advantage of the reprieve in the regulation of its fixed and maximum term contracts, please contact a member of the Kingston Reid team.

November 22, 2023

Outside the developments we have seen in relation to the Government’s proposed “Closing Loopholes” laws, and the looming dates for aspects of the “Secure Jobs, Better Pay” reforms to take effect – including the sunsetting of “Zombie Agreements” and limitations on the use of fixed term contracts – the past month or so has seen a number of important court and Commission decisions come down.

Federal Court finds enterprise agreement capable of retrospective operation

In Murtagh v Corporation of the Roman Catholic Diocese of Toowoomba [2023] FCAFC 172, the Full Federal Court determined that enterprise agreements are capable of operating retrospectively to confer entitlements upon former employees whose employment had ended before the relevant agreement was ever made.

In that case, the employer was found to have contravened its agreement by not paying a back payment to former employees in these circumstances – even to an employee that had left around 12 months earlier.

This is at odds with the long-accepted orthodoxy that enterprise agreements cannot operate in this way, given that the Fair Work Act provides that “an enterprise agreement does not give a person an entitlement unless the agreement applies to the person.

As the Court observed, this is an issue of “considerable systemic importance and related difficulty”, given that enterprise agreements commonly include terms for back-payment of retrospective pay increases (which these generally understood to provide an entitlement only to current employees).

In our view there is room for significant doubt about the correctness of this judgment, and it remains to be seen whether or not it will be challenged.

“Holding discussions”: scope of right of entry provisions clarified by Full Federal Court

The Full Federal Court in Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia v Austal Ships Pty Ltd [2023] FCAFC 180 has overturned a first instance judgment of the Federal Court from late 2022, concerning the right of entry provisions of the Fair Work Act.

At first instance, Colvin J held that although the Act allows right of entry permit holders to enter premises for the purpose of “holding discussions” with relevant employees, an entry is unauthorised if part of the purpose is to seek some form of agreement, commitment or pledge.

On this basis, it would not be lawful for a permit holder to exercise right of entry to seek signatures on a petition, or to recruit members, as these things would be outside the boundaries of a “discussion”.

The Full Court accepted that this was an unduly narrow construction of the relevant provisions, and that discussions will often be had for the very purpose of achieving a particular outcome. The Court held that it was artificial to distinguish holding a discussion from the realisation of the purpose or objective of those discussions.

In light of the Full Court’s judgment, this will no longer be a lawful basis for an employer or occupier of premises to refuse entry.

Multi-employer bargaining authorisations

We have started to see some early Commission cases involving the more controversial aspects of last year’s “Secure Jobs, Better Pay” provisions being handed down.

This has included multi-employer bargaining authorisations being made in the early learning and education sectors. These applications were largely determined by consent, and so the more complex aspects of the reforms have not yet been the subject of fully reasoned consideration.

That said, they nevertheless provide some important insights into the operation of the new provisions.

First, the Commission has acknowledged the complexity and uncertainty of the new multi-employer bargaining schemes which will inevitably be the subject of future debate.

Second, and more importantly, the Commission has indicated that concept of “clearly identifiable common interests – central the multi-employer bargaining framework – is one of “wide import” and tends to “any joint, shared, related or like characteristics, qualities, undertakings or concerns”. This gives credence to employer concerns about the breadth of the provisions.

Fair Work Commission makes first intractable bargaining declaration

We have also now seen the first intractable bargaining declaration (relating to bargaining with Fire Rescue Victoria).

There was no contest in this case that bargaining had become “intractable”, and so again the boundaries of that threshold concept are yet to be fully explored. The Commission has however indicated (without necessarily deciding) that the requirement for the Commission to have previously assisted with “the dispute” means the dispute which led to bargaining becoming intractable, as opposed to just bargaining more generally.

The matter is now listed for hearing in December for the purposes of arbitrating the terms of the Workplace Determination. It appears likely that this will involve some contest about the extent to which parties are able to revisit their position on matters which were the subject of bargaining – an important issue on the overall intractable bargaining framework.

Effective 12 December 2023, the Australian Human Rights Commission (AHRC) will be equipped with enhanced powers to investigate and enforce an employer’s positive duty under the Sex Discrimination Act 1985 (Cth) (SDA).

The AHRC’s expanded authority includes the ability to conduct inquiries, issue compliance notices, seek Court-ordered compliance, and enter into enforceable undertakings.

