[Note: a correction has been issued to this document] [2012] FWAFB 9512 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
VICE PRESIDENT WATSON SENIOR DEPUTY PRESIDENT WATSON COMMISSIONER GOOLEY |
SYDNEY, 8 NOVEMBER 2012 |
Appeal against decision [2012] FWA 6450 of Commissioner Booth at Brisbane on 1 August 2012 in matter number AG2012/1335.
DECISION OF SENIOR DEPUTY PRESIDENT WATSON AND COMMISSIONER GOOLEY
[1] This is an appeal, for which permission is required, pursuant to s.604 of the Fair Work Act 2009 (the Act), by Ostwald Bros Pty Ltd (the Appellant) against the decision of Commissioner Booth of 1 August 2012, 1 in which the Commissioner declined to approve its application for approval of the Ostwald Bros Civil Pty Ltd Collective Agreement 2012 (the Agreement).
[2] The Appellant was supported in the appeal by The Australian Workers’ Union, Queensland Branch (AWU), an employee organisation which gave notice 2 pursuant to s.183 of the Act that it wished to be covered by the Agreement. The appeal was opposed by the Construction, Forestry, Mining and Energy Union (the Respondent), an employee organisation with members who will also be covered by the Agreement and a bargaining representative on behalf of those members the Respondent opposed the approval of the Agreement before Commissioner Booth.
The Proceedings before Commissioner Booth and her decision
[3] In the approval proceedings before Commissioner Booth, the Respondent opposed the approval of the Agreement on several grounds. Relevantly, for the purposes of the appeal, the Respondent submitted that the Agreement could not be approved because the purported notice of representational rights 3 omitted a prescribed clause and therefore did not satisfy s.174(3) of the Act and, as a result, no valid notice had been given and therefore there could be no genuine agreement and the Agreement could not be approved.
[4] It is common ground that the notice of representation rights provided to the relevant employees in relation to the application before Commissioner Booth was in the following terms:
“Schedule 2.1 Notice of employee representational rights
(regulation 2.05)
Fair Work Act 2009, subsection 174 (6)
Ostwald Bros. Civil Pty Ltd gives notice that it is bargaining in relation to an enterprise agreement the Ostwald Bros. Civil Pty Ltd Collective Agreement 2012.
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 Australia.
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 Australia 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.
Questions?
If you have any questions about this notice or about enterprise bargaining, please speak to either Rohan May HR Manager - [number omitted], bargaining representative, go to www.fwa.gov.au, or contact the Fair Work Australia Help Line on 1300799675.” 4
[5] In the proceedings before Commissioner Booth, the Respondent relied on the omission from the notice of advice, prescribed in s.174(3) of the Act, to relevant employees that:
“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.”
[6] Section 174(3) requires that a notice advise employees of what can conveniently be described as default bargaining representation prescribed in s.176(1)(b) of the Act:
“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
(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.”
[7] In addition to the omission is respect of s.174(3) of the Act, the Respondent also raised the deviation in the notice from the terms of the form of the notice of employee representational rights in Schedule 2.1 of the Fair Work Regulations 2009 (the Regulations) prescribed by Regulation 2.05 of the Regulations for s.174(6) of the Act, in that it altered the terms of the Questions section from the form used in Schedule 2.1:
“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 Australia Infoline on [insert number].” 5
[8] The notice also deviated from the form of the notice of employee representational rights in Schedule 2.1 of the Regulations in that it omitted a description of the proposed coverage of the Agreement. This deviation was not raised in the appeal and it is not necessary to deal with it for the purposes of disposing of the appeal.
[9] For completeness, it may be noted that the form prescribed in Schedule 2.1 by Regulation 2.05 includes two additional pieces of information to be included in the first instance if a low-paid authorisation applies to the agreement and in the second instance if the employee is covered by an individual agreement-based transitional instrument. It is not suggested that either of these circumstances arises in the current matter or that there was any requirement to include that information in the notice absent either of those circumstances arising.
[10] Before the Commissioner, the Appellant submitted that the approach to be taken for approval of an agreement is whether the purpose of the Act in respect of agreement approval has been satisfied, urging upon the Commissioner a practical approach rather than a technical approach. It submitted that that when considering the effect of a defective notice, Fair Work Australia must consider the objects of the Act, specifically to provide a simple, flexible, fair framework that enables good faith bargaining, arguing that a defective or irregular notice does not necessarily invalidate it. It argued that the defect in the case before the Commissioner did not invalidate the notice. In summary terms, the Appellant’s position was that a defect in the notice of representational rights did not invalidate the notice for the purpose of genuine agreement and determination of whether or not an enterprise agreement has been genuinely agreed to by the employees requires an assessment, in the circumstances of each case, as to whether the defect affected genuine agreement (the practical approach).
[11] In her decision, the Commissioner:
● considered and applied case law; 6
● distinguished the default bargaining representation in s.176(1)(b) of the Act from the requirement in s.174(3) to appraise relevant employees of the existence of that right; 7
● found that it is “not an unreasonable inference of Parliament’s intention that a notice of representation rights must include the advice of a default representation for the notice to be valid;” 8
● found that “it is necessary to have regard to the legislative context, including ss.174(5) and 178” which deal with the process for the appointment of a non-default bargaining representative and advice in the notice of that process; 9 and
● found that the statutory context discloses an “intention to ensure employees not only have a right to representation in bargaining, whether by default or by appointment, but that employees are armed, by proper notice, with the necessary knowledge about how they can go about exercising that right of representation.” 10
[12] The Commissioner concluded:
“[63] I have concluded that the legislature had a clear intention that certain information be provided to employees during bargaining. In this case, the information was not provided, whether by the prescribed words or other words that adequately conveyed the same intent.
[64] A defective or irregular notice may still be sufficient, consistent with the High Court’s approach in Blue Sky Project and the Full Bench’s statements in Galintel. However, not every defect or irregularity will satisfy the Act’s requirement for notice to be given. As Mr Herbert put it in argument for the Applicant:
‘… the essence of the matter is this: if a notice, which is made and purported to be made in a substantial attempt to comply with section 173, it has the effect of a notice under section 173. The question as to whether it is or purports to be in compliance a notice given in discharge of the employer’s obligations under section 173, will be question that is easily answered by examination of the notice itself.’
[65] In this case, no notice was given of the default representation. I have found that such notice is required by the Act in order to discharge Parliament’s intent that employees not only have representation rights but that they are aided in exercising those rights by a notice that is required to be given as part of the statutory scheme. Its omission is such that the requirements of 174(3) have not been met and therefore the employer has not given a notice of the right to be represented by a bargaining representative to each employee.
[66] What the employer has done is given partial notice, inadequate for the legislated purpose.
[67] I find that the employer has not complied with s.173(1) and therefore notice was not given for the purposes of the 21 days time frame in s.181(2).”
[13] Commissioner Booth also found that, if she was wrong in her conclusion that giving notice of the default bargaining representative is an essential part of giving valid notice, then applying the practical approach urged upon her by the Appellant, that the deficiency in the notice, although accidental, was important and that as a practical matter, in the contested circumstances before her, she could not be satisfied that the Agreement had been genuinely agreed to by the employees covered by the Agreement (s.186(2)(a)). 11
[14] In light of her decision in relation to the s.174(3) issue, the Commissioner found it unnecessary to determine the Respondent’s objection based on the wording of the questions clause in the notice. 12
Submissions in the Appeal
[15] Written submissions were filed by the Appellant and Respondent and augmented by submissions in the hearing of the Appeal on 9 October 2012. In the hearing the AWU supported the submissions of the Appellant.
[16] Although expressed as five separate grounds in the appeal notice, the appeal raises two broad questions:
(a) A construction question: whether as found by the Commissioner, the Act requires a notice in the type required by s.174 (and in this case s.174(3) specifically) in order to meet the requirements of s.186 as to genuine agreement or whether, as contended for by the Appellant, when read in the context of the Act as a whole, a failure to meet the s.174 requirements of a notice (and in this case s.174(3) specifically) does not prevent genuine agreement within the meaning of s.186 of the Act, with the fact of genuine agreement to be determined objectively by reference to the circumstances of a particular case; and
(b) If the Appellant is right on the construction question, whether Commissioner Booth erred in finding, as a matter of practicality, that she could not be satisfied that the Agreement had been genuinely agreed to by the employees covered by the Agreement, in the circumstances of the application before her.
The Appellant’s Case
[17] The Appellant submitted that the legislated purpose of the notice of employee representational rights is to assist employee parties, within the limitations of the extent to which the Act requires the distribution of the notice, to commence negotiations for an agreement and the process of giving such notices was not meant to be so strictly observed as to provide a barrier to the conclusion and approval of agreements in every case where material non-compliance may be found. 13 It submitted that this construction is supported by several matters:
● the broader context of the Act in that only “all reasonable steps” to provide a notice is required (s.173(1));
● only employees at notification time are entitled to receive a notice;
● given employee turnover, many employees who vote on an agreement will not have received a notice; and
● a notice will be largely irrelevant in a highly unionised workforce.
