Dispute resolution for Enterprise Agreements under the Fair Work Bill

25 March 2009 Topics: Workplace relations and safety

In continuing our series on the elements of the Fair Work Bill this bulletin discusses the dispute resolution process which is contained in the Fair Work Bill for parties who are entering into an enterprise bargaining agreement.

The Work Choices amendments in 2006 made significant changes to the alternative dispute resolution procedures which were available to parties who had entered into workplace agreements (now to be known as enterprise agreements). The Workplace Relations Act (WRA) currently outlines a specific dispute resolution model which must be incorporated into each workplace agreement. The model dispute resolution applies to any dispute which arises as a result of a “rights” dispute (i.e. disputes over the rights contained in a workplace agreement). The current model in the WRA does not apply to any interest dispute (i.e. those which arose during the bargaining or negotiating period of the agreement making process).

The current model under the WRA involves a hierarchy of steps to be followed. These are outlined below:

  1. The parties must genuinely try to resolve matters at the workplace level.
  2. If the parties are unable to resolve matters at the workplace level, they may agree to go to a mutually acceptable alternative dispute resolution service provider.
  3. If parties cannot agree on who they wish to appoint then a party to the dispute is entitled to apply to the Industrial Registrar of the Australian Industrial Relations Commission (AIRC) and notify the Registrar that the parties could not agree on an alternative dispute resolution provider.
  4. At that time the Industrial Registrar can provide the required information to the parties giving them 14 days to consider their options. These could include moving through to the AIRC to have the dispute dealt with.

Little variation can be adopted from this model process and workplace agreements are not approved unless the model dispute resolution process is adopted.

If the AIRC accepts the dispute under the current law, it is their role to facilitate conferences to bring the parties together to find a resolution. The AIRC does not have any power to compel a person to do anything to make an award or to resolve the matter. However, the AIRC can arbitrate the matter to determine the respective rights of obligations of the parties, only if the parties agree to give the power to the AIRC. This means that the model process available under the WRA does not confer on the AIRC any power to finally settle any matter unless the parties to the dispute expressly agree to do so.

Under the Fair Work Bill terms dealing with dispute resolution are not as prescriptive as those in the WRA. Enterprise Agreements will require some form of dispute resolution to be incorporated into the agreement and these will still need to comply with specific terms.

The new system will focus on what is prohibited in the dispute resolution clauses; it will not prescribe a specific process.  Disputes will only be able to be settled on the basis that the person adjudicating the dispute is independent.

When assessing enterprise agreements Fair Work Australia must only approve an agreement if the dispute resolution clause allows either Fair Work Australia or an independent person from resolving the dispute between the parties. For example, a dispute resolution procedure could not be included in the agreement if it required the dispute to be resolved by the managing director of the employer or a dispute board made up of officials of a union covered by an agreement. Unlike the WRA, parties are not required to try and resolve mattes at the workplace level.

The Bill also prescribes that employees covered by the agreement must have right for representation when dealing with any dispute.

If the parties give Fair Work Australia the power to deal with disputes under the enterprise agreement, it has greater powers than the AIRC did under the WRA by making a binding decision in relation to a dispute. However, this power must be outlined in the enterprise agreement. If the enterprise agreement prescribes an independent person to have the power to deal with the dispute and not Fair Work Australia, this person can also be given the power to deal with disputes by arbitration and to make a binding award.

The Fair Work Bill does not currently contain a model for dealing with disputes but does allow the Regulations to outline such a model. Regulations have not been tabled to Parliament at this stage. Once further information becomes available we will provide you with an update.

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This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.