A case study in unlawful industrial action
John Holland Pty Ltd v MUA
A recent decision handed down in the Federal Court highlights some key elements of lawful agreement making and provides examples of what can constitute unlawful industrial action.
The case highlights some important lessons for building industry participants:
- There are a number of ways industrial action can be unlawful.
- Like the Workplace Relations Act 1996 (WR Act), the Fair Work Act 2009 (FW Act) still allows employee-negotiated agreements.
- The ABCC may intervene.
Case background
On 1 February 2010 the Federal Court in Sydney imposed a $15,400 penalty on the MUA for unlawful industrial action that took place in March 2008 at the Bluewater desalination project in Sydney.
The Court found the MUA had organised the unlawful industrial action because it was ‘aggrieved’ that the employees were bound by an employee collective agreement rather than a union collective agreement.
The Court noted the WR Act permitted various types of workplace agreements including employee collective agreements and union collective agreements.
The ABCC became a party to the proceeding on 1 April 2008.
Lesson 1: There are a number of ways industrial action can be unlawful—Defining ‘industrially motivated’ and ‘constitutionally connected’
Under the Building and Construction Industry Improvement Act 2005 (BCII Act) industrial action is unlawful if it is ‘industrially motivated’, ‘constitutionally connected’ and not ‘excluded action’, which means action that is protected under the FW Act, or the WR Act as applied in this case.
For industrial action to be defined as industrially motivated it must be undertaken in pursuit of at least one of the following conditions:
- supporting or advancing employment claims made either by or against an employer
- supporting or advancing industrial objectives of an industrial association, or
- to disrupt work.
If industrial action is taken by an organisation, adversely affects a company or is connected to an industrial dispute, then that action is considered constitutionally connected.
In this case the action: affected a company – John Holland Pty Ltd; was taken by an organisation – the MUA; advanced claims against an employer; disrupted work; and was not protected action under the WR Act. It was therefore deemed unlawful.
Lesson 2: Like the Workplace Relations Act, the Fair Work Act allows employee negotiated agreements
The FW Act still allows both unions and employees to negotiate workplace agreements with employers provided a number of conditions are met.
- All enterprise agreements must be lodged with Fair Work Australia (FWA) and are subject to the better off overall test (BOOT) as a safeguard to guarantee that no employee will be worse off on an enterprise agreement than they would be on a modern award. They must also comply with the National Employment Standards.
- Within 14 days of the agreement-making process commencing employers must give the employees who will be covered by the agreement notice of their right to appoint a bargaining representative to help them negotiate their agreement. The content of that notice is set by law. It explains default bargaining representatives and that the employee is required to give a copy of any appointment to the employer.
- Employers must wait 21 days after providing the above notice before holding a vote to decide whether the agreement is or is not approved. Employers must also ensure that the terms of the agreement, and the effect of those terms, are reasonably explained to employees.
- Employers must ensure that employees who are to be covered by the agreement are given a copy of or have access to the agreement and any other incorporated material in the seven-day period before voting starts.
- The employer must also notify the employees who are to be covered by the agreement when to vote, where to vote and the method of voting. It is against the law to force an employee to approve, vary or terminate an enterprise agreement.
Lesson 3: The ABCC may intervene
Unlawful industrial action is prohibited under the BCII Act and serious penalties apply.
The ABCC is the agency responsible for enforcing the BCII Act. Where necessary the ABCC will intervene in court cases that involve building and construction industry participants and make submissions before FWA.
This way the ABCC can ensure that applicants and respondents, FWA and the courts are aware of the impact of relevant federal legislation and achieve improved standards of conduct in the building and construction industry.
Further Information:
Judgment: John Holland Pty Ltd v Maritime Union of Australia (No.2) [2010] FCA 110 (1 February 2010)
Legislation: Building and Construction Industry Improvement Act 2005
Fair Work Act 2009
ABCC fact sheet: Unlawful industrial Action in the Building and Construction Industry
Site inductions – don’t breach FOA
When conducting site inductions employers must be careful about what information they request from employees and how it is requested.
