Mutual Gains Bargaining

An industrial organisation and employer can agree to enter into mutual gains bargaining to negotiate the terms and conditions of employment.¹ The process can also be referred to as interest-based bargaining or principled negotiation.

The principles of mutual gains bargaining are:

• collaboration;
• identifying and communicating key needs to reach an agreement that maximises common interests and reconciles conflicting interests;
• consensus-seeking negotiations and working together to solve problems;
• reaching an agreement that meets the core needs of the parties, so everyone is satisfied with the content of the agreement;
• an efficient use of time and resources;
• creating, maintaining or strengthening good relationships between the parties; and
• ensuring each party is satisfied their interests have been addressed.²

How do parties notify the Commission of the intention to commence mutual gains bargaining?

An industrial organisation and/or employer may give written notice to the Industrial Relations Commission of New South Wales (Commission) of an intention to commence mutual gains bargaining by filing IRC 6 - Notification of intention to commence mutual gains bargaining through the NSW Online Registry. 

Applicants can file the notification by email, post or in person at the Commission’s Registry if the NSW Online Registry is experiencing technical difficulties.  

A recommendation by the Commission under section 134(2) of the Industrial Relations Act 1996 (NSW) (IR Act) that parties undertake mutual gains bargaining will be considered a notification of intention to commence mutual gains bargaining.³

Who will facilitate mutual gains bargaining?

The parties are not required to use the services of a facilitator during mutual gains bargaining, but the Commission may act as a facilitator to assist the parties in reaching an agreement during mutual gains bargaining.

The parties can also appoint a third party or request the Commission to appoint a person to act as the facilitator if all parties are in agreement.  However, a facilitator will not be appointed unless the person possesses the skills, experience or qualifications prescribed by the regulations, if any.⁴

What happens if an agreement cannot be reached?

The Commission, facilitator or one or both of the parties can declare the mutual gains bargaining unresolved under s 129P of the IR Act. 

If a third party was the facilitator, they must consult the Commission before filing a written declaration that the mutual gains bargaining was unsuccessful.

The person making the declaration must report:

• whether, in their opinion, the parties have bargained in good faith;
• which matters remain in dispute in the negotiations;
• whether, in their opinion, the parties have negotiated in accordance with the principles of mutual gains bargaining; and
• any other issues the person making the declaration considers relevant.⁵

The person making the declaration must file the IRC 6A – Declaration that Mutual Gains Bargaining is Unresolved form through the NSW Online Registry.  The notification may be filed by email, post or in person at the Commission’s Registry if the NSW Online Registry is experiencing technical difficulties.

The declaration will be taken by the Commission to be a notification of an industrial dispute under s 130 of the IR Act.  See ‘Industrial Disputes’ for further details.

What does ‘good faith’ mean?

“Good faith” in bargaining means that parties:

• attend and participate in meetings requested at reasonable times;
• provide other parties, as soon as practicable, with relevant information to make informed contributions to negotiations;
• consider proposals made by other parties and respond to the proposals as soon as practicable with reasons for the responses; or
• refrain from capricious or unfair conduct that undermines other parties or the bargaining.

Acting in good faith does not require a party to make concessions during bargaining or reach an agreement.⁶

^{1 Industrial Relations Act 1996 (NSW) s 129K.; 2 Ibid s 129L.; 3 Ibid s 129N.; 4 Ibid s 129O.; 5 Ibid s 129P.; 6 Ibid s 129M.}