[2016] FWC 6104
The attached document replaces the document previously issued with the above code on 29 August 2016.
The document has been edited to correct a typographical error in the spelling of Mr Craig Dearling’s name.
Angela Delo
Associate to Commissioner Booth
Dated: 30 August 2016.
| [2016] FWC 6104 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.238—Scope order
Australian Municipal, Administrative, Clerical and Services Union v Northern SEQ Distributor - Retailer Authority T/A Unitywater
(B2016/612)
The Australian Workers’ Union v
Northern SEQ Distributor - Retailer Authority T/A Unitywater
(B2016/665)
Northern SEQ Distributor - Retailer Authority T/A Unitywater v
Australian Municipal Administrative Clerical and Services Union (ASU), Automotive Food Metals Engineering Printing and Kindred Industries Union Known As the Australian Manufacturing Workers Union (AMWU) the AWU (AWU) Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia and Others (Electrical Division)(CEPU); the Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia (Plumbing Division)(the Plumbers) and the Construction Forestry Mining Energy Union (CFMEU)
(B2016/677)
COMMISSIONER BOOTH |
BRISBANE, 29 AUGUST 2016 |
Multiple scope applications.
[1] The Northern SEQ Distributor-Retailer Authority t/a Unitywater (Unitywater) is the statutory authority that manages and operates the water supply and sewerage related services in the northern region of Brisbane and the Sunshine Coast.
[2] In light of the decision of the High Court CEPU v Queensland Rail, 1 Unitywater was clearly subject to the Fair Work Act 2009 (the Act) and not the Queensland Industrial Relations Act 1999.
[3] Unitywater began bargaining for a single enterprise agreement in August 2015. It is engaged in bargaining with the Australian Municipal Administrative Clerical and Services Union (ASU), Automotive Food Metals Engineering Printing and Kindred Industries Union Known as the Australian Manufacturing Workers Union (AMWU), The Australian Workers Union (AWU), Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia - Electrical, Energy and Services Division - Queensland and Northern Territory Divisional Branch (CEPU); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia-Plumbing Division Queensland Divisional Branch (Plumbers) and the Construction Forestry Mining Energy Union (CFMEU).
[4] In January 2016, Unitywater proposed splitting the agreement into 2 agreements covering outdoor and indoor workers. In April 2016, the AWU proposed a further split of the agreement into trade and non-trade employees. With no agreement as to scope, bargaining representatives continued to bargain, including over scope.
History of scope applications
[5] The scope of a proposed agreement refers to the employer and employees who will be covered by the agreement. Scope can be agreed between the bargaining representatives of the employer and employees, or be a shared assumption on which they bargain.
[6] If the bargaining parties do not agree, scope itself may, but not necessarily, be a subject for bargaining, as was noted in MSS Security. 2
An employer is not obliged to agree to bargain or to commence bargaining for an enterprise agreement in response to a union or other employee bargaining representative proposing an enterprise agreement. An employer can refuse to bargain for an enterprise agreement or can make its agreement to commence bargaining subject to a condition precedent as to the scope of any agreement. If the union or other employee bargaining representative does not accept that condition precedent as to scope, the employer is entitled to refrain from bargaining or agreeing to bargain and the employee bargaining representative’s remedy is to seek a majority support determination under s.236 of the FW Act. When such a determination is made the employer is obliged to bargain in good faith for an agreement in accordance with the good faith bargaining requirements of the FW Act: see s.228(1). Of course, s.228(2) makes it plain that the employer is not required to make concessions during bargaining for the agreement or to reach agreement on the terms that are to be included in the agreement.
[7] If the various bargaining representatives do not reach agreement the Act provides a basis for resolution of scope by the Fair Work Commission (the Commission):
The power to make a scope order is predicated on disagreement between bargaining representatives. The discretion to resolve that disagreement is to be exercised as provided for in ss.238 (4) and (4A). 3
[8] Here the disagreement is between:
[9] The 3 agreements sought by Unitywater and the AWU are described 4 as:
(a) indoor;
(b) outdoor trades; and
(c) outdoor non-trade operations and maintenance (O&M).
[10] The indoor staff, comprising some 500 staff 5 is said to be an operationally distinct group of employees,6 even though some indoor staff have managerial responsibility for outdoor staff and may make field visits.7 Each of the other groups consists of about 100 staff.8 Whether the three groups are in fact organisationally or operationally distinct (or both) is a matter of dispute. No argument was made for geographical distinction and it is plainly not a consideration there are multiple corporate offices and service centres and numerous “outdoor” work sites.9 I return to this issue below.
[11] The scope disagreement has been brought before the Commission by way, ultimately, of the 2 competing scope applications. The long and contested history of this matter involves many other applications for scope orders, bargaining orders and interim orders that have been made and withdrawn or disposed of. The CFMEU brought an application during the hearing of this matter for a competing 2 agreement scope order and interim order application about that scope application that was the subject of my Decision [2016] FWC 6102.