Under the freedom of association provisions of the FW Act building industry participants do not have to answer questions about whether or not they belong to an industrial organisation.
If freedom of association principles are not adhered to on site, including during site inductions, head contractors can be held accountable. Penalties and other deterrents can be imposed on those who contravene the law and compensation paid to those whose right to freedom of association is infringed.
FOA rules when working on National Code jobs
There are a number of National Code provisions that reinforce freedom of association principles on worksites.
These provisions are outlined in s.6.4.2 of the 2009 Implementation Guidelines, which highlight the following practices as inconsistent with the National Code:
- providing the names of new staff, job applicants, contractors and subcontractors to unions other than as required by law
- ‘no ticket, no start’ signs or ‘show card’ days
- discriminating against or disadvantaging elected employee representatives
- using forms requiring the employee to identify their union status or employers and contractors to identify the union status of employees or subcontractors
- refusing to employ someone, or terminating an employee, because of their union status
- employers refusing a reasonable request from a workplace delegate to represent employees in relation to grievances and disputes or discussions with members
- the imposition, or attempted imposition, of a requirement for any contractor, subcontractor or employer to employ a non-working shop steward or job delegate or to hire an individual nominated by a union
- any requirement that a person pay a ‘bargaining fee’, however described, to an industrial association of which he/she is not a member, in respect of services provided by it.
Further information:
Contact the ABCC if you would like to know more about freedom of association or if you feel your right to choose has been infringed.
ABCC fact sheet: Freedom of association in the building and construction industry
ABCC fact sheet: Unacceptable workplace practices and workplace arrangements
Industrial disputation increases, but remains relatively low
The most recent data released from the Australian Bureau of Statistics shows industrial disputation levels in the construction sector remain low.
The data shows 10.4 working days were lost per thousand employees in the construction industry in the three months to December 2009. While this is the second highest number of days lost to industrial disputes since the December 2005 quarter, disputation remains relatively low compared to that experienced before the inception of the ABCC.
A contributing factor to the increase in the number of days lost to industrial disputation during the December quarter was the strike action taken at Woodside Petroleum's Pluto Liquefied Natural Gas Project.
The increase in construction industry disputation also reflects a general increase in disputation across all industries.
Modern awards – the new safety net
Employment relationships in the federal workplace relations system are now underpinned by a system of modern awards. The introduction of modern awards establishes a minimum set of conditions for employers and employees across Australia who work in the same industries or occupations.
Modern awards cover employees and employers in the national workplace relations system and replace existing federal awards, notional agreements preserving state awards and state reference transitional awards.
The following modern awards cover the majority of the building industry:
- Building and Construction General On-site Award 2010
- Electrical, Electronic and Communications Contracting Award 2010
- Plumbing and Fire Sprinklers Award 2010
- Joinery and Building Trades Award 2010
- Asphalt Industry Award 2010.
The Australian Industrial Relations Commission (AIRC) began the award modernisation process in March 2008. From 1 January 2010 Fair Work Australia assumed all functions of the AIRC, including award modernisation. All modern awards can now be found on the FWA website.
Agreement making and modern awards
The introduction of modern awards also affects the agreement making process. All new agreements made on or after 1 January 2010 must meet the better off overall test (BOOT), which replaces the no-disadvantage test. An agreement will pass the BOOT if Fair Work Australia is satisfied that each employee to be covered by the agreement is better off overall than under the relevant modern award.
Further information:
Visit the Fair Work Australia website – Find an award and Approval process of agreements.
FWA decision clarifies agreement making period
A recent ruling by Fair Work Australia has implications for agreement making processes in the building and construction industry.
FWA has ruled that employers must wait until the 22nd day after giving employees notice of their representation rights before asking them to vote on a proposed agreement.
