Fair Work Act 2009
s.604—Appeal of decision

Appeal against decision [2015] FWCA 216 of Commissioner Bull at Sydney on 9 January 2015 in matter number AG2014/4049; whether preapproval requirements in ss.180(2) and (3) had been met; whether relevant reference instrument for the purposes of the BOOT was correctly identified; error identified, permission to appeal granted; appeal upheld on limited grounds; on rehearing not satisfied employers had complied with s.180(3).

Introduction

[1] Susan Jane Williams is the President of the TAB Agents Association (SA Branch) Inc.. That Association is, or was relevantly, the appointed bargaining representative of the 39 employers covered by the TAB Agents South Australia Casual Employees Multi-Enterprise Agreement 2013 (Agreement). It is the Respondent to this appeal. The Agreement also covers 57 employees who are variously employed by the employers covered by the Agreement. The employers each operate a TAB agency under an agreement with Tatts Group Limited (Tatts). That agreement regulates the operation of the TAB agency, its opening and closing hours, procedures, its physical facade and determines the betting odds that are to be offered and the benefits that are to be paid to customers of the TAB agency. 1

[2] The Agreement was made on 10 March 2014 and an application pursuant to s.185 of the Fair Work Act 2009 (the Act) for its approval was made on 20 March 2014. The approval application was dealt with by Commissioner Bull. The Australian Municipal, Administrative, Clerical and Services Union (the Appellant) participated in the approval proceedings. The question whether the Agreement passed the better off overall test (BOOT) was a controversial issue during those proceedings, specifically whether the appropriate reference instrument for the purposes of the BOOT was the Clerks Private Sector Award 2010 (Clerks Award) or the General Retail Industry Award 2010 (Retail Award).

[3] Ultimately the Commissioner concluded that the appropriate reference instrument was the Retail Award and that, by reference to that instrument, the Agreement passed the BOOT. The Commissioner also concluded that all other relevant statutory requirements had been met and so he approved the Agreement, which commenced operation on 16 January 2015. The Commissioner’s reasons for approving the Agreement are set out in a decision delivered on 9 January 2015 2 (the Decision).

[4] The Appellant seeks permission to appeal the Decision by a notice of appeal dated 29 January 2015. It also raises two further bases, related to pre-approval steps, on which it says the Agreement should not have been approved by the Commissioner. These were not raised by the Appellant during proceedings before the Commissioner.

Grounds of appeal

[5] The notice of appeal contains five grounds of appeal. By the time the appeal came on for hearing before us, two of the grounds were no longer pressed by the Appellant. 3 In brief, the remaining grounds raise for consideration two main issues. First, whether the Commissioner erred in reaching a state of satisfaction that the pre-approval requirements had been met. Specifically it is said by the Appellant that the Commissioner could not have been satisfied that the Agreement had been genuinely agreed to by the employees covered by the Agreement because, on the material before him, the Commissioner could not have been satisfied that the employers had taken the pre-approval steps as required by s.180(2) of the Act. It is also contended that on the material before the Commissioner, he could not have been satisfied the employers had complied with s.180(3) of the Act, which deals with notification to employees of the date, place and method of voting for the purpose of approving an enterprise agreement.

[6] Secondly, the appeal grounds require consideration whether the Commissioner was correct in concluding that the Retail Award, rather than the Clerks Award, was the relevant reference instrument for the purposes of the BOOT. The Respondent conceded before the Commissioner that if the Clerks Award was the relevant reference instrument then the Agreement did not pass the BOOT. 4

[7] We deal with each of these matters in turn below.

Consideration

[8] Before an enterprise agreement can be approved, the Fair Work Commission (the Commission) must be satisfied (in relation to a non-greenfields agreement), inter alia that the agreement has been genuinely agreed to by the employees covered by the agreement. 5 Section 188 of the Act explains when employees have genuinely agreed to an enterprise agreement as follows:

188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:


(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);

(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

[9] It seems clear from the structure of s.188 of the Act that the Commission must be satisfied of each of the matters identified therein before it can be said that an enterprise agreement has been genuinely agreed to by employees covered by the agreement. Relevantly, for present purposes, the Commission must be satisfied that each employer covered by the Agreement complied with ss.180(2) and (3) of the Act. Section 180(2) of the Act provides:

Employees must be given copy of the agreement etc.

(2) The employer must take all reasonable steps to ensure that:

(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:

(i) the written text of the agreement;

(ii) any other material incorporated by reference in the agreement; or

(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.

[10] The access period referred to in s.180(2) for a proposed enterprise agreement is the seven day period ending immediately before the start of the voting process referred to in s.181(1) of the Act. 6 Section 181 of the Act provides:

181 Employers may request employees to approve a proposed enterprise agreement

(1) An employer that will be covered by a proposed enterprise agreement may request the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it.

(2) The request must not be made until at least 21 days after the day on which the last notice under subsection 173(1) (which deals with giving notice of employee representational rights) in relation to the agreement is given.

(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.

[11] Section 180(3) provides:

(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:

(a) the time and place at which the vote will occur;

(b) the voting method that will be used.

