313 Business Group Pty Ltd T/A 313 Security Services

[2014] FWC 5637

[2014] FWC 5637

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

313 Business Group Pty Ltd T/A 313 Security Services
(AG2014/6285)

COMMISSIONER GREGORY MELBOURNE, 19 AUGUST 2014

Application for approval of the 313 Security Services Enterprise Agreement 2013 - 2017.

[1] This matter involves an application by 313 Business Group Pty Ltd T/A 313 Security Services (the Applicant) for approval of a single enterprise agreement known as the 313 Security Services Enterprise Agreement 2013 - 2017 (the Agreement). The application is made under s.185 of the Fair Work Act 2009 (Cth) (the Act).

[2] On reviewing the application the Commission raised concerns about two matters, in particular. The first issue concerned the content of the purported Notice of Employee Representational Rights provided to the employees intended to be covered by the proposed Agreement. The second issue went to whether the Agreement satisfies the requirements of the “better off overall” test. This decision deals with these issues.

Notice of employee representational rights

[3] The original application did not contain a copy of the Notice of Employee Representational Rights said to have been given to the employees on 8 April 2014. The Commission therefore wrote to the Applicant on 2 July asking for a copy of the Notice to be provided. On 10 July the Applicant responded and provided a copy of a letter dated 8 April, which it said was provided to the employees intended to be covered by the proposed Agreement. That letter states, in part:

“The purpose of this letter is to inform you that 313 Security Services will undergo the process of Bargaining for an Enterprise Agreement and as per (regulation 2.05) Fair Work Act 2009, subsection 174 (6); 313 Security Services gives notice that it is bargaining in relation to an Enterprise Agreement (313 Security Services Enterprise Agreement 2014 - 2017) which is proposed to cover employees that are employed by 313 Security Services.

As part of this process it is our responsibilities to ensure that you are aware of your rights in relation to this agreement and as such we have attached with this letter details as to your rights to bargaining and then voting for this Agreement.” 1

[4] The letter also attached a six page document prepared by the Office of the Fair Work Ombudsman entitled “Enterprise Bargaining” and setting out a range of generic information to do with bargaining and agreement making.

[5] On 31 July the Commission again wrote to the Applicant indicating, in part:

“I acknowledge your response to my previous queries received on 10 July 2014 containing the letter you sent to employees on 8 April 2014 in place of providing employees with the Notice of Representational Rights.

I bring your attention to s.174(1A) of the Fair Work Act 2009 which I have set out below:”

The letter continued to indicate:

“The correspondence that you have provided the Commission with is not in the format prescribed by Regulation 2.05 of the Fair Work Regulations 2009 and also contains ‘other content’.” 2

[6] The letter finally asked the Applicant to indicate how it wanted to have the matter dealt with. The Applicant indicated in response it wanted the matter set down for hearing and it was listed for 14 August by way of teleconference. Mr Mohammed Medhi Syed appeared on behalf of the Applicant. The employee bargaining representative, Mr Khurram Mehdi, was also notified of the hearing and indicated he intended to appear. An attempt was made to contact him on the telephone number he provided to the Commission, prior to the hearing, but the call went through to his message bank. A message was left asking him to return the call but no return call was received.

[7] When questioned about the form of Notice provided to the employees Mr Syed confirmed the letter dated 8 April was provided to them with the attachment setting out the extract from the documentation prepared by the Office of the Fair Work Ombudsman. He submitted this was appropriate to satisfy the requirements in regard to the provision of the Notice. He also submitted that regardless of whether there had been actual compliance or not he was satisfied the employees proposed to be covered by the Agreement had not been disadvantaged by any failure in this regard, and had been provided at all times with an appropriate opportunity to understand what their rights and entitlements are, and what the process for making the Agreement, and the content of that Agreement, was intended to be.

[8] Section 173 “Notice of employee representational rights” in the Act states, in part:

“(1) An employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who:

(a) will be covered by the agreement; and

(b) is employed at the notification time for the agreement.

...

(5) The regulations may prescribe how notices under subsection (1) may be given.” 3

[9] Section 174 also states in part:

“(1) This section applies if an employer that will be covered by a proposed enterprise agreement is required to give a notice under subsection 173(1) to an employee.

