Application by Lutheran Church of Australia Queensland District T/A Lutheran Education Queensland

[2021] FWC 778

[2021] FWC 778

FAIR WORK COMMISSION

DECISION

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

Application by Lutheran Church of Australia Queensland District T/A Lutheran Education Queensland
(AG2020/3725)

COMMISSIONER HUNT BRISBANE, 16 FEBRUARY 2021

Application for approval of the Queensland Lutheran Schools Single Enterprise Agreement 2020 – interlocutory application pursuant to s.252 for a variation to extend period single interest employer authorisation is in operation – period single interest employer authorisation in operation varied

[1] On 4 December 2020, Lutheran Church of Australia Queensland District, trading as Lutheran Education Queensland (the Applicant) applied for the approval of an enterprise agreement known as the Queensland Lutheran Schools Single Enterprise Agreement 2020 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act).

[2] The Queensland Nurses and Midwives’ Union (the QNMU) and the Independent Education Union of Australia (the IEUA) are bargaining representatives for the Agreement.

[3] The Agreement, if approved, will cover 25 Lutheran primary school and colleges where the employer is the Lutheran Church of Australia Queensland District (LCADQ), together with one Lutheran primary school where the employer is the Peace Lutheran Church Gatton, trading as Peace Lutheran Primary School.

Single interest employer authorisation

[4] The Applicant (LCADQ) and Peace Lutheran Primary School, (collectively the Employers) have historically bargained collectively with their respective employees and employee representatives to achieve a single enterprise agreement. As part of this process, on each occasion the Employers agreed to bargain with employees for a new enterprise agreement, the Employers obtained a single interest employer authorisation from the Fair Work Commission (the Commission) pursuant to s.249 of the Act.

[5] Relevant to this round of bargaining, on 16 September 2019 the Employers were granted a single interest employer authorisation by Commissioner Simpson, Order [PR712453], allowing the Employers to bargain together for the Agreement. The single interest employer authorisation expired on 16 September 2020.

[6] Section 172 of the Act details when an employer may make an enterprise agreement with its employees. Relevant to single-enterprise agreements, section 172(2) provides:

“Making an enterprise agreement

…..

(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.”

[7] Section 172(5) of the Act states which employers, if more than one, are single interest employers:

“Making an enterprise agreement

…..

(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.”

[8] The Agreement was made by the Employers and their employees on 20 November 2020. The Employers are not able to make an enterprise agreement pursuant to s.172(2) of the Act unless the single interest employer authorisation is in operation, as per s.172(5)(c) of the Act. The Employers are not related bodies corporate, and given my decision in this matter, it is not necessary to explore if the Employers are engaged in a joint venture or common enterprise pursuant to s.172(5)(a).

Application for variation to extend period single interest employer authorisation is in operation

[9] In this application, the Applicant made an application pursuant to s.252 of the Act to extend the period the single interest employer authorisation is in operation.

[10] Section 252 of the Act provides:

“(1) A bargaining representative for a proposed enterprise agreement to which a single

interest employer authorisation relates may apply to the FWC to vary the authorisation to extend the period for which the authorisation is in operation.

(2) The FWC may vary the authorisation to extend the period if the FWC is satisfied that:

(a) there are reasonable prospects that the agreement will be made if the authorisation is in operation for a longer period; and

(b) it is appropriate in all the circumstances to extend the period.”

[11] The Applicant submitted the Commission has a number of functions under the Act and must perform its functions and exercise its powers in a manner that, among other things “is quick, informal and avoids unnecessary technicalities”. It also submitted that the Commission has been found to have broad statutory powers including to vary and revoke orders retrospectively.

[12] It is the Applicant’s position that s.252(2)(a) of the Act is satisfied as there is no doubt that there are reasonable prospects the Agreement will be made if the authorisation is in operation for a longer period, noting the vote has occurred and the Agreement has been made. The Applicant submitted that s.252(2)(b) of the Act is satisfied as it is appropriate in all the circumstances to extend the period given the involvement of the parties in the bargaining for the Agreement since September 2019. The Agreement, if approved, will cover 3,244 employees.

Views of union bargaining representatives

[13] In written submissions, the IEUA provided the following views as to whether the Commission is empowered to vary the single interest employer authorisation to extend the period, notwithstanding the application to do so was made following the cessation of the authorisation pursuant to s.249(4) of the Act:

“1.23 The IEU fully supports the submissions on behalf of the employers that the Commission possesses the capability to retrospectively extend the operation of the single interest authorisation pursuant to s252 of the Act.

