Kamal Farouque General Counsel Maurice Blackburn Cashman Employment & Industrial Law Section 25 July 2006 Common Law Industrial Deeds

Deed Presentation Outline  Recap Advantages  General principles  Deed Issues eg privity  Deed Pitfalls

Deeds – Advantages Recapped  Prohibited content can be included in a deed (Note: subject to Trade Practices Act, Freedom of Association Provisions in WR Act & Building Industry Code)  Termination of a deed can be regulated by Agreement (Compare: work choices collective agreement which may be unilaterally terminated under s393 on 90 days written notice after nominal expiry date)  Deed will not permanently displace the operation of awards and pre-reform certified agreements (Compare: work choices collective agreement)  Deed can by made with parties other than the direct employer

General Principles  Deeds are common law agreements  Ordinary common law / commercial law legal principles apply to enforcing a deed  Common law / commercial law principles were not developed to secure collective industrial agreements  See Ryan v TCFUA (1996) 66 IR 258 / [1996] 2 VR 235 (Homfray Carpets Case)

Deed Issues: Only parties to a deed can enforce the deed  Legal principle known as “privity”  A non-party cannot enforce a deed  Exception: WA, QLD & NT  Employee who is not a party to a deed cannot enforce deed in their own name

Deed Issues: What about future employees?  Future employees are those persons who start work after the deed is signed  Special measures must be adopted to make future employees are protected by the deed at the time of their employment  Deed clause requiring the employer to apply the terms of the Deed to future employees; or  Deed clause requiring the employer to offer new employees employment on the terms set out in the Deed; or  Deed variation each time a new employee starts to provide that the new employee becomes party to the Deed

Deed Issues: Enforcement in Common Law Courts  State courts have jurisdiction to enforce deeds  eg the Supreme Court, the County Court and the Magistrates Court  Federal courts may in some circumstances have jurisdiction to enforce deeds  Damages & Specific Performance may be available remedies  Costs jurisdiction : - costs follow the event

Deed Issues: Application of Commercial Arbitration Act?  Commercial Arbitration Acts may apply to deed dispute resolution clauses providing for arbitration  Deed clause requiring the employer to apply the terms of the Deed to future employees ; or  Deed clause requiring the employer to offer new employees employment on the terms set out in the Deed; or  Deed variation each time a new employee starts to provide that the new employee becomes party to the Deed

Deed Pitfalls: No Protected Action  No protected industrial action to support claims in a deed. See LHMU v Wattyl (Full Bench PR973290)  Industrial action in support of deed claims is unlawful:  AIRC s496 orders; or  State or Federal Court injunctions, damages or penalty proceedings

Deed Pitfalls: Negotiation of Deeds & Collective Agreements  Simultaneous negotiation of deeds and collective agreements can create problems:  AIRC or courts may consider that industrial action is being taken in support of deed claims and therefore not protected. See LHMU v Wattyl par 18 –19  Possible rejection of ballot order application. See CEPU v Cadbury Schweppes (SDP Acton, PR973290) par 53 – 54.

Deed Pitfalls: Duress  Deed may be set aside by a court due to “duress”  Duress requires the following elements  X used illegitimate pressure  The illegitimate pressure caused Y to enter into an agreement  Y had no reasonable alternative to enter into the Agreement ?

Deed Pitfalls: Duress  Industrial action for deed claims is unlawful and may be regarded ‘illegitimate’ pressure  See Universe Tankships Inc v ITF [1983] 1 AC 366  See Dimskal Shipping v ITF [1991} 4 All ER 871  Whether employer has “no reasonable alternatives”  Legal action has not generally been considered a reasonable alternative for reasons of uncertainty, expense & delay  But employers have the ability to get s 496 orders?  Delay by the employer in seeking relief from courts may be affirmation of deed despite duress

Deed Pitfalls: Repudiation  If a party breaches an ‘essential’ term of a deed, the other party may treat the breach as a repudiation and bring the deed to an end  eg breach by union of “no industrial action” term may allow employer to treat deed at end  Minimise the number of obligations in the Deed placed on the Union (Note: Remember consideration issue and specific performance)  Carefully draft disputes resolution clause to ensure that before a party can treat the deed as repudiated, the parties will follow the disputes procedure

Deed Pitfalls: Damages  Damages may be awarded against a Union for breach of a Deed term  Damages can be potentially significant if the breach of the term leads to loss of production or loss of contracts  Potential Solution: Deed can set out a sum which is payable for damages in the event of a breach

Deed Pitfalls: TPA  Deeds can be regulated by the Trade Practices Act (TPA)  A term of a Deed could theoretically breach s45E of the TPA  eg a clause of a Deed which prevented a head contractor from dealing with a supplier from whom the head contractor is accustomed to acquiring goods/services

Deed Pitfalls: Freedom of Association  Provisions in Part 16 “Freedom of Association” of WR Act may apply to Deeds  Eg bargaining services fee in deed is void – s 810

Deed Pitfalls: Building Industry Code  Building Industry Code applies to Deeds

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