1
Fair Work Act 2009
s.604 - Appeal of decisions
Alcoa of Australia Limited
v
Construction, Forestry, Mining and Energy Union
(C2014/7740)
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT GOSTENCNIK
COMMISSIONER ROE SYDNEY, 24 APRIL 2015
Appeal against decision [[2014] FWC 7123] of Commissioner Lewin at Melbourne on 24
October 2014 in matter number B2014/168.
Introduction
[1] Alcoa of Australia Limited (Alcoa) has filed a notice of appeal under s.604 of the Fair
Work Act 2009 (FW Act) in which it seeks permission to appeal and appeals a decision of
Commissioner Lewin issued on 24 October 20141 (Decision). The Decision concerned an
application for a majority support determination made by the Construction, Forestry, Mining
and Energy Union (CFMEU) under s.236 of the FW Act. In the Decision the Commissioner
determined to grant the CFMEU’s application, and he subsequently issued the majority
support determination sought by the CFMEU (Determination) on 27 October 2014.2 Alcoa
appeals the whole of the Decision.
[2] Alcoa’s notice of appeal stated three grounds for appeal contending that the
Commissioner erred:
(1) in finding that the group of employees whose employment would be covered
by the proposed enterprise agreement and who would be the subject of the
determination were “fairly chosen” within the meaning of s.237(2)(c) of the
FW Act;
(2) in finding that it was “reasonable in all the circumstances to make the
determination” within the meaning of s.237(2)(d) of the FW Act; and
(3) in making a determination that was inclusive of hypothetical employees or
employees in the classification Power Station Operator 4 (PSO4), in
circumstances where no such employees were presently employed by Alcoa.
1 [2014] FWC 7123
2 PR557071
[2015] FWCFB 1832
DECISION
E AUSTRALIA FairWork Commission
[2015] FWCFB 1832
2
Legislation
[3] Sections 236 and 237 of the FW Act provide as follows:
236 Majority support determinations
(1) A bargaining representative of an employee who will be covered by a proposed
single-enterprise agreement may apply to the FWC for a determination (a majority
support determination) that a majority of the employees who will be covered by the
agreement want to bargain with the employer, or employers, that will be covered by
the agreement.
(2) The application must specify:
(a) the employer, or employers, that will be covered by the agreement; and
(b) the employees who will be covered by the agreement.
237 When the FWC must make a majority support determination
Majority support determination
(1) The FWC must make a majority support determination in relation to a proposed
single-enterprise agreement if:
(a) an application for the determination has been made; and
(b) the FWC is satisfied of the matters set out in subsection (2) in relation to
the agreement.
Matters of which the FWC must be satisfied before making a majority support
determination
(2) The FWC must be satisfied that:
(a) a majority of the employees:
(i) who are employed by the employer or employers at a time
determined by the FWC; and
(ii) who will be covered by the agreement;
want to bargain; and
(b) the employer, or employers, that will be covered by the agreement have not
yet agreed to bargain, or initiated bargaining, for the agreement; and
(c) that the group of employees who will be covered by the agreement was
fairly chosen; and
[2015] FWCFB 1832
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(d) it is reasonable in all the circumstances to make the determination.
(3) For the purposes of paragraph (2)(a), the FWC may work out whether a majority of
employees want to bargain using any method the FWC considers appropriate.
(3A) If the agreement will not cover all of the employees of the employer or
employers covered by the agreement, the FWC must, in deciding for the purposes of
paragraph (2)(c) whether the group of employees who will be covered was fairly
chosen, take into account whether the group is geographically, operationally or
organisationally distinct.
Operation of determination
(4) The determination comes into operation on the day on which it is made.
Factual background
[4] Historically, Alcoa has employed a number of individuals internally designated as
“Power Station Operators” (PSOs) across various functional levels (PSO2, PSO3, PSO4,
PSO5 and PSO6) at its electrical power generation station in Anglesea, Victoria (Power
Station).3 There are currently no persons designated as PSO2s or PSO4s. The Alcoa Point
Henry Smelter and Anglesea Power Station Agreement 2011 (2011 Agreement) covers PSO3
employees, and would cover PSO2 employees if any of them existed.
[5] The functional relationship between employees designated as PSO3, PSO5 and PSO6
was, uncontroversially, described by the Commissioner in the Decision as follows:
“[24] The PSO6, PSO5 and PSO3 employees, currently engaged, are based in the
control room of the power station. The PSO3 employees have a desk and computer
terminal inside the control room. PSO3 employees, however, largely perform duties
outside the control room. PSO3 employees are not authorised to operate the control
panel of the power station. Both the PSO6 and PSO5 employees are authorised to do
so and are the principal operators of the control panel.”
