Common (industrial) interests: Union can represent industrial interests of non-members

What you need to know

• The High Court has clarified that a union can commence proceedings for breaches in relation to affected persons who are eligible to be members, including members and non-members alike.

• The decision confirms longstanding authority that unions are able to represent the industrial interests of persons eligible to be members.  This decision confirms that position in relation to civil penalty proceedings under the Fair Work Act 2009 (Cth).  Unions already have the ability to deal with matters concerning non-members under the legislation, such as under right of entry provisions.

What you need to do 

• Understand what unions legitimately can, and cannot do, in relation to members and non-members.  The eligibility rules of unions continue to proscribe the legitimate field of operation in which a union can be interested and in which its officers and employees can be involved.  Whether a union is entitled to represent the industrial interests of employees is a touchstone in matters such as right of entry, protected action ballots, and enterprise bargaining.

• Check whether the eligibility rules of unions seeking to represent employees, or the interests of affected employees, are capable of covering them.  

What was this dispute about?

This case arose out of statements that Regional Express Holdings Limited (Rex) made to prospective employees relating to the type of accommodation which would be provided to them whilst on overnight layovers.  The Australian Federation of Air Pilots (AFAP) considered that the statements were contrary to entitlements in the applicable enterprise agreement and constituted adverse action against the prospective employees.  AFAP brought proceedings against Rex in the Federal Circuit Court.

For the purpose of bringing an adverse action claim, standing is conferred on an "industrial association" (which includes a registered union) that is "entitled to represent the industrial interests" of a person affected by the alleged contravention of the Fair Work Act 2009 (Cth) (FW Act).  This concept is drawn from authorities of the High Court that the legitimate field of operation of a union is prescribed by its eligibility rules.  The rules of unions determine the eligibility of an employee to join the union and to become a member, and the corresponding right of the union to represent the industrial interests of such persons.

Rex applied for summary dismissal of the proceedings on the basis that AFAP did not have standing to bring them, arguing that because none of the affected employees were its members, it could not represent their industrial interests.

The Federal Circuit Court rejected Rex's argument, and the Full Federal Court dismissed its appeal.  Rex appealed to the High Court. 

The question for the High Court was whether the fact that an affected person is eligible for membership of a union in accordance with its eligibility rules is sufficient to make the union "entitled to represent the industrial interests" of the person, and to have standing to bring the proceedings.  The High Court held that it was sufficient.

What does it mean to represent a person's industrial interests?

The critical issue for the High Court was the meaning of the phrase "entitled to represent the industrial interests".  That term is used throughout the FW Act, but is not defined.  The term is a remnant of previous industrial laws which has been carried through into FW Act.

It is a condition not only for bringing adverse action proceedings in relation to an individual, but also a range of other matters under the FW Act and Fair Work (Registered Organisations) Act 2009 (Cth) (RO Act) such as coverage by enterprise agreements and the ability to make an application to vary a modern award.

Unions may represent the "industrial interests" of workers 

The High Court held that an industrial association that is a registered organisation under the RO Act (ie. a union) is entitled to represent the industrial interests of an employee if that employee is eligible for membership of that industrial association.  Significantly, the High Court also held that its interpretation of the phrase "entitled to represent the industrial interests" has the same meaning wherever it appears in the FW Act.

In particular, the High Court took into account the fact that in several provisions of the FW Act, there is a distinction drawn between a person's membership of an organisation and the organisation's entitlement to represent the industrial interests of the person.  Accordingly, it found that it cannot be that membership is the only entitlement to represent the industrial interests of a person recognised by the FW Act.  It held that the FW Act's conception of "entitlement to represent industrial interests" of a person is broader than simply the membership of the union, and reflected the type of entitlement described in previous High Court authorities, being an entitlement to represent the industrial interest of a person who satisfies an organisation's eligibility rules.

Implications for employers 

This decision means that unions may effectively act as a party principal in relation to civil penalty matters under the FW Act, where it can establish that the persons affected by the alleged contravention are eligible to be members of the union, regardless of the membership status of those employees.

As eligibility for membership, rather than actual membership, is the touchstone for a union's ability to pursue an alleged contravention representing the industrial interests of employees, then the sphere of action that unions may be prepared to take could be expanded by the ruling.  An industrial association (union) will also have standing if t is directly affected or will be affected, itself, by a contravention.

An employer who has a workforce, or parts of its workforce, populated by employees who are not members of a union (and may have no present or future interest in being members of a union or otherwise being represented by one), might find itself affected by proceedings brought by the union on the basis that it is representing the industrial interests of those employees.  This may even be in circumstance where there is no relationship between the union and any of the relevant employees, nor any relationship with the employer.  This may give the union the status akin to an industrial regulator in some circumstances.  It may also lead to a situation where a union could bring proceedings contrary to the express wishes of affected employees, or alternatively, where an employer is exposed to multiple proceedings from the affected employee in their own right and also a union who is said to represent their industrial interests.

Whether unions will expend time and funds pursuing matters that only affect non-members remains to be seen, however the facts of this case illustrate that they might well do so.  There may be evidentiary challenges in unions pursuing matters where they seek to represent the industrial interests of non-members, particularly where a matter is pursued on the basis of the interests of a particular class and there is an absence of a specified person to whom the proceedings relate.

The decision of the High Court also confirms that the basis for standing under the FW Act does depart from similar provisions under the previous Workplace Relations Act 1966 (Cth), which required the union to have "at least one member" and for that the union to be "entitled to represent the industrial interests" of the member in relation to the work carried out.  The High Court's decision confirms that this additional requirement of membership is not to be read into the provision in the FW Act, and also that being "entitled to represent the industrial interests" is a concept different from actual membership.

It goes without saying that such entitlement would stem from satisfying all membership eligibility requirements.  A union would not be able to pursue a matter where coverage under the eligibility rules of the union could not be established, or where an order had been made by the Fair Work Commission declaring that the union does not have the right to represent an employee under a representation ("demarcation") order. 

Authors: Trent Sebbens, Partner; Ming-Yee Ma, Senior Associate; Hannah Martin, Associate; and Cindy Lam, Graduate.