Fair Work Act 2009
s.604 - Appeal of decisions

Appeal against decision [[2016] FWC 6323] of Commissioner Bissett at Melbourne on 5 September 2016 in matter number B2016/931.

Introduction and factual background

[1] Swinburne University of Technology (Swinburne) has lodged an appeal, for which permission to appeal is required, against a decision by Commissioner Bissett issued on 5 September 2016 1 (Decision) to grant an application made by the National Tertiary Education Industry Union (NTEU) for a protected action ballot order and against the order itself2 (Order), which was issued conjointly with the Decision. The appeal was heard by us on 22 September 2016. Because the ballot required by the Order has commenced and is due to close at midday on 28 September 2016, we considered it desirable that we deliver our decision in the appeal before that time. This has meant that the reasons for our decision are expressed in a somewhat more truncated form than might otherwise have been the case.

[2] There was no dispute as to the relevant facts. In relation to certain teaching staff which it employs, Swinburne is currently covered by a multi-enterprise agreement, the Victorian TAFE Teaching Staff Multi-Business Agreement 2009. Most of the TAFE Institutes which were also covered by this agreement subsequently became covered by the Victorian TAFE Teaching Staff Multi-Enterprise Agreement 2015, but Swinburne did not. The nominal expiry date of this latter agreement was 2 July 2016.

[3] On 19 November 2015, the NTEU sent a document to Swinburne entitled “NTEU Swinburne University of Technology PAVE Teaching Staff Log of Claims”. “PAVE” is an acronym for Pathways and Vocational Education and, as we understand it, PAVE teaching staff broadly equate to TAFE teachers. The log of claims advanced proposals for a “Swinburne University of Technology PAVE Teaching Staff Interim Enterprise Agreement 2016” (NTEU proposed single-enterprise agreement) to cover Swinburne’s PAVE teachers. In late 2015 there was an exchange of correspondence between the NTEU and Swinburne concerning whether Swinburne agreed to bargain in relation to the NTEU proposed agreement. In an email to the NTEU dated 7 December 2015, a representative of Swinburne stated:

“As communicated to you in our conversation last week, while we are happy to sit down and have a conversation with you, we are not yet in a position to commence bargaining, nor can we commit to commencing bargaining with the NTEU on any particular date.”

[4] The email went on to give Swinburne’s reason for this position, including that its funding was uncertain at that time and the NTEU’s capacity to represent TAFE teachers was disputed by the Australian Education Union (AEU). It is apparent that both parties subsequently proceeded on the basis that Swinburne had not agreed to bargain in respect of the NTEU proposed single-enterprise agreement.

[5] On 14 April 2016, Swinburne advised the NTEU that it had agreed with the Victorian TAFE Association and stand-alone TAFE institutes to participate in bargaining for a multi-enterprise agreement to cover TAFE teaching staff, and further advised that it looked forward to working with the AEU and the NTEU in this process. On 22 June 2016, Swinburne advised its staff that it expected to commence bargaining for a new “TAFE Teaching Staff Multi-Enterprise Agreement” (proposed TAFE multi-enterprise agreement). Its communication noted “that the NTEU’s preference is to commence bargaining for a single agreement with Swinburne alone, and are seeking a ‘majority support determination’ for that purpose”. On 4 and 11 July 2016, Swinburne issued Notices of Representational Rights (NERRs) to its PAVE teaching staff in respect of the “Victorian TAFE Teaching Staff Multi-Enterprise Agreement 2016”.

[6] On 18 July 2016, the NTEU made an application to this Commission for a majority support determination pursuant to s.236 of the Fair Work Act 2009 (FW Act). However in a letter dated 21 July 2016 the NTEU advised Swinburne that, having had its attention drawn to the Full Bench decision in Maritime Union of Australia v Maersk Crewing Australia Pty Ltd 3 (Maersk), its position was that it did not require a majority support determination in order to negotiate the NTEU proposed single-enterprise agreement or to seek a protected action ballot order in pursuit of that agreement. The NTEU further advised in that letter that it would withdraw its application for a majority support determination, and stated:

“...to avoid NTEU seeking a Protected Action Ballot Order, we request the University respond fulsomely and directly on all the matters in the 19 November 2015 log of claims by 25 July 2016. We request the University meet with NTEU for a full day meeting to negotiate the Agreement on 27 July 2016. We reiterate our desire to genuinely reach an agreement.”

