On 1 September 2017, we provided a case update on the decision of Commissioner Williams to terminate the Murdoch University Enterprise Agreement 2014 (Agreement). Read, Murdoch University Successful in-enterprise Agreement Termination Application.

Since the Murdoch decision was handed down, there has been lively debate around whether the National Tertiary Education Union (NTEU) will appeal and what the Murdoch decision will mean for other universities and the bargaining landscape more generally.

Will there be an appeal?

On 26 September 2017, the date on which the Agreement officially terminated, NTEU General Secretary Grahame McCulloch gave a national address from Murdoch University (Mr McCulloch's discussion of the Murdoch appeal is between 25:26 – 26:52). During the address Mr McCulloch stated that the NTEU had chosen not to appeal for two reasons:

• The prospects of winning an appeal were remote; and
• The resources of the NTEU are scarce and those resources would be better spent negotiating a new agreement and backing a nationwide trade union campaign to 'change the rules'.

How has the Murdoch Decision been used by other Universities?

Prior to the Murdoch decision, very few universities had reached agreement with the NTEU, with many universities being poles apart from the NTEU on key issues.

However, we understand since the Murdoch termination application was lodged, a number of Universities have managed to negotiate mutually suitable deals with the NTEU including the University of Western Australia, Curtin University, Edith Cowan University, Australian National University and the University of Sydney. While some of these deals are 'in principle' and yet to be formalised, Murdoch's application may have assisted Universities to secure concessions in bargaining as the NTEU seeks to mitigate against the risk of another university making an application to terminate their enterprise agreement.

Importantly, while the NTEU has made concessions, it appears it is yet to change its position with respect to two important issues - simplifying misconduct/performance processes and removing limitations on workload allocation.

Have the floodgates opened?

Since the Murdoch decision, commentators have been quick to claim that the 'floodgates' would open and there would be a rush of similar cases. While there is always the prospect of other universities following suit by making application to terminate their enterprise agreement, this would not be any university's prime objective in bargaining. There remains a high threshold to satisfy, namely the Fair Work Commission must be satisfied under section 226 of the Fair Work Act 2009 (Cth) (FW Act) that:

• it is not contrary to the public interest to terminate the agreement; and
• it is appropriate to terminate the agreement taking into account all the circumstances including: 
  • the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and
  • the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.

As a result, the Murdoch decision is unlikely to lead to the 'floodgates' opening. Each case before the Fair Work Commission will still need to be considered on its own merits.

What's Next?

The Murdoch decision is expected to play a role in the industrial relations debate in the lead up to the next Federal election. The Murdoch decision has already been identified as one of the catalysts behind the Australian Council of Trade Unions (ACTU) campaign to 'change the rules'. In particular, the ACTU wants section 225 of the FW Act amended to remove the right of employers to apply to terminate their enterprise agreement. The ACTU has stated:

'The system is broken when agreements previously voted on and approved by both sides can be torn up by the employer to gain a massive advantage in negotiations for a new agreement. The use of this tactic by employers to blackmail workers has increased exponentially and is driving wages down when Australia needs a pay rise'.
Australian Council of Trade Union, (2017), "Bargaining system is broken: Murdoch kicks workers off their agreement"

The position taken by the ACTU is contrary to statements made by the Full Bench in the Aurizon decision in 2013, where it was stated that productive workplaces are not exclusively or primarily achieved by enterprise-level bargaining. According to the Full Bench, the termination of an existing agreement that no longer or never has delivered productivity benefits might better support this goal.

We expect that industrial relations will be a hot topic in next Federal election and something that all employers should keep an eye on. In the meantime, the time is right for universities seeking further flexibility in their labour arrangements to take steps to achieve this.