| [2016] FWCFB 1151 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
VICE PRESIDENT HATCHER |
|
Appeal against decisions [2015] FWC 8003, [2015] FWCA 8004 and associated orders of Commissioner Cambridge at Sydney on 20 November 2015 in matter numbers B2015/766 & AG2015/4301.
Introduction and factual background
[1] On 10 December 2015 the Australian Maritime Officers’ Union (AMOU) lodged a notice of appeal in which it sought permission to appeal and appealed two decisions and associated orders issued by Commissioner Cambridge on 20 November 2015 which arose out of bargaining for an enterprise agreement to cover employees of Harbour City Ferries Pty Ltd (HCF). In the first decision 1 (scope decision), the Commissioner dismissed an application by the AMOU for a scope order under s.238 of the Fair Work Act 2009 (FW Act). In the second decision2 (approval decision), the Commissioner approved the Harbour City Ferries Maritime Agreement 2015 (2015 Agreement) pursuant to an application made by HCF. It should be noted that the two decisions were made in conjunction with each other and that most of the reasoning concerning the approval of the 2015 Agreement is contained in the scope decision.
[2] By way of background, HCF is the private operator of Sydney Harbour ferry services which were previously run by a statutory corporation established under s.35A of the Transport Administration Act 1988 (NSW) known as Sydney Ferries. HCF took over the operation of the ferry services pursuant to a franchise arrangement on 28 July 2012. Immediately before that date an enterprise agreement known as the Sydney Ferries Maritime (AMOU and MUA) Enterprise Agreement 2012 (2012 Agreement) applied to ferry masters, inner harbour engineers, general purposes hands (GPHs) and customer assistance officers (CAOs) employed by Sydney Ferries. The 2012 Agreement had been negotiated between Sydney Ferries and a single bargaining unit (SBU) consisting of the AMOU, acting as bargaining representative for the ferry masters, the Australian Institute of Marine and Power Engineers (AIMPE), acting as bargaining representative for the engineers, and the Maritime Union of Australia (MUA) acting as bargaining representative for GPHs and CAOs.
[3] The 2012 Agreement applied to all employees of Sydney Ferries except “white collar” management and administrative employees, outer harbour engineers and maintenance workers at Sydney Ferries’ Balmain Shipyard. A separate agreement, the Sydney Ferries Maritime (AIMPE) Enterprise Agreement 2012, covered engineers employed on outer harbour services. Outer harbour engineers have been regarded as distinct because the use of ferries with more powerful engines on the heavier seas of the outer harbour Manly-Circular Quay route requires them to have higher engineering qualifications applicable to ocean-going vessels. Both agreements commenced to cover HCF when it took over the operation of ferry services on 28 July 2012 by virtue of Pt.2-8 of the FW Act.
[4] The 2012 Agreement reached its nominal expiry date on 2 May 2014. Negotiations for a replacement agreement between HCF and the SBU commenced in early 2014. However by mid-2014 the negotiations had run into serious difficulties. These were described by the Commissioner in the scope decision in the following way:
“[14] In late June 2014, the MUA had given HCF notice of intention to take protected industrial action which comprised various bans on the performance of particular work including a ban on the collection of fares from ferry passengers. Following the notification of this particular industrial action, discussions occurred directly between HCF and the MUA. These discussions did not involve either the AMOU or the AIMPE in the SBU bargaining configuration. However, in order to avert the anticipated industrial action, HCF improved various aspects of its offer in respect to the enterprise bargaining. The MUA sought to secure these improvements and decided to withdraw its intention to take the notified protected industrial action.
[15] During July, August and September 2014, the enterprise bargaining for an Enterprise Agreement to replace the 2012 Agreement continued under very strained relationships between the three Unions that comprised the SBU. Essentially, HCF had secured agreement in principle with the MUA, but this agreement could not be translated into an agreed position of the SBU. In October 2014, despite there being no agreement reached with the SBU, HCF decided to put a proposed Enterprise Agreement to replace the 2012 Agreement to a vote of relevant employees.”
[5] The proposed agreement (2014 Agreement) was put to a vote of employees on 10 October 2014. The result of the vote demonstrated the division which had emerged in the SBU. MUA members voted 236-8 to approve the 2014 Agreement, but in a separate ballot of AMOU and AIMPE members the result was 81-6 against approval. The overall vote was in favour of approval, and accordingly HCF lodged an application in the Commission for approval of the 2014 Agreement.