Key takeaways

• The positive duty represents a significant shift in how employers must approach unlawful conduct of a sexual nature and sex-based hostility in the workplace. Such a substantial shift demands a corresponding and thorough reassessment of existing preventive measures.
• Considering the common ground now shared by the AHRC and Safety Regulators, organisations should anticipate addressing comparable issues with multiple regulatory bodies.
• The proactive approach encouraged by the AHRC emphasises not just compliance but a genuine commitment to fostering respectful, inclusive workplaces. Tokenistic or artificial measures, such as basic online training for staff in the absence of other measures, will not meet the AHRC’s expectations.

Understanding the Positive Duty

Introduced in 2022 through amendments to the SDA, the positive duty requires employers to take reasonable and proportionate measures to eliminate unlawful behaviours. The positive duty goes beyond sexual harassment to include sex discrimination, sex-based harassment, the creation of a hostile workplace environment based on sex, and related acts of victimisation. The duty also extends beyond the actions of employees and contractors to encompass conduct by third parties, such as customers or clients. While it complements existing obligations under work, health, and safety laws, it does not replace and requires a holistic and comprehensive approach for compliance.

AHRC’s New Investigative Powers

The AHRC’s authority to commence an inquiry arises when there is a reasonable suspicion that an organisation is not complying with the positive duty. This suspicion can be triggered by various sources, including other government agencies, impacted individuals, unions or worker representatives, or media reports. In cases of non-compliance, the AHRC can provide recommendations, issue compliance notices specifying corrective actions, apply for court orders directing compliance, and enter into enforceable undertakings with organisations.

Compliance Guidelines and Principles

To assist employers in meeting their obligations, the AHRC has provided guidance material outlining seven standards and four guiding principles. These standards cover a range of measures employers should adopt to eliminate unlawful conduct. While each employer is expected to address all seven standards, what is deemed “reasonable and proportionate” will vary based on factors such as organisation size, resources, and the practicality and cost of implementing measures.

Industry-Specific Scrutiny

Notably, the AHRC has indicated particular scrutiny on industries such as mining, retail, and legal services. This emphasis underscores the AHRC’s commitment to ensuring that businesses across various sectors actively work towards creating environments free from unlawful behaviours. Employers within these industries are urged to pay special attention to the AHRC guidelines to align their practices with the evolving legal landscape.

Significant changes have occurred in work health and safety law over the last year. Amendments have been made and proposed to state and Commonwealth safety legislation meaning that jurisdictions are straying from what was originally a harmonised regulatory regime. As states and territories become less harmonised, compliance is becoming more complex for organisations with cross-jurisdictional operations. Victoria is now the only ‘non-harmonised’ jurisdiction in the country.

There have been some big changes, particularly in relation to psychosocial health and safety, penalties for breaches of health and safety legislation, prohibitions on contracts for indemnification from penalties, and increased regulatory activity.

Industrial manslaughter is now an offence in 5 state and territory jurisdictions. Two additional jurisdictions are considering or likely to introduce the offence shortly.

The team at Kingston Reid has prepared the following snapshot of recent changes and significant events across the country.

Model laws

The Model WHS Act forms the basis of the WHS Acts implemented across Australia except for Victoria.

The Model WHS Act was amended to significantly increase maximum penalties, to clarify the way in which Category 1 offences operate and to specifically set out that psychosocial risks must be eliminated or mitigated through the risk management clauses contained in the Model WHS Regulations.

Commonwealth

In mid-September, a wide range of amendments to the Commonwealth WHS Act, which applies mainly to the Federal Government and public authorities, were introduced, including prohibitions on insurance to cover WHS penalties and the addition of negligence as a fault element to the category 1 offence (which was historically concerned with recklessness).

The Federal Government’s “Closing Loopholes” Bill includes amendments to the Commonwealth WHS Act. The proposed amendments include the offence of industrial manslaughter, significant penalty increases for breaches and provisions relating to asbestos safety.

Queensland

The report on the review of Queensland’s WHS Act was published along with the Government’s response to the recommendations in the report in May 2023. Several changes to the Queensland WHS Act have been proposed. Significant changes include increased integration of health and safety representatives’ involvement in the performance of inspector and WHS permit holder functions, and increased recognition and participation of unions in safety matters.

