[2015] FWCFB 3337
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.604—Appeal of decision

Australian Maritime Officers’ Union
v
Harbour City Ferries Pty Ltd;
Maritime Union of Australia;
Australian Institute of Marine and Power Engineers
(C2014/8328)

Port authorities

SENIOR DEPUTY PRESIDENT HARRISON
DEPUTY PRESIDENT SMITH
COMMISSIONER JOHNS

SYDNEY, 15 MAY 2015

Appeal against ex tempore decision and decision [2014] FWCA 9069 of Deputy President Booth to approve the Harbour City Ferries Maritime Agreement 2014 at Sydney on 12 December 2014 in matter number AG2014/7955 - appeal allowed - decisions below quashed - application for approval of enterprise agreement refused.

[1] This decision concerns an appeal by the Australian Maritime Officers’ Union (AMOU) against the approval of an enterprise agreement known as the Harbour City Ferries Maritime Agreement 2014 (the Agreement).

[2] The Agreement was approved by Deputy President Booth. 1 The application for its approval was filed under s.185 of the Fair Work Act 2009 (Cth) (the Act) by Harbour City Ferries Pty Ltd (HCF). The Agreement had been made by HCF and its employees who were in classifications identified in clause 4.3. The AMOU, Maritime Union of Australia (MUA) and the Australian Institute of Marine and Power Engineers (AIMPE) are covered by the Agreement. Approval of the Agreement had been opposed by both the AMOU and AIMPE. There was a hearing before the Deputy President to deal with the grounds of opposition. At the conclusion of the hearing, the Deputy President announced that she would approve the Agreement.

[3] The key issue we deal with in this decision is whether those parts of the notice of employee representational rights (NERR) contained in Schedule 2.1 to the Fair Work Regulations 2009 (the regulations) that are to be populated by an employer, prior to issuing a NERR, are each part of the mandatory content or form required by s.174(1A)(a) and (c) of the Act.

[4] In the hearing before us, the AMOU was represented by Mr Howell and HCF by Mr Shariff. We granted each of these barristers permission to appear pursuant to s.596 of the Act, as we were satisfied that doing so would enable the appeal to be dealt with more efficiently taking into account the complexity of matters raised in the grounds of appeal. The MUA was represented by Mr Neal, its Senior National Legal Officer. Written submissions in support of the AMOU were filed by AIMPE, however, it did not appear in the hearing before us.

Background and the hearing before the Deputy President

[5] The application for approval of the Agreement was accompanied by a Form F17, being the employer’s statutory declaration in support of approval. It indicated in answer to question 2.8 that 3 February 2014 was the last date that the NERR was given to an employee who will be covered by the Agreement. The MUA filed a Form F18 supporting the approval of the Agreement. The AMOU and the AIMPE each filed a Form F18 in which they indicated they opposed approval of the Agreement. The forms also indicated that, in the event the Agreement was to be approved, each wished to be covered by it.

[6] The Deputy President listed the matter for hearing. In the hearing, the AMOU and HCF were both legally represented. The MUA also appeared and was represented by Mr Garrett, Assistant Secretary of that union. On the second day of the hearing, Mr Fallone, National Organiser with AIMPE, attended.

[7] There were two statements in evidence before the Deputy President. One was of Mr John Wydell, an Industrial Officer with the AMOU, and the other of Mr Darrin Moy, the General Manager, People and Culture with HCF. Oral evidence was given by Mr Moy and he was cross-examined. At the Deputy President's request, Mr Fallone and Mr Garrett were called to give oral evidence.

