Negotiating enterprise agreements: Key considerations for local government employers
Many local government employers will be renegotiating enterprise agreements this year. The next 12 months will be a unique and challenging environment in which to do so.
The impacts of COVID-19 have negatively affected the financial position of local councils, with many expected to report operating deficits in the 2020-21 financial year. This backdrop of decreased revenue and additional financial pressures leaves little to offer in terms of pay increases.
In addition, local government employers, like other employers, have to deal with the impact of COVID-19 on the workplace, including heightened levels of psychological distress, increased personal financial pressure, social isolation and fears of job loss. These factors can lead to increased absenteeism, workers’ compensation claims and low productivity. Working arrangements for office-based staff have also fundamentally changed and there is an expectation that flexible working arrangements, whether working from home or outside the conventional work hours, will continue.
Councils will need to consider whether, amidst all this uncertainty, it’s better to delay the commencement of negotiations until there is greater certainty about the future. Many councils have already done this in Victoria and it looks like it is something unions, at least, will contemplate.
That said, delaying enterprise bargaining could also be considered a lost opportunity for councils. At present, there appears to be a general appreciation among workers (and unions) of the financial pressures facing employers. Councils may lose the benefit of this understanding if the bargaining is delayed for another year. Employers also have the opportunity to implement and set a framework of working arrangements that play to their employees’ willingness for structured flexibility.
Any employer seeking to engage in successful collective bargaining in this environment needs to appreciate the heightened sensitivity to change and the greater need for clear, consistent, transparent and empathetic messaging.
Employees need to believe their employer places a high priority on their health and safety. This will be enhanced if councils focus on working conditions supporting infection control, physical and mental health and increased flexibility.
In particular, local government employers will need to review the experience of their employees working from home and assess the viability of these arrangements for the future. Many existing local government enterprise agreements give broad discretion to the employer in approving working from home arrangements. This will likely be a point of contention in enterprise bargaining, and councils should consider in advance the kinds of parameters they are willing to put in place around these arrangements.
Local government employers engaging in enterprise bargaining will also need to grapple with concerns raised by unions around working from home arrangements, including:
The Australian Council of Trade Unions is developing a template log of claims reflecting these concerns, among others, and local government employers can expect to see this coming their way in bargaining rounds.
Given the increased financial pressures facing councils, considerations around downsizing, organisational restructuring and outsourcing are inevitable. There will also be consideration of greater use of time-limited contracts, although they also bring their own issues. Councils should consider these realities in their enterprise bargaining and the extent to which they may need to seek increased flexibility in their agreement terms. This is particularly the case with the use of fixed-term engagements, as many local government agreements confine their use to temporary roles. Any increase in the use of fixed-term agreements will likely be heavily contested by unions.
Most importantly, employers will need to consider their overall bargaining strategy and how that aligns with good faith bargaining requirements. The good faith bargaining framework created by the Fair Work Act 2009 (Cth) (FW Act) creates both opportunities and risks for an employer. The former will be maximised and the latter minimised with appropriate preparation and strategy. Before commencing the bargaining process, employers should consider the following:
Good faith bargaining obligations require the articulation of proposals and timely response by other parties. However, they do not require any party to make concessions during bargaining or to reach an agreement on the terms that are to be included in an agreement.
The Council employer can stay strong in its position during negotiations and only make reasonable concessions where it is appropriate to do so, but that strategy brings the risks of industrial action. Hard bargaining is not bargaining in bad faith, but parties must genuinely participate in the bargaining process and not “adopt the role of a disinterested suitor”.
Finally, while not a requirement under the FW Act, it is useful for a council to have regular communications with its employees about the progress of bargaining. This presents an opportunity for the council to keep employees informed, but also communicate its position in terms that are persuasive, but not misleading or intimidating.
Communications with employees about the negotiations should be designed to highlight the benefits of the employer’s position on negotiation issues, report on the bargaining progress and constructively analyse proposals by other bargaining representatives (including correcting misleading information and identifying risks of claims). However, it should not be seen as an opportunity to responsively quibble with communications by unions among its members. Doing so is likely to fracture rather than unite the workforce, and be counterproductive to reaching an agreement.
Authors: Ben McKinley & Hannah Dunai
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Requirements on local governments
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Sunshine Coast Regional Council v Gavin & Anor (No. 2)  QPEC 2
ENVIRONMENT AND PLANNING – BUILDING CONTROL – OTHER MATTERS – where the first and second respondents constructed a building and used it as an "accommodation building" in a zone where this use was not permitted – where respondents accepted they had committed development offences – what enforcements orders are appropriate to secure compliance with the legislative scheme.
ENVIRONMENT AND PLANNING – OTHER MATTERS – STAY OF ORDERS – where enforcement orders to be made requiring building works to be carried out – where respondents have commenced proceedings in the Court of Appeal – where respondents seek a stay of the orders – whether prejudice to applicant or respondent.
ENVIRONMENT AND PLANNING – OTHER MATTERS – COSTS – where application for enforcement orders – jurisdiction to award costs – where applicant largely successful – whether respondents should only pay a part of the applicant’s costs – whether applicant should have its costs of briefing senior and junior counsel.
Planning Act 2016 Qld s 180; Planning and Environment Court Act 2016 Qld s 58, s 59, s 61(1), s 63.
Planning and Environment Court Rules 2018 Qld r 4; Uniform Civil Procedure Rules 1999 Qld r 680, r 686, r 687, r 702, r 742.
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.