Fair Work Act 2009
s.604—Appeal of decision

Appeal against decision [2015] FWCA 5210 of Commissioner Cloghan at Perth on 5 August 2015 in matter number AG2015/4055 – Group of employees fairly chosen – Agreement genuinely agreed to by employees.

Introduction

[1] This is an appeal by the Maritime Union of Australia (the MUA) against the decision 1 of Commissioner Cloghan to approve the Toll Energy Logistics Pty Ltd North West Agreement 2015 (the Toll Energy Agreement).

[2] The Toll Energy Agreement was approved by Commissioner Cloghan on the papers after he was satisfied that the approval requirements in ss.186, 187 and 188 of the Fair Work Act 2009 (the FW Act) had been met. The MUA was not aware of the existence of the Agreement prior to its approval and accordingly did not seek to make submissions before the Commission opposing its approval.

[3] In its amended notice of appeal, the MUA contended that the group of employees covered by the Toll Energy Agreement was not fairly chosen. 2

[4] Further, the MUA contended that there were reasonable grounds upon which to believe that the Toll Energy Agreement was not genuinely agreed to by the employees. 3

[5] There were two preliminary issues that were raised on the appeal namely:

1. Did the MUA have the standing to make the appeal;

2. Should the MUA be permitted to adduce new evidence.

Background

[6] In August 2014 Toll Group announced it had been awarded a contract to provide logistics support for Chevron’s operations. At the same time Toll Group announced it was building three new vessels for the work. Though not part of the announcement the evidence established that the contract had been awarded to Toll Energy Logistics Pty Ltd.

[7] On 15 August 2014, a service order was executed for the supply of the Sandfly. The Sandfly is owned by Perkins Shipping Pty Ltd (trading as Toll Marine Logistics). The Sandfly was to provide marine freight transport and logistics support for the construction phase of Chevron Australia Pty Ltd Gorgon Project. This work involved the transport of fuel and other construction cargo between Barrow Island and Dampier. The crew of the Sandfly were employed by Toll Marine Logistics.

[8] In April 2015 a further service order was executed for the supply of the Firefly to be used to perform work on the construction phase of the project, and like the Sandfly, its crew were employed by Toll Marine Logistics.

[9] Upon the arrival of the Sandfly in Dampier, the MUA sought to initiate discussions about an enterprise agreement. 4 Toll Marine Logistics agreed to bargain for an agreement which covered the work performed by the Sandfly in relation to the construction phase of the project.

[10] On 16 September 2014 the MUA and Toll Marine Logistics met to discuss the proposed agreement.

[11] On 29 September 2014 a notice of representational rights was issued to employees. The proposed agreement was to cover employees who were engaged in the employer’s business in Dampier, Western Australia. With the notice of representational rights was a copy of the proposed agreement. The proposed scope was limited to the work on the Sandfly and “the scope of work contained in the agreement between Chevron Australia Pty Ltd, Kellogg Joint Venture Gorgon and Mermaid Supply Base Pty Ltd, which involves logistic support for the construction phase of the project.” 5

[12] In September 2014 the MUA sought to commence bargaining with Toll Marine Logistics for an enterprise agreement to cover employees on the Sandfly, the Firefly and three New Build Vessels, the Investigator, the Cygnet and the Astrolabe. At the time bargaining commenced there were no employees engaged to work on the three New Build Vessels. 6

[13] The MUA was a bargaining representative for this agreement.

[14] On 23 November 2014, the MUA sent an email to Toll Marine Logistics stating amongst other matters that it was seeking an agreement covering all LCT and barge operations undertaken by Toll Marine Logistics between Dampier and Barrow Island or within coastal waters in Western Australia. 7

[15] Relevantly the MUA proposal included a provision that “recruitment of new employees shall be in consultation with the relevant unions with absolute preference for half the deckhands to be integrated ratings and the other half to have worked in the oil and gas industry as Deckhands for a period of at least five years. Current and future STCW’s to be provided with IR training.” 8

[16] Negotiations continued with recruitment and scope relevant for this decision being unresolved.

