DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Monadelphous Engineering Pty Ltd
(AG2018/7253)

DEPUTY PRESIDENT BEAUMONT

PERTH, 5 JULY 2019

Application for approval of the MWSL Enterprise Agreement 2018.

[1] An application has been made for approval of an enterprise agreement known as the MWSL Enterprise Agreement 2018 (the Agreement). The application was made under s 185 of the Fair Work Act 2009 (Cth) (the Act) by Monadelphous Workforce Pty Ltd (Monadelphous). The Agreement is a single enterprise agreement.

[2] The Australian Workers’ Union (the Union) applied to the Fair Work Commission (the Commission) to be heard concerning the application. It conceded that it was not a bargaining representative for the purposes of the Agreement. However, it pressed that it had significant membership within Monadelphous and its related entities, and as such, had a reasonable expectation that the Agreement would apply to current Union members once approved.

[3] In the alternative, the Union submitted that should the Commission determine not to hear from the Union as a matter of procedural fairness, then it would request that the Commission exercise its discretionary power to inform itself under s 590 of the Act to grant the Union an opportunity to make submissions in relation to the application.

[4] Unsurprisingly, Monadelphous objected to the Union’s application to be heard. It did so on the basis that the Union had provided no persuasive reason as to why it could be of any assistance to the Commission. Although it did qualify that submission observing that perhaps a persuasive reason advanced by the Union was to hear from it in relation to the alleged Better Offer Overall Test (BOOT) issues. In this respect it referred to the decisions of LS Precast Pty Ltd, 1 and LS Precast Pty Ltd,2 where the Commissioner heard from two unions in relation to alleged BOOT issues only, an approach which Monadelphous submits was endorsed by the Full Bench on appeal in CFMEU v LS Precast.3

[5] I have concluded that the Union has not established that it has a right or interest that will be adversely affected by the approval of the Agreement (should it be approved). Whilst the Commission may choose to hear from an employee organisation or any other person about the approval of an agreement even though the organisation or person may not otherwise have a right to be heard, in this case, I have chosen not to do so. Reasons for this decision follow.

BACKGROUND

[6] On 22 December 2018, Monadelphous made its application for the approval of the Agreement. The primary of activity of the applicant was said to be maintenance and industrial services, and the underpinning reference instruments for the Agreement were the Manufacturing and Associated Industries and Occupations Award 2010 and the Hydrocarbons Industry (Upstream) Award 2010. There were no union bargaining representative involved in the Agreement making process although there were four employee bargaining representatives.

[7] The coverage clause of the Agreement states that it covers Monadelphous and those employees of Monadelphous engaged in the States and Territories of Australia and who are employed in a classification listed in the Agreement performing work in, or in connection with work covered by the Manufacturing and Associated Industries and Occupations Award 2010 (clauses 4.10 (a)-(e), (h)-(o), (r-cc) and (gg) and the Hydrocarbons Industry (Upstream) Award 2010.

[8] At the time of the vote there were four employees covered by the Agreement, two of whom cast a valid vote. Both voted to approve the Agreement.

[9] While the parties were invited to proceed by way of oral hearing, both indicated a preference to have the matter determined the papers. A course I took.

FRAMEWORK REGARDING STANDING TO BE HEARD

[10] An employee organisation may establish standing to be heard regarding an application under s 185 of the Act because:

(a) it is bargaining representative of one or more employees to be bound by the proposed agreement; 4
(b) as a matter of procedural fairness if the employee organisation is able to establish a right, interest or legitimate expectation that it will be adversely affected by the decision; 5 or
(c) if invited by the Commission in the exercise of its power under s 590 of the Act to inform itself. 6

DOES THE UNION HAVE A RIGHT TO BE HEARD OTHER THAN AS A BARGAINING REPRESENTATIVE – PROCEDURAL FAIRNESS

Submissions of the Union

[11] In short, the Union advanced that it and its members would be affected by the approval of the Agreement and that, as a matter of procedural fairness, it ought to be heard in relation to its objections to the approval of the Agreement.

