1
Fair Work Act 2009
s.604 - Appeal of decisions
The Maritime Union of Australia
v
MMA Offshore Logistics Pty Ltd t/a MMA Offshore Logistics
(C2016/4902)
The Maritime Union of Australia
v
DOF Management Australia Pty Ltd
(C2016/4903)
The Maritime Union of Australia,
v
Smit Lamnalco Australia Pty Ltd
(C2016/4904)
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT GOSTENCNIK
COMMISSIONER WILLIAMS SYDNEY, 1 FEBRUARY 2017
Appeal against decision [2016] FWCA 5277 of Commissioner Cloghan at Perth on 8 August
2016 in matter number AG2016/3091 Appeal against decision [2016] FWCA 4654 of Deputy
President Binet at Perth on 1 August in matter number AG2016/2924 Appeal against decision
[2016] FWC 5249 of Commissioner Roe at Melbourne on 2 August 2016 in matter number
AG2016/3337.
Introduction
[1] The Maritime Union of Australia (MUA) has applied for permission to appeal and
appealed three decisions approving enterprise agreements made by three different employers
and their employees. The decisions, and the enterprise agreements to which they relate, are as
follows:
[2017] FWCFB 660
DECISION
E AUSTRALIA FairWork Commission
[2017] FWCFB 660
2
(1) In a decision issued on 8 August 20161 (MMAOL Decision), Commissioner
Cloghan approved the MMAOL Pty Ltd Enterprise Agreement 2016 (MMAOL
Agreement).
(2) In a decision issued on 1 August 20162 (DOF Decision), Deputy President
Binet approved the DOF Management Australia Pty Ltd Maritime Offshore Oil
and Gas Industry Enterprise Agreement 2016 (DOF Agreement).
(3) In a decision issued on 2 August 20163 (Smit Lamnalco Decision),
Commissioner Roe approved the Smit Lamnalco Australia Maritime Offshore
Oil and Gas Industry Enterprise Agreement 2016 (Smit Lamnalco Agreement).
[2] The MUA applied for the appeals to be heard together on the basis that they involved
common factual and legal issues. This was resisted by the respondents (MMA Offshore
Logistics Pty Ltd (MMAOL), DOF Management Australia Pty Ltd (DOF) and Smit Lamnalco
Australia Pty Ltd (Smit Lamnalco)). Ultimately, the appeals were heard sequentially on 13
October 2016. The MUA on the one hand and MMAOL, DOF and Smit Lamnalco on the
other had common legal representation in all the appeals. A practical approach was adopted
whereby submissions made in the first appeal (against the MMAOL Decision) did not have to
be repeated in the subsequent appeals where they related to matters common to all the
appeals.
[3] At the outset of the hearing of the first appeal, a member of the Full Bench raised with
the parties an issue potentially affecting whether the DOF Agreement and the Smit Lamnalco
Agreement were capable of approval under the Fair Work Act 2009 (FW Act). This issue had
not been raised in the MUA’s notices of appeal or in the written submissions which the MUA
had filed prior to the hearing in accordance with the Commission’s directions. The issue was
whether in each case a Notice of Employee Representational Rights (NERR) had been
provided to employees who would be covered by the relevant agreement in accordance with
the requirement contained in s.174(1A) of the FW Act. Subsequently, on 20 October 2016,
the MUA sought leave to amend its notices of appeal with respect to the DOF Decision and
the Smit Lamnalco Decision to add to each notice the following appeal ground:
“The Agreement was legally incapable of being approved by the Commission because
the Respondent failed to give to the employees to be covered by the Agreement a
Notice of Employee Representational Rights (NERR) that was in accordance with
s.174(1A) of the Fair Work Act 2009 (Cth).”
[4] Particulars of the proposed additional appeal ground were provided. These disclosed
that the alleged defect in the NERR in each case was that it had not complied with the
prescribed form in Schedule 2.1 of the Fair Work Regulations 2009 (FW Regulations), in that
the form required the telephone number of the Fair Work Commission infoline (1300 799
675) be inserted but that the NERR in each case inserted a different telephone number, being
that of the Fair Work Ombudsman (13 13 94).
1 [2016] FWCA 5277
2 [2016] FWCA 4654
3 [2016] FWC 5249
[2017] FWCFB 660
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[5] We received written submissions from the parties concerning both whether the MUA
should be granted leave to amend its notices of appeals against the DOF Decision and the
Smit Lamnalco Decision and whether, if such leave was granted, permission should be
granted and the appeals upheld on the basis of the proposed additional appeal ground. After
the Commission had received these submissions, a Full Court of the Federal Court delivered
its decision in Shop, Distributive & Allied Employees Association v ALDI Foods Pty Ltd4
(Aldi). That decision was concerned in part with the effect of s.174(1A) of the FW Act and the
consequence of a failure to issue an NERR in accordance with the prescribed form. The
parties requested and were provided with an opportunity to file further written submissions in
light of this decision. Consequently, we are in a position to make a final determination in
respect to the NERR issue in the appeals against the DOF Decision and the Smit Lamnalco
Decision.
Relevant provisions in the statutory scheme
[6] The statutory regime for enterprise bargaining is substantially set out in Pt.2-4 of the
FW Act. Very broadly speaking, Pt.2-4 contains requirements pertaining to the process of
bargaining for and entering into enterprise agreements, their content, and their approval by the
Commission. The objects of Pt.2-4 are set out in s.171 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.
[7] The different types of enterprise agreements which may be made are identified in
s.172. Broadly speaking, an employer may make an agreement with its employees who are
employed at the time the agreement is made and will be covered by it, or with one or more
relevant employee organisations in relation to a genuine new enterprise that the employer is
establishing or proposes to establish. The latter type of agreement is described as a
“greenfields agreements”. Importantly, agreements may involve more than one employer. A
“single-enterprise agreement” may involve two or more employers that are “single-interest
4 [2016] FCAFC 161
[2017] FWCFB 660
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employers” (an expression defined in s.172(5) to include employers that are engaged in a joint
venture or common enterprise, or are related bodies corporate, or are the subject of a “single
interest employer authorisation” made under Div.10 of Pt.2-4). Additionally, employers that
are not single-interest employers may enter into a “multi-enterprise agreement” (which may
either be a greenfields agreement or a non-greenfields agreement).
[8] In relation to the initiation of bargaining for an enterprise agreement that is not a
greenfields agreement, s.173 establishes the requirement that the employer take all reasonable
steps to give each employee who will be covered by the agreement the NERR.
[9] Section 173 provides:
173 Notice of employee representational rights
Employer to notify each employee of representational rights
(1) An employer that will be covered by a proposed enterprise agreement that is not a
greenfields agreement must take all reasonable steps to give notice of the right to be
represented by a bargaining representative to each employee who:
(a) will be covered by the agreement; and
(b) is employed at the notification time for the agreement.
Note: For the content of the notice, see section 174.
Notification time
(2) The notification time for a proposed enterprise agreement is the time when:
(a) the employer agrees to bargain, or initiates bargaining, for the agreement;
or
(b) a majority support determination in relation to the agreement comes into
operation; or
(c) a scope order in relation to the agreement comes into operation; or
(d) a low-paid authorisation in relation to the agreement that specifies the
employer comes into operation.
Note: The employer cannot request employees to approve the agreement under
section 181 until 21 days after the last notice is given (see subsection 181(2)).
When notice must be given
(3) The employer must give the notice as soon as practicable, and not later than 14
days, after the notification time for the agreement.
Notice need not be given in certain circumstances
[2017] FWCFB 660
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(4) An employer is not required to give a notice to an employee under subsection (1)
in relation to a proposed enterprise agreement if the employer has already given the
employee a notice under that subsection within a reasonable period before the
notification time for the agreement.
How notices are given
(5) The regulations may prescribe how notices under subsection (1) may be given.
[10] Section 174 provides for the content and form of the NERR as follows:
174 Content and form of notice of employee representational rights
Application of this section
(1) This section applies if an employer that will be covered by a proposed enterprise
agreement is required to give a notice under subsection 173(1) to an employee.
Notice requirements
(1A) The notice must:
(a) contain the content prescribed by the regulations; and
(b) not contain any other content; and
(c) be in the form prescribed by the regulations.
(1B) When prescribing the content of the notice for the purposes of
paragraph (1A)(a), the regulations must ensure that the notice complies with this
section.
Content of notice—employee may appoint a bargaining representative
(2) The notice must specify that the employee may appoint a bargaining
representative to represent the employee:
(a) in bargaining for the agreement; and
(b) in a matter before the FWC that relates to bargaining for the agreement.
Content of notice—default bargaining representative
(3) If subsection (4) does not apply, the notice must explain that:
(a) if the employee is a member of an employee organisation that is entitled to
represent the industrial interests of the employee in relation to work that will be
performed under the agreement; and
[2017] FWCFB 660
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(b) the employee does not appoint another person as his or her bargaining
representative for the agreement;
the organisation will be the bargaining representative of the employee.
Content of notice—bargaining representative if a low-paid authorisation is in
operation
(4) If a low-paid authorisation in relation to the agreement that specifies the
employer is in operation, the notice must explain the effect of
paragraph 176(1)(b) and subsection 176(2) (which deal with bargaining
representatives for such agreements).
Content of notice—copy of instrument of appointment to be given
(5) The notice must explain the effect of paragraph 178(2)(a) (which deals
with giving a copy of an instrument of appointment of a bargaining
representative to an employee’s employer).
[11] Regulation 2.05 of the FW Regulations prescribes the form in Schedule 2.1 as the
NERR for s.174(6) of the FW Act. The form in Schedule 2.1, in its entirety, is as follows:
Notice of employee representational rights
(regulation 2.05)
Fair Work Act 2009 , subsection 174(6)
[Name of employer] gives notice that it is bargaining in relation to an enterprise
agreement ([name of the proposed enterprise agreement]) which is proposed to cover
employees that [proposed coverage] .
What is an enterprise agreement?
An enterprise agreement is an agreement between an employer and its employees that
will be covered by the agreement that sets the wages and conditions of those
employees for a period of up to 4 years. To come into operation, the agreement must
be supported by a majority of the employees who cast a vote to approve the agreement
and it must be approved by an independent authority, Fair Work Commission.
If you are an employee who would be covered by the proposed agreement:
You have the right to appoint a bargaining representative to represent you in
bargaining for the agreement or in a matter before Fair Work Commission about
bargaining for the agreement.
You can do this by notifying the person in writing that you appoint that person as your
bargaining representative. You can also appoint yourself as a bargaining
representative. In either case you must give a copy of the appointment to your
employer.
[2017] FWCFB 660
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[If the agreement is not an agreement for which a low-paid authorisation applies--
include:]
If you are a member of a union that is entitled to represent your industrial interests in
relation to the work to be performed under the agreement, your union will be your
bargaining representative for the agreement unless you appoint another person as your
representative or you revoke the union's status as your representative.
[If a low-paid authorisation applies to the agreement--include:]
Fair Work Commission has granted a low-paid bargaining authorisation in relation to
this agreement. This means the union that applied for the authorisation will be your
bargaining representative for the agreement unless you appoint another person as your
representative, or you revoke the union's status as your representative, or you are a
member of another union that also applied for the authorisation.
[if the employee is covered by an individual agreement-based transitional instrument--
include:]
If you are an employee covered by an individual agreement:
If you are currently covered by an Australian Workplace Agreement (AWA),
individual transitional employment agreement (ITEA) or a preserved individual State
agreement, you may appoint a bargaining representative for the enterprise agreement
if:
* the nominal expiry date of your existing agreement has passed; or
* a conditional termination of your existing agreement has been made (this is an
agreement made between you and your employer providing that if the enterprise
agreement is approved, it will apply to you and your individual agreement will
terminate).
Questions?
If you have any questions about this notice or about enterprise bargaining, please
speak to either your employer, bargaining representative, go to www.fairwork.gov.au,
or contact the Fair Work Commission Infoline on [insert number].
[12] It may be seen that the NERR prescribed by Schedule 2.1 does not, in its last line,
actually set out the telephone number of the Fair Work Commission Infoline, but requires that
number to be inserted. It is convenient to note at this point that the Commission’s website has
at all relevant times contained a guide to completing and issuing the NERR, which identifies
the Fair Work Commission Infoline as being 1300 799 675 and contains a sample NERR
which includes that telephone number.
[13] In relation to bargaining for agreements that are not greenfields agreements, s.176
provides for employees and employers to appoint bargaining representatives to act on their
behalf. Under s.176(1)(b), a registered union will be the default representative of an employee
who is a member, unless the employee has appointed another person in writing as his or her
[2017] FWCFB 660
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bargaining representative or has revoked the status of the union as a bargaining representative.
In relation to other employees, s.176(1)(c) provides that an employee may appoint in writing a
person as the employee’s bargaining representative. Bargaining representatives must meet the
“good faith bargaining requirements” specified in s.228.
