Andrew Puglisi Trust and Kinkawooka Trust T/A Kinkawooka Mussel Partnership

[2014] FWC 2245

[2014] FWC 2245

The attached document replaces the document previously issued with the above code on 7 April 2014.

Endnote 6 should read [2014] FWCFB 2042 (not [2012] FWCFB 2042)

Denise Jelfs

Associate to Senior Deputy President O’Callaghan

8 April 2014

[2014] FWC 2245

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Andrew Puglisi Trust and Kinkawooka Trust T/A Kinkawooka Mussel Partnership
(AG2014/3844)

SENIOR DEPUTY PRESIDENT O'CALLAGHAN ADELAIDE, 7 APRIL 2014

Application for approval of the Kinkawooka Mussel Enterprise Agreement 2014 - extension of time - access period - better off overall test.

[1] On 3 March 2014 the Andrew Puglisi Trust and Kinkawooka Trust T/A Kinkawooka Mussel Partnership applied for the approval of the Kinkawooka Mussel Enterprise Agreement 2014 (the Agreement) pursuant to s.185 of the Fair Work Act 2009 (the FW Act).

[2] The Employer’s Declaration (Form F17) confirmed that the application was lodged outside of the 14 day time limit specified in s.185(3) of the FW Act. The explanation provided to me in this respect was:

“The date on which the Agreement was made is more than 14 days before the date on which application for approval of the Agreement was lodged due to the time of year the voting took place and the fact that half the employees were late in returning their forms. November and December are Kinkawooka Mussels busiest months of the year. A few of our employees were late returning their voting forms due to the nature of their job out on sea and the busy time. Once these forms were returned we continued with completing the rest of the application when possible during the Christmas and January period. As we were using DMAW Lawyers in Adelaide for advice, we had to work around their holiday period as well.”

[3] The application also gave rise to questions about the process followed to reach the Agreement and elements of the Agreement itself with respect to the better off overall test (the BOOT).

[4] I have decided not to extend the time for lodgement of the application and have set out my reasons for that conclusion in this decision.

[5] On 17 March 2014 I convened a telephone conference with Mr Puglisi and his lawyer, Mr Dugan of DMAW Lawyers. I note that the application confirmed that there were no employee bargaining representatives. At this telephone conference, Mr Dugan advised that there had been no change to the constitution of the workforce since the last vote was lodged on 12 December 2013 and asserted that, on this basis, the extension of time should be granted.

[6] Also, at this conference, I sought clarification of the employer position in relation to compliance with s.180(3) in terms of the requirement that all reasonable steps be taken, before the start of the access period, to advise employees of the time and the place at which the vote would occur and the voting method to be used.

[7] Finally, at this conference, I sought clarification about the application of the BOOT in the context of both the annualised salary arrangements specified in clause 8 of the Agreement and the "time off in lieu" (TOIL) provisions in clause 9.

[8] The employer was given an opportunity to provide written advice regarding these issues. That advice was received on 1 April 2014. I have taken it into account in formulating a conclusion in this matter.

The extension of time issue

[9] Section 185(3) states:

“185 Bargaining representative must apply for the FWC’s approval of an enterprise agreement

....

When the application must be made

(3) If the agreement is not a greenfields agreement, the application must be made:

(a) within 14 days after the agreement 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.”

[10] In this case, the application was lodged some 53 days late. In his correspondence of 1 April 2014 Mr Dugan added to the advice already before me:

“The employer has limited administrative resources and no dedicated human resources personnel.

Whilst the delay is regrettable it is respectfully submitted that there is a reasonable explanation for the delay and it cannot be said in the circumstances that there was any bad faith or improper purpose or motivation on the part of the employer.

All of the employees who were employed by the employer in the period from 11 July 2013 to the end of the voting process on 12 December 2014 who were to be covered by the EA are still employed and no other employees who would be covered by the EA have been employed since that time.

All of the relevant employees voted in favour of approving the EA.

Accordingly, it is submitted that there can be no unfairness to any person if the Commission were to grant the requested extension.

If no extension were granted it would be necessary for the employer to commence a fresh process for the making and approval of the EA. In the circumstances it is respectfully submitted that there would be no substantive purpose to be served by doing so.