(1A) The notice must:

(a) contain the content prescribed by the regulations; and

(b) not contain any other content; and

(c) be in the form prescribed by the regulations.” 4

[10] Regulation 2.05 of the Fair Work Regulations 2009 also provides that for the purposes of s.174 the notice of employee representational rights is set out in Schedule 2.1 of the Regulations. For the sake of completeness a copy of that notice as set out in the Schedule is as follows:

“Schedule 2.1—Notice of employee representational rights

(regulation 2.05)

Fair Work Act 2009, subsection 174(6)

[Name of employer] gives notice that it is bargaining in relation to an enterprise agreement ([name of the proposed enterprise agreement]) which is proposed to cover employees that [proposed coverage].

What is an enterprise agreement?

An enterprise agreement is an agreement between an employer and its employees that will be covered by the agreement that sets the wages and conditions of those employees for a period of up to 4 years. To come into operation, the agreement must be supported by a majority of the employees who cast a vote to approve the agreement and it must be approved by an independent authority, Fair Work Commission.

If you are an employee who would be covered by the proposed agreement:

You have the right to appoint a bargaining representative to represent you in bargaining for the agreement or in a matter before Fair Work Commission about bargaining for the agreement.

You can do this by notifying the person in writing that you appoint that person as your bargaining representative. You can also appoint yourself as a bargaining representative. In either case you must give a copy of the appointment to your employer.

[If the agreement is not an agreement for which a low-paid authorisation applies—include:]

If you are a member of a union that is entitled to represent your industrial interests in relation to the work to be performed under the agreement, your union will be your bargaining representative for the agreement unless you appoint another person as your representative or you revoke the union’s status as your representative.

[If a low-paid authorisation applies to the agreement—include:]

Fair Work Commission has granted a low-paid bargaining authorisation in relation to this agreement. This means the union that applied for the authorisation will be your bargaining representative for the agreement unless you appoint another person as your representative, or you revoke the union’s status as your representative, or you are a member of another union that also applied for the authorisation.

[if the employee is covered by an individual agreement-based transitional instrument—include:]

If you are an employee covered by an individual agreement:

If you are currently covered by an Australian Workplace Agreement (AWA), individual transitional employment agreement (ITEA) or a preserved individual State agreement, you may appoint a bargaining representative for the enterprise agreement if:

• the nominal expiry date of your existing agreement has passed; or



• a conditional termination of your existing agreement has been made (this is an agreement made between you and your employer providing that if the enterprise agreement is approved, it will apply to you and your individual agreement will terminate).

Questions?

If you have any questions about this notice or about enterprise bargaining, please speak to either your employer, bargaining representative, go to or contact the Fair Work Commission Infoline on [insert number].” 5

[11] Various decisions of the Commission have considered what these provisions require. In the decision in Ostwald Bros. Pty Ltd v Construction, Forestry, Mining and Energy Union 6 the Full Bench dealt at length with what is required in terms of the obligation to provide the Notice to employees and the purpose and intent of that provision. The majority decision of Senior Deputy President Watson and Commissioner Gooley stated at paragraph 61 and following:

“[61]The giving of a notice in the terms required by s.174 of the Act is clearly intended to ensure that employees not only have a right of representation in bargaining but that they are also appraised of that right and the means of exercising that right early in the bargaining process in order that they are capable of effectively utilising that right if they choose. The requirements in s.174 of the Act were intended to have effect and were reinforced by their inclusion within Schedule 2.1, made by Regulation 2.05, pursuant to s.174(6) of the Act.

[62]The inclusion by the Parliament within the Act of an express requirement upon employers to provide a notice (s.173) and the express requirements as to the content of a notice (s.174) is consistent with the importance of bargaining representation evident in the bargaining process established by the Act. It is also consistent with the objects of the Act and Part 2-4 of the Act in relation to fairness and representation at work, the right to freedom of association, the right to be represented, collective bargaining underpinned by simple good faith bargaining obligations, a simple, flexible and fair framework that enables collective bargaining in good faith and the facilitation of good faith bargaining.

[63]Given the express statutory requirements as to the terms of a notice and their clear purpose, it is apparent that the requirements in respect of the notice in s.188(a)(ii) are intended to be a notice including the terms required by s.174 of the Act.

