[2017] FWCFB 660
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.604 - Appeal of decisions

The Maritime Union of Australia
v
MMA Offshore Logistics Pty Ltd t/a MMA Offshore Logistics
(C2016/4902)
The Maritime Union of Australia
v
DOF Management Australia Pty Ltd
(C2016/4903)
The Maritime Union of Australia,
v
Smit Lamnalco Australia Pty Ltd
(C2016/4904)

VICE PRESIDENT HATCHER
DEPUTY PRESIDENT GOSTENCNIK
COMMISSIONER WILLIAMS



SYDNEY, 1 FEBRUARY 2017

Appeal against decision [2016] FWCA 5277 of Commissioner Cloghan at Perth on 8 August 2016 in matter number AG2016/3091 Appeal against decision [2016] FWCA 4654 of Deputy President Binet at Perth on 1 August in matter number AG2016/2924 Appeal against decision [2016] FWC 5249 of Commissioner Roe at Melbourne on 2 August 2016 in matter number AG2016/3337.

Introduction

[1] The Maritime Union of Australia (MUA) has applied for permission to appeal and appealed three decisions approving enterprise agreements made by three different employers and their employees. The decisions, and the enterprise agreements to which they relate, are as follows:

(2) In a decision issued on 1 August 2016 2 (DOF Decision), Deputy President Binet approved the DOF Management Australia Pty Ltd Maritime Offshore Oil and Gas Industry Enterprise Agreement 2016 (DOF Agreement).

(3) In a decision issued on 2 August 2016 3 (Smit Lamnalco Decision), Commissioner Roe approved the Smit Lamnalco Australia Maritime Offshore Oil and Gas Industry Enterprise Agreement 2016 (Smit Lamnalco Agreement).

[2] The MUA applied for the appeals to be heard together on the basis that they involved common factual and legal issues. This was resisted by the respondents (MMA Offshore Logistics Pty Ltd (MMAOL), DOF Management Australia Pty Ltd (DOF) and Smit Lamnalco Australia Pty Ltd (Smit Lamnalco)). Ultimately, the appeals were heard sequentially on 13 October 2016. The MUA on the one hand and MMAOL, DOF and Smit Lamnalco on the other had common legal representation in all the appeals. A practical approach was adopted whereby submissions made in the first appeal (against the MMAOL Decision) did not have to be repeated in the subsequent appeals where they related to matters common to all the appeals.

[3] At the outset of the hearing of the first appeal, a member of the Full Bench raised with the parties an issue potentially affecting whether the DOF Agreement and the Smit Lamnalco Agreement were capable of approval under the Fair Work Act 2009 (FW Act). This issue had not been raised in the MUA’s notices of appeal or in the written submissions which the MUA had filed prior to the hearing in accordance with the Commission’s directions. The issue was whether in each case a Notice of Employee Representational Rights (NERR) had been provided to employees who would be covered by the relevant agreement in accordance with the requirement contained in s.174(1A) of the FW Act. Subsequently, on 20 October 2016, the MUA sought leave to amend its notices of appeal with respect to the DOF Decision and the Smit Lamnalco Decision to add to each notice the following appeal ground:

[4] Particulars of the proposed additional appeal ground were provided. These disclosed that the alleged defect in the NERR in each case was that it had not complied with the prescribed form in Schedule 2.1 of the Fair Work Regulations 2009 (FW Regulations), in that the form required the telephone number of the Fair Work Commission infoline (1300 799 675) be inserted but that the NERR in each case inserted a different telephone number, being that of the Fair Work Ombudsman (13 13 94).

[5] We received written submissions from the parties concerning both whether the MUA should be granted leave to amend its notices of appeals against the DOF Decision and the Smit Lamnalco Decision and whether, if such leave was granted, permission should be granted and the appeals upheld on the basis of the proposed additional appeal ground. After the Commission had received these submissions, a Full Court of the Federal Court delivered its decision in Shop, Distributive & Allied Employees Association v ALDI Foods Pty Ltd 4 (Aldi). That decision was concerned in part with the effect of s.174(1A) of the FW Act and the consequence of a failure to issue an NERR in accordance with the prescribed form. The parties requested and were provided with an opportunity to file further written submissions in light of this decision. Consequently, we are in a position to make a final determination in respect to the NERR issue in the appeals against the DOF Decision and the Smit Lamnalco Decision.

Relevant provisions in the statutory scheme

[6] The statutory regime for enterprise bargaining is substantially set out in Pt.2-4 of the FW Act. Very broadly speaking, Pt.2-4 contains requirements pertaining to the process of bargaining for and entering into enterprise agreements, their content, and their approval by the Commission. The objects of Pt.2-4 are set out in s.171 as follows:

[7] The different types of enterprise agreements which may be made are identified in s.172. Broadly speaking, an employer may make an agreement with its employees who are employed at the time the agreement is made and will be covered by it, or with one or more relevant employee organisations in relation to a genuine new enterprise that the employer is establishing or proposes to establish. The latter type of agreement is described as a “greenfields agreements”. Importantly, agreements may involve more than one employer. A “single-enterprise agreement” may involve two or more employers that are “single-interest employers” (an expression defined in s.172(5) to include employers that are engaged in a joint venture or common enterprise, or are related bodies corporate, or are the subject of a “single interest employer authorisation” made under Div.10 of Pt.2-4). Additionally, employers that are not single-interest employers may enter into a “multi-enterprise agreement” (which may either be a greenfields agreement or a non-greenfields agreement).

[8] In relation to the initiation of bargaining for an enterprise agreement that is not a greenfields agreement, s.173 establishes the requirement that the employer take all reasonable steps to give each employee who will be covered by the agreement the NERR.

[9] Section 173 provides:

173  Notice of employee representational rights

[10] Section 174 provides for the content and form of the NERR as follows:

174  Content and form of notice of employee representational rights

[11] Regulation 2.05 of the FW Regulations prescribes the form in Schedule 2.1 as the NERR for s.174(6) of the FW Act. The form in Schedule 2.1, in its entirety, is as follows:

[12] It may be seen that the NERR prescribed by Schedule 2.1 does not, in its last line, actually set out the telephone number of the Fair Work Commission Infoline, but requires that number to be inserted. It is convenient to note at this point that the Commission’s website has at all relevant times contained a guide to completing and issuing the NERR, which identifies the Fair Work Commission Infoline as being 1300 799 675 and contains a sample NERR which includes that telephone number.

[13] In relation to bargaining for agreements that are not greenfields agreements, s.176 provides for employees and employers to appoint bargaining representatives to act on their behalf. Under s.176(1)(b), a registered union will be the default representative of an employee who is a member, unless the employee has appointed another person in writing as his or her bargaining representative or has revoked the status of the union as a bargaining representative. In relation to other employees, s.176(1)(c) provides that an employee may appoint in writing a person as the employee’s bargaining representative. Bargaining representatives must meet the “good faith bargaining requirements” specified in s.228.

