Industrial Relations Strategy:

A Local Government Case Study:

Fairfield City Council

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Introductory Comment

They always say time changes things,

but you actually have to change them
yourself.
AndyWarhol,The Philosophy of Andy Warhol

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 Why are we talking to you?

AndrewMcLeod-GroupManager,Corporate
Services

CharlesMcElroy-SeniorIndustrialOfficer
LGNSW

3
 Who we are?
Councilcoversan
areaof102.5km2
andincorporates27
suburbs

42workplaces
acrosstheCity Itisestimated
Over1,000 that206,168
employees peoplelivein
theCityof
Fairfield.
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 So why did we choose
to eat the elephant?
12outoftimeEAs
Unqualifiedcustomandpractices
MoUsignedwithUnions2007
commitmenttoworkplacereform
WorkChoices:Dead,buriedand
cremated
LocalGovernment(Status)Amendment
Act2008

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 So why did we choose to eat the
elephant?.... $$$$$$$$$
$17,800perdayincrementalleave
liabilitywhichwascompounding

250employeeswithpaidoutsickleave
20daysentitlementperyear

Significantdisparityinsalaries&wages
HistoricalRedCircles-<30%butpaid>30%
more.upto$250pwinsomecases

Historicalprovisionsprevented
managementofthesituation

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How on earth did we come to be
here?
Historicalreluctancetoaddresslegacyissues

StrongLaborCouncilandworkingclasscommunity

PreviousPleasesirIwantsomemore?
negotiations

Butwearespecial.
AwardbasedCouncilAgreementsacrossbusinessunits

LackofIndustrialrelationsexpertiseto
taketheissueson

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 What are the rules of our game?
Legislationwilltelluswhattodo?
Local Government Act 1993
Industrial Relations Act 1996

Mytribunalisbetterthanyours
StatevsFederalsystem

Everyonegetsalong...mainly!
Industry Award: Local Government State Award
Fairandreasonableconditions
Consentagreementspreferentially

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 So where are we going?

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 So what did we need .?

1. DetailedAwardandEAanalysis
conducted

Clausebyclause
BusinessUnitbyBusinessUnit
Wishlistvettedagainstobjectives

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 So what do we need .?(cont.)

2. DetailedFinancialAnalysis

i. Maintainingstatusquonotfinancially
viableincrementalleaveliability
ii. Cashreserves
iii. Forecastoffuturefinancialposition
iv. Forecastofoperatingposition
v. NetPresentValueofconditions

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 So what do we need ?(cont.)
3. StateAwardwasmeetingmostofCouncils
needs
4. Effectiveengagement&communication
wouldbecritical
5. Consentbasedenterpriseagreement
preferredoutcome
6. Multiplenegotiationcycleswouldbe
requiredtoachieveouraims

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 How do we herd these cats?
Managing the managers.
1. Real Engagement with Leadership Team
approval of Industrial Objectives
Direction & Enterprise Bargaining Strategy Key

2. StrongGovernanceStructure
SteeringCommittee
WorkingParty
NegotiationTeam

3. CityManagerasinterfacewithMayor&
Councillors

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How do we herd these cats? (cont.)
Winning the hearts and minds of our crew

Acompellingcaseforchange

Openbookaccounting

Tellem,andtellemoften

Consistent,Transparentandclearinourresolve
todo what is necessary to change

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A strategy for negotiations.
Take the teeth out of the Tiger

Identifyindustrialweakpoints

Identifykeyindustrialinfluencers

Undertakecontingencyactionstomitigateimpact

Pre-determineresponsestoindustrialaction

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A strategy for negotiations (cont.) .

EA Strategy developed for each negotiation

Situationanalysis
Objectives
Riskandcontingency
Anticipatedclaimsbasedonindustryintelligence
BestAlternativetoNegotiatedAgreement(BATNA)
developedforeachclaim

Mostimportantly
Ourapproachfornegotiations

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 Approach to negotiations

Balancing the scales

Negotiationtraining
- Management,Staff&Unions
- 3days-offsite
Genuineinterestbased/mutualneeds
bargaining
SelectiveuseofIndependentfacilitator
(CoSolve)

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 Approach to negotiations (cont.)

