1
Fair Work Act 2009
s.238—Scope order
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries
Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
BRB Modular Pty Ltd
(B2014/902)
COMMISSIONER RYAN MELBOURNE, 7 OCTOBER 2014
Application for a scope order in relation to employees of BRB Modular - granted..
[1] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union”
known as the Australian Manufacturing Workers’ Union (AMWU) has applied for a scope
order pursuant to s.238 of the Fair Work Act 2009 (the Act). The AMWU is a bargaining
representative for employees employed by BRB Modular Pty Ltd (BRB Modular).
Negotiations for an enterprise agreement to replace the BRB Modular Pty Ltd Employee
Collective Agreement 2009 (the current agreement) commenced in May 2014.
[2] The AMWU proposes an enterprise agreement which will cover employees who are
covered under the Manufacturing and Associated Industries and Occupations Award 2010
(with the exclusion of supervisory and managerial employees) who perform work at the
workshop located in Fairview Street, Kangaroo Flat, Victoria.
[3] The relevant section of the Act provides:
“238 Scope orders
Bargaining representatives may apply for scope orders
(1) A bargaining representative for a proposed single-enterprise agreement may apply
to the FWC for an order (a scope order) under this section if:
(a) the bargaining representative has concerns that bargaining for the
agreement is not proceeding efficiently or fairly; and
(b) the reason for this is that the bargaining representative considers that the
agreement will not cover appropriate employees, or will cover employees that
it is not appropriate for the agreement to cover.
No scope order if a single interest employer authorisation is in operation
[2014] FWC 6388 [Note: An appeal pursuant to s.604 (C2014/6975) was
lodged against this decision - refer to Full Bench decision dated 27 March
2015 [[2015] FWCFB 1440] for result of appeal.]
DECISION
E AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/decisionssigned/html/2015FWCFB1440.htm
[2014] FWC 6388
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(2) Despite subsection (1), the bargaining representative must not apply for the scope
order if a single interest employer authorisation is in operation in relation to the
agreement.
Bargaining representative to give notice of concerns
(3) The bargaining representative may only apply for the scope order if the bargaining
representative:
(a) has taken all reasonable steps to give a written notice setting out the
concerns referred to in subsection (1) to the relevant bargaining representatives
for the agreement; and
(b) has given the relevant bargaining representatives a reasonable time within
which to respond to those concerns; and
(c) considers that the relevant bargaining representatives have not responded
appropriately.
When the FWC may make scope order
(4) The FWC may make the scope order if the FWC is satisfied:
(a) that the bargaining representative who made the application has met, or is
meeting, the good faith bargaining requirements; and
(b) that making the order will promote the fair and efficient conduct of
bargaining; and
(c) that the group of employees who will be covered by the agreement
proposed to be specified in the scope order was fairly chosen; and
(d) it is reasonable in all the circumstances to make the order.
Matters which the FWC must take into account
(4A) If the agreement proposed to be specified in the scope order 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 (4)(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.
Scope order must specify employer and employees to be covered
(5) The scope order must specify, in relation to a proposed single-enterprise
agreement:
(a) the employer, or employers, that will be covered by the agreement; and
[2014] FWC 6388
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(b) the employees who will be covered by the agreement.
Scope order must be in accordance with this section etc.
(6) The scope order:
(a) must be in accordance with this section; and
(b) may relate to more than one proposed single-enterprise agreement.
Orders etc. that the FWC may make
(7) If the FWC makes the scope order, the FWC may also:
(a) amend any existing bargaining orders; and
(b) make or vary such other orders (such as protected action ballot orders),
determinations or other instruments made by the FWC, or take such other
actions, as the FWC considers appropriate.
[4] BRB Modular did not dispute that the AMWU had complied with the requirements of
s.238(3). The Commission is satisfied and I so find that the AMWU has complied with
s.238(3).
[5] I accept the correctness of the contention by BRB Modular that the Commission must
be satisfied as to each of the matters set out in paragraphs (a) to (d) of s.238(4).
S.238(4)(a) - that the bargaining representative who made the application has met, or is
meeting, the good faith bargaining requirements
[6] The evidence in this matter from both the AMWU and BRB Modular is that all of the
bargaining representatives have been meeting, exchanging claims, responding to each other’s
position and pursuing their own claims.
[7] The evidence satisfies the Commission that the AMWU has met and is meeting the
good faith bargaining requirements of the Act.
S.238(4)(b) - that making the order will promote the fair and efficient conduct of
bargaining
[8] I accept the correctness of the contention by BRB Modular that the conjunctive “and”
between “fair” and “efficient” means that the Commission has to be satisfied that a scope
order will both promote the fair conduct of bargaining and, at the same time, promote the
efficient conduct of bargaining.
[9] BRB Modular relied on the Full Bench decision in United Firefighters’ Union of
Australia v Metropolitan Fire & Emergency Services Board 1 (UFUA v MFESB) which said
of s.238(4)(b):
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“[54] In its submissions AiGroup sought to limit the circumstances in which an order
might be made. We refer in particular to the submission that a scope order should not
be made against the opposition of a bargaining representative unless one of the
bargaining representatives is pursuing a scope for negotiations which is unfair. That
submission must be rejected. It involves adding an additional requirement to those
specified in ss.238(4)(b) and (c). If two parties to an application for a scope order
advance alternative positions neither of which is objectively unfair but the tribunal is
satisfied of the relevant matters and is disposed to make an order, it would be an error
not to do so.
[55] The relevant consideration under s.238(4)(b) is whether the order will promote
the fair and efficient conduct of bargaining. The implication is that the tribunal should
be satisfied that if an order is made the bargaining will at least be fairer or more
efficient or both than it would be if no order were to be made. The relevant
consideration under s.238(4)(c) is whether the specified group is fairly chosen. It may
be that a number of groupings might be fair – what this criterion requires is that the
group which is included in the scope order is fairly chosen.”
[10] I note that about 7 weeks after the Full Bench decision SDP Richards issued a
decision, APESMA v Australian Red Cross Blood Service2, which adopted a different position
to that of the Full Bench:
“[24] Section 238(4)(b) of the FW Act only requires me to be satisfied that the order I
might make will promote fair and efficient conduct of bargaining, in a procedural sense.
It does not require me to be satisfied that the order will make the conduct of the
bargaining fairer still or more efficient than the conduct of the bargaining for the
proposed Agreement. The threshold condition for an application is not a finding of
unfairness and inefficiency in relation to the conduct of bargaining as it has been. This
is unsurprising as issues of relative fairness and efficiency will often be in contest in
matters of this kind.
[25] The order that FWA might make, however, must stand on its own terms, as it were,
grounded in the evidence, and have the effect of promoting the fair and efficient
conduct of bargaining.
[26] The requirement that an order must promote fair and efficient conduct of
bargaining is a conjunctive requirement. An order by FWA, therefore, must manifest a
capacity to promote both fairness and efficiency in the conduct of bargaining. In a
definitional sense, the order must promote - in that it must excite - the principles of
fairness and efficiency in relation to the conduct of bargaining. The plain words of the
FW Act do not suggest more than this (and the Explanatory Memorandum provides no
further guidance).”
[11] I note that the decision of SDP Richards in APESMA v Australian Red Cross Blood
Service accords with the plain language of the Act whereas the Full Bench decision in UFUA
v MFESB departs from the plain words of the Act and implies other words into the Act.
[12] What the Full Bench is effectively saying in its decision in UFUA v MFESB is that
when Parliament used the words “that making the order will promote the fair and efficient
conduct of bargaining” Parliament didn’t mean what it said rather Parliament meant to say
[2014] FWC 6388
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“that the tribunal should be satisfied that if an order is made the bargaining will at least be
fairer or more efficient or both than it would be if no order were to be made”. Further,
Parliament meant to say this because saying “that the tribunal should be satisfied that if an
order is made the bargaining will at least be fairer or more efficient or both than it would be if
no order were to be made” is necessary to make the provision of s.238(4)(b) accord with the
purpose of the Act.