[7] On 26 August 2016 the NTEU lodged its application for a protected action ballot order pursuant to s.437 of the FW Act. In its application the NTEU, in its response to the question “What is the date of notification time for the proposed enterprise agreement?” answered “At or before 22 June 2016. A document purporting to be a Notice of Representational Rights was sent by the employer to some employees on 4 July 2016”. In relation to the requirement that it describe how it had been and was genuinely trying to reach an agreement, the NTEU referred to its 17 November 2015 log of claims and went on to state, among other things:

“NTEU has been genuinely trying to reach agreement with the employer of the relevant employees, and is continuing to try to reach agreement. NTEU participates in the multi-enterprise negotiations and continues to press its claim for a single-enterprise agreement with Swinburne University of Technology. Specifically, NTEU is not seeking, pursuing or proposing a multi-enterprise agreement with Swinburne University of Technology.”

[8] It is not contended that Swinburne at any stage agreed to bargain or engaged in bargaining about the NTEU proposed single-enterprise agreement.

Legislative framework

[9] The scheme for the making, approval, variation and termination of enterprise agreements is contained in Pt.2-4 of the FW Act. Section 172 of the FW Act provides for two main types of enterprise agreements. Under s.172(2), a “single-enterprise agreement” is one made with an employer or two or more employers that are “single interest employers” (an expression defined in s.172(5)). Under s.172(3), a “multi-enterprise agreement” is one made with two or more employers that are not all single interest employers. Both a single-enterprise agreement and a multi-enterprise agreement may be made either with the employees who are employed at the time the agreement is made and who will be covered by the agreement, or with one or more relevant employee organisations if the agreement relates to a genuine new enterprise that is being established or is proposed to be established and the employer(s) have not employed any of the persons who will be necessary for the normal conduct of that enterprise and will be covered by the agreement. In the latter case, the agreement is described in s.172(4) as a “greenfields agreement”.

[10] Division 3 of Pt.2-4 concerns “Bargaining and representation during bargaining”. Section 173 establishes a requirement for an employer to issue the NERR at an early stage during the bargaining process in respect of a proposed enterprise agreement that is not a greenfields agreement. The section provides:

“173 Notice of employee representational rights

Employer to notify each employee of representational rights

(1) An employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who:

(a) will be covered by the agreement; and

(b) is employed at the notification time for the agreement.

Note: For the content of the notice, see section 174.

Notification time

(2) The notification time for a proposed enterprise agreement is the time when:

(a) the employer agrees to bargain, or initiates bargaining, for the agreement; or

(b) a majority support determination in relation to the agreement comes into operation; or

(c) a scope order in relation to the agreement comes into operation; or

(d) a low paid authorisation in relation to the agreement that specifies the employer comes into operation.

Note: The employer cannot request employees to approve the agreement under section 181 until 21 days after the last notice is given (see subsection 181(2)).

When notice must be given

(3) The employer must give the notice as soon as practicable, and not later than 14 days, after the notification time for the agreement.

Notice need not be given in certain circumstances

(4) An employer is not required to give a notice to an employee under subsection (1) in relation to a proposed enterprise agreement if the employer has already given the employee a notice under that subsection within a reasonable period before the notification time for the agreement.

How notices are given

(5) The regulations may prescribe how notices under subsection (1) may be given.”

[11] It may be observed that the identification of the “notification time” provided for in s.173(2) is significant insofar as s.173(3) requires the NERR to be issued not later than 14 days after the notification time for the proposed agreement. This has further significance because, as the legislative note to s.173(2) reminds, s.181(2) provides that an employer cannot request employees employed at the time who will be covered by a proposed enterprise agreement to vote to approve it until at least 21 days after the day on which the last NERR is given. Compliance with s.181(2) is necessary for any enterprise agreement that is not a greenfields agreement to be approved (see s.186(2)(a) and s.188(a)(ii)).

[12] Division 4 of Pt.2-4 sets out the procedures and criteria for approval of enterprise agreements. It is only necessary for present purposes to note that s.186(2)(b) establishes an approval requirement applicable only to multi-enterprise agreements as follows:

(2)  The FWC must be satisfied that:

...
(b)  if the agreement is a multi-enterprise agreement:

(i)  the agreement has been genuinely agreed to by each employer covered by the agreement; and

(ii)  no person coerced, or threatened to coerce, any of the employers to make the agreement;

...

[13] It can be seen in s.173(2) that where an employer has not agreed to bargain or initiated bargaining, the notification time will arise only if a majority support determination, a scope order or a low-paid authorisation in relation to the agreement comes into operation. Section 236(1) provides that a majority support determination may only be made in relation to a proposed single-enterprise agreement (and not a multi-enterprise agreement). The same applies to bargaining for a scope order; relevantly, s.238(1) provides:

Bargaining representatives may apply for scope orders

(1)  A bargaining representative for a proposed single-enterprise agreement (other than a greenfields agreement) may apply to the FWC for an order (a scope order) under this section if:

(a)  the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly; and

(b)  the reason for this is that the bargaining representative considers that the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover. 4

[14] By contrast, under s.242 a low-paid authorisation may only be applied for in relation to a proposed multi-enterprise agreement.