[12] It continued that a decision to approve the Agreement, which would very likely apply to Union members, would result in its members being covered by an inferior Agreement that was inconsistent with legislative requirements and of which the Union had no input.

[13] According to the Union, it had a legitimate interest in maintaining standards in the industries in which its members worked. Such an interest extended to ensuring that enterprise agreements that operated in its relevant sectors and applied to its membership were not of poor quality, left its members worse off, or at the very least, met legislative requirements.

[14] The Union concluded that given its status as an employee organisation to which many of Monadelphous’ employees belong, and given it is active within the sectors and industries to which the Agreement is stated to apply, should the Commission approve the Agreement without the input of the Union at any stage, the Union would be denied procedural fairness.

Submissions of Monadelphous

[15] With regard to submissions on procedural fairness, Monadelphous stated that the Union’s reliance on its submission that it has an interest in maintaining standards in the industries in which its members perform work only belied the irrelevant and improper purpose of the Union seeking to be involved and/or to provide assistance. Monadelphous continued that the assistance that the Union sought to provide to the Commission appeared to be liable to misdirect and mislead, in pursuit of the Union’s own impermissible interests, rather than to actually assist with the approval requirements.

Consideration

[16] The submissions of both parties concerning the point of procedural fairness failed to adequately address that which the Commission is obliged to turn its mind to when considering this point.

[17] In Collinsville, the Full Bench stated that the right, interest or legitimate expectation that is said to be affected by the application before it, must be identified and understood against the framework of enterprise bargaining and agreement making established by the Act. 7 Furthermore, whether an employee organisation, which is not a bargaining representative, has a right to be heard, in the sense that there is a requirement that procedural fairness be accorded to it, in relation to the application for the approval of an agreement will depend on the circumstances in each case.8

[18] While there have been developments around the concept of legitimate expectation and its utility – namely that it is apt to mislead, is unsatisfactory and superfluous and confusing, in the decision of Construction, Forestry, Maritime, Mining and Energy Union v Mechanical Maintenance Solutions Pty Ltd (Mechanical Maintenance), 9 the Full Bench clearly articulated what was required of administrative decision makers and their obligation to accord procedural fairness:

…Administrative decision-makers, including Members of the Commission must accord procedural fairness to those affected by decisions they make. What is required is to ensure the decision is made fairly and is determined by reference to the circumstances of a given case having regard to the legal framework under which the decision is to be made. The legislative framework discussed in Collinsville Coal was then, and remains relevant to that assessment in the context of an enterprise agreement approval application. In that context the focus of the enquiry is not on what was promised or is expected, rather it is on what should be provided in the circumstances of the case to ensure the decision is made fairly. 10

[19] When considering whether the Union and its members would be affected by a decision the affect appears to be limited to a direct affect. In Mechanical Maintenance, the Full Bench observed that it was uncontroversial that the common law obligation to accord procedural fairness to a person affected by an administrative decision arises when the person is directly affected by such decision. 11 With regard to what right or interest is affected, the Full Bench stated that it was not limited to a legal right, or a proprietary, financial, or reputational interest.12 Furthermore it was not the kind of individual interests that a person had that was relevant; rather, it was the manner in which it is apt to be affected.13

[20] The Union has premised its argument on several assertions. In this respect, I observe that while it is said that the Union had within its membership many Monadelphous employees, there is simply no evidence of that. And, while the Union may have an ongoing relationship with its members who might be covered by the Agreement, the Full Bench in Collinsville observed that this was an insufficient basis to conclude that the approval of an enterprise agreement would adversely affect a right, interest, or legitimate expectation of that employee organisation. 14

[21] It was purported that the Union had a legitimate interest in maintaining standards in the industries in which its members worked and ensuring that enterprise agreements that operated in its relevant sectors and applied to its membership were not of poor quality. It has been observed by the Full Bench that ‘… that an employee organisation has amongst its interests, objects or expectations, that it will obtain and maintain reasonable employment conditions for its members, is in the context of the bargaining framework established by the FW Act, an insufficient basis for there to arise a right, interest or legitimate expectation’. 15

[22] The question before me regarding procedural fairness is whether I am, in order for the decision concerning the Agreement to be made fairly, required to provide the Union with an opportunity to be heard. 16 Clearly that depends, amongst other matters, on the statutory context.17

[23] Having considered the Union’s submissions, legislative framework, and the authorities regarding the law in this area, I have concluded that the decision concerning the Agreement can be made fairly in the absence of providing the Union an opportunity to be heard. The Union has been unable to persuade me that it has a right or interest that is adversely affected, whether directly or indirectly, by a decision to approve the Agreement.