[6] HCF’s approval application was heard by Deputy President Booth. Consistent with the voting results, the MUA supported the 2014 Agreement being approved. The AIMPE and the AMOU opposed approval, but their grounds of opposition did not include that the group of employees covered by the 2014 Agreement was not fairly chosen as required by s.186(3) of the FW Act. The Deputy President approved the 2014 Agreement in an ex tempore decision given on 12 December 2014 (and published on 15 December 2014). 3 The AMOU appealed that decision. It contended in the appeal that the Notice of Employee Representational Rights (NERR) issued by HCF at the commencement of the negotiations failed to identify the coverage of the proposed agreement and was therefore fatally defective. In a decision issued on 15 May 2015 a Full Bench upheld this ground of appeal and quashed the decision approving the 2014 Agreement.4
[7] The evidence before the Commissioner demonstrated that even before the appeal decision, HCF and the MUA had engaged in discussions concerning what would occur if the 2014 Agreement was ultimately not approved. In December 2014 HCF and the MUA reached an understanding that the MUA would continue to support the terms and conditions it had agreed to in the 2014 Agreement, and that HCF would strongly consider putting the same agreement out to a vote of employees, once all the technical and procedural issues were resolved, if the appeal was successful. This was never disclosed to the AMOU or the AIMPE and was discovered by them only as a result of the order for production of documents issued in connection with the hearing before the Commissioner.
[8] On 18 May 2015, three days after the appeal decision, HCF issued a new NERR. This NERR described the coverage of the new agreement proposed by HCF as follows: “... employees that are currently covered by the Sydney Ferries Maritime (AMOU and MUA) Enterprise Agreement 2012”. On 20 May 2015 the AMOU emailed correspondence to HCF indicating that it did not agree with the coverage of the proposed agreement and advocating for the negotiation of a separate agreement to cover ferry masters and engineers. There was a meeting between HCF and the SBU on 27 May 2015 at which the AMOU reiterated its position about coverage. At the meeting HCF stated that it intended to put a new agreement with the same terms and conditions as the 2014 Agreement to a ballot of employees. The AMOU sent further correspondence to HCF on 2 and 3 June 2015 advancing its case for a separate agreement for ferry masters and engineers. In that correspondence it contended, among other things, that the coverage it proposed “would provide a foundation for the conduct of fair and efficient bargaining” and that the AMOU’s members could not accept certain aspects of the 2014 Agreement including “percentage salary increases and no backpay” and that “a number of our members who had previously received a Trainers/Assessor Allowance of approximately $5000 per annum, lost that Allowance as a consequence of the deal between the MUA and HCF”. The AMOU never advanced any specific claim as to the pay and conditions for ferry masters under either its proposed separate agreement or under any new agreement with the same coverage as the 2014 Agreement.
[9] On 21 July 2015 HCF advised the AMOU, the AIMPE and the MUA as well as the affected employees by email and letter that there would be a vote in respect of its proposed new agreement (that is, the 2015 Agreement) on 30 July 2015. The terms of the 2015 Agreement to be put to the vote were the same in substance as those of the 2014 Agreement. The timing and location of the vote were described in the following terms:
“The EA will be put to the vote by show of hands, on a Manly Ferry berthed at Wharf #3, Circular Quay, on Thursday 30th July, 2015. This will be an authorised Stop Work Meeting, so you will be paid to attend the meeting which will start at 10.00am. All rostered staff are required to then be available for duty at 2.00pm.”
[10] On 27 July 2015 the AMOU lodged its application for a scope order. In connection with this application it also sought an interim order restraining the conduct of the vote. This was rejected by the Commissioner in a decision issued on 29 July 2015. 5 The vote proceeded on 30 July 2015 and the result was 115-64 in favour of the 2015 Agreement. HCF lodged its application for approval of the 2015 Agreement on 12 August 2015.
The decisions
[11] Although the AMOU’s grounds of appeal challenged both the decision of the Commissioner to dismiss its application for a scope order as well as the decision to approve the 2015 Agreement, the AMOU did not in its submissions press the former aspect of its appeal at this stage. This was because, as the AMOU properly conceded, its challenge to the dismissal of its scope order application could not arise for consideration unless and until permission to appeal the approval decision was granted, the appeal was upheld in that respect, and the approval decision was quashed. For that reason, it is only necessary to refer to those aspects of the scope decision and the approval decision which were concerned with whether the 2015 Agreement should be approved and which are challenged in the AMOU’s appeal. Three issues in that respect were considered by the Commissioner:
(1) whether the group of employees covered by the 2015 Agreement was “fairly chosen” as required by s.186(3) and (3A) of the FW Act;
(2) whether HCF had complied with that part of the pre-approval step in s.180(3)(a) requiring employees to be notified of the time at which a vote on a proposed enterprise agreement would occur; and
(3) whether HCF had issued a valid NERR which accurately set out the coverage of the proposed agreement as required by the form prescribed under s.174(1A).
[12] In relation to the “fairly chosen” issue, the Commissioner’s reasoning and conclusion, which were set out in the scope decision, were as follows:
“[127] In respect to the coverage of the 2015 Agreement, it was asserted that the group of employees that were chosen was particularly unfair because the choice of that group involved an agreement that had been made between HCF and the MUA, to re-submit the failed 2014 Agreement to another vote of the same group of employees. It was asserted that in this context, there had not been a fair and considered choice of the group to be covered by the 2015 Agreement, but rather the coverage was an arbitrary determination made to simply follow the coverage that had been included in the failed 2014 Agreement.