1.24 Such a determination would be consistent with both the broad discretion possessed by the Commission, and the Objects of the Act, particularly fairness and flexibility. Further, such a determination would be consistent with the Act’s requirement that the Commission perform its functions, inter alia, in a manner that is “fair and just”, and that is “quick, informal, and avoids unnecessary technicalities”. (See s577)

1.25 We submit that there is neither a prohibition on, nor contextual considerations which would militate against, a retrospective variation of the single interest authorisation.

1.26 Notwithstanding our submission we accept that such a variation is at the discretion of the Commission.

1.27 In the current round of bargaining the initial employer proposed Agreement was rejected by employees in a ballot. Further negotiations occurred, resulting in the current proposal which has been endorsed by employees. The IEU does not seek to frustrate that endorsement.”

[14] On 15 February 2021, the QNMU emailed correspondence to my Chambers and to the other parties as follows:

“We support the submission of the Queensland Independent Education Union.

We do not seek to appear or provide any further submissions in respect of the matter.”

No relevant authorities

[15] It appears that there is no precedent of the Commission determining if a single interest employer authorisation may be varied where such application is made after the expiry of the single interest employer authorisation. Where authorisations have been varied to extend the term of the authorisation, the applications that have been determined by decision and order all appear to have been made prior to the expiry of the original authorisation.

Hearing

[16] On 15 February 2021, I conducted a telephone hearing. Ms Victoria Hepburn, Partner, and Ms Sarah Walters, Special Counsel, both of MinterEllison appeared for the Applicant. Mr Dennis Mulherin, Executive Director, and Ms Kerryn Simpfendorfer, both of LCADQ also participated for the Applicant. Mr John Spriggs, Senior Industrial Officer, together with Mr Chris Seymour participated on behalf of the IEUA.

[17] During the hearing, I inquired of the parties if they held a view if the Commission might be empowered to retrospectively vary the authorisation by extending the term in a similar way the Commission has been found to be empowered to extend the 30-day period within a protected action ballot order at s.459(3) of the Act after the initial period had expired. The hearing was adjourned to allow the parties time to consider this proposition.

[18] On resumption of the hearing, the Full Court of the Federal Court decision in Energy Australia Yallourn Pty Ltd v Construction, Forestry, Mining and Energy Union [2014] FCAFC 8 was discussed. The Applicant submitted, and the IEUA agreed that the Commission should adopt the same reasoning of the majority of the Full Court in that decision, resulting in the Commission varying the authorisation to extend the term beyond when the Agreement was made, and as far as is necessary as to when the Agreement might be approved.

[19] In the above decision, North and Bromberg JJ said the following relevant to the Full Bench decision of the Commission, concluding that the Commission is empowered by s.459(3) to extend the 30-day period referred to in s.459(1)(d)(i) at a time after the period had expired:

“18 It is difficult to discern any policy imperative in favour of a legislative intention to limit the Commission’s capacity to extend the initial 30 day period in the manner contended for by EnergyAustralia. EnergyAustralia contended that the construction preferred by the Full Bench significantly undermined the regime for due notice to be given to an employer of protected industrial action to be taken by employees, with the consequence that defensive action which could be taken by an employer may be compromised. That contention is ill-conceived for a number of reasons. The provision of due notice to an employer as a pre-requisite to the taking of protected industrial action is dealt with by s 414. That subject matter has nothing to do with s 459(1). In any event, the construction adopted by the Full Bench does not affect the requirement for the employer to be given notice. Nor does a 30 day limit upon the capacity of the Commission to grant an extension provide any greater certainty to an employer that industrial action will not thereafter be taken. The threat of protected industrial action being taken will subsist despite the expiry of the initial 30 day period. There is no restriction imposed by the FW Act on industrial action being authorised by a second protected action ballot. Whilst the time and effort involved in the conduct of a further ballot of employees may somewhat advantage the employer, that circumstance is not likely to be a source of advantage which the FW Act intends to confer on any party. As the Explanatory Memorandum stated in relation to the object of Division 8 set out in s 436:

The process the Division establishes is not intended to delay or frustrate the taking of protected industrial action by employees.

19    As the Full Bench correctly observed at [26], the construction it preferred would not involve an extension order having retrospective effect so as to confer protection on industrial action taken after the expiry of the 30 day period but before the extension order was made. Section 459(1)(d)(ii) only protects action which “commences” in the extended period. If action has commenced prior to the making of the extension order the action will not be authorised because it commenced prior to the extended period becoming operative. Nor do we consider that the construction we prefer would have the effect of lengthening the outer temporal limit of the authorisation given by the ballot. The extension of up to 30 days which the Commission may grant is to be calculated by reference to the day of the declaration of the results of the ballot and not the day from which any extension is granted.

