DECISION

Fair Work Act 2009
s.238 - Application for a scope order

Application by the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)
(B2018/229)

Application for a scope order – s. 238 considerations – Scope order seeks to excise Victorian employees and to widen the categories of employees subject of bargaining - Commission not satisfied that AMWU took reasonable steps to give notice of concerns to non-member bargaining representatives – Commission not satisfied that making the order will promote fair and efficient conduct of bargaining – Interests of non-Victorian employees may be adversely affected – obligations to issue NERR to broader scope of employees claimed in bargaining – Scope order not appropriate mechanism to address invalidities associated with NERR – Application refused

OVERVIEW

[1] This Decision concerns an application by the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) for a scope order under s.238 of the Fair Work Act 2009 (the Act) with respect to bargaining for an enterprise agreement with Broadspectrum (Australia) Pty Ltd (Broadspectrum) in relation to certain Defence contracts. The scope application was made on 4 April 2018. The application was initially refused by the Commission in a Decision issued in July 2018 (the July 2018 Decision) on the basis that it was determined that the Commission did not have jurisdiction to deal with it. 1 An appeal by the AMWU against that Decision was upheld by a majority decision of a Full Bench of the Commission (the scope appeal Decision) of which I was a member, and the scope application was remitted to me to be reheard on the basis of evidence already adduced and such further evidence as I may determine to admit.2

[2] The AMWU sought to adduce further evidence for the rehearing and Broadspectrum objected. Directions were issued and submissions in relation to the evidence sought to be adduced by the AMWU and whether that evidence should be admitted were made by the parties. The parties were given the option of attending a hearing in relation to this matter which was not taken up. I determined that I would not receive the further evidence sought to be adduced by the AMWU and indicated to the parties that I would provide reasons for this in my Decision in relation to the substantive application unless either party sought those reasons in advance. Neither party sought that I provide reasons for my refusal to receive further evidence prior to determining the substantive application.

[3] The parties also were provided with the option of an oral hearing in relation to the scope application which was also not taken up. Accordingly I have determined the scope application on the basis of the material on the file including that filed by the parties and the transcript of the original proceedings. Both parties were granted permission to be legally represented in the earlier proceedings and to the extent it is necessary I continue that permission pursuant to s. 596(2)(a) of the Act on the basis that I am satisfied that the earlier involvement of those representatives would allow the matter to be dealt with more efficiently taking into account its complexity.

[4] The employees subject of the scope application are currently covered by the Transfield Services LMM Greenfields Enterprise Agreement 2013-2016 3 (the LMM Agreement). The LMM Agreement was approved on 7 June 2013, commenced operation on 14 June 2013 and reached its nominal expiry date on 16 September 2016. Broadspectrum and the AMWU have been bargaining since 2016 for an agreement to replace the LMM Agreement. The scope application relates to that bargaining process. It has been a protracted and difficult process involving multiple proceedings before the Commission.

[5] Following four unsuccessful ballots, a majority of employees who participated in a ballot conducted in December 2017, voted to approve an agreement which was titled the Broadspectrum DMSS Enterprise Agreement 2017 (the 2017 proposed Agreement). Broadspectrum applied to the Commission for approval of the 2017 proposed Agreement. In a Decision issued on 14 March 2018 4 (the March 2018 Decision), the Commission refused the application for approval of the 2017 proposed Agreement. It is apparent from the March 2018 Decision that the scope of the 2017 proposed Agreement was in issue during the bargaining and as it later emerged, was not resolved. In summary, the AMWU sought that the 2017 proposed Agreement cover employees in a number of classifications that Broadspectrum considers are salaried. Broadspectrum agreed to coverage for some but not all of the classifications of employees claimed by the AMWU. The reasons that the application for approval of the 2017 proposed Agreement was dismissed related to the disputed scope and the requirements for the issuing of a Notice of Employee Representational Rights (NERR) to employees within that disputed scope.

[6] Subsequent to the March 2018 Decision, the AMWU sought to continue bargaining with Broadspectrum and advised that it now sought two agreements – one covering employees in Victoria only and the other covering employees in all other States and Territories. The AMWU also sought that the two proposed agreements cover a broader group of employees than were covered by the LMM Agreement, consistent with its earlier position in relation to scope. Broadspectrum’s position was that bargaining had ceased once the 2017 proposed Agreement was approved by a majority of employees and that it would not agree to initiate a new round of bargaining unless there was agreement that the scope would reflect the coverage of the 2017 proposed Agreement.

[7] The AMWU then applied for a scope order seeking a separate replacement agreement for Victoria only but covering a broader scope of employees in that State than that provided for in either the LMM Agreement or the 2017 proposed Agreement. The scope application sought by the AMWU does not deal with an agreement to cover other States and Territories. As previously stated, that application was initially refused in the July 2018 Decision and an appeal by the AMWU against the refusal was upheld resulting in the matter being allocated to me for rehearing. The manner in which the scope application was pleaded and argued makes it necessary to consider the background to the present situation including the process of bargaining between Broadspectrum and the AMWU and earlier proceedings in the Commission. I deal below with aspects of the background which in my view are relevant to the scope application.

BACKGROUND

The coverage of the LMM Agreement

[8] The majority of employees subject of the scope application are covered by the LMM Agreement, which as previously noted reached its nominal expiry date on 16 September 2016. The coverage of the LMM Agreement as set out in clause 6, is as follows:

“6. COVERAGE OF THE AGREEMENT

6.1 Except as provided in sub-clause 6.2, this Agreement will apply to all employees employed by the Company in relation to the provision of maintenance functions and the repair, overhaul and servicing of military equipment (both scheduled and unscheduled) as set out in the LMM contract. Classifications are set out in sub-clause 20.2 of this Agreement.

6.2 This Agreement will not apply to the management and executive staff of the Company. Nor will it apply to;

a) Supervisors/Trainers/Coordinators – Level II as defined in Schedule B – Classification Structure and Definitions; or

b) those engaged in the “professional field” as defined in paragraph (e) of the definition of “vocational fields” in sub-clause 3.1 of the Manufacturing and Associated Industries and Occupations Award 2010.”

[9] Clause 20.2 of the LMM Agreement relevantly provides:

20.2 Classification of Materiel Maintenance Employees

20.2.1 With the exception of Team Leaders, the classification structure and weekly rates of pay for materiel maintenance employees will be as set out in Attachment 1.

20.2.2 Materiel maintenance employees other than Team Leaders will be classified within the classification structure at para 20.2.1 consistent with Schedule B – Classification Structure and Definitions of the Manufacturing and Associated Industries and Occupations Award 2010.

20.2.3 A Team Leader will be an employee who leads other materiel maintenance employees and meets the definition of a Supervisor/Trainer/Coordinator – Level I within Schedule B – Classification Structure and Definitions of the Manufacturing and Associated Industries and Occupations Award 2010.

20.2.4 A Team Leader will be paid for ordinary hours 15% more than the rate received for ordinary hours by the most highly classified of the employees they lead. They will, in no case, receive less than the rate payable to an employee classified at Level C8.

20.2.5 In the event of a dispute over the classification of an individual materiel maintenance employee, clause 24.3 of the Manufacturing and Associated Industries and Occupations Award 2010 will apply.

20.2.6 The numbering of the provisions of the Manufacturing and Associated Industries and Occupations Award 2010 cited in sub-clause 6.2 and this clause were current at the time this Agreement was made. In the event that such numbering changes, the re-numbered provision of the award will apply.

[10] The classification structure in Attachment 1 to the LLM Agreement lists classification level definitions from C13 to C5 (as per the classification structure in the Manufacturing and Associated Industries and Occupations Award 2010 (the Manufacturing Award 2010)) along with salaries for each level.

[11] The AMWU asserts that the LMM Agreement covers “at least materiel maintenance employees and storespeople” and that storespeople are covered on the basis of a concession to this effect made by Broadspectrum in written submissions filed with the Commission on 20 February 2018 in the application for approval of the 2017 proposed Agreement. In its submissions in the scope application, Broadspectrum does not take issue with this assertion. I therefore accept that the LMM Agreement covers storepersons other than those employed at Kapooka in New South Wales.

[12] It is common ground that the LMM Agreement does not cover:

•  a group of employees described by the parties as “non-materiel maintenance employees”;

•  employees not working on the DMSS Contract; or

•  employees at Kapooka.

The 2017 proposed Agreement

[13] The 2017 proposed Agreement was approved by a majority of employees in a ballot conducted on 6 December 2018. The 2017 proposed Agreement provided in relation to coverage as follows:

“6. COVERAGE OF AGREEMENT

6.1 Except as provided in sub-clause 6.2, this Agreement will cover employees of the Company employed in any of the classifications listed in Attachment 1 (Table 1) of this Agreement, and who are performing maintenance functions, including the repair, overhaul and servicing of military equipment (both scheduled and unscheduled) as set out in the DMSS contract, and who are located at Kapooka NSW or any DMSS contract site.

6.2 This Agreement will not cover the following employees of the Company:

•  Clerical and administrative staff;

•  Management and executive staff;

•  Schedulers;

•  Production officers/planners;

•  Production clerks;

•  Purchasing/procurement clerks/officers;

•  Supervisors/Trainers/Co-ordinators – Level II as defined in Schedule B – Classification structure and Definitions; or those engaged in ‘the professional field’ as defined in paragraph (e) of the definition of ‘vocational fields’ in sub-clause 3.1 of the Manufacturing and Associated Industries and Occupations Award 2010.”

[14] Table 1 referred to in clause 6 of the 2017 proposed Agreement contains wage rates for classifications designated C13 – C5. I assume that these classifications are those found in the Manufacturing Award 2010 on the basis that this is the Award referred to in clause 6 of the Agreement.

The March 2018 Decision

[15] Broadspectrum applied to the Commission for approval of the 2017 proposed Agreement. The AMWU opposed the approval contending that as it had claimed in June 2016 that storepersons (including those at Kapooka) and non-materiel maintenance (salaried) employees should be covered by the 2017 proposed Agreement, Broadspectrum was required to take reasonable steps to issue all of those employees with a NERR. Broadspectrum had not done so with the result that the requirements in s. 173(1) of the Act were not met.

[16] In the March 2018 Decision, the application for approval of the 2017 proposed Agreement was dismissed. The March 2018 Decision sets out the following facts which are recorded as not being disputed by the parties:

•  On 20 May 2016 Broadspectrum initiated bargaining and proposed an agreement covering materiel maintenance employees and storepersons at all of its worksites except Kapooka;

•  In June 2016 the AMWU claimed that the proposed agreement should cover materiel maintenance employees (who are also referred to as armoury employees) at Kapooka and non-materiel maintenance employees at all sites;

•  Broadspectrum subsequently agreed to extend the coverage of the proposed agreement and on 14 July 2016 issued a NERR to materiel maintenance employees at Kapooka but did not issue the NERR to any other category of worker at Kapooka or to the non-materiel maintenance employees at other sites;

•  In late 2017 Broadspectrum requested relevant employees to vote to approve the 2017 proposed Agreement;

•  The employees requested to approve the 2017 proposed Agreement were employees to whom Broadspectrum had issued notices on 20 May 2016 and 14 July 2016;

•  The 2017 proposed Agreement was approved by a majority of employees who voted in a ballot on 6 December 2017.

[17] In addition to these facts, it was noted in the March 2018 Decision that it appeared to be agreed that non-materiel maintenance employees (including production and procurement clerks and schedulers) were not covered by the 2017 proposed Agreement. 5 The Commissioner did not make a finding about the group of employees that was covered by the 2017 proposed Agreement stating that it was not necessary to reach a concluded view on this matter.6 Accordingly, the question of whether any of the employees actually covered by the 2017 proposed Agreement did not receive a NERR at all, was not determined.

[18] A number of findings were also made in the March 2018 Decision including that there was a second notification time which commenced on 14 June 2016, when Broadspectrum agreed to expand the scope of the 2017 proposed Agreement to employees at Kapooka. The Decision also records that the parties had different views about the categories of employees at Kapooka that were included in the expanded scope agreed to by Broadspectrum. Broadspectrum maintained that it understood that the AMWU was claiming that the 2017 proposed Agreement should cover only armoury employees at Kapooka and that it agreed to the scope of the 2017 proposed Agreement extending to those employees.

[19] Broadspectrum’s submissions that it understood that the AMWU’s claim in relation to coverage of employees at Kapooka to relate only to armoury employees not storepersons were considered but no definitive finding was made about this matter. Rather, the Commissioner concluded that by the second notification time the AMWU had made a claim for the Agreement to have a broader scope than that proposed by Broadspectrum. As a result, the Commissioner did not make a finding that any employee actually covered by the 2017 proposed Agreement had not been given a NERR at all.

[20] Notwithstanding that the group of employees actually covered by the 2017 proposed Agreement was not definitively identified or that the agreed extent of the increase to the scope of that Agreement was not identified, it was concluded in the March 2018 Decision that at the second notification time when Broadspectrum agreed to bargain within the increased scope claimed by the AMWU for the 2017 proposed Agreement, it was required by s. 173(1) of the Act to take all reasonable steps to give a NERR to all employees subject of the claimed scope including those outside of the increased scope agreed to by Broadspectrum and arguably outside the coverage of the 2017 proposed Agreement. Because of these findings, the Commissioner concluded that Broadspectrum had not taken all reasonable steps to issue a NERR as required by s. 173(1) of the Act as Broadspectrum had given a NERR to some, but not all, of the employees within the broader scope claimed by the AMWU. Accordingly, the Agreement could not be approved. The Commissioner further concluded that the period between the second notification time and the issue of second NERR was more than fourteen days and that this was also fatal to the approval of the Agreement. As previously noted, there was no appeal of the March 2018 Decision.

[21] In the scope appeal Decision, the majority of the Full Bench said in relation to the March 2018 Decision:

“[27] Our reading of the March decision is that the Commissioner decided that the 2017 proposed agreement could not be approved for two reasons. The first was that not all employees who fell within the scope of the agreement as proposed by the AMWU had been served with the NERR. That conclusion was reached notwithstanding that any employee actually covered by the 2017 proposed agreement had not been given a NERR at all. It is not immediately apparent why that constituted a proper basis to dismiss the application for approval of the 2017 Agreement but neither party raised any issue with that conclusion and accordingly we do not need to consider it further. The second reason was that the Kapooka materiel maintenance employees, whom Broadspectrum agreed on 14 June 2016 should be covered by the 2017 proposed agreement did not receive the NERR until 14 July 2017, well after 14 days had passed. Consistent with Uniline the Commissioner held that this constituted a failure to comply with s. 173(3) with respect to the Kapooka employees which was fatal to the approval application.

[28] It necessarily follows that the vote upon the 2017 proposed agreement was not conducted in accordance with s 181(2). A NERR that met the temporal requirement in s 173(3) had not been issued to each employee who would be covered by the 2017 proposed agreement and who was employed at the relevant notifications times, nor was there any evidence that reasonable steps had been taken to do so, as required by s 173(1). The fact that a proportion of those who under s 173(1) were required to be given a valid NERR had in fact received them was not sufficient to bring about compliance with s 182(1). If the contrary were the case, an employer could provide a valid NERR to a minority of employees, or even just one, and still be able to validly request a vote under s 181(1). We consider that that the Commissioner erred in concluding, as she did in paragraph [14] of the Decision, that the issue of a valid NERR to just the non-Kapooka employees was sufficient to allow a vote to proceed in compliance with the requirement in s 181(2).” 7

[22] In summary, the majority of the Full Bench in the scope appeal Decision proceeded on the basis that Broadspectrum had not complied with s. 173(1) because it had not issued a NERR within the required time to each employee who would be covered by the 2017 proposed Agreement and who was employed at the relevant times of the notifications. The majority also found that Broadspectrum had not provided any evidence that it had taken reasonable steps to issue the NERR to those employees and for this reason Broadspectrum could not validly request a vote under s. 181(1) and had not complied with s. 182(1). There was no finding of non-compliance with s. 173(1) on the basis that a NERR was not given to a group of employees who were within the scope claimed by the AMWU which was neither agreed to by Broadspectrum nor covered by the 2017 Agreement.

The requirements in relation to the issuing of a NERR

[23] The proposition in the March 2018 Decision that s. 173(1) of the Act required that Broadspectrum issue a NERR to employees within the broader scope proposed by the AMWU notwithstanding that Broadspectrum had not agreed to bargain in respect of all employees within that broader scope, is a matter of some significance in the AMWU submissions in the scope application and it is necessary to consider it. The proposition is based on a number of Full Bench Decisions: MSS Security v Liquor, Hospitality and Miscellaneous Union (MSS Security) 8; Mermaid Marine Vessel Operations Pty Ltd v The Maritime Union of Australia9 (Mermaid Marine); The Maritime Union of Australia v Swire Pacific Ship Management (Australia) Pty Ltd (Swire)10; and Uniline Australia Limited (Uniline) which were cited in the March 2018 Decision.11

[24] MSS Security concerned circumstances where a union proposed an agreement to cover three categories of employee and the employer agreed to bargain with respect to only one category and issued a NERR to employees in that category only. The union applied for a protected action ballot order which at first instance was granted for all three categories of employees. The employer appealed the decision on grounds including that there could be no bargaining representative for an employee until a NERR is issued and a union could only apply for a protected action ballot order in relation to an employee, if it is a bargaining representative for the employee. The employer also argued that it had not agreed to bargain in respect of all three categories of employees because no NERR had been issued to them. In dismissing the appeal the Full Bench noted the reasoning and conclusion of a Full Bench of the Commission in Stuartholme School v Independent Education Union of Australia 12 stating:

“[15] Once it is accepted that the scope of a proposed agreement can itself be a matter for bargaining it follows that the employer’s obligation under s.173(1) to issue a notice of representation rights in relation to a “proposed enterprise agreement” is to issue such a notice to all employees who would be covered by the broader scope of the agreement proposed by the union or the employer as the case may be.”

