DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Broadspectrum Limited t/a Broadspectrum
v
United Voice
(C2017/2070)

Appeal against decision [[2017] FWC 1818] of Deputy President Kovacic at Canberra on 31 March 2017 in matter number AG2016/3877.

Introduction

[1] Broadspectrum Ltd t/a Broadspectrum has lodged an appeal, for which permission to appeal is required, against a decision of Deputy President Kovacic issued on 31 March 2017 1 (Decision). The Decision concerned an application by Broadspectrum for approval of the JBU Enterprise Agreement 2016 (JBU Agreement), a single-enterprise non-greenfields agreement made under Div.4 of Pt.2-4 of the Fair Work Act 2009 (FW Act). The Agreement had earlier been approved in a decision of the Commission issued on 18 November 2016.2 The decision was the subject of an appeal by United Voice. In a decision issued on 14 February 20173, a Full Bench of the Commission quashed the decision to approve the JBU Agreement, and referred Broadspectrum’s application to approve the Agreement to the Deputy President for re-determination. In the Decision, the Deputy President concluded that the JBU Agreement was not genuinely agreed to as required by s.186(2)(a) of the FW Act on the basis that the employees who made the Agreement were not covered by the JBU Agreement at the time it was made, and dismissed Broadspectrum’s application. In its appeal, Broadspectrum contended that the Deputy President erred in reaching this conclusion, that the JBU Agreement was capable of approval under the FW Act, and that we should grant permission to appeal, quash the Decision and approve the Agreement.

Factual background

[2] Broadspectrum is a business which provides services in a broad range of industry sectors. In late 2015 it established a Justice Business Unit (JBU) in order to tender for contracts in correctional work. In January 2016 the JBU began preparing Broadspectrum’s bid for the Western Australian Government’s court security and custodial services contract (WA contract). Broadspectrum also bid for two other correctional services contracts (in New South Wales and South Australia) in 2016.

[3] In May and June 2016 Broadspectrum engaged four persons to work in the JBU. Two of these persons had not previously been employed with Broadspectrum, nor had they previously worked in connection with custodial services. They were employed on a part-time basis pursuant to comprehensive employment contracts dated 7 June 2016 which described their positions as that of “Care & Security Officer” but did not set out the duties of the positions. The contracts described the commencement location of the employment as being in Perth, and set out the “Total Fixed Remuneration” for the positions, with the second contract providing for a lower rate of salary than the first.

[4] The other two persons were existing employees of Broadspectrum who had previously been engaged to work in the offshore immigration detention centre on Nauru operated by Broadspectrum. They were engaged to work in the JBU pursuant to letters (dated 24 May 2016 and 6 June 2016 respectively) entitled “Change to terms and conditions”. The 24 May 2016 letter stated that it confirmed “...changes to your terms and conditions of employment with Broadspectrum (Australia) Pty Limited with effect from 1 June 2016 up to 30^th November 2016”; the 6 June 2016 letter contained the same provision except it contained the date of 1 May rather than 1 June 2016. The first of the letters referred to a “Position Change” in the following terms “You will be appointed to the position of Care & Welfare Officer on a full time temporary basis at our Immigration Justice contract”, and said “You will be located at our Broadspectrum office in Melbourne, Victoria; however, it may be necessary in future for this to be changed, subject of course to prior consultation”. The second letter described the Position Change as: “You will be appointed to the position of Care and Welfare Supervisor on a temporary full time basis at our Justice contract”. Both letters set out the Total Fixed Remuneration (with the amount in the second letter being substantially higher than in the first), and both separately provided for an additional annual “Justice Project Allowance” of $36,000 payable “... in recognition of project demands”. Neither letter set out the duties of the appointments.

[5] On 6 June 2016 Broadspectrum initiated bargaining for an enterprise agreement to apply to employees in the JBU. It sent a notice of employee representational rights to the four persons earlier referred to, who had by now commenced employment in the JBU. The notices stated that the employees would be covered by the proposed JBU Agreement. Voting on the proposed agreement commenced on 4 July 2016 and concluded on 5 July 2016. Three of the four employees cast a valid vote and voted in favour of the approval of the proposed JBU Agreement. On 12 July 2016 Broadspectrum lodged its application in the Commission for approval of the JBU Agreement.

