What a large employer can teach us about workplace bargaining in the post-pandemic world

While bargaining was already slowing down in 2019, 2020 to 2021 saw employers and employees alike go into deep freeze.

Now, industrial and workplace relations at the beginning of 2023 are like a firecracker.

The Federal Government’s Fair Work Legislation (Secure Jobs, Better Pay) Act 2022 will likely see a rapid increase in bargaining in 2023, but for many employers, the prospect of entering into bargaining as we emerged from the pandemic was a fairly haunting thought.

I took this opportunity to sit down with Divya Sanchez, Employee & Industrial Relations Manager at GenesisCare – the world’s largest provider of cancer care in Australia, with operations in the United States, United Kingdom and Spain – to discuss the important perspectives on workplace relations.

 Michal: Hi Divya, how are you doing?

Divya: Hi Michal, as you know – I have been less busy!

Michal: The preceding two years undoubtedly led to significant changes socially, economically, and of course, within the workplace. Employers and employees alike have felt the impacts of these changes which inevitably arose as a result of the ‘pandemic era’. These effects are still being felt in full force, as workplaces shift away from ‘working from home’ protocols to a ‘COVID normal’ return to work.

Divya: Due to the nature of our operations, we had a hybrid model in which non-client facing roles which did not require location-based working could operate from home or a different location. However, there are a large number of roles that we could not modify and chief amongst those are radiation therapists and physicists, nurses and other front-line staff who treat our very important patients.

Michal: The challenge must have been immense, given the complicated nature of patient immunocompromised conditions.

Divya: COVID-19 was complicated, and still is and will continue to be for some time.

Michal: But of course, there were other day-to-day challenges, including workplace and industrial relations.

Divya: Indeed. We had to do as much as we could but given limitations of public health orders and Work Health Safety legislation in each state, several items went onto the backburner as we dealt with more immediate challenges. We were conscious these challenges would not go away beyond the short term and if it was left any longer would intensify. So, when 2022 arrived it was back on the horse.

Michal: We had seen a hastening decline in bargaining activity across industries in many sectors, including health and care sectors across 2019 but we have seen this activity begin to ramp up again in 2022. GenesisCare was no different.

Divya: That’s right. We embarked upon a bargaining project across several states, including some for the first time. We knew it was ambitious, but we were listening to our people and responding to their wishes. We know they had been through a challenging time during the pandemic, and that there were some issues relating to their terms and conditions that were firmly in the front of their minds. In some states the Health Services Union and Nurses Union were forward in commencing bargaining and in others we wanted to get bargaining started again because it was the right thing to do.

Michal: Much has been written across all industries about the state of the labour market in 2021 and 2022. What has been GenesisCare’s experience?

Divya: We have been no different in facing increased competition. We are in a slightly different position as a larger employer, but there has been intrastate and interstate competition as well as competition from further afield. This was another motivating factor for our bargaining project.

Michal: Tell me, as opposed to the period before the pandemic, what has characterised bargaining in a post pandemic world?

Divya: The broader economy is stuck in a broad-based increased inflationary cycle. This, and a range of other factors, have led to pent-up demand for wage increases, and a sense that business-as-usual terms and conditions will no longer suit circumstances for employers and employees. However, notwithstanding some vigorous and robust discussion at the bargaining table with multiple unions and employee bargaining representatives, the fundamentals remain the same. Much of the discussion relates to the percentage rate of wage increase, meeting the changes to the National Employment Standards and changes to underlying modern awards.

Michal: This is certainly no different to our experience in direct bargaining for clients in the broader care and health economy, in addition to retail, manufacturing, resources, construction and education sectors. There is a sense that as much as things change, they can remain the same. But that, in our experience, tends to overlook the complexity in the bargaining system and the highly technical nature of bargaining that puts many an employer off attempting to bargain in the first place.

Divya: It is certainly more technical to bargain in 2022 than it was in 2018, and it seems that there are more layers being added with the Federal Government’s Secure Jobs, Better Pay Act.

Michal: I want to come back to reform in a moment. We are seeing a few common themes from the Health Services Union and Nurses Union. External to bargaining, there is a continued focus on rapid antigen testing. Some are calling for payment for testing time where certain preconditions are met. In bargaining, this is addressing a perception that there is a casualised workforce or a workforce with insecure work, increasing or maintaining staffing levels in certain environments and other focuses on fatigue management. This has certainly been prevalent in aged care in particular but is certainly a regular theme in private and public hospitals. How has your experience been in bargaining?

Divya: We have seen an increased willingness for unions to use existing powers to make applications for protected action ballot orders, and good faith bargaining orders. These have often been telegraphed at the earliest opportunity where there is a significant divergence of views on the wages position in logs of claims.