[14] Section 186(1) of the FW Act sets out the “basic rule” concerning the circumstances in which an enterprise agreement must be approved by the Commission as follows:

            (1)  If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met

[15] One of the requirements in s.186 which must be met is prescribed by s.186(2)(a) as follows:

                     (a)  if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; and…

[16] Section 188 sets out, for the purpose of s.186(2)(a), when employees have genuinely agreed to an enterprise agreement as follows:

[17] Section 181(2), which is referred to in s.188(a)(ii), requires (as s.188(a)(ii) states) that an employer must not make a request that employees approve a proposed enterprise agreement by voting for it until at least 21 days after the day on which the last NERR under s.173(1) in relation to the agreement is given.

[18] Section 186(2)(c) establishes a further approval requirement to the effect that the agreement does not operate to exclude the National Employment Standards (NES) set out in Pt.2.2 of the FW Act. Section 186(2)(d) requires that the agreement must pass the “better off overall test” (BOOT). That test is set out in s.193, and in broad terms requires satisfaction that each current and prospective employee covered by a modern award would be better off overall if the agreement applied to the employee as compared to if the modern award applied. An agreement which does not pass the BOOT but satisfies all the other approval requirements may nonetheless be approved under s.189 if the Commission is satisfied that, because of exceptional circumstances, the approval of the agreement would not be contrary to the public interest.

[19] A requirement that the group of employees covered by the agreement the subject of an approval application be “fairly chosen” is established by s.186(3) and s.186(3A) as follows:

             (3)  The FWC must be satisfied that the group of employees covered by the agreement was fairly chosen.
          (3A)  If the agreement does not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

[20] In addition to Pt.2-4, Pt.3-3 sets out a scheme under which participants in enterprise bargaining may, in certain circumstances, take protected industrial action in support of their claims or in response to industrial action taken by the other side. Protected industrial action is industrial action which is the subject of the legal immunity conferred by s.415. “Employee claim action”, that is, industrial action that may be taken by employees for the purpose of supporting or advancing their claims, is defined in s.409. Relevantly, s.409(4) provides:

[21] The expression “pattern bargaining” is defined in s.412 as follows:

[22] Section 413(2) provides that, in order for industrial action to be protected, it must not relate to a proposed agreement that is a greenfields agreement or a multi-enterprise agreement.

The MMAOL Decision

[23] The MMAOL Decision concerned an application made by MMAOL on 4 May 2016 for approval of the MMAOL Agreement. MMAOL was a related company of MMA Offshore Vessel Operations Pty Ltd (MMAVO), in that both are wholly owned subsidiaries of MMA Limited. MMA Limited is the parent company of the MMA group, which consists of 21 subsidiaries based in Australia and Asia. MMAVO operated seagoing vessels owned by the MMA Group, and also provided labour on hire to clients in the maritime offshore gas and oil industry. MMAVO had an established workforce of about 70 employees, and was covered by two enterprise agreements dating back to 2010 and 2011 respectively. In about December 2012 bargaining commenced for a replacement enterprise agreement. In this bargaining, the Australian Mines and Metals Association (AMMA) acted as the bargaining representative for MMAVO, and the MUA acted as bargaining representative for various MMAVO employees. MMAVO sought to conduct the bargaining at the industry level in conjunction with a number of other employers who were represented in common by the AMMA. The MUA sought to conduct the bargaining solely at the enterprise level. An impasse in the bargaining was reached in about February 2016, after employees had twice voted to reject MMAVO’s proposals for a new enterprise agreement.

[24] MMAOL to that time had operated as a business hiring labour for onshore logistics operations, and had no history in providing labour to the maritime offshore oil and gas industry. On about 15 March 2015, MMAOL engaged five new employees, and on 18 March 2016 MMAOL initiated enterprise bargaining with them by issuing a NERR to each of them and providing them with a draft enterprise agreement. The 7-day “access period” required by s.180 of the FW Act commenced on 18 April 2016, and by 30 April 2016 the five employees had voted to approve the agreement.

[25] The MMAOL Decision issued by the Commissioner on 8 August 2016 was preceded by two interlocutory decisions issued on 8 July 2016 5 and 25 July 20166 respectively. In the first of these decisions, the Commissioner determined that the MUA should be given an opportunity to adduce evidence and make submissions that the group of employees covered by the MMAOL Agreement was not “fairly chosen” as required by s.186(3) of the FW Act. In the second decision the Commissioner determined that, having received the MUA’s evidence and submissions concerning the “fairly chosen” issue, he was in a position to proceed to determine MMAOL’s application without further involvement of the MUA.

[26] In the MMAOL Decision the Commissioner made a number of critical findings or inferences of fact. Firstly in relation to MMAOL itself, the Commissioner found (footnotes omitted):

[27] Secondly, the Commissioner made findings concerning the commercial context in which the decision to widen MMAOL’s business function had been made. He described there being a downturn in the marine services sector which was associated with a fall in the oil price, the end of the construction phase of a number of offshore projects in Australia and a lack of any new large projects to replace them, and which had placed downward pressure on the contract prices for vessel operators and managers. 7 The Commissioner then described how these commercial pressures caused the decision to be made to expand the scope of MMAOL’s labour hire services:

[28] Thirdly, the Commissioner found that the fact that the five employees nominated one of their number, who was a Master as their bargaining representative, did not mean that the bargaining representative was not free of control or influence of the MMAOL as the employer. Although the Master was senior in the chain of command on a vessel, he or she did not have the power to hire and fire, and being senior did not mean that the Master was the employer’s representative. 8

[29] On the basis of those findings, the Commissioner concluded that the group of employees to be covered by the MMAOL Agreement was fairly chosen for the purpose of s.186(3), in that there was a legitimate business rationale for the selection of the group, they were operationally distinct because they were hired for the purpose of marine labour hire, and no employees were improperly excluded from coverage. The Commissioner rejected the proposition that the fact that the MUA did not participate in the bargaining and that the employees did not take protected industrial action meant that the fairly chosen requirement was not satisfied. 9

[30] The Commissioner found that the MMAOL Agreement satisfied the better off overall test in s.193 10, and otherwise satisfied the approval requirements in ss.186, 187 and 188.11 He noted that the MUA had on 3 August 2016 advised the Commission that “new information has come to hand, relevant to this matter, and supporting a different argument than the one that the Commissioner has dealt with to date” and applied to adduce further evidence and make further submissions on that basis. The Commissioner rejected this application because, among other reasons, the MUA had been given ample opportunity to present its case, it had not identified the nature of the new information or the different argument, and any further delay would be prejudicial to MMAOL. The Commissioner accordingly approved the MMAOL Agreement with an operative date of 15 August 2016.12

The DOF Decision

[31] DOF operates a marine vessels business in the offshore oil and gas industry, including a vessel named the Skandi Singapore. Traditionally it has not engaged employees directly to act as deck ratings on its vessels, but has used the service of labour hire companies to provide this labour. These labour hire companies, including Programmed Marine Pty Ltd (Programmed), supplied employees covered by enterprise agreements negotiated by the MUA. DOF had not participated in the industry bargaining for new enterprise agreements coordinated by AMMA because it did not itself employ the crew members for its vessels. Programmed had participated in this bargaining, and its employees had in November 2015 and February 2016 voted to reject their employer’s proposed enterprise agreement.

