A full bench of Fair Work Australia has held that it is lawful to include provisions which directly regulate health and safety in modern awards.

The decision confirms that:

  • it is lawful to include provisions which directly regulate health and safety in modern awards; and
  • the OHS provision will be lawful if it concerns any of the matters listed in s139 or is an incidental or machinery term within s142 of the Fair Work Act (“the Act”).

The decision left open the question of which would prevail in the event of inconsistency between an OHS provision in an award and an OHS law or Code of Practice. Employers should be aware of the possibility of conflict between OHS provisions in awards and OHS laws and that FWA has not indicated which would prevail.

Factual background

The case arose from Fair Work Australia’s review of modern awards. Master Builders Australia Limited submitted to the review that certain provisions in the Building and Construction General On-site Award 2010 should be removed because they were “unlawful” clauses relating to OHS matters.

Examples of clauses MBA argued were “unlawful” included clauses:

  • providing for reimbursement for protective clothing, equipment and uniforms;
  • providing that apprentices with less than two years’ experience must not use a swing scaffold or bosun’s chair; and
  • imposing obligations on employers to provide certain personal protective equipment or reimburse workers for the purchase of personal protective equipment.

The case was heard by a full bench of Fair Work Australia. Submissions were received by 27 parties including ACTU, Ai Group, and the Construction, Forestry, Mining and Energy Union (CFMEU).

The decision hinged on the interpretation of ss.26-29 - interaction with State and Territory laws, s139 - terms that may be included in modern awards, and s142 - incidental and machinery terms.

Master Builders Australia’s submissions

MBA submitted two main arguments:

  • OHS provisions in modern awards do not displace State and Territory OHS laws. While s26 of the Act states that the Act is intended to apply to the exclusion of all State and Territory laws, and s29(1) provides that modern awards prevail over State and Territory laws, an exception applies for OHS. OHS is a non-excluded matter under s27(2)(c) and s27(1)(c) provides that s26 does not apply to non-excluded matters.
  • Provisions of awards dealing with OHS are not lawful because they fall outside of the matters that may be included in modern awards under s139 and s142. Further, the procedures for consultation, representation and dispute settlement about OHS matters cannot be included in modern awards.

Submissions against MBA’s contentions

The ACTU submitted that:

  • the interaction laws in the Act do not deal with the lawfulness of the content in modern awards but with the interaction of the Act with the inconsistency sections in the Australian Constitution (s109 and s122);
  • section 29 operates to resolve conflict between State or Territory laws and awards but does not determine whether the clause in the award is lawful; and
  • a clause that has a bearing on OHS will be permissible if it touches on a matter specifically listed in s139.

Decision

Senior Deputy President Watson, Senior Deputy President Hamberger, and Commissioner Cargill dismissed MBA’s application and:

  • upheld ACTU’s submission that the interaction laws in the Act do not deal with the lawfulness of the content in modern awards, but provide interaction rules to operate in conjunction with ss109 and 122 of the Constitution;
  • found it unnecessary to decide which would prevail in the case of inconsistency between OHS provisions in an award and OHS laws or Code of Practice; and
  • held that an OHS provision in an award will not be beyond power if it comes under any of the matters listed in s139 or is an incidental or machinery term within s142. This same test applies whether the award provision ‘directly regulates’ or only ‘touches upon’ OHS. The Full Bench found that each of the award provisions in dispute was a matter permitted by s139 of the Act.

In making their decision the Full Bench rejected:

  • MBA’s submission that the interaction sections in the Act have the effect that award provisions which “directly regulate” health and safety are not lawful; and
  • MBA’s submission that OHS award provisions are not lawful because they fall outside of the matters that must or may be included in modern awards under s139 and s142 of the Act.