[25] The Full Bench in MSS Security went on to hold that:

“[17] However, once an employer has agreed to bargain in relation to a group of employees within the scope of an agreement as proposed by a union or other employee bargaining representative, the employer is obliged to

•  issue a notice of representational rights to the employees within the scope of the agreement proposed by the union or other employee bargaining representative; and

•  bargain in good faith in accordance with s.228.

[18] As the Full Bench in Stuartholme noted, “[t]he terms of [s.237] unambiguously suggest that bargaining may have commenced under the Fair Work Act even though the parties to the bargaining process are in disagreement about the scope of the proposed agreement.” 5 Where there is a continuing disagreement between the bargaining parties as to the scope of the proposed enterprise agreement, the remedy for the party who wants a narrower scope is to seek a scope order pursuant to s.238. In the absence of such an order, bargaining will proceed on the basis of the broader scope, save that the parties are entitled to continue bargaining over the scope itself until such time as the scope of the proposed agreement is settled through bargaining or by the making of a scope order.

[19] It follows from the scheme of the FW Act that the obligation under s.173 is to issue a notice of representational rights to the broader class of employees even though the employer does not wish to have an agreement that extends that far. If it were otherwise, it would mean that an employer could always prevent an agreement having a broader scope than it desired by simply refusing or failing to issue notices of representational rights outside its desired scope. Such an outcome is inconsistent with the scheme of the FW Act.

[20] This is not a case where MSS had refused to bargain, rather it had agreed to bargain, and had in fact been bargaining, in relation to one of the three categories of employees within the scope of the agreement proposed by the LHMU. 6 Specifically, it was happy to bargain in relation to Revenue Protection Officers but not in relation to Patrol Officers or Aboriginal Liaison Officers. However, once MSS had agreed to bargain within the scope sought by the LHMU, MSS was obliged to commence bargaining in good faith for the proposed agreement. The scope of the agreement was itself a matter for bargaining or, if the scope could not be agreed, for an application under s.238 of the FW Act for a scope order.”

[26] Mermaid Marine also concerned an application for a protected action ballot order in circumstances where there were two agreements with overlapping coverage (an assignment specific agreement and a general agreement) applying to the relevant employees. One of the agreements had passed its nominal expiry date and the other had not. The employer issued a NERR to a group of employees to whom both agreements applied. The Union initially sought a protected action ballot order in respect of all employees but in the face of objection on the basis that some employees were covered by an agreement that was still in operation so that a protected action ballot order could not be made, the Union proposed a narrower scope clause excluding employees covered by the agreement that remained in operation and sought a protected action ballot order in respect of employees within that narrower scope.

[27] After considering the meaning of the term “proposed enterprise agreement” for the purposes of making a protected action ballot order for a narrower group of employees, the Full Bench in that case cited MSS Security in respect of the obligation to issue an NERR to employees within the broader scope even when the employer does not wish to have an agreement that extends that far, confirming that a scope order is only one remedy in resolving scope issues and that the protected action ballot order could be made in respect of employees within the narrower scope.

[28] Swire was another case about whether a protected action ballot order could be made in circumstances where there were overlapping agreements similar to those considered in Mermaid Marine and one of those agreements was still in operation. The matter was referred to the same Full Bench which had heard the Mermaid Marine appeal. Again, citing MSS Security, the Full Bench said:

“[35] Thirdly, where scope of a proposed agreement is in dispute at the Notification Time, the NERR is to be given to employees within the broader scope of a proposed agreement. But this does not mean that the NERR so given determines the scope of the proposed agreement.” 13

[29] In Uniline a Full Bench of the Commission was considering an appeal by an employer against a decision at first instance refusing to approve an agreement on the basis of the timing of the issuing of a NERR. In that case, the majority of the Full Bench formulated the requirement to issue a NERR to employees in the broader scope of a proposed agreement in a manner that is arguably different to the formulation in MSS Security, Mermaid Marine and Swire, stating that:

“[113] In our view there is no substance in these submissions. Artificial though it may be, an employer that discovers it had issued an invalid Notice, would cease bargaining with its employees and would agree to bargain or initiate bargaining afresh thus triggering a notification time and a new period within which a valid Notice may be issued. There is nothing in the Act which compels a conclusion to the contrary, except perhaps in circumstances where a majority support determination has been made. Where an employer initially agreed to bargain for an agreement with a particular scope and later agreed to bargain for an agreement with a broader scope, that agreement to bargain in our view, triggers a notification time and a requirement thereafter to issue a Notice to relevant employees who are to be covered by the broader scope agreement. We do not need, for present purposes to decide whether, having regard to s.173(4) such a Notice needs to give to employees who received a Notice for the proposed agreement with a more limited scope.” 14 (emphasis added)

[30] MSS Security¸ Mermaid Marine and Swire concerned applications for protected action ballot orders. Those cases all involved a reduction in scope from one that was broader to one that was narrower. In MSS Security the Union bargaining representative initiated bargaining for a broader scope and the employer responded with a narrower scope. The protected action ballot order was found to have been validly made in relation to the broader scope. In Mermaid Marine and Swire the employer initiated bargaining for a broader scope and the Union sought a protected action ballot order with respect to the narrower scope. That protected action ballot order was also found to have been validly made. Uniline concerned the validity of a NERR on the basis of when, rather than to whom, the notice was given. That case was also principally concerned with the consequence of failure to take all reasonable steps to provide a NERR to relevant employees in the required time. The Full Bench in Uniline did not find that s. 173 required a NERR to be issued to employees outside the scope of an agreement or that a failure to do so would result in the agreement not being validly made.

[31] MSS Security, Mermaid Marine and Swire did not involve circumstances where the Commission was deciding whether to approve an agreement. In my view, none of those cases are authority for the proposition that the Commission must find that an agreement is not validly made in circumstances where employees within a broader scope claimed by a bargaining representative at some point during the negotiations, but neither agreed to by the employer nor covered by the agreement, were not issued with a NERR. What the Commission is focusing on in deciding whether to approve an agreement is whether all employees who are covered by the agreement and who were requested to approve it were issued with a NERR in the required manner and form. Those cases are not directly on point with the present case where it is arguable that:

•  The second notification time on 14 June 2016 was in relation to a proposed enterprise agreement to cover materiel maintenance and stores workers at all Broadspectrum sites performing work under the DMSS contract and materiel maintenance employees at Kapooka;

•  The 2017 proposed Agreement as put to a ballot of employees on 6 December 2018 was expressed to cover materiel maintenance and stores workers at all Broadspectrum sites and materiel maintenance employees at Kapooka;

•  Only employees within the coverage of the 2017 proposed Agreement were requested to approve it;

•  All employees within the coverage of the 2017 proposed Agreement were provided with a NERR; and

•  Non-materiel maintenance employees who were not issued with a NERR were not covered by the 2017 proposed Agreement and were not requested to vote to approve it.

[32] However, as previously noted, there was no appeal of the March 2018 Decision and my analysis of the cases considered in that Decision is simply to consider the context of the current matter I am required to determine. Given the way in which the scope application was argued, it appears that the parties accepted that MSS Security¸ Mermaid Marine, Swire and Uniline are authority for the proposition that Broadspectrum was required to issue a NERR to all employees within the broader scope claimed by the AMWU and did not do so. The AMWU asserts that if the scope order is made a new notification time will be triggered which will cure this invalidity thereby promoting fairness and efficiency of bargaining. I have considered this submission, notwithstanding my view that the proposition it is based on is incorrect.

[33] I also note that this may be a moot point given that regardless of the questions arising from the application of MSS Security to the present case, the majority of the Full Bench in the appeal of the scope appeal Decision found that the 2017 proposed Agreement was not validly made on the basis that Broadspectrum had not complied with the temporal requirements in s. 173(3) of the Act with respect to giving the NERR to the group of employees – the armourers at Kapooka – to whom it had agreed to extend the scope of the 2017 proposed Agreement. The Full Bench further noted that there was no evidence that any reasonable steps to give the notice to the relevant employees had been taken. As a result, the vote on the 2017 proposed Agreement was not conducted in accordance with s. 182(1) of the Act

[34] Non-compliance with the requirements in s. 173 of the Act is a barrier to the approval of the 2017 Agreement and this situation will continue until a new notification time is triggered by one of the events in s. 173(2) of the Act and a new NERR is issued. The events in s. 172 of the Act are that Broadspectrum agrees to bargain or initiates bargaining or that a relevant order or determination – including a scope order – starts to operate. The current status is that Broadspectrum has not agreed to bargain in relation to the AMWU’s proposed scope and has shown no sign of altering its position in this regard. Broadspectrum’s failure to issue a further notice is therefore a relevant consideration in deciding whether the scope order should be made.

[35] It may also be open for Broadspectrum to take the approach formulated in Uniline and stop bargaining (arguably Broadspectrum has stopped bargaining during the period of apparent inactivity in recent times) and reissue a NERR to employees who would be covered by the 2017 proposed Agreement thereby triggering a new notification time. This would cure the previous failure by Broadspectrum to meet the temporal requirements for the issuing of a NERR. If the same issue arises with respect to a broader scope claim by the AMWU then the question of the extent of the obligation to issue a NERR to that broader scope will doubtless be determined at the relevant time.

The scope order application

[36] The AMWU filed its application for a scope order on 4 April 2018. The application sought a scope order in respect of bargaining with Broadspectrum. The Form F31 Application for a scope order poses a series of questions and requests for information. At 2.1 the Form F31 asks the applicant to indicate which group of employees it seeks to have covered by the scope order. The Form F31 also asks at 2.1.1 for an explanation as to how bargaining is not proceeding fairly or efficiently because the scope of the agreement does not cover appropriate employees or will cover employees that it is not appropriate for the agreement to cover.

[37] In response to that question the AMWU states that negotiations for a replacement for the LMM Agreement commenced on 1 June 2016. While the LMM Agreement is national agreement covering employees in every State and Territory, Victoria is said to be is significant because of the following matters:

•  Approximately 44% of the workforce to be covered by the replacement agreement are employed in Victoria;

•  The Victorian workforce is by far the most unionised within the States and Territories covered by the LMM Agreement; and

•  The Victorian workforce has been by far the most active in the negotiations including through taking protected industrial action.

[38] It is further stated by the AMWU in the Form F31 that one of the claims pursued by the Union and its members has been that the replacement agreement covers certain non-materiel maintenance employees, a group containing some classifications that Broadspectrum regards as salaried. This claim, which the Company has resisted, has been pressed most heavily in Victoria. The AMWU goes on in the Form F31 to state that bargaining broke down in August 2016 and to set out the history of the four unsuccessful ballots for approval of the 2017 proposed Agreement and the correspondence between the parties. The AMWU states its belief that its membership in Victoria formed the core of the no vote on those four occasions and was decisive in the rejection of the 2017 proposed Agreement in those ballots. The AMWU also asserts that the ballot which resulted in a majority of employees approving the 2017 proposed Agreement was conducted in conjunction with a sign on payment of $925.17 at the (C10 Level) separate from the terms of the proposed 2017 Agreement and subject to it being approved by a valid majority of employees, and that this influenced the outcome.

[39] The AMWU also raises the issues that were ventilated in the application for approval of the 2017 proposed Agreement including the submission accepted by the Commission as a basis for refusing its approval, that non-materiel maintenance employees had been the subject of bargaining for 17 months but had not been issued with a NERR, denying them their right to representation. It is also stated that in response to these claims Broadspectrum had asserted that the AMWU should seek a scope order. The AMWU also said that that it had notified the Company of the occupations and States to be covered by proposed agreement/s and that in response the Company had written to the AMWU stating that another option may be to initiate a fresh bargaining period and issue notices to employees within the scope of the existing LLM Agreement.

[40] In relation to how the making of the scope order would promote the fair and efficient conduct of bargaining the AMWU states that it is apparent that the national workforce is divided in its acceptance or otherwise of the replacement agreement and that resistance to that proposed agreement is concentrated in Victoria. It is asserted that after five failed attempts to have a national agreement approved, the efficiency of the bargaining would be promoted by a recognition of the differences within the workforce and adoption of a new approach that would seek to accommodate those differences, specifically by conducting bargaining separately for the workforces in Victoria and elsewhere. It is also asserted that fairness in bargaining would be promoted by:

•  An acknowledgement that non-materiel maintenance employees have been the subject of bargaining over many months; and

•  Formal recognition that those employees fall within the scope of bargaining and should be notified of their right to representation by a properly served NERR.

[41] The scope order sought by the AMWU is described in the Form F31 Scope application at 2.1.3 as follows:

“1. The AMWU proposes that there be a separate replacement agreement for Victoria. The workforce covered by that agreement would be geographically distinct in that the limits of its coverage would be defined by State borders.

2. The AMWU proposes that the coverage of the Victorian agreement be defined by adapting clause 6 of the LMM Agreement such that the clause would read:

6. COVERAGE OF THE AGREEMENT

6.1 Except as provided in sub-clause 6.2, this Agreement will apply to all employees employed by the Company within Victoria in relation to the provision of maintenance functions and the repair, overhaul and servicing of military equipment (both scheduled and unscheduled) as set out in the LMM contract. To avoid doubt, such employees will include those designated to be within “support employment categories” under the LMM contract, including schedulers, production clerks, senior stores-persons, stores-persons and procurement clerks. It will also include planners, production officers and purchasing officers.

6.2 This Agreement will not apply to the executive staff of the Company. Nor will it apply to:

a) Supervisors/Trainers/Coordinators – Level II as defined in Schedule B – Classification Structure and Definitions; or

b) those engaged in the “professional field” as defined in paragraph (e) of the definition of “vocational fields” in sub-clause 3.1

of the Manufacturing and Associated Industries and Occupations Award 2010.”

[42] In relation to whether the good faith bargaining requirements have been met, the AMWU states in the Form F31 that the Union has attended nine meetings between 1 June and 9 August 2016 when an impasse was reached. Further negotiation meetings were held in November 2016 and April 2017 and following an application under s. 240 of the Act made by the AMWU, conferences were conducted by the Commission over three days in September and November 2017. The Union and the Company also met separately on 4 October 2017. A written notice of concerns is said to have been provided to the Company by way of the letter to Mr Dal Bon dated 21 March 2018.

[43] As previously discussed, Broadspectrum objected to the scope application on jurisdictional grounds which were upheld in the original scope decision. Much of the material filed by the parties deals with the jurisdictional objection. That objection has been determined by the Full Bench and it is not necessary that I consider it. Relevant to the matters I am required to consider, Broadspectrum contends that the AMWU has not established that the requirements of s. 238 of the Act necessary for the Commission to make a scope order have been met and opposes the application. The AMWU maintains that the legislative requirements have been met and that the Order should be made.

EVIDENCE AND SUBMISSIONS

[44] A range of documents and witness statements are before the Commission in relation to the history of negotiations for a replacement for the LMM Agreement. In particular the AMWU tendered a bundle of correspondence and documents which is Exhibit 8. The evidence establishes that those negotiations commenced on 1 June 2016. One of the claims advanced by the AMWU and its members was that the replacement agreement cover certain “non-materiel maintenance employees” a group which covers some classifications that Broadspectrum considers to be salaried staff. The AMWU tendered a letter dated 19 April 2017 from Broadspectrum outlining issues with the scope proposed by the AMWU including salaried staff. The coverage clause proposed by Broadspectrum and attached to that letter was as follows:

“6. COVERAGE OF THE AGREEMENT

6.1 Except as provided in sub-clause 6.2, this agreement will apply to employees of the Company employed in any of the classifications listed in Attachment 1 (Table 1) of this Agreement, and who are performing maintenance functions, including the repair, overhaul and servicing of military equipment (both scheduled and unscheduled) as set out in the LMM contract, and who are located at Kapooka NSW or any LMM contract site.

6.2 This agreement will not apply to the following employees of the Company:

•  Clerical and administrative staff;

•  Management and executive staff;

•  Schedulers;

•  Production officers/ planners;

•  Production clerks;

•  Purchasing/Procurement Clerks/Officers;

•  Supervisors/Trainers/Coordinators – Level II, as defined in Schedule B – Classification Structure and Definitions; or those engaged in the “professional field” as defined in paragraph (e) of “vocational fields” in sub-clause 3.1 of the Manufacturing and Associated Industries and Occupations Award 2010.”

[45] Another claim by the AMWU with respect to the scope of the proposed Agreement was that it cover employees at the armoury in Kapooka. This claim was conceded by Broadspectrum although there was some confusion as to the extent of the concession and the AMWU’s submission states that the claim in respect of Kapooka was conceded by Broadspectrum for materiel maintenance employees, “but as it turned out, not for the storepersons/production clerks working in the armoury.”

