Jim Marr unpacks the recent High Court Electrolux decision to test whether the ruling matches the media hype.
When Lachlan Riches leans back in his Elizabeth St office and foretells “merry hell and chaos” you sit up and take notice.
Riches is a sober soul who has endured the slings and arrows of the Building Industry Taskforce and any number of judges on the way to becoming a partner with Sydney law firm Taylor and Scott.
He has a bee in his bonnet about last month’s High Court decision on Electrolux and reckons a few people will be stung before order is restored.
The decision, he says, leaves unions and their members uncertain about what they can bargain over and whether or not they can legally take industrial action.
According to Riches, the High Court has reverted to the doctrines of the old award-based system and tried to superimpose them on the enterprise bargaining regime that has emerged over the last 10 years.
“They have left it ambiguous as to what the ground rules are and, as a result, fundamental rights that go back 80 years will be challenged and re-examined,” he says.
“There is a lot of scope for mischief. There will be a lawyers’ picnic before it settles down.”
CFMEU legal officer, Rita Malia, concurs. Employers, tin pot and more substantial, are lining up to challenge building industry documents everyone thought had been done and dusted.
She says her members face “massive uncertainty” because even agreements certified by the commission could be trashed retrospectively.
Vehicle industry workers are being driven mad by Electrolux-based attempts to suck clauses out of their agreements.
AIRC senior deputy vice president, O’Callaghan took the big stick to Dandenong employees of Iveco, ruling their did claims not “pertain” to the employer-employee relationship and, as a result, a week of industrial action had not been “protected”.
AMWU vehicle division secretary, Ian Jones, says the clauses in dispute are common to every motor industry agreement in Australia.
Iveco, part of the giant Fiat group, initially responded with a slimmed-down proposal, it said would comply with Electrolux principles. It would also have stripped payments, protections and conditions from its workers.
And it’s not just militants reassessing their agreements. The SDA has redrafted its agreement with supermarket operator Franklins to avoid being sucked into the Electrolux argument.
Matt Thistlewaite from NSW Labor Council, however, is sanguine.
He concedes Electrolux throws up problems but says properly-drafted clauses should still pass muster.
“Some people have drawn conclusions that are unrealistic and not consistent with case law,” he says. “Some reactions have been alarmist.”
So, what is Electrolux all about? Well it’s significance doesn’t lie with the outlawing of strikes in support of political or social ends as some media outlets would have had us believe.
Strictly, on September 2, the High Court of Australia rolled, by majority decision, a full Federal Court ruling that bargaining agent fees were a legitimate matter for negotiations under the Workplace Relations Act.
The case arose from an Electrolux claim that 2001 protected action in support of bargaining fees at its Adelaide plant had been illegal because the issue did not “pertain to the employer-employee relationship”, as required by the Act.
Potentially more significant than bargaining fees, are ramifications flowing from the reasoning behind the High Court’s decision, seen by many as drastically narrowing the theatre in which workers can act.
Already, industrial law firms are circulating employers with advice that union entry rights, delegate education provisions and union fee deductions do not “pertain” to the employer-employee relationship.
The Court has put question marks over clauses that do not relate to the narrowest view of wages and conditions. Limitations on the use of contractors or labour hire, and provisions to secure entitlements seem likely to be contested.
Even childcare provisions, Riches warns, will come up for review.
“Do they address the woman’s rights as an employee or her rights as a mother?” he asks.
The High Court went on to rule that industrial action over matters that did not “pertain” was not protected. In other words, it is illegal and workers can be subject, retrospectively, to financial penalties – up to $10,000 for each day of a stoppage and, under tort law, potentially millions of dollars.
A consequence of the ruling, lawyers say, is that if a commission or court strikes down a clause, even after ratification, the whole document appears to be rendered invalid.
The majority finding was vigorously opposed by Justice Kirby. In a dissenting opinion he contended it would have a “chilling effect” on collective bargaining.