[12] Before turning to consider whether the employers covered by the Agreement complied with the above mentioned pre-approval steps, we make the observation that neither of ss.180(2) and (3) of the Act require the employer to do, in absolute terms, the things set out in those subsections. That which is required by each subsection is for the employer to “take all reasonable steps” to do the things required. Thus it may be, in a particular case, that an employer has notified some or all of the employees of the date, place and method of voting after the start of the access period, but on the facts of the particular case, the Commission might nevertheless be satisfied that the employer took all reasonable steps to do so by the start of the access period.

Compliance with s. 180 (2)

[13] Before turning to the question whether the employers took all reasonable steps to do that which is set out in s.180(2) of the Act, it is necessary to say something about the access period. It is apparent on the face of the employer’s statutory declaration filed in support of the approval of the Agreement that the date on which voting to approve the Agreement commenced was 9 March 2014. 7 As we have indicated above, the access period is the seven day period ending immediately before the start of the voting process referred to in s.181(1) of the Act.8 We therefore need to address related questions, namely: what is the “voting process”? and when did that process begin?

[14] The Appellant submitted that the voting process includes the series of actions taken by an employer to initiate a request to approve an agreement by voting on it. To make good this proposition it relied on the decision in Australian Char Pty Ltd re Australian Char Pty Ltd – Morwell Enterprise Agreement 2010. 9 It was submitted that when voting material is distributed to employees before voting commences, the process of distributing that voting material commences the voting process and so the access period will end the day before the date of distribution of the voting material. In the instant case, so it was submitted, the material before the Commissioner10 showed that the ballot paper was distributed on 3 March 2014 and consequently the access period ended on 2 March 2014.11

[15] The Appellant accepted that if it was incorrect about when the access period began and ended, then on the material before the Commissioner the requirements of s.180(2) of the Act had been met. 12

[16] Although we accept that in some circumstances the distribution of the voting material to employees before the date on which votes are to be cast might result in the access period ending at some stage other than the day before the publicised date on which voting to approve an agreement begins, we do not accept that this will be the result in every case. Much will depend on the circumstances. Thus, for example, if an employer distributes voting material before the date on which voting is to take place or begin, accepts a vote or votes from employees which have been cast before voting for the agreement is to begin and counts the vote or votes as valid, then it might be said that the voting process began on the day the first of those employees cast a vote. Consequently, the access period will have ended on the day before that date. However, if the employer has advised the employees who will be covered by an agreement of the date, method and place of voting and without more merely distributes ballot papers to employees before the date on which the voting is to commence or take place, in our view it cannot be said that the “voting process” commenced at the time the employer distributed the ballot papers.

[17] This conclusion is consistent with both the text of s.180(4) of the Act and the legislative context in which that section appears. To begin with, an object of Part 2 – 4 of the Act is “to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements to deliver productivity benefits”. [Our underlining]

[18] For the purposes of s. 180(4) of the Act, the “voting process” is the process referred to in s.181(1). The “voting process” described in s.181(1) of the Act is the process that is characterised by an employer that will be covered by a proposed enterprise agreement requesting “the employees employed at that time who will be covered by the agreement to approve the agreement by voting for it”. The request made by the employer is to approve the agreement by voting for it.

[19] Section 182(1) of the Act provides that if employees have been asked to approve an agreement under s.181(1) of the Act, the agreement is made when a majority of those employees who cast a valid vote approve the agreement. Section 181(2) of the Act provides that a request to approve an agreement by voting on it must not be made until at least 21 days after the day on which the last notice of employee representational rights in relation to the agreement was given.

[20] It seems to us, therefore, that an agreement may only be approved through a vote of employees employed at the time of the vote who will be covered by the agreement. The request to approve the agreement and the vote are not separate stages of the voting process. Thus, we consider that the voting process starts when an employee is first able to cast a valid vote to approve the agreement and not at some earlier time when an employer may provide to employees the ballot paper.

[21] This construction is also consistent with the explanation given in the Explanatory Memorandum to the Fair Work Bill 2008 which provides:

The access period can run concurrently with the 21-day period referred to in subclause 181(2), so that the shortest period between the day on which an employer gives the last notice of employee representational rights to its employees and the day that the employer requests the employees to vote on the agreement is 21 days. 13

[22] There was no material before the Commissioner which would suggest that voting for the Agreement commenced on any date other than 9 March 2014. It follows that as the access period ended on 8 March 2014, the requirements of s.180(2) of the Act had been complied with on the face of the material contained in the employer’s statutory declaration filed in support of the application to approve the Agreement. 14

Compliance with s.180(3)

[23] Question 2.5 of the employer’s statutory declaration in support of an application to approve an enterprise agreement asks for a description of “the action that was taken to notify all relevant employees of the date and place at which the vote was to occur and the voting method to be used”. In the instant case the following answer was given:

“In the relevant period of seven days prior to all employees voting, each employee was provided by his or her employer with a ballot paper, a copy of the final agreement having already been provided to them. No representation has been made to me as to any alterations that might be appropriate. The terms of the proposed agreement have not changed during the access period.”

[24] The date this action is said to have been taken is given as follows:

“3rd to the 10th March 2014”.

