The shoe was on the other foot in a recent Federal Court of Australia decision, in which the Court held that a union-authorised restriction on the performance of overtime constituted unlawful adverse action against the employer. 

Why is this case significant?

Although there have been a number of court decisions which have considered adverse action protections for employees under the Fair Work Act 2009 (Cth) (Act), decisions which have considered adverse action protections for employers are rare. 

What happened?

The employer operated a mine in Queensland and employment at the site was subject to an enterprise agreement.  A clause of the enterprise agreement provided that the employer could require employees to perform unrostered overtime, subject to prevailing operational requirements.

The local branch of the Construction, Forestry, Mining and Energy Union (CFMEU) had a policy that employees at the mine who were members of the union were limited in the amount of unrostered overtime which they could work (Union Overtime Policy), in order to help the CFMEU to ‘get more new employees a job’ at the mine.  The Union Overtime Policy was communicated through notices in crib rooms and union membership packs.

The employer challenged the Union Overtime Policy in the Federal Court on the grounds that the CFMEU and four of its officials had taken adverse action against it by maintaining and promulgating the policy in breach of a workplace right.  The employer claimed that it had a workplace right to require its employees to work reasonable unrostered overtime in accordance with the enterprise agreement. 

The employer also argued that the CFMEU and the four officials involved had engaged in industrial action during the life of the enterprise agreement by seeking to limit employees’ overtime through the Union Overtime Policy and by making false and misleading statements, contrary to the Act.  The employer alleged that the Union Overtime Policy contravened the enterprise agreement.

The CFMEU ran a ‘no case to answer’ submission in response to the employer’s challenge and did not call any evidence.

What did the Court decide?

The Federal Court found that:

  • the employer had a workplace right pursuant to the enterprise agreement to require employees to work unrostered overtime in prescribed circumstances;
  • the Union Overtime Policy constituted industrial action by the CFMEU against the employer, which is adverse action under the Act; 
  • the CFMEU failed to discharge the onus of proving that the reason for the adverse action was not a prohibited reason under the Act;
  • both the CFMEU and an official engaged in false and misleading representations concerning the right of the employer to require unrostered overtime because the Union Overtime Policy, which was authorised by the CFMEU and promulgated by the official, included false or misleading statements in breach of the Act;
  • the CFMEU organised industrial action within the meaning of the Act in that it imposed an overtime ban, limitation or restriction and encouraged CFMEU members to apply the ban, limitation or restriction; and
  • an official was knowingly concerned in or a party to the CFMEU’s industrial action because he signed the letter annexing the Union Overtime Policy, which was sent to all new members of the union employed at the mine.

However, the Court held that there was insufficient evidence to find that the three other union officials had taken unlawful adverse action, because there was no evidence that those officials authored documents containing the Union Overtime Policy or were party to promulgating the Union Overtime Policy.

The Court rejected the employer’s argument that the CFMEU had contravened the requirement in the enterprise agreement to work reasonable unrostered overtime, because this requirement did not impose an obligation on the CFMEU.  Similarly, the Court concluded that there was no evidence that the four union officials – who were employed by the employer - refused to work unrostered overtime in contravention of the enterprise agreement.

Following a hearing as to the appropriate penalty, penalties will be imposed on the CFMEU and the official who was found to have contravened the Act.

So what?

This decision follows an earlier Federal Court decision in which an employer sought to restraint three unions from encouraging industrial action, by banning after-hours work without the consent of the unions, during the life of an enterprise agreement.  In that decision, the Court found that there was a serious question to be tried about the existence of the employer’s workplace rights and whether adverse action had been taken by the unions in relation to these workplace rights.  The employer in that case claimed it had workplace rights as follows:

  • to require work whenever the project schedule required it in accordance with the enterprise agreement, without the consent of the unions; and
  • that no industrial action be organised or engaged in by the unions prior to the expiry date of the enterprise agreement. 

When these two decisions are considered alongside one another, we can see a willingness from the Federal Court to accept and protect employers from unlawful adverse action by unions. 

Lessons for employers

This decision is important for employers because it establishes that:

  • if an employer has an entitlement to require employees to work reasonable overtime, such as under an enterprise agreement, this is an employer’s workplace right; and
  • a union which seeks to impose a ban, limitation or restriction on the performance of work, in the face of an employer’s right to require work to be done, may be held to have taken unlawful adverse action against the employer.

This decision of the Federal Court should give comfort to employers because it indicates the Federal Court’s willingness to accept that if an employer has an entitlement to require work to be done by employees this will constitute a workplace right and a union which organises or encourages industrial action in the face of this workplace right may be taking unlawful adverse action.