| [2016] FWC 4868 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
MMA Offshore Logistics Pty Ltd T/A MMA Offshore Logistics
(AG2016/3091)
COMMISSIONER CLOGHAN |
PERTH, 25 JULY 2016 |
Application for approval of the MMAOL Pty Ltd Enterprise Agreement 2016 – whether the MUA should be heard in relation to approval of the MMAOL Agreement - further decision.
[1] On 4 May 2016, MMA Offshore Logistics Pty Ltd trading as MMA Offshore Logistics (MMAOL or Employer) made application to the Fair Work Commission (Commission) pursuant to s.185 of the Fair Work Act 2009 (FW Act) for approval of an enterprise agreement.
[2] The name of the proposed enterprise agreement is the MMAOL Pty Ltd Enterprise Agreement 2016 (MMAOL Agreement).
[3] MMAOL, at the time of making its application, also sought a Confidential Order pursuant to s.594(1)(c) and (d) of the FW Act.
[4] On 6 May 2016, the Maritime Union of Australia (MUA) emailed the Commission and referred to MMAOL’s application. The MUA stated in its email that the Union “has members, and is entitled to represent the industrial interests of employees, who are employed by the Applicant within the scope of this proposed enterprise agreement”.
[5] On 20 May 2016, I issued an Order pursuant to s.594(1)(a), (b) and (c) of the FW Act.
[6] On 8 July 2016, I issued a Decision [2016] FWC 3789 on whether the MUA should be heard in relation to the Commission’s approval of the proposed MMAOL Agreement.
[7] In the Decision, I made the following statement:
“The MUA state, without equivocation, that it has evidence to support its contention that the group of employees to be covered by the MMAOL Agreement was not fairly chosen. Pursuant to s.590(c) and (d) of the FW Act, I intend that the Commission inform itself in the following way:
[8] On 18 July 2016, I held a hearing to admit into proceedings the material provided by the MUA as a result of the above requirement in paragraph [7] and receive oral submissions of both parties.
[9] At the hearing, MMAOL was represented by Mr R Dalton of Counsel. The MUA was represented by Mr M Ritter SC and evidence given on behalf of the Union by Mr W Tracey, Deputy National Secretary.
[10] Subsequent to the hearing, the MUA sought to provide additional evidence of what had occurred on 19 July 2016 which was relevant to its “fairly chosen” argument.
[11] MMAOL did not oppose the provision of the additional evidence on the basis that it was limited “to facts, matters or things that occurred after the conclusion of the hearing and are relevant to the Commission’s consideration of whether the relevant group of employees was fairly chosen”. MMAOL reserved the right to object to the material, and make any application or submission in response, to the material after reviewing the content.
[12] The MUA provided a witness statement of Ms Palmer, MUA Industrial Officer, on 20 July 2016. A copy was provided to MMAOL. To date, no response has been received from MMAOL. Accordingly, Ms Palmer’s witness statement has been incorporated into proceedings and marked “MUA2”.
[13] This is my further decision on whether the MUA should be heard in relation to the Commission’s approval of the MMAOL Agreement.
[14] In its earlier written submission, the MUA stated:
“…that it be granted permission to be heard as a full participant in the proceedings including permission to lead its own evidence and to cross examine any witnesses called by the Applicant. The MUA will seek to obtain documents in advance of the final hearing of the application including the instruments, appointments of bargaining representatives and the emails referred to in question 12 of the Form F17, subject to confidentiality orders or other measures to protect the identify of individual employees involved in the bargaining.”
[15] I now turn to the material provided by the MUA in support of its assertion that the group of employees to be covered by the MMAOL Agreement was not fairly chosen.
[16] The MUA did not provide any material in relation to the first “dot” point in paragraph [7] above.
[17] In relation to the second “dot” point in paragraph [7] above, Mr Tracey provided a written witness statement which was admitted into proceedings without cross examination.
[18] As noted earlier, Ms Palmer’s witness statement has been admitted into proceedings.
[19] There are, at least, four ways and means by which the MUA can establish standing to be heard in relation to approval of the proposed MMAOL Agreement.
[20] Firstly, as a bargaining representative.
[21] The MUA was not, and does not submit that it was, a bargaining representative for the proposed MMAOL Agreement pursuant to s.176 of the FW Act.
[22] It is not necessary, in this decision to determine whether the MUA was a “default bargaining representative” pursuant to s.176 of the FW Act.