[46] After bargaining broke down in August 2016 Broadspectrum put a proposed agreement to ballot on four occasions between September 2016 and May 2017. On each occasion the proposed agreement was not approved by a valid majority of employees. In a fifth ballot conducted in December 2017 a majority of employees voted to approve the 2017 proposed agreement. According to the submissions of Broadspectrum, the results of successive ballots for the 2017 proposed agreement were as follows:

[47] As previously stated, an application for approval of the 2017 proposed Agreement was made and refused. Thereafter, there was a series of correspondence exchanged by the parties before the AMWU made the scope application on 4 April 2018. The correspondence was tendered as a bundle by the AMWU and marked as Exhibit 8. Relevantly, on 15 March 2018, Mr Mike Nicolaides, Assistant National Secretary of the AMWU, wrote to Mr Daniel Dal Bon, Executive Manager Employee Relations of Broadspectrum in the following terms (formalities omitted):

“Negotiations to replace [the Current Agreement] have been in train for more than 21 months. Those negotiations have been contentious.

In a letter to you of 11^th August, 2016 the AMWU identified the following as matters on which “the parties were a long way apart and unlikely to be able to bridge their differences”:

•  The method of determining pay increases;

•  The nominal expiry date;

•  The balance to be struck between work and family life;

•  Classification coverage…

As you are aware, the AMWU ultimately narrowed the scope of its claims on the last two of these matters, such that the concessions it sought would apply at Wallangarra, Bandiana and Puckapunyal only.

As you are also aware, protected industrial action has been taken by members of the AMWU in pursuit of concession of their claims, that action being most concentrated at Bandiana and Puckapunyal.

Whilst the AMWU does not have precise numbers, it estimates that Victoria currently employs around 44% of the blue-collar workforce to be covered by the company’s preferred replacement agreement.

The relatively high proportion of the workforce represented in Victoria and its long demonstrated resistance to the terms of the replacement agreement proposed by the company are relevant to the length of the negotiations and the fact that, after five votes of the workforce nationally, no replacement has yet been approved by the Fair Work Commission (FWC). Four have been voted down (three narrowly, at least on the declared votes) and one has been rejected because the FWC assessed that the company had not met its statutory obligations.

No one could argue that bargaining for the replacement agreement has proceeded either efficiently or fairly. In relation to fairness, it is of note that of the four groups which the AMWU says were the subject of bargaining, only one was found by the FWC to have been unambiguously issued with a NERR in conformity with the Fair Work Act. In the words of Commissioner McKinnon: “The effect was that reasonable steps were not taken to give all relevant employees notice of their right to be represented in bargaining as required by section 173(1) of the Act”. Such effect is inconsistent with s 3(f) of the Act, which expresses as an object of the legislation the enablement of “fairness and representation at work … by recognising the right to freedom of association and the right to be represented…”

The AMWU stands ready to re-enter negotiations with the company in good faith.

It writes to propose that the parties now adopt a revised approach within those negotiations. Specifically, it proposed that there be two replacement agreements – one for Victoria and the other for the remaining States and Territories. Negotiations for the Victorian agreement would extend to include both materiel and non-materiel maintenance employees, the latter being generally characterised by the company as “salaried employees”. To avoid doubt:

•  The non-Victorian agreement would include all employees working in the armour at Kapooka; and

•  Negotiations for both proposed agreements would extend to include storespeople employees in relation to the provision of maintenance functions and the repair, overhaul and servicing of military equipment (both scheduled and unscheduled).

The AMWU seeks your written response to this letter and its proposal by no later than noon (Melbourne/Sydney time) on Tuesday 3^rd April. In the absence of the response or should the response be unsatisfactory, the union will consider the options available to it under Subdivision C of Part 2-4 of the Fair Work Act. 15

[48] Part 2-4 of the Act relates to Enterprise Agreements and has more than one “Subdivision C”. Presumably, the letter is referring to Subdivision C of Division 8, which deals with majority support determinations and scope orders.

[49] On 15 March 2018, Broadspectrum sent a “DMSS Enterprise Agreement Bulletin” to employees informing them that the Commission had refused to approve the 2017 proposed Agreement on “technical grounds” but had found that the Agreement passed the BOOT. The Bulletin also informed employees that:

“On the back of the FWC decision, the AMWU has revealed a new agenda in writing to the Company today, proposed that there be two replacement agreements covering DMSS – one for Victoria and the other for the remaining State and Territories.” 16

[50] On 21 March 2018, Mr Dal Bon responded to Mr Nicolaides, with a copy also being sent to the National Union of Workers stating:

“I refer to your letter of 15 March indicating that unless Broadspectrum agreed to commence bargaining now for two (2) enterprise agreements you would seek a scope order from the Fair Work Commission to force bargaining for two separate enterprise agreements. No detail is provided by you as to the scope of the two (2) agreements you are seeking notwithstanding your indication of seeking a scope order.

Broadspectrum is considering the decision of Commission McKinnon on 14 March 2018 rejected the DMSS Enterprise Agreement 2017 on technical grounds.

We are concerned that the employees’ desire to have the agreement finalised as soon as possible will be frustrated if you seek to re-open negotiations, including on the issue of scope. The agreement was approved by a solid majority of employees (65% of the employees who cast a vote) and the decision of Commissioner McKinnon is very clear that the agreement would have provided for employees to be better off overall.

We also note that the additional employees you seem to be proposing to cover are represented in separate enterprise agreement negotiations with the National Union of Workers (whom we have copied into this correspondence given their obvious interest).

We are currently considering the decision of Commissioner McKinnon and whether to appeal that decision. We also note that another option to give effect to the expressed will of the majority of our employees may be to initiate a fresh bargaining period and issue notices to our employees within the scope of the existing LMM agreement so that a vote free of any technical issues can take place so employees can start to receive the benefits under the proposed enterprise agreement as approved by the employees on 6 December 2017. If this path was taken, it would obviously be most efficient with your union’s support.

So that we understand exactly what the union has in mind given the Commission’s decision, we propose a discussion with you via teleconference…I stress that by proposing this meeting and by Broadspectrum management participating in it, we are not agreeing to bargaining with the AMWU. However it is a discussion for Broadspectrum to understand exactly what the union is proposing given the Commission’s decision.”

[51] It seems that the teleconference mentioned in Mr Dal Bon’s letter of 21 March 2018 occurred. On 3 April 2018, Mr Dal Bon corresponded with Mr Nicolaides as follows:

“I refer to my telephone conversation with you on 28 March 2018 involving Mike McDowell, DMSS Contract Manager, and Darren Dwyer, Organiser of the AMWU.

I wanted to confirm the Company’s understanding of what the AMWU is seeking in relation to future enterprise agreement coverage for Broadspectrum’s DMSS Contract:

1. Coverage of Defence Stores personnel working in the armoury section for Broadspectrum at Kapooka (which coverage is the subject of separate enterprise agreement negotiations with the NUW);

2. Two new replacement enterprise agreements with coverage of the following classes of employees:

•  Victoria only EA:

•  Existing materiel maintenance employees; plus

•  Non-material maintenance employees (planners/schedulers/production/purchasing); plus

•  All storespeople employed by Broadspectrum in relation to DMSS work.

•  Rest of Australia EA:

•  Existing materiel maintenance employees; plus

•  All employees working in the Kapooka armoury; plus

•  Any storespeople employed by Broadspectrum in relation to DMSS work.

As we indicated to you in the meeting, bargaining has ended in relation to the Broadspectrum DMSS Enterprise Agreement 2017.

Broadspectrum’s view of your proposal to re-commence bargaining for two separate agreements is unworkable, and is not based on how employees currently work; or any community of interest, but more about creating a voting group within Victoria which you obviously feel will give a voting result consistent with the AMWU’s preferences, rather than respecting the wishes of our employees, as expressed on 06 Dec 2017.

We also do not see any reason articulated by you as to why Broadspectrum should depart from the existing agreement scope, should the Company consider further bargaining.

The AMWU’s proposal, if adopted, is likely to result in unnecessary workplace disputation – including the potential of a demarcation dispute with the NUW, given the Company is presently in bargaining with the NUW.

Following recent consultation with DMSS employees, we are advised that a great many of our employees have not been consulted about what the AMWU is seeking, and are of the view that they prefer to see an agreement in exactly the terms and scope as approved by employees on 06 Dec 2017, and submitted to the Fair Work Commission.

Our opinion is that the simplest and easiest course is that any agreement to bargain should be on the basis of exactly the same scope as proposed under the Broadspectrum DMSS Enterprise Agreement 2017.

Should the AMWU or other employee bargaining representatives agree to adopt this course, the Company would be prepared to initiate a fresh bargaining process as a means to realise the will of employees to have an enterprise agreement in the terms made on 06 Dec 2017.

We hope the AMWU will take the time to reflect and consider its position on this matter.”

[52] The AMWU made the application for a scope order on 4 April 2018. Witness Statements were made by a number of persons on behalf of the AMWU in support of the scope application. The evidence of those witnesses can be summarised as follows. Mr Alex Snowball is an official of the National Union of Workers’ (the NUW) employed within the NUW’s national office. Mr Snowball’s statement 17 addressed the purported tension between the AMWU and NUW that Broadspectrum has referred to as a potential issue should the coverage issue fall in the AMWU’s favour.

[53] Mr Snowball stated that the NUW and the AMWU have cooperated in negotiating agreements to do with the Defence work in the area and during the lives of those agreements. 18 In 2013 the work that had been undertaken under the Defence contracts was split into two streams. Separate tenders for each of those streams occurred resulting in two different companies being successful in tendering for the work. Those companies entered into separate enterprise agreements with the AMWU a party to one and the NUW a party to the other. The NUW “accepted at the time”19 that the AMWU may have coverage of storespeople performing work in relation to the LMM Agreement. To the best of Mr Snowball’s knowledge there have been no demarcation disputes between the unions regarding these employees.

[54] Mr Snowball stated that the NUW is aware of the AMWU’s application for a scope order 20 and of the coverage issues as Broadspectrum had copied the Union into correspondence of 21 March 2018 and 3 April 201821 but that given the “long history of cooperation between the NUW and AMWU”22 in relation to these Defence contracts it is “fanciful” to suggest that the unions would engage in workplace disruption over coverage.

[55] Mr Alan Grant is a diesel mechanic working for Broadspectrum at the Bandiana in Victoria and has done so for approximately 10 years. Mr Grant performs work on the land materiel maintenance contract and has been an AMWU delegate for approximately four and a half years. Mr Grant said in statement 23 that it is his understanding that work under the land materiel maintenance contract is performed at 15 sites across all states and territories and that in excess of 40% of the workforce performing work under this contract is based in Victoria.24

[56] Prior to Broadspectrum taking over the Defence contract, Mr Grant was employed by its predecessor. While working for that company Mr Grant was covered by the BAE Systems Australia Defence Pty Ltd, Albury Wodonga Military Area Collective Agreement 2010-2013. Mr Grant understands that a separate industrial instrument, being the BAE Systems Australia Logistics Pty Ltd, Defence Integrated Distribution Systems (DIDS), Collective Agreement 2010-2013, covered his colleagues nationally. The AMWU and NUW were parties to both agreements and the relations at Bandiana were good and have continued to be so since the contractual arrangements with Defence were split. Mr Grant is not aware of any disputes between the AMWU and NUW over the coverage of stores people.

[57] The AMWU’s membership at Bandiana includes blue and white-collar employees. Mr Grant states that not a working day goes by without somebody approaching him to discuss a workplace issue. From time to time Mr Grant approaches people on the floor or in the office to discuss workplace issues with them and assess their views. Over the last two years, these discussions have often been about the replacement of the LMM Agreement. Because of these discussions Mr Grant considers he is reasonably well informed regarding the collective views of employees at Bandiana, members of the AMWU and non-members. In his oral evidence Mr Grant said that the AMWU’s membership at Bandiana includes employees in procurement, production clerks and historically schedulers and planners. Those employees had signed the petition tendered by the AMWU.

[58] Mr Grant considers that Bandiana has a good voice in contributing to the AMWU’s log of claims and states that a lot of issues raised by employees at Bandiana were captured in the log of claims and Bandiana probably influenced its development as much or more than any other single site.  25 Prior to the log of claims being formally adopted by the AMWU a mass meeting of members occurred with members at the Bandiana site supporting the log overwhelmingly. Mr Grant states that particular claims within the log are of particular interest to Bandiana members including RDOs, new classification streams for non-materiel maintenance employees, the maintenance disability allowance and provision of a summer uniform. In his oral evidence Mr Grant said that while pay was important to Victorian employees lifestyle issues were more important and nowhere as important to non-Victorian employees.

[59] Face to face negotiations with Broadspectrum involving the AMWU occurred in Victoria, generally in Melbourne but once in Wodonga. The AMWU has continued to consult with delegates and through the delegates, members and non-members at site, about their views and progress of the employee claim in relation to enterprise bargaining. Mr Grant’s view is that members in Victoria, including at Puckapunyal, are more determined to press a wider range of the AMWU’s claims than members in other sites interstate where the main concern seems to be pay rises. 26 While pay rises are important to members at Bandiana, those members are also determined to pursue their claims for RDOs, coverage of white-collar employees and access to appropriate classifications for stores people.

[60] The determination of Bandiana employees has been shown through their engagement in protected industrial action, which began in October 2016 and has progressively escalated in intensity. The protected industrial action has only been interrupted between the successful 5^th vote of a proposed agreement and the March 2018 Decision refusing to approve the agreement.

[61] The views of employees at Bandiana about the proposals being made by Broadspectrum have not changed much throughout bargaining. Mr Grant’s view, on the basis of discussions with members and non-members, is that they remain opposed to the 2017 proposed Agreement. The employees view has changed, however, regarding bargaining and Broadspectrum’s attitude to them. Mr Grant states that anger has increased and the mood could be described as “festering” 27. In his oral evidence Mr Grant said that he was surprised at Mr Michael’s evidence about the numbers of employees at Bandiana who voted to approve the 2017 proposed Agreement and said that this was the result of the sign on bonus offered by Broadspectrum.

[62] On 7 and 8 May 2018, a petition was circulated to blue and white-collar employees at Bandiana. The petition concerned the AMWU’s scope application and a Victoria-only enterprise agreement. The petition was signed by 100 employees indicating support for the AMWU’s application. Mr Grant says that there are 113 non-management employees at Bandiana. On the days the petition was circulated there were 8 employees off-site, meaning that the maximum number of signatures was 105.

[63] Mr Grant attaches the unsigned version of the petition to his statement. The signed version was admitted into evidence subject to a confidentiality order issued in the original scope hearing in relation to the signatures on the petition. The text of the petition states:

“We are aware that:

•  Negotiations to replace the [Current Agreement] commenced on 1/6/16 – nearly two years ago – and have been unsuccessful to date;

•  The AMWU has applied to the Fair Work Commission to facilitate an agreement for Victoria separate from that which would apply to other States and Territories;

•  The AMWU’s proposed agreement would cover a wider range of classifications than does the [Current Agreement], inclusive of some classifications currently designated by the company as “salaried”; and

•  If the AMWU’s application were to succeed, negotiations would have to take place, without guarantee of any particular outcome.

We support the AMWU”s application for a Victoria-only agreement. We also support the coverage of that agreement as proposed by the AMWU.” 28

[64] Under cross-examination, Mr Grant said that he was not in a position to dispute the evidence of Mr McDowell that the issues raised by Victorian employees in negotiations had also been raised by other employees. Mr Grant accepted that Victorian employees are required to go interstate for project based work for periods of up to three weeks and that this occurred approximately five times per year. Mr Grant agreed that Broadspectrum employees attend training conducted by Defence and that interstate travel was also required of employees to attend this training. Mr Grant also agreed that this was important for both the Company and the employees involved. In relation to bargaining Mr Grant agreed that the AMWU had consistently put a single position and that the phone hook-ups with delegates had not involved non-AMWU bargaining representatives.

[65] Mr Darren Dwyer is an Organiser within the Victorian State Office of the AMWU and is responsible for organising and representing employees within the AMWU’s coverage at Puckapunyal whose employer performs land materiel maintenance functions under contract with the Department of Defence. Mr Dwyer’s statement 29 dealt with circumstances related to a previous employer which had undertaken the contract work at Puckapunyal and an enterprise agreement covering the employees of that employer. According to Mr Dwyer’s evidence, the enterprise agreement covering the employees of the previous employer provided for a system of RDOs by virtue of employees working a 19 day month. Mr Dwyer states that contracts with the Department of Defence are for a specified period and upon expiration may be subject to competitive re-tender.

[66] The previous employer was required to re-tender for the work. When that employer sought to pilot flexible work arrangements at Puckapunyal, the AMWU negotiated an extension and variation to the enterprise agreement applicable to the employees of that employer which included an RDO system worked by employees as an attachment to the agreement. That employer was not successful in the re-tendering process. The successful bidder was Transfield Services Australia Pty Ltd now known as Broadspectrum. The AMWU negotiated a greenfields agreement (the LMM Agreement) with Broadspectrum which did not include the RDO provisions attached to the previous agreement.

[67] Mr Dwyer stated that the AMWU did not press for the inclusion of the RDO provisions in the LMM Agreement on the basis that they were the subject of an exchange of letters which was attached to his witness statement. In that exchange of letters, Transfield (now Broadspectrum) stated that the AMWU’s position in its letter setting out the RDO arrangement at Puckapunyal “does not cause the Company any concerns.” According to Mr Dwyer, when the performance of LMM work at Puckapunyal transferred to Transfield (now Broadspectrum) in or around July 2013, the Company immediately withdrew the RDO arrangements from employees. A dispute lodged with the Commission in 2013 did not result in a resolution of this matter.

