Telstra’s IR dogfight has lessons for all employers

If you thought the new Labor Government meant that workplace relations were going to get simpler, think again. PETER VITALE reports on the IR wrangling that is testing these boundaries.

By Peter Vitale

IR law challenges

If you thought the new Labor Government meant that workplace relations were going to get simpler, think again. We report on the IR wrangling that is testing these boundaries.

In recent weeks, Telstra’s post-WorkChoices strategy has hit the headlines in a big way. What lessons can small and medium business learn from the stance being taken by Telstra in one corner and the ACTU in the other?

The developing saga originated with Telstra’s offer of Australian Workplace Agreements after the election of the Rudd Labor Government in late 2007.

Already with a large number of AWAs in place, Telstra sought to take advantage of the now closed window before the new Government could implement its policy of abolishing AWAs.

The company has an agreement with the unions that covers employees other than those who have an AWA which passed its nominal expiry date earlier this month. The unions, supported by the ACTU, are campaigning strongly to do a new collective deal that excludes AWAs. The push for AWAs led to a complaint to the workplace Ombudsman, which was subsequently dismissed, asserting that Telstra was applying duress to try and get employees to sign new AWAs.

The unions then attempted to lock Telstra into collective bargaining through a “constructive relationship agreement” at the same time as trying to negotiate the new union collective agreement. Telstra refused to enter the agreement in July and broke off negotiations entirely, and the legal bun fight began in earnest. It subsequently advised sections of the workforce that it intended to try and negotiate a non-union collective agreement.

The unions see these negotiations as a big test of Labor’s transitional laws, and Telstra is seeking to validate its individual bargaining strategy with its employees in the new environment. Neither is willing to give ground easily. In an unusual move, the Minister for Workplace Relations, Julia Gillard, has expressed her support for the unions’ position.

Telstra next accused the ACTU of lying about the company’s attitude to the proposed constructive relationship agreement. This was later backed up by legal action in the Federal Court seeking injunctions to prevent the unions continuing with the allegedly offending communications to employees.

In a portent of what’s to come when the Rudd Government introduces its “good faith” bargaining rules, the unions made an application to the Australian Industrial Relations Commission seeking an order for Telstra’s employees to take part in a secret ballot to determine what form of agreement they preferred.

Such a ballot would not have bound Telstra, but a vote for the unions would have given their campaign more steam. Telstra did not send any representation to a subsequent mediation called by the AIRC, and its further application to force Telstra to mediate, saying the current union agreement obliged Telstra to bargain in good faith. The union’s ballot application failed with a ruling by the AIRC at an urgent weekend hearing that the current legislation did not give it the power to intervene in the dispute.

In the meantime Telstra’s injunction application was rejected by the Federal Court.

The fight now moves to the first employee vote on Telstra’s proposed non-union agreement, which is due this week.

The lessons for employers:

  • If you thought the Rudd Government brought a promise of simpler industrial relations, think again.
  • The union movement has clearly flagged its intent to exploit “good faith bargaining” rules to the full. Employers could find themselves entangled in litigation just to determine the rules of engagement.
  • This is likely to become a key forum for disputes of all kinds to be brought to the yet-to-be-created Fair Work Australia.



Peter Vitale is the principal of CCI Victoria Legal



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