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What will happen if I don’t consult with my employees about organisational change generally?

Frequenty Asked Questions

What will happen if I don’t consult with my employees about organisational change generally?

It depends what the change is, and whether your employees are covered by a modern award or enterprise agreement.

Award/Agreement covered employees:

Non-compliance with a consultation obligation arising under a modern award or enterprise will expose an employer to legal claims from either affected employees, a union representing those employees or the Fair Work Ombudsman.

In 2010 the Federal Court fined QR National $249,600 for its failure to comply with its enterprise agreement obligation to consult with employees about changes to employment arrangements flowing from its plans to privatise some of its operations. The relevant unions brought that proceeding. The evidence showed that the failure to consult did have a material impact on affected employees.

Award/Agreement free employees:

Whilst it is considered best practice to consult with employees about major workplace change, it is not necessarily an obligation set in place by the FW Act for those employees who are award and/or agreement free. Failing to consult with your employees in some situations (e.g. mergers with other companies, or acquisitions of other companies) may be a practical and deliberate necessity, particularly if there is a chance that confidential merger negotiations may be affected, or jeopardised as a result. On the other hand however, and in other less sensitive circumstances, failure to consult with employees may erode the trust which has been established between employer and employee and could have negative impacts on your business. These may include lowered morale, motivation and engagement.

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