MUA and Labour Hire Company ordered to pay $800,000 over “Closed Shop”

In a recent decision from the Fair Work Ombudsman, a non-union couple were denied employment simply because they were not members of the union.  The couple had applied for work as ship stewards in 2009 and although the labour hire company wanted to employ them, the couple were told they would need to first join the MUA.  The MUA refused their membership applications, in line with its policy of giving preference to “beached” out-of-work members.  In determining compensation, Justice John Gilmour said he considered the couple would have been “above average employees” free of an “entitlement mindset” and could reasonably be described as “salt of the earth” people.  He said that if they had been engaged, the couple would “not have readily given up such employment” as stewards on the vessel, and calculated their income loss over five years from 2009.

Although the contraventions arose from the conduct of both the MUA and the labour hire company, Justice Gilmour said “there was no parity or even approximate parity” and the MUA’s bore “far greater” culpability.  Therefore, the MUA was ordered to pay two thirds of $723,000 in compensation for the couple, plus a further $80,000 in penalties for contravening the Workplace Relations Act and the Fair Work Act.

To secure preference of employment for union members contravenes the freedom of association principles.

Personally, I am a little surprised that we don’t hear more about other cases that are similar to this one.  Perhaps if we did, it would send a stronger message to those unions who may still choose to operate under similar practices as this case.

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