FWAFB 7161
Fair Work Act 2009
s.604 —Appeal of decisions
Australian Municipal, Administrative, Clerical and Services Union
City of Fremantle
JUSTICE GIUDICE, PRESIDENT
MELBOURNE, 22 NOVEMBER 2011
 This is an appeal, for which permission is required, by the Australian Municipal, Administrative, Clerical and Services Union (ASU) against a decision issued by Commissioner Cloghan on 20 June 2011 approving the City of Fremantle Workplace Agreement 2010-2014 (the agreement). 1 The City of Fremantle, which is the relevant employer and made the application for approval of the agreement, is the respondent in these proceedings. The appeal concerns the application of the better off overall test (BOOT) in s.193 of the Fair Work Act 2009 (the Act).
The coverage issue
 The agreement contains salaries and related conditions for two groups of classifications. The first group is set out in Schedule A2 to the agreement. The second group of classifications is in Schedule B1 to the agreement. The classifications in Schedule A2 are covered by the City of Fremantle Officers’ Award 2002 (the enterprise award). 2 The award coverage of the classifications in Schedule B1 is contentious. According to the respondent however, this group is covered by the Local Government Industry Award 2010 (the industry award).3 According to the ASU, some or all of the classifications in this group are covered by the enterprise award. The principle matter at issue before the Commissioner and on appeal is, therefore, whether the classifications in Schedule B1 are covered by the industry award, as the terms of the agreement suggest, or by the enterprise award.
 The resolution of this issue is very important in the application of the BOOT. The wages and conditions in the enterprise award are more beneficial than those in the industry award. It seems to be common ground that if employees in classifications in Schedule B1 are covered by the enterprise award the agreement would fail the BOOT in relation to those employees. At the least, there would be a significant issue in relation to the BOOT. The ASU also submitted that even if Schedule B1 employees are covered by the industry award, as the Commissioner found, the agreement would still fail the BOOT in relation to those employees.
 The ASU did submit to the Commissioner that the employees in the classifications in Schedule B1 of the agreement are covered by the enterprise award although, as will be seen, the argument was put quite briefly and without much elaboration. The respondent submitted that the employees had been employed on common law contracts until 1 January 2010, when the industry award commenced to operate. It is common ground that the industry award applies on a broad basis to employees of local governing authorities. It does not apply, however, to employers and employees covered by an enterprise instrument. The enterprise award is an enterprise instrument.
 The Commissioner found that employees in the classifications in Schedule B1 were not covered by the enterprise award but had been employed on common law contracts until the industry award commenced on 1 January 2010, and are now covered by the classification structure in that award. The Commissioner’s main conclusions appear in the following paragraphs:
“ Ms Caranna, with 25 years service in the City of Fremantle’s Human Resources department, gave unequivocal evidence that the employees in Schedule B1 have been exempt from past agreements applicable to the Employer. Until the introduction of the Modern Local Government Industry Award 2010, the employees were considered “non award or minimum conditions.” The ASU did not contradict this evidence of the City of Fremantle but indicated that it, “is not in a position at this time to repudiate [the Employer’s evidence]”.
 To assist the ASU to repudiate the evidence of the City of Fremantle that the employees in Schedule B1 had been award/agreement free for over 20 years, and subject to minimum conditions of employment since 1993, I invited the Union to make a submission to the Tribunal by 4pm on the day following the hearing. The Union did not make a submission but provided a statement essentially emphasising its primary position.
 I am satisfied, on the evidence before the Tribunal, that the employees engaged in the occupations set out in Schedule B1 to the Agreement have, until the introduction of the Modern Local Government Industry Award 2010, been employed on common law contracts. Accordingly, the appropriate award for the purposes of the BOOT is the Modern Local Government Industry Award 2010. Having applied the comparator instrument, I am satisfied that the employees in Schedule B1 are better off overall than if they were employed under the Modern Local Government Industry Award 2010.” 4
The denial of natural justice issue
 The ASU also submitted that it was denied the opportunity to put its full case. That submission is based on the following events. When the respondent indicated to the Commissioner that it wished to call Ms Caranna to give evidence about the award coverage issue, the ASU advocate, Ms Butler, objected. Her objection was that the ASU negotiating committee members, who are employees of the respondent, had intended to take paid leave to attend the proceedings but had been told by the respondent that should they apply for leave, it would be refused. Ms Butler submitted that in the circumstances the ASU would be unable to call any witness to rebut evidence given by the respondent’s witness. The Commissioner ruled that he would hear Ms Caranna’s evidence and then give the ASU an opportunity to put to him why it should be permitted to call evidence in rebuttal.
