[2012] FWA 10497 |
|
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Dyno Nobel Asia Pacific Pty Ltd
(AG2012/7471)
COMMISSIONER BOOTH |
BRISBANE, 13 DECEMBER 2012 |
Application for approval of Dyno Nobel Central & South Queensland Operations Enterprise Agreement 2012 - unlawful terms and coverage.
[1] Dyno Nobel Asia Pacific Pty Ltd (Dyno) applied on 2 August 2012 for approval of the Dyno Nobel Central & South Queensland Operations Enterprise Agreement 2012 (the Agreement) pursuant to s.186 of the Fair Work Act 2009 (the Act).
[2] On or about 21 August 2012, the Construction, Forestry, Mining & Energy Union – Mining and Energy Division Queensland District Branch (CFMEU) sought to be covered by the agreement. On 5 October 2012, the CFMEU objected formally to clauses 24.1, 24.2 and 24.6 of the agreement (the statutory health assessment clauses) asserting those clauses were unlawful terms pursuant to ss.186(4) and 194(b) of the Act because of certain Queensland laws about occupational health and safety.
[3] Fair Work Australia (the Tribunal) must approve an enterprise agreement if the requirements of ss.186 and 187 are met. One of the key requirements is set out by ss.186(4) which provides as follows:
“(4) FWA must be satisfied that the agreement does not include any unlawful terms (see Subdivision D of this Division).”
“Unlawful terms’ by s.194(b) include “objectionable terms”, defined in the Dictionary in s.12 as follows:
“objectionable term means a term that:
(a) requires, has the effect of requiring, or purports to require or have the effect of requiring; or
(b) permits, has the effect of permitting, or purports to permit or have the effect of permitting;
either of the following:
(c) a contravention of Part 3-1 (which deals with general protections);
(d) the payment of a bargaining services fee.”
[4] The somewhat circuitous pathway to finding an agreement might contain an unlawful term (including an objectionable term) was discussed by a Full Bench in The Australian Industry Group v ADJ Contracting Pty Ltd (ADJ) 1 and the Full Court of the Federal Court in Australian Industry Group v Fair Work Australia (AIG).2
[5] The ADJ and AIG decisions confirm that a term of an agreement would be unlawful if it required a party to contravene the general protections provisions in Pt.3-1 of the Act. The contravention might include a regulatory provision in state law that is not otherwise excluded from the operation of the Act. 3 In brief, the pathway is that s.186(4) prohibits unlawful terms in enterprise agreements. By s.194, unlawful terms include objectionable terms as defined in s.12. A person is protected from the “adverse action” of another person pursuant to s.341. Adverse action is prohibited in regard to “workplace rights”, defined in s.341 to include (among other things) the person being:
(a) “entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body”: s.341(1)(a) or
(b) “able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument”: s.341(1)(b).
[6] Section 341(2) defines “process or proceedings under a workplace law or workplace instrument”:-
“Workplace law” is defined in s.12 to include “any other law of the Commonwealth, a State or a Territory that regulates the relationships between employers and employees (including by dealing with occupational health and safety matters).
“Adverse action” is defined by reference to the table in s.342, for example in Item 1 if an employer alters the position of an employee to the employee’s prejudice.
[7] In this case, the assertion of the CFMEU is that the statutory health assessment clauses require Dyno’s employees (among other things) to pay for services that the company must pay for under Queensland mining health and safety laws (set out below), and further, that the clauses put Dyno in breach of those Queensland laws.
[8] There are a number of issues presented to the Tribunal for consideration in regard to the agreement:
1. Coverage
[9] Dyno originally argued that the CFMEU had no entitlement to represent workers to be covered by the agreement. The company submitted that the CFMEU could not be a bargaining representative as it was not entitled to represent the employees. The work, the company submitted, was shot firing and blasting covered by the Federal Explosives, Manufacturing and Distribution (AWU) Award 2000 (the Explosives Award).
[10] In support of its claim that the CFMEU has no entitlement to coverage, Dyno cited Construction, Forestry, Mining & Energy Union v Dyno Nobel Asia Pacific Pty Ltd and Transport Workers' Union of Australia v Queensland Properties Investment Pty Limited. 4 Dyno also asserted:
“that no official of the CFMEU was a recognised bargaining representative during negotiations over the proposed agreement, as the CFMEU Rules do not provide for it to represent employees performing the work that will be covered by the agreement.” 5
[11] Dyno abandoned this line of argument in later submissions, while still not conceding coverage. Dyno’s solicitors wrote on 3 October 2012 saying:
“… our client neither consents to nor opposes the orders sought by the CFMEU. Given that the CFMEU’s request will have no practical effect on the approval and operation of the EA, we leave it to the Commissioner to determine whether the CFMEU is covered by the EA.”