20    Finally, as the Full Bench correctly observed at [22], the construction contended for by EnergyAustralia would lead to unnecessary and counterproductive resort to industrial action:

As the expiry of the 30 day period approaches, there will be a natural incentive for a union bargaining representative to initiate forms of protected industrial action authorised by a protected action ballot that have not yet been utilised in order to preserve their availability for future use in the bargaining, even if bargaining is progressing satisfactorily and appears likely to be successful without resort to action of that type. A prudent bargaining representative will take account of the possibility that bargaining may not be successful without resort to such protected industrial action. The construction for which the union contends it [sic] better attuned to the objects of the Act.

21    For those reasons, we consider that the Commission’s decision involved no error and was within jurisdiction.”

Consideration

[20] I consider it would be prudent and sensible for employers seeking a variation of a single interest employer authorisation to extend the term of the authorisation to make an application to the Commission prior to the expiry of the authorisation. The Applicant in this matter has done so previously, and the extension was granted by the Commission where the bargaining was due to go beyond the period of 12 months in the authorisation.

[21] The Explanatory Memorandum for the Fair Work Bill 2008 (Cth) at [1050] states the following:

“1050. If a single-enterprise agreement is not made within 12 months after the day on which FWA made a single interest employer authorisation in relation to the agreement, the authorisation will cease to operate. This is intended to ensure that the authorisation only operates in relation to the proposed enterprise agreement for which it is made. Clause 251 enables a bargaining representative for the proposed agreement to apply to FWA to extend the period for which the authorisation is in operation.”

[22] It is open to the Commission to determine that the authorisation ceases to operate for all time upon the expiry of the authorisation. In that situation, parties who had been bargaining must, it seems, cease bargaining, and apply to the Minister for a declaration pursuant to s.247 of the Act. The parties would then be required to await the decision of the Minister, and if the Minister decided to make the declaration, the employers would then be required to make a fresh application to the Commission pursuant to s.248 for a single interest employer authorisation. The Commission may decide to grant the authorisation.

[23] It is clear that where parties are engaged in bargaining and time is approaching 12 months, the application should be made to the Commission for the variation to extend. However, where this step is inadvertently missed, and the parties are intent on concluding their bargain, I do not consider it is in the best interests of the parties for the steps in [22] to be required to be undertaken. To do so might result in an artificial break from bargaining and loss of connectivity in the process.

[24] I am mindful that the decision in Energy Australia does not support a retrospective application of the extension of the period in which protected industrial action may take place. That is, the extension only operates from when it is granted, and any industrial action taken in any gap between the end of the first 30 days and the commencement of the extended period is not taken to be protected.

[25] In the matter before me, it is clear that the Employers made the Agreement with the employees on 20 November 2020, in a period where the authorisation had ceased operation, and no application for a variation to extend had been made. In these circumstances, it would be necessary, having regard to s.172(2) to make any such extension to an authorisation retrospective, covering at least the period 20 November 2020.

[26] In considering s.252(2)(a) and whether there are reasonable prospects that the Agreement will be made if the authorisation is in operation for a longer period, it is demonstrably clear that this is met give the Agreement has, in fact, been made. I am satisfied that s.252(2)(a) is met.

[27] In considering s.252(2)(b) and if it is appropriate in all the circumstances to extend the period, I have had regard to the large number of employees to be covered by the Agreement, if approved. The negotiations took approximately 14 months, and on the submissions made by the IEUA, the Employers improved the offering to employees from the first round of balloting to then achieve a yes vote of 1934 from 2182 votes, being 88.6%, which is a very strong yes vote.

[28] I consider it appropriate in all the circumstances to extend the period because to not grant the application would result in a very long and complicated road back to the bargaining table for a deal that is supported by a large majority of employees who participated in the vote. I do not consider that path is in the parties’ best interests, and I note the support of the IEUA and the QNMU in the Applicant’s application. Having regard to these factors, I am satisfied it is appropriate to extend the period.

Conclusion

[29] The Applicant has applied to vary the single interest employer authorisation to extend the period for which the authorisation is in operation. I am satisfied that s.252(2)(a) and (b) have been met and have exercised my discretion to grant the application.

[30] An order extending the authorisation will be issued with this decision. I have decided to grant the extension from the date of 16 September 2020.

[31] I will proceed to deal with the outstanding matters relating to the application pursuant to s.185 of the Act, in which a separate decision will be issued in due course.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR726969>