Australia: The Wide Reach of the Adverse Action Provisions under Fair Work

Last Updated: 4 June 2013
Article by Alistair Salmon

Most Read Contributor in Australia, September 2016

The adverse action provisions under the Fair Work Act apply not only to "workplace rights" of employees but also "workplace rights" of independent contractors. The reach of the adverse action provisions is very broad as the following two cases demonstrate.

In CFMEU v State of Victoria [2013] FCA 445, the CFMEU commenced adverse action proceedings in the Federal Court against the Victorian Government in December 2012 for interlocutory relief. The CFMEU claimed that unlawful adverse action had been taken by the Victorian Government against Lend Lease Project Management & Construction (Australia) Pty Ltd and its employees by refusing, or threatening to refuse, to engage it on a project because Lend Lease's enterprise agreement (which was approved by the then Fair Work Australia and in force) did not comply with the Code and Guidelines for the Victorian Building and Construction industry issued by the Victorian Government (Victorian Code and Guidelines). The Victorian Code and Guidelines are monitored by the Construction Code Compliance Unit (CCCU). Non-compliance of the Victorian Code and Guidelines by a person may result in that person being excluded from tendering for and performing public building and construction work in Victoria. The Victorian Government denied the claim but undertook at the interlocutory hearing not to make any decision to exclude Lend Lease from the project tender process until the final hearing of the CFMEU's application.

In CFMEU v Eco Recyclers Pty Ltd & Ors [2013] FCA 24, the CFMEU also commenced proceedings in the Federal Court in December 2012 for interlocutory relief. The CFMEU asserted in this case that a contractor, McCorkell Constructions Pty Ltd (McCorkell), refused or threatened to refuse to engage or use a sub-contractor, Eco Recyclers Pty Ltd (Eco), contrary to the adverse action provisions of the FW Act. The conduct by McCorkell was alleged to be motivated by the non-conformity of Eco's enterprise agreement (which was approved by the then Fair Work Australia and in force) with the Victorian Code and Guidelines. Eco was informed by the CCCU that its enterprise agreement was non-compliant with the Victorian Code and Guidelines at the time it was seeking to be utilised as a sub-contractor to McCorkell for demolition work on the upcoming construction project. Eco attempted to convince the CFMEU to support a variation to the Eco Agreement to remedy the non-compliance but was not successful. Eco then took steps to seek to have the Eco Agreement varied to remedy the non-compliance before the Fair Work Commission. The Court proceedings preceded the hearing of Eco's application before the Fair Work Commission. The Victorian Government was a named respondent to the proceedings. The CFMEU submitted that the Victorian Government applied pressure on McCorkell not to engage the services of Eco. The Court held that there was a serious issue to be tried as it was satisfied that McCorkell's refusal or threatened refusal is, or has been, motivated by the content of the Eco Agreement and no evidence or submission to the contrary was made by McCorkell or the Victorian Government. The Court held that it is not only the fact of the existence of an industrial agreement but also the content of that agreement that may constitute a "workplace right". The Court held that the balance of convenience was in favour of the CFMEU and that orders should be made with the effect of precluding McCorkell from refusing or threatening to refuse to engage or use the services of Eco because of any actual or perceived non-compliance of the Eco Agreement with the Victorian Code and Guidelines.

On 17 May 2013, the Federal Court handed down substantive judgments in the two cases. The Court held in the Lend Lease case that the Victorian Government took unlawful adverse action against Lend Lease when it threatened to exclude it from the tender because the Lend Lease Agreement did not comply with the Victorian Code and Guidelines. The Court held in the Eco case that McCorkell took unlawful adverse action against Eco by excluding it from the demolition work because the Eco Agreement did not comply with the Victorian Code and Guidelines and the Victorian Government unlawfully coerced Eco and its employees to vary the agreement to make it compliant with the Victorian Code and Guidelines.

As at the date of this article, penalties for the contraventions have not been determined by the Court.

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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