[6] Alcoa has commenced bargaining for an enterprise agreement to replace the 2011
Agreement. The enterprise agreement it proposes would, like the 2011 Agreement, not cover
any employees who are graded above PSO3. However 15 employees who are graded PSO5 or
PSO6 and are represented by the CFMEU wish to negotiate with Alcoa for a new enterprise
agreement. Alcoa refused to bargain with them. Accordingly the CFMEU, as their bargaining
representative, has made an application for a majority support determination.
The Decision
[7] The Commissioner identified two critical issues to be determined in the Decision as
follows:
3 Alcoa’s Outline of Submissions [3]
[2015] FWCFB 1832
4
“ whether the group of employees whose employment would be covered by the
proposed enterprise agreement and who would be the subject of the determination
sought is fairly chosen; and,
whether it would be reasonable in all the circumstances to make the
determination.”4
[8] After setting out the background to the application and the relevant provisions of the
FW Act, the Commissioner reviewed the guiding authorities and summarised the evidence
before him. The Commissioner identified the Full Bench decision in Cimeco Pty Ltd v
Construction, Forestry, Mining and Energy Union5 (Cimeco) as outlining the proper approach
to be taken in determining whether the employees were “fairly chosen”. In making his
findings as to the evidence, the Commissioner proceeded on the basis that there were no
substantial conflicts on the primary facts and that any differences in the witnesses’ evidence
were interpretative in nature or based on opinion.6 In relation to the “fairly chosen” issue, the
Commissioner said:
“[21] Therefore, the relevant context is a situation where the proposed enterprise
agreement, in respect of which the determination is sought, will not cover all of the
employees of the employer.”
[9] As a result of this conclusion that the proposed agreement would not cover all of the
employees of the employer the Commissioner, as required by s.237(3A), went on to consider
whether the group who would be covered by the agreement was geographically, operationally
or organisationally distinct, and reached the following conclusions on these matters:
“[42] On the evidence before me, I find that the PSO6 and PSO5 (and PSO4)
employees are relevantly located geographically with the other employees of Alcoa
engaged in the conduct of Alcoa’s electrical power generation enterprise at Anglesea
in Victoria. I find that within that enterprise, the PSO6 and PSO5 (and PSO4)
employees form part of an operationally distinct group made up of employees
described as PSOs or Power Station Operators of various functional levels. I have
noted that, historically, this operational group has been identified as comprised of PSO
levels 2 through 6 and that there are currently no employees engaged in this
operational group at PSO4 or PSO2.
[43] Moreover, I find that historically the PSO6 and PSO5 (and PSO4) levels have
been organisationally distinct for the purposes of the differentiation and regulation of
their terms and conditions of employment. In my view, the overlay of the existing
enterprise agreement, which regulates the terms and conditions of employment of
PSO3 (and PSO2) employees, does not substantially distinguish the operational or
organisational circumstances of the PSO6 and PSO5 (and PSO4) employees, except to
the extent that it differentiates the determination of the remuneration and terms and
conditions of employment of employees in the PSO organisational structure at PSO3
(and PSO2) employees from PSO6 and PSO5 (and PSO4) employees.”
4 Decision at [10]
5 (2012) 219 IR 139
6 Decision at [15]
[2015] FWCFB 1832
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[10] Having regard to these conclusions, the Commissioner in accordance with s.237(2)(c)
went on to consider whether the relevant group of employees, that is the PSO6, PSO5 (and
PSO4) employees, were fairly chosen in relation to the proposed enterprise agreement. The
Commissioner found that there would be no unfairness to the PSO6, PSO5 (or PSO4)
employees if the proposed enterprise agreement was the subject of bargaining. Regarding
Alcoa’s other employees the Commissioner found that there would be no unfairness to PSO3
(or PSO2) employees, to other employees who were not Power Station Operators, or to any
group of employees at the Power Station who are not currently bargaining for a proposed
enterprise agreement.7 The Commissioner also noted that with the exception of professional
and managerial employees at Anglesea, most employees were bargaining with Alcoa for a
proposed enterprise agreement.8
[11] Regarding the issue of fairness or unfairness to Alcoa, the Commissioner said:
“[70] In my view, the statutory objects of facilitating enterprise bargaining and the
wishes of a group of employees who propose an enterprise agreement are to be given
some weight when considering whether a group of employees was fairly chosen in
relation to a proposed enterprise agreement.
[71] When considering fairness to an employer of a selected group, there would
need to be a clear and cogent case that the selection of the group would be sufficiently
prejudicial to the productivity or efficient conduct of an employer’s business, in all the
relevant circumstances, to outweigh a presumption that the Commission should
facilitate bargaining for an enterprise bargaining agreement where the employees of
the group unanimously wish to bargain.”
