1
Fair Work Act 2009
s.236—Majority support determination
Construction, Forestry, Mining and Energy Union
v
Alcoa of Australia Limited
(B2014/168)
COMMISSIONER LEWIN MELBOURNE, 24 OCTOBER 2014
Application for a majority support determination - all employees concerned want to bargain -
application opposed by the employer - employer negotiating with other employees - whether
group fairly chosen - whether majority support determination is “inappropriate”- whether
scope order is “more appropriate” - whether reasonable to make determination.
Introduction
[1] This decision concerns an application for a majority support determination made to the
Fair Work Commission (the Commission) under s 236 of the Fair Work Act 2009 (the Act).
The application has been made by the Construction, Forestry, Mining and Energy Union (the
CFMEU).
[2] The CFMEU is a bargaining representative for 15 employees of Alcoa of Australia
Limited (Alcoa) who are engaged as power station operators at the Anglesea electrical power
generation station of Alcoa in Victoria.
Relevant legislation
[3] The relevant statutory provisions under which the application is made and is to be
determined are set out below:
“236 Majority support determinations
(1) A bargaining representative of an employee who will be covered by a proposed
single-enterprise agreement may apply to the FWC for a determination (a majority
support determination) that a majority of the employees who will be covered by the
agreement want to bargain with the employer, or employers, that will be covered by
the agreement.
[2014] FWC 7123 [Note: a correction has been issued to this document]
[Note: An appeal pursuant to s.604 (C2014/7740) was lodged against this
decision - refer to Full Bench decision dated 24 April 2015 [[2015]
FWCFB 1832] for result of appeal.]
DECISION
E AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/decisionssigned/html/2015FWCFB1832.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2015FWCFB1832.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2014FWC7123_pr557101.htm
[2014] FWC 7123
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(2) The application must specify:
(a) the employer, or employers, that will be covered by the agreement; and
(b) the employees who will be covered by the agreement.
237 When the FWC must make a majority support determination
Majority support determination
(1) The FWC must make a majority support determination in relation to a proposed
single-enterprise agreement if:
(a) an application for the determination has been made; and
(b) the FWC is satisfied of the matters set out in subsection (2) in relation to
the agreement.
Matters of which the FWC must be satisfied before making a majority support
determination
(2) The FWC must be satisfied that:
(a) a majority of the employees:
(i) who are employed by the employer or employers at a time
determined by the FWC; and
(ii) who will be covered by the agreement;
want to bargain; and
(b) the employer, or employers, that will be covered by the agreement have not
yet agreed to bargain, or initiated bargaining, for the agreement; and
(c) that the group of employees who will be covered by the agreement was
fairly chosen; and
(d) it is reasonable in all the circumstances to make the determination.
(3) For the purposes of paragraph (2)(a), the FWC may work out whether a majority of
employees want to bargain using any method the FWC considers appropriate.
(3A) If the agreement will not cover all of the employees of the employer or
employers covered by the agreement, the FWC must, in deciding for the purposes of
paragraph (2)(c) whether the group of employees who will be covered was fairly
chosen, take into account whether the group is geographically, operationally or
organisationally distinct.
[2014] FWC 7123
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Operation of determination
(4) The determination comes into operation on the day on which it is made.”
[4] There is no dispute that the application is validly made in accordance with the
statutory provisions, in particular ss 236(1) and (2). There is also no dispute that Alcoa has
not yet agreed to bargain with the employees who are subject of this application or
commenced bargaining for the relevant proposed enterprise agreement in relation to which the
application has been made.
Opposition to the application
[5] The application is opposed by Alcoa. The grounds upon which Alcoa opposes the
application are as follows:
Alcoa has already commenced bargaining for a proposed enterprise agreement with a
majority of employees who are employed at the Anglesea power station;
the employees to be covered by the enterprise agreement proposed by the CFMEU
are not fairly chosen;
the proper order the CFMEU should be seeking is a scope order under s 238 of the
Act;
the determination sought by the CFMEU would not assist in fair and efficient
industrial bargaining at the Anglesea power station;
it is not reasonable to make the determination in all the circumstances.
[6] It is convenient to note at this point that the enterprise agreement in respect of which
Alcoa has commenced bargaining is not the enterprise agreement proposed by the employees
who are the subject of this application. The enterprise agreement in respect of which Alcoa
has started bargaining would not cover the employees in respect of whom the majority
support determination sought would be made.
Background
[7] Historically, the Anglesea power station has been primarily associated with the supply
of electrical power to the Point Henry aluminium smelter operated by Alcoa. Due to the
impending closure of the smelter, the Anglesea power station will operate as a generator of
electrical power for sale to the national electricity supply grid. Associated with the power
station is an open-cut coal mine.
[8] The 15 employees for whom the CFMEU is a bargaining representative have each
signed an individual petition evidencing their unanimous wish to bargain with Alcoa for a
proposed enterprise agreement.
[9] On what is before me, I am satisfied that the relevant employees in respect of whom
the determination is sought want to bargain.
[2014] FWC 7123
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[10] It seems to me that the critical issues to be determined in this matter are:
whether the group of employees whose employment would be covered by the
proposed enterprise agreement and who would be the subject of the determination
sought is fairly chosen; and,
whether it would be reasonable in all the circumstances to make the determination.
Guiding authorities
[11] In the case of Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union
(2012) 219 IR 139 (Cimeco), albeit in a different statutory context, a Full Bench of the
Commission considered the proper approach to s 186(3) of the Act, which refers to a group of
employees being “fairly chosen” for the purposes of making an enterprise agreement and
approval by the Commission of an enterprise agreement.