[18] It further submitted that the criteria for approval under s.186 of the Act (s.186(2)(b)), referable to s.181(2) is concerned only with the timing of the application in relation to the last notice to those who are entitled to receive a notice. It submitted that s.188 does not include an express requirement that s.173 or s.174 of the Act has been complied with. 14
[19] The Appellant submitted that it would be an extraordinary outcome that if, after a protracted negotiation and hard won “genuine agreement”, that an undetected non-compliance with a distant s.173 must prevail over that agreement. 15 It submitted that the Act accomodates this possibility by focussing at the point of approval on the fact of genuine agreement and gives a wide discretion in s.188(c) of the Act for Fair Work Australia to do so.16
[20] The Appellant submitted that the fact and consequences of non-compliance in the terms of a s.173 notice are matters to be taken into account in the assessment of whether an agreement has been genuinely agreed to and omissions of the kind which occurred in this case does not automatically mean that a subsequent agreement, which on its face has been genuinely agreed to, must be refused approval. 17 It submitted that automatic refusal in circumstances of non-compliance with the requirements as to the terms of a notice would create the antithesis of a “simple, flexible and framework”.18 Although the appeal is directly concerned with only s.174(3) of the Act, the Appellant accepted that its construction of the Act and the approach it supports would extend to other terms of a notice within s.174 of the Act, including s.174(2).19
[21] The Appellant submitted that relevant authority 20 establishes that failure to strictly comply with the requirement to issue notices of representational rights in accordance with the Act and Regulations, does not invalidate the notice, so as to lead to the consequences found by Commissioner Booth, leading her to refuse approval of the Agreement.
[22] The Appellant submitted that the Full Bench in “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Inghams Enterprises Pty Ltd 21 (Inghams) held that a notice was not invalid because it omitted a qualification to the right of bargaining representation contained in Schedule 2.1 of the Regulations because the employees were notified of their “core” right to appoint a bargaining representative.22 It submitted that the notice provided in the current case met the “fundamental criteria” of a notice under the Act in that it advised employees that:
● The employer was bargaining in relation to an agreement;
● The Agreement was proposed to cover the nominated employees; and
● The employees could nominate a bargaining representative of their choice.
[23] It submitted that the omission of advice of default representation was not a “fundamental criteria” of the notice. 23
[24] The Appellant also put submissions on the basis of alleged error in respect of the application of the practical approach it supported. It is unnecessary to set out that argument in light of our decision in respect of the construction issue.
[25] The Appellant submitted that permission to appeal should be granted in the public interest in light of a number of related decisions which are not easy to reconcile and the public benefit of clear guidance as to the standing of s.173 notices in cases where non-compliance has occurred.
The Respondent’s Case
[26] The Respondent commenced its submissions by submitting that the authorities relied on by the Appellant did not directly apply to the position before Commissioner Booth.
[27] It accepted that the proper approach to determining the validity of an act done in breach of a statutory provision is aptly set out Project Blue Sky v Australian Broadcasting Authority 24 (Project Blue Sky) with the task being to discern what Parliament’s intention was in respect of a failure to comply with a notice omitting the s.174(3) paragraph.
[28] It submitted that s.171(a) of the Act relevantly provides that the object of the part is “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”.
[29] The Respondent submitted that Parliament, by stipulating not only that the notice must be provided and setting out its content but by allowing for the prescription in the Regulations of the precise content of the notice, simplified the task of an employer giving the notice and specified what is necessary to satisfy the requirement of giving notice. 25
[30] It submitted that the qualification to the giving of notice - “take all reasonable steps” - applies to the giving of the notice, not its content. The qualification to the giving of the notice contrasts with the absence of any qualification as to the content requirements, strongly suggesting that near enough is not good enough in respect of the content.
[31] The Respondent submitted that the stipulation in s.174(3) of the Act is clear and is reinforced by its prescription through the Regulations.
[32] The Respondent submitted that the purpose of the need for an explanation within a notice as to default representation is clear. It submitted that (non-greenfield) agreements under the Act are made between the employer and its employees, who have an important role to play in the outcome of agreement negotiations and an important role to play in the process of bargaining. It submitted that the Act provides them with a choice as to how that role is to be undertaken, that Parliament has mandated that the employees need to be aware of their rights in respect of bargaining at the commencement of the bargaining process and a failure to do that, strikes at the heart of the whole bargaining process. The Respondent contends that the purpose of s.174(3) of the Act is consistent with the objects of the Act and in particular s.3(f): “achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action.”
[33] It submitted that Commissioner Booth was correct in finding that there has been no proper notice given and therefore the requirements of s.173 of the Act had not been complied with.
[34] It is not necessary to set out the respondent’s submissions on the application of the practical approach supported by the Appellant.
[35] The Respondent submitted that the appeal is misconceived and permission to appeal should be refused.
Consideration
Permission to Appeal
[36] We think that it is in the public interest that permission to appeal be granted in light of the general issues raised in respect of the notice of employee representational rights within bargaining provisions of the Act.
The Construction issue - s.174(3) of the Act
[37] The construction issue, as noted above is whether the Act requires a notice in the type required by s.174 of the Act (and in this case meeting the requirements of s.174(3) specifically) in order to meet the requirement in s.186 of the Act for genuine agreement, as found by Commissioner Booth, or whether, when read in the context of the Act as a whole, a failure to meet the s.174 requirements of a notice (and in this case s.174(3)) does not prevent genuine agreement within the meaning of s.186, of the Act with the fact of genuine agreement to be determined objectively by reference to the circumstances of a particular case, as contended for by the Appellant
[38] We accept, as reflected in the Full Bench decision in Inghams, that guidance can be found in Tasker and others v Fullwood and others 26 (Tasker), and Project Blue Sky to the following effect:
● The task of construction is to determine whether the legislature intended that a failure to comply with the stipulated requirement “would invalidate the act done, or whether the validity of the act would be preserved notwithstanding non-compliance”;
● The only true guide to “the statutory intention is to be found in the language of the relevant provision and the scope and object of the whole statute”;
● “The intention being sought is the effect upon the validity of the act in question, having regard to the nature of the precondition, its place in the legislative scheme and the extent of the failure to observe its requirement”; 27
● It can mislead if one substitutes for the question thus posed an investigation as to whether the statute is mandatory or directory in its terms; and
● “A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid . . . In determining the question of purpose, regard must be had to the ‘language of the relevant provision and the scope and object of the whole statute’.” 28
[39] We note that Commissioner Booth did not pose the question before her in terms of whether the statute is mandatory or directory but addressed herself to the statutory intention within the broader context of the Act. 29
[40] In giving effect to the approach in Tasker and Project Blue Sky it is necessary to set out provisions of the Act which provide the broader statutory context.
[41] The achievement of the objects of the Act in s.3 is to be achieved by:
“enabling fairness and representation at work and the prevention of discrimination by recognising the right to freedom of association and the right to be represented . . .” 30 and;
“achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action.” 31
[42] The objects of Part 2-4 - Enterprise agreements - of the Act 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 FWA 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 FWA for approval of enterprise agreements are dealt with without delay.” 32
[43] Non-greenfields agreements are made between an employer and their employees. 33
[44] Representation of employees (and employers) in bargaining (for non-greenfields agreements) has an important role within the bargaining process of the Act, with Division 3 of Part 2-4 of the Act, setting out:
● Requirements for an employer that will be covered by an agreement to take all reasonable steps to give notice to relevant employees of the right to be represented by a bargaining representative 34 and the timing of such notice35 at an early stage of the bargaining process;
● Requirements in relation to the content of the notice; 36
● Who are “persons who are bargaining representatives”, 37 including an employee organisation as a default representative in respect of an employee who is a member of the organisation unless another representative has been nominated in accordance with the Act or the employee has revoked the default representation;38
● The means of appointing a non-default representative 39 and other matters in relation to them, including a requirement that the employee provide a copy of the appointment instrument to their employer;40
● The right and process for revoking the appointment of a bargaining representative. 41
[45] The Act “adopts prescriptive and formal requirements for the appointment of bargaining representatives” and “it is fundamental to the exercise of power by a bargaining representative that the appointment has been validly made.” 42
[46] Various rights and obligations (actual or potential) arise in respect of bargaining representatives under the Act. 43
[47] It is also useful to set out the provisions of the Act which arise more directly in the circumstances of the appeal.
[48] Section 186 of the Act sets out a number of general requirements for approval of an enterprise agreement.
[49] The first such requirement, found in s.186(2)(a) of the Act is that Fair Work Australia must be satisfied, “if the agreement is not a greenfields agreement - the agreement has been genuinely agreed to by the employees covered by the agreement.”
[50] Section 188 of the Act provides that employees have genuinely agreed to an enterprise agreement, if Fair Work Australia 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.”
[51] As noted in Inghams:
“FWA must be satisfied the enterprise agreement has been genuinely agreed to by the employees covered by it and FWA will be so satisfied if it is satisfied the employer, amongst other things, did not request that the relevant employees approve the enterprise agreement until 21 days after giving the last notice of employee representational rights.” 44 [references omitted]
[52] It may be seen that “genuinely agreed” in s.188 of the Act is expressed in terms of satisfaction that particular bargaining provisions within the Act have been complied with (ss.188(a) and (b)) and satisfaction of a more general criterion in s.188(c) of the Act, rather than in terms of a more general consideration of whether in all of the circumstances of a particular agreement a member is satisfied that the agreement has been genuinely agreed to by the employees.
