In response to a long-running pay dispute with its staff, Murdoch University has applied to the Fair Work Commission to terminate their existing agreement, which would allow the university to negotiate lower pay rates and entitlements than staff are currently getting. It’s the first time a university has attempted this tactic, which means employees must bargain for a new agreement from the basis of award conditions, rather than the more generous current agreement provisions. If the application is successful, the university has undertaken to maintain the current conditions for the 3558 academic and administrative employees for six months. After that, staff could be forced to accept serious reductions in pay and conditions.

Negotiations have been going on since May 2016, and in December of last year, following industrial action by staff, the university applied to terminate the existing agreement. The parties are currently before the commission in Perth — the National Tertiary Education Union is currently fighting the application. The evidentiary stage concludes on Friday, when the parties make their final oral submissions.

The number of applications to terminate agreements across industries has exploded in recent years. The FWC annual report for 2015-16 lists that it received 311 applications to terminate nominally expired agreements. This was up from 161 the year before, and 99 the year before that. The commission does not record how many such applications are successful, but the wording of the Fair Work Act makes them difficult to oppose.

The act states the Fair Work Commission must terminate an expired agreement on application from a party to that agreement if the commission is satisfied that it would not be contrary to the public interest, and it considers it appropriate, taking into account the views and circumstances of the parties covered by the agreement and the likely effect the termination would have on each of them. But in the majority of high-profile cases where unions have argued against the termination of an existing agreement on public interest grounds, such arguments have been unsuccessful. This is particularly after the precedent set by the Aurizon case, where the full bench of the FWC found that there was nothing inherently inconsistent with the termination of an expired enterprise agreement and the continuation of collective bargaining in good faith for a new enterprise agreement. 

When Griffin Coal successfully terminated its enterprise agreement last year, employees lost up to $29,000 per year. In approving the termination, the commission considered the flexibility and productivity of the business (which had lost $300 million in the previous five years) as more relevant to public interest considerations than the entitlements of the workforce.  

As University of Sydney law school associate professor Shae McCrystal told Crikey earlier this year — after dairy company Parmalat applied to terminate its agreement with its workers — it isn’t clear “what the commission would view as contrary to the public interest. It is also not clear when the circumstances of the parties would make it inappropriate to terminate.”

“Like many other unions the NTEU believes that the laws in this area are unfair and favour termination at the application of the employer,” Western Australian division secretary for the NTEU Gabe Gooding told Crikey. “Given that this is the first university to attempt to terminate a collective agreement there will be much attention paid to the public interest test and particularly whether it is appropriate for a publicly established and funded university to commit so many resources to pursuing an attack on the working conditions of their employees.”

Gooding was cautious about saying this would set a precedent for other universities.

“Murdoch’s case rests heavily on its allegedly poor financial situation, so that tends to mitigate against it being seen as test case for the higher education sector,” he said.

A Murdoch University spokesperson denied the application was an attack on employee entitlements, saying “at no time during negotiations have we suggested pay cuts to employees”.

“We need an agreement that reduces administrative burden and allows us to manage our business more effectively. Our future success is vital for us and good for the sector,” they said.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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