The introduction of good faith bargaining in Western Australia: Policy origins and implications for collective bargaining

The introduction of good faith bargaining inThe introduction of good faith bargaining in Western Australia: Policy origins and implications for collective bargaining

Michael Gillan and Donella Caspersz
University of Western Australia


The Australian Industrial Relations Commission ruled in 2003 that there was no legal duty on parties to bargain in ‘good faith’. In Western Australia, the Gallop Labor Government has introduced good faith bargaining provisions as a redress available when a party is considered to be negotiating in ‘bad faith’. What does this rhetoric mean? The aim of this paper is to unravel what is meant by ‘good faith bargaining’ and to consider how this provision has been used within Western Australian industrial relations thus far.

The decentralisation of the Australian industrial relations system during the 1990s was characterised by
a historic shift towards enterprise level bargaining (Deery et al. 2001: 247-253). The consequences of
enterprise bargaining in terms of effi ciency and equity outcomes have been widely discussed and analysed (Burgess and Macdonald, 2003). However, the implications of decentralised bargaining for negotiation processes and the strategic response of relevant actors have been comparatively under-explored (Fells, 1998a). In particular, the expansion of direct negotiations betweens parties at workplace level over wages and conditions of employment have led to concerns over bargaining “asymmetry” between actors (Fells, 1998b) and the possibility that bargaining relationships can be re-oriented or terminated through a process of excluding unions or shifting towards individualised arrangements (Australian Workplace Agreements) under the federal Workplace Relations Act (1996) (McCallum, 2002; Peetz 2002). In relation to these concerns and with a view to the future role of collective bargaining in the overall agreement making regime, the Australian Labor Party and sections of the trade union movement have explored and promoted the idea of “good faith bargaining” as a necessary adaptation (rather than a rejection) of enterprise level bargaining. The notion of facilitating “good faith” in negotiations and in employment relations also matches with the general ideological sway of ‘third way’ perspectives for centre left parties that now embrace key aspects of neo-liberal agendas for promoting labour market fl exibility and enterprise competitiveness while, at the same time, promoting a commitment to cooperative ‘social partnership’ relationships (Howell, 2004).

This paper provides an overview of the principle of ‘good faith bargaining’ (GFB) and notes its international origins within North America’s relatively decentralised model of industrial relations and its recent emergence as a policy innovation in New Zealand. In Australia, GFB has been a recurrent, if marginalised, feature of industrial relations and the paper fi rstly outlines the history of the principle within the federal arena. It then focuses on the recent introduction of the “good faith” principle in Western Australia as a central component of the industrial relations reform agenda of the Gallop Labor government. As the fi rst state to introduce “good faith” provisions that are widely applicable (Toten, 2002) and in light of federal Labor’s support for similar provisions (Skulley, 2003), the West Australian ‘case’ provides for a preliminary examination of the implications of such measures and the response of employer organisations and unions to this policy innovation. It is argued, however, that to date the ‘good faith’ provisions in Western Australia have not been widely utilised and where they have been brought into effect, their scope has been relatively circumscribed.

The introduction of good faith bargaining in Western Australia: Policy origins and implications for collective bargaining

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