|Issue No 17||11 June 1999|
Reithıs AWAs Dealt a Blow
By Jim Nolan
- Denman Chambers
ASU v Electrix rules that AWAs can't be a take it or leave it proposition.
In a little noticed decision of the Federal Court of Australia in March this year Justice Marshall dealt a significant blow to Peter Reithıs draconian Australian Workplace Agreements. One of the more odious features of AWA's is that - contrary to what has been said by the Government - there is no choice at all at the point of engagement. Prospective employees can be, and are often, told to sign an Australian Workplace Agreement or be refused employment.
In Australian Services Union v Electrix Pty. Limited Justice Marshall of the Federal Court of Australia decided that the offering of Australian Workplace Agreements in such circumstances arguably amounts to duress and is a contravention of s.170WG(1) of the Workplace Relations Act .
The case arose when meter readers who had previously been employed by one of the contractors to the former SECV, VMM, relinquished its contract when it was placed in receivership and the new contractor insisted on AWAs. In February 1998 the Australian Industrial Relations Commission had certified an agreement between Victoria Meter Management Pty Limited, and the ASU.
From October 1998 VMM was placed in receivership. A replacement contractor was sought by Powercor and January 1999 Powercor announced that Electrix was the new preferred contractor.
In February 1999 Electrix invited the meter readers who had been employed by VMM to register an expression of interest for the employment with Electrix. One of the conditions placed on prospective employees was that they were to sign a document entitled "The Electrix Meter Reading Australian Workplace Agreement". A number of meter readers appointed the ASU as their bargaining agent under the Workplace Relations Act . The ASU had discussions with Electrix regarding the terms and conditions of employment which would apply to meter readers employed by Electrix and was told that if members did not sign an AWA they would not get a job.
Electrix position was that it did not wish to employ meter readers on the same terms and conditions as those provided in the certified agreement. It saw the AWA's as a vehicle to cut labour costs. This is not surprising since the AWA stream has been typically used to under-cut previously established wages and conditions where employment had been outsourced or contracted out.
The ASU applied to the Federal Court for an interlocutory injunction, arguing that deprivation of choice amounted to duress and was a breach of the duress provisions of the Workplace Relations Act . To establish a sufficient case for an interlocutory injunction the Union had only to demonstrate that there was a serious question to be tried on the issue of whether or not the meter readers had been subjected to duress, as it is defined in the Act.
The ASU had to demonstrate that the balance of convenience favoured the granting of an injunction. The specific issue was whether or not a serious issue to be tried had been raised by reason of the fact that compulsion or absence of choice had been thrust upon the meter readers and upon the ASU as their bargaining.
His Honour observed that it was also his view that the conduct of Electrix in saying to the meter readers it's the AWA or your job was unconscionable conduct which no employee in a humane tolerant and egalitarian society should have to sufferı. The Judge held that there was a serious issue to be tried, notwithstanding the fact that the explanatory memorandum which had accompanied the Workplace Relations and Other Legislation Amendment Bill 1996 had stated that "an employer would not be prevented from offering employment on the basis that the employee enter into an AWA".
The ASU argued that the explanatory memorandum flew in the face of the clear intention of the statutory provision which dealt with duress in a general sense and did not exempt offers of new employment. The Union argued that there was a critical distinction between a situation where the entering upon an AWA was subject of negotiation between parties and one where the entry of an AWA was made a condition of employment. The Judge said that the mere reference to the situation in the explanatory memorandum could not govern or contradict what was a plain and unambiguous intention of the Act. He agreed with counsel for the Union that it would be an absurd result if an employer was free to apply duress to a perspective employee in connection with an AWA but not free to do so once the employee was actually employed by the employer and some replacement AWA or ancillary document was being offered to the employee.
Turning to the question of the balance of convenience, his Honour observed that a large number of the meter readers were resident in country Victoria. Their employment prospects would be bleak if the were not able to continue in their current occupation and for that reason they were particularly susceptible to pressure which could be applied to them by any perspective employer. He found in the absence of the injunctive relief which they sought the meter readers would be confronted with the choice by Electrix forcing them to vary their entitlements on a take it or leave it basis. He said "without injunctive relief meter readers would essentially be left with the choice of reduced entitlements or the economic scrap heap of unemployment".
He found that he was unable therefore to accept the submission of the Company that the evidence disclosed that the meter readers had not been hurt. He observed that as a practical matter it would be difficult for any other contractor, in the short term, to train a wholly new workforce, like the meter readers. It is more likely, he observed, that as a matter of commercial reality those currently experienced meter readers would be favoured by an employer whoever Powercor chooses to perform work previously carried out by VMM.
In another important finding the Judge rejected the employer's submission that no injunction should be granted because damages would be an adequate remedy for employees if they were to make out their case on a final basis. He observed that even accepting that compensation would be payable to meter readers if the application succeeded "I am of the view that such compensation cannot wholly compensate for the stigma of unemployment especially for that large number of meter readers who reside in depressed areas in country Victoria." He observed "that mere dollars and cents could not compensate for the loss of one's livelihood".
This decision is extremely important although it has been decided on an essentially limited basis and it is understood that the case has now settled and will not proceed to trial. The lesson in the decision is that there is a respectable argument to the effect that AWA's offered on a take it or leave itı may involve, duress and may fall foul of the prohibitions as limited as they are in the Workplace Relations Act. This is especially significant since it is understood that the Employment Advocate has advised employers that they can offer AWA's on a take it or leave it basis.
The lesson here for unions is to be off quick of the mark. To gain an advantage one needs to approach the court very quickly and in circumstances such as those which confronted the meter readers. The circumstances which confronted the meter readers are especially suited to a timely application to the Court because the workforce is known and organised and the circumstances in which the transfer from one contractor to another are well known and understood. The commercial reality will be that a new employer will almost certainly have to recruit from the outgoing workforce of the previous contractor.
This decision has very important ramifications for all those involved in the contracting industry as well as those involved in government or permanent work which is to be privatised or contracted out.
The rights of the existing workforce need to be protected and their terms and conditions need to be protected as far as practicable. This decision shows that a timely application to the Court may well have the effect of protecting those rights at least in the short to medium term during which time steps can be taken to see to it that the gains are consolidated.
The decision does not amount to a binding precedent in the sense that decisions in interlocutory injunction applications are very much viewed by the Courts as decisions made on the run endeavouring to make the best arrangements that can be made feasibly pending the final hearing of the issue in question.
Notwithstanding this, the analysis of Marshall J regarding the significance of the explanatory memorandum and the circumstances in which it can be said that employees can be subject to duress is extremely valuable and must be built on by unions and their advisers to maximise the protection for union members represented in the decision.
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