Making logical changes to workplace processes should be simple and straight forward. However, a recent decision of the Fair Work Commission (FWC) confirms that employers still need to make sure they follow the additional step of proper employee consultation, or risk a poor outcome in the Commission. This means managers need to ensure employees' feedback has not only been sought, but also be able to demonstrate how employee feedback has influenced the process and been accounted for in the final outcome(s).
The obligation arises from – A requirement to consult employees regarding changes in production, program, organisation or structure is a standard clause in all Awards and Enterprise Agreements. There is also an obligation to consult with (affected) employees where there is a change to rosters or hours. Since almost all employees in most businesses are covered by an Award, the obligation to consult with affected employees where there are (non-trivial) changes in a workplace is almost universal.
As circumstances change, workplace polices and procedures should be updated. In fact, there is an obligation on employers to review and update policies in line with legislative changes, particularly in relation to WHS requirements. However, the FWC decision in AMWU v Opal Packaging confirms that even “administrative” and “logical” changes to workplace policies and procedures need to go through a comprehensive employee consultation process. These obligations do not just occur under Section 49 of the Work Health and Safety Act (2011), which outlines when consultation is required. The obligations also extend to consultation clauses under Awards and, as in the Opal Packaging case, in Enterprise Agreements.
The case was concerned with changes made to the company’s alcohol and other drugs (AOD) policy. Ultimately, those changes were voided by the Commission because of a failure by the business to properly undertake a consultation process. The Commission determined that there was a failure to provide employees and their Union with:
“all ‘relevant information’ which had the knock-on effect of compromising the opportunity of employees to provide their feedback and influence the decision making.”
This decision confirms that the Commission will consider the process that has occurred in the consultation, and that this process needs to be able to demonstrate that a number of things occurred.
What Went Wrong?
In the Opal Packaging case, the Commission was concerned, in part, with the operation of the Model WHS Act, and Sections 48 and 49 in particular [s. 82]. These sections relate to employee consultation, with the Commission finding that “the rationale for the proposed changes were not spelt out” by the employer [s. 72] and that “relevant information” about the policies was not provided in an adequate fashion.
Critically for employers, much of the evidence in the Commission was concentrated on an AOD presentation. The presentation was given to employees, and formed part of the basis for the employers' argument that adequate consultation had occurred. Tellingly, the Commission said “the content of the AOD presentation is more significant for what is not included in the presentation [emphasis added].” [s. 105].
What the employer failed to do was to include “the rationale for each of the proposed changes” [s. 105]. That is, they didn’t provide information about why the policy needed to operate in the way proposed. Importantly, while blanket statements were included about the financial and practical impacts of AOD testing processes, there was no business specific information provided about how the policy would, or should, operate and the impact on that particular business.
Further, associated documentation indicated no evidence of alternative policy approaches being considered, and no evidence of the questions raised by workers being responded to. This meant the Commission found workers were not given a “reasonable opportunity to express their views and contribute to decision making.” [s. 111]
What Does Employee Consultation Need To Look Like?
The Opal Packaging case contains some helpful guidance for employers on what consultation should look like. In short, the Commission determined the consultation was inadequate. Instead, the consultation needs to be clear and comprehensive with a clear feedback option. In short, it needs to be collaborative, not merely communicative.
So, what would the Commission be happy with?
As a starting point, employers need to be able to demonstrate:
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how workers were consulted (the process); and
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what was done to consider, respond to and incorporate the information or feedback provided during that consultation (the impact of the feedback).
Businesses also need to be able to demonstrate that “relevant information” was provided to workers, and that they were genuinely provided with an opportunity to be part of the decision-making process.
Finally, this case demonstrates the critical nature of everyday business collateral like PowerPoint presentations and, particularly, the associated speaking notes or supporting information provided to managers. This becomes particularly important when those presentations relate to policies and procedures, or employee entitlements, and even more critical when changes are being made (particularly any which may not be universally popular). While we often put these things together for visual impact, or to just ‘get the information out there’ the contents may just land you on the wrong side of the Commission, as happened in the Opal Packaging case.
We are always happy to discuss changes to your workplace, and advise on what managers may need to consider in those processes, particularly the aspects which may not be immediately obvious but which can cause significant problems down the track.
Article written by Hicksons’ Partner, Warwick Ryan and Senior Associate, Helen Sexton