Application for approval of the All Districts Coating Enterprise Agreement 2017

[2017] FWC 4787

[2017] FWC 4787

FAIR WORK COMMISSION

INTERIM DECISION

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

Mr Irving Warren
(AG2017/1682)

Building, metal and civil construction industries

COMMISSIONER CAMBRIDGE SYDNEY, 19 SEPTEMBER 2017

Application for approval of the All Districts Coating Enterprise Agreement 2017.

[1] This Interim Decision concerns a preliminary issue arising in respect to an application for approval of an enterprise agreement known as the All Districts Coating Enterprise Agreement 2017 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The application has been made by Irving Warren (the applicant or Mr Warren) and the employer to be covered by the Agreement is All Districts Coating (NSW) Pty Ltd (the employer or All Districts). The Agreement is a single-enterprise agreement.

[2] The application, made in the prescribed Form F16, was lodged at Sydney on 15 May 2017. The application included a Statutory Declaration made in the prescribed Form F17, of Carlos Habibeh, made on behalf of the employer and dated 15 May 2017 (the F17 Declaration). The F17 Declaration stated that the Agreement was made on 10 May 2017. Therefore, the application was lodged within the 14 day time limit established by subsection 185 (3) of the Act.

[3] On 16 May 2017, the Fair Work Commission (the Commission) received an email communication from the Construction, Forestry, Mining and Energy Union (the CFMEU) which advised, inter alia, that the CFMEU sought to be heard in respect to the application for approval of the Agreement. In addition, the CFMEU sought to be provided with copies of the F16 application, the F17 Declaration, any other documentation which had been submitted in support of the application, and details of any directions or dates of Hearing of the application.

[4] On 29 May 2017, an Agreement Assessor at the Commission’s Melbourne premises sent the CFMEU an email which attached redacted copies of the F16 and F17 documentation in the matter. Also on 29 May 2017, the Agreement Assessor sent an email to Mr Warren which, inter alia, advised that the application for approval of the Agreement had been allocated to Lee C who had identified some concerns with the application. These concerns were detailed in the email, some requested Undertakings were also provided, and a response was requested by 1 June 2017.

[5] On 30 May 2017, the CFMEU sent an email to the Commission which inquired as to whether the application for approval of the Agreement had been allocated to a Commission Member, and further, indicated that the CFMEU had concerns about the Agreement failing to satisfy the Better Off Overall Test (BOOT).

[6] On 1 June 2017, the Commission received an email from Mr Warren which indicated that he would be unable to provide a response to the concerns raised by Lee C within the timeframe requested.

[7] On 5 June 2017, Mr Warren sent a letter to Lee C on letterhead of “The People Management Company #1” which requested that he be provided with a period until 30 June 2017, to provide submissions in response to the concerns raised by Lee C. This letter also mentioned that the CFMEU had sought to be heard in the matter, and it had provided 12 pages of submissions objecting to a number of provisions included in the Agreement. Also on 5 June 2017, the CFMEU sent an email to the Agreement Assessor which inter alia, stated; “The CFMEU has members employed by the Company.”

[8] On 13 June 2017, the Agreement Assessor sent an email to Mr Warren which advised that Lee C had determined that Mr Warren would be requested to provide submissions in response to all concerns, including those raised by the CFMEU, by 30 June 2017. On 27 and 28 June there were further emails exchanged between Mr Warren and the Agreement Assessor regarding clarification of detail of one particular concern.

[9] On 3 July 2017, Mr Warren sent a further email to the Agreement Assessor which apologised for being unable to finalise submissions in response to concerns which had been raised by the Commission and the CFMEU, and requested that he be provided with an extension until 7 July 2017 to lodge submissions. On 5 July 2017, the Agreement Assessor sent an email to Mr Warren which advised that the request for an extension until 7 July for submissions had been granted.

