Managing people

Workplace change: why you must consult employees

It’s important to consult employees about major workplace changes that will impact them. Learn more about consultation here.

7 September 2021

 

A ‘standard’ clause in modern awards requires employers to consult with employees when a definite decision has been made regarding major workplace change, such as the introduction of new technology.  

Such enforced consultation is seen by tribunals as beneficial in avoiding potential industrial disputes.  

Provisions aimed at providing existing employees with some protection against the effect of changes on their employment, or some notification and consultation in the event that such changes are contemplated, are appropriate to be included in the terms and conditions of employment. See Federated Clerks’ Union of Australia v Victorian Employers’ Federation (1984) HCA 53

Modern awards 

The ‘standard’ provision relating to consultation regarding major workplace change in modern awards requires an employer to notify affected employees, and discuss the changes, where the change is likely to have ‘significant effects’ on employees.  

‘Significant effects’ include: 

  • termination of employment 
  • major changes in the composition, operation, or size of the employer’s workforce or in the skills required 
  • the elimination or diminution of job opportunities, promotion opportunities, or job tenure 
  • the alteration of job hours of work 
  • the need for retraining or transfer of employees to other work or locations, and  
  • the restructuring of jobs. 

Consultation provisions must be taken seriously. There is a difference between saying ‘this is what is going to be done’ and saying to that person ‘I’m thinking of doing this; what have you got to say about that?’ Only in the latter case is there ‘consultation’.

Employers are not bound to follow employees’ suggestions but they are nevertheless obliged to give employees a real opportunity to provide them. This means employers should not make assumptions about the outcomes of consultation. See Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited [2010] FCA 591. In this case, the employer was fined $660,000 (reduced to $384,000 on appeal), because the employer had merely ‘dictated… the proposal’ and ‘failed utterly to consult with [its] workers'. 

Enterprise agreements 

An enterprise agreement must contain a consultation term, being a term that requires an employer to consult employees about major workplace changes that are likely to have a significant effect on them. The clause must also allow for employees to be represented for the purposes of that consultation. The clause also requires consultation about changes to regular rosters or ordinary hours of work. 

If an enterprise agreement does not include a consultation term (or the consultation term does not comply with the provisions of the FWAct), the model consultation term is taken to be a term of the agreement. 

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