[15] Part 3-3 of the FW Act is concerned with the taking of industrial action. It establishes a regime under which industrial action if taken in prescribed circumstances is “protected” - that is, it is subject to immunity from any action under any State or Territory law to the extent specified in s.415. The right to take protected industrial action is linked to enterprise bargaining for a proposed agreement undertaken under Pt.2-4. However s.413(2) provides a relevantly significant limitation in that respect:

Type of proposed enterprise agreement

(2)  The industrial action must not relate to a proposed enterprise agreement that is a greenfields agreement or multi-enterprise agreement.

[16] In other words, protected industrial action is only available in respect of bargaining for a single-enterprise agreement which is not a greenfields agreement.

[17] Under Pt.3-3, protected industrial action may be taken by employees only after it has been authorised by them by way of a protected action ballot. Such a ballot may only occur in accordance with a protected action ballot order made by the Commission under s.443. Section 443(1) identifies the circumstances in which the Commission must make such an order:

(1)  The FWC must make a protected action ballot order in relation to a proposed enterprise agreement if:

(a)  an application has been made under section 437; and
(b)  the FWC is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.

[18] Section 437, under which an application must be made as one of the two preconditions in s.443(1) for the making of a protected action ballot order, provides:

437 Application for a protected action ballot order

Who may apply for a protected action ballot order

(1) A bargaining representative of an employee who will be covered by a proposed enterprise agreement, or 2 or more such bargaining representatives (acting jointly), may apply to the FWC for an order (a protected action ballot order) requiring a protected action ballot to be conducted to determine whether employees wish to engage in particular protected industrial action for the agreement.

(2) Subsection (1) does not apply if the proposed enterprise agreement is:

(a) a greenfields agreement; or

(b) a multi-enterprise agreement.

(2A) Subsection (1) does not apply unless there has been a notification time in relation to the proposed enterprise agreement.

Note: For notification time, see subsection 173(2). Protected industrial action cannot be taken until after bargaining has commenced (including where the scope of the proposed enterprise agreement is the only matter in dispute).

Matters to be specified in application

(3) The application must specify:

(a) the group or groups of employees who are to be balloted; and

(b) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.

(4) If the applicant wishes a person other than the Australian Electoral Commission to be the protected action ballot agent for the protected action ballot, the application must specify the name of the person.

Note: The protected action ballot agent will be the Australian Electoral Commission unless the FWC specifies another person in the protected action ballot order as the protected action ballot agent (see subsection 443(4)).

(5) A group of employees specified under paragraph (3)(a) is taken to include only employees who:

(a) will be covered by the proposed enterprise agreement; and

(b) either:

(i) are represented by a bargaining representative who is an applicant for the protected action ballot order; or

(ii) are bargaining representatives for themselves but are members of an employee organisation that is an applicant for the protected action ballot order.

Documents to accompany application

(6) The application must be accompanied by any documents and other information prescribed by the regulations.

[19] Section 437(2A) was added to the above provision as a result of the Fair Work Amendment Act 2015. It was intended to reverse the result of the Federal Court Full Court decision in JJ Richards & Sons Pty Ltd v Fair Work Australia 5, in which it was determined that there was no prohibition in the FW Act against the grant of a protected action ballot order where bargaining in respect of a proposed enterprise agreement had not yet commenced. The new provision uses the pre-existing mechanism of the “notification time” in s.173(2) as the means to identify the commencement point for bargaining before which an application for a protected action ballot order may not be made.

The Maersk decision

[20] Because the Full Bench decision in Maersk 6 was critical to the Commissioner’s reasoning in the Decision and the parties’ appeal submissions, it is necessary to refer to it in some detail. For relevant purposes, the issue dealt with in Maersk was whether s.437(2A) prevented the making of an application for a protected action bargaining order in circumstances where there had been no notification time for the single-enterprise agreement proposed by the applicant union, but the employer had on two earlier occasions proposed single-enterprise agreements, one of which had a wider scope, and both of which had a notification time.