Recruitment and scope

[17] By email dated 12 February 2015 the MUA asked Toll Marine Logistics to give consideration to employing named seafarers on the LCT’s. In its email the MUA stated that “it was keen to see local employment on the LCT’s but also understand the company’s position in regard to existing employees. The MUA is keen to work on an acceptable compromise and looks forward to settling an enterprise agreement……”. 9

[18] Ms Leanne Cull, a Human Resources Manager with Toll Transport Pty Limited, gave evidence that at the meetings before and after this email, the MUA made it a condition of reaching agreement that the majority of positions on the New Build Vessels had to be filled from the MUA’s list of unemployed Western Australian branch MUA members. 10

[19] On 17 February 2015 the MUA sent Toll Marine Logistics an email reiterating its position that “the MUA are seeking a number of Western Australians offered employment on the LCT’s, along with the existing NT crew”. 11

[20] This claim was rejected by Toll Marine Logistics because its priority in the first instance was to recruit and redeploy current employees in Western Australia, Queensland and the Northern Territory into vacant positions on the New Build Vehicles as they became available. It needed to do this to meet its redeployment obligations to its current employees, as work on the Sandfly and Firefly was only temporary and Toll Marine Logistics crew members in the Northern Territory and Gladstone businesses were not guaranteed job offers with the new owners.

[21] On 26 or 27 February 2015 a further bargaining meeting occurred. At that meeting the MUA told Toll Marine Logistics that the outstanding items were not negotiable. 12

[22] On 3 March 2015 the MUA sent an email advising that the MUA was now seeking to maintain its position as articulated in the correspondence of 23 November 2014. 13

[23] On the same day, in response to that email, Toll Marine Logistics agreed to include the New Build Vessels in the scope of the agreement and in relation to priority being given to Western Australian MUA members, that are not current Toll employees, Toll Marine Logistics advised that they gave a commitment to the recruitment of current employees of the Toll Group into any vacancies, irrespective of the location of the employees. This it was said would apply to current Sandfly crew and possible Firefly crew. 14

[24] On 5 March 2015 Toll Marine Logistics put forward a proposed agreement to the MUA and advised that they sought a response by 10 March 2015 failing which they would put the proposal to the crew. 15

[25] On 8 March 2015, Toll Marine Logistics advised all employees on the Sandfly and Firefly of the current state of negotiations. 16

[26] On 10 March 2015 the MUA responded to Toll Marine Logistics’ proposed agreement and advised that:

“The primary position was that if we were to explore a new position or alternate landing then we would do on the basis that there was 100% permanency of employment for this work including any new vessels that come. As a secondary position we said that it is our preference for inshore local work for there to be preference for local employment – but having consideration for the fact that those employees who are currently doing this work on the Sandfly to have the initial jobs on the new builds and to have permanency for the life of that contract including seniority over anyone that is employed after them. Our view is that the company should explore local employment for subsequent jobs after the initial crews have filled the first positions on the new builds.

We accept Toll’s in respect of what they have put to us and will work with you to ensure you meet your internal obligations as well.

As a result of being unable to reach an outcome on the alternate landing with the most recent discussions we wish to continue to negotiations where we left off prior to exploring the alternative position.”

[27] This correspondence was provided to the crew of the Sandfly and Firefly. 17

[28] On 22 April 2015 Ms Cull advised the MUA that “all crew in the WA project already will transfer from the Firefly or Sandfly in their current roles onto the first two new builds when they arrive. There are plans for a third vessel in the later quarter that is yet to be crewed. Crew will be considered from across TML”. 18

[29] No further negotiations took place until 30 June 2015 when the MUA proposed another meeting by which time Toll Energy Logistics had lodged for approval an agreement to cover employees on the New Build Vessels. The MUA was not advised of this until after the Toll Energy Agreement was approved.

Negotiations for the Toll Energy Logistics Pty Ltd North West Agreement 2015

[30] The first of the New Build Vessels, the Investigator, was due to arrive in Dampier in early August 2015. Seven employees were needed to make up the first crew. The second crew would not be needed until September 2015 at the commencement of the next swing. 19

[31] Toll Energy Logistics identified seven employees, three from the Sandfly and four from the Firefly, as potential employees. A two-day meeting was organised with these potential employees on 22 and 23 June 2015. The purpose of the meeting was to finalise employment offers, conduct inductions and training, and commence negotiations for a new enterprise agreement to cover the work. 20

[32] The proposed employees were informed that the Investigator and the other New Build Vessels would be operated by Toll Energy Logistics. Employees were required to sign confidentiality agreements which required them to undertake not to disclose or use any commercially sensitive information that was provided to them at the meeting. 21

[33] The proposed employees were handed employment contracts along with the Fair Work Information Statement. It was Ms Cull’s evidence that she told the employees that there was no pressure to accept the employment offer and that “if they did not wish to take up employment with Toll Energy, they could remain in their current roles.” 22 The seven employees accepted the offer of employment.