[8] A key ground raised by the AMOU for opposing approval of the Agreement was that the NERR which HCF had given to employees who were to be covered by the Agreement did not comply with s.174 of the Act. We later refer in more detail to the deficiency in the notice, but for present purposes, it is adequate to indicate that the NERR did not contain a description of the employees who are proposed to be covered by the Agreement. The notice indicated that the employees who were to be covered were those in “Attachment A”. There was no Attachment A or any other attachment to the NERR. Although HCF had initially asserted there had been such an attachment, by the second day of hearing it accepted that the NERR had no Attachment A. It was also agreed that no document purporting to be Attachment A or describing the classifications of employees proposed to be covered by the Agreement was provided to employees at or about the time they were provided with the NERR. It was also not in issue that at the time the NERR was provided to employees there was no document in existence which purported to be the then proposed “Harbour City Ferries Maritime Agreement 2014”.

[9] It is not necessary for us to detail all of the matters addressed before the Deputy President. It is sufficient for the purposes of this appeal to indicate that the transcript makes it clear the AMOU submitted that the Deputy President could not be satisfied that the Agreement had been genuinely agreed in terms of s.188 of the Act because HCF had never issued a NERR in accordance with the Act and regulations. The requirements of s.188(a)(ii) had not been met. 2 As a consequence, the AMOU submitted that the Agreement could not be approved. In support of its submission, it referred to the Full Bench decision in Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union (Peabody Moorvale).3 HCF submitted that the NERR complied with the requirements of the Act and regulations and that the AMOU’s reliance on Peabody Moorvale was “misguided and unhelpful”.4

[10] At the conclusion of the hearing, the Deputy President gave her reasons in transcript for deciding to approve the Agreement. We will refer only to the relevant key observations and findings she made. They are as follows:

[11] Subsequently, the Deputy President published a decision which was in a short “standard” form indicating she was “satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met”. 11 No additional reasons for reaching that decision were given.

The provisions of the Act, regulation 2.05 and Schedule 2.1 to the regulations

[12] Section 173 of the Act provides that an employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who will be covered by the agreement and is employed at the notification time for the agreement. Section 174 deals with the content and form of the notice. It is in these terms:

“

[13] Regulation 2.05 is the relevant regulation. It reads:

[14] It is to be noted that there is no s.174(6) in the Act. This issue was clarified in paragraph [9] of Peabody Moorvale in these terms:

[15] We reproduce at Annexure A to this decision the terms of the prescribed notice in Schedule 2.1 of the regulations.

[16] Sections 186 and 188 should also be referred to. Section 186 provides that if an application for the approval of an enterprise agreement is made, the Commission must approve the agreement if the requirements set out in that section and s.187 are met. The relevant requirement here is s.186(2), which provides that the Commission must be satisfied the enterprise agreement has been genuinely agreed to by the employees covered by it. Section 188 deals with the considerations to be taken into account when deciding if an agreement has been genuinely agreed. It is in these terms:

Consideration[17] We deal first with the grounds of appeal which concern the requirements of s.174(1A) of the Act. The AMOU contends that the Deputy President was in error in that she failed to consider and give reasons as to whether those parts of the NERR prescribed by s.174(1A), regulation 2.05 and Schedule 2.1 which are to be populated by an employer prior to issuing the NERR are part of either or both of the “form prescribed by the regulations” or the “content prescribed by the regulations”. In the alternative, the AMOU contends that the Deputy President was in error in deciding that those parts of the NERR prescribed by s.174(1A), regulation 2.05 and Schedule 2.1 which are to be populated by an employer prior to issuing the NERR are not part of either or both of the mandatory “form prescribed by the regulations” or the “content prescribed by the regulations”. In short, the AMOU submits that the Deputy President failed to deal with, and give reasons for her decision, to reject the AMOU’s submission about the consequences of the NERR not containing Attachment A or, in the alternative, if she did rule against the AMOU about this submission she was in error in doing so.

[18] In respect to the first ground, the AMOU submitted that the reasons given by the Deputy President do not expressly indicate her ruling on the construction to be given to s.174(1A) of the Act and the consequences of the NERR not containing a description of the employees to be covered. She did not rule upon whether she was satisfied that the requirements of s.188(a)(ii) had been met. Accordingly, the AMOU submits that the failure to give reasons about what was a key issue before her constitutes appealable error. Associated with this ground of appeal is a submission that relates to the comments made by the Deputy President about not being satisfied, in terms of s.188(c), that there were any other reasonable grounds for believing that the Agreement had not been genuinely agreed. The AMOU submitted the consideration in that subsection does not arise until a decision is reached about whether s.188(a)(ii) was complied with.