Shining
light on the shadows
RegularExecutiveLeadership
Teambriefings
StaffConsultations:
- MultipleSurveys
- Weeklystaffemailupdates
- FAQsupdatedweekly
CaptivatePresentations
Headphonespurchasedforstaff
Keymessagingatkeymilestones
PresentationsatToolboxTalksOutdoorstaff

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 Approach to negotiations(cont.)

Shining light on the shadows
Realtimeintranetupdates
FAQs/Agreementsemails
JointcommunicationswithUnion(where
agreed)
Mediareleases(wherenecessary)

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The importance of your
Negotiation Team
Pick your team purposefully
Considerrelationships(management&staff)
Considerobjectivityandconflictsofinterest
Considerconsciousincompetence
BalanceoperationalandIRexpertise

Keep the bear in the cage, unless needed

They will need support LGNSW

-Importanceofawatchingbrief
-Independentdiscussionontactics&strategy
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 The Negotiations we undertook
1. ConcessionalLeave2009accruedleave
liability
2. SeniorManagementTeamconditions2011
3. DomesticWasteCollection2012-continuity
(incentive)payments
4. PaidOutSickLeave2013-$7.2Mliability
NPVof$24M(basedonretirementageof67
years)
5. CorporateEnterpriseAgreement-allowances
andconditions

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 Debugging Negotiation Myths
1. WearegoingtotakeyoutotheCommission

2. Youwilllosealloftheaffectedstaff

3. Letthematurestaffkeeptheirentitlementsuntilretirement

4. Youcantwithdrawyouroffer!

5. Wewillcontinuetobidagainstourselves

6. Itswhatwevegotnowplus

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But we dont agree.
StalematenodealoncorporateEA

DecisiontoterminateEAsandLGNSWinvolvement

Whatnext?

Whocareswhatisthedynamicnow?

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Stick to the strategyalways?
Thinkingahead
actionsandreactions
Facilitationofexternaladvice
Why?When?Who?
Communication:
Purpose,
Controllingcommunications
Whentosaynothing.

This report, by its very length, defends itself against the risk of
being read.
Winston Churchill

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 If you see the bus coming, dont
step off the curb!
1. Wewantedafairandreasonableoutcomeforall
2. Wewerenotgoingtonegotiateagainstourselves
3. Wewerenotgoingtobereactionary,yetwe
understoodandwouldholdtoourBATNA

However, eventually, we had

gone as far as we couldsowe
servednoticeonallexisting
EAs.

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Let the games begin.
Strike

Councilresponse

IRCrole/powers

Notificationofdispute

Continuingnegotiations

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 Application for Award
AwardapplicationfiledbyUSU.
NSWIRCwagefixingprinciplesFairand
reasonableconditionsofemployment
Statusquoandlimitedundertakings
Evidencearbitratedcase
Takingadviceandmakingstrategicdecisions
LGNSWasintervener

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 What did we achieve?
Enterprise Agreements reached for:

a. ConcessionalLeave2009accruedleaveliability
b. SeniorManagementTeam
c. DomesticWasteCollection2012-continuity
(incentive)payments
d. PaidOutSickLeave2013-$7.2MliabilityNPVof
$24M(basedonretirementageof67years)
e. CorporateEnterpriseAgreement-allowancesand
conditions

ExpiredEnterpriseAgreementsconcluded,settlement
reachedonAgreementAllowances&returntoStateAward
conditions

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 What did we learn?
1. Haveanagreedindustrialstrategy

2. Doyourhomework

3. Knowyournumberswhatarethefinancial
implicationsofstatusquonetpresentvalue

4. Clearly,directlyandcontinuallymessagefor
change

5. Playtostrengthsofyourteam

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 What did we learn? (cont.)

6. Ensureaneffectiveworkingrelationshipwith
youradvocate
Give advice but act on instructions
7. Dontbargainagainstyourselfknowyour
BATNA(BestAlternativetoaNegotiated
Agreement)
8. Youdonthavetoreact
9. Thedefinitionofinsanity.
10. Thereisnosuchthingasrapidchange!

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Questions.

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