Industrial Relations – recent developments - Kingston Reid

Industrial Relations – recent developments

Outside the developments we have seen in relation to the Government’s proposed “Closing Loopholes” laws, and the looming dates for aspects of the “Secure Jobs, Better Pay” reforms to take effect – including the sunsetting of “Zombie Agreements” and limitations on the use of fixed term contracts – the past month or so has seen a number of important court and Commission decisions come down.

Federal Court finds enterprise agreement capable of retrospective operation

In Murtagh v Corporation of the Roman Catholic Diocese of Toowoomba [2023] FCAFC 172, the Full Federal Court determined that enterprise agreements are capable of operating retrospectively to confer entitlements upon former employees whose employment had ended before the relevant agreement was ever made.

In that case, the employer was found to have contravened its agreement by not paying a back payment to former employees in these circumstances – even to an employee that had left around 12 months earlier.

This is at odds with the long-accepted orthodoxy that enterprise agreements cannot operate in this way, given that the Fair Work Act provides that “an enterprise agreement does not give a person an entitlement unless the agreement applies to the person.

As the Court observed, this is an issue of “considerable systemic importance and related difficulty”, given that enterprise agreements commonly include terms for back-payment of retrospective pay increases (which these generally understood to provide an entitlement only to current employees).

In our view there is room for significant doubt about the correctness of this judgment, and it remains to be seen whether or not it will be challenged.

“Holding discussions”: scope of right of entry provisions clarified by Full Federal Court

The Full Federal Court in Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia v Austal Ships Pty Ltd [2023] FCAFC 180 has overturned a first instance judgment of the Federal Court from late 2022, concerning the right of entry provisions of the Fair Work Act.

At first instance, Colvin J held that although the Act allows right of entry permit holders to enter premises for the purpose of “holding discussions” with relevant employees, an entry is unauthorised if part of the purpose is to seek some form of agreement, commitment or pledge.

On this basis, it would not be lawful for a permit holder to exercise right of entry to seek signatures on a petition, or to recruit members, as these things would be outside the boundaries of a “discussion”.

The Full Court accepted that this was an unduly narrow construction of the relevant provisions, and that discussions will often be had for the very purpose of achieving a particular outcome. The Court held that it was artificial to distinguish holding a discussion from the realisation of the purpose or objective of those discussions.

In light of the Full Court’s judgment, this will no longer be a lawful basis for an employer or occupier of premises to refuse entry.

Multi-employer bargaining authorisations

We have started to see some early Commission cases involving the more controversial aspects of last year’s “Secure Jobs, Better Pay” provisions being handed down.

This has included multi-employer bargaining authorisations being made in the early learning and education sectors. These applications were largely determined by consent, and so the more complex aspects of the reforms have not yet been the subject of fully reasoned consideration.

That said, they nevertheless provide some important insights into the operation of the new provisions.

First, the Commission has acknowledged the complexity and uncertainty of the new multi-employer bargaining schemes which will inevitably be the subject of future debate.

Second, and more importantly, the Commission has indicated that concept of “clearly identifiable common interests – central the multi-employer bargaining framework – is one of “wide import” and tends to “any joint, shared, related or like characteristics, qualities, undertakings or concerns”. This gives credence to employer concerns about the breadth of the provisions.

Fair Work Commission makes first intractable bargaining declaration

We have also now seen the first intractable bargaining declaration (relating to bargaining with Fire Rescue Victoria).

There was no contest in this case that bargaining had become “intractable”, and so again the boundaries of that threshold concept are yet to be fully explored. The Commission has however indicated (without necessarily deciding) that the requirement for the Commission to have previously assisted with “the dispute” means the dispute which led to bargaining becoming intractable, as opposed to just bargaining more generally.

The matter is now listed for hearing in December for the purposes of arbitrating the terms of the Workplace Determination. It appears likely that this will involve some contest about the extent to which parties are able to revisit their position on matters which were the subject of bargaining – an important issue on the overall intractable bargaining framework.

 

Brad Popple
Special Counsel
+61 3 9958 9613
[email protected]