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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
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
2
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
3
Jun-12
May-12
Apr-12
Mar-12
Feb-12
Jan-12
Dec-11
Nov-11
Oct-11
Sep-11
Aug-11
Jul-11
Jun-11
May-11
Apr-11
Mar-11
Feb-11
Jan-11
Dec-10
Nov-10
Oct-10
Sep-10
Aug-10
Jul-10
Jun-10
May-10
Apr-10
Mar-10
Feb-10
Jan-10
Dec-09
Nov-09
Oct-09
Sep-09
Aug-09
Jul-09
Number of applications made
Applications lodged under Part 2-4, monthly
350
300
250
200
150
100
50
0
4
Applications lodged under Part 2-4, by type
1200
Number of applications made
1000
800
600
400
200
0
s.229 bargaining order
s.236 majority support
determination
s.238 scope order
s.240 bargaining dispute
s.242 low-paid authorisation
5
Applications lodged under Part 2-4,
by applicant type
1400
Number of applications made
1200
1000
800
600
400
200
0
Employer Organisation
Employer
Individual
Union
Applicant type
6
Applications lodged under Part 2-4, monthly,
by state/territory
1000
900
800
Number of applciations made
700
600
500
400
300
200
100
0
NT
TAS
ACT
WA
SA
Qld
NSW
VIC
7
Other services
Arts and recreation services
Health care and social assistance
Education & training
Public administration & safety
Administrative and support services
Professional, scientific and technical services
Rental, hiring & real estate services
Finanical & insurance services
Information media & telecommunications
Transport, postal and warehousing
Wholesale & retail trade
Construction
Electricity, gas & water
Manufacturing
Mining
Agriculture, forestry & fishing
Number of applications made
Applications lodged under Part 2-4, by industry
500
450
400
350
300
250
200
150
100
50
0
8
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
9
Jun-12
May-12
Apr-12
Mar-12
Feb-12
Jan-12
Dec-11
Nov-11
Oct-11
Sep-11
Aug-11
Jul-11
Jun-11
May-11
Apr-11
Mar-11
Feb-11
Jan-11
Dec-10
Nov-10
Oct-10
Sep-10
Aug-10
Jul-10
Jun-10
May-10
Apr-10
Mar-10
Feb-10
Jan-10
Dec-09
Nov-09
Oct-09
Sep-09
Aug-09
Jul-09
Number of applciations
Applications for majority support
determinations, monthly total
18
16
14
12
10
8
6
4
2
0
10
Other services
Arts and recreation services
Health care and social assistance
Education & training
Public administration & safety
Administrative and support services
Professional, scientific and technical services
Rental, hiring & real estate services
Finanical & insurance services
Information media & telecommunications
Transport, postal and warehousing
Wholesale & retail trade
Construction
Electricity, gas & water
Manufacturing
Mining
Agriculture, forestry & fishing
Number of applications made
Applications for majority support
determinations, by industry
90
80
70
60
50
40
30
20
10
0
11
Procedural matter
Order/determination not made
Order/determination made
Matter resolved in whole or in part
Application adjourned indefinitely
Application withdrawn
Lodged only
Don't know
Applications for majority support
determinations, by outcome
120
100
80
60
40
20
0
12
Majority Support
Determinations – Key Issues

FWC has taken a relatively flexible and nonlegalistic 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
13
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
14
Assessing the Impact of MSD
Provisions (2)

Impact confirmed by employer interviewees


It was often now only employers very hostile to bargaining who
sought to defend applications for MSDs, where there was
evidence of majority support:


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.’
… [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
15
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
16
Applications for scope orders, by outcome
60
Number of applciations made
50
40
30
20
10
0
Don't know
Lodged only
Application withdrawn Application adjourned
indefinitely
Order made
Order not made
17