Association for Christian Senior Citizens Homes Inc. T/A Outlook Gardens Aged Care Facility
[2018] FWC 7109
•22 NOVEMBER 2018
| [2018] FWC 7109 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Association for Christian Senior Citizens Homes Inc. T/A Outlook Gardens Aged Care Facility
(AG2018/2702)
| Deputy President Masson | MELBOURNE, 22 NOVEMBER 2018 |
Application for approval of the Association for Christian Senior Citizens Homes Inc. (trading as Outlook Gardens Aged Care Facility), ANMF and HSU Enterprise Agreement 2017.
An application has been made for approval of the Association for Christian Senior Citizens Homes Inc. (trading as Outlook Gardens Aged Care Facility), ANMF and HSU Enterprise Agreement 2017 (the Agreement). The application was made pursuant to section 185 of the Fair Work Act 2009 (the Act). It has been made by Association for Christian Senior Citizens Homes Inc. T/A Outlook Gardens (the Applicant). The Agreement is a single enterprise agreement.
A notice of employee representational rights was provided to employees on 6 February 2018 and the notice complied with the regulations. The Applicant states that employees were provided with access to the Agreement and information about the effect of the terms of the Agreement on 30 May 2018.
Employees were notified of the time, place and method of voting via emails and employee meetings on 30 May 2018 and voting occurred between 11 and 14 June 2018. A majority of those who voted approved the Agreement.[1]
The Applicant filed a statutory declaration in support of the Agreement. The statutory declaration noted that the relevant award for the purpose of the better off overall test was the Nurses Award 2010 (Nurses Award)[2] and the Aged Care Award 2010 (Aged Care Award)[3].
The statutory declaration noted that some provisions in the Agreement were more beneficial than the Award or were not conferred by the Award. Less beneficial terms were also identified.
In reviewing the Agreement for approval, the Fair Work Commission (the Commission) identified a number of issues in relation to the Agreement and supporting documentation. These included pre-approval requirements, National Employment Standards (NES) compliance and better off overall test (BOOT) assessment considerations. The Commission wrote to the Applicant on 5 October 2018 and identified a number of issues requiring a response.
Various correspondence was then exchanged between the Applicant and the Commission in which the Applicant made submissions and proffered undertakings that addressed a majority of the issues raised. There were however some significant outstanding concerns the Commission held. Those concerns were:
1. Whether the Applicant had taken all reasonable steps to explain the terms of the Agreement to employees having regard to the particular circumstances of employees, noting that of the 101 employees eligible to vote, 70 employees were identified as coming from a non-English speaking background.
2. Clause 43.2 Shift Worker Definition - defines registered nurses and enrolled nurses as a shift worker in more restrictive terms that the Nurses Award.
3. Clause 27.11 Recall - provides for a “recall” for a minimum of 3 hours whilst the Aged Care Award provides for “recall” a minimum of 4 hours.
4. Whether and how the explanation of less beneficial terms of the Agreement was provided to employees.
The Applicant made the following submissions in relation to the above issues in correspondence to the Commission dated 10 October 2018:
1. With respect to the explanation of the terms to employees the Applicant submitted all communication at the facility, both written and spoken, was in English and that all staff are competent in both methods of communication. As to whether employees understood the explanation the Applicant simply could not say. Evidence of the employees’ understanding of the Agreement, according to the Applicant could be seen in the 70 employees that cast a vote in support of the Agreement.
2. With respect to the definition of shift workers under the Agreement the Applicant submitted that the Award could in fact be interpreted more restrictively than the Agreement.
3. With respect to the minimum period of “recall”, the Applicant submitted that the only staff likely to be recalled would be more senior employees that enjoy rates of pay significantly above the Awards therefore a BOOT issue is unlikely to arise.
4. With respect to the explanation of the less beneficial terms to employees, the Applicant made the following submission:
“As to the Deputy President’s request for further information as to how the perceived less beneficial terms were explained to the relevant staff, I would suggest that the responses given above to those matters should lead to the clear inference that, as none of them are likely to have any effect upon my client’s employees, specific reference to those matters was unnecessary and unwarranted. I would also note, in passing, that the matters referred to in Clauses 27.11 and 46.7 were contained in my client’s 2014 Agreement which was approved by the Commission without any queries raised at that time.”