[128] It is unnecessary to repeat the history of relevant industrial coverage which led to what might be described as the watershed development whereby the 2012 Agreement covered for the first time in a single Agreement, the work of masters, inner harbour engineers and GPHs and CAOs. There was evidence which supported various operational efficiencies that were obtained when the 2012 Agreement covered what had been previously the subject of three separate Agreements. Understandably, HCF has sought to maintain these operational efficiencies. Further, particularly in respect to career path opportunities, there would seem to be tangible benefits for employees if there is a single Agreement rather than two or three separate instruments.
[129] In view of the shared benefits which are obtained through what might be described as the simplification of Agreement coverage, and in the context of the protracted difficulties associated with the enterprise bargaining for an Agreement to replace the 2012 Agreement, there is a compelling case to support that the group of employees covered by the 2015 Agreement was fairly chosen when taking into account factors such as the geographical, operational and organisational distinctions, which can be identified.
[130] It is relevant to observe that the geographical, operational and organisational distinctions which have been identified have not significantly altered from the position that existed when the 2012 Agreement was made. The asserted unfairness of the group of employees chosen to be covered by the 2015 Agreement has arisen because the SBU became dysfunctional. It would seem to be entirely inappropriate to translate relational difficulties between the three Unions into a proper basis for deciding that the group to be covered by the 2015 Agreement was not fairly chosen, when there was no suggestion that that same group of employees was not fairly chosen in 2012 when there were more harmonious relationships between the three Unions.
[131] The absence of unfairness is reinforced by the lack of any articulated terms and conditions of employment which were identified as manifestly detrimental consequences arising from the particular choice of the group of employees to be covered by the 2015 Agreement. The purported unfairness was broadly confined to a desire for self-determination which, particularly in the case of the AIMPE, would not alter any of the terms contained in the 2015 Agreement.
[132] Particularly in the absence of the identification of any manifestly deleterious consequences in respect to the terms achieved as outcomes from the enterprise bargaining, the Commission is satisfied that the group of employees covered by the 2015 Agreement was fairly chosen having regard for the requirements of sub-section 186 (3A) of the Act.”
[13] Concerning the identification of the time the vote would take place, the Commissioner said (in the scope decision):
“[106] Relevantly, sub-section 180(3) states that the employer must take all reasonable steps to notify the relevant employees of inter alia, the time at which the vote will occur. In circumstances where a vote in respect to a proposed Enterprise Agreement has been arranged to occur at a meeting of relevant employees, it is just not feasible to precisely specify the particular time at which the vote will occur. The specification of the scheduled commencement time of the meeting at which the vote is to occur is sufficient to satisfy the requirements of sub-section 180 (3) in that the employer had taken all reasonable steps to notify the relevant arrangements for the time that the vote in respect of the 2015 Agreement was to occur.” (underlining in original)
[14] In relation to the NERR issue, the AMOU’s submission before the Commissioner was that the description of the proposed coverage of the 2015 Agreement was “...misleading because there were two classifications, General Purpose Hand - Team Leader and Intermediate General Purpose Hand, contained in the 2015 Agreement which did not appear in the 2012 Agreement”. 6 In response to this issue, the Commissioner said (in the scope decision):
“[114] The description in an NERR of the coverage of a proposed Enterprise Agreement would ordinarily be generic in nature and not necessarily classification specific. Further, classifications which might represent variations or permutations to an existing classification, would be readily understood and comprehended by any broadly described existing classification. Consequently, I reject the proposition that the addition of two classifications which are permutations of the broader GPH classification, misleads or, in any material way, alters the coverage as between the 2012 and 2015 Agreements.
[115] Therefore, the NERR issued on 18 May 2015 does not contain misleading content in respect to the proposed coverage of the 2015 Agreement and it complies with the requirements of s. 174 of the Act. No invalidity arises in respect to the NERR issued for the 2015 Agreement.”