[34] After lunch the employees were provided with a notice of employee representational rights. Ms Cull told them that they had the right to have someone represent them. She said she made it clear that they were free to choose their own representative. She denied putting any pressure on employees to appoint themselves as their own bargaining representative. 23

[35] She explained to employees that an enterprise agreement was required because:

1. it considered this to be necessary to provide Chevron and Toll Energy Logistics with security and certainty of the marine logistics support services for the period of the contract;

2. Toll Marine Logistics had been negotiating with the MUA and other unions to cover the work of the Sandfly and Firefly but had been unable to reach an agreement;

3. Toll Energy Logistics wanted an agreement to cover the operations phase work and wanted to negotiate with and hear directly from the employees as it was important to them;

4. Toll Energy Logistics had a draft agreement prepared but employees would have every opportunity to go through it and put forward what they thought should not be included. 24

[36] She denied telling the employees that:

1. if they did not make the agreement that they would go back to their old vessels;

2. the MUA were demanding crew only be from Western Australia and that the MUA was trying to replace the Toll Marine Logistics employees with Western Australian branch members. In response to an issue raised by the employees that the MUA was trying to give [their] jobs away, she told the employees that the MUA have put forward a demand to name the people they wanted on the vessels and the ratio was higher for their people than for our people. She told the employees that it had not been agreed to as they saw their obligation was to redeploy their own employees;

3. they had to appoint a particular bargaining representative;

4. they only had two choices, nominating themselves or nominating one of the other crew;

5. the Chevron contract was at risk. 25

[37] The employees were provided an opportunity to discuss the matter amongst themselves and after that they advised Ms Cull that they wished to negotiate on their own behalf. Each employee appointed themselves a bargaining representative. 26

[38] Further negotiations for the Toll Energy Agreement continued in the afternoon and on the next day. The employees were due to commence their first swing on 8 August 2015 though one of the crew joined the vessel on 15 July 2015 for the journey to Australia. 27

[39] On 6 July 2015 a final meeting was held with six of the employees to review the Toll Energy Agreement and the employees were provided with a final copy of the document. The employees were also provided a notice setting out voting dates, methods and details. 28 A separate meeting was held with the seventh employee.29

[40] The Toll Energy Agreement was approved by the employees and the application to approve the agreement was lodged and the Toll Energy Agreement was approved by the Fair Work Commission on 5 August 2015.

[41] On 12 August 2015, Ms Cull sent an email to all Toll Marine Logistics employees advising them that the Toll Energy Agreement had been approved. The email further advised employees that “those employees who wish to move to the New Build Vessels will be offered a position with Toll Energy Logistics Pty Ltd working on the Toll Investigator, Cygnet or Astrolabe and at that point the conditions within this agreement will apply to their employment.” 30

Discussions with Toll Energy Logistics employees

[42] Mr Thomas Mayor, the Branch Secretary of the Northern Territory branch of the MUA, rang one of the crew members on the Investigator to ask what had happened. He said he was told by Mr Andrew Milner that they had been called to a meeting at short notice and were told at the meeting with Ms Cull and Mr Trent Lonsdale that:

1. They either had to sign a confidentiality agreement to be part of Toll Energy on the new vessel the Investigator or go back to the Sandfly;

2. Having signed the confidentiality agreement, that the meeting was about the new enterprise agreement with Toll Energy;

3. The MUA was demanding crew only be from Western Australia and that the union had been trying to replace them with W.A. branch members;

4. Having been given bargaining representative forms, that they were to nominate themselves or one of the other crew and to do it collectively;

5. That one of the reasons it was being done with them directly was because negotiations with the unions had failed and the contract was a risk.

[43] Mr Mayor said he was also told by Mr Milner that the employees then met by themselves and subsequently told Mr Lonsdale and Ms Cull that they had agreed to negotiate themselves and put forward some claims. On the next day they met and finalised the Toll Energy Agreement and the document was given to them before they flew home.

[44] Mr Mayor then spoke to another crew member Mr Garry Laurensz and he confirmed Mr Milner’s account. Mr Mayor took notes of these conversations and typed them up into an email sent to Mr Kyle McGinn, the Northwest organiser for the W.A. branch. The email was copied to Mr Milner and Mr Laurensz. Mr McGinn asked Mr Milner and Mr Laurensz to confirm what was contained in Mr Mayor’s email. Mr Milner’s response was as follows:

“The email Thomas had sent was misconstrued. We do not believe there was any threat to our employment with Toll. The EBA is widely accepted by everyone on board the Toll Investigator, and we believe no further action is required. Thank you for your concerns.” 31

[45] Ms Cull exhibited to her statement a draft letter from Mr Laurensz sent on 15 August to her. That letter said:

“On the 22/06/15 as the new selected crew for the new build Toll Investigator we were all invited down to Perth to discuss and have a meeting about the ship that was arriving.
Once arriving in Perth at the meeting we asked to sign a confidentiality agreement, as we were going to have a discussion on where we were all going into the future.
As this ship is not a vessel of Toll Marine Logistics, it will be operating under Toll Energy. We as the crew were still under the EBA of Toll Marine Logistics.
The company Toll Energy approached us about a new EBA. They did however give us the option to negotiate the new EBA; this was unanimous decision with all crew, the negotiations went for two days in Perth and then a follow-up two weeks later in Brisbane.
We as the crew for Toll Investigator are very happy with the outcome of the new EBA and were at no stage put under any duress to sign, we also appreciate your concerns in this matter but we believe we have a good outcome and are happy with EBA.” 32

[46] Against this background, we consider the MUA’s grounds of appeal.

