Hundreds of overseas sourced workers in Australia's booming off-shore oil and gas sector could be plunged into illegal status from Thursday when the Federal Court is due to rule on the application of law governing their employment.
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The case could have major implications for the offshore slice of the $200 billion sector which, according to the government, accounts for some $28 billion of economic activity.
And it could also set new limits on the power of ministers to make rules outside of parliament.
An action brought on appeal to the full bench of the Federal Court by the industrially aggressive Maritime Union of Australia and the Australian Maritime Officers Union, has argued a Ministerial Determination used by the Assistant Minister for Immigration and Border Protection Minister, Michaelia Cash, last year granting work rights to the employees is unlawful.
The determination, which followed one day after the Senate rejected proposed government regulations, was used to make it easier for oil and gas projects to attract and hire overseas labour.
The unions had opposed the widespread use of overseas labour in the offshore sector and secured support from the former Labor government to require employers to prove they had made all reasonable efforts to find Australian employees first.
If successful, the union appeal could see more than 400 employees currently engaged in laying undersea pipes and in the building and maintenance of other structures, who are not Australian citizens, forced to down tools.
As a contingency plan, the government is understood to be considering another temporary legal instrument to give the employees protection and allow them to remain insured.
The legal dispute has become a crucial test of the powers of the executive to make rules which, in effect, run counter to the intent of the legislature.
The unions say the Abbott government failed in its attempt to repeal Labor legislation roping in workers employed at sea and beyond the migration zone, and so has tried to achieve the same result by use of ministerial determination.
While the MUA hopes to regain the full protection of Australian employment law for all employees engaged in the sector, not everyone in the broader labour movement is happy with the action.
A spokesman for Senator Cash said the Federal Court had already validated government actions once.
"On 15 September 2014, the Federal Court upheld the validity of the Determination used by Minister Cash to provide certainty to the offshore oil and gas industry," he said.
"Contrary to the efforts of the MUA, the Coalition government will protect this vital industry – a $200 billion sector which generates $28 billion in revenue and supports thousands of Australian jobs.
"The MUA's ongoing industrial relations tantrum at the sector employing a small number of highly specialised foreign workers ironically ignores the fact that these specialists help create jobs for Australians.
"We await the judgment of the Full Federal Court tomorrow morning."
The government believes the offshore component of the oil and gas sector is vital to the national interest and that the union action threatens future investment.
Studies have shown that in addition to the 2500 jobs in the offshore sector, another 10,000 are supported across the economy.
For the entire oil and gas sector, those numbers are considerably greater with some $200 billion already invested helping to underpin up to 100,000 jobs, according to work by the firm Deloitte Access Economics.
A successful appeal could see the matter referred to the High Court, this time by the government.