[25] There does not appear to have been any other material directed to compliance with s.180(3) of the Act before the Commissioner. Two things are apparent from the answer given in the statutory declaration. First, apart from the indication that a ballot paper was provided to employees at some stage between 3 March and 10 March 2014, there is no indication whether employees were given the ballot paper on 3 March 2014 or on some subsequent date. Secondly, there is no indication about the information contained in the ballot paper. Thirdly, on the information provided it seems clear that if the ballot paper contained the information required by s.180(3) of the Act the information was given after the access period had begun. There is no indication that any other documents contained the information or that any other form of communication was utilised to convey the information to employees. A copy of the ballot paper was not provided with the materials filed in support of the application to approve the Agreement. According to the statutory declaration the date that voting for the Agreement commenced and the date on which an employee was first able to cast a vote was 9 March 2014. The access period therefore began immediately after midnight of 1 March 2014, that is, it began on 2 March 2014. It ended at midnight on 8 March 2014. The ballot paper was provided to employees on and after 3 March 2014.

[26] Section 180(3) of the Act requires an employer to take all reasonable steps to notify the relevant employees of the date and place at which the vote will occur and of the voting method to be used “by the start of the access period”. On the information available to the Commissioner, it seems to us that he could not have been satisfied that the employers had complied with s.180(3) of the Act, because all of the information indicated that whatever steps were taken to notify the employees, these were taken on or after 3 March 2014, and not by 2 March 2014 as required.

[27] As we have earlier noted, this issue was not agitated by the Appellant before the Commissioner. If the issue had been raised before the Commissioner then the question whether the employer had taken “all reasonable steps” to provide the requisite information by the start of the access period might have been able to be addressed by the Respondent and considered by the Commissioner. It is most unfortunate, and frankly unsatisfactory, that the Appellant did not alert the Commissioner to this issue notwithstanding its evident opposition to the approval of the Agreement.

[28] Following the conclusion of the hearing of the appeal we invited the Respondent to provide further material directed to the question posed by question 2.5 of the employer’s statutory declaration together with any short submissions. The Appellant was also given an opportunity to reply to any material provided by the Respondent. Pursuant to the invitation, a statutory declaration by Ms Williams declared on 19 May 2015 (the Williams declaration) was provided by the Respondent. The Williams declaration relevantly provides as follows:

“3. A vote by employees to approve the agreement subsequently confirmed by His Honour Commissioner Bull took place on the 9th March 2014. Prior to that vote taking place a vote on the same proposed agreement took place in December 2013. On that earlier vote all employees voted and all employees did so by providing their ballot papers to their respective employees at their place of employment on the nominated date.

4. It having been decided by the Association that a vote would take place on 9 March 2014 in the same way as before, I caused a voting package to be dispatched on 19th February 2014 by Express Post Next Day Delivery to all employers whose names appear in the attachment to this Statutory Declaration . . . One voting package went to each employer with enough forms in such package to be available to be signed by the number of employees who I knew to be employed by that employer. It was intended that the employees would vote by simply completing the ballot paper and providing it to their employer at their place of work on the nominated date. This vote was to be conducted in the identical manner to that of the previous vote in which the parties had participated in respect of the same agreement as had been conducted in December 2013 with all employees being familiar with this process.

5. Each such voting package contained a receipt in the form of the document . . . being a document entitled “Receipt Re Voting”. Each voting package contained enough of these forms to enable each employee to sign same. It was the intention that each employer would provide to each of his employees such form which the employee would then sign and return to me. I received back said receipts signed by all employees acknowledging receipt of both the agreement and the voting slip with such receipts being dated the 3rd of March 2014.

6. Each such voting package also included a Ballot paper . . . Again each voting package contained enough of these forms to enable each employee to sign same. It was the intention that each employer would complete the initial part of the ballot paper advising name of employer and number of employees present and would then provide the ballot paper to the employee who would then complete the ballot paper and lodge with the employer on or about March 9 2014.

7. On 20 February 2014 all employers were either e-mailed or if they did not have e-mail were forwarded a hard copy by land post of correspondence advising them to expect the package on the 20th February 2014 and that their office had been allocated a committee member as their point of reference for clarification of any issues.

8. The following day being the 21 February 2014 specific committee members of the Association who had been allocated a group of employers contacted by telephone those agents to ensure that each such employer had received the package. As a result of those enquiries I am satisfied that all employers had a copy of the voting package by no later than the 22nd February 2014.

9. Each of those members of the committee including myself who telephoned all the employers also advised such employers that the employees were to be advised verbally as soon as possible of the date the vote was to take place. The employer agents were advised of the importance of the timetable to be observed and to take steps to ensure as soon as possible that their employees were told of the need (1) for all employees to be available within the access period to receive and acknowledge receipt of the proposed agreement on which they would vote within the access period and preferably at the beginning of such period; and (2) for all employees to vote by providing to their employer on the 9th March 2014 a completed ballot paper previously provided to them.

10. On the basis of that direction made by all committee members and the subsequent signing by all of the employees of the Receipt Re Voting I verily believe that all the employees of all the employers who participated in the vote were well aware of the date the vote was to be held by late February 2014 but in any event by no later than the commencement of the access period on the 2nd March 2014.

11. The employment situation in respect of each employee is that they work in a small shop and have at all times when working direct and immediate contact with their employer. Each employee is either the only employee or one of at most four employees employed in such shop. The arrangements made concerning the provision of information to individual employees was that they would be told directly by their employer when they next arrived at work or telephoned if the employer saw fit.