[10] On 7 July 2017, Mr Warren sent a letter to Lee C which enclosed; submission in response to concerns of the Commission, dated 29 May 2017, and CFMEU, dated 5 June 2017; Notice to Employees dated 18 April 2017; Undertakings of the employer dated 7 July 2017; and revised signature page for the Agreement. Relevantly, the submissions provided by Mr Warren, dated 5 July 2017, advised that the employer formally opposed the CFMEU being given approval to be heard in the matter, 1 and further, stated that “Natural justice and due process would require that the parties to the agreement be given the opportunity to respond to any CFMEU application for a right to be heard.”2

[11] In view of the identified issues of contest, the matter was reallocated and subsequently listed for Mention and Directions proceedings on 27 July 2017, in Sydney. On 27 July, Mr I Warren, appeared for the employer, and Mr T Fischer appeared for the CFMEU.

[12] During the proceedings held on 27 July, Mr Warren maintained his challenge that the CFMEU should not be heard in the matter nor should the Commission have regard for the submissions made by the CFMEU. Mr Warren submitted that the CFMEU did not have the status of being a bargaining representative in respect to the Agreement. Therefore, Mr Warren asserted that the CFMEU did not have standing in the matter, and it was not entitled to appear and/or be heard in respect to the application for approval of the Agreement.

[13] In the course of the proceedings on 27 July, the Commission noted that if as was asserted by the CFMEU in its email of 5 July 2017, it had one or more members, who were employed by All Districts then the CFMEU would have status as a bargaining representative for the Agreement, albeit previously unidentified. If this was the case, the CFMEU would be entitled to appear and/or be heard in respect to the application for approval of the Agreement.

[14] Mr Warren accepted that if the CFMEU had one or more members who were employed by All Districts, the CFMEU would be entitled to appear in any proceedings involving the application for approval of the Agreement. In these circumstances, the Parties agreed to provide respective lists of names to the Commission on a confidential basis, in order to have the Commission verify whether or not the CFMEU had one or more members who were employed by All Districts.

[15] On 28 July 2017, Mr Warren sent a confidential list of employees of All Districts to the Commission. On 31 July 2017, Mr Fischer provided the Commission with a confidential list of names of members of the CFMEU who were believed to be employed by All Districts.

[16] On 31 July 2017, my associate advised the Parties that I had examined the respective confidential lists of names provided by the Parties, and this material did not establish that the CFMEU had a member employed by All Districts. Consequently, the CFMEU was not a bargaining representative for the Agreement, and it therefore did not have a right to appear and/or be heard in respect to the application for approval of the Agreement.

[17] Although the CFMEU did not have a right to appear in the proceedings, it nevertheless sought to have the Commission exercise a discretion, broadly provided by s. 590 of the Act, to permit the CFMEU to appear and/or be heard. The Commission fixed a timetable for the Parties to provide written submissions on the question as to whether the CFMEU should be granted standing to appear and/or be heard in respect to the application for approval of the Agreement. Although it was initially anticipated that this question would be determined upon the filed written material, subsequently the Commission facilitated a Hearing to enable the Parties to fully articulate their respective positions.

[18] On 29 August 2017, the Commission held a Hearing on the question of whether the CFMEU should be granted standing to enable it to appear and/or be heard in respect to the application for approval of the Agreement. At the Hearing held on 29 August 2017, Mr Warren continued his appearance for the employer, and Mr Fischer continued his appearance for the CFMEU.

The Submissions of the CFMEU

[19] Mr Fischer made oral submissions in elaboration of written material which had been filed on 7 August 2017. The submissions made by Mr Fischer acknowledged that the CFMEU sought to persuade the Commission to exercise the discretion to inform itself as it saw fit rather than any claimed right of appearance. Mr Fischer submitted that the Commission would be assisted in any determination of the application for approval of the Agreement if it heard from and had regard for the submissions of the CFMEU.

[20] Mr Fischer made further submissions which strongly objected to various paragraphs that were contained in written submissions made by Mr Warren dated 16 August 2017. Mr Fischer described certain content of the 16 August submissions made by Mr Warren as being irrelevant, hugely prejudicial, inappropriate, incoherent, defamatory and embarrassing. Mr Fischer asked the Commission to disregard a number of identified paragraphs contained in the 16 August submissions made by Mr Warren.

[21] In summary, Mr Fischer submitted that the CFMEU had particular expertise in respect to enterprise agreements in the building and construction industry as it had negotiated more than 29,000 such agreements. Mr Fischer submitted that the Commission would be assisted particularly in respect to whether or not the Agreement passed the BOOT, and whether it was compliant with the NES, if it had the benefit of hearing from the CFMEU. Mr Fischer urged the Commission to exercise the discretion to permit the CFMEU to appear and/or be heard in respect to the application for approval of the Agreement.

