Collective Bargaining
03 September 2015Duty of Good Faith does not require collective agreement to be concluded
There is no longer an obligation to conclude a collective agreement, nor is there any obligation to continue bargaining after a deadlock has been reached. S.33 of the Act provides that:
(1) The duty of good faith in section 4 does not require a union and an employer bargaining for a collective agreement–
(a) to enter into a collective agreement; or
(b) to agree on any matter for inclusion in a collective agreement.
(2) However, an employer does not comply with the duty of good faith if –
(a) the employer refuses to enter into a collective agreement; and
(b) the employer does so because the employer is opposed, or objects in principle, to bargaining for or being party to a collective agreement.”
However, there remains an obligation to bargain in good faith. That amongst other things, requires the parties to not deceive or mislead each other, to be active and constructive in establishing and maintaining a productive employment relationship in which the parties are, among other things, responsive and communicative; to provide information and so on.
Authority may determine that bargaining has concluded
The Act provides a process for parties to collective bargaining to apply to the Authority for a declaration that bargaining has ended. Before making a decision the Authority:
- Must consider whether an attempt has been made to resolve the difficulties by mediation or facilitation,
- May direct the parties to mediation,
- Must direct the parties to facilitation if any of the grounds in s.50C(1) exist, unless the Authority considers that the use of facilitation will not contribute to resolution, is not in the public interest, will undermine the urgent nature of the process, or will otherwise be impractical or in appropriate. The grounds in s.50C(1) include:
- A serious and sustained breach of good faith which has undermined the bargaining,
- The bargaining has been unduly protracted despite extensive efforts, including mediation, to resolve the difficulties,
- There has been one or more strikes or lockouts; which have been protracted or acrimonious.
- A party has proposed a strike or lockout; which if it were to occur, would be likely to affect the public interest substantially.
If the Authority determines bargaining has concluded it must make a declaration to that effect, which means none of the parties to the bargaining may initiate further bargaining until 60 days after the date on which the declaration was made (unless the parties otherwise agree).
If the Authority determines bargaining has not concluded it may make a recommendation as to the process the parties should follow to resolve their difficulties, in which case none of the parties to the bargaining may make another application for a declaration that bargaining has ended until the process recommended by the Authority has been followed.
If the Authority determines bargaining has not concluded but does not make a recommendation as to the process the parties should follow, none of the parties to the bargaining may make another application for a declaration that bargaining has ended until 60 days after the date on which the declaration was made (unless the parties otherwise agree).
Note that the Authority must dismiss an application for a declaration if it is satisfied that the party seeking the declaration has failed to observe the duty of good faith, but is not precluded from making a declaration where the if it is satisfied the party at fault has rectified the failure.
When bargaining may be initiated
The Act provides that where there is a single collective agreement in force the union and employer parties may initiate bargaining 60 days before the expiry date of the collective agreement (previously a union could initiate 60 days before expiry but the employer could only initiate 40 days prior).
Where there is more than one collective in force that binds one or more unions or one or more employers, or both, the parties will not be able to initiate bargaining before the later of the following dates:
- The date that is 120 days before the date on which the last applicable collective agreement expires, and
- The date that is 60 days before the date on which the first applicable collective agreement expires.
When an employer receives a notice initiating bargaining, the employer must draw the existence and coverage of the bargaining, and the intended parties to it, to the attention of all employees (whether or not members of a union concerned) whose work would be covered by the intended coverage clause if the collective agreement were entered into. Such advice must be given to employees as soon as possible, but no later than:
- 10 days after bargaining is initiated if only one employer is an intended party to the bargaining, or
- 15 days after bargaining is initiated if two or more employers are intended parties to the bargaining.
Employer may opt out of bargaining for a multi-employer collective agreement (MECA)
The Act enables an employer to opt out of bargaining for a MECA, including a claim for an employer to become a subsequent party to an existing MECA.
The employer simply gives an “opt out” notice to all other intended parties to the bargaining within 10 days of receiving the notice of initiation. The notice must be in writing and signed by the employer, or a representative of the employer.
The notice takes effect from the date on which it is given to all other intended parties to the bargaining, at which point the employer ceases to be a party to the bargaining or to have any further obligations in relation to that bargaining. For the avoidance of doubt:
- The employer must opt out separately in relation to each notice received.
- An employer who has opted out may still be included as an intended party in any subsequent notice of initiation.
- Nothing prevents an employer from opting out of bargaining for a collective that is intended to replace a previous collective agreement that covered the employer.
Once an employer has opted out, strike action against that employer would be unlawful because at that point the employees would not be involved in bargaining for a collective agreement.
Continuation of collective agreement after specified expiry date
A collective agreement continues in force after it expires, provided the bargaining was initiated before the expiry date, for the period during which bargaining continues to a maximum of twelve months. This applies whether the bargaining is initiated by the union or the employer.
An employer that has opted out of bargaining to replace a MECA to which it is a party, remains covered by the MECA for a similar period, provided that after the employer’s opt out notice takes effect and before the MECA expires, the employer or the union initiated bargaining to replace the existing MECA.
Note that for the purpose of calculating the period which a collective agreement continues after its specified expiry date, the 60 days period in which bargaining may not be re-initiated under s 50K(3)(b) is to be disregarded if the Authority or the Court determines that bargaining has concluded, or a determination has been successfully challenged or appealed against.