[13] It is not unknown that the language of particular provisions of an Act may be unclear
or if clear may not accord with the purpose of the Act and that Courts and Tribunals are left
with the task of interpreting the language of an Act so as to give effect to the purpose of the
Act.
[14] The interpretation of legislation is a subject matter that has received much attention
from Parliament, the Courts and academics over time and the principles of statutory
interpretation are well known. In the Australian context an oft quoted text is “Statutory
Interpretation in Australia”, by Pearce and Geddes, now in its seventh edition (2011).
[15] The starting point for interpreting the Fair Work Act is s.15AA of the Acts
Interpretation Act which was introduced in 1981 and is as follows:
“15AA. Interpretation best achieving Act's purpose or object
In interpreting a provision of an Act, the interpretation that would best achieve the
purpose or object of the Act (whether or not that purpose or object is expressly stated
in the Act) is to be preferred to each other interpretation.”
[16] This provision itself has been subject to judicial interpretation. In Mills v Meeking3,
Dawson J at para 19 said of the Victorian equivalent of s.115AA:
“The approach required by s.35 needs no ambiguity or inconsistency; it allows a court
to consider the purposes of an Act in determining whether there is more than one
possible construction. Reference to the purposes may reveal that the draftsman has
inadvertently overlooked something which he would have dealt with had his attention
been drawn to it and if it is possible as a matter of construction to repair the defect,
then this must be done. However, if the literal meaning of a provision is to be modified
by reference to the purposes of the Act, the modification must be precisely identifiable
as that which is necessary to effectuate those purposes and it must be consistent with
the wording otherwise adopted by the draftsman. Section 35 requires a court to
construe an Act, not to rewrite it, in the light of its purposes.”
[17] The learned authors of Statutory Interpretation in Australia, 7th edn, at [2.10] at page
35 say of Dawson J’s decision:
“The second point made by Dawson J in the above extract from his judgement in Mills
v Meeking is also an important one. Section 15AA and equivalent provisions do not
permit courts to ignore the actual words of a statute. This was illustrated by
acknowledgement of Kirby P in several cases in the New South Wales Court of
Appeal that he was bound to give effect to the clear language of a statute although in
his own opinion the result was anomalous or unfair. Dawson J’s second point was also
[2014] FWC 6388
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echoed in the Full Federal Court decision in R v L (1994) 49 FCR 534; 122 ALR 464.
In that case, Burchett, Miles and Ryan JJ commented (at 538; 468):
The requirement of s.15AA(1) that one construction be preferred to another can
have meaning only where two constructions are otherwise open, and s.15AA(1)
is not a warrant for redrafting legislation nearer to an assumed desire of the
legislature: Trevisan v FCT (1991) 29 FCR 157 at 162; 101 ALR 26 at 31 per
Burchett J.
What is the Purpose that S.238 has to accord with?
[18] Section 238 is in Division 8 of Part 2-4 of the Act.
[19] Section 169 which commences Part 2-4 provides a guide to the Part and relevantly
provides:
“This Part is about enterprise agreements. An enterprise agreement is made at the
enterprise level and provides terms and conditions for those national system
employees to whom it applies. An enterprise agreement can have terms that are
ancillary or supplementary to the National Employment Standards.
Division 8 provides for the FWC to facilitate bargaining by making bargaining orders,
serious breach declarations, majority support determinations and scope orders. It also
permits bargaining representatives to apply for the FWC to deal with bargaining
disputes.”
[20] The broad purpose of Part 2-4 is also reflected in the objects of the Act as set out in s.3
which relevantly provides as follows:
“3 Object of this Act
The object of this Act is to provide a balanced framework for cooperative and
productive workplace relations that promotes national economic prosperity and social
inclusion for all Australians by:
(f) achieving productivity and fairness through an emphasis on enterprise-level
collective bargaining underpinned by simple good faith bargaining obligations
and clear rules governing industrial action
[21] The Explanatory Memorandum (EM) to the Fair Work Bill contained both a general
explanation of Part 2-4 as well as more specific explanation of the several divisions of Part 2-
4. At paragraph 640 and 641 the EM says:
“Overview
640. Part 2-4 provides for the making of enterprise agreements through collective
bargaining primarily at the enterprise level. It enables employers and employees, and
their bargaining representatives, to bargain in good faith to make an enterprise
agreement.
[2014] FWC 6388
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641. Employers and employees can make an enterprise agreement about permitted
matters. Permitted matters include matters pertaining to the relationship between an
employer and its employees, matters pertaining to the relationship between an
employer and an employee organisation that will be covered by the agreement,
deductions from wages and how the agreement operates.”
[22] In the general explanation the EM refers to scope orders as follows:
“651. If an employer does not agree to bargain with its employees, a bargaining
representative for an employee may apply to FWA for a majority support
determination. If FWA determines that there is majority support among employees for
collective bargaining, the employer is required to bargain. If the employer still refuses
to bargain, the employee bargaining representative may seek a bargaining order to
require the employer to meet the good faith bargaining requirements. Where there is a
dispute about which classes or groups of employees will be covered by the proposed
enterprise agreement, FWA has power to make scope orders. A scope order is
available on application by a bargaining representative. “
[23] The EM specifically explains the terms of s.238:
“Clause 238 – Scope orders
980. Subclause 238(1) allows a bargaining representative for a single enterprise
agreement to apply for a scope order if the representative has concerns that bargaining
for the proposed enterprise agreement is not proceeding efficiently or fairly because
the agreement will not cover the appropriate employees, or will cover employees that
is not appropriate for the agreement to cover.
981. Subclause 238(2) prohibits a bargaining representative applying for a scope order
in respect of: a multi-enterprise agreement (including one for which a low-paid
authorisation is in operation) or a single enterprise agreement in respect of which a
single-interest authorisation is in operation.
982. A bargaining representative may only apply for a scope order if the
representative:
has given a written notice to the relevant bargaining representatives setting out
the concerns mentioned in subclause 238(1); and
has provided a reasonable time within which to respond to the concerns, and
considers that the relevant bargaining representatives have not responded
appropriately to the concerns.
983. These same preconditions apply for bargaining orders (except that for bargaining
orders, FWA has the ability to waive the requirement to give the written notice of
concerns). This requirement is included to encourage bargaining representatives to
consider resolving issues surrounding the scope of a proposed enterprise agreement
through the good faith bargaining process. It also ensures that it is no more expedient
to obtain a scope order rather than a bargaining order.
[2014] FWC 6388
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984. Subclause 238(4) provides that FWA may make a scope order only if FWA is
satisfied that:
the applicant bargaining representative has met or is meeting the good faith
bargaining requirements;
making the order will promote the fair and efficient conduct of bargaining;
if the agreement will not cover all the employees of the employer and the group
of employees that will be covered by the agreement is not geographically,
operationally or organisationally distinct, the group of employees was fairly
chosen; and
it is reasonable in all the circumstances to make the order.
985. A scope order must specify the employer(s) and the employees or classes or
group of employees that will be covered by the proposed enterprise agreement. For
example, a scope order may require an employer to include a class of employees in
bargaining for a proposed agreement or exclude a class of employees from bargaining
for an agreement. Alternatively, a scope order may require an employer to bargain
collectively with different classes of employees in relation to separate agreements.
986. Subclause 238(7) provides that when FWA makes a scope order, it may also
amend existing bargaining orders and make or vary other orders, determinations or
other instruments made by FWA, or take other actions as it considers appropriate. This
ensures that FWA may vary a majority support determination rather than allow it to be
inconsistent with a scope order. Equally, FWA may extend the application of earlier
bargaining orders issued in relation to bargaining for a proposed enterprise agreement,
so that they continue to apply to the new proposed enterprise agreements as detailed in
the scope orders.
Illustrative example David‘s Debt Services (DDS) is refusing to bargain collectively
with its employees, who are in two Divisions – the Loans Division, and the Debt
Recovery Division. Justine, a bargaining representative for the Debt Recovery
employees, obtains a majority support determination that a majority of the employees
at DDS want to bargain with the employer for a proposed enterprise agreement.
DDS, Justine and the bargaining representative for the Loans Division employees,
Cath, commence negotiations. However, the different interests of the employees of the
two Divisions mean that Justine and Cath cannot agree on their negotiating strategy.