[21] The Full Bench’s reasoning and conclusion in respect of this issue was as follows (footnotes omitted):

“[24] Contrary to Maersk’s contention, we are not persuaded that s.437(2A) requires that there has been a notification time in respect of the enterprise agreement proposed by the PABO applicant. As we have mentioned, the reference to ‘a proposed enterprise agreement’ in s.437(1) refers relevantly to the enterprise agreement proposed by the applicant at the time the PABO application is made. Subsection 437(2A) provides that a PABO application cannot be made ‘unless there has been a notification time in relation to the proposed enterprise agreement’ (emphasis added). The subsection does not require there to have been a notification time for the particular agreement proposed by the PABO applicant. It is sufficient that there has been a notification time ‘in relation to’ the agreement proposed by the PABO applicant.

[25] The expression ‘in relation to’ is one ‘of broad import’. In O’Grady v Northern Queensland Co Ltd McHugh J observed that the expression ‘requires no more than a relationship, whether direct or indirect, between two subject matters’. Context is important in determining the connection to which a statutory provision is referring. In Travelex Ltd v Commissioner of Taxation, French CJ and Hayne J said ((2010) 241 CLR 510 at [25]):

‘It may readily be accepted that ‘in relation to’ is a phrase that can be used in a variety of contexts, in which the degree of connection that must be shown between the two subject matters joined by the expression may differ. It may also be accepted that ‘the subject matter of the enquiry, the legislative history, and the facts of the case’ are all matters that will bear upon the judgment of what relationship must be shown in order to conclude that there is a supply ‘in relation to’ rights [citations omitted].’

[26] The legislative purpose in the enactment of s.437(2A) is to ensure that protected industrial action cannot be taken until after bargaining has commenced – that is, after the time when the employer agrees to bargain, or initiates bargaining (or one of the other circumstances constituting the ‘notification time’ within the meaning of s.173(2)). To import into s.437(2A) a requirement that the ‘notification time’ must be in respect of the agreement proposed by the PABO applicant would mean (relevantly in the context of the present matter) that the employer must have agreed to bargain or have initiated bargaining for a proposed enterprise agreement with precisely the same scope as that sought by the PABO applicant. Such a construction would have the effect of removing scope from the matters in bargaining in support of which employees can engage in protected industrial action. This would be the case because a bargaining representative would only be able to apply for a PABO in relation to a proposed enterprise agreement containing the scope proposed by, or agreed with, the employer.

[27] A consequence of the construction proposed by Maersk is that by not agreeing on the scope of the proposed enterprise agreement, an employer would be able to prevent employees from engaging in protected industrial action unless they have first obtained a majority support determination, scope order or low paid authorisation. It seems to us that such a consequence is inimical to the scheme of the FW Act. The scope of a proposed enterprise agreement can itself be the subject of bargaining and bargaining within the meaning of the FW Act may have commenced even though the parties disagree about the scope of the proposed enterprise agreement. As the Full Bench observed in Stuartholme School v The Corporation of the Trustees of the Roman Catholic Archdiocese of Brisbane:

‘[t]he terms of [s237] unambiguously suggest that bargaining may have commenced under the Fair Work Act even though the parties to the bargaining process are in disagreement about the scope of the proposed agreement’.

[28] Importantly, in the absence of a scope order, the parties to a proposed enterprise agreement are entitled to continue to bargain over the scope of the agreement until that matter is settled through bargaining. If there is a notification time in relation to the proposed agreement, protected industrial action in support of a claim for a particular scope may be taken.

[29] The construction we have adopted is entirely consistent with the legislative note to s.437(2A). As set out earlier, the Note states:

“For notification time, see subsection 173(2). Protected industrial action cannot be taken until bargaining has commenced including where the scope of the proposed enterprise agreement is the only matter in dispute.” (emphasis added)

[30] The Note clearly contemplates that the scope of a proposed enterprise agreement may be the subject of bargaining and that protected industrial action may be taken in support of a claim for a particular scope.”

[22] The Full Bench in Maersk went on to reject a submission that the issue of NERRs was a necessary element of a notification time having arisen. In doing so the Full Bench analysed that part of the explanatory memorandum for the Fair Work Amendment Bill 2014 relevant to the interpretation of s.437(2A) and parts of the report of the Fair Work Review Panel that were referred to in that explanatory memorandum. The Full Bench quoted Recommendation 31 from that Report and said:

“... Recommendation 31: The Panel recommends that Division 8 of Part 3-3 be amended to provide that an application for a protected action ballot order may only be made when bargaining for a proposed agreement has commenced, either voluntarily or because a majority support determination has been obtained. The Panel further recommends that the FW Act expressly provide that bargaining has commenced for this purpose despite any disagreement over the scope of the agreement.

