Fair Work Act 2009
s.604 - Appeal of decisions

Appeal against decision [2015] FWCA 3047 of Deputy President Lawrence at Sydney on 4 May 2015 in matter number AG2015/2356; whether employer had complied with pre-approval steps; public interest enlivened; permission to appeal granted; appeal upheld; decision to approve agreement quashed; application to approve agreement remitted to Deputy President Gostencnik for determination.

Introduction

[1] Mirait Technologies Australia Pty Ltd (Respondent) applied under s. 185 of the Fair Work Act 2009 (Act) for the approval of a single enterprise agreement titled “Mirait Technologies Australia (MTA) Enterprise Agreement 2015 – 2019” (Agreement) 1. The Agreement was approved by Deputy President Lawrence on 4 May 2015 (Decision).2

[2] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (Appellant), seeks permission to appeal the Decision by notice of appeal given on 22 May 2015. The Appellant says it has standing to bring the appeal as it is a person aggrieved by the Decision because it has members employed by the Respondent who are covered by the Agreement. The Respondent did not submit otherwise, and we accept that the Appellant has standing to bring this appeal.

[3] Accompanying the Respondent’s application for approval of the Agreement was a statutory declaration of Andrew Fenech, the Human Resources Manager of the Respondent, made on 25 March 2015. 3 On 24 April 2015, the Appellant made written submissions and provided a number of documents to the Deputy President in opposition to the approval of the Agreement.4 The Appellant does not appear to have been a bargaining representative for the proposed Agreement in the period leading to the vote of employees but claims that at the time of the appeal it had as members persons who were employed by the Respondent and who were covered by the Agreement.5

[4] On 28 April 2015, the Respondent made written submissions and provided a number of documents in response to the issues raised in the Appellant’s submissions. 6 The documents attached to the Respondent’s submissions were said to include the “original F17 statutory declaration of Andrew Fenech”.7 Statutory declarations by Greg Egan, the Respondent’s State Manager, made on 23 April 2015, and by Mr Richter, a Director of the Respondent, made on 28 April 2015, were also included in the documents attached to the Respondent’s submissions.8

[5] On 1 May 2015, the Appellant wrote to the Deputy President’s Associate maintaining its objection to approval of the Agreement and requesting a hearing.

[6] A hearing did not take place, and as indicated above, the Agreement was approved. An undertaking given by the Respondent which was lodged with the application was noted in the Decision. The undertaking is said to be taken to be a term of the Agreement. 9

Grounds of appeal

[7] The first two grounds of appeal concern the validity of the making of the Agreement and the Respondent’s compliance with the pre-approval requirements set out in s. 180 of the Act. Related to these grounds, the Appellant maintained that on the face of the material before the Deputy President, there were other reasonable grounds for believing that the Agreement had not been genuinely agreed to by the employees for the purposes of s. 188(c) of the Act, and so the Deputy President could not have been satisfied as required by s. 186(2)(a) of the Act. 10

[8] The third ground of appeal concerned the undertaking given by the Respondent. The Appellant alleged that the Deputy President accepted the undertaking without seeking the views of each person known to be a bargaining representative as required by s. 190(4) of the Act. As it is apparent on the face of the application for approval of the Agreement, the purported employee bargaining representatives were not appointed by another employee in writing. 11 Therefore, there were no known bargaining representatives from whom views might have been sought. Consequently, this ground of appeal was not pressed by the Appellant.12

[9] The fourth ground of appeal alleges that the failure by the Deputy President to convene a hearing, despite the Appellant’s request, denied the Appellant a reasonable opportunity to present its case and to make submissions.

[10] The fifth ground of appeal concerns the adequacy of the reasons given by the Deputy President in approving the Agreement and in rejecting the submissions made by the Appellant in opposition to the approval of the Agreement.

Consideration

[11] For reasons that will become apparent, we have found it unnecessary to deal with all the grounds raised by the Appellant as we are able to dispose of the appeal by dealing with the Appellant’s pre-approval steps ground.

[12] Before an enterprise agreement is approved, the Fair Work Commission (Commission) must be satisfied, in relation to a non-greenfields agreement, inter alia that the agreement has been genuinely agreed to by the employees covered by the agreement. 13 Section 188 of the Act explains when employees have genuinely agreed to an enterprise agreement as follows:

188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

 
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);


(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and


(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

[13] Given the structure of s.188 of the Act, it is apparent that the Commission must be satisfied of each of the matters identified therein before it can be said that an enterprise agreement has been genuinely agreed to by employees covered by the agreement. Relevantly, for present purposes, the Commission must be satisfied that each employer covered by the Agreement complied with ss.180(2), (3) and (5) of the Act, and that there are no other reasonable grounds for believing that the Agreement has not been genuinely agreed to by the employees.

