1
Fair Work Act 2009
s.604 - Appeal of decisions
Australian Manufacturing Workers’ Union
v
Broadspectrum (Australia) Pty Ltd
(C2018/4075)
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT ASBURY
COMMISSIONER McKENNA SYDNEY, 13 NOVEMBER 2018
Decision of Vice President Hatcher and Deputy President Asbury
Introduction and background
[1] The Australian Manufacturing Workers’ Union (AMWU) has lodged an appeal, for
which permission to appeal is required, against a decision of Commissioner McKinnon issued
on 4 July 20181 (Decision). The Decision concerned an application made by the AMWU for a
scope order pursuant to s 238 of the Fair Work Act 2009 (FW Act) with respect to bargaining
for an enterprise agreement with Broadspectrum (Australia) Pty Ltd (Broadspectrum) in
respect of its defence materiel maintenance contracts in Victoria. The circumstances in which
a scope order may be applied for and made are set out in s 238(1)-(4) as follows:
238 Scope orders
Bargaining representatives may apply for scope orders
(1) A bargaining representative for a proposed single-enterprise agreement (other than
a greenfields agreement) may apply to the FWC for an order (a scope order) under this
section if:
(a) the bargaining representative has concerns that bargaining for the
agreement is not proceeding efficiently or fairly; and
(b) the reason for this is that the bargaining representative considers that the
agreement will not cover appropriate employees, or will cover employees that
it is not appropriate for the agreement to cover.
No scope order if a single interest employer authorisation is in operation
1 [2018] FWC 3974
[2018] FWCFB 6556
DECISION
E AUSTRALIA FairWork Commission
2
(2) Despite subsection (1), the bargaining representative must not apply for the scope
order if a single interest employer authorisation is in operation in relation to the
agreement.
Bargaining representative to give notice of concerns
(3) The bargaining representative may only apply for the scope order if the bargaining
representative:
(a) has taken all reasonable steps to give a written notice setting out the
concerns referred to in subsection (1) to the relevant bargaining representatives
for the agreement; and
(b) has given the relevant bargaining representatives a reasonable time within
which to respond to those concerns; and
(c) considers that the relevant bargaining representatives have not responded
appropriately.
When the FWC may make scope order
(4) The FWC may make the scope order if the FWC is satisfied:
(a) that the bargaining representative who made the application has met, or is
meeting, the good faith bargaining requirements; and
(b) that making the order will promote the fair and efficient conduct of
bargaining; and
(c) that the group of employees who will be covered by the agreement
proposed to be specified in the scope order was fairly chosen; and
(d) it is reasonable in all the circumstances to make the order.
[2] In the Decision the Commissioner proceeded on the basis, which was said to have
been agreed between the parties, that a scope order could only be made pursuant to s 238 if
bargaining for a proposed enterprise agreement had commenced in accordance with the FW
Act. The Commissioner concluded that bargaining for an agreement with Broadspectrum had
not in fact commenced, and accordingly dismissed the AMWU’s application. The AMWU
contends that the Commissioner erred in reaching this conclusion, and thus wrongly
dismissed its application.
[3] The background circumstances of this matter require some explanation. On 20 May
2016, Broadspectrum informed the AMWU that it agreed to commence bargaining for an
enterprise agreement, and on 23 May 2016 it issued to relevant employees a notice of
employee representational rights (NERR) pursuant to s 173 of the FW Act. The notice
identified the coverage of the proposed agreement as encompassing materiel maintenance and
stores workers at all Broadspectrum’s worksites except at Kapooka in NSW.
3
[4] A dispute about the scope of the coverage of the proposed agreement soon emerged, in
that the AMWU in June 2016 advanced a claim that the proposed agreement should cover
materiel maintenance workers (alternatively referred to as armoury employees) at Kapooka
and non-materiel maintenance workers at all sites. Broadspectrum subsequently agreed to
extend the coverage of the proposed agreement to the materiel maintenance employees at
Kapooka, and on 14 July 2016 Broadspectrum issued a further NERR to materiel maintenance
workers at Kapooka. It never issued a NERR to any other category of worker at Kapooka.
[5] The subsequent bargaining was protracted and difficult. It is sufficient to say that in
late 2017 Broadspectrum requested relevant employees to vote to approve a proposed
agreement (2017 proposed agreement) covering at least those employees to whom it had
issued a NERR in 2016, including materiel maintenance employees at Kapooka (noting that
the AMWU subsequently contended that the agreement also covered storepersons and non-
materiel maintenance employees at Kapooka). The 2017 proposed agreement was approved
by a majority of those who voted in a ballot process which occurred on 6 December 2017, and
consequently Broadspectrum applied to the Commission for its approval. This was opposed
by the AMWU.
[6] In a decision issued on 14 March 20182 (March decision), the Commissioner
dismissed Broadspectrum’s application for approval of the 2017 proposed agreement. The
Commissioner’s reasoning, for relevant purposes, as follows:
“[27] Broadspectrum was invited to provide evidence in support of its contention that
agreement was reached in relation to employees at Kapooka after 14 June 2016. On
9 March 2018, it submitted that agreement was reached in relation to the expanded
scope on 12 July 2016 and provided a revised F17 to that effect. However, it did not
explain how, or why, the agreement to bargain for an expanded scope did not occur on
14 June 2016 as earlier submitted. Notes of a bargaining meeting on 12 July 2016
tendered in support of the submission record simply that a NERR will be sent to
Kapooka and copied to the AMWU. There is no additional insight into the nature of
the discussion, or whether it was to confirm what was only an ‘in principle’ agreement
on 14 June 2016.
[28] Activity trackers detailing the progress of negotiations on 14 June 2016, 29-30
June 2016 and as at 24 August 2016 all record in identical terms that Broadspectrum
“agrees ‘in principle’ with incorporating Kapooka site into EA coverage clause.” A
statutory declaration filed on 20 February 2018 on behalf of Mr Stephen Polzin,
employee bargaining representative, refers to a discussion on 14 June 2016 about
covering armourers at Kapooka by the Agreement and notes that the proposal was one
“to which Broadspectrum agreed”. On balance, the evidence supports a finding that
agreement on the expanded scope was reached on 14 June 2016. While I do not
discount the possibility that this was only an ‘in principle’ agreement that required
formal approval to take effect, there is no evidence of that before me. I find that there
was a second notification time in relation to the Agreement on 14 June 2016.
[29] On 14 July 2016, Broadspectrum issued the second Notice to armoury employees
at Kapooka. It is not in dispute that the second Notice was not issued to any other
category of employee at Kapooka or to any non-materiel maintenance employee.
2 [2018] FWC 1516
4
Whether it should have been depends on whether those categories of employee were
the subject of a claim for coverage from the AMWU.
[30] The evidence establishes that a claim to cover non-materiel maintenance
employees was in issue in bargaining between the parties from 1 June 2016.
[31] I accept Broadspectrum’s submissions that it understood the AMWU’s claim in
relation to coverage of employees at Kapooka to relate only to armoury employees,
not storepersons. On its face, the AMWU’s claim in relation to Kapooka appears
wider in scope than that understood by Broadspectrum and could extend to
storepersons. However, that proposition is tempered somewhat by references to the
LMM contract in the AMWU’s proposed version of a replacement agreement as well
as the AMWU’s 1 June 2016 table of claims and activity trackers which separately
refer to the claims for coverage at Kapooka and coverage of non-materiel maintenance
employees (both clerical and stores).
[32] While it is possible that the claim in relation to coverage at Kapooka, either as
sought by the AMWU or as agreed to by Broadspectrum, was affected by a
fundamental misunderstanding between the parties, I consider it unlikely in
circumstances where bargaining had been ongoing for a lengthy period, was between
experienced industrial parties and no evidence was led that any potential issue of this
kind was either identified or discussed until after the agreement was made.