[68] Mr Dwyer states that this has coloured the perspective of members of the Union at Puckapunyal in respect of negotiations for the 2017 proposed Agreement both in the lead up to bargaining and the responses of AMWU members to subsequent proposals. The RDO issue and other matters have been pursued in negotiations for the 2017 proposed Agreement and a suggestion about an alternative to RDOs from a Member of the Commission who conducted conferences of the parties to assist in the negotiation of that Agreement, was rejected by members at Puckapunyal. Mr Dwyer’s view, based on reports from a Delegate who attended the conferences and reported to members, is that members at Puckapunyal are sceptical because of past experience of management assurances. Mr Dwyer also asserts that AMWU members at Puckapunyal have been firm in wanting a greater balance between their working and family lives whether through greater access to RDOs or some other way. Those members have also wanted pay rises higher than those offered by Broadspectrum to recognise that the LMM Agreement had nominally expired in September 2016 and in their minds it was not unreasonable to have expected that their next increase would take effect shortly after that date.

[69] During the course of negotiations for the 2017 proposed Agreement the AMWU has held national telephone hook-ups for the purpose of reporting to members and seeking direction from them and Mr Dwyer participated in the majority of those hook-ups. Mr Dwyer’s understanding from the hook-ups is that members beyond Victoria, with the exception of those at Wallangarra, have not been as interested in pursuing claims for a better balance between work and family life as those in Victoria, particularly in relation to gaining access to RDOs. The AMWU had intended to simultaneously circulate petitions at Bandiana and Puckapunyal expressing support for its scope order application. According to Mr Dwyer that intention was frustrated by the absence on sick leave for a one week period of the AMWU’s principal delegate at Puckapunyal. The petition was circulated at Puckapunyal on 22 May 2018 and was signed by 16 employees. The petition was less successful at Puckapunyal than at Bandiana and Mr Dwyer maintains that this is because by the time it was circulated at Puckapunyal, Broadspectrum had seen the AMWU’s outline of submissions in the scope application which was filed on 14 May 2018 and had been alerted to the Union’s intention with respect to the petition. Discussions with delegates at Puckapunyal led Mr Dwyer to believe that after 14 May they were reluctant to circulate the petition. Signed copies of petitions were tendered by the AMWU and marked as Exhibit 7 and a confidentiality order was made in relation to that exhibit. The petitions were signed by 100 employees at Bandiana and 16 employees at Puckapunyal.

[70] Under cross-examination Mr Dwyer agreed that the AMWU had spoken with one voice throughout the negotiations, but in re-examination said that there had been five attempts to reach a national agreement while the AMWU was speaking with one voice.

[71] The AMWU submits that the Commission can be satisfied that it has met the good faith bargaining requirements. Meetings to progress bargaining occurred on 1, 14, 29 and 30 June, 21 and 22 July and 8 and 9 August 2016. The AMWU was present at each day of bargaining for the entirety of the session and states that negotiations collapsed on 9 August 2016. Further negotiations occurred on 15 November 2016 and 4 April 2017, in which the AMWU participated but no advances of significance were made towards concluding an agreement.

[72] On 23 August 2017 the AMWU filed an application in the Commission under s.240 of the Act, for the Commission to deal with a bargaining dispute. The Commission conducted conferences with the parties over three days in September and November 2017, with the parties meeting without the involvement of the Commission on 4 October 2017. Some progress was made but this did not result in a concluded agreement. The s.240 process was suspended on 15 November 2017. Following the March 2018 Decision refusing to approve the 2017 proposed Agreement the AMWU submits that it has remained ready and willing to re-enter negotiations in good faith.

[73] The AMWU submits that the requirement under s.238(4)(b) is that the Commission be satisfied that the order will promote the fair and efficient conduct of bargaining. In United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board 30 the Full Bench stated that the Commission must be satisfied that:

“…if an order is made the bargaining will at least be fairer or more efficient or both than it would be if no order were to be made.” 31

[74] An object of the Act is “enabling fairness…by recognising the right to freedom of association and the right to be represented” 32. This object associates “fairness” with the rights of association and representation, which are relevant to consideration of ‘fair’ under s.238 of the Act. The AMWU submits that Broadspectrum continues to maintain its position about the coverage of the Agreement and not expanding the coverage to include certain categories of employee. The AMWU submits that the material indicates that Broadspectrum intends to continue to hold its bargaining position in relation to these employees and that this denies recognition of the rights to freedom of association and representation of those employees. Making the scope order would trigger a new notification time and require that Broadspectrum issue a NERR to all employees within the scope.

[75] As to efficiency, Broadspectrum’s concern about the potential for a demarcation dispute with the NUW will not affect the efficiency of bargaining and support for this assertion is found in the evidence of Mr Snowball. The AMWU submits that the Victorian workforce makes up a significant proportion of the employees who will be covered by the replacement agreement, a majority of the AMWU’s membership is within the Victorian workforce, the history of bargaining and protected industrial action indicates that the Victorian workforce has strongly pressed the AMWU’s claims and that the resistance to the proposed agreements has come from Victoria. This is reflected in the 4 unsuccessful ballots seeking approval of agreements – the AMWU submits that the 5^th successful ballot should be considered separately.

[76] According to the AMWU, these factors indicate that the workforce “cannot agree on their negotiation strategy” 33 and that the order will promote efficiency by requiring bargaining to be conducted separately for the workforces in Victoria and elsewhere. The AMWU also submits that the 5^th successful ballot should be considered separately to the previous 4 unsuccessful ballots. The AMWU submits that what employees were being asked to approve was a proposed agreement and a sign-on bonus. Had the sign-on bonus not been a part of the ballot the 2017 proposed Agreement may not have been approved. In any event the AMWU submits that the 5^th ballot still received a “significant minority” of no votes at approximately 35% of valid votes. The AMWU submits that it is “reasonable to speculate”34 that a significant proportion of the no vote came from the Victorian workforce given the intensity of industrial action taken in Victoria and Mr Grant’s evidence.

[77] The AMWU’s application seeks an order that there be an agreement specific to Victoria and it is submitted that the group of employees is geographically distinct in that it is defined by State borders. In this regard reference was made to the Decision of a Full Bench of the Commission in Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union and Ors which stated that:

“[19] Given the context and the legislative history it can reasonably be assumed that if the group of employees covered by the agreement are geographically, operationally or organisationally distinct then that would be a factor telling in favour of a finding that the group of employees was fairly chosen. Conversely, if the group of employees covered by the agreement was not geographically, operationally or organisationally distinct then that would be a factor telling against a finding that the group was fairly chosen.

[20] It is important to appreciate that whether or not the group of employees covered by the agreement is geographically, operationally or organisationally distinct is not decisive, rather it is a matter to be given due weight, having regard to all other relevant considerations.

[21] It is not appropriate to seek to exhaustively identify what might be the other relevant considerations. They will vary from case to case and will need to be demonstrated to the satisfaction of the tribunal. The word ‘fairly’ suggests that the selection of the group was not arbitrary or discriminatory….” 35

[78] According to the AMWU, the proposed scope of the Victorian agreement would overcome the anomaly of Broadspectrum’s differentiation between the employees in dispute. The AMWU also submits that it would be reasonable to make the scope order sought. The views of employees are significant in considering whether to issue a scope order. Because the AMWU is proposing an order that would result in bargaining for a Victoria specific agreement, the views of Victorian employees are significant and this is evidenced by the petitions conducted with respect to employees at Bandiana and Puckapunyal.

[79] The AMWU submits that the petition evidences that the views of Bandiana employees are exceptionally clear and that despite bargaining to reach a national agreement for over two years, the employees now seek an alternative approach. The alternative approach would not prejudice the position of non-Victorian employees, for whom separate bargaining could continue. The AMWU also submits that those matters it has submitted in relation to fairness and efficiency would also lead the Commission to conclude that it was reasonable to issue the order. The efficient operation of the employer’s business and demonstrated prejudice to the employer’s business operations do not outweigh the preference of employees, evidenced by the petition results. In addition, the AMWU submits that the order would have a benefit to operations in that protected industrial action would be interrupted to facilitate bargaining in good faith.

[80] In its reply submissions, the AMWU said that the letter of 15 March 2018 does not only refer to concerns regarding freedom of association. The AMWU submits that the correspondence goes on to clarify the concern that the makeup and view of the Victorian workforce were relevant to the length and difficulties associated with bargaining. The AMWU submitted that it has complied with s.238(3)(a) of the Act and the provision does not require that written notice be given to all bargaining representatives, nor does it define who is a “relevant” bargaining representative. The AMWU submitted that it and the CEPU have been most active of the bargaining representatives and were, practically speaking, the only bargaining representatives that participated in the application for approval that was ultimately refused by the Commission. The AMWU also pointed to Mr McDowell’s statement that a number of non-Victorian (including non-union aligned) bargaining representatives had attended bargaining sessions but had not been as verbally active.

[81] The AMWU submitted that “relevance” might be assessed against the influence that the bargaining representative concerned would have upon the AMWU as the applicant for a scope order. Accordingly, at the time after the Commission refused to approve the 2017 proposed Agreement, Broadspectrum was the only bargaining representative that the AMWU considered would be able to influence its decision to make an application for a scope order. The non-Victorian employee bargaining representatives referred to in Mr McDowell’s evidence were unlikely to be interested in the AMWU’s concerns in the letter of 15 March 2018 because the proposal contained in that letter would have allowed them to pursue an agreement without the impediment the AMWU submits Victorian employees pose to bargaining continuing in a fair and efficient way.

[82] By email of 15 May 2018, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia – Electrical Division, advised the Commission that it has members who would be covered by the proposed scope order, that it supported the AMWU’s application and the submissions of the AMWU and that it did not propose to attend the Hearing in relation to the matter.

[83] Evidence in opposition to the scope application was given on behalf of Broadspectrum by Mr Michael McDowell, Senior Contract Manager, who has responsibility for delivery of the Company’s Defence Maintenance and Support Services Contract (DMSS Contract), Australian Submarine Corporation Contract (ASC Contract) and the National Vehicle Recovery Contract (NVR Contract). Mr McDowell’s responsibilities also include the LMM Agreement and its replacement.

[84] According to Mr McDowell’s evidence, Broadspectrum (formerly known as Transfield Services) was awarded the contract to undertake maintenance services for Joint Logistic Command (JLC) a sub-group within the Department of Defence. The DMSS contract involves providing effective and efficient delivery of materiel maintenance services through Joint Logistics Units (JLUs) to support defence equipment. Broadspectrum presently employs 580 persons to service the DMSS contract. Broadspectrum also provides services to the Department of Defence under other contracts including catering, accommodation, range management, waste management, grounds management and the like. In late 2017 there were 15 sites that undertook work for the DMSS contract:

Queensland: Amberley; Cairns; Townsville; Wallangarra; Meeandah and Enoggera (since early 2018)

New South Wales: Moorebank and Singleton

Victoria: Bandiana; Puckapunyal and Watsonia.

ACT: Duntroon.

South Australia: Edinburgh.

Tasmania: Hobart.

Northern Territory: Robertson Barracks.

Western Australia: Guildford

[85] A new site in Queensland – Enoggera – also commenced undertaking work for the DMSS contract in early 2018. The Defence site at Kapooka is not a DMSS contract site. Staff at that site are employed to service the Defence Base Services Contract. The Kapooka armourers are not covered by the LMM Agreement but are paid the rates in that Agreement. Kapooka Storepersons based in the Kapooka Armoury (currently 1 staff member) who are the subject of the present scope application are covered by the Transfield Services Defences Stores Riverina Murray Valley Agreement 2014. There are 7 JLUs between which the Department of Defence splits its maintenance work as follows:

•  West: Guildford;

•  North: Robertson;

•  North Queensland: Townsville, Cairns;

•  South Queensland: Amberley, Wallangara, Enoggera, Meeandah;

•  East: Moorebank, Singleton, Duntroon;

•  Vic/Tas: Bandiana, Puckapunyal, Watsonia, Hobart; and

•  South: Edinburgh.

[86] Mr McDowell states that the AMWU’s proposal is that staff located in Victoria (Bandiana, Puckapunyal and Watsonia) would be covered by a separate enterprise agreement. This would cover only part of a JLU leaving out the Hobart site which is also part of the Vic/Tas JLU, and leave the remaining JLUs plus Hobart to be covered by a separate agreement. This would interfere with the efficient operations of Broadspectrum and the provision of DMSS contract services.

[87] Each year under the DMSS Contract, Defence issues Broadspectrum with the “man hours” it requires for each site and these are revised quarterly. In order to be compliant with the terms of its contract Broadspectrum is required to fulfil 98% of these hours to meet a key performance indicator and avoid incurring a financial penalty. Broadspectrum has implemented a network approach to efficiently service the DMSS contract which involves the re-location of labour resources from one JLU to another to fill gaps in completing critical work. Relocations will often be interstate and this is often required because of the specialised nature of skills required to perform the tasks on the DMSS contract. The Company also has requests from the Commonwealth for some of the DMSS contract workers to go between States and Mr McDowell estimates that interstate transfers happen around 5 – 8 times per year.

[88] Mr McDowell states that despite the relatively low numbers of interstate transfers, the ability to transfer staff seamlessly between States is very important to the fulfilment of the DMSS contract. This need is particularly important at sites where there is a smaller number in trade groups and where Broadspectrum is more exposed due to smaller numbers, if a staff member is unable to fulfil their usual hours for whatever reason. Mr McDowell states that the DMSS Resource Network has been well received by Defence and is integral to the DMSS contract. There is also a significant amount of training that is carried out each year by Broadspectrum DMSS staff across State boundaries. That training is supplied by Defence and is required to enable Broadspectrum employees to work on specialised Defence equipment. Broadspectrum’s staff participate in this training with Defence personnel and the Company is not able to dictate where or when it will occur. Broadspectrum employees based in Victoria may be required to attend such training from time to time.

[89] The LMM Agreement was established specifically for the purpose of servicing the DMSS contract and applies nationally to covered workers in all States and Territories. Mr McDowell traversed the history of bargaining and the five ballots for a replacement Agreement. Bargaining ceased after the December 2017 Ballot and has not resumed. Since the March 2018 Decision Broadspectrum has not agreed to commence bargaining and has not yet decided whether to commence/initiate bargainin.

[90] Mr McDowell states that the day after March 2018 Decision – on or around 15 March 2018 – he became aware of correspondence sent to Mr Dal Bon from the AMWU stating that the Union was ready to re-enter negotiations with the Company in good faith and proposing that the LMM Agreement be replaced with two agreements, one for Victoria and one for other States and Territories. To the best of Mr McDowell’s knowledge, this is the first time that the AMWU proposed two separate Agreements to replace the LMM Agreement. Mr McDowell attended the teleconference between Mr Dal Bon and Mr Nicolaides on 28 March 2018 and took notes of that conference. Mr McDowell’s notes record that Mr Dal Bon stated that bargaining had been terminated following the ballot of employees that approved the Agreement on 6 December 2017. Mr Nicolaides stated his view that the Commission’s decision to refuse to approve the proposed 2017 Agreement meant that bargaining fell back to where it had been prior to the vote in December 2017 and the bargaining process had not been concluded event though the parties were not currently negotiating.

[91] In response to questions from Mr Dal Bon about the AMWU’s scope claims, Mr Nicolaides stated that non-materiel employees included Planners, Schedulers, Production Clerks etc. (ie. all white collar staff except for those in executive management positions). Mr McDowell said that there appear to be two key changes to the scope of the LMM Agreement that the AMWU seeks as part of the present application:

1. That the LMM Agreement be replaced with two enterprise agreements – one for Victoria and one for the other States and Territories (separate agreements issue); and

2. That some non-materiel maintenance staff or “salaried staff” working on the DMSS contract be covered by the LMM proposed 2017 Agreement (the coverage issue).

[92] In relation to the separate agreements issue, Mr McDowell said that the LMM Agreement and the 2017 proposed Agreement cover all non-salaried staff who work on the DMSS contract nationally with no distinction in terms and conditions based on location. If the scope application made by the AMWU was granted and there is a separate enterprise agreement for Victoria that agreement would likely contain differences in conditions as otherwise there would be no basis on which the AMWU could justify separating the employees. Having different conditions for employees working in the same roles on the same DMSS contract would likely create the following issues:

•  Discourage necessary relocation of staff between States to perform critical work on the basis of reluctance to work under lesser conditions and place increased administrative burden on staff;

•  A split in the Vic/Tas JLU creating a misalignment with the Client’s structure;

•  Additional administrative burden associated with administering two sets of conditions requiring additional human, administrative, payroll and financial resources;

•  Cultural/morale issues resulting in division between Victoria and the other States and Territories giving rise to an “us v them” mentality;

•  Creating two separate enterprise agreements would increase the time and cost burden to both Broadspectrum and the AMWU of renegotiating the agreements; and

•  The possibility of employees in other States also seeking separate State based agreements thereby multiplying and amplifying these problems.