[12] Before turning to the evidence, it is appropriate to refer at length to that decision, as
follows:
“[10] The Tribunal’s first task under s 186(3) is to establish whether the agreement
covers all of the employees of the employer(s) covered by the agreement. If all of the
employees are covered then s 186(3A) is irrelevant but the Tribunal must still decide
whether the group of employees covered by the agreement (ie. all of the employers’
employees) was “fairly chosen”. In some circumstances it may not be fair to choose all
of the employees of an employer as the group to be covered by an agreement. If all of
the employees are not covered then the Tribunal must make a finding as to whether the
group of employees covered by the agreement is geographically, operationally or
organisationally distinct. Absent such a finding the Tribunal cannot properly perform
its statutory task. Section 186(3A) provides that the Tribunal must take that matter (ie.
Whether the group is geographically, operationally or organisationally distinct) into
account and give it due weight, having regard to all other relevant factors. Finally, the
Tribunal must state its reasons for concluding that the group of employees either was
or was not fairly chosen.
[11] At issue in these proceedings is the proper construction of the expression “fairly
chosen” in s 186(3). The starting point is to construe the words according to their
ordinary meaning having regard to their context and purpose.
[12] The words “fairly” and “chosen” have a variety of meanings, depending on the
context. The Oxford Dictionary defines “chosen” to mean, among other things, “taken
by preference, selected, picked out”. The word “chosen” in the context of s 186(3)
simply means selected to be covered by the relevant agreement.
[13] The word “fairly” is derived from the adverb “fair” and is a word of wide import.
What is fair in a particular context is largely a matter of impression and judgment. Of
the various definitions of “fairly” in The Oxford Dictionary the most apt in this context
are:
[2014] FWC 7123
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“by proper means, legitimately, impartially, justly”; and
“with due regard to equity, candidly, impartially; without undue advantage on
either side”.
[14] It is also relevant to note that s 186(3) requires FWA to be satisfied that the group
of employees covered by the agreement “was fairly chosen”. We agree with the
observation of Lawler VP in Re ANZ Stadium Casual Employees Enterprise
Agreement 2009 that:
“… the group of employees to be covered by a proposed agreement is “chosen”
when the employer and the main employee bargaining representatives agree on
a particular scope or the bargaining representatives commence bargaining on a
shared assumption as to scope (as is often the case when bargaining proceeds
by reference to the terms of an existing agreement that is to be replaced by a
proposed new agreement) … The time of the choosing is a factual issue to be
determined in the usual way. The group of employees to be covered by a
proposed agreement — the scope of the agreement — will typically be chosen
at or shortly after the commencement of bargaining …”
[15] Section 186(3A) is also relevant. In circumstances where an agreement does not
cover all of the employees of the employer(s) covered by the agreement s 186(3A)
imposes an obligation on FWA, in deciding whether the employees were “fairly
chosen”, to “take into account” whether the group of employees covered by the
agreement is geographically, operationally or organisationally distinct. To take a
matter into account means that the matter is a “relevant consideration” in the Peko-
Wallsend sense of matters which the decision maker is bound to take into account. As
Wilcox J said in Nestle Australia Ltd v Federal Commissioner of Taxation:
“To take a matter into account means to evaluate it and give it due weight,
having regard to all other relevant factors. A matter is not taken into account by
being noticed and erroneously discarded as irrelevant.”
[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.
[17] The legislative history of these provisions is also instructive. For example, the
Workplace Relations Act 1996 (Cth) (the 1996 Act) provided that collective
agreements could be made covering a “single business” or “part of a single business”.
Section 322(3) of that act provided that “part of a single business” included:
“(a) a geographically distinct part of the single business; or
(b) a distinct operational or organisational unit within the single business.”
[2014] FWC 7123
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[18] Hence, under the 1996 Act an agreement could be made in relation to a part of a
business that was geographically, operationally or organisationally distinct, without
any separate consideration of whether the group of employees covered by the
agreement were fairly chosen.
[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.
[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.
[13] Similar statutory terms regarding the meaning of “fairly chosen” in other related
statutory contexts have also been considered in United Firefighters’ Union of Australia v
Metropolitan Fire & Emergency Services Board (2010) 193 IR 293 (UFU) and The
Australian Workers’ Union v BP Refinery (Kwinana) Pty Ltd [2014] FWCFB 1476
(Kwinana). On my reading of these Full Bench decisions, I discern consistency of approach
with the principles expressed in Cimeco concerning the proper approach to the relevant
provisions of s 237(2)(c) and I will determine this matter accordingly.
[2014] FWC 7123
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The evidence
[14] The following persons filed witness statements and gave viva voce evidence at the
hearing:
Duncan Edward Macgregor, an organiser for the Victorian district of the CFMEU,
for the CFMEU;
Neil Charles Carlson, for the CFMEU;
David Monahan, former Human Resources Business Partner at Alcoa, now a an
external consultant for Alcoa, for Alcoa;
Bryce Hutton, Operations Area Supervisor at the Anglesea power station, for Alcoa.
[15] There are no substantial conflicts in the evidence of a factual nature. In substance, the
differences between the witnesses are matters of interpretation, definition, emphasis or
reasoning. That is to say, the differences in the evidence, other than some matters of detail,
are somewhat discursive (in the sense of directly or indirectly interpreting concepts addressed
in the course of Commission decisions arising in the statutory context of applying the words
“fairly chosen” to describe a group of employees to be covered by an enterprise agreement or
a proposed enterprise agreement), and to some extent, opinion or judgement about matters the
witnesses no doubt consider pertinent.
