"Objectionable provisions" and their impact on union deeds

By Chris Hartigan.

Key Points:
Although a provision of a deed which is objectionable within the meaning of the Workplace Relations Act is deemed to be void by section 811, an employer is not subject to a penalty for entering into such an agreement, unlike the penalty which applies if the employer lodges a workplace agreement which contains prohibited content.

One common tactic adopted by unions in response to the increasing legislative restrictions on what can be included in a workplace agreement made under the Workplace Relations Act 1996 ("WRA") has been to demand that employers enter into common law deeds, which contain provisions that could not otherwise be contained in a workplace agreement. This trend has been taking place for several years, and first arose in response to the Electrolux decision[1] which confirmed the terms that matters which did not pertain to the employee relationship could not be included in a certified agreement.

Prohibited content

One of the amendments to the WRA that arose out of the Workplace Relations Amendments (Work Choices) Act 2005 (Cth) is an expanded notion of "prohibited content" which provides that a broad range of material, including matters which did not pertain to the employer/employee relationship, can not be included in a workplace agreement. If an employer did include such content in a workplace agreement when it lodged the agreement with the Office of Employment Advocate, then the employer (and not the union or employee parties) can be subject to a fine of up to $33,000. The WRA also expressly prohibits industrial action in support of an agreement containing prohibited content (see section 436 of the WRA.)

Objectionable provisions

A new change in the new Act has been an expansion of a concept of "objectionable provision". This is to be found in section 810 of the WRA, and is situated within the freedom of association provisions.

This concept did exist in the pre-reform Act, and it was defined as a provision of an agreement which breached the freedom association provisions of the WRA (See section 298Z(5) of the pre-reform Act). A provision of a certified agreement that required payment of a bargaining services fee was also deemed to be objectionable.

Section 298Y of the pre-reform Act provided that a provision of an industrial instrument, or an agreement or arrangement whether written or unwritten is void to the extent that it required or permitted, or has the effect of requiring or permitting, any conduct that would contravene the freedom of association provisions.

Under the new Act, this component of the meaning of objectionable content is retained, but it is also broadened to include:

"810(b) a provision that directly or indirectly requires a person:

(i) to encourage another person to become, or remain, a member of an industrial association; or

(ii) to discourage another person from becoming, or remaining, a member of an industrial cessation;

(c) a provision that indicates support for persons being members of an industrial association;

(d) a provision that indicates opposition to persons being members of an industrial association;

(e) a provision that requires or permits payment of a bargaining services fee to an industrial association" (see section 810(1)).

Objectionable content is also prohibited content.

Union side deeds

During or after the negotiation of a union collective agreement lodged under the WRA, unions commonly claim that an employer should enter into a deed with the union which includes provisions such as one requiring the employer to deduct union membership fees and to pay them to the union. Such provisions clearly fit within the definition of objectionable provisions in section 810. Such provisions cannot be included in workplace agreements. However, even if the employer were to agree to enter into such a deed, then section 811 provides that a provision of an industrial instrument or an agreement or arrangement (whether written or unwritten) is void to the extent it requires or permits or has the effect of requiring or permitting any conduct that will contravene the relevant part of the Act.

Clearly the effect of the Federal Government's amendment to this part of the WRA is that unions are prevented from avoiding the limitation on certain clauses within collective agreements, by entering into common law agreements such as these deeds. Although a provision of a deed which is objectionable within the meaning of the WRA is deemed to be void by section 811, an employer is not subject to a penalty for entering into such an agreement, unlike the penalty which applies if the employer lodges a workplace agreement which contains prohibited content. Consequently, employers must make a commercial decision about whether they are prepared to execute deeds which may expose them to legal action in common law courts to satisfy union demands made upon them to retain provisions which cannot lawfully be included in workplace agreements under the WRA.

Thanks to Rose Bryant-Smith for her assistance in writing this article.