Was the group of employees covered by the Toll Energy Agreement fairly chosen?

[47] The MUA submitted that:

1. Toll Energy manipulated the agreement making process. It submitted that Toll Energy Logistics always intended that a wider group of employees would be employed under the Toll Energy Agreement and this group of employees was readily identifiable at the time the Toll Energy Agreement was made.

2. There was no legitimate bona fides business rationale for the transfer of employment to Toll Energy Logistics and that the only purpose in making an agreement with Toll Energy Logistics rather than Toll Marine Logistics was to deprive a wider group of the right to collectively bargain and to have the MUA as their representative.

[48] Chapter 2, Part 2-4 of the FW Act provides for the making of enterprise agreements between an employer and the employees who are employed at the time the agreement is made and who will be covered by the agreement. 33 Before the Commission can approve an agreement, it must be satisfied that the group of employees covered by the agreement was fairly chosen.34 If the agreement does not cover all the employees of the employer then the Commission must decide whether the group of employees covered was fairly chosen, taking into account whether the group is geographically operationally or organisationally distinct.35

[49] As was considered by the Full Court of the Federal Court in Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd and Another, 36 it is accepted that the reference to the group of employees covered by the agreement is a reference to “the whole class of employees to whom the agreement might in the future apply, rather than the group of employees which actually voted on whether to make the agreement.”37

[50] The MUA rely on the following passage in John Holland where Buchanan J accepted that it was legally possible for an agreement to be made with as few as three employees but that:

“Nevertheless, obviously questions may arise about the extent to which it is ‘fair’ for a very small group of employees to fix the terms and conditions of a larger group of employees who may be engaged during a period of years into the future. Whatever position is taken, once an agreement is approved it endures for up to 4 years and no protected industrial action is possible during the term of an agreement. Future employees, therefore, have less (if any) opportunity to bargain.” 38

[51] He went on :

“There is no requirement that employees who vote to make an agreement must have been in employment for any length of time, and there is no requirement that they remain in employment after the agreement is made. Presumably, the presently employed members of such a group will act from self-interest, rather than from any particular concern for the interests of future employees. The potential for manipulation of the agreement making process is, accordingly, a real one. However, no suggestion of that kind is made in the present case and the possibility may therefore be put to one side for the purpose of the discussion. That is an important consideration because it suggests, as the primary judge thought, that determination of whether the group of employees was fairly chosen in the present case needed to bring to account the business rationale for the choice, as well as deal with any possibility of unfair exploitation.” 39

[52] This passage was considered by the Full Bench in CEPU v Sustaining Works Pty Limited 40 which accepted that “deliberate manipulation of the agreement-making procedures under the FW Act might found a conclusion that the group of employees covered by the agreement was not fairly chosen.”41

[53] The Full Bench in that matter rejected the submissions of the CEPU and found there to be no deliberate manipulation of the agreement making process. 42

[54] It was also considered by the Full Bench in CEPU and AMWU v Main People Pty Ltd 43 which said:

“[32] It may be accepted that in the above passage the possibility is recognised that the enterprise bargaining process may be manipulated in such a way as to lead to the unfair exploitation of employees to be covered by the agreement. However, it is clear from the Appeal Decision that the first Full Bench was alive to this possibility, as paragraphs [18]–[21] (quoted above) demonstrate. As the Full Bench observed, merely because, at the time an agreement is negotiated and made, the employer only has a small number of employees with whom to negotiate, and the coverage of the resultant agreement encompasses a much wider range of employees, it does not follow that the process has been manipulated and the ‘fairly chosen’ requirement has not been met. This situation may simply reflect the hopes and ambitions of a small business which desires to become a much larger business.

[33] The position might be different if, for example, the small group of employees with whom the agreement was negotiated were not employed at the time for bona fide business reasons but rather only for a short period for the purpose of negotiating and making an agreement which was disadvantageous to genuine future employees. In that circumstance, it might be concluded that the group of employees covered by the agreement was not fairly chosen. But there was no evidence of anything like this here.”

[55] As was held in John Holland the issue of whether the group of employees was fairly chosen requires attention to be given to the whole scope of the future coverage of the agreement. 44

[56] The starting point therefore in assessing whether the group of employees was fairly chosen is the scope of the agreement.