[14] Section 186(1) of the FW Act sets out the “basic rule” concerning the circumstances
in which an enterprise agreement must be approved by the Commission as follows:
Basic rule
(1) If an application for the approval of an enterprise agreement is made under
subsection 182(4) or section 185, the FWC must approve the agreement under this
section if the requirements set out in this section and section 187 are met
[15] One of the requirements in s.186 which must be met is prescribed by s.186(2)(a) as
follows:
(2) The FWC must be satisfied that:
(a) if the agreement is not a greenfields agreement—the agreement has been
genuinely agreed to by the employees covered by the agreement; and…
[16] Section 188 sets out, for the purpose of s.186(2)(a), when employees have genuinely
agreed to an enterprise agreement as follows:
188 When employees have genuinely agreed to an enterprise agreement
An enterprise agreement has been genuinely agreed to by the employees covered by
the agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with
the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to
approve an enterprise agreement until 21 days after the last notice of employee
representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1) or (2)
applies (those subsections deal with the making of different kinds of enterprise
agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not
been genuinely agreed to by the employees.
[17] Section 181(2), which is referred to in s.188(a)(ii), requires (as s.188(a)(ii) states) that
an employer must not make a request that employees approve a proposed enterprise
agreement by voting for it until at least 21 days after the day on which the last NERR under
s.173(1) in relation to the agreement is given.
[2017] FWCFB 660
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[18] Section 186(2)(c) establishes a further approval requirement to the effect that the
agreement does not operate to exclude the National Employment Standards (NES) set out in
Pt.2.2 of the FW Act. Section 186(2)(d) requires that the agreement must pass the “better off
overall test” (BOOT). That test is set out in s.193, and in broad terms requires satisfaction that
each current and prospective employee covered by a modern award would be better off
overall if the agreement applied to the employee as compared to if the modern award applied.
An agreement which does not pass the BOOT but satisfies all the other approval requirements
may nonetheless be approved under s.189 if the Commission is satisfied that, because of
exceptional circumstances, the approval of the agreement would not be contrary to the public
interest.
[19] A requirement that the group of employees covered by the agreement the subject of an
approval application be “fairly chosen” is established by s.186(3) and s.186(3A) as follows:
Requirement that the group of employees covered by the agreement is fairly chosen
(3) The FWC must be satisfied that the group of employees covered by the
agreement was fairly chosen.
(3A) If the agreement does not cover all of the employees of the employer or
employers covered by the agreement, the FWC must, in deciding whether the
group of employees covered was fairly chosen, take into account whether the
group is geographically, operationally or organisationally distinct.
[20] In addition to Pt.2-4, Pt.3-3 sets out a scheme under which participants in enterprise
bargaining may, in certain circumstances, take protected industrial action in support of their
claims or in response to industrial action taken by the other side. Protected industrial action is
industrial action which is the subject of the legal immunity conferred by s.415. “Employee
claim action”, that is, industrial action that may be taken by employees for the purpose of
supporting or advancing their claims, is defined in s.409. Relevantly, s.409(4) provides:
Industrial action must not be part of pattern bargaining
(4) A bargaining representative of an employee who will be covered by the
agreement must not be engaging in pattern bargaining in relation to the
agreement.
[21] The expression “pattern bargaining” is defined in s.412 as follows:
412 Pattern bargaining
Pattern bargaining
(1) A course of conduct by a person is pattern bargaining if:
(a) the person is a bargaining representative for 2 or more proposed
enterprise agreements; and
(b) the course of conduct involves seeking common terms to be included in
2 or more of the agreements; and
[2017] FWCFB 660
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(c) the course of conduct relates to 2 or more employers.
Exception--genuinely trying to reach an agreement
(2) The course of conduct, to the extent that it relates to a particular employer, is
not pattern bargaining if the bargaining representative is genuinely trying to
reach an agreement with that employer.
(3) For the purposes of subsection (2), the factors relevant to working out whether
a bargaining representative is genuinely trying to reach an agreement with a
particular employer, include the following:
(a) whether the bargaining representative is demonstrating a preparedness
to bargain for the agreement taking into account the individual
circumstances of that employer, including in relation to the nominal
expiry date of the agreement;
(b) whether the bargaining representative is bargaining in a manner
consistent with the terms of the agreement being determined as far as
possible by agreement between that employer and its employees;
(c) whether the bargaining representative is meeting the good faith
bargaining requirements.
(4) If a person seeks to rely on subsection (2), the person has the burden of proving
that the subsection applies.
Genuinely trying to reach an agreement
(5) This section does not affect, and is not affected by, the meaning of the
expression "genuinely trying to reach an agreement", or any variant of the
expression, as used elsewhere in this Act.
[22] Section 413(2) provides that, in order for industrial action to be protected, it must not
relate to a proposed agreement that is a greenfields agreement or a multi-enterprise
agreement.
The MMAOL Decision
[23] The MMAOL Decision concerned an application made by MMAOL on 4 May 2016
for approval of the MMAOL Agreement. MMAOL was a related company of MMA Offshore
Vessel Operations Pty Ltd (MMAVO), in that both are wholly owned subsidiaries of MMA
Limited. MMA Limited is the parent company of the MMA group, which consists of 21
subsidiaries based in Australia and Asia. MMAVO operated seagoing vessels owned by the
MMA Group, and also provided labour on hire to clients in the maritime offshore gas and oil
industry. MMAVO had an established workforce of about 70 employees, and was covered by
two enterprise agreements dating back to 2010 and 2011 respectively. In about December
2012 bargaining commenced for a replacement enterprise agreement. In this bargaining, the
Australian Mines and Metals Association (AMMA) acted as the bargaining representative for
[2017] FWCFB 660
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MMAVO, and the MUA acted as bargaining representative for various MMAVO employees.
MMAVO sought to conduct the bargaining at the industry level in conjunction with a number
of other employers who were represented in common by the AMMA. The MUA sought to
conduct the bargaining solely at the enterprise level. An impasse in the bargaining was
reached in about February 2016, after employees had twice voted to reject MMAVO’s
proposals for a new enterprise agreement.
[24] MMAOL to that time had operated as a business hiring labour for onshore logistics
operations, and had no history in providing labour to the maritime offshore oil and gas
industry. On about 15 March 2015, MMAOL engaged five new employees, and on 18 March
2016 MMAOL initiated enterprise bargaining with them by issuing a NERR to each of them
and providing them with a draft enterprise agreement. The 7-day “access period” required by
s.180 of the FW Act commenced on 18 April 2016, and by 30 April 2016 the five employees
had voted to approve the agreement.
[25] The MMAOL Decision issued by the Commissioner on 8 August 2016 was preceded
by two interlocutory decisions issued on 8 July 20165 and 25 July 20166 respectively. In the
first of these decisions, the Commissioner determined that the MUA should be given an
opportunity to adduce evidence and make submissions that the group of employees covered
by the MMAOL Agreement was not “fairly chosen” as required by s.186(3) of the FW Act. In
the second decision the Commissioner determined that, having received the MUA’s evidence
and submissions concerning the “fairly chosen” issue, he was in a position to proceed to
determine MMAOL’s application without further involvement of the MUA.
[26] In the MMAOL Decision the Commissioner made a number of critical findings or
inferences of fact. Firstly in relation to MMAOL itself, the Commissioner found (footnotes
omitted):
“[37] MMAOL is a labour-hire company. Prior to October 2011, it was owned by
Brambles. MMAOL continue to provide on hire labour to entities that carry out “land
based logistical support – that is, receipt of freight and supplies and delivery of same
to the lay down area at the Dampier wharf”.
[38] Recently the MMA Group made a decision to expand MMAOL’s labour-hire
business to include “all aspects of logistics applicable to the offshore oil and gas
industry”. This included supplying on-hire officers, engineers and other seafarers for
vessel operations.
[39] The decision of the MMA Group to expand MMAOL on-hire operations in the
maritime area, led to the employment of the five (5) employees, the making of the
proposed enterprise agreement and an application for approval of the MMAOL
Agreement.”
[27] Secondly, the Commissioner made findings concerning the commercial context in
which the decision to widen MMAOL’s business function had been made. He described there
being a downturn in the marine services sector which was associated with a fall in the oil
price, the end of the construction phase of a number of offshore projects in Australia and a
lack of any new large projects to replace them, and which had placed downward pressure on
5 [2016] FWC 3789
6 [2016] FWC 4868
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the contract prices for vessel operators and managers.7 The Commissioner then described how
these commercial pressures caused the decision to be made to expand the scope of MMAOL’s
labour hire services:
“[43] In and around early 2016, the MMA Group decided to expand MMAOL’s labour
hire services for a number of reasons. Firstly, there was a market to supply marine
personnel particularly to overseas based vessel operators for projects in Australia.
[44] Secondly, clients, in some cases, were only seeking short term contracts.
[45] Thirdly, some clients did not require a vessel and were only seeking part, or all,
of the crew. In other words, clients were not seeking the “full service” but local
specialist crew.
[46] Fourthly, after three-and-a-half years of bargaining with respect to a replacement
to the MMAVO enterprise agreement, “there was little likelihood of achieving a
breakthrough in those negotiations with the MUA”. Attempts to reach agreement with
officers, engineers and seafarers directly had failed. In the Second Decision, I stated
that there is a reasonable inference, on the evidence, that no enterprise agreement has
been made between employers and employees, because the MUA will not endorse any
of the proposed agreements.
[47] Mr Lofthouse’s evidence is that while there will continue to be opportunities for
“full service” contracts offered by MMAVO, “the commercial reality of not having an
in-term enterprise agreement is that it becomes difficult to maintain or win contracts”.
[48] Finally, the extension of MMAOL, from its existing on-hire land labour to marine
personnel, was a natural extension of the business.
[49] It was in this context that the MMA Group made the decision to expand MMAOL
operations into on-hire marine labour. In time, MMAOL expects that the re-profiling
of its labour services will provide vertical integration for clients who will deal with
one labour provider from “depot to port to port”.
[50] To achieve such a strategic outcome, it is necessary for MMAOL to have in place
an enterprise agreement for marine labour, as well as its current agreement for the on-
hire land logistics employees.”
[28] Thirdly, the Commissioner found that the fact that the five employees nominated one
of their number, who was a Master as their bargaining representative, did not mean that the
bargaining representative was not free of control or influence of the MMAOL as the
employer. Although the Master was senior in the chain of command on a vessel, he or she did
not have the power to hire and fire, and being senior did not mean that the Master was the
employer’s representative.8
7 MMAOL Decision at [40]-[42]
8 MMAOL Decision at [54]-[63]
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[29] On the basis of those findings, the Commissioner concluded that the group of
employees to be covered by the MMAOL Agreement was fairly chosen for the purpose of
s.186(3), in that there was a legitimate business rationale for the selection of the group, they
were operationally distinct because they were hired for the purpose of marine labour hire, and
no employees were improperly excluded from coverage. The Commissioner rejected the
proposition that the fact that the MUA did not participate in the bargaining and that the
employees did not take protected industrial action meant that the fairly chosen requirement
was not satisfied.9
[30] The Commissioner found that the MMAOL Agreement satisfied the better off overall
test in s.19310, and otherwise satisfied the approval requirements in ss.186, 187 and 188.11 He
noted that the MUA had on 3 August 2016 advised the Commission that “new information
has come to hand, relevant to this matter, and supporting a different argument than the one
that the Commissioner has dealt with to date” and applied to adduce further evidence and
make further submissions on that basis. The Commissioner rejected this application because,
among other reasons, the MUA had been given ample opportunity to present its case, it had
not identified the nature of the new information or the different argument, and any further
delay would be prejudicial to MMAOL. The Commissioner accordingly approved the
MMAOL Agreement with an operative date of 15 August 2016.12
The DOF Decision
[31] DOF operates a marine vessels business in the offshore oil and gas industry, including
a vessel named the Skandi Singapore. Traditionally it has not engaged employees directly to
act as deck ratings on its vessels, but has used the service of labour hire companies to provide
this labour. These labour hire companies, including Programmed Marine Pty Ltd
(Programmed), supplied employees covered by enterprise agreements negotiated by the
MUA. DOF had not participated in the industry bargaining for new enterprise agreements
coordinated by AMMA because it did not itself employ the crew members for its vessels.
Programmed had participated in this bargaining, and its employees had in November 2015
and February 2016 voted to reject their employer’s proposed enterprise agreement.
[32] On about 31 March 2016, DOF employed four persons as deck ratings for its vessels.
They had previously been employed by Programmed and deployed to DOF vessels. They
initially underwent training, and did not actually perform any work on a vessel until mid-May
2016. On 1 April 2016, DOF initiated enterprise bargaining when it issued a purported NERR
to each of the four employees together with a copy of its proposed enterprise agreement. The
access period commenced on 19 April 2016, and by 28 April 2016 the four employees had
voted to approve the agreement. After the DOF Agreement was approved, DOF began to
expand its workforce, including by recruiting persons previously employed by Programmed to
work on the Skandi Singapore.
