Electrolux V AWU - The Aftermath of The Decision

The Aftermath of The Decision

The case is probably more famous for the aftershock it created than the actual decision itself. It was feared that on the logic of the High Court of Australia many existing enterprise bargaining agreements had been certified invalidly. (and therefore could not be enforced) This forced Federal Parliament to pass the Workplace Relations Amendment (Agreement Validation) Act 2004 No. 155, 2004.

Further, uncertaintly existed around what could be placed in enterprise bargaining agreements in the future. Also as unions could only undertake protected industrial action or strikes in pursuit of enterprise bargaining agreements a serious question surrounded what in fact unions could undertake strikes in pursuit of. This led to around 6 months of industrial confusion in which time, almost no enterprise bargaining agreements were certified nor any industrial action occurred.

The industrial confusion specifically surrounded a raft of clauses, which until the decision of Electrolux v AWU had been commonly placed in enterprise bargaining agreements. Most of these clauses were union friendly provisions, they included: trade union training leave, right of entry, recognition of union delegates or shop stewards. (However there was also some concern regarding provisions against the use of contract labour or setting the terms and conditions of contract labour and salary sacrifice into superannuation.) Many argued that these types of clauses did not "pertain" and accordingly could not be included into future enterprise agreements. This created considerable concern in the union movement as if these union friendly provisions could not be included into future enterprise bargaining agreements it would considerably limit union influence in the Australian worksite. The problem was comprehensively resolved by the Australian Industrial Relations Commission's landmark decision on the 21 March 2005 the Schefenacker, the Murray Bridge and the La Trobe University certified agreements (‘the three certified agreements case’). The decision determined what provisions the Australian Industrial Relations Commission would allow to be certified in enterprise agreements. The decision was generally considered as a union victory as it endorsed a whole raft of union friendly clauses.

One final consequence of the case of Electrolux v AWU is that it upheld several previous decisions of the High Court of Australia which had decided that provisions allowing for payroll deductions of union dues did not "pertain to the relationship between employer and employee." Payroll deductions were consequently prohibited from being placed into enterprise agreements and cannot be placed into workplace agreements created under the workchoices reforms.

Interestingly, the relevance of Electrolux v AWU itself as an authority in Australian industrial relations in many ways ceased with the introduction of the WorkChoices legislation reform package. However, consistent with the litigation itself, it was the consequent events which remained relevant. The decision of (‘the three certified agreements case’). is still an applicable authority in determining what can and cannot be placed in a workchoices reform workplace agreement.