However, a recent successful application by the CFMEU for an
injunction to stop a scheduled ballot has highlighted other
potential issues with such an approach – in particular,
the need to ensure that the employer does not misrepresent to
employees that the proposed agreement has been endorsed by the
relevant union. It has also dispelled the common misunderstanding
that unions must be described as a party or signatory to an
agreement, in order to be bound.
After the Employer wrote to the CFMEU to advise that it intended
to proceed to a vote, the CFMEU responded that the Agreement, as
drafted, was a 'misleading representation' as at no time
had the CFEMU endorsed the Agreement for approval. The CFMEU then
made an urgent application to the Federal Court for orders that the
scheduled ballot not take place.
At the interlocutory application, Dodds-Streeton J agreed with
the union that there was a serious question to be tried that the
Employer had breached
section 345 of the FW Act by misrepresenting to employees that
the union had endorsed the Agreement for approval. Her Honour held
that it was "probable that the inclusion of the
CFMEU's name in the title to the proposed agreement would
indicate to an ordinary reader that the CFMEU was a party to the
agreement", and made orders restraining the Employer from
proceeding with the ballot.
A key issue for the Court in reaching this decision was that the
Employer took no steps to explicitly advise employees that the
CFMEU did not agree with the Agreement and that it was not a party
to the Agreement. While this seems like it could have easily been
remedied, in practice it sounds even more confusing –
i.e. telling employees that a union is not bound, even though the
Agreement says they are bound!
This decision is important for all employers who simply accept
or assume that unions must be listed as parties to an Agreement, or
must sign the Agreement on behalf of employees.
Section 183 of the FW Act provides the mechanism for unions to
write to FWA to advise that they wish to be covered by an
Agreement. Provided that the union is a bargaining representative,
this step is available regardless of whether the union endorses the
Agreement or the employer agrees with their participation. There
are no other requirements or obligations to refer to a union in
making an enterprise agreement (however in practice unions often
insist on being referred to).
If it is the case that an employer wishes to proceed to a vote
despite union opposition to an Agreement, it may be that the safer
approach is to remove any references to the union in the Agreement
– after all, if the agreement is approved by employees
and Fair Work Australia, it will be a matter for the union as to
whether they still want to be covered.
About Fraser Milner Casgrain LLP (FMC)
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