A recent Federal Court decision expanding workplace delegate rights is raising serious concerns for businesses, with CCIWA warning the ruling could increase costs, undermine productivity and create new compliance risks.
This could particularly impact major projects and multi-employer worksites.
The decision overturns earlier Fair Work Commission limits on delegate powers and effectively places workplace delegates on the same footing as union officials, including the ability to undertake union-related activities during paid working time.
Dr Anthea Wesley, CCIWA Head of Policy, said the ruling would shift costs directly onto employers.
“Australian businesses will be forced to foot the bill for unions in their workplaces, under a decision handed down by the Federal Court of Australia,” she said.
“This decision will effectively mean an employer is paying someone to do work on behalf of a union, potentially across multiple worksites in the case of labour hire or contract workers.”
What the ruling changes
The decision applies across a wide range of modern awards covering construction, mining, manufacturing and energy, including the Building and Construction General On-site Award, Mining Industry Award and Manufacturing and Associated Industries and Occupations Award.
While this decision relates to just these sectors, its impact will be felt across the entire workplace due to the terms being similar across all modern awards.
For employers, this creates the real prospect of delegates being paid by one business while undertaking union delegate work across an entire enterprise or project, including sites involving multiple contractors.
Dr Wesley said the implications for WA’s resources sector were particularly concerning.
“This will be a major drag on productivity, particularly in the mining and resources sector in WA, where companies will be paying a union delegate to simply do union work.”
Industry concerns grow
Employer groups have warned the ruling represents a return to a 1970s-style industrial relations environment, with blurred lines between employee and union official roles.
Minerals Council of Australia chief executive Tania Constable said the decision demonstrated the far-reaching impact of the Closing Loopholes legislation which came into effect more than a year ago.
“The decision shows that the Federal Government’s Closing Loopholes legislation gives unions significantly more power than what the independent umpire determined was a fair and reasonable balance,” she said.
“As well as being an over-reach of union power, this would create a two-tiered class system among Australian workers: those who actually work for the business, and those who work for the union but get paid by the business to do so.”
What this means for businesses
The ruling raises immediate questions for employers around:
- paying for delegate time
- managing productivity and direction of work
- delegate activity across multiple employers on the same site
- compliance with award obligations and adverse action laws
Dr Wesley said the decision sat at odds with the need to lift productivity across the economy.
“Australia needs a modern workplace relations system that delivers a genuine safety net for workers but tackles the nation’s stagnant productivity and gives businesses the agility they need to succeed,” she said.
“Without strong businesses, there are no jobs.”
The importance of getting the right advice
Ryan Martin, Legal Director at CCIWA’s wholly-owned subsidiary, Business Law WA (BLWA), said the decision materially changed the legal risks employers faced and made early advice critical.
“This ruling changes the way delegate rights operate in practice. Employers who don’t understand how it applies to their workforce risk breaching the law or losing control of productivity on their sites,” he said.
“Getting clear, tailored legal advice now allows businesses to stay compliant while putting practical controls in place that protect their operations.”
BLWA is advising employers to review award coverage, workplace policies and delegate arrangements as a priority, particularly those operating in construction, mining, energy and major project environments.
As industrial relations laws continue to evolve, it was important for all employers to be aware of their obligations and seek advice if they are unsure about their arrangements.
Need clarification on the new workplace laws? Get in touch on (08) 9365 7746 or via [email protected].
This article is authorised by Business Law WA, an incorporated legal practice and wholly owned subsidiary of CCIWA. The content of this article is general in nature and is not legal or professional advice and should not be relied upon as such.