[32] On about 31 March 2016, DOF employed four persons as deck ratings for its vessels. They had previously been employed by Programmed and deployed to DOF vessels. They initially underwent training, and did not actually perform any work on a vessel until mid-May 2016. On 1 April 2016, DOF initiated enterprise bargaining when it issued a purported NERR to each of the four employees together with a copy of its proposed enterprise agreement. The access period commenced on 19 April 2016, and by 28 April 2016 the four employees had voted to approve the agreement. After the DOF Agreement was approved, DOF began to expand its workforce, including by recruiting persons previously employed by Programmed to work on the Skandi Singapore.

[33] On 29 April 2016, DOF filed its application for approval of the DOF Agreement. The DOF Decision concerned this application. The Deputy President commenced by recording that she had granted the MUA standing to be heard in relation to the application but that, at the commencement of the hearing of the matter on 11 July 2016, the MUA had withdrawn from the proceedings, and that in any event she took into account the written submissions earlier filed by the MUA in making her decision. 13

[34] The Deputy President went on to consider the submission made by the MUA that the Commission could not be satisfied that the group of employees covered by the DOF Agreement was fairly chosen as required by s.186(3) because DOF had engaged in deliberate manipulation of the agreement-making procedures. She observed that the DOF Agreement contained all the classifications necessary for the Deck Department on a vessel (which were within the classifications within the coverage of the MUA), but that the four employees only fell within two of these classifications. 14 In considering whether this small group covered by the DOF Agreement was fairly chosen, the Deputy President proceeded on the basis that she was unable “…to find that the fairly chosen requirement is not satisfied if DOF are able to demonstrate that a bona fide business reason existed for why only a small number of employees voted on the Proposed Agreement despite DOF intending that a larger group of employees be employed pursuant to the Proposed Agreement”.15

[35] The Deputy President concluded that “bona fide business reasons existed for DOF to directly hire employees and ensure an agreement was in place for these employees”. 16 This conclusion was reached on the basis of evidence adduced by DOF which was set out in the DOF Decision17 and may relevantly be summarised as follows:

[36] The Deputy President, after analysis, concluded that the better off overall test was satisfied, and also that all the other conditions for approval in ss.186 and 187 were satisfied. She accordingly approved the DOF Agreement with operative effect from 8 August 2016. 18

Smit Lamnalco Decision

[37] Smit Lamnalco is part of the Smit Lamnalco Group, which owns and operates a large number of vessels worldwide and employs a large number of persons. Subsidiaries of the group provide marine towage and associated services to the offshore oil and gas industry in Australia. One particular vessel was, until February 2016, operated by Smit Lamnalco to provide support services to Quadrant Energy, an oil and gas supply business. This vessel was crewed by employees from labour hire companies, and insofar as those employees were within the coverage of the MUA, they were covered by enterprise agreements negotiated by the MUA.

[38] In 2015 Smit Lamnalco made the decision to crew the vessel with direct employees. In November 2015, it made an enterprise agreement with three employees it had recruited pursuant to this decision. This agreement was initially approved by the Commission, but after the MUA appealed the approval decision, Smit Lamnalco consented to the appeal being upheld and the approval decision being quashed because it had failed to file in the Commission a copy of the agreement which was signed by a representative of the three employees in accordance with s.185(2)(a) of the FW Act and Reg.2.06A(2) of the FW Regulations. A few days after this occurred; Smit Lamnalco lost its contract with Quadrant Energy.

[39] After February 2016, Smit Lamnalco began undertaking maintenance on the vessel so that it could be hired out for short term contracts. In the period 5-11 April 2016 Smit Lamnalco engaged three new employees on a casual basis - a master, an engineer and a deck rating. Only the last was within the coverage of the MUA. They were initially engaged to perform maintenance work. One of the employees resigned on 1 June 2016, and at the time of the hearing before the Commissioner the other two had yet to perform any seagoing work.

[40] On 12 April 2016, Smit Lamnalco initiated enterprise bargaining by issuing a purported NERR to the three employees. The employees initially nominated one of their number as their bargaining representative. However, after they were sent copies of Smit Lamnalco’s proposed enterprise agreement on 25 April 2016, the employees requested access to legal advice about it. Smit Lamnalco offered to pay for such legal advice, and ultimately the employees were provided with the services of a solicitor nominated by AMMA at total cost to Smit Lamnalco of $20,000. By 20 May 2016 the three employees had voted to approve the Smit Lamnalco Agreement.

[41] Smit Lamnalco lodged its application for approval of this agreement on 27 May 2016. In the Smit Lamnalco Decision the Commissioner identified three “issues of concern” in relation to the approval application. First, that certain rates were lower than the relevant modern award rates. Secondly, whether the scope of the Smit Lamnalco Agreement was fairly chosen, and thirdly, whether there had been genuine agreement 19 - and stated that he was otherwise satisfied that the approval requirements in ss.186 and 187 had been met. He recorded that he had declined to allow the MUA a general right of intervention in the proceedings, but that he allowed the MUA to make submissions about the second and third issues of concern because he considered that he would be assisted by this.

[42] In relation to the fairly chosen issue, the Commissioner noted that the Smit Lamnalco Agreement did not cover all employees, but expressed his satisfaction that the group of employees which it did cover, namely officers, engineers and ratings employed in the offshore oil and gas industry, were an operationally and organisationally distinct group. The Commissioner accepted evidence adduced by Smit Lamnalco that there was a “clear business rationale” to move to a direct hired crew, namely to reduce costs in the context of an industry undergoing a business contraction, and to grow the business’s reputation and secure more work by presenting itself as having a stable workforce of its own employees. 20 However, the Commissioner considered it was reasonable to infer, “[g]iven the timing of the events and the extraordinary efforts made by the employer to support the making of the Agreement with three casual employees” that “one of the reasons why the three employees were engaged was for the purpose of achieving the Agreement”.21 The Commissioner noted that he had considered whether one or more of the employees should be required to give evidence, but that he had already made confidentiality orders protecting their identity from disclosure and the MUA did not seek that such a course be taken.22

[43] The Commissioner concluded that the scope of the Smit Lamnalco Agreement had been “manipulated to include the traditional work at sea in the oil and gas industry to avoid dealing with the MUA” 23, but went on to say:

[44] In relation to the requirement for genuine agreement, the Commissioner expressed a number of concerns, including the arrangement by which a lawyer had been engaged on the employees’ behalf, the lack of any “vigorous bargaining”, the alacrity with which the NERRs had been issued after the last of the three employees was engaged and with which an employee bargaining representative was appointed, and the fact that the rates in the proposed agreement for the work the employees were performing were significantly below what they were actually being paid. 24 Ultimately the Commissioner came to the conclusion that “on a fine balance” that although he had “serious concerns about the authenticity of the bargaining process”, the facts were not sufficient for him to draw the inference that there had been “some form of implied condition of employment or assurance about future work in return for cooperation to make the Agreement”.25 The Commissioner found that there was no evidence that misleading information had been given to the employees, that (except in relation to one issue) they had not been informed about the effect of the Smit Lamnalco Agreement, that they had been hindered from voting, that the voting was not a true expression of the employees’ views, or that the employees could not appreciate the real impact and purpose of the Smit Lamnalco Agreement. He also noted that the scope of the Smit Lamnalco Agreement did not extend to unrelated industries within which the voting employees were not engaged, that although the employees had not yet worked at sea (which was the principal purpose of the agreement), there was some prospect that they might do so in the future, and the classifications in which the employees worked were representative of the three main streams of work covered by the agreement, so that the employees were “in a reasonable position to understand what they were voting upon and its impact on future employees”.26 He therefore approved the Smit Lamnalco Agreement (subject to the receipt of an undertaking concerning an issue which arose about the rates of pay which is not presently relevant).