A health and safety manager at the Queensland Museum was charged and pleaded guilty to a category 2 offence (an offence relating to a failure to comply with a duty resulting in exposure of a person to the risk of death or serious injury), following her failure to complete a risk assessment and implement controls relating to zoonotic diseases present at the Museum’s taxidermy department.

New South Wales

In October this year, the NSW Government formally committed to enacting a provision for the offence of industrial manslaughter.

This announcement followed NSW Work Health and Safety Minister Sophie Cotsis’ announcement of a 12-month “anytime, anywhere” inspector blitz campaign to combat the number of workplace fall incidents.

A bill was introduced which will triple the maximum penalty for category 1 breaches and increase all other WHS fines by 40%. The Bill also gives police powers under the WHS Act.

A PCBU charged with a category 1 offence was fined a record $2.025 million and a leading employee was also fined $101,250 in relation to the death of a worker in a woodchipper accident.

ACT

The ACT WHS Act was amended to include sexual assault incidents as notifiable incidents. Penalties will apply if PCBUs fails to notify WorkSafe ACT about an incident.

Codes of Practice dealing with psychosocial hazards and asbestos training were also made.

Victoria

WorkSafe Victoria has successfully prosecuted several breaches of the Occupational Health and Safety Act 2004 in respect of psychological risks. This was without any legislative change relating to the management of psychosocial risks.

Court Services Victoria was charged for failing to eliminate or mitigate health and safety risks for workers who were the subject of a toxic workplace culture, bullying and excessive workloads.

Tasmania

Following an inquest into the suicide death of four Tasmanian policemen, a coroner recommended that workers who are exposed to certain distressing incidents should automatically be referred to support providers for psychological assessment. The coroner also recommended mandatory six-monthly wellbeing screening for all serving officers.

South Australia

South Australia adopted the industrial manslaughter offence. Regulations regarding psychosocial risks were also introduced.

Western Australia

The WA Government launched its “Speak Up, Report It” campaign to address bullying, harassment and inequality in the key sectors of the Western Australian economy.

The Government also introduced a bill to adopt an ‘applied law approach’ to its mirror Rail Safety National Law legislation. If passed, the laws will automatically update in line with changes made to the Rail Safety National Law by the South Australian Parliament – the ‘author’ of the laws which other states and territories have agreed to adopt.

Northern Territory

The Northern Territory Supreme Court upheld the record breaking WHS fines of $960,000 imposed on a PCBU and $180,000 imposed on its director in relation to the death of a worker inside the strike zone of mobile plant.

The NT Government also made a new Code of Practice relating to tower cranes.

The fact is, many of us spend a rather large portion of our waking hours each week at work, meaning that our colleagues are often who we spend the most time with. Research shows that not only is work important in building social relationships, but those social relationships make us better at our work – it’s something to be encouraged. So, it’s unsurprising then that those social relationships have a tendency to carry on outside of the workplace (and working hours) – whether that’s at the pub on a Friday evening, ‘kicking on’ after a work function, or to keep the conversation going through social media chat groups.

Of course, the question for employers becomes what can be done when employees behave badly outside of what is traditionally considered to be the workplace. It’s a timely question that is worth revisiting following two recent decisions, as we move towards the festive season.

Whilst out of hours conduct may be a reason to terminate an employee’s employment (or take other disciplinary action), the employer will need to show that the conduct occurred “in connection with work” – a phrase which will be considered in a manner that is beneficial to the particular employee in question and involve a consideration of all of the circumstances including:

• the nature of the out of hours conduct (what happened and where did it occur)
• the circumstances in which the out of hours conduct occurred
• the purpose and nature of the employment (including the nature of the business, and role and duties of the employee concerned)
• the express and implied terms of the contract of employment
• the effect of the conduct on the employer’s business (or its effect on other employees of the employer)

Recent case law

Each of the following decisions, one of the High Court, and one of the Full Bench of the Fair Work Commission (FWC), both handed down in the last 3 months, consider the question of connection with work in some detail.

The proceedings in the High Court were to determine whether the employer was vicariously liable for the negligent act of one employee against a colleague. Central to the proceedings was the question as to whether the employee was acting in connection with his employment.

Both employees worked at a restaurant at the resort and their roles required them to live on site, where they shared a room in accommodation provided by the employer.

After work one evening, the employees went for a drink, returning to their room at about 1:00am. The employee left shortly afterwards for some more drinks, while the colleague went to bed. During the night, the colleague was woken up by the employee urinating on him in his bed. The colleague inhaled and choked on the urine, and suffered a cataplectic attack, caused by the emotional stress of the situation.

