The Fair Work Principles ("FWPs") are a procurement policy of the Commonwealth government which requires that government suppliers have a particular form of dispute settlement provision ("DSP") in new enterprise agreements. This requirement does not sit comfortably with the Fair Work Act 2009 and could lead to exposure for government entities and their suppliers.

The Commonwealth government considers that best practice for DSPs includes the capacity for one party to be able to refer a dispute to independent arbitration. The FWPs reinforce that view by requiring that procurement be only from suppliers who have DSPs modelled on that practice in any new enterprise agreements (after 1 January 2010).

The existence of the FWPs should not encourage a view that procurement polices can be introduced without taking into account the Fair Work Act. The general protections provisions of the Fair Work Act, including protection from adverse action based on workplace rights, mean that procurement policies need to be constructed and applied with care whenever they have potential to restrict or alter choices that are protected under the Fair Work Act itself.

This article is available in full at Mondaq.