Appeal grounds, submissions and evidence

MUA’s case

[45] The matters agitated by the MUA in these appeals may be placed in three categories:

[46] We will deal with the issues in these three categories in turn.

[47] In relation to the common issue, the MUA sought leave to adduce new evidence in each appeal, namely a witness statement made by Elyane Drouart Palmer, an industrial officer of the MUA on 19 September 2016. That statement may be summarised as follows:

[48] The MUA also sought to adduce as new evidence in each appeal the evidence adduced at first instance in each of the other two matters.

[49] On the basis of this evidence, the MUA contended in each appeal that each of the three agreements was entered into as part of a scheme amongst a number of employers overseen by the AMMA to achieve an industry standard of employment conditions that were inferior to those agreed in the 2010 industry bargaining round by avoiding having to negotiate with the MUA. It was submitted that the “genuinely agreed” requirement in s.186(2)(a) could not have been satisfied in those circumstances because the scheme was extraneous to the employment relationship and had never been disclosed to the employees voting upon the agreements, meaning that they could not have given informed consent. Further, it was submitted that the agreements lacked the necessary authenticity and moral authority because their purpose was related to industry rather than enterprise bargaining and establishing new industry standards.

[50] The MUA also contended that the “fairly chosen” requirement in s.186(3) could not have been satisfied in respect of each agreement because the group of employees to be covered was unfairly chosen to advance the industry scheme and effect the extraneous purpose earlier described.

[51] Specifically in relation to the MMAOL Agreement appeal, the MUA’s detailed grounds 1, 2, 5 and 6 were as follows:

[52] Ground 1 of the DOF Agreement notice of appeal was as follows:

[53] The grounds of appeal specific to the Smit Lamnalco Agreement appeal were:

[54] The MUA submitted that permission to appeal should be granted in relation to its grounds of appeal in all three matters because they raise important questions about the proper interpretation and application of s.186(2)(a) and s.186(3), those sections had not previously been considered by a Full Bench in the context of the factual issues the subject of the appeal, the grounds of appeal concerned the jurisdiction of the Commission to approve the agreements, there was significant relevant evidence that was not available at first instance, and the decisions were attended by sufficient doubt to warrant their reconsideration.

[55] In relation to the NERR issue in the DOF Agreement and the Smit Lamnalco Agreement appeals, the MUA submitted that:

The respondents’ cases

[56] In relation to that which has earlier been referred to as the common issues in the appeals (grounds 3 and 4 of the MMAOL Agreement notice of appeal, grounds 2 and 3 of the DOF Agreement notice of appeal, and grounds 3 and 4 of the Smit Lamnalco Agreement notice of appeal), the respondents all submitted that:

[57] In relation to grounds 1, 2, 5 and 6 of the MMAOL Agreement appeal, MMAOL submitted:

[58] In relation to ground 1 of the DOF Agreement appeal, DOF submitted:

[59] In relation to grounds 1, 2, 5 and 6 of the Smit Lamnalco Agreement appeal, Smit Lamnalco submitted:

[60] In relation to the NERR issue, DOF and Smit Lamnalco submitted that:

Consideration

Permission to appeal, adduction of new evidence and leave to amend to raise the NERR issue

[61] It was determined by the Full Bench in Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited 31 that “confidence in the agreement approval process” may be a significant matter weighing in favour of the grant of permission to appeal in respect of an appeal against a decision to approve an enterprise agreement, and that this may outweigh the fact that the arguments proposed to be advanced in the appeal were not agitated at first instance. In Hart, the Full Bench granted permission to appeal in respect to a challenge to a finding at first instance that the relevant agreement satisfied the “better off overall test” (BOOT) requirement imposed by s.186(2)((d) and explicated in s.193, notwithstanding that the appellant had not been involved in the approval process at first instance and consequently had not earlier advanced his arguments for consideration by the Commissioner who approved the agreement, on the basis that satisfaction of the BOOT was “…a matter of fundamental importance…”.32 In a subsequent decision and order the Full Bench upheld the appellant’s challenge to the BOOT finding and quashed the approval decision.33 Hart may be taken as emphasising that, in considering whether to grant permission to appeal against an enterprise agreement approval decision, the Commission must at the appellate level place significant weight upon the need to ensure that the agreement approval process established by the FW Act has not been compromised by the approval of an agreement where the Commission has no legal capacity to do so. And, for reasons which include that the enterprise agreement approval process in the large majority of cases does not involve any contradictor and thus requires the Commission to assess the approval criteria against uncontradicted information and material advanced by the applicant for approval, it may be appropriate to grant permission to appeal in respect of arguments which were never advanced at first instance.

[62] In respect of that which we have earlier referred to as the “common issue” (grounds 3 and 4 of the MMAOL Agreement notice of appeal, grounds 2 and 3 of the DOF Agreement notice of appeal, and grounds 3 and 4 of the Smit Lamnalco Agreement notice of appeal), we consider that permission to appeal should be granted. The complex and unusual factual scenario common to all three appeals, including the background history of industry bargaining in the maritime offshore oil and gas industry, the longstanding involvement of powerful industry players such as the MUA and the AMMA, the fact that the respondents in the appeals have not previously employed persons in the industry, and the very small numbers of employees involved in the making of each agreement, means that the appeals raise somewhat unusual issues requiring appellate scrutiny. Further, we will admit the new evidence which the MUA seeks to adduce in support of these grounds of appeal. While we consider that most of the content of Ms Palmer’s witness statement could have been adduced at first instance in each matter, nonetheless we consider that that her evidence should be admitted so that the MUA’s case in respect of the common issue may properly be considered. This will not cause prejudice to the respondents, for reasons which will be explained.

[63] For the same reasons, we consider that permission to appeal should be granted in respect of grounds 1 and 2 of the MMAOL Agreement Decision appeal, ground 1 of the DOF Agreement Decision appeal and grounds 1 and 2 of the Smit Lamnalco Agreement Decision appeal. However, we refuse permission in relation to grounds 5 and 6 of the MMAOL Agreement Decision appeal and grounds 5 and 6 of the Smit Lamnalco Agreement Decision appeal. Those grounds concern discretionary interlocutory procedural decisions made by the respective Commissioners. In each matter it was not in contest that the MUA was not a bargaining representative for any of the employees who made the agreement. In that circumstance, it does not appear that the MUA had a right to be heard, and the degree and nature of its involvement in each proceeding was a matter within the discretion of the Commissioner in the exercise of the Commission’s power under s.590 of the FW Act to inform itself as it considers appropriate. 34 No question of a possible denial of procedural fairness can therefore arise. For these reasons we do not consider that these grounds are of a nature which make it appropriate to grant permission to appeal.