[33] On 29 April 2016, DOF filed its application for approval of the DOF Agreement. The
DOF Decision concerned this application. The Deputy President commenced by recording
9 MMAOL Decision at [64]-[98]
10 MMAOL Decision at [99]-[101]
11 MMAOL Decision at [102], [112]
12 MMAOL Decision at [113]
[2017] FWCFB 660
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that she had granted the MUA standing to be heard in relation to the application but that, at
the commencement of the hearing of the matter on 11 July 2016, the MUA had withdrawn
from the proceedings, and that in any event she took into account the written submissions
earlier filed by the MUA in making her decision.13
[34] The Deputy President went on to consider the submission made by the MUA that the
Commission could not be satisfied that the group of employees covered by the DOF
Agreement was fairly chosen as required by s.186(3) because DOF had engaged in deliberate
manipulation of the agreement-making procedures. She observed that the DOF Agreement
contained all the classifications necessary for the Deck Department on a vessel (which were
within the classifications within the coverage of the MUA), but that the four employees only
fell within two of these classifications.14 In considering whether this small group covered by
the DOF Agreement was fairly chosen, the Deputy President proceeded on the basis that she
was unable “…to find that the fairly chosen requirement is not satisfied if DOF are able to
demonstrate that a bona fide business reason existed for why only a small number of
employees voted on the Proposed Agreement despite DOF intending that a larger group of
employees be employed pursuant to the Proposed Agreement”.15
[35] The Deputy President concluded that “bona fide business reasons existed for DOF to
directly hire employees and ensure an agreement was in place for these employees”.16 This
conclusion was reached on the basis of evidence adduced by DOF which was set out in the
DOF Decision17 and may relevantly be summarised as follows:
the decline in the Australian offshore oil and gas industry meant that DOF’s
Australian operations had been reduced from three ships to one, the Skandi Singapore,
and the client for the Skandi Singapore had requested a reduction in its total contract
operating costs of 20%;
as a consequence, DOF had decided to reduce costs by employing labour directly and
to expand its business by providing seafaring labour to others;
this would generate savings of around $3.5 million annually in the crewing of the
Skandi Singapore;
DOF was motivated by other benefits including improving productivity and
efficiency, gaining credibility with clients by becoming a “full service” operator,
gaining a competitive advantage over competitors and establishing consistency in
workplace culture and management practices;
DOF already had two enterprise agreements applying to employees in its Deck Officer
Department and its Engineering Department (who were not within the coverage of the
MUA);
13 DOF Decision at [4]-[7]
14 DOF Decision at [22]
15 DOF Decision at [37]
16 DOF Decision at [47]
17 DOF Decision at[38]-[46]
[2017] FWCFB 660
15
DOF only employed a small number of employees initially because of limitations in
its capacity to train employees, it was subject to lengthy notice periods and penalty
payments for the early termination of labour from labour hire providers, it wished to
avoid the risk of an entire crew undertaking protected industrial action, and it needed
to transition its payroll systems;
the four employees engaged were known to DOF because they had previously been
hired to work for DOF, and were trained by DOF or had a reputation as being
hardworking;
the four employees remained employed by DOF and had since been joined by a
further tranche of direct hire employees.
[36] The Deputy President, after analysis, concluded that the better off overall test was
satisfied, and also that all the other conditions for approval in ss.186 and 187 were satisfied.
She accordingly approved the DOF Agreement with operative effect from 8 August 2016.18
Smit Lamnalco Decision
[37] Smit Lamnalco is part of the Smit Lamnalco Group, which owns and operates a large
number of vessels worldwide and employs a large number of persons. Subsidiaries of the
group provide marine towage and associated services to the offshore oil and gas industry in
Australia. One particular vessel was, until February 2016, operated by Smit Lamnalco to
provide support services to Quadrant Energy, an oil and gas supply business. This vessel was
crewed by employees from labour hire companies, and insofar as those employees were
within the coverage of the MUA, they were covered by enterprise agreements negotiated by
the MUA.
[38] In 2015 Smit Lamnalco made the decision to crew the vessel with direct employees. In
November 2015, it made an enterprise agreement with three employees it had recruited
pursuant to this decision. This agreement was initially approved by the Commission, but after
the MUA appealed the approval decision, Smit Lamnalco consented to the appeal being
upheld and the approval decision being quashed because it had failed to file in the
Commission a copy of the agreement which was signed by a representative of the three
employees in accordance with s.185(2)(a) of the FW Act and Reg.2.06A(2) of the FW
Regulations. A few days after this occurred; Smit Lamnalco lost its contract with Quadrant
Energy.
[39] After February 2016, Smit Lamnalco began undertaking maintenance on the vessel so
that it could be hired out for short term contracts. In the period 5-11 April 2016 Smit
Lamnalco engaged three new employees on a casual basis - a master, an engineer and a deck
rating. Only the last was within the coverage of the MUA. They were initially engaged to
perform maintenance work. One of the employees resigned on 1 June 2016, and at the time of
the hearing before the Commissioner the other two had yet to perform any seagoing work.
18 DOF Decision at [85]
[2017] FWCFB 660
16
[40] On 12 April 2016, Smit Lamnalco initiated enterprise bargaining by issuing a
purported NERR to the three employees. The employees initially nominated one of their
number as their bargaining representative. However, after they were sent copies of Smit
Lamnalco’s proposed enterprise agreement on 25 April 2016, the employees requested access
to legal advice about it. Smit Lamnalco offered to pay for such legal advice, and ultimately
the employees were provided with the services of a solicitor nominated by AMMA at total
cost to Smit Lamnalco of $20,000. By 20 May 2016 the three employees had voted to approve
the Smit Lamnalco Agreement.
[41] Smit Lamnalco lodged its application for approval of this agreement on 27 May 2016.
In the Smit Lamnalco Decision the Commissioner identified three “issues of concern” in
relation to the approval application. First, that certain rates were lower than the relevant
modern award rates. Secondly, whether the scope of the Smit Lamnalco Agreement was fairly
chosen, and thirdly, whether there had been genuine agreement19 - and stated that he was
otherwise satisfied that the approval requirements in ss.186 and 187 had been met. He
recorded that he had declined to allow the MUA a general right of intervention in the
proceedings, but that he allowed the MUA to make submissions about the second and third
issues of concern because he considered that he would be assisted by this.
[42] In relation to the fairly chosen issue, the Commissioner noted that the Smit Lamnalco
Agreement did not cover all employees, but expressed his satisfaction that the group of
employees which it did cover, namely officers, engineers and ratings employed in the offshore
oil and gas industry, were an operationally and organisationally distinct group. The
Commissioner accepted evidence adduced by Smit Lamnalco that there was a “clear business
rationale” to move to a direct hired crew, namely to reduce costs in the context of an industry
undergoing a business contraction, and to grow the business’s reputation and secure more
work by presenting itself as having a stable workforce of its own employees.20 However, the
Commissioner considered it was reasonable to infer, “[g]iven the timing of the events and the
extraordinary efforts made by the employer to support the making of the Agreement with
three casual employees” that “one of the reasons why the three employees were engaged was
for the purpose of achieving the Agreement”.21 The Commissioner noted that he had
considered whether one or more of the employees should be required to give evidence, but
that he had already made confidentiality orders protecting their identity from disclosure and
the MUA did not seek that such a course be taken.22
[43] The Commissioner concluded that the scope of the Smit Lamnalco Agreement had
been “manipulated to include the traditional work at sea in the oil and gas industry to avoid
dealing with the MUA”23, but went on to say:
“[36] This suggests that the scope of the Agreement has not been fairly chosen.
However, there are other countervailing factors which need to be considered and
which suggest that the exclusion of the MUA was not the sole purpose or rationale for
the broader scope of the Agreement.
19 Smit Lamnalco Decision at [2].
20 Smit Lamnalco Decision at [29]-[30]
21 Smit Lamnalco Decision at [32]
22 Smit Lamnalco Decision at [34]
23 Smit Lamnalco Decision at [35]
[2017] FWCFB 660
17
[37] I do not see that an agreement with a scope that includes all three main
occupational streams and which includes in its scope maintenance work on an
unemployed vessel without contracts in the industry is necessarily unfairly chosen.
Those who perform the maintenance work on an unemployed vessel can then perform
required work at sea as part of a full crew. I accept the evidence of Ms Carter that the
maintenance work was a necessary precursor to obtaining contracts on the spot
market. I accept that completion of the maintenance work was necessary to obtain the
necessary audits so that the vessel could be offered for work at sea at short notice.
There is a rationale for the scope chosen by Smit Lamnalco and the employees who
voted for the agreement. The rationale for the employees is that it increased the
possibility that they would get work at sea. The rationale for Smit Lamnalco is that the
work to get the vessel ready is closely linked to achieving work at sea and if it
achieved work at sea it may include those workers in the crew.
[38] This is not a case where there is any basis to conclude that it is likely that the
Agreement will end up covering a much broader scope of classifications or work than
that which the employees who make the Agreement understood or experienced. Smit
Lamnalco only operates one vessel in the industry so the Agreement is not a device to
achieve an instrument which will cover a much broader scope of work. The three
employees include one employee from each of the main classes of work in the
industry. Although there are a wider range of classifications in the Agreement the
employees who voted would have a reasonable appreciation of the scope of the work
for which they are determining the wages and conditions. This is in sharp contrast to
some of the other cases where concerns have been raised about the scope of an
agreement being manipulated.
[39] In the absence of direct evidence from the employees concerned there is no basis
to find that the employment of the three employees was conditional upon them making
the Agreement.
[40] I have weighed the extent to which I consider that the scope selected was a
deliberate manipulation and the extent to which I consider it to be based upon a bona
fide business rationale. On a fine balance I have reached the conclusion that the group
of employees to be covered was fairly chosen.”
[44] In relation to the requirement for genuine agreement, the Commissioner expressed a
number of concerns, including the arrangement by which a lawyer had been engaged on the
employees’ behalf, the lack of any “vigorous bargaining”, the alacrity with which the NERRs
had been issued after the last of the three employees was engaged and with which an
employee bargaining representative was appointed, and the fact that the rates in the proposed
agreement for the work the employees were performing were significantly below what they
were actually being paid.24 Ultimately the Commissioner came to the conclusion that “on a
fine balance” that although he had “serious concerns about the authenticity of the bargaining
process”, the facts were not sufficient for him to draw the inference that there had been “some
form of implied condition of employment or assurance about future work in return for
24 Smit Lamnalco Decision at [48].
[2017] FWCFB 660
18
cooperation to make the Agreement”.25 The Commissioner found that there was no evidence
that misleading information had been given to the employees, that (except in relation to one
issue) they had not been informed about the effect of the Smit Lamnalco Agreement, that they
had been hindered from voting, that the voting was not a true expression of the employees’
views, or that the employees could not appreciate the real impact and purpose of the Smit
Lamnalco Agreement. He also noted that the scope of the Smit Lamnalco Agreement did not
extend to unrelated industries within which the voting employees were not engaged, that
although the employees had not yet worked at sea (which was the principal purpose of the
agreement), there was some prospect that they might do so in the future, and the
classifications in which the employees worked were representative of the three main streams
of work covered by the agreement, so that the employees were “in a reasonable position to
understand what they were voting upon and its impact on future employees”.26 He therefore
approved the Smit Lamnalco Agreement (subject to the receipt of an undertaking concerning
an issue which arose about the rates of pay which is not presently relevant).
Appeal grounds, submissions and evidence
MUA’s case
[45] The matters agitated by the MUA in these appeals may be placed in three categories:
(1) A contention common to all three appeals, namely that all three agreements
had been made as a part of a scheme amongst several industry employers to
avoid bargaining with the MUA and to thereby establish a new industry
standard of lesser employment conditions than that which currently exists. This
issue was raised in grounds 3 and 4 of the MMAOL Agreement notice of
appeal, grounds 2 and 3 of the DOF Agreement notice of appeal, and grounds
3 and 4 of the Smit Lamnalco Agreement notice of appeal;
(2) Matters specific to each appeal identified in the other grounds of the notices of
appeal as they were at the time of the hearing before us (grounds 1-2 and 5-6
of the MMAOL Agreement notice of appeal, ground 1 of the DOF Agreement
notice of appeal, and grounds 1-2 and 5-6 of the Smit Lamnalco Agreement
notice of appeal); and
(3) The NERR issue in relation to the DOF Agreement and the Smit Lamnalco
Agreement earlier identified in paragraphs [3]-[5] above.
[46] We will deal with the issues in these three categories in turn.