[12] The Commissioner’s reasoning as to the conclusion that there was no relevant
unfairness to Alcoa if PSO6, PSO5 (and PSO4) employees were granted a majority support
determination included the following:
“[72] Alcoa suggests, through the evidence of Mr Monahan, that the PSO6 employees
should be characterised as senior managers. In this respect, no doubt some comfort is
sought by analogue with the decision in UFU in relation to the identity of certain
“officer” levels in the Metropolitan Fire Brigade.
[73] On my evaluation of the evidence, the description of PSO6 employees as senior
managers is not apt generally or in the particular context of the operation of the
Anglesea power station. Moreover, I do not think there is any relevant analogue
between the operational or organisational structure of the Anglesea power station and
the Metropolitan Fire Brigade, as far as I can discern from a reading of the relevant
decision.
[74] In my view, in the relevant operational and organisational framework of the
Anglesea power station, the senior management positions are clearly identified in the
organisational chart referred to above as Power Station Manager and Operations Area
Supervisor.
. . .
7 Decision at [46]-[49]
8 Decision at [48]
[2015] FWCFB 1832
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[82] Having regard to all of the above, I am satisfied that there has been and
continues to be no unfairness in the selection of the group of employees whose
employment would be covered by the terms of the proposed enterprise agreement or as
between the selected group, Alcoa and any other employees of Alcoa at the Anglesea
power generation enterprise.
[83] Moreover, I consider the group selected to be fairly chosen. The employees are
part of an operational group, of whom some are able to bargain for an enterprise
agreement in accordance with the relevant objects of the legislation. It is fair to the
selected group and not unfair to Alcoa or any other employee in the relevant
circumstances that the chosen group should be able to bargain for a proposed
enterprise agreement commensurately with the objects of the legislation.
[84] Indeed, on what is before me, of all the relevant considerations, the selection of
the PSO6, PSO5 (and PSO4) level employees, who among the other PSOs are not
currently covered by an enterprise agreement, is a choice which is coherent with the
functional and operational activities of those employees, the Power Station Operators.
[85] In my judgement, the selection of the relevant employees does not exclude any
Power Station Operators from enterprise bargaining or impose any burden on the
relevant operational group or other employees below professional or clearly
designated managerial levels, as previously identified, and does not prejudice the
efficiency or productivity of Alcoa’s electrical power generation enterprise at
Anglesea.”
[13] After rejecting an argument on the part of Alcoa that it was not reasonable to make a
majority support determination because the CFMEU should have applied for a scope order
under s.238, the Commissioner stated the following conclusions:
“[94] As with my consideration of whether the group was fairly chosen, of itself, the
preference of Alcoa not to bargain does not mean that it would be unreasonable to
make the order.
[95] The history of the terms and conditions of employment of the relevant employees
was described in the evidence of Mr Monahan, who was asked if those terms and
conditions of employment were arrived at by bargaining or individual negotiations
with the employees.
[96] Mr Monahan’s evidence was as follows:
The distinction between PSO3 (and PSO2) and PSO6, PSO5 (and PSO4)
employees has been a feature of the industrial organisation of the Anglesea power
station since its inception;
An enterprise award was made in 1982 by the Commission, which incorporates
this division; and,
The employees have been working within the ambit of this structure since the
inception of enterprise bargaining at Alcoa.
[2015] FWCFB 1832
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[97] No doubt bargaining, either individually or collectively, with the relevant
employees in relation to their terms and conditions of employment, will be a new and
different development for Alcoa. As noted by the Full Bench of the Commission,
above, the Commission must give due weight to the wishes of employees who propose
to bargain. Additionally, the objects of Part 2-4 of the Act provide a framework to
facilitate and enable enterprise bargaining.
[98] It is also of note that while discretion is provided to the Commission, in relation
to the satisfaction required by s 237(1)(b) and 237(2) of the Act, it is mandatory for
the Commission to make a majority support determination when the Commission is
relevantly satisfied.
[99] The applicable legislative provisions indicate a strong policy framework in favour
of enterprise bargaining, subject to the relevant considerations, particularly in light of s
3 and the relevant words of s 169, referring to Division 8, and s 171 of the Act.
[100] In the circumstances of this case, where all of the relevant employees
unanimously want to bargain, the group of employees was fairly chosen and there is
no objective basis upon which it is possible to be satisfied that the productivity or
efficiency of the employer’s business would be unfairly affected by bargaining with
those employees, it is difficult to see how it would be other than reasonable to make
the majority support determination sought to enable bargaining in accordance with the
policy objectives of the legislative scheme.
[101] For all of the above reasons, I find it would be reasonable to make the majority
support determination sought in this matter.”