DISCRETION UNDER S 590

[24] In Collinsville the Full Bench observed the Commission may choose, in a particular case, to hear from an employee organisation or any other person about the approval of an enterprise agreement even those the organisation or person may not otherwise have a right to be heard. 18

Submissions of the Union

[25] The Union advanced that the Commission should hear from it under its discretionary power to inform itself under s 590. The basis of the contention was that the Commission would benefit from the presence of an experienced industrial participant with knowledge of the industries to which the Agreement applies. This, according to the Union, was particularly the case, given the application was not accompanied by a declaration by an employee bargaining representative and therefore the applicant employer would be the sole participant in the approval process.

[26] The Union advanced that the following circumstances weighed toward the Commission exercising its power under s 590:

(a) no union involvement in the bargaining;
(b) no support from an employee bargaining representative in the form of a declaration;
(c) the Agreement has BOOT issues;
(d) the employees covered by the Agreement were not previously covered by an enterprise agreement and therefore were unlikely to have extensive experience in the process;
(e) issues with the dispute resolution procedure;
(f) the coverage of the Agreement was inconsistent with the scope of the Agreement in terms of the underpinning awards;
(g) not all less beneficial terms were identified; and
(h) employees could be employed on a part-time and full-time basis simultaneously.

[27] The Union concluded that although there was no requirement on it to provide any compelling reason why it sought to be heard for the Commission to exercise discretion under s 590, the Union considered the reasons provided in support of its request were compelling.

Submissions of Monadelphous

[28] Monadelphous remarked that it was altogether typical that employee bargaining representatives had not necessarily filed materials to support the agreement, observing that the employees’ vote was evidence of their support for the Agreement. It continued that the Union was not positioned to add any new information regarding the pre-approval steps, and in any event, approval processes should be quick and informal, and not subject to unnecessary technicality.

[29] It continued that just because an enterprise agreement had not previously been made with the same scope, this said nothing about the experience of the employees who voted it up. Further, the Union was a stranger to those employees and is therefore in no position to add information about what their experience was or was not.

[30] Concerning those issues on Agreement content, Monadelphous submitted that here was nothing strange about, or any regulatory requirement that existed, which stipulated that an enterprise agreement must cover the same scope as the underpinning award(s).

Consideration

[31] First, regarding Monadelphous’ submission that the employees’ vote was evidence of their support for the Agreement, I would observe that there were four employee bargaining representatives, two out of the four employees voted, and both voted in favour. The scope of the Agreement is broad. Clearly, the attention of this Commission will turn to, as it should when considering any application for approval, whether the Agreement has been genuinely agreed to. In this respect, I do not consider that the Union is able to assist. Its submissions indicate as much.

[32] I consider that there is merit in the submissions advanced by Monadelphous that the Union has no relevant knowledge or information about the making of the Agreement that would likely assist the Commission in its consideration of the application.

[33] While a preliminary review of the Agreement has identified, what the Union refers to as BOOT issues, I am confident this Commission can competently identify those issues without the Union’s assistance. I have considered the decisions of LS Precast Pty Ltd, 19 and LS Precast Pty Ltd,20 and CFMEU v LS Precast.21 However, I do not consider that these decisions provide a persuasive reason, in the circumstances of this matter, to hear from the Union. Clearly, I consider that the Commission is positioned to conduct the evaluative process required under the statutory framework of Part 2-4, and in doing so is able to properly inform itself without recourse to the Union for assistance on this occasion.

al of Deputy President Beaumont of the Fair Work Commission