[47] In relation to the common issue, the MUA sought leave to adduce new evidence in
each appeal, namely a witness statement made by Elyane Drouart Palmer, an industrial officer
of the MUA on 19 September 2016. That statement may be summarised as follows:
the major offshore oil and gas industry clients who contract with maritime employers
have a right of veto over any enterprise agreement that the employer proposes;
25 Smit Lamnalco Decision at [54]
26 Smit Lamnalco Decision at [50]
[2017] FWCFB 660
19
maritime employers have said to the MUA during enterprise bargaining that they were
required to obtain the approval of clients before they could reach an agreement;
the AMMA hosts regular meetings of the maritime offshore oil and gas industry
employers to discuss the employer’s strategy in the bargaining, and the employers
contribute to a collective legal fund for the AMMA to arrange legal representation in
bargaining-related proceedings before the Commission and the Federal Court;
one of the MUA’s major claims in the bargaining has been to maintain manning levels
as provided for in the 2010 maritime offshore oil and gas industry enterprise, the
requirement for the Integrated Rating qualification to be the minimum Rating
qualification on all vessels except Schedule 7 and 10 vessels, and a minimum ratio of
casual to permanent employees;
until early 2016, most bargaining was conducted at the industry level, with employers
generally represented by the AMMA and a small group of employers;
from about April 2014, the MUA has sought that bargaining occur at the enterprise
level, but this has been resisted by the AMMA on behalf of the employers;
there was a hiatus in bargaining from September 2014 until September 2015, when
bargaining at the industry level commenced;
in October 2016 five employers provided the MUA with draft enterprise agreements,
which were substantially the same in form and content and appeared to be based on a
template developed by the AMMA (AMMA template);
in meetings with maritime employers, it was confirmed that the clients supported the
AMMA template;
the MMAOL Agreement, the DOF Agreement and the Smit Lamnalco Agreement all
had the AMMA template formatting;
all vessels owned by the MMA Group continued to be operated by employees of
MMAVO, and MMAOL did not have any maritime offshore oil and gas industry
contracts; and
Smit Lamnalco did not currently have any maritime offshore oil and gas industry work
or contracts in Australia.
[48] The MUA also sought to adduce as new evidence in each appeal the evidence adduced
at first instance in each of the other two matters.
[49] On the basis of this evidence, the MUA contended in each appeal that each of the three
agreements was entered into as part of a scheme amongst a number of employers overseen by
the AMMA to achieve an industry standard of employment conditions that were inferior to
those agreed in the 2010 industry bargaining round by avoiding having to negotiate with the
MUA. It was submitted that the “genuinely agreed” requirement in s.186(2)(a) could not have
[2017] FWCFB 660
20
been satisfied in those circumstances because the scheme was extraneous to the employment
relationship and had never been disclosed to the employees voting upon the agreements,
meaning that they could not have given informed consent. Further, it was submitted that the
agreements lacked the necessary authenticity and moral authority because their purpose was
related to industry rather than enterprise bargaining and establishing new industry standards.
[50] The MUA also contended that the “fairly chosen” requirement in s.186(3) could not
have been satisfied in respect of each agreement because the group of employees to be
covered was unfairly chosen to advance the industry scheme and effect the extraneous
purpose earlier described.
[51] Specifically in relation to the MMAOL Agreement appeal, the MUA’s detailed
grounds 1, 2, 5 and 6 were as follows:
“1. The Commissioner erred in failing to properly undertake the task mandated by
s 186(2)(a) of the Act, to decide whether the Fair Work Commission was
satisfied that the Agreement had been ‘genuinely agreed to by the employees
covered by the agreement’, in that:
(a) There was no, or alternatively no sufficient, evidence before the learned
Commissioner to support a finding that the Agreement had been
genuinely agreed to by the employees;
(b) The Commissioner failed to take into account or have proper regard to
evidence supporting a finding that the agreement had not been
genuinely agreed to, being:
(i) The agreement extends into an industry in which the employer
had not previously operated and there was no evidence as to
whether the employees who voted to approve the agreement
have worked, or will ever work, in that industry;
(ii) There was an absence of robust or rigorous bargaining;
(iii) The employer did not call any direct evidence from any of the
employees or their bargaining representatives;
(c) The Commissioner failed to direct himself to relevant questions arising
from this evidence, including:
(i) What information the employees had been provided with, if any,
to encourage them to vote to approve the Agreement?
(ii) When, why and how were the employees recruited and on what
basis?
(iii) What work the employees were engaged to perform and what
work have they performed in the period since the employer
initiated bargaining?
[2017] FWCFB 660
21
(iv) Was there a temporal or other connection between their
recruitment and the bargaining?;
(d) The Commissioner erred in his consideration and finding as to whether
the employees’ bargaining representative was free from the control or
improper influence of the employer, in that:
(i) The Commissioner misconstrued the role of the Master on a
vessel and the role of a bargaining representative;
(ii) There was no, or alternatively no sufficient, evidence before the
Commissioner to support a finding that the bargaining
representative was free from the control or improper influence
of the employer.
2. The Commissioner erred in failing to properly undertake the task mandated by
s 186(3) of the Act, to decide whether the Fair Work Commission was satisfied
that ‘the group of employees covered by the agreement was fairly chosen’, in
that:
(a) The Commissioner failed to apply the proper test in finding that the
evidence demonstrated to the Commissioner’s satisfaction that the
group of employees covered by the agreement was fairly chosen,
including because the Commissioner misconstrued s 186(3) (and the
MUA’s submissions on this point) as being directed to whether ‘the
employees employed, and who voted on the proposed agreement’ were
fairly chosen and not ‘the group of employees covered by the
agreement’;
(b) The Commissioner failed to adequately take into account the evidence
and findings that gave rise to an inference and finding that the group
was not fairly chosen, including those matters set out in paragraphs [43]
to [48] and [53] of the decision;
(c) There was insufficient evidence before the Commissioner to support a
finding that the employer had a legitimate business reason for making
the agreement with the small group of employees.
…
5. The Commissioner erred in failing to properly inform himself of relevant
matters, in that he:
(a) Failed to call the employees who voted to approve the Agreement to
give evidence;
(b) Failed to direct the employer to produce the documents identified by the
MUA in a Form F52 filed 12 July 2016;
(c) Refused the MUA’s requests dated 3 and 5 August 2016 to provide
evidence and submissions in relation to new evidence that was not
before the Commission;
[2017] FWCFB 660
22
(d) Refused the MUA permission to act as a contradictor in the proceedings
despite there being a real issue as to whether there were legitimate
business reasons for the making of the agreement with a small group of
employees.
6. The Commissioner erred, in performing his statutory task in that he:
(a) Refused the MUA permission to participate in the final hearing of the
application, including to view, test, and make submissions about, the
employer’s evidence;
(b) [Not pressed];
(c) [Not pressed];
(d) Refused to direct the employer to produce the documents in the Form
F52 mentioned above and to grant the MUA access to those
documents.”
[52] Ground 1 of the DOF Agreement notice of appeal was as follows:
“1. The Deputy President erred in failing to properly undertake the task mandated
by s 186(2)(a) of the Act, to decide whether the Fair Work Commission was
satisfied that the Agreement had been ‘genuinely agreed to by the employees
covered by the agreement’, in that:
(a) There was no, or alternatively no sufficient, evidence before the Deputy
President to support a finding that the Agreement had been genuinely
agreed to by the employees;
(b) The Deputy President failed to take into regard or have proper regard to
evidence supporting a finding that the agreement had not been genuinely
agreed to, being:
(i) The employees were offered (and accepted) employment and
appointed themselves or each other as bargaining
representatives on the same day;
(ii) There was an absence of robust or rigorous bargaining;
(iii) The employer did not call any direct evidence from any of the
employees or their bargaining representatives.”
[53] The grounds of appeal specific to the Smit Lamnalco Agreement appeal were:
“1. The Commissioner erred in failing to properly undertake the task mandated by s
186(2)(a) of the Act, to decide whether the Fair Work Commission was
satisfied that the Agreement had been ‘genuinely agreed to by the employees
covered by the agreement’, in that:
[2017] FWCFB 660
23
(a) The Commissioner failed to properly decide the question required by s
186(2)(a) and s 188(c) of the Act in finding, at [54], that, ‘I therefore
cannot conclude that there are other reasonable grounds for believing
that the agreement has not been genuinely agreed to by the employees’,
as this was an inversion of the statutory question;
(b) There was no, or alternatively no sufficient, evidence before the
Commissioner to support a finding that the Agreement had been
genuinely agreed to by the employees;
(c) The Commissioner failed to take into account or have proper regard to
evidence supporting a finding that the agreement had not been
genuinely agreed to, including those matters set out in paragraphs [10],
[45] to [46], [48] and [52] to [53] of the decision.
2. The Commissioner erred in failing to properly undertake the task mandated by s
186(3) of the Act, to decide whether the Fair Work Commission was satisfied
that ‘the group of employees covered by the agreement was fairly chosen’, in
that the evidence and findings set out in paragraphs [10] to [13], [19], [24] to
[27], [31] to [35] of the decision precluded satisfaction that the group of
employees was fairly chosen.
…
5. The Commissioner erred in failing to properly inform himself of relevant
matters, in that he:
(a) Failed to call the employees who voted to approve the Agreement to
give evidence, despite finding, at [34], [39], [51] and [53], that their
evidence was relevant and necessary in order to decide the question of
satisfaction required by s 186(3) of the Act;
(b) Failed to direct the employer to produce the documents identified by the
MUA in submissions filed on 22 July 2016 (paragraphs [33] and [41]).
6. The Commissioner erred in that, having granted the MUA permission to
participate in the proceedings as a contradictor, the Commissioner denied the
MUA procedural fairness by refusing to direct the employer to produce the
documents referred to above and to grant the MUA access to those documents.”
[54] The MUA submitted that permission to appeal should be granted in relation to its
grounds of appeal in all three matters because they raise important questions about the proper
interpretation and application of s.186(2)(a) and s.186(3), those sections had not previously
been considered by a Full Bench in the context of the factual issues the subject of the appeal,
the grounds of appeal concerned the jurisdiction of the Commission to approve the
agreements, there was significant relevant evidence that was not available at first instance,
and the decisions were attended by sufficient doubt to warrant their reconsideration.
[55] In relation to the NERR issue in the DOF Agreement and the Smit Lamnalco
Agreement appeals, the MUA submitted that:
[2017] FWCFB 660
24
permission should be granted to allow the additional appeal ground as it raises a
question of law only, concerned the legal capacity of the Commission to approve
the agreements, did not rely upon any additional evidence and was cogent;
the Full Bench decision in Peabody Moorvale Pty Ltd v CFMEU27 (Peabody)
established that the effect of s.174(1A) was that there was no capacity to depart
from the form and content of the prescribed NERR, and any modification of the
prescribed content and form invalidated the NERR and meant that the relevant
enterprise agreement could not be approved by the Commission;
in Australian Maritime Officers’ Union v Harbour City Ferries Pty Ltd and Ors28
(Harbour City Ferries) the Full Bench determined that strict compliance with the
form and content of the prescribed NERR required the correct population of the
fields in the prescribed form, and the Commission had no discretion to accept as
valid a non-complying NERR;
in KCL Industries Pty Ltd29 (KCL) the Full Bench considered (among other things)
the same factual circumstance as here, namely an NERR which had inserted the
wrong number for the Fair Work Commission infoline, and determined that the
NERR was invalid and the agreement for which it was issued was incapable of
approval;
the legal position was therefore clear; the NERRs issued by DOF and Smit
Lamnalco were invalid and consequently the DOF Agreement and the Smit
Lamnalco Agreement were incapable of approval;
the Federal Court Full Court decision in Aldi did not determine to finality the
question of whether a valid NERR requires strict or substantial compliance with
the form and content requirements of s.174(1A), but Katzmann J endorsed the
conclusion in Peabody and White J, while not expressing a concluded view,
considered the reasons of Katzmann J to have some force; and
accordingly permission to appeal should be granted and the DOF Agreement
Decision and the Smit Lamnalco Decision should be quashed.
The respondents’ cases
[56] In relation to that which has earlier been referred to as the common issues in the
appeals (grounds 3 and 4 of the MMAOL Agreement notice of appeal, grounds 2 and 3 of the
DOF Agreement notice of appeal, and grounds 3 and 4 of the Smit Lamnalco Agreement
notice of appeal), the respondents all submitted that:
the new evidence relied upon to support these grounds of appeal was available to the
MUA during the hearings at first instance and lacked cogency since it was based on
27 [2014] FWCFB 2042, (2014) 242 IR 210
28 [2015] FWCFB 3337, (2015) 250 IR 1
29 [2016] FWCFB 3048, (2016) 257 IR 266
[2017] FWCFB 660
25
weak inferences drawn from anecdotal information and so-called AMMA template
documents;
the new evidence would require the Full Bench to ignore the direct evidence adduced
by the respondents at first instance concerning their respective business rationales for
entering into the agreements, which evidence had been accepted;
at least in the case of MMAOL and DOF, the allegation that they were part of an
industry scheme was never put to their witnesses at the hearing and thus they have
been denied the opportunity to respond;
none of the respondents had previously been engaged in industry bargaining with the
MUA, and so could not be part of the alleged industry scheme;
in any event, nothing in the FW Act prevented the respondents from bargaining for
employment conditions different to those prevailing in the industry, and it was a
matter for the relevant employees to decide whether to accept the conditions proposed;
the respondents were not required to bargain with the MUA, unless it was a bargaining
agent; and
the evidence was that the MUA was not a default bargaining representative for any
relevant employee of the respondents, and each employee chose someone else as their
bargaining representative.
