Currently, union demarcation is generally defined by awards and agreements entered with named unions as respondents. Existing agreements typically reference union rules and award respondency.

Under the Fair Work Act regime, two things are set to change.

First, the Bill states: "A permit holder may enter premises to hold discussions with one or more persons who perform work on the premises; and whose industrial interests the permit holder's organisation is entitled to represent; and who wish to participate in those discussions." (Section 484). So, a union won't have to be covered by an award or agreement to gain entry to a site for member recruitment and discussion purposes, as long as the union's rules allow them to cover the workers.

Second, the Federal Government removed the traditional concept of respondency in modern awards in order to ensure the award modernisation process was not hamstrung by complex demarcation arguments. The Government has sought to avoid the inclusion in modern awards of "cumbersome union coverage schedules". That is, modern awards will not have any named respondents. So, in order for a union to represent employees, its Union Rules must permit it to cover the work performed under an award or agreement.

This poses problems in civil construction where competition between the AWU and CFMEU is keen. The AWU has traditionally claimed exclusive coverage and the CFMEU maintains that its Rules allow it to have coverage. The AWU's position is that it long ago decided it had no interest in highrise construction and that was the domain of the CFMEU, and equally the CFMEU should not be trying to cover civil construction.

The result is likely to be that competition between unions on civil construction sites will increase. Unions will market to eligible members that they can achieve better agreement outcomes and representation than their union competitor.

The Government has responded to the union and employer concern by suggesting that new representation orders exercised by Fair Work Australia could be the answer. That is, in the Government's view, the simplest way to manage union representation and potential demarcation disputes is to retain current award-derived coverage rights, and where representation is disputed, parties can apply to FWA for representation orders.

But a party would need to make application to FWA for orders, and that is probably not a place that civil construction industry employers want to be. In many cases, seeking representation orders that remove a union's right to represent certain employees could result in uncertainty and be hazardous to site profitability.

Union representation rights are proposed to be included in the forthcoming transitional and consequential bill legislation, which will no doubt be controversial and will need to be debated and settled by July 1 to be ready for the operational date of the substantive Fair Work Bill. The Government is aiming to have the Fair Work Bill through Parliament by 19 March 2009.

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