Earlier this month, a unanimous Full Bench of the Fair Work Commission (FWC) handed down a decision that is set to lay the landscape for the interpretation of union eligibility rules into the future.[1] In its reasons, the Full Bench provided critical guidance on how union eligibility rules should be interpreted. In particular, the Full Bench considered that the position adopted by the appellant, the Australian Rail, Tram and Bus Industry Union (RTBU), during the award modernisation process was instructive.

The decision is significant, upholding long-standing industrial arrangements for the representation of locomotive drivers and rail workers in Australia’s strategically important Pilbara region and the mining industry more generally.

Union eligibility rules as a species of their own

Union eligibility rules are a species of their own, requiring the application of interpretive principles that differ from those applied when interpreting statutes, regulations or even contracts. The amalgamation of unions over the years has not assisted, resulting in ambiguous and confusing union rules which are difficult to interpret.

During the era of conciliation and arbitration in Australia, when industrial disputes were settled by the issuing of awards binding the parties, union eligibility rules were centrally important. Those rules informed award coverage and in doing so carved out union ‘turf’.

However, the advent of modern awards (introduced 1 January 2010),[2] which do not name unions as being “a party” has opened the way for some unions to contest coverage and venture into ‘new turf’.  In this Modern Award era, the relevance of historical award coverage as a factor when interpreting union eligibility rules has been questioned.

Union representation under the Fair Work Act 2009 (Cth)

At the core of the dispute was s 176(3) of the Fair Work Act 2009 (FW Act). That section stipulates that a union cannot be a bargaining representative unless the union is entitled, pursuant to its eligibility rules, to represent employees specifically in relation to the work that will be performed under the enterprise agreement.[3] Railtrain Pty Ltd (Railtrain) disputed the RTBU’s right to represent the industrial interests of a rail maintenance worker on the basis that he was a member of the union.

Several consequences follow from a union representative lawfully acting as a bargaining representative during enterprise bargaining negotiations, such as:

  • the mutual obligations on all representatives to bargain in good faith.[4]
  • if an agreement is reached and approved by the FWC, a union may seek to be noted as being covered by the agreement.[5] Coverage is significant, granting entitlements to unions that they would not otherwise have, such as to enforce the terms of the agreement.[6]

Quite apart from enterprise bargaining negotiations, the FW Act also grants unions rights to enter premises, although the threshold test for entering for the purposes of holding discussions is lower than the s 176(3) eligibility test.[1]

The decision

The case turned on the interpretation of the RTBU’s eligibility rules – was the rail maintenance worker employed in or in connection with the railway industry? Railtrain submitted that work covered by the enterprise agreement was work in the mining industry, whilst the RTBU argued that the work fell within the railway industry.

At first instance, Commissioner Roe held that Railtrain is engaged in the mining industry. Consequently, the RTBU was not entitled under s 176(3) of the FW Act to represent the worker.[2]  The Commissioner clarified that the same employer might fall within different industries, depending the work that is performed under different enterprise agreements.

On appeal, the Full Bench upheld the Commissioner’s conclusion. Established custom and practice, including the position adopted by the RTBU in the award modernisation process as to the coverage of the Rail Industry Award and the Mining Industry Award was instructive and substantially formed the basis of the Full Bench’s decision.

Broader implications for industrial relations in Australia

The decision illustrates the importance to clients of understanding Australia’s unique industrial relations system. In the wake of a steady decline in union membership over the past 30 years, unions are likely to test the boundaries. When confronted with a union seeking to venture into ‘new turf’, businesses will need to be attuned to the history of award coverage and especially to the commitments made by unions during the award modernisation process. Based on this seminal decision, the FWC is unlikely to depart from long-recognised custom and practice which clearly delineates union turf.

[1] FW Act, s 484. See also, for example, the right of entry provisions for suspected breaches of the Occupational Safety and Health Act 1984 (WA) under s 49I of the Industrial Relations Act 1979 (WA).

[2] Railtrain Pty Ltd [2016] FWCA 1385.

[1] Railtrain Pty Ltd [2016] FWCFB 3153.

[2] The Rail Industry Award and the Mining Industry Award were the subject of dispute in this case.

[3] Relevantly in this case, the Railtrain Pty Ltd Rail/Civil Maintenance & Operations Pilbara Enterprise Agreement 2016.

[4] FW Act, s 228.

[5] FW Act, s 201(2).

[6] FW Act, s 539, table item 4.

Leave a Reply

Your email address will not be published. Required fields are marked *