[12] A scope order may be made, in the Commission’s discretion, on application of a bargaining representative under s.238. That section states conditions that must be satisfied by the applicant in order to bring the application, and of which the Commission must be satisfied in order to exercise its discretion.
[13] Each of the 3 applicants in this matter, submit that they have complied with the requirements for a scope order to issue in accordance with their application and that I should exercise my discretion to do so.
[14] In the outline below I deal with whether each applicant has in fact complied with the requirements for a scope order to issue
Part 1 – Preliminary Requirements
Has each bargaining representative complied with the requirements of s.238(1) – (3)?
[15] A bargaining representative may apply for a scope order under s.238(1). It requires that:
A bargaining representative for a proposed single-enterprise agreement (other than a greenfields agreement) may apply to the FWC for an order (a scope order) under this section if:
(a) the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly; and
(b) the reason for this is that the bargaining representative considers that the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover.
ASU
[16] No party contended that the ASU had not complied with the conditions in s.238(1). On the face of the application and its submissions I am satisfied that it has met the requirements in s.238(1).
Unitywater and the AWU
[17] The CFMEU contends that the applications made by Unitywater and AWU have not been properly made.
[18] As to Unitywater, the CFMEU submits that to the extent Unitywater had legitimate concerns those concerns only arise in respect of the 3 proposed agreements not negotiations for the single agreement. Further there was adequate progression in terms of the single agreement. And if there was a lack of progress in terms of bargaining, Unitywater provided information at a late stage.
[19] However, this assertion is inconsistent with Unitywater’s concerns notice. It makes explicit that it has concerns about fairness and efficiency of bargaining for a single agreement. It further states that the reason for that was past experience. Unitywater gives various reasons why it considers the matter to be inefficient. That is, it had concerns about the efficiency of the negotiations, as the single agreement proposed by the five unions in early June for a single enterprise agreement will cover employees it is not appropriate to cover.
[20] Section 238(1) is a subjective test; it looks to whether the bargaining representative has concerns about the efficiency or fairness of the negotiations. The concerns notice from Unitywater sets out efficiency concerns, which are based on the proposed one scope.
[21] This satisfies the requirements of s.238(1)(a) as it applies to Unitywater.
[22] The CFMEU also submit the AWU have not complied with s.238(1)(a).
[23] It contends that the AWU sent concerns notices where there existed no reasonable basis to do so. It asserts that the AWU properly and actively participated in negotiations in meetings from the second bargaining meeting through to the 15th meeting (which was prior to the proposal to split to the 3rd agreement).
[24] CFMEU points to the AWU witnesses Mr McLady 10 and Mr Bolton11 and suggests that its witnesses were unable to provide detail about the concerns.
[25] Further that a senior official was involved in the decision and the Commission has not heard from the official. It suggests that the AWU split because they were more likely to get a deal on their own.
[26] The AWU concerns notice suggests that having bargained from August 2015 to January 2016 no significant process was made.
[27] Further the reason for this was competing interests and sometimes completely different interests.
[28] In my view these are reasonable and logical concerns. Further the basis of those concerns is further explained in the concerns notice with the proposed 3 groups being the AWU preferred scope for fair and efficient conduct of bargaining.
[29] These are concerns contemplated by s.238(1). Participation in 13 meetings without agreement, is more likely to establish that bargaining is not progressing efficiently or fairly than to prove efficiency of bargaining.
[30] I therefore conclude that the AWU has complied with s.238(1)(a).
Concerns notice
[31] Under s.238(3) a bargaining representative may only apply for the scope order if the bargaining representative:
(a) has taken all reasonable steps to give a written notice setting out the concerns referred to in subsection (1) to the relevant bargaining representatives for the agreement; and
(b) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and
(c) considers that the relevant bargaining representatives have not responded appropriately.
[32] Notices of concerns were sent by the ASU, AWU and Unitywater and to each other. In addition these 3 applicants sent notices to the other applicants, the trades unions and the CFMEU.
ASU concerns notice
[33] ASU wrote to Unitywater on 1 June seeking a response by 3 June. Unitywater says the timeframe was too short. However, Unitywater responded within the time required and did not complain at that point. In its response it rejected the concerns. It was reasonable for the ASU to conclude that Unitywater had not responded appropriately.
[34] The letter was sent by email to the other bargaining representatives in similar terms. It detailed the timelines concerning the request to Unitywater to respond. A further paragraph was included noting that it reserved its right in seeking scope orders if Unitywater did not provide assurance around the proposal for a single agreement. In addition, the letter indicated if the bargaining representatives have any questions or wish to provide a response it could do so directly to Mr Mattner.
[35] No bargaining representatives other than Unitywater responded.
[36] The AWU claimed that its representative, Mr Alan Bolton, did not receive the email. It appears Mr Bolton was on leave at the time.
[37] Mr Mattner of the ASU says that he was unaware that Mr Bolton was on leave and that Mr Bolton did not have a ‘out of office’ reply on his email account.