[14] Section 180(2) of the Act provides:

Employees must be given copy of the agreement etc.


(2) The employer must take all reasonable steps to ensure that:


(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:

(i) the written text of the agreement;


(ii) any other material incorporated by reference in the agreement; or

(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.

[15] The access period referred to in s. 180(2) of the Act for a proposed enterprise agreement is the seven day period ending immediately before the start of the voting process referred to in s.181(1) of the Act. 14 Section 181 of the Act provides:

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.


(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.

[16] Section 180(3) provides:

(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:


(a) the time and place at which the vote will occur;


(b) the voting method that will be used.

[17] Section 180(5) provides:

(5) The employer must take all reasonable steps to ensure that:

(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and


(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.

[18] The gravamen of the Appellant’s complaint is that on the material before the Deputy President, the Deputy President could not have been satisfied that the Respondent had complied with the pre-approval steps set out in s. 180 of the Act, and that there were other reasonable grounds for believing that the Agreement had not been genuinely agreed to by the employees.

[19] The Respondent submitted that the evidence before the Deputy President was that all of the relevant employees were provided with the written text of the Agreement on or around 13 March 2015; the written text of the Agreement voted on by all employees was the same; and that this was sufficient to satisfy the Deputy President that the Respondent had complied with s.180(2) of the Act, as set out in the Decision at [7].

[20] The Respondent further submitted that the evidence before the Deputy President was that there was an appropriate explanation of the terms of the Agreement to all employees, and this was sufficient to satisfy the Deputy President that the Respondent, had complied with s. 180(5) of the Act, as set out in the Decision at [7]. It follows, according to the Respondent, that the material relied on by the Appellant attached to its submissions was, at its highest, evidence that representatives of the Respondent had contemplated a change to the text of the Agreement, and there is no evidence that the Respondent actually presented any amendment in the Agreement to any employee before or after the approval process.

[21] We disagree. The material before the Deputy President needs to be considered in its totality and when that is done, it discloses more questions than answers, which in our view required further enquiry. The totality of the material before the Deputy President provided an insufficient basis to enable satisfaction that particular preapproval steps had been complied with as required by s.188(a)(i) of the Act. Reference to a few examples is sufficient to make good this point.

[22] As we have earlier indicated, in support of the application for the approval of the Agreement the Respondent lodged a statutory declaration made by Andrew Fenech made on 25 March 2015 (First Fenech Declaration). 15 Attached to the Respondent’s submission in response to the Appellant’s objection to the approval of the Agreement is a document said to be the “Original F17 Statutory Declaration of Andrew Fenech” (Second Fenech Declaration).16 A review of these two documents discloses the following. First, the signature page to each declaration appears to be identical. Both declarations were made on 25 March 2015. Secondly, the information contained in each declaration is different and inconsistent. There is inconsistency both as between the First and Second Fenech Declarations and internal inconsistency in the First Fenech Declaration. In particular, critical questions directed to assessing whether the pre-approval requirements had been met are materially different. For example:

Section 180(3) requirement

○ Question 2.5 of the employer’s statutory declaration in support of an application for the approval of an enterprise agreement (Form F17) requires a description of the action taken to notify all relevant employees of the date and place at which the vote will occur and the method of voting to be used. In answer to question 2.5, the First Fenech Declaration provides inter alia that the “date, place and time at which the vote was notified in writing via email” and “voting forms and method had previously been explained to all employees”.

○ The Second Fenech Declaration does not provide any response to question 2.5. The only email in the material which makes reference to the vote to approve the Agreement is an email from Andrew Fenech dated 13 March 2015. 17 That email advises that “another vote will be conducted at 7am Monday, 23 March 2015”. That email contains no information about the “place” at which the vote will occur or of “the voting method to be used”. The answer given in the First Fenech Declaration to question 2.5 does not contain any information about when the details of the vote said to have been communicated to all employees was in fact communicated.

○ There is no other information in the First Fenech Declaration from which a date or dates on which relevant employees were notified of the date and place at which the vote would occur and the voting method to be used as required by s. 180(3) of the Act might be discerned. The statutory declarations of Greg Egan 18 and Ian Richter19 do not address this issue.

○ The absence of such a date or dates means that the Deputy President could not have been satisfied that the Respondent took all reasonable steps to notify relevant employees of these matters “by the start of the access period for the agreement”. Consequently, the Deputy President could not have been satisfied on the material of the matters set out in s. 188(a)(i) of the Act and therefore of s. 186(2)(a) of the Act.