[16] I review some, but not all, of the factual information provided by the evidence, below.
Nevertheless, I have taken all the evidence into account for the purposes of this decision and
given each aspect due consideration in arriving at my conclusions.
[17] The employees who seek the determination through their bargaining representatives
are not the subject of an enterprise agreement and never have been.
[18] The employees are part of what is described by Alcoa as a team or family within the
operational and managerial structure of the power station. The employees have historically
been award free and subject to individual common law contracts of employment.
[19] Alcoa designates the employees who are proposing the relevant enterprise agreement
as Power Station Operators (PSOs). This descriptor was invented some years ago by Alcoa to
replace a previous nomenclature relevant to positions within what Alcoa describes as the
operative team or family.
[20] From time to time there have been employees variously described as PSO 2, 3, 4, 5
and 6. The relevant employees who would be covered by the proposed enterprise agreement
and the determination sought are described by Alcoa as PSO4, PSO5 and PSO6. There are
currently no PSO2 or PSO4 employees. Alcoa employs PSO3 employees who are subject to
the supervision of PSO5 and PSO6 employees. PSO3 employees are covered by the Alcoa
Point Henry Smelter and Anglesea Power Station Agreement 2011 (the Agreement), as would
be any PSO2 employees, if such were currently or subsequently employed.
[21] Therefore, the relevant context is a situation where the proposed enterprise agreement,
in respect of which the determination is sought, will not cover all of the employees of the
employer.
[2014] FWC 7123
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[22] The PSO6, PSO5 (and PSO4) and PSO3 (and PSO2) employees, as variously
employed from time to time, work in an organisational structure as follows:
[23] There are a number of employees of Alcoa at the power station and associated mine
site who perform functions other than that of the Power Station Operator group.
[24] The PSO6, PSO5 and PSO3 employees, currently engaged, are based in the control
room of the power station. The PSO3 employees have a desk and computer terminal inside
the control room. PSO3 employees, however, largely perform duties outside the control room.
PSO3 employees are not authorised to operate the control panel of the power station. Both the
PSO6 and PSO5 employees are authorised to do so and are the principal operators of the
control panel.
[25] Alcoa describes the PSO6 employees as having responsibilities which can be
characterised as “managerial” as well as operational, including supervision of the PSO5 and
PSO3 employees.
Power Station Manager Operations Area Supervisor Power Station Operator 6 (PSO6) Power Station Operator 5 (PSO5) Power Station Operator 4 (PSO4) -Dormant Power Station Operator 3 (PSO3) Power Station Operator 2 (PSO2) - Dormant
[2014] FWC 7123
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[26] In considering if a group of employees that will be covered by a proposed enterprise
agreement was fairly chosen, for the purposes of s 237(2)(c) of the Act, the Commission must
take into account whether that group of employees is geographically, operationally or
organisationally distinct, having regard to s 237(3A) of the Act.
Geographical consideration
[27] This raises the question of what the geographical reference is for the evaluation of
whether the PSO6 and PSO5 (and PSO4) employees can be described as distinct accordingly.
While Alcoa’s operations at Anglesea and Point Henry are covered by a single enterprise
agreement they have some geographical distinction.
[28] However, I do not give that great weight in the circumstances, particularly as the Point
Henry smelter is geographically close, nor do I attach great weight to the distinct geographic
location of the Anglesea power station. This is due to my taking into account the imminent
closure of the Point Henry smelter.
[29] Despite what might constitute potential points of geographic distinction in the
particular circumstances between the Point Henry smelter and the Anglesea power station, my
approach is to consider the relevant geographical location as confined to the operation of the
power station and the associated mine at Anglesea. In my view, that is the relevant Alcoa
enterprise in the circumstances which evolved from the decision to close the Point Henry
smelter. Geographically, the area is relatively compact. I judge that, within the scope of that
enterprise, the PSO6 and PSO5 (and PSO4) employees are not geographically distinct.
Rather, in my view, they are geographically located with all of the relevant employees
conducting the relevant enterprise for Alcoa at the Anglesea electrical power generation
station. In particular, they are geographically collocated with the other Power Station
Operators, that is, the PSO 3 (and PSO 2) employees.
[30] I will have regard to the weight that should be attached to this conclusion for the
purpose of determining if the relevant group of employees was fairly chosen in all the relevant
circumstances, below.
Operational configuration
[31] The PSO6 and PSO5 (and PSO4) employees are in some ways operationally distinct
within the enterprise as a whole and in other ways indistinct. The significant point of
distinction is the particular and exclusive responsibility of PSO6 and PSO5 employees for the
control function of the operation of the power station. In particular, continuous use of the
control panel in the control room of the power station.
[32] On my assessment of the evidence, the PSO6 and PSO5 and PSO3 employees,
currently engaged, are operationally distinct and are identified as such in Alcoa’s functional
grouping of the PSO employees, which it describes as Power Station Operators. As are the
vacant positions of PSO4 and PSO2. However, PSO2, 3, 4, 5 and 6 employees should be
considered operationally indistinct from one another. That group as shown in the
organisational chart, above, is the group of employees at the Anglesea location and in the
enterprise who are responsible for the operation of the power station.
[2014] FWC 7123
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[33] On what is before me, operational responsibility for the power station is distinct from
the mine operations and other functions necessary for the conduct of Alcoa’s enterprise at
Anglesea.
