1
Fair Work Act 2009
s.604 - Appeal of decisions
Communications, Electrical, Electronic, Energy, Information, Postal,
Plumbing and Allied Services Union of Australia - Electrical, Energy and
Services Division - Queensland Divisional Branch; "Automotive, Food,
Metals, Engineering, Printing and Kindred Industries Union" known as the
Australian Manufacturing Workers' Union (AMWU)-Queensland Branch
v
Main People Pty Ltd
(C2014/1593)
SENIOR DEPUTY PRESIDENT HAMBERGER
DEPUTY PRESIDENT ASBURY
COMMISSIONER ROE SYDNEY, 25 NOVEMBER 2014
Appeal against decision [2014] FWCA 4694 of Deputy President McCarthy at Perth on 14
July 2014 in matter number AG2014/6270 - Approval of enterprise agreement; ‘fairly
chosen’; better off overall test.
[1] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing
and Allied Services Union (CEPU) and the Automotive, Food, Metals, Engineering, Printing
and Kindred Industries Union known as the Australian Manufacturing Workers’ Union
(AMWU) (the appellants) have applied for permission to appeal and to appeal the approval by
Deputy President McCarthy of the Main People Pty Ltd Agreement (the Agreement) on 14
July 2014i.
[2] The appeal was heard in Brisbane on 6 November 2014. The unions were represented
by E White and Main People Pty Ltd (the respondent) by D Williams.
[3] The appellants contended that the Deputy President was in error in being satisfied that
the group of employees covered by the Agreement was fairly chosen (as required by s. 186 (3)
of the Fair Work Act 2009 (the FW Act)) and that the Agreement passed the better off overall
test (as required by s. 186 (2) (d) of the FW Act).
[4] Two preliminary issues arise in relation to the application: whether the appellants have
standing to appeal the decision to approve the Agreement, and, if so, whether they should be
granted an extension of time to file their appeal.
[2014] FWCFB 8429
DECISION
E AUSTRALIA FairWork Commission
[2014] FWCFB 8429
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Do the appellants have standing to appeal?
[5] Under s. 604 of the FW Act only ‘a person who is aggrieved by a decision’ may
appeal the decision.
[6] The respondent submitted that neither of the appellants are a ‘ person who can show a
grievance which will be suffered as a result of the decision complained of beyond that which
he or she has as an ordinary member of the public’.ii Neither union was a bargaining
representative for the Agreement, nor was there any evidence that any employee of the
respondent at the time of the vote to approve the Agreement was a member of either union.
Further there was no evidence that any subsequent employees of the respondent had asked the
appellants to represent their interests in relation to the Agreement.
[7] The appellants have the right to represent employees under the terms of the
Agreement. Moreover, given the nature of the respondent’s business, and the industry within
which it operates, we are satisfied that it is likely that some members of the appellants will be
employed by the respondent in the future, in classifications covered by the Agreement. In the
circumstances of this case we consider that this gives the appellants an interest in the decision
to approve the Agreement beyond that of an ordinary member of the public. Accordingly, we
are satisfied that the appellants have standing to appeal the decision to approve the
Agreement.
Should an extension of time for the appeal be granted?
[8] The decision to approve the Agreement was made on 14 July 2014. The application to
appeal was lodged on 29 August 2014. Under the Fair Work Commission Rules 2013 a notice
of appeal must be lodged within 21 calendar days after the date of the decision being appealed
against, or within such further time allowed by the Commission on application by the
appellant.
[9] The notice of appeal was lodged 25 days beyond the 21 day period. We have had
regard to the relevant factors and are willing on this occasion to extend the time for the filing
of the application to appeal. We are satisfied that the appellants lodged their notice of appeal
as soon as they became aware of the decision to approve the Agreement, the length of the
delay was relatively short and, as will become clear later in this decision, at least one of the
grounds raised by the application to appeal has merit.
Was the group of employees covered by the Agreement fairly chosen?
[10] Clause 3 of the Agreement indicates that it shall apply to all employees of the
respondent engaged in one of the classifications set out in the Agreement in all the States and
Territories in Australia. The classifications covered by the Agreement include:
trade qualified electrical fitter/mechanics;
trade qualified boilermakers;
trade qualified fitters;
trade qualified painters;
open ticketed crane drivers (100 tonnes and over);
advanced/intermediate riggers;
advanced/intermediate scaffolders;
[2014] FWCFB 8429
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mobile crane drivers;
welders;
painters/blasters (not qualified);
dogman;
scaffolders;
riggers;
operators;
trades assistants;
peggy/cleaners; and
storepersons.
