| [2015] FWCFB 1832 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
VICE PRESIDENT HATCHER |
|
Appeal against decision [[2014] FWC 7123] of Commissioner Lewin at Melbourne on 24 October 2014 in matter number B2014/168.
Introduction
[1] Alcoa of Australia Limited (Alcoa) has filed a notice of appeal under s.604 of the Fair Work Act 2009 (FW Act) in which it seeks permission to appeal and appeals a decision of Commissioner Lewin issued on 24 October 2014 1 (Decision). The Decision concerned an application for a majority support determination made by the Construction, Forestry, Mining and Energy Union (CFMEU) under s.236 of the FW Act. In the Decision the Commissioner determined to grant the CFMEU’s application, and he subsequently issued the majority support determination sought by the CFMEU (Determination) on 27 October 2014.2 Alcoa appeals the whole of the Decision.
[2] Alcoa’s notice of appeal stated three grounds for appeal contending that the Commissioner erred:
(1) in finding that the group of employees whose employment would be covered by the proposed enterprise agreement and who would be the subject of the determination were “fairly chosen” within the meaning of s.237(2)(c) of the FW Act;
(2) in finding that it was “reasonable in all the circumstances to make the determination” within the meaning of s.237(2)(d) of the FW Act; and
(3) in making a determination that was inclusive of hypothetical employees or employees in the classification Power Station Operator 4 (PSO4), in circumstances where no such employees were presently employed by Alcoa.
Legislation
[3] Sections 236 and 237 of the FW Act provide as follows:
236 Majority support determinations
(1) A bargaining representative of an employee who will be covered by a proposed single-enterprise agreement may apply to the FWC for a determination (a majority support determination) that a majority of the employees who will be covered by the agreement want to bargain with the employer, or employers, that will be covered by the agreement.
(2) The application must specify:
(a) the employer, or employers, that will be covered by the agreement; and
(b) the employees who will be covered by the agreement.
237 When the FWC must make a majority support determination
Majority support determination
(1) The FWC must make a majority support determination in relation to a proposed single-enterprise agreement if:
(a) an application for the determination has been made; and
(b) the FWC is satisfied of the matters set out in subsection (2) in relation to the agreement.
Matters of which the FWC must be satisfied before making a majority support determination
(2) The FWC must be satisfied that:
(a) a majority of the employees:
(i) who are employed by the employer or employers at a time determined by the FWC; and
(ii) who will be covered by the agreement;
want to bargain; and
(b) the employer, or employers, that will be covered by the agreement have not yet agreed to bargain, or initiated bargaining, for the agreement; and
(c) that the group of employees who will be covered by the agreement was fairly chosen; and
(d) it is reasonable in all the circumstances to make the determination.
(3) For the purposes of paragraph (2)(a), the FWC may work out whether a majority of employees want to bargain using any method the FWC considers appropriate.
(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.
Operation of determination
(4) The determination comes into operation on the day on which it is made.
Factual background
[4] Historically, Alcoa has employed a number of individuals internally designated as “Power Station Operators” (PSOs) across various functional levels (PSO2, PSO3, PSO4, PSO5 and PSO6) at its electrical power generation station in Anglesea, Victoria (Power Station). 3 There are currently no persons designated as PSO2s or PSO4s. The Alcoa Point Henry Smelter and Anglesea Power Station Agreement 2011 (2011 Agreement) covers PSO3 employees, and would cover PSO2 employees if any of them existed.
[5] The functional relationship between employees designated as PSO3, PSO5 and PSO6 was, uncontroversially, described by the Commissioner in the Decision as follows:
“[24] The PSO6, PSO5 and PSO3 employees, currently engaged, are based in the control room of the power station. The PSO3 employees have a desk and computer terminal inside the control room. PSO3 employees, however, largely perform duties outside the control room. PSO3 employees are not authorised to operate the control panel of the power station. Both the PSO6 and PSO5 employees are authorised to do so and are the principal operators of the control panel.”
[6] Alcoa has commenced bargaining for an enterprise agreement to replace the 2011 Agreement. The enterprise agreement it proposes would, like the 2011 Agreement, not cover any employees who are graded above PSO3. However 15 employees who are graded PSO5 or PSO6 and are represented by the CFMEU wish to negotiate with Alcoa for a new enterprise agreement. Alcoa refused to bargain with them. Accordingly the CFMEU, as their bargaining representative, has made an application for a majority support determination.
