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Landmark decision allows university to take ‘nuclear’ option

Melbourne. Melbourne University open day – Melbourne Age. news. Photo by Angela Wylie. August 19 2007. SPECIALX MELBOURN n Financial Review Education Summit. KEYNOTE MINISTERIAL ADDRESS | ??????s position in higher education and key updatesSenator the Hon Simon Birmingham, Minister for EducationWednesday 30th August 2017 AFR photo Louie Douvis .
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SYDNEY, AUSTRALIA – FEBRUARY 13: Aurizon CEO Andrew Harding for half yearly profits report on February 13, 2017 in Sydney, . (Photo by Ben Rushton/Fairfax Media)

Sally McManus , Secretary of the ACTU. Photo Nick Moir 30 March 2017

NEWS: Sydney UNI + Video. Story by Anna Patty. Joellen Riley, the Dean of Law at Sydney University. Photograph by edwina Pickles. Taken on 17th May 2016.

Aspiring students, many with their mums and dads in tow, had travelled from as far away as Dubbo to the University of Sydney Open Day to make some big decisions about the future.

But when they arrived last weekend, they found that many of the lecturers they were relying on for advice had abandoned information booths to join picket lines in protest against the latest university pay offer.

The withdrawal of labour on the biggest day of the university calendar, which attracts more than 30,000 visitors, was part of the traditional argy-bargy of enterprise bargaining.

But the tone of that bargaining shifted dramatically across universities around the country this week after Murdoch University in West gave up on routine industrial tactics of negotiation and bargaining. It took the “nuclear” option.

It applied for – and won – the right to terminate the university’s enterprise agreement with staff. It was a landmark decision for a public institution, and the Fair Work Commission’s judgement has shocked university staff around the country. It is also expected to fuel greater militancy on the part of unions and employers.

Until now, the hardline industrial tactic had been reserved as a last resort within the private sector by businesses including transport company Aurizon, power company AGL and mining companies Peabody Energy and Griffin Coal.

The WA decision has strengthened the bargaining power of university management overnight, something federal Education Minister Simon Birmingham was quick to promote.

He is urging university leaders to follow Murdoch University’s example to modernise work practices and save money while his government cuts their teaching budgets by 4.9 per cent in 2018 and 2019.

The WA decision has opened the way for up to 30 universities across the country to remove union control on management decisions, fixed-term contracts and staff discipline rules.

Birmingham thinks there is scope to lower rates of funding growth for universities based on their ability to absorb costs through more modern and efficient staffing structures. But while he is pushing for open slather, Labor wants new laws to restrict employers from terminating enterprise agreements so easily.

If an enterprise agreement is terminated, workers fall back onto award wages which are often much lower and conditions, won over many years of collective bargaining, can be lost. And Labor and the unions are worried about an increasing number of enterprise agreements which have been terminated in the last two years.

“It can put employees and unions in the position of having to start again and mount arguments for previously hard-fought improvements to their pay and conditions,” Labor’s workplace spokesman Brendan O’Connor says.

“Labor is concerned it has become too easy for employers to undercut wages and conditions through various loopholes in the Fair Work Act, particularly at a time when we are facing record low wages growth.”

Labor says bargaining power is tilted in favour of bosses, and wants to change fair work laws to limit the ability of employers to terminate agreements.

n Council of Trade Unions Secretary Sally McManus says companies need to be stopped from bypassing the normal bargaining process and reaching for the “nuclear option”.

“I think it is a crisis for enterprise bargaining,” she says. “You can no longer bargain fairly.”

“If it’s the case now … that employers can just apply to have agreements cancelled, we are in serious trouble.”

According to the unions, workers could see their pay packets cut by 30 per cent if they are forced onto lower paying awards, despite decades of bargaining for better wages and conditions.

McManus accuses lawyers of hawking the enterprise agreement termination model to employers and accuses Murdoch University of inappropriately spending up to $2.8 million in public money to “get its own way in bargaining”.

Former ACTU assistant secretary Tim Lyons, who now works for think tank Per Capita, says he was shocked to see hardline IR tactics now being used in the public sector.

“This is migration of a tactic from the mining industry which has always been the reservoir of the worst in n industrial relations,” he says.