[57] In this case the scope of the Toll Energy Agreement was:

“3. APPLICATION AND SCOPE

(a) This Agreement is made and is binding on Toll Energy Logistics Pty Ltd, its Employees whose classifications appear at Clause 37 and work on vessels that perform Marine Work in the North West Marine Area as defined.

(b) Marine Work means work performed on vessels which are continually operating in the North West Marine Area and shall include (but not be limited to) the operation of personnel transfers vessels, general cargo supply vessels, landing craft vessels and bunker vessels.

(c) North West Marine Area is defined as the belt of water within a radius extending 200 nm from Lat 20°39’8 Longitude 116°43’E, Port of Dampier, Australia.”

[58] There were no submissions made that the scope of the Toll Energy Agreement was not appropriate. There were no submissions that, assuming the scope did not extend to all the employees of Toll Energy Logistics that the group chosen was not geographically, operationally or organisationally distinct.

[59] The complaint of the MUA is that Toll Group used Toll Energy Logistics as the employer rather than Toll Marine Logistics at a time when Toll Marine Logistics employed a larger number of employees who were potentially within the scope of the Toll Energy Agreement.

[60] The MUA submitted that there was no bona fide business rationale for the transfer of employment to Toll Energy Logistics.

[61] That submission is not supported by the evidence. Mr Scott Woodward, the General Manager of Toll Energy Logistics, gave evidence of why the decision was taken that Toll Energy Logistics employ the marine crew for the Chevron contract on the New Build Vessels. 45 His evidence was that Toll Energy Logistics had a contractual obligation to have an enterprise agreement in place prior to the commencement of the first swing.46 That evidence was not challenged. At the time that decision was made bargaining between Toll Marine Logistics and the MUA for an enterprise agreement had stalled.47 Mr Woodward said that he made the decision in March 2015 that Toll Energy Logistics would be the employer of the crew on the New Build Vessels because it had the commercial obligations to provide the contracted services.48 It was also the owner of the vessels.49

[62] Mr Woodward accepted that one of the reasons he made the decision to use Toll Energy Logistics as the employing entity was because he did not think that Toll Marine Logistics would be able to make an agreement. 50 Mr Woodward also gave evidence that around the same time there was a reorganisation and Toll Marine Logistics “would effectively be disbanded as an entity.”51

[63] Mr Woodward did not deny that one of the motivations was that it was more likely that they would be able to make an agreement directly with employees before the Investigator commenced service in Dampier if the employees were employed by Toll Energy Logistics. 52

[64] It was suggested to Mr Woodward that he wanted to exclude the MUA from the negotiations process. Mr Woodward denied this was his motivation. 53 There is no evidence that had any of the seven employees, some of whom were MUA members, not appointed themselves as a bargaining representative that Toll Energy Logistics would have refused to bargain for an agreement with the MUA.

[65] We consider it is arguable that a reason that the decision to use Toll Energy Logistics was made was in order to exclude the MUA from the bargaining process or make it likely that the MUA would be excluded from the process. If there was no other legitimate business reason it would be arguable that this was a manipulation of the bargaining process. However, it is not necessary to determine this matter because we have found that there were other legitimate business reasons for Toll Group to decide to use Toll Energy Logistics as the employer of the crew on the New Build Vessels. The reasons advanced by Mr Woodward were not seriously challenged in cross examination.

[66] The MUA did not seek to have the Full Bench lift the corporate veil. There may be cases where the identity of the employer is relevant to the question of whether a group of employees was fairly chosen. However in this matter we do not consider it to be a relevant consideration.

[67] It was further submitted that Toll Energy Logistics knew that it would need to employ additional employees to perform the work and these employees were identifiable as the employees employed by Toll Marine Logistics on the Sandfly and the Firefly.

[68] It is not contested that up until March 2015 negotiations were occurring with the employees of Toll Marine Logistics for an enterprise agreement which would cover the New Build Vessels. It is also not contested that in April 2015 it was intended that the employees on the Sandfly and Firefly would transfer to the New Build Vessels and that through their bargaining representative, the MUA, they were bargaining for an agreement which would cover the work. It is not contested that these employees and the MUA were never advised that Toll Marine Logistics had stopped bargaining. Nor were they told (except for the seven crew) that Toll Energy Logistics was going to be the employer of the crew on the New Build Vessels. It cannot be denied that the decision to engage only seven employees denied those employees the opportunity to bargain for an agreement which would, if they accepted employment with Toll Energy Logistics, cover their employment.