[64]Second, s.174 evinces a clear intention that employees are fully informed as to their right of representation - default representation or to otherwise nominate a bargaining representative - and the means of affecting that right.” 7

[12] In the matter of Shape Shopfitters Pty Ltd 8 the employer provided material in addition to that provided for in the notice contained in schedule 2.1 of the Regulations. Deputy President Gooley, firstly, made reference in her decision to the amendments to the Act that took effect from 1 January 2013, and the Explanatory Memorandum to that Fair Work Amendment Act 2012 which stated:

“This amendment responds to Panel recommendation 19. The amendment is intended to eliminate confusion about whether employers may modify the content or form of the notice of employee representational rights. The amendment would make clear that the notice must contain only the content prescribed by the regulations and no other content except that which the regulations require an employer to insert or omit.” 9

[13] She continued at [13] in the following terms;

“In my view the two documents provided to employees combined comprise the notice of representational rights. As the notice of representational rights contains additional content it does not comply with section 174(1A). As a consequence no notice of representational rights was provided to employees and the application for approval must be dismissed.” 10

[14] By way of further explanation she continued to indicate:

“[15] It is not relevant that the employer understands that none of the employees are union members. The notice provided to employees, at the commencement of bargaining, informs employees of how they may be represented. It informs both union and non union members that should they wish to have a union as their default bargaining representative they must be a member of the union. Further there is no obligation on the employees to advise their employer of their union membership. Both union and non union members are able to decide if they want union representation. Of course non union members would need to join the union for the union to be their default bargaining representative.

[16] Further it is not relevant that the employees all chose another bargaining representative. The employees did so after they were given misleading information. It is not possible to determine what would have occurred had they been provided with the notice as required by the FW Act.” 11

[15] These decisions emphasise, firstly, the importance that the scheme of the legislation attaches to the Notice of Employee Representational Rights being given to the employees proposed to be covered by an agreement, in terms of informing them about their rights to representation and how they may go about exercising those rights. They also make clear that compliance with these requirements is an essential consideration in any determination about whether the employees have, or can be said to have, genuinely agreed to the Agreement in accordance with the requirements of section 186 of the Act.

[16] The more recent amendments to the Act contained in s.174(1A), and the decision of Deputy President Gooley in Shape Shopfitters, also make clear the Notice given to employees must not contain additional content over and above that set out in the form of notice provided for in the Schedule.

[17] The Applicant in the present matter has not provided the Notice to the employees intended to be covered by the proposed Agreement in the form provided for in the Regulations. It has, instead, provided some explanatory materials compiled by the Office of the Fair Work Ombudsman dealing with enterprise bargaining. It is acknowledged this does contain some of the information the Notice of Employee Representational Rights deals with, although it does not, for example, indicate how an employee can exercise the right to appoint a bargaining representative to represent them in bargaining for an agreement. It also clearly contains an amount of additional material over and above that contained in the Notice set out in the Schedule.

[18] The Applicant submits it has not set out to avoid its obligations under the Act in making the present application, nor has it sought to deny giving the employees the opportunity to understand what the process is all about, and what rights and entitlements they have in that process. However, given the scheme of the Act, and the decisions referred to, I am satisfied the Applicant has not complied with s.173(1), and therefore notice cannot be said to have been given for the purposes of the 21 day timeframe set out in s.181(2). It follows that the Agreement cannot be approved and the application is therefore dismissed.

[19] Given this decision it is not necessary to continue to consider the terms of the proposed Agreement and whether it satisfies the requirements of the “better off overall” test. However, it is noted that the application indicates the Agreement is only going to cover employees employed on a casual basis at this point. It also proposes to provide a single rate of pay to be paid for all hours worked, regardless of when and on what days employees are rostered to work. It is simply noted in response that an agreement can be structured around the provision of a single hourly rate being provided for all hours worked. However, in such cases the rate must be set at a level that provides adequate compensation, for example, for any penalty rates that would otherwise apply if any work is to be performed at weekends or on public holidays if the requirements of the “better off overall” test are to be satisfied. Given the rates contained in the proposed Agreement, particularly for casual employees, it is unclear whether this requirement would be satisfied.

COMMISSIONER

Appearances:

Mr Mohammed Syed appeared on behalf of the Applicant.

Hearing details:

2014.

Melbourne (by telephone):

14 August.

 1   Letter dated 8 April 2014 provided to the Commission by email from Mehdi Syed on 10 July 2014

 2   Letter dated 31 July 2014 from Commissioner Gregory to Mehdi Syed sent by email

 3   Fair Work Act 2009 (Cth) at c.173

 4   Ibid at s.174

 5   Fair Work Regulations 2009 at Schedule 2.1

 6   [2012] FWAFB 9512

 7   Ibid at [61]-[64]

 8   [2013] FWC 3161

 9   Fair Work Amendment Bill 2012 Explanatory Memorandum at [147] as quoted in [2013] FWC 3161 at [7]

 10   Above n.viii at [13]

 11   Ibid at [15]-[16]

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