Competition, productivity, and safety concerns cited in dismissing 12 contractors' single interest authorisation bid
The Fair Work Commission (FWC) has dismissed an application by 12 electrical contractors to bargain together for a single multi-enterprise agreement across New South Wales and the Australian Capital Territory, citing concerns over competition, productivity, and workplace safety.
The employers, led by Fredon Industries, applied on 5 June for a single interest employer authorisation. They did so with the consent of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), whose electrical division is the Electrical Trades Union (ETU).
The National Electrical and Communications Association NSW & ACT (NECA) opposed the application.
In a decision handed down on 24 September, Commissioner Sarah McKinnon was not satisfied that making the authorisation would not be contrary to the public interest.
"The available information gives rise to concerns about whether the authorisation will facilitate outcomes that are consistent with the objects of the Act, and whether the outcome will instead mean less competition, lower productivity, and one that undermines efforts to ensure the safety, integrity and security of workplaces in the electrical contracting and construction industries," the Commissioner wrote.
Because the employers, not the union, made the application, no statutory presumption applied in its favour. The Commission needed "a positive state of satisfaction" on the public interest.
Competition and pattern bargaining
McKinnon noted that labour costs were likely to be a significant part of any tender because the work is services-based. The Commissioner found that "one purpose of the authorisation is to restrict competition in the electrical services market."
NECA argued that the real purpose of the application was to rope other employers into the agreement once it was made.
The Commission found this submission "not without substance," saying the CEPU's "intention to rope in other employers in the electrical contracting industry in NSW and the ACT does not appear to have changed."
The decision also said that endorsing a mechanism that "legitimises widespread pattern bargaining practices across an industry sits uncomfortably with the emphasis in Part 2-4 of the Act on enterprise-level bargaining and guardrails against industrial action in support of pattern bargaining."
Productivity doubts
The decision noted that the CEPU "was unable to identify any likely productivity benefits from the proposed agreement."
Most of the proposed terms were found either to be neutral on productivity or to tend against it. These included restrictions on supplementary, casual and foreign labour, and five weeks' annual leave.
The Commissioner described the claimed productivity benefit of a "one break day" arrangement as "illusory," finding it would result in 10 minutes less work per day.
Surveillance clause
One proposed clause would require employers to destroy information obtained through third-party surveillance and bar its use in disciplinary action.
The Commissioner said that, on its face, it could require an employer to destroy footage appearing to show a serious safety incident, sexual harassment or a crime.
"Such an outcome would not be consistent with prevailing community standards," McKinnon wrote.
The clause "is likely to undermine efforts in the construction industry and the electrical contracting industry to provide a safe workplace, uphold integrity and foster a sense of security for employees and others while they are at work."
NECA welcomes ruling
Mark Stedfut, executive director of NECA NSW & ACT, said its members would be "relieved" that the potential threat to their livelihoods is no longer under consideration.
"Common sense has prevailed and NECA welcomes the Commissioner's decision," Stedfut said.
"The multi-employer bargaining laws must not be used to create a de facto industry award or hand one union control over the future of the electrical contracting industry, or any industry."
The decision is regarded as important for the electrical industry and its contractors Australia-wide because the multi-enterprise agreement legislation is relatively new, according to Lisa Carey, senior associate at NECA Legal Services.