[11] The coverage of the Agreement is not otherwise restricted by reference to geography
or industry.
[12] According to the respondent’s statutory declaration in support of its application for
approval of the Agreement the primary activity of the respondent was maintenance work. The
Agreement was to apply in all States and Territories. The Agreement did not cover all the
respondent’s employees. Other employees were employed in management, supervision and
office type roles.
[13] The respondent’s statutory declaration indicated that at the time the Agreement was
made it had three casual employees. Each of these three employees had been appointed as
bargaining representatives. Based on the employees’ own statutory declarations one was a
boilermaker and the other two were trades assistants. All were employed at Karratha in
Western Australia.
[14] The appellants submitted that the selection of the group of employees covered by the
Agreement was unfair because it ‘undermined collective bargaining in a manner which was
not compatible with Part 2-4 of the Act and was contrary to the purpose and policy of the
Act.’ Only three employees had engaged in bargaining for the Agreement. However the
Agreement had application to a group of employees far wider than the group of three
employees. The Agreement covered 17 separate classifications and operated in all States and
Territories. The appellants alleged that respondent knew at the time of making the Agreement
that it intended to undertake operations in areas outside of Karratha. It must have been known
to the respondent that it would need more employees than the three casuals it employed at the
time of making the Agreement.
[15] The appellants submitted that the Deputy President could not, in these circumstances,
have objectively been satisfied that the group of employees, which included full-time, part-
time and casual employees in 16 different classification streams throughout the whole of
Australia, had been fairly chosen.
[16] The parties took us to a number of decisions of this tribunal and the courts as to the
proper construction of s.186 (3) of the FW Act. We have had particular regard to the recent
decision of Siopsis J in the case of John Holland Pty Ltd v Construction, Forestry, Mining
and Energy Unioniii, the Full Bench decision in Cimeco Pty Ltdiv and the decision of
Katzmann J in Construction, Forestry, Mining and Energy Union v Hamberger and Another.v
[17] FWC must be satisfied that group covered by the agreement was fairly chosen. In
determining that matter in a situation where not all employees of the employer are covered by
[2014] FWCFB 8429
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the agreement, FWC must take into account whether the group is geographically,
operationally or organisationally distinct.
[18] It is in the nature of the scheme established by the FW Act that (a majority of) the
employees employed at the time an enterprise agreement is made can agree to terms and
conditions of employment that will then bind future employees employed under the terms of
that agreement. Nor is there anything in the FW Act to prevent employees voting to approve
an agreement that will affect employees in classifications or geographic locations other than
their own (unless a relevant scope order has been made).
[19] There is nothing unusual or necessarily untoward in a relatively new business making
an enterprise agreement early in its life with a small number of employees, with an
expectation that the business will grow and eventually employ a much larger number of
employees, who would then be covered by the agreement. The evidence suggests that the
respondent is a ‘start up’ venture.
[20] It is clear from the respondent’s statutory declaration in support of the application for
approval of the Agreement that the Agreement covered all the respondent’s ‘blue-collar’ work
force as opposed to its ‘white-collar’ employees performing management, supervisory and
office-based roles). That represents a clear organisational distinction; nor is there any reason
to suggest that such coverage involved any other form of unfairness.
[21] The scope of the Agreement is not arbitrary or discriminatory. We also note that there
was no evidence of anything artificial or improper about the way the Agreement was made.
[22] We do not consider that the Deputy President’s decision was in error in relation to the
‘fairly chosen’ issue.
Did the Agreement pass the better off overall test (the BOOT)?
[23] The respondent’s statutory declaration in support of the application for approval of the
Agreement nominated the Manufacturing and Associated Industries and Occupations Award
2010 (the Metals Award) as the (only) award that at the time covered the respondent and the
employees covered by the Agreement. The appellants submitted that a close inspection of the
classifications which fall within the Agreement ‘reveals that the appropriate comparator
award extends beyond the Metals Award to the Building and Construction Onsite Award 2010
(the “Construction Award”) and the Electrical, Electronic and Communications Contracting
Award 2010 (the “Electrical Contracting Award”).’
