Court ruling means it's 'OK to deceive workers': Labor

Cases

Court ruling means it's 'OK to deceive workers': Labor

The Federal Government's WorkChoices laws allow employers to mislead employees into joining a collective agreement, Labor has claimed. A recent Federal Court decision is behind this view.

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The Federal Government's WorkChoices laws allow employers to mislead employees into joining a collective agreement, Labor has claimed. A recent Federal Court decision is behind this view.

The claim follows the Federal Court refusing to declare void a five-year non-union collective deal despite finding the employer misled employees about its contents.

The court also ruled that if it had declared the agreement void, the workers could not have returned to their previous agreement, but would instead revert to the WorkChoices minimum standards.

'False and misleading'

In the case, Judge Peter Graham found that the information provided by Karellas Investments to workers at its IGA supermarkets in two Sydney suburbs was significantly 'false or misleading' regarding pay, penalty rates and casual loading.

However he rejected the claim that the workers had relied on the misleading statements when voting on the agreement, saying that evidence was needed on this.

A factor in the case was that the employees had individual contracts operating on top of their agreement, and while the safety net of the agreement had been lowered this was not enough to declare the agreement void.

Old agreement 'cannot be revived'

In any case, Justice Graham said, the previous agreement had ceased operating when the new one was lodged with the Employment Advocate and could not be revived.

Opposition IR spokeswoman, Julia Gillard, said the situation now was that it's 'OK for an employer to mislead the employees into joining a collective agreement; that it was OK for an employer to misrepresent what was in the agreement, to pretend that it was better than it was. And those employees, having been misled are now stuck with that agreement'.

Bargain in good faith

Asked how Labor would ensure 'that workers who are not a union member are fully aware of the collective agreement they are considering', Gillard said a Labor Government would legislate for good faith bargaining.

'Under Labor, whether or not people are union members, there is an obligation for good faith bargaining,' she said. 'We want employers and employees sitting around the table dealing with each other in good faith. That means, of course, being frank about what offer is on the table so both sides know exactly what's going on.

'We expect that when people deal with each other in other settings, we expect that when people deal with each other in commercial settings, that there is frankness and honesty on the transaction. There should be frankness and honesty between employers and employees as well.'

The case in issue

The SDA had sought an order that the 2007 non-union agreement was void. It argued that the information the company provided the workers before they voted was misleading, and on that basis the agreement was not approved in accordance with the legislation.

Justice Graham found that the company's pre-ballot information was false and/or misleading in significant respects on pay, penalty rates, and casual loading.

A proper case for voiding the agreement was made out. However, employees at the company also had individual contracts operating on top of their agreement. The union argued that employees' safety net had been significantly lowered, but Justice Graham held this was not enough:

'There is absolutely no evidence to suggest … any Karellas employee suffered any monetary loss or damage ... '

Justice Graham did not void the agreement but instead made a declaration that it was not approved in accordance with the legislation.

The judge noted that even if he had declared the 2007 agreement void, the 2003 agreement ceased to be in operation when the 2007 agreement was lodged with the Employment Advocate, and could not be revived.

SDA v Karellas Investments Pty Ltd (No.2) [2007] FCA 1425 (12 September 2007)


[Note: The decision summarised above was confirmed on appeal by a Full Bench of the AIRC:

SDA v Karellas Investments Pty Ltd [2008] FCAFC 42 (4 April 2008)]


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