Two months after the determination is made DDS applies for a scope order because it
believes bargaining is not proceeding efficiently on the basis it is more appropriate for
it to bargain separately with the employees of each Division.
FWA is satisfied that: DDS is meeting the good faith bargaining requirements; making
the order will promote the fair and efficient conduct of bargaining; the two groups of
employees are operationally distinct; and it is reasonable in the circumstances to make
the order. FWA makes the scope order specifying DDS and the Debt Recovery
Division employees in one proposed enterprise agreement, and DDS and the Loans
Division employees in another proposed enterprise agreement. At the same time, FWA
varies the majority support determination so that it applies to what are now the two
proposed agreements.”
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[24] There is nothing in the language of s.238 nor in the EM which immediately suggests
that s.238(4)(b) which reads as “that making the order will promote the fair and efficient
conduct of bargaining” can only make sense and only conform to the purpose of the Act if it
is read as ‘that making the order will promote the fairer and more efficient conduct of
bargaining than if the order was not made’.
[25] To assist in understanding the language of s.238 it is relevant to look at the provisions
in Division 8 of Part 2-4 which relate to bargaining orders.
[26] Section 238(1) permits a bargaining representative to apply for a scope order where
the bargaining representative has a subjective concern that that bargaining is not proceeding
efficiently or fairly and that the reason for this concern is the scope of the proposed enterprise
agreement.
[27] Section 229 which relates to applications for bargaining orders permits a bargaining
representative to apply for a bargaining order under s.229(4)(a)(ii) where the bargaining
representative has a subjective concern that “the bargaining process is not proceeding
efficiently or fairly because there are multiple bargaining representatives for the agreement”.
[28] In the case of an application under s.229(4)(a)(ii) for a bargaining order the
Commission must pursuant to s.230(a)(ii) be satisfied that “the bargaining process is not
proceeding efficiently or fairly because there are multiple bargaining representatives for the
agreement”.
[29] In the case of an application for a scope order under s.238(1) the Commission has to
be satisfied pursuant to s.238(4)(b) “that making the order will promote the fair and efficient
conduct of bargaining”.
[30] When ss229(4) and 238(1) are looked at together and ss.230(3) and 238(4) are looked
at together it is clear that to make the respective applications the applicant need only have a
subjective view about the efficiency and fairness of the bargaining process but that the
Commission must make an objective assessment as to the existence of the criteria for the
making of the respective order. In both ss.230 and 238 the criteria, which refer to the
efficiency and fairness of the bargaining process, do not use comparative language and the
context in which both criteria appear does not require the use of comparatives.
[31] Section 238(4)(b) uses words which all have simple meanings. The Macquarie
Dictionary Online defines the following terms:
“Promote” means
1. to advance in rank, dignity, position, etc.
2. to further the growth, development, progress, etc., of; encourage.
3. to help to found; originate; organise; launch (a financial undertaking, publicity
campaign, etc.).
“Fair” means adjective
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1. free from bias, dishonesty, or injustice: a fair decision; a fair judge.
2. that is legitimately sought, pursued, done, given, etc.; proper under the rules: a fair
game; a fair stroke; a fair fight.
3. moderately good, large, or satisfactory; not undesirable, but not excellent: a fair
income; a fair education; a fair reputation.
4. marked by favouring conditions; likely; promising: in a fair way to succeed.
5. Meteorology
a. (of the sky) bright; sunny; cloudless to half-cloudy.
b. (of the weather) fine; with no aspect of rain, snow, or hail; not stormy.
6. unobstructed; not blocked up: a fair passage.
7. without irregularity or unevenness: a fair surface.
8. free from blemish, imperfection, or anything that impairs the appearance, quality,
or character: a fair copy.
9. clear; easy to read: fair handwriting.
10. of a light hue; not dark: fair skin.
11. beautiful; pleasing in appearance; attractive.
12. seemingly good or sincere but not so: fair promises.
13. courteous; civil: fair words.
–adverb 14. in a fair manner: he doesn't play fair.
15. straight; directly, as in aiming or hitting.
16. favourably; auspiciously: to bid fair; speak fair.
17. Colloquial completely: I was fair flabbergasted; it fair took my breath away.
–noun Obsolete 18. that which is fair.
19. a woman.
20. a beloved woman; sweetheart.
–verb (t) 21. Shipbuilding to adjust or test the lines of curve of a hull, design, etc.
22. Obsolete to make fair.
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–phrase 23. a fair cop, Colloquial the discovery of a wrongdoer in the act or with
guilt apparent.
24. a fair cow, Colloquial anything regarded as disagreeable or difficult.
25. a fair treat, Colloquial excellently; splendidly.
26. a fair way, Colloquial a not inconsiderable distance.
27. fair and square, Colloquial
a. honest; just; straightforward: a fair and square deal.
b. directly; accurately: I hit him fair and square on the chin.
c. honestly; justly; straightforwardly: to be beaten fair and square.
28. fair call, Colloquial (an expression acknowledging the reasonableness of an
attitude stated by another.)
29. fair crack of the whip, Colloquial (an appeal for fairness or reason.)
30. fair enough, Colloquial (an expression of agreement.)
31. fair's fair, (an exclamation offered as a plea for fair play.)
32. fair shake of the dice (or stick), Colloquial (an appeal for fairness or reason.)
33. fair suck (of the sav) (or sauce bottle), Colloquial (an appeal for fairness or
reason.)
34. fair to middling, Colloquial reasonably good; so-so. [Phrase Origin: from cotton
grading on the east coast of North America in the 1860s where grades went across the
range, with one intermediate grade middling fair also called fair to middling]
35. give something a fair shake, Colloquial to attempt an activity, enterprise, etc., to
the best of one's ability.
36. in a fair way to, likely to; on the way to: you're in a fair way to becoming an
alcoholic, the amount you drink.
37. the fair, (an epithet of someone, man or woman, regarded as beautiful): Charles
the Fair.
[Middle English; Old English fæger]
–fairness, noun
“Efficient” means 1. effective in the use of energy or resources.
2. adequate in operation or performance; having and using the requisite knowledge,
skill, and industry; competent; capable.
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3. producing an effect, as a cause; causative.
[Latin efficiens, present participle, accomplishing]
–efficiently, adverb
[32] By way of contrast:
“Fairer” is the word fair with the suffix “er” added
“er” means a suffix forming the comparative degree of adverbs, as in faster.
[Middle English, Old English -or]
[33] Dictionaries can be a helpful guide to understanding the language of an act but they
must be used carefully. As the authors of Statutory Interpretation in Australia comment:
“The use of a dictionary to assist in the understanding of words used in an Act must
not, however, result in the words of the Act being abandoned in favour of synonymous
expressions. The legislature will have chosen a particular word and it follows that
other like words have been considered and rejected.” ([3.30] page 95)
[34] As was noted by Underwood CJ in The Honourable Mr David Llewellyn v The
Resource Management and Planning Appeal Tribunal4:
“36 Although recourse to dictionaries is an accepted practice to ascertain the common
meaning of a word (R v Peters (1886) 16 QBD 636 at 641), every word must be
construed in the context of the legislation in which it appears and in accordance with
its purpose as directed by the Acts Interpretation Act, s8A. As Anderson J said in
Falconer v Pederson [1974] VicRp 24; [1974] VR 185 at 187:
"Mr Alston also referred to a number of dictionaries which gave a variety of
meanings to the verb 'traffic', ... I do not think one can select any one of the
several meanings given in the various dictionaries and attribute to the phrase
'traffic in' appearing in s32(a) that particular dictionary meaning, and leave it at
that. One must interpret the phrase as used in its context, assisted as it may be,
but not necessarily bound, by one of a variety of dictionary definitions."
[35] Having regard to the plain words used in s.238(4)(b) the plain meaning of each of the
words used as well as the plain meaning of the whole of clause is readily ascertainable and
easily understood. There is no need to use synonyms for the words used in s.238(4)(b) the
words speak for themselves.