[19] In support of the alternative ground, the AMOU submitted that if, as can be inferred from the Deputy President approving the Agreement, she rejected its submission about the consequences of the NERR not containing a description of the employees to be covered by the Agreement, she was in error. It submits the NERR was invalid and consequently approval of the Agreement should have been refused.

[20] We turn to the terms of the NERR which HCF gave to the relevant employees. It is only necessary for us to reproduce the heading and first paragraph of the notice. It was not in issue that the remainder complied with the terms of the prescribed notice in Schedule 2.1 which we have attached to this decision. For ease of comparison, however, we will also set out the heading and first paragraph of the prescribed notice here in the body of this decision.

The prescribed NERR:

The NERR given to the HCF employees:

[21] As we have earlier indicated, the notice did not have an Attachment A. Nor was any document purporting to be Attachment A given to employees at the time the NERR was given to them. We observe that although the AMOU concentrated on the absence of the attachment and the failure to describe the employees who were to be covered, the NERR also departed from the prescribed notice in that it did not contain the term “to cover employees that”, but instead contained the words “to cover those employees of Harbour City Ferries...”. The notice also capitalised each of the words in the title whereas the prescribed notice does not. About these last two observations, we accept they could be described as minor and insignificant, however, a strict reading of s.174(1A) suggests not even these variations from the prescribed form are acceptable. Happily, we do not need to dispose of this appeal by reference to these considerations. It is the absence of any description of the proposed coverage of the Agreement that we concentrate on.

[22] We commence our consideration by referring to Peabody Moorvale. One issue before the Full Bench was whether the NERR provided by the employer complied with s.174(1A) of the Act and, if it did not comply, whether it was necessarily invalid and of no effect. The NERR given to employees (which was in the prescribed form) had two documents stapled to it. They were described as a “Nominee Form” and an “Employer Form”.

[23] The Full Bench considered the construction appropriate to be given to the wording of s.174 (1A) and commented that it uses language in mandatory form and “goes to some lengths to make it clear there can be no departure from the content or form of the Notice prescribed in the regulations.” 12 It considered the purpose and function of the NERR, the relevant explanatory memorandum and related recommendations from the report of a Panel which had been established to review the Act. About one recommendation of that Panel the Full Bench said:

[24] The Full Bench said at paragraph [39] that “[t]he language of s.174(1A), the context and legislative purpose all support the proposition that a failure to comply with the provision goes to invalidity...”. They then turned to the consequences of this construction. After considering ss.173, 181, 186(2) and 188 they said:

[25] The Full Bench later referred to ss.188(a) and (c) and said at paragraph [70] they were not to be conflated. They are two separate requirements and need to be considered as such:

[26] Although we agree with the Deputy President’s observation that the facts in Peabody Moorvale are different to those in this matter, nonetheless it is clear the decision dealt in detail with the construction that was to be given to the same provisions of the Act here in contention. We agree with the AMOU that the Deputy President was required to determine whether those parts of the NERR prescribed by s.174(1A) of the Act, regulation 2.05 and Schedule 2.1 that are to be populated by an employer (here the “proposed coverage” part in particular) are part of either or both of the “form prescribed by the regulations” or the “content prescribed by the regulations”. She was required to rule whether a valid NERR was given to employees and, if not, to accept, on the authority of Peabody Moorvale, the Agreement could not be approved.

[27] In our opinion, the whole of the document that is in Schedule 2.1, including the fields to be populated by the employer, constitutes the prescribed notice and must therefore comply with the constraints in s.174(1A). In the first paragraph it contains text that identifies the subject matter of three fields into which an employer must make entries. It also contains text which, depending on whether individual agreement-based transitional instruments or a low-paid authorisation exist, is to be included or excluded. Finally, it contains text which must be included in all NERRs.