[41] As reflected in the Explanatory Memorandum, s.437(2A) implements the first aspect of recommendation 31.The Note clarifies that bargaining can be taken to have commenced for the purpose of s.437(2A), even where the scope of the proposed enterprise agreement is the only matter in dispute. To that extent the Note relates to the second part of recommendation 31, although as we earlier observed the Note is not part of the FW Act. It follows that if bargaining can begin with an employer proposing a broadly scoped agreement and when scope is in dispute, a bargaining representative proposing a more narrowly scoped agreement may apply for a protected action ballot order in relation to that proposed agreement.”

The Decision under appeal

[23] In the Decision the Commissioner described the issue before her as follows:

“[28] This matter turns on whether the notification time for the proposed agreement given by Swinburne meets the requirements of s.437(2A) such that the NTEU can make an application for a PABO and the Commission has jurisdiction to consider that application.”

[24] Having analysed the Maersk decision, the Commissioner turned in the Decision to the question of whether Swinburne had agreed to bargain with the NTEU. Her findings and conclusions about this were:

“Has Swinburne agreed to bargain with the NTEU?

[33] I am satisfied that Swinburne has agreed to bargain with the NTEU. This much is clear from its letter of 14 April 2016. That it agreed to bargain with the NTEU with respect to a proposed MEA [multi-enterprise agreement] (that is, the agreement it seeks) and not the NTEU proposed enterprise agreement as set out in the NTEU log of claims is not the relevant consideration.

[34] The NTEU has engaged in the negotiations for the proposed MEA. This does not mean and cannot be taken to mean that it has agreed with Swinburne as to the proposed agreement with respect to employees at Swinburne. The decision to enter into bargaining involves the parties coming together with different agendas to see if agreement can be reached. That both come to the table is not evidence that either agrees with anything the other has put to be negotiated. It is just that they have agreed to negotiate.” (italics in original)

[25] The Decision then dealt with the questions of whether there had been a notification time, and whether any such notification time was in relation to the NTEU proposed single-enterprise agreement as follows (footnotes omitted):

“Has there been a ‘notification time’

[38] I am satisfied that Swinburne has provided notice of its agreement to bargain (s.173(2)(a)).

[39] I accept that its notice of agreement to bargain specifies that its proposed enterprise agreement is a multi-enterprise agreement, that is it is of a different scope to that sought by the NTEU in its log of claims.

...

[41] In the context of the matter before me, to import into s.437(2A) a requirement that the ‘notification time’ must be in respect of the type of agreement as proposed by the NTEU would mean that the Swinburne must have agreed to bargain for a proposed enterprise agreement with the same scope as that sought by the NTEU.

[42] I am satisfied that there has been a ‘notification time’ by Swinburne and that its notification relates to a proposed MEA. Subject to the matter below, that Swinburne seeks an MEA does not automatically stop the NTEU making its application. There is no requirement that the agreement that Swinburne proposed must be the same as the proposed enterprise agreement of the NTEU.

Is the notification time ‘in relation’ to the NTEU proposed enterprise agreement?

[43] The proposed enterprise agreement referred to in s.437 is ‘the agreement the bargaining representative applying for an order under s. 447 is proposing at the time the application for a protected action ballot order is made.’ In this case, it is a single enterprise agreement proposed by the NTEU. Any submission to the contrary must be rejected. It is accepted that the ‘proposed enterprise agreement’ in s.437 cannot be a proposed MEA and in this case it is not.

[44] The question is whether there has been a notification time ‘in relation to’ the NTEU proposed enterprise agreement. This requires a determination of whether the notification by Swinburne that it agrees to bargain for an MEA can be seen to be ‘in relation to’ to the single enterprise agreement proposed by the NTEU.

[45] The Act contemplates the making of an enterprise agreement that might be a single-enterprise agreement (s.172(2)), a multi-enterprise agreement (s.172(3)) or a greenfields agreement (s.172(4)).

[46] A multi-enterprise agreement can be made where two or more employers agree to make such an agreement with their employees who are employed at the time the agreement is made.

[47] Swinburne put, and I agree, that a multi-enterprise agreement is a voluntary process entered into by employers. A multi-enterprise agreement cannot be forced upon employers. This is evident by the provisions of the Act which specify that neither a majority support determination nor a scope order can be issued for one. In addition, good faith bargaining orders cannot be issued (unless a low-paid authorisation exists which is not the case in this matter) and protected industrial action cannot be taken in support of an MEA. In this respect, the decision to enter into bargaining for an MEA is in the hands of the employer. I accept that all of these matters differentiate a MEA from a single enterprise agreement.