[36] It is difficult to understand how the Full Bench in UFUA v MFESB came to the
conclusion that the words in s.238(4)(b) meant “that the tribunal should be satisfied that if an
order is made the bargaining will at least be fairer or more efficient or both than it would be if
no order were to be made.”
[37] This conclusion appears to be in stark contrast to the decision of the Full Bench to
reject the interpretation of s.238(4)(b) and (c) advanced by the AiGroup “that a scope order
should not be made against the opposition of a bargaining representative unless one of the
[2014] FWC 6388
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bargaining representatives is pursuing a scope for negotiations which is unfair.” As the Full
Bench clearly stated:
“[54] That submission must be rejected. It involves adding an additional requirement to
those specified in ss.238(4)(b) and (c). If two parties to an application for a scope order
advance alternative positions neither of which is objectively unfair but the tribunal is
satisfied of the relevant matters and is disposed to make an order, it would be an error
not to do so.”
[38] Furthermore the Full Bench specifically decided against introducing a comparative test
in relation to s.238(4)(c) when it said:
“[55] The relevant consideration under s.238(4)(c) is whether the specified group is
fairly chosen. It may be that a number of groupings might be fair – what this criterion
requires is that the group which is included in the scope order is fairly chosen.”
[39] In light of these two specific conclusions it is difficult to discern the reasoning behind
the Full Bench saying of s.238(4)(b) that “The implication is that the tribunal should be
satisfied that if an order is made the bargaining will at least be fairer or more efficient or both
than it would be if no order were to be made”.
[40] The Illustrative Example contained in the EM tells quite strongly against an
interpretation of s.238(4)(b) which requires it to be read as ‘that making the order will
promote the fairer and more efficient conduct of bargaining than if the order was not made’.
[41] Just because DDS has formed a subjective view that bargaining is not proceeding
fairly and efficiently with Cath and Justine does not mean that objectively bargaining is not
proceeding fairly and efficiently. It could quite well be the case that the bargaining processes
in place have created a very fair and efficient bargaining process. What appears to be the real
problem is that the outcomes sought by DDS are best achieved through splitting the
bargaining and separating Debt Recovery from Loans.
[42] The interpretation of s.238(4)(b) advanced by the Full Bench in UFUA v MFESB
would in some circumstances prevent the Commission from granting a scope order sought by
DDS and this would be so if the making of the scope order only promoted a level of fair and
efficient bargaining which was equal to or less than what was occurring at the time of the
application.
[43] In stark contrast it would appear that the outcome identified in the Illustrative Example
could always be achieved if s.238(4)(b) is interpreted without the comparator sought to be
imposed by the Full Bench in UFUA v MFESB.
[44] It is permissible for a court or tribunal to read into an act words which aren’t there but
the authorities make clear that there must be a real necessity to do so.
[45] The starting point concerning an inclination of a court or tribunal to read words into an
act should be the warning given by Lord Mersey in an oft-cited passage from Thompson v
Goold & Co5:
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“It is a strong to read into an Act of Parliament words which are not there, and in the
absence of clear necessity it is a wrong thing to do”.
[46] The “clear necessity” required by Lord Mersey has given way to a test which has
regard to the purpose of the legislation.
[47] In Australian Education Union v Department of Education and Children's Services6,
in a matter involving the construction of an Act concerning the appointment of teachers,
French CJ, Hayne, Kiefel and Bell JJ said:
“26. The disposition of this appeal turns upon the correct construction of s 9(4). The
process of construction begins with a consideration of the ordinary and grammatical
meaning of the words of the provision having regard to their context and legislative
purpose.
28. The reasoning in the IRC was informed by the view that it was desirable that the
Minister have flexibility in the appointment of teachers and that Pt III of the Act might
be "unnecessarily prescriptive" in its application to the ad hoc appointments of relief
teachers in diverse circumstances. This approach, with respect, emphasised a judicially
constructed policy at the expense of the requisite consideration of the statutory text
and its relatively clear purpose. In construing a statute it is not for a court to construct
its own idea of a desirable policy, impute it to the legislature, and then characterise it
as a statutory purpose]. The statutory purpose in this case was to be derived from a
consideration of the scheme of the Act as a whole, the respective functions of Pts II
and III of the Act, and the regulatory requirements of Pt IV of the Act.”
[48] More recently in Taylor v The Owners – Strata Plan No 115647 French CJ, Crenna
and Bell JJ said:
“The principles
35. In Young Spigelman CJ suggested that the authorities do not warrant the court
supplying words in a statute that have been "omitted" by inadvertence per se.
Construing the words actually used by the legislature in "their total context",
Spigelman CJ suggested that the process of construction admits of reading down of
general words or giving the words used an ambulatory operation. His Honour cited
Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation as an
instance of the former and Bermingham v Corrective Services Commission (NSW) as
an instance of the latter. In R v PLV his Honour expanded on his analysis in Young,
observing:
"The authorities which have expressed the process of construction in terms of
'introducing' words to an Act or 'adding' words have all, so far as I have been
able to determine, been concerned to confine the sphere of operation of a
statute more narrowly than the full scope of the dictionary definition of the
words would suggest. I am unaware of any authority in which a court has
'introduced' words to or 'deleted' words from an Act, with the effect of
expanding the sphere of operation that could be given to the words actually
used. ... There are many cases in which words have been read down. I know of
no case in which words have been read up." (emphasis in original)
http://www.austlii.edu.au/au/cases/cth/HCA/2012/3.html#fn43
[2014] FWC 6388
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36. In Leys the Victorian Court of Appeal was critical of Spigelman CJ's
characterisation of purposive construction as a process of construing "the words
actually used" (emphasis in original). Their Honours said that the process requires the
court to determine whether the modified construction is reasonably open in light of the
statutory scheme and against a background of the satisfaction of Lord Diplock's three
conditions. Their Honours questioned the utility of the distinction between "reading
up" and "reading down" and rejected the proposition that a purposive construction may
not result in an expanded operation of a provision.
37. Consistently with this Court's rejection of the adoption of rigid rules in
statutory construction, it should not be accepted that purposive construction may never
allow of reading a provision as if it contained additional words (or omitted words)
with the effect of expanding its field of operation. As the review of the authorities in
Leys demonstrates, it is possible to point to decisions in which courts have adopted a
purposive construction having that effect. And as their Honours observed by reference
to the legislation considered in Carr v Western Australia, the question of whether a
construction "reads up" a provision, giving it an extended operation, or "reads down" a
provision, confining its operation, may be moot.
38. The question whether the court is justified in reading a statutory provision as if
it contained additional words or omitted words involves a judgment of matters of
degree. That judgment is readily answered in favour of addition or omission in the
case of simple, grammatical, drafting errors which if uncorrected would defeat the
object of the provision. It is answered against a construction that fills "gaps disclosed
in legislation" or makes an insertion which is "too big, or too much at variance with
the language in fact used by the legislature".
39. Lord Diplock's three conditions (as reformulated in Inco Europe Ltd v First
Choice Distribution (a firm)) accord with the statements of principle in Cooper
Brookes and McColl JA was right to consider that satisfaction of each could be treated
as a prerequisite to reading s 12(2) as if it contained additional words before her
Honour required satisfaction of a fourth condition of consistency with the wording of
the provision. However, it is unnecessary to decide whether Lord Diplock's three
conditions are always, or even usually, necessary and sufficient. This is because the
task remains the construction of the words the legislature has enacted. In this respect it
may not be sufficient that "the modified construction is reasonably open having regard
to the statutory scheme" because any modified meaning must be consistent with the
language in fact used by the legislature. Lord Diplock never suggested otherwise.
Sometimes, as McHugh J observed in Newcastle City Council v GIO General Ltd, the
language of a provision will not admit of a remedial construction. Relevant for present
purposes was his Honour's further observation, "[i]f the legislature uses language
which covers only one state of affairs, a court cannot legitimately construe the words
of the section in a tortured and unrealistic manner to cover another set of
circumstances."