[28] The italicised words in the first paragraph on the prescribed form in Schedule 2.1 direct an employer to certain content that must be included in a NERR. It must be in the notice as that is the only way an employee can understand the wording in the NERR “If you are an employee who would be covered by the proposed agreement” that he or she has the right to appoint a bargaining representative to represent him or her and about the default bargaining representative provision which applies to “the work to be performed under the agreement”.

[29] The terms of the prescribed form necessitate the provision of information so that an employee is able to assess whether he or she is an employee who would be covered by the proposed agreement. The employee reading the notice must be able to understand who it is “who would be covered” by the proposed agreement. That is the purpose of the words in the first paragraph of the prescribed form “... which is proposed to cover employees that [proposed coverage]”.

[30] That the proposed coverage may evolve as bargaining progresses does not matter. Contrary to the submission of HCF, that fact does not mean that when bargaining commences the employer is not obliged to identify what it is then intending to be the coverage of the proposed enterprise agreement.

[31] We agree with the AMOU’s submission that if an employer could issue a NERR in precisely the form of Schedule 2.1 without providing a description of “proposed coverage” (or for that matter, an entry corresponding to the other italicised words in the first paragraph), it would make little sense to its recipients and would not assist in alerting employees to their rights. Construing the words “proposed coverage” as part of the mandatory content facilitates the legislative purpose of a NERR.

[32] The only scope given to an employer to modify the content of the notice with respect to the three fields in the first paragraph is to delete the italicised words and put words in the corresponding space which meet the description of the subject matter. In the case of “proposed coverage” we accept the Act, regulations and prescribed form do not direct how the description of proposed coverage is to be given. But that does not mean an employer is at liberty to omit to give a description. In this case, the description could have been to list the classifications to be covered or to indicate the coverage was the same as in clause 5.3 of the existing enterprise agreement 13 (and maybe one new classification which apparently was to be introduced). But a description needed to be given and it was not.

[33] Contrary to the submission of HCF, we do not believe that the NERR here given by HCF complied with each of the requirements contained in s.174(1A) of the Act. HCF contended that so long as the parts to be populated by the employer had some words inserted, it did not matter that the employer had made a mistake in relation to what was actually inserted. HCF contended that the Act and regulations do not impose any obligation upon the employer as to how these parts are to be populated. However, in our opinion, even if this submission was correct, it does not allow for one of the fields to contain no required information. Nor is this a case of an inconsequential misdescription of the proposed coverage; there was no description.

[34] HCF submitted that unlike other parts of the NERR in respect of which the regulations prescribe the precise content to be included, the legislature left it to the employer to determine the content of the variables notated by the italicised portions of the notice. An omission or mistake in what was put into the notice was not intended to result in its invalidity. It submits its construction of s.174(1A) is supported by the explanatory memorandum that accompanied the bill that introduced the section. In fact, both the AMOU and HCF submitted that the explanatory memorandum supported the construction of the section for which they contended.

[35] We turn to the relevant extract from that memorandum. It is in these terms:

[36] On balance, we think the above extract supports the AMOU’s argument that the Parliament intended that those parts of the form in Schedule 2.1 that are to be populated by an employer are part of the prescribed content and form. The entries are ones which, in terms of paragraph 147, the regulations require an employer to insert or omit. Paragraph 148 indicates “[t]he notice currently prescribed in the regulations requires an employer to insert into the notice: ... the proposed coverage of the agreement.”

[37] In our opinion, as there was no description of the “proposed coverage” of the Agreement in the NERR, HCF had never issued a valid notice. The consequence of failing to give employees a NERR which complies with the content and form requirements of s.174(1A) is that the Deputy President was not able to approve the Agreement. In doing so, she was in error.

[38] We accept that when a NERR contains, say, a minor typographical error, there may remain some room for judgment by a Commission Member as to whether it renders the notice invalid. We do not need to consider this possibility further in this appeal. For the reasons we have given, the omission here was not minor or insignificant.