[6] It was not in dispute that none of the four employees involved in making the JBU Agreement were involved in correctional or custodial duties at any time prior to the lodgment of the application for approval of the JBU Agreement. In the proceedings below, Broadspectrum tendered position descriptions for the positions of “Care & Custody Officer (Inc Escorts) and “Court Supervisor”. The former position was concerned with the transport of persons in custody to and from courts, and the latter with the supervision of other staff in connection with reception and discharge of persons in custody at court locations. Both were described as full-time roles. It was not in dispute that the four employees did not perform the duties of these positions at any time prior to the lodgment of the JBU Agreement approval application. In correspondence dated 21 October 2016, Broadspectrum advised the Commissioner who first heard the application that the employees’ duties at this time were in fact as follows:

“As a new business unit, the 4 employees have been engaged in establishing the systems and processes that potential clients expect Broadspectrum to have in place. They have worked on drafting, compiling and reviewing policies and operating manuals to suit the day-to-day operational requirements of tender requirements of the client as well as those required legislative by the client. They have been involved with the technical requirements of Broadspectrum bids for WA Court Security and Custody Services, Wandoo (WA), John Morony Correctional Facility (NSW) and Mt Gambier (SA). In addition to the processes and procedures for handling persons in care (PICs), they have worked on rostering and staffing requirements, methods for maximising staffing efficiencies, ways of ensuring OHS compliance given the nature of the work. As Broadspectrum wins work they will be engaged in their roles on those contracts.” 4

[7] The remuneration paid to the four employees was significantly in excess of the rates of pay specified in the JBU Agreement.

[8] The deadline for lodgment of proposals for the performance of the WA contract was 17 June 2016. On 31 August 2016, it was announced that Broadspectrum was the “Preferred Respondent” for the WA contract, and on 16 September 2016 negotiations concerning the terms of the contract commenced. The WA contract was executed on 27 October 2016, and a transition period was to commence the following day, with Broadspectrum being required to commence the provision of services pursuant to the WA contract on 23 March 2017. Two of the four employees appear to be now performing custodial duties in connection with the WA contract. Of the other two, one resigned in August 2016 and the other was promoted to a position back on Nauru.

The JBU Agreement

[9] The coverage of the JBU Agreement is set out in clause 2, Coverage and Application of Agreement, as follows:

“2.1 This Agreement shall cover and apply to:

(a) Broadspectrum (Australia) Pty Ltd; and

(b) Employees of Broadspectrum (Australia) Pty Ltd engaged within the Justice Business Unit in the classifications listed in Clause 17 in the Commonwealth of Australia.

2.2 Notwithstanding clause 2.1, this Agreement shall not cover or apply to any managerial Employees.”

[10] Clause 17, Classifications and Minimum Wages, sets out the classifications upon which clause 2.1(b) operates. Clause 17.1 sets out the classifications (and the minimum weekly wages for each such classification) in two categories. The first category is “Correctional Classifications”, and the classifications listed in this category are Correctional Officer Level 1, Correctional Officer Level 2, Correctional Officer - Perimeter/Security Level 1, Correctional Officer - Perimeter/Security Level 2, Correctional Supervisor Level 1, Correctional Supervisor Level 2, Court Security Officer, Court Security Supervisor, Custody Officer and Prisoner Escort Transport Officer. The second category is “Administrative Officer Classifications”, and is divided into 5 levels, with Level 1 being subdivided into years 1, 2 and 3, and Level 2 being subdivided into years 1 and 2. The classifications are not defined in the JBU Agreement, but clause 17.2 provides guidance in this respect as follows:

“17.2 Schedule B of the Corrections and Detention (Private Sector) Award 2010 and Schedule B of the Clerks - Private Sector Award 2010 will apply for the purpose of determining the appropriate classification level for an Employee covered by this Agreement.”

The Awards

[11] The coverage of the Corrections and Detention (Private Sector) Award 2010 (Corrections Award) is set out in clause 4 of the award. For present purpose, clauses 4.1 and 4.2 are relevant, and provide:

“4.1 This industry award covers employers throughout Australia in the corrections and detention industry and their employees in the classifications listed in clause 13 - Classifications to the exclusion of any other modern award.

4.2 In this award, the corrections and detention industry means the private operation of correctional facilities, custody centres, court custody services and detention facilities, and the private operation of prisoner or detainee facilities or services, including the provision of security escort services to and from correctional facilities, courts and/or hospitals carried out by private operators.”

[12] The classifications in the Corrections Award are listed in clause 14, Minimum Wages, and are divided into three categories - Correctional Employees, Detention Employees and Catering employees. The Correctional Employee classifications are the same as those in the “Correctional Classifications” category in the JBU Agreement except that they contain the additional classification of Trainee. The classifications for Correctional Employees are defined in Schedule B to the Corrections Award.