[12] The CFMEU thereafter proceeded on the basis that coverage was not in issue, although it clearly remains to be determined.
[13] The 2005 decision cited by Dyno related to operations in New South Wales under, it seems, a range of awards including a New South Wales award. The decision was made under the now-repealed Workplace Relations Act 1996. Apart from citing the 2005 case, Dyno also asserted that CFMEU is not a bargaining representative.
[14] The CFMEU on the other hand submitted the following:
[15] Clause 20.1 cited above reads in full as follows: 10
20 Bargaining agent
20.1 Recognition
This Agreement has been negotiated with the employees’ appointed bargaining agent, the Construction, Forestry, Mining and Energy Union, Mining and Energy Division (‘Union’). The Company undertakes during the life of this Agreement to continue to recognize the Union as the bargaining agent for employees until such time as an authority to act as bargaining agent is withdrawn by any of the relevant employees.
[16] These submissions were not contested by Dyno.
[17] On the basis the material before me, including the earlier agreement specifying CFMEU as bargaining representative and no evidence of any material change in the work or rules since that agreement, the numbers of members and the attendance of Mr Brodsky at bargaining meetings, I find on the evidence before me, the CFMEU is entitled to be covered by the agreement.
2. Unlawful terms
[18] The ‘statutory health assessment’ clauses that the CFMEU submit are unlawful are:
24. Statutory health assessments, generic passports, drug testing and licences
Reimbursement
24.1 Where a new Employee is required to obtain a Generic Passport, Statutory Health Assessments, SGS Passport and Drug Test prior to commencing employment, the cost will be met by the Employer but reimbursed by the Company following six (6) months of employment with the Company.
24.2 Existing employees are responsible for renewing the licenses and authorisations required to perform their work, including a Generic and/or SGS Passport and Statutory Health Assessment examination, Dangerous Goods Licence and Shotfirer Licence (if applicable). The Company will pay the cost of the course and license fee only for each applicable license.
…
Statutory health assessment
24.6 An employee may choose to attend one of the two Company-nominated medical advisors for the Statutory Health Assessment Examinations.
[19] The CFMEU submits that the clauses are inconsistent with provisions of the Mining and Coal Mining Safety and Health Regulation 2001 (Qld) (the Queensland Regulation), in particular ss.44-53. The Queensland Regulation is a workplace law for the purposes of the definition is s.12 of the Act, and being a law about occupational health and safety matters is not excluded by s.26 because of the effect of s.27.
[20] It is common ground that an agreement inconsistent with obligations imposed by applicable laws might be an unlawful provision. 11
[21] Relevantly, the Queensland Regulation requires the employer to meet the cost of a health assessment or medical examination:
47 Employer’s responsibility for health assessment
(1) The employer must—
(a) arrange for the health assessment or medical examination mentioned in section 46; and
(b) ask the nominated medical adviser to give—
(i) a health assessment report to the employer; and
(ii) a copy and explanation of the report to the person to whom it relates; and
(c) ensure, before an explanation of the report from the nominated medical adviser is given to the employer, the person to whom the health assessment report relates agrees to the giving of the explanation and is present.
(2) The nominated medical adviser must comply with a request under subsection (1)(b).
(3) The employer must pay for the following—
(a) the health assessment or medical examination;
(b) a copy of a report about the medical examination.
Maximum penalty for subsection (3)—100 penalty units.
(4) Subsection (3) is not a safety and health obligation for the Act.
(5) Nothing in this division makes the employer responsible for the treatment of any physical or medical condition of the person.
[22] For completeness, the effect s.47(4) is that the penal sanctions in s.34 of the Coal Mining Safety and Health Act 1999 (Qld) (Queensland Act) do not apply. That is, breach of the regulation is subject only to the civil penalty stated in s.47(3) itself.
[23] Under the Queensland Regulation, a health assessment must be carried out before a prospective coal mine worker is employed as such. 12 A person cannot lawfully undertake coal mine work without first meeting the obligations so stated.
