The Australian Industry Group has called on the Government to review its Fair Work industrial relations regime after a Fair Work Australia decision it says has expanded union workplace entry rights.
But experts say there is still some leeway for businesses and the decision is most relevant for the construction sector and those involved in new negotiations.
In a 2-1 ruling, the Fair Work Australia full bench yesterday rejected a bid by the Australian Industry Group to overturn an agreement by a company called ADJ Contracting and Victoria’s Electrical Trades Union. A related case between the CFMEU and Moyle Bendale Timber this week also reaffirmed broader entry rights for unions.
The decision reaffirms the legality of a number of clauses in a pattern agreement for up to 10,000 of the state’s electricians. The agreement means contractors will be paid the same as employees, unions will have enhanced rights of entries and employers will be required to promote union membership.
“There was an argument from the employer and ultimately the employer association that the right of entry right in that agreement was not permissible because it went further than the [Fair Work] Act allowed,” Allens Arthur Robinson partner Simon Dewberry says.
He says the ruling would have the biggest impact on the construction industry, and companies involved in negotiation or soon to start, although Dewberry says a further challenge to the ruling is possible.
The Australian Industry Group has slammed the decision, calling for changes to Fair Work and warning that for the construction industry, “what these clauses mean in reality is a return to the damaging practices of the past whereby unions had undue control over building sites.”
“This includes stopping contractors coming onto a site unless they have an enterprise agreement with the relevant union,” AIG chief Heather Ridout says.
She also called for the state and federal Governments to use their purchasing powers to ensure their contracts “promote productivity growth.”
In its ruling, FWA yesterday said that the agreement was legal as it met the Fair Work Act’s requirement to have a dispute resolution clause within all agreements, and the AIG concerns that this dispute resolution clause expanded union entry rights were not valid.
“[The clause] makes it clear that the entry to enable the employee to be represented cannot be used for any other purpose. It can be invoked only when a dispute has arisen and then only in respect of an employee who has asked the representative to become involved. For these reasons we agree with Her Honour that the clause is not an unlawful term and accordingly this ground of appeal should be dismissed.”
Hall & Wilcox lawyers partner Karl Rozenbergs says the ruling means that the “unions have a clause which is lawful and they will seek to put the clause in future agreements.”
“The thing for employers is that the unions will be putting these clauses about the right to enter going forward in negotiations,” Rozenbergs says.
While the ruling is a win for unions, Rozenbergs says many of the practises under discussion already occur, particularly when companies have a good relationship with the relevant union, and companies have some leeway in regards to negotiating how much notice union officials need to give before they enter a site and what issues it wants the union to become involved in.
In its original submission, AIG raised concerns that employers were required to pass on to unions details on their contractors and labour hire companies, saying it could lead to circumstances where the union pressures an employer to only deal with contractors and labour hire firms that have arrangements with the union.
It also argued against a clause that “union membership shall be promoted by the employer to all prospective and current employees.”
The Victorian secretary of the Electric Trades Union, Dean Mighell, told The Australian that the AIG wanted to “open the door for big business to use contractors to avoid paying superannuation, penalty rates, public holidays and annual leave.”
The decision “curtails the exploitation of workers by contracts and upholds the right of employees to be represented by unions,” Mighell told the paper.
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