The Submissions of Mr Warren

[22] Mr Warren made extensive oral submissions which expanded upon his 16 August written submissions. Mr Warren said that the CFMEU was claiming a righteous position as a responsible industrial body, however, according to Mr Warren, its officials seem to ignore the requirements of the Fair Work Act. Mr Warren submitted that the CFMEU should be considered to be unreliable as a potential intervenor in the matter.

[23] Mr Warren made reference to various Federal Court Judgements and Royal Commission findings which he said established that the CFMEU had a history of failing to comply with industrial legislation generally. Mr Warren also submitted that the CFMEU obtained significant income from its enterprise bargaining services which were charged to employers, and this made it a commercial competitor which would benefit from opposing the approval of the Agreement.

[24] Further, Mr Warren submitted that the CFMEU had not established its credentials as a body which could provide expert advice that was not already available within the Commission. Mr Warren submitted that the CFMEU had presented nothing in the way of compelling reason to be granted standing in the proceedings.

[25] The submissions made by Mr Warren included detailed reference to various Federal Court Judgements which had imposed fines upon the CFMEU for breaches of relevant industrial legislation. Mr Warren submitted that there had been in excess of $10 million in fines imposed upon the CFMEU, and it was not an organisation of good repute. Mr Warren said that the strong criticism of the CFMEU made by various Judges of the Federal Court was something that the Commission should not ignore when considering whether someone offering their services to provide information regarding an enterprise agreement should be granted the relevant standing.

[26] In summary, Mr Warren submitted that the CFMEU had not established any compelling circumstances which would justify it being heard in the matter. Mr Warren urged that the CFMEU application for standing should be dismissed.

Consideration

[27] During the course of the proceedings in this matter it has become apparent that the CFMEU was not a bargaining representative in respect of the Agreement, and it therefore did not obtain a right to appear and/or be heard in respect to the application for approval of the Agreement. Instead, the CFMEU has sought standing in the matter by virtue of the discretion provided to the Commission under s. 590 of the Act.

[28] The CFMEU made submissions which, in broad terms, relied upon its extensive organisational experience and expertise in negotiating enterprise agreements in the building and construction industry, as providing potential assistance to the Commission as proper basis to have standing to be heard. On the other hand, Mr Warren primarily asserted that the Commission would not be assisted by the CFMEU because (a), it had a commercial interest in opposing enterprise agreements which were negotiated without its involvement, and (b), it was a generally disreputable body which the Commission should either not recognise in these circumstances, or disregard because it would not provide any useful analysis or assistance in respect to issues under consideration in the application for approval of the Agreement.

[29] There have been numerous instances where registered organisations which had not obtained (or retained) the status of a bargaining representative, have sought to be granted standing in respect to proceedings that involved an application for approval of an enterprise agreement. The position in respect to proceedings at first instance has been firmly established by a line of Authority that, in broad terms, developed from the Full Bench Decision in the matter of CFMEU v Collinsville Coal  3 (Collinsville).

[30] The Full Bench Decision in Collinsville firmly rejected that employee organisations had a right to be heard in relation to an application to approve an enterprise agreement, simply because of their industry or occupational representational role. The following extract from the Decision in Collinsville is relevant:

“…that an employee organisation has amongst its interests, objects or expectations, that it will obtain and maintain reasonable employment conditions for its members, is in the context of the bargaining framework established by the FW Act, an insufficient basis for there to arise a right, interest or legitimate expectation and thereby a conferral on the employee organisation of a right to be heard in relation to an application to approve an enterprise agreement.” 4

[31] However, the position in respect to any Appeal against a first instance Decision to approve of an enterprise agreement has established that organisations which are registered in or in connection with the industry or occupations covered by an enterprise agreement, will generally be accepted to be a person aggrieved by a Decision to approve of that enterprise agreement, such that they would be granted standing. This line of Authority can be broadly traced with reference to the cases of; The Australian Institute of Marine and Power Engineers v Inco ships Pty Ltd  5 and; CEPU v Main People 6(Main People) and; CEPU v Sustaining Works 7and, more recently; TWU v ALDI Foods (Aldi).8

