The Attorney-General’s Department is conducting an inquiry into use of the term good faith in Commonwealth legislation.  The ACTU’s submission to this inquiry is as follows:

  • “Good faith” is a term used in a range of different legislative areas, with no singular meaning or usage of the term.  The AGD’s paper of June 2021 correctly points out:

The concept of good faith is used throughout Commonwealth legislation and delegated legislation, including as a positive standard of conduct, an element of a criminal defence, a basis for excluding liability, or a condition of validity for a transaction.  It also has relevance beyond statutory law in various areas of general law, such as contract law, and in commercial practice.

  • In industrial relations, the term ‘good faith’ is used in legislation in at least three ways:
    • In the Fair Work Act 2009 (Cth) (FW Act), in relation to enterprise bargaining, where there is further guidance as to the meaning of the term.  The good faith bargaining regime could (and needs to) be strengthened; however, this is best achieved by means other than further codification of the existing usage of the term good faith.
    • In the Fair Work (Registered Organisations Act 2009 (Cth) (FWRO Act), in a range of different contexts, and where there is no further elaboration (within the legislation itself) of the meaning of the term.  Within this, the term is used in at least two ways.
      • To provide for positive duties (with both civil and criminal consequences) for office holders; and
      • to validate certain acts.
    • In employment contracts, where an obligation to act in good faith (whether mutual or otherwise), exists either expressly or impliedly.
  • It is already the case that the conduct of unions and their officers is heavily regulated.
  • The common law provides guidance as to the meaning of the term good faith.
  • An across-the-board statutory definition of good faith may provide elusive and may, if imposed, produce unintended consequences due to the different ways in which the term is used across different pieces of legislation;
  • Caution should be had with respect to enacting a statutory definition of good faith in any area of law – for instance, one which captures the conduct of negotiations between dairy farmers and processors – with due regard being paid to whether and how such a definition (and the common law which might build up around it) could impact on the use of the terms in other legislative areas (such as industrial relations and trade union governance).