Adam Broome v GWA Group Limited T/A GWA Bathrooms & Kitchens

[2014] FWC 4626

[2014] FWC 4626

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.238—Scope order

Michael Voet; Adam Broome
v
GWA Group Limited T/A GWA Bathrooms & Kitchens
(B2014/883)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 14 JULY 2014

Application for a scope order - requirements for a scope order application - merits of claim.

[1] On 1 July 2014 I issued a decision 1 which dealt with the jurisdictional objection to this application for a scope order made by Mr Voet and Mr Broome in relation to an agreement proposed by GWA Group Limited T/A GWA Bathrooms & Kitchens (GWA). In that initial decision I dismissed an argument put by GWA that Mr Voet and Mr Broome were not bargaining representatives and hence could not make the application.

[2] The scope order application was consequently the subject of a further hearing on 8 July 2014. This decision deals with the issues addressed in this hearing.

[3] The background to the matter is that GWA is in the process of negotiating an Enterprise Agreement with its operational employees. These employees are generally represented by the Australian Workers Union (AWU) and the National Union of Workers (NUW) as bargaining representatives. Neither union has been involved in this application. GWA advise, and I have accepted, that agreement in principle has been reached with the bargaining representatives and this agreement proposal is now set to be put to the employees to be covered by it, for their consideration.

[4] The agreement proposed by GWA is intended to cover all employees of GWA performing work in the manufacturing, supply and distribution operations in South Australia, excluding employees engaged in a managerial, supervisory or professional capacity. 2

[5] Mr Voet and Mr Broome are appointed bargaining representatives for four supervisors. I have been provided with copies of the notices issued to GWA to that effect. I am further advised that there are five supervisors.

[6] The essence of the application is that the supervisors seek to be included in the scope of the proposed agreement and in negotiations to this end.

[7] The supervisors advised that their employment is currently regulated by the Manufacturing and Associated Industries and Occupations Award 2009 but that they are paid in excess of those award rates of pay. They asserted that their salaries and other conditions, such as redundancy entitlements, have not kept pace with changes made to the agreement which regulates operational employees and which, at some time in the past, also regulated them as supervisors. They asserted their exclusion from the agreement coverage means that the group of employees to be covered by the Agreement is not fairly chosen.

[8] GWA assert that the prerequisite requirements for the making of a Scope Order have not been established. Alternatively, GWA assert that the employees proposed to be covered by the agreement are fairly chosen and that the inclusion of the supervisors would not be reasonable in these circumstances.

[9] In considering the application I have noted that very limited material has been put to me, particularly by Mr Wilson, of counsel, representing Mr Voet and Mr Broome. I have been provided with a copy of the notice provided to GWA setting out their concerns about the bargaining process. Additionally, I have been provided with the 2009 advice of employment arrangements then applicable to the supervisors and the Enterprise Agreement bargaining meeting minutes of 18 March 2014 which relevantly refer to the proposed inclusion in the agreement, of wage rates applicable to relief supervisors.

[10] For GWA, Mr Dunstan, the Norwood Manager of GWA, provided evidence about the supervisory functions and the differences between those functions and operational duties. Mr Dunstan's evidence also went to the negotiation arrangements associated with the proposed agreement.

[11] Section 238 states:

“238 Scope orders

Bargaining representatives may apply for scope orders

(1) A bargaining representative for a proposed single-enterprise 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.”

The capacity to make the application

[12] There is no single interest employer authorisation relative to this matter.

[13] Section 238(3) establishes the requirements which must be satisfied for a scope order application to be made. The GWA position is that there is no evidence that these steps have been taken with respect to the AWU and the NUW which, given that these unions represent operational employees, must be regarded as relevant bargaining representatives.

[14] Mr Wilson's position, on behalf of Mr Voet and Mr Broome, was that the AWU and NUW had been advised of the application and had indicated that they did not oppose it.

[15] In that factual respect, Mr Wilson may well be absolutely correct. However, I think the requirements of s.238(3) go beyond the requirement for a discussion.