[38] In these circumstances it would seem that the ASU has taken reasonable steps to notify the AWU.
[39] The ASU filed its scope application on 6 June.
[40] I conclude this letter sets out the concerns of the ASU, it provided an appropriate time to respond. The ASU has therefore complied with s.238(3).
Unitywater and AWU concerns notices
[41] I refer to findings above in relation to the Unitywater and AWU concerning s.238(1). In addition, the timing of the notices of concern are reasonable and Unitywater and the AWU have complied with s.238(3).
[42] I am also satisfied that all 3 applicant’s notices were sufficient, in the circumstances of this protracted bargaining, to meet the requirements of s.238(3)(a) as to notifying their concerns to relevant bargaining representatives. This was not a case of merely copying the notice: it was addressed by email individually and the bargaining history was clearly directed at the scope question, in particular one versus three agreements. As it was noted in Woolworths, the Commission is reluctant to adopt a pedantic approach. 12 This case is more akin to that in Australian Municipal, Administrative, Clerical and Services Union v Essential Energy.13
Part 2 - When the FWC may make scope order s.238(4)
[43] The ASU, Unitywater and AWU have complied with the preliminary requirements detailed above. I am therefore required to consider whether a scope order should issue.
[44] Section 238(4) The FWC may make the scope order if the FWC is satisfied of the matters set out in the following sections.
(a) that the bargaining representative who made the application has met, or is meeting, the good faith bargaining requirements.
[45] Section 228 provides guidance as to what is required of a bargaining representative to meet the good faith bargaining requirements. These are:
(a) attending, and participating in, meetings at reasonable times;
(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;
(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;
(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative's responses to those proposals;
(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;
(f) recognising and bargaining with the other bargaining representatives for the agreement.
(2) The good faith bargaining requirements do not require:
(a) a bargaining representative to make concessions during bargaining for the agreement; or
(b) a bargaining representative to reach agreement on the terms that are to be included in the agreement
[46] In order to obtain a scope order, an applicant must demonstrate it meets or has met the good faith bargaining requirements. In assessing whether an applicant meets these requirements it was noted by the Full Bench in Tahmoor Coal, that: 14
“whether a party observes or fails to observe the good faith bargaining requirements set out in s228(1) is to be determined in the light of all the relevant circumstances. While at one level this is stating the obvious, it is appropriate in view of the submissions in the appeal to indicate the question will rarely be decided by reference to one action or a series of actions. Equally it would be undesirable to read into the legislation concepts which do not already appear in it for the purpose of explaining its operation.”
[47] That is, in assessing to whether a party has observed good faith bargaining requirements, there needs to be consideration of all the relevant circumstances.
Has the ASU satisfied the good faith bargaining requirements?
[48] The ASU provides evidence and submissions satisfying the good faith bargaining requirements. This evidence was not challenged by any other party and I conclude that the ASU met the requirements of s.238(4).
Has Unitywater satisfied the good faith bargaining requirements?
[49] The ASU submit that Unitywater generally breached the good faith bargaining requirements. In its submission it particularly focused on the following:
[50] In the bargaining history of this matter, Unitywater has variously supported a single agreement, 2 agreements and now 3 agreements.
[51] The other union parties assert that Unitywater has not bargained in good faith essentially because it has operated on an assumption that the 3 agreements’ scope is active and that good faith bargaining requires it only to engage with the bargaining representatives it determined to be properly a bargaining representative for each agreement. See for example Statement of Glenn Carroll paragraph 54 and onward: Statement of Arturo Menon dated 18 July 2016 paragraph 29; and the Statement of Jim White paragraph 8.
[52] Unitywater relied on Senior Deputy President Richards’ decision in Construction, Forestry, Mining and Energy Union v Ostwald Bros Pty Ltd, 15 in which the point was made that a bargaining representative’s status was a question of fact and a mere assertion of the right was not enough if challenged by an employer. However this case is different.
[53] All the unions were clearly bargaining representatives under the single agreement that was the subject of the Notice of Employee Representation Rights. 16 It was only when the employer sought firstly 2 then 3 agreements that the union coverage of the different groups of employees was a consideration.
[54] But scope was a matter in dispute and the subject of active bargaining. All the 1 agreement unions were bargaining representatives on the question of scope and excluding them from information provision; responses to proposals (especially on scope); and recognising them and bargaining with them are relevant considerations on the question of good faith.
[55] Unitywater cannot bargain in good faith and exclude a bargaining representative on a presumption of 3 agreements or another state of affairs that was not settled. In my view such conduct was inconsistent with paragraphs (b), (d) and (f) of s.288(1). That conduct may also have been capricious, a change in bargaining status without a sound basis in law or fact.
[56] In order to assert its right to bargain differentially based on the 3 agreements proposed, Unitywater should first have obtained scope agreement or sought a scope order. As the Full Bench in MSS Security v LHMU said:17
Where there is a continuing disagreement between the bargaining parties as to the scope of the proposed enterprise agreement, the remedy for the party who wants a narrower scope is to seek a scope order pursuant to s.238. In the absence of such an order, bargaining will proceed on the basis of the broader scope, save that the parties are entitled to continue bargaining over the scope itself until such time as the scope of the proposed agreement is settled through bargaining or by the making of a scope order.
