The resurgence of enterprise bargaining 07: when strikes strike

Jennifer Wyborn, Belinda Miller
25 Oct 2023
Time to read: 3.5 minutes

Industrial action strikes fear into the heart of many employers approaching enterprise bargaining. However, the whens, whys and hows are often misunderstood. In this article, we will set out what industrial action is, when it can happen, and what employers can do if it happens at their workplace.

In our last article on enterprise bargaining, we focused on options for resolving bargaining disputes, including how to obtain bargaining orders and when an intractable bargaining declaration may be made. Here, we will explore what happens when disputes can't be resolved, and protected industrial action is taken.

Industrial action: protected… unless it isn't

There are two types of industrial action: protected, and not protected. This article mostly focuses on protected industrial action, which is industrial action authorised by the Fair Work Commission (FWC) under the terms of the Fair Work Act 2009 (Cth) (FW Act). Protected industrial action can only be taken in the context of negotiating for a new enterprise agreement, and those participating in it have civil immunity for the protected industrial action taken.

Unprotected industrial action is industrial action which doesn't meet the requirements for protected industrial action (listed below). If employees participate in unprotected action, they are not immune from liability and employers can take disciplinary action against them.

!Tip! Before employers take action in response to industrial action, check whether you are dealing with unprotected or protected action. Taking adverse action against employees for participating in protected industrial action breaches the FW Act.

There are three types of protected industrial action:

  • employee claim action – action taken by employees in support of their claims for a new enterprise agreement;
  • employer response action – action taken by an employer in response to employee claim action; and
  • employee response action – action taken by employees in response to employer response action.

For example, the current industrial action being taken by employees of various public service agencies is employee claim action, while the 2011 Qantas lock-out is one of the best-known examples of employer response action.

Lights, camera, action!

Protected industrial action can take any form which has been approved by employees as part of a protected action ballot (PABO). Common types of employee protected industrial action include:

  • strike action – where employees refuse to attend work or perform any work duties;
  • partial work bans – where employees refuse to perform some, but not all, of their duties, for example, librarians refusing to charge late fees, or shift workers refusing to work overtime;
  • stop work meetings and work stoppages – these are a form of short strike. Unauthorised work meetings and work stoppages may be a form of unprotected industrial action.

Employer response action generally takes the form of a lock-out.

When industrial can strike

Protected industrial action can't just happen. For it to be protected, certain pre-conditions need to be met.

For employee claim action, these include:

Diagram of the various points in enterprise bargaining in which industrial action can arise

Similar processes and preconditions are required for employer or employee response action, though both of those types of action require the other party to have commenced action first.

Industrial action can't happen in relation to a co-operative workplace agreement (a form of agreement being negotiated with the assistance of the FWC) or a greenfields agreement. However, it can occur as part of both single interest and multi-enterprise agreement negotiations, meaning industrial action could technically occur across several organisations simultaneously. If a protected action ballot order (PABO) is sought on behalf of employees across multiple organisations, the FWC must treat this as if a separate PABO application has been made for the employees of each separate workplace. This measure, introduced as part of the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 is a safeguard to ensure smaller, less-unionised workplaces involved in a multi-enterprise agreement don't get caught up in industrial action if this doesn't reflect their specific workforce.

What are you going to do if it happens to you?

An employer is not required to just cop industrial action on the chin. There are both legal and non-legal strategies which an employer can take.

Legally, employers have two main options:

  1. Employer response action – for example, locking out employees. This tactic, made infamous by the 2011 Qantas lock-out, is considered an extreme measure. Employers should carefully consider operational, financial and reputational impacts of employer response action before taking this step.
  2. Apply to the Fair Work Commission to terminate the protected industrial action. The FWC may only terminate if the action:
  • has threatened, is threatening, or would threaten:
    • to endanger the life, personal safety, health or welfare of the population (or a part of it); or
    • to cause significant damage to the Australian economy, or part of it.
  • is protracted and is causing, or is going to cause, significant economic harm to the employer or employees who will be covered by the agreement.

If the FWC agrees to terminate the industrial action, the parties will have a 21 day "post-industrial action negotiating period". If they can't resolve the outstanding matters between them within that period, and the FWC refuses to extend the timeframe, the FWC will make a workplace determination. A workplace determination is an FWC-made agreement, and rarely meets either party's preferred outcomes. This is another reason why parties should be cautious in seeking FWC intervention to terminate industrial action.

Employees are not entitled to payment for periods they are on strike. The situation for partial work bans is more complicated. At a high level, employers should still pay employees for work performed, but may reduce pay by a proportion for partial work bans (eg. if employees will only perform manual tasks with their non-dominant hand). This is an area employers should seek legal advice on.

Strategically, employers faced with industrial action should be well prepared and ensure they have an industrial action management plan in place before commencing bargaining. In addition, we recommend communicating with all employees about the consequences of their action (eg. reduced pay), what the employer will do next if the action doesn't stop, and other ways employees can communicate their concerns and grievances without participating in the industrial action.

Key takeaways for managing and responding to industrial action

Managing industrial action when it occurs can be difficult. The best strategy when faced with the prospect of industrial action is to communicate transparently with both bargaining representatives and the general employee population, including explaining how and why an impasse has been reached and what the employer is doing to resolve it. If an industrial action management plan isn't yet in place, it should be developed as soon as industrial action is threatened.

If industrial action occurs, make sure to follow the procedural requirements in the FW Act and seek legal advice on options and considerations if the action becomes prolonged or particularly damaging, and remember that communication is key throughout any action.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.