Employers can insist on awas for new employees

Cases

Employers can insist on awas for new employees

The freedom of association provisions of the Workplace Relations Act 1996 do not inhibit an employer from refusing to employ a person simply because that person will not agree to the employer's preferred mode of industrial regulation under the Act.

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The freedom of association provisions of the Workplace Relations Act 1996 do not inhibit an employer from refusing to employ a person simply because that person will not agree to the employer's preferred mode of industrial regulation under the Act. The Full Court of the Federal Court has ruled that so long as the prospective employee does not enjoy an existing entitlement to a relevant industrial instrument, employers may insist that prospective employees enter into an Australian Workplace Agreement as a condition of employment. (Burnie Port Corporation Pty Ltd v Maritime Union of Australia, [2000] FCA 1768, 6 December 2000).

Legislation

The freedom of association provisions of the Workplace Relations Act 1996are found in Part XA of the Act. Section 298Ksets out a number of things that an employer must not, for a prohibited reason, do or threaten to do. The types of things that an employer must not do include refusing to employ a person [s298K(1)(d)]. Section 298Lexplains the meaning of 'prohibited reason' and provides that conduct is for a prohibited reason if it is carried out because, for example, an employee is entitled to the benefit of an industrial instrument, such as an enterprise bargaining agreement (EBA) [s298L(1)(h)].

Background

Employees of the Corporation (Burnie Port Corporation Pty Ltd), were either employed under individual AWAs or under one of two certified enterprise bargaining agreements (EBAs). In August 1999 the Corporation wished to engage a number of persons to fill vacancies. During the interviews with the prospective candidates the Corporation made it known that it would require the successful candidates to agree to enter into an AWA prior to the commencement of employment. One of the candidates - Mr. R - declined to enter into an AWA, and was ultimately passed over in favour of other candidates who agreed to enter into an AWA.

In the first instance matter before Ryan J the union argued that the requirement imposed upon the prospective candidates that they agree to employment under an AWA was in effect a requirement that they agree to be employed on terms that would disentitle them to the benefits of an EBA. His Honour was satisfied that the union's claim, that the Corporation's requirement constituted a contravention of the freedom of provisions of the Act, had been made out.

The appeal

The appeal against Ryan J's decision was based on three grounds:

  1. That the Corporation had not refused to employ Mr. R, but rather that he had declined to accept the terms and conditions of employment.

  2. That his Honour erred in finding that the Corporation refused Mr. R employment because he would have been entitled to the benefit of the EBA.

  3. That at the date of refusal Mr. R was not entitled to the benefit of the EBA, and that it was insufficient to argue that the freedom of association provisions had been contravened simply because Mr. R may in the future be entitled to the benefit of the EBA.

In relation to the first ground of appeal the Full Court was not persuaded that his Honour erred on the evidence before him in arriving at the conclusion that the Corporation had refused to employ Mr. R when it decided to employ other applicants in preference to him.

The second ground relied upon by the Corporation centered around the contention that his Honour erred in finding that Mr. R had been refused employment because he would have been entitled to the benefit of the EBA. That is, Ryan J erred in holding that the substantial reason for refusing to employ Mr. R was to exclude him from the benefit of the EBA rather than the reason proffered by the Corporation. That reason related to competitive pressures and the desire to ensure that the Corporation was not at a disadvantage relative to its competitor ports. The Full Court was not persuaded that in light of the evidence presented, his Honour erred in finding that the Corporation refused Mr. R employment to preclude him from the benefits afforded by the EBA.

Finally, the Court considered the Corporation's third ground of appeal. It was common ground that at the date of refusal Mr. R was not an employee of the Corporation. As such it was contended that the prospective candidate had no existing legal entitlement to any benefit under the EBA and the union had not demonstrated that employment had been refused by reason of an existing entitlement under an industrial instrument.

In response the union submitted that the construction of s298K(1)(d) and s298L(1)(h) advanced by the Corporation would effectively denude those provisions of any operative effect. Rather, the union advocated a 'positive construction' whereby s298L(1)(h) must be taken to refer to an existing entitlement or to an entitlement that would arise upon employment. This positive approach was advocated by the primary Judge who found that Mr. R would have been entitled to the benefit of the EBA if there had not been a refusal to employ him because he would not agree to be employed under an AWA.

The Corporation submitted that its interpretation of s298K(1)(d) and s298L(1)(h) did not render the provisions nugatory. This is because there can be instances where a job candidate has an actual and existing entitlement under an industrial instrument that may be required to be foregone as a precondition to employment. The Corporation offered two examples of such instances. The first is where a former employee agrees to refund termination entitlements as a condition of employment, and the second example is in a transmission of business case where a candidate is refused employment because of an existing entitlement.

Therefore, the appeal came down to a resolution of the question of whether s298L(1)(h) is only concerned with existing rather than prospective entitlements to the benefit of an industrial instrument.

Conclusion

In attributing the ordinary and natural meaning of s298K(1)(d) and s298L(1)(h) the Full Court arrived at the view that when the proscribed conduct occurs, the person concerned must enjoy an existing legal entitlement to the benefit of an industrial instrument. The union's contention would require that s298L(1)(h) be construed as relating to a benefit to which the person concerned is or would be entitled if the proscribed conduct had not occurred. This view, the Full Court held was not supported by the ordinary and natural meaning of the provisions or by any discernible legislative policy or intention in respect of prospective employees.

The Full Court concluded by emphasising two matters. Firstly that the decision was confined to the specific construction of s298K(1)(d) and s298L(1)(h) and was not intended to reflect upon the broad operation of other freedom of association provisions. Secondly, the Full Court reiterated the point that the decision does not mean that s298K(1)(d) and s298L(1)(h) cannot apply to prospective employees, rather it relates to prospective employees who do not have an existing entitlement to the relevant industrial instrument.

The appeal was accordingly allowed and the orders of Ryan J set aside.

 
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