Ampcontrol SWG Pty Limited

[2018] FWC 5543

[2018] FWC 5543

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.210—Enterprise agreement

Ampcontrol SWG Pty Limited
(AG2018/3175)

AMPCONTROL – MANUFACTURING ENTERPRISE AGREEMENT 2017

Manufacturing and associated industries
DEPUTY PRESIDENT GOSTENCNIK	MELBOURNE, 7 SEPTEMBER 2018

Application for variation of the Ampcontrol-Manufacturing Enterprise Agreement 2017 – variation of an agreement to include additional employer and its employees – application dismissed.

[1] On 15 May 2018, an application was lodged by Trojan Recruitment Group Pty Limited (Trojan) pursuant to s.210 of the Fair Work Act 2009 (the Act) for the approval of a variation to the Trojan Workforce Labour Solutions Agreement 2014 (the Trojan Agreement). On 12 July 2018, an application was lodged by Ampcontrol SWG Pty Limited (Ampcontrol) for the approval of a variation to the Ampcontrol - Manufacturing Enterprise Agreement 2017 (the Ampcontrol Agreement).

[2] The applications by Trojan and Ampcontrol respectively sought the approval of variations to the Trojan Workforce Labour Solutions Agreement 2014 and the Ampcontrol-Manufacturing Enterprise Agreement 2017 (the Agreements) to extend the coverage of the agreements by adding, in the case of the Trojan Agreement, six employers, and in the case of the Ampcontrol Agreement, one employer to the coverage provision of the respective agreements. The six employers proposed to be covered by the Trojan Agreement are related bodies corporate vis-à-vis each other and the existing employers covered by that agreement. Ampcontrol Transformers Pty Ltd is a related body corporate to Ampcontrol, which is covered by the Ampcontrol Agreement.

[3] In reviewing the applications, I raised concerns separately with the Applicants as to whether the Act permitted a variation of an enterprise agreement in the manner proposed. Written submissions were provided and the Applicants were provided an opportunity to be heard on the issues. Both Applicants are represented by the Australian Industry Group (AI Group) and at their request, the matters were listed for hearing concurrently.

[4] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) are covered by the Ampcontrol Agreement. Each organisation supported the submissions of Ampcontrol.

[5] I reserved my decision in respect of the applications at the conclusion of the hearing on 4 September 2018. On 6 September 2018, AI Group advised my Chambers that Trojan was discontinuing its application. This decision deals with the application to approve the variation to the Ampcontrol Agreement.

[6] In summary, Ampcontrol contends that pursuant to s.207 of the Act, a variation may be made to an agreement where there are two or more employers, if all of those employers and the affected employees agree. Further, it contend that pursuant to ss.207(1)(a) and (b), affected employees are defined to be all of those employed at the time who are covered, and all of those employed at the time who will be covered by the agreement if the variation is approved. Accordingly, it contends that all relevant affected employees were asked to vote. It contends that the employers are related bodies corporate, and therefore are single interest employers in accordance with s.172(5) vis-à-vis the Ampcontrol Agreement.

[7] Ampcontrol further submits that s.208 of the Act states “[A]n employer covered by an enterprise agreement may request the affected employees for a proposed variation of the agreement to approve the proposed variation by voting for it” and noted that the provision does not refer to “the employer”, but rather it says “an employer covered”, referring to any of the employers covered. It says the provision does not restrict the variation process to agreements pertaining to only one employer, nor does it require all employers who are parties to the agreement to make the request. The provision simply provides that a request for variation is made and that all affected employees are given notice and the opportunity to vote.

[8] Ampcontrol submits that nothing in s.208 prevents employers being added as parties “provided that “an employer covered” – that is to say, one (or more) of the employers covered by the agreement as it stands before the variation - requests “the affected employees” – all of those covered by the agreement as it stands, and any who will be covered by the variation if it is approved - to approve the variation by voting”. It says that this was the process followed for the proposed variation of the agreement. The Applicant also relies on a number of decisions where the approval of variations had the effect of adding employers 1.

[9] Ampcontrol contends that in the present case an employer who is covered by the relevant agreement in its current form asked all of the affected employees to approve the variation of the agreement. This meets the requirements of s.208. It contends that the majority of those of the affected employees who cast a valid vote, voted in favour of the variation, upon which the variation was validly made.

[10] These submissions are rejected. They proceed upon a misreading of the relevant statutory provisions.

