It is estimated that managers spend between 30 to 50 per cent of their time managing workplace conflict, and that senior human resource executives can spend up to 20 per cent of their time in litigation activities related to workplace conflict.

This demonstrates that there is a significant cost associated with internal conflict in organisations.

Conflict can result in decreased productivity, motivation and performance as well as increased staff turnover, absenteeism, work-related stress and subsequent workers’ compensation claims.

Other cost considerations include reduced morale and damage to brand loyalty and the overall image of the business. To avoid such outcomes, employers need to be aware of any dispute resolution procedures that apply to their business. These may be prescribed by awards, agreements or in the form of company policies and/or contracts of employment.

What is dispute resolution?

Dispute resolution refers to one of several processes used to resolve disagreements between parties, including negotiation, mediation, conciliation and arbitration. The process is designed to meet components of each party’s needs and to address their individual interests. In the context of the workplace, parties can be either employees, employers and/or their representatives.

Types of Dispute Resolution

Negotiation: A process where the parties (employers and employees) attempt to resolve a dispute without the assistance of a third party. Parties may choose to represent themselves or use professional negotiators to act on their behalf. Approaches to negotiation can range from extremely facilitative to aggressive depending on the parties involved and the nature of the dispute.

Mediation/conciliation: This involves a neutral third party (the mediator/conciliator) that assists the parties with their discussions. The role of the mediator/conciliator is to generate options around the matters of contention, seek and evaluate alternatives and use these to facilitate agreement on a mutually beneficial outcome.

Arbitration: This is where the parties to a dispute present their cases to a neutral third party who then makes a determination regarding the dispute. The Fair Work Commission (FWC) can resolve a dispute by imposing a binding settlement on the parties. FWC offers voluntary arbitration (if both parties agree to this) as well as the power to order compulsory arbitration if the parties cannot reach agreement.

Dispute resolution in awards and agreements

Awards

The Fair Work Act 2009 requires that all modern awards contain a dispute settlement procedure for settling disagreements between employers and employees about any matters arising under either a modern award or the National Employment Standards. The dispute resolution clause, generally found at Clause 9 of most modern awards, provides a guide to handling such disputes.

The key steps generally prescribed in modern awards, are outlined below. These are a guide only. Provided there is no registered agreement in place, employers must always refer to the award that covers their business and follow the dispute resolution term contained therein. Failure to do so may result in a breach of the award.

• Parties must initially attempt to resolve the dispute at the workplace level by holding discussions between the employee(s) concerned and the relevant supervisor or line manager;
• If the dispute cannot be resolved at this level, parties will escalate the matter to more senior levels of management;
• Continuation of the dispute should result in the matter being referred to the most senior level of management appropriate to deal with such a dispute;
• If the dispute still cannot be resolved by the parties at the workplace level, and all appropriate steps have been adhered to under the dispute resolution clause in the award, then either party may refer the dispute to the FWC for settlement. The application can be lodged by either party. The FWC may exercise any method of dispute resolution permitted under the Act that it considers appropriate to settle the dispute.

Employers and employees may choose to appoint a third party to accompany and/or represent them for the purposes of dispute resolution.

Enterprise agreements

When applying to have an enterprise agreement approved, the FWC must be satisfied that the agreement includes a term that provides a procedure for resolving disputes. The term must outline the procedure for dealing with disputes arising over either the conditions of the agreement or the National Employment Standards.

The procedure must also allow either the FWC, or another independent third party to assist in settling the dispute, as well as allowing employees to be represented, for example by another employee or a union.

The Fair Work Regulations contain a model term for dealing with disputes for enterprise agreements that can be used as a guide to assist employers in constructing a dispute resolution procedure in their agreement. CCI’s Industrial Relations Consultants can assist employers in drafting compliant dispute resolution clauses in agreements.

Other dispute settlement terms

In addition to dispute settlement terms contained in awards and agreements, employers must also follow any dispute resolution procedures contained in contracts of employment and/or company policies.

FAQs

Where do my obligations come from in the event of a dispute arising over award, agreement or NES conditions?

In the event of a dispute arising over terms contained in an agreement, award or the NES employers should check any relevant industrial instrument that applies. The term ‘industrial instrument’ may include:

• A binding award, i.e.:
  1. 1. modern award (e.g. including modern enterprise awards)
     2. award-based transitional instrument (e.g. notional agreement preserving a state award aka ‘NAPSA’ or a pre-reform federal award).
• A binding agreement, i.e.:
  • 1. enterprise agreement
    2. individual agreement-based transitional instrument (e.g. Australian Workplace Agreements ‘AWA’ or Individual Transitional Employment Agreements ‘ITEA’)
    3. collective agreement-based transitional instrument.

Additionally, obligations may be derived from contracts of employment and policies. Where more than one instrument applies, employers must comply with each of those instruments.

What are the features of a fair dispute resolution procedure?

A fair dispute resolution procedure should:

• Have appropriate stages that are simple, easy to follow and encourage the dispute to be resolved at the workplace level
• Be accessible to all employees and employers regardless of location or seniority
• Provide both employers and employees with access to a third party, for representation (i.e. CCIWA or the relevant union)
• Include an independent body that can exercise power if the dispute cannot be resolved at the workplace level.

What are the powers of the Fair Work Commission?

The FWC can assist with a dispute if:

• a modern award or enterprise agreement contains a term for dealing with disputes for enterprise agreements, or
• a modern award or enterprise agreement contains a dispute resolution procedure that allows for intervention on the Commission’s behalf.

The FWC can either mediate or conciliate a dispute. A tribunal can arbitrate the dispute (assuming it cannot be resolved by conciliation or mediation) only where the dispute resolution procedure in an industrial instrument allows for arbitration, or if both parties agree on such a course of action. The FWC can only assist with a dispute if a party to the dispute has made a formal application for assistance. The FWC cannot deal with disputes if it relates to whether an employer has reasonable business grounds to refuse a request by an employee for:

• flexible working arrangements
• an extension of parental leave beyond the initial 12 month period of parental leave.

Notwithstanding this, the FWC may deal with disputes over such issues where an applicable agreement contains provisions for flexible working arrangements and/or parental leave extension that is similar to or the same as that contained in the NES.

Can CCIWA assist with a dispute?

CCIWA’s Industrial Relations Consultants can be engaged to represent employers during dispute resolutions processes. However, CCIWA cannot act as an unbiased independent mediator /conciliator to a dispute as CCIWA represent the employer’s interests.

Can an independent body assist with a dispute?

Independent third parties are permitted to assist with disputes in the following circumstances:

• Where an award or agreement contains a term that allows for a third party to conciliate, mediate or arbitrate a dispute
• Where a contract of employment or written arrangement contains a similar provision to that mentioned above.

As with the FWC, an independent third party can not assist with disputes where an employer has reasonable business grounds to refuse a flexible working arrangement application or extension of unpaid parental leave unless specifically provided for in an agreement.

Members are encouraged to contact CCIWA’s Employee Relations Advice Centre on (08) 9365 7660 or email [email protected] for further information regarding dispute resolution in the workplace.