[33] Be that as it may, by the second notification time,3 the AMWU had made a claim
for the Agreement to have a broader scope than that proposed by Broadspectrum.
Broadspectrum gave the second Notice to armoury employees at Kapooka, and did not
give it to any non-materiel maintenance (either clerical or stores) employees. The
effect was that reasonable steps were not taken to give all relevant employees notice of
their right to be represented in bargaining as required by section 173(1) of the Act.
[34] Further, the period between the second ‘notification time’ and the issue of the
second Notice was more than 14 days. In this respect, the requirements of section
173(3) were not met in relation to the second Notice.
[35] The Act confers no discretion on the Commission to extend or waive the
requirements in the Act in relation to the giving of notice under section 173.
[36] The result is that the Agreement cannot be approved.”
[7] There was no appeal of the March decision.
[8] Subsequent to the March decision, the AMWU sought to continue bargaining with
Broadspectrum, and advised that it now sought an agreement which covered employees in
Victoria only, with Kapooka to be covered by a separate agreement applying to all other
States and Territories. In response, in correspondence dated 3 April 2018, Broadspectrum
advised that its position was that bargaining had ceased once the 2017 proposed agreement
3 “Second notification time” was intended by the Commissioner to mean 14 June 2016, which was found by the
Commissioner to be the date when Broadspectrum agreed to expand the coverage of the proposed agreement to include
materiel maintenance employees at Kapooka.
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had been approved by a majority of employees and that it would not agree to initiate a new
round of bargaining unless there was agreement that the scope would reflect the coverage of
the 2017 proposed agreement. The AMWU then applied for its scope order on 4 April 2018.
The Decision and the Recommendation
[9] In the Decision, the Commissioner’s reasoning for the conclusion that bargaining had
not yet commenced was as follows:
“[14] The facts in this case are that Broadspectrum did issue valid Notices to
employees in bargaining for the DMSS Agreement.4 That meant that it could request
employees to vote on the DMSS Agreement under section 181. No party contended
that the 21 day period between issue of the last valid Notice and the date the request to
approve the DMSS Agreement was made had not been met. I find that the DMSS
Agreement was made in compliance with the requirements of sections 181 and 182 of
the Act.
[15] I agree with the observations of Commissioner Platt in AMIEU v Coles
Supermarkets Australia Limited ([2016] FWC 4870). In accordance with the majority
decision in Uniline, bargaining for the DMSS Agreement concluded when the DMSS
Agreement was approved by a majority of employees and application was made to the
Commission for its approval. The alternative construction would leave the parties
bargaining aimlessly for an enterprise agreement that could never be approved. The
result would be plainly inconsistent with the scheme of the Act.
[16] There is no evidence of any circumstance that has yet triggered a ‘notification
time’ for the purposes of section 173(2) in the present case. The evidence, including
correspondence between the parties since March 2018, is to the contrary. I am satisfied
that a new round of bargaining for a proposed agreement to replace the LMM
Agreement has not yet commenced. In that circumstance, it is hard to see how
bargaining (which is not even occurring) could be made fairer or more efficient. It is a
matter for the parties to once again agree to bargain, or if needs be, obtain a majority
support determination to compel it. However, until that happens, there is no
jurisdiction to make a scope order.”
[10] Having ordered the dismissal of the application,5 the Commissioner then said:
“[18] I have decided not to decide the substantive merits of the proposed scope order
sought by the AMWU and instead to make a recommendation to assist the parties in
future bargaining. The recommendation will be published separately to this decision.”
[11] The recommendation referred to was published simultaneously with the Decision on 4
July 2018 (Recommendation). In the Recommendation the Commissioner expressed her
views in relation to the AMWU’s scope order application concerning the matters identified in
s 238(4)(b)-(d) to the effect that she was not satisfied that:
4 i.e. the 2017 proposed agreement.
5 Decision at [17]
6
the scope order sought by the AMWU would promote the fair and efficient conduct of
bargaining;
the group of employees to be covered by the proposed agreement specified in the
scope order sought was “likely to be considered fairly chosen; and
it would have been reasonable to make the scope order sought.
[12] The Commissioner then recommended that the parties recommence bargaining for a
new agreement, that the AMWU particularise its claim for a broader scope, and that
Broadspectrum then issue a NERR within that broader scope.
Submissions
[13] In its appeal submissions, the AMWU did not take issue with the premise in the
Decision that the commencement of bargaining was a prerequisite for the making of an
application for scope orders under s 238 and for the grant of any such orders. However the
AMWU submitted that the Commissioner erred in determining that the bargaining which had
commenced in 2016 had ended when the relevant employees of Broadspectrum had voted to
approve the 2017 proposed agreement. The failure to comply with s 173(3) which was found
to have occurred in the March decision meant, the AMWU submitted, that no agreement was
ever “made” pursuant to s 182(1) because there was no valid request for a vote in accordance
with s 181(2), and accordingly bargaining continued notwithstanding the dismissal of the
application for approval of the 2017 proposed agreement. In the alternative, the AMWU
submitted that even if it was the case that an agreement had been “made” for the purpose of s
182(1), nonetheless bargaining had commenced because Broadspectrum’s correspondence of
3 April 2018 in response to the AMWU’s claim for an agreement covering materiel
maintenance employees in Victoria only constituted engagement in bargaining concerning the
scope of a proposed agreement. The AMWU submitted that permission to appeal should be
granted, the appeal upheld, and the matter remitted to a single member of the Commission
other than the Commissioner because of the views expressed by the Commissioner as to the
merits of the AMWU’s scope order application in the Recommendation.
[14] Broadspectrum submitted that permission to appeal should not be granted because the
appeal did not raise any issue of general application, and because the appeal was futile in that:
even if an agreement had not previously been “made” for the purpose of s 182(1) so
that bargaining was continuing, it remained the case that bargaining had to commence
afresh in order to produce an agreement capable of approval by the Commission given
the previous failure to comply with s 173; and
the Commissioner had dealt with the substantive merits of the AMWU’s application in
the Recommendation, and there was no substantive basis on which it could be
considered that those conclusions would be likely to change.
[15] As to the merits of the appeal, Broadspectrum submitted that:
it was found in the March decision that the first NERR issued on 23 May 2016 was
issued in accordance with s 173, and to that extent it was able to request employees
engaged at the time to vote to approve the 2017 proposed agreement;
7
no legislative purpose to invalidate the employee approval of a proposed enterprise
agreement could be discerned in the language or scheme of the FW Act, and matters
of compliance with s 173 arise for consideration when the Commission determines
whether a proposed agreement which has been “made” should be approved;
the construction advanced by the AMWU would mean that bargaining remained on
foot but could never lead to an enterprise agreement capable of approval, contrary to
that stated in paragraph [113] of the majority Full Bench decision in Uniline Australia
Limited;6
bargaining concludes once an agreement is made by the employees and an application
for approval of the agreement has been lodged, irrespective of whether the agreement
is ultimately approved;
an agreement having been made when the relevant employees of Broadspectrum voted
to approve the 2017 proposed agreement, there was no basis to conclude that
bargaining was taking place when the AMWU made its application for a scope order;
and
the AMWU had conceded at first instance that Broadspectrum had not agreed to
bargain for a new agreement since the vote on the 2017 proposed agreement had
occurred, and it should not be permitted in the appeal to advance its alternative
submission that Broadspectrum had in fact agreed to bargain on the basis of its
correspondence of 3 April March 2018.