Section 180 (2) requirement

○ Question 2.4 of Form F17 requires a description of the steps that were taken by the employer and the date on which the steps were taken to ensure that relevant employees were given, or had access to, the text of the agreement and any material incorporated by reference into the agreement during the access period. The First and Second Fenech Declarations provide that the “final draft of enterprise agreement finalised and distributed to all employees” on 13 March 2015. 20 The same information is contained in the statutory declaration of Greg Egan.21

○ The Appellant produced a series of emails passing between several of the Respondent’s managers, which on their face suggest that a variation to the Agreement was being contemplated as late as 24 March 2015. 22 Indeed, an agreement attached to one of the emails contains additional classification and an additional rate of pay.23

○ The Respondent’s submission to the Deputy President made in response to the Appellant’s concerns contained the following: “The WA staff raised the concern as part of discussions, and it was agreed that an additional classification would be added for them. As this addition effected (sic) no other staff member within the group, all parties felt comfortable that the Undertakings submitted in addition to the EA document or appropriate in the situation”. 24

○ It seems clear that the Respondent was asserting that it had agreed to vary the Agreement to include a new classification to cover employees in Western Australia who would be covered by the Agreement. The method by which this would be effected was to proffer an unsolicited undertaking to the Commission.

○ There was no material before the Deputy President which would indicate that the proposed variation to the Agreement was discussed with any employee covered by the Agreement outside of Western Australia. The material suggests that an agreement was reached by the Respondent with some employees who will be covered by the Agreement but not with others, and that this was done after voting for the Agreement had commenced. That which was sought to be approved on 23 March 2014 was different to the Agreement that was proposed on 24 March 2014. That there was no material change which affected employees in New South Wales is beside the point. Employees are not asked to approve only those parts of an agreement that affect them. Employees are asked to approve the whole of an agreement, whether particular parts effect particular employees or not.

○ In any event, it seems clear on the material that employees in Western Australia were led to believe, whether through the provision of an undertaking or otherwise, that the additional classification proposed would form part of the Agreement and would be legally binding if approval of the Agreement was given by the Commission.

○ Section 190 of the Act makes clear that the provisions concerning the giving of an undertaking only apply, relevantly, if the Commission “has a concern that the agreement does not meet the requirements set out in sections 186 and 187”. There is no material which would suggest that the Deputy President raised any concerns about whether the requirements in ss. 186 and 187 of the Act have been met. The Respondent accepted that no such concern was raised by the Deputy President. 25

○ Whatever else might be said of the undertaking, it is not an undertaking that could have been accepted. Consequently, the undertaking given by the Respondent cannot, contrary to [8] of the Decision, be taken to be a term of the Agreement.

○ As the terms of the undertaking were intended by the Respondent to operate as terms of the Agreement, and as the material before the Deputy President does not disclose whether employees, other than Western Australian employees were aware of this, it seems to us that the Deputy President could not be satisfied on the material that either:

n during the access period the relevant employees were given a copy of the “written text of the agreement” for which approval was sought; or

n that the relevant employees had access to the written text of the agreement throughout the access period,

as required by s.180(2) of the Act. Consequently the Deputy President could not have been satisfied on the material of the matters set out in section 188 (a) (i) and therefore of section 186 (2) (a) of the Act.

○ Moreover, in the circumstances it seems to us that there were reasonable grounds for believing that the Agreement may not have been genuinely agreed to by the employees as the content of the Agreement had in effect been altered after the voting for the approval of the Agreement had commenced. It is not within the scheme of the Act that a party can seek to alter the terms of an agreement by proffering an undertaking which is not responsive to a concern raised by the Commission as set out in s. 190(1) of the Act. Any suggestion to employees who will be covered by a proposed agreement that such an unsolicited undertaking will be effective as a term of the agreement is likely to mislead.

Section 180(4) requirement

○ The First Fenech Declaration sets out in tabular form some steps said to have been taken by the Respondent to explain the terms of the Agreement, and the effect of those terms to the relevant employees. The information provided asserts that “all employees met to review Enterprise Agreement” on 27 January 2015. 26 The information also asserts that various meetings were conducted in February and March 2015 with all employees and the Negotiating Committee.27

○ No information is provided about the explanation provided during these meetings, and, self-evidently, “all employees” could not have attended the same meeting or meetings since the bulk of employees were in New South Wales and three of the employees were located in Western Australia.

