A clause requiring consultation prior to implementing major change is included in all local government enterprise agreements. While consultation obligations may seem simple on their face, there is often a lack of clarity and difference of opinion about what they actually require in practice.

Last year the Fair Work Commission provided some useful clarity on this point in a matter involving Boroondara City Council, and The Australian Services Union (Union) which Maddocks represented Council.

Background

The case emerged from major changes to both the funding model and scope of aged care services delivered under the Commonwealth Home Support Program that will begin on 1 July 2024.

Like many other local councils, Council needed to consider whether this new operating environment meant it could no longer continue to deliver such services in the same way as it had in the past. It developed a proposal to exit the provision of some in-home aged care support services, resulting in the possible redundancy of some staff positions.

During the consultation process, a dispute arose with the Union as to what was required in order for Council to meet its consultation obligations under its enterprise agreement.

Usefully, in resolving this dispute, the Commission provided guidance on the following questions:

1. Where an Agreement requires a council to provide ‘all relevant information about the proposed change’, what does this actually mean in practice? What must be provided?
2. Is a council required to provide responses received from affected employees and their representatives during the consultation process to the ultimate decision maker (in this case, the Councillors)?

What information needs to be provided?

Consistent with most local government enterprise agreements, Council’s enterprise agreement required it to, among other things, ‘provide in writing…all relevant information about the changes, including the nature of the changes proposed, the expected effects of the changes including on employees and any other matters likely to affect employees’ to the employees concerned and their representatives (except for confidential information, the disclosure of which would be contrary to Council’s interests).

Information, not documents

Notably, the Commission confirmed the obligation to provide ‘all relevant information’ meant just that – information. Council was not required to provide all relevant documents. The obligation was far narrower and only required Council to provide information relevant to the proposed change.

Information must exist

The Commission also found that the information about the changes must exist and be in the possession or knowledge of the council – there is no requirement for the council to create or go searching for information, although the requirement to respond promptly to matters raised during discussions, might indeed result in council creating the information.

Which information is relevant?

The fundamental purpose of providing this information was to ensure affected employees could engage in genuine discussions with Council about possible alternatives to the proposed changes. It did not impose an obligation on Council to ‘undertake an exercise of discovery’ for information that was not already in its possession or knowledge, merely on the basis that such information would enable an affected employee to ‘mount a case’ against the workplace plans.

Applying these principles to the documents requested from Boroondara City Council by the Union, the Commission found the following information had to be provided, with the exception of confidential information, the disclosure of which would be contrary to Council’s interests:

• information about the underpinning rationale for the proposal
• information supporting an alternative action to the one proposed (although this is not required to be sought out or created if it doesn’t exist)
• information given to clients about the change (although not personal information)
• information provided to Councillors (but not confidential information)
• information provided by Council to other parties (in this case the Federal Government) in connection with the proposed changes
• information about client numbers (existing and projected)
• information about the estimated ongoing annual subsidy that Council would be required to provide to maintain the existing services
• information contained in any external consultancy reports (i.e. a summary of recommendations)
• information about any skill-based assessments or evaluation of Council’s capacity to continue to provide the services, and
• information about the cost of proceeding with the proposed changes or expected savings (total costing of the proposal and redundancies, but not itemised costings)

What about confidential information?

The Commission confirmed there was no obligation on Council to disclose confidential information or information where the disclosure would be contrary to its interests.

The Commission did, however, caution against taking a broad brush approach to withholding entire documents or categories of information on the basis that some of the information is confidential. The Commission suggested information may be synthesised or summarised or redacted to protect its confidentiality so at least some of the information can be provided.

Who needs to receive employee/union feedback?

The case also found unless feedback advanced by affected employees (and their representatives) that could influence the decision was communicated to the decision maker (in this case, the Councillors), the consultation clause would be futile and provide ‘no right at all’ for those impacted.

However, the Commission said only those matters which involved advocating for an alternative proposal or changes to the timing or nature of the proposal which ‘rationally have the capacity to influence the decision’ need to be made known to the decision maker. Even then, it may have been appropriate for Council to provide the Councillors with an accurate summary of the employees’ feedback rather than the responses verbatim.

While the Union contended that consultation must occur directly between the decision maker and the affected employees and their representatives, this proposition was rejected. There is no obligation requiring direct consultation between the employees/their representatives and the decision maker, such as by way of an open forum discussion in which affected employees can canvas their views. That responsibility falls to senior staff within Council. Those staff do have a responsibility to ensure a full and accurate summary of the matters raised (limited as discussed above) is provided to Councillors who are the ultimate decision makers.

Key takeaways

• Read your own consultation clause forensically, as early as possible before preparing for a potential major change in workplace arrangements. All consultation clauses are different.
• Make sure you have a clear, coherent rationale for why you are proposing the major change. This is important because the underlying rationale is key to understanding which information is relevant and must be disclosed.
• Before providing information to impacted employees or their union, consider – what is the best format to provide this? Do I need to provide the full document? Or can I synthesise the relevant information?
• Where a relevant document appears confidential, consider whether all information is confidential or if some could be provided.
• When preparing a brief for the decision maker, ensure that any feedback received from employees and/or their union that could affect the decision is provided, either in full or in summary form.
• Always use terms such as “proposal”, “proposed decision”, "provisional decision”, or “preliminary decision subject to consultation” in all documents (including internal emails) until consultation is complete. Until then, never refer to a “decision” in final or concluded terms.

If you have further questions about enterprise agreements or other employment laws in local government, please contact our Partners Lindy Richardson or Ross Jackson from our Employment, Safety & People Team.