[64] In relation to the additional ground concerning the NERR issue sought to be raised in the DOF Agreement Decision appeal and the Smit Lamnalco Agreement Decision appeal, we grant the MUA leave to amend its notice of appeal to add the additional ground in each case, and we grant permission to appeal in respect of that ground. The argument sought to be raised by the MUA is, for reasons which we will set out, well-founded and pertains to the legal capacity of the Commission to approve the agreement in each case. That necessarily outweighs the fact that the issue was not raised (or identified) by the MUA at first instance. The issue is a purely legal one which may be determined by us on the basis of the material which accompanied the application in each case.

The common issue

[65] In considering the common issue raised by grounds 3 and 4 of the MMAOL Agreement notice of appeal, grounds 2 and 3 of the DOF Agreement notice of appeal and grounds 3 and 4 of the Smit Lamnalco Agreement notice of appeal, it is necessary at the outset to make three significant observations about the statutory scheme for enterprise bargaining in the FW Act. The first is that there is nothing in the approval requirements for enterprise agreements in ss.186 and 187 of the FW Act which expressly prohibits the approval of enterprise agreements which have been established within a broader framework of industry bargaining or which reflect a standard established in an industry. Although the object of Pt.2-4 in s.171(a) adverts to the desirability of collective bargaining occurring at the enterprise level, the statutory scheme does not compel that to occur, and indeed through the mechanisms of multi-enterprise agreements and agreements with single-interest employers provided for in s.172, it explicitly allows collective bargaining to occur in a way which extends beyond the scope of a single enterprise (provided that protected industrial action may not be taken in connection with a multi-enterprise agreement). Nor does the scheme prohibit pattern bargaining, by which a bargaining representative seeks common terms to be included in a number of different enterprises. The only relevant prohibition (in s.409(4)) is that protected industrial action cannot be taken where pattern bargaining is occurring, but even then the definition of pattern bargaining contained in s.412 which operates to define the scope of that prohibition excludes a situation where the relevant bargaining representative is “genuinely trying to reach an agreement” with the particular employer (s.412(2)-(4)). Thus, an enterprise agreement which is the product of a process of pattern bargaining is not illegitimate under the FW Act and may validly be approved if the requirements of ss.186 and 187 are otherwise satisfied. The practical consequence of this feature of the scheme is that it is not uncommon in certain sectors of industry for enterprise agreements to be made and approved which contain common conditions derived from a process of industry or pattern bargaining.

[66] The second observation is that, subject to satisfaction of the BOOT requirement in s.186(2)(d) (or the alternative exceptional circumstances test in s.189), the statutory scheme does not prohibit an employer from bargaining for wages and other conditions of employment which are inferior to those contained in an earlier enterprise agreement and/or those prevailing in an industry as a result of previous round of industry or pattern bargaining. Provided that employees receive the full benefits of the NES and are better off overall compared to any modern award which covers them, the scheme is not concerned with the level of remuneration and other benefits which employees receive in any enterprise agreement that is made. That is a matter for the employees to assess when they vote upon an agreement which their employer has requested them to approve. 35

[67] The third observation is that, under s.176(1), where an employee is not a member of an employee organisation, it is up to the employee to select who the employee wants to represent him or her as a bargaining representative for a proposed enterprise agreement. The good faith bargaining requirements in s.228 apply only in respect of bargaining representatives, and the scheme does not otherwise contemplate the involvement of persons who are not bargaining representatives in enterprise bargaining. Thus if the employees to be covered by a proposed agreement are not members of a particular union, and none of them select that union to be their bargaining representative, then there is no basis for that union to be a participant in the bargaining for the proposed agreement.

[68] Bearing these matters in mind, we turn to the common issue raised by the MUA in the three appeals. We are not wholly satisfied that the evidence of Ms Palmer, and the other evidence upon which the MUA seeks to rely, provides a reliable foundation for the inferences which the MUA seeks to draw from it. Nonetheless, for the purpose of our analysis, we are prepared to take the MUA’s case at its highest.

[69] The MUA’s contention is that the three agreements came about as a result of a scheme between employers orchestrated by the AMMA to obtain template enterprise agreements in the maritime offshore oil and gas industry which undercut the industry standard terms and conditions of employment established in the 2010 industry bargaining round, and to achieve this result by avoiding bargaining with the MUA. Assuming that is the case, we do not consider that by itself is demonstrative of the employees covered by the agreements not having been fairly chosen or not having genuinely agreed to the agreements. Simply because a group of employers led by their employer association has engaged in a process akin to pattern bargaining in order to improve their commercial position does not mean that any resultant enterprise agreements are illegitimate and incapable of approval under the FW Act. That is no different in substance to employees across a range of enterprises in an industry, coordinated by their union, advancing a common claim for proposed enterprise agreements to increase their wages by a standard amount or to a standard level.

[70] Likewise, even if the relevant employers and the AMMA preferred to avoid having to bargain with the MUA, it does not follow that the MUA was illegitimately excluded from the bargaining process for the three agreements. It was not in contest that none of the employees covered by the agreements were at any relevant time members of the MUA, so the MUA could not have been their default bargaining representative at any time. The employees, consistent with s.176(1), nominated in writing persons other than the MUA to be their bargaining representatives, and accordingly there was no basis for the MUA to be involved in the bargaining process.

[71] In relation to an earlier statutory scheme for enterprise agreement, the Federal Court Full Court in CFMEU v Australian Industrial Relations Commission 36 held that the then requirement for employees to have genuinely made the agreement “plainly betokens a concern with the authenticity and, as it were, the moral authority of the agreement”. For the reasons we have given, we do not consider that, simply because the agreements may have emerged as a result of the “scheme” posited by the MUA, they lacked the requisite authenticity or moral authority. The MUA referred to the decision of the Australian Industrial Relations Commission in Grocon Pty Ltd Enterprise Agreement (Victoria)37 in which it was held that an agreement made pursuant to s.170LK of the Workplace Relations Act 1996 between the employer and two employees was not genuinely agreed because certain matters were not disclosed to the employees. We consider the facts of that case are distinguishable. There, the employees were employed by one of five subsidiary companies operating the same business. Previously all the employees of all the companies in the business had been covered by a common agreement, but on this occasion separate agreements with common terms were put to a vote of the employees of each company. The employees of the four other companies rejected the proposed agreement. The non-disclosure to the two employees of the facts that they were to be the only employees covered by the particular agreement they were voting upon, and that by voting for that agreement they might end up with different employment conditions to the other employees in the business employed by the other four companies, was held to vitiate their agreement.38 Those facts are not analogous to the situation here, because there is no suggestion that the employees of any of the three respondents at the time they voted to approve the agreements could have been operating under the belief that they were voting upon an agreement that might apply to anyone but themselves. It having not been contended that the employees in each case had not been provided with the documents and information required by s.180 prior to voting, we do not consider that the non-disclosure of the “scheme” postulated by the MUA could, by itself have affected the genuineness of the employees’ agreement.

