Legal

Competing Agendas in Enterprise Bargaining

By JA Houlton - MUA legal offcer

Recent developments show unions how they can turn the Reith laws on their head.

The May 1999 discussion paper released by the Federal Minister for Employment, Workplace Relations and Small Business, The Continuing Reform of Workplace Relations: Implementation of More Jobs for Better Pay, raises issues of serious concern to the union movement.

The discussion paper claims that 12,064 collective agreements have been certified by the Australian Industrial Relations Commission (AIRC) and 52,961 Australian Workplace Agreements (AWAs)) have been approved during the first two years of operation of the Workplace Relations Act 1996 (the WR Act).

The discussion paper, under the heading "implementation", advances a range of suggested measures for "simplifying" the procedures relating to the certification of Agreements (CAs), as well as proposals in relation to the status of AWAs under the WR Act. Some of the more disturbing of these proposals are:

� to ensure a "proper" role for unions in agreement making, measures would be introduced to stop unions party to s170LK Agreements (those made directly with employees) from blocking their extension or variation

� that employees could "switch" from s170LJ Agreements (made with unions) to s170LK Agreements

� that AWAs prevail over CAs comprehensively

� that an AWA made after a CA can override the CA

� that s170MX Awards (arbitrated when bargaining periods are terminated upon application of the parties or the Minister) don't exclude AWAs.

The discussion paper articulates a clear policy to push employers towards the exclusive use of AWAs.

The discussion paper also deals with the issue of "freedom to associate". It proposes that the legislation be extended to include "indirect" as well as direct breaches of the freedom to associate provisions in the WR Act. These provisions in effect are to protect persons from being discriminated against or victimised because of membership or non-membership of a union. They provide for wide ranging remedies to be imposed by the Federal Court of Australia, including but not limited to injunctions and penalties against individuals or corporations.

The reforms proposed in the discussion paper to the freedom to associate sections of the WR Act are designed to prevent, among other things, "site agreements" that are common in the construction industry. There is also a suggested change to allow for a defence (clearly designed to assist employers) to breaches of the freedom to associate provisions where the conduct complained of is designed to overcome a closed shop.

Also, the extension of these laws is designed to prevent CAs and AWAs that contain clauses that encourage employees to become union members. This would overcome the decision of Munro J in Clout Engineering Pty Ltd v AFMEPKIU, where a clause that stated general support for union membership in an agreement that was to be certified was found not to be objectionable by the AIRC. It is also suggested in the discussion paper that a clause requiring non-union members to pay a service fee to a union should be disallowed.

The above proposals, if enacted as legislation, would further erode union rights to represent employees.

Adopting a new approach by using corporate structures (Esso - a case study)

In the face of these proposed changes, unions must develop innovative responses to the clearly ideologically driven agenda of the Federal Government.

The discussion paper flags the future approach which will more than likely be pushed for by the Federal Government when amendments to the WR Act 1996 are introduced in the winter session of Federal Parliament. The Maritime Union of Australia (MUA) has adopted a novel approach to "enterprise bargaining", initiated when it was denied the opportunity to represent offshore oil workers during recent enterprise bargaining negotiations, that offers one such innovative response to the Federal Government's agenda.

Background

In 1998, 80 non-union offshore oil and gas workers approached the MUA and expressed an interest in becoming members. The offshore operations technicians (the operators) worked on oil and gas platforms in Bass Strait. Many of the employees had worked for Esso Australia Pty Ltd (Esso) for over 15 years. The operators had expressed dissatisfaction with their former union, the Australian Workers Union (AWU). In addition to the 80 non-union employees, there were a further 114 employees at the workplace who were covered by other unions: the Australian Manufacturing Workers Union (AMWU) and the Communications, Electrical and Plumbers Union (CEPU).

A s170LJ CA - the Esso Offshore (Certified) Agreement 1996 - was in place at the workplace. This CA expired at about the same time that the operators approached the MUA. The MUA attempted to attend a preliminary meeting for negotiations for a new collective agreement, which was then to be certified. Esso refused to allow the operators to be represented by the MUA. Esso argued, correctly, that the MUA did not have industrial coverage of the operators. A union can only be party to a CA under the WR Act if it has an eligibility rule which covers those employees.