12. I am not able to say of my own direct knowledge when precisely each employer told each of his or her employees that the vote was to be on March 9 2014. However I believe in light of-

(1) the directions given to such employers by myself and other members of the committee of the Association on or about 21st February 2014

(2) the subsequent acknowledgement of receipt by all employees of a copy of the agreement and the ballot paper as of the 3rd March 2014

(3) the subsequent and unanimous “yes” vote by all employees in the ballot;

(4) the fact that as a matter of practice each and every employee, on the first day they attended work after about 21 February 2014, would have direct and immediate access to his or her employer;

that each employee was advised that the vote was to take place on March 9 2014 and was most likely to have been advised in person of such vote taking place no later than the first day they worked after about 22 February 2014 or by way of a telephone communication from their employer in the event of the employee not being rostered at work for that week.

13. No employee was provided with any written notice of the date of the proposed vote. In view of the close personal relationship between each employer in the Association and their employee or employees it was never considered necessary to do so.” 15

[29] As we have earlier indicated, s.180(3) of the Act does not require an employer, in absolute, to do that which is required by the subsection. Rather, that which is required is the employer to take all reasonable steps to give the relevant information to employees by the required time. Whether all reasonable steps were taken requires an objective assessment of the steps that were taken in the circumstances faced by the employer of the employees who are covered by the Agreement. However, when account is taken of the matters set out in the Williams declaration it is clear that there is no evidence offered of any step taken by any employer to comply with s.180(3) of the Act. The Williams declaration provides evidence of the steps taken by Ms Williams to assist the employers who would be covered by the Agreement to meet the pre-approval requirements and speculates about steps that might have been taken by the employers thereafter. In truth we cannot know, based on this material, what, if any steps were taken by the employers, let alone assess whether all reasonable steps were taken to comply with s.180(3) of the Act.

[30] On 10 June 2015, we advised the parties that we would give the Respondent a further opportunity to lead evidence directed to the pre-approval requirement in s.180(3) of the Act. We remitted the matter of any further evidence to Deputy President Gostencnik to hear and prepare a report for the Full Bench.

[31] The Deputy President convened a directions hearing by telephone on 11 June 2015, at which solicitors for the Respondent advised that the Respondent could not add any further material to that which is contained in the Williams declaration. On that basis the Respondent did not wish to be heard further on the matter. The Respondent’s position was confirmed in an email to the Chambers of the Deputy President on 12 June 2015.

[32] It follows that as s.180(3) of the Act has not been complied with by the employers, the employees who are covered by the Agreement are not taken to have genuinely agreed to the Agreement within the meaning of s.188 of the Act.

[33] In these circumstances, we consider the Commissioner was in error in concluding that the employers had complied with the pre-approval steps in s.180(3) of the Act on the basis of the limited material before him. As we have earlier indicated, it is most unfortunate that the Appellant did not raise this matter at first instance. However, compliance with s.180(3) of the Act is a mandatory step and a necessary element of s.188 of the Act which is directed to the genuineness of the employees’ agreement. We therefore consider that it is appropriate for permission to appeal to be granted, and the appeal upheld. The decision to approve the Agreement must be set aside.

[34] On a rehearing of the matter, for the reasons given, we are not satisfied that the employers complied with s.180(3) of the Act. Consequently we are not satisfied that the employees covered by the Agreement genuinely agreed to it within the meaning of s.188 of the Act. It follows that we are not satisfied that the requirements of s.186(2)(a) of the Act have been met.

[35] Subsections 190(1) and (2) of the Act allow the Commission to approve an agreement on the provision of an undertaking that meets concerns that an agreement does not meet the requirements of ss.186 and 187 of the Act. Since any undertaking would by reason of s.191(1) of the Act be taken to be a term of the Agreement, we have some doubts as to whether an appropriate undertaking may be given in the circumstances of this case In any event, the Respondent has been on notice of the concerns about compliance with s.180(3). It has been given an opportunity to make further submissions and provide further materials and it has not proposed any undertaking.

[36] Although it is strictly not necessary for us to deal with the other appeal grounds, since the matters were fully argued, we express our view below.

Relevant modern award and the BOOT

[37] The BOOT is set out in s. 193 of the Act and relevantly provides as follows:

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 the FWC 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.

FWC must disregard individual flexibility arrangement

(2) If, under the flexibility term in the relevant modern award, an individual flexibility arrangement has been agreed to by an award covered employee and his or her employer, the FWC must disregard the individual flexibility arrangement for the purposes of determining whether the agreement passes the better off overall test.

. . .

Award covered employee

(4) An award covered employee for an enterprise agreement is an employee who:

(a) is covered by the agreement; and

(b) at the test time, is covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and

(iii) covers his or her employer.

Prospective award covered employee

(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:

(a) would be covered by the agreement; and

(b) would be covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) would cover the person in relation to the work that he or she would perform under the agreement; and

(iii) covers the employer.

Test time

(6) The test time is the time the application for approval of the agreement by the FWC was made under section 185.

FWC may assume employee better off overall in certain circumstances

(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.