[57] I note that Unitywater provided a significant amount of material to various bargaining representatives on request. I also accept that on many occasions Unitywater provided detailed responses to questions for example there is evidence from Mr Dearling that when he received a request he responded. 18 Unitywater dealt with issues raised by various bargaining representatives, and where appropriate specifically answered questions raised. An example of this is the email dated 28 May 2016 answering specific questions about the water industry worker in response to requests for specific detail on the type of work to be performed by a Water Industry Worker.
[58] While this exchange of information was useful and a positive contribution to bargaining, it cannot make good refusal or failure to bargain with bargaining representatives under the agreement in terms of the good faith obligation. It was however sufficient in my view to ensure, as a practical matter, that the bargaining representatives were not left in the dark.
[59] Additionally CFMEU suggest that Unitywater engaged in capricious and unfair conduct which included making it difficult for the CFMEU to meet its members by changing rosters, removing vehicles and dismissing delegates who were heavily involved in bargaining. In its final submissions, the CFMEU submitted that the following also represented capricious and unfair conduct:
i. unilateral changes to scope (this was also raised against the AWU);
ii. changes in work practices absent consultation;
iii. engagement in threatening or coercive behaviour by sending out a letter before the vote of employees; and
iv. engaging in separate discussions regarding annualised salaries.
[60] Apart from i, which I have dealt with above, there was insufficient evidence before the Commission to make findings as to whether these matters involved capricious and unfair conduct.
[61] I deal with the letter mentioned in item iii. later in my reasons, where I conclude the letter was unhelpful but that it did not amount to a breach of the good faith bargaining requirements.
[62] I conclude that Unitywater has not satisfied s.238(4)(a) and therefore its Scope application cannot succeed.
Has the AWU satisfied the good faith bargaining requirements?
[63] The ASU submits that the AWU while initially meeting good faith bargaining requirements did not:
[64] The ASU and the CFMEU contend that the AWU had an obligation to disclose its reasons for its decision on 21 April 2016 to pursue a change of scope and to not do so was a breach of good faith bargaining requirements.
[65] Just as the other bargaining representatives seek a different scope which advantages their members, the AWU is entitled to present a proposal in the terms it did. That it is not acceptable to other Unions means there is a disagreement over scope but not a breach of good faith bargaining requirements.
[66] It is then a matter of bargaining about that scope.
[67] This process did not breach the requirement to provide information in a timely way.
[68] Additionally the ASU submits that the AWU engaged in capricious and unfair conduct that undermined freedom of association and collective-bargaining, including failure to provide the full schedule of negotiation meetings.
[69] But scheduling negotiation meetings was Unitywater’s responsibility, and the AWU, a distinct bargaining representative for some of Unitywater’s employees, cannot be held accountable for an error of the employer. There is no suggestion that the AWU was in anyway complicit.
[70] The CEPU, the Plumbers and the AMWU (the joint unions) submit that the AWU failed to recognise their eligible bargaining representatives through the course of these negotiations.
[71] I have found that Unitywater failed to recognise eligible bargaining representatives, but is it the case that the AWU has similarly failed to recognise eligible bargaining representatives?
[72] The AWU submits that it was always bargaining with whoever attended the meetings. There was no evidence that disputed this finding.
[73] The AWU strongly asserts its right to represent employees in the non-trades agreement to the exclusion of other unions. It is entitled to do so.
[74] Having confirmed that it bargained with whoever attended the meetings, the fact that certain representatives were not at the meetings because they were not invited does not mean the AWU failed to recognise eligible bargaining representatives.
[75] For these reasons I conclude that the AWU has satisfied the requirement of bargaining in good faith.
[76] Having concluded that both the ASU and the AWU have satisfied the requirements in terms of good faith bargaining, I now turn to whether making the order will promote fair and efficient conduct of bargaining.
(b) that making the order will promote the fair and efficient conduct of bargaining
[77] The Full Bench in AWU v BP Refinery Kwinana observed: 19
[23] It is true that the Commission can only make a scope order when such an order will be “necessary to promote fair and efficient conduct of bargaining”. Where, as here, bargaining is at an impasse because of the disagreement over scope of a proposed enterprise agreement and the Commission is confronted with competing applications an order is “necessary” to break that impasse.
[24] When considering two competing applications in a particular case, it may properly be found in the case of each application that “making the order sought will promote the fair and efficient conduct of bargaining” within the meaning of s.238(4)(b). The relative degree of promotion of such fairness and efficiency in the conduct of bargaining will obviously be relevant to a determination of which of the two competing applications should be accepted.