40. Lord Diplock's speech in Wentworth Securities laid emphasis on the task as
construction and not judicial legislation. In Inco Europe Lord Nicholls of Birkenhead
observed that even when Lord Diplock's conditions are met, the court may be inhibited
from interpreting a provision in accordance with what it is satisfied was the underlying
[2014] FWC 6388
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intention of Parliament: the alteration to the language of the provision in such a case
may be "too far-reaching". In Australian law the inhibition on the adoption of a
purposive construction that departs too far from the statutory text has an added
dimension because too great a departure may violate the separation of powers in the
Constitution.
[49] In the same decision Gageler and Keane JJ in dissent said:
“65. Statutory construction involves attribution of legal meaning to statutory text,
read in context. "Ordinarily, that meaning (the legal meaning) will correspond with the
grammatical meaning ... But not always." Context sometimes favours an
ungrammatical legal meaning. Ungrammatical legal meaning sometimes involves
reading statutory text as containing implicit words. Implicit words are sometimes
words of limitation. They are sometimes words of extension. But they are always
words of explanation. The constructional task remains throughout to expound the
meaning of the statutory text, not to divine unexpressed legislative intention or to
remedy perceived legislative inattention. Construction is not speculation, and it is not
repair.
66. Context more often reveals statutory text to be capable of a range of potential
meanings, some of which may be less immediately obvious or more awkward than
others, but none of which is wholly ungrammatical or unnatural. The choice between
alternative meanings then turns less on linguistic fit than on evaluation of the relative
coherence of the alternatives with identified statutory objects or policies.”
[50] It would appear that applying the tests for statutory interpretation (no matter how
expressed by the High Court) to the language of s.238(4)(b) leads to a simple conclusion that
the words used do accord with the policy purpose of the Act, the words do not lead to an
outcome that would be contrary to the purpose of the Act, the words are used in a context
where a comparative test is not required and the words used are simple enough that their
meaning can be readily ascertained both within the context of s.238 and within the context of
the Act as a whole.
[51] The Full Bench in UFUA v MFESB has rewritten s.238(4)(b) in a way which is too
much at variance with the language in fact used by the legislature.
[52] The consequence of the Full Bench decision in UFUA v MFESB can be seen in
decisions which apply that decision. In APESMA v Australian Red Cross Blood Service [2011
FWA 2914 at [66], Hampton C said:
“The applicant for a scope order must demonstrate that the making the order would
promote, that is encourage and facilitate, bargaining that is fairer and more efficient
than if no order was made.”
I only cite this decision because it stands in contrast to the decision of SDP Richards
involving the same issue and the same parties and which I have cited earlier in this decision.
[53] The simple language of s.238(4)(b) does not require the Commission to reach a
conclusion as to relative fairness or relative efficiency if an order is to be made under s.238.
[2014] FWC 6388
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[54] A further and real practical difficulty with introducing a comparator into s.238(4)(b) is
that the presence of a comparator requires a standard to be adopted against which the
comparator can work. Where the comparator is ‘fairer’ then a standard of what is ‘fair’ has to
be set in order to test whether what will occur will be ‘fairer”. Similarly where the comparator
is ‘more efficient’ then a standard of what is ‘efficient’ has to be set in order to test whether
what will occur will be ‘more efficient”. The standard introduced into s.238(4)(b) by the Full
Bench in UFUA v MFESB is the level of fairness and efficiency attached to the bargaining
process at the time the application for a scope order is dealt with. This standard will be a
movable feast as the standard will be different in every single application for a scope order.
[55] There is no objective standard of “fair” and or “efficient” in the approach adopted by
the Full Bench in UFUA v MFESB against which a comparator of ‘fairer’ and ‘more efficient’
can be applied.
[56] Fair is a word which is value laden, it is a term of relativity and it is term which is
used throughout the Act but is never defined in the Act. As the dictionary definition of “fair”
makes clear this is a word with many meanings; it is a polysemy. The use of polysemy in
legislation can give rise to ambiguity. As G.C. Thornton notes in his textbook Legislative
Drafting, 4th edn, at 11 in relation to ambiguity of words:
“The second kind of ambiguity arises from the word itself and not from its use with
other words. It arises when a word has more than one meaning, a circumstance which
is known as polysemy. A moment’s thought or a glance at a dictionary serves as a
reminder that polysemy, or multiple meaning of words, is common in our language.
This is not necessarily a bad thing for it is economic if one symbol can serve to convey
more than one meaning, and in all but a few cases the context will make clear the
sense in which a word is being used. Nevertheless, a drafter must exercise a continuing
care to ensure that the potential ambiguity of words with a multiple meaning is
nullified by the context in which they are used.”
[57] The context in which the word fair is used within the Act means that it has different
meanings in the different contexts in which it is used. For the purpose of Division 8 of Part 2-
4 of the Act the word “fair” would appear to have the meaning of “moderately good, large, or
satisfactory; not undesirable, but not excellent”.
[58] Attributing meaning to the word “fair” still does not resolve the practical issue of
determining what is fair relative to what is not fair.
[59] The issue of relativity needs to be addressed by reference to an objective standard. The
courts have dealt with issues of relativity when considering what is “reasonable” and what is
“unreasonable” in the context of legislation which neither defines the term nor specifies the
criteria to be considered in relation to the term.
[60] Courts have adopted the concept of what would an average citizen consider is
reasonable. A similar approach can and should be adopted in relation to what is to be
considered “fair and efficient conduct of bargaining”.
[61] The fact that there is no such person as the average citizen or the reasonable person on
the Clapham Omnibus in the UK or on the No 96 Tram in Melbourne hasn’t prevented courts
from constructing a test which has a strong degree of objectivity and as well as reflecting the
[2014] FWC 6388
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social norm. As Gleeson CJ observed, during proceedings in the High Court, reference to the
‘man on the Clapham Omnibus”:
“It is a rhetorical form of objectifying a view about reasonableness”.8
[62] The Full Bench in UFUA v MFESB has set a standard for comparing “fair” and fairer”
and “efficient” and “more efficient” which appears to lack any sense of objectivity.
[63] The Full Bench in UFUA v MFESB has rewritten s.238(4)(b) in an impermissible
manner.
[64] A final observation on the context of the Fair Work Act is necessary. Section
596(2)(a) of the Act shows that when Parliament wants to introduce a comparator in relation
to efficiency then Parliament expresses itself quite clearly. Section 596(2)(a) reads as follows:
“596(2) The FWC may grant permission for a person to be represented by a lawyer or
paid agent in a matter before the FWC only if:
(a) it would enable the matter to be dealt with more efficiently, taking into
account the complexity of the matter; or”
[65] In circumstances where Parliament has used the term “more efficiently” in an Act then
it is unlikely that when Parliament used the term “efficient” elsewhere in the same Act that
they intended the word “efficient” to mean “more efficiently”.
[66] Parliament must be given some credit for having used different words in different
sections to mean different things.
[67] There is a convention, which is well founded, that single members should follow
decisions of Full Bench’s and it is a brave or foolish member who doesn’t. In this matter I
will apply the plain language of s.238(4)(b) and not the words implied into s.238(4)(b) by the
Full Bench in UFUA v MFESB.
[68] BRB Modular in its Respondent’s Closing Submissions summarised the bargaining
process at paras 12 and 13 and concluded at para 14 that “the Applicant’s own evidence
demonstrates nothing extraordinary about how bargaining proceeded, and on the contrary, has
a high degree of normality.” At para 16 of its Respondent’s Closing Submissions BRB
Modular contended that “the evidence demonstrates bargaining has occurred in an abundantly
fair and efficient manner to date”.
[69] I agree with the conclusion that the bargaining process to date has been fair and
efficient and this permits me to be satisfied that the parties will, if the AMWU application for
a scope order is granted, conduct any bargaining in a fair and efficient manner.
[70] It is possible that the making of a scope order will promote fair and efficient
bargaining which could be less fair, more fair or equally as fair and/or could be less efficient,
more efficient or equally as efficient, or any combination of these degrees of fairness and
efficiency, than if no scope order was made. However I do not need to determine the degree
of fairness and efficiency which attaches to the bargaining that will occur if a scope order is
[2014] FWC 6388
19
made. I need to be satisfied that the making of a scope order will promote the fair and
efficient conduct of bargaining and I am so satisfied.