[23] Even if the MUA is a “default bargaining representative”, the Full Bench in Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Limited (Collinsville) [2014] FWCFB 7940 stated that this does not result “in the organisation having standing to make submissions or to otherwise be heard in opposition to an application of an agreement” 1.
[24] Secondly, if an employee organisation, which is not a bargaining representative, can establish “any right, interest or legitimate expectation that would be adversely affected by a decision” 2 to approve the proposed MMAOL Agreement. When the rights, interests or expectations as set out by the MUA are considered in the legislative context, the Union has not established any of these factors would be adversely affected by a decision to approve the proposed MMAOL Agreement which would give it standing to be heard. Further, the legitimate rights and interest of the MUA was not affected as a result of the DOF Agreement to which I will refer to later.
[25] Thirdly, pursuant to s.590 of the FW Act which I adopted in view of the written submissions.
[26] Finally, on appeal which is not relevant in these circumstances.
[27] Broadly:
[28] For the purpose of these generalisations, I have not specifically included any reference to “greenfields” or “multi enterprise” agreements.
[29] Paragraphs 10 to 30 of Mr Tracey’s evidence are similar, if not the same, as the MUA’s earlier written submission.
[30] Mr Tracey’s evidence includes a brief history of bargaining between MMA Vessel Operations Pty Ltd (MMAVO) and the MUA on a replacement enterprise agreement to the Mermaid Marine Vessel Operations Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2010 (2010 Agreement) and the Mermaid Marine Operations Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers Gorgon Enterprise Agreement 2011 (2011 Gorgon Agreement).
[31] The MUA acknowledge that MMAVO and MMAOL are separate but discrete subsidiaries of MMA Offshore Limited.
[32] Bargaining for replacement enterprise agreements involving MMAVO and other offshore oil and gas employers commenced in December 2012. The scope clause of bargaining reflected occupational classifications of employees eligible to the members of the MUA.
[33] Mr Tracey paying deference to the understatement states that, “bargaining for an MUA Employees agreement took place, over time, with varying degrees of intensity”. 3
[34] Mr Tracey’s evidence outlines that bargaining moved from separate “officers”, “engineers” and “ratings” agreements, to what he describes as “a whole of fleet agreement”. 4
[35] Mr Tracey sets out, over a period, requests by MMAVO to its employees, to approve various “whole of fleet agreements’.
[36] With respect to various proposed agreements, the MUA, “advised its members to vote no to [these] proposed enterprise agreement[s] and a majority of employees did not approve the agreement[s]”. 5
[37] Pointedly, Mr Tracey gives evidence:
“No whole of fleet enterprise agreements have been approved by employees other than the MMAOL Agreement. No MUA only enterprise agreements have been approved by employees without the MUA’s endorsement (DOF made an enterprise agreement with four people, but the MUA was not aware of this agreement until after it was made)”. 6 (DOF Agreement)
[38] In summary, after three-and-a-half years of bargaining, no agreement has been made to replace the 2010 Agreement and the various offshore agreements. Mr Tracey’s evidence reasonably infers that no agreements have been made by employers and employees, because the MUA will not endorse any of the proposed agreements.
[39] Having set out this bargaining background, Mr Tracey details the MUA’s “concerns about MMAOL [Agreement]” , which are:
[40] Mr Tracey asserts that evidence of new employment opportunities “with MMAOL and not MMAVO” is already occurring. 9 Ms Palmer’s evidence is relevant to this assertion.
[41] Despite stating unequivocally that the MUA had evidence to support its contention that the group of employees to be covered by the MMAOL Agreement was not “fairly chosen”, Mr Tracey did not include the words “fairly chosen” either separately or together in his evidence.
[42] Ms Palmer’s evidence relates to MMAVO employees. One employee whom Ms Palmer had spoken to directly “had been offered, and accepted, work on the Plover, commencing in August 2016”. That MMAVO employee, and member of the MUA, relayed to Ms Palmer that another permanent MMAVO employee had also been offered, and accepted, work on the Plover.
[43] The Plover is a Platform Supply Vessel (PSV) to be used in the contract, referred to in Mr Tracey’s evidence.
[44] Ms Palmer’s evidence states “nobody from MMA has made any mention of MMAOL to the member”. 10
[45] A MUA member’s understanding is that “MMA has recruited the entire crew for the Plover and that the crew has been recruited from MMAVO’s existing workforce”. 11
[46] Ms Palmer’s evidence continues with respect to two further employees, one of whom is a permanent employee of MMAVO. The evidence is that the member was offered, and accepted, work on the Plover “approximately five to six weeks ago”. That member had been asked to “resign from MMAVO and be re-employed by MMAOL”. 12
[47] In summary, Ms Palmer’s evidence is provided in support of the MUA’s concerns as set out in paragraph [39] above in Mr Tracey’s evidence.