[25] One can postulate circumstances where bargaining for two agreements for two groups would be more efficient than bargaining for a single agreement covering both groups. To give a single example, the evidence may establish that the two groups of employees have conflicting positions on issues that are important to them but not particularly important to the employer, as can arise where there are demarcation issues. In such a case, it may plainly be more efficient to have two separate agreements and avoid the effort and delay involved in resolving those issues for a single agreement.
[78] Kwinana also made plain that fairness and efficiency may lie in 2 agreements rather than 1, despite the inherent duplication of process, because bargaining for a single agreement may, in relevant circumstances, bring conflicting positions unnecessarily into the process. Which is preferable is a matter for evidence. 20 The same comments apply to this instance of one versus three agreements and the Commission is charged with judging which application, subject to threshold considerations, satisfies the requirements of s.238(4) and (4A) better.21
[79] As to the nature of s.238(4)(b) in Kwinana at first instance 22 Commissioner Cloghan noted:
“Paragraph 238(4)(b) is “forward” looking. By ‘forward’ looking I mean that the Commission is satisfied that in making an order, it will promote the fair and efficient conduct of bargaining.”
[80] The Commission’s task is to assess if a particular scope order promotes the fair and efficient conduct of bargaining in the future. Looking backwards at what happened in the past might inform the Commission to reach the necessary satisfaction, but it is not the focus.
[81] The ASU submits that granting a scope application for a single agreement would be fair and efficient for the following reasons:
[82] The AWU submits that an order in terms of 3 separate agreements would be fairer.
[83] This is because:
[84] The AWU relies on the Full Bench in RDNS v HSU 23 that it said did not disturb Commissioner Roe’s comments at first instance that the concept of efficiency in bargaining is not narrow but includes the concept of an effective process for all parties involved.
[85] In considering this matter I agree with the ASU that it is relevant to consider comments from UFU v MFSB 24 where the Full Bench stated:
The implication is that the tribunal should be satisfied that if an order is made the bargaining will at least be fairer or more efficient or both than if it would be if no order were to be made.
[86] Both the AWU and the ASU agree that bargaining has not been proceeding fairly or efficiently.
[87] It is the ASU’s argument that there would be an immediate improvement in efficiency in both in terms of both highly contentious issues and the logistics of bargaining.
[88] The AWU also put points to what it describes as a long-running history of animosity between itself and the CFMEU. It points to evidence and cross-examination, and to at least one exchange during bargaining where AWU delegates were called ‘fucking scabs’.
[89] While the CFMEU rejected the long-running history of animosity, they did accept that Mr Menon did describe the AWU delegates this way. It would appear an apology was offered although in what terms is not clear. No other union was subject to such claims.
[90] The CFMEU submits it is Unitywater’s conduct that put bargaining in its current impasse, pointing to the Unitywater’s refusal to recognise the CFMEU and other unions (other than the AWU) as bargaining representatives for the of employees it says are eligible for membership.
[91] All unions other than the AWU argue that each of the unions has coverage that has been not recognised by Unitywater.
[92] The issue of fairness and effectiveness in this matter is not clear cut between the 2 competing scope applications.
[93] There were many submissions and much evidence that the issue of right to represent will not be properly addressed unless there is a single agreement.
[94] Representation rights are about eligibility rules not scope. These issues, to the extent they exist, are not affected by the decision on scope.
[95] The Joint Unions accepted this position. Ms Traill put it as follows:
There’s been a few comments made thus far in relation to the relevant coverage of different unions with respect to employees of Unity water. It is the joint unions submission that while coverage may be a relevant issue in so far as the good faith bargaining arguments that have been advanced by the parties it is not a relevant issue in so far as determining the appropriate scope of employees… 25
[96] Ms Traill went on to say that the contest around who will rightfully have coverage within those agreements was clearly relevant to the fair and efficient conduct of bargaining. It is something that will be raised at that particular juncture but not at this point in time.
[97] That coverage issues could impact on the efficiency of bargaining is probably a practical effect. But I agree also with Ms Traill’s first statement: it is not a relevant issue in determining the appropriateness of the scope of employees.
[98] I turn now to deal first with the issue of efficiency.
[99] The AWU argues that the 3 agreement scope has been demonstrated to be more efficient by the fact that it is ready to be put to a ballot.
[100] Mr Mattner submitted for the ASU reducing the bargaining participants for a particular agreement might be called efficient but that is a construct and comes at the expense of other views. 26
[101] In my view efficiency does favour the 3 agreement proposal – there was progress in that the non-trades agreement moved quickly toward finalisation following the proposal for a scope for 3 agreements.
[102] The issue of fairness is less clear. It would seem to me that a single agreement might be fair, reflecting the coverage of the current Water Industry Award.
[103] But there is nothing inherently unfair in the three agreements. The issues between the CFMEU and the AWU are not decisive but tend to favour separate bargaining where the potential for animosity is clearly less likely to occur.
[104] In my view, fairness and efficiency, on the evidence, favours 3 agreements because that will be more efficient going forward than the alternative proposition for one agreement and that fairness is well served by either proposition.