AMOU’s grounds of appeal and submissions
[15] The AMOU contended that the Commissioner’s reasoning and conclusion concerning the “fairly chosen” issue were attended by appealable error in that:
(1) the Commissioner incorrectly determined the issue by reference to the outcome of the bargaining process rather than at the time the choice of scope was made, contrary to the Full Bench decision in Cimeco Pty Ltd v CFMEU 7 at [14];
(2) the Commissioner, in any event, erroneously found that the agreement which was the outcome of the bargaining process did not contain any terms and conditions which were manifestly detrimental to ferry masters, given that it was not in dispute that as a result of the 2015 Agreement a number of ferry masters lost the training allowance which was not even made up by the wage increases provided for;
(3) in circumstances where the 2015 Agreement did not cover all of HCF’s employees, the Commissioner failed to make findings about whether he was satisfied that the proposed scope represented a geographically, operationally or organisationally distinct group, and further failed to state any reasons for his conclusion about this;
(4) the Commissioner provided no reasons why the selection of the scope of the 2015 Agreement was fair at all, or fair by reference to HCF’s business reasons for why the choice was made;
(5) the Commissioner mischaracterised the AMOU’s case as being based on relational difficulties between the unions belonging to the SBU, when in fact the AMOU’s case was based on a concern about at-work relational difficulties between employees themselves as a consequence of ferry masters being “swamped” in a vote of GPHs and thus not having their concerns addressed, and as a result the AMOU’s case was not properly addressed and considered and/or adequate reasons were not given for the rejection of that case; and
(6) the conclusion that the group of employees covered by the 2015 Agreement was fairly chosen was wrong given that the terms of that agreement had been negotiated and agreed with the MUA before the NERR had even been issued and bargaining had commenced, with the result that the AMOU was deprived of the opportunity to genuinely bargain on behalf of ferry masters.
[16] The AMOU also contended that the Commissioner had erred in concluding that employees had been notified of the time of the vote in accordance with s.180(3) of the FW Act. HCF’s notice said nothing about the time at which the vote would occur; it only identified the time at which the stop work meeting would occur, and implicitly did no more than indicate that the vote would occur at some time during a meeting that would run for several hours. HCF was not, it was submitted, entitled to adopt an unauthorised approach concerning the identification of the time because of the voting method (a show of hands) that was to be used. The Commissioner’s conclusion that it was not feasible to precisely specify the time at which the vote would occur was not supported by the evidence and was illogical. Because compliance with the s.180(3)(a) pre-approval step was required in order for the 2015 Agreement to have been “genuinely agreed” under s.188, the failure to comply meant that the 2015 Agreement could not be approved.
[17] In relation to the NERR ground of appeal, the AMOU submitted that a valid NERR must include an accurate (and not misleading) description of the coverage of the proposed agreement as part of its mandatory content. At the time the NERR was issued there were employees employed in classifications that were not listed in the 2012 Agreement (in particular the classifications of General Purpose Hand – Team Leader and Intermediate General Purpose Hand) which were intended to be captured by the 2015 Agreement. By describing the coverage of the proposed agreement as being the same as the 2012 Agreement, it was submitted, the NERR was misleading. It was irrelevant to take into account, as the Commissioner did, that the description of coverage in a NERR would ordinarily be generic and not classification-specific, since the issue was not the form of the description but whether it was accurate. Nor was the question whether the Commissioner himself understood the terms of the NERR, but whether employees would have understood from the NERR who it was who would be covered by the proposed agreement so that they would know whether they would be involved and therefore whether they should appoint a bargaining agent. The NERR was invalid, and as a result the 2015 Agreement could not be approved.
Consideration
[18] This is an appeal for which permission is required under s.604 of the FW Act. The Commission is required to grant permission to appeal if it is satisfied that it is in the public interest to do so, but the circumstances in which it may grant permission are not limited to situations in which the public interest requires it. 8 That is, it has a residual discretion as to the grant of permission to appeal. However it will rarely be appropriate to exercise that discretion in favour of the grant of permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error.9 However, the mere identification of some error in the decision under appeal may not by itself constitute a sufficient basis for the grant of permission to appeal.10
[19] We are not satisfied that the AMOU has demonstrated an arguable case that the decisions under appeal were attended by appealable error in the respects alleged. We set out our reasons for this conclusion below by reference to the three aspects of the AMOU’s appeal.
Whether the group of employees covered by the 2015 Agreement was fairly chosen
[20] We consider that the starting point in considering the “fairly chosen” issue is the fact that the coverage of the 2015 Agreement is the same as that for the 2012 Agreement approved by the Commission (then known as Fair Work Australia). We discuss the parity in coverage in greater detail later in connection with the AMOU’s challenge to the validity of the NERR. It is sufficient to say that both agreements covered all employees, including onshore employees, involved in the actual operation of HCF’s ferry services apart from outer harbour engineers (as distinct from employees occupied in management, administration and maintenance).
[21] It was of course the case that the 2012 Agreement could not have been approved if the “fairly chosen” requirement in s.186(3) had not been satisfied. At the approval hearing for the 2012 Agreement, which was attended by a representative of the AMOU, there appears to have been no specific debate about the “fairly chosen” requirement since there was no opposition to the approval of that agreement. Nevertheless it must be observed that the approval decision for the 2012 Agreement 11 stated the following (underlining added):
“[5] At a hearing of the application on 14 February 2012, Mr G Jolly - Solicitor, appeared for the applicants, with Ms C Williams; Mr P Garrett appeared for the MUA, Mr J Wydell appeared for the AMOU. There was no appearance by AIMPE. The Unions have each filed Declarations in relation to the application (Form 18) consenting to the application and seeking to be covered by the Agreement (s 183). For the purposes of s 201(2) of the Act, I note that the Unions are to be covered by the Agreement. Mr Jolly outlined the main features of the Agreement and submitted that all of the legislative requirements for approval of the Agreement have been satisfied and the Agreement should be approved by FWA. Mr Garrett and Mr Wydell supported the applicant’s submissions.