“To expose an industrial organisation of employees to grave, even critical, civil liability for industrial action, determined years later to have been unprotected, is to introduce a serious chilling effect into the negotiations that such organisations can undertake on behalf of their members,” Kirby contended.
He called the majority view “impractical” and “narrow”, suggesting it was divorced from the reality of industrial relations.
Riches takes up that point. During negotiations, he says, a proposal can be raised, thrashed out, and end up being dropped, or agreed in a very different form.
However, under this ruling, he says, any industrial action can be declared “unprotected”, and participants fined, if a single clause is ruled not have been compliant at any stage of that process.
The debate seems as philosophical as it is legal.
Right wing organisations have been campaigning for years against “special privileges enjoyed” by workers’ organisations.
By this, they mean in part, a specialist jurisdiction dealing with industrial issues – the IRC with its own body of case law and specialist commissioners.
When the Federal Court brought down its original decision on Electrolux, the HR Nicholls Society went feral about “the right to strike”.
Trade unions, according to the HR Nicholls Society, “live by extorting economic rents” from employers.
The HRs say there should no special industrial jurisdictions and that strikes should be treated as “extortion rackets”. These views spring from a notion that there is no “power imbalance” between individual workers and corporations who should “contract freely” under common law.
This idea was rejected nearly 100 years ago in most of the English-speaking world. The rights of English and Welsh workers to strike was acknowledged in the Trade Disputes Act of 1906.
Australian leaders of a social democratic persuasion took another route at the turn of last century, establishing a system of conciliation and arbitration that sought to remove the impetus for strikes.
The basic concept went unchallenged for decades. Even the conservative Menzies and Fraser administrations stuck to the core system while seeking to hem workers in with regulations.
But, with deregulation came change. In 1993, Labor moved away from the centralised award system and, since 1996, the Howard Government has openly championed the views of the HR Nicholls Society.
Workplace Relations Minister, Kevin Andrews, was formally joined to the Electrolux case in support of the company and was one of the first to celebrate the September 2 ruling.
His government’s Workplace Relations Act formalised a dog-eat-dog bargaining system where employers or employees could take “protected action” without the right to call on an umpire to settle the issue.
Last year’s harrowing Morris McMahon dispute was a result of that approach. Low-paid workers were locked out of the can manufacturing operation for more than three months while the company refused to negotiate, or recognise its employees’ decision to involve a union.
The Howard Government has been a militant advocate of the hands-off view that no third part should “interfere” in contractual negotiations. Although, where this sits with the ability of Commissions or Courts to strike out freely negotiated clauses is not entirely clear.
Unions are adopting a range of responses to Electrolux – from business as usual, through forensic examinations of existing agreements, to sitting on their hands and hoping it will all be rendered academic by the events of October 9.
Others, especially in Victoria, are trading certified agreements for letters of intent.
All know their problems will be compounded by the “stack” of the Industrial Relations Commission engineered by the Howard Government.
Workplace Relations Ministers Tony Abbott and Andrews have appointed a series of activist commissioners – commissioners, essentially, who don’t people who don’t believe in the concept of a commission.
The most obvious of these are former Employment Advocate Jonathan Hamberger, an outspoken champion of non-union AWAs; and former Rio Tinto and Telstra headkicker, Rob Cartwright, who was elevated to the bench shortly after the Federal Court found him guilty of discriminating against union members.
Observers say senior vice presidents Lacy and O’Callagahan are similarly inclined.
Thistlewaite has personal experience of trying to have agreements certified by Cartwright from his days with the AWU.
“Cartwright had a general approach of not certifying any agreements with clauses that sought controls over contract labour or provided right of entry provisions,” Thistlewaite explained.
In one case, Cartwright removed right of entry and labour hire provisions that had been agreed by the employer only to be over-ruled by a full commission bench.
If the High Court decision does nothing else, it will strengthen the hands of Cartwright and commissioners like him.