The High Court confirmed that an employer will be liable for the acts of employees committed in the course or scope of the employment, but needed to consider whether the employee was acting as a “stranger to his employer” and whether he was on a “frolic of his own”.

In deciding that the employee was not acting in connection with his employment, the High Court considered the points set out above, and importantly, that the behaviour engaged in by the employe was so far removed from the duties and his employer’s expectations of him that the employer could not be held liable.

In the second matter, the Full Bench of the FWC was required to consider an appeal of an unfair dismissal decision in which the employee had been reinstated to his employment notwithstanding that he had been an active participant in a Facebook group of current and former employees where offensive and pornographic material was shared.

While agreeing that an employee’s employment may be terminated for ‘out of hours’ conduct, the FWC considered that neither the composition of the Facebook group, (being employees or ex-employees), nor the offensive nature of the posts (although contrary to the employer’s policies and procedures), were enough to establish the requisite connection with the workplace. At the same time, the FWC was clear to admonish the employee’s behaviour, making clear that the type of material shared in the Facebook group “has no place at or in any workplace, regardless of the nature of the work or the constitution of the workforce”.

The FWC held that the employee’s conduct occurred outside of working hours and in a group set up for consenting friends and there was no evidence that his conduct had an impact at the workplace.

So, what does this mean for employers?

At first glance, the FWC decision to reinstate the employee, despite the “abject stupidity” of his behaviour, appears somewhat at odds with the employer’s positive duty to take reasonable and proportionate measures to eliminate sex discrimination and sexual harassment in the workplace.

Employers may have little control over employees’ conduct outside of the workplace or after working hours, including at end of year ‘after parties’, but they do have a responsibility for how that conduct impacts their work or the work of others.

If ‘out of hours’ conduct is spilling over into work time or otherwise causing disruptions to work that make it difficult for employees to do their jobs or work cooperatively, then employers will need to implement strategies to effectively manage those impacts and those relationships in light of these decisions and the employer’s legal obligations to ensure a safe workplace.

Current status

Since the “Closing Loopholes” Bill was tabled in Parliament on 4 September 2023 (purporting to close what the Government has described as “regulatory loopholes”), it has continued to capture broad public interest. Many of the changes proposed by the omnibus Bill are generating heated debate, such as:

• the Government’s foreshadowed “same job, same pay” amendments (allowing the Fair Work Commission to make orders requiring that “host” companies ensure that labour hire workers are afforded the same pay and conditions as employees engaged directly under an enterprise agreement that applies to the host), the criminalisation of “wage theft” and changes aimed at regulating “employee-like” workers (namely gig economy platform workers and road transport industry workers); and
• more surprising changes including new workplace rights for union delegates and changes to how employee status is determined (which would reverse the effect of the landmark 2022 High Court rulings in CFMMEU v Personnel Contracting[1] and Jamsek[2]).

(Kingston Reid has previously published a guide on the Government’s Bill, which can be accessed here.)

Facing resistance from the Senate crossbench, the Bill was swiftly sent off for inquiry by the Senate Education and Employment Legislation Committee which has, over the course of October, convened 6 public hearings and received over 170 separate submissions on various aspects of the Bill.

New single-issue bills

Amidst this process, some of the proposed changes have quietly found support with Senate cross-benchers David Pocock and Jacqui Lambie who, just two weeks ago, introduced four ‘single issue’ bills in the Senate in an attempt to expedite certain less-contentious aspects of the Closing Loopholes reform package.

These single-issue bills seek to:

1. broaden the functions of ASEA (the Asbestos Safety and Eradication Agency) to address and coordinate national action in relation to the increase in silicosis and other silica-related diseases in Australia;
2. improve protection against discrimination for employees who have been, or continue to be, subjected to family and domestic violence;
3. address an ‘anomaly’ in how the small business redundancy pay exemption operates where a business downsizes and becomes a small business employer due to insolvency or bankruptcy (which has a consequential impact on the redundancy entitlements of remaining staff); and
4. introduce a rebuttable presumption that post-traumatic stress disorder suffered by emergency (‘first responder’) employees covered by the Safety, Rehabilitation and Compensation Act 1988 (Cth) (such as employees of the Australian Federal Police, firefighters, ambulance officers and paramedics) was contributed to, to a significant degree, by an employee’s employment.