Submissions
Alcoa’s submissions
[14] Relying upon its three grounds of appeal, Alcoa sought that permission to appeal be
granted, the Commissioner’s order making the majority support determination be quashed and
the application for the determination be dismissed. Alcoa submitted firstly that the
Commissioner’s finding that the group of employees was “fairly chosen” within the meaning
of s.237(2)(c) of the FW Act was attended by appealable error. Alcoa contended that the
Commissioner erred:
by including notional PSO4 employees as part of the group for whom majority
support was determined and by failing to find unfairness to Alcoa in requiring
Alcoa to bargain with notional employees of a dormant designation;
in finding that there was a “presumption” to facilitate bargaining where the
employees of the group unanimously wished to bargain;
in failing to find that PSO6 employees were operationally and/or organisationally
distinct from PSO5 employees, and in doing so failing to give any weight or due
weight to the “significant and qualitatively distinct managerial functions and
substantial decision making authority of the PSO6 employees as compared to
PSO5 employees” and the potential conflict of interest to which this gave rise; and
[2015] FWCFB 1832
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in failing to find that PSO6 employees working conditions were incompatible
with typical terms of an enterprise agreement, and in doing so failing to give
proper weight to “Alcoa management’s prerogative to organise its workforce” in
the manner that it was.
[15] Secondly, Alcoa submitted that it was not open to the Commissioner to find that it was
“reasonable in all the circumstances” for the determination to be made. In this regard, Alcoa
relied upon each of the grounds set out above and further submitted that the Commissioner
failed to give weight to the benefits of common law contracts and the historical pattern of
bargaining in Alcoa’s enterprise.
[16] Finally, Alcoa submitted that the inclusion of notional PSO4 employees in the
determination was erroneous and outside the Commissioner’s jurisdiction under s.237(1) of
the FW Act because at the time majority support was determined no PSO4s were employed or
balloted for the purposes of the determination.
[17] Alcoa submitted that permission to appeal should be granted because there was a
“dearth of authority on the range of matters which are relevant to the Commission’s
discretion’’ under ss.237(2)(c) and 237(2)(d) of the FW Act. Alcoa further submitted that it
was in the public interest for the Commission to consider the applicability of the principles
stated in United Firefighters’ Union v Metropolitan Fire and Emergency Services Board9 case
outside of the emergency services and uniformed services context and, further, to consider the
characteristics of seniority or managerial responsibility within an organisation which may
render it unreasonable for a majority support determination to be issued.
CFMEU’s submissions
[18] Regarding Alcoa’s first ground of appeal, the CFMEU contended that there was no
error in the Commissioner’s finding that the group of employees that would be covered by the
agreement was fairly chosen where such a proposed agreement includes a classification in
which no employees are currently employed. The CFMEU submitted that the finding that a
majority support determination can be validly made in circumstances where the agreement
includes classifications that are not currently in use is consistent with other authorities.
[19] The CFMEU submitted that the Commissioner was correct to find that there was a
presumption that the Commission should facilitate bargaining for an enterprise agreement
when the employees unanimously wish to bargain, in that the Commissioner’s reference to “a
presumption” was, in effect, a different way of saying that the view of employees “prima
facie carry greater weight” and that the Commissioner’s approach was consistent with the
Full Bench decisions in United Firefighters’ Union v Metropolitan Fire and Emergency
Services Board10 and Australian Workers’ Union v BP Refinery (Kwinana) Pty Ltd.11
[20] The CMFEU submitted that the Commissioner did not fall into error by failing to find
that PSO6 employees were operationally and/or organisationally distinct from PSO5
employees and that this finding was clearly open to the Commissioner on the evidence before
9 [2010] FWAFB 3009, 193 IR 293
10 Ibid
11 [2014] FWCFB 1476
[2015] FWCFB 1832
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him. The CFMEU further contended that if PSO5 and PSO6 employees were found to be
operationally and/or organisationally distinct it would not necessarily follow that the group of
employees was not “fairly chosen” for the purposes of s.237(2)(c) as it is merely one matter of
which the decision maker must be satisfied before making a majority support determination
under s.237(2).
[21] The CFMEU submitted that Alcoa’s second ground of appeal proceeded on a
“misunderstanding of the FW Act’s bargaining scheme and the Commission’s role in deciding
whether to issue a majority support determination”. In this regard, the CFMEU relied upon
Construction, Forestry, Mining and Energy Union v CBI Constructors Pty Ltd in which it was
stated that the Commission’s role when considering the “reasonableness” requirement is not
“to make any judgments at all about the appropriateness or otherwise of the terms and
conditions” and is “limited to ascertaining whether a majority wanted to bargaining [sic] for
an enterprise agreement that would cover them.”12
[22] In response to Alcoa’s final ground of appeal regarding the inclusion of notional PSO4
employees, the CFMEU relied upon the submissions outlined above.