The Decision
[7] The Commissioner identified two critical issues to be determined in the Decision as follows:
“
[8] After setting out the background to the application and the relevant provisions of the FW Act, the Commissioner reviewed the guiding authorities and summarised the evidence before him. The Commissioner identified the Full Bench decision in Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union 5 (Cimeco) as outlining the proper approach to be taken in determining whether the employees were “fairly chosen”. In making his findings as to the evidence, the Commissioner proceeded on the basis that there were no substantial conflicts on the primary facts and that any differences in the witnesses’ evidence were interpretative in nature or based on opinion.6 In relation to the “fairly chosen” issue, the Commissioner said:
“[21] Therefore, the relevant context is a situation where the proposed enterprise agreement, in respect of which the determination is sought, will not cover all of the employees of the employer.”
[9] As a result of this conclusion that the proposed agreement would not cover all of the employees of the employer the Commissioner, as required by s.237(3A), went on to consider whether the group who would be covered by the agreement was geographically, operationally or organisationally distinct, and reached the following conclusions on these matters:
“[42] On the evidence before me, I find that the PSO6 and PSO5 (and PSO4) employees are relevantly located geographically with the other employees of Alcoa engaged in the conduct of Alcoa’s electrical power generation enterprise at Anglesea in Victoria. I find that within that enterprise, the PSO6 and PSO5 (and PSO4) employees form part of an operationally distinct group made up of employees described as PSOs or Power Station Operators of various functional levels. I have noted that, historically, this operational group has been identified as comprised of PSO levels 2 through 6 and that there are currently no employees engaged in this operational group at PSO4 or PSO2.
[43] Moreover, I find that historically the PSO6 and PSO5 (and PSO4) levels have been organisationally distinct for the purposes of the differentiation and regulation of their terms and conditions of employment. In my view, the overlay of the existing enterprise agreement, which regulates the terms and conditions of employment of PSO3 (and PSO2) employees, does not substantially distinguish the operational or organisational circumstances of the PSO6 and PSO5 (and PSO4) employees, except to the extent that it differentiates the determination of the remuneration and terms and conditions of employment of employees in the PSO organisational structure at PSO3 (and PSO2) employees from PSO6 and PSO5 (and PSO4) employees.”
[10] Having regard to these conclusions, the Commissioner in accordance with s.237(2)(c) went on to consider whether the relevant group of employees, that is the PSO6, PSO5 (and PSO4) employees, were fairly chosen in relation to the proposed enterprise agreement. The Commissioner found that there would be no unfairness to the PSO6, PSO5 (or PSO4) employees if the proposed enterprise agreement was the subject of bargaining. Regarding Alcoa’s other employees the Commissioner found that there would be no unfairness to PSO3 (or PSO2) employees, to other employees who were not Power Station Operators, or to any group of employees at the Power Station who are not currently bargaining for a proposed enterprise agreement. 7 The Commissioner also noted that with the exception of professional and managerial employees at Anglesea, most employees were bargaining with Alcoa for a proposed enterprise agreement.8
[11] Regarding the issue of fairness or unfairness to Alcoa, the Commissioner said:
“[70] In my view, the statutory objects of facilitating enterprise bargaining and the wishes of a group of employees who propose an enterprise agreement are to be given some weight when considering whether a group of employees was fairly chosen in relation to a proposed enterprise agreement.
[71] When considering fairness to an employer of a selected group, there would need to be a clear and cogent case that the selection of the group would be sufficiently prejudicial to the productivity or efficient conduct of an employer’s business, in all the relevant circumstances, to outweigh a presumption that the Commission should facilitate bargaining for an enterprise bargaining agreement where the employees of the group unanimously wish to bargain.”
[12] The Commissioner’s reasoning as to the conclusion that there was no relevant unfairness to Alcoa if PSO6, PSO5 (and PSO4) employees were granted a majority support determination included the following:
“[72] Alcoa suggests, through the evidence of Mr Monahan, that the PSO6 employees should be characterised as senior managers. In this respect, no doubt some comfort is sought by analogue with the decision in UFU in relation to the identity of certain “officer” levels in the Metropolitan Fire Brigade.