[34] In due course it will be necessary to give consideration to the coverage of one part of
this operationally distinct group by the scope of an enterprise agreement which covers a large
number of employees at Point Henry and Anglesea who have been so covered for many years,
namely, PSO 3 and PSO2 employees and that Alcoa has commenced bargaining for a
replacement of that Agreement.
[35] However, it is convenient to note in this respect that the incidence of coverage of an
enterprise agreement overlays the operational configuration of an enterprise and does not
determine that operational configuration.
[36] In addition to operating the control panel within the control room, PSO6 and PSO5
employees, as currently engaged, perform operational tasks at the power station outside the
control room. I therefore proceed on the basis that the operational tasks performed by PSO6
and PSO5 employees, as engaged, are principally control functions within the control room
and such employees also perform tasks intermittently outside of the control room of the power
station of an operational nature. Some such tasks overlap with those of PSO3 employees.
[37] When the power station is operating outside standard hours the PSO6 employees are
the most senior operational employees at the power station and the point of reference for
emergency response. The PSO6 has recourse to contact the Operations Area Supervisor
subject to availability.
[38] The PSO6 and PSO5, and PSO3, employees, currently employed, depending on the
circumstances, have some limited ability to make purchases for Alcoa. PSO6, PSO5 and
PSO3 employees have no disciplinary authority; however, PSO6s may make
recommendations of this kind. PSO6 employees participate in the recruitment selection
process to fill vacancies in the Power Station Operations Team (the PSO group).
[39] At all times, the terms and conditions of employment for PSO6 and PSO5 (and PSO4)
employees have been determined exclusively by Alcoa. Those terms and conditions of
appointment have not been the subject of individual or collective bargaining, which is distinct
from the circumstances of the PSO3 (and PSO2) employees. However, the hours of work of
PSO6, PSO5, (PSO4), PSO3 and (PSO2) employees have been the same and follow the same
shift work pattern. Historically, the PSO6 and PSO5 employees have been treated by Alcoa as
distinct from PSO3 (and PSO2) employees and from various other employees at the Anglesea
power station. However, Mr Monahan noted that the calculation of the shift allowance, which
forms part of the remuneration of the PSO6 and PSO5 employees, as currently engaged, is
inherently related to the same methodology used for the PSO3 (and by extension PSO2)
employees.
Organisational configuration
[40] On the evidence before me, the PSO6 and PSO5 (and PSO4) employees have been
situated distinctly within the organisational configuration of the power station staffing
establishment with respect to the determination of their terms and conditions of employment,
when compared to PSO3 and PSO2 employees. The terms and conditions of employment for
[2014] FWC 7123
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PSO3 (and PSO2) employees have been determined by bargaining for an enterprise
agreement, for some time, whereas, although operationally within the same configuration,
those of PSO6 and PSO5 (and PSO4) have not.
[41] The PSO6 and PSO5 employees are presently part of an operational group comprised
of PSO6, PSO5 and PSO3 employees, with dormant PSO4 and PSO2 work descriptors. Alcoa
has therefore distinguished the regulation of the terms and conditions of employment of PSO6
and PSO5 (and PSO4) employees, organisationally, from those of PSO3 (and PSO2)
employees.
Geography, Operation, Organisation
[42] On the evidence before me, I find that the PSO6 and PSO5 (and PSO4) employees are
relevantly located geographically with the other employees of Alcoa engaged in the conduct
of Alcoa’s electrical power generation enterprise at Anglesea in Victoria. I find that within
that enterprise, the PSO6 and PSO5 (and PSO4) employees form part of an operationally
distinct group made up of employees described as PSOs or Power Station Operators of
various functional levels. I have noted that, historically, this operational group has been
identified as comprised of PSO levels 2 through 6 and that there are currently no employees
engaged in this operational group at PSO4 or PSO2.
[43] Moreover, I find that historically the PSO6 and PSO5 (and PSO4) levels have been
organisationally distinct for the purposes of the differentiation and regulation of their terms
and conditions of employment. In my view, the overlay of the existing enterprise agreement,
which regulates the terms and conditions of employment of PSO3 (and PSO2) employees,
does not substantially distinguish the operational or organisational circumstances of the PSO6
and PSO5 (and PSO4) employees, except to the extent that it differentiates the determination
of the remuneration and terms and conditions of employment of employees in the PSO
organisational structure at PSO3 (and PSO2) employees from PSO6 and PSO5 (and PSO4)
employees.
[44] In light of the above, I now turn to consider whether the relevant group of employees,
PSO6 and PSO5 (and PSO4), were fairly chosen in the circumstances of this case as they
apply at the Anglesea power station, in relation to the proposed enterprise agreement, to cover
PSO6, PSO5 and PSO4 employees’ terms and conditions of employment.
Fairly chosen
[45] As observed by the Full Bench in Cimeco, the relevant statutory question which must
be answered in relation to the choice of a group of employees to be covered by a proposed
enterprise agreement is one of fairness. It is therefore necessary for me to take into account
the conclusions I have reached in relation to the geographical, operational and organisational
circumstances and afford them due weight in the matrix of facts and circumstances of the
enterprise, as I have identified it, in order to consider the fairness or otherwise of the selection
of the group chosen for the relevant proposed enterprise agreement, which would be subject to
the majority support determination sought.
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[46] On what is before me, it is difficult to discern what unfairness there would be if an
enterprise agreement, as proposed, were the subject of bargaining between Alcoa and the
relevant employees. Clearly, there would be no unfairness for the PSO6 or PSO5 (or PSO4)
employees.