○ Moreover, the First and Second Fenech Declarations contain a conflict in the account of the steps taken to explain the terms of the Agreement to the employees in Western Australia. The Second Fenech Declaration provides the following explanation:

“We had no employees from a non-English speaking background nor did we have any junior workers. Thus the process included various meetings with the terms and conditions were explained to all relevant employees. Normal plain English was used to explain the terms and conditions of the enterprise agreement. All employees were encouraged to ask questions and to speak to be a supervisor of (sic) workplace representative if they had any questions or concerns. All employees either had a copy of the agreement or had access to the enterprise agreement.” 28

○ The First Fenech Declaration provides the following explanation:

“To the Applicant (sic) knowledge, all employees are fluent in English. An interpreter service was offered to three (3) employees in W.A. who are from a non-English-speaking background, however those employees declined and preferred instead to hold discussions regarding the enterprise agreement prepare project manager. The Applicant does not employ junior workers at this time. Thus the process included various meetings with the terms and conditions were explained to all relevant employees. The Applicant presented an explanation of the terms and conditions of the enterprise agreement in plain language. All employees were encouraged to ask questions and to speak to their supervisor of (sic) workplace representative if they have any queries or concerns. All employees either had a copy of the agreement or had access to the enterprise agreement.” 29

○ This inconsistency required further examination. When combined with the attempted last-minute alterations to the Agreement, it seems to us that the Deputy President could not have been satisfied on the material that the Respondent took all reasonable steps to ensure that the terms of the Agreement and the effect of those terms were explained to relevant employees as required by s. 180(5) of the Act. Consequently, the Deputy President could not have been satisfied on the material of the matters set out in s. 188(a)(i) of the Act and therefore of s. 186(2)(a) of the Act.

[23] The examples given above are by no means an exhaustive dissertation of the inconsistency in the material before the Deputy President, but as we indicate above, it is sufficient for our purposes to establish that on the state of the material before the Deputy President there was not a proper basis upon which the Deputy President could have been satisfied that the Respondent had complied with the pre-approval steps set out in s. 180 of the Act. Moreover, there is no explanation in any of the materials before the Deputy President for the different and inconsistent statutory declarations. This fact alone necessitated further enquiry, although we note the Respondent’s email to the Deputy President of 28 April 2015 asserted that the Second Fenech Declaration was the “Original F17 Statutory Declaration of Andrew Fenech” 30 This may have had the result that the content of that declaration was not read.

Nature of the appeal

[24] Appeals brought pursuant to s.604 of the Act involve an appeal by way of re-hearing, and the Commission’s powers on appeal are exercisable only if there is error on the part of the primary decision-maker. 31 An appeal may only be made with the permission of the Commission; there is no right to appeal.

[25] If we are satisfied that it is in the public interest to do so, we must grant permission to appeal. In GlaxoSmithKline Australia Pty Ltd v Colin Makin 32 a Full Bench summarised the concept of public interest in the following terms:

“Although the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters...” 33

[26] We are satisfied that the matters we have identified and which arise in the appeal raise important questions about the proper consideration and application of the pre-approval steps that are set out in s. 180 of the Act. In those circumstances, we are satisfied that it is in the public interest to grant permission to appeal, and we so do. It is evident from our analysis above that we have identified an error of the kind identified in House v The King. 34 It is appropriate therefore to uphold the appeal and to quash the Decision.

Deposition of the appeal

[27] For the reasons given above, we grant permission to appeal, uphold the appeal and quash the Decision. The application by the Respondent for the approval of the Agreement is remitted to Deputy President Gostencnik for determination.

SENIOR DEPUTY PRESIDENT

Appearances:

N Read of Counsel for the appellant

B Gee, Solicitor for the respondent

Hearing details:

Sydney

18 June

2015

 1   AB 1-7

 2   [2015] FWCA 3047; see also correction dated 9 June 2015 to [6] of the Decision

 3   AB 8-18

 4   AB 22-66

 5   Appellant’s outline of submissions at [6]

 6   AB 67-114

 7   AB 67, 75-85

 8   AB 86-87

 9   Ibid at [8]

 10   Transcript PN 81–97

 11   AB 5

 12   Transcript PN 158–159

 13   See ss.186 (1) and (2) (a)

 14   See s.180(4)

 15   AB 8–17

 16   AB 67, AB 75–85

 17   AB 29

 18   AB 86

 19   AB 87

 20   AB 11 and AB 78

 21   AB 86

 22   AB 32–36

 23   AB 56 and AB 58

 24   AB 71

 25   Transcript PN 346 –347

 26   AB 11

 27   Ibid

 28   AB 78

 29   AB 12

 30   AB 67

 31   Coal and Allied v AIRC (2000) 203 CLR 195 at 203-4 Gleeson CJ, Gaudron and Hayne JJ

 32   [2014] FWCFB 4397

 33   Ibid at [27]

 34   (1936) 55 CLR 499 at 504-505

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