Statement by AREEA Chief Executive Officer Steve Knott AM
The Fair Work Commission has taken a common sense approach by retaining the definite decision trigger in the new model consultation term for enterprise agreements.
Today, a FWC Full Bench published its final decision on enterprise agreement model terms for consultation, flexibility and dispute resolution in workplaces.
While employers and employees can negotiate their own terms provided they meet legal requirements, the new model terms will serve as the default in various circumstances.
Union calls to lower the threshold for employer consultation with employees from a “definite decision” on a major workplace change to merely proposing to introduce such were shrill and ill-advised.
As AREEA underscored in its submissions to the Full Bench, caving in to union demands on the definite decision trigger would have abandoned decades of precedent and best practice.
Consultation is properly and only about the consequential decisions for employment that arise from a substantive business decision.
It would be absurd to require a board of directors to consult employees on issues such as company mergers, acquisitions or business closures prior to discharging their duties to make such decisions in the best interests of the company and its shareholders.
The 40-year-old precedent behind the definite decision trigger – based upon the landmark 1984 Termination, Change and Redundancy case – has stood the test of time as it makes sense for commercial decision-making and with respect to directors’ legal obligations.
Employers also welcome the new consultation term preserving criteria as to what constitutes major workplace change, namely major change to production, program, organisation, structure or technology.
The removal of these clear parameters, as advocated by the ACTU, would have greatly increased the risk of disputes between unions and employers over what is considered major change.
With employers already hit hard by the Albanese Government’s IR agenda, including new union workplace powers, such uncertainty would have only added to the red tape dragging down the productivity of Australian workplaces.