[38] The Commissioner undertook an extensive analysis of the modern award coverage issue at [35] - [71] of the Decision. We do not propose to reproduce the Commissioner’s analysis, although we will refer to parts of that analysis.

[39] The relevant provisions of the Clerks Award which determine its coverage are set out in the Commissioner’s decision as follows:

[42] The Clerks Award provides at clause 4.1:

“4.1 This award covers employers in the private sector throughout Australia with respect to their employees engaged wholly or principally in clerical work, including administrative duties of a clerical nature, and to those employees. However, the award does not cover:

(a) an employer bound by a modern award that contains clerical classifications; or

(b) an employee excluded from award coverage by the Act.”

(My underline)

[43] Clause 3 Definitions and Interpretation of the Clerks Award defines clerical work in the following terms:

“clerical work includes recording, typing, calculating, invoicing, billing, charging, checking, receiving and answering calls, cash handling, operating a telephone switchboard and attending a reception desk”

(My underline)

. . .

[46] . . . Clause 4.1 repeated above provides that the Clerks Award does not cover an employer bound by a modern award that contains clerical classifications. Clause 4.6 states:

4.6 “Without limiting the generality of the foregoing this award does not cover employers covered by the following industry awards with respect to employees covered by the awards:

• ...

• The General Retail Industry Award 2010

• ...”. 16

[40] The Appellant contended that the Clerks Award covers the employees who are covered by the Agreement and that this award should have been applied by the Commissioner for the purposes of assessing whether the Agreement passed the BOOT. The Appellant submitted that as the Commissioner concluded that the applicable instrument for the purposes of the BOOT was the Retail Award, he was in error. The Appellant submitted that the employees covered by the Agreement were engaged in “wagering” and that “wagering” is a term with a well-understood meaning. “Wagering” refers to the practice of accepting bets, which are related to the outcome of gambling events, and the subsequent paying out of any money that is liable to be paid on the outcome of such gambling events. The Appellant submitted that wagering is interchangeable with betting and contended that the term was used in this manner when, according to the Appellant, a Full Bench in Australian Municipal, Administrative, Clerical and Services Union (Modern Enterprise Award Decision) 17 ruled on the coverage of the Clerks Award.

[41] The Appellant therefore contended that if its definition of “wagering” is accepted, and the employees are engaged in the taking and paying of bets, the Agreement covers wagering businesses and not retail businesses.

[42] The Appellant also submitted that the Commissioner did not refer to the Modern Enterprise Award Decision and did not try to reconcile his decision with it. 18 To the extent that this submission is intended to be a criticism of the Commissioner it is most unfair. It is to be observed that the Modern Enterprise Award Decision was published on 12 December 2014 whereas the Commissioner published his decision of 9 January 2015. The hearing before the Commissioner concluded on 8 September 2014 at which time the Commissioner reserved his decision. No application was made by the Appellant to reopen its case after the 12 December 2014 and no effort was made by it to alert the Commissioner to the Modern Enterprise Award Decision after it was published.

[43] It would appear to be common ground that the employees handle cash and therefore on the face of it perform work within the definition of clerical work as defined in clause 3.1 of the Clerks Award.

[44] In the Award Modernisation Decision 19 a Full Bench said of “wagering” the following:

[224] The ASU contended that the legal services industry required consideration under a separate industry award and that special provisions of one sort or another are appropriate for the cash processing and wagering industries. We agree that the legal services industry should be considered as a separate industry and will do so in Stage 4. At this stage we have not excluded cash processing or wagering from the Clerks private sector award. We have included a definition of clerical work to make it clear that it is a term of broad application and includes cash processing. Clerks involved in wagering also fall within the scope of the award. 20

[45] In the Modern Enterprise Award Decision a Full Bench dealt with the issue of wagering and the application of the Clerks Award to that work as follows:

[62] Ms Bernadette McLoughlin gave evidence for THL that “Tabcorp Holdings Limited, with its subsidiaries and associated entities (together Tabcorp) is Australia’s leading wagering, racing media, gaming services and Keno operator.” In respect of “Wagering”, Ms McLoughlin’s evidence was that:

“Wagering

5 Tabcorp’s on-course wagering operations fall within Tabcorp’s wagering business division.

6 Tabcorp’s wagering business includes tote, fixed odds and sports betting. These products are sold from fixed retail outlets, call centre operations and through various digital channels. It includes bets placed through Tabcorp’s TAB.com.au (which is based in New South Wales), Luxbet.com (which is based in the Northern Territory), by phone with Tabcorp’s New South Wales call centre staff and betting at approximately 2,900 TAB outlets across New South Wales and Victoria. It also includes Tabcorp’s on course totalising activities, which is betting that takes place at over 270 racecourses in New South Wales and Victoria.

7 In the 2013 financial year, Tabcorp’s self-service EasyBet Terminals, which are self-serve terminals installed throughout Tabcorp’s network, generated 53.2% of retail turnover in Victoria and 40.5% of retail turnover in New South Wales. Digital wagering (particularly via iPhone, iPad and Android) and fixed odds wagering are areas of growth for Tabcorp. For the 2013 financial year, annual growth in the turnover of digital wagering was 13.6% and annual growth in fixed odds revenue was 25.8%.” 