[57] In relation to grounds 1, 2, 5 and 6 of the MMAOL Agreement appeal, MMAOL
submitted:
the arguments in appeal grounds 1(a) to (c) were not raised at first instance, and no
explanation was advanced by the MUA as to why this was the case or why it should
now be permitted to raise these matters in its appeal;
the Commissioner was able to reach his state of satisfaction concerning s.186(2)(a) on
the basis of the material before him in the conventional way;
there was no requirement upon MMAOL to call persons who voted on the agreement
to give evidence;
appeal ground 1(d) simply seeks to re-run the argument advanced before the
Commissioner and rejected concerning the capacity of a Master to act as a bargaining
representative, and does not identify any appealable error in the Commissioner’s
findings at [58]-[63] of the MMAOL Decision;
ground 2(a) had no substance, since paragraph [70] of the MMAOL Decision made it
clear that the Commissioner assessed the “fairly chosen” approval requirement by
reference to the employees covered by the MMAOL Agreement, not just those who
voted upon it;
[2017] FWCFB 660
26
grounds 2(b) and (c) did not identify any appealable error in the Commissioner’s
conclusions that the employees covered by the MMAOL Agreement were fairly
chosen and that there was a legitimate business reason for making the agreement, but
amounts to no more than a submission that certain matters should have been given
greater weight;
it could not be said that the Commissioner could not, on the evidence before him, have
formed the relevant state of satisfaction;
there was nothing unfair or improper about the fact that MMAOL bargained directly
with its employees without the involvement of the MUA;
appeal grounds 5 and 6 concerned challenges to what were discretionary procedural
decisions;
there was no substance to the proposition that the Commissioner erred by not
requiring, of his own motion, that the employees give evidence or that certain
documents be produced;
there was no error in the Commissioner’s refusal to allow the MUA to participate in
the proceedings once the “fairly chosen” issue had been dealt with, given that it was
not contended that the MUA had a right to appear in the proceedings;
for the same reason, the Commissioner did not err in refusing to hear the MUA’s
application to re-open the hearing in order to adduce allegedly new and entirely
unspecified evidence; and
there was no arguable case of appealable error, it would be contrary to the public
interest to allow the MUA to advance arguments it did not raise at first instance, and
accordingly permission to appeal should be refused and the appeal dismissed.
[58] In relation to ground 1 of the DOF Agreement appeal, DOF submitted:
the arguments sought to be advanced in appeal ground 1 were not raised at first
instance, despite the MUA having filed three sets of written submissions below and
having been in possession of all the relevant information concerning the process by
which the DOF Agreement was made;
the Deputy President was able to reach her state of satisfaction concerning s.186(2)(a)
on the basis of the material before her in the conventional way;
there was no requirement upon DOF to call persons who voted on the agreement to
give evidence;
that the employees appointed a bargaining representative on the day that commenced
employment, and that there was an absence of rigorous or robust bargaining, did not
without more raise any arguable contention as to the genuineness of the employee’s
agreement; and
[2017] FWCFB 660
27
permission to appeal should be refused.
[59] In relation to grounds 1, 2, 5 and 6 of the Smit Lamnalco Agreement appeal, Smit
Lamnalco submitted:
in relation to appeal ground 1(a), the Commissioner had correctly applied the test in
s.188 for genuine agreement;
in relation to appeal grounds 1(b) and (c), the MUA had not demonstrated any
appealable error in circumstances where the assessment of the genuineness of
agreement involved the making of a discretionary value-judgement;
appeal ground 2, which challenged the conclusion of the Commissioner concerning
the “fairly chosen” approval requirement, likewise did not identify any appealable
error is a decision-making exercise which involved a very broad judgment;
it was open on the evidence for the Commissioner to find that there were legitimate
business rationales for the coverage of the agreement chosen by Smit Lamnalco;
the exclusion of the MUA from the negotiations was the result of the choice exercised
by the employees concerning their bargaining representatives;
appeal grounds 5 and 6 involved challenges to discretionary procedural decisions in
relation to which no appealable error had been demonstrated;
there was no obligation upon the Commission to act as an inquisitorial body and to
make its own inquiries beyond the issues and evidence which the parties placed before
it or to requiring persons to give evidence or produce documents in circumstances
where this had not been requested by the MUA; and
there was no arguable case of appealable error and no public interest in the appeal, and
permission to appeal should be refused.
[60] In relation to the NERR issue, DOF and Smit Lamnalco submitted that:
the MUA should not be granted leave to amend its notice of appeal to add the
additional NERR appeal ground, since it had not raised the issue at first instance and it
only arose when ventilated by a member of the Full Bench;
in the circumstances described the proposed amendment would amount in substance to
the Commission initiating an appeal against its own decision;
in any event the point was wrong for a number of reasons;
firstly, the NERR was valid, in that the text of the prescribed form in Schedule 2.1 of
the FW Regulations had been followed completely;
Harbour City Ferries was authority only for the proposition that the fields in the form
had to be populated, not that they had to be populated “correctly”;
[2017] FWCFB 660
28
KCL involved a different set of facts, in that the wrong infoline had been described;
Peabody involved a very substantial departure from the prescribed form, and was in
any event decided incorrectly;
Aldi did not determine the correctness or otherwise of Peabody;
Peabody when read with Harbour City Ferries would lead to absurd outcomes,
including that the slightest error in the information used to populate the NERR would
lead to invalidity;
there was no obligation to populate the fields accurately or correctly;
the failure to include the correct telephone number did not undermine the purpose and
intent of the NERR in any way, given that the final paragraph of the prescribed form
did not inform the employee of anything relevant to bargaining, the infoline is only
one of four contact points identified, the correct number was not hard to find, and the
use of the Fair Work Ombudsman’s number which was actually included in the DOF
and Smit Lamnalco NERRs was likely to lead to the person being assisted with their
inquiry or referred to the correct number; and
alternatively, consideration of the NERR issue should be deferred until applications
for questions concerning defective NERRs which arose in two other appeals30 to be
referred by the President to the Federal Court pursuant to s.608 of the FW Act had
been determined. If the referrals were ordered, the determination of the issue should
then be further deferred until the Court had issued its decision. If the referrals were
refused, the Full Bench should not determine the appeals until DOF and Smit
Lamnalco had been given an opportunity to apply themselves for referrals of the
NERR issue pursuant to s.608.
Consideration
Permission to appeal, adduction of new evidence and leave to amend to raise the NERR issue
[61] It was determined by the Full Bench in Hart v Coles Supermarkets Australia Pty Ltd
and Bi-Lo Pty Limited31 that “confidence in the agreement approval process” may be a
significant matter weighing in favour of the grant of permission to appeal in respect of an
appeal against a decision to approve an enterprise agreement, and that this may outweigh the
fact that the arguments proposed to be advanced in the appeal were not agitated at first
instance. In Hart, the Full Bench granted permission to appeal in respect to a challenge to a
finding at first instance that the relevant agreement satisfied the “better off overall test”
(BOOT) requirement imposed by s.186(2)((d) and explicated in s.193, notwithstanding that
the appellant had not been involved in the approval process at first instance and consequently
had not earlier advanced his arguments for consideration by the Commissioner who approved
the agreement, on the basis that satisfaction of the BOOT was “…a matter of fundamental
30 C2016/1264 and C2016/3735
31 [2015] FWCFB 7090 at [46]-[47]
[2017] FWCFB 660
29
importance…”.32 In a subsequent decision and order the Full Bench upheld the appellant’s
challenge to the BOOT finding and quashed the approval decision.33 Hart may be taken as
emphasising that, in considering whether to grant permission to appeal against an enterprise
agreement approval decision, the Commission must at the appellate level place significant
weight upon the need to ensure that the agreement approval process established by the FW
Act has not been compromised by the approval of an agreement where the Commission has
no legal capacity to do so. And, for reasons which include that the enterprise agreement
approval process in the large majority of cases does not involve any contradictor and thus
requires the Commission to assess the approval criteria against uncontradicted information
and material advanced by the applicant for approval, it may be appropriate to grant permission
to appeal in respect of arguments which were never advanced at first instance.
[62] In respect of that which we have earlier referred to as the “common issue” (grounds 3
and 4 of the MMAOL Agreement notice of appeal, grounds 2 and 3 of the DOF Agreement
notice of appeal, and grounds 3 and 4 of the Smit Lamnalco Agreement notice of appeal), we
consider that permission to appeal should be granted. The complex and unusual factual
scenario common to all three appeals, including the background history of industry bargaining
in the maritime offshore oil and gas industry, the longstanding involvement of powerful
industry players such as the MUA and the AMMA, the fact that the respondents in the appeals
have not previously employed persons in the industry, and the very small numbers of
employees involved in the making of each agreement, means that the appeals raise somewhat
unusual issues requiring appellate scrutiny. Further, we will admit the new evidence which the
MUA seeks to adduce in support of these grounds of appeal. While we consider that most of
the content of Ms Palmer’s witness statement could have been adduced at first instance in
each matter, nonetheless we consider that that her evidence should be admitted so that the
MUA’s case in respect of the common issue may properly be considered. This will not cause
prejudice to the respondents, for reasons which will be explained.
[63] For the same reasons, we consider that permission to appeal should be granted in
respect of grounds 1 and 2 of the MMAOL Agreement Decision appeal, ground 1 of the DOF
Agreement Decision appeal and grounds 1 and 2 of the Smit Lamnalco Agreement Decision
appeal. However, we refuse permission in relation to grounds 5 and 6 of the MMAOL
Agreement Decision appeal and grounds 5 and 6 of the Smit Lamnalco Agreement Decision
appeal. Those grounds concern discretionary interlocutory procedural decisions made by the
respective Commissioners. In each matter it was not in contest that the MUA was not a
bargaining representative for any of the employees who made the agreement. In that
circumstance, it does not appear that the MUA had a right to be heard, and the degree and
nature of its involvement in each proceeding was a matter within the discretion of the
Commissioner in the exercise of the Commission’s power under s.590 of the FW Act to
inform itself as it considers appropriate.34 No question of a possible denial of procedural
fairness can therefore arise. For these reasons we do not consider that these grounds are of a
nature which make it appropriate to grant permission to appeal.
[64] In relation to the additional ground concerning the NERR issue sought to be raised in
the DOF Agreement Decision appeal and the Smit Lamnalco Agreement Decision appeal, we
32 Ibid at [46]
33 [2016] FWCFB 2887; PR581624
34 CFMEU v Collinsville Coal Operations Pty Ltd [2014] FWCFB 7940, (2014) 246 IR 21 at [69]-[75]
[2017] FWCFB 660
30
grant the MUA leave to amend its notice of appeal to add the additional ground in each case,
and we grant permission to appeal in respect of that ground. The argument sought to be raised
by the MUA is, for reasons which we will set out, well-founded and pertains to the legal
capacity of the Commission to approve the agreement in each case. That necessarily
outweighs the fact that the issue was not raised (or identified) by the MUA at first instance.
The issue is a purely legal one which may be determined by us on the basis of the material
which accompanied the application in each case.
The common issue
[65] In considering the common issue raised by grounds 3 and 4 of the MMAOL
Agreement notice of appeal, grounds 2 and 3 of the DOF Agreement notice of appeal and
grounds 3 and 4 of the Smit Lamnalco Agreement notice of appeal, it is necessary at the
outset to make three significant observations about the statutory scheme for enterprise
bargaining in the FW Act. The first is that there is nothing in the approval requirements for
enterprise agreements in ss.186 and 187 of the FW Act which expressly prohibits the approval
of enterprise agreements which have been established within a broader framework of industry
bargaining or which reflect a standard established in an industry. Although the object of Pt.2-
4 in s.171(a) adverts to the desirability of collective bargaining occurring at the enterprise
level, the statutory scheme does not compel that to occur, and indeed through the mechanisms
of multi-enterprise agreements and agreements with single-interest employers provided for in
s.172, it explicitly allows collective bargaining to occur in a way which extends beyond the
scope of a single enterprise (provided that protected industrial action may not be taken in
connection with a multi-enterprise agreement). Nor does the scheme prohibit pattern
bargaining, by which a bargaining representative seeks common terms to be included in a
number of different enterprises. The only relevant prohibition (in s.409(4)) is that protected
industrial action cannot be taken where pattern bargaining is occurring, but even then the
definition of pattern bargaining contained in s.412 which operates to define the scope of that
prohibition excludes a situation where the relevant bargaining representative is “genuinely
trying to reach an agreement” with the particular employer (s.412(2)-(4)). Thus, an enterprise
agreement which is the product of a process of pattern bargaining is not illegitimate under the
FW Act and may validly be approved if the requirements of ss.186 and 187 are otherwise
satisfied. The practical consequence of this feature of the scheme is that it is not uncommon in
certain sectors of industry for enterprise agreements to be made and approved which contain
common conditions derived from a process of industry or pattern bargaining.
