Democrats' Industrial Relations spokesperson Senator Andrew Murray said the NFF may be in breach of the Freedom of Association provisions of the Act, which aim to protect the rights of workers to join or not join a union without interference from the employer.
Under Part XA, the NFF could be liable for a fine of $10,000 and compensation to the MUA or its members if it refuses to employ a person because they want to join a union.
Senator Murray said he would be raising the NFF's attempt to set up a union-free workplace with the Employment Advocate to ensure that the full spirit and letter of the law was followed.
"Just as the MUA does not have the legal right to force a closed shop, the NFF does not have the legal right to establish a union-free worksite," Senator Murray said. "That is a choice for the workers concerned, not the employer.
"The Act is about encouraging employers and unions to work together to improve productivity.
"Instead of an legally and industrially dubious multi-million dollar union-busting exercise, the Government and the NFF should first take up the MUA offer to set up an Industry Consultative Council under the AIRC to fast-track negotiations on efficiency improvements."
Senator Murray said he was also concerned that the NFF leadership did not appear to have consulted its members or even its own council on the use of its multi-million dollar fighting fund.
"The NFF, as a registered employers organisation, has a legal responsibility under section 187A of the Workplace Relations Act to ensure democratic control by its members," he said.
"If a union was setting out to spend millions of dollars without member approval, the Government would rightly be up in arms. The Minister must ensure that the NFF is not acting contrary to the provisions of the Act in its own internal operations.
"And, I think the public also needs to be assured that none of the public money that flows to the NFF is directly or indirectly propping up its anti-union Fighting Fund.
"If the Government is committed to fair and balanced workplace relations and wants 'rogue' unions like the MUA to abide by the spirit and the letter of the law, it must also make sure that 'rogue' employer groups like the NFF do likewise," Senator Murray concluded.