[63] We are not persuaded that the references in this evidence to “products” being “sold” and “retail outlets” is decisive of the modern award coverage of the persons covered by the Wagering Award.

[64] The evidence before us indicates THL’s wagering business in so far as the Wagering Award is concerned revolves around THL accepting bets relating to the outcome of gambling events such as a race and paying out money that THL is liable to pay on the outcome of the gambling events. 

[65] This is consistent with the definition of a “wagering contract” in the Macquarie Dictionary which provides that:

“wagering contract n. contact in which mutual promises are made between two persons, that one will pay the other a certain sum of money if a certain event is ascertained to have happened.”

[66] Such acceptance of bets and paying out of money does not fall within the “general retail industry” as defined in the Retail Award in that it does not fall within the constituent parts of that definition. It is not the “sale or hire of goods or services”. THL maintained its wagering business did come within the “general retail industry” as “a bet, is the provision of a ‘service’ for ‘personal consumption’.” However, as the evidence before us indicates, it is not THL who provides a bet, rather they accept a bet.

[67] Moreover, having regard to the nature of the definition of the “general retail industry” as a whole in the Retail Award, it cannot sensibly be said that such acceptance of bets and paying out of money is in the “general retail industry”.

[68] Accordingly, we are not persuaded that, in so far as THL is an employer in its wagering business, it is an employer in the “general retail industry” and would be covered by the Retail Award but for the Wagering Award.

[69] We add that the employees covered by the Wagering Award are those engaged in the “Head Office Administration Business Group”, engaged in the “Operations and Data Processing divisions”, employed as “branch clerks, Account Sales Operators and head office clerks”, and employed “on course in or in connection with the operation of a totalizator”.

[70] The Retail Award covers employees in the classifications listed in its clause 16 and clause 16 of the Retail Award refers to its “Schedule B—Classifications”. Schedule B to the Retail Award requires an employee to be performing functions at a “retail establishment”. It is not evident that the employees covered by the Wagering Award perform their functions at a “retail establishment”. As a result, we are also not persuaded the employees covered by the Wagering Award would be covered by the Retail Award but for the Wagering Award.

[71] Further, as earlier set out, the Banking Award covers “employers throughout Australia who are engaged in the banking, finance and insurance industry in respect of work by their employees in a classification in [the] award and those employees.”

[72] The “banking, finance and insurance industry” is defined in the Banking Award as meaning “the industries of banking, lending, loaning, providing credit, investment, finance, superannuation, all forms of insurance, credit unions, building societies, financial intermediaries, trustee creditors and agencies, money market dealers, credit or charge card institutions, wool broking, agribusiness and services to the above industries such as broking, trading, debt recovery, financial consulting, valuation, money changing, data processing, transaction accounts, telephone enquiries and transaction processing.”

[73] The ASU maintained THL’s wagering business comes within the “banking, finance and insurance industry” as defined in the Banking Award as the Totalizator Act 1997 (NSW) defines “totalizator” as:

“6 Meaning of ‘totalizator’

For the purposes of this Act,

‘totalizator’ means:

(a) a system used to enable persons to invest money on events or contingencies with a view to successfully predicting specified outcomes of those events or contingencies and to enable the money left after the deduction of commission to be divided and distributed among those persons who successfully predict those outcomes, and

(b) any instrument, machine or device through or by which the system is operated.

Note: Under this Act money can be invested on a totalizator for horse and greyhound races, and on other events approved by the Minister. References in this Act to a totalizator can include a reference to an approved betting activity under section 13. See that section.”

[74] However, in our view, THL’s acceptance of bets relating to the outcome of gambling events and paying out of money liable to be paid on the outcome of the gambling events does not result in it being engaged in the industry of investment as contemplated in the Banking Award having regard to the nature of the definition of the “banking, finance and insurance industry” as a whole in the Banking Award.

[75] Accordingly, we are not persuaded that in so far as THL is an employer in its wagering business, it is an employer engaged in the “banking, finance and insurance industry” and would be covered by the Banking Award but for the Wagering Award.

[76] The Clerks Award covers “employers in the private sector throughout Australia with respect to their employees engaged wholly or principally in clerical work, including administrative duties of a clerical nature, and to those employees”, subject to some exceptions with which we need not be further concerned. “Clerical work” in the Clerks Award “includes recording, typing, calculating, invoicing, billing, charging, checking, receiving and answering calls, cash handling, operating a telephone switchboard and attending a reception desk”.

[77] Given the nature of the employees covered by the Wagering Award as described in its coverage clause and elaborated upon in its wage rates clause and the classification structure set out in its Appendix A, we are satisfied that employees covered by the Wagering Award are “engaged wholly or principally in clerical work, including administrative duties of a clerical nature” and would thereby be covered by the Clerks Award but for the Wagering Award. As a result, their employer, THL, would also be covered by the Clerks Award but for the Wagering Award.

[78] We are fortified in this view by the comments of the Full Bench of the AIRC, which we have earlier set out, when it made the Clerks Award. 21 [Endnotes omitted]

[46] In our view, neither the Award Modernisation Decision nor the Modern Enterprise Award Decision is determinative of the issue whether the Clerks Award or the Retail Award covers the employers and employees who are covered by the Agreement. Nor does either decision stand for the proposition that any employee engaged in wagering work or work involving wagering is covered by the Clerks Award. Both decisions stand for the proposition that clerks or employees involved in wagering perform clerical work or work of a clerical nature that are covered by the Clerks Award.