Following receipt of the Applicant’s 10 October 2018 response the Commission wrote to the Applicant again on 15 October 2018 raising concerns in relation to the matters previously raised above as the Applicant’s responses had failed to satisfy the particular concerns raised.
The Applicant made further submissions in correspondence to the Commission on 22 October 2018 reinforcing its earlier submissions made in relation to Clause 43.2 Shift Worker Definition and Clause 27.11 Recall. As regards to the explanation of the terms of the Agreement the Applicant declined to make further submissions.
The Commission then wrote to the Applicant on 25 October 2018 advising, that based on the outstanding issues that had not been adequately addressed, the Applicant may wish to consider withdrawing the application or seek to be heard. A response was requested by close of business Thursday 1 November 2018. No response was received following which the Commission again wrote to the Applicant on 7 November 2018 requesting a response to the earlier correspondence by close of business Friday 9 November 2018. The Applicant failed to also reply to that latter correspondence from the Commission.
As a consequence of the failure of the Applicant to reply and advise whether it wished to withdraw the application or seek to be heard I now intend to deal with the application on the material before me.
Statutory Provisions
Section 186 requires, amongst other things, that in order for an enterprise agreement, that not is a greenfields agreement to be approved, the Commission must be satisfied that employees have genuinely agreed to it. Section 186 relevantly provides as follows:
“186 When the FWC must approve an enterprise agreement—general requirements
Basic rule
(1)If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.
Note: The FWC may approve an enterprise agreement under this section with undertakings (see section 190).
Requirements relating to the safety net etc.
(2)The FWC must be satisfied that:
(a)if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; and
. . . . . . ”
Section 188 prescribes when employees are held to have genuinely agreed to an enterprise agreement where it 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
(b)the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c)there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.”
Section 180 of the Act details the steps that must be taken by the employer to ensure that, prior to a ballot for an agreement, employees are properly informed as to the agreement and are notified of the ballot process. The relevant provisions are as follows:
“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.
. . . . . .
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;
(b) employees who did not have a bargaining representative for the agreement.”
Consideration
I turn first to deal with the explanation of the terms of the Agreement to employees and whether the requirements of ss.180(5) and (6) of the Act had been met.
The meaning of s.180(5) and what is required was subject to detailed consideration in the recent decision of the Full Court of the Federal Court in One Key Workforce Pty Ltd v Contsruction, Forestry, Mining and Energy Union (One Key Workforce (No 2))[4]. The Court made the following observations about the Commission’s function in assessing s.188(a)(i) whether it is satisfied that the employer has complied with s.180(5):
“113A consideration of the subject-matter, scope and purpose of the relevant provisions of the Fair Work Act indicates that the content of the explanation and the terms in which it was conveyed were relevant considerations to which the Commission was bound to have regard. The absence of that information meant that the Commission was not in a position to form the requisite state of satisfaction. Put differently, without knowing the content of the explanation, it was not open to the Commission to be satisfied that all reasonable steps had been taken to ensure that the terms and their effect had been explained to the employees who voted on the Agreement or that they had genuinely agreed to the Agreement.
114.The following considerations point inexorably to that conclusion.
115.The Commission was required to be satisfied that OKW had taken “all reasonable steps to ensure” that both the terms and the effect of the terms had been explained to the relevant employees as an element in the inquiry as to whether “genuine” agreement had been obtained from them. The agreed purpose of the obligation imposed on employers by s 180(5) is to enable the relevant employees to cast an informed vote: to know what it is they are being asked to agree to and to enable them to understand how wages and working conditions might be affected by voting in favour of the agreement.
116.In order for the employer to comply with the obligation it must take into account the particular circumstances and needs of those employees, including their cultural and linguistic backgrounds, their youth, and the absence of a bargaining representative. That is made explicit in s 180(6). How could the Commission decide whether the steps the employer had taken were “all reasonable steps” unless it knew what the employees had been told before they cast their votes? Without knowing the terms in which the explanation had been conveyed how could the Commission form an opinion on the sufficiency of the explanation, particularly having regard to the considerations mentioned in s 180(6)? Ultimately, how could the Commission decide that a genuine agreement had been reached without having evidence upon which it could answer both these questions?