Consideration
[16] Section 182 identifies when a single-enterprise agreement that is not a greenfields
agreement can be said to have been “made” for the purpose of the legislative scheme
concerning enterprise agreements in Pt 2-4 of the FW Act in the following terms:
(1) If the employees of the employer, or each employer, that will be covered by a
proposed single-enterprise agreement that is not a greenfields agreement have been
asked to approve the agreement under subsection 181(1), the agreement is made when
a majority of those employees who cast a valid vote approve the agreement.
[17] The parties’ submissions in this appeal were premised on two propositions about
which they did not disagree. The first was that once an agreement is “made” pursuant to s
182(1), the bargaining process that gave rise to that agreement comes to an end. That
proposition is derived from a decision of a single member of the Commission in AMIEU v
Coles Supermarkets Australia Pty Ltd.7 That specific proposition has not yet been endorsed
judicially or at the Full Bench level, although we note that in the Full Bench decision in
Uniline Australia Limited8 the majority said that bargaining ended upon lodgement of an
application for approval of an agreement (presumably one “made” in accordance with s 182
6 [2016] FWCFB 4969, 263 IR 255
7 [2016] FWC 4870 at [38]-[42]
8 [2016] FWCFB 4969, 263 IR 255
8
rather than merely a purported agreement). For the purpose of this appeal we shall assume,
without deciding, that the proposition is correct.
[18] The second proposition is that there must be bargaining occurring in order for an
application for a scope order to be made and granted. This proposition is indubitably correct.
The capacity to make an application for a scope order is predicated, in s 238(1) and (3), on a
bargaining representative having concerns that bargaining for an agreement is not proceeding
fairly or efficiently because of scope issues, with such concerns having been communicated to
the other bargaining representatives and without an appropriate response having been received
after a reasonable amount of time. The capacity of the Commission to grant a scope order
application is dependent upon it being satisfied under s 238(4)(a) that the applicant bargaining
representative has met or is meeting the good faith bargaining requirements. Clearly those
requirements are predicated on bargaining having commenced and being underway.
[19] The critical question which arises in this appeal is therefore whether the vote to
approve the 2017 proposed agreement which took place on 6 December 2017 resulted in an
agreement being “made” in accordance with s 182(1). For an agreement to have been “made”
under that provision, the relevant employees must have been asked to approve the agreement
under - that is, in accordance with - s 181(1). Section 181(1) provides:
(1) An employer that will be covered by a proposed enterprise agreement may request
the employees employed at the time who will be covered by the agreement to approve
the agreement by voting for it.
[20] Section 181(1) operates subject to s 181(2), which provides:
(2) The request must not be made until at least 21 days after the day on which the last
notice under subsection 173(1) (which deals with giving notice of employee
representational rights) in relation to the agreement is given.
[21] The following propositions may be derived from Full Bench decisions concerning the
operation of ss 181 and 182(1):
(1) In AMWU v Saunders International Ltd9 it was held that a failure to comply
with the requirement for requesting a vote upon a proposed agreement in s
181(2) meant that an agreement could not have been “made” under s 182(1).
(2) Where a NERR has been issued which does not strictly comply with the
content and form requirements for NERRs prescribed by s 174, there cannot
have been compliance with s 181(2): Peabody Moorvale Pty Ltd v CFMEU10;
MUA v MMA Offshore Logistics.11
[22] There is a temporal as well as a content and form obligation attaching to the issue of
the NERR. Section 173(3) requires that the NERR be given to relevant employees “as soon as
practicable, and not later than 14 days, after the notification time for the agreement”. Section
180(2) defines the “notification time” as follows:
9 [2013] FWCFB 6557
10 [2014] FWCFB 2042; 242 IR 210 at [44]
11 [2017] FWCFB 660; 263 IR 81 at [92]-[98]
9
(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.
[23] In the Full Bench majority decision in Uniline,12 the reasoning in Peabody Moorvale
Pty Ltd v CFMEU and MUA v MMA Offshore Logistics was applied to the temporal
requirement in s 173(3). The majority said:
“[108] We consider that unless the Appellant took all reasonable steps to give such a
Notice to each relevant employee in the form required and within the time required, it
cannot be said to be a Notice as contemplated by the Act and in particular for the
purposes of s.181(2) was given. It is not in contest that the Appellant took no step to
give and did not give, a Notice to any employee until well after the notification time.
It follows that the request by an Appellant that employees approve the Agreement was
made prematurely, that is, the time for reckoning the 21 day period is yet to begin
because a valid Notice had not been given. This would be the case if a Notice was not
given at all. We see no reason why a Notice given some two years after the
notification time should yield a different result.
[109] Absent such a Notice, there cannot be satisfaction that the Appellant covered by
the Agreement complied with subsection 181(2) of the Act, with the consequence that
there cannot be satisfaction that the Agreement has been genuinely agreed to by the
employees covered by the Agreement as required by s.186(2)(a) of the Act.”
[24] It follows that an agreement cannot have been “made” unless each employee who will
be covered by the proposed agreement and who is employed at the notification time has been
given the NERR within 14 days of the notification time.
[25] The position becomes somewhat more complex where, after the NERR is issued to
employees within the coverage of the proposed agreement in its initial form, the employer
subsequently agrees or decides to propose an agreement with a wider scope of coverage. What
the legislative scheme requires in that situation was identified in Uniline as follows:
“Where an employer initially agreed to bargain for an agreement with a particular scope
and later agreed to bargain for an agreement with a broader scope, that agreement to
bargain in our view, triggers a notification time and a requirement thereafter to issue a
Notice to relevant employees who are to be covered by the broader scope
agreement. We do not need, for present purposes to decide whether, having regard to
12 [2016] FWCFB 4969, 263 IR 255
10
s.173(4) such a Notice needs to give to employees who received a Notice for the
proposed agreement with a more limited scope.”13
[26] Neither party submitted before us that Uniline was incorrectly decided in either of the
respects set out above.
[27] Our reading of the March decision is that the Commissioner decided that the 2017
proposed agreement could not be approved for two reasons. The first was that not all
employees who fell within the scope of the agreement as proposed by the AMWU had been
served with the NERR. That conclusion was reached notwithstanding that the Commissioner
made no finding that any actually employee covered by the 2017 proposed agreement had not
been given a NERR at all. It is not immediately apparent why that constituted a proper basis
to dismiss the application for approval of the 2017 proposed agreement, but neither party
raised any issue with that conclusion and accordingly we do not need to consider it further.
The second reason was that the Kapooka materiel maintenance employees, whom
Broadspectrum agreed on 14 June 2016 should be covered by the 2017 proposed agreement,
did not receive the NERR until 14 July 2017, well after 14 days passed. Consistent with
Uniline, the Commissioner held that this constituted a failure to comply with s 173(3) with
respect to the Kapooka employees which was fatal to the approval application.
[28] It necessarily follows that the vote upon the 2017 proposed agreement was not
conducted in accordance with s 181(2). A NERR that met the temporal requirement in s
173(3) had not been issued to each employee who would be covered by the 2017 proposed
agreement and who was employed at the relevant notifications times, nor was there any
evidence that reasonable steps had been taken to do so, as required by s 173(1). The fact that a
proportion of those who under s 173(1) were required to be given a valid NERR had in fact
received them was not sufficient to bring about compliance with s 182(1). If the contrary were
the case, an employer could provide a valid NERR to a minority of employees, or even just
one, and still be able to validly request a vote under s 181(1). We consider that that the
Commissioner erred in concluding, as she did in paragraph [14] of the Decision, that the issue
of a valid NERR to just the non-Kapooka employees was sufficient to allow a vote to proceed
in compliance with the requirement in s 181(2).