[47] That the work performed by an employee is covered by the Clerks Award does not determine that the award applies to that employee and his or her employer. The work performed by that employee might also be covered by another modern award. In order for a modern award to apply to an employee it must, inter alia, cover both the employee in relation to the particular employment with the employer and cover the employer. 22

[48] The Commissioner determined that:

[47] . . .the employees handle cash which is included as clerical work under the Clerks Award definition of clerical work extracted above. It appears from the evidence that handling cash (credit card transactions cannot be conducted) is principally what the employees are engaged in. 23

and:

[48] . . . that employees are principally involved in cash handling, a duty that meets the definition of “clerical work” under the Clerks Award, and as the employees are engaged, wholly or principally, in this work they would prima facie be covered by the Clerks Award despite the work not being traditional office based clerical work. 24

[49] But, as the Commissioner correctly observed, that is not the end of the matter. Clause 4.1 of the Clerks Award provides that it does not cover an employer bound by a modern award that contains clerical classifications. As the Commissioner discussed at [50] – [52] of the Decision, the Retail Award contains clerical classifications.

[50] Clause 4.6 Clerks Award relevantly provides:

“Without limiting the generality of the foregoing this award does not cover employers covered by the following industry awards with respect to employees covered by the awards:

• ...

• The General Retail Industry Award 2010

• ...”

[51] The Commissioner dealt with the question whether the employers who are covered by the Agreement are covered by the Retail Award as follows:

[50] The Retail Award coverage is described at clause 4. Sub clause 4.1 reads:

“This industry award covers employers throughout Australia in the general retail industry and their employees in the classifications listed in clause 16 - Classifications to the exclusion of any other modern award....”

[51] Clause 16 refers to the classifications contained in Schedule B. Schedule B describes the functions undertaken by retail employees between Levels 1 and 8. Each Level is related to functions performed by employees at a retail establishment. Various classification Levels refer to a clerical assistant and clerical officer. The Retail Employee Level 1 classification includes a clerical assistant which is defined as an employee accountable for clerical and office tasks as directed within the skill levels set out.

[52] The duties of a Retail Employee Level 1 include performing the following functions at a retail establishment:

• the receiving, arranging or making payment by any means;

• the recording by any means of a sale or sales;

• the provision of information, advice and assistance to customers.

[53] The above are tasks undertaken by the employees covered by the Agreement and the receiving, arranging or making payment by any means must include paying and selling cash amounts to customers, which the Applicant submits, is the principle task of the employees. For the purposes of clause 4.1(a) of the Clerks Award, the Retail Award contains clerical classifications.

[54] The words retail establishment are not defined in the Retail Award although it was not argued by the ASU that the work premises being stand-alone buildings or strip shops and described by the Applicant as “high street businesses” were not retail establishments. 

[55] There is however a definition of “general retail industry” which is described as:

“... the sale or hire of goods or services to final consumers for personal or household consumption.”

[56] A list of non-exhaustive examples is then provided, none of which neatly encompasses the employers’ business. The Applicant argues that the work of employees is more properly characterised as sales and therefore covered by the reference to the sale of services in the definition of retail establishment.

[57] I accept that the employers are engaged in the “general retail industry” in that they provide for the sale of a service to final consumers for their personal consumption. The substantial character of the employers’ enterprise is to take and pay bets via the retail point of sale (the betting terminals), to effect the betting odds and benefits that are dictated by the Tatts Group Ltd.

[58] Further support for this conclusion arises from clauses 4.7 of both the Retail and Clerks Awards which reads as follows:

“Where an employer is covered by more than one award, an employee of that employer is covered by the award classification which is most appropriate to the work performed by the employee and to the environment in which the employee normally performs the work.”

[59] The nature of the work performed, the business of the employers and the priority given to the Retail Award at clause 4.6 of the Clerks Award would indicate the Retail Award is the most appropriate award in respect of coverage.

[52] We have already set out relevant passages from the Modern Enterprise Award Decision. At [64] – [68] of that decision, the Full Bench discusses whether Tabcorp Holdings Limited, in relation to its wagering business, is an employer in the “general retail industry” and covered by the Retail Award. As is evident from those passages, the Full Bench concluded that, having regard to the definition of “general retail industry”, the acceptance of bets and paying out of money is not in the “general retail industry”.

[53] The Appellant submitted that the Modern Enterprise Award Decision made the key finding that the business of accepting bets and paying money for successful bets is not capable of falling within the scope of the Retail Award and rather is covered by the Clerks Award. The Appellant submitted that this proposition is not affected by whether a wagering business is conducted on course (as it was in the Modern Enterprise Award Decision) or off course (as in the present matter) and that a wagering business is either the “sale or hire of goods or services” or it is not. The Appellant submitted that this question was clearly and directly answered in the negative by the Modern Enterprise Award Decision. Consequently, according to the Appellant, the Commissioner’s decision is directly inconsistent with the key finding in the Modern Enterprise Award Decision and it needs to be overturned. 25

[54] For the reasons that follow, we do not accept the Appellant’s contention in respect of either the breadth of the conclusions reached in the Modern Enterprise Award Decision or that there is some inconsistency in the Commissioner’s conclusions and that of the Full Bench in the Modern Enterprise Award Decision.

