Tenth anniversary of the Fair Work Act – Part 1: A change to the union landscape

With the Fair Work Act 2009 (Cth) (the FW Act) nearing its tenth anniversary in April, now is an apt time to reflect on how the landscape of industrial law has changed both because of the Act, and because of changes to it over time.

We have previously discussed how the FW Act, in this age of rapid technological change, has led to the rise of the non-lawyer industrial advocate (see related article here).

In more recent years, however, we have seen the rise of another form of industrial advocate which has generated much anguish amongst registered unions and caused any number of headaches for those unions and employers alike – the unregistered union.

What is a ‘registered union’?

A registered union – or, to use the term in the FW Act, a ‘registered organisation’ – is an industrial association, representing either employers or employees, registered under the Fair Work (Registered Organisations) Act 2009 (Cth).

Registration confers various benefits on these organisations, such as the right to appear without leave before the Fair Work Commission and the right for their officers and employees to hold right of entry permits.

However, registration also subjects these organisations to additional regulation imposed by the Fair Work (Registered Organisations) Act 2009 and to the oversight of the Registered Organisations Commission. This regulation places some strict conditions on the conduct of these organisations, including strict financial reporting obligations and criminal sanctions for poor conduct by officers of those organisations.

How can there be any such thing as an ‘unregistered’ union?

Believe it or not, the expressions ‘union’ and ‘trade union’ have no specific legal or protected meaning – this is why brands such as ‘credit unions’ and ‘farmers’ union’ can appear in advertising and on our supermarket shelves.

Although many unions are also registered organisations, there is no requirement that an entity must be a registered organisation in order to call itself a union.

These unregistered unions fall into what the FW Act calls ‘industrial associations’. This expression captures not only registered organisations, but any association formed for the purpose of protecting and promoting the industrial interests of its members. Each and every registered organisation was, before being registered, an industrial association.

Because of this ‘loophole’, it is perfectly valid for an industrial association to call itself a union without being a registered organisation.

What are the key differences between a registered and unregistered union?

The main difference between these two types of union is in the level of regulatory oversight that they enjoy (or suffer, depending on your perspective) and the privileges afforded to them.

A registered union must comply with strict financial reporting requirements imposed by the Fair Work (Registered Organisations) Act 2009, and its officers must submit to strict rules of conduct which, if broken, may result in criminal penalties including jail time.

An unregistered union, however, may structure itself in such a manner as to avoid regulation by anyone. However, most become incorporated associations under State law which entitles them to body corporate status with minimal regulatory obligations.

Under the FW Act, registered unions have certain rights reserved for them. For example, only a delegate of a registered union can hold a right of entry permit under the FW Act, which allows their delegates to compel entry to the workplaces of their members so long as certain procedural requirements are met.  Unregistered unions have no such privilege, and must wait to be invited into the workplace by the employer.

Additionally, registered unions have an automatic right to appear before the Fair Work Commission; unregistered unions must seek the leave of the Commission, and will not always convince the Commission that they should be allowed in.

Why do unregistered unions exist?

Unregistered unions are the result of a perception among some people that the registered unions are not doing a good enough job of protecting their members’ interests. Because of this, unregistered unions such as the Retail and Fast Food Workers Union (RAFFWU) and the Nurses’ Professional Association of Queensland (NPAQ) have appeared to fill this perceived niche.

It is, however, all but impossible to register a new union if a registered union already exists covering the same workers. The only time that two registered organisations can have coverage over the same industry is if those organisations pre-dated the Fair Work legislation, so naturally any union created after the Fair Work legislation faces a significant barrier to registration.

As registration is unlikely to be granted, these new unions make do without it.

Why do people bother with an unregistered union?

Despite their seeming disadvantage compared to registered organisations, unregistered unions have been making waves in the last few years and, in some cases, succeeded in overturning long-standing schools of thought in the application of the Fair Work laws.

It was an unregistered union, for example – and not only that, but an unregistered union in its most formative stages – that forced the Fair Work Commission to re-examine how it applied the Better Off Overall Test (BOOT) when approving enterprise agreements. This case notably set the precedent that a single employee, out of thousands it not tens of thousands, could derail the approval of an enterprise agreement.

Whilst all unions, registered or unregistered, promote the interests of their members, unregistered unions tend to focus more on the interests of their individual members rather than the collective body of their members.

This manifests in that you are more likely to see a registered organisation advocating for structural change of workplace relations laws in the political sphere than an unregistered union, whilst an unregistered union will spend the bulk of their time appearing on behalf of individual members in discussions with employers and before the Fair Work Commission.

This may be because the relatively small size of unregistered unions allows them to give individuals this level of attention; it remains to be seen whether this will remain the case as these groups continue to grow.

Should I be concerned about unregistered unions?

In short, yes.

Whilst unregistered unions have fewer resources than the main unions, their small size means they are able to bring a larger amount of resources, per member, to bear. They are also known for their tenacity in advancing the interests of their individual members.

We mentioned above how a single employee, with the help of an unregistered union, managed to force the Fair Work Commission to re-asses its thinking in relation to the BOOT. This was Hart v Coles Supermarkets Australia Pty Ltd, which also overturned months, if not years, of negotiations between Coles and the various unions representing the 77,507 employees who would have been covered by the proposed enterprise agreement considered by the Commission in that case. The ability of unregistered unions to make a significant impact should not be underestimated.

Whilst registered organisations are more likely to take the stance that “the good of the many outweighs the needs of the few”, unregistered unions are more likely to focus solely on their own members to the exclusion of all others. This can make attempting to negotiate with them more difficult than with others.

If one of your employees is a member of an unregistered union, you can be rest assured that if you are not dotting all your ‘I’s and crossing every ‘T’, you will be told about it in no uncertain terms.