[66] The second observation is that, subject to satisfaction of the BOOT requirement in
s.186(2)(d) (or the alternative exceptional circumstances test in s.189), the statutory scheme
does not prohibit an employer from bargaining for wages and other conditions of employment
which are inferior to those contained in an earlier enterprise agreement and/or those prevailing
in an industry as a result of previous round of industry or pattern bargaining. Provided that
employees receive the full benefits of the NES and are better off overall compared to any
modern award which covers them, the scheme is not concerned with the level of remuneration
and other benefits which employees receive in any enterprise agreement that is made. That is
a matter for the employees to assess when they vote upon an agreement which their employer
has requested them to approve.35
35 See e.g. CEPU and AMWU v Sustaining Works Pty Limited [2015] FWCFB 4422 at [26]
[2017] FWCFB 660
31
[67] The third observation is that, under s.176(1), where an employee is not a member of an
employee organisation, it is up to the employee to select who the employee wants to represent
him or her as a bargaining representative for a proposed enterprise agreement. The good faith
bargaining requirements in s.228 apply only in respect of bargaining representatives, and the
scheme does not otherwise contemplate the involvement of persons who are not bargaining
representatives in enterprise bargaining. Thus if the employees to be covered by a proposed
agreement are not members of a particular union, and none of them select that union to be
their bargaining representative, then there is no basis for that union to be a participant in the
bargaining for the proposed agreement.
[68] Bearing these matters in mind, we turn to the common issue raised by the MUA in the
three appeals. We are not wholly satisfied that the evidence of Ms Palmer, and the other
evidence upon which the MUA seeks to rely, provides a reliable foundation for the inferences
which the MUA seeks to draw from it. Nonetheless, for the purpose of our analysis, we are
prepared to take the MUA’s case at its highest.
[69] The MUA’s contention is that the three agreements came about as a result of a scheme
between employers orchestrated by the AMMA to obtain template enterprise agreements in
the maritime offshore oil and gas industry which undercut the industry standard terms and
conditions of employment established in the 2010 industry bargaining round, and to achieve
this result by avoiding bargaining with the MUA. Assuming that is the case, we do not
consider that by itself is demonstrative of the employees covered by the agreements not
having been fairly chosen or not having genuinely agreed to the agreements. Simply because a
group of employers led by their employer association has engaged in a process akin to pattern
bargaining in order to improve their commercial position does not mean that any resultant
enterprise agreements are illegitimate and incapable of approval under the FW Act. That is no
different in substance to employees across a range of enterprises in an industry, coordinated
by their union, advancing a common claim for proposed enterprise agreements to increase
their wages by a standard amount or to a standard level.
[70] Likewise, even if the relevant employers and the AMMA preferred to avoid having to
bargain with the MUA, it does not follow that the MUA was illegitimately excluded from the
bargaining process for the three agreements. It was not in contest that none of the employees
covered by the agreements were at any relevant time members of the MUA, so the MUA
could not have been their default bargaining representative at any time. The employees,
consistent with s.176(1), nominated in writing persons other than the MUA to be their
bargaining representatives, and accordingly there was no basis for the MUA to be involved in
the bargaining process.
[71] In relation to an earlier statutory scheme for enterprise agreement, the Federal Court
Full Court in CFMEU v Australian Industrial Relations Commission36 held that the then
requirement for employees to have genuinely made the agreement “plainly betokens a
concern with the authenticity and, as it were, the moral authority of the agreement”. For the
reasons we have given, we do not consider that, simply because the agreements may have
emerged as a result of the “scheme” posited by the MUA, they lacked the requisite
authenticity or moral authority. The MUA referred to the decision of the Australian Industrial
36 [1999] FCA 847, (1999) 93 FCR 317 at [126] per Wilcox and Madgwick JJ, with whom Moore J relevantly agreed at [155]
[2017] FWCFB 660
32
Relations Commission in Grocon Pty Ltd Enterprise Agreement (Victoria)37 in which it was
held that an agreement made pursuant to s.170LK of the Workplace Relations Act 1996
between the employer and two employees was not genuinely agreed because certain matters
were not disclosed to the employees. We consider the facts of that case are distinguishable.
There, the employees were employed by one of five subsidiary companies operating the same
business. Previously all the employees of all the companies in the business had been covered
by a common agreement, but on this occasion separate agreements with common terms were
put to a vote of the employees of each company. The employees of the four other companies
rejected the proposed agreement. The non-disclosure to the two employees of the facts that
they were to be the only employees covered by the particular agreement they were voting
upon, and that by voting for that agreement they might end up with different employment
conditions to the other employees in the business employed by the other four companies, was
held to vitiate their agreement.38 Those facts are not analogous to the situation here, because
there is no suggestion that the employees of any of the three respondents at the time they
voted to approve the agreements could have been operating under the belief that they were
voting upon an agreement that might apply to anyone but themselves. It having not been
contended that the employees in each case had not been provided with the documents and
information required by s.180 prior to voting, we do not consider that the non-disclosure of
the “scheme” postulated by the MUA could, by itself have affected the genuineness of the
employees’ agreement.
[72] We likewise do not consider that, without more, it could be inferred from the existence
of the postulated scheme that the employees were unfairly chosen for the purpose of putting
that scheme into effect. The position might be different if it were additionally demonstrated
that the bargaining and agreement process had been manipulated in the sense that there was
no legitimate business rationale for the coverage of the relevant agreement39 and/or that the
employees who made the agreement were not engaged to meet genuine work requirements but
rather for the artificial and short-term purpose of negotiating and making an agreement which
was disadvantageous to genuine future employees.40 The MUA’s contentions along those
lines are separately considered in relation to the other specific grounds of each appeal. But
we do not consider that those are matters which could simply be inferred from the existence
of the postulated scheme alone.
[73] Grounds 3 and 4 of the MMAOL Agreement notice of appeal, grounds 2 and 3 of the
DOF Agreement notice of appeal and grounds 3 and 4 of the Smit Lamnalco Agreement
notice of appeal are therefore rejected.
Other MMAOL appeal grounds
[74] The MUA’s first appeal ground in relation to the MMAOL Decision concerned the
“genuinely agreed” approval requirement in s.186(2)(a). In the MMAOL Decision the
Commissioner did not analyse the “genuinely agreed” requirement in any detail, but only
recorded his satisfaction that the requirement had been satisfied, in general terms at paragraph
37 (2003) 127 IR 13
38 Ibid at [50]-[53]
39 See Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd [2015] FCAFC 16 at [33]; MUA v Toll
Energy Logistics Pty Ltd [2015] FWCFB 7272, (2015) 254 IR 353 at [65]
40 See CEPU and AMWU v Main People Pty Ltd [2015] FWCFB 4467 at [33]
[2017] FWCFB 660
33
[102] and in specific terms at paragraph [112]. The fact that the issue was treated this way
was undoubtedly a function of the fact that the MUA, notwithstanding it had access to the
approval application and the supporting statutory declaration (with the names of the
individual employees redacted), was represented by counsel, and had the opportunity to make
written and oral submissions and to adduce evidence, did not seek to be heard on the question
of whether the employees who made the MMAOL Agreement had genuinely agreed to it. It
pressed its participation in the proceedings on the basis that it only wished to be heard
concerning the “fairly chosen” approval requirement. The MUA has not advanced an
acceptable explanation as to why the matters now raised in ground 1 of its appeal were not
raised at first instance. The new evidence which has been adduced in the appeal does not, for
the reasons already given, provide a proper basis alone for concluding that the MMAOL
Agreement was not genuinely agreed.
[75] In those circumstances, we consider that the Commissioner was entitled to reach a
state of satisfaction concerning the s.186(2)(a) requirement based on the material before him.
That material included a statutory declaration in support of MMAOL’s approval application
made by Mr Warren Harrower, Manager, on 3 May 2016, which at paragraphs 2.4-2.10
contained information demonstrating satisfaction of the elements of the “genuinely agreed”
definition in s.188(a) and (b).
[76] Section 188(c) is expressed in the negative - that is, the Commission must be satisfied
that there are “no other reasonable grounds” for believing that the agreement was not
genuinely agreed. The material before the Commissioner did not disclose any reasonable
ground for this belief, nor as already explained did the MUA submit that any such reasonable
ground existed. In those circumstances, we consider that it was open for the Commissioner to
conclude that the s.186(2)(a) requirement was satisfied. That MMAOL intended to use the
MMAOL Agreement to operate in an industry sector in which it had not previously operated,
that bargaining might not have been “robust or rigorous”, and that MMAOL did not call the
employees who voted to approve their agreement or their bargaining representatives to give
evidence, were not factors alone or in combination capable of allowing the inference to be
drawn that there was no genuine agreement. Accordingly there was no error on the part of the
Commissioner in not specifically adverting to these matters in his consideration of the
s.186(2)(a) requirement. Nor were these matters of a nature that required the Commissioner to
engage in a further course of inquiry in respect of that requirement.
[77] In relation to appeal ground 1(d), the issue of the possible role of the Master as a
bargaining representative in the process was the subject of specific analysis and conclusions
by the Commissioner at paragraphs [54]-[63] of the MMAOL Decision, as earlier
summarised. It is sufficient to say that we agree with the Commissioner’s conclusions, and
that the MUA has not demonstrated any appealable error.
[78] The second appeal ground concerned the “fairly chosen” requirement in s.186(3)-(3A).
The first point raised here (appeal ground 2(a)) is that the Commissioner erred by applying the
test by reference to the employees who voted on the agreement, and not in relation to the
group of employees covered by it. That the requirement applies to the latter and not the
former was made clear by the Federal Court Full Court in Construction, Forestry, Mining and
Energy Union v John Holland Pty Ltd.41 In that respect the MUA drew our attention to
41 [2015] FCAFC 16
[2017] FWCFB 660
34
paragraph [68] of the MMAOL Decision where the Commissioner, after referring to an
extract from the Explanatory Memorandum for the Fair Work Bill 2009 which discussed the
“fairly chosen” requirement and contained an “illustrative example”, stated:
“[68] Translating the illustrative example into the proposed MMAOL Agreement, if
MMAOL had chosen five (5) employees of one particular occupational classification,
to the exclusion of other occupations, it is likely that that choice would have been open
to doubt as to whether the employees had been fairly chosen. The accusation would
be, “How can it be a truly ‘whole of fleet’ agreement, if the Employer has only made
an enterprise agreement with, for example, engineers to the exclusion of “masters” or
“ratings”?”
[79] We accept that the above paragraph appears to be discussing, in a hypothetical way,
the “fairly chosen” requirement in connection with the employees who voted upon the
agreement, not those covered by it. However elsewhere in the MMAOL Decision, the
Commissioner made it clear that he understood that the requirement was to be assessed by
reference to the coverage of the agreement under consideration. In paragraph [66] he said:
“[66] When I reflect on the statutory provisions that the Commission, “must be satisfied
that the group of employees was fairly chosen, it should be considered within the
context of the statutory “heading” which is that the, “group of employees covered by
the [proposed] agreement was fairly chosen”. That is, “fairly chosen” is within the
context of the coverage of the proposed agreement. (my emphasis)”
[80] And in stating his conclusion on the subject, the Commissioner referred to the
coverage of the MMAOL Agreement:
“[70] In this instance, the MMAOL’s evidence is clear. The proposed coverage of work
to be carried out by the employees is on-hire marine labour as distinct from land based
logistics. The entity is organisationally distinct. The coverage is operationally distinct.
From this perspective, there is nothing to say that the employees were not fairly
chosen.”
[81] Accordingly we reject the contention in appeal ground 2(a) that the Commissioner
failed to apply the proper test.
[82] In relation to appeal grounds 2(b) and (c), we have earlier set out paragraphs [43]-[50]
of the MMAOL Decision, in which the Commissioner made findings concerning the business
rationale for the choice of the coverage of the MMAOL Agreement. No appealable error in
those findings has been demonstrated, and we consider that they provided a proper basis for
the Commissioner’s satisfaction that the coverage of the MMAOL Agreement was fairly
chosen. That the business rationale included, among other things, the fact that MMAVO had
been unable to reach an agreement with its employees does not compel the conclusion that the
coverage of the MMAOL Agreement was not fairly chosen. In circumstances where clients
would have a legitimate interest in engaging maritime logistics providers who were not at risk
of being subject to protected industrial action, and where MMAVO’s inability to obtain a new
enterprise agreement made it difficult for it to win and maintain contracts, we consider a
choice by MMAOL to have an agreement which covered maritime logistics work was
reasonable and fair. We would not infer from this that the purpose of MMAOL (or indeed of
the MMA Group) was simply to avoid bargaining with the MUA, but rather to conclude an
[2017] FWCFB 660
35
enterprise agreement on commercially appropriate terms. For these reasons, we reject appeal
grounds 2(b) and (c).
