Australian Municipal, Administrative, Clerical and Services Union v Inner Melbourne Community Legal Inc T/A Inner Melbourne Community Legal, Young People's Legal Rights Centre Inc T/A Youthlaw
[2024] FWC 2491
•16 SEPTEMBER 2024
| [2024] FWC 2491 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.242 - Application for the FWC's approval of a supported bargaining authorisation
Australian Municipal, Administrative, Clerical and Services Union
v
Inner Melbourne Community Legal Inc T/A Inner Melbourne Community Legal, Young People's Legal Rights Centre Inc T/A Youthlaw
(B2024/1113)
| DEPUTY PRESIDENT HAMPTON | ADELAIDE, 16 SEPTEMBER 2024 |
Application for a supported bargaining authorisation regarding a proposed multi-enterprise agreement to cover the employees of two named employers engaged within the community legal sector operating within Victoria – authorisation issued.
Introduction
The Australian Municipal, Administrative, Clerical and Services Union (ASU) has applied for a supported bargaining authorisation (authorisation) pursuant to s.242(1) of the Fair Work Act 2009 (Cth) (FW Act). The application specifies two employers operating in the community legal sector in Victoria: Inner Melbourne Community Legal Inc T/A Inner Melbourne Community Legal (IMCL) and Young People's Legal Rights Centre Inc T/A Youthlaw (collectively the employers).
The application also specifies that the employees who will be covered by the proposed multi-enterprise agreement are all employees of IMCL and Youthlaw (employees).
There is no dispute that the employers specified in the application are all ‘national system employers’ within the meaning of s.14 of the FW Act.
The employers and employees who would be subject to the authorisation are covered by the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award).[1] Until 6 September 2024, they were subject to the Community Legal Centres Multi Business Agreement (MBA) Certified Agreement 2006-2009 (2006 Agreement). This agreement was a so called ‘zombie agreement’ operating under the relevant transitional legislation[2] that has now ceased to operate.[3]
The employers are not opposed to, and support the making of, the authorisation sought in the application.
The application was subject to a hearing on 13 September 2024. Each of the parties provided comprehensive and constructive submissions in support of the application. At the conclusion of the hearing, I indicated that I would issue the authorisation in an amended form to reflect certain points of drafting clarification.
My reasons are set out below.
The background to the application
Some of the background has been set out earlier in this Decision. It is also appropriate to note that the employees and employers who would be covered by the authorisation were subject to an earlier bargaining process that led to the making and approval of the Victorian Community Legal Centres Multi-Enterprise Agreement 2024-2027[4] (VCLC EA). However, that agreement was not approved by the majority of employees of the employers and consequently[5] the direct parties here are not covered by the VCLC EA.
I observe that many of the other employers who were subject to 2006 Agreement and now covered by the VCLC EA.
I understand that the rejection of the VCLC EA at the two Employers has meant that the terms and conditions of employment have fallen back to the SCHADS Award but with some more beneficial terms being preserved by reference to the VCLC EA (in the case of Youthlaw) and the 2006 Agreement and policies (in the case of IMCL).
The issues that remain unresolved from the earlier bargaining include wages and the notion of some portability of entitlements across the community legal sector.
I also understand that the majority of the relevant employee cohort are female.
Both employers are heavily dependent upon funding from the Commonwealth and Victorian Governments and the consequences of the level of funding plays a significant role in the bargaining.
The statutory framework
The FW Act was amended by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (SJBP Act), effective from 6 June 2023, to introduce (among other things) a new ‘supported bargaining stream’ for multi-enterprise agreements in place of the previous ‘low paid bargaining stream’. That part of the object of the FW Act in s.3(f) was not altered, nor were the objects of Part 2-4 in s.171, but the ‘guide’ to Part 2-4 in s.169 was, in relation to Division 9 of the Part, amended to provide:
“Division 9 provides for the making of supported bargaining authorisations in relation to proposed multi-enterprise agreements. The effect of such an authorisation is that specified employers are subject to certain rules that would not otherwise apply (for example, bargaining orders that would not usually be available for multi-enterprise agreements will be available). It also permits the FWC to assist the bargaining representatives for such agreements.”
