Good Faith Bargaining - Essay

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The objective underlying the Fair Work Act 2009 was to “get the balance right” (Smart Company, 2010 ; Forsyth, 2005) between fairness and flexibility in Australian workplaces while getting rid of the harsher aspects of Work Choices which preceded it. The Fair Work Act sought to restore collective bargaining in the Australian workplace relations system, including enhanced rights for union involvement and, most importantly, the good faith bargaining requirements.

Good faith bargaining is an important requirement placed on the parties by the Fair Work Act 2009. The concept of ‘good faith bargaining’ is not a “novel concept”. It has been defined as “negotiations in which two parties meet and confer at reasonable times, minds open to persuasion, with a view to reaching agreement on new contract terms” (Cox, 2009). Essentially, good faith bargaining relates to the ‘method’, not the ‘outcome’ (Cox, 2009) of the agreement. Nevertheless, good faith bargaining (GFP) does not imply that either party is required to make “concessions or reach agreements on any proposal” (Australian (Vic) Government (n.d.), Retrieved on September 16, 2010). In essence, good faith bargaining seeks to establish an ideal framework for bargaining processes and relationships. In addition, good faith bargaining is about ‘evening up’ the relationship between parties to a negotiation by providing a level of confidence that the conduct of the parties and the information they bring to the negotiations will be directed towards a sensible resolution of the issues in disagreement. Under Work Choices, there was no provision or requirement to bargain in good faith and employers could “unilaterally determine the conduct and outcome of negotiations” (Australian (Vic) Government (n.d.), Retrieved on September 18, 2010) between the parties. This change under the ‘Fair Work Bill 2008’, in that, by contrast, this placed obligations on parties to bargain in ‘good faith’. This essay will focus on the argument whether the good faith bargaining requirements, as embodied in the Fair Work Act 2009, will impact the efficiency and equity of employees, workplaces and the economy. Therefore, based on this argument, this essay will firstly, seek to identify the key concepts underpinning good faith bargaining, followed by an analysis regarding how the good faith bargaining requirements will translate in practice. For each requirement there will be a discussion on how these legislative provisions of the Act impact the efficiency and equity for employees, whether these provisions will have a bearing on the workplace and lastly, how they reflect on the economy as a whole.

Bargaining representatives for a “proposed enterprise agreement” (Douglas, 2010) must meet the good faith bargaining requirements. A bargaining representative may apply to Fair Work Act for a “bargaining order” (Douglas, 2010) to ensure that the good faith bargaining requirements are being met and that bargaining is proceeding “efficiently and fairly” (Douglas, 2010). The provisions relating to good faith bargaining requirements set out in ‘s228 (1) of the Fair Work Act 2009’, relate to a method or process in the bargaining and ‘negotiations for an enterprise agreement’ (Feinsinger, 2009). Good faith bargaining requirements are generally self explanatory. The requirements of good faith bargaining can be mainly discussed with reference to the Act. Under the Act, bargaining representatives (employers, employees and unions) are required to ‘attend and participate in, meetings at reasonable times’ (Feinsinger, 2009). This provision emphasises that merely ‘turning up to a meeting’ will not suffice. The Act stipulates that the employers must also ‘participate’, by engaging in ‘some form of dialogue’ (Heinsz, 2000) with employees or unions, during the meetings. However, in some instances where employers are located in “remote areas”, physical attendance at meetings becomes difficult. In...
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