[53] The more general provision within s.188(c) of the Act requires satisfaction that “no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.” The expression “other reasonable grounds” indicates that s.188(c) of the Act is concerned with considerations not dealt with within ss.188(a) and (b).
[54] The specific requirements in s.188(a) of the Act are that the employer “covered by the agreement complied with the following provisions in relation to the agreement.”:
● Section 180(2) of the Act: The employer must take all reasonable steps to ensure that during the access period for the agreement, 45 “the employees employed at the time who will be covered by the agreement are given a copy” of the agreement and “any other material incorporated by reference in the agreement” or “have access, throughout the access period for the agreement, to a copy of those materials.”
● Section 180(3) of the Act: “The employer must take all reasonable steps to notify the relevant employees” of the “time and place at which the vote will occur” and the voting method by the start of the access period for the agreement.
● Section 180(5) of the Act: The employer must take all reasonable steps to ensure that the terms of the agreement, and their effect are explained to the relevant employees, “in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.”
● Section 181(2) of the Act: the request by the employer of the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it “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.”
[55] It is s.181(2) of the Act which specifically arises in the appeal.
[56] Section 188(b) of the Act requires satisfaction that a majority of those employees who cast a valid vote approve the agreement.
[57] Section 173(1) of the Act provides that 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 “will be covered by the agreement” and is employed at the “notification time” for the agreement. 46
[58] Section 174 sets out the required content of notice of employee representational rights as follows:
“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.
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 FWA 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
(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).
Regulations may prescribe additional content and form requirements etc.
(6) The regulations may prescribe other matters relating to the content or form of the notice, or the manner in which employers may give the notice to employees.” 47
Consideration
[59] Having regard to the statutory context within which it appears, we find that genuine agreement by employees in s.188(a)(ii) requires that the last notice under s.173(1) which must be given at least 21 days in advance of a request to vote is a notice of the type prescribed in s.173, including the content requirement in s.174(3). The Appellant contended that a failure to provide a notice in those terms is of no consequence unless the deficiency in the notice is found, on the relevant evidence, to have vitiated genuine agreement when considered as a broad discretionary judgement. We find that construction to be unsustainable in the context of the Act. Our reasons follow.
[60] Firstly, it is necessary to give effect to the Parliament’s express inclusion within the Act of the requirements in s.174 as to the terms of the notice and the purpose of that provision.
[61] The giving of a notice in the terms required by s.174 of the Act is clearly intended to ensure that employees not only have a right of representation in bargaining but that they are also appraised of that right and the means of exercising that right early in the bargaining process in order that they are capable of effectively utilising that right if they choose. The requirements in s.174 of the Act were intended to have effect and were reinforced by their inclusion within Schedule 2.1, made by Regulation 2.05, pursuant to s.174(6) of the Act.
[62] The inclusion by the Parliament within the Act of an express requirement upon employers to provide a notice (s.173) and the express requirements as to the content of a notice (s.174) is consistent with the importance of bargaining representation evident in the bargaining process established by the Act. It is also consistent with the objects of the Act and Part 2-4 of the Act in relation to fairness and representation at work, the right to freedom of association, the right to be represented, collective bargaining underpinned by simple good faith bargaining obligations, a simple, flexible and fair framework that enables collective bargaining in good faith and the facilitation of good faith bargaining.
[63] Given the express statutory requirements as to the terms of a notice and their clear purpose, it is apparent that the requirements in respect of the notice in s.188(a)(ii) are intended to be a notice including the terms required by s.174 of the Act.
[64] Second, s.174 evinces a clear intention that employees are fully informed as to their right of representation - default representation or to otherwise nominate a bargaining representative - and the means of affecting that right.
[65] Having legislated the default position in relation to bargaining representatives and the appointment of a non-default representative and the means of obtaining such representation (ss.176(1)(b) and (c)) and other matters in relation to bargaining representatives, including the requirement to notify the appointment of a non-default representative (s.178), the provisions in s.173 and s.174 of the Act were clearly intended to serve another purpose. The requirement to give a s.173 notice to relevant employees, in the terms required by s.174, serves a distinct and separate purpose from the giving of rights of representation through s.176. The requirement to give the notice in the required terms is directed to the additional purpose of advising employees of their rights of representation and the means of exercising them in order that they can effectively utilise their right of representation in bargaining and to enhance the process of fair bargaining under the Act.
[66] In our view Commissioner Booth was correct in finding that “the creation of the right by statute is different from the exercise of that right, having been put on notice as to its existence” 48 and that Parliament’s intention “that a notice of representation rights must include the advice of a default representation for the notice to be valid.”49
[67] A Full Bench in Galintel Rolling Mills Pty Ltd T/A The Graham Group 50 (Galintel), which noted the Inghams decision,51 considered a notice in identical terms to the prescribed form mentioned in Regulation 2.05 of the Regulations but which added a slip enabling employees to nominate bargaining representatives. The decision in Galintel provides relevant guidance as to the purpose of the notice.
[68] In considering whether the employer gave a notice under s.173 of the Act, the Full Bench noted:
“[39] The context and purpose of these provisions are important. Imposing a requirement for employers to notify its employees of their rights of representation is obviously seen by the legislature as an essential ingredient of fair bargaining and agreement making under the Act. So too is the notion of employees being free to exercise their choice of representation. In some workplaces employers may be negative or even hostile to union representation. Negotiations may be quite adversarial.
[40] The requirement in s181(2) is that employers advise employees of their rights and allow the specified time for employees to make whatever choice they wish to make. If an employer fails to advise employees of their rights in the manner specified, the requirement is not satisfied.”
[69] The Full Bench in Galintel, 52 described the requirement in s.181(2) of the Act as having two elements: for employers to “advise employees of their rights” and to “allow the specified time for employees to make whatever choice they wish to make.”
[70] Applying the observations in Galintel to the circumstances arising in the current appeal, the Appellant has failed to meet the requirement to notify its employees of their rights of representation, in this case their right of default representation. Such an omission meant that employees were not informed of their right to utilise default representation and have bargaining representation without bringing themselves to the attention of the employer. The requirement in s.181(2) of the Act that employers advise employees of their rights was not satisfied.
[71] The Appellant characterised the legislated purpose of the notice of employee representational rights as assisting employee parties to commence negotiations for an agreement. 53 That characterisation was emphasised by the Appellant in an analogy concerning the game of football, in which the Appellant likened the giving (and purpose) of a notice of representational rights to the bouncing of the ball to start a football match.54
[72] The giving of the s.173 notice does not commence the bargaining process under the Act. It commences when the employer agrees to bargain or initiates bargaining or when a majority support order, scope order or low paid authorisation order comes into operation. 55 The requirement to take all reasonable steps to give notice of the right to be represented by a bargaining representative arises following the commencement of bargaining through one of those means and is intended to ensure that employees are made aware of the right to representation at the beginning of the bargaining process, so that bargaining can proceed with the maximum amount of efficiency and fairness.56
[73] Viewed in the context of the bargaining processes of the Act, the purpose of the notice, within the limitations of the extent to which the Act requires the distribution of the notice, is to inform the employees about their right to rely on default representation or to appoint a representative and be represented by the bargaining agent of their choice at the outset of the bargaining process, in order so that they can exercise those rights.
[74] Third, the requirement in s.174 of the Act as to communication of the types of bargaining representation and the means of obtaining representation is a clear requirement in respect of the notice of representational rights. The Appellant sought to distinguish between advice to employees that they could nominate a bargaining representative of their choice (s.174(2)), which it categorised as fundamental, 57 and advice about default representation (s.174(3)). It did not categorise advice about default representation as fundamental, submitting that the omission of advice of default representation did not invalidate a “fundamental criteria” of the notice.58 In our view, such a distinction cannot be properly made having regard to the terms of s.174 of the Act and the broader statutory context. Section 174(2) and s.174(3) are each options for bargaining representation under the Act, equally valid options which s.174 requires employers to advise employees about. No sensible distinction can be made between s.174(2) and s.174(3) of the Act. Advice as to each of these matters is required by the terms of s.174 and to meet the statutory purpose of advising employees of the rights of representation. An employee needs to be appraised of each option to be fully aware of his/her representational rights in bargaining and to effectively exercise their rights.
[75] The Appellant’s distinction as to “fundamental criteria” drew on the decision in Inghams. The Appellant submitted that the Full Bench in Inghams held that a notice was not invalid because it omitted a qualification to the right of bargaining representation contained in Schedule 2.1 of the Regulations because the employees were notified of their “core” right to appoint a bargaining representative. 59
[76] The decision in Inghams considered the validity of a s.173 notice, which omitted information, contained in Schedule 2.1 concerning a qualification to their right of representation in respect of employees covered by an individual agreement-based transitional instrument. 60 The omission from the notice in Inghams was of a qualification to the right of representation.61 The notice provided advice of their right to representation and the means of utilising that right. That situation is clearly distinguishable from the omission in respect of s.174(3) which had the effect of denying employees advice as to the fact of default representation and the means of utilising it. In the current case, the omission in respect of s.174(3) of the Act had the effect of denying advice to employees of information identifying one element of their “core” right to appoint a bargaining representative - the right to default representation.
