Whether “income protection” is “prohibited content”

Australian Maritime Officers Union v Sydney Ferries Corporation [2009] FCAFC 145

On appeal the court held income protection as part of subclause 12.8.9 of the Sydney Ferries Corporation Maritime Officers Enterprise Agreement 2006 – 2008 was not prohibited content within the meaning in s.358 of the Workplace Relations Act 1996 (Cth.).

The basis for the rational was that there was the required nexus to the employment relationship. In particular the court held at paragraphs 24 & 25:

“24 What of the decided cases? Much of the debate at first instance took place by reference to the facts and circumstances of earlier cases, none of which provide a direct analogy with the agreed term. However, the circumstances of the present case are much closer in principle to Manufacturing Grocers than any of Portus, Alcan or Electrolux. The agreed term in the present case does not suffer from the defect identified in Portus and Alcan. It does not direct a payment from a pre-existing entitlement to satisfy an obligation arising outside the employment relationship. Neither is it directed, as in Electrolux, to ensuring that a payment is made by employees to a union, regardless of choice or of union membership. The agreed term operates during the employment relationship only. There is no obligation upon SFC to pay a premium in respect of a non-employee. The circumstance against which an employee would be protected is the loss of income arising from the employment relationship.

25 Under the regulations the agreed term contains prohibited content only to the extent that it does not pertain to the relations of employers and employees. There are some uncertainties about the precise content of the agreed term and the specific obligations which it imposes but, as was the case in Manufacturing Grocers, it is in part because the agreed term is not expressed in more elaborate terms that it is not correct to say it does not pertain to the relations of employers and employees. Whether, if some more elaborate provision was advanced it might not pertain to the relations of employers is not, at present, to the point. Re Amalgamated Metal Workers’ Union of Australia; Ex parte The Shell Company of Australia Limited [1992] HCA 38; (1992) 174 CLR 345 provides an example of provisions claimed about superannuation arrangements at a level of detail which exposed some provisions as ones not pertaining to the relationship of employers and employees. Furthermore, neither the trial judge, nor the Court on the appeal, was asked to give any consideration to what might constitute full compliance with the agreed term. Breach of the term was admitted. The proceedings were dismissed only because the trial judge found that the term, as drafted, had no valid operation. Whatever uncertainties may remain about the precise content of the obligation imposed by the term, it is not invalid by reason that it contains only prohibited content, as presently drafted. ”

Brisbane Barrister – David Cormack

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