Contractor and right of entry clauses stymie Unilever agreement

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Contractor and right of entry clauses stymie Unilever agreement

The AIRC has refused to certify an enterprise agreement for Unilever’s North Rocks (Sydney) site because two clauses pertaining to use of labour hire staff and unions’ right of entry were outside the requisite employment relationship referred to in s170LI(1) of the Workplace Relations Act.

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The AIRC has refused to certify an enterprise agreement for Unilever’s North Rocks (Sydney) site because two clauses pertaining to use of labour hire staff and unions’ right of entry were outside the requisite employment relationship referred to in s170LI(1) of the Workplace Relations Act.

Background

Unilever Australia Ltd applied for certification of the Unilever North Rocks Enterprise Agreement 2003. The agreement was made under s170LJ of the Workplace Relations Act between Unilever and three unions: the Australian Workers' Union, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union - Electrical Division.

At the initial hearing, Senior Deputy President Cartwright raised concerns over clause 23 of the agreement, headed 'Labour Hire Agencies', and whether the clause was one about a matter pertaining to the relationship set out in s170LI(1) of the Act. He also raised similar concerns about aspects of clause 22, headed 'Union Representation'.

Clause 23 said that while it was the company's intention to reduce the need for casual employees there would still be the need to use labour hire agencies. It stipulated that employees acquired through such agencies would have an EBA with the relevant union. Clause 22 gave accredited union officials the right to enter the premises 'for the purposes of conversing with or interviewing union members on genuine union business'.

Findings

As the initial test, Senior Deputy President Cartwright relied on High Court authorities which endorsed the approach that the 'matters' referred to in s170LI(1) must pertain to the relationship between the 'employer, as such, and the employees, as such'. 

'Those cases make plain that it is neither the employer's relationship with the union, nor with the employee as union member, but with the employee in the capacity of employee, that is contemplated by this test. Similarly, a relationship between employer and non-employee would not, of itself, meet this test.'

The Senior Deputy President said two issues arose with respect to contractor provisions in agreements: Can certified agreements regulate the terms of a contract for services? If not, can contractor provisions still be included in agreements as impacting on employees such that they pertain to the requisite relationship?

Quoting 'National Transport Operations Pty Ltd Certified Agreement 2002' SDP Cartwright said the Full Bench rejected the submission that the word 'persons', appearing in s170LI(1)(b), extended the category of entities that can be party to an agreement so as to accommodate contractor provisions. 

'Section 170LI(1) is limited to those who are, or who will be, employed by the constitutional corporation, in the contract of service context. In the present agreement, clause 23 cannot fall directly within the requisite relationship.'

He said the question, therefore, turned to whether clause 23, in requiring that labour hire agencies have EBAs with the relevant union, affected the relationship between the employer and its employees in a manner sufficient to bring the clause within the scope of the requisite relationship. 

He concluded that he did not see how requiring that labour hire agencies have EBAs with unions could affect how contractors interact with Unilever employees. The SDP also noted that there was nothing in clause 23 that specifies the contents of those EBAs meaning they could provide for rates of pay and conditions well below those in the present agreement. 

'In the circumstances of this case clause 23 must be described as having an "indirect, consequential and remote effect" on the employment relationship, such that it does not, of itself, pertain to the requisite relationship.'

On this issue, SDP Cartwright concluded that if a clause of an agreement is about a discrete and substantive matter itself, and that matter does not pertain to the requisite relationship, then the agreement cannot be certified with that clause included. Referring to 'Atlas Steels', he found the agreement could not be certified with clause 23 included within it.

On the question of the right of entry provisions in clause 22, the senior deputy president said it was difficult to see what, if any, relationship arises between the employer and its employees, so that the clause pertains to the requisite relationship. 

'Not only is the clause directed to employees as union members, it was conceded at the hearing that "genuine union business" could include "canvassing for votes in a union election or organising the union picnic or organising the May Day march". 

'It is clear that "genuine union business" encompasses a range of matters which cannot pertain to the requisite relationship. Without more, this clause, directed as it is to employees in their capacity as union members, is of the type described by the High Court in 'Alcan' as directed to "strengthening the position of a union or union members", and as such, does not pertain to the requisite relationship.'

He also noted that the unions have statutory rights of entry under s285B and 285C of the Act which are wider than that countenanced by the clause. SDP Cartwright again found that as this was not a matter that pertained to the requisite relationship, the agreement could not be certified with this clause included.

The unions submitted that even if the SDP found that either or both of the clauses did not pertain to the requisite relationship, he could still certify the agreement. This submission relied on obiter comments in the Electrolux decisions in the Federal Court. 

However, SDP Cartwright said, both benches in 'Atlas Steels' and NUW rejected this argument, ruling that each substantive matter must pertain to the requisite relationship for the agreement to be certified. He agreed with this construction of s170LI(1) and accordingly rejected the unions' submissions.

See: Unilever Australia Ltd and Others re Unilever North Rocks Enterprise Agreement 2003, AIRC PR935410, (30 July 2003).

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