In brief - Regional Express Holdings Limited v Australian Federation of Air Pilots holds lessons for employers

In an extraordinary week for Australian employment law, the High Court of Australia released three decisions in the second week of December 2017. The most important of these decisions for most Australian employers confirmed the standing of registered organisations to represent non-members. This judgment is likely to have far-reaching consequences, giving employee organisations the standing to investigate and enforce certain contraventions of the Fair Work Act 2009 (Act) on behalf of employees who are not members of their organisations.

Australian Federation of Air Pilots entitled to represent non-members under section 540 of Fair Work Act, Court finds

In Regional Express Holdings Limited v Australian Federation Of Air Pilots [2017] HCA 55 (REX), the High Court held that a registered industrial association is entitled to apply for an order on behalf of the industrial interests of a non-member, if that person is eligible for membership of the industrial association, pursuant to its eligibility rules. 

The decision concerned conduct by Regional Express Holdings Limited (REXL). REXL wrote to employees in its cadets program indicating that anyone who insisted on appropriate accommodation during layovers would not be given a position of command in the future. The right to appropriate accommodation was a workplace right as it arose under an enterprise agreement. None of the cadets were members of the Australian Federation Of Air Pilots (union) at the time of the threats from REXL but the union sought to apply for orders against REXL for contravening the Act.

The decision concerned section 540 of the Act which relates to the "standing" to apply for orders in the Federal Court for alleged contraventions of the Act. Standing is the ability of a potential party to a claim to demonstrate sufficient connection to the alleged claim, to support that party's participation in the Court proceeding. The Act codifies the standing requirements by limiting who can apply for an order following an alleged breach. 

While the decision in REX is important, it effectively only reinforced what was reasonably clear from the wording of the Act; that unions can apply for Court orders, where an employee is (or will be) affected by certain alleged contraventions, if the union is entitled to represent the interests of the employee.

The High Court considered the meaning of "entitled to represent" by analysing a string of historical decisions concerning similar passages in various former Australian industrial relations acts. Further, the Court noted that the same phrase "entitled to represent" is used regularly elsewhere throughout the Act. 

REXL contested the union had standing to represent non-members by arguing that a broad interpretation of the phrase would result in situations where employees who did not want a union to represent their interests, could find the union doing so. REXL also suggested that the interpretation which the union sought would be inconsistent with the purposes of the Act, and the relevant object of the part of the Act subject to the Court's consideration.

Ultimately the Court rejected the appellant's submissions and confirmed that the union's entitlement to standing under the Act did not require it to be only on behalf of paid members. The Court also noted that the industrial circumstances of non-members were clearly within the interests of a union that represented other employees in the same industry.

Consider your obligations under Fair Work Act and review employees' award status and entitlements

It remains to be seen what effect this decision will have on employee organisations. If unions take a more active role in finding, investigating and prosecuting alleged breaches, claims against employers for contraventions of the Act may increase significantly.

Employers, company boards, HR staff, payroll and accountants must be vigilant in ensuring that they are meeting their obligations under the Act. The liability provisions of the Act mean that anyone involved in contraventions can be held responsible by the courts, essentially piercing the corporate veil, and creating considerable risks for decisions makers and advisors operating without sufficient expertise in employment and industrial law. 

Australia's national workplace relations system is complicated. Award classifications can be very difficult in some industries and professions, especially for employers without an understanding of the evolution of Australia's workplace relations framework. As a matter of priority, employers should conduct a review of the Award status and entitlements of their employees now to ensure that they are compliant with any requirements. 

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2024.

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