[6] Having heard the parties’ submissions and upon reviewing the terms of the preapproval process documentation and the Agreement itself, I am satisfied that all of the requirements of the Act, in particular ss 180, 186, 187 and 188, in so far as relevant to this application, have been met...”
[22] Therefore, in respect of the 2012 Agreement, the AMOU must be taken as having supported the proposition that the relevant class of employees was fairly chosen, and the Commission must be taken to have found as such. It may also be noted that although the 2014 Agreement was ultimately not approved, it was only on the basis of invalidity in the NERR. The conclusion in the first instance decision that initially approved the 2014 Agreement was that “each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met”. 12 The AMOU did not put in contest that the coverage of the 2014 Agreement was fairly chosen, and its appeal was solely based on the contention that the NERR was invalid. There was no dispute that the 2014 Agreement had the same coverage as the 2015 Agreement.
[23] The AMOU did not contend in these proceedings, either at first instance or on appeal, that the coverage of the 2012 Agreement was not fairly chosen or that the Commission erred in approving that agreement. Nor could it have done so without, in effect, approbating and reprobating on the fairly chosen issue. Nor did it contend in these proceedings that the coverage of the 2014 Agreement was not fairly chosen. In that context, the AMOU could only have succeeded at first instance in establishing that the coverage of the 2015 Agreement was not fairly chosen by demonstrating that changed circumstances since the 2014 Agreement was made had rendered the choice of coverage unfair.
[24] The changed circumstance relied upon by the AMOU at first instance was the understanding between HCF and the MUA in December 2014 which envisaged a new vote on an agreement with the same substantive terms as the 2014 Agreement should the AMOU’s appeal against the approval of the 2014 Agreement be successful. The AMOU contended that this rendered the subsequent choice of coverage for the 2015 Agreement arbitrary and unfair because it contemplated the use of the employee majority constituted by GPHs and CAOs who were represented by the MUA to “swamp” the minority votes of the ferry masters and engineers who were represented by the AMOU and the AIMPE and who had voted overwhelmingly against the 2014 Agreement.
[25] That was, with respect, an untenable contention and it was rightly rejected by the Commissioner. It was entirely understandable and predictable that, anticipating the possible success of the AMOU’s appeal on the legal/technical NERR point, the HCF and the MUA on behalf of the majority of employees who voted for the 2014 Agreement would turn their minds as to how another agreement in the same terms might be made and approved upon a new and valid NERR being issued. There was no dispute about scope at that time. The actual choice of coverage was made immediately after the AMOU’s appeal was upheld, at a time when it was known that, but for the invalid NERR, the 2014 Agreement would have been held to conform to the requirements of the FW Act and approved. There was still no dispute about scope at this time, since it was only after the new NERR was issued that the AMOU first raised the issue of having a separate agreement for ferry masters and engineers. In that context there was nothing unfair (or surprising) about proposing a new agreement with the same coverage and substantive terms as the 2014 Agreement. There was no basis therefore to conclude that the December 2014 understanding between HCF and the MUA constituted a changed circumstance which rendered the fairly chosen coverage of the 2012 Agreement and the 2014 Agreement unfair in the case of the 2015 Agreement.
[26] We now deal with the specific contentions of error with respect to the fairly chosen issue raised in the appeal by the AMOU (in the same order as we have earlier set them out).
[27] First, there is, in our view, no basis to support the proposition that the Commissioner erred in taking into account the “outcome of the bargaining process” (that is, the terms of the 2015 Agreement) rather than assessing the fairly chosen issue at the point of time at which the choice was made. In Cimeco 13 the Full Bench dealt with the question as to the point in time when the choice of coverage is made in the following way:
“[14] It is also relevant to note that s.186(3) requires FWA to be satisfied that the group of employees covered by the agreement ‘was fairly chosen’. We agree with the observation of Lawler VP in Re ANZ Stadium Casual Employees Enterprise Agreement 2009 that:
‘... the group of employees to be covered by a proposed agreement is ‘chosen’ when the employer and the main employee bargaining representatives agree on a particular scope or the bargaining representatives commence bargaining on a shared assumption as to scope (as is often the case when bargaining proceeds by reference to the terms of an existing agreement that is to be replaced by a proposed new agreement)... The time of the choosing is a factual issue to be determined in the usual way. The group of employees to be covered by a proposed agreement - the scope of the agreement - will typically be chosen at or shortly after the commencement of bargaining ...’.”