[69] However there is no evidence to support a finding that the seven employees employed by Toll Energy Logistics were not employed for bona fide business reasons. There was no question that crew were needed to operate the vessel. The MUA complains that Toll Energy Logistics did not engage the second crew when it knew that it would have to employ them within a very short period of time. Mr Woodward gave evidence that it would not have been commercially viable for Toll Energy Logistics to employ the second crew at the same time the first crew were engaged as the client would not pay Toll Energy Logistics for the second crew at that time. 54 When asked why the employees could not have been offered employment to commence at a later date Mr Woodward advised that that was not how the company operated.55 He denied that the effect of this decision was to deny the employees the opportunity to be engaged in bargaining for the new agreement.56 It was his evidence that at the time the prospective employees had not been identified or selected.57

[70] We are unable to conclude that Toll Energy Logistics, by not employing the second crew at the same time as it employed the first crew, did anything improper. There is nothing inherently improper with an employer negotiating with a small number of employees in circumstances where it knows that a larger group of employees will be engaged in the near future. In this matter the contractual requirement to have an agreement in place prior to the commencement of the first swing made the need for such an agreement a priority.

[71] We accept the submission that the pool of future employees was identifiable, namely existing employees of Toll Marine Logistics employed on the Sandfly and Firefly. 58

[72] However, the real issue is whether the failure of Toll Energy Logistics to involve the MUA in bargaining on behalf of its members who were employed on the Sandfly and Firefly and who were going to be offered work on the New Build Vessels means that the group of employees was not fairly chosen.

[73] We are unable to conclude that there is an obligation in the FW Act for the employer to bargain with potential employees. The FW Act provides that an agreement is made with employees who are employed at the time the agreement is made and who will be covered by the agreement. 59 The notice of employee representational rights is to be given to employees who will be covered and who are employed at the notification time.60 Employees are entitled to be represented in bargaining. Only employees who are employed at the time are entitled to a vote on the agreement.61

[74] We therefore find that the group of employees was fairly chosen.

Were there reasonable grounds upon which to believe that the Toll EnergyAgreement was not genuinely agreed to by the employees?

[75] The parties are in agreement that DP Asbury in Central Queensland Services Pty Ltd T/A BHP Billiton Mitsubishi Alliance 62 summarised the approach to determining whether s.188(c) of the FW Act is engaged in particular circumstances. We endorse the approach of the Deputy President but note that her summary is not intended to be an exhaustive list of the circumstances in which s.188(c) might apply.

[76] The focus of s.188(c) is the genuineness of the employees’ agreement.

[77] As Deputy President Asbury concluded:

“What an employer is not permitted to do is to mislead and misinform employees or coerce or intimidate them in a way which interferes with their right to bargain or to be represented by a person of their choice, or so that they do not have the freedom to choose to approve or not approve an enterprise agreement.” 63

[78] The MUA seek to rely upon evidence given by Mr Mayor to support its contention that employees were given misleading or intimidating information.

[79] In this case we have direct evidence from Ms Cull about what occurred at the meeting with the employees. Mr Mayor’s evidence about what occurred is hearsay and in any event his version of what he was told was contradicted by Mr Milner in his email to Mr McGinn 64 of 18 August 2015.

[80] The MUA submitted that the following false and misleading statements were made:

1. Bargaining with the MUA had failed;

2. The MUA was demanding that the new vessels only be crewed from Western Australia, such that the employees would be denied employment;

3. The employees must nominate themselves or each other as bargaining representatives;

4. The contract pursuant to which the employment was created was at risk if the Toll Energy Agreement was not made;

5. If they did not accept employment with Toll Energy Logistics under the Toll Energy Agreement they would not be able to continue working on the new vessels.

[81] We turn to deal with these matters.

1. Bargaining with the Appellant had failed

[82] The MUA relied upon Ms Cull’s statement that Toll Marine Logistics had been unable to reach an agreement with the MUA. We do not consider that this statement was misleading. The MUA had not since March 2015 made any attempt to progress negotiations. There is no doubt that when she made the statement it was true.

2. The MUA was demanding that the new vessels only be crewed from Western Australia, such that the employees would be denied employment

[83] The MUA rely in part on Ms Cull’s evidence about what she said to employees about the MUA’s position on the crewing of the new vessels. Ms Cull said in response to a crew member statement that the MUA “are trying to give our jobs away”, that the “MUA had put forward a demand to name the people they wanted on the vessels and the ratio was higher for their people than our people [Toll employees].”

