Australia Post ruling shows flaw in workplace law

UNIONS cannot apply to take industrial action to try to restrict the use of contract labour, according to a ruling that a legal expert said highlighted an "absurd" aspect of Labor's workplace laws.

Fair Work Australia has published the reasons for its decision last month to cancel a proposed national strike ballot of Australia Post employees.

It found the workers' union was not genuinely trying to reach an agreement with the organisation.

During negotiations over an enterprise agreement, the Communications Electrical and Plumbing Union had sought to restrict Australia Post's right to use independent contractors, including requiring the company to contract out a position only if it was not wanted by an Australia Post employee.

But Fair Work Australia upheld earlier legal rulings that provisions restricting or qualifying the employer's right to use independent contractors were not matters pertaining to the employment relationship.

"The CEPU has been and is pursuing as a substantive term of the proposed enterprise agreement a claim in respect of contractors which is not about a permitted matter for a proposed enterprise agreement under the Fair Work Act," a full bench of the tribunal found.

Therefore, it said, it was not satisfied the union had been genuinely trying to reach an agreement with Australia Post.

University of Adelaide law professor Andrew Stewart said the decision highlighted how the Fair Work Act "unequivocally" differed from Labor's Forward with Fairness policy, which originally gave employers and employees the freedom to negotiate terms of agreements.

After subsequently deeming certain matters would be unlawful, Professor Stewart said the government devised a "half-baked compromise" that said certain non-permitted matters were allowed in agreements, but could not be enforced.

Unions could not take industrial action in support of a non-permitted matter unless a union reasonably believed they were a permitted term.

"All this looks fairly straightforward," he said. "It just produces what, in my view, is an absurd result that a union can't take industrial action over a clause that can be included in an agreement but isn't enforceable."

Professor Stewart said there were not any provisions in the Fair Work Act "that tells you for sure whether you can put a term in your agreement regulating the use of contractors or labour hire workers".

"Instead, what we've got is a view that there are some kinds of restrictions which are OK and some which are not, based on decades of confusing case law about the matters pertaining issue," he said.

"The view is you can't stop an employer hiring outside labour because that's not a matter pertaining to the employment relationship.

"Why? Because the High Court told us so in a rather contentious decision about 40 years ago.

"But you can have clauses in your agreement that regulate what wages or conditions they should receive because that is a matter pertaining to employment, according to some recent decisions by the Industrial Relations Commission. So we have got considerable uncertainty about what you can and can't put in an agreement."