 Ms Butler’s cross examination of Ms Caranna was limited. She suggested to Ms Caranna that one of the classifications in Schedule B1, the CCTV team leader, was a supervisory position covered by a generic classification in the enterprise award. That proposition was rejected by Ms Caranna. Ms Butler also suggested to Ms Caranna that the classification descriptions in the enterprise award did not convey much information and had to be read in conjunction with position descriptions. Ms Caranna appeared to accept this.
 While Ms Caranna was still in the witness box Ms Butler submitted that without being able to consult with the ASU negotiating committee, who had been prevented by the respondent from attending, she was not in a position to challenge Ms Caranna’s evidence. At this stage the Commissioner referred to the possibility of Mr Burlinson giving evidence. Mr Burlinson is apparently an ASU official of many years experience in relation to award coverage of local government in Western Australia. In response to this suggestion Ms Butler indicated she was unaware of Mr Burlinson’s availability.
 The question of further evidence from the ASU arose again at the end of the submissions, although not as a direct result of anything done by the ASU. The Commissioner referred to the fact that the ASU had not called any evidence and told Ms Butler that in his view the person best placed to give evidence on behalf of the ASU was Mr Burlinson. The Commissioner went on to indicate that if the ASU wanted to do so it could file a statement from Mr Burlinson the next day contesting the evidence that had been given by Ms Caranna. Although the ASU did file a further submission, it was not accompanied by any relevant witness statement.
 We deal first with the coverage issue. The evidence and material before the Commissioner included various extracts from the enterprise award and it is to be assumed that the Commissioner had access to a full copy of that award. (It is clear that the ASU did not take the Commissioner to all of the relevant provisions of the enterprise award.) It was submitted to us on appeal that there are a number of indications in the enterprise award that some of the classifications in Schedule B1 of the agreement were covered by the enterprise award. We turn now to an examination of the parts of the enterprise award which the ASU relies on.
 Clause 4 of the enterprise award is:
“ 4. - PARTIES BOUND
This award is binding on the City of Freemantle, the Australian Municipal, Administrative, Clerical and Services Union and its members and, the Association of Professional Engineers, Scientists and Managers, Australia and its members; in respect of employees whose positions are defined in Schedule B - Salary and classification structure - bands of this award, whether members of the union(s) or not. Provided that where agreed in writing between the City and the employee, this award shall not apply to the Chief Executive Officer.”
 By operation of this clause the award is made binding on the respondent in respect of “employees whose positions are defined in Schedule B.” Schedule B to the enterprise award defines these position streams: corporate/administrative services, community/environmental services and technical/supervisor services. Within each stream there are a number of bands Officer band 1A, the lowest band, is common to all streams. Then there are band definitions for a further 6 bands in each of the three streams. In addition there is a management services stream, with three bands, and a director stream, also with three bands. Although some of the band definitions refer to trade, diploma or degree qualifications, the definitions are for the most part drafted in a generic way and describe skills, perhaps in order to avoid a multiplicity of definitions for specific jobs.
 The ASU submitted that the classifications outlined in Schedule B1 to the agreement cover employees in three groups. Those groups are the employees in the city’s leisure and recreation centre, the employees in the city’s art gallery and the CCTV operators who monitor video feed from cameras located throughout the city. It further submitted that a large number of employees in these classifications would be covered by the community/environmental services stream in Schedule B to the enterprise award. Clause 1.1.2 of Schedule B defines that stream. It reads:
“1.1.2 Community /environmental services stream
Positions in this stream will be principally responsible for providing client service, environmental monitoring and/or regulatory services to the community. These positions are characterised by providing services which predominately involve direct interaction with the community or client groups.”
 The ASU submitted that all of the classifications in Schedule B1 to the agreement, except the cleaners and the CCTV operators, are within this definition. It was submitted that the cleaners and the CCTV operators might well come within one of the other two streams. It relied upon the corporate/administrative services stream in particular.
 On this basis the ASU submitted that it was up to the respondent to establish that none of the classifications in Schedule B1 to the agreement are included in Schedule B to the enterprise award. It was submitted that, instead, the respondent had argued that the employees had always been treated as award-free – a different matter.
