In a decision handed down yesterday, Senior Deputy President
Acton of Fair Work Australia approved the new Victorian pattern
enterprise bargaining agreement (EBA) for
electrical trades, dismissing the objections of employer groups and
the Australian Building and Construction Commissioner
This decision has serious consequences for the construction
industry for two primary reasons:
the EBA contains a number of terms which are not compliant with
the National Code of Practice for the Construction Industry and
Implementation Guidelines (the Code)
the clauses at the heart of the debate are inevitably going to
be repeated in CFMEU claims across the country this year.
What are the problem clauses?
The clauses which the employers and the ABCC objected to are in
many respects ghosts from the past and construction industry
participants will be familiar with their predecessors.
1. Labour hire/Security of employment
The clause in question requires employers to consult with the
union and employees when it wishes to engage contractors or labour
hire employees. This consultation must occur within the 14 days
prior to the contractors commencing work and involves the provision
of significant information. If there is a dispute over the
engagement or the consultation, the union has the right to refer
the matter to the Disputes Panel for determination. This in effect
gives the Disputes Panel the right to veto an employer's
freedom to use contractors as it requires. Any employer who has
appeared before the Disputes Panel in Victoria will be aware of how
difficult it is to obtain a favourable decision.
Once engaged, the contractors or labour hire workers must be
paid on terms no less favourable than those contained in the EBA,
regardless of the terms and conditions of any agreement covering
2. Right of entry
The second controversial clause states that an Electrical Trades
Union (ETU) official shall be allowed to enter the workplace to
assist with representing an employee under the Dispute Resolution
Clause. This right is not restricted by the entry provisions in the
Fair Work Act and the usual requirement to give 24 hours
The dispute must have been notified to the employer first, and
while on site, the union official cannot use the entry for any
other purpose such as holding a mass meeting, conducting a safety
audit or review, inspecting records or talking to other
3. Union recognition
The clause requires the employer to "promote" union
membership to all prospective and current employees. It also
requires the shop steward, during the official induction program,
to explain the terms of the EBA to new employees. All employees who
are members of the ETU are to be encouraged to participate in union
meetings. The term "encouragement" has a positive meaning
– that is, the employer cannot take a passive
What does the decision mean?
This decision means that these terms are allowed to be in EBAs
under the Fair Work Act. From a practical perspective, given these
are issues with a high degree of importance to building industry
and other unions, it is certain they will appear in similar if not
identical terms in claims lodged by other unions on a national
basis. Employers will need to think long and hard about their
negotiations and whether they are prepared to have such terms in
Where does it leave the Code and the Industry?
This decision leaves the ABCC in a very difficult position.
These clauses are clearly not compliant with Code and on the face
of it, a subcontractor with an EBA in similar terms, will not be
able to work on projects where compliance with the Code is
However, the position of the Federal Government has been that
EBAs certified in accordance with the Fair Work Act (such
as this one) will be deemed to be compliant with the Code. This
policy will need to change to avoid a direct contradiction with the
terms of the Code itself when these EBAs are assessed. Either that
or the Code itself will have to be amended. Ultimately something
will need to give as it stands now, electrical contractors with an
agreement in these terms will not be Code compliant and therefore
no Contractor on a directly or indirectly funded Government project
will be technically able engage them.
This is a critical issue for the ABCC and the Government to
resolve particularly given these types of clauses will now spread
across the industry.
For now, construction industry participants need to be cautious
in allowing any subcontractors with EBAs containing clauses such as
the ones above to work on Code projects. In addition, the industry
needs to prepare to deal with demands to include such clauses in
any negotiations in the future.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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