[24] Dyno submits that the Queensland Regulation is outside the requirements of the Act, citing Construction, Forestry, Mining and Energy Union v ResCo Training and Labour Pty Ltd (Resco). 13
[25] That case concerned an agreement challenged for inconsistency with New South Wales training regulations. The Full Bench held that those regulations were consistent with the Act and the relevant agreement, in part because the training obligations to trainees employed by ResCo sat alongside their employment obligations but were separate from them.
[26] Here, there is no side obligation. The requirement to undergo medical or health examination at the employer’s expense is self-contained in the Queensland Regulation, and is a prerequisite to lawfully engaging in coal mining work. The payment is addressed specifically in the agreement in different terms. The Resco appeal failed on the basis that the CFMEU’s argument misconstrued the agreement, the Act and the New South Wales training regulatory framework.
[27] In regard to covering the costs of the medical examination, Dyno argues that it effectively covers the costs by reimbursing outlays after 6 months of employment with the company. The CFMEU submits that the Queensland Regulation does not require “effective” covering of the costs: the regulation requires the employer to pay for the medical examination.
[28] Dyno also submitted that their employees are outside the meaning of coal mine worker in the Queensland Act, in part because their employees do not work only at coal mines. The CFMEU submitted that working only part-time as a coal mine worker does not remove the employee from the definition. Schedule 3 of the Queensland Act defines the term as follows:
coal mine worker means an individual who carries out work at a coal mine and includes the following individuals who carry out work at a coal mine—
(a) an employee of the coal mine operator;
(b) a contractor or employee of a contractor.
[29] I agree with the CFMEU’s submissions in regard to both the definition of coal mine worker and the issue of paying the costs of the medical examination.
[30] However, I find that the CFMEU has misconstrued one of the agreement provisions, but not so the other two.
[31] Clause 24.6 permits an employee to use the services of the company’s nominated medical examiners but does not require that examiner to be used as the CFMEU suggests. If it did, it may be an unlawful provision, but that is not the case on the proper construction of the clause.
[32] Clause 24.2 is uncertain as to whether the costs related to the all elements of the clause are to be covered by Dyno or only the “course and licence fees”. If it does not cover the broader range of outlays, it may be inconsistent with the Queensland Regulation to the extent the various examinations and documents are obligations that fall within the regulation. An appropriate undertaking by the company would remedy the construction difficulties.
[33] Clause 24.1 is, in my view, clearly inconsistent with the Queensland Regulation because a new employee must pay the costs and may not be reimbursed: the employment relationship may cease before the expiration of 6 months for any number of reasons, including dismissal for cause, resignation or even death. While the inconsistency is clear, an appropriate undertaking would allow the Tribunal to be satisfied for the purposes of approving the agreement.
3. Better off overall test
[34] Dyno contends that the Explosives Award is the appropriate reference instrument for the BOOT. Dyno and The Australian Workers Union are the only parties to the Explosives Award. The CFMEU contends for the Black Coal Industry Award 2010.
[35] In order for the agreement to be approved, the Tribunal must be satisfied that the agreement passes the better off overall test: s.186(2)(d). The BOOT is explained in s.193:
193 Passing the better off overall test
When a non-greenfields agreement passes the better off overall test
(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if FWA is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.
[36] It is common ground, or at least uncontested, that the agreement passes the BOOT regardless which award is the appropriate reference instrument. I have considered both awards, and I am satisfied in terms of ss.186(2)(d) and 193(1) that the agreement passes the BOOT.
4. Undertakings
[37] Given the findings I have made, it is appropriate that the parties draft a form of undertaking in accordance with this decision and file them by 19 December 2012.
COMMISSIONER
1 [2011] FWAFB 6684 at paragraphs 11-14 and 16.
2 [2012] FCAFC 108 at paragraph 9.
3 See s.26 excluding certain State laws, and s.27 that excepts from the exclusion certain matters including State laws as to occupational health and safety.
4 PR956868 (14 July 2005) and [2011] FWAFB 8207
5 representations by AMMA for Dyno dated 29 August 2012.
6 Form F18 dated 21 August 2012, paragraph 3.
7 CFMEU representations dated 5 September 2012.
8 ibid paragraph 2
9 ibid paragraphs 3, 4 and 5
10 Dyno Nobel Bowen Basin Certified Agreement 2006 [AG848252]
11 Dyno Submissions dated 5 November 2012 at Part 6; CFMEU Submissions dated 31 October 2012 at paragraph 6 and Submissions in reply dated 7 November 2012 at paragraph 48.
12 Queensland regulation, s.46(2)(a).
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