AMWU v Top Cut Food Industries

[2017] FWC 2798

[2017] FWC 2798

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.236—Majority support determination

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Top Cut Food Industries Pty Ltd T/A Top Cut Food Industries; Caterfare Pty Ltd
(B2016/1098)

COMMISSIONER LEE MELBOURNE, 24 MAY 2017

Application for a majority support determination.

[1] This is an edited version of the decision delivered ex tempore and recorded in transcript on 26 April 2017. This matter involves an application to make a majority support determination in respect of employees of Top Cut Food Industries Pty Ltd and Caterfare Pty Ltd (the Respondents/company) engaged at 20 Gilbertson Road, Laverton in the state of Victoria on the production line, including as cleaners, and in the warehouse (including despatch or stores) (the employees).

[2] It is not in contest between the parties that there is sufficient evidence before the Fair Work Commission (the Commission) that a majority of employees who are employed by the company and who will be covered by the agreement want to bargain. It is not in contest that the company has not yet agreed to bargain and it is not in contest that the employees are an operationally distinct group and fairly chosen.

[3] In that context, against that background, the requisite requirements in terms of when the Fair Work Commission must make a majority support determination in terms of s.237(1) are met and the requirements of s.237(2)(a)(i) and (ii), (b) and (c) are met. However, in this matter the Respondent has submitted that the circumstances in s.237(2)(d) are such that I should find that it is not reasonable in all the circumstances to make the determination.

[4] In that regard, directions were set and materials were filed, and the matter was listed for hearing on 26 April 2017. Evidence was given by Mr Thomas Hale for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and Mr Sam Bevacqua for the Respondents. I have considered the evidence and submissions, including the written submissions that were filed and the oral submissions made during the hearing.

[5] In terms of the law to be applied, there is no need for me to set out the requirements of s.237 of the Act. They have been canvassed in the submissions. As I have made clear, the only consideration is to 237(2)(d) of the Act. The Respondents noted in their submissions that they could not locate any decision of the Commission in which a majority support determination has been sought in circumstances equivalent to those which apply to the company, but there are various decisions in relation to the operation of s.237 where s.237(d) of the Act has been explored and indeed, the phrase “reasonable in all the circumstances” has been generally considered. 1

[6] The Respondents helpfully took me to a number of cases that dealt firstly, with the phrase “reasonable in all the circumstances” as per the decision Alcoa of Australia Limited v Construction, Forestry, Mining and Energy Union (Alcoa) 2 referred to in paragraph 5(a) of the Respondents submissions. In paragraph 5(b), issues about concurrent processes of consultation as were considered in the decision Re: Finance Sector Union of Australia 3 and in paragraph 5(c) consideration of where it is not reasonable to compel an employee to commence bargaining for an agreement which cannot be made in the decision “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v APC Storage Solutions Pty Ltd.4 There was also reference to CBI Constructors v Construction, Forestry, Mining and Energy Union (CBI Constructors)5 where there was a canvassing of the considerations as to the demobilisation of a plant and its imminent ending and the extent to which that could or should be taken into account in determining the reasonableness or otherwise of making a majority support determination. Further, the decision Re: Australian Licensed Aircraft Engineers Association (Re ALAEA)6where Vice President Watson indicated it was not sufficient for the purposes of s.237(d) of the Act for an employer to simply indicate it opposes bargaining. Lastly, the decision National Union of Workers v Coldunit Pty Ltd7about timing, and a case dealing with the evidence of improper conduct which, for circumstances that will become clear, are not really relevant to this case.

[7] The AMWU, for their part in their written submission, have accepted these authorities are useful in guiding the Commission in determining this matter. I have had regard to them, and as will become clear from the consideration, I have taken them into account.

[8] Mr Bevacqua is the General Manager, Manufacturing Victoria for the company. He gave an overview of the operations at 20 Gilbertson Road. Importantly, his evidence was that on 3 April 2017 “all employees engaged at the Laverton site were advised that a decision had been made to close the Laverton site” and he provided a copy of the notice given to employees in that regard. He also indicated that “whilst redeployment opportunities and other steps to mitigate the impacts of the decision on affected employees are being fully explored, the expected site closure date is 1 June 2017 and there will no longer be any employees of the Respondent employed at that site”.