S.238(4)(c) - that the group of employees who will be covered by the agreement proposed
to be specified in the scope order was fairly chosen
[71] The leading authority on fairly chosen is the Full Bench decision in Cimeco P/L v
CFMEU, AMWU and CEPU9. Whilst that matter concerned s.186 of the Act the provisions
considered are the same as in s.238(4)(c) and 238(4A). Relevantly the Full Bench said:
“[19] Given the context and the legislative history it can reasonably be assumed that if
the group of employees covered by the agreement are geographically, operationally or
organisationally distinct then that would be a factor telling in favour of a finding that
the group of employees was fairly chosen. Conversely, if the group of employees
covered by the agreement was not geographically, operationally or organisationally
distinct then that would be a factor telling against a finding that the group was fairly
chosen.
[20] It is important to appreciate that whether or not the group of employees covered
by the agreement is geographically, operationally or organisationally distinct is not
decisive, rather it is a matter to be given due weight, having regard to all other relevant
considerations.
[21] It is not appropriate to seek to exhaustively identify what might be the other
relevant considerations. They will vary from case to case and will need to be
demonstrated to the satisfaction of the tribunal. The word ‘fairly’ suggests that the
selection of the group was not arbitrary or discriminatory. For example, selection
based upon employee characteristics such as date of employment, age or gender would
be unlikely to be fair. Similarly, selection based on criteria which would have the
effect of undermining collective bargaining or other legislative objectives would also
be unlikely to be fair. It is also appropriate to have regard to the interests of the
employer, such as enhancing productivity, and the interests of employees in
determining whether the group of employees was fairly chosen. In this regard, it is not
only the interests of the employees covered by the agreement that are relevant; the
interests of those employees who are excluded from the coverage of the agreement are
also relevant. We note that there is a suggestion to the contrary in the oral submissions
put on behalf of Cimeco when counsel submitted that:
‘It was an erroneous approach to introduce the identification of the persons who
were relevantly employed at the time of the making of the agreement for the
purposes of testing the group chosen.’ [citation omitted]
[22] To the extent that it is suggested that the interests of the excluded employees are
irrelevant we reject that submission. In evaluating whether the group to be covered by
the agreement has been fairly chosen it is entirely appropriate to have regard to the
consequences of that choice, that is, which employees have been excluded from the
agreement.”
[72] In relation to the operation of s.186(3A), which is in similar terms to s.238(4A), the
Full Bench said:
[2014] FWC 6388
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“[16] Curiously the Act does not specify how the matters in s.186(3A) are to be taken
into account. The context and legislative history are relevant. In terms of the context
each of the characteristics identified in s.186(3A) has a degree of objectivity about
them. The selection of the group of employees to be covered by an agreement on some
objective basis (as opposed to an arbitrary or subjective basis) is likely to favour a
conclusion that the group was fairly chosen.”
[73] The contention of BRB Modular was as follows:
21. Although the proposed scope appears, at first brush, to be ‘geographically distinct’,
the Respondent submits organisational and operational distinctiveness outweigh
‘geographical distinctiveness’, and it ought not ‘carry the day’, as outlined in ANF v St
John of God Health Care Inc ([2012] FWA 452, [191]).
22. The Respondent’s three Victorian sites are operationally and organisationally
intertwined, significantly integrated and heavily reliant on each other to ultimately
achieve the Respondent’s objectives of manufacturing, assembling and installing
demountable buildings for customers. Put simply, one cannot function without the
other two.
23. The Respondent’s evidence will outline the aforementioned integration between
the three sites. Employees from all three sites regularly and invariably work side by
side on projects both big and small, and/or are required to travel to customer sites to
install the Respondent’s demountable products. Frequently, employees from all three
sites will assist their fellow employees to complete relevant tasks as required and
directed due to the inescapable time restrictions and deadlines required for the
installation of the buildings on site.
24. The Respondent submits, based on this evidence, it will be demonstrably clear the
requisite level of ‘distinctiveness’ is not evident. The site and/or group of employees
are not a discrete group amenable to being ‘carved out’ of the Respondent’s operations
or organisation.
27. The Applicant’s proposed scope will exclude all employees from the Kangaroo
Flat and Somerton sites. The result will likely be inconsistency of terms and conditions
applicable to the two groups and increased administrative and managerial
inefficiencies for a relatively small employer primarily engaged in regional Victoria.
28. Furthermore, the result on the ‘excluded’ employees will mean a delay in the
bargaining process already undertaken to date (in which the Applicant has been
involved in every step of the way), due to the diversion of managerial and
administrative resources in dealing with the ‘carved out’ scope of employees.
29. The Respondent submits there are no other discernible, logical and objective
reasons why the Kangaroo Flat site ought to be “assessed as meeting the requirements
of s.238(4)(c) of the Act” as per Commissioner Hampton’s aforementioned extract (at
Para 25).
30. The Respondent submits the Applicant’s proposed scope is not ‘fairly chosen’
within the context of s 238(4)(c).”
[2014] FWC 6388
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[74] In its final written submissions in the matter BRB Modular did not address the
evidence or make further detailed submissions but simply said:
“The Respondent relies on its Outline of Submissions and witness evidence regarding
this factor.”
[75] The AMWU’s final written submission analysed the evidence of all of the witnesses to
highlight the evidence which the AMWU contended supported its contention that the group of
employees was fairly chosen.
[76] The evidence shows that:
BRB Modular operates out of 4 locations, 3 are in Victoria (Kangaroo Flat,
Wood St, Bendigo and Somerton) and 1 is in Queensland (Crestmead).
BRB Modular proposes that there be 2 enterprise agreements. The scope of
one enterprise agreement is to be for some of the Queensland employees. The
scope of the other enterprise agreement is to cover employees in Victoria
who are employed in the classifications of Labourer, Carpenter, Painter,
Electrician, Truck Driver, Plasterer, Welder and Team Leader at the 3 sites.
Other employees in Victoria are not to be covered by any enterprise
agreement.
The AMWU proposes an enterprise agreement which will “cover employees
who are covered under the Manufacturing and Associated Industries and
Occupations Award 2010 (excluding supervisors and managers, etc) who
perform work at the workshop located in Fairview Street, Kangaroo Flat”.
The Victorian and Queensland sites are all concerned with the manufacture
of modular buildings in a factory environment and the installation of modular
buildings on site. All aspects of the process of manufacturing a modular
building is performed at a single location in Queensland. In Victoria separate
parts of the process of manufacturing a modular building are performed at
different sites.
The work performed at the Kangaroo Flat site is almost totally the
manufacturing of the metal frames for the modular buildings.
The work performed at Wood St Bendigo is primarily the assembly of the
metal frames into a building structure and then the addition of walls, roofing
and internal fit out.
BRB Modular has not split its operations across several sites in Victoria in
order to keep them separate but rather has utilised existing leases and
properties whilst intending to bring all parts of the manufacturing process in
Victoria together under one roof as soon as practicable.
BRB Modular has split its organisational structure into two with Queensland
being designated as part of a Northern region and Victoria being designated
as part of a Southern region and with each region having their own General
Manager.
Each of the three sites in Victoria has its own site Manager.
Whilst employees employed at the Kangaroo Flat site predominantly work at
that site they do work as required at the Wood St site and the Somerton site
and onsite when installing modular buildings.
[2014] FWC 6388
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There is almost daily movement of staff between Kangaroo Flat site and the
other sites but the number of employees who would work outside the
Kangaroo Flat site on any one day is small.
Kangaroo Flat employees primarily work at other sites on metal fabrication
related tasks.
[77] The way in which BRB Modular has organised its Victorian operations supports the
position of the AMWU. In Queensland BRB Modular has a single operation on a single site
yet by way of contrast BRB Modular has split its operation across three sites in Victoria with
an apparent natural division occurring between the Kangaroo Flat site and the other sites.
[78] At its simplest there is a geographic separateness between the Kangaroo Flat site and
the other 2 sites in Victoria. There is also a reasonably clear functional difference between the
work done at the Kangaroo Flat site and the other sites. Finally the group of employees at the
Kangaroo Flat site appear to fall into a discrete occupational grouping which is different from
the occupational groups at the other sites. All of these factors support the contention of the
AMWU that the group of employees at the Kangaroo Flat site are fairly chosen.