[39] We have considered the submissions of HCF that the construction for which the AMOU contends results in an outcome that is not as fair as the objects of Part 2-4 envisage. It allows the AMOU to have waited right up to the time of filing the Agreement for approval to raise an objection it could have raised many months earlier. HCF also identified numerous discretionary considerations in support of why the Agreement should be approved. It submitted that, other than the deficiency in the NERR, there was no basis to suggest the Agreement was not genuinely agreed to by employees. If the relevant test was substantial compliance with the prescribed notice, or if the Commission had a discretion to accept as valid a NERR which did not comply with s.174(1A), regulation 2.05 and schedule 2.1, these submissions would all have merit. However, these discretionary considerations do not persuade us that the construction of those provisions for which the AMOU contends should not be accepted.

[40] We can deal briefly with the ground of appeal which relates to the finding made by the Deputy President with reference to s.188(c) of the Act. In giving her reasons for decision, she referred to s.188(c) and said she was not satisfied there were any other reasonable grounds for believing that the Agreement had not been genuinely agreed to by the employees to be covered by it. As is clear from the extract from Ostwald Bros Pty Ltd v CFMEU, 14 which was approved by the Full Bench in Peabody Moorvale, s.188(c) is not to be considered until after a finding is made by reference to s.188(a)(ii). The Deputy President did not give any reasons why she was satisfied the requirements of s.188(a)(ii) had been met. Accordingly, the AMOU submits that the failure to give reasons about what was a key issue before her constitutes appealable error. We agree. Although the reasons need not have been lengthy, nonetheless they should have explained why the Deputy President rejected the argument of the AMOU.

[41] As we have found the NERR was invalid, it follows there was no occasion for s.188(c) to be considered. A finding under that section could not cure the invalidity. The Agreement should not have been approved.

[42] A supplementary note was filed by HCF after the appeal hearing. It related to whether the Act imposed any requirements on an employer about the need to issue a NERR upon a change to the scope of a proposed enterprise agreement. The note also addressed an associated issue about whether there is a requirement for an employer to issue a NERR to employees who commenced employment after the notification time referred to in s.173(2). We have considered the matters addressed in that note. They do not persuade us that the conclusion we have reached in relation to the grounds of appeal we have considered is incorrect.

[43] After we had heard the appeal, the Commission published a document titled “Guide - notice of employee representational rights”. Its purpose was to provide information to parties about the completion of a NERR. The guide contained a reference to Peabody Moorvale. It also contained a table which explained how to complete the notice and an example of a completed notice. We decided that we would bring the guide to the parties’ attention and give them an opportunity, should they so wish, to make any additional submissions. It was understood that the grounds of appeal in this matter would be decided on the basis of the submissions made by the parties; however, we thought it appropriate to bring the guide to their attention.

[44] We have considered the submissions filed by the AMOU and HCF. It is not necessary for us to discuss them in detail. In effect, each maintained the position they had contended for in the appeal hearing in relation to the appropriate construction to be put on the relevant provisions of the Act and regulations. Submissions about additional matters not earlier raised, and not in response to the invitation to comment on the guide, have not been taken into account. To the extent the submissions of the AMOU, in particular, seized upon the guide to identify possible additional arguments it might have pursued, we have not taken them into account.

[45] In light of our decision about the two grounds of appeal we have dealt with, we do not propose to deal with any of the other grounds of appeal.

Conclusion

[46] No issue was taken with the standing of the AMOU to file this appeal. We accept the AMOU is, in terms of s.604(1) of the Act, a person aggrieved by the decision of the Deputy President.

[47] We have decided that it is in the public interest to grant permission to appeal. The grounds of appeal raise considerations not directly considered in Peabody Moorvale about the content and form of a NERR. We were not taken to any Full Bench decision which had addressed the issues enlivened by the grounds of appeal in this matter. They are issues which, in our opinion, are of importance and general application.