In response to this refusal, the MUA in September 1998 set up a corporate structure, MUA HTS Pty Ltd, as an interim measure. MUA HTS was a proprietary company with limited liability, whose regulation is governed by the Corporations Law. The sole director of the company, Mr. John Coombs, also holds the office of National Secretary of the MUA.

MUA HTS was now able to represent the operators in its own right, but was arguably only able to assist with negotiations for a s170LK Agreement (a direct agreement). Importantly, a legal nexus had to be established between the corporate structure and the operators. MUA HTS requested that the operators individually sign a service agreement and formally appoint their delegates to provide instructions to MUA HTS. A delegate notified Esso of the appointment of MUA HTS on 6 November 1998. At this time, Esso appeared to be unaware of the type of representation that was being proposed.

Establishing a valid bargaining period

MUA HTS had the advantage of surprise but believed that it was essential that a valid "bargaining period" be commenced by the operators to strengthen the basis for representation. At the time, there was only one case on commencing a "bargaining period" by employees acting on their own behalf: Group Four Securitas Pty Ltd v Transport Workers Union of Australia [P6630] was an application made by the employer to terminate a bargaining period commenced by employees. Thirteen of the 25 employees had commenced a bargaining period acting on their own behalf. These employees wanted to be represented by the Transport Workers Union (TWU), which did not have coverage of them. The company argued that the TWU could not represent the employees because they could not join the TWU. The AIRC said that the WR Act remained silent on who is able to be authorised by employees to represent them in enterprise bargaining negotiations (see page 5 of the decision). The AIRC also said:

"Nor does it appear that the Act precludes a situation wherein employees may divide into a number of groups with each group authorising a different representative to attend the enterprise bargaining negotiations/discussions"(page 6).

And: "I am unable to find anything in the Act or the Minister's second reading speech which precludes or limits employees from being represented in enterprise bargaining negotiations/discussions by whoever they so authorise. As employers frequently do, employees may authorise a firm of lawyers to represent them, or they may authorise a particular individual to represent them. The Act does not prevent the employees from authorising a union to which they do not and could not belong from representing them"(page 6).

This case supported the operators in their quest for representation. But it also raised the potential for many groups to commence a bargaining period which, if it occurred, could cause fragmentation in the workplace during periods when a CA is not in place or has expired. This is a disadvantage to employers as well as unions. MUA HTS was concerned to ensure that competing agendas did not arise between the employees that could prevent a collective agreement from being reached.

Legal issues in relation to commencement of bargaining period with Esso

Previously, the delegate had tried to initiate a bargaining period under the WR Act and provided notice to Esso under s170MI(2) of the WR Act on behalf of the operators. It was necessary to establish a valid bargaining period because there could be no "protected action" without one. Protected action is a concept contained in the WR Act which provides limited legal immunity from civil action for employees if they want to take industrial action to advance their "enterprise bargaining" claims. Arguably, the bargaining period was invalid. Notice given to commence the bargaining period that the operators had provided to Esso may have been legally defective.

As non-union members could only negotiate one form of collective agreement - a s170LK Agreement (a direct agreement between employees and employer) - if protected action was not available, then these employees would be exposed directly to common law actions by Esso. The CEPU and the AMWU had also attempted to commence bargaining periods with Esso. Their notices may have also been defective.

Esso was still unaware of the new relationship that existed between MUA HTS and the operators, and the role that was planned for MUA HTS in enterprise bargaining negotiations. Esso's representatives argued that the MUA or MUA HTS could only be appointed as bargaining agent for the purpose of negotiating AWAs. They did not appear to see the legal distinction between the two entities, nor what MUA HTS sought to achieve.