[48] Having acknowledged that MMAVO and MMAOL are two separate and discrete corporate entities, the MUA submit that:
[49] In sequence, I will deal with the first dot point of the submission as follows.
[50] Firstly, the MUA concede that it is possible, and the FW Act provides, for the making of an enterprise agreement with a small number of employees.
[51] Secondly, it is employees (including members of unions) who make the choice as to who their bargaining representative shall be for the purpose of making an enterprise agreement. If an employee is a member of an employee organisation, and decides not to have that employee organisation as their bargaining representative, that is a decision of the employee. It should be remembered that s.176(1)(b)(i) of the FW Act is an “opt out” provision for members of unions, and furthermore, the employee has to appoint themselves or another as a bargaining representative, in writing.
[52] Thirdly, the employee is not “denying” collective representation by appointing some other person as a bargaining representative but exercising a choice permitted under the FW Act.
[53] Fourthly, Mr Tracey’s evidence goes to great lengths to indicate that a “sister” organisation within MMA Offshore Limited has been bargaining with the MUA for the last three-and-a-half years as the representative of MMAVO employees. In this application, MMAOL is bargaining with the employees’ bargaining representative which is no different to MMAVO bargaining with the employee bargaining representative (MUA) in its negotiations for a replacement to the 2010 Agreement.
[54] In my earlier decision, the MUA state, but did not provide, any evidence of why the MMAOL employees were not fairly chosen even though this is the primary basis on which the Union is seeking to be heard or participate in the approval proceedings.
[55] I now go to the second part of the MUA’s submission.
[56] In Maritime Union of Australia v Toll Energy Logistics Pty Ltd [2015] FWCFB 7272 (Toll Energy), it was stated that the starting point in assessing whether a group of employees was fairly chosen, is the scope of the agreement.
[57] The MUA does not contest that Clause 5 in the proposed MMAOL Agreement refers to MMAOL and its employees in various occupational classifications, including those classifications of employees eligible to become members of the MUA.
[58] The application for the MMAOL Agreement demonstrates that the group of employees who voted to approve the MMAOL Agreement included a Master, Engineer and a Rating.
[59] Notwithstanding the scope of the MMAOL Agreement, the MUA question whether there are legitimate business reasons for making the proposed MMAOL Agreement.
[60] I consider Mr Tracey’s evidence provides an insight into an answer to this question.
[61] For three-and-a-half years, another subsidiary of MMA Offshore Limited, MMAVO, has been unable to reach agreement with the MUA on replacement enterprise agreements.
[62] Next, Mr Tracey’s evidence indicates that MMA Offshore Limited was awarded a contract to operate two PSVs “for long term production support operations on the INPEX Project”. 15 The contract is for a fixed term of five (5) years plus two (2) five (5) year options.
[63] MMA Offshore Limited’s contract, including the options, according to Mr Tracey’s evidence, is worth $500 million at 2014 exchange rates.
[64] The Full Court of the Federal Court in John Holland stated that the scheme of the FW Act envisaged that it would be an employer who employed and chose the employees to be covered by any proposed enterprise agreement 16 .
[65] There is no evidence from Mr Tracey which would indicate that MMAOL deliberately chose the employees who voted on the MMAOL Agreement (manipulate them) for the purpose of not meeting the BOOT. In fact, Mr Tracey’s evidence is that the proposed MMAOL Agreement “is similar to that which MMAVO requested its employees approve in November 2015 and February 2016, and which MMAVO employees voted not to approve [on advice of the MUA].” 17 Consequently, I am unable to find that the employees who voted on the MMAOL Agreement were employed or chosen by MMAOL to reach agreement for the purposes of their terms and conditions being exploited or manipulated. The employees were, it appears, being asked to consider a proposed agreement similar to that already put to employees in a “sister” entity and publicly available.
[66] Mr Tracey gave evidence that on or about 7 October 2015, a MMAVO representative stated that if no agreement could be reached with the MUA on a replacement agreement to the 2010 Agreement, an alternative approach may be considered similar to the “Toll Energy case” 18.
[67] In Toll Energy, the MUA also put the argument that the group of employees covered by the Toll Energy Logistics Agreement was not fairly chosen.