[29] We do not accept the proposition stated in paragraph [15] of the Decision, and
advanced by Broadspectrum in its submissions, that the conclusion that no agreement was
ever made and that bargaining continues would leave “the parties bargaining aimlessly for an
enterprise agreement that could never be approved”. As the Commissioner found, a valid
NERR was given to the non-Kapooka employees, and consequently it is open for
Broadspectrum to reach a valid agreement with them. A bargaining representative who seeks
an agreement with a wider scope may seek a scope order under s 238 which, if made by the
Commission, would trigger a new notification time under s 173(2)(c) and require the issue of
a further NERR. This is not a case where any futility follows from the approach to the
relevant provisions of the FW Act which we prefer.
[30] We also do not accept Broadspectrum’s submission that the conclusion we have
reached is inconsistent with paragraph [113] of the majority decision in Uniline.14 The
majority said:
13 Ibid at [113]
14 Ibid
11
“Artificial though it may be, an employer that discovers it had issued an invalid Notice,
would cease bargaining with its employees and would agree to bargain or initiate
bargaining afresh thus triggering a notification time and a new period within which a
valid Notice may be issued.”
[31] That observation was made by reference to a bargaining situation in which no
employee had received a valid NERR within the required time period, with the result that no
valid agreement could ever be made without starting afresh. That is not the situation here.
Further, the majority was only referring to the practical means by which an employer could
resolve that situation by starting bargaining afresh; its observation was not to the effect that
bargaining came to an end by virtue of an agreement being “made” notwithstanding the
invalidity of the NERR.
[32] The result of the erroneous approach taken by the Commissioner was that the
AMWU’s application was not determined in accordance with the FW Act. We do not accept
Broadspectrum’s submission that, notwithstanding this, we should refuse permission to appeal
on the basis that the views expressed by the Commissioner in the Recommendation
concerning the merits of the AMWU’s application meant that there was no significant
possibility of a different outcome. Leaving aside the question of the source of power to make
the Recommendation, the matters about which the Commission must be satisfied in s 238(4)
must necessarily be assessed by reference to the bargaining which is occurring. Having
erroneously found that no bargaining was occurring, the Commissioner was not then in a
position to carry out the required assessment within the proper factual framework, and the
Recommendation in effect deals with the AMWU’s application as concerning a hypothetical
rather than an actual bargaining process. We therefore do not consider that the merits of the
AMWU’s application can be said to have been properly considered. On the basis of the error
we identified, permission to appeal should be granted and the appeal upheld.
[33] It will be necessary to remit the AMWU’s application for re-hearing to a single
member other than the Commissioner because of the views expressed about the application in
the Recommendation. The application shall be re-heard on the basis of the evidence already
adduced and such further evidence as the member may determine to admit.
Orders
[34] We order as follows:
(1) Permission to appeal is granted.
(2) The appeal is upheld.
(3) The Decision ([2018] FWC 3974) is quashed.
(4) The AMWU’s application (B2018/229) is remitted to Deputy President Asbury
for re-hearing based on the evidence adduced to date and such further evidence
as the Deputy President may determine to admit.
12
Decision of Commissioner McKenna
[35] I have had the opportunity to read in draft the decision of Hatcher VP and Asbury DP,
but, respectfully, have reached a conclusion different from the majority on the central issue of
when an agreement is “made”, and the collateral operation of that factor in relation to the
application pursuant to s.238 of the Fair Work Act 2009 (“the Act”) for a scope order that was
before Commissioner McKinnon. The background to the proceedings before the
Commissioner and a summary of the parties’ submissions in the appeal are recited in the
majority decision, so I will not repeat them.
[36] In “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union”
known as the Australian Manufacturing Workers’ Union (AMWU) v Broadspectrum
(Australia) Pty Ltd Pty Ltd [2018] FWC 3974 (“the Decision”), the Commissioner relevantly
concluded that bargaining for the Broadspectrum DMSS Enterprise Agreement 2017
concluded when that agreement was approved by a majority of employees and application
was made to the Commission for its approval. The agreement was not approved; it was
dismissed for the reasons set out by the Commissioner in an earlier decision: Broadspectrum
(Australia) Pty Ltd T/A Broadspectrum [2018] FWC 1516. After setting-out certain matters,
the Decision concerning the application for the scope order concluded:
“[15] I agree with the observations of Commissioner Platt in AMIEU v Coles
Supermarkets Australia Limited. In accordance with the majority decision in Uniline,
bargaining for the DMSS Agreement concluded when the DMSS Agreement was
approved by a majority of employees and application was made to the Commission for
its approval. The alternative construction would leave the parties bargaining aimlessly
for an enterprise agreement that could never be approved. The result would be plainly
inconsistent with the scheme of the Act.
[16] There is no evidence of any circumstance that has yet triggered a ‘notification
time’ for the purposes of section 173(2) in the present case. The evidence, including
correspondence between the parties since March 2018, is to the contrary. I am satisfied
that a new round of bargaining for a proposed agreement to replace the LMM
Agreement has not yet commenced. In that circumstance, it is hard to see how
bargaining (which is not even occurring) could be made fairer or more efficient. It is a
matter for the parties to once again agree to bargain, or if needs be, obtain a majority
support determination to compel it. However, until that happens, there is no
jurisdiction to make a scope order.
[17] The application is dismissed.”
[37] As can be seen from the preceding extract from the Decision, in concluding that the
application by the AMWU (“Automotive, Food, Metals, Engineering, Printing and Kindred
Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)) for a
scope order, the Commissioner referred to The Australasian Meat Industry Employees Union
v Coles Supermarkets Australia Pty Ltd [2016] FWC 4870 (“Coles”). In that case, Platt C had
before him an application pursuant to s.437 of the Act for a protected action ballot order. The
application for the protected action ballot order was made by The Australasian Meat Industry
Employees Union (“the AMIEU”) in circumstances where a proposed agreement - the
heavily-litigated Coles Store Team Agreement 2014-2017 - had been made and approved by
the Commission, but the approval was quashed on appeal on the basis of findings by the Full
13
Bench that the agreement did not pass the better off overall test: Hart v Coles Supermarkets
Australia Pty Ltd and Bi-Lo Pty Limited T/A Coles and Bi Lo; The Australasian Meat
Industry Employees Union v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited T/A
Coles and Bi Lo [2016] FWCFB 2887, and subsequent order in PR581624 (“Hart/AMIEU”).
[38] Following the appeal in Hart/AMIEU, Coles and Bi-Lo, for their own reasons,
declined to agree to bargain with the AMIEU. In its application before Platt C for a protected
action ballot order, the AMIEU placed reliance on the notification time concerning the
agreement the approval of which had been quashed on appeal in Hart/AMIEU because it did
not pass the better off overall test. In a decision dismissing the AMIEU’s application for a
protected action ballot order, Platt C wrote:
“[24] In April 2014, bargaining for a proposed agreement commenced between Coles,
Bi-Lo Pty Ltd and their employees covered by six agreements detailed in paragraph [7]
above. The Notice of Employee Representational Rights was distributed in April 2014.
In April 2014, Coles were seeking a national ‘four walls” agreement which included
the work performed by AMIEU members. It appears that the bargaining activities of
the AMIEU described by Mr Smith, including the agreement scope fell within the
breadth of the Coles position. There has not been any other notification time relied
upon by the AMIEU.
[25] Based on the material before me, I find that the notification time commenced on 7
April 2014. This notification time related to the 2014 Proposed Agreement.
Has the notification time ceased?
[26] My next consideration is whether this notification time has ceased. The Act does
not contain a provision which explicitly states when the notification time ceases, and
the topic is not directly discussed in the Explanatory Memorandum to the Fair Work
Bill 2009. There does not appear to be judicial consideration of this topic.