Other DOF Agreement appeal grounds
[83] Ground 1 of the MUA’s notice of appeal against the DOF Decision is in the same
terms as ground 1 of the MMAOL Decision appeal. Again, the appeal ground raises issues
concerning the “genuinely agreed” approval requirement in s.186(2)(a) that were not raised by
the MUA at first instance. Indeed, as earlier explained, the MUA having sought and been
granted the opportunity to be heard in the proceedings before the Deputy President, withdrew
from the proceedings at the commencement of the hearing. The material which it had earlier
filed addressed the “fairly chosen” and BOOT approval requirements, but did not raise any
issue concerning the “genuinely agreed” requirement. The MUA has not advanced before us
any adequate explanation as to why it should now be permitted to agitate this issue in the
appeal.
[84] In any event, we consider that the material that was before the Deputy President was
sufficient to enable her to reach a state of satisfaction concerning the “genuinely agreed”
requirement. This material included statutory declarations in support of the approval
application made by Mr Darren McCormick, DOF’s General Manager, and by three of the
employees who voted to approve the DOF Agreement. Having perused this material, we are
ourselves satisfied that the s.186(2)(a) requirement was met. In the face of this material there
was no requirement for the Deputy President to take into account the matters referred in the
MUA’s appeal ground 1(b) or to embark upon any further course of inquiry. The appeal
ground is rejected.
Other Smit Lamnalco appeal grounds
[85] Ground 1 of the Smit Lamnalco Decision appeal also concerns the “genuinely agreed”
approval requirement in s.186(2)(a). We have earlier summarised the Commissioner’s
reasoning and conclusion concerning this approval criterion. It is clear, we consider, that the
Commissioner took into account the various factual considerations weighing for and against
the conclusion that the agreement of the employees was genuine, and he expressly stated that
the conclusion he reached was on a “fine balance”.42
[86] Satisfaction as to assessment of the genuineness of agreement under s.186(2)(a) and
s.188 involves an evaluative assessment akin to the exercise of a discretion. Accordingly, it is
necessary, in an appeal challenging a finding that the s.186(2)(a) requirement has been
satisfied, it is necessary to demonstrate appealable error of the type identified in House v The
King.43
[87] The MUA’s contention (in appeal ground 1(a)) that the Commissioner inverted the
statutory test in s.188(c) is based on paragraph [54] of the Smit Lamnalco Decision, in which
the Commissioner expressed the conclusion that: “I therefore cannot conclude that there are
42 Smit Lamnalco Decision at [54]
43 [1936] HCA 40; (1936) 55 CLR 499 at 504-505 per Dixon, Evatt and McTiernan JJ; see Coal and Allied Operations Pty
Ltd v Australian Industrial Relations Commission [2000] HCA 47; 203 CLR 194 at [21] per Gleeson CJ, Gaudron and
Hayne JJ
http://www.austlii.edu.au/au/cases/cth/HCA/1936/40.html
[2017] FWCFB 660
36
other reasonable grounds for believing that the agreement has not been genuinely agreed to by
the employees”. In our view, it would constitute appellate nit-picking to conclude that this
sentence represents a misunderstanding of the test in s.188(c). A conclusion that reasonable
grounds cannot be identified for the purpose of s.188(c) is plainly relevant and foundational to
a state of satisfaction that no such reasonable grounds exist. Appeal ground 1(a) is rejected.
[88] Appeal grounds 1(b) and (c) are not demonstrative of appealable error. It cannot be
said that the Commissioner failed to take any relevant matter into consideration; indeed, the
MUA in its submissions relies on express findings which the Commissioner made and which
he brought to bear in his consideration of the “genuinely agreed” requirement. This is in
substance a complaint that the Commissioner should have given greater weight to some
matters and lesser weight to other matters and a plea for the Full Bench to re-weigh the
relevant matters and come to a different conclusion. This is not a sufficient basis for appellate
intervention44, and the grounds are rejected.
[89] The MUA’s appeal ground 2 must fail for similar reasons. The submission advanced is
that certain express findings in the Smit Lamnalco Decision precluded the conclusion that the
“fairly chosen” requirement was satisfied. These included the finding at paragraph [35] that
the scope of the Smit Lamnalco Agreement had been manipulated to include at-sea work in
the oil and gas industry in order to avoid dealing with the MUA. The MUA’s submission in
effect was that the Commissioner should have given decisive weight to this consideration and
lesser or no weight to the other matters which the Commissioner also took into account,
including in particular the other legitimate business reasons for Smit Lamnalco’s choice of
coverage for the agreement which he subsequently identified. Because the assessment of
whether the coverage of the Smit Lamnalco Agreement was fairly chosen also involved an
evaluative assessment that was in the nature of a discretionary decision, it is not sufficient to
justify appellate intervention to submit that a different result should have pertained upon a re-
weighing of the relevant factors to be taken into account.
[90] It is also significant that the approach taken by the Commissioner was consistent with
that taken by the Full Bench in MUA v Toll Energy Logistics Pty Ltd.45 In that matter the Full
Bench dismissed an appeal against the approval of an enterprise agreement brought on the
basis, among other things, that the conclusion that the coverage of the agreement was fairly
chosen was in error. In rejecting this contention the Full Bench said:
“[65] We consider it is arguable that a reason that the decision to use Toll Energy
Logistics was made was in order to exclude the MUA from the bargaining process or
make it likely that the MUA would be excluded from the process. If there was no other
legitimate business reason it would be arguable that this was a manipulation of the
bargaining process. However, it is not necessary to determine this matter because we
have found that there were other legitimate business reasons for Toll Group to decide
to use Toll Energy Logistics as the employer of the crew on the New Build Vessels.
The reasons advanced by Mr Woodward were not seriously challenged in cross
examination.”
44 Restaurant and Catering Association of Victoria [2014] FWCFB 1996 at [57] –[58]
45 [2015] FWCFB 7272, (2015) 254 IR 353
http://www.austlii.edu.au/au/cases/cth/FWCFB/2014/1996.html#para57
[2017] FWCFB 660
37
[91] Thus it was open to the Commissioner to conclude that the coverage of the Smit
Lamnalco Agreement was fairly chosen notwithstanding his finding that the coverage had
been manipulated to avoid dealing with the MUA. Appeal ground 2 is therefore also rejected.
The NERR issue
[92] The decision of the five-member Full Bench in Peabody determined that:
(1) Section 174(1A) established a clear and unambiguous requirement that the
form and content of the NERR had to be as set out in the template provided for
in the FW Regulations.
(2) There was no capacity to depart from the template in the FW Regulations. The
Commission accepted the submission of the Commonwealth Minister for
Employment that “A mandatory template is provided in the Regulations. The
provisions make it clear that there is not scope to modify either the content or
the form of the Notice other than as set out in the template.”
(3) A failure to comply with the form and content requirement in s.174(1A)
renders the NERR invalid.
(4) The consequence of failing to give a valid NERR is that the Commission
cannot approve any subsequent enterprise agreement that is made. That is
because the requirement in s.181(2) that an employer not request employees to
approve a proposed enterprise agreement until at least 21 days have passed
since the last NERR was issued presupposes that the NERR is valid. If it is not,
s.180(2) has not been complied with. The paragraph (a)(ii) element of the
“genuinely agreed” definition in s.188 cannot therefore be satisfied, and
accordingly the “genuinely agreed” approval requirement in s.186(2)(a) cannot
be satisfied.
[93] In Aldi, the Federal Court Full Court considered a challenge to the validity of the
approval by the Commission of a particular enterprise agreement. The challenge was
advanced on a number of grounds, one of which being that the NERR issued by the employer
did not conform to the form of the NERR in Schedule 2.1, in that in the last paragraph it said
“If you have any questions about this notice or about enterprise bargaining, please speak to
either your leader, bargaining representative…” instead of the prescribed words “If you have
any questions about this notice or about enterprise bargaining, please speak to either your
employer, bargaining representative…” (underlining added in each case). In response, the
respondent contended among other things that Peabody was incorrectly decided and that only
substantial compliance with the prescribed form for the NERR was required.
[94] The majority of the Full Court (Katzmann and White JJ, Jessup J dissenting)
determined that the relevant agreement was invalidly approved on a different ground. In
relation to the NERR ground, Jessup J said:
“[43] In Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy
Union [2014] FWCFB 2042; (2014) 242 IR 210, a Full Bench of the Commission held
that compliance with the form prescribed for the purposes of s 174(1A) of the FW Act
was mandatory, and that a failure to comply would invalidate the notice. In such a
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case, there would be no reference point for the operation of s 181(2) – which requires
that the employer’s request to employees to approve a proposed agreement not be
made until at least 21 days after the s 173 notice – and the Commission could not,
therefore, be satisfied of the matter specified in s 188(a)(ii), with the result that it
could not be satisfied that the agreement was genuinely agreed to by the employees
concerned for the purposes of s 186(2)(a).
[44] In the applicant’s submission, we should follow Peabody and hold that the
agreement was not such as the Commission could approve under s 186 of the FW Act.
[45] The difficulty with that submission is that it treats compliance with s 174(1A)
as a jurisdictional fact apropos the approval of the putative enterprise agreement which
follows from the bargaining process in question. That is not the case. As the
Commission’s reasoning in Peabody demonstrates, ultimately compliance with s
174(1A) is something of which the Commission must be satisfied. It is a matter left to
the decision of the Commission itself. It is true, of course, that, if the Commission’s
decision on the matter in a particular case proceeded on a legally erroneous reading of
the requirements of s 174(1A), that may open the way to an application of the kind
that the applicant presently makes in other departments of this case. But that did not
happen here, for the very reason that no-one submitted, either to Bull DP or to the Full
Bench, that the requirements of s 174(1A) had not been complied with.
[46] What appears to have happened is that, subsequently to the decision of the Full
Bench, ALDI itself brought this minor terminological departure of the notice of
employee representational rights which it was accustomed to use from the form
prescribed in the regulations to the attention of the Commission, and sought to make
the necessary correction in relation to a notice used in the setting of a different
enterprise agreement altogether. Taking note of this development as it did, the
applicant adopted the point as its third ground in this proceeding. It justifies its failure
to raise the point before the Full Bench on the basis that, at the time, it was not aware
of what it now says was a mistake in the terms used in ALDI’s notice.
[47] I would not accept that justification. The applicant sought, and was granted,
the right to appeal from the decision of Bull DP, and proceeded to prosecute an appeal
on grounds of its own choosing. It seems to have made productive use of such
procedures as were available to require ALDI to produce documents to sustain those
grounds. It did not challenge the notice of employee representational rights. That too
was its own choice. The Commission having completed its statutory task, with the
assistance of the applicant’s contribution, it is now too late for the applicant to say that
it has since uncovered (by whatever means) a new argument which it might have put,
but which it did not put, to the Full Bench.
[48] The remedies which the applicant seeks are discretionary ones. Whatever
might be the strength of its third ground considered as a legal proposition in isolation,
because it does not involve a jurisdictional fact, and in the light of the procedural
history of the matter to which I have referred, I would, in the exercise of the court’s
discretion, decline to grant the relief sought insofar as this ground is relied on.
[49] I would make one parting observation. Ex hypothesi, an employer which
resorts to s 173 of the FW Act will, in the usual case, be a corporation. Read literally,
[2017] FWCFB 660
39
the injunction in the form in the regulations that an employee who has any questions
should “speak to ... your employer” is a challenging one. If, as is contemplated,
speaking is involved, one would imagine that the addressee would inevitably be a flesh
and blood servant or agent. At least within reasonable bounds, for the employer to
have nominated the individual to whom it intends that questions should be addressed
would not, in my view, amount to a departure from the prescribed form, even if strict
compliance were necessary. Had the Full Bench’s attention been drawn to the issue
which the applicant now seeks to agitate, it would not, therefore, have been in error,
jurisdictionally, to have read s 174(1A) as permitting the reference to “leader” as used
by ALDI on the facts of the present case.”
[95] Katzmann J began her analysis of the NERR ground by declining to join in the
“parting observation” made by Jessup J at [49]. Her Honour went on to agree with the
conclusion in Peabody that the effect of s.174(1A) was to require strict compliance, and that
substantial compliance was not required. Her Honour said:
“[63] Two questions arise. The first is whether, by sending a notice with this
alteration, ALDI failed to comply with s 173. The second is whether non-compliance
invalidates the agreement.
[64] Turning then to the first question, the substitution of the word “leader” for the
word “employer” meant that the form distributed to employees was different from the
form prescribed by s 174(1A)(c) and reg 2.05. It also meant that the notice did not
contain the content prescribed by the regulations (contrary to s 174(1A)(a)) and
contained content not prescribed by the regulations (contrary to s 174(1A)(b)).
