FWC Full Bench: FWC shouldn’t hold back arbitrating intractable bargaining disputes

Where a process of collective bargaining is not likely to successfully result in an enterprise agreement being made, or the cost and inconvenience being caused by bargaining is too great, the Fair Work Act 2009 (Cth) (FW Act) authorises the Fair Work Commission (FWC) to issue an intractable bargaining declaration. This allows the FWC, following any post-declaration negotiation period, to compulsorily arbitrate any matters on which agreement had not been reached by the parties.

What are the compulsory arbitration powers?

Compulsory arbitration powers were introduced in 2023 to deal with circumstances in which employers or unions with significant bargaining power can refuse to make concessions during bargaining (surface bargaining). By allowing the FWC to resolve intractable disputes through arbitration, where there is no reasonable prospect of agreement being reached, there is a strong incentive for good-faith negotiations, reducing the time for enterprise agreements to be finalised and allowing for quicker resolution of intractable disputes.

When may the FWC make an intractable bargaining declaration?

After the end of the minimum bargaining period, the FWC may make an intractable bargaining declaration if it is satisfied that:

the FWC has dealt with the dispute about the agreement and the applicant participated in the FWC’s processes to deal with the dispute;
there is no reasonable prospect of agreement being reached if the FWC does not make the declaration; and
it is reasonable in all the circumstances to make the declaration, taking into account the views of all the bargaining representatives for the agreement.

Recent FWC Full Bench ruling on the making of an intractable bargaining declaration

In Association of Professional Engineers, Scientists and Managers Australia (APESMA) v Ulan West Operations Pty Ltd (2025), the FWC Full Bench overturned on appeal a decision by the FWC that, according to the Full Bench, displayed undue reticence in finding that it was reasonable in all the circumstances to make an intractable bargaining declaration.

The Full Bench observed the FWC should not adopt an attitude of reluctance when considering whether it is reasonable to make a declaration. The power to issue an intractable bargaining declaration is not opposed to encouraging and enabling enterprise bargaining; rather it is intended to foster and support collective bargaining.

The Full Bench ruled that the question of reasonableness would provide scope for the FWC to, for example, consider the dispute in the context of the whole of the relationship of the parties, the history of the bargaining, the conduct of the parties, the prevailing economic conditions and the bargaining environment.

In considering the history of the bargaining and the conduct of the parties, the FWC might conclude it is not reasonable to make an intractable bargaining declaration if the applicant bargaining representative has behaved unreasonably in bargaining. If an applicant for an intractable bargaining declaration had not participated genuinely or constructively in bargaining, that might support a finding that it was not reasonable to make an intractable bargaining declaration in all the circumstances.

Another factor going to reasonableness is that the prevailing economic conditions, and the bargaining environment, are the reasons bargaining had become intractable related to the uncertainty of the economic circumstances affecting the employer or the relationship with other bargaining processes.

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