[27] Its predecessor, the Workplace Relations Act 1996, contained a similar concept,
termed the “bargaining period” which commenced 7 days after the service of a written
notice and concluded when an agreement was made or when the initiating party
advised that it no longer wished to bargain.
[28] The Fair Work Act removed the concept of a bargaining period although
industrial action continued to be protected during bargaining for an enterprise
agreement. The Explanatory Memorandum indicated that Parliament intended that
protected industrial action be available only during negotiations for an enterprise
agreement.
…
[31] The Act provides three stages in the enterprise agreement process. Bargaining for
an enterprise agreement, making an enterprise agreement and the approval of an
enterprise agreement.
Proposed enterprise agreements
[32] The Act has a large number of provisions that concern the regulation of proposed
enterprise agreements including general conduct agreements, good faith bargaining
http://www.austlii.edu.au/au/legis/cth/bill/fwb2009124/
http://www.austlii.edu.au/au/legis/cth/bill/fwb2009124/
14
requirements and orders, single interest employer authorisations, workplace
determinations and industrial action.
Enterprise agreements
[33] With respect to enterprise agreements, s.180 of the Act requires that proposed
enterprise agreements and related material be distributed for a minimum period prior
to a vote, s.181 allows an employer to request employees who will be covered by a
proposed enterprise agreement to approve the agreement by a vote. An agreement is
made when a proposed agreement is approved by a majority of employees who cast a
valid vote. Section 185 requires that one of the bargaining representatives apply to the
Commission for approval of the Agreement.
Agreement approval
[34] Division 4 details the requirements which must be met for approval.
[35] As can be seen from a review of the provisions referred to above, the existence of
a proposed enterprise agreement is a prerequisite for a range of requirements and
bargaining powers. It appears that the Commission’s powers to regulate bargaining
cease at the time the proposed Agreement is made and becomes an enterprise
agreement.
[36] Absent a proposed enterprise agreement, there is no capacity to take protected
industrial action under the Act. The Act requires that “employee claim action” must be
in respect of a proposed enterprise agreement. In addition, the common requirements
for industrial action also require it to be in support of a proposed enterprise agreement
(but not a greenfields or a multi-employer agreement).
[37] The final step involves the Commission determining whether to approve the
agreement subject to the requirements contained in Division 4 of the Act.
[38] It appears to me that the Parliament intended that the making of an Agreement
would conclude the bargaining process. That can be inferred from the considerable
reliance on the existence of a proposed agreement as detailed above. If the making of
an agreement did not stop the bargaining process, then parties would be able to (for
example) take industrial action in support or opposition to the Commission approving
the Agreement. Such an approach would be inconsistent with the objects in Part 2-4 of
the Act.
[39] If the employer determines not to commence bargaining and thus enliven the
notification time, a bargaining agent may pursue alternative methods to commence the
notification time as provided in s.193(2)(b)-(d). [sic; s.173(2)(b)-(d)]
[40] I have considered if this construction would result in unintended consequences. I
note that Part 2-4, Division 4 provides the Commission with a range of options to
address deficiencies in enterprise agreements that have been made. I recognise that
this construction of the Act will require parties to an agreement that has been made
and which cannot be approved, start the entire bargaining process afresh. Fortunately,
15
as a result of the Commission’s powers to remedy deficient agreements, the cases
where this occurs are few.
[41] In my view, the statutory construction which best achieves the purpose and
objects of the Act is that at the point the bargaining processes ceases (by the making of
an Agreement) the notification time under the Act must cease to have effect in relation
to the specific proposed agreement.
[42] Applying that approach to the facts in this case, the notification time in respect of
the 2014 Proposed Agreement between Coles and the AMIEU (and other parties)
ceased at 10.00 pm on 5 May 2014 when the a [sic] majority of employees who cast a
valid vote approved the Coles Store Team Enterprise Agreement 2014-2017.
[43] I therefore find that there is no notification time that the AMIEU can rely on.
[44] Absent notification time in relation to the 2014 Proposed Agreement, the pre-
requisites for the approval of the application are not met and the application must fail.”
(underlining in original; references omitted)
[39] (As to the significance of a notification time in relation to applications for protected
action ballot orders see also Construction, Forestry, Mining and Energy Union v AGL Loy
Yang Pty Ltd (t/as AGL Loy Yang) [2016] FWCFB 2878, including the observation at [40]:
“As we have already indicated, s.437(2A) prevents an application for a PABO by a bargaining
representative being made, unless there is a notification time in relation to the proposed
agreement. The scheme of the Act marks out the “notification time” as the time at which, for
present purposes, bargaining has commenced, (noting that if a scope order is made after
bargaining has commenced in circumstances where scope is in issue in bargaining, this would
trigger another notification time and its attendant consequences). … [42] … The amendment
gives effect to the legislative purposes removing the ‘strike first talk later issue’ by taking
away the capacity of a bargaining representative to apply for a [protected action ballot order]
unless there has been a notification time in relation to the proposed agreement.)
[40] In the Decision, the Commissioner referred also to Uniline Australia Limited [2016]
FWCFB 4969. In that decision, the majority (Gostencnik DP and Riordan C) said the
following:
“[112] First it is said that the interpretation of the Act adopted by the Commissioner
would impose impractical, unworkable and very costly outcomes on employers and
employees, because:
In many circumstances an employer would be unable to issue a new Notice during
bargaining if a minor error was discovered in the wording of the earlier Notice
issued at the commencement of bargaining;
An employer would be unable to issue a new Notice during bargaining to a new
group of employees if the scope of the proposed enterprise agreement was expanded
and this new group of employees was proposed to be covered, as to do so would lead
to a breach of s.173(3) and an inability to have the agreement approved; and
16
An employer would be unable to overcome an oversight to issue a Notice within 14
days of the “notification time”, because in most circumstances an employer has no
capacity to establish a new “notification time”. Under the Act, once bargaining has
commenced an employer has good faith bargaining obligations and it does not have
the right to unilaterally stop bargaining and to then initiate or agree to bargain (see
s.173(2)(a) of the Act).
[113] In our view there is no substance in these submissions. Artificial though it may
be, an employer that discovers it had issued an invalid Notice, would cease bargaining
with its employees and would agree to bargain or initiate bargaining afresh thus
triggering a notification time and a new period within which a valid Notice may be
issued. There is nothing in the Act which compels a conclusion to the contrary, except
perhaps in circumstances where a majority support determination has been made.
Where an employer initially agreed to bargain for an agreement with a particular scope
and later agreed to bargain for an agreement with a broader scope, that agreement to
bargain in our view, triggers a notification time and a requirement thereafter to issue a
Notice to relevant employees who are to be covered by the broader scope agreement.
We do not need, for present purposes to decide whether, having regard to s.173(4)
such a Notice needs to give to employees who received a Notice for the proposed
agreement with a more limited scope.
[114] The Appellant also submitted that if an enterprise agreement was not approved
by the Commission on the basis of failure to strictly comply with s.173(3), the parties
would be at risk of having any subsequent proposed agreement rejected because the
employer would have typically initiated or agreed to bargain months before and the
timeframe in s.173(3) would be calculated from that earlier time.
[115] There is no substance to this submission. Once an application is made to the
Commission, bargaining for the agreement has concluded albeit that the agreement
might not be approved for a variety of reasons, including for example, that it does not
pass the better off overall test. In that event, the employer could if it wished, initiate
bargaining for a proposed agreement, the effect of which will be to trigger a
notification time following which a valid Notice must be given.
[116] The Appellant also submitted that it would be open to a union or employee
bargaining representative to apply for a majority support determination to overcome
an employer’s failure to comply with s.173(3), an employer could indefinitely frustrate
the desire of the majority of employees to bargain collectively by simply failing to
issue a Notice within 14 days of any majority support determination being made.