[48] I would observe that if it was the intention that industrial action could not be taken or applied for in circumstances where the employer had chosen to do seek an MEA, the Act would have said so. It does not. The Act cannot be read to impose any general prohibition on a bargaining representative making an application for a PABO even where the employer wishes to enter into a proposed MEA. The prohibitions in relation to applying for a PABO or taking industrial action are where these are directed at the proposed MEA that is, in support of or opposed to content of the proposed MEA or directed at the participants in the bargaining for the proposed MEA to force them to do something in that process. This is not the circumstance before the Commission.

[49] I am not convinced that the things that distinguish a multi-enterprise agreement from a single enterprise agreement are enough to say that the notification in relation to the MEA is not ‘in relation’ to the NTEU proposed enterprise agreement.

[50] Swinburne wishes to enter into an agreement. They have made this clear. Their proposal is that it be done with a number of other employers. The coverage of its proposed agreement is broader than the NTEU’s preference, but its notification (as opposed to other employers who may also participate in the MEA) is only in relation to an enterprise agreement that will cover a group of its employees. These employees are the same ones (or close to) as those who would be covered by the NTEU proposed agreement. For this reason, I am satisfied that Swinburne’s notification is in relation to the agreement proposed by the NTEU. Regardless of its preference, Swinburne has no control over who else will be covered by the proposed MEA. Its ‘notification time’ is in relation to its employees, the same ones the NTEU says will be covered by its proposed enterprise agreement, it is just that Swinburne wish to engage with other employers as well.

[51] A distraction of discussion as to the type of agreement preferred by Swinburne (a multi-enterprise agreement compared to a single enterprise agreement) does not alter my decision or reasons.

[52] It seems to me that the issue between Swinburne and the NTEU is, at its basic level, one of scope. Having decided, and having a preference, to be part of a proposed MEA does not mean that Swinburne is required by law to stay that course. Of course, having decided as I have does not stop Swinburne remaining in the proposed MEA and allowing its employees to decide if they wish to accept the terms of the proposed MEA or not. Whatever its employees decide will not have any negative consequences on others bargaining for the proposed MEA.

...

[54] The NTEU does not seek to force Swinburne to bargain, Swinburne has already agreed to do that. It seeks to engage with Swinburne as to scope (and perhaps other matters). The Act allows it to do so.

[55] For all of these reasons, I am satisfied that the requirements of s.437(2) have been met. That is, there has been a notification time in relation to the proposed enterprise agreement.” (italics in original)

Submissions

[26] Swinburne submitted:

● it was not in dispute that it had never agreed to bargain or initiated bargaining for a single-enterprise agreement;

● accordingly there was no notification time in relation to the NTEU proposed single-enterprise agreement for the purposes of s.437(2A);

● the Decision failed to give effect to the bifurcation of the two streams of bargaining (for multi-enterprise agreements and single-enterprise agreements) in the statutory scheme;

● the Decision was in error in treating Maersk as determinative of the outcome, when Maersk turned on its particular facts and involved no consideration of the position of the notification time for multi-enterprise agreements under s.437(2A); and

● the effect of s.437(2A) on the facts in this case was to bar the NTEU from making a protected action ballot order, and the Commissioner erred in concluding otherwise.

[27] The NTEU submitted:

● the difference between the NTEU proposed single-enterprise agreement and the proposed TAFE multi-enterprise agreement was substantially one of scope;

● Maersk was therefore squarely applicable, since it stood for the proposition that if an employer proposed an agreement with a broader scope and agreed to bargain in relation to it, and an employee bargaining representative proposed an agreement with a narrower scope in response, that bargaining representative was permitted to apply for a protected action ballot order;

● the position advanced by Swinburne had the absurd consequence that if an employer elected to propose a multi-enterprise agreement, an employee bargaining representative could not apply for a majority support determination or a scope order, and therefore protected industrial action could never occur unless the employees were in a low-paid group and were susceptible to a low-paid authorisation; and

● the Swinburne approach would allow multi-employer bargaining to trump enterprise-level bargaining, which was inflexible, unfair and contrary to the legislative intention.

Consideration

[28] We consider it is appropriate to grant permission to appeal, and in the public interest to do so. Swinburne’s appeal challenges the Commission’s power to make the Order may ultimately determine whether Swinburne’s PAVE teaching staff are entitled to take protected industrial action pursuant to the Order, and raises a novel question concerning the interpretation and application of s.437(2A) which may arise again in future cases.

[29] We therefore turn to the substance of the appeal. It is necessary to state at the outset that in our view the application of the reasoning and conclusions in Maersk to the facts of this case must be approached with caution. Although in the passages we have earlier quoted Maersk expresses propositions of apparent general application to enterprise agreements, those passages must be read in the context of the facts of that case. Maersk involved competing proposals for a single-enterprise agreement, and involved no consideration of how s.437(2A) might apply in connection with a proposed multi-enterprise agreement. We therefore do not consider that Maersk can be read as automatically determinative of the outcome of this matter, contrary to the approach taken in the Decision.

