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Excerpts from this article first published in ‘Human Resources’ Magazine, Issue 109, 25 July 2006
The Federal Court recently held that an employer acted lawfully by refusing to promote an employee who did not sign an Australian Workplace Agreement (AWA).
In Bishop v Ropolo Services Pty Ltd, Mr Bishop, a landscape gardener, had been acting in the position of Site Supervisor for two months before the position was offered permanently to him on the condition that he enter into an AWA. Mr Bishop refused saying he did not ‘believe in’ AWAs. The Site Supervisor’s position was filled internally and Mr Bishop returned to his former (lower) position.
In the Federal Court, Mr Bishop alleged his employer was in breach of the provisions of the Workplace Relations Act 1996 (as it stood prior to the Work Choices reforms) by applying duress in connection with the AWA. The Work Choices reforms have similar provisions as to duress in connection with an AWA.
The Court held that duress was not applied to Mr Bishop. The Court said that to merely remind an employee of his or her weak economic position or of the economic consequences of not entering into an AWA is not, of itself, likely to constitute the application of duress. Duress requires something more.
While the Work Choices reforms make it clear a person does not apply duress in connection with an AWA merely by making the AWA a condition of engagement, it has not been tested whether it will be duress to require an existing employee to accept an AWA on promotion.
HR Tip
Whilst an employer is free to make an offer of employment to a prospective employee conditional on the person accepting the terms of an AWA, employers should exercise caution when offering AWAs to existing employees.
In particular, employers should avoid making continued employment conditional upon an existing employee entering into an AWA. Such action is likely to constitute duress. Further, there is a risk that an employer could breach Freedom of Association laws by making the promotion of an existing employee conditional on the employee signing an AWA. For this reason employers should obtain legal advice before seeking to make promotion conditional upon an existing employee entering into an AWA.
Jason Donnelly, Senior Associate