[93] In relation to the coverage issue, Mr McDowell states that there are significant differences between those employees currently covered by the LMM Agreement and the new category of salaried staff that the AMWU proposes is covered – non-materiel maintenance employees referred to by Mr McDowell as salaried staff. Of the 580 people servicing the DMSS contract there are approximately 120 salaried staff with 19 being located in Puckapunyal. The primary role of salaried staff is planning, scheduling or administration of work done by wages staff and salaried staff do not undertake trades work. The role of Production Officer is quite a senior role on site with the Production Officer on some sites being Broadspectrum’s lead or taking charge of the site when the site leader is away.

[94] Other key differences are that salaried staff are paid an annual salary whereas wages staff are paid under the relevant enterprise agreement according to hours worked; salary reviews and pay increases are undertaken for salaried staff each year by way of a process involving a prescribed percentage increase set by Broadspectrum’s Board; salaried staff have flexible working hours whereby they can take time off and make it up; and salaried staff participate in a performance development review involving half yearly catchups with managers and an employee development plan. The coverage of such staff under the proposed 2017 Agreement would require Broadspectrum to implement significant change to its business model to set up internal processes and systems to change the conditions of staff and corresponding changes in payroll, finance and administration. It is Mr McDowell’s expectation that if the AMWU was successful with its scope application, it would seek to have other staff across the business covered by other enterprise agreements.

[95] In response to Mr Snowball’s statement Mr McDowell said that there were two storepersons/production clerks working in the armoury at Kapooka in 2016 when negotiations for the proposed 2017 Agreement commenced and there was one at the time Mr McDowell made his statement. That employee is covered by another enterprise agreement which covers the NUW. In response to Mr Grant’s statement, Mr McDowell said that the white collar staff at Bandiana who are members of the AMWU referred to by Mr Grant are likely to include Purchasing Officers who are not covered by the LMM Agreement but as a matter of day to day practice have its terms and conditions applied to them. Mr McDowell also said that the AMWU is seeking to include all Victorian staff under a Victorian agreement including the Purchasing Officers but excluding executive site management. Except for Bandiana purchasing officers, Broadspectrum pays all other Victorian salaried staff under a Total Fixed Remuneration arrangement paid monthly. Wages employees are paid under the LMM Agreement on a fortnightly basis.

[96] In relation to RDOs Mr McDowell said that the AMWU initially sought these at all sites but had modified its approach and was seeking RDOs at Bandiana and Puckapunyal. Since the commencement of the DMSS contract, Broadspectrum has undertaken a number of inquiries and considered different operational arrangements to introduce RDOs. These have determined that RDOs are not feasible. This has been conveyed to staff. Mr McDowell also said that on the basis of his interactions with Bandiana and Puckapunyal staff there does not appear to be a lot of interest by salary and wages staff for salaried staff to be covered by a new enterprise agreement. Salaried staff at Puckapunyal have contacted Mr McDowell to voice their concerns at the AMWU seeking to have them covered by a new enterprise agreement without consultation with them.

[97] Mr McDowell also said that while the number of staff relocated from Bandiana is typically less than five people each year and the duration of the relocation is short term, the transfer of staff across all DMSS sites is necessary not just Bandiana, and this is an essential feature of the provision of services to the DMSS. In a supplementary statement 36 Mr McDowell referred to two petitions which were tendered during his oral evidence at the initial hearing. The first petition is a scope petition signed by 18 of 19 salaried employees at Puckapunyal and provided to Broadspectrum on 31 May 2018. The scope petition states that the signatories are aware that the AMWU is seeking two agreements with Broadspectrum including one for Victoria covering salaried employees and that the signatories have not been consulted about this by the AMWU and do not want to employed under an enterprise agreement.

[98] The second petition – referred to by Mr McDowell as the 2017 enterprise agreement petition – asks that an enterprise agreement based on the wording of the proposed 2017 Agreement initially rejected by the Commission on the basis of non-compliance with requirements related to the notice of employee representational rights, be accepted for approval for the applicable DMSS employees on the basis that the Commission as then constituted had indicated that the other requirements of the Act for approval had been met. That petition was signed by 21 employees. Both petitions were tendered as confidential exhibits so as to protect the identity of the signatories. 37

[99] In response to the evidence of Mr Grant, Mr McDowell said that a number of issues such as access to RDOs, maintenance and disability allowance and provision of summer uniforms had been raised by employees in other States and were not Victorian-only matters. Mr McDowell also said that while the AMWU had modified its approach during negotiations and had originally sought RDOs across all sites and later sought them only at Puckapunyal and Bandiana.

[100] In relation to the bargaining meetings, Mr McDowell said that the AMWU represented its members and there were also a number of other employee bargaining representatives who were appointed by employees under the Act. With the exception of one meeting held at Bandiana and one at Broadspectrum’s Melbourne Head Office, all bargaining meetings were held at the AMWU office in Carlton with AMWU delegates attending in person and other employee bargaining representatives attending by telephone. Mr McDowell said that while employee bargaining representatives have not been as verbally active in negotiation sessions, this may be because they have attended the meetings by telephone.
[101] Under cross-examination, Mr McDowell was shown an extract from the relevant Defence Contract setting out support employment categories comprising: Scheduler, Production Clerk, Senior Store-person, Store-person and Procurement Clerk. 38 Mr McDowell was asked how Broadspectrum determines that categories of employees are salaried and said that the positions of Scheduler, Production Clerk and Procurement Clerk have traditionally been salaried and the other categories have not. Mr McDowell also said that the question of whether employees are salaried or not comes down to Broadspectrum’s business model and the roles that people play on sites. Mr McDowell also maintained that it is imperative for Broadspectrum to achieve a single set of national conditions but said that he was referring to the DMSS contract subject of the present matter and not to uniformity across all contracts. Further, Mr McDowell maintained that the consistency sought was in relation to all wages employees working on the DMSS contract. Mr McDowell agreed that there are some terms and conditions in the LMM Agreement that apply only to employees in particular States and Territories including a retention payment for employees in Darwin.

[102] Mr Michael Marcus Michael also gave evidence on behalf of Broadspectrum. Mr Michael is the Managing Director of Cirrena Independent Voting Solutions (Cirrena), a position he has held since August 2017. Cirrena has conducted the secret ballot for all 5 requests made by Broadspectrum for employees to approve a proposed agreement. In relation to the successful December 2017 vote, Mr Michael states that he has reviewed the breakdown of the Victorian votes and, specifically, of the two main sites in Victoria, Bandiana and Puckapunyal. Combined, a total of 169 Victorian employees were eligible to vote in the December 2017 ballot. The results were as follows:

[103] Mr Michael’s view of these results is that 44% of Victorian employees who voted in December 2017 voted to approve the proposed agreement and around 56% noted no. There is a third Victorian site, Watsonia, which Mr Michael advises only had 2 employees entitled to vote. Given the small number of employees at that site Mr Michael has not revealed the result of their votes so as to maintain the confidentiality of their choice.

[104] Broadspectrum submits that the scope order application does not comply with the jurisdictional requirements of s. 238(1) of the Act. According to Broadspectrum, if the Commission was satisfied that the AMWU has concerns that bargaining was not proceeding fairly or efficiently, the evidence does not disclose that the reason for this is a reason contemplated by s.238(1)(b) – that the AMWU considers that coverage is the reason bargaining is not proceeding efficiently or fairly.

[105] Broadspectrum submits that the AMWU relies upon its letter of 15 March 2018 as being written notice for the purpose of s.238(3) of the Act. While that letter refers to efficiency and fairness, it does not set out concerns of the kind referred to in s.238(1) of the Act. Broadspectrum also submits in relation to s. 238(1)(a) that while the AMWU’s letter of 15 March 2018 is framed in terms of assertions that bargaining has not proceeded efficiently or fairly, the only concern raised by the AMWU is a misconceived assertion that there was a denial of freedom of association associated with the scope of the earlier bargaining. Broadspectrum asserts that it responded to those concerns appropriately in letters dated 21 March and 3 April 2018 and its response raises the further issue of whether the Commission can be objectively satisfied that the AMWU has the relevant state of mind for the purposes of s. 238(3)(c) of the Act.

[106] Broadspectrum also contends that the rejection of its response to the AMWU’s concerns does not, objectively considered, arise from dissatisfaction with the Broadspectrum response to any valid concern notified to it in writing, but from dissatisfaction with the refusal to agree to a separate voting group that the AMWU considers it is more likely to be able to persuade. Broadspectrum refers to its 3 April 2018 letter detailing the reasons for its refusal to agree to negotiate in relation to two separate agreements.

[107] Further, Broadspectrum submits that the AMWU should have given a written notice in compliance with s.238(3)(a) to all relevant bargaining representatives. Broadspectrum submits that in the particular circumstances of this matter the AMWU was obliged to give written notice to all bargaining representatives because coverage or scope issues where bargaining for separate state agreements is sought is significant. 39 The AMWU has not given evidence that it provided its written notice to all bargaining representatives.

[108] Broadspectrum accepts that s.238(3)(c) is directed to the AMWU’s view that Broadspectrum has not responded appropriately but submits that the AMWU’s view should be objectively determined. Objectively, Broadspectrum submits that the AMWU’s concerns with the response do not relate to the appropriateness of that response but rather the AMWU’s dissatisfaction with Broadspectrum’s refusal to accept the proposed coverage.

[109] Broadspectrum adopts the summary of principles in AMWU, CEPU v Qantas Airways 40, and in particular the following propositions:

“(a) Consideration of the views of employees may be taken into account. However, this does not mean that such views are given any greater weight than the other factors to be considered by the Commission under the other subsections. 41

(b) The onus rests on the moving party to demonstrate that the making of a scope order will encourage and facilitate bargaining which is fairer and more efficient than if no order is made, to be considered by reference to the employer and proposed employees (in this case, the national workforce and not only the Victorian section of that workforce).

(c) Evidence which is said to support the making of a scope order which is speculative, hypothetical or presupposes outcomes of bargaining, is unhelpful to the task of determining whether a scope order should be made.

(d) The history of bargaining between the parties is a relevant consideration to whether a scope order should or should not be made (status quo).

(e) Seeking leverage by increasing the bargaining power by weight of numbers is not a valid basis to make a scope order.” 42

[110] In addition to these principles, Broadspectrum submits that the reasonableness requirements in s.238(4)(d) meant that a scope order should not be made that would alter bargaining without the Commission being satisfied that there would be a substantive – as opposed to nominal – promotion in fairness and efficiency than if no scope order is made. 43

[111] In relation to fairness, Broadspectrum submits that the AMWU’s proposed scope order would be a substantial departure from the coverage of the LMM Agreement and therefore the status quo. The AMWU’s proposed scope would require two separate agreements, rather than one, and would, in the case of the Victorian agreement, include coverage of salaried staff in Victoria, where salaried staff would not be covered by the other agreement.

[112] Broadspectrum submits that it is a misconception in the AMWU’s submissions that bargaining for an agreement with the current coverage denies Victorian salaried staff recognition of the right to freedom of association and the right to be represented. It is said that the hyperbole of that assertion does not withstand any analysis. Broadspectrum also submits that it is able, and would be anticipated to, bargain broadly within the scope of an existing agreement. 44 The issue of scope has been the subject of bargaining and a significant majority approved the 2017 proposed Agreement which did not contain a substantive change to the status quo as to scope. There is no inherent unfairness in such an approach. Concerns regarding the ability to bargain are ordinarily resolved by a majority support determination, which has not been sought and which, according to the evidence of Mr McDowell, employees within the group do not want.

[113] Broadspectrum submits that the AMWU’s approach is underpinned by an assumption that an enterprise agreement with the current scope would not be approved by employees. Broadspectrum submits that this assumption is incorrect because an agreement with the current scope has already been approved by a majority of employees. The Victorian employees only marginally voted down the last agreement with 56% of Victorian votes not in favour of the agreement. Broadspectrum seeks that the Commission infer from the approval of the agreement in the 5^th ballot that employees would be strongly inclined to approve an agreement again with the current scope. To assert otherwise involves speculation and hypotheticals, which is unhelpful in determining a scope application. 45

[114] Broadspectrum submits that given these matters issuing the scope order would likely decrease the efficiency of bargaining. There is a current consensus among employees, evidenced by the successful ballot to approve the agreement, which will be disturbed if the scope order were to be issued and then required separate bargaining to occur. This would delay the introduction of the new agreement for all employees, not just those in Victoria. Further, Broadspectrum submits that bifurcating the bargaining process may lead to each group being reluctant to approve an agreement if they consider that the other group may achieve a better result.

[115] Broadspectrum submits that it is imperative for it to achieve a single set of national conditions that do not create barriers to its national network approach. This is supported by the evidence of Mr McDowell. Broadspectrum also submits that the group of employees to which the proposed scope order operates has not been fairly chosen. The scope order involves separation of Victorian wages and salary staff from wages and salaried staff in every other State and Territory in Australia. Broadspectrum submits that the interests of interstate employees, and the necessary practice of Broadspectrum in transferring interstate employees to service client requirements weighs heavily against a “mere geographic” distinction. Broadspectrum submits that there is inadequate distinctiveness in a group arbitrarily limited to Victoria that does not align with the organisation of Department of Defence work being serviced.

LEGISLATION

[116] The provisions of the Act setting out the powers of the Commission to make a scope order are set out in s. 238 of the Act as follows:

“238 Scope orders

Bargaining representatives may apply for scope orders

(1) A bargaining representative for a proposed single-enterprise agreement (other than a greenfields agreement) may apply to the FWC for an order (a scope order) under this section if:

(a) the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly; and

(b) the reason for this is that the bargaining representative considers that the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover.

No scope order if a single interest employer authorisation is in operation

(2) Despite subsection (1), the bargaining representative must not apply for the scope order if a single interest employer authorisation is in operation in relation to the agreement.

Bargaining representative to give notice of concerns

(3) The bargaining representative may only apply for the scope order if the bargaining representative:

(a) has taken all reasonable steps to give a written notice setting out the concerns referred to in subsection (1) to the relevant bargaining representatives for the agreement; and

(b) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and

(c) considers that the relevant bargaining representatives have not responded appropriately.

When the FWC may make scope order

(4)  The FWC may make the scope order if the FWC is satisfied:

(a)  that the bargaining representative who made the application has met, or is meeting, the good faith bargaining requirements; and

(b)  that making the order will promote the fair and efficient conduct of bargaining; and

(c)  that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen; and

(d)  it is reasonable in all the circumstances to make the order.

Matters which the FWC must take into account

(4A) If the agreement proposed to be specified in the scope order will not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding for the purposes of paragraph (4)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

Scope order must specify employer and employees to be covered

(5) The scope order must specify, in relation to a proposed single-enterprise agreement:

(a) the employer, or employers, that will be covered by the agreement; and

(b) the employees who will be covered by the agreement.

Scope order must be in accordance with this section etc.

(6) The scope order:

(a) must be in accordance with this section; and

(b) may relate to more than one proposed single-enterprise agreement.

Orders etc. that the FWC may make

(7) If the FWC makes the scope order, the FWC may also:

(a) amend any existing bargaining orders; and

(b) make or vary such other orders (such as protected action ballot orders), determinations or other instruments made by the FWC, or take such other actions, as the FWC considers appropriate.”

[117] It is apparent, and sometimes misunderstood 46, that s.238 is directed to the fair and efficient conduct of bargaining and not a generalised power in the Commission to determine the scope of proposed agreements. Fairness and reasonableness are relevant in the exercise of the discretion under s.238 of the Act but it remains that the purpose of the order is to promote the fair and efficient conduct of bargaining.

[118] The precondition to the exercise of the discretion requires that the Commission is satisfied that the making of the order will promote the fair and efficient conduct of bargaining. 47 It is not necessary that a finding be made that the bargaining is inefficient or unfair. However, the Commission should be satisfied that if a scope order is made the bargaining will at least be fairer or more efficient or both than it would be if no order was made.48

[119] The potential power imbalance between a minority and a majority group of employees may be relevant but is not determinative and may be affected by considerations such as the group’s special interests and potential disadvantage, the impact on the interests of other bargaining parties, the history of the conduct in bargaining and the stage of bargaining. 49

[120] The efficiency of bargaining may be effected by the duplication created in bargaining for two agreements when compared with a single agreement 50 and there is no statutory bias in favour of an enterprise agreement that covers as much of the employer’s enterprise as possible.51

[121] The views of employees are a significant factor when considering reasonableness and the views of employees carry greater significance than the subjective views of the employer although an alternate conclusion may be appropriate in particular circumstances. 52

[122] The good faith bargaining requirements referred to in s. 238(4)(a) are established by s.228 of the Act and are as follows:

“228 Bargaining representatives must meet the good faith bargaining requirements

(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:

(a) attending, and participating in, meetings at reasonable times;

(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;

(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;

(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative's responses to those proposals;

(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;

(f) recognising and bargaining with the other bargaining representatives for the agreement.

Note:          See also section 255A (limitations relating to greenfields agreements).

(2) The good faith bargaining requirements do not require:

(a) a bargaining representative to make concessions during bargaining for the agreement; or

(b) a bargaining representative to reach agreement on the terms that are to be included in the agreement.”