[68] In Toll Energy, the MUA was bargaining with Toll Marine Logistics for an enterprise agreement to service a particular contract.
[69] Bargaining commenced in September 2014 and agreement had not been reached with the MUA, and other unions, by 30 June 2015.
[70] In opposing the approval of the Toll Energy Agreement, the MUA also argued 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 collective bargaining and to have the MUA as their representative” 19.
[71] In July 2015, agreement was reached with seven (7) employees employed by Toll Energy Logistics and approved by the Commission on 5 August 2015.
[72] The MUA’s submission in the Toll Energy case is similar, but not identical, to its submission in this application to be heard in relation to approval of the MMAOL Agreement.
[73] If, as the MUA submit, this was deliberate manipulation of the agreement making procedures in the FW Act, the MUA was aware of such purported manipulation some six (6) months before it actually took place. Furthermore, it was the appellant in Toll Energy.
[74] As I have previously stated, the “making” of an enterprise agreement is at the “heart” of Part 2-4 of the FW Act. Notwithstanding this, I am often reminded that s.228 of the FW Act provides that bargaining does not require agreement. In this case, MMAVO and the MUA have not reached agreement, however, that does not prevent another corporate entity and national system employer, in this case, MMAOL, reaching agreement with another appointed bargaining representative on an agreement which covers employees eligible to be members of the MUA.
[75] The Full Bench in Sustaining 20 points to various options available to employers under the FW Act to achieve enterprise bargaining outcomes. In assessing those options, it is a legitimate business rationale to exercise an option which is unable to be achieved in bargaining with unions.
[76] The Commission has a statutory duty, if MMAOL meets the legislative requirements, to approve the MMAOL Agreement between MMAOL and its employees.
[77] Subsection 186(3) of the FW Act requires the Commission must be satisfied that the group of employees covered by an enterprise agreement was fairly chosen. In doing so, the Commission must take into account whether the group is geographically, operationally or organisationally distinct. These factors are not exclusive of other matters which the Commission may wish to take into account, nor are they determinative.
[78] I detect from the MUA’s evidence and submissions that while the “fairly chosen” requirement is the primary “vehicle” upon which it seeks to participate in these proceedings, the real issue for the MUA is that it did not want MMAOL to choose any employees for the purpose of making any enterprise agreement in view of its current bargaining with MMAVO. Clearly, in bargaining with MMAVO, the Union has a bargaining representative role. Further, the MUA infer that the work to be done by employees pursuant to the proposed MMAOL Agreement, should be carried out by MMAVO employees pursuant to the 2010 Agreement and the attendant rights which go with bargaining for a replacement to that agreement.
[79] Secondly, I detect that the MUA are concerned with the consequences for MMAVO employees should the Commission approve the proposed MMAOL Agreement.
[80] Dealing with the last matter first, I am not inclined to presume or second guess what may or may not happen with respect to employees of another entity should the proposed MMAOL Agreement be approved. For that reason, the MUA’s further participation in these proceedings would not be necessary.
[81] With respect to the reasonable inference from the evidence and submission that MMAOL should not make an enterprise agreement with any employees and that the work intended to be carried out by the proposed MMAOL Agreement, be done pursuant to the 2010 Agreement, I make the following observations.
[82] In my view, it is the statutory role of the Commission to approve a proposed enterprise agreement should the agreement meet the legislative requirements in sections 186, 187 and 188 of the FW Act. I am unable to determine in the FW Act where it provides that I must restrict one corporate entity’s ability to make an enterprise agreement because another corporate entity has an enterprise agreement with employees who, it is alleged by a union, should carry out the work intended by the entity wishing to make the agreement.
[83] While the MUA have identified a tension between their role, rights and interests in relation to the 2010 Agreement, and the lack of same in the proposed MMAOL Agreement, that is in accord with the scheme of the FW Act. There is no guaranteed right in the FW Act for the MUA to be the bargaining representative in all bargaining involving MUA members or employees eligible to be members. In this application, another person is the appointed bargaining representative. What is guaranteed under the FW Act, is the right of employees being represented and a union’s right to be the default bargaining representative, should it have members covered by any proposed agreement.
[84] The provisions in the FW Act with respect to enterprise bargaining reflect a balance between the interests of employers, union members, non union members and those who are disinterested. In this application, I am faced with employees whether they are union members or not, who have nominated a specific individual employee to be their representative; the scheme of the FW Act for such a course of action. Such action accords with the expressed intent of Parliament.