[13] As observed by the Deputy President in the Decision 5, the classifications in the Corrections Award which appear to align with Broadspectrum’s positions descriptions for “Care & Custody Officer (Inc Escorts) and “Court Supervisor” are B.5 Court Security Officer, B.6 Court Security Supervisor, B.7 Custody Officer and B.8 Prisoner Escort Transport Officer. It is not necessary for present purposes to set out the entirety of the definitions of these classifications in Schedule B; it is sufficient to set out the “primary objective” of each of these classifications identified in their respective definitions:

“B.5 Court Security Officer

…

B.5.2 The primary objective of the Court Security Officer is to ensure, on a day-to-day basis, the security of prisoners, staff, judiciary and the public within a court complex.

B.6 Court Security Supervisor

B.6.1 A Court Security Supervisor is a person selected on merit to ensure on a day-to-day basis, the efficient delivery of prisoners to court/s within the centre by scheduling the prisoners in accordance with the court lists.

B.7 Custody Officer

…

B.7.2 The primary objective of the Custody Officer is to ensure, on a day-to-day basis, the security and welfare of persons in custody in the centre.

B.8 Prisoner Escort Transport Officer

…

B.8.2 The primary objective of the Prisoner Escort Transport Officer is to ensure the humane and secure transportation (by road, rail and air) of prisoners.”

[14] The coverage of the Clerks - Private Sector Award 2010 (Clerks Award) is, subject to certain exclusions which are not presently relevant set out in clause 4.1 as follows:

“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.”

[15] The expression “clerical work” is defined in clause 3.1 to include “recording, typing, calculating, invoicing, billing, charging, checking, receiving and answering calls, cash handling, operating a telephone switchboard and attending a reception desk”.

[16] The classifications listed in clause 16, Minimum Wages, of the Clerks Award are the same as those listed in the “Administrative Officer Classifications” in the JBU Agreement, except that there are the additional classifications of “Call centre principal customer contact specialist” and “Call centre technical associate”. The definitions of these classifications are set out in Schedule B. The definitions of the Level 4 and Level 5 classifications, which are primarily relevant to Broadspectrum’s submissions in this appeal, are (relevantly) as follows:

“B.5 Level 4

B.5.1 Characteristics

Employees at this level will have achieved a level of organisation or industry specific knowledge sufficient for them to give advice and/or information to the organisation and clients in relation to specific areas of their responsibility. They would require only limited guidance or direction and would normally report to more senior staff as required. Whilst not a pre-requisite a principal feature of this level is supervision of employees in lower levels in terms of responsibility for the allocation of duties, co-ordinating work flow, checking progress, quality of work and resolving problems.

They exercise initiative, discretion and judgment at times in the performance of their duties.

They are able to train employees in Levels 1–3 by personal instruction and demonstration.

B.5.2 Typical duties/skills

Indicative typical duties and skills at this level may include:

(i) Secretarial/executive support services which may include the following: maintaining executive diary; attending executive/organisational meetings and taking minutes; establishing and/or maintaining current working and personal filing systems for executive; answering executive correspondence from verbal or handwritten instructions.

(ii) Able to prepare financial/tax schedules, calculating costings and/or wage and salary requirements; completing personnel/payroll data for authorisation; reconciliation of accounts to balance.

(iii) Advising on/providing information on one or more of the following:

● employment conditions; 

● workers compensation procedures and regulations; and 

● superannuation entitlements, procedures and regulations.

(iv) *Applying one or more computer software packages, developed for a micro personal computer or a central computer resource to either:

● creating new files and records; 

● maintaining computer based management systems; 

● identifying and extract information from internal and external sources; or 

● using of advanced word processing/keyboard functions.

(v) Call centre customer contact team leader …

* Note: These typical duties/skills may be either at Level 3 or Level 4 dependent upon the characteristics of that particular level.

B.6 Level 5

B.6.1 Characteristics

Employees at this level are subject to broad guidance or direction and would report to more senior staff as required.

Such employees will typically have worked or studied in a relevant field and will have achieved a standard of relevant and/or specialist knowledge and experience sufficient to enable them to advise on a range of activities and features and contribute, as required, to the determination of objectives, within the relevant field(s) of their expertise.

They are responsible and accountable for their own work and may have delegated responsibility for the work under their control or supervision, including, scheduling workloads, resolving operations problems, monitoring the quality of work produced and counselling staff for performance and work related matters.