117.As there was no evidence of these matters before the Commission, it necessarily follows that the Commission purported to be satisfied that OKW’s obligations under s 180(5) had been discharged without taking those matters into account. That was a jurisdictional error because the Commission did not have authority to make the decision unless its satisfaction had been informed by them. As is often the case, there are several ways of describing the error. It could be characterised as a misconception as to what the exercise of the statutory power entails or an error “as to an important attribute of the decision to be made”: Graham at [68]. Equally it could be seen as a misunderstanding on the part of the Commission of the nature of the opinion it was required to form: Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 at [31] (Gleeson CJ, Gaudron and Hayne JJ). Had the Commissioner applied his mind to the question of what the putative explanation entailed, he would inevitably have inquired into its content and terms.[5]”
Based on the submissions made by the Applicant, it is unclear whether any explanation was provided to employees regarding the less beneficial terms of the Agreement. There were clearly a number of less beneficial terms including those identified by the Applicant in material filed with the Commission on making the application for approval of the Agreement. Further, the Applicant proffered a number of undertakings going to concerns raised by the Commission in relation to less beneficial terms in the Agreement.
The Applicant glibly dismissed the need for an explanation to employees given the Applicant’s view that any identified less beneficial terms would be unlikely to have an effect upon the Applicant’s employees. Were it the case that the identified less beneficial provisions had little or no effect upon employees then the question arises as to why the Applicant would trouble itself to draft the Agreement including less beneficial provisions in it. I found the submission to be disingenuous and unconvincing.
The response received from the Applicant was dismissive of the Commission’s concerns and fell well short of addressing the matter raised. I am consequently unable to be satisfied on the basis of the material before me that the Applicant took “all reasonable steps” to explain the terms of the Agreement, specifically the less beneficial terms, to employees.
This failure is brought into relief by the fact that a significant proportion of the Applicant’s workforce are from a non-English speaking background. According to the material filed by the Applicant, of the 101 employees eligible to participate in the Agreement ballot, 70 employees were from a non-English speaking background. While it is not possible to ascertain based on the ballot results how many employees of a non-English speaking background voted in support of the Agreement, it can be assumed that a significant number of employees of a non-English speaking background did participate in the ballot.
The Applicant submits that all employees are competent in both written and spoke English and as such the communication of the Agreement and the explanation of the terms of the Agreement in English met the statutory requirement that the Applicant take all reasonable steps. Beyond the broad statement provided that all employees were competent in English, no additional evidence was adduced to support the submission.
I am not satisfied on the material before me that the particular circumstances of a significant proportion of the Applicant’s workforce, those from a non-English speaking background which made up 70% of the workforce, were taken into account in determining the manner of communication of the terms and effects of the terms of the Agreement.
Having regard to my findings above I am not satisfied that the Applicant has taken all reasonable steps to explain the less beneficial terms and the effects of those terms of the Agreement to employees as required by s.190(5) of the Act. Further, I am not satisfied that the explanation of the terms of the Agreement to employees, such as it was, was made in a manner that had regard to the particular cultural or linguistic circumstances of a significant proportion of the Applicant’s workforce, contrary to the requirements of s.190(6) of the Act.
Having reached my findings above regarding the explanation of the terms of the Agreement, it is unnecessary for me to deal with the remaining issues, those being the two BOOT matters.
Conclusion
In order to approve the Agreement, the Commission must, as part of its consideration, be satisfied in respect of s.186(2) and s.188(a)(i) requirements under the Act, that is, the Agreement has been “genuinely agreed” to. For the reasons detailed above, I am not satisfied the Agreement has been “genuinely agreed” to as the requirements of ss.180(5) and (6) have not been met. Consequently, the application for approval of the Agreement is dismissed. An order reflecting this decision will be separately issued.
DEPUTY PRESIDENT
<PR702468>
[1] Section 180 of the Act
[2] MA000034
[3] MA000018
[4] [2018] FCAFC 77
[5] Ibid at paragraphs [113] – [117]
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