Skip to content.

Home

Allens Arthur Robinson

Focus: Workplace Relations

21 December 2009

In this issue: we look at whether employers can communicate directly with their employees even though they are engaged in good faith bargaining with a trade union; a case that shows that deeds of release are not absolute; and the circumstances where Fair Work Australia may suspend protected industrial action on the grounds of significant economic harm.

FWA encourages direct communication during bargaining

In brief: Employers can communicate directly with employees during negotiations for enterprise agreements despite having to negotiate with trade unions as part of good faith bargaining. Lawyer Andrew Stirling reports on two recent Fair Work Australia cases.1

How does it affect you?

  • Employers should not feel restrained from communicating directly with their employees to provide them with information during enterprise bargaining,
  • Good faith bargaining does not require trade unions to participate in all discussions employers have with employees about the status of negotiations.
Background

In the first case, Mingara Recreation Club Ltd (Mingara) was bargaining with the Liquor, Hospitality and Miscellaneous Union (the LHMU). Separate to the negotiations, Mingara invited its employees to an information session during which it explained the negotiation process and its planned offer. The LHMU was not invited to the meeting. When its organiser turned up anyway, she was denied entrance. The LHMU sought orders to force Mingara to include the LHMU in any future discussions of any type related to the negotiations.

In the second case, Lourdes Home for the Aged (Lourdes) had not commenced bargaining with the Queensland Nurses' Union (the QNU). Prior to agreeing to negotiate for an enterprise agreement, Lourdes proposed to canvass its employees via a ballot to see whether they actually wanted an enterprise agreement. The QNU sought orders to prevent the ballot from occurring.

Decisions

Fair Work Australia rejected both applications, stating that an employer may directly communicate and bargain with its employees throughout the negotiation process, so long as it otherwise meets its good faith bargaining obligations. That means that, provided any communication or discussions are not accompanied by a refusal to meet and communicate with a bargaining representative, an employer is within the good faith bargaining requirements of the Act.

Although Fair Work Australia decided to reject the QNU's application for other reasons in the Lourdes decision, it supported the decision in Mingara's case by stating that, had it been required to do so, it would not have found the proposed ballot was contrary to the good faith bargaining obligations.

Return to top

Limitations on deeds of release

In brief: Often employers and employees will enter into deeds of release on the termination of employment, particularly if a legal claim has been threatened. However, a recent Queensland case is an important reminder that these releases are not absolute.2 Senior Associate John Naughton reports.

How does it affect you?

  • Terms of a deed of release will be read narrowly and against the person drafting the release (usually the employer).
  • It will assist an employer if they can show that the employee was:
    • not under duress when they signed the deed; and
    • given an opportunity to consider their position and take legal advice regarding the effect of the release.
  • If the employer is aware of specific claims, these ought to be precisely specified in the deed.
  • If statutory claims cannot be released or are subject to a tribunal's discretion, the deed should at least contain an express acknowledgment by the employee of the employer's intentions that the benefits payable under the deed are provided with the intention of compromising all potential claims and bringing the whole of the relationship to finality.
Background

In this case, the applicant Ms Diggles, had been an employee of Australian Laboratory Services Pty Ltd (ALS) since 1993. Her employment was terminated on 18 February 2008, and on the same day she signed a deed providing that, in return for certain benefits (including a payment and an outplacement program) she would release the employer from all claims relating to her employment.

Two months after the termination of her employment, she filed a complaint with the Anti-Discrimination Commission Queensland (ADCQ), alleging discrimination by ALS and one of its employees on the basis of impairment.

Following the claim being accepted by the ADCQ, ALS and the respondent employee sought to have the complaint dismissed through an application to the Queensland Anti-Discrimination Tribunal (QADT), on the basis that the deed anticipated all potential claims arising out of Ms Diggles' employment, and that it would be unfair for ALS and the respondent employee to have to defend the discrimination claim in light of the deed of release and the benefits already provided under it.

Complaint allowed to proceed

In deciding that the release did not prevent Ms Diggles from pursuing her impairment discrimination claim, the QADT considered the statutory framework and noted that, while section 137 of the Anti-Discrimination Act 1991 (Qld) allowed the ADCQ to consider deeds of release before deciding whether to accept a complaint, there was no equivalent power available to the QADT. Once the ADCQ had considered the release and decided to accept the complaint anyway, the complaint must proceed without interference from the QADT.

Conclusion

The case demonstrates the need for deeds of release to be drafted carefully so as to provide the maximum protection available in the circumstances. While that may not prevent a claim where a statutory right may be subject to a discretion, it can reduce the risk substantially if it would encourage the discretion not to be exercised to allow the claim to proceed.

Return to top

Suspending protected industrial action due to significant economic harm

In brief: Fair Work Australia recently considered whether an employer was suffering significant economic harm as a result of protected industrial action, and therefore whether to suspend the protected industrial action for that reason. Senior Associate Nicholas Fletcher and Lawyer Tom Randall report.