All of these single-issue bills were unanimously passed in the Senate on 9 November 2023, however, their course is being blocked by the Government in the House of Representatives. It appears unlikely that we will see substantial movement until early 2024.

Casual employees & other proposed alterations

In respect of the casual employee provisions of the Closing Loopholes Bill, some excitement has recently been generated by the prospect of a legislative “note” being included in the Bill to indicate that employees can be casual even when they work according to a regular and predictable pattern.

However, this is likely to be seen as cold comfort by employers, as the note is unlikely to offer comprehensive and unequivocal protection to employers and it remains to be seen what form the final legislation will take. This is bound to be a pressure point in further Parliamentary (and public) debate over the proposed new laws over the next few months leading into 2024.

At the same time, it looks increasingly likely that we will see further amendments to certain parts of the Closing Loopholes Bill potentially before the Senate Committee reports back. For instance, in relation to the Bill’s gig economy-related provisions, Minister Tony Burke has agreed for the new laws to clarify that gig workers are engaged as contractors (and not employees). Separately, Minister Burke has agreed to the exclusion of “service contractors” (who supply equipment and/or their own management services, as distinct from the sole provision of labour) from the operation of the Bill’s “same job, same pay” provisions. A revised Bill reflecting this (amongst other) changes is expected to be tabled in the House of Representatives next week (commencing 27 November 2023).

The Senate Education and Employment Legislation Committee’s inquiry report is due on or after 1 February 2024.

[1] [2022] HCA 1.
[2] [2022] HCA 2.

October 12, 2023

The Secure Jobs Better Pay amendments to the Fair Work Act 2009 (Cth) (FW Act) introduced a new set of provisions to deal with “intractable” bargaining (replacing the previous serious breach declaration provisions), which took effect in June 2023. Under that scheme, once the minimum bargaining period has ended (typically 9 months after the day bargaining starts, unless a later alternative date under s235(5) applies) and upon application by a bargaining representative, the Fair Work Commission (FWC) could make an intractable bargaining declaration if it is satisfied that the criteria outlined in s235(1) have been met.

Given the nature of the United Firefighters Union of Australia (UFU)’s application, the circumstances leading up to the FWC’s declaration were complex and protracted, dating back to when Fire Rescue Victoria (FRV) first absorbed functions of the Metropolitan Fire and Emergency Board and the Country Fire Authority in mid-2020.

From that time, an ‘interim’ agreement for operational staff was introduced whilst bargaining took place between FRV and the UFU for a new agreement. Whilst informal discussions commenced shortly after the transfer in July 2020, a notice of representational rights was not issued until April 2022, once the FRV had obtained government approval to commence formal bargaining.

In the intervening period however, ongoing discussions had been occurring between FRV and UFU including in relation to an ‘efficiencies’ allowance said to arise under Pillar 3 of the Victorian Government’s then-in-force 2019 Wages Policy (Efficiencies Allowance), which in effect would enable those covered under the agreement to share in cost savings obtained through agreed efficiencies arising from the absorption of both the Metropolitan Fire and Emergency Board and the Country Fire Authority.

Bargaining disputes between 2021 to 2023

During this period, several disputes were filed in the FWC and a number of conferences were conducted. Relevantly, a dispute was lodged by the UFU in respect of the efficiencies issue, which led to a series of conferences being conducted in late 2021 to enable the parties to engage in costing the proposed Pillar 3 efficiencies.

The UFU subsequently outlined its claim for the Efficiencies Allowance in a s739 application. However, before that application was heard, it filed a further (s240) dispute in relation to nine items (one of which was ‘wages and allowances’), leading to a further series of FWC conferences. After the Minister for Emergency Services intervened, the issue of the Efficiencies Allowance was ultimately left to be resolved by the parties through further bargaining.

The 2023 Wages Offer – an ‘unbridgeable’ distance

In March 2023, the FRV put forward its wages offer to the UFU, which included modest wage increases and a once-off payment, but not the Efficiencies Allowance as the Victorian Government did not authorise the FRV to do so, consistent with its new 2023 Wages Policy and Bargaining Framework which was introduced around this time.  On this point, the FRV’s position was that it had consistently maintained that wages and allowances were subject to Government authorisation and applicable Wages Policy.