Accordingly, it is submitted that in all the circumstances it would be fair to extend the period for the making of the application until the date on which the application was made.” 1

[11] It is patently clear that the Commission has the capacity to extend the time for lodgement of an agreement application. It is commonly the case that acceptable reasons for delays are provided to the Commission. However, the general approach must be that the time limit specified in the FW Act should be followed. When substantial time delays have occurred it must be incumbent on the parties on application to provide a sound basis for such an extension.

[12] In this case, were it not for the concerns set out below I could be persuaded to grant that extension of time. However, those concerns are of such moment that I see no utility in doing so.

The Agreement making process

[13] In the Form F17 Mr Puglisi advised that employees were handed a letter, dated 4 November 2013 which invited them to vote on the Agreement by completing and returning a voting form within 11 days. 2

[14] Mr Puglisi then advised that employees were able to vote from 4 November 2013. 3

[15] Attached to the application were the actual employee votes. The earliest of these is dated 14 November 2013. Also attached to the application is a list of the employees who voted in favour of the Agreement which is signed by each individual employee.

[16] Section 180 states:

“180 Employees must be given a copy of a proposed enterprise agreement etc.

Pre-approval requirements

(1) Before an employer requests under subsection 181(1) that employees approve a proposed enterprise agreement by voting for the agreement, the employer must comply with the requirements set out in this section.

Employees must be given copy of the agreement etc.

(2) The employer must take all reasonable steps to ensure that:

(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:

(i) the written text of the agreement;

(ii) any other material incorporated by reference in the agreement; or

(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.

(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:

(a) the time and place at which the vote will occur;

(b) the voting method that will be used.

(4) The access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1).

Terms of the agreement must be explained to employees etc.

(5) The employer must take all reasonable steps to ensure that:

(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and

(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.

(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:

(a) employees from culturally and linguistically diverse backgrounds;

(b) young employees;

(c) employees who did not have a bargaining representative for the agreement.”

[17] Mr Dugan’s correspondence of 1 April 2014 relevantly states:

By letter dated 4 November 2013 all relevant employees were provided with a further copy of the materials referred to in paragraphs 16.1 and 16.2 above, together with a voting form. The letter sought the submission of voting forms by 15 November 2013.

Voting did not begin until 14 November 2013 and the final vote was made on 12 December 2013.

In the circumstances it is evident that by virtue of the letters of 11 July 2013 and 4 November 2013 and the enclosed material, the requirements of section 180(2) and section 180(6) have been satisfied.

The only question is whether the requirements of section 180(3) have been satisfied.

The evident purpose of section 180 is to ensure that employees have access to the relevant information for a certain period before they are required to vote on the agreement so that they have an adequate period of time within which to make up their minds on whether to approve the agreement. The use of the word “request” in section 180 reflects the fact that voting is voluntary. This period is the 7 day “access period” before the start of the voting process provided for in section 180(4).

The letter of 4 November 2013 served the purpose of advising employees of the method and time by which votes were requested to be cast. The “voting process” commenced on 14 November 2013 when voting commenced. The “access period” was therefore the preceding 7 day period beginning on 6 November 2013.

Accordingly the requirements of section 180(3) have been satisfied in that by virtue of the letter of 4 November the employer had taken “all reasonable steps” to and did in fact inform employees of the time, place and method of voting more than 7 days before the start of the “voting process” and hence the “by the start of the access period”.

The employer submits that this is consistent with the evident intention of section 180(3), namely that an employee have the relevant information at least 7 days before voting on the agreement begins.” 4

[18] I am unable to agree with Mr Dugan’s contentions. It may be that Mr Dugan’s position is a common sense one, but it does not sit comfortably with the legislation. It seems to me that ss.180(3) and (4) require that, at least seven days before an employee is able to vote, which must represent the start of the voting process, all reasonable steps must be taken to provide information about the voting process. The reality that employees did not vote within that seven day period cannot be retrospective relied upon in order to establish compliance with this section in its present form.

[19] Section 186 of the FW Act provides that, if the requirements of that section and s.187 are met, the Commission must approve the Agreement. One of the requirements in s.186(2)(a) is that an agreement had been genuinely agreed to by the employees covered by it.

[20] Section 188 relevantly states:

“188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);

(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

....”

[21] Advice about the voting process is not altogether clear to me. The ballot papers provided to me all identify employees by name and I have also been provided with a list signed by all eight employees indicating their support for the agreement. The information provided to me gives rise to some uncertainty about the integrity of the voting process, but notwithstanding this, I have not relied upon that in reaching a conclusion about s.180(3).