[23] The CFMEU submitted that permission to appeal should be refused and the appeal
dismissed because there were no errors in the Commissioner’s decision and it was “not
attended with sufficient doubt to warrant its reconsideration”.
Consideration
Nature of the decision-making process
[24] Alcoa proceeded on the basis that its appeal was against a decision which involved the
exercise of a discretion, and it was therefore necessary for it to demonstrate error of the type
identified in House v The King.13 Insofar as the non-jurisdictional issues raised by its appeal
are concerned, it was correct to do so. Although under s.237(1), the Commission “must” make
a majority support determination if an application has been made and the Commission is
satisfied of the matters set out in s.237(2), the task of determining whether the “fairly chosen”
requirement in s.237(2)(c) and the “reasonable in all the circumstances” requirement in
s.237(2)(d) are satisfied can properly be characterised as involving the exercise of a
discretion. The decision-making process with respect to these two requirements is one in
which no one consideration and no combination of considerations is necessarily determinative
of the result and the decision-maker is allowed some latitude as to the choice of the decision
to be made.14 In the recent Federal Court Full Court decision in Construction, Forestry,
Mining and Energy Union v John Holland Pty Ltd15 the assessment of whether the “fairly
chosen” requirement in s.186(3) (where it is one of the requirements for approval of enterprise
agreements) was satisfied was described as involving a “very broad judgment” and the
exercise of an “independent discretion”16, and we see no reason to take a different view of the
requirement in s.237(2)(c). Similarly in Transport Workers' Union of Australia
12 [2010] FWA 2164 at [17]
13 (1936) 55 CLR 499 at 504-505
14 See Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194 at [19] per
Gleeson CJ and Gaudron and Hayne JJ
15 [2015] FCAFC 16
16 Ibid at [60], [62]
[2015] FWCFB 1832
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v Hunter Operations Pty Ltd17 the requirement in s.230(1)(c) for the making of a bargaining
order that the Commission be “satisfied that it is reasonable in all the circumstances to make
the order” was described as requiring “a broad evaluative judgment that is in the nature of a
discretionary decision”, and we consider that s.237(2)(d) can be characterised in the same
way. Therefore it is necessary for Alcoa to demonstrate, in order to succeed in its appeal, that
the Commissioner acted upon a wrong principle, allowed extraneous or irrelevant matters to
guide or affect him, mistook the facts, did not take into account some material consideration,
or reached a result which, on the facts, was unreasonable or plainly unjust.
The fairly chosen requirement
[25] We shall deal with Alcoa’s first challenge to the Commissioner’s conclusion that the
“fairly chosen” requirement was satisfied concerning the inclusion of “notional” PSO4
employees in the majority support determination later in this decision.
[26] Alcoa’s second challenge was that the Commissioner made an error of principle in
referring, in paragraph [71] of the Decision (which we have earlier set out), to a
“presumption” that the Commission should facilitate bargaining for an enterprise agreement
where the employees of the group unanimously wished to bargain. If this was to be read as a
reference to a legal presumption, then we accept that this would constitute an error of
principle, if not a jurisdictional error. However we consider that, fairly read in the context of
the Decision as a whole, the paragraph should not be understood in this way.
[27] The Commissioner had earlier, in paragraph [69], referred to s.171(b) of the FW Act
which provides that it is an object of Part 2-4 (in which ss.236-237 are located) to “enable the
FWC to facilitate good faith bargaining and the making of enterprise agreements ...”. He had
also referred to the decision in Australian Workers’ Union v BP Refinery (Kwinana) Pty Ltd18
in which the Full Bench, in relation to the “fairly chosen” requirement in s.238(4)(c) applying
to the grant of a scope order, had said that: “... unless there are factors relating to the fairness
and efficiency of bargaining and or demonstrated prejudice to the employer’s business
operations that make it more reasonable to accept the employer’s application, notwithstanding
the contrary preference of employees, weight should be accorded to the views of the
employees.”19 In the paragraph immediately preceding paragraph [71], the Commissioner
stated that the statutory object of facilitating enterprise bargaining and the wishes of a group
of employees who propose an enterprise agreement are to be given “some weight” when
considering the “fairly chosen” criterion. Read in this context, we consider that in paragraph
[71] the Commissioner is to be understood as saying no more than that, in considering
fairness to the employer, the unanimous wish of the relevant group of employees to bargain
should be given significant weight in the absence of a countervailing case that the selection of
the group would be prejudicial to the productivity or efficient conduct of the employer’s
business. That is certainly the way in which the Commissioner subsequently approached his
analysis in paragraphs [73]-[85] of the Decision. Although the use of the word “presumption”
may have been inapt, it does not amount to appealable error. Contrary to the submission of
Alcoa, the approach taken by the Commissioner was consistent with the view expressed by
the Full Bench in United Firefighters’ Union v Metropolitan Fire and Emergency Services
17 [2014] FWC 7469
18 [2014] FWCFB 1476
19 Ibid at [44]
[2015] FWCFB 1832
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Board20 (also in relation to s.238(4), including the “fairly chosen” requirement in s.238(4)(c))
as follows:
“[53] ... It may be implied from the legislative scheme that the collective choice of
employees is significant. It must be said, however, that while weight should be given
to the views of the employees potentially affected, it may be that a proper
consideration of the matters specified in ss.238(4) and (4A) in a particular case may
make it appropriate to make a scope order contrary to the views of the employees
potentially affected.”
