Hatcher VP, Gostencnik DP and Williams C
ENTERPRISE AGREEMENTS – approval – ss.185, 604 Fair Work Act 2009 – appeal – Full Bench – appellant applied for permission to appeal and appealed three decisions approving enterprise agreements made by three different employers and their employees – the decisions, and the enterprise agreements to which they relate, are: a decision issued on 8 August 2016 (MMAOL Decision), where Cloghan C approved the MMAOL P/L Enterprise Agreement 2016 (MMAOL Agreement); a decision issued on 1 August 2016 (DOF Decision), where Binet DP approved the DOF Management Australia P/L Maritime Offshore Oil and Gas Industry Enterprise Agreement 2016 (DOF Agreement); and a decision issued on 2 August 2016 (Smit Lamnalco Decision), where Roe C approved the Smit Lamnalco Australia Maritime Offshore Oil and Gas Industry Enterprise Agreement 2016 (Smit Lamnalco Agreement) – appellant applied for the appeals to be heard together on the basis that they involved common factual and legal issues – this was resisted by the respondents (MMA Offshore Logistics P/L (MMAOL), DOF Management Australia P/L (DOF) and Smit Lamnalco Australia P/L (Smit Lamnalco)) – appeals heard sequentially – at the outset of hearing of first appeal, a member of the Full Bench raised with the parties an issue potentially affecting whether the DOF Agreement and the Smit Lamnalco Agreement were capable of approval under FW Act – issue had not been raised by appellant – issue was whether in each case a Notice of Employee Representational Rights (NERR) had been provided to employees who would be covered by the relevant agreement in accordance with requirement contained in s.174(1A) of FW Act – appellant sought leave to amend its notices of appeal with respect to the DOF Decision and the Smit Lamnalco Decision – alleged defect in NERR in each case was that it had not complied with prescribed form in Schedule 2.1 of Fair Work Regulations 2009 (FW Regulations), in that the form required telephone number of the Fair Work Commission Infoline (1300 799 675) be inserted but that the NERR in each case inserted a different telephone number, being that of the Fair Work Ombudsman (13 13 94) – Full Bench received written submissions from the parties concerning whether appellant should be granted leave to amend its notices of appeals – after the Full Bench had received those submissions, a Full Court of the Federal Court delivered its decision in Aldi – Aldi was concerned in part with the effect of s.174(1A) and consequence of failure to issue an NERR in accordance with the prescribed form – parties requested and were provided with an opportunity to file further written submissions in light of this decision – NERR prescribed by Schedule 2.1 does not actually set out the telephone number of the Fair Work Commission Infoline, but requires that number to be inserted – convenient to note that Commission's website has at all relevant times contained a guide to completing and issuing the NERR, which identifies Fair Work Commission Infoline as being 1300 799 675 and contains a sample NERR which includes that telephone number – the matters agitated by appellant in the appeals may be placed in three categories – (1) a contention common to all three appeals, namely that that all three agreements had been made as a part of scheme amongst several industry employers to avoid bargaining with MUA and to thereby establish new industry standard of lesser employment conditions than that which currently exists (this issue was raised in grounds 3 and 4 of the MMAOL Agreement notice of appeal, grounds 2 and 3 of the DOF Agreement notice of appeal, and grounds 3 and 4 of the Smit Lamnalco Agreement notice of appeal) – (2) matters specific to each appeal identified in the other grounds of the notices of appeal as they were at the time of the hearing (grounds 1-2 and 5-6 of the MMAOL Agreement notice of appeal, ground 1 of the DOF Agreement notice of appeal, and grounds 1-2 and 5-6 of the Smit Lamnalco Agreement notice of appeal) – (3) the NERR issue in relation to the DOF Agreement and the Smit Lamnalco Agreement – 'confidence in the agreement approval process' may be a significant matter weighing in favour of permission to appeal in respect of an appeal against a decision to approve an enterprise agreement, and that this may outweigh the fact that arguments proposed to be advanced in the appeal were not agitated at first instance [Hart] – in respect of the 'common issue' under appeal (grounds 3 and 4 of the MMAOL Agreement notice of appeal, grounds 2 and 3 of the DOF Agreement notice of appeal, and grounds 3 and 4 of the Smit Lamnalco Agreement notice of appeal) the Full Bench considered that permission to appeal should be granted – further, the Full Bench admitted new evidence which appellant sought to adduce in support of these grounds of appeal – Full Bench also considered that permission to appeal should be granted in respect of grounds 1 and 2 of the MMAOL Agreement Decision appeal, ground 1 of the DOF Agreement Decision appeal and grounds 1 and 2 of the Smit Lamnalco Agreement Decision appeal – permission to appeal was refused in relation to grounds 5 and 6 of the MMAOL Agreement Decision appeal and grounds 5 and 6 of the Smit Lamnalco Agreement Decision appeal – in relation to the additional ground concerning the NERR issue sought to be raised in the DOF Agreement Decision appeal and the Smit Lamnalco Agreement Decision appeal, the Full Bench granted the appellant leave to amend its notice of appeal to add the additional ground in each case, and granted permission to appeal in respect of that ground – the common issue – necessary to make three significant observations about the statutory scheme for enterprise bargaining in FW Act – first was that there was nothing in the approval requirements for enterprise agreements in ss.186 and 187 of the FW Act which expressly