[77] Further, the omission in Inghams concerned a failure to include a term of the notice made by Regulation 2.05, as Schedule 2.1, raising the application of s.25C of the Acts Interpretation Act 1901 (Cth) whereas in this case the omission was of an express statutory requirement in s.174(3) of the Act, which was replicated in Schedule 2.1.
[78] Fourth, the nature and terms of s.188 of the Act - When employees have genuinely agreed to an enterprise agreement - supports the construction we have applied. “Genuinely agreed”, in s.188 is expressed in terms of satisfaction that particular bargaining provisions within the Act have been complied with (ss.188(a) and (b)) and satisfaction of a more general criterion in s.188(c), rather than in terms of a general consideration of whether in the circumstances of a particular agreement a member is satisfied that the agreement has been genuinely agreed to by the employees.
[79] As the Full Bench in Galintel noted “Section 188 establishes a set of requirements, each of which must be satisfied if the necessary finding is to be made under s186(2)(a)”. 62
[80] Section 188 of the Act does not provide a wide general discretion for determining whether employees have genuinely agreed to an enterprise agreement focussed at the point of approval. Rather it requires specific actions to have been undertaken (in ss.188(a) and (b) at specified times in advance of approval), with s.188(c) then requiring satisfaction that there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees. Section 188(c) of the Act, although itself a broad discretionary consideration, is an additional matter about which Fair Work Australia needs to be satisfied and relates to grounds other than those arising in relation to the ss.188(a) and (b) matters.
[81] Section 188 of the Act is different, in that respect, from some previous statutory provisions concerning genuine agreement or genuine approval of agreements which were cast in general terms. For example, s.170LT (Certifying an Agreement) of the Workplace Relations Act 1996 (the WR Act), as it operated from December 1996 provided a range of tests for certification of an agreement, including s.170LT(5):
“If the agreement was made in accordance with section 170LJ or Division 3, a valid majority 63 of persons employed at the time whose employment would be subject to the agreement must have genuinely approved the agreement.”
[82] The WR Act contained no provision, of the type of s.188 of the Act, which prescribed “when employees genuinely approve an agreement”.
[83] Fifth, we do not accept the Appellant’s contention that the qualification to the giving of the notice in s.173 of the Act - “take all reasonable steps” - suggests a context in which the requirements as to the content of notices in s.174 should be qualified. The qualification to the giving of notice - “take all reasonable steps” - applies to the giving of the notice, not its content. It qualifies the giving of the notice, recognising that an absolute requirement to give each employee the notice might be impractical. No similar qualification exists in relation to the content of the notice and no practical impediment to the giving of the notice in the required terms exists to support such a qualification. The absence of a statutory qualification as to the content requirements, comparable to that associated with the giving of the notice, strongly suggests that near enough is not good enough in respect of the content requirements.
[84] In this context, we note that the Appellant relied on the conclusion by a Full Bench in CJ Manfield Pty Ltd v CEPU that the requirement to provide a notice in s.173 is not an absolute requirement. 64 This conclusion was made because, as the Full Bench immediately noted “The requirement is to take ‘all reasonable steps to give notice’.”.65 This observation lends no support whatever to the construction advanced by the Appellant in relation to the content requirements of the notice.
[85] Sixth, we do not accept the Appellant’s broad proposition that a failure to meet a specific requirement in the Act could not have been intended to prevent approval in circumstances where genuine agreement otherwise exists. Such a proposition would have an extremely broad application beyond the omission of advice of default representation required by s.174(3) of the Act. It would apply equally to a failure to advise an employee of their right to appoint a bargaining representative to represent them in bargaining for an agreement as required by s.174(2). Sections 174(2) and (3) are two parts of a provision with the same statutory purpose - appraising employees of the options for representation in bargaining and means of obtaining representation.
[86] If the underlying logic of the Appellant’s proposition was accepted, it would operate beyond s.174 of the Act. To illustrate, the logic of the Appellant’s argument would mean that a request for approval of an agreement prior to 21 days after the last notice of employee representational rights is given would be of no consequence for the purpose of a finding of genuinely agreed under s.188, notwithstanding s.188(a)(ii), in circumstances where it was found on a generalised assessment that employees had genuinely agreed to an enterprise agreement, notwithstanding the failure to give the notice at least 21 days prior to a request for approval.
[87] The Appellant relied on a view expressed by the majority in Stephen Bland v CEVA Logistics (Australia) Pty Ltd 66 (CEVA), that “we doubt that compliance with the provisions of s.173(1) is mandatory, such that a breach of it necessarily renders an enterprise agreement void and incapable of approval.”67 In its decision, the majority in CEVA had found that the requirements of s.173(1) had been met in circumstances of the case before it.68 The observation relied on by the Appellant went to a broader construction issue advanced by the employer, which the majority cited in its decision and noted had “force”.69 The majority then expressed the view relied upon by the Appellant. Given that genuinely agreed, within s.188, requires satisfaction of a number of requirements each of which must be satisfied, including compliance by the employer with s.181(2),70 we think the view expressed by the majority is wrong.
[88] Finally, we note that the construction supported by the Appellant would allow the provision of partial information, which would mislead employees as to their rights in relation to bargaining representation. That is clearly evidenced by the notice given in the current matter. The notice is clearly misleading in advising employees of their right to nominate a representative but not advising them of the default representation. Upon reading the notice, an employee who was not accurately informed by other means as to their rights in relation to bargaining representation would be left with the erroneous understanding that in order to be represented in bargaining they would need to nominate a representative, notify the representative in writing and provide a copy of the appointment to the employer.
Conclusion
[89] Properly construed, in the broader context of the Act, s.188(1)(b) of the Act requires the giving of notice of employee representational rights 21 days prior to a request to approve an enterprise agreement under s.181 in the terms required by s.174 of the Act, which includes advice of default representation in s.174(3). The notice given in this case, which omitted the information to employees required by s.174(3) was not a notice as required by s.188(1)(b).
[90] Commissioner Booth was correct in her construction of the Act and was correct in her conclusion that the employer has not complied with s.173(1) and therefore notice was not given for the purposes of the 21 days time frame in s.181(2). 71 The Commissioner’s decision not to approve the Agreement was correct.
[91] It is unnecessary for us to consider the Commissioner’s discretionary finding that she could not be satisfied as a practical matter that the agreement had been genuinely agreed to by the employees covered by the agreement (s.186(2)(a)). 72
[92] We grant permission to appeal and dismiss the appeal.
SENIOR DEPUTY PRESIDENT
DECISION OF VICE PRESIDENT WATSON
Introduction
[93] This appeal concerns two aspects of the test for approval of an enterprise agreement in s.186(2)(a) of the Fair Work Act 2009 (the Act) arising from the omission in the Notice of employee representational rights (Notice,) issued by Ostwald Bros. Pty Ltd (Ostwald) to its employees, of one paragraph of the prescribed form, being a requirement regarding the content of the Notice specified in s.174(3) of the Act, and a further departure from the prescribed form in the final paragraph of the Notice.
[94] The relevant facts are not in dispute. On 12 January 2012 Ostwald issued a Notice to all of its employees. The Notice was in the following terms:
“Schedule 2.1 Notice of employee representational rights
(regulation 2.05)
Fair Work Act 2009, subsection 174(6)
Ostwald Bros. Civil Pty Ltd gives notice that it is bargaining in relation to an enterprise agreement Ostwald Bros. Civil Pty Ltd Collective Agreement 2012.
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 Australia.
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 Australia 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.
Questions?
If you have any questions about this notice or about enterprise bargaining, please speak to Rohan May HR Manager - [number omitted], bargaining representative, go to www.fwa.gov.au, or contact the Fair Work Australia Helpline on 1300 799 675.”
[95] The Notice did not contain the following paragraph of the prescribed form in Schedule 2.1 of the Fair Work Regulations 2009 (the Regulations):
“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.”
[96] The final paragraph of the Notice contained a departure from the prescribed form. The final paragraph of the prescribed form is as follows:
“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 Australia Infoline on [insert number].”
[97] Shortly after the issue of the Notice, Ostwald commenced negotiations with the Australian Workers Union (the AWU), a bargaining representative of its members employed by Ostwald.
[98] On 27 February 2012 the Construction, Forestry, Mining and Energy Union (CFMEU) lodged an application under s.229 of the Act seeking bargaining orders against Ostwald alleging that Ostwald had refused to recognise it as an employee bargaining representative and instead embarked upon an agreement making exercise exclusively with the AWU. On 2 March 2012 Senior Deputy President Richards presided over a conference of the parties. On 5 March 2012 Senior Deputy President Richards conducted a hearing into certain jurisdictional matters concerning the application under s.229(4) of the Act. On 6 March 2012 his Honour issued a decision in which he noted that a principal jurisdictional question arising from s.176(3) of the Act was disposed of over the course of the proceedings and the application met the requirements of s.229(4) of the Act. 73
[99] The substantive matter was heard by Senior Deputy President Richards on 21 March 2012. His Honour handed down his decision in the matter on 23 March 2012 rejecting the application for a bargaining order. His Honour said: 74
“[80] It appears to me, on the evidence, that there were meetings in September 2011 and November 2011 between the CFMEU and the Company, but none of these interactions demonstrated that bargaining had commenced, or that the Company had conceded that the CFMEU was a bargaining representative the purposes of s.176 of the Act.