[72] We likewise do not consider that, without more, it could be inferred from the existence of the postulated scheme that the employees were unfairly chosen for the purpose of putting that scheme into effect. The position might be different if it were additionally demonstrated that the bargaining and agreement process had been manipulated in the sense that there was no legitimate business rationale for the coverage of the relevant agreement 39 and/or that the employees who made the agreement were not engaged to meet genuine work requirements but rather for the artificial and short-term purpose of negotiating and making an agreement which was disadvantageous to genuine future employees.40 The MUA’s contentions along those lines are separately considered in relation to the other specific grounds of each appeal. But we do not consider that those are matters which could simply be inferred from the existence of the postulated scheme alone.

[73] Grounds 3 and 4 of the MMAOL Agreement notice of appeal, grounds 2 and 3 of the DOF Agreement notice of appeal and grounds 3 and 4 of the Smit Lamnalco Agreement notice of appeal are therefore rejected.

Other MMAOL appeal grounds

[74] The MUA’s first appeal ground in relation to the MMAOL Decision concerned the “genuinely agreed” approval requirement in s.186(2)(a). In the MMAOL Decision the Commissioner did not analyse the “genuinely agreed” requirement in any detail, but only recorded his satisfaction that the requirement had been satisfied, in general terms at paragraph [102] and in specific terms at paragraph [112]. The fact that the issue was treated this way was undoubtedly a function of the fact that the MUA, notwithstanding it had access to the approval application and the supporting statutory declaration (with the names of the individual employees redacted), was represented by counsel, and had the opportunity to make written and oral submissions and to adduce evidence, did not seek to be heard on the question of whether the employees who made the MMAOL Agreement had genuinely agreed to it. It pressed its participation in the proceedings on the basis that it only wished to be heard concerning the “fairly chosen” approval requirement. The MUA has not advanced an acceptable explanation as to why the matters now raised in ground 1 of its appeal were not raised at first instance. The new evidence which has been adduced in the appeal does not, for the reasons already given, provide a proper basis alone for concluding that the MMAOL Agreement was not genuinely agreed.

[75] In those circumstances, we consider that the Commissioner was entitled to reach a state of satisfaction concerning the s.186(2)(a) requirement based on the material before him. That material included a statutory declaration in support of MMAOL’s approval application made by Mr Warren Harrower, Manager, on 3 May 2016, which at paragraphs 2.4-2.10 contained information demonstrating satisfaction of the elements of the “genuinely agreed” definition in s.188(a) and (b).

[76] Section 188(c) is expressed in the negative - that is, the Commission must be satisfied that there are “no other reasonable grounds” for believing that the agreement was not genuinely agreed. The material before the Commissioner did not disclose any reasonable ground for this belief, nor as already explained did the MUA submit that any such reasonable ground existed. In those circumstances, we consider that it was open for the Commissioner to conclude that the s.186(2)(a) requirement was satisfied. That MMAOL intended to use the MMAOL Agreement to operate in an industry sector in which it had not previously operated, that bargaining might not have been “robust or rigorous”, and that MMAOL did not call the employees who voted to approve their agreement or their bargaining representatives to give evidence, were not factors alone or in combination capable of allowing the inference to be drawn that there was no genuine agreement. Accordingly there was no error on the part of the Commissioner in not specifically adverting to these matters in his consideration of the s.186(2)(a) requirement. Nor were these matters of a nature that required the Commissioner to engage in a further course of inquiry in respect of that requirement.

[77] In relation to appeal ground 1(d), the issue of the possible role of the Master as a bargaining representative in the process was the subject of specific analysis and conclusions by the Commissioner at paragraphs [54]-[63] of the MMAOL Decision, as earlier summarised. It is sufficient to say that we agree with the Commissioner’s conclusions, and that the MUA has not demonstrated any appealable error.

[78] The second appeal ground concerned the “fairly chosen” requirement in s.186(3)-(3A). The first point raised here (appeal ground 2(a)) is that the Commissioner erred by applying the test by reference to the employees who voted on the agreement, and not in relation to the group of employees covered by it. That the requirement applies to the latter and not the former was made clear by the Federal Court Full Court in Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd. 41 In that respect the MUA drew our attention to paragraph [68] of the MMAOL Decision where the Commissioner, after referring to an extract from the Explanatory Memorandum for the Fair Work Bill 2009 which discussed the “fairly chosen” requirement and contained an “illustrative example”, stated:

[79] We accept that the above paragraph appears to be discussing, in a hypothetical way, the “fairly chosen” requirement in connection with the employees who voted upon the agreement, not those covered by it. However elsewhere in the MMAOL Decision, the Commissioner made it clear that he understood that the requirement was to be assessed by reference to the coverage of the agreement under consideration. In paragraph [66] he said:

[80] And in stating his conclusion on the subject, the Commissioner referred to the coverage of the MMAOL Agreement:

[81] Accordingly we reject the contention in appeal ground 2(a) that the Commissioner failed to apply the proper test.

[82] In relation to appeal grounds 2(b) and (c), we have earlier set out paragraphs [43]-[50] of the MMAOL Decision, in which the Commissioner made findings concerning the business rationale for the choice of the coverage of the MMAOL Agreement. No appealable error in those findings has been demonstrated, and we consider that they provided a proper basis for the Commissioner’s satisfaction that the coverage of the MMAOL Agreement was fairly chosen. That the business rationale included, among other things, the fact that MMAVO had been unable to reach an agreement with its employees does not compel the conclusion that the coverage of the MMAOL Agreement was not fairly chosen. In circumstances where clients would have a legitimate interest in engaging maritime logistics providers who were not at risk of being subject to protected industrial action, and where MMAVO’s inability to obtain a new enterprise agreement made it difficult for it to win and maintain contracts, we consider a choice by MMAOL to have an agreement which covered maritime logistics work was reasonable and fair. We would not infer from this that the purpose of MMAOL (or indeed of the MMA Group) was simply to avoid bargaining with the MUA, but rather to conclude an enterprise agreement on commercially appropriate terms. For these reasons, we reject appeal grounds 2(b) and (c).

Other DOF Agreement appeal grounds

[83] Ground 1 of the MUA’s notice of appeal against the DOF Decision is in the same terms as ground 1 of the MMAOL Decision appeal. Again, the appeal ground raises issues concerning the “genuinely agreed” approval requirement in s.186(2)(a) that were not raised by the MUA at first instance. Indeed, as earlier explained, the MUA having sought and been granted the opportunity to be heard in the proceedings before the Deputy President, withdrew from the proceedings at the commencement of the hearing. The material which it had earlier filed addressed the “fairly chosen” and BOOT approval requirements, but did not raise any issue concerning the “genuinely agreed” requirement. The MUA has not advanced before us any adequate explanation as to why it should now be permitted to agitate this issue in the appeal.