[117] There are many things that an employer or a bargaining representative may do
during the course of bargaining to frustrate the making and the approval of an
agreement. The employer could deliberately issue a Notice that does not comply with
the form and content requirements. The employer could deliberately ask employees to
vote to approve the agreement less than 21 days after the last date on which a valid
Notice was issued. The employer could deliberately fail to give an explanation to
employees of the terms of the agreement and their effect. The employer could
deliberately fail to give employees a copy of the written text of the agreement or make
it available during the relevant period, or fail to make available material incorporated
by reference in the agreement. The employer could deliberately fail to notify relevant
17
employees by the start of the access period, of the time at which the vote will occur,
the place at which the vote will occur or the voting method that will be used. These are
just some of the things that an employer could do to frustrate the capacity of the
Commission to approve an agreement. Each of these failures would be a basis for the
Commission not to approve an agreement. However, that this might occur does not
provide a reason to not give full effect to the provisions of the Act, which the
Parliament has made clear form part of the statutory test that must be passed before the
Commission approves an agreement.
…
[120] We would observe in passing that we are not unsympathetic to the position in
which an employer or indeed other bargaining representatives might find themselves
upon discovering that a Notice is not valid. If the legislative provisions provided some
discretion about this and other pre-approval technical requirements then an
examination of the actual impact of any deficiency upon the bargaining process and its
outcome might result in the deficiency being disregarded. But that is not the legislative
scheme the Commission is required to administer. It is a matter for Parliament to make
such amendments to the scheme of the Act as it sees fit.”
[41] Although we were not taken in the appeal to the judgment, the High Court addressed
the matter of when an agreement is “made” in ALDI Foods Pty Limited v Shop Distributive &
Allied Employees Association [2017] HCA 53 (“ALDI”) in an appeal where the Full Court of
the Federal Court had determined certain coverage and better off overall issues. Given the
focus in the appeal before us on when an agreement has been “made”, it is apposite to quote
the judgment in ALDI at some length (per Kiefel CJ, Bell, Keane, Nettle, Gordon and
Edelman JJ; Gaegler J separately agreeing with the orders and adding an additional
observation):
“Making an enterprise agreement
39 Under s 180(2)(a) of the Act, the employer must take all reasonable steps to ensure
that “the employees … employed at the time who will be covered by the agreement”
are given a copy of the agreement and certain other material.
40 By s 181(1) of the Act:
“An employer that will be covered by a proposed enterprise agreement may
request the employees employed at the time who will be covered by the
agreement to approve the agreement by voting for it.”
41 As to when a single-enterprise agreement is made, s 182 of the Act provides
relevantly:
“(1) If the employees of the employer … that will be covered by a proposed
single-enterprise agreement that is not a greenfields agreement have been asked
to approve the agreement under subsection 181(1), the agreement is made
when a majority of those employees who cast a valid vote approve the
agreement.
…
18
(3) A greenfields agreement is made when it has been signed by each employer
and each relevant employee organisation that the agreement is expressed to
cover …
(4) If:
(a) a proposed single-enterprise agreement is a greenfields agreement that
has not been made under subsection (3); and
…
(e) the relevant employer or employers apply to the [Commission] for
approval of the agreement;
the agreement is taken to have been made:
(f) by the relevant employer or employers with each of the employee
organisations that were bargaining representatives for the agreement; and
(g) when the application is made to the [Commission] for approval of the
agreement.”
42 It can be seen that an agreement that is not a greenfields agreement, ie one that has
not been made under s 172(2)(b), is made upon approval by the employees who will
be covered by the agreement. When it is made, those employees are accurately
described as being covered by it, even though it does not yet apply to them in the sense
of being in operation so as to create rights and liabilities in relation to work actually
performed under it. It covers them in the sense contemplated by s 53 of the Act
because it is expressed to cover the jobs described as being within its scope; it is the
charter of rights and duties for those who actually enter into employment under its
terms.
43 Under s 185(1), if an enterprise agreement is made, a bargaining representative for
the agreement, whether for the employer or employees, must apply to the Commission
for approval of the agreement.
Approval by the Commission
44 At the time that approval is sought from the Commission, the agreement will have
already been made, in the case of a non-greenfields agreement, by the employees who
made it under s 182(1) of the Act.
45 Section 186(1) of the Act requires the Commission, on an application for approval
of an enterprise agreement under s 182(4) or s 185, to approve the agreement “if the
requirements set out in this section and section 187 are met.”
46 Under s 186(2), the Commission must be satisfied relevantly 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
…
19
(d) the agreement passes the better off overall test.
47 One may note that s 186(2)(a) is necessarily speaking of an enterprise agreement
that is made, not as referred to in sub-s (2)(b) of s 172, but as referred to in sub-s (2)(a)
of s 172.
48 Section 186(2)(a) requires, in respect of a non-greenfields enterprise agreement,
that the Commission be satisfied that the agreement has been genuinely agreed to by
the employees “covered by” the agreement. Such an agreement is, as has been seen
from s 182(1), an agreement that has been made. The Full Bench in this case was
correct when it said:
“In our view the concepts of ‘coverage’ and ‘application’ in ss 52 and 53 of the
Act provide the key to the interpretation of the phrase 'who will be covered by
the agreement' in s 172(2)(a) and s 182(1). An enterprise agreement covers an
employee if it is expressed to cover the employee. An enterprise agreement
applies to an employee in relation to particular employment if the agreement
covers them and the agreement is in operation.”
49 The Full Bench was also correct when it went on to say that, in determining
whether, for the purposes of s 186(2), the employees “will be covered by the
agreement after it is made”, “[a]pplication of the agreement is not relevant.”
50 Section 186(3) provides, in relation to both greenfields agreements and
non-greenfields agreements, that the Commission must be satisfied that the group of
employees “covered by” the agreement was fairly chosen. In this regard, s 186(3A)
relevantly provides:
“If the agreement does not cover all of the employees of the employer …
covered by the agreement, the [Commission] must, in deciding whether the
group of employees covered was fairly chosen, take into account whether the
group is geographically, operationally or organisationally distinct.”
51 Section 188 of the Act states the circumstances in which the Commission may be
satisfied that an enterprise agreement “has been genuinely agreed to by the employees
covered by the agreement”.
52 Section 187(5) contains an additional requirement in respect of a greenfields
agreement. It is the only provision of Pt 2-4 which does not neatly accommodate the
view that an agreement covers employees when it is made, so that they are then
employees who are covered rather than employees who will be covered. It provides:
“If the agreement is a greenfields agreement, the [Commission] must be
satisfied that:
(a) the relevant employee organisations that will be covered by the agreement
are (taken as a group) entitled to represent the industrial interests of a majority
of the employees who will be covered by the agreement, in relation to work to
be performed under the agreement; and
20
(b) it is in the public interest to approve the agreement."
53 Section 187(5) is not a sufficient warrant to disregard the scheme otherwise
followed in Pt 2-4. It is evident that Parliament did not draw a significant distinction
by the change of tense from “covered” to “will be covered” in s 187(5). It may be
noted here that s 187 is expressed to set out “additional requirements” for the approval
of agreements to the “general requirements” contained in s 186. In this regard, s 186,
which also applies to greenfields agreements, uses the present tense in sub-ss (2)(a),
(2)(b)(i), (3), (3A) and (6)(a) notwithstanding that the agreement is yet to be approved
by the Commission. Parties to a greenfields agreement, too, are covered by an
agreement when it is made and before it is approved, as is apparent from sub-ss (3)
and (4)(g) of s 182.”