[73] On my evaluation of the evidence, the description of PSO6 employees as senior managers is not apt generally or in the particular context of the operation of the Anglesea power station. Moreover, I do not think there is any relevant analogue between the operational or organisational structure of the Anglesea power station and the Metropolitan Fire Brigade, as far as I can discern from a reading of the relevant decision.
[74] In my view, in the relevant operational and organisational framework of the Anglesea power station, the senior management positions are clearly identified in the organisational chart referred to above as Power Station Manager and Operations Area Supervisor.
. . .
[82] Having regard to all of the above, I am satisfied that there has been and continues to be no unfairness in the selection of the group of employees whose employment would be covered by the terms of the proposed enterprise agreement or as between the selected group, Alcoa and any other employees of Alcoa at the Anglesea power generation enterprise.
[83] Moreover, I consider the group selected to be fairly chosen. The employees are part of an operational group, of whom some are able to bargain for an enterprise agreement in accordance with the relevant objects of the legislation. It is fair to the selected group and not unfair to Alcoa or any other employee in the relevant circumstances that the chosen group should be able to bargain for a proposed enterprise agreement commensurately with the objects of the legislation.
[84] Indeed, on what is before me, of all the relevant considerations, the selection of the PSO6, PSO5 (and PSO4) level employees, who among the other PSOs are not currently covered by an enterprise agreement, is a choice which is coherent with the functional and operational activities of those employees, the Power Station Operators.
[85] In my judgement, the selection of the relevant employees does not exclude any Power Station Operators from enterprise bargaining or impose any burden on the relevant operational group or other employees below professional or clearly designated managerial levels, as previously identified, and does not prejudice the efficiency or productivity of Alcoa’s electrical power generation enterprise at Anglesea.”
[13] After rejecting an argument on the part of Alcoa that it was not reasonable to make a majority support determination because the CFMEU should have applied for a scope order under s.238, the Commissioner stated the following conclusions:
“[94] As with my consideration of whether the group was fairly chosen, of itself, the preference of Alcoa not to bargain does not mean that it would be unreasonable to make the order.
[95] The history of the terms and conditions of employment of the relevant employees was described in the evidence of Mr Monahan, who was asked if those terms and conditions of employment were arrived at by bargaining or individual negotiations with the employees.
[96] Mr Monahan’s evidence was as follows:
[97] No doubt bargaining, either individually or collectively, with the relevant employees in relation to their terms and conditions of employment, will be a new and different development for Alcoa. As noted by the Full Bench of the Commission, above, the Commission must give due weight to the wishes of employees who propose to bargain. Additionally, the objects of Part 2-4 of the Act provide a framework to facilitate and enable enterprise bargaining.
[98] It is also of note that while discretion is provided to the Commission, in relation to the satisfaction required by s 237(1)(b) and 237(2) of the Act, it is mandatory for the Commission to make a majority support determination when the Commission is relevantly satisfied.
[99] The applicable legislative provisions indicate a strong policy framework in favour of enterprise bargaining, subject to the relevant considerations, particularly in light of s 3 and the relevant words of s 169, referring to Division 8, and s 171 of the Act.
[100] In the circumstances of this case, where all of the relevant employees unanimously want to bargain, the group of employees was fairly chosen and there is no objective basis upon which it is possible to be satisfied that the productivity or efficiency of the employer’s business would be unfairly affected by bargaining with those employees, it is difficult to see how it would be other than reasonable to make the majority support determination sought to enable bargaining in accordance with the policy objectives of the legislative scheme.
[101] For all of the above reasons, I find it would be reasonable to make the majority support determination sought in this matter.”
Submissions
Alcoa’s submissions
[14] Relying upon its three grounds of appeal, Alcoa sought that permission to appeal be granted, the Commissioner’s order making the majority support determination be quashed and the application for the determination be dismissed. Alcoa submitted firstly that the Commissioner’s finding that the group of employees was “fairly chosen” within the meaning of s.237(2)(c) of the FW Act was attended by appealable error. Alcoa contended that the Commissioner erred:
[15] Secondly, Alcoa submitted that it was not open to the Commissioner to find that it was “reasonable in all the circumstances” for the determination to be made. In this regard, Alcoa relied upon each of the grounds set out above and further submitted that the Commissioner failed to give weight to the benefits of common law contracts and the historical pattern of bargaining in Alcoa’s enterprise.