[81] Further, the CFMEU’s own conduct over this period lacked any continuity. The organisation met Mr May in September 2011 and again in November 2011. But as I have discussed, there is no evidence of a dynamic link between these meetings. Indeed, the evidence of Mr May was that the meeting of early November 2011 was incidental for the reason the CFMEU's attendance at site was abandoned owing to rain.
[82] The CFMEU subsequently forwarded correspondence to the Company on 15 November 2011 indicating an intention to arrange meetings for purposes of enterprise bargaining, but never took any steps to arrange any such meetings.
[83] On the CFMEU's evidence, despite a notice of representational rights having been issued on 12 January 2012, the CFMEU did not make contact with the Company until 21 February 2012 for the purpose of agitating its right to be represented in any negotiations. It could have done so, but it did not, when Mr Taylor contacted Mr May by telephone on 19 January 2012.
[84] In effect, therefore, there was no contact between the Company and the CFMEU between 15 November 2011 and 21 February 2012 that expressly agitated the CFMEU’s role in bargaining. And when the CFMEU did come to agitate its status it did so on the cusp of the vote of employees.
[85] Generally then, on the basis of the evidence before me, I am not able to characterise the conduct of the CFMEU as having agitated expressly or continuously for an agreement with the Company over the period from September 2011 to late February 2012. Equally so, I do not see in the materials before me evidence of the Company (or Mr May at least) having accepted an unqualified preference for bargaining with the CFMEU, only to have rejected that course of conduct at a subsequent point in time.
[86] It appears to me the interactions between the CFMEU and the Company, when taken as a whole, were episodic, ill-defined and contingent (on further conduct by the CFMEU which was not forthcoming). Interactions of this kind are not the basis for a finding, therefore, that the Company conducted itself in a manner that was inconsistent with the good-faith bargaining requirements of the Act in relation to its dealings with the CFMEU between September 2011 and late February 2012.”
[100] At no time during the proceedings before Senior Deputy Richards did the CFMEU raise any issue as to the validity of the Notice issued by Ostwald on 12 January 2012.
[101] As a result of the application made by the CFMEU under s.229 of the Act the ballot for the Agreement was delayed from March 2012 to April 2012. On 23 March 2012 Ostwald issued a memorandum to its employees advising of the decision of Senior Deputy President Richards and indicating that the vote for an agreement would commence on Monday 26 March “weather and site access permitting.” A second ballot notice providing details of the deferred ballot was issued on 26 March 2012. It stated that the ballot would be conducted at the various sites from 2 April to 12 April 2012.
[102] Two officials of the CFMEU exercised rights of entry at two of the Ostwald sites on 28 March 2012 for the purposes of holding discussions with Ostwald employees.
[103] Although there was some confusion as to the precise numbers of employees and votes it appears that at the time of the ballot there were 166 eligible employees, 159 valid votes cast and 86 votes cast in favour of the Agreement.
[104] An application to Fair Work Australia for approval of the Agreement was made by Ostwald on 19 April 2012. The matter was listed for conference before Commissioner Booth on 12 June 2012. In an outline of submissions dated 6 June 2012 the CFMEU asserted that the Agreement could not be approved because s.174(3) had not been complied with. 75 Written submissions were subsequently filed by Ostwald and the AWU and the matter was listed for hearing on 6 July 2012. On 1 August 2012 Commissioner Booth issued her decision declining to approve the Agreement, essentially on two grounds.
[105] In her decision the Commissioner concluded as follows:
● by virtue of the circumstances outlined above Ostwald had not complied with s.173(1) and therefore notice was not given for the purposes of the timeframe in s.181(2), at [67]. By virtue of s.188(a)(ii) this has consequences for the general conclusion on satisfaction of the test in s.186(2)(a).
● the tribunal cannot be satisfied in terms of s.186(2)(a) because of the defect in the Notice, at [71]. This appears to be based on the requirements in s.188(c).
● it was not necessary to consider arguments as to the significance of the departure in the wording of the questions clause given the other conclusions reached, at [16].
The Grounds of Appeal
[106] Ostwald contends that there are two errors in the Commissioner’s decision.
[107] First, Ostwald submits that the Commissioner should not have held that no notice for the purpose of s.173 of the Act had been issued. Its specific grounds were expressed as follows:
“(a) The Commissioner wrongly held and determined that the Appellant had not given each employee a notice as required by s.173 [of] the Act.
(b) The Commissioner wrongly held that as (in the Commissioner’s view) the omissions from the notice given to each employee were such that the notice did not comply with s.173 of the Act, that therefore no notice was given to those employees for the purposes of commencing the operation of the time limits in s.181(2) of the Act;...” 76
[108] Secondly, Ostwald submits that the conclusion as to s.186(2)(a) is wrong and contrary to the evidence. Its specific grounds are as follows:
“(c) Having held (correctly) at [69] that in certain circumstances “a deficient notice makes no difference” and that a valid agreement can still be made and approved, the Commissioner wrongly failed to consider at all the evidence in the proceedings, and the effect of the evidence, as to:
i. the manner in which the negotiations for the agreement proceeded and the history of those negotiations, including the involvement of the AWU in that process; and
ii. the manner in which the objecting union (CFMEU) conducted itself in relation to those negotiations, and the knowledge of the CFMEU and its members as to the negotiations then occurring; in deciding the question as to whether the agreement had been genuinely agreed to, as required by s.186(2)(a) of the Act, and whether the deficiencies in the notice in contention in these proceedings “made a difference” in this case.
(d) The Commissioner wrongly took into account irrelevant and/or unclear or unascertainable matters when deciding whether, as a practical matter, the deficiencies in the notice in contention in these proceedings “made no difference”, and whether the agreement had been genuinely agreed to, as required by s.186(2)(a), and did not have regard to the matters prescribed by s.188 of the Act.” 77
[109] The AWU supports the submissions of Ostwald.
[110] The CFMEU contends that the decision of the Commissioner is correct and the departure in the wording of the questions paragraph was a further reason for refusing approval of the Agreement.
[111] In order to succeed in the appeal Ostwald needs to establish that:
● permission to appeal should be granted,
● the conclusion that s.181(2) was not met was wrong,
● the conclusion that s.186(2)(a) was not met was wrong, and
● the departure in wording in the “questions” paragraph was not a separate basis for declining to approve the agreement.
[112] The question of permission to appeal depends largely on the substance of the other grounds and I will consider that question later.
[113] The conclusion on s.181(2) relates to the satisfaction of a non-discretionary statutory test, necessary for a finding that the element of the agreement being genuinely agreed in s.188(a)(ii) is satisfied. In this appeal it is necessary for the Bench to consider whether the conclusion of the Commissioner was right or wrong.
[114] The conclusion on s.186(2)(a) is in my view properly regarded as a discretionary decision as it is based on the terms of s.188(c) and effectively a finding that there are reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees. In my view this appeal ground requires the application of the approach to appeals against discretionary decisions enunciated in House v R. 78
[115] The departures in wording of the “questions” paragraph falls to be determined by reference to the same considerations as the primary question on compliance with s.181(2). For this reason it is conveniently dealt with in conjunction with the first alleged error.
Compliance with s.181(2)
[116] Section 186 provides the general duty of the tribunal in relation to the approval of enterprise agreements and the relevant requirement to this appeal, namely that the agreement has been genuinely agreed to by the employees covered by it. Relevantly it provides as follows:
“186 When FWA must approve an enterprise agreement—general requirements
Basic rule
(1) If an application for the approval of an enterprise agreement is made under section 185, FWA must approve the agreement under this section if the requirements set out in this section and section 187 are met.
Note: FWA may approve an enterprise agreement under this section with undertakings (see section 190).
Requirements relating to the safety net etc.
(2) FWA 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; ...”
[117] The meaning of “genuinely agreed” is dealt with in s.188 which provides:
“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 FWA 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.”
[118] This, in turn, establishes that an element of an agreement being “genuinely agreed” is compliance with s.181(2). Section 181(1)and (2) is as follows:
“181 Employers may request employees to approve a proposed enterprise agreement
(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.
(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...”
[119] The question required to be determined by the Commissioner was whether, in compliance with s.181(2), the request to employees to vote on the Agreement was made at least 21 days after the day on which the last Notice was given. The Commissioner’s conclusion was that this requirement was not met because the effect of the failure to include the paragraph required by s.174(3) meant that no Notice was ever issued under s.173(1) and the 21 day period never began. The CFMEU contends that the same result arises from the departure in the “questions” paragraph.
[120] 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
(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.
[121] Section 174 provides:
“174 Content 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.
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 FWA 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
(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).
Regulations may prescribe additional content and form requirements etc.