[65] Yet ALDI submitted that it had complied with s 173 because s 25C of the Acts
Interpretation Act 1901 (Cth) (“Interpretation Act”) provides that “[w]here an Act
prescribes a form, then strict compliance with the form is not required and substantial
compliance is sufficient”. Section 2 of the Interpretation Act, however, provides that
the application of a provision of that Act to a provision of another Act is subject to a
contrary intention.
[66] It may be accepted that ALDI substantially complied with the form. But in the
case of s 174(1A), substantial compliance will not do. Section 25C of
the Interpretation Act does not apply because the contrary intention is manifest.
Nothing less than strict compliance is sufficient. This is apparent from the language of
s 174(1A), which makes clear that the notice must contain no more and no less than
the content prescribed by the regulations. It is also apparent from the legislative
history. Section 174(1A) was introduced for the purpose of eliminating confusion
about whether strict or substantial compliance was required. As the Explanatory
Memorandum to the Bill which became the Amendment Act reveals (at [147]):
The amendment responds to Panel recommendation 19. The amendment is
intended to eliminate confusion about whether employers may modify the
content or form of the notice of employee representational rights. The
amendment would make clear that the notice must contain only the content
prescribed by the regulations and no other content except that which the
regulations require an employer to insert or omit.
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[67] The “Panel recommendation” to which this paragraph refers can be found
in Towards more productive and equitable workplaces: An evaluation of the Fair
Work legislation(Department of Education, Employment and Workplace Relations,
Canberra, 2012). This was a fullscale review of the Fair Work legislation,
commissioned by the government of the time. Recommendation 19 arose from a
submission by a number of unions that modifications and additions to the prescribed
form should not be permitted under the Act. Examples were given to the Panel in
which it was alleged that employers had sought to encourage employees to extinguish
their rights to be represented by their union. The Panel noted that the approach of what
was then Fair Work Australia (now the Commission) was to require only substantial
compliance with the notice requirements and said that:
The s. 173 notice is an integral element in the bargaining regime. To eliminate
confusion and any opportunities for malpractice, we recommend that the
Government amend s. 174 of the FW Act to make it clear that a bargaining
notice may only contain the requirements as specified in the section and its
attendant regulations.
[68] It is well established that the Court may have regard to the reports of law
reform bodies to ascertain the mischief which a statute is intended to cure: CIC
Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408. Here the
mischief is plain, as are the means the legislature chose to cure it. Section 174(1A)
requires strict compliance. In Peabody Moorvale Pty Ltd v Construction, Forestry,
Mining and Energy Union [2014] FWCFB 2042; 242 IR 210 a five-member bench of
the Commission, the President presiding, came to the same conclusion. The
Commission correctly observed at [19] that the meaning of s 174(1A) is “clear and
unambiguous” and “consistent with the context and mischief to which the provision is
addressed”.
[69] It follows that, as a result of the omission of the word “employer” and the
substitution of the word “leader”, the notice was not in the prescribed form and ALDI
failed to comply with s 173(1) of the FW Act (read with s 174(1)–(1A)) by giving
notice in the required form.
[70] It seems to me that if ALDI’s management wished to designate an appropriate
person or persons to whom questions could be directed, it could have done so by other
means, for example, in an accompanying document. But in my respectful opinion s
174(1A) requires that there be no alteration in form or content. The Act does not allow
for exceptions for administrative efficiency or convenience.”
[96] However, in relation to the second question identified at paragraph [63], Katzmann J
agreed with Jessup J that the question was not whether the NERR did or did not satisfy the
requirements of s.174(1A), but whether the Commission fell into jurisdictional error in
concluding that the agreement had been “genuinely agreed” to within the meaning of s.186(2).
Her Honour went on to say:
“[71] … I also agree that, if the Commissioner reached that state of satisfaction on in
incorrect understanding of the law, that may lead to jurisdictional error: see, for
example, Wei v Minister for Immigration and Border Protection [2015] HCA 51; 327
ALR 28 at [33]–[35]. But there is no need to reach a final view about whether the
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defective notice caused the Commissioner to fall into jurisdictional error because, for
the reasons given by Jessup J at [46]–[48], relief on this ground should be refused in
the exercise of the Court’s discretion.”
[97] In relation to the NERR ground, White J said:
“[175] In my opinion, the SDA’s contention that the decision of the Full Bench is
affected by jurisdictional error by reason of a defect in the NERR should be rejected. I
respectfully agree with the reasons of Jessup J in [39]-[48] concerning this ground.
[176] The reasons of Katzmann J on the question of whether a notice given pursuant
to s 174 must conform strictly with the prescribed form do appear to have some force,
but I would prefer not to express a concluded view on that issue until it is necessary to
do so.”
[98] In summary no member of the Full Court expressed the view that Peabody was
incorrect. Jessup J appears to have been prepared to assume that Peabody was correct for the
purpose of his analysis, but stated the obiter opinion (at [49]) that, even if strict compliance
with the prescribed form was required, the minor departure in the NERR issued in that case
would not be sufficient to invalidate it. Katzmann J concluded expressly that Peabody was
correct, and did not agree with Jessup J’s observation at [49]. White J agreed with Jessup J’s
analysis of the NERR ground at [39]-[48] (but declined to express agreement with the
observation in [49]), and acknowledged the force of Katzmann J’s reasoning concerning the
need for strict compliance with the prescribed NERR without deciding the issue. In light of
Aldi, we consider that the proper course is to follow Peabody and approach the NERR issue
on the basis that a purported NERR which does not strictly comply with the prescribed form
in Schedule 2.1 is invalid, and that an enterprise agreement which proceeds on the basis of an
invalid NERR is incapable of approval.
[99] We have earlier described the defect in the NERRs issued in respect of the DOF
Agreement and the Smit Lamnalco Agreement. A defect of a similar nature was considered by
the Full Bench in KCL as follows:
“[16] The NERR issued by KCL, on its face, departs from the prescribed form in at
least three respects:
(1) The first paragraph is restructured into two separate sentences.
(2) The Fair Work Commission is described as “Fair Work Australia”, which
was the name of the Commission prior to 1 January 2013.
(3) In the last paragraph, rather than referring to the Fair Work Commission
Infoline, the reference is to the “Fair Work Infoline” with the number “13 13
94”.
[17] The second departure referred to above does not constitute a failure to comply
with s.174(1A), for the reasons explained in the Full Bench decision in Serco
Australia Pty Limited v United Voice and the Union of Christmas Island
Workers [2015] FWCFB 5618. The first is, arguably, a triviality with which s.174(1A)
might not be concerned. However the third cannot be ignored. The “Fair Work
Infoline on 13 13 94” is in fact an entirely different infoline to that operated by this
[2017] FWCFB 660
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Commission. It is operated by the Fair Work Ombudsman. If the intention had been
that the template NERR advise employees of the existence of the Fair Work
Ombudsman’s infoline (rather than the Commission’s infoline) as a source of relevant
information, the prescribed form in Schedule 2.1 of the FW Regulations would have
referred to it.”
[100] The Full Bench in KCL went on (at [18]-[22]) to reject arguments that the “infoline”
information in the prescribed NERR in Schedule 2.1 was not authorised to be included by
s.174, that the purported NERR that was used by the employer had been obtained from the
Commission’s website, and that the infoline identified in the prescribed form did not in fact
provide information about representation or bargaining.
[101] As DOF and Smit Lamnalco pointed out, the NERRs here were different to that in
KCL, in that they had followed the prescribed wording for the reference to the infoline, unlike
the employer in KCL which had actually misdescribed it, and their only failure was to insert
the correct telephone number. However, we do not consider that this distinction can lead to
any different result. The prescribed form clearly intended that employees in receipt of an
NERR be informed of the telephone number of the Fair Work Commission infoline as a
source of information about enterprise bargaining. The prescribed form commanded that the
number for that infoline be inserted for that purpose. That purpose would be frustrated
entirely if a different and incorrect telephone number could validly be inserted into the NERR.
Even if the requirement for strict compliance still allowed some capacity for errors of an
entirely trivial nature to be overlooked (the possibility of which was adverted to by Jessup J in
Aldi at [49] and by the Full Bench in KCL at [17]), we do not consider that the defect in the
NERRs here could be characterised as trivial for the reason we have given.
[102] We do not consider it necessary to consider the broader submission made by DOF and
Smit Lamnalco concerning the correctness of the ruling in Harbour City Ferries that all of the
“fields” in the prescribed form needed to be correctly populated in order for the NERR to be
valid. Some of the other fields, such as the requirement in the first paragraph to identify the
“proposed coverage” might leave some room for doubt as to what is precisely necessary to be
filled in. However, in respect of the Fair Work Commission infoline, there is no room for
such doubt; either the correct telephone number is given or it is not.
[103] If s.186(2)(a) and s.188 allowed for the exercise of a discretion in respect of the
requirement to provide employees with the NERR, then the submissions made by DOF and
Smit Lamnalco that there was no evidence the defect in the NERRs had any effect on the
genuineness of the employees’ vote to approve the agreements would have considerable force.
However, the analysis of the statutory scheme in Peabody does not allow for the exercise of
any such discretion.
[104] It may be observed that s.174 does not require the prescribed content in the NERR to
include the telephone number of the Commission’s infoline, or indeed anything that is
currently contained in the last paragraph of Schedule 2.1. It would be open to the Minister at
any time to exercise the power in s.173(5) and s.796 to have a new form prescribed which
omits the last paragraph which, for reasons which escape us, employers frequently fail to
correctly reproduce in the NERRs which they issue. However, until that occurs, we consider
that the Commission’s duty is to not approve enterprise agreements where the NERR issued
by the employer does not strictly comply with the currently prescribed form in respect of that
last paragraph.
[2017] FWCFB 660
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[105] For completeness, we reject the submission advanced by DOF and Smit Lamnalco that
we should defer dealing with the NERR issue until applications for questions concerning
defective NERRs which arose in two other appeals46 to be referred by the President to the
Federal Court pursuant to s.608 of the FW Act had been determined. Those applications were
heard by the President on 1 July 2016, but a decision was deferred pending the outcome of
Aldi and have not since progressed any further. We do not consider that those applications are
likely to lead to a Federal Court decision that is determinative of whether s.174(1A) requires
strict compliance with the prescribed NERR form within any reasonable timeframe. Nor do
we consider that we should wait until the referral applications have been determined and then,
if they are refused, give DOF and Smit Lamnalco the opportunity to apply to the President for
referral of the NERR issue in their matters. At any time since the MUA sought leave to amend
its appeal notice to add the NERR ground, DOF and Smit Lamnalco could have applied for
such referrals, but they have not. We think the most efficient course is for us to issue our
decision, and then DOF and Smit Lamnalco will be at liberty to seek judicial review of the
decision.
[106] We conclude that the DOF Agreement and the Smit Lamnalco Agreement could not
have validly been approved because the NERRs which the employer issued in each case were
invalid. Accordingly the DOF Decision and the Smit Lamnalco Decision must be quashed,
and the applications for approval of the DOF Agreement and the Smit Lamnalco Agreement
must be dismissed.
Orders
[107] In matter C2016/4902, we order as follows:
(1) Permission to appeal is granted in respect of appeal grounds 1, 2, 3 and 4.
Permission to appeal is otherwise refused.
(2) The appeal is dismissed.
[108] In matter C2016/4903, we order as follows:
(1) The MUA is granted leave to amend its notice of appeal to add the proposed
additional appeal ground concerning the validity of the NERR.
(2) Permission to appeal is granted in respect of appeal grounds 1, 2 and 3 and the
additional appeal ground concerning the validity of the NERR.
(3) The appeal is upheld.
(4) The DOF Decision ([2016] FWCA 4654) is quashed.
(5) The application for approval of the DOF Agreement (AG2016/2924) is
dismissed.
46 C2016/1264 and C2016/3735
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[109] In matter C2016/4904, we order as follows:
(1) The MUA is granted leave to amend its notice of appeal to add the proposed
additional appeal ground concerning the validity of the NERR.
(2) Permission to appeal is granted in respect of appeal grounds 1, 2, 3 and 4 and
the additional appeal ground concerning the validity of the NERR. Permission
to appeal is otherwise refused.
(3) The appeal is upheld.
(4) The Smit Lamnalco Decision ([2016] FWC 5249) is quashed.
(5) The application for approval of the Smit Lamnalco Agreement (AG2016/3337)
is dismissed.
VICE PRESIDENT
Appearances:
M. Ritter SC and E. Palmer for the Maritime Union of Australia.
R. Dalton and M. Follett of counsel for MMA Offshore Logistics Pty Ltd, DOF Management
Australia Pty Ltd and SMIT Lamnalco Australia Pty Ltd.
Hearing details:
2016.
Perth:
13 October.
Printed by authority of the Commonwealth Government Printer
Price code G, PR589875
OF THE FAIR WORK MISSION THE