[16] Finally, Alcoa submitted that the inclusion of notional PSO4 employees in the determination was erroneous and outside the Commissioner’s jurisdiction under s.237(1) of the FW Act because at the time majority support was determined no PSO4s were employed or balloted for the purposes of the determination.
[17] Alcoa submitted that permission to appeal should be granted because there was a “dearth of authority on the range of matters which are relevant to the Commission’s discretion’’ under ss.237(2)(c) and 237(2)(d) of the FW Act. Alcoa further submitted that it was in the public interest for the Commission to consider the applicability of the principles stated in United Firefighters’ Union v Metropolitan Fire and Emergency Services Board 9 case outside of the emergency services and uniformed services context and, further, to consider the characteristics of seniority or managerial responsibility within an organisation which may render it unreasonable for a majority support determination to be issued.
CFMEU’s submissions
[18] Regarding Alcoa’s first ground of appeal, the CFMEU contended that there was no error in the Commissioner’s finding that the group of employees that would be covered by the agreement was fairly chosen where such a proposed agreement includes a classification in which no employees are currently employed. The CFMEU submitted that the finding that a majority support determination can be validly made in circumstances where the agreement includes classifications that are not currently in use is consistent with other authorities.
[19] The CFMEU submitted that the Commissioner was correct to find that there was a presumption that the Commission should facilitate bargaining for an enterprise agreement when the employees unanimously wish to bargain, in that the Commissioner’s reference to “a presumption” was, in effect, a different way of saying that the view of employees “prima facie carry greater weight” and that the Commissioner’s approach was consistent with the Full Bench decisions in United Firefighters’ Union v Metropolitan Fire and Emergency Services Board 10 and Australian Workers’ Union v BP Refinery (Kwinana) Pty Ltd.11
[20] The CMFEU submitted that the Commissioner did not fall into error by failing to find that PSO6 employees were operationally and/or organisationally distinct from PSO5 employees and that this finding was clearly open to the Commissioner on the evidence before him. The CFMEU further contended that if PSO5 and PSO6 employees were found to be operationally and/or organisationally distinct it would not necessarily follow that the group of employees was not “fairly chosen” for the purposes of s.237(2)(c) as it is merely one matter of which the decision maker must be satisfied before making a majority support determination under s.237(2).
[21] The CFMEU submitted that Alcoa’s second ground of appeal proceeded on a “misunderstanding of the FW Act’s bargaining scheme and the Commission’s role in deciding whether to issue a majority support determination”. In this regard, the CFMEU relied upon Construction, Forestry, Mining and Energy Union v CBI Constructors Pty Ltd in which it was stated that the Commission’s role when considering the “reasonableness” requirement is not “to make any judgments at all about the appropriateness or otherwise of the terms and conditions” and is “limited to ascertaining whether a majority wanted to bargaining [sic] for an enterprise agreement that would cover them.” 12
[22] In response to Alcoa’s final ground of appeal regarding the inclusion of notional PSO4 employees, the CFMEU relied upon the submissions outlined above.
[23] The CFMEU submitted that permission to appeal should be refused and the appeal dismissed because there were no errors in the Commissioner’s decision and it was “not attended with sufficient doubt to warrant its reconsideration”.
Consideration
Nature of the decision-making process
[24] Alcoa proceeded on the basis that its appeal was against a decision which involved the exercise of a discretion, and it was therefore necessary for it to demonstrate error of the type identified in House v The King. 13 Insofar as the non-jurisdictional issues raised by its appeal are concerned, it was correct to do so. Although under s.237(1), the Commission “must” make a majority support determination if an application has been made and the Commission is satisfied of the matters set out in s.237(2), the task of determining whether the “fairly chosen” requirement in s.237(2)(c) and the “reasonable in all the circumstances” requirement in s.237(2)(d) are satisfied can properly be characterised as involving the exercise of a discretion. The decision-making process with respect to these two requirements is one in which no one consideration and no combination of considerations is necessarily determinative of the result and the decision-maker is allowed some latitude as to the choice of the decision to be made.14 In the recent Federal Court Full Court decision in Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd15 the assessment of whether the “fairly chosen” requirement in s.186(3) (where it is one of the requirements for approval of enterprise agreements) was satisfied was described as involving a “very broad judgment” and the exercise of an “independent discretion”16, and we see no reason to take a different view of the requirement in s.237(2)(c). Similarly in Transport Workers' Union of Australia
v Hunter Operations Pty Ltd17 the requirement in s.230(1)(c) for the making of a bargaining order that the Commission be “satisfied that it is reasonable in all the circumstances to make the order” was described as requiring “a broad evaluative judgment that is in the nature of a discretionary decision”, and we consider that s.237(2)(d) can be characterised in the same way. Therefore it is necessary for Alcoa to demonstrate, in order to succeed in its appeal, that the Commissioner acted upon a wrong principle, allowed extraneous or irrelevant matters to guide or affect him, mistook the facts, did not take into account some material consideration, or reached a result which, on the facts, was unreasonable or plainly unjust.
