Common Law Industrial Deeds
Kamal Farouque
General Counsel
Maurice Blackburn Cashman
Employment & Industrial Law Section
25 July 2006
Deed Presentation Outline
 Recap Advantages
 General principles
 Deed Issues eg privity
 Deed Pitfalls
Deeds – Advantages Recapped
 Prohibited content can be included in a deed (Note:
subject to Trade Practices Act, Freedom of Association Provisions in
WR Act & Building Industry Code)
 Termination of a deed can be regulated by
Agreement (Compare: work choices collective agreement which
may be unilaterally terminated under s393 on 90 days written notice
after nominal expiry date)
 Deed will not permanently displace the operation
of awards and pre-reform certified agreements
(Compare: work choices collective agreement)
 Deed can by made with parties other than the
direct employer
General Principles
 Deeds are common law agreements
 Ordinary common law / commercial law legal
principles apply to enforcing a deed
 Common law / commercial law principles
were not developed to secure collective
industrial agreements

See Ryan v TCFUA (1996) 66 IR 258 / [1996] 2 VR 235
(Homfray Carpets Case)
Deed Issues: Only parties to a
deed can enforce the deed
 Legal principle known as “privity”
 A non-party cannot enforce a deed
 Exception: WA, QLD & NT
 Employee who is not a party to a deed
cannot enforce deed in their own name
Deed Issues: What about
future employees?
 Future employees are those persons who
start work after the deed is signed
 Special measures must be adopted to make
future employees are protected by the deed
at the time of their employment
 Deed clause requiring the employer to apply the terms
of the Deed to future employees; or
 Deed clause requiring the employer to offer new
employees employment on the terms set out in the
Deed; or
 Deed variation each time a new employee starts to
provide that the new employee becomes party to the
Deed
Deed Issues: Enforcement in
Common Law Courts
State courts have jurisdiction to enforce deeds
 eg the Supreme Court, the County Court and the
Magistrates Court
Federal courts may in some circumstances have
jurisdiction to enforce deeds
Damages & Specific Performance may be
available remedies
Costs jurisdiction : - costs follow the event
Deed Issues: Application of
Commercial Arbitration Act?
 Commercial Arbitration Acts may apply to
deed dispute resolution clauses providing
for arbitration
 Deed clause requiring the employer to apply the terms
of the Deed to future employees ; or
 Deed clause requiring the employer to offer new
employees employment on the terms set out in the
Deed; or
 Deed variation each time a new employee starts to
provide that the new employee becomes party to the
Deed
Deed Pitfalls: No Protected Action
 No protected industrial action to support
claims in a deed. See LHMU v Wattyl (Full Bench
PR973290)
 Industrial action in support of deed claims
is unlawful:
 AIRC s496 orders; or
 State or Federal Court injunctions, damages or
penalty proceedings
Deed Pitfalls: Negotiation of
Deeds & Collective Agreements
 Simultaneous negotiation of deeds and
collective agreements can create problems:
 AIRC or courts may consider that industrial
action is being taken in support of deed claims
and therefore not protected. See LHMU v Wattyl par
18 –19
 Possible rejection of ballot order application.
See CEPU v Cadbury Schweppes (SDP Acton, PR973290) par
53 – 54.
Deed Pitfalls: Duress
 Deed may be set aside by a court due to
“duress”
 Duress requires the following elements
 X used illegitimate pressure
 The illegitimate pressure caused Y to enter
into an agreement
 Y had no reasonable alternative to enter into
the Agreement ?
Deed Pitfalls: Duress
 Industrial action for deed claims is unlawful and
may be regarded ‘illegitimate’ pressure


See Universe Tankships Inc v ITF [1983] 1 AC 366
See Dimskal Shipping v ITF [1991} 4 All ER 871
 Whether employer has “no reasonable
alternatives”


Legal action has not generally been considered a
reasonable alternative for reasons of uncertainty,
expense & delay
But employers have the ability to get s 496 orders?
 Delay by the employer in seeking relief from
courts may be affirmation of deed despite duress
Deed Pitfalls: Repudiation
If a party breaches an ‘essential’ term of a deed,
the other party may treat the breach as a
repudiation and bring the deed to an end
 eg breach by union of “no industrial action” term may
allow employer to treat deed at end
Minimise the number of obligations in the Deed
placed on the Union (Note: Remember consideration
issue and specific performance)
Carefully draft disputes resolution clause to ensure
that before a party can treat the deed as repudiated,
the parties will follow the disputes procedure
Deed Pitfalls: Damages
Damages may be awarded against a Union
for breach of a Deed term
Damages can be potentially significant if
the breach of the term leads to loss of
production or loss of contracts
 Potential Solution: Deed can set out a sum
which is payable for damages in the event of a
breach
Deed Pitfalls: TPA
Deeds can be regulated by the Trade
Practices Act (TPA)
A term of a Deed could theoretically breach
s45E of the TPA
 eg a clause of a Deed which prevented a head
contractor from dealing with a supplier from
whom the head contractor is accustomed to
acquiring goods/services
Deed Pitfalls: Freedom of
Association
Provisions in Part 16 “Freedom of
Association” of WR Act may apply to
Deeds
 Eg bargaining services fee in deed is void – s
810
Deed Pitfalls: Building
Industry Code
Building Industry Code applies to Deeds
END