[30] An example of the difficulty in applying Maersk to the facts of this case arises from the Full Bench’s discussion in paragraphs [27]-[30] and [41] concerning a dispute about the “scope” of an enterprise agreement. The Full Bench concluded that where different enterprise agreements are proposed on behalf of the employer and employees respectively, and the employer proposal has a wider scope of employee coverage than the employee proposal, an employee bargaining representative who applies for a protected action ballot may satisfy the condition in s.437(2A) on the basis that the notification time for the employer’s proposed agreement is “in relation to” the employees’ proposed agreement. In reaching this conclusion the Full Bench relied in part upon the reference to scope being in dispute in the legislative note to s.437(2A). At paragraphs [50]-[54] of the Decision the Commissioner treated the difference between the Swinburne proposed multi-enterprise agreement and the NTEU proposed single-enterprise agreement as one about “scope” and applied the Maersk reasoning in that respect. This approach was, with respect, in error. As earlier stated in our discussion of the legislative framework, under s.238 an application for a scope order may only be made in respect of bargaining for a proposed single-enterprise agreement. It does not accommodate a situation in which bargaining parties are at odds as to whether there should be a multi-enterprise agreement or a single-enterprise agreement. The reference in the legislative note to s.437(2A) to “scope” being the only matter in dispute is to be read, consistent with s.238, as referring to bargaining for a single-enterprise agreement only.

[31] As was observed in Maersk 7, the legislative context is important in determining the degree of connection between different subject matters connoted by the use of the expression “in relation to” in a statute. In Maersk the Full Bench determined that because the enterprise bargaining scheme of the FW Act contemplated the commencement and continuation of bargaining even though the scope of the proposed agreement was in dispute, the notification time for an agreement proposed by the employer with a wider scope could be regarded, for the purpose of s.437(2A), as “in relation to” an agreement with a narrower scope proposed by an applicant for a protected action ballot order. However we do not regard that conclusion as applicable to the situation here where the relevant employer has proposed a multi-enterprise agreement, because the dispute between the parties is for the reasons stated not properly to be characterised as one about “scope” having regard to the meaning given to that concept by the FW Act.

[32] Two other contextual conclusions militate against the proposition that the expression “in relation to” in s.437(2A) can be interpreted so widely that the notification time for a proposed multi-enterprise agreement can serve to satisfy the provision’s requirement in respect of a single-enterprise agreement proposed by a protected action ballot order applicant. The first is that, as earlier outlined, the FW Act requires in s.413(2) that protected industrial action not relate to (relevantly) a proposed multi-enterprise agreement. This is supported by the associated requirement in s.186(2)(b)(ii) that a multi-enterprise agreement is not to be approved unless the Commission is satisfied that no person coerced, or threatened to coerce, any of the employers covered by it to make the agreement.

[33] If a protected action ballot order could be made on the basis that, under s.437(2A), there was the requisite relationship between a proposed single-enterprise agreement and the notification time for a proposed multi-enterprise agreement, it would appear necessarily to follow that any industrial action taken consequent upon the ballot in support of the single-enterprise agreement would likewise be “in relation to” the multi-enterprise agreement. If so, that would be directly contrary to the requirement in s.413(2). The tension between s.437(2A) and s.413(2) which arise in this respect is avoided if “in relation to” in s.437(2A) is read more narrowly than it was in the Decision so that the notification time for a proposed multi-enterprise agreement could not be treated as having the requisite relationship with a proposed single-enterprise agreement.

[34] Furthermore, the approach taken in the Decision could also allow a bargaining agent to coerce an employer or employers to enter into a multi-enterprise agreement of a particular character. If, in bargaining for a multi-enterprise agreement, an employer or employers had not acceded to particular claims made by an employee bargaining representative, the bargaining representative could tactically advance a claim for a single-enterprise agreement and apply for a protected action ballot order in order to use protected industrial action as a method to coerce the employer(s) to accede to the bargaining representative’s claims for the proposed multi-enterprise agreement. This would be in direct contradiction to the requirements of s.413(2) and s.186(2)(b)(ii). We do not intend to suggest that, on the facts here, the NTEU has engaged in a tactical manouevre of this nature. However this possible consequence of the approach taken in the Decision (and advanced by the NTEU in its submissions) strongly suggests that it does not correctly reflect the legislative intention.