The fairly chosen requirement
[25] We shall deal with Alcoa’s first challenge to the Commissioner’s conclusion that the “fairly chosen” requirement was satisfied concerning the inclusion of “notional” PSO4 employees in the majority support determination later in this decision.
[26] Alcoa’s second challenge was that the Commissioner made an error of principle in referring, in paragraph [71] of the Decision (which we have earlier set out), to a “presumption” that the Commission should facilitate bargaining for an enterprise agreement where the employees of the group unanimously wished to bargain. If this was to be read as a reference to a legal presumption, then we accept that this would constitute an error of principle, if not a jurisdictional error. However we consider that, fairly read in the context of the Decision as a whole, the paragraph should not be understood in this way.
[27] The Commissioner had earlier, in paragraph [69], referred to s.171(b) of the FW Act which provides that it is an object of Part 2-4 (in which ss.236-237 are located) to “enable the FWC to facilitate good faith bargaining and the making of enterprise agreements ...”. He had also referred to the decision in Australian Workers’ Union v BP Refinery (Kwinana) Pty Ltd 18 in which the Full Bench, in relation to the “fairly chosen” requirement in s.238(4)(c) applying to the grant of a scope order, had said that: “... unless there are factors relating to the fairness and efficiency of bargaining and or demonstrated prejudice to the employer’s business operations that make it more reasonable to accept the employer’s application, notwithstanding the contrary preference of employees, weight should be accorded to the views of the employees.”19 In the paragraph immediately preceding paragraph [71], the Commissioner stated that the statutory object of facilitating enterprise bargaining and the wishes of a group of employees who propose an enterprise agreement are to be given “some weight” when considering the “fairly chosen” criterion. Read in this context, we consider that in paragraph [71] the Commissioner is to be understood as saying no more than that, in considering fairness to the employer, the unanimous wish of the relevant group of employees to bargain should be given significant weight in the absence of a countervailing case that the selection of the group would be prejudicial to the productivity or efficient conduct of the employer’s business. That is certainly the way in which the Commissioner subsequently approached his analysis in paragraphs [73]-[85] of the Decision. Although the use of the word “presumption” may have been inapt, it does not amount to appealable error. Contrary to the submission of Alcoa, the approach taken by the Commissioner was consistent with the view expressed by the Full Bench in United Firefighters’ Union v Metropolitan Fire and Emergency Services Board20 (also in relation to s.238(4), including the “fairly chosen” requirement in s.238(4)(c)) as follows:
“[53] ... It may be implied from the legislative scheme that the collective choice of employees is significant. It must be said, however, that while weight should be given to the views of the employees potentially affected, it may be that a proper consideration of the matters specified in ss.238(4) and (4A) in a particular case may make it appropriate to make a scope order contrary to the views of the employees potentially affected.”
[28] Alcoa’s submission that the Commissioner erred in failing to find that PSO6 employees were operationally and organisationally distinct from PSO5 employees must also be rejected. The Commissioner found, as a matter of primary fact, that the operational tasks performed by PSO6 and PSO5 employees principally involved control functions within the control room and, intermittently, tasks outside the control room of an operational nature, some of which overlapped with the duties of PSO3s. 21 He also found that PSO6 and PSO5 employees had no disciplinary authority, but that PSO6 employees could make disciplinary recommendations and also participated in the recruitment selection process to fill vacancies in the Power Station Operations Team.22 There was no challenge to these finding of primary fact in the appeal.