[11] The task of ascribing meaning to the words of the statute is concerned with interpreting the relevant statutory provision(s) consistently with the intended purpose or objects of the legislature as disclosed by the text of the statute and begins with an examination of the ordinary grammatical meaning of the words used in the context of the statute as a whole in which they appear. 2 Section 15AA of the Acts Interpretation Act 19013also makes it clear in interpreting a statute, regard must be had to the purpose or object underlying the statute (whether that purpose or object is expressly stated in the statute or not) and that a construction that would promote its underlying purpose or object is to be preferred to a construction that would not promote that purpose or object.

[12] Turning then to the relevant provisions, s.207 provides as follows:

207 Variation of an enterprise agreement may be made by employers and employees

Variation by employers and employees

(1) The following may jointly make a variation of an enterprise agreement:

(a) if the agreement covers a single employer--the employer and:

(i) the employees employed at the time who are covered by the agreement; and

(ii) the employees employed at the time who will be covered by the agreement if the variation is approved by the FWC;

(b) if the agreement covers 2 or more employers--all of those employers and:

(i) the employees employed at the time who are covered by the agreement; and

(ii) the employees employed at the time who will be covered by the agreement if the variation is approved by the FWC.

Note: For when a variation of an enterprise agreement is made, see section 209.

(2) The employees referred to in paragraphs (1)(a) and (b) are the affected employees for the variation.

Variation has no effect unless approved by the FWC

(3) A variation of an enterprise agreement has no effect unless it is approved by the FWC under section 211.

Limitation--greenfields agreement

(4) Subsection (1) applies to a greenfields agreement only if one or more of the persons who will be necessary for the normal conduct of the enterprise concerned and are covered by the agreement have been employed.

[13] Section 208 deals with requests to employees to approve a proposed variations and provides:

208 Employers may request employees to approve a proposed variation of an enterprise agreement

(1) An employer covered by an enterprise agreement may request the affected employees for a proposed variation of the agreement to approve the proposed variation by voting for it.

(2) Without limiting subsection (1), the employer may request that the affected employees vote by ballot or by an electronic method.

[14] Section 209 deals with when a variation to an agreement is made and provides:

209 When a variation of an enterprise agreement is made

Single-enterprise agreement

(1) If the affected employees of an employer, or each employer, covered by a single-enterprise agreement have been asked to approve a proposed variation under subsection 208(1), the variation is made when a majority of the affected employees who cast a valid vote approve the variation.

Multi-enterprise agreement

(2) If the affected employees of each employer covered by a multi-enterprise agreement have been asked to approve a proposed variation under subsection 208(1), the variation is made when a majority of the affected employees of each individual employer who cast a valid vote have approved the variation.

[15] Section 210 sets out who may make an application to vary an agreement, how and when it must be made:

210 Application for the FWC's approval of a variation of an enterprise agreement

Application for approval

(1) If a variation of an enterprise agreement has been made, a person covered by the agreement must apply to the FWC for approval of the variation.

Material to accompany the application

(2) The application must be accompanied by:

(a) a signed copy of the variation; and

(b) a copy of the agreement as proposed to be varied; and

(c) any declarations that are required by the procedural rules to accompany the application.

When the application must be made

(3) The application must be made:

(a) within 14 days after the variation is made; or

(b) if in all the circumstances the FWC considers it fair to extend that period--within such further period as the FWC allows.

Signature requirements

(4) The regulations may prescribe requirements relating to the signing of variations of enterprise agreements.

[16] Section 211 sets out the circumstances in which the Commission must approve a variation and makes provision for a modified operation of certain statutory preapproval provisions concerning the approval of an enterprise agreement in their application to the variation of an agreement.

[17] The remaining provisions (ss.212-216) deal with undertakings and the operative date of a variation. Also relevant for the purposes of the application are s.172(2) which deals, inter alia, with single interest employers making an enterprise agreement and s.172(5) which sets out the circumstances in which two or more employers are single interest employers. These provide as follows:

172 Making an enterprise agreement

Single-enterprise agreements

(2) An employer, or 2 or more employers that are single interest employers, may make an enterprise agreement (a single-enterprise agreement ):

(a) with the employees who are employed at the time the agreement is made and who will be covered by the agreement; or

(b) with one or more relevant employee organisations if:

(i) the agreement relates to a genuine new enterprise that the employer or employers are establishing or propose to establish; and

(ii) the employer or employers have not employed any of the persons who will be necessary for the normal conduct of that enterprise and will be covered by the agreement.

Note: The expression genuine new enterprise includes a genuine new business, activity, project or undertaking (see the definition of enterprise in section 12.

Single interest employers

(5) Two or more employers are single interest employers if:

(a) the employers are engaged in a joint venture or common enterprise; or

(b) the employers are related bodies corporate; or

(c) the employers are specified in a single interest employer authorisation that is in operation in relation to the proposed enterprise agreement concerned.