[28] In this case, the decisions by HCF once the 15 May 2015 appeal decision was delivered to re-initiate bargaining, issue the NERR, propose an agreement with the same coverage as the 2014 Agreement, and propose that the terms of the agreement be the same in substance as the 2014 Agreement, were made virtually simultaneously. The agreement of the MUA for that course had, for all intents and purposes, already been secured. The 2015 Agreement that was later made was, in substance, no different from the agreement initially proposed. In those circumstances, there was no difference in time between the choice of coverage for the agreement and the proposal for the terms of that agreement, and the Commissioner was entitled to have regard to those terms, reflected as they were in the final agreement, in assessing whether the coverage was fairly chosen.
[29] If the group of employees to be covered by an agreement is selected on the basis that a majority section of the employees may vote to approve an agreement with terms advantageous to themselves but disadvantageous to a minority group, that may support a conclusion that the group was not fairly chosen. But, as the Commissioner correctly found, there were no identifiable provisions of the 2015 Agreement which caused any manifest detriment to the ferry masters represented by the AMOU (or the inner harbour engineers represented by the AIMPE).
[30] The second contention of the AMOU was that the Commissioner erred in this conclusion because a number of ferry masters lost a training allowance which was not otherwise compensated for by the wage increases provided for by the 2015 Agreement. However, as was explained by HCF at the appeal hearing and not contradicted by the AMOU, the training allowance was payable to training assessors in all classifications including engineers, GPHs and CAOs as well as ferry masters. Clause 19.4 required there to be 20 training assessors in total, which was a reduction from the previous number of 40. Therefore 20 persons who were previously training assessors lost the allowance. Of these, approximately 13 or 14 were ferry masters. Those facts are not demonstrative of any special disadvantage having been imposed by the majority on the minority.
[31] Third, it is incorrect to say that the Commissioner was required to be satisfied that the proposed coverage of the 2015 Agreement represented a geographically, operationally or organisationally distinct group. As was explained in Cimeco, what s.186(3A) requires is for the Commission to take into account whether the group is geographically, operationally or organisationally distinct; it does not require a positive finding or expression of satisfaction that it is geographically, operationally or organisationally distinct:
“[15] Section 186(3A) is also relevant. In circumstances where an agreement does not cover all of the employees of the employer(s) covered by the agreement s.186(3A) imposes an obligation on FWA, in deciding whether the employees were ‘fairly chosen’, to ‘take into account’ whether the group of employees covered by the agreement is geographically, operationally or organisationally distinct. To take a matter into account means that the matter is a ‘relevant consideration’ in the Peko-Wallsend 14 sense of matters which the decision maker is bound to take into account. As Wilcox J said in Nestle Australia Ltd v Federal Commissioner of Taxation:15
‘To take a matter into account means to evaluate it and give it due weight, having regard to all other relevant factors. A matter is not taken into account by being noticed and erroneously discarded as irrelevant.’
[16] Curiously the Act does not specify how the matters in s.186(3A) are to be taken into account. The context and legislative history are relevant. In terms of the context each of the characteristics identified in s.186(3A) has a degree of objectivity about them. The selection of the group of employees to be covered by an agreement on some objective basis (as opposed to an arbitrary or subjective basis) is likely to favour a conclusion that the group was fairly chosen.
...
[19] Given the context and the legislative history it can reasonably be assumed that if the group of employees covered by the agreement are geographically, operationally or organisationally distinct then that would be a factor telling in favour of a finding that the group of employees was fairly chosen. Conversely, if the group of employees covered by the agreement was not geographically, operationally or organisationally distinct then that would be a factor telling against a finding that the group was fairly chosen.
[20] It is important to appreciate that whether or not the group of employees covered by the agreement is geographically, operationally or organisationally distinct is not decisive, rather it is a matter to be given due weight, having regard to all other relevant considerations.”
[32] It is clear from the scope decision at paragraphs [128]-[130] that the Commissioner took into account whether the group of employees covered by the 2015 Agreement was geographically, operationally or organisationally distinct, as required by s.186(3A). Further, it is reasonably apparent from those paragraphs that the Commissioner considered that the group was subject to geographical, operational and organisational distinctions, although these were not identified with any precision. The AMOU’s complaint that the Commissioner’s reasons on this score were inadequate might have had some validity if it had advanced a substantive case in the appeal that a finding that the group of employees covered by the 2015 Agreement were geographically, operationally or organisationally distinct was not available on the evidence. However it did not do so, and for good reason. It could not reasonably be argued that the employees covered by the 2015 Agreement, who as earlier stated had the responsibility for the actual operation of HCF’s ferry services, were not geographically, operationally and organisationally distinct from HCF’s managerial, administrative and maintenance employees. Further, the finding made by the Commissioner that the outer harbour engineers were the subject of separate industrial instruments “because of the particular nature and qualifications required for that work” 16 (which we have earlier described) was not the subject of any challenge and supported the conclusion that they were at least operationally distinct from those covered by the 2015 Agreement.