[84] There is no doubt that the MUA had been seeking to have Western Australian MUA members engaged on the new vessels. The statement that Ms Cull made was the MUA’s position during the negotiations. However Ms Cull’s statement did not accurately reflect the MUA’s position at the time she made the statement as the MUA had modified its position on 10 March 2015. Nonetheless, her statement must be seen in context. The employees had received a copy of Toll Marine Logistics’ email of 8 March 2015 and the MUA’s circular of 10 March 2015 explaining its position. By the time the statement was made the employees had been offered and accepted employment on the new vessel. By this time the employees knew that if they appointed the MUA as their bargaining representative then the issues associated with their employment prospects were no longer relevant.

[85] It is difficult to see how Ms Cull’s statement had a material effect on the bargaining behaviour and voting intentions of the employees. The Toll Energy Agreement did not contain provisions relating to recruitment.

[86] Further, nothing in the statement misled the employees about the content of the Toll Energy Agreement or the effect of the Toll Energy Agreement.

[87] We do accept that misleading employees about their right to be represented in bargaining can lead to a finding that the employees did not genuinely agree to an agreement. However, we do not consider that Ms Cull’s statement meant that the employees were misled about their right to appoint the MUA as their bargaining representative.

3. The employees must nominate themselves or each other as bargaining representatives

[88] Ms Cull denied telling employees that they had to appoint themselves or another member of the crew as a bargaining representative and we accept her direct evidence.

[89] In oral submissions the MUA relied upon Ms Cull telling employees that Toll Energy Logistics wanted to hear directly from employees. The MUA submitted that this was in effect code for “we want you to appoint yourselves or another member of crew” 65 as a bargaining representative and telling the employees that Toll Energy Logistics did not want to negotiate with the MUA.

[90] We do not consider it was misleading for Ms Cull to tell employees that Toll Energy Logistics wanted to hear directly from the employees. That was the company’s preferred position. We accept that the employees would reasonably have understood that the company did not want to negotiate with the MUA. While we accept that there may be circumstances where an employer through their words or actions intimidates employees such that they are not free to appoint a bargaining representative of their choice or have their union as a default bargaining representative, we do not consider that Ms Cull’s comments were of that character.

4. The contract pursuant to which the employment was created was at risk if the Toll Energy Agreement was not made

[91] Ms Cull denied telling the employees that the contract was at risk. She did say that an agreement was considered necessary to provide certainty for Chevron and Toll Energy Logistics. Given Mr Woodward’s evidence that an enterprise agreement was required, Ms Cull in fact understated the need for an agreement. It cannot be said that this statement was misleading.

5. If they did not accept employment with Toll Energy Logistics under the Toll Energy Agreement they would not be able to continue working on the new vessels.

[92] There is no doubt that Ms Cull told the employees that they did not have to accept employment with Toll Energy Logistics and if they did not they would return to the Sandfly and Firefly. There is also no doubt that this was said in the context where employees knew that work on those vessels was for a limited duration and the work on the New Build Vessels would be ongoing for five years. However, that did not make the statement misleading.

[93] We are unable to conclude that the evidence before the Commission supports a finding that employees were given false and/or misleading information during the course of bargaining such as to enable us to find that the Toll Energy Agreement was not genuinely agreed to by the employees.

[94] Next we consider the MUA’s standing to appeal and permission to adduce new evidence, before concluding.

Did the MUA have the standing to make the appeal?

[95] The MUA was not a bargaining representative for the Toll Energy Agreement.

[96] The MUA relied upon the decision of the Full Bench in CEPU and AMWU v Main People Pty Ltd 66 to support its submission that it had standing to bring the appeal. The circumstances in that matter are similar in that the unions were not bargaining representatives. In that case there was no evidence that the employees who voted to approve the agreement were members of either union. In this case the evidence is that the employees were members but they had not asked the union to represent them. In this case the evidence was that other members of the MUA would be employed in the future.

[97] The Full Bench in Main People held that:

“[7] The appellants have the right to represent employees under the terms of the Agreement. Moreover, given the nature of the respondent’s business, and the industry within which it operates, we are satisfied that it is likely that some members of the appellants will be employed by the respondent in the future, in classifications covered by the Agreement. In the circumstances of this case we consider that this gives the appellants an interest in the decision to approve the Agreement beyond that of an ordinary member of the public. Accordingly, we are satisfied that the appellants have standing to appeal the decision to approve the Agreement”.

[98] We consider this reasoning and conclusion are applicable to this appeal and therefore we find that the MUA has the standing to bring the appeal.

Should the MUA be permitted to adduce new evidence?

[99] At the hearing we determined that we should permit the parties to adduce evidence and both parties did so.