[16] There can be no doubt that GWA is a relevant bargaining representative but I also consider that the AWU and the NUW are relevant bargaining representatives. Those unions have been involved in the bargaining process which has resulted in an "in principle agreement". They also represent employees who report to the supervisors. It would be fundamentally inappropriate to do anything other than to regard those unions as relevant bargaining representatives or to deprive them of the opportunity to express a position relative to the inclusion of the supervisors in the agreement given the stage reached in the bargaining process.

[17] In this respect, it seems to me that Mr Wilson's proposition that the position of the AWU and the NUW can be addressed on the basis of a discussion which he has had with these unions, overlooks an essential prerequisite for the making of this application. Accordingly, I have concluded that I am obliged to dismiss the application on the basis that the essential prerequisites in s.238(3) have not been properly met.

[18] An Order (PR552983) to this effect will be issued.

[19] There is no impediment to a further s.238 application being made. However, it seems to me that before this is done, some fundamental issue should be considered.

[20] Central to the issue here is the proposition that GWA’s exclusion of the supervisors means that the group of employees to be covered by the agreement was not fairly chosen.

[21] The concept of a fairly chosen group was recently considered by a Full Bench of the FWC in AWU v BP Refinery (Kwinana) Pty Ltd 3 in the following terms:

“[14] Depending upon the circumstances of the particular case, there may be more than one way of fairly choosing the group of employees to be covered by a proposed enterprise agreement.

[15] Enterprise agreements that cover all employees in a business are commonplace. Almost all such business will have organisation structures that will allow organisationally distinct groups to be identified. Many of those businesses contain operationally distinct groups. Yet it will rarely be the case that a ‘whole of enterprise’ group would be unfairly chosen.

[16] It follows that the weight to be attached to the geographical, operational or organisational distinctness of groups with a broader group will be neutral in determining whether an order ought be made, unless there are particular features of, or circumstances associated with, that distinctness that render the broader group one that is not fairly chosen.

[17] In this case, the operational and organisational distinctness between the operators and the laboratory technicians at the Kwinana refinery was pedestrian. The nature of that distinctness did not render the combined group in the Union’s proposed agreement a group that was not fairly chosen.

[18] Where the Commission is dealing with a single application for a scope order, it may be open in a particular case to find that the group proposed to be covered was fairly chosen notwithstanding that there may have been another grouping that could also have been fairly chosen. When there are competing applications it will often be the case that the alternative groupings can both be regarded as fairly chosen.”

[22] The exclusion of supervisors from an Enterprise Agreement is commonplace and reflects a very normal practice. The evidence of Mr Dunstan in this matter has confirmed significant differences in the work and the responsibility of GWA supervisors from operational employees. Evidence to contradict this position is not before me. In this context, the proposition that the exclusion of the supervisors creates an unfairly chosen workgroup seems to me to lack evidentiary support and to be fraught with difficulty. It simply cannot be the case that the mere exclusion of supervisors creates unfairness in the selection of employees to be covered by a proposed agreement. Consequently, if a new application is to be pursued, I suggest that evidence to support the supervisor’s circumstances should be provided and that this evidence should go beyond the mere assertion that the supervisors would like to be covered by the proposed agreement.

[23] A further issue should also be considered in that s.238(4)(b) establishes that a scope order may be made if the FWC is satisfied that such an order would promote the fair and efficient conduct of bargaining. In this situation, the material before me indicates that the negotiation process has reached a point where it is now proposed that the employees to be covered by the agreement vote on it. Consequently the making of a scope order to include supervisors may well result in a delay in the finalisation of the agreement proposal. This issue may also need to be considered in the context that the supervisors would appear to have the capacity to pursue their own agreement proposal in a manner which would not impact on the agreement in principle which has now been achieved.

SENIOR DEPUTY PRESIDENT

Appearances:

D Wilson counsel for the applicants

P Abrams agent for the respondent.

Hearing details:

2014.

Adelaide:

July 8.

 1   [2014] FWC 4307

 2   Exhibit G1

 3   [2014] FWCFB 1476

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<Price code C, PR552980>