[123] The Commission must also be satisfied that the group of employees specified in the proposed scope order was fairly chosen. In this regard, s. 238(4)(c) must be read in conjunction with s.238(4A), which is similarly worded to ss.186(3) and (3A), in relation to the approval of enterprise agreements. The Explanatory Memorandum to the Fair Work Bill 2009 states in relation to the question of whether a group of employees is “fairly chosen” for the purposes of considering whether an enterprise agreement should be approved that:

“It is intended that in assessing whether a group of employees is fairly chosen, FWC might have regard to matters such as:

•  the way in which an employer has chosen to organise its enterprise; and

•  whether it is reasonable for the excluded employees to be covered by the agreement having regard to the nature of the work they perform and the organisational and operational relationship between them and the employees who will be covered by the Agreement.” 53

[124] In relation to these provisions a Full Bench of the Commission held in Australian Maritime Officers’ Union v Harbour City Ferries Pty Ltd 54 that the Commission is not required to make a positive finding or express satisfaction that a group is geographically, organizationally or operationally distinct, but rather that the commission take this into account. In Aerocare Flight Support Pty Ltd v Transport Workers’ Union55 a Full Bench of the Commission set out relevant principles in relation to finding whether a group of employees are fairly chosen as follows:

“[26] The following principles may be gleaned from earlier decisions concerning s 186(3)-(3A):

•  the expression “the group of employees covered by the agreement” in s 186(3) refers to the whole class of employees to whom the agreement might in future apply, not the group of employees who actually voted on whether to make the agreement;

•  the references in s 186(3) and (3A) to whether “the group of employees covered by the agreement was fairly chosen” are, in the case of a non-greenfields agreement made with a group of employees, particularly a small group, references to a choice made by the employer;

•  a Member’s decision as to whether or not they are satisfied that the group of employees covered by an agreement was “fairly chosen” involves a degree of subjectivity and the exercise of a very broad judgment or value judgment, and in a broad sense can be characterised as a discretionary decision;

•  in an appeal from a decision of that nature, it will be necessary for the appellant to demonstrate error in the decision-making process of the type identified in the House v The King in order for the Full Bench to set aside the decision;

•  once it has been determined that an agreement does not cover all of the employees of the employment, it is necessary for the Commission to make a finding as to whether the group of employees who are covered is geographically, operationally or organisationally distinct, and then take that matter into account and give it due weight, having regard to all other factors;

•  if the group of employees covered by the agreement is geographically, operationally or organisationally distinct then that would be a factor telling in favour of a finding that the group of employees was fairly chosen; conversely, if the group of employees covered by the agreement was not geographically, operationally or organisationally distinct then that would be a factor telling against a finding that the group was fairly chosen;

•  however while the question of whether the group of employees covered is geographically, operationally or organisationally distinct must be evaluated and given due weight having regard to all other relevant considerations, that is not a determinative consideration in that it is not necessary to make a finding that the group is geographically, operationally or organisationally distinct in order to be satisfied that it was fairly chosen;

•  the selection of the group of employees to be covered on some objective basis, as opposed to an arbitrary or subjective basis, is likely to favour a conclusion that the group was fairly chosen;

•  the relevant considerations will vary from case to case, but the word “fairly” suggests that the selection of the group covered was not arbitrary or discriminatory, so that for example selection based upon employee characteristics such as date of employment, age or gender would be likely to be unfair; and

•  it is appropriate to have regard to the interests of the employer, such as enhancing productivity, and the interests of both the employees included in the agreement’s coverage and the employees excluded.

[27] Additionally, guidance may be obtained as to how to interpret and apply the expression “organisationally distinct” in s 186(3A) from decisions concerning the use of the same expression in ss 237(3A) and 238(4A). The following propositions are relevant:

•  the term “organisation” refers to the manner in which the employer has organised its enterprise in order to conduct its operations;

•  the performance by a group of employees of duties which are qualitatively different from duties performed by other employees may justify a conclusion that the group is organisationally distinct;

•  however the mere performance by a group of employees of different tasks or roles to others may not be sufficient to render it organisationally distinct where the employees work in an integrated way with the other employees to perform a particular business function; and

•  most businesses have organisation structures which will allow organisationally distinct groups to be identified.” 56

(citations omitted)

[125] The case law dealing with the approach to considering an application for a scope order was comprehensively summarised by Deputy President Sams in "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union; Australian Workers' Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Qantas Airways Limited t/a Qantas as follows:

“[165] Perhaps a useful starting point is the general approach framed by the Full Bench in BRB Modular v AMWU in the following passage found at paras 53-54:

[53] The scope of an agreement is an open question in many enterprise bargaining exercises. It is frequently a topic of competing claims, discussion and negotiation. Rarely will it be possible to say that one scope proposal is wrong and another correct. There may be justifications for a preference one way or another. Hence it is usually the case that the scope is left to the bargaining parties to determine in the context of the overall enterprise bargaining framework. The reasonableness of making a scope order should be considered against that background.

[54] As we have said above, a consideration of reasonableness requires a full consideration of all of the circumstances and a level of satisfaction that the order requiring the parties to adopt a particular scope of an enterprise agreement in their ongoing bargaining is objectively justified. We are not satisfied that the applicant has established that it is reasonable in all the circumstances to make the scope order. We are satisfied that bargaining can continue and it remains open to the parties to continue to consider the scope of the agreement in the overall context.

[166] A number of other general principles have been developed in the body of jurisprudence dealing with scope order applications. These include the following:

1. By the inclusion of the word ‘may’ in the heading to s 238(4) of the Act, the Commission is to exercise its discretionary powers after determining whether all of the criteria in ss (a)-(d) are satisfied. As all of the criteria must be satisfied (by use of the disjunctive word ‘and’ separating each criterion), it must follow that if one of the criterion is not met, then a scope order cannot be made. The converse is true; that is, if all of the ss (4) criteria are met, the Commission may make a scope order.

2. The scope of a proposed enterprise agreement is a matter that can itself be the subject of bargaining by the parties for their agreement. In Stuartholme School and Others; The Corporation of the Trustees of the Roman Catholic Archdiocese of Brisbane t/as Brisbane Catholic Education Office and Others v Independent Education Union of Australia [2010] FWAFB 1714, a Full Bench of Fair Work Australia (as the Commission was then styled) said at para 21-22:

[21] The second difficulty is that there is Full Bench authority, not referred to by the majority in Ford, which strongly suggests the scope of a proposed agreement can be a proper subject for bargaining under the Fair Work Act. In Liquor, Hospitality and Miscellaneous Union v Coca-Cola Amatil (Aust) Pty Ltd (Coca-Cola) a Full Bench considered an appeal against the refusal of a member of Fair Work Australia to make a scope order. In the course of its decision the Full Bench noted that there was disagreement between the negotiating parties as to the scope of any agreement or agreements to be made. The situation is concisely set out in this paragraph:

“[32] Against this background, we turn to consider the competing interpretations of a s.237(2)(b) majority support determination, which arise because the LHMU and Coca-Cola have different bargaining positions as to the number and scope of agreements which should be made in relation to the relevant employees. The LHMU seeks a single agreement covering all employees, while Coca-Cola seeks three agreements covering various specified groups of employees. None of the agreements cover one small group of employees. There is a dispute as to the scope of the agreement or agreements to be made.”

[22] Despite the disagreement as to scope, there is no indication in the decision that because of that disagreement bargaining had not commenced. To the contrary, the Full Bench approached the appeal on the basis that a scope order might be applied for after bargaining had commenced.

See also MSS Security v LHMU at paras 17-19.

3. Consideration of the views of employees may be taken into account. However, this does not mean that such views are given any greater weight than the other factors to be considered by the Commission under the other subsections. In UFU v MFESB, the Full Bench of Fair Work Australia said at para 53:

[53] As recorded above, it was submitted by the UFUA and the ACTU that particular weight should be given to the views of employees because of, for example, legislative policy imperatives concerning freedom of association. While we generally agree with that submission it requires some qualification. The power to make a scope order is predicated on disagreement between bargaining representatives. The discretion to resolve that disagreement is to be exercised as provided for in ss.238(4) and (4A). While those provisions do not assign priority to the views of employees, in applying the provisions it is necessary to have regard to the overall context. The legislative scheme supports collective bargaining principles and the Fair Work Act encourages freedom of association and collective bargaining. It may be implied from the legislative scheme that the collective choice of employees is significant. It must be said, however, that while weight should be given to the views of the employees potentially affected, it may be that a proper consideration of the matters specified in ss.238(4) and (4A) in a particular case may make it appropriate to make a scope order contrary to the views of the employees potentially affected. (My emphasis)

See also: TWU v Chubb.

4. It is improper to use a scope order application to address a bargaining representative/s’ good faith bargaining concerns, which are more properly considered under s 228 of the Act. In BRB Modular v AMWU a Full Bench of the Commissions said at para 52:

[52] We have made the observation above that the major complaints raised by the AMWU go to the conduct of the Respondent in the negotiations and that they are, in essence, allegations that the Respondent was not engaging in good faith bargaining. It is apparent, therefore, that the Appellant was attempting to use the vehicle of a scope order application to address good faith bargaining concerns. It was an improper vehicle to ventilate those concerns.

5. The onus rests on the moving party to demonstrate that the making of a scope order will encourage and facilitate bargaining which is fairer and more efficient than if no order is made. In UFU v MFESB, the Full Bench said at para 55:

[55] The relevant consideration under s.238(4)(b) is whether the order will promote the fair and efficient conduct of bargaining. The implication is that the tribunal should be satisfied that if an order is made the bargaining will at least be fairer or more efficient or both than it would be if no order were to be made. The relevant consideration under s.238(4)(c) is whether the specified group is fairly chosen. It may be that a number of groupings might be fair – what this criterion requires is that the group which is included in the scope order is fairly chosen. This issue is also dealt with in s.238(4A), which we discuss shortly.

See also: Tasmanian Water at 158.

6. Issues of mere inconvenience or preference with the bargaining process are not decisive to whether a bargaining process is fairer or more efficient. In Shinagawa I said at para 28:

[28] Mr Stewart deposed, and it was not disputed, that the negotiations for the 2008 agreements were conventional, without any disputation or angst over the outcome of two separate agreements. Moreover, the respondent’s management in 2005 had made no complaint when the two agreements concept was proposed. In my view, this history relevantly demonstrates that any perceived difficulties arising from two agreements on site, is largely speculative and is probably little more than an inconvenience, rather than a real impediment to securing appropriate and fair industrial outcomes.

See also: Royal District Nursing v HSU at para 53 and Tasmanian Water at paras 115-120.

7. Evidence which is said to support the making of a scope order which is speculative, hypothetical or presupposes outcomes of bargaining, is unhelpful to the task of determining whether a scope order should be made. In APESMA v Red Cross, Hampton C said at para 70:

[70] On balance, I am not persuaded that the granting of the scope order would promote fairer or more efficient negotiations in this matter. The evidence reveals that at this point in time many of the considerations supporting the application are largely speculative, and weighing up all of the considerations it has not been demonstrated that the making of a scope order would meet the requirements in s.238(4)(b) of the Act given all of the circumstances of this matter.

See also: FSU v BWA at 54.

8. The history of bargaining between the parties is a relevant consideration to whether a scope order should or should not be made (status quo). In TWU v Chubb, Asbury DP said at para 69:

[69] I have also given consideration to the following circumstances, which in my view, weigh against the making of a scope order in this case. The status quo is that there are separate agreements to cover each of Chubb’s Queensland Depots. The TWU is seeking to alter the status quo. I do not accept the argument that because Chubb has not filed a competing application for a scope order, that less weight should be placed on the maintenance of the status quo. This is not a case where the issue of the scope of the proposed agreement is causing disputation and has stalled the negotiations. On the case advanced by the TWU, the granting of a scope order will increase disputation by strengthening the capacity of Nerang AVOs to take protected industrial action, presumably with the involvement of Moorooka AVOs.

See also: Shinagawa; TWU v Chubb at 26, NUW v Linfox at 60, FSU v BWA at 101-104 and Tasmanian Water at 157-158.

9. Seeking leverage by increasing the bargaining power by weight of numbers is not a valid basis to make a scope order. In TWU v Chubb, Asbury DP at 60:

[60] In relation to s.238(4)(b), I am unable to be satisfied in the circumstances of this case that making a scope order will promote the fair and efficient conduct of bargaining. It is apparent from the evidence that the TWU is seeking a scope order principally for the purpose of strengthening the bargaining position of Nerang AVOs by reducing the capacity of Chubb to use AVOs from Moorooka to cover any periods of protected industrial action taken by Nerang AVOs. The view of the TWU and its members that this will increase the fairness of bargaining is subjective and I do not accept that enhancing the bargaining strength of Nerang AVOs to assist them to take more effective protected industrial action against Chubb, is a valid basis upon which I could find that bargaining would be fairer or more efficient if a scope order was made.

[126] I turn now to the application of the legislation and the principles established in relevant cases, to the present case.

CONSIDERATION

Application by AMWU to call further evidence

[127] As previously noted, the AMWU sought to call further evidence in the present proceedings. Directions were issued requiring the parties to file and serve outlines of submissions in relation to whether that further evidence should be received. After considering those submissions I decided to refuse to receive further evidence and indicated that I would give reasons for this in the substantive decision. The reasons for my refusal to receive further evidence are as follows.

[128] The further evidence that the AMWU sought to place before me related to a Recommendation made by Commissioner McKinnon as a consequence of the July 2018 Decision to dismiss the scope application. It is necessary to consider the Recommendation for the purposes of setting out my reasons for refusing to receive further evidence. As a preamble to the Recommendation, the Commissioner set out her view in relation to whether the scope order would have been issued having regard to the relevant legislative provisions, had she found that there was jurisdiction to make the scope order. It suffices to note that it is apparent from those views that the Commissioner would not have made the scope order. The Recommendation was in the following terms:

“[21] I recommend that the parties recommence bargaining for an enterprise agreement to replace the Agreement. Assuming that the AMWU maintains its claim for a broader scope in that agreement, I recommend that it particularise its claim as a matter of priority and that a notice of employee representational rights be issued to employees within the broader scope sought by the AMWU. It is then a matter for the parties to reach agreement on the actual scope of any replacement agreement in the usual way.”

[129] In support of its application that further evidence be received, the AMWU said that Counsel for Broadspectrum had submitted in the initial scope hearing that regardless of the ruling on jurisdiction, that the Commission should deal with the merits of the application on the basis that this may be of assistance to the parties somewhere down the track. The further evidence that the AMWU sought to call in the present proceedings related to compliance with the Recommendation and to conduct of the parties subsequent to the Recommendation. The AMWU asserts that it has complied with the Recommendation insofar as it relates to continuation of national negotiations and that Broadspectrum has not. In particular the AMWU points to the fact that Broadspectrum has not issued a further NERR to employees within the broader scope proposed by the AMWU.

[130] The AMWU also states that if its application for a scope order fails and national negotiations resume consistent with Broadspectrum’s previously argued imperative of a national agreement with a scope proposed by the Company, but without the issuing of a NERR consistent with the scope claimed by the AMWU, it is likely that any resultant “agreement” would be challenged and would fail to win the Commission’s approval.

[131] Broadspectrum objected to the admission of further evidence. Broadspectrum points to the submission of the AMWU in the appeal against the scope application decision made by Commissioner McKinnon that the matter should be remitted to another member of the Commission on the basis that the Commissioner had expressed a view on the outcome of the scope application in the event that jurisdiction was found, by making a recommendation. This is submitted to be inconsistent with the position adopted by the AMWU in the present case to the effect that the Commission as presently constituted should take some notice of the Recommendation. It is also submitted that notwithstanding the contradiction in what the AMWU is now advancing there is no basis for admitting new material. This is because there is no agreement between the parties about the scope of the proposed Agreement and admitting evidence about compliance with the Recommendation does not have any probative value or additional benefit to the task of determining an application under s. 238 of the Act.

[132] In relation to the AMWU’s assertion that if the scope order application fails then any resultant agreement would be challenged, Broadspectrum asserts that the AMWU is indicating a position that it will continue to seek to frustrate any agreement if it does not obtain the scope order it seeks. Broadspectrum also asserts that the AMWU is seeking to revisit the role of the NERR in circumstances where the Full Bench Decision in the appeal indicated a position in relation to the effectiveness of the NERR issued by Broadspectrum and the Decision of the Full Bench should not be reopened. Broadspectrum submits that there is no matter raised by the AMWU which merits permitting new evidence or submissions and the Commission should proceed on the basis of the record of proceedings before Commissioner McKinnon.

[133] In my view, evidence about compliance with the Recommendation is predicated on a finding – overturned on appeal – that the 2017 proposed Agreement was made notwithstanding the failure of Broadspectrum to comply with s.173 of the Act with respect to giving a NERR to employees, and that as a consequence bargaining has ceased. If bargaining has ceased it is not for that reason. Leaving aside the issue of whether the failure to give the NERR to employees in the broader scope claimed by the AMWU (in accordance with the proposition in MSS Security discussed earlier in this decision) the issue of compliance with s. 173 of the Act will not be resolved by considering whether Broadspectrum complied with the Recommendation.

[134] Further, the Recommendation does not reflect the scope order that the AMWU seeks in the application I am required to consider and any evidence about compliance or non-complaince with that Recommendation has no bearing on whether or not the AMWU’s application should be granted. That question is to be determined by reference to the relevant legislative provisions and the evidence and submissions before me, which I turn now to consider.