[85] As I have already stated, employers and employees can make an enterprise agreement. Employees are entitled to appoint a bargaining representative for an enterprise agreement. Importantly, the proposed single enterprise agreement is made when a majority of those employees cast a valid vote to approve the proposed agreement.
[86] Having made the enterprise agreement, the Commission’s role is akin to a regulatory function to determine whether the proposed agreement meets the general and conditional requirements in sections 186, 187 and 188 of the FW Act. The Commission confirms or verifies the enterprise agreement which has been made.
[87] The evidence and submissions of the MUA generally reflect a concern with the results or consequences of the approval of the MMAOL Agreement.
[88] Parliament’s intention is that the Commission “will usually act speedily and informally to approval agreements with most agreements being approved on the papers within seven (7) days”. Exceptions to this general rule are acknowledged. It is not essential that the Commission hold a hearing – in this case, I held a hearing but it was for the purposes of enabling the MUA to set out its case that the employees had been “unfairly chosen” and that it should have an ongoing role in the approval process.
[89] I tend to agree with Mr Dalton that these proceedings shifted from the MUA’s application to be heard to matters associated with the proposed MMAOL Agreement. Nevertheless, I am now in a position to determine whether the MUA should have an ongoing role in these proceedings.
[90] The Commission exercising its discretion pursuant to s.590 of the FW Act has given the MUA the opportunity to provide information. This information has enabled me to see, hear and analyse why the MUA seeks a role in approval proceedings of the MMAOL Agreement.
[91] While I appreciate the MUA’s evidence and submission, a balance has to be struck between the MUA’s interests and arguments, and that of the Employer and its employees who have made the MMAOL Agreement and seek its approval. At this point, I will provide the Employer with the opportunity to conclude its case on the approval of the application without any further role of the MUA in proceedings. After that, I will make my determination on whether the Commission should approve the MMAOL Agreement.
[92] On 8 July 2016, I provided the MUA with the opportunity to inform the Commission by way of evidence and oral submission as to why the group of employees to be covered by the MMAOL Agreement pursuant to s.590(c) and (d) of the FW Act.
[93] Having given the MUA the opportunity to participate in these proceedings, I have considered its evidence and submissions and the case law. For the reasons set out above, I am now satisfied that I can proceed to determine the application by MMAOL for approval of the proposed MMAOL Agreement without any further participation of the MUA. Accordingly, permission to participate any further in the proceeding ceases.
Production of Documents
[94] On 12 July 2016, the MUA sought a schedule of documents from MMAOL.
[95] At the hearing on 18 July 2016, I advised the MUA that I would consider an Order for the production of documents after I made a decision on the evidence and submission that the group of employees had not been fairly chosen.
[96] In view of my decision in paragraph [93] above, the MUA is not a party in this matter before the Commission, and accordingly, pursuant to rule 54 of the Fair Work Commission Rules has no standing to make application for the production of the documents. Accordingly, the application must be dismissed for want of jurisdiction.
Section 183 – Entitlement of MUA to have proposed MMAOL Agreement cover it
[97] The MUA, in its submissions, have sought that it be given the opportunity to make application, pursuant to s.183 of the FW Act, should I determine to approve the proposed MMAOL Agreement. To that end, the MUA has provided, on a confidential basis, a list of its members in the period 18 March 2016 to 30 April 2016.
[98] I informed the MUA on 18 July 2016 that should I determine to approve the proposed agreement, I would cross reference these names against the employees who were in bargaining for the MMAOL Agreement.
COMMISSIONER
Appearances:
R Dalton, Counsel with N Burmeister, Counsel on behalf of MMAOL.
M Ritter SC on behalf of the MUA.
Hearing details:
2016:
Perth,
18 July.
1 Collinsville at [38]
2 Collinsville at [72]
3 Exhibit MUA1 (11)
4 Exhibit MUA1 (12)
5 Exhibit MUA1 (15 to 21)
6 Exhibit MUA1 (34)
7 Exhibit MUA1 (36)
8 Exhibit MUA1 (37)
9 Exhibit MUA1 (37)
10 Exhibit MUA2 (6(j))
11 Exhibit MUA2 (6(k))
12 Exhibit MUA2 (9(d))
13 Transcript PN41
14 Transcript PN41
15 Exhibit MUA1 (41)
16 Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd [2015] FCAFC 16 at paragraph 31
17 Exhibit MUA1 (26)
18 Exhibit MUA1 (13)
19 Transcript PN47
20 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Sustaining Works Pty Limited [2015] FWCFB 4422 at paragraph 26
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