Other employees
[47] There is nothing before me which would lead me to conclude that bargaining for a
proposed enterprise agreement for the PSO6 and PSO5 (and PSO4) employees would lead to
unfairness for PSO3 (or PSO2) employees currently enjoying the coverage of an enterprise
agreement. If the PSO6 and PSO5 (and PSO4) employees were able to bargain for a proposed
enterprise agreement, all employees in the PSO structure would have equal opportunity to
bargain in accordance with the Act. If there were to be issues of the scope of bargaining, the
Act provides provisions for the regulation of such bargaining (see the provisions of s 238 of
the Act).
[48] There is nothing before me upon which I could be satisfied that if the PSO6 and PSO5
(and PSO4) employees were to be able to bargain for a proposed enterprise agreement that
other employees, who are not Power Station Operators, at the Anglesea power station, would
be unfairly affected. Indeed, on what is before me, with the exception of professional and
managerial employees at Anglesea, most employees are currently bargaining with Alcoa for a
proposed enterprise agreement and currently enjoy the ability to do so, which is sought by the
PSO6 and PSO5 (and in relation to PSO4) employees by this application.
[49] On what is before me, I am unable to discern a group of employees engaged at the
Anglesea power station who are not currently bargaining for a proposed enterprise agreement
for whom it would be unfair if the PSO6 and PSO5 (and PSO4) employees were able to
bargain for a proposed enterprise agreement.
[50] No bargaining representative of other employees of Alcoa at Anglesea or individual
employee has sought to intervene or make any submission to the Commission in relation to
this aspect of the matter. While this aspect of the matter is noted, it is not appropriate to assign
any weight to it, but rather, treat it as neutral having regard to the particular circumstances of
the proceeding, which may or may not be well known among the other employees. Although,
as an observation, it would seem highly unlikely that in an enterprise with a long history of
industrial organisation, in which enterprise bargaining is currently underway, these
proceedings would be unknown.
Purpose of “fairly chosen”
[51] It is highly relevant that the question of whether the selected group is fairly chosen is
to be considered for a defined purpose; namely, as set out in s 237(1)(b) “in relation to the
agreement”.
[52] The consequence therefore is that the question, in compound form as between
s 237(1)(b) and s 237(2)(c), is:
was the group of employees who will be covered by the proposed enterprise
agreement fairly chosen in relation to the Agreement?
[2014] FWC 7123
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[53] Answering the question in accordance with the relevant statutory direction for the
purposes of s 237 is somewhat more attenuated than a free floating question of fairness or
otherwise without specific purposive conditioning by the relevant provisions of the Act.
[54] The question is whether it would be fair if, in relation to the enterprise agreement, as
proposed, this chosen group is able to bargain accordingly, from among all of the relevant
employees engaged in the enterprise of electrical power generation by Alcoa at the Anglesea
power station and mine.
[55] In order to consider the fairness or otherwise of the choosing of the group of PSO6s
and PSO5s (and PSO4s), it is necessary to specifically consider the scope of the majority
support determination sought by the CFMEU. The CFMEU has proposed an enterprise
agreement to cover the work of PSO6, PSO5 and PSO4 employees in the relevant
circumstances.
[56] As noted, the position of PSO4 is dormant as there are currently no employees of this
kind engaged at the power station. Historically, PSO4 employees were engaged in the
operational group in which PSO2 through PSO6 employees have worked.
[57] The scope of the current Alcoa enterprise agreement does not include PSO4
employees. Neither is bargaining proceeding in this respect. In my view, although somewhat,
but not entirely, hypothetical, the work of PSO4 employees fits within the power station
operator stream and is operationally contiguous with the other PSO levels of Power Station
Operators. Moreover, while that work is geographically co-located with the other levels of
power station operator, it has been treated as organisationally distinct in the same way as
PSO6 and PSO5 employees, as previously noted.
[58] Given the dormancy of the PSO4 level, and the nature of its organisational distinction,
it is difficult to see how the inclusion of such work as a subject of bargaining enabled by a
majority support determination would cause any more or less fairness or unfairness to any
other employee of Alcoa at the Anglesea power station.
Fairness and Alcoa
[59] In order to consider the approach to the issue of fairness or unfairness to Alcoa arising
from the selection of the PSO6 and PSO5 (and PSO4) employees as employees whose
employment would be covered by the proposed enterprise agreement, in respect of which the
majority support determination would be made, I have sought guidance from decisions of the
Full Bench of this Commission, and its predecessors, which, in different, but related, statutory
contexts, have touched upon that consideration.
[60] In Kwinana, the Full Bench of the Commission considered the operation of s 238 of
the Act in relation to scope orders. While a critical axis upon which those statutory provisions
operate is the “fair and efficient conduct of bargaining”, which is not a matter expressly
identified in ss 236 and 237 of the Act, the concept of a group which is fairly chosen forms a
relevant consideration for the determination of an application made under s 238 of the Act.
[2014] FWC 7123
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[61] The Full Bench in Kwinana referred to the decision in UFU in the following terms:
“[44] In accordance with the approach laid down in United Firefighters, prima facie, if
the group proposed by the Union is reasonable it should have been preferred unless
there was some good reason to prefer the two groups proposed by the Company over
the single group preferred overwhelmingly by the employees. That is, unless there are
factors relating to the fairness and efficiency of bargaining and or demonstrated
prejudice to the employer’s business operations that make it more reasonable to accept
the employer’s application, notwithstanding the contrary preference of employees,
weight should be accorded to the views of the employees.
[45] The Company relied upon a history of separate agreements going back to 1997
and the fact that the two groups have different educational profiles and largely
performed different tasks.