Bargaining representative may apply for scope order – s. 238(1)

[135] It is not in dispute that the AMWU is a bargaining representative for a proposed single-enterprise agreement with Broadspectrum and that the agreement is not a greenfields agreement. I accept that the AMWU has concerns that bargaining is not proceeding efficiently or fairly. I also accept that the reason that the AMWU holds this view is that it considers that the agreement will not cover appropriate employees or will cover employees that it is not appropriate for the agreement to cover.

[136] I do not accept Broadspectrum’s submission that the evidence does not disclose that the reason for the AMWU’s concern that bargaining not proceeding efficiently or fairly is a reason contemplated by s. 238(1)(b). In this regard, I do not accept that the notice of concerns (interlinked with Broadspectrum’s response to those concerns) is limited to the issue of denial of freedom of association and that this was the only concern raised by the AMWU.

[137] In my view s. 238(1) does not require that the concerns of a bargaining representative are objectively reasonable. The section is directed at the views of the bargaining representative – which are necessarily subjective – and it is sufficient that those concerns relate to the efficiency and fairness of bargaining and that the reason for the concerns is the reason in s. 238(1)(b)

[138] While the AMWU did not directly address s.238(1) in its initial outline of submissions it did so in reply submissions. Essentially those submissions were that the requirements in s. 238(1) had been met by virtue of the letter to the Company dated 15 March 2018. In particular the AMWU pointed to the reference in that letter to the high proportion of the workforce in Victoria and the resistance of the Victorian workforce to the terms of the replacement agreement. While the letter goes on to make various assertions about freedom of association, I am satisfied that it sufficiently sets out the AMWU’s concerns that bargaining is not proceeding efficiently or fairly and that the reason for this is that the AMWU considers that the Agreement will not cover appropriate employees or will cover employees that it is not appropriate for the Agreement to cover.

[139] That letter makes clear that the AMWU seeks two agreements – one for Victoria and the other for the remaining States and Territories. The letter goes on to broadly outline the coverage of the two proposed agreements. The letter also makes clear that each of the two proposed agreements would cover a broader group of employees of Broadspectrum than the group covered by the LMM Agreement.

[140] I am satisfied that the letter is sufficient to establish that the AMWU has the requisite concerns within the terms of s. 238(1)(a) and that those concerns are for reasons within the terms of s. 238(1)(b). It is clear from the letter of 15 March 2018 that the AMWU has concerns about the efficiency and fairness of bargaining for reasons including that the Agreement subject of the bargaining to that point is proposed to cover employees in Victoria as well as employees in other States and Territories and that there are some employees who are not proposed to be covered by an agreement at all and the AMWU believes that fairness requires that they should be covered.

[141] The fact that the letter also raises issues about denial of freedom of association as a result of employees not being provided with a NERR and whether the requirements of the Act with respect to the provision of such notices were met with respect to the 2017 proposed Agreement, does not mean that the letter is deficient. Section 238(1) of the Act does not require that a notification of concerns within the terms in s. 238(1) cannot include other concerns which are not within those terms.

[142] I am also of the view that the arguments about the reasons for the concerns advanced by Broadspectrum conflate the matters required to be considered in s. 238(1) with those in s. 238(4). The views of a bargaining representative for the purposes of s. 238(1) may be subjective while the views that the Commission is required to form for the purposes of s. 238(4) are objective. Accordingly, I am satisfied that the requirements of ss. 238(1) in relation to the application being made, have been met.

No scope order if single interest employer authorisation is in operation – s. 238(2)

[143] A single interest employer authorisation is not in operation in relation to the agreement in the present case.

Notice of concerns – s. 238(3)

[144] Section 238(3) (in conjunction with s. 238(1)) provides that a bargaining representative may only apply for a scope order if the bargaining representative has taken all reasonable steps to give written notice to relevant bargaining representatives for the agreement setting out its concerns that bargaining is not proceeding efficiently or fairly and the reason for this (being a reason within the terms of s. 238(1). The other requirements of s. 238(3) are that an applicant for a scope order has given relevant bargaining representatives a reasonable time to respond to the notice of its concerns (s. 238(3)(b)) and considers that the relevant bargaining representatives have not responded appropriately to those concerns (s. 238(3)(c)).

[145] Broadspectrum asserts that AMWU is required to establish that it has given notice of its concerns to all relevant bargaining representatives on the basis that the nature of the scope application sought is such that their responses would be significant, citing in support of this assertion the Decision in CFMEU v Veolia Environmental Services. 57 Broadspectrum submits that the petition asserted by the AMWU to have been signed by Victorian employees does not tell the Commission anything about the views of employees in every other State and Territory.

[146] In its reply submissions, the AMWU said that s. 238(3)(a) requires that notice be given to “relevant bargaining representatives” and does not mandate that all bargaining representatives for the agreement are given notice, nor define who “relevant” bargaining representatives are. The AMWU also pointed to the involvement of bargaining representatives in negotiations and conferences chaired by the Commission in September and November 2017 in relation to a related application made by the AMWU under s.240 of the Act. The evidence of the s. 240 proceedings indicates that beyond Broadspectrum, the AMWU and the CEPU, no bargaining representatives participated and the AMWU submits that the involvement of bargaining representatives other than Unions in negotiations was relatively passive. The AMWU also submits that “relevance” might best be assessed against the level of influence that the responses the bargaining representatives concerned would have had on the intending applicant’s decision as to whether or not to make an application for a scope order. In the circumstances prevailing after 14 March 2018 Decision, Broadspectrum was the only bargaining representative genuinely able to influence such a decision by the AMWU

[147] The AMWU further submits that the non-Victorian employee bargaining representatives were unlikely to have been concerned because the proposal set out in the AMWU’s letter of 15 March 2018 would have allowed them to pursue an agreement free of much of the organised opposition which led to the frustration of five previous attempts. According to the AMWU, in assessing who were the relevant bargaining representatives for the purposes of paragraph 238(3)(a) of the Act the AMWU had regard to the levels of engagement of the various bargaining representatives during the full course of bargaining and those who had been a party to the more recent negotiations together with the parties notified of the conciliation conferences and to whom the Commission’s directions in relation to those conferences applied. The AMWU’s letter/notice of concern was addressed to Broadspectrum and was also sent to the CEPU. The CEPU has expressed support for the AMWU’s application and outline of submissions by email dated 15 May 2018. Reference was also made by the AMWU to the Fair Work Bill 2008 Explanatory Memorandum which after discussing the provisions that became s. 283(3) of the Act, stated at paragraph 983:

“These same preconditions apply for bargaining orders (except that for bargaining orders, FWA has the ability to waive the requirements to give written notice of concerns). This requirement is included to encourage bargaining representatives to consider resolving issues surrounding the scope of the proposed enterprise agreement through the good faith bargaining process. It also ensures that it is no more expedient to obtain a scope order rather than a bargaining order.” (emphasis added).

[148] According to the AMWU, the facts in the present case can be distinguished from those considered by in CFMEU v Veolia 58 where separate agreements were being proposed by the Company for a number of States and negotiations in at least one of the States were in their final stages. In the present case, negotiations had reached a point where a fifth version of a proposed replacement agreement had been referred to a vote and these negotiations may resume afresh consequent upon the Commission declining to approve the proposed replacement for the LLM Agreement. The AMWU submits that it has satisfied the requirements of s. 238(3) of the Act.

[149] I do not accept the AMWU’s submission that employee bargaining representatives are “relevant” for the purposes of s. 238(3) by reference to the level of influence they would have upon the AMWU’s decision to apply for a scope order. The scope of an agreement is generally a critical matter and one in which all bargaining representatives have an interest. A change in scope may weaken or strengthen the position of bargaining representatives. In my view the purpose of the requirement for a bargaining representative to give a written notice to other bargaining representatives is so that they have an opportunity to express their view – including in proceedings before the Commission – in relation to whether a scope order should be made.

[150] The importance of the notice in s. 238(3) is emphasised by the manner in which the requirement to give the notice is expressed. Firstly – at the risk of stating the obvious – it is a “notice” that is required to be given in writing. Secondly, the application for a scope order can only be made if all reasonable steps are taken to give the notice to relevant bargaining representatives for the agreement. Thirdly, the importance of the notice in s. 238(3) is emphasised by the fact that it is required to be a notice setting out the concerns referred to in s. 238(1). Those concerns are that:

•  Bargaining for the agreement is not proceeding efficiently or fairly; and

•  The reason for this is that the bargaining representative making the scope application considers that the agreement will not cover appropriate employees or will cover employees that it is not appropriate for the agreement to cover.

[151] A notice for the purposes of s. 238(3) should at least state the concerns and identify the coverage of the agreement sought by the bargaining representative seeking the scope order and the reasons that this is considered by the applicant for the scope order to address its concerns about coverage. Fourthly, the purpose of the notice is further indicated by the fact that recipients must be given a reasonable time to respond to the concerns set out in the notice.

[152] All of these matters indicate that “relevant bargaining representatives” for the purposes of giving the notice are persons who will or will likely be affected by the coverage proposed by the applicant for a scope order and who have an interest in the agreement. This would include bargaining representatives of employees whose position would be altered if the scope application was granted – either by exclusion or inclusion in the proposed scope.

[153] In the present case, the uncontested evidence of Mr McDowell is that there were employee bargaining representatives appointed by other employees. Mr McDowell stated that those bargaining representatives attended meetings by telephone and while not as vocal as the AMWU representatives, nonetheless participated in the negotiations. The Form F16 Application for approval of the proposed 2017 Agreement identifies 12 employee bargaining representatives other than the union bargaining representatives separately identified on the Form.

[154] There is no evidence that the AMWU took any steps – reasonable or otherwise – to give written notice of its concerns that bargaining was not proceeding efficiently or fairly, and what it proposed to address this issue, to any of those representatives before making the application for a scope order. The names and contact details of those representatives could have been obtained or at least an attempt to obtain them could have been made. The AMWU could also have requested that Broadspectrum provide the notice to the bargaining representatives or assist in providing contact details for them.

[155] In relation to the impact of a Victorian only agreement, accepting the AMWU’s evidence about the Victorian bargaining representatives and membership being more vocal in the bargaining process, to excise those representatives from the bargaining process as it relates to employees in other States and Territories may result in the bargaining position of the latter group being weakened. In this regard, I accept the evidence of Mr McDowell, confirmed in cross-examination of Mr Grant, that there are issues in common between the Victorian and non-Victorian employees. I consider that there is some likelihood that non-Victorian employees would not be given priority in bargaining if the focus shifted to a Victorian agreement. I also note that the AMWU does not provide any information in the scope application or its letter of 15 March 2018 about bargaining elsewhere than in Victoria with respect to the employees who will be left when the Victorian group is excised from the negotiations. Regardless of the level of participation of non-Victorian bargaining representatives they were relevant bargaining representatives for the purpose of the requirements in s. 283(3) and AMWU should have taken reasonable steps to given them written notice of its concerns and a reasonable time to respond. The AMWU did not do so and did not comply with s. 238(3) of the Act.

[156] The failure by the AMWU to comply with the requirements in s. 238(3) means that the AMWU could not make the scope application and I am accordingly required to dismiss it. While it is not necessary that I do so, I proceed to consider the other requirements in s. 238 of the Act in relation to whether a scope application should be made. I do so, on the basis that the failure to provide notice is a matter that could be cured by the AMWU giving notice to other bargaining representatives and making a further scope application in the same terms as the present application.

When the FWC may make a scope order – s. 238(4)

[157] Section 238(4) of the Act provides that the Commission may make a scope order if satisfied in relation to the matters set out in that section.

Has the AMWU met the good faith bargaining requirements?

[158] There is no evidence and it is not asserted by Broadspectrum that the AMWU is not meeting the good faith bargaining requirements as set out in s. 228 of the Act and I am satisfied that the AMWU has met the good faith bargaining requirements.

Will making the scope order promote the fair and efficient conduct of bargaining?

[159] Section 238(4)(b) provides that the Commission may make a scope order if satisfied that doing so will promote the “fair and efficient conduct of bargaining”. The use of the term “and” in s.238(4)(b) in relation to the Commission being satisfied can be contrasted with the use of the term “or” in s.238(1)(a). The use of the term “and” is not conjunctive to the extent that there is a positive requirement for the Commission to be satisfied that making a scope order will promote both fairness and efficiency in equal measure. However as a Full Bench of the Commission observed in UFU v MFESB the Tribunal should be satisfied that bargaining will be at least fairer or more efficient or both. The use of the term “and” indicates that fairness and efficiency are related and the Commission would be less inclined to make a scope order where bargaining would be marginally fairer but less efficient, or vice versa.

[160] From the material filed by the AMWU including the Form F31 Application for a scope order the following grounds upon which it is asserted that such an order would promote the fair and efficient conduct of bargaining can be distilled. Firstly, the AMWU essentially raises an issue with the geographic scope of the proposed agreement and claims that bargaining cannot proceed efficiently or fairly if Victorian employees are grouped with employees in other States and Territories. In this regard it is asserted that a significant proportion of the employees (44%) who would be covered by the 2017 proposed Agreement are in Victoria and are highly unionised and active. Resistance to the Company’s proposals is said to be concentrated in Victoria and it is also asserted that there is a division in the National workforce between those in Victoria on the one hand and those in other States and Territories on the other hand. A number of claims are said to be pressed most heavily in Victoria including matters such as RDOs, summer uniforms, classification streams for non-materiel maintenance employees and maintenance disability allowances. Further it is submitted that the bargaining process to date indicates that employees in Victoria and other States and Territories cannot agree on their negotiating strategy.

[161] Secondly, the AMWU raises issues associated with the occupational scope of the the proposed agreement and maintains that employees that Broadspectrum regards as salaried should be covered by an agreement. The AMWU refers to this issue as the anomaly of Broadspectrum’s differentiation between the employees in dispute. In this regard the AMWU points to what it describes as Broadspectrum’s failure to properly explain its acceptance that some categories of employees the AMWU claims should be covered by the proposed agreement are within the coverage of the LMM Agreement and some are not. According to the AMWU, the scope application will address this anomaly as it seeks that the proposed Victorian agreement also cover employees in support employment categories including schedulers, production clerks, senior storepersons, storepersons, production clerks, planners, production officers and purchasing officers, who were the subject of claims made by the AMWU during negotiations.

[162] Thirdly, the AMWU raises representational issues associated with the giving of a NERR to employees within the scope specified by the AMWU in its application. In relation to this matter, the AMWU submits that the conduct of Broadspectrum has denied employees their right to be represented in bargaining. The AMWU submits that it is implicit from the Company’s position that it does not wish to issue all categories of employees claimed by the AMWU with a NERR thereby denying these employees their right to be represented and the right to freedom of association. The scope order sought by the AMWU would result in bargaining being fairer than it would be if it was allowed to continue as it has since 1 June 2016, on the basis that the scope order would trigger a new notification time and oblige Broadspectrum to issue a NERR to all employees within the scope of the order, inclusive of the employment categories the AMWU maintains should be covered by the proposed agreement.

[163] It is also stated that said that the failure of Broadspectrum to properly issue a NERR to employees which led to the March 2018 Decision refusing to approve the 2017 proposed Agreement would be rectified by the making of the scope order thereby ensuring that employees are not denied their right to representation. It is asserted that fairness would be promoted by an acknowledgement that non-materiel maintenance employees have been the subject of bargaining over many months and formal recognition that those employees fall within the scope of bargaining and should be notified of their right to be represented. The AMWU also provides evidence – in the form of a petition – that indicates the support of Victorian employees for the scope order to be made. In relation to fairness, the AMWU also raises issues with the provision of voting results to the Union by the agent engaged by Broadspectrum to conduct ballots for approval of various versions of the agreement.

[164] I accept that the process of bargaining for a replacement for the LMM Agreement has been lengthy and difficult. However, I am unable to be satisfied that making the scope order in the form sought by the AMWU will at least make the bargaining fairer or more efficient. In relation to the geographical scope issue raised by the AMWU, it does not follow that because the Victorian employees are more vocal and have pressed their claims to a greater level than employees in other States, that it would promote fairness or efficiency if the Victorian employees were the subject of a scope order which would trigger a notification time in relation to an agreement that would operate only in Victoria.

[165] It is purely hypothetical to suppose that it is more likely that two agreements – one for Victoria and one for other States and Territories – could be bargained for more efficiently or fairly than one national agreement, if a scope order in the form sought by the AMWU was made. Given Broadspectrum’s evidence about the manner in which it delivers services with respect to the LMM contract and its imperative of a single agreement with uniform terms and conditions for employees working on the LMM Contract, it is improbable that Broadspectrum would agree to a separate agreement with different terms and conditions for Victorian employees even if the Company was required by the effect of a scope order to bargain consistent with the good faith bargaining requirements. Those requirements do not require that negotiating parties make concessions including in relation to the scope of a proposed agreement.

[166] Weighing against the prospect that the scope order sought by the AMWU would promote efficiency or that bargaining would be more efficient it that order was made, is the fact that a majority of employees – 65% of those who voted – approved the 2017 proposed Agreement in a ballot conducted on 6 December 2018. I do not accept that I should infer that this was not significant simply because of the fact that a sign on bonus was offered if the agreement was approved. I also do not accept that the vote of Victorian employees was significantly against approval of the 2017 proposed Agreement given Mr Michael’s evidence that almost all Victorian employees voted in the ballot (with 3 of 111 eligible voters at Bandiana and 1 of 58 eligible voters at Puckapunyal abstaining) and that 44% of those employees voted to approve the Agreement. The fact that the 2017 proposed Agreement was not validly made because of non-compliance by Broadspectrum with the requirements in s. 173 of the Act does not detract from the fact that a majority of employees indicated their approval for a national agreement including a not insignificant number of Victorian employees.