(6) The regulations may prescribe other matters relating to the content or form of the notice, or the manner in which employers may give the notice to employees.”
[122] The omitted paragraph was clearly required to be part of the Notice by virtue of s.174(3). The “questions” paragraph is part of the prescribed form in schedule 2.1 to the Regulations. The actual Notice was in an amended form. The critical questions however involve the significance of the non-compliance with s.174(3), and the departure from the prescribed form. This involves the application of tests formulated by the High Court and other courts when similar circumstances exist.
[123] The leading case in this regard is the decision of the High Court of Australia in Project Blue Sky v Australian Broadcasting Authority 79 (Project Blue Sky). That case concerned the adoption of an Australian Standard by the Australian Broadcasting Authority which was found to be inconsistent with the requirement for Australian Standards in s.160(d) of the Broadcasting Services Act 1992 (Cth). The relevance of the case to the matter before this Bench is the consequences of finding that the Australian Standard was inconsistent with the enabling Act. The majority of the Court (McHugh, Gummow, Kirby and Hayne JJ) said:
“91. An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition. Unfortunately, a finding of purpose or no purpose in this context often reflects a contestable judgment. The cases show various factors that have proved decisive in various contexts, but they do no more than provide guidance in analogous circumstances. There is no decisive rule that can be applied; there is not even a ranking of relevant factors or categories to give guidance on the issue.
92. Traditionally, the courts have distinguished between acts done in breach of an essential preliminary to the exercise of a statutory power or authority and acts done in breach of a procedural condition for the exercise of a statutory power or authority. Cases falling within the first category are regarded as going to the jurisdiction of the person or body exercising the power or authority. Compliance with the condition is regarded as mandatory, and failure to comply with the condition will result in the invalidity of an act done in breach of the condition. Cases falling within the second category are traditionally classified as directory rather than mandatory. In Pearse v Morrice, Taunton J said “a clause is directory where the provisions contain mere matter of direction and nothing more”. In R v Loxdale, Lord Mansfield CJ said “[t]here is a known distinction between circumstances which are of the essence of a thing required to be done by an Act of Parliament, and clauses merely directory”. As a result, if the statutory condition is regarded as directory, an act done in breach of it does not result in invalidity. However, statements can be found in the cases to support the proposition that, even if the condition is classified as directory, invalidity will result from non-compliance unless there has been “substantial compliance” with the provisions governing the exercise of the power. But it is impossible to reconcile these statements with the many cases which have held an act valid where there has been no substantial compliance with the provision authorising the act in question. Indeed in many of these cases, substantial compliance was not an issue simply because, as Dawson J pointed out in Hunter Resources Ltd v Melville when discussing the statutory provision in that case:
“substantial compliance with the relevant statutory requirement was not possible. Either there was compliance or there was not.”
93. In our opinion, the Court of Appeal of New South Wales was correct in Tasker v Fullwood in criticising the continued use of the "elusive distinction between directory and mandatory requirements” and the division of directory acts into those which have substantially complied with a statutory command and those which have not. They are classifications that have outlived their usefulness because they deflect attention from the real issue which is whether an act done in breach of the legislative provision is invalid. The classification of a statutory provision as mandatory or directory records a result which has been reached on other grounds. The classification is the end of the inquiry, not the beginning. That being so, a court, determining the validity of an act done in breach of a statutory provision, may easily focus on the wrong factors if it asks itself whether compliance with the provision is mandatory or directory and, if directory, whether there has been substantial compliance with the provision. A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. This has been the preferred approach of courts in this country in recent years, particularly in New South Wales. In determining the question of purpose, regard must be had to “the language of the relevant provision and the scope and object of the whole statute”.”
(references omitted)
[124] In the circumstances of that matter the Court found that while s.160 imposed a legal duty on the ABA, an act done in breach of its provisions is not invalid. As to the consequences of the breach the majority said:
“100. In a case like the present, however, the difference between holding an act done in breach of s 160 is invalid and holding it is valid is likely to be of significance only in respect of actions already carried out by, or done in reliance on the conduct of, the ABA. Although an act done in contravention of s 160 is not invalid, it is a breach of the Act and therefore unlawful. Failure to comply with a directory provision “may in particular cases be punishable”. That being so, a person with sufficient interest is entitled to sue for a declaration that the ABA has acted in breach of the Act and, in an appropriate case, obtain an injunction restraining that body from taking any further action based on its unlawful action.”
[125] This approach must be applied to the circumstances of the agreement making and approval provisions of the Act. Specifically, it needs to be determined whether Ostwald’s contravention of s.174(3) in failing to insert the paragraph required by that section in its 12 January Notice means that the tribunal must find that the Agreement has not been genuinely agreed for the purposes of s.186 of the Act and the definition of that term in s.188. A similar analysis is required with respect to the departure from the prescribed form in the “questions” paragraph.
[126] Project Blue Sky has been applied by a Full Bench of this tribunal in relation to an alleged defect in a Notice of Representational rights in “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Inghams Enterprises Pty Ltd (the Inghams case) 80. In that case the Notice issued by Inghams did not include the qualification set out in item 2(3) of Schedule 13 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 or Schedule 2.1 of the Regulations. The Full Bench said:
“[49] An object of the FW Act emphasises “enterprise-level collective bargaining underpinned by simple good faith bargaining obligations” and the objects of Part 2-4 of the FW Act concerning enterprise agreements include providing “a simple, flexible and fair framework that enables collective bargaining in good faith ... for enterprise agreements” and enabling “FWA to facilitate good faith bargaining and the making of enterprise agreements, including through ... ensuring that applications to FWA for approval of enterprise agreements are dealt with without delay.”
[50] Provisions in Part 2-4 of the FW Act require that an employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give the notice of the right to be represented by a bargaining representative to each relevant employee and the employer cannot request the relevant employees to approve the proposed enterprise agreement by voting for it until at least 21 days after the day on which the last notice is given. Further, in order to approve an enterprise agreement, FWA must be satisfied the enterprise agreement has been genuinely agreed to by the employees covered by it and FWA will be so satisfied if it is satisfied the employer, amongst other things, did not request that the relevant employees approve the enterprise agreement until 21 days after giving the last notice of employee representational rights.
[51] A notice of employee representational rights consistent with Schedule 2.1 of the FW Regulations, except for an omission of the type made by Inghams, still notifies the employee in question that they have a right to appoint a bargaining representative. The failure to include the qualification to that right set out in item 2(3) of Schedule 13 of the TPCA Act and the additional paragraph in Schedule 2.1 of the FW Regulations merely means the employee is not notified through the notice that their right to appoint a bargaining representative or for a person to become their bargaining representative is qualified.
[52] The omission does not affect the legislative entitlement of an employee covered by an individual agreement-based transitional instrument to appoint a bargaining representative or for a person to become the bargaining representative of such an employee. That legislative entitlement is governed by item 2(2) of Schedule 13 of the TPCA Act.
[53] Against this background we have come to the view that the legislature did not intend a notice of employee representational rights to be rendered invalid because of an omission of the type made by Inghams. Given the limited effect of the omission and the centrality under the FW Act of a valid notice of employee representational rights to the making and approval of an enterprise agreement, such a conclusion is the most consistent with the attainment of the objects of the FW Act.
[54] Accordingly, we are not persuaded the omission of the qualification in item 2(3) of Schedule 13 of the TPCA Act or the additional paragraph concerning an employee covered by an individual agreement-based transitional instrument from the notice of employee representational rights given by Inghams affected the validity of the notice or was of any consequence for the making and approval of the Somerville Agreement. We dismiss the AMWU’s ground of appeal concerning the notice of employee representational rights.”
(references omitted)
[127] In Bland v CEVA Logistics (Australia) Pty Ltd 81 another Full Bench said as follows:
“[42] Having regard to the scheme of the Act, the context in which s.173(1) is found and the terms of s 188, we doubt that compliance with the provisions of s.173(1) is mandatory, such that a breach of it necessarily renders an enterprise agreement void and incapable of approval.
[43] There might be circumstances where a failure to comply with the requirements of s.173(1) could lead to Fair Work Australia not being satisfied that an agreement was genuinely agreed to. We could envisage a situation where a failure by an employer to take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee might lead to a conclusion that the employees who did not receive such a notice and nevertheless voted to approve the agreement did not genuinely agree to it because they had been deprived of the opportunity to appoint a bargaining agent and were thereby prejudiced in the decision-making process. In such a case there would be reasonable grounds for believing that the agreement had not been genuinely agreed to by the employees under s.188(c). However, that is not the case here.”
[128] In Re Galintel Rolling Mills Pty Ltd a Full Bench made the following observations about the requirements of the Act with respect to notices of employee representational rights: 82
“[38] Subsection 181(2) provides that the employer request to approve an agreement must not be made until at least 21 days after the day on which the last notice under s173(1) in relation to the agreement is given. The AMWU contends that s181(2) can only be satisfied if a valid Notice of Representational Rights is given. Even though the requirement in s181(2) relates to the required period of time between certain events, we agree that the requirement cannot be satisfied if a notice referred to in s173 is not given. It is therefore necessary to consider whether the employer gave a notice under s173.