[55] First, the discussion about acceptance of bets and paying out of money in the Modern Enterprise Award Decision occurs in the context of the definition of “wagering contract” referred to at [65] of that decision. The unchallenged submission of the Respondent made before the Commissioner was that the employers who are covered by the Agreement are prohibited by the terms of their respective agreements with Tatts from engaging in wagering in any way. 26 It must follow that if the employers cannot engage in wagering, they cannot enter into a wagering contract, although they are in the business of facilitating the entry into a wagering contract by others. Moreover, if the employers cannot engage in wagering, they cannot be said to “accept a bet”. It is this notion of “acceptance of bets” which is central to the decision by the Full Bench in the Modern Enterprise Award Decision as is evident by the discussion at [66] – [67] of that decision. The fact that the employers who are covered by the Agreement cannot engage in wagering was an important factor in the Commissioner’s conclusion that the Retail Award more appropriately covered the work of the employees.27

[56] Secondly, it is clear that the Full Bench in the Modern Enterprise Award Decision did not consider that the relevant employees were performing their functions at a “retail establishment”. 28 The Full Bench’s consideration was confined to the wagering business conducted by Tabcorp Holdings Limited in an on-course environment and in its head office administration business group.29 The employers who are covered by the Agreement are contractually prohibited from engaging in wagering, do not conduct any operations on-course, and conduct their business in stand-alone buildings or strip shops set amongst other retail establishments.30

[57] Thirdly, while the definition of “general retail industry” in the Retail Award, namely, “the sale or hire of goods or services to final customers for personal or household consumption” might not be apt to describe “the acceptance of bets and the paying out of money”, this is not the business conducted by the employers that are covered by the Agreement. It seems to us that these employers are in the business of providing a service which enables a customer to enter into a wagering contract with Tatts by placing a bet with Tatts. So understood, the business of the employers is one that comfortably falls within a description of selling a service to a customer, namely enabling or facilitating the customer’s entry into a wagering contract with Tatts, a service which is for the customer’s personal consumption.

[58] We do not think there is any inconsistency between the Modern Enterprise Award Decision and the Decision that is the subject of this appeal. Moreover, we are satisfied that the Commissioner was correct in his conclusion and that no appealable error has been demonstrated.

Disposition of appeal

[59] For the reasons we have given, we are satisfied that the Commissioner was correct in his conclusion that the Retail Award covered the employees and employers who are covered by the Agreement. We are also satisfied that the Commissioner was not in error in concluding that the employers had complied with s.180(2) of the Act.

[60] However we have concluded that the Commissioner was in error in his conclusion that he was satisfied that the employers had complied with s.180(3) of the Act based on the information before him. Permission to appeal on this ground is therefore granted. The appeal is upheld on this ground and the decision to approve the Agreement is set aside. As we have indicated in [34], on a rehearing we are not satisfied that the requirements of s.186(2)(a) of the Act have been met.

SENIOR DEPUTY PRESIDENT

Appearances:

Y. Bakri of counsel for the Australian Municipal, Administrative, Clerical and Services Union

T. Bryant of counsel for TAB Agents Association (SA Branch) Inc.

A. McNab of counsel for Pomarla Pty Ltd as intervener

Hearing details:

Melbourne.

2015

14 April

Final written submissions:

19 May, 1 June 2015

 1   Appeal Book tab 8 at [5].

 2   [2015] FWCA 216.

 3   See Appellant’s outline of submissions at [15].

 4   [2015] FWCA 216 at [73].

 5   See ss.186 (1) and (2) (a).

 6   See s.180(4).

 7   See employer's statutory declaration in support of application for approval of an enterprise agreement at p 9 (Q2.5).

 8   See s.180 (4).

 9   [2011] FWA 1627 at [18] per Ryan C.

 10   See employer's statutory declaration in support of application for approval of an enterprise agreement at p 8 (Q2.5).

 11   See Appellant’s supplementary outline submissions at [4] – [7].

 12   Transcript at PN 116 – PN 118.

 13   Explanatory Memorandum to the Fair Work Bill 2008 at [737].

 14   See in particular employer's statutory declaration in support of application for approval of an enterprise agreement at p 8 (Q2.4).

 15   Statutory declaration of Susan Jane Williams declared on 19 May 2015 at [3] – [13].

 16   [2015] FWCA 216.

 17   [2014] FWCFB 7989.

 18   Appellant’s outline of submissions at [44].

 19   [2008] AIRCFB 1000.

 20   Ibid at [224].

 21   [2014] FWCFB 7989 at [62]-[78].

 22   See ss.47 and 193(4).

 23   [2015] FWCA 216 at [47].

 24   Ibid at [48].

 25   Appellant’s outline of submissions at [44].

 26   Appeal Book tab 4 at [9].

 27   [2015] FWCA 216 at [71].

 28   [2014] FWCFB 7989 at [70].

 29   Ibid at [59], [69].

 30   [2014] FWCFB 7989 at [54].

Printed by authority of the Commonwealth Government Printer

<Price code C, PR567709>