[167] It is also hypothetical to suppose that hiving off the Victorian employees into their own bargaining process would ensure that demands about which they feel more strongly than do employees in other States and Territories would be agreed to by Broadspectrum, resulting in bargaining being more efficient. It is equally probable that both parties would maintain their present positions in relation to matters such as RDOs which they have been unable to agree on for the entirety of the negotiations. This is particularly so given the evidence about the history of the RDO matter and the views of the employees about the conduct of Broadspectrum in agreeing and then withdrawing agreement to RDOs for Victorian employees and the stated position of the Company that RDOs would decrease efficiency and that it would not agree to RDOs. If RDOs are a deal breaker for Victorian employees they will continue to be so regardless of whether the parties are bargaining for an agreement to cover Victoria or a national agreement. This matter did not stop a majority of employees approving the 2017 proposed Agreement.

[168] In relation to the geographical scope issue, I note that the scope application as filed by the AMWU does not deal with employees in States and Territories other than Victoria. Section 238(6) provides that the application could have dealt with more than one proposed single enterprise agreement and it is not clear why there is no mention of the proposal with respect to employees in States and Territories other than Victoria. While the letter of 15 March setting out the AMWU’s proposal for two agreements included a proposed scope for a Victorian agreement and an agreement to cover employees in other States and Territories, and that each of the two agreements cover the additional classifications claimed by the AMWU in negotiations, the scope application does not seek an order from the Commission in relation to employees in States and Territories other than Victoria. I assume that the AMWU will seek to negotiate an agreement to cover those employees and that consistent with its letter to Broadspectrum of 15 March 2018 that the proposed agreement for States and Territories other than Victoria will also include employees in classification claimed by the AMWU during negotiations.

[169] However, in the absence of consideration in the application for the position of non-Victorian employees this view is hypothetical and it is not apparent how the making of the scope order specified in the AMWU application would address issues of fairness and efficiency for those employees. It is also not apparent that bargaining for an agreement to cover all other States and Territories would be more efficient in the absence of Victorian employees and their specific claims. It is at least equally probable that bargaining in other states would stop or slow down given that it would no longer encompass the most vocal group of employees – ie. those in Victoria.

[170] There is also no evidence of the views of non-Victorian employees about being separated from Victorian employees. For reasons set out above, this separation may weaken the position of those employees. In my view, where the status quo is that there is an agreement that applies across all States and Territories, fairness requires consideration of the impact of the scope order sought by the AMWU on all employees and not just those in Victoria. In the absence of such evidence I am unable to be satisfied that the scope order sought by the AMWU would promote fairness in the conduct of the bargaining and I am also of the view that it is at least equally probable that it would have the opposite effect on a large group of employees who are currently within the scope of the bargaining that has been ongoing since 2016 – albeit slowly.

[171] I also do not accept that the scope order sought by the AMWU would promote the fair and efficient conduct of bargaining by addressing the anomaly the AMWU asserts has arisen with respect to Broadspectrum’s differentiation between the employees in dispute. It is true that regardless of whether Broadspectrum understood the extent of the AMWU’s position in relation to scope, the AMWU sought to expand the group of employees to be covered by the replacement for the LMM Agreement to include employees at Kapooka, storepersons and non-materiel maintenance employees. It is also true that the scope order sought by the AMWU does seek to include those classifications consistent with the AMWU’s claims during the negotiation process.

[172] However, the scope order sought by the AMWU goes beyond simply seeking to extend the scope of any agreement to cover the additional classifications claimed in negotiations. Instead the AMWU is seeking an agreement to cover Victoria only and then to extend the scope of that agreement to cover a wider group of employees in Victoria. As previously noted, the scope application does not deal with this broader group of employees who are employed by Broadspectrum in other States other than Victoria or the employees at Kapooka who were also the subject of the AMWU’s claim in relation to a broader scope for bargaining, and which Broadspectrum partially conceded.

[173] I accept that a scope application which sought to cover all employees of Broadspectrum in the broader range of classifications claimed by the AMWU during bargaining, without the limitation of a separate agreement for Victorian employees, would have the effect of triggering a new notification time and that Broadspectrum would be required to issue a further NERR to that group. This would cure any invalidity related to the second NERR and the requirements of s. 173 of the Act in the event that an agreement was reached with that broader group.

[174] However, if the scope application was granted in its present form, any efficiency in terms of the issuing of a third NERR to employees in a broader range of classifications would be negated by the fact that the notice would only be required to be issued to employees in that broader group who are employed in Victoria. Accordingly, making the scope order would not address the scope issues that were raised by the AMWU in the negotiations and in my view this would not promote fairness or efficiency of the bargaining process.

[175] The views of employees are also a relevant consideration in deciding whether a scope order should be made. As I have previously noted, there is no evidence as to the views of employees in other States and Territories about being separated from the Victorian employees in terms of bargaining and a real possibility that the scope order would unfairly impact those employees. There is also evidence in the form of a petition tendered by Mr McDowell which indicates that a number of salaried employees do not wish to be covered by an enterprise agreement at all, regardless of whether it applies in Victoria only or in all States and Territories. This is also a matter going to fairness.

[176] I am unable to accept that there are matters that are unique to employees in Victoria such that the interests of other employees throughout Australia should be outweighed. Mr Grant’s evidence establishes that there are common issues for all employees currently covered by the LMM Agreement. As I have observed earlier, to excise almost half of the employees currently covered by an agreement leaving the remaining employees to their own devices will likely have an impact on the bargaining process for the latter group. This is particularly the case given the evidence of witnesses for the AMWU to the effect that Victorian bargaining representatives are more vocal than bargaining representatives in other States. Even if the Victorian employees feel more strongly about matters such as RDOs and work/life balance than employees in other States, it does not follow that bargaining will be fairer or more efficient if there is a separate set of negotiations for Victorian employees.

[177] While I accept that employees at Bandiana and Puckapunyal signed petitions indicating their support for the scope application, I do not accept that those views outweigh the other considerations of fairness and efficiency set out above. I also do not accept that in all of the circumstances of this case that the scope order sought by the AMWU will promote efficiency or fairness when the position of Broadspectrum is considered. The Company must deliver services under its DMSS contract with Defence across JLUs designated by Defence. It has organised its operations accordingly, including by making a single agreement to cover employees performing work under the DMSS Contract. I accept the evidence of Mr McDowell about the misalignment with the Company’s operational and contractual requirements of two agreements with potentially different terms and conditions of employment operating, one in Victoria and the other in all other States and Territories. I do not accept that the matters raised by the AMWU in support of the scope order being made will promote efficiency and fairness in the conduct of bargaining at all, much less to the extent that these matters would outweigh the imperatives for Broadspectrum of a national agreement. For these reasons, I am not satisfied that if I make the scope order as sought by the AMWU that bargaining will be fairer or more efficient.

Is the group of employees the subject of the scope order fairly chosen?

[178] The AMWU maintains that the scope it proposes involves a group of employees that is geographically distinct. This is said to be a matter to be given weight in deciding whether to make the scope order. The AMWU also submits that the scope of the Victorian agreement it proposes would overcome the anomaly caused by Broadspectrum’s refusal to include all support employment categories in the scope of the proposed agreement. I do not accept that this is the case.

[179] The starting point is that the agreement proposed to be specified in the scope order sought by the AMWU will not cover all of Broadspectrum’s employees. Accordingly, in deciding whether the group of employees is fairly chosen as required by s. 238(4)(c), I must have regard to whether the group is geographically, organisationally or operationally distinct. Even if the group of employees specified in the proposed scope order is geographically, organisationally or operationally distinct that is not the end of the matter. I must also be satisfied that having regard to those matters, the group is fairly chosen. Relevant considerations in relation to whether a group of employees is fairly chosen are not limited to its organisational, operational or geographical distinctiveness but can also include matters such as the views of employees in the group, implications for employees who are excluded from the group and the views of the employer about how it wishes to organise and conduct its operations and activities.

[180] In the present case, the group specified by the AMWU in the scope application is geographically distinct but is not organisationally or operationally distinct. The evidence of Mr McDowell establishes that the group is not aligned with Broadspectrum’s contractual obligations and the manner in which its services under the contract are delivered. The group is also not aligned with the organisational structure that Broadspectrum has established to deliver services under the DMSS contract. Not only does the group specified by the AMWU excise Victorian employees from the group of employees that Broadspectrum utilises to deliver services under the DMSS contract, it also includes in the excised group, employees of Broadspectrum who do not work on the DMSS contract.

[181] Leaving aside the fact that there are some members of the group specified by the AMWU in its application who are not performing work on the DMSS contract and who may be working in a part of the business that is not operationally aligned with that contract, it is also the case that there are employees in other States and Territories who are doing the same or substantially the same work as the employees in Victoria who are within the specified scope and who will not be covered by the agreement simply by virtue of their geographical location. The scope application is silent in relation to these employees. Even if it is accepted – by implication – that the AMWU proposal is a separate agreement for those employees not within the scope specified in its application, it is not apparent why the residual group of employees should be grouped together for bargaining purposes. The only rationale appears to be that the AMWU believes that it will be easier to bargain for an agreement with that group if it does not include Victorian employees or alternatively that it will be easier to bargain for Victorian employees only given their specific interests. For the reasons set out above, I am not satisfied that either of these assumptions are made out.

[182] In all of the circumstances I am not satisfied that the fact that the group specified by the AMWU is geographically distinct results in the group being fairly chosen. The geographical distinctiveness of the group does not outweigh other considerations relevant to fairness.

Is it reasonable in all the circumstances to make the order?

[183] I am not satisfied that it is reasonable in all of the circumstances to make the order. While the bargaining has not proceeded efficiently I do not accept that excising Victorian employees from employees in other States and Territories for the purposes of making an agreement will result in bargaining proceeding on a fairer or more efficient basis.

[184] There is a real prospect of the scope order having an unfair impact on non-Victorian employees who have been subject of bargaining as part of a single group including Victorian employees since 2016. I am not satisfied that the non-Victorian employees were given notice of the concerns of the AMWU and its proposal for a separate Victorian agreement and that they were denied an opportunity put their views forward in relation to a matter that could have a real impact on their opportunity to negotiate an agreement.

[185] The proposal for a separate agreement for Victorian employees does not completely address the scope issue that the AMWU has agitated – namely the coverage of employees that Broadspectrum maintains are salaried. On the basis of the petition tendered by Broadspectrum, a proportion of those employees do not wish to be covered by an enterprise agreement and have not been consulted about the matter and this counterbalances the views of those who signed petitions supporting the AMWU’s scope application. In those circumstances the imperatives of Broadspectrum to have a single set of national conditions for wages employees is not outweighed by the views of employees.

[186] I do not accept that the matters about which the Victorian employees have strong views are unique to Victorian employees and it is equally probable that they are matters in which non-Victorian employees would also have an interest. I am also of the view that there is a prospect of agreement being reached given that the 2017 proposed Agreement was approved by a majority of employees. Any invalidity with respect to the giving of a NERR to the relevant group of employees can in my view be overcome. If the views about the effect of MSS Security as set out in the March 2018 Decision are correct, then Broadspectrum can stop bargaining – which arguably it has done – and then recommence by issuing a NERR to the group of employees it wishes to bargain with. It is also the case, as the Full Bench observed in the appeal of the July 2018 Decision that a valid NERR was given to non-Kapooka employees and it is still open to Broadspectrum to try to reach an agreement with those employees. The making of a scope order in the terms sought by the AMWU is not an appropriate mechanism to address any invalidity in the process of issuing an NERR and this is not of itself a sufficient basis for making a scope order.

CONCLUSION

[187] In summary:

•  I am satisfied that the AMWU being a bargaining representative for a proposed single-enterprise agreement has concerns that bargaining is not proceeding efficiently or fairly and the reason for this is that the AMWU considers that the agreement will cover employees that it is not appropriate for it to cover;

•  I am not satisfied that the AMWU has taken all reasonable steps to give a written notice of its concerns to other relevant bargaining representatives;

•  I am satisfied that the AMWU is meeting the good faith bargaining requirements;

•  I am not satisfied that an agreement covering Victorian employees only will promote the fair and efficient conduct of bargaining;

•  I am not satisfied that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen; and

•  I am not satisfied that it is reasonable in all of the circumstances to make the scope order in the terms sought by the AMWU.

[188] Accordingly, I must dismiss the application by the AMWU for a scope order and an Order to that effect will issue with this Decision.

[189] In doing so, I make the following observations. It is regrettable that the parties have reached a stalemate. An agreement that covers employees in Victoria only will not resolve that stalemate. If bargaining has ceased, it is not because an agreement has been made and Broadspectrum’s previous assertions to that effect are wrong. If bargaining has ceased it is due to inactivity and there is no reason why bargaining cannot resume.

[190] Given the time that has elapsed, Broadspectrum should in my view issue a new NERR to employees with whom it agrees to bargain and resume bargaining for an agreement. The employees who voted to approve the 2017 proposed Agreement are not responsible for the fact that the Agreement was not approved by the Commission. Broadspectrum could correct the error it made with respect to issuing the second NERR by issuing a third NERR to employees within the scope of the 2017 proposed Agreement. If after issuing a third NERR, Broadspectrum agrees to negotiate with respect to employees within a broader scope than that to which the third NERR was issued the Company should comply with s. 173 of the Act by taking all reasonable steps to issue a NERR to employees within that broader group.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR710335>

 1   [2018] FWC 3974.

 2   “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Broadspectrum (Australia) Pty Ltd [2018] FWCFB 6556.

 3   [2013] FWCA 3679.

 4   [2018] FWC 1516.

 5   [2018] FWC 1516 at [8]

 6   [2018] FWC 1516 at [16]

 7   [2018] FWCFB 6556 at [27] – [28].

 8   (2010) 197 IR 294;[2010] FWAFB 6519.

 9   (2014) FWCFB 1317.

 10   [2014] FWCFB 2587.

 11   [2016] FWCFB 4969.

 12   (2010) 192 IR 29.

 13   [2014] FWCFB 2587 at [35].

 14   [2016] FWCFB 4969 at [113].

 15   Exhibit 8 Annexure 3.

 16   Exhibit 8 Annexure 4.

 17   Exhibit 1.

 18   Ibid at paragraph 9.

 19   Ibid at paragraph 17.

 20   Ibid at paragraph 19.

 21   Ibid at paragraph 20 to 23.

 22   Ibid at paragraph 27.

 23   Exhibit 2.

 24   Ibid at paragraph 5.

 25   Ibid at paragraph 23.

 26   Ibid at paragraph 35.

 27   Ibid at paragraph 39.

 28   Exhibit 7.

 29   Exhibit 4.

 30   [2010] FWAFB 3009.

 31   Ibid at [55].

 32   Fair Work Act 2009 s3(e).

 33   Referring to the explanatory memorandum at pg156.

 34   AMWU Outline of submissions at paragraph 100.

 35   [2012] FWAFB 2206.

 36   Exhibit 6 – Supplementary Statement of Richard McDowell.

 37   Exhibit 7.

 38   Exhibit 8 Annexure 3.

 39   In this respect Broadspectrum relied upon Construction, Forestry, Mining and Energy Union v Veolia Environmental Services (Australia) Pty Ltd [2010] FWA 9211 at [15].

 40   [2017] FWC 1526 at [165] to [166].

 41   UFU v MFESB [2010] FWAFB 3009 at [53] and AWU v BP Refinery (Kwinana) [2014] FWCFB 1476 at [30]-[31].

 42   Respondent’s outline of submissions at paragraph 23.

 43   In this regard Broadspectrum relied upon The Australian Workers’ Union v BP Refinery (Kwinana) at paragraph [24].

 44   Respondent’s outline of submissions at paragraph 28, relying on The Australasian Meat Industry Employees Union v Woolworths [2010] FWAFB 1625 at [181].

 45   Relying on AMWU, CEPU v Qantas Airways.

 46   LexisNexis Butterworths, Workplace Law - Fair Work, Vol 1 Service 73 [80,730]

 47   Fair Work Act 2009 s.238(4)(b).

 48   United Firefighters’ Union of Australia v Metropolitan Fire & Emergency Services Board (2010) 913 IR 293 at [54] – [55]; BRB Modular Pty Ltd v AMWU [2015] FWCFB 1440 at [6]-[15].

 49   National Union of Workers v Linfox Australia Pty Ltd [2013] FWC 9851 at [59].

 50   Transport Workers’ Union of Australia v Coles Supermarkets Australia Pty Ltd [2015] FWC 1591 at [145]-[148].

 51   United Firefighters’ union of Australia v Metropolitan Fire & Emergency Services Board (2010) 193 IR 293.

 52   The Australian Workers’ Union v BP Refinery (Kwinana) Pty Ltd (2014) 242 IR 238.

 53   Explanatory Memorandum to the Fair Work Bill 2009 at [777].

 54   [2016] FWCFB 1151 at [31].

 55   (2017) 270 IR 385; [2017] FWCFB 5826.

 56   Ibid at [26] – [27].

 57   [2010] FWA 9211.

 58   Ibid.