Incentivising employees not to strike is not good faith bargaining

The right to take protected industrial action is embedded in the bargaining framework of the Fair Work Act 2009 (Cth) (FW Act). Employees have a lawful mechanism to advance their claims and place pressure on an employer to extract concessions in the bargaining process.

The requirements of good faith bargaining set out in the FW Act include refraining from unfair conduct that undermines collective bargaining.

In Transport Workers' Union of Australia v K&S Freighters Pty Ltd (2026), the Fair Work Commission (FWC) was asked to make an order to restrain an employer from offering employees who continued to work during industrial action ‘a customer service continuity payment’, which would be paid on approval of the new enterprise agreement.

The union argued the offer of the payment was unfair conduct in the context of good faith bargaining obligations because it was exclusively available to employees who do not exercise a right to take protected industrial action, a right expressly created and protected by the FW Act.

The union accepted that giving a benefit to employees who do not take protected industrial action after the action has concluded was permissible. That is because their decision to engage in the action is not influenced by the promise of a benefit payable if they do not take industrial action. However, the offer of a financial incentive to employees not to take protected industrial action was unfair and undermined collective bargaining.

The FWC noted the offer of the payment was defensive action by the employer to mitigate the effects of industrial action on its business. However, the FWC concluded the conduct unfairly interfered with the fundamental structures of the bargaining regime and was inconsistent with good faith bargaining requirements.

The FWC observed that protected industrial action is not effective if employees don’t act together. The impact of offering the customer service continuity payment undermined the collectiveness and in turn effectiveness of the protected industrial action.

The FWC ruled that, by offering employees the customer service continuity payment if they continued to work during a period of protected industrial action, the employer had not met the FW Act good faith bargaining requirements. That was because the conduct was unfair and undermined collective bargaining as required by the FW Act.

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