[18] As is evident from the above, s.207 sets out who may make a variation of an enterprise agreement.

[19] If an enterprise agreement “covers a single employer”, as is the case in the Ampcontrol agreement, a variation of that agreement may “jointly” be made by the employer covered by the agreement and employees employed at the time were covered by the agreement, and employees employed at the time who will be covered by the agreement if the variation is approved by the Commission. These two groups of employees are described as “affected employees”.

[20] Plainly a single employer covered by an agreement may make a variation the effect of which is to extend the coverage of an enterprise agreement to employees of the employer who are not covered by the enterprise agreement. Thus in addition to making a variation with employees who are covered by the agreement, the employer may also make a variation with employees who will be covered by the agreement if the variation is approved, provided that the employees are employed at the time that the variation is made. The reference to “employees employed at the time” in s.207(1)(a)(ii) is plainly a reference to those employees of the employer making the variation agreement who will be covered by the agreement as varied if it is approved by the Commission. This is clear from the structure of s.207(1)(a), allowing only the employer covered by the agreement and the identified classes of employees to make a variation.

[21] The variation scheme so far as it concerns making a variation of an enterprise agreement that covers a single employer does not contemplate a single employer making an variation of an enterprise agreement with, inter alia, employees of another employer who are at the time employed by another employer which is not at the time covered by the agreement.

[22] The variation proposed to the Ampcontrol agreement has the effect of adding Ampcontrol Transformers Pty Ltd, and as a consequence adding the employees employed by Ampcontrol Transformers Pty Ltd, to the coverage provisions of the Ampcontrol agreement. It is not in contest that employees employed by Ampcontrol Transformers Pty Ltd voted to approve the variation to the Ampcontrol agreement. The following therefore jointly made a variation to the Ampcontrol agreement:

•  Ampcontrol SWG Pty Ltd, the employer covered by the Ampcontrol agreement; and

•  Ampcontrol Transformers Pty Ltd, an employer that is not covered by the Ampcontrol agreement; and

•  Employees employed at the time by Ampcontrol SWG Pty Ltd who are covered by the Ampcontrol agreement; and

•  Employees of employed at the time by Ampcontrol Transformers Pty Ltd.

[23] The adverb “jointly” use in s.207(1) signifies that the variation is collectively made by the persons therein identified. The identified people together make the variation. It is done in conjunction with each other or as one. The people identified form an exclusive group. Others not in the group cannot “jointly” with those in the group make a variation.

[24] The employers and employees identified in [22] cannot on a proper construction of s.207(1)(a) “jointly” make a variation of an enterprise agreement because the second named employer and the fourth named group of employees do not fall within the described entities and persons that may jointly make such a variation.

[25] Where a variation of an enterprise agreement covering a single employer does not involve the modification of the coverage of the agreement, then those jointly making the variation will be limited to the employer covered by the agreement and the employees identified in s.207(1)(a)(i).

[26] The employer to be added by the coverage variations proposed in each agreement is a related body corporate vis-à-vis the employer covered by the agreement. Together they are single interest employers within the meaning of s.172(5) capable of making a single enterprise agreement with employees as described in s.172(2)(a). However such employers are not treated collectively as a single employer for the purposes of the agreement making or agreement variation provisions of the Act.

[27] The position of single interest employers under the Act was considered in Construction, Forestry, Mining and Energy Union v AGL Loy Yang Pty Ltd T/A AGL Loy Yang 4. The Full Bench explained the position as follows:

[36] It is plainly the case that two or more employers may make an enterprise agreement which is a single enterprise agreement where those employers are single interest employers. Two or more employers are single interest employers if, relevantly, the employers are engaged in a joint venture or common enterprise, or the employers are related bodies corporate. There is no dispute that AGL Loy Yang and AGL Energy (and it would follow related bodies corporate of AGL Energy) are related bodies corporate.

[37] Single interest employers that propose to make an enterprise agreement as a single enterprise agreement are not, under the Act, treated as one employer. This is to be contrasted with the position under the Workplace Relations Act 1996 where for the purposes of making a workplace agreement, two or more employers carrying on a business, project or undertaking as a joint venture or common enterprise, or two or more corporations that were related to each other for the purposes of the Corporations Act 2001 each carrying on a single business, are respectively to be taken to be one employer and in the case of the latter, the single businesses conducted by the related corporations could be treated as one single business. 