[29] Alcoa’s case that PSO6 employees were operationally and organisationally distinct from PSO5 employees rested on the characterisation of PSO6 employees by its witness, Mr Monahan, as being senior managers. The Commissioner rejected this characterisation, and in doing so noted that the senior management positions were identified in Alcoa’s organisation chart (reproduced in paragraph [22]) as those of Power Station Manager and Operations Area Supervisor. We consider that this conclusion was reasonably open to the Commissioner, and we agree with it. The fact that there were operational differences between the PSO6 and PSO5 roles, as recognised in the very existence of the separate PSO6 role and its higher remuneration, was not demonstrated to be of such significance as to compel the conclusion that the group was not fairly chosen. No error in the exercise of the Commissioner’s discretion has been demonstrated.
[30] We additionally observe that Alcoa’s submissions on this issue impermissibly conflate the issues which arise for consideration in majority support determinations with those relating to scope orders. The submissions relied upon those parts of the United Firefighters’ Union decision which referred to the inclusion of senior management employees of the Metropolitan Fire and Emergency Services Board in bargaining together with lower ranks as involving a conflict of interest. However, as earlier stated, United Firefighters’ Union was concerned with applications under s.238 for scope orders. The reference to a conflict of interest was made in the context of a conclusion that excluding the relevant senior management employees from the scope of bargaining would “promote the fair and efficient conduct of bargaining” 23 - a required consideration under s.238(4)(b), but one not specified in s.237(2). Whilst, as earlier noted, ss.237(2) and 238(4) both require consideration of the “fairly chosen” requirement, it should not be forgotten that majority support determinations and scope orders serve distinct purposes in the bargaining regime in Part 2-4 of the FW Act and give rise to differing considerations. This point was well made by the Full Bench in Liquor, Hospitality and Miscellaneous Union v Coca-Cola Amatil (Aust) Pty Ltd as follows24:
“[28] Division 8 also contains a variety of processes designed to facilitate agreement making. Within those processes, the role of a majority support determination is to commence the bargaining process when there is majority support among employees to collectively bargain, when their employer has not agreed to do so. The effect of a majority support determination itself extends no further. However, once a determination is made, the bargaining process under the Act is enlivened, including the good faith bargaining requirements under s.228 of the Act.
[29] Where the bargaining raises a dispute about the scope of the agreement or agreements to be made and the classes or groups of employees to be covered by the proposed enterprise agreement or agreements, Fair Work Australia has power to make scope orders to determine which classes or groups of employees are to be covered. The scheme of the Act does not envisage a role for a majority support determination in determining the scope of bargaining or the scope of an agreement.
. . .
[39] It should be noted, given the competing views of the parties as to the number and scope of agreements which should be made, that a majority support determination does not determine the scope of bargaining, any more than it determines the terms and conditions to apply. Once bargaining has commenced, s.238 is available to deal with disputes about the scope which impede bargaining. Unlike a majority support determination, a scope order can limit or extend the scope of bargaining, through a requirement to include or exclude a class of employees in bargaining for a proposed agreement or requiring bargaining collectively with different classes of employees in relation to separate agreements.”
[31] The final point made by Alcoa concerning the “fairly chosen” consideration was that the Commissioner erred in failing to find that the working conditions of PSO6 employees were incompatible with typical terms of an enterprise agreement. This submission is, with respect, misconceived. The making of a majority support determination does not pre-suppose that an enterprise agreement will be made containing particular terms. It does not pre-suppose that an enterprise agreement will be made at all. To attempt to predict what the outcome of enterprise bargaining might be if a majority support determination is made, and then to have regard to that in deciding whether such a determination would be made, would involve the Commission taking into account an entirely speculative and irrelevant consideration. We agree with the following statement made in this connection in Construction, Forestry, Mining and Energy Union v CBI Constructions Pty Ltd 25 in response to a submission that a majority support determination should not be made where an employee’s existing terms and conditions of employment were “competitive and current”:
“[17] CBI argues that the 2007 Agreement will continue to apply and that the ITEA's covering employees had sought to be terminated. If the ITEA's were terminated then the terms and conditions of those employees would be covered by the 2007 Agreement, supplemented by a set of conditions known as the Pluto Project Conditions. These terms and conditions, CBI argues, are current and competitive. The assertion seems to be that as the actual terms and conditions are current and competitive then that is not reasonable in all the circumstances for me to make the MSD. This to me seems to misunderstand the nature of bargaining and the role of FWA in MSD applications. It is not for FWA to make any judgments at all about the appropriateness or otherwise of the terms and conditions applying or of any sought, particularly at this juncture. FWA's role is limited to ascertaining whether a majority wanted to bargain for an enterprise agreement that would cover them.”