[100] In Reihana v Mastercare Highrise Cleaning Services Pty Ltd, 67 the Full Bench endorsed the following approach to the admission of new evidence:

“The majority in J.J. Richards recognised that s.607(2) confers a discretion on a Full Bench hearing on appeal to ‘admit further evidence’ and ‘take into account any other information or evidence’ and that the principles governing the admission of fresh evidence on appeal in the courts provide a useful guide to the exercise of the discretion. In that regard, in Akins v National Australia Bank, Clarke JA said:

‘The Court is empowered to receive further evidence upon the hearing of an appeal (s.75A(7) of the Supreme Court Act 1970) but pursuant to subs (8) of that section may not receive further evidence after a trial on the merits ‘except on special grounds’. Although it is not possible to formulate a test which should be applied in every case to determine whether or not special grounds exist there are well understood general principles upon which a determination is made. These principles require that, in general, three conditions need be met before fresh evidence can be admitted. These are: (1) It must be shown that the evidence could not have been obtained without reasonable diligence for use at the trial; (2) The evidence must be such that there must be a high degree of probability that there would be a different verdict; (3) The evidence must be credible.’” (Endnotes omitted)

[101] While we accept that the evidence given by the MUA could have been obtained at the time we note that there was no notification of the intention to approve the Toll Energy Agreement nor was there a hearing. In this matter, the MUA was not afforded an opportunity to put this evidence forward at the hearing. Further, we formed the view that the evidence was probative and if accepted by the Commission could have affected the decision that the employees were not fairly chosen.

Conclusion

Given there was no hearing of this matter or any opportunity for any person to put any of the matters raised by the MUA to the Commission before the Toll Energy Agreement was approved, we consider that it is in the public interest for the permission to appeal to be granted. However, for the reasons set out above we dismiss the appeal and, having regard to the totality of the material before the Commission in respect of the Toll Energy Agreement, confirm the Commissioner’s decision to approve the Toll Energy Agreement.

SENIOR DEPUTY PRESIDENT

Appearances:

M Ritter, senior counsel with E Palmer for the Maritime Union of Australia.

R Dalton, counsel with A Millhouse, solicitor for Toll Energy Logistics Pty Ltd.

Hearing details:

2015.

Perth:

September 24.

 1   [2015] FWCA 5210.

 2   Fair Work Act 2009 (Cth), ss186(3) and (3A).

 3   Fair Work Act 2009 (Cth), ss186(2)(b) and 188.

 4   Exhibit R1 at [8].

 5   Exhibit A2 at KM2.

 6   Ibid.

 7   Ibid at KM3.

 8   Ibid.

 9   Exhibit R1 at LC2.

 10   Ibid at [18]-[19].

 11   Exhibit A2 at KM8.

 12   Exhibit R1 at [23].

 13   Ibid at LC3.

 14   Ibid at LC4.

 15   Ibid at LC5.

 16   Exhibit A2 at KM12.

 17   Exhibit R1 at [34].

 18   Exhibit A1 at TM7.

 19   Exhibit R1 at [39]-[40].

 20   Exhibit R1 at [41]- [44].

 21   Ibid at [46].

 22   Ibid at [47].

 23   Ibid at [49]-[52].

 24   Ibid at [53].

 25   Ibid at [54]-[57].

 26   Ibid at [58]-[59].

 27   Ibid at [61]-[63].

 28   Ibid at [65].

 29   Ibid at [67].

 30   Exhibit A1 at TM1.

 31   Ibid at TM2.

 32   Exhibit R1 at LC11.

 33   s172(2)(a).

 34   Fair Work Act 2009 (Cth), s186(3).

 35   Fair Work Act 2009 (Cth), s186(3A).

 36   [2015] FCAFC 16.

 37   Besanko J at [2], Buchanan J at [36].

 38   John Holland op. cit. at [20].

 39   Ibid at 33.

 40   [2015] FWCFB 4422.

 41   Ibid at [24].

 42   Ibid at [27].

 43   [2015] FWCFB 4467.

 44   John Holland op. cit. at [44].

 45   Exhibit R2 at [26].

 46   Transcript PN 736.

 47   Ibid PN 742.

 48   Ibid PN 753.

 49   Ibid PN 754.

 50   Ibid PN 759.

 51   Ibid PN 759.

 52   Exhibit R2 at [26].

 53   Transcript PN 761.

 54   Ibid PN 768.

 55   Ibid PN 770.

 56   Ibid PN 774.

 57   Ibid PN 780.

 58   Exhibit A1 at TM7.

 59   Fair Work Act 2009 (Cth), s172(2)(a).

 60   Fair Work Act 2009 (Cth), s173(1).

 61   NTEU v Swinburne University of Technology, [2015] FCAFC 98 at [24].

 62   [2015] FWC 1554.

 63   Ibid at [84].

 64   Exhibit A1 at TM2.

 65   Transcript PN 849.

 66   [2014] FWCFB 8429.

 67   [2013] FWCFB 4960.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR573176>