[79] As the Full Bench decision in Cimeco P/L v CFMEU, AMWU and CEPU makes clear
it necessary for the Commission to consider the views of and have regard to the position of
employees who are not to be covered by the scope order.
[80] In this matter BRB Modular introduced into evidence three petitions signed by
employees. Three employees at the Kangaroo Flat site signed one petition, Exhibit R2, and 26
employees at the Wood St, site in Bendigo signed a petition, Exhibit R3, and 6 employees at
the Somerton site signed a petition, Exhibit R4.
[81] The petitions were prepared by BRB Modular. The petitions were not initiated by the
employees.
[82] The evidence of Mr Bell, Factory Manager at Kangaroo Flat was that the petition was
sent to him by someone at the Melbourne office of BRB Modular. Mr Bell only showed the
petition to the three employees who signed it and these 3 employees had been identified by
Mr Bell as not being in the AMWU. One of the three was a team leader. The three employees
were happy to sign it.
[83] Mr Nihill, Factory Manager at the Wood St site, gave evidence that he spoke to
employees at the Wood St site about the bargaining process and that he invited the employees
to sign the petition. In answer to a question from the Commission , Mr Nihill said:
PN1078: I was under instructions to speak to our staff about where we are in the process
of the collective agreement and what the application for two separate agreements is
going - how that's going to affect them.
It was in this context that the petition was produced by BRB Modular and given to the 3 site
managers for them to invite employees to sign the petition.
[84] The evidence from BRB Modular is that the petition was not made known to the
AMWU or to members of the AMWU. The petitions clearly show that the first employees to
[2014] FWC 6388
23
sign the petition did so on 14 July 2014 and the last signed it on 17 July 2014, only one day
before the hearing in this matter.
[85] The view within BRB Modular is that if the AMWU is granted a scope order then this
will lead to there being two separate enterprise agreements in Victoria with different terms
and conditions of employment. The evidence of Mr Waring was that it would not be possible
for there to be two enterprise agreements with the same terms and conditions.
[86] Whilst BRB Modular management gave evidence as to the views of its employees and
in particular the views of its employees as expressed through the petitions, BRB Modular led
no evidence from any of the employees who signed the petition.
[87] In the context of this matter and in the context of how the petitions were created,
explained and signed I have very real doubts that the petitions are a genuine expression of
employees preference for the scope of a single enterprise agreement as proposed by BRB
Modular.
[88] There is another matter which I consider relevant in relation to the fairly chosen test.
The scope of coverage of the agreements proposed by each of the AMWU and BRB Modular
clearly and deliberately excludes some of the employees of BRB Modular.
[89] Whilst the desire of BRB Modular is to make an agreement to cover its Victorian
workforce the coverage of the proposed enterprise agreement is less than the coverage of the
current agreement. The existing agreement covers employees employed anywhere in Australia
in the classifications of Factory/Yard Labourer, Tradesperson-Carpenter, Tradesperson-
Painter, Tradesperson-Welder, Tradesperson-Electrician, Leading Hand(up to 6), Supervisor,
Office Employee Level 1 and Office Employee Level 2. The proposed new agreement covers
the same classifications but only in Victoria.
[90] From the perspective of BRB Modular the group of employees covered by the current
agreement was fairly chosen and the group of employees to be covered by the proposed
agreement was also fairly chosen, even though the coverage of the proposed agreement is
significantly less than the coverage of the current agreement.
[91] The observation to be made is that the application of the fairly chosen test is not an
“either / or” test. It is not the case that if one group of employees meets the fairly chosen test
then all other groups must fail the fairly chosen test. Rather there can be multiple
combinations of workers all of which may meet the fairly chosen test.
[92] The group of employees chosen by the AMWU to be covered by its scope application
is based upon applying two discriminators. The first discriminator is the geographic location
of the Kangaroo Flat site vis a vis the geographic location of all other sites. The second
discriminator is based on the type of work performed by employees at that site. The AMWU
proposes a scope for an enterprise agreement which is limited to employees who are covered
by the Manufacturing and Associated Industries and Occupations Award excluding
supervisors and managers and excluding clerical and administrative employees. The result is
that the AMWU does not seek to have an agreement which covers employees at the Kangaroo
Flat site who are employed in the classification of Supervisor, Office Employee Level 1 or
Office Employee Level 2. The group of employees sought to be covered by the AMWU
proposed agreement would be employees employed at the Kangaroo Flat site currently
[2014] FWC 6388
24
employed in the in the classifications of Factory/Yard Labourer, Tradesperson-Welder and
Leading Hand(up to 6).
[93] The combination of classifications chosen by the AMWU for inclusion in its proposed
agreement is certainly a discrete group of workers within BRB Modular.
[94] Having considered all of the circumstances of this matter I conclude that the group of
employees who are proposed to be covered by the scope order in this matter is fairly chosen.
S.238(4)(d) - it is reasonable in all the circumstances to make the order.
[95] The cumulative effect of the operation of s.238(4) means that even if the Commission
is satisfied as to the matters in s.238(4)(a), (b) and (c) the Commission must then consider
each of these matters as well as all the circumstances of the matter before the Commission can
come to a concluded view that it it reasonable in the all the circumstances to make the scope
order sought.
[96] In addition to the matters raised in s.238(4)(a), (b) and (c) BRB Modular also contend
that a relevant circumstance is the timing of the application.
The Timing of the Application
[97] BRB Modular contended that the application was made too late.
[98] The application in this matter was made after 4 bargaining meetings had taken place
and in circumstances where the AMWU’s claim for a separate agreement for the Kangaroo
Flat site had been raised at the first bargaining meeting.
[99] BRB Modular relied upon RTBU v ARTC10 where Cambridge C said:
“[59] There appears to be an inescapable inefficiency attached to the pursuit of a scope
order at a point in time after the enterprise bargaining negotiations have progressed.
Logically, in order to ensure that enterprise bargaining is undertaken with efficiency
any issue regarding the scope of the proposed agreement needs to be resolved before
time, money and energy is spent in negotiation of the particular terms of a proposed
agreement. Consequently there is a very strong prospect that any scope order which is
not made at or shortly after the commencement of the bargaining process will fail to
satisfy the requirement that it would promote the efficient conduct of bargaining.”
[100] In that matter the four unions representing employees served a joint log of claims on
ARTC and the issues of scope of any agreement was specifically addressed in the log of
claims. The unions identified two groups of employees which required separate agreements
with the remainder in a third agreement. ARTC advised the Unions in writing that it rejected
any separate agreement or agreements for any of the classifications that had been identified in
the Unions’ log of claims. Bargaining nevertheless continued and at least six further meetings
took place before the RTBU made an application under s.238.
[101] In the context of the matter before him the comment of Cambridge C is understandable
but as a general proposition it is not consistent with the plain language of the Act and the
purpose of s.238 as explained in the EM.
[2014] FWC 6388
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[102] The Act very clearly deals with the timing of an application for a scope order.
[103] Theoretically an application for a scope order can be made any time after the
employer, pursuant to s.176(2)(a) gives a Notice of Employee Representational Rights to
employees. Where the employer issues a Notice of Employee Representational Rights to
employees the employer is required to identify the group of employees to be subject to a
proposed enterprise agreement. This may immediately give rise to a dispute between the
employer and some employees as to the scope of the proposed enterprise agreement.
[104] Practically, an application for a scope order can only be made after the bargaining
process has begun. This is so because the condition precedent for the making of an application
for a scope order is that the bargaining representative has concerns that bargaining for the
agreement is not proceeding efficiently or fairly.(s.238(1)(a)) This concern could only be
made out after bargaining has commenced. Further the applicant for a scope order is required
to have given the employer notice of their concerns and also to have given the employer an
opportunity to respond to those concerns.
