eba masterclass part iv: drafting an agreement

EBA Masterclass Part IV: Drafting an Agreement

How To Draft The Agreement and Include What You Agreed To

In the previous articles (part one, part two and part three) I provided tips on how to plan for EBA negotiation success, how to ‘set the table’ at the start of the negotiation and control the process, and then how to trade claims and ‘maximise the pie’ when trading claims. This article will give you key insights in how to trade ‘log of claims’ items and ‘maximise the pie’ at the bargaining table.

Once the various claims have been agreed in-principle, you should seek to transform the logs of claims issues into agreement clauses. An introduction of individual clauses towards the end of the negotiation process is a good way of beginning to get some agreement terms agreed to, which reduces the work at the drafting stage of the bargaining process.

In some instances, the drafting of the agreement will require little work, simply changing some numbers or minor wording. In others, significant re-drafting will be required to ensure the inserted wording (such as in a ‘Dispute Settlement Procedure’ or a ‘Classification Review’ clause) significantly changes the understanding and application of the clause.

EBA Hack #1 – Draft a clear and concise agreement

The FW Act enables employers and unions to bargain over a much wider range of matters than that permitted under the previous regime (‘Work Choices’ or Voldemort, to some!) and its restrictive ‘prohibited content’ rules.

In most instances your previous collective agreement will form the template for your proposed agreement. If you do not have a previous agreement you may encounter the union suggesting using the underlying Award and transforming it into a collective agreement format (or even, yuck, including the whole Award as an appendix!). This will usually mean a lengthy, complicated and unwieldy template for an agreement and we strongly advise against such an approach.

Alternatively, the trade union involved may helpfully suggest using a standardised ‘union template’ as the basis for the agreement, in order for them to achieve conformity with other collective agreements they have concluded with other businesses in your industry. To this, we suggest you quietly mutter ‘Timeo Danaos et dona ferentes’ and decline this offered gift, or face an unreasonably employee-friendly and restrictive agreement for years to come as a result.

Regardless of the style or ‘look’ of the new agreement, ensuring wording the clauses in a way that maintains control of how you employ your people, how you achieve flexibility and drive performance on site and, as much as possible, how you discipline and performance manage your employees, will be crucial.

EBA Hack #2 – Check in and get pre-approved suitable clauses provided by us

As battle-hardened bargaining veterans, our Wizards have a number of carefully-worded clauses which we have drafted across a range of industries, which ‘pass muster’ with the Commission.

We can suggest these suitable template clauses, or re-draft something bespoke for your organisation, when you are at this drafting stage to ensure your proposed agreement achieves the above aims as far as possible.

EBA Hack #3 – Key clauses to ensure agreement brevity, clarity and usefulness

Lastly, there are some nifty little hacks you can include in your agreement to ensure your EBA is brief, concise, useful and user-friendly to the employees who it covers (as well as managers and payroll).

a) Award Incorporation clauses (‘Greatest hits’, not ‘one stop shop’)

Some try and draft these agreements to anticipate and cover off every single, miscellaneous entitlement which might conceivably apply in the future life of the agreement. The result is a long, complex and detailed agreement which your staff won’t even attempt to read (and payroll might well mis-interpret (hello wages underpayment claim!). Instead, try and make your EBA a ‘greatest hits’ of the main key enterprise pay and conditions, not a ‘one stop shop’ of anything and everything which might ever apply.

You can do this through an ‘‘Award Incorporation’ clause, which incorporates the underlying modern award, but then clearly says that in the event of “an inconsistency between the agreement and the award, the agreement prevails”. Therefore, if it is, say, a query regarding travel allowance, the travel allowance provided in an agreement prevails over the corresponding award term. If however, the nature of the employee changes over the life of the agreement and they become entitled to something not originally contemplated and for which an agreement is silent (e.g. a confined spaces allowance, or working with heights payment) then, cool, the employee gains an entitlement to this ‘new’ allowance through the Award even though it wasn’t ‘written in’ to the agmt at the time of creation. Simple!

b) Consultation after a change proposal is formed, not during formulation

Many employers think it’s fair and reasonable the obligation to consult (with employees and unions) is triggered when the introduction of major change is “contemplated” as opposed to when a “definite decision” is made (noting the latter is the wording which is contained in the ‘model clause’ in the Fair Work Regulations 2009 (Cth)). This is misconceived in our view.

Conceivably, this means the clause is triggered at a far earlier point on “contemplation” of change, or when possible major change is being canvassed and discussed by the management group, as opposed to when an organisation’s management has actually decided on a plan (and costed same) to introduce change in the future. It is more appropriate that consultation is ‘triggered’ when this “definite decision” to do something (restructure/reduce span of hours/outsource etc.) has been formulated. Therefore, the affected employees and trade union then have something to be consulted about, not a vague, non-specific and uncosted ‘contemplation’ of some change somewhere. We consider such a wide breadth to a consultation obligation to be detrimental to employers, unnecessarily scare and worry employees (who don’t have any comfort about the what and when is being proposed), is generally an unreasonable extension of the ability to make organisational change and should be avoided.

c) Resolving disputes and avoiding staying stuck in the ‘status quo’

Many employers are tempted to agree to dispute resolution clauses which state something like: “Until the dispute is resolved, the status quo antes will prevail… In order to be clear, if the dispute is about a change at work, the status quo represents the position before the implementation of the change”. We strongly recommend against such ‘status quo’ retention in dispute settlement clauses.

The (Labor) Federal Government, in inserting a ‘model clause’ in the Fair Work Regulations 2009 (Cth) which provided for the ability of employers to make necessary changes (barring an employee having “a reasonable concern about an imminent risk to his/her health or safety”) – see suggested clause below – explicitly rejected the concept of a ‘status quo’ remaining in place whilst the parties are ‘in dispute’ under the DSP in the Agreement. The rationale behind this is that employers should be free to make necessary changes to their operations, with the actions capable of being reviewed (but not delayed) by the relevant trade union (through either challenging the consultation engaged in) under the consultation clause) or challenging the decision/change before FWA (through the DSP clause).

We have seen unions use such wide ‘status quo’ to challenge and delay such employer actions of:

  • Necessary restructures;
  • Changes to specific duties / tasks of an employee’s role;
  • Performance Management / Investigations / Dismissals of employees;
  • Introduction of technology.

If such a clause is being pushed for by a trade union (as is often the case), employers should ‘push back’ at the negotiation table for more reasonable clause. We consider a reasonable, and middle ground position for agreements is the ‘model clause’ contained in Regulation 6.01 (Schedule 6.1) of the Fair Work Regulations 2009 (Cth) – it was drafted by the Labor Government and the trade union movement (ACTU) anyway!

 

How did you find this article? What prevented (or assisted) you in getting to an ‘in principle’ agreement? Did you try to negotiate claims and draft the proposed EBA all at once and, if so, how did you find it?

Workplace Wizards partners with employers throughout EBA negotiations to provide you the specialist strategy, legally-compliant documents required by law to be issued through bargaining, tactical tips (relevant to your industry and union organiser), bargain ‘in the room’ with you (if needed) and ensure you are meeting the legally-prescribed procedural and temporal deadlines.  

Contact me on 0458 6444 69 or mark@workplacewizards.com.au for a copy of our ‘EBA Planning for Success Templates’ or to get our specialist help. 

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