[46] Those matters, without more, do not provide a justification for preferring the
scope sought by the Company over the scope sought by the employees in deciding
which order is more reasonable to make (cf s.238(4)(d)).
[47] There was nothing in the evidence to demonstrate how the Company would be
prejudiced in the fairness and efficiency of bargaining, or in its business operations,
through an enterprises agreement for the combined group proposed by the Union
rather than separate agreements that had existed for many years. It follows that there
was no proper basis to prefer the application of the Company.”
[62] As referred to above, in Cimeco, the Full Bench in that matter addressed the issue of
what would be relevant when considering fairness in the choice of employees selected was as
follows:
“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.’”
[63] In applying the reasoning of these decisions in the context of an application for a
majority support determination under s 236 of the Act and to determining the requisite
[2014] FWC 7123
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satisfaction under s 237(2), one must have regard to the difference between a situation in
which bargaining is sought by a majority support determination and where bargaining is
extant but, allegedly, not proceeding fairly and or efficiently in relation to a proposed
enterprise agreement and an order is sought under s 238.
[64] Nevertheless, arising from the decisions referred to above, it seems to me that the fair
selection of a group of employees for bargaining in relation to a proposed enterprise
agreement, with respect to the interests of the relevant employer, falls to be considered as
follows: would there be any prejudice to the productivity or efficiency of the business
operations of the employer’s enterprise?
[65] Any such prejudice must be evaluated and accorded due weight along with other
relevant considerations.
[66] In Kwinana, the Full Bench of the Commission said as follows:
“[29] The right of employees to bargain collectively is a right recognised in ILO
Convention 87 Freedom of Association and Protection of the Right to Organise (1948)
and ILO Convention 98 Right to Organise and Collective Bargaining (1949) both of
which have been ratified by Australia. It is a right that was foundational to the
enterprise bargaining regime first introduced to the federal industrial legislation in
1993. It is implicit in the right to bargain collectively that the preferences of employees
as to the appropriate collective should be respected unless there is some good reason
under the legislation to decide otherwise – a reason that relates to the conduct an
efficiency of bargaining or to the efficient operation of the employer’s business. It is,
after all, the employees who are in the best position to determine the collective that
best suits their legitimate interests.
[30] In United Firefighters [2010] FWAFB 3009 the Full Bench said (at [53]):
“[53] As recorded above, it was submitted by the UFUA and the ACTU that
particular weight should be given to the views of employees because of, for
example, legislative policy imperatives concerning freedom of association.
While we generally agree with that submission it requires some qualification.
The power to make a scope order is predicated on disagreement between
bargaining representatives. The discretion to resolve that disagreement is to be
exercised as provided for in ss.238(4) and (4A). While those provisions do not
assign priority to the views of employees, in applying the provisions it is
necessary to have regard to the overall context. The legislative scheme supports
collective bargaining principles and the Fair Work Act encourages freedom of
association and collective bargaining. It may be implied from the legislative
scheme that the collective choice of employees is significant. It must be said,
however, that while weight should be given to the views of the employees
potentially affected, it may be that a proper consideration of the matters
specified in ss.238(4) and (4A) in a particular case may make it appropriate to
make a scope order contrary to the views of the employees potentially
affected.”
[31] It is in this way that the views of the employees become significant and prima
facie carry greater weight than the subjective views of the employer unless, as in
[2014] FWC 7123
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United Firefighters, there are particular circumstances in a given case that make a
contrary conclusion appropriate upon a proper application of s.238.”
[67] It seems to me appropriate to note that s 236 appears in Subdivision C of Division 8 of
Part 2-4 of the Act. Division 8 is headed: “Division 8—FWC’s general role in facilitating
bargaining”.
[68] When considering the satisfaction required by ss 236 and 237, it is appropriate to do so
having regard to the relevant statutory intention and the statutory context in which these
provisions are situated. Section 3 of the Act, which states the objects of the Act, 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; and
...
[69] Section 171 of the Act sets out the objects of Part 2-4 Enterprise Agreements of the
Act as follows:
“171 Objects of this Part
The objects of this Part are:
(a) to provide a simple, flexible and fair framework that enables collective bargaining
in good faith, particularly at the enterprise level, for enterprise agreements that deliver
productivity benefits; and
(b) to enable the FWC to facilitate good faith bargaining and the making of enterprise
agreements, including through:
(i) making bargaining orders; and
(ii) dealing with disputes where the bargaining representatives request
assistance; and
(iii) ensuring that applications to the FWC for approval of enterprise
agreements are dealt with without delay.”
[70] In my view, the statutory objects of facilitating enterprise bargaining and the wishes of
a group of employees who propose an enterprise agreement are to be given some weight when
[2014] FWC 7123
17
considering whether a group of employees was fairly chosen in relation to a proposed
enterprise agreement.
[71] When considering fairness to an employer of a selected group, there would need to be
a clear and cogent case that the selection of the group would be sufficiently prejudicial to the
productivity or efficient conduct of an employer’s business, in all the relevant circumstances,
to outweigh a presumption that the Commission should facilitate bargaining for an enterprise
bargaining agreement where the employees of the group unanimously wish to bargain.
[72] Alcoa suggests, through the evidence of Mr Monahan, that the PSO6 employees
should be characterised as senior managers. In this respect, no doubt some comfort is sought
by analogue with the decision in UFU in relation to the identity of certain “officer” levels in
the Metropolitan Fire Brigade.
[73] On my evaluation of the evidence, the description of PSO6 employees as senior
managers is not apt generally or in the particular context of the operation of the Anglesea
power station. Moreover, I do not think there is any relevant analogue between the operational
or organisational structure of the Anglesea power station and the Metropolitan Fire Brigade,
as far as I can discern from a reading of the relevant decision.