As tensions escalated, the UFU purported to accept the FRV’s wages offer, but subject to the determination of the various efficiencies by the FWC at ‘no less than $117M”, which once determined (for the purposes of the allowance), should be backdated to the start of the proposed agreement. When FRV responded that it was unable to finalise bargaining, the UFU filed its application for an intractable bargaining declaration, in respect of which the FRV submitted that the distance between the parties on the issue of wages and allowances was ‘currently unbridgeable’, and as such, the application for a declaration was not opposed by FRV.

Statutory criteria for making a declaration

In order for the FWC to make an intractable bargaining declaration under s235 of the FW Act, it must be satisfied that:

1. it has dealt with the dispute about the agreement under s240 and that the applicant (in this case, the UFU) participated in the FWC’s processes in doing so;
2. there is no reasonable prospect of agreement being reached if the declaration is not made; and
3. it is reasonable in all the circumstances to make the declaration, taking into account the views of all the bargaining representatives for the agreement.

The FWC’s considerations

The decision sets out some useful observations on how the FWC will determine whether it can be ‘satisfied’ as to each of the abovementioned criteria. Importantly, it notes that for the purposes of applying section 235 of the FW Act, the FWC’s exercise of discretion is broader in relation to prescribed matters of ‘opinion, policy or taste’.

Whilst the first criterion set out above requires only a finding of fact, the second involves an evaluative judgment by the FWC as to whether there is ‘no reasonable prospect’ of agreement if a declaration is not made. Unpacking that double-negative, the FWC need not be convinced that agreement will never arise, but that it is rationally improbable to the point that there is not a reasonable chance of agreement. Crucially, the FWC has indicated that this state of satisfaction is unlikely unless there has been a protracted bargaining period and the parties have exhausted all reasonable efforts (noting in this case, the parties had attended a dozen or so conferences in the period leading up to February 2023 alone).

In relation to the third criterion, it is noteworthy that the FRV (and the Minister, intervening) agreed that bargaining had reached an impasse and supported a declaration being made. This feature of the proceedings (which is unlikely to be the status quo in other applications) is important, given that the views of all the bargaining representatives must form part of the FWC’s evaluative judgment as to reasonableness.

Contrast this with the first intractable bargaining declaration case brought by Virgin Australia Regional Airlines when, during the running of the case, Virgin agreed to further bargain with the relevant unions, thus effectively scuttling its own application. Of course, the likelihood in a contested application will be that there are strongly different views amongst bargaining representatives as to the status and utility of further negotiation.

In the present case however, and in the absence of an opposing view in relation to the UFU’s application, the FWC had regard to:

• the nature of the firefighting services provided by FRV, being critical to public safety;
• that bargaining had been occurring (albeit in various forms) for three years or so; and
• that the parties would be ready for any further arbitration to follow, as the dispute had already been programmed for hearing (for which the parties had commenced preparation),

and, having been satisfied of the necessary criteria (and not identifying any other matters weighing against), made its first intractable bargaining declaration, imposing a post-declaration negotiating period of two weeks, to enable the parties to further narrow the issues requiring arbitration.

Final Comments

Whilst it was not considered to be relevant in this case, the Full Bench did briefly address an important jurisdictional consideration for parties who find themselves inching towards a bargaining stalemate.

Firstly, it must be noted that (existing) s240 provides the FWC with a broad range of powers to assist bargaining representatives with any dispute that arises in bargaining that they are unable to resolve, which includes conducting conferences, mediation, conciliation, making a recommendation, expressing an opinion, or conducting arbitration (by consent). Further, applying to the FWC to deal with a dispute under section 240 (and participating in the resultant process) is a necessary step that must occur prior to applying for an intractable bargaining declaration under (new) s235.

In the UFU decision, the Full Bench has clarified the narrower operation of section 235(2) which requires the FWC to be satisfied that it has dealt with ‘the’ dispute, and not simply ‘a’ dispute under s240, confirming that the relevant bargaining dispute dealt with under s240 “must be the same as the dispute which is said to have caused bargaining to become intractable…”.

In light of the steps to follow the making of an intractable bargaining declaration, this is an important jurisdictional consideration that warrants close scrutiny (in respect of both s235 and s240 applications more broadly), particularly if various disputes have arisen in relation to a range of issues over a protracted bargaining period. For now, it remains to be seen whether bargaining representatives will attempt to cast their s240 nets more broadly when characterising the nature of ‘the’ dispute to be dealt with by the FWC with an eye on the prospect of making an application for an intractable bargaining declaration down the track, if necessary.