[33] Fourth, we do not accept that the Commissioner gave no reasons as to why he considered the selection of the coverage of the 2015 Agreement to be fair. He set out those reasons in detail in paragraphs [126]-[132], referring to the previous history of coverage, the operational efficiencies and career path opportunities delivered by the coverage of the 2012 Agreement, the benefits to HCF in maintaining that coverage, the identifiable geographical, operational and organisational distinctions of that coverage, and the lack of any detrimental consequences for ferry masters or engineers arising out of that coverage. In giving those reasons, it is manifest that the Commissioner took into account HCF’s business reasons for the choice of coverage.
[34] Fifth, we do not accept that the Commissioner mischaracterised the AMOU’s case. The AMOU’s correspondence of 3 June 2015 (which first raised the scope issue) asserted that relations between the members of the SBU and its ultimate “failure” as the reason why bargaining based upon the existing coverage had not proceeded fairly or efficiently, and this correspondence was specifically referred to in the AMOU’s written submissions before the Commissioner. 17 That was the feature of the AMOU’s case which the Commissioner addressed in his reasons. The same correspondence, in a passage quoted in the same AMOU submissions,18 did raise “a real concern there will be ongoing resentment between the two groups of workers that may manifest itself in difficult on-water relationships”. That was patently a purely speculative statement, and there was no evidence of the existence of any such resentment, or even an allegation of such resentment, at the time that the coverage of the 2015 Agreement was chosen. That the Commissioner did not directly address this minor and meritless aspect of the AMOU’s case in his decision does not constitute appealable error.19
[35] As to the AMOU’s sixth contention, we refer to our earlier reasoning and conclusion that the AMOU’s case at first instance that the coverage of the 2015 Agreement was not fairly chosen was untenable. To the extent the AMOU submitted that the selection of the employees to be covered by the 2015 Agreement deprived it of the opportunity to genuinely bargain on behalf of ferry masters, we consider that the following circumstances demonstrate that this proposition is also untenable:
(1) The decision of HCF, immediately after the appeal decision, to pursue a new agreement with the same coverage and substantive terms as the 2014 Agreement can hardly come as any surprise to the AMOU. It could not seriously have been thought that bargaining would start entirely afresh simply because a defective NERR had caused the 2014 Agreement not to be approved.
(2) Apart from a general complaint about the previously agreed salary increases, no backpay and the training allowance issue, the AMOU never advanced any specific claim on behalf of ferry masters for terms and conditions of employment different from those in the 2014 Agreement.
(3) Despite the fact that the NERR specifying the coverage of the proposed new agreement was issued on 18 May 2015, the AMOU did not apply for a scope order until 27 July 2015, over two months later. It should have been apparent to the AMOU as early as the meeting on 27 May 2015 that HCF was not going to change its position on coverage and intended to put a new agreement reflecting the terms of the 2014 Agreement out to vote. However it waited until after this actually occurred on 21 July 2015.
Notification of the time of the vote
[36] The requirement in s.180(3)(a) is for the employer to take “all reasonable steps”, by the start of the access period, to notify employees of the time and place at which the vote on the proposed enterprise agreement is to occur. The construction of the expression “all reasonable steps” was discussed in the Full Bench decision in The Maritime Union of Australia v Northern Stevedoring Services Pty Ltd 20 as follows:
“[33] The expression “all reasonable steps”, and the case authorities concerning that and similar expressions were discussed at length in the decision of the Industrial Relations Commission of NSW in Court Session Bluescope Steel Ltd v The Australian Workers' Union, New South Wales. 21 The following propositions may be derived from the Court’s analysis:
[34] Additionally in Parland Pty Ltd & Ors v Mariposa Pty Ltd 22 the Tasmanian Supreme Court said, in relation to a requirement for a party to use its best endeavours to achieve a particular object, that a failure to take a particular step had to be assessed by reference to its materiality to the failure to achieve the relevant object. The Court said:
‘In any event quite apart from authority it would seem to me to be an untenable proposition that a party could be held to have failed to satisfy a condition requiring it to use its best endeavours in relation to an application because it failed to take some particular step if in fact the application would have been unsuccessful even had that step been taken.’
[35] That proposition appears to us to be equally applicable to consideration of whether an obligation to take all reasonable steps has been complied with.”
[37] The evidence demonstrated that it was determined the vote should take place at a stop-work meeting at which there would be prior briefings and debate about the merits of the proposed agreement. This was consistent with past practice within HCF/Sydney Ferries. The process allowed MUA, AMOU and AIMPE officials to attend and lead the debate. The fact that the vote was to take place in that way constituted the relevant circumstances which existed at the time the obligation on HCF to take all reasonable steps to notify employees of the time and the place of the vote applied. Given that the vote was to take place at the meeting once the briefings and debate had run their course, it is clear that a precise time could not be assigned in advance to the conduct of the vote. In that context a reasonable person would consider that the reasonable step to be taken was to notify employees of the commencement time of the meeting during which the vote was to take place. That was a step sufficient to serve the evident policy objective of s.180(3)(a), namely to ensure that employees had the information necessary to enable them to exercise their right to vote upon the proposed agreement if they wished to do so. For these reasons we consider that the Commissioner’s conclusion about this issue was clearly correct.