(Emphasis added.)
[32] On any reading of the Decision, the Commissioner took into account that Alcoa had organised its workforce so that PSO5s and PSO6s were employed on individual contracts and that Alcoa wanted things to remain that way. However that the Commissioner did not accord this consideration the decisive weight which Alcoa submitted he should does not amount to appealable error. It is not sufficient to demonstrate appealable error to contend that the first instance decision-maker failed to give a particular matter “sufficient weight” or failed to have “proper regard” to it unless this amounted in substance to a failure to exercise the discretion conferred on the court or tribunal. 26
Whether reasonable in all the circumstances to make the determination
[33] Insofar as Alcoa raises the same contentions of error in the exercise of the discretion as to whether, under s.237(2)(d), it was reasonable in all the circumstances to make the determination as it did in relation to the “fairly chosen” criterion in s.237(2)(c), we reject those contentions for the same reasons as already stated.
[34] We also reject the further submission that the Commissioner failed to give weight to the benefits of the individual contracts to which PSO5 and PSO6 employees were party and to the historical position whereby they had not previously been involved in collective bargaining in Alcoa’s enterprise. The Commissioner took these matters into account, weighed them against the other relevant considerations, in particular the unanimous support of the employees in the group for enterprise bargaining to occur, and came to an overall conclusion that it was reasonable in all the circumstances to make the Determination. No error in the exercise of the discretion is discernible.
Inclusion of PSO4 employees
[35] Alcoa’s submission that the Commissioner fell into jurisdictional error by including PSO4 employees in the Determination is founded on the proposition stated in its submissions that “The employees who form part of the group that must be ‘fairly chosen’ pursuant to s.237(2)(c) are the same employees of whom a majority must be formed in s.237(2)(a)”. That proposition states an incorrect construction of s.237. Section 237(2)(a) requires the Commission, as a prerequisite to the making of a majority support determination, to be satisfied that the majority of the employees “who are employed by the employer or employers at a time determined by the FWC” and “who will be covered by the agreement” want to bargain. That provision, in its dual characterisation of the class of employees the majority of which must want to bargain, clearly contemplates that the group of employees actually employed at the relevant time may not be co-extensive with the group of employees who will be covered by the agreement if made. By contrast, the “fairly chosen” requirement in s.237(2)(c) operates by reference only to “the group of employees who will be covered by the agreement”. It is clear therefore that the majority support requirement must be satisfied by reference to that portion of the group of employees who will be covered by the proposed agreement who are presently employed at the time determined by the Commission, whereas the fairly chosen requirement must be satisfied in relation to the entire group who will be covered by the proposed agreement.
[36] Our conclusion in this respect is supported, albeit indirectly, in Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd. 27 In that matter, one issue considered by the Full Court was whether, in relation to the requirement for approval of enterprise agreements in s.186(3) that the Commission be satisfied “that the group of employees covered by the agreement was fairly chosen”, the group of employees referred to was “the whole class of employees to whom the agreement might in the future apply, rather than the group of employees which actually voted on whether to make the agreement”.28 The Court stated the former construction was the correct one. In dealing with this issue, Buchanan J (with whom Besanko29 and Barker30 JJ relevantly agreed) referred to s.237, among other provisions, as supporting the proposition that the FW Act draws a distinction between those presently employed who may bargain for and vote to approve an enterprise agreement and the “wider group” who will ultimately be covered by the agreement once it takes effect. Buchanan J said:
“[38] Secondly, there are other indications in the FW Act that a distinction must be made between the group of present employees who will be covered by an agreement and the wider group who will be covered if the agreement is made. Indications of that sort may be seen in the procedures to assist “good faith bargaining”, whereby a bargaining representative (which may be a union – s 176(1)(b)) may apply to the FWC for a “majority support determination” or a “scope order”. In either case, the FWC must address the question (similarly to s 186(3) and (3A)) whether “the group of employees who will be covered by the agreement was fairly chosen” and whether the group is geographically, operationally or organisationally distinct (s 237(2)(c), (3A); s 238(4A)). In context, it appears clear that this is a wider group (corresponding to potential coverage) than the group of present employees who wish to bargain or whose immediate interests are those being represented.”
