Electrolux Decision must be fought

Lisbeth Latham

The September 2 High Court's Electrolux decision has signalled a serious assault on the right of workers to organize and strike.

In a six-to-one decision, the High Court ruled that bargaining-agent fees could not be included in an enterprise agreement as this “does not pertain to the employer-employee relationship” and is thus in violation of Section 170LI of the Workplace Relations Act (WRA).


Bargaining-agent fees are levies paid to the union by non-union members to recognise gains the union has won for all workers in the industry.

The immediate effect of the High Court's ruling is that industrial action undertaken against Electrolux by unions seeking enterprise agreements that included bargaining fees is now deemed not to have been “protected action”, leaving the unions and their members open to be sued for legal damages by Electrolux.

However, as bargaining agent fees had already been banned by the Coalition government's June 2002 amendments to the WRA, the significance of the decision broke the previous interpretation of the WRA by both the Federal Court and the Australian Industrial Relations Commission (AIRC).

The previous interpretation had been that enterprise agreements could contain some “non-pertaining” items as long as the whole agreement could be characterised as pertaining to the relationship between employer and employees. The September 2 ruling calls into question the inclusion of a wide range of provisions in enterprise agreements, including automatic deduction of union dues from workers' pay, entitlements of union delegates and trade union to training leave, encouragement/facilitation of union membership and the right of union officials to enter workplaces.

The court's decision means that industrial action taken to support a claim that includes non-pertaining issues cannot be considered protected action.

The decision has caused considerable confusion and uncertainty as it calls into doubt the certification of thousands of EAS, including those already certified by the AIRC. Adding to this confusion and uncertainty has been the threat by companies such as Wesfarmers in Western Australia to seek legal damages for past industrial action that they argue was not protected action in the light of the High Court's ruling.

The uncertainty over allowable clauses in enterprise agreements has been partially allayed with the first test case of the Electrolux decision in the AIRC, on the agreement between Victorian butter manufacturer K.L. Ballantyne and the National Union of Workers. On October 25, AIRC deputy president Iain Ross refused to certify the agreement, arguing that payroll deductions of union fees did not pertain to the employer-employee relationship.

However, Ross's ruling allows clauses relating to prohibitions on the use of Australian Workplace Agreements, trade union training leave, right of workplace entry for union officials and paid union meeting provisions, union picnic days, union access to time and wages records and limitations on the use of contractors and casuals to be included in agreements.

While the K.L Ballantyne decision signals that many agreements can now be certified, unions continue to face challenges. How to protect those clauses that are viewed as not-pertaining is still an issue.

The re-elected federal Coalition government's next wave of industrial relations legislation is likely to include measures reinforcing the High Court's Electrolux decision. Any union strategy that delays challenging attacks on workers' rights can only undermine the capacity of unions to fight back and increase the Coalition's confidence to attack workers.

Originally published in Green Left Weekly #605