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The Fair Work Commission’s Role in the Enterprise Bargaining Process

This research study examines the Fair Work Commission's role in the enterprise bargaining process in Australia. It provides an overview of the data on applications made under Part 2-4 of the Fair Work Act and analyzes the effectiveness of Majority Support Determinations (MSDs) and Scope Orders. The study presents key findings and conclusions based on comprehensive data and interviews with parties involved in enterprise bargaining.

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The Fair Work Commission’s Role in the Enterprise Bargaining Process

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  1. The Fair Work Commission’s Role in the Enterprise Bargaining Process Associate Professor Anthony Forsyth RMIT University School of Law Associate Professor John Howe Melbourne Law School

  2. Overview • Background and methodology • Overall data on applications under Part 2-4 of FW Act • Data & Interviews on MSDs and Scope Orders • Data & Interviews on Bargaining Orders, 240 and Low Paid Bargaining Orders • Updated FWC data • Key Findings and & Conclusions The University of Melbourne

  3. Research Methodology • Study of operation of Part 2-4 of FW Act over first 3 years of operation (1 July 2009-30 June 2012) – Forsyth, Gahan, Howe and Landau • We drew from four principal sources of data: • Quarterly reports on agreement-making made publicly available by DEEWR • Unit record file data drawn from FWC’s own case management system; • Relevant decisions and orders relating to applications made under Part 2-4 of the FW Act; • Qualitative evidence drawn from interviews with parties The University of Melbourne

  4. Applications lodged under Part 2-4, monthly

  5. Applications lodged under Part 2-4, by type

  6. Applications lodged under Part 2-4, by applicant type

  7. Applications lodged under Part 2-4, monthly, by state/territory

  8. Applications lodged under Part 2-4, by industry

  9. Getting Parties to the Table: Are MSDs Working? • The provisions governing MSDs - ss.236 and 237 of the FW Act • An employee bargaining representative may apply to FWC for an MSD where an employer refuses to bargain, and it can be demonstrated that a majority of the relevant employees wishes to bargain collectively • If employer refuses to bargain after MSD, bargaining rep may apply for bargaining order • A key departure from previous regime The University of Melbourne

  10. Applications for majority support determinations, monthly total

  11. Applications for majority support determinations, by industry

  12. Applications for majority support determinations, by outcome

  13. Majority Support Determinations – Key Issues • FWC has taken a relatively flexible and non-legalistic approach to the task of determining whether majority support for collective bargaining exists • Members of the tribunal have shown initiative in ascertaining the views of employees, where the evidence of majority support presented by an applicant for an MSD is equivocal. • In certain circumstances, FWC has suggested the parties agree to a secret ballot The University of Melbourne

  14. Assessing the Impact of the MSD Provisions • Interview data supports the conclusion that the MSD provisions have been fairly effective in compelling employers to bargain, where a majority of workers wish to • Unions have adjusted their approach to MSDs to minimise challenges • ‘Shadow effect’ of provisions • ‘... just the existence of the MSD [provisions] means that an employer is far more likely to agree to bargaining ...’ The University of Melbourne

  15. Assessing the Impact of MSD Provisions (2) • Impact confirmed by employer interviewees • I think it’s conducive to reaching agreement, because it creates an environment where the onus is on the party not wanting to collectively bargain, they have to demonstrate why. And it’s a high hurdle, so it encourages engagement.’ • It was often now only employers very hostile to bargaining who sought to defend applications for MSDs, where there was evidence of majority support: • … [M]y experience is that it has to be a really entrenched position of the employer to contest these. They have to be really motivated to want to keep the union out … • there was still some concern voiced – from both employers and unions – that the process could be unfairly manipulated The University of Melbourne

  16. Who is to be covered by the agreement? Scope Orders • Ss 238-239 of FW Act introduced to provide an alternative to industrial action as the principal means of resolving these disputes • Main issue in decided cases has been whether the making of an order will promote fair and efficient decision-making • A relatively small number of applications: suggests that most parties determine scope without using provisions The University of Melbourne

  17. Applications for scope orders, by outcome

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