Negotiating AGLs contentious replacement enterprise agreement

The changes are expected to have a profound impact on the productivity and longevity of the Loy Yang A power station and associated coal mine in an increasingly competitive electricity market, which will be to the benefit of both AGL and its workforce.

A battle for the right to manage key assets

AGL engaged MinterEllison to guide it through a lengthy and complex industrial dispute in relation to its Loy Yang A power station and coal mine in the Latrobe Valley in Victoria.

The negotiation: a strategic approach

Together with AGL’s team, MinterEllison developed and implemented a strategy and:

• successfully defended an application by the key union for good faith bargaining orders, strengthening AGL's position in bargaining and revealing the union’s conduct and involvement in the appointment of various "independent" bargaining representatives;
• helped AGL to seek the assistance of the Fair Work Commission to convene conferences in the Commission utilising a section 240 'bargaining dispute' application;
• successfully intervened in three protected action ballot order applications by the union to set an important precedent on the meaning of 'genuinely trying to reach agreement' in s443 of the Fair Work Act 2009;
• intervened in the union’s fourth application for a protected action ballot order, successfully obtaining 7 working days' notice of any industrial action by the key union (rather than the standard 3 working days);
• successfully sought orders to stop unprotected industrial action by the key union;
• successfully applied to terminate the Loy Yang Power Enterprise Agreement 2012 on AGL's behalf;
• intervened in support of an application by the Victorian Minister for Industrial Relations, Natalie Hutchins, who successfully applied for an order terminating all industrial action; and
• supported AGL in relation to the recent vote by employees on the new AGL Loy Yang Enterprise Agreement 2017, which was voted up by more than 90% of the workforce.

The challenges

Industrial disputes involving key essential services have unique challenges including the potential for industrial action which can have significant consequences for the employer and also the public and the prospect of intense political and media scrutiny. The challenges in the context of these negotiations were amplified by concerns about the security of supply in the National Electricity Market, the existence of historical inflexibilities at the site and entrenched union opposition to change.

The outcome

Achieving this landmark industrial change has improved the productivity and longevity of the Loy Yang A power station and associated coal mine in an increasingly competitive electricity market. This has had benefits for the security of electricity supply in Victoria and neighbouring States in an ever changing supply landscape. It is also expected to be positive for the employees, who have now overwhelmingly accepted a modern and flexible enterprise agreement which will serve to increase productivity and preserve employment opportunities at the Loy Yang complex.