(c) that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen
[105] The Full Bench in Kwinana said:27
[14] Depending upon the circumstances of the particular case, there may be more than one way of fairly choosing the group of employees to be covered by a proposed enterprise agreement.
[15] Enterprise agreements that cover all employees in a business are commonplace. Almost all such business will have organisation structures that will allow organisationally distinct groups to be identified. Many of those businesses contain operationally distinct groups. Yet it will rarely be the case that a ‘whole of enterprise’ group would be unfairly chosen.
…
[18] Where the Commission is dealing with a single application for a scope order, it may be open in a particular case to find that the group proposed to be covered was fairly chosen notwithstanding that there may have been another grouping that could also have been fairly chosen. When there are competing applications it will often be the case that the alternative groupings can both be regarded as fairly chosen.
[106] That Parliament provided for the fair choosing of employees by way of sub-sets of the unity of employees is evident in the words of ss.238(4)(c) and (4A). Factors relevant to deciding what is “fairly chosen” are stated in ss.238(4A): “whether the group is geographically, operationally or organisationally distinct.”
[107] That fairness revolves not around the content of the proposed agreements but the fairness of the choosing. 28
[108] And it is entirely possible that different, even competing configurations of employees may each be fairly chosen. 29 Thus it is entirely possible that the two competing applications here may each be “fairly chosen” as defined.
Are the groups geographically, operationally or organisationally distinct?
[109] As noted above there is no argument as to the geographical element. It is only whether the three groups are operationally or organisational distinct.
[110] The Full Bench in Harbour City Ferries 30 made the following point:
[31] Third, it is incorrect to say that the Commissioner was required to be satisfied that the proposed coverage of the 2015 Agreement represented a geographically, operationally or organisationally distinct group. As was explained in Cimeco, what s.186(3A) requires is for the Commission to take into account whether the group is geographically, operationally or organisationally distinct; it does not require a positive finding or expression of satisfaction that it is geographically, operationally or organisationally distinct.
[111] The ASU submits that a ‘whole of enterprise’ group is fairly chosen. There is significant authority that it would be rare to find such a proposal not fairly chosen. No such submissions were put in this matter and I accept that the ASU scope of a single agreement is ‘fairly chosen’.
[112] I turn to the AWU proposed 'three scope'.
[113] The leading authority on fairly chosen is the case of Cimeco: 31
…it is not appropriate to seek to exhaustively identify what might be the other relevant considerations. They will vary from case to case and will need to be demonstrated to the satisfaction of the tribunal. The word ‘fairly’ suggests that the selection of the group was not arbitrary or discriminatory. For example selection based upon employee characteristics such as date of employment age or gender would be unlikely to be fair. Similarly, selection based on criteria which would have the effect of undermining collective bargaining or other legislative objectives would also unlikely to be fair. It is also appropriate to have regard to the interests of the employer such as enhancing productivity and the interests of employees in determining whether the group of employees was fairly chosen.
[114] The AWU proposal is described in their submissions as seeking an order that covers 3 separate and distinct groups of employees:
a. indoor office staff;
b. outdoor trade staff; and
c. outdoor non-trade staff.
Indoor Office Staff
[115] Indoor Office Staff are operationally distinct performing administration professional and technical duties and work 36.25 hours per week.
Outdoor Trade Staff
[116] Outdoor Trade Staff are operationally and organisationally distinct the employees perform trades work in line with their qualifications and generally work between 6am and 6pm. They are not required to be worked out of hours or to be on call. This group also includes the construction crew members and pump attendants.
Outdoor Non-Trade Staff
[117] Outdoor Non-Trade Staff operate sewage treatment plants and perform non-trade civil maintenance work. These employees do not require a qualification. Their work is 24 hours 7 days a week. These employees are required to work out of hours, be on call, and deal with maintenance and operational issues as they arise.
[118] Much of the evidence in this case dealt with the issue of the exact nature of some employees’ work.
[119] The ASU submits that there are classification overlaps and there is a lack of organisational and operational distinction between the proposed employee groups. The ASU gives the example of site planning officers. Unitywater proposes that these employees will come under the indoor agreement. However on a daily basis these employees have roles in the ‘field’ providing direct supervision of employees who are proposed to come under the outdoor non-trade’s agreement.
[120] In ResMed Limited v Australian Manufacturing Workers' Union 32, Perry J, citing Cimeco, noted:
[61] However, nothing in the FW Act, suggests that the fact that a group of employees is defined by reference to the eligibility rules of an employee organisation means that the “fairly chosen” requirement will be met, nor that union eligibility rules are necessarily relevant to that question.
[121] Evidence was given by Mr Grocott on behalf of the CFMEU that although he is potentially covered by the nontrade agreement he works potentially or regularly with those in the trade qualified employees
[122] The joint unions assert that witness evidence did not sufficiently identify any organisational geographical or operational distinctness as necessitated to narrow the scope in either the AWU or Unitywater applications.