The operators had also given notice to take protected action before MUA HTS was formally involved. That notice, given to Esso on 13 November 1998, may have been defective, either because the bargaining period had not properly commenced or because the notice did not contain particulars of the action. It was vague and may have been challenged by Esso. The delegates were advised of the case of the CFMEU and Curragh Queensland Mining Ltd [1998] FCA (30 September 1998). This case stands, according to some views, for the "principle of certainty". Employers continue to argue that they cannot meet claims that are vague and uncertain. This argument, although similar to that which is used in requests for particulars in common law pleadings, may be used to delay and unnecessarily complicate proceedings in common law courts. (See Casson and Dennis, Odgers' Principles of Pleadings and Practice In Civil Actions in the High Court of Justice, 22nd edition, Stevens and Sons, 1981, pages 152ff.)

MUA HTS involvement

On 13 November 1998, Esso was notified by MUA HTS that the company now acted as agent for the operators. Despite advice to the delegates that the bargaining period may not have been properly commenced, the delegates instructed MUA HTS to serve a new notice of protected action which was consistent with the new legal requirements (in light of Curragh's case) to particularise. The AMWU, CEPU and AWU had instructed solicitors to assist with the preparation of material relevant to the three unions to enable protected action to be taken.

Subsequently, the delegates accepted earlier advice from MUA HTS to ensure that valid bargaining periods were established before taking protected industrial action. A new notice to commence a bargaining period was forwarded to Esso by MUA HTS on 26 November 1998. The AMWU, CEPU and AWU sent new notices as well. MUA HTS received a letter from Esso, dated 27 November 1998, stating that they were not prepared to "enter into negotiations for a new agreement with a private shelf company".

MUA HTS responded on 30 November 1998 with a new "protected action" notice. The notice said that industrial action was to commence on 4 December 1998. The unions also provided notice for protected action, which was set to commence the following day (5 December 1998).

On 1 December 1998, Esso again attempted to challenge MUA HTS's right to represent the operators. Although Esso argued that it did not have to negotiate with MUA HTS, MUA HTS (who argued that Esso was not making an agreement with MUA HTS but with its own employees) Esso did not object to representatives of MUA HTS participating in the negotiations for the new agreement. A single bargaining unit was formed and included representation on behalf of the three unions. The negotiations continued to the eve of the scheduled protected industrial action. An agreement was reached, and certified on 10 May 1999 as a section 170LJ Agreement.

Adopting new approaches

The experience with the Esso workforce demonstrates the potential for unions to use the WR Act to turn an anti-union stance on its head. Clearly, the company was considerably confused as to the role of MUA HTS. Although it maintained a legally aggressive approach, and initially denied the employees representation, Esso was subsequently forced to allow the operators to be represented by MUA HTS in order to secure an agreement. Unions, who are faced with a reform agenda that is laced with anti-union proposals, must adopt a new approach to be assured of a continued role in "enterprise bargaining" even if that means participating in negotiations for "direct agreements".

  View entire issue - print all of the articles!

  Issue 18 contents

»	Carers Crisis: Victims Turned Away
»	Farmers Back Social Audit
»	Holiday Bugs: Government Asked to Act on Y2K
»	Oakdale Miners Take Message to Canberra
»	United Front for Public Sector Pay
»	Talking Books Silenced
»	Upper House Reform: Lest We Forget Greiner
»	Pregnancy Bunfight Looms
»	Horta Launches East Timor Mercy Ship
»	Sparkies Back Fantastic Plastic
»	APHEDA Helps Beat The Blockade
»	Torture Support Day, June 26

»	Guest Report
»	Sport
»	Trades Hall
»	Piers Watch

»	Chardonnay Debate Lacks Class
»	GST Rally, Town Hall, Monday June 21

Notice Board
- Check out the latest events

Latest Issue

View entire latest issue
- print all of the articles!

Previous Issues

Subject index

Search all issues

© 1999-2000 Labor Council of NSW

LaborNET is a resource for the labour movement provided by the Labor Council of NSW

[ Privacy Statement | Disclaimer | Credits ]

LaborNET is proudly created, designed and programmed by Social Change Online for the Labor Council of NSW