We Say Decision on Compulsory Arbitrations Will Not Stand
You are here:In our view, a recent decision by FWA not to approve an enterprise agreement on the basis it did not provide for compulsory arbitration will not stand - one way or the other...
Commissioner Greg Smith of Fair Work Australia (FWA) recently decided not to approve an enterprise agreement between a division of Woolworths (its Produce and Recycling Distribution Centre) and the SDA on the basis that it failed to include "a procedure that requires or allows FWA, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes about any matters arising under the agreement and in relation to the National Employment Standards" as required by s.186 of the Act.
Importantly, he held it was because the agreement did not provide for compulsory arbitration that he would not approve the agreement, despite including a clause that provided for arbitration of disputes by agreement of the parties.
This decision was particularly surprising because it is completely in opposition to assurances by Workplace Relations Minister Julia Gillard prior to the last federal election that "Arbitration will be limited to exceptional circumstances only - where industrial action is causing a threat to safety or health, a threat to the economy, or significant harm to the parties."
The Australian newspaper reports that Minister Julia Gillard acknowledged the ruling was important, and signalled the government could intervene. "The Commonwealth understands this is a significant decision and we are getting advice on the matter," a spokeswoman for Ms Gillard reportedly said.
ER Strategies Comment: The decision - if it stands - will be a significant extension to the powers of FWA over the former AIRC and would be significant step backwards in terms of labour market reform. On that basis, we believe the decision will be either overturned on appeal, or alternatively the Government will change the legislation to remove this new found power.
