A landmark Federal Court ruling has ignited fierce criticism from Australia's resources sector, with industry leaders warning it creates a damaging 'two-tiered' workplace system and grants unions unprecedented power.
Court overturns 'reasonable limits' on delegate rights
The Federal Court decision, handed down on Wednesday, 17 December 2025, effectively grants workplace delegates the same on-site rights as union officials. This interpretation means employers could be compelled to pay their own employees for time spent organising industrial action, rather than performing their usual work duties.
The ruling overturns previous orders by the Fair Work Commission which had placed what industry describes as "reasonable limits" on the exercise of union delegate powers. Tania Constable, Chief Executive of the Minerals Council of Australia, stated the decision shows the Federal Government's Closing Loopholes legislation gives unions "significantly more power" than the independent umpire deemed fair.
Industry warns of productivity and investment risks
Resource employer groups have blasted the judgement, arguing it blurs a critical, long-standing distinction between union officials and employee delegates. Steve Knott, CEO of the Australian Resources & Energy Employer Association (AREEA), said the laws create serious risks for productivity and workplace stability.
"They blur the long-standing distinction between union officials and workplace delegates," Mr Knott said. "The separation between the roles and responsibilities... had been well established and understood by industrial parties since Federation."
Ms Constable framed the outcome in stark terms, warning it enshrines a divisive class system. "This would create a two-tiered class system among Australian workers: those who actually work for the business, and those who work for the union but get paid by the business to do so," she said.
The industry argues this comes at a time of unprecedented cost pressures, citing industrial relations changes, high energy prices, project delays, and increased royalties. They claim these combined forces are driving investment offshore to jurisdictions with lower environmental and emissions standards.
Union hails confirmation of 'real, enforceable rights'
In contrast, the Mining and Energy Union has welcomed the Federal Court's interpretation. The union's General Secretary, Grahame Kelly, said the decision confirms that delegates' rights "cannot be confined by artificial employment boundaries."
"The court has confirmed that Parliament intended workplace delegates to have real, enforceable rights to represent workers they work alongside, not just those who happen to share the same employing entity," Mr Kelly stated.
The ruling is seen as a significant development under the Albanese Government's sweeping overhaul of industrial relations laws since 2022, which has broadly emboldened the union movement. The nation's largest mining employers now contend that the decision exacerbates existing concerns about record-low productivity levels.