[84] In any event, we consider that the material that was before the Deputy President was sufficient to enable her to reach a state of satisfaction concerning the “genuinely agreed” requirement. This material included statutory declarations in support of the approval application made by Mr Darren McCormick, DOF’s General Manager, and by three of the employees who voted to approve the DOF Agreement. Having perused this material, we are ourselves satisfied that the s.186(2)(a) requirement was met. In the face of this material there was no requirement for the Deputy President to take into account the matters referred in the MUA’s appeal ground 1(b) or to embark upon any further course of inquiry. The appeal ground is rejected.

Other Smit Lamnalco appeal grounds

[85] Ground 1 of the Smit Lamnalco Decision appeal also concerns the “genuinely agreed” approval requirement in s.186(2)(a). We have earlier summarised the Commissioner’s reasoning and conclusion concerning this approval criterion. It is clear, we consider, that the Commissioner took into account the various factual considerations weighing for and against the conclusion that the agreement of the employees was genuine, and he expressly stated that the conclusion he reached was on a “fine balance”. 42

[86] Satisfaction as to assessment of the genuineness of agreement under s.186(2)(a) and s.188 involves an evaluative assessment akin to the exercise of a discretion. Accordingly, it is necessary, in an appeal challenging a finding that the s.186(2)(a) requirement has been satisfied, it is necessary to demonstrate appealable error of the type identified in House v The King. 43

[87] The MUA’s contention (in appeal ground 1(a)) that the Commissioner inverted the statutory test in s.188(c) is based on paragraph [54] of the Smit Lamnalco Decision, in which the Commissioner expressed the conclusion that: “I therefore cannot conclude that there are other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees”. In our view, it would constitute appellate nit-picking to conclude that this sentence represents a misunderstanding of the test in s.188(c). A conclusion that reasonable grounds cannot be identified for the purpose of s.188(c) is plainly relevant and foundational to a state of satisfaction that no such reasonable grounds exist. Appeal ground 1(a) is rejected.

[88] Appeal grounds 1(b) and (c) are not demonstrative of appealable error. It cannot be said that the Commissioner failed to take any relevant matter into consideration; indeed, the MUA in its submissions relies on express findings which the Commissioner made and which he brought to bear in his consideration of the “genuinely agreed” requirement. This is in substance a complaint that the Commissioner should have given greater weight to some matters and lesser weight to other matters and a plea for the Full Bench to re-weigh the relevant matters and come to a different conclusion. This is not a sufficient basis for appellate intervention 44, and the grounds are rejected.

[89] The MUA’s appeal ground 2 must fail for similar reasons. The submission advanced is that certain express findings in the Smit Lamnalco Decision precluded the conclusion that the “fairly chosen” requirement was satisfied. These included the finding at paragraph [35] that the scope of the Smit Lamnalco Agreement had been manipulated to include at-sea work in the oil and gas industry in order to avoid dealing with the MUA. The MUA’s submission in effect was that the Commissioner should have given decisive weight to this consideration and lesser or no weight to the other matters which the Commissioner also took into account, including in particular the other legitimate business reasons for Smit Lamnalco’s choice of coverage for the agreement which he subsequently identified. Because the assessment of whether the coverage of the Smit Lamnalco Agreement was fairly chosen also involved an evaluative assessment that was in the nature of a discretionary decision, it is not sufficient to justify appellate intervention to submit that a different result should have pertained upon a re-weighing of the relevant factors to be taken into account.

[90] It is also significant that the approach taken by the Commissioner was consistent with that taken by the Full Bench in MUA v Toll Energy Logistics Pty Ltd. 45 In that matter the Full Bench dismissed an appeal against the approval of an enterprise agreement brought on the basis, among other things, that the conclusion that the coverage of the agreement was fairly chosen was in error. In rejecting this contention the Full Bench said:

[91] Thus it was open to the Commissioner to conclude that the coverage of the Smit Lamnalco Agreement was fairly chosen notwithstanding his finding that the coverage had been manipulated to avoid dealing with the MUA. Appeal ground 2 is therefore also rejected.

The NERR issue

[92] The decision of the five-member Full Bench in Peabody determined that:

[93] In Aldi, the Federal Court Full Court considered a challenge to the validity of the approval by the Commission of a particular enterprise agreement. The challenge was advanced on a number of grounds, one of which being that the NERR issued by the employer did not conform to the form of the NERR in Schedule 2.1, in that in the last paragraph it said “If you have any questions about this notice or about enterprise bargaining, please speak to either your leader, bargaining representative…” instead of the prescribed words “If you have any questions about this notice or about enterprise bargaining, please speak to either your employer, bargaining representative…” (underlining added in each case). In response, the respondent contended among other things that Peabody was incorrectly decided and that only substantial compliance with the prescribed form for the NERR was required.

[94] The majority of the Full Court (Katzmann and White JJ, Jessup J dissenting) determined that the relevant agreement was invalidly approved on a different ground. In relation to the NERR ground, Jessup J said:

[95] Katzmann J began her analysis of the NERR ground by declining to join in the “parting observation” made by Jessup J at [49]. Her Honour went on to agree with the conclusion in Peabody that the effect of s.174(1A) was to require strict compliance, and that substantial compliance was not required. Her Honour said:

[96] However, in relation to the second question identified at paragraph [63], Katzmann J agreed with Jessup J that the question was not whether the NERR did or did not satisfy the requirements of s.174(1A), but whether the Commission fell into jurisdictional error in concluding that the agreement had been “genuinely agreed” to within the meaning of s.186(2). Her Honour went on to say:

[97] In relation to the NERR ground, White J said:

[98] In summary no member of the Full Court expressed the view that Peabody was incorrect. Jessup J appears to have been prepared to assume that Peabody was correct for the purpose of his analysis, but stated the obiter opinion (at [49]) that, even if strict compliance with the prescribed form was required, the minor departure in the NERR issued in that case would not be sufficient to invalidate it. Katzmann J concluded expressly that Peabody was correct, and did not agree with Jessup J’s observation at [49]. White J agreed with Jessup J’s analysis of the NERR ground at [39]-[48] (but declined to express agreement with the observation in [49]), and acknowledged the force of Katzmann J’s reasoning concerning the need for strict compliance with the prescribed NERR without deciding the issue. In light of Aldi, we consider that the proper course is to follow Peabody and approach the NERR issue on the basis that a purported NERR which does not strictly comply with the prescribed form in Schedule 2.1 is invalid, and that an enterprise agreement which proceeds on the basis of an invalid NERR is incapable of approval.

[99] We have earlier described the defect in the NERRs issued in respect of the DOF Agreement and the Smit Lamnalco Agreement. A defect of a similar nature was considered by the Full Bench in KCL as follows:

[100] The Full Bench in KCL went on (at [18]-[22]) to reject arguments that the “infoline” information in the prescribed NERR in Schedule 2.1 was not authorised to be included by s.174, that the purported NERR that was used by the employer had been obtained from the Commission’s website, and that the infoline identified in the prescribed form did not in fact provide information about representation or bargaining.

