The "rogue union": the rise of unregistered organisations and their impact on employers

By Hilary Searing, Jessica Tinsley

06 Jul 2017

The rapid rise of an unregistered union in the fast food and retail sectors is causing concern for employers and traditional unions alike. 

An application to terminate an enterprise agreement covering 75,000 Coles supermarkets workers by self-represented night fill worker Penny Vickers has become the latest battleground of choice for the unregistered Retail and Fast Food Workers Union (RAFFWU) to challenge Australia's largest private sector union the Shop, Distributive & Allied Employees Association (SDA).

The SDA will support Coles' attempt to have Ms Vickers' termination application dismissed when it is heard by the Full Bench of the Fair Work Commission in October.  In an unorthodox move, the RAFFWU sought to intervene in support of the application by representing two individual Coles employees in the termination proceedings before the Full Bench.  This intervention was strongly opposed by both the SDA (who in recent Senate enquiries have called the RAFFWU a "bogus union") and Coles (who referred to the RAFFWU as a "rogue union" during the course of the proceedings).

While the RAFFWU failed to convince the Commission that it should be heard in the proceedings in its own capacity, the decision by the Commission is unlikely to provide Coles or the SDA much comfort ahead of October.

This is because RAFFWU officials are still allowed to represent Coles employees in their individual capacities, providing the RAFFWU an opportunity to influence employees and, potentially, steer the direction of these proceedings. 

The RAFFWU's next steps should be watched closely, not only by employers in the retail and fast food sectors, but by all employers.  This case illustrates the manner in which unregistered employee associations could seek to involve themselves in matters previously left to traditional unions, while not requiring those same organisations to comply with the strictures of legislation, such as the Fair Work Act 2009 or Fair Work (Registered Organisations) Act 2009 (Cth).

The challenge to the SDA

While the current proceedings relate to an employee's application to terminate an enterprise agreement, it is just one chapter in a long list of challenges between the SDA and the RAFFWU since its formation in November 2016.

The RAFFWU, with its relatively young and progressive membership base, is an increasing threat to the powerful and conservative SDA.

The RAFFWU has publically criticised the SDA for supporting what it calls corporate "behemoths" such Coles, Woolworths and McDonalds in their attempt to allegedly undermine employee's rights.  In the past it has lent support to employees challenging their employers in the sector, including during the successful landmark challenge to the Coles supermarkets enterprise agreement approval application last year.  The current case is the first time however the RAFFWU has flexed its muscle in a legal forum on its own behalf.

As the Registered Organisations Act precludes the registration of a union representing the same category of worker who can "more conveniently" belong to an already existing union, the RAFFWU will face significant challenges becoming a "registered organisation" while the SDA exists.

While the recent hearing before the Commission has confirmed that its lack of formal registration precludes the RAFFWU from intervening in certain matters related to the termination and variation of enterprise agreements on its own behalf, this is not the end of the story and there are several other aspects where the RAFFWU could intervene in other industrial matters in an attempt to push its agenda and push the SDA and other existing unions aside,  disrupting the status quo.

"Rogue" unions and the Fair Work Act - room to move?

While the current case has clarified that the RAFFWU has no rights to terminate or vary an existing enterprise agreement on its own behalf, an unregistered union is not precluded from involvement during the crucial enterprise agreement negotiation process (noting the RAFFWU has recently announced it is a bargaining representative for "quite a few employees" for the proposed new Coles enterprise agreement).  

An employee may appoint in writing a "person" to be their own bargaining representative.  As "person" does not necessarily mean "natural person", unregistered unions who are also incorporated associations (like the RAFFWU) may in theory also be appointed to this position.

If the RAFFWU, or organisations like it, are appointed as bargaining representatives it will have rights to be actively involved in the bargaining process and have these rights as protected "workplace rights" under the Fair Work Act.   These enforceable rights may include:

  • being formally notified of all meetings and decisions made by the employer and other parties;
  • applying to have an enterprise agreement approved by the Commission; and
  • making applications to the Commission, in its own capacity as a bargaining representative, for:
  • bargaining orders;
  • majority support determinations;
  • scope orders; and
  • for the Commission to deal with a bargaining dispute.

The rights afforded to bargaining representatives are wide-ranging and have the potential to influence the bargaining process.

Watch this space

While union membership is at an all-time low across Australia, the rise of the RAFFWU demonstrates an ongoing appetite for popular unionism.

The RAFFWU is taking advantage of an industry that is largely dominated by a young, urban workforce who it alleges has become disillusioned by the "out-of-touch" SDA.  In light of the wording in the Fair Work Act that may allow the RAFFWU to heavily influence industrial relations between employers and their workforce, it is vital that employers in the retail and fast food sectors seek legal advice as soon as possible prior to the commencement of enterprise bargaining and/or related disputes.  In particular, employers will need to understand:

  • the risks associated with dealing with an unknown and well-resourced third party organisation;
  • their obligations to unregistered unions (including, for example, when unregistered union delegates must be consulted during the bargaining process); and
  • their rights to challenge applications/ decisions made by unregistered organisations when its conduct is unreasonably impeding the efficient running of the bargaining process or otherwise causing detriment to the business.

While the RAFFWU's position in Australia's industrial relations environment remains unique, employers in other industries should keep a watchful eye out for similar organisations aiming to pique the interest of their own workforces. 

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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 communication. Persons listed may not be admitted in all States and Territories.