Australia: Employers do not need to hold out for legislative change to activate useful enterprise bargaining levers

In recent weeks, we’ve seen a very familiar industrial relations dynamic play out in the media. Imminent strike. Employees demand higher wages. Employer offers a 2.5% increase. Employees reject the offer because similar interstate roles receive higher pay. Employer claims that the interstate comparison is inaccurate.

Most recently, the imminent strike involved teachers within the Queensland catholic school system. But the calls for 'comparative wages justice' are not confined to Queensland education. They have been echoed throughout various recent enterprise bargaining campaigns, and are seemingly more common in the public sector.

It goes without saying that most wage comparisons in the context of bargaining are imprecise and missing important context, and therefore provide little (if any) adequate justification for wage increases. Working conditions are different. Hours of work are different. Cost of living is different. Educational pre-requisites are different. Performance expectations and assessments are different. The workplace and industry challenges faced by the respective employers are different. The majority of these differences are inherently difficult to quantify and impossible to evaluate uniformly.

Of course, teachers (ambulance officers, firefighters, police officers, etc...) are entitled to apply lawful pressure on their employers in pursuit of wage claims (assuming they are playing within the 'rules of the game'). But this raises the question - can employers challenge inadequate justification of union (or employee) claims?

The answer is yes - through targeted questioning pursuant to the good faith bargaining requirements. At first glance, this strategy might appear to be a toothless tiger. But picture this - the employer can require the union to justify its claims by providing information about its assumptions, the source of the information being relied upon, and perhaps the comparative wage analysis itself. This may create some exposure for the union - such analysis might never have been undertaken, or might be inaccurate.

Failure to provide this information, or otherwise adequately justify the claim, may have a number of consequences. The union may have breached good faith bargaining requirements (exposing the union to corrective orders). Or, the employer may be in a position to prove that the union is misrepresenting employees' workplace rights through the provision of inaccurate information (exposing the union to injunctions, penalties, and other compensatory orders).

But the sting in the tail is that the employer will have the high moral ground. The employer will be able to cast doubt on the accuracy of the union’s communications with its members. At the very least, the inadequate justifications (and ambit claims) will usually cease. Employers do not need to hold out for legislative change to harness such leverage - it is already available.

Enterprise bargaining outcomes turn on the art of influence and persuasion. For a new agreement to commence operation, a majority of employees need to vote in favour of it, except in limited scenarios involving arbitrated outcomes. Pressing unions (and other employee bargaining representatives) to provide justification for their claims provides an avenue to encourage a workforce to critically analyse what the union is telling them, and perhaps even accept the reasonableness of the employer's bargaining position. This won't necessarily get the deal done the very next day, but it might give employees access to more accurate and reliable information, which may help position the offer more favourably in their eyes. At the end of the day, only employers have the power to put agreements to an employee vote - they don't need the unions' permission.

This article was written by Rohan Doyle, Executive Counsel, and Kirsty Faichen, Partner.