[35] The second contextual consideration arises from the way in which that aspect of the notification time definition contained in s.173(2)(a) must operate in respect of a multi-enterprise agreement. Because a multi-enterprise agreement necessarily involves a number of employers, it seems to us that a notification time in relation to a proposed multi-enterprise agreement could arise under s.173(2)(a) only if all the employers to be covered had agreed to bargain or had initiated bargaining for the proposed agreement. In CFMEU v AGL Loy Yang Pty Ltd 8 the Full Bench concluded, in relation to a single-enterprise agreement involving a number of single interest employers, that the trigger for a notification time under s.173(2)(a) would arise only when all the employers had agreed to bargain or had initiated bargaining, and we discern no logical reason why the same would not apply with respect to a multi-enterprise agreement. This approach requires “the employer” in s.173(2)(a) to be read in the plural in relation to a proposed multi-enterprise agreement, consistent with s.23(b) of the Acts Interpretation Act 1901. The NERRs to be issued pursuant to such a notification time under s.173 would then have to be issued by each different employer to its relevant employees.

[36] That being the case, it is difficult to see how such a notification time involving multiple employers and their respective employees could be considered to relate to a proposed single-enterprise agreement involving only one of those employers and its employees under s.437(2A). A proposed single-enterprise agreement will have no meaningful connection with an agreement by a number of employers to engage in joint bargaining, in circumstances where all but one of those employers would not be covered by the proposed single-enterprise agreement and the one employer who would be covered did not agree to bargain for a single-enterprise agreement. This wider perspective was not, with respect, properly taken into account in the Decision because the s.437(2A) issue was analysed solely through the prism of the dealings between Swinburne and the NTEU.

[37] We have therefore come to the conclusion that s.437(2A) is not to be interpreted on the basis that a notification time for a proposed multi-enterprise agreement could be treated as being “in relation to” a proposed single-enterprise agreement. While it might be going too far to say that a multi-enterprise agreement and a single-enterprise agreement are “clean different things”, to borrow the language of Charles I on the scaffold, the incompatibility of a number of the statutory requirements which apply to these two types of agreements means, we consider, that a relationship of the requisite proximity under s.437(2A) cannot arise. In this case, Swinburne had never agreed to bargain and had never initiated bargaining for a single-enterprise agreement of any description with respect to its PAVE teaching staff, and that fact meant that the NTEU was not permitted by s.437(2A) to apply for a protected action ballot order with respect to its proposed single-enterprise agreement. Its application in that connection therefore should have been dismissed, and the Decision and Order in determining otherwise were made in error.

[38] We emphasise that it does not follow from our conclusion, contrary to the submissions of the NTEU, that the choice of an employer to pursue a multi-enterprise agreement somehow forecloses employees from ever taking protected industrial action in support of a proposed single-enterprise agreement. If an employee bargaining representative proposes a single-enterprise agreement, and the employer refuses to bargain in relation to this because it prefers a multi-enterprise agreement, then there is no impediment to an application being made by the bargaining representative for a majority support determination under s.236. If such a determination is made, it will give rise to a notification time under s.173(2)(b), and the path will be cleared for a protected action ballot order application to be made. That course remains available for the NTEU to pursue in this case (as it had originally intended to do).

[39] For completeness, we also recognise the possibility that an employer may propose and initiate bargaining in relation to a multi-enterprise agreement, and simultaneously agree to bargain (expressly or by inference from its conduct) in relation to a counter-proposal for a single-enterprise agreement, so that all matters are dealt with globally in the same negotiation. In that factual scenario, it might be argued that a notification time in relation to the proposed single-enterprise agreement exists for the purpose of s.437(2A) and a protected action ballot order application could be made. However that was not the factual situation in the matter before us and we therefore do not need to consider it further.

Orders

[40] We order as follows:

(1) Permission to appeal is granted.

(2) The appeal is upheld.

(3) The Decision ([2016] FWC 6323) and Order (PR585040) are quashed.

(4) The NTEU’s application for a protected action ballot order in matter B2016/931 is dismissed.

VICE PRESIDENT

Appearances:

P. O’Grady QC and A. Manos of counsel for Swinburne University of Technology.

J. Fetter of counsel for National Tertiary Education Industry Union.

Hearing details:

2016.

Sydney:

22 September.

 1   [2016] FWC 6323

 2   PR585040

 3   [2016] FWCFB 1894

 4   Section 238(2) also provides that, despite s.238(1), a scope order cannot be applied for when a single interest employer authorisation is in operation in relation to the proposed agreement.

 5   [2012] FCAFC 53, (2012) 218 IR 454

 6   [2016] FWCFB 1894

 7   Ibid at [25]

 8   [2016] FWCFB 2878 at [38]

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