They would also be able to train and to supervise employees in lower levels by means of personal instruction and demonstration. They would also be able to assist in the delivery of training courses. They would often exercise initiative, discretion and judgment in the performance of their duties.

The possession of relevant post secondary qualifications may be appropriate but are not essential.

B.6.2 Typical duties/skills

Indicative typical duties and skills at this level may include:

(i) Apply knowledge of organisation’s objectives, performance, projected areas of growth, product trends and general industry conditions.

(ii) Application of computer software packages within either a micro personal computer or a central computer resource including the integration of complex word processing/desktop publishing, text and data documents.

(iii) Provide reports for management in any or all of the following areas:

● account/financial;

 
● staffing; 

● legislative requirements; and 

● other company activities.

(iv) Administer individual executive salary packages, travel expenses, allowances and company transport; administer salary and payroll requirements of the organisation.

(v) Call centre principal customer contact leader …

An employee who holds a Diploma—Front Line Management or equivalent is to be classified at this level when employed to perform the functions defined.”

The Decision

[17] In his consideration of the application to approve the JBU Agreement, the Deputy President commenced by concluding that “...based on the material contained in Broadspectrum’s Form F17 and the other material before the Commission I am satisfied that the requirements of ss.186(2)(c), 186(2)(d), 186(3), 186(4), 186(4A), 186(5), 186(6) and 187 of the Act are met...”. 6 The Deputy President then went on to characterise the issue in contest as follows:

“[26] .... What is in contest in this case is whether or not the Commission can be satisfied that s.186(2)(a) of the Act, which requires that the agreement has been genuinely agreed to by the employees covered by the agreement (underlining added), is met. Section 188 of the Act sets out when employees have genuinely agreed to an enterprise agreement. Based on the material before the Commission I am satisfied that the requirements of ss.188(a) and 188(b) are met. However, as can be seen from above, UV contends that there are reasonable grounds for believing that the Agreement was not genuinely agreed to by employees. While UV cites a number of reasons for that view, the two primary grounds that it relies upon are:

(i) the work performed by the four employees involved in making the Agreement was not covered by the Agreement as it fell outside the classifications covered by the Agreement; and 

(ii) as all four employees were paid remuneration well in excess of that provided for in the Agreement, they had no stake in the Agreement.”

[18] The Deputy President then made a series of findings of fact which are not the subject of challenge in this appeal, and which are broadly summarised in our earlier account of the factual background. 7 The Deputy President then referred, as we have, to the coverage and classification provisions of the JBU Agreement, the Corrections Award and the Clerks Award, and stated the following conclusions concerning coverage (footnotes omitted):

“[34] A comparison of the evidence regarding the work undertaken by the four employees who made the Agreement and the classification descriptors in the Corrections and Clerks Awards indicates that the work performed by the four employees at the time the Agreement was made bears little, if any, resemblance to the classification descriptors set out above. The only possible exception is in respect of contract #4 on the basis of that employee’s potential supervisory responsibilities, which would potentially bring that position within the coverage of the Clerks Award.

[35] As to whether or not the work performed by the employees was covered by the Agreement’s classifications, as previously mentioned, Broadspectrum relied on the decision in Carpenter [(2002) 122 IR 387]. In that case a Full Bench of the then Australian Industrial Relations Commission observed that:

“In our view, in determining whether or not a particular award applies to identified employment, more is required than a mere quantitative assessment of the time spent in carrying out various duties. An examination must be made of the nature of the work and the circumstances in which the employee is employed to do the work with a view to ascertaining the principal purpose for which the employee is employed. In this case, such an examination demonstrates that the principal purpose for which the appellant was employed was that of a manager. As such, he was not ‘‘employed in the process, trade, business or occupation of . . . soliciting orders, obtaining sales leads or appointments or otherwise promoting sales for articles, wares, merchandise or materials’’ and was not, therefore, covered by the award.” (References not included, underlining added)

Ms Lawton’s evidence was that she sought approval to engage the four employees after considering the work involved in preparing Broadspectrum’s various bids for correctional services work, including the CS&CS contract, and that there were “some 22 plus” online training modules which had to be developed. This suggests that the primary purpose the employees were engaged for was to undertake the necessary preparatory work relating to the various tenders for correctional services work which Broadspectrum was pursuing rather than work performed by the classifications listed in clause 17 of the Agreement. While I note Broadspectrum’s email response to the Commissioner which stated that “As Broadspectrum wins work they will be engaged in their roles on those contracts”, I also note that employees would not have transitioned to those operational roles until 24 March 2017 when Broadspectrum commenced work under the CS&CS contract. This is some 260 days after the Agreement was made. This does not support a finding that the principal purpose for which the employees were employed was the positions specified in their contracts or that they were therefore covered by the Agreement.