[32] The following extract from the Decision in Aldi is relevant:

“…Full Benches of the Commission have accepted the standing of organisations to appeal against decisions to approve agreements. In CEPU v Main People, neither union was a bargaining representative for the Agreement and nor was there any evidence that any employee of the respondent at the time of the vote to approve the Agreement was a member of either union. Further there was no evidence that any subsequent employees of the respondent had asked the appellants to represent their interests in relation to the Agreement. Nevertheless the Full Bench determined that the unions were persons aggrieved and had standing to institute the appeal.” 9

[33] The Decision in Collinsville was issued about 10 days after the Decision in Main People, and in reference number 13 of the Collinsville Decision, mention is made of the Decision in Main People. Reference 13 of the Collinsville Decision relevantly includes the following consideration:

“We note that in CEPU and AMWU v Main People Pty Ltd [2014] FWCFB 8429 a Full Bench of the Commission determined that a right to represent employees under the terms of the agreement and the likelihood that members of the appellant unions would in the future be employed under the agreement resulted in the appellants having standing to institute the appeal as those factors gave the appellants an interest beyond that of an ordinary member of the public. We would observe that in the context of the statutory scheme established for agreement making and approval, the question whether a person should be heard during an application to approve an agreement is a different question whether a person is aggrieved by a decision for the purposes of bringing an appeal. For the reasons set out at [70] of our decision, we do not regard the possibility or even likelihood that members of an employee organisation might in the future be employed under the agreement as grounding a right to be heard. Nor does that fact that employees covered by an agreement might choose to be represented by the employee organisation under particular terms of the agreement give rise to a right to be heard. The right of representation under the terms of an agreement resides with the employee, not the organisation or person selected by the employee to provide representation.”

[34] Consequently, a distinction has emerged between, on the one hand, the absence of any right of standing for a relevant registered organisation under the statutory scheme in respect to first instance proceedings involving the approval of an enterprise agreement, in contrast with, on the other hand, the standing provided to that registered organisation as an aggrieved person in any Appeal proceedings taken against the first instance Decision to approve (or refuse) of the enterprise agreement. The corollary of this distinction, in a practical sense, would appear to mean that a registered organisation might be denied standing at the first instance Hearing of an application to approve an enterprise agreement, but likely be granted standing in any subsequent Appeal proceedings.

[35] A recent Full Bench Decision in Construction, Forestry, Mining and Energy Union v Concrete Constructions (WA) Pty Ltd 10(Concrete Constructions), has provided confirmation of the position that relevant registered organisations may obtain standing as a “person who is aggrieved by a decision” in respect to an Appeal against a Decision to approve an enterprise agreement where the registered organisation was not a bargaining representative for the enterprise agreement. However, in the Concrete Constructions case, the first instance Decision of the Commission appeared to permit and consider the submissions made by the CFMEU without objection from the applicant in that matter.

[36] In the present circumstances, the applicant, Mr Warren, has objected to the CFMEU being heard at all, including that the submissions of the CFMEU opposing the application for approval of the Agreement should not be considered by the Commission. Consequently, although those submissions were reviewed by Lee C, I have studiously avoided examining that material in any detail prior to the determination of the application of the CFMEU to be granted standing in the matter. I note that, without examining the detail of the position advanced by the CFMEU, one aspect of objection that has been raised involves an assertion that the Agreement does not satisfy the BOOT.

[37] The Commission has a broad discretion provided by s. 590 of the Act, to permit persons and/or organisations to appear before it and provide evidence and/or oral or written submissions. Although, as yet, I have not examined in any detail, the CFMEU submissions opposing the approval of the Agreement, there is clearly a significant contest regarding an alleged failure of the Agreement to satisfy the BOOT. These circumstances are, in many respects, analogous to the contest regarding the BOOT that was carefully considered by the Full Bench in the Concrete Constructions Decision. Similar circumstances are also reflected in another recent Full Bench Decision in the case of Construction, Forestry, Mining and Energy Union v Levent Painting Pty Ltd t/a Levent Altintas 11 (Levent Painting).

