IN a case further clarifying the illegality of union’s seeking EBA provisions over labour hire, the Fair Work Commission has rejected a union’s application for a protection action ballot order (PABO) on grounds that labour hire provisions are not permitted matters in workplace agreements.

As part of ongoing negotiations with Phillip Leong Stores toward a workplace agreement for employees working at its Sydney distribution centre, the National Union of Workers (NUW) lodged an application for a PABO to the Fair Work Commission.

The union indicated that negotiations had come to an impasse over provisions relating to labour hire, which comprised about 120 workers at the warehouse, sourced from two labour hire agencies.

The organisation, however, opposed the application on grounds that the union had not genuinely tried to reach an agreement, asserting that the labour hire provisions were outside the scope of permitted matters.

In particular, the union’s log of claims included requirements that:

  • Labour hire be paid in accordance with the proposed agreement and are offered permanent employment after six months;
  • The organisation review the use of labour hire in consultation with the union on a quarterly basis; and
  • Labour hire agents comprise only 20% of the permanent workforce.

Citing Full Bench authority, the union argued that the Fair Work Commission did not need to consider whether the claims were not permitted matters because the union ‘reasonably believed’ they were, concluding that it was genuinely trying to reach an agreement.

Commissioner Geoff Bull, however, cited conflicting Full Bench decisions to reject the argument.

“A reasonable belief that only permitted matters are being pursued is not an absolute defence to not having tried to genuinely reach an agreement, where non-permitted matters are being sought,” he said.

Additionally, the Commissioner said it was necessary to assess each application on its own facts and circumstances.

“The conduct of the NUW must be examined and assessed for the purpose of determining as a matter of fact whether it has been, and is, genuinely trying to reach an agreement,” Cmn Bull said.

“This demands an examination of all of the steps and actions taken by the NUW in genuinely trying to reach an agreement, separately and independently of whether it simply wants an agreement.”

Commissioner Bull went on to clarify that provisions for labour hire in enterprise agreements were limited in permissibility.

“Terms relating to conditions or requirements which sufficiently relate to an employee’s security of employment and maintenance of wages and conditions, such as a requirement that contractors must not be engaged on terms and conditions that would undercut the enterprise agreement, are permitted matters as they pertain to the employment relationship,” he said.

“Terms that contain a prohibition on the employer engaging contractors or labour hire employees or the employer’s right to use independent contractors are not matters pertaining to the employment relationship, as opposed to those which may relate to the regulation of conditions to be afforded to contractor employees.

“A bargaining representative pursuing an agreement that contains non-permitted matters as substantive terms cannot be genuinely trying to reach an agreement under the Fair Work Act.”

Concluding the union had not been making a reasonable effort to reach an agreement due to the inclusion of excessive labour hire provisions, Commissioner Bull dismissed the union’s PABO application.

To read the decision in full, click here.

AMMA’s workplace relations experts are leaders in negotiating workplace agreements on behalf of the Australian resource industry. Contact your local AMMA office for advice and information about workplace agreements for your workforce.