[36] In summary, the above analysis does not support a finding that the Agreement was genuinely agreed to as the employees were not covered by the Agreement when it was made.”

[19] After stating that it not necessary to determine United Voice’s second argument, the Deputy President stated his overall conclusion as follows:

“[38] For all the above reasons, I consider that there are reasonable grounds for believing that the Agreement was not genuinely agreed to by the employees. As a result, I am not satisfied that the Agreement was genuinely agreed to as required by s.186(2)(a) on the basis that the employees who made the Agreement were not covered by the Agreement at the time it was made. Accordingly, the Agreement cannot be approved. An Order dismissing the application will be issued in conjunction with this decision.”

Appeal grounds and submissions

[20] Broadspectrum’s appeal grounds were as follows:

“1. The Deputy President erred by finding that the work undertaken by the employees who made the Proposed Agreement (the Subject Employees) was not work that the Proposed Agreement would, if approved, cover (the Non‐Coverage Finding).

2. The Deputy President erred by finding that the Non‐Coverage Finding was a fact that did “…not support a finding that the [Proposed] Agreement was genuinely agreed to” for the purposes of s. 188 of the Fair Work Act 2009 (Cth) (the Act).

3. In failing to be satisfied:

(a) that there were no reasonable grounds for believing that the Proposed Agreement was not genuinely approved by the Subject Employees; and, by extension,

(b) that the Proposed Agreement was genuinely approved for the purposes of s. 186(2)(a),

the Deputy President erred by having regard to a circumstance irrelevant to either of those issues, namely the Non‐Coverage Finding.”

[21] Broadspectrum submitted that:

•  the issue of non-coverage did not bear upon the character or quality of the agreement of the four employees, and thus was an irrelevant consideration under s.188(c), although non-coverage would be fatal to the application for approval of the JBU Agreement because it meant that there was no enterprise agreement made in accordance with s.172(2)(a) that was capable of approval;

•  the finding of non-coverage was in error, because the principal purpose for the engagement of the four employees was for them to perform the tasks identified in the position descriptions, which was work covered by the corrections classifications in the JBU Agreement (because it fell within the classification definitions in the Corrections Award);

•  the decision of the Australian Industrial Relations Commission Full Bench in Carpenter v Corona Manufacturing Pty Ltd 8 made it clear that in determining award coverage, more was required than a quantitative assessment of the time spent in carrying out various duties, and it was necessary to identify the principal purpose for which the employee is employed;

•  the fact that the four employees performed other tasks in the interim period did not disqualify them from classification as corrections employees;

•  alternatively, the duties the four employees were performing clearly fell within the Administrative Officer classifications in the JBU Agreement, because it fell within the classification definitions in the Clerks Award (particularly Levels 4 and 5);

•  the four employees used software packages to produce business documents; provided advice and information concerning employment conditions, procedures and regulations, and in doing so exercised initiative, discretion and judgment and used word processing facilities; and produced reports for management concerning staffing, legislative requirements and other company activities, again using initiative, discretion and judgment; and all of these duties fell within the Clerks Award classification definitions; and

•  there was no other basis for the refusal of approval for the JBU Agreement; the fact that the four employees were paid remuneration above the minimum rates prescribed was insufficient to establish that they lacked a “stake” in the JBU Agreement because they derived a range of other legally enforceable benefits from it.

[22] United Voice submitted that the Decision was correct and should not be disturbed on appeal. The submission of Broadspectrum that coverage of the employees who made the JBU Agreement was an irrelevant consideration was contrary to recent authority and clearly wrong. The Deputy President’s factual finding that the primary purpose of the four employees’ engagement was to undertake the necessary preparatory work for the contractual tenders that Broadspectrum was pursuing was clearly correct, and meant that the employees could not possibly be classified as correctional employees under the JBU Agreement at the time the agreement was made. The finding that the Deputy President made concerning the lack of any resemblance between the work of the employees and the classification definitions in the Clerks Award was also plainly correct.

Consideration

[23] Section 186(2)(a) of the FW Act requires, in respect of agreements that are not greenfields agreements, that the Commission be satisfied that “the agreement has been genuinely agreed to by the employees covered by the agreement” as a prerequisite for approval of the agreement. Section 188 explicates the requirement for genuine 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.

