An industry association has drawn to our attention an agreement negotiating strategy in Queensland that raises significant concerns.
A clause in the proposed agreements identified as the ‘Contracting Clause’ appears to include terms that would be of no effect. This is because the terms are not about permitted matters.
The terms of concern require an employer to inform union delegates of a range of details about contractors engaged to perform work on a project before they commence.
Employers should exercise caution before reaching an agreement that contains such a clause.
An agreement containing non-permitted matters
Terms of the clause appear not to be a permitted matter. The requirement for the employer to notify the union delegates with specified information about contractors before engaging them gives rise to such concerns.
Under the Fair Work Act 2009 (FW Act), a term of an enterprise agreement that is not about a permitted matter has no effect and is unenforceable. If this term is included in an agreement employers do not have to comply with it. Also, a union or employees cannot take protected industrial action in support of claims for an agreement that contains a term that is not about permitted matters.
It is also possible that the on-site application of the clause could expose the parties to contraventions of other provisions of the FW Act and the Building and Construction Industry Improvement Act 2005. This would depend on the manner of the terms’ application. Issues infringing general protections under the FW Act and discrimination related to the type of industrial instrument could occur.
Possible National Code compliance implications
An agreement, even if it contains a term that is not about a permitted matter, is still considered a valid agreement. The National Code Implementation Guidelines treat an agreement that has been approved by Fair Work Australia as being National Code compliant.
However, it is necessary that the on-site practices adopted by contractors are consistent with the Implementation Guidelines. A contractor who entered an agreement that contained the clause would have to exercise great care to ensure their on-site practices were National Code compliant.
Your rights
If you are asked to negotiate an agreement that includes a contracting clause containing such terms you should seek advice from an industrial relations adviser, lawyer or industry association.