[9] Mr Bevacqua gave further evidence about a range of operational matters that needed to be executed prior 1 June 2017. This included building of a large volume of stock, transferring products, operational equipment, transferring Caterfare products to another site in Queensland and the fact that the company will continue to operate their productions. He described these issues as exceptional and that the company would be extremely busy between now and when the Laverton site closes. Further, that management are impacted individually and his evidence was “the individual impact of the site closure will make any diversion of attention to an enterprise agreement highly disruptive and impactful on productivity”.

[10] In terms of consultation in regards to the change Mr Bevacqua gave evidence about the company’s consultation with the AMWU and with employees directly, about the closure. This is set out at paragraph 17 of Mr Bevacqua’s witness statement. Mr Bevacqua, also gave evidence about his view in relation to commencing bargaining for an enterprise agreement at paragraph 18 of his witness statement:

“It is my view that we should not be forced to commence bargaining for an enterprise agreement in the present circumstances, I hold this view because:

a. I want to devote what energy and resources which we have available to assisting impacted employees to find jobs, (including facilitating meetings with labour hire providers, having employees off the production floor periodically for CV writing, interview training and support in identifying opportunities to find employment). Commencing enterprise bargaining is going to devote resources which could be better spent;

b. In the context where many employees are likely to be terminated and in which no employees will shortly work at the Laverton Site I do not understand the strategic objective of bargaining for an enterprise agreement at this site;

c. I doubt very much if bargaining will result in achievement of an agreement in short period of time which is left between now and the closure of the site.”

[11] Mr Bevacqua was clear in his evidence during cross-examination that a key reason for not wanting bargaining to occur is that the company made a decision about the closure based on the cost and the framework that they have in place which is based on the existing entitlements for redundancy and he did not want that to be altered. That was the decision that the Board had taken and he had no latitude in that regard.

[12] Mr Hale gave evidence for the AMWU and in summary, his evidence was that as the National Secretary of the relevant division of the AMWU, that he’s been responsible for negotiating Simplot national agreements to cover five sites in New South Wales and Tasmania. He gave evidence about the disparity in conditions between Laverton and the organised sites, being stark, particularly in the area of redundancy. The organised sites have severance pay of four weeks’ pay per year of service, compared to the statutory minimum that applies at Laverton. That with redundancies imminent at Laverton, the AMWU’s priority is to achieve redeployments for redundant employees, and if there are not enough redeployment opportunities to increase the severance payment above the National Employment Standards.

[13] Further, Mr Hale gave evidence that he felt the AMWU’s best chance of improving this redundancy for Laverton members was through bargaining and that if bargaining was to commence, that the union’s demands would be narrow and simple, enhanced redundancy payments and improved redeployment provisions and he was flexible about how that can be achieved. He notes that redundancy standards elsewhere in Simplot were achieved through collective bargaining.

[14] I have considered the evidence in this matter and all the relevant authorities. It is an accepted fact that the 20 Gilbertson Road site will close on 1 June 2017. That means, it is not controversial, that there is little time in which the parties have to bargain for an agreement and it is clearly relevant as a consideration as to whether or not it is reasonable to make a determination.

[15] Mr Bevacqua is concerned about the pressures on the company being required to bargain, the diversion of resources and so on that I outlined in my summary of his evidence. Against that I have to consider the evidence of Mr Hale, given in response to that evidence that the AMWU’s priority is to achieve redeployments and to increase the severance payment. As I referred to earlier, their demands are narrow and simple for enhanced redundancy payments and for achieving redeployment provisions.

[16] Mr Hale gave evidence that he would be looking to consult with employees about the redeployment aspect at least, of that claim and much was made of that by the company as to whether there was an articulation of what the claim might be. I have formed the view that it is not for me to speculate about how long Mr Hale might spend determining what the claim might be and how long he spends consulting with his membership. It may be a short perfunctory process, it might not.

[17] I am not satisfied, moreover, that the demands on the company of bargaining within the narrow timeframe proposed and considering the limited range of matters in which the AMWU are saying they want to bargain, would be so onerous as to make it unreasonable to make the majority support determination. A lot of the activities that Mr Bevacqua is involved in, including for example, the fact that the company will be producing up until the time that it closes is business as usual. I do not see that those sorts of circumstances will be onerous. I do accept that there will be other exceptional matters that are going on like the transfer of equipment and so on, but Mr Bevacqua’s evidence did not satisfy me that they were of such a weight that the company couldn’t engage in a process of bargaining with the union at the same time.