[28] Alcoa’s submission that the Commissioner erred in failing to find that PSO6
employees were operationally and organisationally distinct from PSO5 employees must also
be rejected. The Commissioner found, as a matter of primary fact, that the operational tasks
performed by PSO6 and PSO5 employees principally involved control functions within the
control room and, intermittently, tasks outside the control room of an operational nature, some
of which overlapped with the duties of PSO3s.21 He also found that PSO6 and PSO5
employees had no disciplinary authority, but that PSO6 employees could make disciplinary
recommendations and also participated in the recruitment selection process to fill vacancies in
the Power Station Operations Team.22 There was no challenge to these finding of primary fact
in the appeal.
[29] Alcoa’s case that PSO6 employees were operationally and organisationally distinct
from PSO5 employees rested on the characterisation of PSO6 employees by its witness, Mr
Monahan, as being senior managers. The Commissioner rejected this characterisation, and in
doing so noted that the senior management positions were identified in Alcoa’s organisation
chart (reproduced in paragraph [22]) as those of Power Station Manager and Operations Area
Supervisor. We consider that this conclusion was reasonably open to the Commissioner, and
we agree with it. The fact that there were operational differences between the PSO6 and PSO5
roles, as recognised in the very existence of the separate PSO6 role and its higher
remuneration, was not demonstrated to be of such significance as to compel the conclusion
that the group was not fairly chosen. No error in the exercise of the Commissioner’s
discretion has been demonstrated.
[30] We additionally observe that Alcoa’s submissions on this issue impermissibly conflate
the issues which arise for consideration in majority support determinations with those relating
to scope orders. The submissions relied upon those parts of the United Firefighters’ Union
decision which referred to the inclusion of senior management employees of the Metropolitan
Fire and Emergency Services Board in bargaining together with lower ranks as involving a
conflict of interest. However, as earlier stated, United Firefighters’ Union was concerned with
applications under s.238 for scope orders. The reference to a conflict of interest was made in
the context of a conclusion that excluding the relevant senior management employees from
the scope of bargaining would “promote the fair and efficient conduct of bargaining”23 - a
required consideration under s.238(4)(b), but one not specified in s.237(2). Whilst, as earlier
noted, ss.237(2) and 238(4) both require consideration of the “fairly chosen” requirement, it
should not be forgotten that majority support determinations and scope orders serve distinct
20 [2010] FWAFB 3009, 193 IR 293
21 Decision at [36]-[37]
22 Decision at [38]
23 [2010] FWAFB 3009, 193 IR 293 at [70]
[2015] FWCFB 1832
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purposes in the bargaining regime in Part 2-4 of the FW Act and give rise to differing
considerations. This point was well made by the Full Bench in Liquor, Hospitality and
Miscellaneous Union v Coca-Cola Amatil (Aust) Pty Ltd as follows24:
“[28] Division 8 also contains a variety of processes designed to facilitate agreement
making. Within those processes, the role of a majority support determination is to
commence the bargaining process when there is majority support among employees to
collectively bargain, when their employer has not agreed to do so. The effect of a
majority support determination itself extends no further. However, once a
determination is made, the bargaining process under the Act is enlivened, including
the good faith bargaining requirements under s.228 of the Act.
[29] Where the bargaining raises a dispute about the scope of the agreement or
agreements to be made and the classes or groups of employees to be covered by the
proposed enterprise agreement or agreements, Fair Work Australia has power to make
scope orders to determine which classes or groups of employees are to be covered.
The scheme of the Act does not envisage a role for a majority support determination in
determining the scope of bargaining or the scope of an agreement.
. . .
[39] It should be noted, given the competing views of the parties as to the number and
scope of agreements which should be made, that a majority support determination
does not determine the scope of bargaining, any more than it determines the terms and
conditions to apply. Once bargaining has commenced, s.238 is available to deal with
disputes about the scope which impede bargaining. Unlike a majority support
determination, a scope order can limit or extend the scope of bargaining, through a
requirement to include or exclude a class of employees in bargaining for a proposed
agreement or requiring bargaining collectively with different classes of employees in
relation to separate agreements.”
