[2009] FWA 301

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FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Alphington Aged Care
(AG2009/11742)
Sisters of St Joseph Health Care Services (Vic) t/a Mary Mackillop Aged Care
(AG2009/11382)

COMMISSIONER WHELAN

MELBOURNE, 17 SEPTEMBER 2009

Applications to approve enterprise agreements - Alphington Aged Care Employee Enterprise Agreement 2009-2012; Sisters of St Joseph Health Care Services (Vic) Employee Enterprise Agreement 2009-2012 – procedural requirements; s.173(1); s.180(2), (3) and (5); s.181(2); s.185(2); s.186; and s.187.

[1] These are applications for the approval of enterprise agreements made by Sisters of St Joseph Health Care Services (Vic) trading as Mary Mackillop Aged Care (‘Mary Mackillop’) and Alphington Aged Care (also known as ‘the Alphington’). The applications are opposed by the Australian Nursing Federation (ANF).

AG2009/11382

[2] The application in this matter was lodged by Mr Rahilly on behalf of the employer and supported by a declaration made by Ms Bradley. There was no declaration lodged on behalf of any employee representatives. A signed copy of the agreement was also lodged signed by Ms Bradley and Ms Burtt ‘representing the employees covered by the agreement’. The application was lodged on 7 August 2009.

[3] The declaration of Ms Bradley stated that the agreement was made on 27 July 2009. At least seven days before the start of the voting process (which commenced on 17 July 2009) the employees covered by the agreement had access to the written terms of the agreement and other material incorporated into the agreement. The employees were first requested to vote on the agreement on 17 July 2009. The date on which the employer provided notice to employees under section 173(1) was 25 June 2009.

[4] The evidence presented through Ms Bradley was that the collective agreement covering employees of Mary Mackillop expired on 30 November 2008. The ANF and Health Services Union of Australia (HSU) issued logs of claims and sought to engage the employer in bargaining in December 2008. Ms Bradley notified the ANF in correspondence dated 31 December that Clare Dewan and Associates would represent them. 1

[5] On 30 March 2009, Mary Mackillop wrote to all staff advising them of the employer’s position on the negotiations then underway between the ANF and Clare Dewan and Associates. That letter set out a series of points described as the employer’s ‘offer’. 2 This was followed by a meeting of staff on 9 April 2009 at which Mary Mackillop reiterated their position and their offer.

[6] On 12 May 2009 at a further staff meeting the employer again outlined its position and advised that ‘an agreement would be posted fort staff to review and a meeting arranged to answer questions’.

[7] On 25 June 2009, Mary Mackillop issued a memo which on Ms Bradley’s evidence was put on a notice board in the staff room and put in the memo book in the staff room. The memo advised that copies of the ‘amended agreement’ could be found at reception and in the staff room and advised employees of a proposed ballot. The evidence of Ms Bradley was that the notice of representational rights was posted at the same time in the same places.

[8] On 23 June 2009, the ANF wrote to Mary Mackillop seeking a response to their previous correspondence seeking Mary Mackillop’s position on the ANF’s claims and offering to meet with the employer either directly or through their representatives.

[9] On 1 July 2009 Ms Bradley wrote to the ANF in the following terms:

[10] On 16 July 2009, Mary Mackillop held a staff meeting. Ms Bradley stated that ‘at this stage the negotiations with the union have not been successful’. The position of the employer was again put to the employees. Information was then given about the ballot process. A staff member asked about existing conditions and payments and Ms Bradley confirmed that all payments would remain and that the first of the 3% rises would occur in November 2009.

[11] This appears to have been the only discussion of the content of the agreement at that meeting.

[12] A memo about voting for an ‘employee collective agreement’ was put in the memo book on 16 July 2009 and staff were provided with a further memo about the ballot on 23 July 2009. This second memo set out the key elements of the agreement. On 29 July 2009 the employees were advised by memo of the outcome of the ballot. Of the 93 employees to be covered by the agreement, 32 had voted and of these 30 voted in favour. 4

[13] At no stage after 1 July 2009 did Mary Mackillop or Clare Dewan and Associates advise the ANF that they no longer intended to bargain with the ANF as the bargaining representative for their members employed by Mary Mackillop. It is clear from her evidence that Ms Bradley was aware that the ANF had members employed by Mary Mackillop. Ms Bradley was aware that under the Fair Work Act the employer was a bargaining representative but stated that they chose to appoint Clare Dewan and Associates.

