The Fair Work Commission (the “Commission”) has ruled in favour of an employer and rejected an appeal by the Australian Manufacturing Workers’ Union (ANWU). ANWU’s application concerned a dispute with an employer alleging a breach of the employer’s enterprise agreement.
The enterprise agreement contained a clause regulating the use of casual employment. This clause required the employer to offer permanent employment to casuals (including those engaged through a labour hire company) if they were required to work more than three months. The dispute arose when the employer refused to offer full-time employment to two workers who had completed three months service.
In order to resolve the dispute, the first Commission needed to determine whether the clause in the enterprise agreement was a “permitted matter” under the Fair Work Act (the “Act”). If the clause was not a “permitted matter” the employer would not be bound to it and the dispute would fail.
The Commission considered case law as well as the Explanatory Memorandum for the Fair Work Bill 2009 (the “Memorandum”) which provides a helpful list of examples of terms intended to be “permitted matters”. The Memorandum identifies terms intended to be in the scope of permitted matters included “terms relating to conditions or requirements about employing casual employees or engaging labour hire or contractors if those terms sufficiently related to the employee’s job security”. The Memorandum also identified those terms not intended to be within the scope of permitted matters includes “terms that would contain a general prohibition on the employer employing labour hire employees or contractors”.
The ANWU argued the clause related to job security, which is permitted, given it protected against an employer hiring a high number of causals or contract workers to avoid engaging permanent staff members. In contrast, the business argued that the clause was not a permitted matter because it has the effect of prohibiting the engagement of labour hire employees.
In the original determination, the Commission concluded the clause restricted and/or qualified the use of labour hire workers and was not sufficiently related to job security. The Commission decided the clause was not permitted. The application was dismissed. The ANWU applied to the Full Bench of the Commission to appeal the decision. On appeal, the Full Bench gave consideration to: the “permitted matters” clause of the Act: the enterprise agreement; and relevant case law. The Full Bench upheld the Commission decision and refused permission to appeal.
This decision clearly demonstrates clauses in enterprise agreements which have the effect of stopping the employers engage casual employees are not permitted under the Act. To broaden your knowledge in this area attend our Enterprise Bargaining and Agreement Making training to increase your knowledge of the benefits an enterprise agreement may offer to your business including a step-by-step guide of what is required.
Written by Stephanie Beckett
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