[48] For the reasons we have given, we have decided the Deputy President was in error in approving the Agreement. We allow the appeal. We have decided to quash the approval of the Agreement. We have considered for ourselves whether the Agreement can be approved and, for the reasons we have given, we have decided it cannot. The application for approval of the Agreement is refused.


SENIOR DEPUTY PRESIDENT

Appearances:

Mr A Howell, counsel, with Mr J Wydell for the Australian Maritime Officers’ Union.

Mr Y Shariff, counsel, with Ms R Farrar for Harbour City Ferries Pty Ltd.

Mr A Neal for the Maritime Union of Australia.

[There was no appearance for the Australian Institute of Marine and Power Engineers.]

Hearing details:

Sydney.

2015.

February 18.

Final written submissions:

Australian Maritime Officers’ Union: 24 March 2015.

Harbour City Ferries Pty Ltd: 31 March 2015.

Annexure A

Schedule 2.1 Notice of employee representational rights

(regulation 2.05)

Fair Work Act 2009, subsection 174 (6)

[Name of employer] gives notice that it is bargaining in relation to an enterprise agreement ([name of the proposed enterprise agreement]) which is proposed to cover employees that [proposed coverage].

What is an enterprise agreement?

An enterprise agreement is an agreement between an employer and its employees that will be covered by the agreement that sets the wages and conditions of those employees for a period of up to 4 years. To come into operation, the agreement must be supported by a majority of the employees who cast a vote to approve the agreement and it must be approved by an independent authority, Fair Work Commission.

If you are an employee who would be covered by the proposed agreement:

You have the right to appoint a bargaining representative to represent you in bargaining for the agreement or in a matter before Fair Work Commission about bargaining for the agreement.

You can do this by notifying the person in writing that you appoint that person as your bargaining representative. You can also appoint yourself as a bargaining representative. In either case you must give a copy of the appointment to your employer.

[If the agreement is not an agreement for which a low-paid authorisation applies — include:]

If you are a member of a union that is entitled to represent your industrial interests in relation to the work to be performed under the agreement, your union will be your bargaining representative for the agreement unless you appoint another person as your representative or you revoke the union’s status as your representative.

[If a low-paid authorisation applies to the agreement — include:]

Fair Work Commission has granted a low-paid bargaining authorisation in relation to this agreement. This means the union that applied for the authorisation will be your bargaining representative for the agreement unless you appoint another person as your representative, or you revoke the union’s status as your representative, or you are a member of another union that also applied for the authorisation.

[if the employee is covered by an individual agreement-based transitional instrument — include:]

If you are an employee covered by an individual agreement:

If you are currently covered by an Australian Workplace Agreement (AWA), individual transitional employment agreement (ITEA) or a preserved individual State agreement, you may appoint a bargaining representative for the enterprise agreement if:

the nominal expiry date of your existing agreement has passed; or

a conditional termination of your existing agreement has been made (this is an agreement made between you and your employer providing that if the enterprise agreement is approved, it will apply to you and your individual agreement will terminate).

Questions?

If you have any questions about this notice or about enterprise bargaining, please speak to either your employer, bargaining representative, go to www.fairwork.gov.au, or contact the Fair Work Commission Infoline on [insert number].

 1   [2014] FWCA 9069.

 2   PN54, PN169-71.

 3   [2014] FWCFB 2042.

 4   HCF’s submissions dated 10 December 2014, although not marked as an exhibit, are referred to at PN496 in the final submissions.

 5   PN546, PN554.

 6   PN555. The transcript records the reference was to “section 188C”, but we think it more likely the Deputy President was referring to s.188(c).

 7   PN556.

 8   PN557.

 9   PN558-559.

 10   PN560.

 11   [2014] FWCA 9069, [4].

 12   Ibid [18].

 13   Sydney Ferries Maritime (AMOU and MUA) Enterprise Agreement 2012 (AE891796).

 14   [2012] FWAFB 9512.

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