[31] The final point made by Alcoa concerning the “fairly chosen” consideration was that
the Commissioner erred in failing to find that the working conditions of PSO6 employees
were incompatible with typical terms of an enterprise agreement. This submission is, with
respect, misconceived. The making of a majority support determination does not pre-suppose
that an enterprise agreement will be made containing particular terms. It does not pre-suppose
that an enterprise agreement will be made at all. To attempt to predict what the outcome of
enterprise bargaining might be if a majority support determination is made, and then to have
regard to that in deciding whether such a determination would be made, would involve the
Commission taking into account an entirely speculative and irrelevant consideration. We
agree with the following statement made in this connection in Construction, Forestry, Mining
and Energy Union v CBI Constructions Pty Ltd25 in response to a submission that a majority
support determination should not be made where an employee’s existing terms and conditions
of employment were “competitive and current”:
“[17] CBI argues that the 2007 Agreement will continue to apply and that the ITEA's
covering employees had sought to be terminated. If the ITEA's were terminated then
the terms and conditions of those employees would be covered by the 2007
Agreement, supplemented by a set of conditions known as the Pluto Project
24 [2009] FWAFB 668, 191 IR 124
25 [2010] FWA 2164; affirmed on appeal in [2011] FWAFB 7642.
[2015] FWCFB 1832
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Conditions. These terms and conditions, CBI argues, are current and competitive. The
assertion seems to be that as the actual terms and conditions are current and
competitive then that is not reasonable in all the circumstances for me to make the
MSD. This to me seems to misunderstand the nature of bargaining and the role of
FWA in MSD applications. It is not for FWA to make any judgments at all about the
appropriateness or otherwise of the terms and conditions applying or of any sought,
particularly at this juncture. FWA's role is limited to ascertaining whether a majority
wanted to bargain for an enterprise agreement that would cover them.”
(Emphasis added.)
[32] On any reading of the Decision, the Commissioner took into account that Alcoa had
organised its workforce so that PSO5s and PSO6s were employed on individual contracts and
that Alcoa wanted things to remain that way. However that the Commissioner did not accord
this consideration the decisive weight which Alcoa submitted he should does not amount to
appealable error. It is not sufficient to demonstrate appealable error to contend that the first
instance decision-maker failed to give a particular matter “sufficient weight” or failed to have
“proper regard” to it unless this amounted in substance to a failure to exercise the discretion
conferred on the court or tribunal.26
Whether reasonable in all the circumstances to make the determination
[33] Insofar as Alcoa raises the same contentions of error in the exercise of the discretion
as to whether, under s.237(2)(d), it was reasonable in all the circumstances to make the
determination as it did in relation to the “fairly chosen” criterion in s.237(2)(c), we reject
those contentions for the same reasons as already stated.
[34] We also reject the further submission that the Commissioner failed to give weight to
the benefits of the individual contracts to which PSO5 and PSO6 employees were party and to
the historical position whereby they had not previously been involved in collective bargaining
in Alcoa’s enterprise. The Commissioner took these matters into account, weighed them
against the other relevant considerations, in particular the unanimous support of the
employees in the group for enterprise bargaining to occur, and came to an overall conclusion
that it was reasonable in all the circumstances to make the Determination. No error in the
exercise of the discretion is discernible.
Inclusion of PSO4 employees
[35] Alcoa’s submission that the Commissioner fell into jurisdictional error by including
PSO4 employees in the Determination is founded on the proposition stated in its submissions
that “The employees who form part of the group that must be ‘fairly chosen’ pursuant to
s.237(2)(c) are the same employees of whom a majority must be formed in s.237(2)(a)”. That
proposition states an incorrect construction of s.237. Section 237(2)(a) requires the
Commission, as a prerequisite to the making of a majority support determination, to be
satisfied that the majority of the employees “who are employed by the employer or employers
at a time determined by the FWC” and “who will be covered by the agreement” want to
bargain. That provision, in its dual characterisation of the class of employees the majority of
which must want to bargain, clearly contemplates that the group of employees actually
employed at the relevant time may not be co-extensive with the group of employees who will
26 Restaurant and Catering Association of Victoria [2014] FWCFB 1996 at [57]
[2015] FWCFB 1832
14
be covered by the agreement if made. By contrast, the “fairly chosen” requirement in
s.237(2)(c) operates by reference only to “the group of employees who will be covered by the
agreement”. It is clear therefore that the majority support requirement must be satisfied by
reference to that portion of the group of employees who will be covered by the proposed
agreement who are presently employed at the time determined by the Commission, whereas
the fairly chosen requirement must be satisfied in relation to the entire group who will be
covered by the proposed agreement.