Section 193 of the FW Act provides that the BOOT applies both to employees who are
covered by an enterprise agreement at the time the application for approval of the agreement
is made as well as to prospective employees who, if they had been employed at the time the
application for approval of the agreement had been made, would have been covered by the
agreement.
[24] In the circumstances of the Agreement this means that the BOOT had to be considered
not only in relation to the three employees who voted to make the agreement but to any
prospective employees who might be covered by the Agreement at a later stage. The BOOT
would however need to be applied ‘as at’ the time the application for approval of the
Agreement was made.
[2014] FWCFB 8429
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[25] The appellants submitted an analysis that purported to demonstrate that the Agreement
did not pass the BOOT whether the Metals Award, the Construction Award, or the Electrical
Contracting Award was used.
[26] The respondent submitted that its employees ‘conduct maintenance, project and
shutdown work (amongst other things), including mechanical fitting, electrical work and
rigging. These are all occupations which fall within clause 4.9(c) (i) of the Manufacturing
Award, since this work clearly falls within the ‘engineering streams’ as defined in clause 3.1
of the Manufacturing award. Further, Main People’s employees carry out tasks contained in
the Manufacturing Award for classifications Level 13 to Level 10.’
[27] The respondent submitted that the Metals Award was the only relevant award for the
purposes of the BOOT, and that the Agreement passed the BOOT when compared against this
award. The respondent submitted that the rates of pay in the Agreement were well above
those in the Metals Award and that many of the allowances in the award that are not
replicated in the Agreement would not apply to the work being performed by the respondent’s
employees.
[28] When considering the text of the Agreement itself, it is clear that it potentially covers a
wide range of work across a range of different industries. There could be a number of
different Modern Awards that could be relevant to the application of the BOOT. This does not
appear to have been something that the Deputy President took into account when considering
whether to approve the Agreement. On the face of the record he only took into account
whether the Agreement passed the BOOT against the Metals Award. On the material before
the Deputy President there was insufficient material to reach the conclusion that the Metals
Award was the appropriate benchmark. We are also concerned that there was insufficient
material before the Deputy President to be satisfied the Agreement passed the BOOT, even
when considered against the Metals Award. The employer in the F17 Statutory Declaration
stated that there were no conditions which were less beneficial to employees than the Metals
Award. Although the respondent submitted that a number of allowances did not apply to the
current scope of work, the Agreement does not prevent a broader scope of work being
performed in the future. An examination of the Agreement reveals a number of other matters
which are less beneficial than the Metals Award. It is only necessary to consider two of those
matters to conclude that the BOOT is unlikely to be met. Those matters are the failure to
specify the maximum roster cycle over which hours are to be averaged, and the scope to
employ tradespersons at a classification above the C10 level who would be entitled to a higher
award rate.
[29] The failure of the Deputy President to take account of these material considerations
amounted to an appealable error.
[30] We are of the view that it is in the public interest to grant permission to appeal,
because the proper application of the BOOT with respect to approval of an enterprise
agreement is an issue of importance which has general application.
[2014] FWCFB 8429
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Conclusion
[31] Given the error identified in relation to the application of the BOOT, we grant
permission to appeal, allow the appeal and set aside the decision to approve the Agreement. It
is possible that our concerns in relation to whether the Agreement passes the BOOT could be
overcome by the provision of suitable undertakings. In Re BUPA Care Servicesvi it was held
that where the Commission has a concern that an agreement does not meet the requirements
set out in s.186 and s.187 of the Act (including that the agreement does not pass the BOOT) s.
190 requires that the Commission give the employer an opportunity to provide a written
undertaking aimed at meeting those concerns. In accordance with the approach adopted by
that Full Bench we will refer the application for approval of the Agreement to DP Asbury.
SENIOR DEPUTY PRESIDENT
Appearances:
E White for the appellants
D Williams for the respondent
Hearing details:
2014
Brisbane
6 November
Printed by authority of the Commonwealth Government Printer
Price code C, PR558188
i [2014] FWCA 4694
ii Tooheys Ltd v Minister for Business and Consumer Affairs (1981) 36 ALR 64
iii [2014] FCA 286
iv [2012] FWAFB 2206
v [2011] FCA 719
vi BUPA Care Services v P & A Securities Pty Ltd as trustee for the D’Agostino Family Trust T/as Michel’s Patisserie
Murwillumbah and others [2010] FWAFB 2762