Alleged invalid NERR
[38] Section 173(1)(a) of the FW Act relevantly requires an employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement to “take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who … will be covered by the agreement …”. Section 174(1A) sets out the requirements as to the form and content of the NERR in the following terms:
(1A) The notice must:
(a) contain the content prescribed by the regulations; and
(b) not contain any other content; and
(c) be in the form prescribed by the regulations.
[39] The prescribed form for the NERR is set out in Schedule 2.1 of the Fair Work Regulations 2009. The part of the form concerned with coverage is as follows:
“[Name of employer] gives notice that it is bargaining in relation to an enterprise agreement ([name of the proposed enterprise agreement]) which is proposed to cover employees that [proposed coverage].”
[40] The AMOU’s case was that any misdescription of the coverage of the proposed agreement constitutes a failure to comply with s.174(1A) and thereby renders the NERR invalid. We accept, on the basis of the Full Bench decision in Australian Maritime Officers’ Union v Harbour City Ferries Pty Ltd, that any non-trivial misdescription of coverage will render a NERR invalid with the consequence that any subsequent enterprise agreement will be incapable of approval. 23 However we do not consider that there is any basis for the proposition that the NERR issued on 18 May 2015 in fact misdescribed who would be covered by the proposed agreement. The employees covered by the 2012 Agreement were described in clause 5.3 of that agreement in the following terms:
“5.3 The employees covered by this Agreement are:
(a) Trainees
(b) GPH inductees
(c) CAO
(d) GPH/Cashiers
(e) Inner Harbour Engineers
(f) Masters
(g) Probationary Masters / Inner Harbour Engineers”
[41] The employees covered by the 2015 Agreement (the terms of which constituted the proposed agreement referred to in the 18 May 2015 NERR) were set out in clause 4.3 of the agreement as follows:
“4.3 The Employees covered by this Agreement are:
(a) Trainees;
(b) Customer Assistance Officers;
(c) General Purpose Hands/Cashiers;
(d) General Purpose Hand-Team Leader
(e) General Purpose Hands;
(f) Intermediate General Purpose Hands;
(g) Inner Harbour Engineers; and
(h) Masters.”
[42] The AMOU’s identification of the references to “General Purpose Hand-Team Leader” and “Intermediate General Purpose Hands” in clause 4.3 being absent from clause 5.3 of the 2012 Agreement, and “Probationary Masters” in clause 5.3 of the 2012 Agreement being absent from clause 4.3, is not demonstrative of any difference in coverage. The same cadre of employees in HCF’s business which were covered by the 2012 Agreement is covered by the 2015 Agreement. Both agreements covered all employees, including onshore employees, involved in the actual operation of the ferry services except for outer harbour engineers (as distinct from employees occupied in administration or maintenance). There was no suggestion in the evidence or submissions that any actual employee or job which was covered by the 2012 Agreement was not covered by the 2015 Agreement, or that any actual employee or job not covered by the 2012 Agreement became covered by the 2015 Agreement. The fact that some employees were given a different classification description for pay purposes by the 2015 Agreement compared to the 2012 Agreement is entirely beside the point. The coverage was the same. The Commissioner’s conclusion on this score was correct and no error has been demonstrated.
Order
[43] We order that permission to appeal is refused.
VICE PRESIDENT
Appearances:
A. Howell of counsel with J. Wydell for the Australian Maritime Officers’ Union.
A. Slevin of counsel for the Maritime Union of Australia.
A. Gotting of counsel for Harbour City Ferries Pty Ltd.
Hearing details:
2016.
Sydney:
23 February.
6 Scope decision at [113]
7 [2012] FWAFB 2206; (2012) 219 IR 139 at [14]
8 Australian Commercial Catering Pty Ltd v Fair Work Commission [2015] FCAFC 189 at [61]
9 Wan v AIRC (2001) 116 FCR 481 at [30]
10 GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 at [26]-[27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089 at [28], 202 IR 288, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28]
12 [2014] FWCA 9069 at [4]
14 Minister for Aboriginal Affairs v Peko-Wallsend [1986] HCA 40; (1986) 162 CLR 24
15 (1987) 16 FCR 167 at 184
16 Scope decision at [7]
17 AMOU reply submissions at paragraph [58]
18 Ibid at paragraph [59]
19 See Linfox Australia Pty Ltd v Fair Work Commission (2013) 240 IR 178 at [47]; Soliman v University of Technology, Sydney (2012) 207 FCR 277 at [55]-[56]
21 [2004] NSWIRComm 222; 137 IR 176 at [67]-[71]
22 [1995] TASSC 91; (1995) 5 TASR 121 at 133
23 [2015] FWCFB 3337 at [27]-[39]
Printed by authority of the Commonwealth Government Printer
<Price code C, PR577289>