[123] In support of its submission it points to the evidence of:
[124] In their submission the repair and maintenance of water treatment plants demonstrates the performance of work of the trades and the water treatment plant operators are not operationally distinct and they rely on one another.
[125] Unitywater provided a breakdown of the three groups proposed in both its own (and the AWU’s) scope application for 3 agreements, and as a respondent to the ASU’s single agreement application. 33
[126] Indoor salaried staff are those performing professional roles such as branch managers, engineers and the like as are administrative roles.
[127] In the non-trade agreement, described as work of operation and maintenance of infrastructure and assets, are treatment plant employees and the non-trade civil maintenance employees. The third agreement, the trades agreement, contains a Mechanical and Electrical Branch which includes trade qualified people and trade assistants and the Operations Support Branch, and other trades.
[128] While I accept that performing these tasks does require working together across the three groups, there is a clear and rational organisational distinctness between each of the three proposed groups as described by Unitywater.
[129] In deciding whether the group of employees is fairly chosen whether the group is organisationally distinct is not decisive.
[130] I am also required to take into consideration the views of employer and employees.
[131] Cimeco decided consideration about ‘fairly chosen’ must take into account the employer’s views. Here, these are:
[132] Unitywater refers to the explanatory memorandum to the Fair Work Bill noting that a group of employees covered by an agreement will be fairly chosen will allow if agreement to cover a group of employees is constituted in any fair and appropriate way.
[133] Further the issue of fairness is limited to the choice of the group of employees not to the proposed content of the agreement as was noted in Stadium Australia: 34
I can see no warrant in the language of s.186(3) when construed in context, for utilising that requirement to determine that the group of employees covered by an agreement was not fairly chosen merely because at the conclusion of bargaining one subgroup of employees has fared relatively worse than another subgroup of employees when compared to the actual terms and conditions of employment of both subgroups that obtained before the agreement was made.
Employees’ views
[134] Two surveys were done in this matter the first by the employer and the second by the Commission.
[135] The Unitywater survey was of limited use. It was limited to whether employees wanted to vote on terms to be negotiated with the group.
[136] For the Commission survey, the questions were agreed between the various bargaining representatives and voting was confidential. About 75% of employees completed the survey with the following results:
Employee group |
Preference for three agreements |
Preference for one agreement | ||
Indoor group |
210 |
60% |
140 |
40% |
Nontrades group |
54 |
59% |
38 |
41% |
Trade group |
14 |
21% |
52 |
79% |
TOTAL |
278 |
55% |
230 |
45% |
[137] Two of the 3 groups demonstrate a preference for 3 agreements and the trade group a preference for 1 agreement. However a majority of employees overall favoured 3 agreements. Additionally within groups the indoor group and the nontrade trade group both expressed preference for 3 agreements over 1 agreement.
[138] In making this comment I am mindful of the Full Bench direction that proper weight should be given to the views of employees potentially affected in but in particular cases it may be appropriate to make a scope order contrary to the views of the employees potentially affected.
Unitywater letter
[139] Unitywater choose to send a letter to employees during the conduct of the Commission’s survey. The letter, signed by the chair, Jim Soorley, and Unitywater’s chief executive, George Theo, urged a particular vote.
[140] The AWU described the letter in these terms:
Your actions in sending this email have now undermined the integrity of the process that all parties had agreed to. … This now means that even if the results of the survey show that the employees want 3 separate agreements these results cannot be relied on as at least some of the employees will have potentially answered that way under duress.
[141] The ASU submitted I should give little weight to the survey on the basis of the Unitywater letter.
[142] The letter was at best unhelpful. The letter did call into question the weight that should be given to the survey. I consider that while the intent of the letter may have been to influence employees, there was little evidence it affected the overall integrity of the vote. I consider the survey remained generally representative of the views of employees at Unitywater expressing a slight preference for 3 agreements.
[143] I have therefore concluded that:
[144] I have concluded that the 3 agreement scope also is fairly chosen.
(d) it is reasonable in all the circumstances to make the order.
[145] In Kwinana the Full Bench noted:
[43] The Commissioner was considering two separate and competing applications for a scope order. Each had to be considered on its own merits. In circumstances where each of the competing proposed agreements satisfied the requirements in s.238(4)(a) to (c), the resolution of the competing applications is governed by s.238(d).
[146] One of the 2 applications will be a more reasonable exercise of discretion. 35
[147] I am mindful of the ASU’s submission that its proposed scope would improve efficiency of bargaining by allowing specific and thorough negotiation of issues affecting the entire enterprise, including application of the Water Industry Award, and that these can be resolved prior to any new agreement being approved. 36
[148] But in my view this submission conflates 2 issues.
[149] The task of the Commission here is to decide between to competing and acceptable scope applications on the basis of the Act’s requirements, notably in s.238. Efficiency is an issue for scope, does that not require me to consider whether there will be an opportunity to resolve disputed matters that are the subject of bargaining.
[150] As noted earlier, it is clear from Stadium Australia that what matters is the fairness of the choice of group of employees to be covered by the proposed agreements rather than the fairness of the content of the agreement.