(bolding and square bracketing in original; references omitted; underlining added)
[42] The judgment in ALDI later continued:
“77 The question of coverage that arises when the Commission asks whether the
agreement has been genuinely agreed to for the purposes of s 186(2)(a) is not whether
the employees voting for the agreement are actually employed under its terms, but
rather whether the agreement covers all employees who may in future have the terms
and conditions of their jobs regulated by it. At the stage of considering whether an
enterprise agreement is available to be made under s 172 of the Act, ie when no
agreement has as yet been made, it is a natural and ordinary use of language to speak
of the employees whose jobs are within the scope of the proposed agreement as
employees who “will be covered” by the agreement. At the stage of considering
whether an enterprise agreement, which has been made (by virtue of s 182(1)), should
be approved pursuant to s 186(2)(a), it is a natural and ordinary use of language to
speak of the employees, whose jobs are described by the terms of the agreement which
has been made, as employees who “are covered” by the agreement.
…
83 … The employees covered by agreements that are not greenfields agreements
presented to the Commission for approval are necessarily those employees with whom
the agreements have been made under s 182(1).
(underlining added)
[43] Moreover, following after the ALDI judgment in December 2017 was the May 2018
judgment of the Full Court of the Federal Court (Bromberg, Katzmann and O’Callaghan JJ) in
One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018]
FCAFC 77 (“One Key”). The Full Court, in turn, set out matters in paragraphs 6-32
identifying the legislative architecture concerning enterprise agreements, including the
following paragraph:
“22. A single-enterprise agreement that is not a greenfields agreement is made when a
majority of those employees who cast a valid vote approve the agreement: s 182(1). An
agreement is only effective, however, if and when it is approved by the Commission.
As the plurality explained in ALDI Foods Pty Ltd v Shop, Distributive and Allied
Employees Association [2017] HCA 53; (2017) 350 ALR 381; 92 ALJR 33; 270 IR
459 at [34]:
21
An enterprise agreement comes into operation in the sense of creating rights
and obligations between an employer and employees in relation to the work
performed under it only after it has been approved by the Commission. After
that time the agreement applies to the employers and employees who are
covered by it. But before that time, as will be seen, by virtue of s 182(1) of the
Act, a non-greenfields enterprise agreement is “made” when a majority of
those employees who will be covered by the agreement cast a valid vote to
approve the agreement. As will be seen, once the agreement is made in
accordance with s 182(1), the agreement is treated by the Act as covering the
employers and employees to whom it refers.”
(my underlining)
[44] The ALDI judgment, which was delivered on 6 December 2017, post-dated decisions
of the Commission such as The Maritime Union of Australia v MMA Offshore Logistics Pty
Ltd [2017] FWCFB 660 (“MMA Offshore Logistics”), where a Full Bench concluded at [106]:
“We conclude that the DOF Agreement and the Smit Lamnalco Agreement could not have
validly been approved because the [notices of employee representational rights] which the
employer issued in each case were invalid” (my underlining). Similarly, in an earlier case,
“Australian Manufacturing Workers’ Union (AMWU) v Saunders International Ltd [2013]
FWCFB 6557 (“Saunders”) a Full Bench relevantly concluded:
“[11] According to the Form F17 “Employer’s Declaration in Support of Application
for Approval of Enterprise Agreement” dated 6 August 2013, the date on which the
last notice under s.173(1) was given to an employee to be covered by the Agreement
was 12 July 2013, and the date on which voting for the Agreement commenced was 2
August 2013. There was no issue that this was a factually correct statement. That being
the case, we are satisfied that Ground 3 of the notice of appeal is made out (as the
Respondent conceded). The employer’s request to employees for approval of the
Agreement was not made at least 21 days after the day on which the last notice of
representational rights was given. It follows that the Agreement was not properly
“made” in accordance with s.182 of the Act, nor was it genuinely agreed to as defined
in s.188. In those circumstances, the Commissioner had no jurisdiction to approve the
Agreement, and erred in doing so.
…
[13] It is necessary for us to determine the Application. For the reasons we have
stated, the Agreement was not “made” in accordance with s.182(1) of the Act, nor was
it genuinely agreed to by the employees to be covered by the Agreement. It cannot
therefore be approved under the Act. We dismiss the Application.
(references not reproduced; underlining added)
[45] The High Court in ALDI and in the Full Court of the Federal Court in One Key have
pronounced upon the matter of when an agreement is “made”; and whether a single-enterprise
agreement has been “made” within the meaning of s.182(1) of the Act does not turn on
concepts such as “validly” made, “purportedly” made, “properly” made - or any similar
glosses or variants on when an agreement is “made”.
[46] Once an agreement has been “made”, it then falls to the Commission to consider, in
relation to an application made pursuant to s.185 of the Act for the approval of the agreement,
whether the agreement is susceptible of approval against the background of the detailed
matters specified in the Act. It is unnecessary in this decision to traverse why an agreement
22
that has been “made” might not be approved, for such matters have been addressed in a range
of decisions. These decisions include, but certainly are not limited to, Construction, Forestry,
Maritime, Mining and Energy Union and Ors v CBI Constructors Pty Ltd [2018] FWCFB
2732; Construction, Forestry, Maritime, Mining and Energy Union v Dawsons Maintenance
Contractors Pty Ltd [2018] FWCFB 2992; Construction, Forestry, Maritime, Mining and
Energy Union v Lightning Brick Pavers t/a Lightning Brick Pavers [2018] FWCFB 3825.
Other miscellaneous considerations arise, including, for example, that an agreement cannot be
“made” with a single employee: s.172(6). While a single-enterprise agreement is, within the
meaning of s.182(1) of the Act, “made” when a majority of those employees who cast a valid
vote approve an agreement, the agreement cannot be approved by the Commission for any
range of reasons, such as of the type considered in Saunders (timing issue concerning notice
of employee representational rights) and MMA Offshore Logistics (content of notice of
employee representational rights).
[47] Regardless of which approach has been taken in past decisions of this Commission in
cases such as Saunders and MMA Offshore Logistics including considerations as to “properly
made” and the like, the end-result is the same because the subject agreement cannot be
approved by the Commission once the application for the approval of the agreement is made
to the Commission. (For completeness, I should add that as to employees who “cast a valid
vote” within the meaning of s.182(1) of the Act, I take that to mean a valid vote in the sense
of the vote being cast by employees who are eligible to vote by virtue of them being
employees who would be covered by the proposed agreement and who voted in a manner
conformably with the advice thereto pursuant to s.180(3) of the Act, i.e., that the eligible
voters’ votes are cast within the time, at the place, and using the relevant voting method, etc.)
[48] The approach adopted by the Commissioner in the Decision was consonant with the
approach of Platt C in Coles, sitting as a single member. It was also consonant with what was
said by a Full Bench of the Commission (per Gostencnik DP and Riordan C) in Uniline at
paragraph [115], which I again reproduce:
“[115] … Once an application is made to the Commission, bargaining for the
agreement has concluded albeit that the agreement might not be approved for a variety
of reasons, including for example, that it does not pass the better off overall test. In
that event, the employer could if it wished, initiate bargaining for a proposed
agreement, the effect of which will be to trigger a notification time following which a
valid Notice must be given.”
[49] It may be noted that what was said in the preceding passage in Uniline is consonant
also with what was said by a five-member bench in Peabody Moorvale Pty Ltd v
Construction, Forestry, Mining and Energy Union [2014] FWCFB 2042:
“[45] The consequence of failing to give a Notice which complies with the content and
form requirements of s.174(1A) is that the Commission cannot approve the enterprise
agreement. We note that this does not prevent the employer from recommencing the
bargaining process, completing the pre-approval steps (including the giving of valid
Notices) and making application to have the resultant enterprise agreement approved
by the Commission.”