[37] In the Decision the Commissioner assessed the majority support requirement by reference to those of the group who would be covered by the proposed agreement (that is, PSO4s, PSO5s and PSO6s) who were currently employed by Alcoa. In doing so, he correctly recognised that there were no PSO4s currently employed. In relation to the fairly chosen requirement, he took the entire group who would be covered by the Agreement into account. That was an approach which conformed to the requirements of s.237 as we have construed them.
[38] The Determination was expressed in the following way (excluding formal parts and the date of effect):
“[1] Further to the decision in Construction, Forestry, Mining and Energy Union v Alcoa of Australia Limited [2014] FWC 7123, and pursuant to ss 236 and 237 of the Fair Work Act 2009 (the Act), the Fair Work Commission determines as follows:
A majority of the employees employed by Alcoa of Australia Limited at the Anglesea power station in the classifications of Power Station Operator 6, Power Station Operator 5 and Power Station Operator 4, who will be covered by the proposed enterprise agreement, want to bargain for a proposed enterprise agreement with Alcoa of Australia Limited.”
[39] There is no error in the way the Determination is expressed which makes it beyond power. The sentence in the indented paragraph correctly identifies that “A majority of the employees employed by Alcoa” - that is a majority of those currently employed - who are “in the classifications of Power Station Operator 6, Power Station Operator 5 and Power Station Operator 4, who will be covered by the proposed enterprise agreement” - that is, who fall within the class of persons who will be covered by the proposed agreement - want to bargain. Accordingly this third ground of appeal is also rejected.
[40] Alcoa made the additional submission that the inclusion of PSO4 employees in the Commissioner’s consideration of the “fairly chosen” requirement constituted an error in the exercise of his discretion. However this submission was founded on the same misconstruction of s.237 and therefore may be rejected.
Conclusion
[41] We are not satisfied, for the reasons stated, that Alcoa has demonstrated any appealable error in the Decision. Nor do we consider that the appeal raises any issues of general controversy concerning the interpretation or application of ss.236 and 237.
[42] Under s.604(1), an appeal lies to the Full Bench only with permission. In relation to such permission, s.604(2) provides: “Without limiting when the FWC may grant permission, the FWC must grant permission if the FWC is satisfied that it is in the public interest to do so.” The effect of this provision is that permission must be granted if it is in the public interest to do so, but may otherwise be granted on discretionary grounds. We are not satisfied that it is in the public interest that permission to appeal be granted or that there are discretionary grounds justifying the grant of permission.
[43] Accordingly permission to appeal is refused.
VICE PRESIDENT
Appearances:
R. Sweet of counsel with E. Mentiplay solicitor, for Alcoa of Australia Limited.
Y. Bakri of counsel with A. Thomas for the Construction, Forestry, Mining and Energy Union.
Hearing details:
2015.
Melbourne:
12 March.
3 Alcoa’s Outline of Submissions [3]
4 Decision at [10]
5 (2012) 219 IR 139
6 Decision at [15]
7 Decision at [46]-[49]
8 Decision at [48]
9 [2010] FWAFB 3009, 193 IR 293
10 Ibid
12 [2010] FWA 2164 at [17]
13 (1936) 55 CLR 499 at 504-505
14 See Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194 at [19] per Gleeson CJ and Gaudron and Hayne JJ
15 [2015] FCAFC 16
16 Ibid at [60], [62]
19 Ibid at [44]
20 [2010] FWAFB 3009, 193 IR 293
21 Decision at [36]-[37]
22 Decision at [38]
23 [2010] FWAFB 3009, 193 IR 293 at [70]
24 [2009] FWAFB 668, 191 IR 124
25 [2010] FWA 2164; affirmed on appeal in [2011] FWAFB 7642.
26 Restaurant and Catering Association of Victoria [2014] FWCFB 1996 at [57]
27 [2015] FCAFC 16
28 Ibid at [2] per Besanko J
29 Ibid at [1]
30 Ibid at [87]
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