1 August, 2011
In a landmark ruling issued 25 July by the full bench of Australia’s Federal Court, the Construction, Forestry, Mining and Energy Union (CFMEU) successfully short-circuited Rio Tinto’s 2008 decision to unilaterally put into effect a non-union collective agreement. The ruling voids Rio Tinto’s sham five-year agreement with ten new hires in July 2008 that was intended to cover thousands of iron ore miners in West Australia, both signed under bygone individual work agreements under the John Howard government and future employees.
The practice was done to avoid law changes then coming under Fair Work Australia.
The 20-page ruling likely will serve as a precedent and a key portal for CFMEU to recruit miners in the mostly non-union Pilbara mining areas and then enter into legitimately negotiated enterprise labour agreements. Besides Rio Tinto, BHP Billiton also implemented long-term phoney collective agreements as a means to escape the CFMEU once the Fair Work Act took effect.
CFMEU's Gary Wood
“Rio and other employers that went down that path were, obviously, looking to shield themselves from the new legislation which brought fairness into the workplace, particularly around bargaining,” said CFMEU West Australia Mining and Energy Secretary Gary Wood.
The CFMEU challenged the validity of Rio Tinto’s 2008 non-union contract last year, but Justice Robert Buchanan ruled in August 2010 that it was valid. On CFMEU appeal, however, the full bench of Justices Peter Gray, Bruce Lander, and Anna Katzmann overturned Buchanan’s decision, determining that the contract was not an “employee collective agreement” as defined by the new legislation.
The case centered on Rio’s subsidiary Pilbara Iron Company Pty. Ltd. and a so-called Pilbara Iron Employee Agreement that was intended to last until 2013. The CFMEU argued that the company could not properly describe employees scheduled to work under the agreement when it was signed on 28 July 2008.