[18] Indeed, consistent with the evidence of Mr Hale, I do not see there is any reason that the activities of bargaining could not take place concurrently with the activities around the consultation process that appropriately is underway. I have given due regard to the consideration as to whether that might lead to some confusion of the type that was contemplated by Deputy President Smith in Re: Finance Sector Union of Australia 8however I am not satisfied on the evidence that this will occur.

[19] Time is not on the AMWU’s side and they concede that this is the case. The company urged me to find that this was not any party’s fault, and I agree with this. It is where we are in terms of the timeframe. This does not preclude the making of a majority support determination. There was extensive reference made to the decision in CBI Constructors and of course in that decision there was evidence about a demobilisation, some speculation about whether or not there would still be employees after a particular date, and that was certainly relevant in that case. There’s no such speculation here. There will not be any employees engaged after 1 June 2017, and the parties have their eyes open about that. In that case, the Full Bench found that in a particular case, evidence of this sort (that is the sort about going to the demobilisation) may lead to a conclusion that it is not reasonable to make a majority support determination. 9 The decision says no more than that. It may, it may not. One has to consider all of the circumstances. It is appropriate to take into account that in these circumstances, it does not rule out the possibility of a majority support determination being made. It is agreed that the timeframe, while difficult to reach an agreement, is difficult. It is conceded that it’s not impossible. I agree with the submission of the company that it is not the test to say it’s not impossible, therefore a majority support determination should be made. . The decision needs to be made as to whether it is reasonable in all the circumstances, based on the material and the evidence before me.

[20] If I were to make a majority support determination in this case, it would be consistent with the decision CBI Constructors where, as I said, nothing more was made of the fact and I agree, that it was certainly relevant to consider the demobilisation, but I have to take into account all of the factors. The objects of the Act clearly encourage bargaining when a majority of employees wish it to occur.

[21] Mr Bevacqua made clear in his evidence that they do not expect to be in a position to change their position, as it were, in terms of redundancy payments and so on. He gave evidence that they do not have authority to change it and that may well be the case, but such is the nature of bargaining that parties take positions into bargains, and sometimes change them. To give consideration to those matters, to a greater degree, would be an error and inconsistent with the observations of the Full Bench in Alcoa at paragraph 31 where it was made clear that the making of a majority support determination does not presuppose that an enterprise agreement will be made in particular terms. It doesn’t presuppose that an enterprise agreement will be made at all. To attempt to predict the outcome of enterprise bargaining if a majority support determination is made, and to have regard to that in deciding whether such a determination would be made, would involve the Commission taking into account an entirely speculative and irrelevant consideration.

[22] While all the factors that are in evidence, as per the evidence of Mr Bevacqua, are relevant to a consideration as to whether it is reasonable to make the majority support determination order, having weighed that evidence against all of the considerations and the evidence in the matter, I am not satisfied in all the circumstances, that it outweighs the clear object of the Act, as His Honour Vice President Watson said in Re ALAEA “the objects of the Act clearly encouraged bargaining when a majority of employees wish it to occur”. 10

[23] I am not satisfied that, in all the circumstances, it is unreasonable to make the order such that the wishes of the majority of employees to bargain are not given effect to, as per the clear objective of the Act. For these reasons, I consider it reasonable to make the order sought.

[24] The majority support determination has previously been published in PR592191.

COMMISSIONER

Appearances:

B Terzic for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)

M Mead on behalf of Top Cut Food Industries Pty Ltd and Caterfare Pty Ltd

Hearing details:

2017.

Melbourne:

26 April.

Final written submissions:

21 April 2017.

 1   Respondents Submissions, dated 20 April 2017, [5]

 2   [2015] FWCFB 1832

 3   [2012] FWC 5951

 4   [2014] FWC 2576

 5   [2011] FWAFB 7642

 6   [2013] FWC 4267

 7   [2016] FWC 9044

 8  [2012] FWC 5951

 9   [2011] FWAFB 7642, [39]

 10   [2013] FWC 4267, [13]

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