[14] Ms Bradley’s evidence was that Mary Mackillop was aware that Clare Dewan and Associates were negotiating with the union. In response to a question concerning when Mary Mackillop decided not to talk to the ANF she responded, ‘I don’t think there was any particular point to not negotiate with the union. We were doing that through Clare Dewan and Associates, was my understanding’ 5 and later was asked, ‘What did you believe about the state of negotiations between Clare Dewan and Associates and the ANF, in respect particularly to Mary Mackillop?’. She responded, ‘That we were unable to reach agreement in relation to all of the union claims. And, because of our financial capacity within the organisation, we made an offer to staff on what we believed was fair and reasonable’.6

[15] On 1 July 2009 the Fair Work Act came into operation. The provisions of the Act dealing with agreement making are contained in Part 2-4.

[16] The objects of that Part state:

[17] The Explanatory Memorandum states that the Act provides a more significant formal role for bargaining representatives in the bargaining process compared to bargaining agents under the Workplace Relations Act 7. Bargaining representatives are entitled to apply for protected action ballots, bargaining orders, majority support determinations, scope orders and serious breach declarations. It is a breach of bargaining in good faith to refuse to recognise or bargain with a bargaining representative (section 228(1)(f)).

[18] Several issues arise in relation to the application made by Mary Mackillop. The first relates to the application itself. Section 185 requires a bargaining representative to apply to Fair Work Australia for approval of the agreement. Section 185(2) provides:

[19] Section 609 of the Act deals with the power of the President of Fair Work Australia to make procedural rules. In relation to section 185(2) the President made procedural rules which included the form in which an application was to be made and the declarations required to accompany such an application. Form F16 (as it was at the relevant time) sought in Part 1 details to be provided of ‘the bargaining representative lodging the application’. That nominates Mr Rahilly of Clare Dewan and Associates. The applicant is then stated to be the employer. The section requiring the applicant to provide ‘details of any employee organisations that were bargaining representatives for the agreement’ is blank.

[20] The form goes on to deal with service requirements - ‘A copy of this application must be served on each employer, employee organisation or employee bargaining representative, as soon as practicable after the application is lodged’ and ‘other requirements’:

[21] The application was accompanied by a Form F17 but no Form F18 was lodged.

[22] By virtue of section 176(1)(b) the ANF was a bargaining representative for the agreement. The ANF had in fact been bargaining with Clare Dewan and Associates who has been appointed by the employer as their bargaining representative. The union was not notified by either Clare Dewan and Associates or Mary Mackillop that the employer no longer wished to bargain with the ANF as the representative of the ANF members it employed.

[23] The failure of the applicant to have the ANF or HSU to lodge a F18 with the application is a breach of procedural requirements. Mr Rahilly submitted that Fair Work Australia should not allow technicalities to stand in the way of the agreement being approved. He referred to the provisions of section 577 and 578:

[24] While the failure to comply with the rules is a matter which can be overcome by virtue of Rule 4, it is not an insubstantial matter. Section 585 requires that an application to Fair Work Australia must be in accordance with the procedural rules and section 587 empowers Fair Work Australia to dismiss an application if it is not made in accordance with the Act.

[25] In this case, the defects in the application are not merely a technical error. They are indicative of a failure by the applicant to recognise the role of the ANF as bargaining representative for its members at Mary Mackillop.

[26] Section 228(1)(b) refers to bargaining representatives being required to disclose relevant information in a timely manner. A decision to put an agreement directly to employees while ostensibly still bargaining with a bargaining representative, representing at least some of them, appears to me to be relevant information which was not disclosed at all to the union.

[27] The absence of any mention in the application of the ANF’s role as a bargaining representative is more than a technical defect in the application.

[28] The Act provides in section 186 and 187 the requirements for approval of an agreement by Fair Work Australia. The ANF, in their submissions, addressed the requirements of section 188 which sets out the matters about which Fair Work Australia must be satisfied in order to find that the employees have genuinely agreed to the agreement.

[29] The first of these deal with the pre-approval steps. These are set out in section 180(2), (3) and (5) and section 181(2).