 The ASU also relied upon the terms of Schedule A to the enterprise award. That schedule is entitled “Salary and Classification Structure”. It contains a list of positions set out in streams and bands within each stream. The ASU submitted that the listed positions were representative only: i.e they include only some of the total number of positions covered by the enterprise award. The ASU also submitted that the nature of some of the indicative positions listed in Schedule A suggest that a number of the classifications listed in Schedule B1 to the agreement were also covered by the enterprise award.
 It appears that the Commissioner was greatly influenced by the fact that the ASU had in the past accepted that Schedule B1 employees were not covered by the enterprise award. The following passage illustrates that view:
“ However, I consider it appropriate to respond to the ASU’s assertions in support of its view that some, if not all, of the employees in Schedule B1 of the Agreement are covered by the [enterprise award].
 Firstly, it was uncontested evidence that the ASU have not attempted, in the past 20 years, to establish, as a matter of law, that the employees in Schedule B1 of the Agreement, are covered by an award or agreement which covered the employees in Schedule A1.
 I accept, to use Ms Butler’s words, “...it’s a dangerous assumption to just assume that silence means consent”. However, it is a reasonable inference for the Employer to conclude that the ASU has agreed with the industrial status, or coverage, of the employees during the past 20 years. In saying this, the past approach does not preclude the Union from challenging the status of these employees at any particular time in the future.
 Secondly, the contention that a great majority of those employees in Schedule B1 are “un-unionised and disorganised” is acknowledged. However, this does not excuse the lack of positive action to address, what the ASU asserts, has been their wrongful employment under common law contracts.” 5
 It is important to point out that the coverage of the enterprise award is primarily a question of law. The question can only be answered by examining the terms of the enterprise award to ascertain whether, on their proper interpretation, they extend to some or all of the Schedule B1 classifications. Whether the parties had treated the employees as covered by the enterprise award or not is beside the point and the conduct of the ASU, upon which the Commissioner appears to have relied, is of limited if any relevance.
 In our view the Commissioner made an error in treating the conduct of the parties, the ASU and the respondent, as determining the question of coverage. The correct approach involves examining the relevant terms of the enterprise award to ascertain whether it covers any of the classifications listed in Schedule B1 to the agreement. This does not appear to have been done.
 As often happens, the submissions on appeal were far more comprehensive than those made to the Commissioner. We are satisfied, however, that the ASU did raise the issue of coverage in the correct way. We are also satisfied on the material and submissions advanced by the ASU on the appeal, that the coverage question requires further examination. There are indications in that material that at least some of the classifications in Schedule B1 to the agreement are covered by the terms of the enterprise award.
 We deal now with the denial of natural justice issue. As we indicated earlier, the ASU submitted that it had not been permitted to put its case. This submission had two parts. The first was that the ASU had been prevented from calling any workplace representatives because the respondent had indicated that it would refuse them leave to be absent from work. The second was that the Commissioner should not have nominated Mr Burlinson as the appropriate person to give evidence on behalf of the union.
 We have decided to refer the question of coverage to a member of this bench to consider. We grant permission to appeal to that extent. We do not consider that it would be appropriate to grant permission to appeal in relation to any other aspect of the appeal. In relation to the second main issue in the appeal, the allegation of a denial of natural justice, the procedure we have decided on makes it unnecessary to consider that ground further. The ASU will have the opportunity to put its case.
 Another matter requires comment. In addition to the coverage issue and the natural justice issue, the ASU raised another question about the operation of the BOOT as we noted earlier. It argued that even if the Schedule B1 employees are covered by the industry award rather than the enterprise award, on a proper application of the BOOT they would not be better off overall under the agreement, principally because of the operation of the hours of work provisions in the agreement and the absence of penalty rates. This submission appears not to have been put to the Commissioner. We do not think it appropriate that we should grant permission to appeal in relation to that aspect. The ASU had an adequate opportunity to deal with it in the proceedings before the Commissioner. It appears not to have done so. The Commissioner’s decision was open to him on the material and submissions advanced by the respondent.
 We grant permission to appeal in relation to the coverage issue. Should it be found that some or all of the classifications in Schedule B1 to the agreement are covered by the enterprise award it will be necessary to apply the BOOT on that basis. We refer the application to Senior Deputy President Drake to investigate and report to us on the following matters:
(a) whether the classifications in Schedule B1 to the agreement, or any of them, are covered by the enterprise award and, if so,
(b) whether and if so what action is appropriate under ss.607(2) and (3) or s.190.
K Harvey and D Butler for the Australian Municipal, Administrative, Clerical and Services Union
S Bibby for City of Fremantle.
1  FWA 3519, AE886296.
4  FWA 3519.
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