Agreements: why you must stick to the rules

Cases

Agreements: why you must stick to the rules

The creation and application of enterprise agreements in the Fair Work system must conform with the legislative rules prescribed. When there are breaches of these rules agreements can be refused registration and/or parties responsible can be held liable.

WantToReadMore

Get unlimited access to all of our content.

The creation and application of enterprise agreements in the Fair Work system must conform with the legislative rules prescribed. When there are breaches of these rules agreements can be refused registration and/or parties responsible can be held liable.

Six cases are noted here illustrating this point.

Penalties for union breaches paid to employer
Unnecessary legal costs not due to lawyer's negligence
Draft agreement and voting process must be separate
One day late too late for access to draft agreement
Agreement terminated – return to award
ROE training  program to be completed

Penalties for union breaches paid to employer


The Federal Court has approved an agreement for the MUA and two union officials to pay $41,000 in penalties to a stevedoring company for unlawful industrial action the union took when the company planned to dismiss an employee who had been on long term leave.

The industrial action occurred in 2012 and covered three eight-hour shifts at the company's Port Botany site. It was in breach of the Fair Work Act as it occurred during the life of the relevant enterprise agreement.

Justice Flick fined the union $30,000, and the officials $8,000 and $3,000. 

The court  said when an order was sought by a victim of the contraventions, it was important there be no blurring of the line between the true payment of penalties and a disguised damages claim or a costs order.

Justice Flick said although the contraventions involved deliberate conduct, they were, in essence, an overreaction by the union and two officials to the decision to dismiss the impaired worker.

Although the response by the union and officials was unjustified, it was certainly not conduct warranting the imposition of a penalty at anything other than the lower range. 

DP World Sydney Limited v Maritime Union of Australia (No 2) [2014] FCA 596 (6 June 2014)

Unnecessary legal costs not due to lawyer’s negligence


The Federal Circuit Court stated it has the discretion to make costs orders against lawyers in industrial matters. There is no comparable power in the Fair Work Act.

A company director asked the court to order the lawyer of one of the company's former journalists to pay legal costs the director incurred when he tried to set aside two subpoenas issued in the course of underpayment litigation. 

The court said there was an implied incidental power of a federal court to regulate the conduct of legal practitioners appearing before it to the extent necessary to ensure the observance of their duties to the court and the integrity of its procedures. It said  the Federal Circuit Court Act was broad enough to empower the judges of the Court to make rules that specify the circumstances in which the court may make an order for costs against a lawyer appearing before it. 

However, in this matter, the court declined to order costs as the director had failed to demonstrate that those costs had been incurred as a result of any negligence by the lawyer.

Robinson v Blackheart Industries Pty Ltd & Ors [2014] FCCA 1353 (27 June 2014) 

Draft agreement and voting process must be separate


Commissioner Ryan in the FWC  said companies must provide employees with a copy of any draft enterprise agreement and notify them of the time, place and method of voting up to seven days before the start of the voting process.

The commission noted the voting process included the systematic series of actions by which an employer initiates the request for employees to approve the agreement by voting on it, carries out the request for employees to approve the agreement by voting on it and determines the outcome of the request for employees to approve the agreement by voting on it.

The company here had begun the voting process on 1 May by sending employees the notification, ballot paper and return envelope. This meant the access period was the seven days leading up to 1 May.

Concept Engineering (Aust) Pty Ltd [2014] FWC 4227 (27 June 2014) 

One day late too late for access to draft agreement


The FWC has refused to approve a new agreement as the employer gave employees access to the draft deal and details about the approval ballot a day later than required.

Senior deputy president Harrison found the company had not met the access requirement because the seven-day period included the day on which it gave employees notice.

The commission found the information relating to the proposed agreement and employee ballot was required to be given to employees by the start of the access period.

Re Hydro Electric Corporation [2014] FWC 4169 (24 June 2014)
 

Agreement terminated – return to award


The Fair Work Commission noted the union’s submission that it was generally not in the public interest for an expired enterprise agreement to provide terms and conditions of employment below the award safety net.

Based on the submissions before the Commission, the tribunal was not aware of any evidence of any objection or any adverse reaction from employees to what was being proposed by way of termination of the agreement. Based on the submissions and material provided to the Commission it would appear the employees would generally be better off under the coverage of the award than the agreement. 

Shop, Distributive and Allied Employees Association [2014] FWCA 4301 (27 June 2014)  

ROE training  program to be completed


The FWC made an order suspending entry rights with respect to Lend Lease sites in SA for CFMEU officials for one year, unless or until a specific right of entry training program was completed.

Certain officials were excepted. Corresponding restriction on new entry permits were also appropriate.

Misuses were found to be significant in number and scale and the evidence confirmed significant potential for repetition of the behaviours previously found by the full bench of the commission.

The evidence indicated the strategy referred to by the full bench appeared to be directed to Lend Lease, rather than at a particular site managed by Lend Lease.

Re Fair Work Commission [2014] FWC 3907 - O'Callaghan SDP - 13 June 2014 

Post details