[24] In the Decision the Deputy President proceeded on the basis that s.188 was premised on the proposition that there had to be genuine agreement on the part of employees who were covered by the agreement at the time it was made. 9 In that respect, the Deputy President relied upon the Federal Court Full Court decision in Shop, Distributive & Allied Employees Association v ALDI Foods Pty Ltd.10 In that decision White J (with whom Katzmann J relevantly agreed) said:

“[133] First, to my mind, it is a natural understanding of the language of s 186(2)(a) that it refers to the genuine agreement of the employees whom the enterprise agreement expresses itself to cover and who are in fact covered by it. There may be a question as to whether the employees to whom s 186(2)(a) refers are those who were covered at the time the agreement was made or includes those who have become covered by it by the time of the FWC’s consideration of the approval application. It is not necessary for the resolution of the present application to determine that question.

[134] The matters listed in s 188 to which the FWC is to have regard in determining whether there has been genuine agreement to an enterprise agreement seem, with the possible exception of (c), to be of an objective kind. Nevertheless, it is the genuineness of the agreement by particular persons which the FWC is to assess, these persons being the employees “covered by” the agreement. There is, accordingly, an inherent requirement in s 186(2)(a) and s 188 that there be such persons. That is to say, it is implicit in s 186(2)(a) that there be persons covered by the agreement whose genuineness in agreeing to it (on the basis identified in s 188) can be assessed by the FWC. Persons who will become covered by the agreement only at some time in the future do not answer that description, even if they did, by some means, vote to approve it.”

[25] The High Court has granted special leave to appeal from the Full Court’s decision. One of the arguments raised in the appeal is that the conclusion stated in the passage above involves a misconstruction of the FW Act, and that the genuine agreement requirement in s.186(2)(a) is to be read as applying in respect of “those persons currently employed who fall within the whole class of employees to whom the agreement might in future apply”. 11 The appeal is listed to be heard before the Court on 9 August 2017.

[26] In its appeal, Broadspectrum did not contend that the approval requirement in s.186(2)(a) could be satisfied on the basis that the four employees who were permitted to vote upon the JBU Agreement (of whom three actually voted) would be covered by the JBU Agreement at some time in the future. Rather, the appeal was brought on the basis that they were in fact covered at the time the agreement was made, and that the Deputy President had erred in deciding otherwise. Accordingly the point raised in the ALDI appeal does not arise for consideration here, and it is therefore not necessary for us to await the outcome of the ALDI appeal in order to determine this appeal.

[27] It is also significant that, as earlier stated, Broadspectrum made the concession that the Deputy President’s “non-coverage finding”, if correct, was fatal to its application for approval of the JBU Agreement, notwithstanding its submission that the issue of coverage was not a relevant consideration under s.188(c). The consequence of that concession is that there would be no utility in granting permission to appeal in relation to Broadspectrum’s s.188(c) argument if we were satisfied that the “non-coverage finding” was correct, because there would be no basis upon which the application for approval of the JBU Agreement could succeed.

[28] Broadspectrum’s primary challenge to the “non-coverage finding” was that, because the principal purpose of the engagement of the four employees was to perform custodial work, they fell within the correctional employee classifications in the JBU Agreement. We consider Broadspectrum’s case in that respect to be misconceived on a number of levels. First, the classifications definitions in the Corrections Award, which are imported into the JBU Agreement by clause 17.2, clearly require the performance of correctional or custodial duties. The specific classifications relied upon by Broadspectrum all required the performance of specific types of correctional/custodial duties. On no reading of those classifications descriptions were they capable of application to persons who performed none of the tasks or duties described. As earlier stated, it was not in dispute that none of the four employees performed duties of this nature at the time the JBU Agreement was made or for many months afterwards.

[29] Second, the classifications in the Corrections Award must be read as limited by the coverage of the Corrections Award itself. It is trite to say that an award classification, however expressed or defined, cannot apply to an employee who does not fall within the coverage of the award as a whole. We consider that the importation of the classification definitions in Schedule B of the Corrections Award into the JBU Agreement necessarily carried with it this overall limitation, since otherwise the classifications could be given an operation at odds with their proper and intended meaning. Read with the coverage clause, the classifications are only capable of application to employees of employers who operate in the “corrections and detention industry” as defined in clause 4.2 of the Corrections Award. Under that definition, in order for Broadspectrum to be in that industry at the time the JBU Agreement was made, it needed to be engaged in the “private operation of correctional facilities, custody centres, court custody services and detention facilities, and the private operation of prisoner or detainee facilities or services, including the provision of security escort services to and from correctional facilities, courts and/or hospitals carried out by private operators.” The evidence makes it clear that Broadspectrum was not engaged in any such operations at the relevant time or for a long period afterwards.