A final, practical issue that arises concerns how the FWC will evaluate any jurisdictional objection to a s235 application, as to whether or not it is, in fact, ‘the’ dispute that is said to have caused bargaining to have become intractable. Given the range of ways in which the FWC may deal with a dispute under s240 – some of which are confidential and/or without prejudice – it is unclear how the FWC might do so without requiring the parties to waive or otherwise impugn the confidentiality of those processes (short of having the relevant FWC Member form part of the Full Bench convened in the event such an objection is raised).

Given the active role being played by the FWC at present in relation to other high profile and protracted industrial negotiations, we may ultimately not need to wait very much longer for further guidance from the Full Bench on this front.

September 29, 2023

From 1 October 2023, significant changes to the Public Interest Disclosure (PID) regime in NSW come into effect.

The Public Interest Disclosures Act 2022 (NSW) (PID Act) completely replaces the Public Interest Disclosures Act 1994 (NSW) (1994 Act), creating significant changes aimed at enhancing protections for disclosers, streamlining reporting processes, and strengthening the framework for investigating disclosures of wrongdoing within NSW government agencies.

Here is what’s new:

Public Interest Disclosure Policies: While agencies were required to have a under the 1994 Act, the requirements for these policies under the PID Act are more detailed and prescriptive than previously.

Agency PID policies must now detail (amongst other things) the procedures for receiving, acknowledging, and responding to disclosures. The PID Policy must also identify nominated disclosure officers and their contact details. The content of a PID policy is prescribed by section 43 of the PID Act 2022.

While many agencies will likely amend their existing PID policy, the Ombudsman has helpfully prepared a model PID policy: available here.

Categories of Public Interest Disclosures: The PID Act sorts public interest disclosures into three categories:

Mandatory Public Interest Disclosures: these are disclosures about serious wrongdoing by a public official either in the course of their duties or under a legal obligation.

Witness Public Interest Disclosures: these disclosures involve providing information during an investigation of serious wrongdoing, whether related to a voluntary disclosure or not.

Voluntary Public Interest Disclosures: these disclosures are made voluntarily and must show or tend to show serious wrongdoing. Voluntary disclosures can be made anonymously.

Serious Wrongdoing is defined in the PID Act to include behaviour such as corrupt conduct, government information contraventions, serious maladministration, privacy contraventions, and substantial waste of public money. This definition is broader than that contained in the 1994 Act.

Who Can Make a PID: The categories of individuals who can make PIDs have been expanded. It includes not only employees but also those providing services or exercising functions on behalf of an agency, such as contractors, subcontractors, and volunteers.

Recipients of Disclosures: Under the PID Act, there is no “wrong” recipient for a disclosure. All public interest disclosures are made in the same manner. Recipients include the head of an agency, disclosure officers, managers, members of Parliament, and journalists. However, certain conditions must be met for disclosures to members of Parliament or journalists to be protected.

Protections for Disclosers: It is an offence to take detrimental action against a person who has made a disclosure if the disclosure was a contributing factor to the action. This threshold is lower than that of the PID Act 1994, which required that the action be “substantially in reprisal” for the disclosure.

Our 3 WISE tips

1. Agencies should ensure that their existing PID Policy is amended to meet the new requirements. While many agencies will have drafts in place ahead of 1 October 2023, it is also important to ensure that disclosure officers and others central to the operation of the PID Act are trained on the changes, in addition to staff more generally.
2. When considering the expanded definition of who can lawfully make a protected disclosure, agencies should consider those entities it contracts with to carry out services or functions on behalf of the agency and ensure they are advised of the changes to the PID Policy.
3. Finally, it is best practice to conduct an audit of your agency’s PID functions from time to time. This is the perfect time to do so to ensure your agency is implementing and maintaining procedures with respect to:
   • dealing with disclosures that are or may be voluntary PIDs;
   • providing information to the makers of voluntary PIDs;
   • assess and minimise the risk of detrimental action;
   • dealing with allegations that a detrimental action offence has been committed;
   • maintaining confidentiality and protecting the identity of the makers of voluntary PIDs;
   • taking appropriate corrective action in response to findings of serious wrongdoing or other misconduct;
   • record-keeping and reporting; and
   • establishing internal oversight of your agency’s compliance.