[74] In my view, in the relevant operational and organisational framework of the Anglesea
power station, the senior management positions are clearly identified in the organisational
chart referred to above as Power Station Manager and Operations Area Supervisor.
[75] It is clear that for historical and other reasons Alcoa prefers not to bargain with the
relevant employees. When considering fairness to the employer in relation to the bargaining
for a proposed enterprise agreement in the context of an application under s 236 of the Act,
unanimously supported by the relevant employees, the preference of the employer not to
bargain is a problematic consideration.
[76] It is self-evident that the mischief which s 236 of the Act sets out to address is an
employer’s preference not to bargain for an enterprise agreement where a majority of relevant
employees wish to do so. It would therefore be somewhat at odds with the statutory scheme to
simply determine that a group of employees who unanimously wish to bargain for the
proposed enterprise agreement was not fairly chosen because the employer prefers not to
bargain for the enterprise agreement proposed.
[77] However, the evidentiary basis upon which an employer submits that a group of
employees is not fairly chosen, evaluated objectively, could give rise to a finding that
bargaining with the selected group would be prejudicial to the efficiency or productivity of
the employer’s business in an individual case and that this should outweigh the apparent
intention and purpose of the legislation to facilitate enterprise bargaining.
[78] I have considered the evidence accordingly.
[79] The evidence of Alcoa is that demarcation or other disputes could arise from
bargaining for the proposed enterprise agreement. My evaluation of the evidence is that this
proposition is highly speculative and the subjective opinion of Mr Hutton, a witness for
Alcoa. Moreover, at least in relation to demarcation disputes, the witness, in my judgement,
was not fully informed of the nature of such disputes.
[2014] FWC 7123
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[80] As for other disputes, as I understand the evidence, it is based upon speculation of
what might be agreed as a result of bargaining for the proposed enterprise agreement and
potentially anomalous outcomes for different employees, for example, as between PSO3 and
PSO2 employees and PSO6, PSO5 and PSO4 employees. I consider I should decline to
determine the application by giving any weight to what the relevant employees and Alcoa
might choose to agree to, if anything, for a proposed enterprise agreement, in order to
determine if the selected group of employees was fairly chosen and are able to bargain in
good faith. Predicting whether any enterprise agreement will be made or what the particular
terms and conditions of a putative enterprise agreement would be require extraordinary
perception not supported by any evidence.
[81] Perhaps more importantly, there is nothing in the evidence before me of a probative
kind to support a conclusion that the selected group of employees would be any less
productive or efficient as Power Station Operators if a determination were made that those
employees who wish to bargain, were fairly chosen, and were able to bargain in good faith for
a proposed enterprise agreement. Moreover, if an enterprise agreement were made, I am
unable to discern how this would be unfair to Alcoa or how it would be that the enterprise
would be disadvantaged in terms of productivity or efficiency, on the basis of the evidence
before me for the reasons stated above.
[82] Having regard to all of the above, I am satisfied that there has been and continues to be
no unfairness in the selection of the group of employees whose employment would be
covered by the terms of the proposed enterprise agreement or as between the selected group,
Alcoa and any other employees of Alcoa at the Anglesea power generation enterprise.
[83] Moreover, I consider the group selected to be fairly chosen. The employees are part of
an operational group, of whom some are able to bargain for an enterprise agreement in
accordance with the relevant objects of the legislation. It is fair to the selected group and not
unfair to Alcoa or any other employee in the relevant circumstances that the chosen group
should be able to bargain for a proposed enterprise agreement commensurately with the
objects of the legislation.
[84] Indeed, on what is before me, of all the relevant considerations, the selection of the
PSO6, PSO5 (and PSO4) level employees, who among the other PSOs are not currently
covered by an enterprise agreement, is a choice which is coherent with the functional and
operational activities of those employees, the Power Station Operators.
[85] In my judgement, the selection of the relevant employees does not exclude any Power
Station Operators from enterprise bargaining or impose any burden on the relevant
operational group or other employees below professional or clearly designated managerial
levels, as previously identified, and does not prejudice the efficiency or productivity of
Alcoa’s electrical power generation enterprise at Anglesea.
[2014] FWC 7123
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Reasonable in all the circumstances?
[86] I turn now to consider whether it is reasonable to make the determination sought by
the application.
[87] Alcoa submitted that it is not reasonable to make a majority support determination in
all of the circumstances because “the proper order for the CFMEU to seek in the
circumstances is not a MSD [majority support determination], but a scope order pursuant to
section 238 of the FW Act”. Alcoa submitted that where bargaining has already commenced
for a majority of employees at the workplace, a majority support determination is not an
appropriate tool to alter the scope of bargaining at the workplace. In this respect, Alcoa refers
to the explanatory memorandum to the Fair Work Bill 2008, as follows:
“Clause 237 – When FWA must make a majority support determination
978. This clause requires FWA to make a majority support determination if an
application for the determination has been made and FWA is satisfied that:
a majority of the employees (employed at a time determined by FWA) who will be
covered by the proposed agreement want to bargain (paragraph 237(2)(a));
the employer has not yet agreed to bargain, or initiated bargaining, for the agreement
(paragraph 237(2)(b)). If bargaining has commenced in relation to a proposed
enterprise agreement, the appropriate tool to resolve issues surrounding coverage are
scope orders (or bargaining orders) and not majority support determinations. This
does not prevent employees of the employer who are not covered by the proposed
agreement from applying for a majority support determination in relation to an
agreement that will cover them;
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 (paragraph
237(2)(c)); and
it is reasonable in all the circumstances to make the majority support determination
(paragraph 237(2)(d)).”