[30] Third, Broadspectrum’s resort to the “principal purpose” test cannot lead to the result for which it contends. That test was stated by the AIRC Full Bench in Carpenter v Corona Manufacturing Pty Ltd 12 in the following terms:

“[9] In our view, in determining whether or not a particular award applies to identified employment, more is required than a mere quantitative assessment of the time spent in carrying out various duties. An examination must be made of the nature of the work and the circumstances in which the employee is employed to do the work with a view to ascertaining the principal purpose for which the employee is employed.”

[31] The above passage makes clear that the required analysis of the principal purpose is to be conducted by reference to the work performed by the employee. The test enunciated is primarily of utility where an employee performs a mixture of duties some of which fall, prima facie, within the coverage of the award or classification under consideration and some of which do not. However the test cannot be used to bring an employee within the coverage of an award or classification where the employee does not perform any of the prescribed work duties. In Australasian Meat Industry Employees Union v Teys Australia Beenleigh Pty Ltd 13 the Full Bench majority (Acton SDP and Simpson C) said (underlining added):

“[85] In Brand v APIR Systems Limited, [PR938031] a Full Bench of the Australian Industrial Relations Commission pointed out the following:

‘[12] Much of the argument advanced on Mr Brand's behalf in the appeal was directed at whether his employment was within the incidence of the award. As we have indicated above, even if his employment was within the incidence of the award, his application was not within jurisdiction unless he was employed in one of the award classifications.

[13] We note that the Commissioner adopted and applied a test based on the principal purpose for which the applicant was employed. She relied upon the Full Bench decision in Carpenter v Corona Manufacturing Pty Ltd in that respect. (PR925731 at para [9]). An analysis of the authorities referred to in that case shows that industrial courts and tribunals have at different times adopted different formulations of the test to be applied in determining whether the work of an employee or group of employees is within a particular occupation or classification. One formulation requires that the question should be decided by reference to the major and substantial employment of the employee (Ware and O'Donnell Griffin (Television Services) Pty Ltd [1971] AR (NSW) 18). Another formulation requires that the principal purpose or purposes of the employment be identified (Merchant Service Guild of Australia v J Fenwick & Co Pty Ltd (1973) 150 CAR 99 at 101-2). In some cases the formulations have both been referred to (Comdox (No. 272) Pty Ltd t/as Ronald Stead Golf v Dawson (1993) 49 IR 458 at 462; Logan v Otis Elevator Co Pty Ltd, Unreported, Industrial Relations Court of Australia (Moore J) 20 June 1997). In one case a Full Bench of the Commission held that the principal purpose formulation was a refinement of the major and substantial employment formulation (Re The Australian Workers' Union Construction, Maintenance and Services (WA Government) Award 1987 1991/12 CAR 68 at 72). A Full Court of the Federal Court of Australia, without reference to other authorities, adopted a test based on whether the employees were ‘engaged substantially’ in the duties of the relevant occupation (Federated Tobacco Workers Union of Australia v Amalgamated Metal Workers Union and another (1988) 29 IR 263 at 275).

[14] In this appeal both parties accepted that the ‘principal purpose’ formulation as stated in Carpenter v Corona Manufacturing Pty Ltd should be applied. We are content to decide this application on that basis. We should add, however, that we are satisfied that whichever of the formulations referred to might be applied, in this case the result would be the same.’

[86] In Brand and each of the cases cited in this extract from Brand, whether it is a “principal purpose”, “major and substantial” or “engaged substantially” formulation that is adopted, it is the work of the employee that is considered relevant in that regard.”

[32] Teys was concerned with whether a certain category of employees at an enterprise were covered by a proposed agreement and thus eligible to vote to approve it. The Full Bench majority (which overturned the decision at first instance 14) determined that the employees were not eligible to vote. An application for judicial review of this decision was unsuccessful: Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry Employees Union.15 In the judgment of Buchanan J, the opinion was expressed that the Full Bench’s conclusion that the analysis at first instance concerning coverage of the relevant category of employees (who had temporarily been redeployed to particular duties) was in error was itself incorrect.16 However this was held not to amount to jurisdictional error, and there was no doubt expressed about the correctness of the principle stated in the above passage from the Full Bench decision. Indeed Buchanan J said that “evaluation and judgment about the particular work” of the employees in question was required.17 A “principal purpose” cannot therefore be identified which has no connection to the actual work duties of the employees in question.