Under s.181(2) of the FW Act an agreement must not be put to a vote until ‘at least 21 days after the day on which the last notice under subsection 173(1) in relation to the agreement is given’. Subsection 173(1) deals with giving notice of employee representational rights.
FWA senior deputy president Peter Richards recently referred to the Acts Interpretation Act 1901 to conclude that the 21-day period did not include the day on which the representation notice was given.
Senior deputy president Richards noted this interpretation of the 21-day period also applied to s.54 of the FW Act, which states that an agreement approved by FWA operates from ‘seven days after the agreement is approved’.
Court round up
Legal proceedings
ABCC pursues Federal Court case against CBI employees in WA
The Federal Court in Perth has ordered the CFMEU, AMWU and three of their officials be joined as additional respondents in ABCC v Abbott & Ors.
The CFMEU and its official Bradley Upton and the AMWU and its officials John Windus and Andrew Holdsworth are now named on the ABCC’s Statement of Claim along with 118 employees of CBI Constructors Pty Ltd (CBI).
The proceedings concern the North West Shelf LNG Phase V Expansion Project in Western Australia, where employees of CBI allegedly engaged in unlawful industrial action for eight days from 14 October 2008.
The employees allegedly failed to comply with an AIRC order that they return to work. On 28 October 2008 the Federal Court ordered that the employees not engage in further industrial action.
It is alleged that the CFMEU and its official Bradley Upton and the AMWU and its officials John Windus and Andrew Holdsworth organised and encouraged the unlawful industrial action taken by CBI employees.
It is also alleged that over the course of the dispute 12,720 man hours were lost due to unlawful industrial action.
A directions hearing has been scheduled for 6 July 2010.
Updated ABCC media backgrounder: ABCC V Abbott & Ors
Judgments
ABCC fights to protect freedom of association
The Federal Magistrates’ Court in Melbourne has reinforced the right of employees to choose not to join a union, penalising the CFMEU and two of its representatives a total of $14,000 in two separate cases.
In the first case, the court found CFMEU OHS representative Nick Salta told employees at the Doncaster Shoppingtown project that if they did not become members of the CFMEU they would not be allowed to use toilet facilities or smoko sheds and that their pay would be reduced.
In another case also relating to the Doncaster Shoppingtown project, CFMEU organiser Tony Ioannidis was found to have restricted employees from working because they had not paid union fees.
It is against the law to coerce an employee to join a union or pay union membership. It is also against the law to penalise workers who choose not to join a union.
In both of these cases workers were discriminated against for not belonging to a union.
In each case the respondents admitted to the contraventions and agreed on the penalties to be imposed.
In both proceedings the CFMEU was ordered to pay penalties of $6000 and the union representatives $1000.
Related documents
Media statement: ABCC fights for employees’ right to choose
Media backgrounder: Cozadinos v CFMEU & Salta
Media backgrounder: Cozadinos v CFMEU & Ioannidis
Penalties imposed for strikes on Monash Freeway Project
The CFMEU, organiser Gareth Stephenson and delegate Harry Slater have been penalised $31,000 after they admitted to organising a half-day strike on the Monash Freeway Widening project on 30 April 2008.
The Federal Magistrates’ Court in Melbourne found that the CFMEU, Mr Stephenson and Mr Slater contravened s.38 of the BCII Act by procuring industrial action. The court penalised the CFMEU $25,000, Mr Stephenson $5000 and Mr Slater $1000 suspended for 12 months.
Building industry laws protect a worker’s right to strike if there is a reasonable concern about an imminent risk to health and safety.
The concerns Mr Stephenson and Mr Slater raised, which related to toilet amenities on site, did not justify a work stoppage and should have been resolved with site management. The strike action was therefore found to be unlawful.
Related documents:
Media statement: Strike action on Victoria's Monash Freeway Project results in $31,000 penalties
Media backgrounder: Wotherspoon v CFMEU, Stephenson and Slater