[30] The union contested that the employer had complied with section 180(2). The employer’s evidence was that the employees were notified that copies of the agreement were available at the reception desk and in the staff room; copies of the relevant awards, parts of which were to be incorporated by reference in the agreement, were kept in folders in the staff room. Relevant memos were posted on a notice board in the staff room and kept in the staff memo book. I am satisfied that reasonable steps were taken to provide copies of these documents.

[31] The employer, also by memorandum dealt with in the same way notified employees of the voting method and the period during which a vote could be lodged.

[32] Section 180(5) requires the employer to take all reasonable steps:

[33] It is apparent from the employer’s evidence that the employer relies on a letter sent to employees in March 2009 in relation to a then proposed collective employee agreement to satisfy the provisions of section 180(5). It further submitted that apart from changes required to comply with the Fair Work Act the document they were asked to vote on had not changed from when that letter was sent to employees.

[34] I am not of the view that a document sent almost four months before the vote can be relied upon to satisfy this requirement. A further summary was contained in a memo on 23 July 2009, but this was after the voting had already commenced.

[35] Section 181(2) requires that the request to employees to approve an agreement cannot be made until at least 21 days after that date on which the notice was given in compliance with section 173(1).

[36] The ballot opened on 17 July 2009. The notice was given on 25 June 2009. The union contend that the employer did not take all reasonable steps to give the notice required by section 173(1) because there were employees who did not see the notice on the notice board in the staff room and could not recall seeing it at all.

[37] I think there is a more fundamental problem with the process. Could a notice provided to employees prior to the Act coming into operation be made in compliance with the Act? On 25 June 2009 the right to appoint a bargaining representative did not exist. A notice to employees of such a right could therefore not be effective. Ms Burtt’s appointment of herself, on 26 June 2009, as a bargaining representative could also have no effect under the Act as such a right did not exist at the time.

[38] In my view an effective notice to employees could not be given until 1 July 2009, when the Fair Work Act came into operation. To find otherwise would be to render the bargaining provisions of the Act to be meaningless. As those provisions did not have effect until 1 July 2009, the employee could not give notice of those rights prior to that date.

[39] If the notice of 25 June 2009 was ineffective, then the ballot which opened on 17 July 2009 could not have been done in compliance with section 181(2).

[40] The union also submitted that there were other reasonable grounds to believe that the agreement had not been genuinely agreed to by the employees. 8

[41] The union submitted that the employees had not been fully informed because they did not know what was happening in terms of the union’s negotiations with the employer’s bargaining representative and they were not aware of what was happening in bargaining with other aged care employers. Mr Hubbard referred to the decisions in Grocon Pty Ltd Enterprise Agreement 9 and CFMEU v AIRC10 both of which are referred to in the Explanatory Memorandum.

[42] The objects of section 171 are couched in terms of god faith bargaining in the making of enterprise agreements and the creation of a fair framework that enables collective bargaining in good faith. The decisions referred to by the Australian Nursing Federation place emphasis on the ‘genuine’ approval of an agreement implying that the consent of the employees was informed. Further more recently in CEPU v Blue Star Pacific Pty Ltd, Reeves J considered the process of employees approving a collective agreement under the Workplace Relations Act. 11 His decision suggests that it is inherent in the concept of collective bargaining that the employees who will be affected by the proposed agreement have the opportunity to meet together as a group, to discuss the provisions of the proposed agreement.

[43] It is clear that the employees in this case were not aware that the employer was purportedly still bargaining with the ANF as a bargaining representative through Clare Dewan and Associates at the same time as it was asking them to vote on a proposed agreement. Had they been aware of this it may have effected how they voted.

AG2009/11742

[44] It is clear that the application in this matter suffered from a number of the same defects as the application in AG2009/11382.

[45] Mr Harding’s evidence was that he was aware that there were ANF members amongst the Alphington’s employees. On 1 July 2009 he wrote to the ANF as follows:

[46] He agreed that it was his intention to enter negotiations with the ANF through Clare Dewan and Associates. When asked why he did not contact the ANF before he put the agreement to a ballot on 27 July 2009 he responded that he did not believe there was a need to. In general negotiations (with the ANF) were proceeding slowly and it seemed logical to him that he could make an agreement directly with the staff.