How does it affect you?

  • Even if industrial action is protected, it will not be allowed to continue if it would cause 'significant economic harm'.
  • When considering significant economic harm, FWA looks at the nature of the enterprise, its current circumstances, and the practical effect of the protected industrial action.
Background

Nyrstar Port Pirie Pty Ltd (Nyrstar) operated a silver, lead and zinc smelter at Port Pirie. Due to the age and condition of the smelter, Nyrstar relied heavily on overtime and call-in arrangements. Nyrstar and the unions had failed to reach agreement on a new enterprise agreement. The unions notified Nyrstar on 3 November 2009 that the following protected industrial action would be taken:

  • for two weeks - bans on working overtime, working out of hours, stand-by and out-of-hours call-in work, and on-staff relief work; and
  • a four-hour stop-work meeting at 7:30 am on 11 November 2009.
The first application

On 5 November 2009, Nyrstar lodged an application with FWA seeking the suspension of the proposed protected industrial action, principally on the ground that the action threatened to cause Nyrstar significant economic harm under section 423 of the Fair Work Act 2009 (Cth) (the Act).

In considering whether protected industrial action is causing, or is threatening to cause, significant economic harm, the Act sets out relevant factors that FWA is to take into account, including:

  • the source, nature and degree of harm suffered, or likely to be suffered by the employer;
  • the likelihood that the harm will continue to be caused or will be caused;
  • the capacity of the employer to bear the harm; and
  • whether there is no reasonable prospect of agreement being reached.3

Senior Deputy President O'Callaghan held that in considering these factors FWA is to look at the 'nature' of the commercial operation and in this case:

  • Nyrstar's need to maintain an appropriate level of feedstock for the operation of the blast furnace, and the negative impact that the proposed action would have on this, were relevant because the continued operation of the blast furnace was central to the business. Nyrstar's evidence indicated feedstock levels would diminish to such an extent that the blast furnace would be shut down, at a cost of $600,000 per day, and would perhaps not be recommissioned due to the prevailing economic conditions; and
  • the reliance of Nyrstar on overtime and call-in arrangements, due to the age and condition of the smelter, was also relevant, as it was particularly vulnerable to the proposed action.

Accordingly, while FWA accepted that Nyrstar would suffer 'significant economic harm', the protected industrial action must also have been engaged in for a protracted period of time.4 As the protected action had not yet commenced, an order under s423 was not available.

The second application

Having been unsuccessful in its first application,5 Nyrstar made a second application to FWA on 13 November 2009 to suspend the protected industrial action, four days after it had commenced.6

Again, Senior Deputy President O'Callaghan held that the relevant conditions were not satisfied, because four days could not be considered a 'protracted period' in the circumstances.

However, on its second application, Nyrstar also sought an order under s425 of the Act, which allows protected industrial action to be suspended in circumstances including where it 'would be beneficial to the bargaining representatives for the agreement because it would assist in resolving the matters at issue.' Senior Deputy President O'Callaghan considered the criteria for such an order had been met, finding that:

  • suspension would assist in resolving the matters in issue as there had been confusion regarding the scope and extent of the bans, leading to further disputes between the unions and Nyrstar;
  • although the protected action had continued for only four days, it looked likely to continue and the parties' positions had become further entrenched over that period;
  • suspension for a short period would not be contrary to the public interest nor inconsistent with the objects of the Act, given the closure of the blast furnace would be adverse to all parties' interests; and
  • while the unions had acted in good faith in honouring their commitment not to shut down the blast furnaces, confusion by both parties regarding the bans, and the role this played in escalating the stand-off, supported the case for suspension.

FWA made an order suspending the protected industrial action for six days so that a conciliation conference could be held.

Conclusion

Even where an employer is able to prove that it will suffer significant economic harm, it will be difficult to obtain an order suspending protected industrial action before it has commenced.

Return to top

Footnotes
  1. LHMU v Mingara Recreation Club Ltd [2009] FWA 1442; QNU v The Corporation of the Roman Catholic Diocese of Toowoomba [2009] FWA 1553.
  2. Diggles v Heery and Australian Laboratory Services Pty Ltd [2009] QADT 22 (23 November 2009).
  3. Sub-section 423(4) of the Act.
  4. Sub-section 423(6)(a) of the Act (emphasis added).
  5. Nyrstar Port Pirie Pty Ltd v Construction, Forestry, Mining and Energy Union and Others [2009] FWA 1148.
  6. Nyrstar Port Pirie Pty Ltd v Construction, Forestry, Mining and Energy Union and Others [2009] FWA 1144.

For further information, please contact:

Return to top

Share with

What are these?

 

 

Recent Workplace Relations publications