10 March 2011

Old enterprise agreements - when can protected action ballot orders be made?

Fair Work Australia has shut off an avenue to industrial action where even one employee sought to be covered under a new enterprise agreement is covered by an old agreement which is not about to expire. The decision in Power Projects International Pty Ltd v “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union [2011] FWAFB 1327 is an important clarification both of the availability of protected action ballot orders, and the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009.

The application for protected action ballot orders

PPI's employees perform work under maintenance contracts. They are covered by a certified agreement made in 2008 under the Workplace Relations Act 1996. PPI then won the contract to perform upgrade work. The unions argued that the upgrade work was not covered by the 2008 Agreement, and approached to PPI to negotiate an enterprise agreement to apply to the upgrade work. They then applied under section 437 of the Fair Work Act for protected action ballot orders, which were granted by Deputy President Harrison.

What happens if the employees are covered by a transitional instrument?

The key issue in this case was whether these protected action ballot orders could be made at all. This turned on item 17 of Schedule 13 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, which restricts when protected action ballot orders may be made where the employees are already covered by a collective agreement-based transitional instrument, such as a collective agreement, workplace determination, or a pre-reform certified agreement.

The Full Bench of the Fair Work Australia said they couldn't: if any of the employees presently covered by the 2008 Agreement were included within the group to be covered by the proposed agreement, the applications for ballot orders could proceed no further.

This decision is similar to the approach taken by Senior Deputy President Hamberger in Construction, Forestry, Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd, Hamersley Iron Pty Ltd and Robe River Iron Mining Co Pty Ltd (2010) FWA 8210.

Implications for employers

This decision is an important clarification of the way that the industrial relations system transitions to the Fair Work Act.

It makes it clear that employers will not be subject to industrial action in relation to a proposed enterprise agreement if:

  • even one employee that would be covered by the proposed new agreement is still covered by a transitional agreement; and
  • that agreement has more than 30 days to run before its nominal expiry date.

You might also be interested in ...

Disclaimer
Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.
For more information, contact...
Email: Robbie Walker, Partner
Tel: +61 2 9353 4208
Email: Glen Bartlett, Partner
Tel: +61 3 9286 6909
Email: Dr Graham Smith, Partner
Tel: +61 3 9286 6138
Email: Hedy Cray, Partner
Tel: +61 7 3292 7003
Email: Saul Harben, Partner
Tel: +61 8 9426 8219
Email: Mark Spain, Partner in Charge
Tel: +61 8 8943 2512