[50] Thus, the Full Bench in Peabody Moorvale noted that an employer is not prevented
from recommencing the bargaining process, completing the pre-approval steps (including
23
giving valid notices of employee representational rights) and making an application to have
the resultant agreement approved. Equally, it is clear, an employer is not obligated to take the
initiative to recommence, or agree to recommence, that “bargaining process” described in
Peabody Moorvale - in which case it would be open to a bargaining representative seek a
majority support determination pursuant to an application under s.236 of the Act.
[51] If an agreement is incapable of approval or otherwise not approved by the
Commission, on the basis of whichever failing there may be arising from the stipulations in
the Act, it follows that it is, as Platt C noted in Coles at [40], necessary to “start the entire
bargaining process afresh”. As the outline of submissions for Broadspectrum correctly
pointed out at paragraph 2.5: “… bargaining needs to be recommenced so as to enliven a
notification time. In these circumstances, the employer has the option to initiate bargaining for
a proposed agreement or it can be compelled to bargain by a majority support determination.
Either way, the point remains that the bargaining must commence afresh to facilitate the
making of an agreement capable of approval by the Commission. …”.
[52] An agreement, once voted-up, has been “made”, and bargaining on it concluded -
regardless of whether the agreement is then subsequently approved by the Commission. This
same outcome of starting the bargaining process afresh is likewise also necessary if an
application before the Commission is discontinued by the applicant for the approval of the
agreement. The everyday experience of matters is that discontinuance of an application for the
approval of an agreement typically occurs in circumstances where an issue is drawn to an
applicant’s attention by a member of the Commission, including an issue that would be fatal
to an approval of the agreement, e.g., a pre-approval step failure is evident on the face of the
Form F17 (which is the employer’s statutory declaration in support of an application for
approval of an enterprise agreement) or evident in the Form F17’s supporting annexures; or
there is an issue concerning the text of the notice of employee representational rights; or if the
better off overall test failings are such that proposed undertakings would result in substantial
changes to the agreement. The same considerations as to the need to start afresh would also
apply in circumstances such as the atypical ones which emerged in CJ Mansfield Pty Ltd v
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied
Services Union of Australia [2011] FWA 3934 (where an agreement that had been made and
was the subject of an application for approval - and which was presumptively capable of
approval - was the subject of discontinuance by an employer prior to approval, over the
objection of the union which had been the employees’ bargaining representative).
[53] The AMWU put alternative arguments turning on the proposition that “even if the
2017 Proposed Agreement was validly ‘made’, on the facts of the matter the AMWU had and
retains standing to bring the application, and the Commission jurisdiction to hear it.” It is
unnecessary to further consider the AMWU’s alternative arguments because the question of
whether the proposed agreement was “validly ‘made’” is not to the point. This is because
ALDI now conditions the approach as to when an agreement is considered to have been
“made”, as set-out in the extracts above from that judgment of the High Court, and Uniline
has addressed when bargaining is concluded.
[54] Once an agreement has been “made” – held by the High Court in ALDI to be made
when a majority of those employees who cast a valid vote approve the agreement - and then
the application before the Commission is either dismissed or discontinued, it is not available
thereafter to place purported reliance on any earlier notification time and/or earlier notice of
employee representational rights because the bargaining for the agreement concluded when
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that agreement was made. The original notification time and associated notice of employee
representational rights for a proposed agreement are, for the want of a better description,
“spent” once the subject proposed agreement is made when a majority of those employees
who cast a valid vote approve the agreement (and an application subsequently lodged with the
Commission, which must occur because if an enterprise agreement is “made” a bargaining
representative must apply to the Commission for approval of the agreement: s.185(1)). This is
so, in the case of an application that is either discontinued or dismissed, notwithstanding the
operation of s.173(4) of the Act (cf. Site Fleet Services Pty Ltd [2017] FWC 2163 per Roe C
and Wangaratta Rural City Council [2018] FWCA 4087 per Lee C which considered the
availability of that section in circumstances where a predecessor agreement had been,
respectively, discontinued and dismissed; and, separately, see United Voice v MSS Security
Pty Ltd [2017] FWC 5291 per Spencer C as to a majority support determination application).
This because ALDI and One Key indicate when an agreement has been “made”, and Uniline
also indicates that once an application is made to the Commission bargaining for the
agreement has by then “concluded” - albeit the agreement might not be approved for a variety
of reasons, with the result the employer could, if it wished, initiate bargaining for a proposed
agreement the effect of which will be to trigger a notification time following which a valid
notice must be given.
[55] Specifically, starting bargaining afresh necessitates, among other matters, a new
notification time as described in s.173 of the Act:
the employer agrees to bargain, or initiates bargaining, for the agreement
(s.173(2)(a));
a majority support determination in relation to the agreement comes into operation
(s.173(2)(b));
a scope order in relation to the agreement comes into operation (s.173(2)(c)); or
a low-paid authorisation in relation to the agreement that specifies the employer
comes into operation (s.173(2)(d)).
[56] Hand-in-hand with the new notification time, an employer that will be covered by a
proposed agreement (other than a greenfields agreement) must take all reasonable steps to
give a notice of representational rights to those employees who will be covered by the
agreement and who are employed at the notification time for the agreement; those notices
must be only in the prescribed form and be given as soon as practicable, and not later than 14
days, after the notification time.
[57] I discern no appealable error in the Decision in dismissing the AMWU’s application
for a scope order for want of jurisdiction. Indeed, the Decision in such respects was,
respectfully, in my view, correct - including in its reliance on the decisions in Coles and
Uniline in the conclusion reached.
[58] Last, I am bound to note, the majority seems to convey at least some criticism about a
source of jurisdiction in that the Commissioner made a recommendation in relation to certain
matters, in association with dismissing the application for the scope order. As to this, I note
the oral submissions before the Commissioner were (at transcript PN548ff) that it would be of
assistance to the parties if views were expressed about the merits of the matter, even if the
25
Commissioner were to form the view there was no jurisdiction in relation to the application -
“because that would assist the parties going forward” in connection with any future
bargaining. The Commissioner made a recommendation against the background of the
evidence and submissions before her, as had been requested. The question of the source of a
power to make a recommendation might equally be questioned in relation to any number of
the multitudes of matters about which the Commission makes recommendations to parties on
a day-in, day-out basis. Recommendations of the Commission are, of course, often of
assistance to parties in dispute about matters, even if such recommendations are not sourced
from specific statute-based provisions (such as in the example of s.595(2)(b) of the Act). The
making of recommendations by members as they deem appropriate (and, in the proceeding
before the Commissioner, it may be noted, upon party request) should not, in my view, be in
any way discouraged or be seen to be discouraged by a Full Bench for want of a specific
source of power to make a recommendation.
[59] Were it not for the majority conclusion concerning the disposition of the appeal -
namely, that the appeal is upheld and the Decision quashed - I would have proposed a
relisting of the appeal proceedings to draw to the parties’ attention what was said in ALDI and
One Key, in the event they may wish to make any further submissions.
[60] I would grant permission to appeal because it is in the public interest to do so, given
what flows from when an agreement is “made” and related issues such as triggering a new
notification time. This is particularly so in the wake of the fairly recent judgments of the High
Court in ALDI and the Full Court of the Federal Court in One Key as to when an agreement is
“made”, and considered in the context of earlier Full Bench and single-member decisions of
this Commission. Absent a relisting and considering any further submissions, I would
otherwise dismiss the appeal.
VICE PRESIDENT
Appearances:
L. Saunders of Counsel on behalf of the AMWU.
B. Rauf of Counsel on behalf of Broadspectrum (Australia) Pty Ltd.
Hearing details:
2018.
Sydney:
17 September.
Printed by authority of the Commonwealth Government Printer
PR701698
OF THE FAIR WORK MISSION THE
