Corrs In Brief: Ballantyne certification decision – Commission approach lessens the impact of Electrolux
25 October 2004
A decision on certification of the K.L. Ballatyne enterprise agreement has been awaited as the first comprehensive examination of the impact of the High Court’s Electrolux decision on subject-matter that can properly be included certified agreements as dealing with matters pertaining to the relationship between employer and employee, "machinery" matters, or being "ancillary" or "incidental" to matters pertaining.
In a decision handed down last Friday, Vice President Ross adopted an approach that gives wide scope to ancillary and incidental clauses (K.L. Ballantyne & National Union of Workers (Laverton Site) Agreement 2004, PR952656). If this approach is followed in subsequent decisions, many agreement clauses that were seen to be problematic in light of Electrolux will be permissible.
Principles
VP Ross declined to adopt the narrow approaches to "matters pertaining" and ancillary and incidental clauses that were urged by ACCI and the AiG. In particular, VP Ross rejected submissions that machinery, ancillary and incidental clauses must support the operation of particular substantive clauses of an agreement, and that a clause in part directed to strengthening the position of trade unions or union members, cannot also pertain to the employment relationship.
VP Ross accepted that:
- whether a matter pertains to the requisite relationship must be considered in the context of the relationship between the employer and employees bound by the agreement concerned
- if a particular provision has previously been included in an award, then prima facie it can be included in a certified agreement, although this is not determinative of the issue
- a provision that is "directed to the maintenance of an effective settlement between the parties and prevention of further disputes" may be included in a certified agreement as an ancillary clause.
VP Ross also observed that it may be permissible for a certified agreement to include non-pertaining aspirational statements that do not give rise to rights or obligations.
In a decision also handed-down last week, SDP Lacy found that statements of intent and objectives may be included in agreements if they have an impact on the practices of the employer, but may not always be permissible (Transfield Worley North West Shelf Onshore and Offshore (Maintenance, Modification and Upgrades) Certified Agreement 2004, PR952438) (Transfield).
Permissible clauses
VP Ross found clauses dealing with the following to be permissible:
- no extra claims - ancillary as being directed to the maintenance of an effective settlement and prevention of further disputes
- agreement to commence negotiations for a replacement agreement 3 months before expiry of the Agreement - either machinery or incidental
- prohibition of AWAs - ancillary as directed to maintaining the integrity of the Agreement
- requirement to provide any “above agreement” benefits to all employees covered by the Agreement - a matter pertaining as dealing with payments or benefits to employees
- consultation with union over introduction of major change - a matter pertaining
- indemnity of employees for acts or omissions whilst acting within the scope of employment - a matter pertaining
- agency and directly employed casuals performing work covered by the Agreement to be employed under terms no less favorable then those under the Agreement - a matter pertaining
- substitution of public holidays by agreement with the union - a matter pertaining - the means by which substitution is effected had been agreed between the parties and did not change the character of the clause
- trade union training leave - a matter pertaining - the purpose for which paid time off work is provided is not pertinent to whether the provision pertains to the requisite relationship
- union notice board - ancillary or incidental as being directed to the maintenance of an effective settlement and prevention of further disputes
- recognition of delegates - machinery
- paid time on-site and off-site for delegates to conduct union business - a matter pertaining as akin to a paid leave
- paid on-site union meetings - a matter pertaining as akin to a paid leave
- union right of entry - ancillary or incidental as relating to maintaining the settlement reflected in the Agreement and hence making substantive provisions effective
- requirement to keep time and wages book and allow union inspection - ancillary or incidental as relating to maintaining the settlement reflected in the Agreement and hence making substantive provisions effective
- requirement to provide employees with a copy of the Agreement - machinery as relating to Agreement compliance and related issues.
VP Ross’ decision on "agency casuals" is based on a review of authorities relating to contractors and provides further authority that a certified agreement may regulate the terms and conditions on which contractors may be engaged, at least by reference to the terms and conditions of employees. SDP Lacy in
Transfield also found a clause regulating the terms on which contractors could be engaged to be permissible.
In the circumstances it was not necessary for VP Ross to decide whether a clause prohibiting the engagement of contractors to perform work covered by an agreement may be permissible. This remains open on the current case law.
VP Ross’ decision on the public holiday substitution clause in the Agreement is of broader importance as authority that requirements to reach agreement with a union in relation to matters pertaining are permissible.
Also of broader importance is VP Ross’ finding in considering trade union training leave, that a clause dealing with paid leave is a matter pertaining regardless of the purpose of the leave. A similar finding was made by SDP Lacy in Transfield.
In contrast to some pre-Electrolux decisions of the Commission, VP Ross accepted that it was not necessary for clauses dealing with matters such as trade union training leave and rights of entry to make an express connection to the operation of other clauses of an agreement (such as dispute settlement clauses), for them to be considered ancillary or incidental. SDP Lacy also took this approach in relation to time off and facilities for delegates in Transfield.
Impermissible clauses
VP Ross found clauses dealing with the following to be impermissible:
- union opportunity to recruit new members and delegates to be given time to discuss Union matters with new workers
- deduction of Union membership fees and remittance to the Union
The approach taken by VP Ross in this case departs in some respects from a number of pre-
Electrolux decisions of the Commission. While the decisions in
Ballantyne and
Transfield will be highly influential, they need not be followed by other members of the Commission or by the courts. However, two senior members of the Commission seem to have adopted a consistent approach in their application of
Electrolux.
It is to be hoped that a consistent body of case law will now begin to emerge from the Commission and courts to give certainty as to the validity of current agreements, and to provide guidance as to the permissible subject-matter of new agreements and of enterprise bargaining claims that can be pursued through protected industrial action.
For further information and advice contact:
Val Gostencnik - Partner
Email: val.gostencnik@corrs.com.au
Tel: (03) 9672 3093
Fax: (03) 9672 3010
Breen Creighton- Partner
Email: breen.creighton@corrs.com.au
Tel: (03) 9672 3173
Fax: (03) 9672 3010
This article provides information about topical legal issues.
Information contained in this article is intended as an introduction only
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