Just because an enterprise agreement has an unlawful clause in it doesn’t mean it can’t be approved, according to a senior member of Fair Work Commission (FWC). This is so because the Fair Work Act permits the approval of an agreement even though there is a “non-permitted” matter in it.
The case involved around 10 construction companies all making template agreements with the construction union, the CFMEU, with a clause in their agreements saying the use of supplementary labour was (a) restricted and (b) subject to the union’s approval. This meant the employers were not free to enter into arrangements with third parties, clearly a matter not between the employer and the employees. This, Fair Work said, was a long-standing issue and there were many cases about what constituted ‘permitted matters’.
The employers did not make any submissions. The CFMEU argued that Fair Work had no authority to enquire into this area and should approve the agreements. Despite finding that in all probability the clause was not permitted and therefore unlawful (and unenforceable), FWC did not reject the agreements, pointing out that the Act did not require FWC to do so even though the agreements contained a ‘non-permitted’ matter.
This case demonstrates another example of inadequacy of the Fair Work Act. It is passing strange that an agreement can be approved with an obvious problem like this, but if an employer misses some procedural step in the making an agreement, the whole application is deemed void. It is of use where an employer includes a clause in an agreement which, despite being ‘non-permissible’ is nevertheless able to bluff employees to behave in certain ways in the same way this case shows the CFMEU is effectively bluffing employers.