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Fair Work arbitration on public sector pay likely to benefit union, says academic

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The Fair Work Commission’s (FWC) intervention between the Department of Immigration and Border Protection (DIBP) and the major public sector union on a new pay agreement is likely to benefit the union, says a labour law academic.

The Commission ruled last week that the two parties, the DIBP and the Community and Public Sector Union (CPSU), had 21 days to come up with a solution or its Full Bench would wade into the fray and decide the outcome of the prolonged, tense dispute over pay, working rights and conditions.

The ruling came after the government applied for a temporary suspension of protected industrial action (PIA) at airports, ports and cargo terminals. Instead, the Commission terminated PIA on October 6, triggering supervised negotiations and possible arbitration.

If an agreement cannot be reached by October 26, talks can continue for a further 21 days but both parties would have to apply for this extension to make it happen.

An agreement within the timeframe appears unlikely. The two parties do not even agree on the content of enterprise bargaining agreement that is on the table.

While the Department insists the latest pay offer is between 6.4 per cent and 10.7 per cent for “the majority of staff” the Union has argued that some workers will receive a 4.7 per cent pay rise and end up with less than 1 per cent per year (if this figure is taken from 2014, the start of the dispute).

Professor Ron McCallum, Emeritus Professor in the Faculty of Law of the University of Sydney, said that the threat of arbitration was a victory for the union and something the federal government would probably be unhappy about.

“The Union will do much better [under arbitration] than they were likely to do in bargaining and I think the government is on the back foot,” Professor McCallum said.

“The federal government’s two per cent [pay offer] and the amalgamating of people to create Border Force means there are all sorts of people coming from different wage areas and they all need to be realigned.”

He said the government had not handled the bargaining process very well adding, “They don’t want to be caught up in an arbitration but they obviously weren’t flexible in their bargaining.”

In July 2015, the border control functions of the DIBP and the Australian Customs and Border Protection Service (Customs) were merged into one agency: Australian Border Force, which comes within the DIBP.

It appears that the Union will be the more confident party if arbitration goes ahead. The government pushed to suspend protected industrial action until November 21 and go to a third ballot, while the union wanted to stop strike action and go to arbitration.

But Sydney Law School’s Associate Professor Shae McCrystal said that both sides would be taking a gamble if the decision went to arbitration and this would influence their negotiating position.

“The arbitration is hanging over the heads of the parties,” Dr McCrystal said.

“Whether or not you’re going to see movement comes down to whether or not the parties [think they] will get what they want at arbitration.

“It’s a gamble that the Commission will see the claims the same way that each particular party does in the light of the factors that they have to look at.”

She said both sides would be posturing during “live negotiation” but they could well be making concessions behind the scenes.

The Commission will consider various factors before it reaches its final verdict including: the public interest, the impact on productivity, the stance each side has taken and the conduct of bargaining representatives.

As each arbitration is determined on its own merits, the outcomes of earlier arbitrations are not directly relevant to the dispute. They don’t provide an indication of how the decision will play out.

Despite Immigration Secretary Mike Pezzullo’s warnings to staff that the process could drag on for 18 months Professor McCallum believed the Commission will want to expedite the verdict.

“I think the Commission will be pretty determined to get rid of these things. They have been in the past. Once it goes to arbitration it will put in a timetable for the parties to give evidence. I would have thought that this will be by the 30th of June next year,” he said.

Whatever the verdict, the Commission’s decision will be a strong signal to the union and the government about what to expect should other Commonwealth departments go to arbitration, including on the contentious issue of back pay.

There are still around 100,000 federal public sector workers without an agreement after three years, including staff at the behemoth Department of Human Services, the Taxation Office, Defence, the Bureau of Meteorology, Agriculture and Water Resources and Prime Minister and Cabinet.

Dr McCrystal said she did not think the union would need to push for arbitration if the DIBP result was favourable to them. Likewise, the government could attempt to force arbitration if they were happy with the verdict, for example, by locking out staff, as Qantas did in 2011.

DIBP workers went on strike for 24 hours in August having rejected pay offers in March 2016 and September 2015 by significant margins.

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