[101] As DOF and Smit Lamnalco pointed out, the NERRs here were different to that in KCL, in that they had followed the prescribed wording for the reference to the infoline, unlike the employer in KCL which had actually misdescribed it, and their only failure was to insert the correct telephone number. However, we do not consider that this distinction can lead to any different result. The prescribed form clearly intended that employees in receipt of an NERR be informed of the telephone number of the Fair Work Commission infoline as a source of information about enterprise bargaining. The prescribed form commanded that the number for that infoline be inserted for that purpose. That purpose would be frustrated entirely if a different and incorrect telephone number could validly be inserted into the NERR. Even if the requirement for strict compliance still allowed some capacity for errors of an entirely trivial nature to be overlooked (the possibility of which was adverted to by Jessup J in Aldi at [49] and by the Full Bench in KCL at [17]), we do not consider that the defect in the NERRs here could be characterised as trivial for the reason we have given.

[102] We do not consider it necessary to consider the broader submission made by DOF and Smit Lamnalco concerning the correctness of the ruling in Harbour City Ferries that all of the “fields” in the prescribed form needed to be correctly populated in order for the NERR to be valid. Some of the other fields, such as the requirement in the first paragraph to identify the “proposed coverage” might leave some room for doubt as to what is precisely necessary to be filled in. However, in respect of the Fair Work Commission infoline, there is no room for such doubt; either the correct telephone number is given or it is not.

[103] If s.186(2)(a) and s.188 allowed for the exercise of a discretion in respect of the requirement to provide employees with the NERR, then the submissions made by DOF and Smit Lamnalco that there was no evidence the defect in the NERRs had any effect on the genuineness of the employees’ vote to approve the agreements would have considerable force. However, the analysis of the statutory scheme in Peabody does not allow for the exercise of any such discretion.

[104] It may be observed that s.174 does not require the prescribed content in the NERR to include the telephone number of the Commission’s infoline, or indeed anything that is currently contained in the last paragraph of Schedule 2.1. It would be open to the Minister at any time to exercise the power in s.173(5) and s.796 to have a new form prescribed which omits the last paragraph which, for reasons which escape us, employers frequently fail to correctly reproduce in the NERRs which they issue. However, until that occurs, we consider that the Commission’s duty is to not approve enterprise agreements where the NERR issued by the employer does not strictly comply with the currently prescribed form in respect of that last paragraph.

[105] For completeness, we reject the submission advanced by DOF and Smit Lamnalco that we should defer dealing with the NERR issue until applications for questions concerning defective NERRs which arose in two other appeals 46 to be referred by the President to the Federal Court pursuant to s.608 of the FW Act had been determined. Those applications were heard by the President on 1 July 2016, but a decision was deferred pending the outcome of Aldi and have not since progressed any further. We do not consider that those applications are likely to lead to a Federal Court decision that is determinative of whether s.174(1A) requires strict compliance with the prescribed NERR form within any reasonable timeframe. Nor do we consider that we should wait until the referral applications have been determined and then, if they are refused, give DOF and Smit Lamnalco the opportunity to apply to the President for referral of the NERR issue in their matters. At any time since the MUA sought leave to amend its appeal notice to add the NERR ground, DOF and Smit Lamnalco could have applied for such referrals, but they have not. We think the most efficient course is for us to issue our decision, and then DOF and Smit Lamnalco will be at liberty to seek judicial review of the decision.

[106] We conclude that the DOF Agreement and the Smit Lamnalco Agreement could not have validly been approved because the NERRs which the employer issued in each case were invalid. Accordingly the DOF Decision and the Smit Lamnalco Decision must be quashed, and the applications for approval of the DOF Agreement and the Smit Lamnalco Agreement must be dismissed.

Orders

[107] In matter C2016/4902, we order as follows:

[108] In matter C2016/4903, we order as follows:

[109] In matter C2016/4904, we order as follows:

scription: Seal of the Fair Work Commission with the member's signature.

VICE PRESIDENT

Appearances:

M. Ritter SC and E. Palmer for the Maritime Union of Australia.

R. Dalton and M. Follett of counsel for MMA Offshore Logistics Pty Ltd, DOF Management Australia Pty Ltd and SMIT Lamnalco Australia Pty Ltd.

Hearing details:

2016.

Perth:

13 October.

 1   [2016] FWCA 5277

 2   [2016] FWCA 4654

 3   [2016] FWC 5249

 4   [2016] FCAFC 161

 5   [2016] FWC 3789

 6   [2016] FWC 4868

 7   MMAOL Decision at [40]-[42]

 8   MMAOL Decision at [54]-[63]

 9   MMAOL Decision at [64]-[98]

 10   MMAOL Decision at [99]-[101]

 11   MMAOL Decision at [102], [112]

 12   MMAOL Decision at [113]

 13   DOF Decision at [4]-[7]

 14   DOF Decision at [22]

 15   DOF Decision at [37]

 16   DOF Decision at [47]

 17   DOF Decision at[38]-[46]

 18   DOF Decision at [85]

 19   Smit Lamnalco Decision at [2].

 20   Smit Lamnalco Decision at [29]-[30]

 21   Smit Lamnalco Decision at [32]

 22   Smit Lamnalco Decision at [34]

 23   Smit Lamnalco Decision at [35]

 24   Smit Lamnalco Decision at [48].

 25   Smit Lamnalco Decision at [54]

 26   Smit Lamnalco Decision at [50]

 27   [2014] FWCFB 2042, (2014) 242 IR 210

 28   [2015] FWCFB 3337, (2015) 250 IR 1

 29   [2016] FWCFB 3048, (2016) 257 IR 266

 30   C2016/1264 and C2016/3735

 31   [2015] FWCFB 7090 at [46]-[47]

 32   Ibid at [46]

 33   [2016] FWCFB 2887; PR581624

 34   CFMEU v Collinsville Coal Operations Pty Ltd [2014] FWCFB 7940, (2014) 246 IR 21 at [69]-[75]

 35   See e.g. CEPU and AMWU v Sustaining Works Pty Limited [2015] FWCFB 4422 at [26]

 36   [1999] FCA 847, (1999) 93 FCR 317 at [126] per Wilcox and Madgwick JJ, with whom Moore J relevantly agreed at [155]

 37   (2003) 127 IR 13

 38   Ibid at [50]-[53]

 39   See Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd [2015] FCAFC 16 at [33]; MUA v Toll Energy Logistics Pty Ltd [2015] FWCFB 7272, (2015) 254 IR 353 at [65]

 40   See CEPU and AMWU v Main People Pty Ltd [2015] FWCFB 4467 at [33]

 41   [2015] FCAFC 16

 42   Smit Lamnalco Decision at [54]

 43   [1936] HCA 40; (1936) 55 CLR 499 at 504-505 per Dixon, Evatt and McTiernan JJ; see Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; 203 CLR 194 at [21] per Gleeson CJ, Gaudron and Hayne JJ

 44   Restaurant and Catering Association of Victoria [2014] FWCFB 1996 at [57] –[58]

 45   [2015] FWCFB 7272, (2015) 254 IR 353

 46   C2016/1264 and C2016/3735

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