[39] The context and purpose of these provisions are important. Imposing a requirement for employers to notify its employees of their rights of representation is obviously seen by the legislature as an essential ingredient of fair bargaining and agreement making under the Act. So too is the notion of employees being free to exercise their choice of representation. In some workplaces employers may be negative or even hostile to union representation. Negotiations may be quite adversarial.
[40] The requirement in s181(2) is that employers advise employees of their rights and allow the specified time for employees to make whatever choice they wish to make. If an employer fails to advise employees of their rights in the manner specified the requirement is not satisfied. But employers are not precluded from other representations provided the statutory advice is given. There is nothing that we can see in the legislation that precludes, for example, an employer from expressing a preference or giving employees advice on representation. If the representations contradict the notice about employee rights then there will be real questions whether a valid notice was in fact given. If the representations are such that they affect the genuineness of any subsequent agreement then section 188(c) will become relevant.”
[129] Decisions of single members have applied these provisions in different ways. Some failures to issue a complete Notice have been held to be fatal to applications for approval of agreements. In other cases the failure to provide a notice has not precluded approval of the agreement after considering the overall circumstances and the specific legislative tests.
[130] In determining the consequences of the breaches in this case it is necessary to make a judgement as to whether it was the intention of the legislature that an agreement made following the omission and departure in the Notice would be invalid. Regard must be had to the language of the relevant provision and the scope and object of the whole statute.
[131] The Objects of the Act in s.3 include the following:
“(e) enabling fairness and representation at work and the prevention of discrimination by recognising the right to freedom of association and the right to be represented, protecting against unfair treatment and discrimination, providing accessible and effective procedures to resolve grievances and disputes and providing effective compliance mechanisms; and
(f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action;”
[132] The Objects of Part 2-4 of the Act are:
“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 FWA 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 FWA for approval of enterprise agreements are dealt with without delay.”
[133] There can be no doubt that the Act requires notices of employee representational rights to contain the omitted paragraph. It is important to consider its purpose. The Notice does not create rights of representation - they exist in any event by virtue of the provisions of the Act. In the case of the omitted paragraph the organisation is a bargaining representative of its members by virtue of s.176(1). The purpose of the Notice is to bring certain matters to the attention of employees at the commencement of bargaining who will ultimately be asked to agree to an enterprise agreement. The obligation to provide a Notice is not absolute - it is merely to take all reasonable steps. There is no ongoing obligation to provide the Notice to employees recruited after the Notice is given. The practical significance of the Notice will depend on the level of unionisation, the amount of turnover and the existing knowledge of employees about the right to representation in enterprise bargaining negotiations.
[134] The intention of the Notice is clearly to assist employees understand their rights and the enterprise bargaining process. The Notice explains the concept of an enterprise agreement, the right to appoint a bargaining representative, the process of appointing a bargaining representative and the sources of further information. Its purpose is to assist in bringing about the situation whereby bargaining commences with representatives chosen by employees. The wording of s.173(1) reflects this. It expresses the obligation on an employer “to take all reasonable steps to give notice of the right to be represented by a bargaining representative” to each employee who is employed at the notification time and who will be covered by the agreement. Other requirements for the content of the Notice are secondary to this central purpose.
[135] The omitted paragraph notifies employees that they need not advise their employer if they wish their union to be their bargaining representative. In other words it informs employees of their right to be represented without advising their employer that they are a union member. In some circumstances this may be important. For a non-union member it also informs them that they could be represented in the negotiations by joining a union. The provision of this information, and the rights themselves, are no doubt important matters within the scheme of the Act. The practical significance of these matters will vary. For example, in a heavily unionised workplace the Notice is unlikely to have any impact on the number of bargaining representatives or the matters put to the employer by the representatives. Nor is it likely to have a significant impact on the ultimate vote cast by the employees.
[136] Ostwald submits in this case that the omission of the paragraph might, at worst, result in an employee notifying the employer that they wish to be represented by their union when they did not need to do so. While this is correct, the significance of such consequences needs to be considered within the scheme of the Act. In this case it appears that there were no bargaining representatives other than the AWU and the CFMEU. The former supported a vote for the Agreement while the later opposed the Agreement.
[137] The source of further information is also important. The departure in the Ostwald’s Notice might have given employees the impression that further information was not available from their bargaining representative. In my view any such impression is unlikely in a workplace that is highly unionised.
[138] The nature of the Fair Work Australia approval process is also important. The duty to approve agreements in s.186 is expressed in mandatory terms if the statutory requirements for approval are met. However the tests for approval of an agreement do not require Fair Work Australia to be satisfied that a Notice has been issued or that the Notice contains all provisions as required by the Act. If the legislature had intended that a defective Notice would result in approval of the subsequent agreement being withheld, it could have made compliance with the legislative requirements a condition of approval. Instead, the legislature dealt with the matter under the rubric of genuine agreement.
[139] One ingredient of a genuine agreement is the requirement in s.181(2) of the elapse of at least 21 days from the giving of a Notice to the request for approval of an agreement. The object of this provision is clearly to avoid unfair haste which would deny employees a reasonable opportunity to arrange representation and have input into the terms of an agreement. A time period of at least 21 days is regarded by the legislature as sufficient.
[140] Another ingredient of a genuine agreement is that there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees (s.188(c)). If a Notice is not given to employees who are not represented, or is given in such a form that misleads employees in a way that denies them the opportunity to arrange representation and have input into the agreement, there could well be reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees. This would be a question of fact based on a consideration of all the circumstances.
[141] Another consideration is the legislative consequences of the subsequent detection of a defect in a Notice. If the defect is discovered after some months of bargaining, the issue of a further Notice would need to meet an objection that it did not comply with s.173(3) to be given as soon as practicable, and not later than 14 days, after the employer initiates bargaining for the agreement. Indeed the issue of such a Notice, well after bargaining had commenced and where agreement with bargaining representatives may have been reached would be a fiction and in many cases of no practical purpose.
[142] The first basis of the Commissioner’s decision is that the legislation should be construed as invalidating any further steps, bargaining or agreement making taken after a non-compliant Notice is given. In other words, regardless of the circumstances, no approval of an agreement can be given if the process commenced by the giving of a non-compliant Notice. In the context of enterprise agreement making, where negotiations may be lengthy, significant effort may be exercised and an agreement may be made in good faith, the tribunal should be cautious about reaching such a conclusion.
[143] In my view the following aspects of the legislative scheme imply that the failure to comply with s.174(3) does not render any subsequent agreement invalid and incapable of approval:
● the object of the legislative scheme of a simple, flexible and fair framework of agreement making,
● the purpose of the Notice is not to create rights but inform employees of the rights that otherwise exist,
● the fundamental object of the Notice to alert employees of their right to choose their bargaining representative,
● the duty of Fair Work Australia to approve agreements that comply with the specific legislative tests,
● the absence of a requirement for the compliance with s.174(3) in the quite prescriptive tests for approval of agreements,
● the purpose of the requirement in s.181(2) is for sufficient time between a Notice and the request for a vote,
● the provision in s.188(c) for considering the actual relevance of breaches of the requirements for the Notice,
● the inherent breach of the Act and the artificiality of subsequently providing a compliant Notice well after bargaining has occurred, and
● the impact on the parties to an agreement who may otherwise genuinely reach an agreement after lengthy, comprehensive and time-consuming bargaining.
[144] The considerations that infer that issuing a non-compliant Notice is intended to invalidate any subsequent agreement include:
● the importance of the rights for employees contained in the omitted paragraph,
● the decision of the legislature to require the omitted paragraph by a statutory requirement,
● the potential for future avoidance of the obligation in s.174(3) if non-compliance does not lead to invalidity.
[145] In my view the application of the approach enunciated in Project Blue Sky requires the same conclusion as reached in that case. The case guards against an overly technical approach to legislative requirements and suggests a reluctance to invalidate instruments where no fundamental defect exists and the legislature cannot reasonably be assumed to have intended such consequences. The case requires far more than a finding that the legislature intended that a statutory provision be complied with. Considering this question alone is an erroneous approach.
[146] The approach in Project Blue Sky requires a balancing of factors relevant to legislative intent such as including those I have identified above. In the Inghams case a Full Bench applied this test and reached the same conclusion with respect to a different defect in the Notice. In my view the proper application of Project Blue Sky leads to the same result in this case. It is clear in my view that the weight of the legislative scheme lies heavily on the side of the interpretation that the Notice given in this case and the agreement reached as a result of genuine agreement are valid. The scheme of the Act is to permit employers and employees to genuinely reach agreements for their mutual advantage. The provisions are intended to be accessible and applied by the parties themselves - not necessarily through professional advisors or external bargaining representatives. A result which places more emphasis on technicalities than the actual genuineness of an agreement is not one which sits comfortably with the context and objects of the legislation.
[147] The omission of the required paragraph did not mean that no notice was given to employees of their fundamental right to select their bargaining representative. Notice of that right was given. The employees had ample time to organise their representative to negotiate on their behalf. This is the only real purpose of s.181(2) and was clearly fulfilled. Fair Work Australia has a duty to approve agreements if the statutory tests are satisfied. Non compliance with s.174(3) can be relevant to approval under s.188(c) where the actual significance of technical breaches can be assessed against the fundamental question - whether the agreement has been genuinely agreed. The overly technical approach contended for by the CFMEU led the tribunal in this case into error and denied approval of the Agreement by reference to matters which formed no part of the express or intended legislative tests for approval. The result was inconsistent with the scheme of the Act.
