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Can a lack of consultation unravel a policy?

Consultation when introducing major changes that will have significant effects on your employees is mandatory. Changes to policies are no exception. Employers must undertake a process of consultation (in accordance with any relevant enterprise agreement or Modern Award) for any new policies or substantial amendments to existing policies.


A fulsome consultation process ensures the employees are across the policy and that the employees have a chance to raise their input so that any final policy is workable and appropriate. Failure to do so may lead to the policy being deemed unreasonable.

In the recent case of AWU v Santos Limited; AMWU v Santos Limited, Santos Limited (Santos) tried to introduce an alcohol standardisation policy for FIFO workers to ensure all their sites were aligned under the same policy.

The proposed policy included the following elements:

  1. Remove the sale of full-strength beer.
  2. Reduce the amount of alcohol that could be purchased per day.
  3. Reduce the number of drinks workers could buy in one transaction.
  4. Require alcohol to be consumed only in designated areas like wet mess bars.
  5. Prohibit workers from taking drinks back to their private rooms.

The Unions brought dispute proceedings under the relevant enterprise agreement (EBA) alleging lack of consultation and that the policy was unfair, unreasonable, and not warranted. The Unions also alleged that it would harm mental health because workers used alcohol to bond with colleagues or while talking to loved ones in their private rooms.

The Fair Work Commission determined Santos had failed to comply with its strict consultation obligations under the EBA:

  • While Santos had consulted workers on how to reduce the impacts of the policy changes, they had not consulted on possible ways to avert implementation and the proposal itself, as required by the EBA;
  • Santos consulted only once it had made a definite decision to implement the proposal – the EBA required consultation before final decision made; and
  • Santos had not consulted with the Unions.

Ultimately, Deputy President Anderson determined that the policy was logical and safe as Santos was trying to proactively manage the risks of a high-risk industry – it was a reasonable risk mitigation tool in the circumstances. However, he provided the following recommendations to resolve the consultation dispute:

  • The proposed policy not be implemented until further consultation occurs including discussion and genuine consideration on any proposals advanced by the Unions to avert the need to introduce the Policy or certain limbs of the Policy;
  • If no agreement is reached, Santos can implement policy; and
  • Wet mess infrastructure should be audited to ensure that there is adequate capacity for employees to undertake private communication or one-on-one discussions with loved ones to address mental health concerns.

The Santos decision provides a timely reminder that even the most valid and reasonable policies must be subject to consultation where they constitute a major change, to ensure the policy accounts for employees’ genuine concerns as well.

Key lessons for employers

  • Alcohol and drug policies must be built around risk analysis for employees and business.
  • Many a good idea fails because the employer fails to consult – avoid a dispute claim by complying with the consultation provisions of the relevant industrial instrument!
  • Risk mitigation exercises will be supported by the Fair Work Commission, but the strength of a policy change does not exclude an employer from its consultation obligations.

Written by Nina Hoang

Have a question or need advice?

Our team are here to provide the right advice for your business and workforce. If you have a question or require assistance, please contact Andrew Douglas or Kim McLagan.


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