[36] Our conclusion in this respect is supported, albeit indirectly, in Construction, Forestry,
Mining and Energy Union v John Holland Pty Ltd.27 In that matter, one issue considered by
the Full Court was whether, in relation to the requirement for approval of enterprise
agreements in s.186(3) that the Commission be satisfied “that the group of employees covered
by the agreement was fairly chosen”, the group of employees referred to was “the whole class
of employees to whom the agreement might in the future apply, rather than the group of
employees which actually voted on whether to make the agreement”.28 The Court stated the
former construction was the correct one. In dealing with this issue, Buchanan J (with whom
Besanko29 and Barker30 JJ relevantly agreed) referred to s.237, among other provisions, as
supporting the proposition that the FW Act draws a distinction between those presently
employed who may bargain for and vote to approve an enterprise agreement and the “wider
group” who will ultimately be covered by the agreement once it takes effect. Buchanan J said:
“[38] Secondly, there are other indications in the FW Act that a distinction must be
made between the group of present employees who will be covered by an agreement
and the wider group who will be covered if the agreement is made. Indications of that
sort may be seen in the procedures to assist “good faith bargaining”, whereby a
bargaining representative (which may be a union – s 176(1)(b)) may apply to the FWC
for a “majority support determination” or a “scope order”. In either case, the FWC
must address the question (similarly to s 186(3) and (3A)) whether “the group of
employees who will be covered by the agreement was fairly chosen” and whether the
group is geographically, operationally or organisationally distinct (s 237(2)(c), (3A); s
238(4A)). In context, it appears clear that this is a wider group (corresponding to
potential coverage) than the group of present employees who wish to bargain or whose
immediate interests are those being represented.”
[37] In the Decision the Commissioner assessed the majority support requirement by
reference to those of the group who would be covered by the proposed agreement (that is,
PSO4s, PSO5s and PSO6s) who were currently employed by Alcoa. In doing so, he correctly
recognised that there were no PSO4s currently employed. In relation to the fairly chosen
requirement, he took the entire group who would be covered by the Agreement into account.
That was an approach which conformed to the requirements of s.237 as we have construed
them.
[38] The Determination was expressed in the following way (excluding formal parts and
the date of effect):
27 [2015] FCAFC 16
28 Ibid at [2] per Besanko J
29 Ibid at [1]
30 Ibid at [87]
[2015] FWCFB 1832
15
“[1] Further to the decision in Construction, Forestry, Mining and Energy Union v
Alcoa of Australia Limited [2014] FWC 7123, and pursuant to ss 236 and 237 of the
Fair Work Act 2009 (the Act), the Fair Work Commission determines as follows:
A majority of the employees employed by Alcoa of Australia Limited at the
Anglesea power station in the classifications of Power Station Operator 6,
Power Station Operator 5 and Power Station Operator 4, who will be covered
by the proposed enterprise agreement, want to bargain for a proposed
enterprise agreement with Alcoa of Australia Limited.”
[39] There is no error in the way the Determination is expressed which makes it beyond
power. The sentence in the indented paragraph correctly identifies that “A majority of the
employees employed by Alcoa” - that is a majority of those currently employed - who are “in
the classifications of Power Station Operator 6, Power Station Operator 5 and Power Station
Operator 4, who will be covered by the proposed enterprise agreement” - that is, who fall
within the class of persons who will be covered by the proposed agreement - want to bargain.
Accordingly this third ground of appeal is also rejected.
[40] Alcoa made the additional submission that the inclusion of PSO4 employees in the
Commissioner’s consideration of the “fairly chosen” requirement constituted an error in the
exercise of his discretion. However this submission was founded on the same misconstruction
of s.237 and therefore may be rejected.
Conclusion
[41] We are not satisfied, for the reasons stated, that Alcoa has demonstrated any
appealable error in the Decision. Nor do we consider that the appeal raises any issues of
general controversy concerning the interpretation or application of ss.236 and 237.
[42] Under s.604(1), an appeal lies to the Full Bench only with permission. In relation to
such permission, s.604(2) provides: “Without limiting when the FWC may grant permission,
the FWC must grant permission if the FWC is satisfied that it is in the public interest to do
so.” The effect of this provision is that permission must be granted if it is in the public interest
to do so, but may otherwise be granted on discretionary grounds. We are not satisfied that it is
in the public interest that permission to appeal be granted or that there are discretionary
grounds justifying the grant of permission.
[43] Accordingly permission to appeal is refused.
VICE PRESIDENT
Appearances:
R. Sweet of counsel with E. Mentiplay solicitor, for Alcoa of Australia Limited.
Y. Bakri of counsel with A. Thomas for the Construction, Forestry, Mining and Energy Union.
OF THE FAIR WORK MISSION THE
http://www.fwc.gov.au/decisionssigned/html/2014fwc7123.htm
[2015] FWCFB 1832
16
Hearing details:
2015.
Melbourne:
12 March.
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