[22] In Ostwald Bros Pty Ltd v CFMEU 5 the majority of the Full Bench stated:

“[80] .... it requires specific actions to have been undertaken (in ss.188(a) and (b) at specified times in advance of approval), with s.188(c) then requiring satisfaction that there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees. Section 188(c) of the Act, although itself a broad discretionary consideration, is an additional matter about which Fair Work Australia needs to be satisfied and relates to grounds other than those arising in relation to the ss.188(a) and (b) matters.”

[23] This position was adopted with approval by a recent Full Bench in Peabody Moorvale Pty Ltd v CFMEU. 6

[24] I am required to follow these Full Bench conclusions which reflect the absence of discretion available to the Commission relative to s.180. Simply put, because of the provisions of the FW Act, a failure to comply with s.180 negates the capacity to approve an agreement and hence makes an extension of time inappropriate.

The BOOT

[25] I have set out below my concerns about the Agreement relative to the BOOT. In this respect, I hasten to confirm that these concerns may well be capable of being addressed through either revision of the Agreement provisions if the agreement making process is repeated, or through the provision of undertakings in the future.

[26] The Agreement applies to full-time and part-time (but not casual) employees of the Kinkawooka Mussel Partnership whose employment is covered by any of the following awards:

● the Aquaculture Industry Award 2010
● Clerks Private Sector Award 2010, and
● Seafood Processing Industry Award 2010.

[27] The agreement excludes certain named management positions.

[28] Clause 8 provides for the adoption of a system of payment of an unspecified annualised salary at the election of the employer. The annualised salary would include payment for ordinary hours of work, overtime, allowances, penalties and loadings. This clause requires that the annualised salary is in excess of the relevant award entitlements over the year (lesser period as appropriate) for which the salary is paid. The clause requires a minimum annual salary review.

[29] This provision would require clarification that amounts paid in the form of the annual salary will, in fact, be increased retrospectively over a nominated period of time if these payments are less than the relevant award entitlements.

[30] Clause 9 requires that employees shall take TOIL of payment for overtime. TOIL must be taken at times directed by the employer and must be taken within six months of the overtime being worked. TOIL is accrued on an hour for hour basis. The employer is able to elect to make payment at the applicable award rate as an alternative to the TOIL. The clause provides that employees who take TOIL in any one year of service will accrue an additional day of annual leave at the end of that year.

[31] Mr Dugan’s correspondence asserts that:

“The employer will provide an undertaking under section 190(3) of the FWA that it will maintain wage rates and work arrangements so as to ensure that employees covered by the EA will continue to be better off financially under the EA than under the relevant awards.

In addition to purely financial consideration, the employer submits that employees covered by the Aquaculture Award will also receive the benefit of a significantly reduced number of average weekly hours of work through the operation of the IOL arrangement in the EA.

....

The employer submits that under the terms of the EA taken together with an undertaking to the effect referred to above all employees to be covered by the EA will be substantially better off overall than under the terms of the relevant awards.

The employees covered by the Aquaculture Award will receive:

• more in wages than under the award; and



• the benefit of a significantly reduced number of average weekly hours of work through the operation of the TOIL arrangement in the EA.




The employees covered by the Seafood Processing Award will not have the right to elect whether to take TOIL but will be better off financially than under the terms of the award.” 7

[32] Mr Dugan also provided a spreadsheet purporting to compare Agreement provisions with the relevant award provisions. I am not satisfied that this spreadsheet enables the comparison necessary for the BOOT to be conducted.

[33] The Agreement TOIL arrangement appears to me to have the capacity to significantly disadvantage employees. These disadvantages relate to the arrangement being mandatory, time off being at the discretion of the employer and arrangements in the event that TOIL is not taken within the defined period.

[34] Without being prescriptive about the form of any entitlement, some care may be taken to ensure that arrangements for TOIL for payment for overtime, benefits both employees and the employer.

[35] I have included these references to the BOOT in any endeavour to assist the parties in considering future steps relative to this matter.

SENIOR DEPUTY PRESIDENT

 1   Submissions of 1 April 2014, paras 29 - 35

 2   Form F17, para 2.6

 3   Form F17, para 2.8

 4   Submissions of 1 April 2014, paras 17 - 24

 5   [2012] FWAFB 9512, para [80]

 6   [2014] FWCFB 2042, para 70

 7   Submissions of 1 April 2014, paras 8, 9, 11, 12, 13

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