Michal: In some respects, it is gratifying that these matters have not become more technical as a result of reform to the Fair Work Act.

Divya: Indeed. We know where we are at with these matters.

Michal: Okay, onto reform. What are some of the key challenges you see in the Secure jobs, Better Pay Act?

Divya: We should, and I say should, have bargaining completed in a number of locations by the time some of these changes can significantly impact upon us, but we see more bargaining happening in 2023 because:

• employee bargaining representatives are able to effectively commence bargaining once an agreement has passed its nominal expiry date; and
• bargaining for a new single enterprise agreement will be a mechanism by which employers can avoid being compelled to bargain for, or “roped into” multi-enterprise agreements.

Michal: This will definitely be a challenge for employers in the health and care sector who do not currently have enterprise agreements or have parts of their business without enterprise agreements. For these employers it is a matter of when not if bargaining will commence. There are other changes at the approval stage which could have an impact upon business engaging with the Fair Work Commission at the approval stage:

• If the Fair Work Commission has a concern that an enterprise agreement does not meet the Better Off Overall Test (BOOT), the Commission may amend the agreement if it considers an amendment is necessary to address the concern (rather than seeking undertakings). While the views of the parties must be sought before such an amendment is made, this could conceivably result in the Commission including terms in an agreement that do not reflect those agreed by the parties.
• An application may be made during the life of an agreement for the Commission to re-assess the BOOT where there are particular changes to the type of employees, work or working arrangements that were not considered by the Commission for the purpose of the BOOT at the time the agreement was approved. The Commission can accept undertakings or amend the agreement if it considers it necessary following consultation with the parties. This derogates from one of the key benefits of having an in-term enterprise agreement – certainty with respect to terms and conditions.

Divya: I was not aware of this! What fun awaits us! Do you think we’ll see more applications to terminate enterprise agreements?

Michal: I have certainly seen an uptick in clients making these types of applications. I have had three to four in the past two years after having zero in the earlier four years. These are usually highly contested applications where it is a union agreement, but density is lower than 25 per cent of a workforce. Other changes that are coming are to introduce “same job, same pay legislation” requiring workers employed through labour hire companies to receive no less pay than workers employed directly.

Divya: Thankfully, this will not affect us too much as we engage very few labour hire staff as part of the workforce mix.

Michal: There is final new item I want to touch on – intractable bargaining orders. The Fair Work Commission will be empowered to deal with ‘intractable bargaining’ disputes by arbitrating matters that have not been agreed in bargaining. This will operate in a similar manner to current ‘workplace determinations’ but will be more accessible. This option will not be available:

• unless the parties have first unsuccessfully attempted to resolve the disputes, with the help of the FWC, through section 240 of the Act; or
• for multi-employer agreements unless a supported bargaining authorisation is in operation.

We are hopeful that this will be a net positive for employers and employees alike. I know there are employers who see this as an easy way for a union to advance claims the employer has expressly no interest in adopting, but there are others like Sydney Trains that would see this as a very welcome change where protected industrial action is causing damage to operations.

Divya: We have not yet seen a situation with intractable bargaining, but we can foresee bargaining becoming more easily entrenched in their views if arbitration is available to resolve it.

Michal: Like so many other reform moments in our space including in 2009 with the advent of the Fair Work Act, or earlier with Work Choices, there is no way to find out other than to get stuck in and participate in workplace relations. I am looking forward to seeing how 2023 plays out.

Divya: It will be an exciting year.

Given the magnitude of these changes, we can only expect that the coming year will be an adjustment period for all businesses, irrespective of size.

Whilst some industries may see more intense changes than others, all businesses will inevitably feel the impact. The health care industry has faced enormous pressures over the last few years, so we encourage all to seek support whilst navigating these changes.

Have a question about how the Federal Government’s Fair Work Legislation (Secure Jobs, Better Pay) Act 2022, or enterprise bargaining and how it will impact your organisation? Contact the team at FCB Workplace Law.

If this information has raised any further questions, or you have another matter you need advice on, please reach out to the team at FCB for a confidential discussion. You can call us on 02 9922 5188 or email us at info@fcbgroup.com.au .

About our author

Michal Roucek is a Partner and Solicitor at Citation Legal and is based in Sydney and has also worked in London. Since 2009, he has worked exclusively in workplace and industrial relations law and is known as a safe pair of hands in dealing with complex workplace disputes and strategic litigation in the full suite of employment, workplace relations, industrial relations and executive level. Michal is an interest-based advocate recognised by both the business and union-employee communities as a conciliatory and innovative problem solver. He is focussed on outcomes and solutions for clients.