"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union", known as the Australian Manufacturing Workers' Union (AMWU) v Visy Board Pty Ltd [2018] FWFB 8

Factual Background. The Australian Manufacturing Workers' Union ("AMWU") sought to enforce a casual conversion clause in an EA after the respondent ("Visy") refused to offer full-time employment to two labour hire workers. The workers had completed a continuous full-time period of three months' engagement at one of Visy's sites. Clause 16 of the applicable EA required Visy to offer full-time, permanent employment to casual employees where their engagement at a Visy site had continued for a continuous full-time period of three months. 

At first instance, the Commission concluded that Clause 16 of the EA was not a "permitted matter" (as that term is used in the Act). The AMWU then appealed the Commission's decision. The key issue on appeal was whether the Commission had the power to determine the dispute. The Commission also considered whether Clause 16 of the EA was a "permitted matter", and accordingly whether that clause required Visy to offer employment to a labour hire worker. 

Legal Background. EAs may be made about "permitted matters" within the meaning of the Act. "Permitted matters" include those matters pertaining to the relationship between an employer and the employees covered by the EA, as well as matters pertaining to the relationship between the employer and the employee organisation (i.e. union) covered by the EA.

In 2010, the Commission held that terms of an EA that contained a general prohibition on an employer engaging labour hire employees or contractors were not permitted matters. The Commission also held that terms relating to conditions about employing casual employees or engaging labour hire or contractors are permitted matters only if those terms sufficiently relate to employees' job security. 

Decision. The Full Bench of the Commission held that Clause 16 was not a "permitted matter". The Commission referred to its 2010 decision, and said that this issue had been settled and that, accordingly, it lacked the jurisdiction to deal with the dispute. Terms restricting or qualifying an employer's right to use independent contractors are not permitted matters pertaining to the employment relationship.

The Commission distinguished this case from its decision in the 2005 Murray Bridge case, where a term of an EA partially prohibiting the use of labour hire employees by the employer was deemed to relate to the employment relationship. This was because the term was also designed to increase permanent employment by placing obligations upon the employer to engage more permanent employees. 

Lessons for Employers. When drafting EAs with unions and other employee representatives, employers should be aware that the Commission cannot enforce clauses that are not permitted matters within the meaning of the Act. General clauses prohibiting employers from engaging labour hire employees or contractors will be unenforceable, unless they place additional obligations on the employer that relate to employees' job security.