[88] I find this submission to be misconceived. Scope orders are the subject of s 238 of the
Act. On my reading of the Act, the relevant statutory provisions require that an application for
a scope order may only be made by a bargaining agent in relation to bargaining which is
extant. In my view, no such application may be made where an employer has not agreed to
bargain and no majority support determination has been made for the relevant proposed
enterprise agreement.
[89] Alcoa has agreed to bargain for a proposed enterprise agreement to cover up to 49 of
the employees engaged at the Anglesea power station. The CFMEU is not a bargaining
representative of those employees. The PSO6 and PSO5 (and PSO4) employees are not the
subject of the proposed enterprise agreement for the 49 other employees. It is clear that this
circumstance is envisaged by the explanatory memorandum to the Fair Work Bill, at the last
sentence of the second dot point, as shown above.
[2014] FWC 7123
20
[90] I accept that the bargaining for the proposed enterprise agreement with other
employees at the Anglesea power station is a relevant consideration. It seems to me that the
explanatory memorandum clearly contemplates that the application made by the CFMEU is of
a kind envisaged under the statutory scheme rather than as Alcoa characterises it
“inappropriate” in the relevant circumstances.
[91] Indeed, Alcoa’s submission seems to equivocate somewhat on this aspect of its
opposition to the application:
“The EM notes that a party is not prevented from applying for a majority support
determination even where a scope order would be more appropriate, and this is not in
dispute.”
[92] Alcoa made reference to the decision of the Full Bench in Liquor, Hospitality and
Miscellaneous Union v Coca-Cola Amatil (Aust) Pty Ltd (2009) 191 IR 124 (Coca-Cola
Amatil), in which the Full Bench observed that majority support determinations do not
determine the scope or disputes about the scope of bargaining. It follows that in this matter, a
majority support determination cannot do so. Rather, all that the majority support
determination sought can effect is an obligation upon Alcoa to bargain with the
representatives of the relevant employees in good faith. Alcoa or the bargaining
representatives of the employees who would be covered by the majority support
determination are not required to make an agreement or to agree upon the scope of bargaining
for any such agreement.
[93] In my view, Alcoa erroneously conflates the majority support determination sought
with a scope order. The majority support determination sought by the CFMEU can have no
legally definitive consequence for the scope of bargaining for the proposed enterprise
agreement contemplated by the employees who want to bargain. However, once a majority
support determination is made, provided the relevant statutory requirements are met, an
application for a scope order may be made in relation to bargaining for the proposed
enterprise agreement in respect of which the majority support determination is made.
[94] As with my consideration of whether the group was fairly chosen, of itself, the
preference of Alcoa not to bargain does not mean that it would be unreasonable to make the
order.
[95] The history of the terms and conditions of employment of the relevant employees was
described in the evidence of Mr Monahan, who was asked if those terms and conditions of
employment were arrived at by bargaining or individual negotiations with the employees.
[96] Mr Monahan’s evidence was as follows:
The distinction between PSO3 (and PSO2) and PSO6, PSO5 (and PSO4) employees
has been a feature of the industrial organisation of the Anglesea power station since
its inception;
An enterprise award was made in 1982 by the Commission, which incorporates this
division; and,
The employees have been working within the ambit of this structure since the
inception of enterprise bargaining at Alcoa.
[2014] FWC 7123
21
[97] No doubt bargaining, either individually or collectively, with the relevant employees
in relation to their terms and conditions of employment, will be a new and different
development for Alcoa. As noted by the Full Bench of the Commission, above, the
Commission must give due weight to the wishes of employees who propose to bargain.
Additionally, the objects of Part 2-4 of the Act provide a framework to facilitate and enable
enterprise bargaining.
[98] It is also of note that while discretion is provided to the Commission, in relation to the
satisfaction required by s 237(1)(b) and 237(2) of the Act, it is mandatory for the Commission
to make a majority support determination when the Commission is relevantly satisfied.
[99] The applicable legislative provisions indicate a strong policy framework in favour of
enterprise bargaining, subject to the relevant considerations, particularly in light of of s 3 and
the relevant words of s 169, referring to Division 8, and s 171 of the Act.
[100] In the circumstances of this case, where all of the relevant employees unanimously
want to bargain, the group of employees was fairly chosen and there is no objective basis
upon which it is possible to be satisfied that the productivity or efficiency of the employer’s
business would be unfairly affected by bargaining with those employees, it is difficult to see
how it would be other than reasonable to make the majority support determination sought to
enable bargaining in accordance with the policy objectives of the legislative scheme.
[101] For all of the above reasons, I find it would be reasonable to make the majority
support determination sought in this matter.
Decision
[102] In light of all my conclusions, as stated above, I will make a majority support
determination.
[103] The majority support determination will specify Alcoa of Australia Limited as the
employer and will specify the employees as employees of Alcoa of Australia Limited who are
employed at the Anglesea power station in the classifications of Power Station Operator 4
(PSO4), Power Station Operator 5 (PSO5) and Power Station Operator 6 (PSO6).
COMMISSIONER
Appearances:
Mr A Thomas, for the CFMEU.
Mr C Hartigan, of Herbert Geer Lawyers, for Alcoa.
Hearing details:
2014.
Melbourne.
October 7.
Printed by authority of the Commonwealth Government Printer
Price code C, PR556410
THE FAIR WORK FAIR 0 COMMISSION THE SEA