[38] As under the Act, single interest employers are not treated as one employer, it follows that in the case of a proposed enterprise agreement with two or more employers who are single interest employers, that the trigger for a notification time for that proposed agreement is the time when each employer has agreed to bargain or initiates bargaining. To conclude otherwise, at least since the enactment of s.437(2A) of the Act, would have the effect of undermining the evident legislative purpose of that section. A conclusion that there has been a notification time in relation to a proposed agreement that would cover single interest employers when only one employer has agreed to bargain or initiated bargaining, would in effect permit the making of a PABO, and if the ensuing ballot approved the taking of protected industrial action for the proposed agreement, would permit taking protected industrial action in circumstances where bargaining with an employer who would be covered by the proposed agreement had not begun. Such a construction should be rejected. [Endnotes omitted]

[28] Section 207(1)(b) deals, inter alia, with the position of single interest employers who have made a single enterprise agreement. It is plain that all those employers who are covered by an agreement may jointly make a variation of an enterprise agreement with the identified classes of employees. But if an employer that is not covered by an agreement is a related body corporate to an employer that is covered by an agreement, s.207(1)(b) is not a vehicle which permits the first mentioned employer to jointly make a variation of the agreement with the second mentioned employer, the identified classes of employees of the first mentioned employer and its own employees of the second mentioned employer.

[29] Section 207(1)(b) makes it clear that if an enterprise agreement “covers 2 or more employers”, a variation of that agreement may be made “jointly” by “all of those employers” and the employees employed at the time who are covered by the agreement, and employees employed at the time who will be covered by the agreement if the variation is approved by the Commission. The key here, as is evident from the text of the subsection, is that the agreement that is to be varied must cover “all of those employers”. As with s.207(1)(a)(ii), the reference to “employees employed at the time” in s.207(1)(b)(ii) is a reference to those employees of the employers making the variation agreement who will be covered by the agreement as varied if it is approved by the Commission.

[30] Section 207(1)(b) is not a vehicle through which the Ampcontrol Agreement could be varied since plainly only one employer is covered by that agreement.

[31] Section 208 the Act provides no assistance for the approval of the variation that is the subject of this application. True it is that not all employers covered by an agreement need make a request of the affected employees for a proposed variation to approve the proposed variation by voting for it in the case of an agreement made in accordance with s.207(1)(b). Only one employer covered by the agreement need make such a request of the whole class of employees described as “the affected employees” for the proposed variation of the agreement. However “affected employees” takes its meaning from s.207(2) which makes clear that “affected employees” for the variation means the employees to which reference is made in ss.207(1)(a) and (b). The relevant classes of employees who were requested to approve the variation by voting for it included classes of employees who were not “affected employees” within the meaning of s.207(2).

[32] Moreover as s.209(1) makes clear, it is the “affected employees” of an employer, or each employer, covered by the single enterprise agreement, to whom the request to approve the proposed variation is to be made under s.208(1). The variation is made when a majority of those employees, that is, the affected employees, who cast a valid vote have approved the variation.

[33] The scheme of the Act makes clear that only employees covered by the agreement and those who will be covered by the agreement as varied, of an employer or of several employers, each of which is covered by the agreement can jointly make a variation of an enterprise agreement with that employer or those employers. A variation of an enterprise agreement cannot be made with an employer who is not covered by that agreement or with employees of that employer.

[34] The decisions to which the Applicant refers, noted earlier in this decision, are of no assistance. It is obvious from those decisions that this issue was neither raised nor argued. To the extent the decisions are said to stand for the proposition contrary to that which I considered is the effect of s.207(1), then I would be respectfully decline to follow the decisions, as in my view, they are plainly wrong.

[35] It follows from the analysis above that the purported variations to the Ampcontrol Agreement is not variations made by those who can jointly make a variation as described in s.207 of the Act. The cohort of employees who voted for the purported variation were not all affected employees within the meaning of s.207(2). The second employer is not one who can “jointly” make the variation agreement. The employer covered by the Ampcontrol Agreement requested a broader cohort of employees than the affected employees to vote to approve the purported variation. This was not a request of the kind contemplated by s.208(1). The purported variation was not one that could be made. The application to approve the purported variation of the Ampcontrol Agreement is dismissed.

DEPUTY PRESIDENT

Appearances:

D. Murray on behalf of Ampcontrol SWG Pty Ltd.

D. Austin on behalf of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

K. Presdee on behalf of the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU).

Hearing details:

2018.

Sydney:

4 September.

Printed by authority of the Commonwealth Government Printer

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 1   McDonald's Australia Limited [2016] FWCA 1209 (25 February 2016), CC Cafe & Deli Pty Ltd[2015] FWCA 833 (5 February 2015) and SUEZ Recycling & Recovery Pty Ltd[2016] FWCA 3968 (17 June 2016).

 2   Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355

 3   As in force on 25 June 2009; Fair Work Act 2009 (Cth) s 40A

 4   [2016] FWCFB 2878