The ABC Commissioner has challenged key provisions of an enterprise agreement currently before Fair Work Australia for approval.
In its first submission of this kind, the ABCC has argued that a number of provisions of the ADJ Contracting Pty Ltd agreement, which is based on the deal struck between the Electrical Trades Union (Victoria branch) and the National Electrical and Communications Association (NECA) earlier this year, may contravene sections of the Fair Work Act 2009 (FW Act).
ABC Commissioner Leigh Johns said there were significant public interest considerations leading to the ABCC taking this action given its concern for the possibility of non-compliance with the FW Act which may arise from the agreement.
‘One of the principal roles of this office is to bring about improved standards of conduct in the building and construction industry. The building law authorises our making submissions to Fair Work Australia in these circumstances.
‘Any contractor presented with this as a framework negotiating agreement may not be aware of what is lawful or unlawful, and what is acceptable and what is objectionable material within the agreement. Contractors may also be uncertain of their legal responsibilities and liabilities if sections of the agreement are implemented but not legally enforceable.’
The ABCC’s submission calls for those clauses which contain legally objectionable material under the FW Act to be removed from the agreement or to at least be noted within the agreement as not being binding upon the parties signing up to it.
‘Fair Work Australia’s (FWA) approval is required before implementation of an agreement. The ABCC’s submission will assist FWA. It is the only opportunity for objections to be raised with FWA about the agreement’s content. Once the agreement is approved it can be implemented and may become the template for other contractors within the electrical trades industry.
‘Fair and productive agreements will lead to fair and productive building work.’
FWA has currently adjourned the matter.
Further information
What is the background of this issue?
NECA and the ETU finalised a standardised framework agreement for electrical contractors in January 2011. ADJ Contracting Pty Ltd is the first electrical contractor to use the agreement as its template and has submitted it to Fair Work Australia (FWA) for approval.
Why is the ABCC making a submission to FWA?
The ABCC has reviewed the proposed agreement and has identified a number of provisions within it that may contain objectionable material that should not be binding upon those parties who sign up to the agreement.
Under the Building and Construction Industry Improvement Act 2005 (BCII Act), the ABCC has the wide power to make submissions to FWA, including about the contents and effect of a proposed enterprise agreement
What, in summary, are the issues that the ABCC is addressing in its submission?
1. Limit an employer’s capacity to contract work without the approval of the union
The ABCC's contends that clauses 4.3(b)(v) and (vi) may be objectionable terms and unlawful terms within the meaning of the FW Act because they permit a possible contravention of sections 354(1)(a)(iii) and/or section 354(1)(b)(ii) of the FW Act.
2. Allow right of workplace entry inconsistent with the FW Act
Clause 15.2(k) allows for workplace entry not in accordance with Part 3-4 of the FW Act (i.e. without giving the requisite notice). Accordingly, any requirement in clause 15 providing right of entry by union officials may be an unlawful term.
3. Promotion of union membership to employees
Clause 16.6(b) provides that "Union membership shall be promoted by the Employer to all prospective and current Employees". Accordingly, the clause imposes an obligation to promote union membership to its employees and prospective employees in possible contravention of s350 of the FW Act.
What outcome is the ABCC seeking from its submission?
In summary, two outcomes are proposed:
(a) If clause 16.6(b), promoting membership of a specified union, is an unlawful term under the FW Act, the agreement should not be approved.
(b) Alternatively, if the clauses relating to contracting and workplace entry are objectionable terms under the FW Act, a written notation should be incorporated in the agreement that the term is an objectionable term and is legally of no effect.
Why doesn’t the ABCC let the parties sort it out for themselves?
As the regulator for the building and construction industry, the ABCC monitors and promotes appropriate standards of conduct, and provides assistance and advice regarding building industry pariticipants’ rights and responsibilities.
While parties do not have to sign-up to this agreement, any contractors presented with it is unlikely to be aware of what is lawful, unlawful, acceptable or objectionable.
Making this submission to FWA before this agreement is approved is the most appropriate way for the ABCC to raise these concerns and to give FWA the opportunity to address them.
1. By section 194 of the FW Act an 'objectionable term' is an unlawful term for the purposes of the FW Act including agreement approval purposes. Further, to the extent that a term of an enterprise agreement is an objectionable term it has no effect: section 356.