Lyons believes the Fair Work Commission has set the bar too low in satisfying the legal test set out in section 226 of the Fair Work Act, which says an agreement must be terminated if it is not contrary to the public interest and it is appropriate taking into account all the views and circumstances of employees, unions and employers.

“It’s not really the way enterprise bargaining was supposed to work that essentially the employer can go to a tribunal and wipe out potentially 20 years of the outcomes of collective bargaining. It’s pretty outrageous really,” Lyons says.

But with companies and now universities armed with the “nuclear option”, Lyons says unions need to lift their game in the skills of negotiation and bargaining.

Innes Willox, chief executive of employers’ organisation n Industry Group, says the Fair Work Act provisions that enable the termination of an expired enterprise agreement contain substantial protections, and strike the right balance between the interests of all parties. “It is important that the provisions remain in place,” he says. ‘Old rituals’

Academics at the University of Sydney were divided when it came to supporting the National Tertiary Education Union’s decision to strike on Open Day. One left-wing academic was critical of the union “falling back on old rituals”, including strike action. The academic believes the union would have been better off “handing out leaflets on a day when students are making big decisions about their future”.

The University’s Law School dean, Joellen Riley, who publicly resigned her membership of the NTEU in 2013 over its industrial militancy, is now on the university’s side of the enterprise bargaining table. She describes negotiations over the past six months as constructive and collegial.

“So I was deeply disappointed to see that the NTEU picketed the university on its most important day of the year for showing potential students all the benefits of a Sydney university education,” says Professor Riley, an expert in workplace relations law.

The university’s offer retains conditions in the current agreement, including 50 days of personal leave each year. It also proposes to introduce 22 weeks of paid parental leave for fathers and same-sex partners. The university is offering a 2.1 per cent pay rise, but the union is insisting on 2.4 per cent and plans further strike action next month in its push to get it.

The union’s NSW state secretary Michael Thomson says 2.4 per cent is in line with NSW public sector rates. Union members have also been pointing out that university vice chancellor Michael Spence received a $1.4 million salary package last year including a $200,000 bonus.

While there are some disagreements about the union’s industrial tactics, there is no suggestion so far that Sydney or any other university will follow the Murdoch example. A University of Sydney spokeswoman confirmed the termination option was not being considered.

“It is difficult to say at this point in time, the university will need to read the decision to fully understand the applicability of it to our circumstances,” she says. “Although we are disappointed that industrial action is being taken by the NTEU, it is important to note the effort that all parties have put into the enterprise bargaining process over many months.”

The union’s national president Jeannie Rea says most universities around the country were negotiating enterprise agreements without resorting to Murdoch’s tactics. She says it was “pretty strange for Murdoch to take the step it did” when three other West n universities were close to reaching agreements.

But Murdoch’s decision will give comfort to employers who want a better enterprise agreement. “The significance of this decision is that hopefully it gives employers the courage to push for enterprise agreements that are best practice and not put up with agreements that are outdated,” says Minter Ellison partner Kathy Reid.

Reid, who represented Murdoch University, said most employers were not likely to want to take the drastic step of terminating an enterprise agreement. She rejects union claims that the case has undermined enterprise bargaining.

In Murdoch’s case, she says, the outdated enterprise agreement was holding it back from realising a bright future. “The judgement was recognising that with an outdated enterprise agreement, Murdoch is not going to be able to realise its new strategy and to do all the great things it wants to do.”

The Fair Work Commission agreed to free Murdoch University of the “constraints and impediments” in its enterprise agreement to allow it to be more agile in transforming to meet new challenges in a “changing globally competitive education landscape”.

The university wants to be more flexible in determining the way academic staff split their time between teaching and research among other staff management issues. It is operating at a deficit, putting it under great financial strain.

But contrary to the university’s argument, Commissioner Bruce Williams says in his judgement that termination of the agreement would make it harder for the union and management to reach a future agreement.

“Given the recalcitrance of the university to date, it is likely that termination will simply embolden the university to dig in further and continue to demand acceptance of its clauses without compromise,” he said in his judgement.

The NTEU branch president at Western Sydney University, David Burchell, says enterprise bargaining has been tougher this year than in years gone by. University management has seemed more aggressive and organised at the outset.

“The overall mood in the sector has been different,” he says. “A number of university managements were taking a more aggressive posture.”

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