[38] It is relevant to observe that the Full Bench Decisions referred to above in the cases of Concrete Constructions and Levent Painting, involved the CFMEU providing the Appeal Bench with an analysis of the BOOT which would have presumably assisted the respective Members of the Commission who dealt with the matters at first instance. In both cases the Appeal Bench found that the respective enterprise agreements did not pass the BOOT 12.

[39] In circumstances where a registered organisation with industry or occupational coverage for work that would be comprehended and regulated by the Agreement seeks to be heard at first instance proceedings, particularly in respect to the BOOT, it would seem to be logical and expedient to permit standing and invite a contradictor. Alternatively, as occurred in both the Concrete Construction and Levent Painting cases, the benefit of the contradictor may only be obtained at the Appeal Bench level.

[40] The Commission is required to ensure that the Agreement complies with the Act, and the resolution of any concerns which have been identified should be conducted with transparency and appropriate rigour. Registered organisations with a legitimate interest in the industry and occupations covered by the Agreement may assist in the resolution of these issues of concern. Concerns about the BOOT in particular are likely to benefit from the presence of a contradictor. In this way, a process involving open, diligent and comprehensive scrutiny should provide for the correct outcome, and also enhance broader confidence in the Commission’s enterprise agreement approval role.

[41] In the particular circumstances of this matter, I have decided to grant standing for the CFMEU as an intervener in the matter. Thus, the CFMEU shall be entitled to appear and be heard in respect to the proceedings. The CFMEU shall be provided with an opportunity to openly scrutinize the issues of concern which it has identified, particularly in respect to whether the Agreement passes the BOOT. An examination of these issues with the presence of a contradictor would assist the Commission in the discharge of its statutory function.

[42] In order to provide for further Hearing of the application, the CFMEU is directed to file and serve any further material upon which it relies, within two weeks from the date of this Decision. Mr Warren will be provided with a further two weeks to file and serve any further material that he and the employer may wish to rely upon. The further Hearing of the matter will be scheduled for 10 am on 24 October 2017.

[43] As a potential alternative to any further contested Hearing of the matter, I note that during the Hearing held on 29 August, I alluded to evidence of there being a more amicable relationship between the employer and the CFMEU in the past. As a matter of record, on 22 September 2005, the Australian Industrial Relations Commission certified the All Districts Coating (Aust) Pty Ltd/ CFMEU Enterprise Agreement expiring 31 March 2008 which was signed for the CFMEU by Andrew Ferguson and by Carlos Habibeh for All Districts Coating (Aust) Pty Ltd. As noted above, Carlos Habibeh provided the Form F17 Statutory Declaration attached to the application in this matter.

[44] Consequently, in view of a past history which, at least at one point in time, involved agreement between the CFMEU and a business operated by or connected with the employer, it may be beneficial for discussions to occur between the employer and the CFMEU, aimed at resolving or at least reducing, the nature and extent of contest, particularly regarding the alleged failure of the Agreement to pass the BOOT.

COMMISSIONER

Appearances:

Mr I Warren appeared for the employer.

Mr T Fischer appeared for the Construction, Forestry, Mining and Energy Union.

Hearing details:

2017.

Sydney:

August, 29.

 1   Submissions of Mr Warren, dated 5 July 2017, @ paragraph 46.

 2   Submissions of Mr Warren, dated 5 July 2017, @ paragraph 50.

 3   Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Limited [2014] FWCFB 7940.

 4 Ibid @ [70].

 5   The Australian Institute of Marine and Power Engineers v Inco Ships Pty Ltd [2011] FWAFB 1537.

 6   CEPU v Main People [2014] FWCFB 8429.

 7   CEPU v Sustaining Works [2015] FWCFB 4422.

 8   Transport Workers' Union of Australia & Anor v ALDI Foods Pty Limited as General Partner of ALDI Stores (A Limited Partnership) [2016] FWCFB 91.

 9 Ibid @ [22].

 10   Construction, Forestry, Mining and Energy Union v Concrete Constructions (WA) Pty Ltd [2017] FWCFB 3912.

 11   Construction, Forestry, Mining and Energy Union v Levent Painting Pty Ltd t/a Levent Altintas [2017] FWCFB 3911.

 12   See paragraph 15 in Concrete Constructions and paragraph 11 in Levent Painting.

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