[33] Fourth, and in any event, the Deputy President in fact made a finding concerning the principal purpose of the employment of the four employees based on the evidence of Broadspectrum’s witness Ms Lawton, namely that “the primary purpose the employees were engaged for was to undertake the necessary preparatory work relating to the various tenders for correctional services work which Broadspectrum was pursuing rather than work performed by the classifications listed in clause 17 of the Agreement”. 18 We consider that this finding was obviously correct. The employees could not have been engaged when they were in May/June 2016 for the purpose of performing correctional or custodial duties, because there was no such work to perform. While it may have been the intention of Broadspectrum to utilise at least two of the four employees to perform such work at a later time in the event that it won a contract (noting that the engagement in the JBU of the two who had been redeployed from Nauru was apparently to end on 30 November 2016), that was not the purpose of their employment at the time the JBU Agreement was made.

[34] We also consider that there is no merit in Broadspectrum’s alternative argument that the four employees were covered by the Administrative Officer classifications in the JBU Agreement having regard to the classifications definitions in Schedule B of the Clerks Award imported by clause 17.2. The characteristics, skills and duties of those classifications as defined are expressed in highly generic terms, but as with the classification definitions in the Corrections Award, they must be read as necessarily limited by the scope of coverage of the Clerks Award. The award applies with respect to employees engaged wholly or principally in clerical work, as defined in clause 3.1. Thus although, for example, the Level 4 classification in the Clerks Award is defined in Schedule B to apply to employees who “have achieved a level of organisation or industry specific knowledge sufficient for them to give advice and/or information to the organisation and clients in relation to specific areas of their responsibility”, who will usually have supervisory responsibilities, who exercise “initiative, discretion and judgment at times”, and will typically (among other things) apply “one or more computer software packages”, this must be read as subject to the overriding requirement that the employee is engaged wholly or principally in clerical work as defined. Were it otherwise, the classifications in the Clerks Award could be read as applicable to almost any person performing “white collar” work.

[35] We have earlier set out the way in which Broadspectrum characterised the work of the four employees prior to it winning any correctional/custodial contracts in its correspondence to the Commission of 21 October 2016. In summary, the work described was that of preparing the policies, procedures and processes necessary to enable Broadspectrum to win and perform correctional/custodial contracts in the future. On no view could this be described as merely clerical work as defined in clause 3.1 of the Clerks Award, that is “recording, typing, calculating, invoicing, billing, charging, checking, receiving and answering calls, cash handling, operating a telephone switchboard and attending a reception desk”. It was work of a higher order, and the level of remuneration paid to the employees reflected this fact. We consider that the Deputy President’s conclusion that the work performed by the employees at the time the agreement was made bore little if any resemblance to the classification descriptors 19 was correct having regard to the overriding requirement in the Clerks Award for the performance or clerical work.

Conclusion and order

[36] For the reasons given, we do not consider that the Decision was attended by sufficient doubt such as to require the grant of permission to appeal in the public interest or to justify the grant of permission on a discretionary basis. Accordingly we order that permission to appeal is refused.

VICE PRESIDENT

Appearances:

J. Snaden of counsel on behalf of Broadspectrum Ltd t/a Broadspectrum.

S. Bull on behalf of United Voice.

Hearing details:

2017.

Melbourne:

June 13.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR593683>

 1   [2017] FWC 1818

 2   [2016] FWCA 8209; see also [2016] FWC 7936

 3   [2017] FWCFB 871

 4   [2017] FWCFB 871 at [24]

 5   Decision at [32]

 6   Decision at [26]

 7   Decision at [27]

 8   (2002) 122 IR 387

 9   A non-greenfields enterprise agreement is “made” when a majority of the employees who will be covered by the proposed agreement cast a valid vote to approve the agreement.

 10   [2016] FCAFC 161

 11   Appellant’s written submissions filed in the High Court on 11 April 2017.

 12   (2002) 122 IR 387

 13   [2014] FWCFB 5643

 14   [2014] FWC 2449

 15   [2015] FCAFC 11

 16   Ibid at [77]-[83]

 17   Ibid at [82]

 18   Decision at [35]

 19   Decision at [34]