Contracting clauses can be in agreement

ADJ Contracting applied for approval of an enterprise agreement. Ai Group and the ABCC opposed approval of the agreement because of concerns that it included unlawful terms that could not be included in an agreement under section 186 of the Fair Work Act 2009. The clauses in dispute required contractors to be engaged on terms that were no less favourable than the terms of employees (the job security clause), permitted union right of entry in wider circumstances than provided in the Act and required the employer to promote union membership to its employees.

Ai Group and the ABCC argued that the job security clause was unlawful because it would lead to a breach of the general protections (by effectively requiring ADJ to only engage contractors with union agreements) or cause the parties to breach a Commonwealth law (the former Trade Practices Act), contrary to section 192. FWA dismissed these arguments, finding that the job security clause was not unlawful. In relation to the clause requiring ADJ to promote union membership, AiGroup argued that this was contrary to section 350 of the FW Act, which prohibits ‘inducements’ in relation to membership of a union. FWA found that a requirement to ‘promote’ union membership did not amount to an  ’inducement’, setting the threshold for breaches of section 350 relatively high, and dismissed this argument. Finally, on the right of entry clause, FWA agreed that it could be inconsistent with Part 3-4 of the Act and invited the employer to provide an undertaking that right of entry for the purposes set out in the Act would be in accordance with the Act. The employer subsequently provide the undertaking and the agreement was approved.