[148] Notwithstanding the non-compliance with a legislative requirement for the content of the Notice, the correct application of Project Blue Sky requires a conclusion that the Notice was not invalid, and the omission did not automatically disqualify the parties from making an agreement and having their Agreement approved under the Act.
[149] The Commissioner reached the conclusion:
“[67] I find that the employer has not complied with s.173(1) and therefore notice was not given for the purposes of the 21 days time frame in s.181(2).”
[150] On any view this does not represent a proper application of the relevant tests for invalidity and reaches an erroneous conclusion. In my view this conclusion cannot stand.
[151] It will be clear from my analysis that I would reach the same conclusion in relation to departure in the “questions” paragraph. The departure is not significant and could not have led to the Notice being invalid. It is fanciful to suggest that the legislature could have intended such a result.
[152] That is not to say that the omission and/or the departure have no relevance to approval whatsoever. These matters may still be relevant to the element of the test for the agreement to be genuinely agreed in s.188(c). Indeed, that provision properly allows a fair consideration of all of the circumstances. I now turn to consider that aspect of the tests for approval.
Genuine Agreement
[153] An enterprise agreement has been genuinely agreed if each of the elements of s.188 are satisfied. In this case the Commissioner found that paragraph (c) was not satisfied: She said:
“[67] I find that the employer has not complied with s.173(1) and therefore notice was not given for the purposes of the 21 days time frame in s.181(2).
[68] If I am wrong in my conclusion that giving notice of the default bargaining representative is an essential part of giving valid notice, then Mr Herbert’s urging of a practical approach would require consideration of whether the agreement had been genuinely agreed by the employees.
[69] As I noted earlier, there is a history to this matter, including contested representation rights by the CFMEU, and a relatively close ballot approving the agreement. It is not a case of a small workforce, all of whom are represented by one union and all of whom approved a proposed agreement. In such a case, it may, as a matter of practical reality, a deficient notice makes no difference and that FWA might be satisfied that the requirements of s.186 are met.
[70] As a matter of practicality, given the history in this matter, the deficiency in the notice is important. Mr Herbert argued that the omission was accidental, the CFMEU did not contest that assertion, and accordingly I accept it at face value.
[71] However, the omission directly affected the question of the default bargaining representative. I conclude that as a practical matter, in the contested circumstances before me, the Tribunal cannot be satisfied in terms of s.186(2)(a) because of the defect in the notice.”
[154] This passage does not address the test required by s.188(c). That provision is only a basis for finding that the agreement is not genuinely agreed if there are found to be reasonable grounds for believing that the agreement has not been genuinely agreed. No such finding is made. The test requires a consideration of the soundness of the agreement. Directly affecting the default bargaining representative is not to the point. In any event it is not explained how an omission in a Notice issued in January concerning a default bargaining representative affected the agreement made in this case in a vote in April. It is counterintuitive to suggest that there could be any real impact at all. It may be that some employees notified the employer that they were to be represented by their union when they did not need to do so. There is no evidence of that. As found by Senior Deputy President Richards, the CFMEU did not seek to be involved in the negotiations despite being alerted to the issue of the Notice in January. It did however take steps to campaign against the approval of the Agreement after securing a delay in the vote following its application for bargaining orders. There was a high turnout of employees who voted. A majority of the employees who voted in relation to the Agreement voted in favour of it.
[155] All of these issues were required to be addressed if there was to be a finding that the omission of the default representative paragraph in the January Notice amounted to a reason why the Agreement, constituted by a majority vote in a secret ballot in April, should not be regarded as amounting to genuine agreement.
[156] The absence of any such analysis in the Commissioner’s decision is an error of the House v R 83 kind. On applying the test in this matter it is very clear that the circumstances do not constitute reasonable grounds for believing that the Agreement has not been genuinely agreed to by the employees.
[157] In my view there is no reasonable basis explained or in existence to found such a level of satisfaction. The CFMEU refers to the closeness of the vote and the defects in the Notice. It contends that the subsequent steps in bargaining, including negotiations, communications, applications for bargaining orders, the deferral of the vote and the ultimate vote in favour did not cure the defect in the Notice. The CFMEU contends that the Commissioner’s conclusion in this regard is unexceptional. In my view, given the history of this matter, the contention that the defects in the Notice amounted to reasonable grounds for believing that the Agreement had not been genuinely agreed is untenable.
Conclusions
[158] For the reasons above I would grant permission to appeal, allow the appeal and subject to satisfaction of the other statutory tests not dealt with in the decision, approve the Agreement. The defects in the Notice did not lead to its invalidity on a proper application of the approach of the High Court in Project Blue Sky. Nor was any test for approval not satisfied by virtue of the defects. There were no reasonable grounds for believing that the Agreement had not been genuinely agreed.
VICE PRESIDENT WATSON
Appearances:
A. K. Herbert, of counsel, for Ostwald Bros Pty Ltd
W. Friend, SC, with C. Massy of counsel for the Construction, Forestry, Mining and Energy Union
T. Spence for the Australian Workers’ Union
Hearing details:
2012.
Brisbane.
October, 9.
2 Form F18, question 7.
3 Section 173.
4 Appeal Book at p. 140.
5 Section 174(3).
6 [2012] FWA 6450, at paras 24-31, 36-48, 56-61 and 64.
7 [2012] FWA 6450, at para 50.
8 [2012] FWA 6450, at para 51.
9 [2012] FWA 6450, at para 52.
10 [2012] FWA 6450, at para 54.
11 [2012] FWA 6450, at paras 68-71.
12 [2012] FWA 6450, at para 16.
13 Exhibit H1, at para 10.
14 Exhibit H1, at paras 12 and 25.
15 Exhibit H1, at para 14.
16 Exhibit H1, at para 15.
17 Exhibit H1, at para 17.
18 Section.171(a).
19 Transcript, at para 176.
20 CJ Manfield Pty Ltd v CEPU [2012] FWAFB 3534 at para 44 and Stephen & Bland v CEVA Logistics (Australia) Pty Ltd [2011] FWAFB 7453, at paras 46-51.
22 Exhibit H1, at para 32.
23 Exhbit H1, at paras 34 and 36.
24 (1998) 194 CLR 355, at para 93.
25 Exhibit F1, at paras 14 and 15.
26 [1978] 1 NSWLR 20 at pp. 23-24.
27 [1978] 1 NSWLR 20 at p. 20.
28 (1998) 194 CLR 355, at para 93.
29 [2012] FWA 6450, at paras 38 and 39.
30 Section 3(e).
31 Section 3(f).
32 Section 171.
33 Section 172(2) and s.181.
34 Section 173(1).
35 Section 173(3).
36 Section 174.
37 Section 176.
38 Section 176(1)(b).
39 Section 176(1)(c).
40 Section 178.
41 Section 178A.
42 Kaizen Hospitals (Essendon) Pty Ltd; Kaizen Hospitals (Malvern) Pty Ltd; Kaizen Hospitals (Mount District) Pty Ltd v Australian Nursing Federation, [2012] FWAFB 8866 at para 13.
43 See, for example, s.183, s.184, s.185, s.190, s.228, s.229, s.231, s.233, s.234, s.236, s.238, s.240, s.242, s.244, s.252, s.254 and s.260.
44 [2011] FWAFB 6106, at para 50.
45 Section 180(4).
46 Section 173(2).
47 Regulation 2.05 of the Fair Work Regulations 2009 prescribes that “For subsection 174(6) of the Act, the notice of employee representational rights in Schedule 2.1 is prescribed.”
48 [2012] FWA 6450, at para 50.
49 [2012] FWA 6450, at para 51.
51 [2011] FWAFB 6772, at para 45.
52 [2011] FWAFB 6772, at para 40.
53 Exhibit H1, at para 10.
54 Transcript, at para 56.
55 Section 173(2) - Notification time.
56 Transcript, at para 63.
57 Exhibit H1, at para 34.
58 Exhibit H1, at paras 34 and 36.
59 Exhibit H1, at para 32.
60 Item 2 of Schedule 13 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009.
61 [2011] FWAFB 6106, at para 51.
62 [2011] FWAFB 6772, at para 36.
63 The expression “valid majority” was defined in s.170LE of the Workplace Relations Act 1996
64 [2012] FWAFB 3534 at para 44.
65 [2012] FWAFB 3534 at para 44.
67 [2011] FWAFB 7453, at para 42.
68 [2011] FWAFB 7453, at para 28.
69 [2011] FWAFB 7453, at para 41.
70 Section 188(a)(ii).
71 [2012] FWA 6450, at para 67.
72 [2012] FWA 6450, at paras 68-71.
75 Appeal Book pg150.
76 Exhibit H1 at para 2.
77 Ibid.
78 (1936) 55 CLR 499.
79 (1998) 194 CLR 355.
83 (1936) 55 CLR 499.
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