[47] On 6 July 2009 Mr Harding placed the notice required by section 173(1) on the notice board in the carer’s office – a common place for notices. There was one person on maternity leave whom he spoke to but he did not send her a copy of the notice. The failure to provide the notice to this employee is a failure to meet the requirements of section 173(1). On 17 July 2009 at a staff meeting the proposed agreement was distributed and the vote was conducted on 27 July 2009.

[48] As with the application in AG2009/11382, there is no employee organisation named as a bargaining representative and no Form F18 was filed. By virtue of section 176(1)(b) the ANF was a bargaining representative for the agreement. The ANF had in fact been bargaining with Clare Dewan and Associates. Clare Dewan and Associates had forwarded to the union the position of ‘the Alphington’ and on 4 August in an email to the union proposed that they met to discuss their position on 26 August. The application to approve the agreement in this matter was lodged on 14 August 2009.

[49] The failure to name the ANF as a bargaining representative in this matter is again more than a technical defect. The application was lodged by Mr Rahilly who was supposed to be meeting with the ANF some 12 days later in what the ANF believed was the process of bargaining for a new agreement. The union was not notified that the Alphington no longer wanted to bargain with the ANF as bargaining representative for its members.

[50] I am further satisfied that this application does not meet the requirements of section 181(2). That section requires that the request to approve an agreement must not be made until at least 21 days after the day on which the notice under section 173(1) was given. The notice was given on 6 July and the vote was taken on 27 July.

[51] A similar issue arose in Re: White’s Discounts Pty Ltd t/as Everybody’s IGA Everyday and Broken Hill Foodland. 13 In that case the relevant provision was section 170LK(2) which required that employees were to have ‘at least 14 days notice’, in writing, of the intention to make an agreement. The Full Bench held that the provisions of section 36(1) of the Acts Interpretation Act 1901 applied. It reads:

[52] As the provision had not been complied with, the vote being taken on the fourteenth day, the agreement could not be certified.

[53] On the same basis the agreement in this matter could not be approved.

Conclusions

[54] For the above reasons I am satisfied that these agreements do not meet the requirements for approval under the Act and therefore the applications must be dismissed.

[55] The employers in this case appear to have been under the misapprehension that they could be both bargaining with the union, through their bargaining representative and seeking to make an agreement as they described it ‘directly with their employees’ on the other. This probably derives from the distinction between a ‘union collective agreement’ and an ‘employee collective agreement’ which existed under the Workplace Relations Act. Those distinctions no longer apply. Where an employer seeks to make an agreement with its employees and some of those employees are members of a union, unless the employees appoint another bargaining representative, the union will be recognised by the Act as their bargaining representative.

[56] Any single enterprise agreement under the Act is an agreement between an employer and its employees. The union however, has status as a bargaining representative, by virtue of its right to represent those employees who are its members. The bargaining in good faith requirements include recognising and bargaining with the other bargaining representatives for the agreement. 14

[57] In my view, where the employer is aware that there are employees who are union members and the union is therefore their bargaining representative, it would be a breach of good faith bargaining to put an agreement to a vote without notifying the union of its intention to do so. Particularly, as occurred in this case, where bargaining is underway with the union, to not notify the union that bargaining is at an end – which a decision to put an agreement to the vote clearly implies – undermines the process of good faith collective bargaining which the objects of the Act support.

COMMISSIONER

Appearances:

M. Rahilly for Alphington Aged Care and Sisters of St Joseph Health Care Services (Vic) t/a Mary Mackillop Aged Care.

L. Hubbard and P. Gilbert for the Australian Nursing Federation.

Hearing details:

2009.

Melbourne:

September 1.

 1   Exhibit ANF1.

 2   Exhibit MM1.

 3   Exhibit ANF4.

 4   Exhibit MM1.

 5   Transcript at PN99.

 6   Transcript at PN104.

 7   Paragraph 697.

 8   Section 188(c).

 9   Grocon Pty Ltd Enterprise Agreement (2003) 127 IR 13.

 10   CFMEU v AIRC (1999) 96 IR 156.

 11   CEPU v Blue Star Pacific Pty Ltd (2009) FCA 750.

 12   Exhibit ANF6.

 13   Re: White’s Discounts Pty Ltd t/as Everybody’s IGA Everyday and Broken Hill Foodland [PR93796].

 14   Section 228(1)(t).




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