[151] I am not persuaded the ASU’s submission is relevant. It concerns the possible content of the agreement rather than the choice of employees to be covered under one or three agreements as proposed.
[152] Kwinana again emphasises the views of employees should be given weight subject of course to the general requirements of fairness and efficiency of bargaining.
[153] This case has been somewhat unusual in that various employee bargaining representatives are the competing parties because the Unitywater’s application could not proceed. None-the-less there were valid and competent scope applications on foot. Each met all the requirements of the Act, and the determination fell ultimately to the Commission’s discretion and assessment of reasonableness in the circumstances.
[154] For the reasons stated above in detail, I am satisfied that the AWU scope order for 3 agreements being the Indoor Office Staff, Outdoor Trade Staff and Outdoor Non-Trade Staff and detailed in paragraphs 115 to 117 of this Decision best fulfils the criteria stated in s.238(4) and that an Order in those terms is reasonable in all the circumstances.
[155] In view of this conclusion, the Application B2016/665 is granted and an order to this effect is issued with this Decision. Further as a consequence of this Decision, it is necessary to dismiss the Applications B2016/612 and B2016/677 and also to issue orders to this effect.
COMMISSIONER
Appearances:
Mr J Mattner for the Australian Municipal, Administrative, Clerical and Services Union.
Mr T McKernan for the Australian Workers’ Union.
Mr J Wells on behalf of Unitywater.
Mr E White of Counsel, with Mr W Ash on behalf of Construction, Forestry, Mining and Energy Union.
Ms N Traill for Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
Ms S Fogarty for Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia- Plumbing Division Queensland Divisional Branch.
Mr J Blundell- Thornton for “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
Hearing details:
2016.
Brisbane:
August 3, 4, 5, 12 and 18.
Final written submissions:
Construction, Forestry, Mining and Energy Union 17 August 2016;
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia- Plumbing Division Queensland Divisional Branch; and “Automotive, Food, Metals, Engineering, Printing and Kindred (Joint Submissions) 17 August 2016;
Australian Municipal, Administrative, Clerical and Services Union 18 August 2016;
The Australian Workers’ Union 18 August 2016; and
Unitywater 18 August 2016.
COMMISSIONER
1 [2015] HCA 11
2 MSS Security Pty Ltd v Liquor, Hospitality and Miscellaneous Union [2010] FWAFB 6519 [16]
3 United Firefighters' Union of Australia v Metropolitan Fire & Emergency Services Board; Metropolitan Fire & Emergency Services Board v United Firefighters' Union of Australia, Mr W. Crossley, Mr P. Swain and Mr P. Holmes [2010] FWAFB 3009 [53] (UFU)
4 Unitywater Final Submissions [1]
5 Unitywater Final Submissions [190]
6 AWU Final Submissions in Reply [2]; Mr Dearling in transcript PN 319 and Statement [7].
7 Unitywater Final Submissions [207]
8 Unitywater Final Submissions [190]
9 Unitywater Annual Report 2014-2015 pp.9-10
10 At PN 1564
11 At PN 605 (9august), PN 3394, 3401, 3404
12 Australasian Meat Industry Employees Union v Woolworths Limited [2010] FWAFB 1625 [18]
14 Construction, Forestry, Mining and Energy Union (Mining and Energy Division) v Tahmoor Coal Pty Ltd (2010) 195 IR 58
15 [2012] FWA 2484 [95]-[97]
16 The scope proposed under Notice of Employee Representation Rights that was for a single agreement for all employees covered under the Water Industry Award.
17 [2010] FWAFB 6519 [18]
18 Paragraph 104 final submissions unity water
20 Kwinana [24]-[28]
21 Kwinana [28]
23 Royal District Nursing Service Limited v Health Services Union and another [2012] FWAFB 1489
24 United Firefighters' Union of Australia v Metropolitan Fire & Emergency Services Board; Metropolitan Fire & Emergency Services Board v United Firefighters' Union of Australia, Mr W. Crossley, Mr P. Swain and Mr P. Holmes [2010] FWAFB 3009 [55]
25 PN 2712 -2713
26 PN 2527
28 and see Re ANZ Stadium Casual Employees Enterprise Agreement 2009 [2010] FWAA 3758 [27]-[28]
29 Kwinana [2014] FWCFB 1476 [14], [18]
30 Australian Maritime Officers' Union, The v Harbour City Ferries Pty Ltd [2016] FWCFB 1151
31 Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union [2012] FWAFB 2206 [21]
32 [2015] FCA 360. Appeal dismissed: [2015] FCAFC 195
33 Statement of Craig Dearling attachment 65
34 Stadium Australia Operations Pty Ltd t/a ANZ Stadium re ANZ Stadium Casual Employees Enterprise Agreement 2009 [2010]FWAA 3758 [31]
35 Unless neither meets the criteria
36 Paragraph 29 final submissions ASU
Printed by authority of the Commonwealth Government Printer
<Price code G, PR584742>