prohibited the approval of enterprise agreements which had been established within a broader framework of industry bargaining or which reflected a standard established in an industry – second was that, subject to satisfaction of the BOOT requirement, the statutory scheme did not prohibit an employer from bargaining for wages and other conditions of employment which were inferior to those contained in an earlier enterprise agreement and/or those prevailing in an industry – third was that where an employee is not a member of an employee organisation, it is up to the employee to select who will represent him or her as a bargaining representative for a proposed enterprise agreement – appellant's contention was that the three agreements came about as a result of a scheme between employers orchestrated by Australian Mines and Metals Association (AMMA) to obtain template enterprise agreements in maritime offshore oil and gas industry which undercut industry standard terms and conditions of employment established in the 2010 industry bargaining round, and to achieve this result by avoiding bargaining with the appellant – none of the employees covered by the agreements were at any relevant time members of appellant, so appellant could not have been their default bargaining representative at any time – the employees nominated persons other than appellant to be their bargaining representatives, and accordingly there was no basis for appellant to be involved in the bargaining process – grounds 3 and 4 of the MMAOL Agreement notice of appeal, grounds 2 and 3 of the DOF Agreement notice of appeal and grounds 3 and 4 of the Smit Lamnalco Agreement notice of appeal were rejected – other MMAOL Agreement appeal grounds – first appeal ground in relation to MMAOL Decision concerned the 'genuinely agreed' approval requirement – at first instance the Commissioner did not analyse the 'genuinely agreed' requirement in any detail, but only recorded his satisfaction that the requirement had been satisfied – new evidence which was adduced did not provide a proper basis for concluding that the MMAOL Agreement was not genuinely agreed – Full Bench considered the Commissioner was entitled to reach a state of satisfaction concerning the 'genuinely agreed' requirement based on the material before him – second appeal ground concerned the 'fairly chosen' requirement – appellant submitted the Commissioner erred by applying the test by reference to the employees who voted on the agreement, and not in relation to the group of employees covered by it – Full Bench found that in MMAOL Decision, the Commissioner made it clear that he understood that the requirement was to be assessed by reference to the coverage of the agreement under consideration – rejected the contention that the Commissioner failed to apply the proper test – Full Bench found no appealable error in the Commissioner's findings concerning business rationale for choice of coverage of the MMAOL Agreement – other DOF Agreement appeal grounds – ground 1 of the appellant's notice of appeal against the DOF Decision is in the same terms as ground 1 of the MMAOL Decision appeal – appeal ground raised issues concerning the 'genuinely agreed' approval requirement – Full Bench considered the material that was before the Deputy President was sufficient to enable her to reach a state of satisfaction concerning the 'genuinely agreed' requirement – appeal ground rejected – other Smit Lamnalco appeal grounds – ground 1 of Smit Lamnalco Decision appeal also concerned the 'genuinely agreed' approval requirement – Full Bench considered the Commissioner took into account the various factual considerations weighing for and against the conclusion that the agreement of the employees was genuine – appeal ground rejected – other appeal grounds also rejected – the NERR issue – no capacity to depart from the template in FW Regulations [Peabody] – consequence of failing to give a valid NERR is that the Commission cannot approve any subsequent enterprise agreement that is made [Peabody] – in Aldi, the Federal Court Full Court considered a challenge to the validity of the approval by the Commission of a particular enterprise agreement on a number of grounds including that the NERR issued by the employer did not conform to the form of the NERR in Schedule 2.1 – no member of the Full Court expressed the view that Peabody was incorrect – in light of Aldi, the Full Bench considered that the proper course was to follow Peabody and approach the NERR issue on the basis that a purported NERR which did not strictly comply with the prescribed form in Schedule 2.1 was invalid, and that an enterprise agreement which proceeded on the basis of an invalid NERR was incapable of approval – KCL considered – even if requirement for strict compliance still allowed some capacity for errors of an entirely trivial nature to be overlooked (the possibility of which was adverted to by Jessup J in Aldi at  and by the Full Bench in KCL at ), the Full Bench did not consider that the defect in the NERRs could be characterised as trivial – Full Bench concluded that the DOF Agreement and the Smit Lamnalco Agreement could not have validly been approved because the NERRs which the employer issued in each case were invalid – accordingly the DOF Decision and the Smit Lamnalco Decision must be quashed, and the applications for approval of the DOF Agreement and the Smit Lamnalco Agreement must be dismissed.
Fair Work Division of the Federal Court of Australia
Application [WAD38/2017] filed 9 February 2017 seeking relief under s.39B Judiciary Act 1903.
On 17 February 2017 Justice McKerracher granted DOF Management a stay of the Full Bench's decision of 1 February 2017, pending the hearing and determination by the Federal Court of the substantive proceeding.
This matter is listed for hearing before a Full Court of the Federal Court on 22 August 2017.