Fair Work Act 2009
s.604 - Appeal of decisions

Appeal against decision [[2014] FWC 6601] and Order PR555900 of Commissioner Roe at Melbourne on 24 September 2014 in matter number B2014/937 - Whether group of employees to be covered by proposed enterprise agreement fairly chosen - Whether regard was given to irrelevant considerations - Whether correct principle applied - Permission to appeal denied - Fair Work Act 2009, ss. 236, 237.

[1] This decision concerns an application for permission to appeal by Cotton On Group Services Pty Ltd (Cotton On) against a decision of Commissioner Roe handed down on 24 September 2014. The decision of the Commissioner concerned an application for a majority support determination made by the National Union of Workers under s. 236 of the Fair Work Act 2009 (the Act) in relation to the warehouse employees at the Cotton On warehouse at Wacol, Queensland.

[2] At the conclusion of the hearing of this matter on 27 November 2014 we announced our decision to deny permission to appeal and vacate the stay order issued by the Commission pending the hearing and determination of the appeal. These are our reasons for that decision.

[3] The decision under appeal was to make a majority support determination with respect to the approximately 91 Cotton On warehouse employees at Wacol. Cotton On employs a total of 118 employees at Wacol in a variety of capacities including managerial and administrative employment. Cotton On also has a similar warehouse facility in Lara, Victoria.

[4] The grounds of appeal challenge the finding by the Commissioner that the group of employees covered by the determination were “fairly chosen” - a prerequisite for the making of a determination in s. 237(2)(c) of the Act. Sub-section (3A) provides:

“(3A) If the agreement will not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding for the purposes of paragraph (2)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.”

[5] A decision on such a matter is a discretionary decision which can only be overturned on appeal if it is established that there is an error in the way the discretion has been exercised. It is not sufficient to argue that a different result should have been reached in the exercise of the discretion.

[6] The Commissioner’s conclusions on this question were expressed as follows:

“c. Conclusion as to fairly chosen?

[28] I am satisfied that the group chosen is geographically and operationally distinct. I am satisfied that there is a degree of organisational integration and also a degree of distinctness. It is common for a national and multi-national enterprise to have a number of separate site specific agreements. It is also common for national and multi-national enterprises to have agreements which cover more than one site. Depending upon the circumstances the employees in either case can be fairly chosen. Where there is a separate site specific agreement it will be common for there to be a lack of organisational distinctness in respect to matters such as IT, planning, training of salaried staff and OHS systems as occurs in this case. These matters are commonly managed at an enterprise level. I am not satisfied that the degree of organisational integration between the Wacol distribution centre and other distribution centres renders the group chosen unfair.

[29] Cotton On argues that I should consider the interests of those employees who have been excluded as a consequence of the group chosen by the NUW. I agree that this is a relevant consideration. In the absence of any evidence about the interests of those not chosen it is difficult to take this into account. If there was evidence that the majority of employees at the Lara site wished to be included in the group bargaining for the agreement then this might be relevant to a finding that the group was not fairly chosen. If they did not then it might conversely be relevant to a finding that the group was fairly chosen. However, there is no evidence one way or another and therefore this consideration is a neutral factor.

[30] I am not satisfied that the employer’s argument that a different group would be more fairly chosen is, in the circumstances of this case, sufficient reason to find that the group is not fairly chosen. In this regard I have had regard to the approach taken by the Full Bench in Cimeco and BP Refinery.

[31] After taking into account whether the group is geographically, operationally or organisationally distinct and other relevant factors I am satisfied that the group has been fairly chosen.”

[7] Cotton On contends that the Commissioner made absolute findings of geographical and operational distinctness in circumstances where the warehouse employees at Wacol were not geographically distinct from the other employees at Wacol and not operationally distinct from the warehouse employees at Lara. It submits that these are fundamental errors and the decision-making process is thereby flawed.

[8] Clearly the Commissioner did not mistake the facts. His decision makes it clear that there were non-warehouse employees at Wacol and warehouse employees at Lara. The controversy relates to how such a situation is described for the purposes of considering the factors in s. 237(2)(c) of the Act. Rather than consider the question of distinctness in an absolute sense, he considered that the concept was more a matter of degree and the warehouse employees could be distinct from some other employees in some respects and distinct from some other employees in others. He did not consider that the group needed to be unique within the corporation in order to be distinct in a relevant sense. He considered the factual position on these matters in the course of reaching a finding that the group of employees subject to the determination was fairly chosen.

[9] In our view, Cotton On has failed to establish sufficient grounds to grant permission to appeal in this matter. The Commissioner’s findings of fact were correct. He took into account the relevant factors in determining whether the group was fairly chosen. He treated the notion of distinction by reference to some other groups of employees, not all other groups of employees. In our view, this approach was not erroneous. It enabled him to consider the question of whether the group was fairly chosen on an informed and sound basis.

[10] For these reasons we declined permission to appeal. An order giving effect to our decision is published as PR558793.

VICE PRESIDENT WATSON

Appearances:

Mr. M Follett of counsel, with Mr. I Dixon, for Cotton On Group Services Pty Ltd.

Ms. A Duffy of counsel, with Ms. I Beynon and Mr D. Mujkic, for National Union of Workers.

Hearing details:

2014.

Melbourne.

27 November.

Final written submissions:

Cotton On Group Services Pty Ltd on 13 November 2014.

National Union of Workers on 21 November 2014.

Printed by authority of the Commonwealth Government Printer

<Price code A, PR558795>