[105] Additionally the EM at para 983 explains the purpose behind the requirement to give
notice:
“This requirement is included to encourage bargaining representatives to consider
resolving issues surrounding the scope of a proposed enterprise agreement through the
good faith bargaining process. It also ensures that it is no more expedient to obtain a
scope order rather than a bargaining order. “
[106] It would certainly be at odds with the both the purpose and the scheme of s.238 for a
bargaining representative to make an application for a scope order without having tried to
resolve the scope of the proposed agreement through the bargaining process.
[107] In the present matter the AMWU presented a log of claims to BRB Modular at the first
bargaining meeting on 6 May 2014. The log contained a claim for a separate agreement for
Kangaroo Flat.
[108] BRB Modular contended that:
“The Applicant’s claim for a separate scope was submitted, discussed, considered and
ultimately denied from the outset of bargaining”.
[109] The evidence of Mr Miller under cross examination from BRB Modular was as
follows:
“PN242 Mr Barkatsas: Okay, so your evidence is as I'm saying then that therefore you
were given an opportunity, you firstly tabled your log of claims. You were given an
opportunity to discuss that. The response wasn't given immediately. There was time
between that tabling and then a response in the third meeting?---Mr Miller: Mm'hm.
...
PN270 Mr Barkatsas: All right, now with respect to you mentioned, I think your
words were that the scope was a priority claim. Was that right?---Mr Miller: That's
correct.
[2014] FWC 6388
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PN271. And it was effectively tabled as part of the log in the very first meeting?---
That's correct.
PN272: So we don’t have a date at this point in evidence just yet but I think you may
have said it was early May, or mid, sometime in May?---No, it was earlish May.
PN273. So we've established it was a priority claim. It was a key claim for your
members and your organisation and it was tabled at the very first meeting. Is that
right?
---That's correct.
PN274. And by the third meeting on your evidence there was a response to that? Or
there was discussion, sorry, beforehand about that and you outlined the importance of
that claim? Is that correct?---Yes, in those first two meetings, yes.
PN275. First two meetings, yes, and in the third meeting which is potentially may
have been a fortnight later and we'll get the - I guess the timelines will be in evidence
soon enough. But at the third meeting a response was given to you?---In regards to
that claim?
PN276. Yes?---No, it was probably - - -
PN277. I think it was your evidence a response was given to all claims, wasn't it?---To
all claims, yes.
PN278. All outstanding claims which included the scope claim?---Yes.
...
PN341 Mr Barkatsas: And bargaining commenced in early May and scope of the
agreement was one of your key items and was tabled at the very first meeting.
However, this application wasn't made until 26 June. Is that correct?---Mr Miller:
Again without that information in front of me I would have to have a look.
PN342. It's a document of the commission, Commissioner. The applicant's application
was filed on 26 June.
PN343. So despite the claim for scope being tabled at the very first meeting being
discussed you continued to participate in bargaining right up until the very end and
granted it may have ended earlier than you expected or had hoped. However, this
application wasn't made until after bargaining had ceased. Would you agree with
that?---I thought the information that was exchanged between yourself and Dave
Vroland - - -
PN344. Yes?---- - -and it was obviously forewarned at one of the negotiation meetings
by myself that the AMWU would be looking at its capabilities or abilities under the
Act.
PN345. So you advised that - - -?---And that was prior to the meeting on the 20th.
PN346. So earlier than the final meeting you had advised or you were aware of the
capability to make this application to the Fair Work Commission?---We had
forewarned the company that we were going to look at our legal options.
PN347. You had forewarned the company but you didn't do anything until 26 June?
---Well, there was a process that needed to be followed and I was led by the advice of
Dave Vroland that we needed to meet certain requirements or criteria to continue
down this line.
...
PN1456 Mr Barkatsas: Was there a response to any claims that were put forward in
the first meeting? Was there any - - -?---Mr Waring: I mean, I think we had general
discussion both for the employee claims and for the union claims. I think obviously,
you know, as an employer I guess we had positions on certain claims and I guess, you
know, addressing the - - -
[2014] FWC 6388
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PN1457: Were those positions relayed or sorry, communicated at the time?---Yes,
certainly. I think from the first claim as far as the scope I think we were, you know,
quite emphatic in regard to not wanting to entertain that just purely due that we didn’t
believe the, you know, it was a relevant claim.”
[110] I also note from Exhibit A2 that in the email exchange between the AMWU and
VECCI on 18 and 19 June 2014 the AMWU specifically addressed the issue of scope of a
separate agreement for the Kangaroo Flat site. The response from VECCI contained the
following:
“In short, we are instructed to reject your union’s request to bargain for a separate
agreement.”
[111] The evidence of the AMWU was led from both Mr Miller and Mr Harrison and
relevantly is as follows:
“PN152. Mr Vroland: What sort of response did you get to that claim in the first
meeting? ---Mr Miller: I don't believe there was any initial response from the
company in the very first meeting in regards to that claim. There was more about an
explanation of the claims.
...
PN162 Mr Vroland: But in the course of that did the company provide a response to
the AMWU's log of claims?---Mr Miller: Not at that particular time.
...
PN166 Mr Vroland: After those meetings did the AMWU hold discussions with its
members?---Mr Miller: Not at that particular time because there was nothing to report
back on because we hadn't received any responses back from - in regards to our
claims.
...
PN184 Mr Vroland: What was the response on the claim with respect to scope,
number one?---Mr Miller: All other claims it was not given sufficient response other
than to those claims that had costs and the answer, the response that we got off the
company was basically that we know what these claims pertain but the answer is no, to
words to that effect.
...
PN540 Mr Vroland: What was the response from the company as Danny addressed the
log of claims?---Mr Harrison: That they would take them on board and get back to us
sort of thing, I think.
...
PN565 Mr Vroland: I think we've really got to the start of the meeting. How did the
meeting progress?---Mr Harrison: We've gone on into the log of claims. The company
is reading them out and saying, "No, we don't want to have a separate agreement for
the multiple different sites" and whatever in regards to log one, the claim.
PN566. Did they give reasons as to why they didn't want a separate agreement?---
Because of duplicating the process.”
[112] The email communication from VECCI as bargaining representative of BRB Modular
to the AMWU on 19 June 2014 appears to be the first formal written response from BRB
Modular on the issue of the scope of the enterprise agreement.
[2014] FWC 6388
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[113] The very fact that the AMWU only made an application after receiving the written
response from BRB Modular is both appropriate and timely. At the very least there is clear
evidence that the AMWU were pursuing the claim for a specific scope of an enterprise
agreement through the bargaining process as they were required to do.
[114] In this matter the earliest proper time for the AMWU to make an application for a
scope order was after they received the written response from BRB Modular.
[115] It was appropriate for the AMWU to have made its application for a scope order
shortly after 19 June 2014 and an application made on 26 June 2014 cannot be described as a
dilatory.
[116] The timing of the application is a matter that the Commission can have regard to as
part of all of the circumstances of the matter. In the present matter the timing of the
application does not weigh against the making of a scope order. Rather it would weigh,
although only slightly, in favour of the making of a scope order.
Conclusion
[117] Having considered each of the matters in s.238(4)(a), (b) and (c) and being satisfied as
to each of those matters and considering the matter raised by s.238(4)(d), I am satisfied that
the scope order as sought by the AMWU should be granted.
COMMISSIONER
Appearances:
D. Vroland on behalf of the Applicant.
N. Barkatsas, VECCI, on behalf of the Respondent.
Hearing details:
2014.
Melbourne:
July 18, 25.
THE FAIR WORK COMMISSION HE SEALO
[2014] FWC 6388
29
Printed by authority of the Commonwealth Government Printer
Price code G, PR555420
1 [2010] FWAFB 3009.
2 [2010] FWA 3911.
3 [1990] HCA 6.
4 [2007] TASSC 21(cited in Statutory Interpretation in Australia at [3.30].
5 [1910] AC 409 at 420 (cited in Statutory Interpretation in Australia at [2.32] at page 55.
6 [2012] HCA 3.
7 [2014] HCA 9.
8 Cattanach & Anor v Melchior & Anor B22/2002 [2003] HCATrans 564.
9 [2012] FWAFB 2206.
10 [2012] FWA 6329.