Division 9 of Part 2-4 is now entitled ‘Supported bargaining’. The objects of Division 9 are set out in s.241 as follows:
“241 Objects of this Division
The objects of this Division are:
(a) to assist and encourage employees and their employers who require support to bargain, and to make an enterprise agreement that meets their needs; and
(b) to address constraints on the ability of those employees and their employers to bargain at the enterprise level, including constraints relating to a lack of skills, resources, bargaining strength or previous bargaining experience; and
(c) to enable the FWC to provide assistance to those employees and their employers to facilitate bargaining for enterprise agreements.”
Section 242 concerns the making of applications for supported bargaining authorisations, including requirements as to standing and content. The section provides:
“242 Supported bargaining authorisations
(1) The following persons may apply to the FWC for an authorisation (a supported bargaining authorisation) under section 243 in relation to a proposed multi-enterprise agreement:
(a) a bargaining representative for the agreement;
(b) an employee organisation that is entitled to represent the industrial interests of an employee in relation to work to be performed under the agreement.
Note: The effect of a supported bargaining authorisation is that the employers specified in it are subject to certain rules in relation to the agreement that would not otherwise apply (such as in relation to the availability of bargaining orders, see subsection 229(2)).
(2) The application must specify:
(a) the employers that will be covered by the agreement; and
(b) the employees who will be covered by the agreement.
(3) An application under this section must not be made in relation to a proposed greenfields agreement.”
f_p_n_7_
Section 243 of the FW Act sets out the circumstances in which the Commission is required to make a supported bargaining authorisation:
“243 When the FWC must make a supported bargaining authorisation
Supported bargaining authorisation—main case
(1) The FWC must make a supported bargaining authorisation in relation to a proposed multi-enterprise agreement if:
(a) an application for the authorisation has been made; and
(b)the FWC is satisfied that it is appropriate for the employers and employees (which may be some or all of the employers or employees specified in the application) that will be covered by the agreement to bargain together, having regard to:
(i) the prevailing pay and conditions within the relevant industry or sector (including whether low rates of pay prevail in the industry or sector); and
(ii) whether the employers have clearly identifiable common interests; and
(iii) whether the likely number of bargaining representatives for the agreement would be consistent with a manageable collective bargaining process; and
(iv) any other matters the FWC considers appropriate; and
(c) the FWC is satisfied that at least some of the employees who will be covered by the agreement are represented by an employee organisation.
Note: This subsection is subject to section 243A (restrictions on making supported bargaining authorisations).
Common interests
(2) For the purposes of subparagraph (1)(b)(ii), examples of common interests that employers may have include the following:
(a) a geographical location;
(b) the nature of the enterprises to which the agreement will relate, and the terms and conditions of employment in those enterprises;
(c) being substantially funded, directly or indirectly, by the Commonwealth, a State or a Territory.
Supported bargaining authorisation—declared industry etc.
(2A) The FWC must also make a supported bargaining authorisation in relation to a proposed multi-enterprise agreement if:
(a) an application for the authorisation has been made; and
(b) the employees specified in the application are employees in an industry, occupation or sector declared by the Minister under subsection (2B).
Note: This subsection is subject to section 243A (restrictions on making supported bargaining authorisations).
(2B) The Minister may, by legislative instrument, declare an industry, occupation or sector, if the Minister is satisfied that doing so is consistent with the objects of this Division set out in section 241.
What authorisation must specify etc.
(3) The authorisation must specify:
(a) the employers that will be covered by the agreement; and
(b) the employees who will be covered by the agreement; and
(c) any other matter prescribed by the procedural rules.
Operation of authorisation
(4) The authorisation comes into operation on the day on which it is made.”
Section 243 operates subject to s.243A, which specifies certain restrictions on the making of supported bargaining authorisations. Section 243A(1) provides that the Commission must not make such an authorisation specifying an employee who is covered by a single enterprise agreement that has not passed its nominal expiry date. However, this restriction operates subject to s.243A(3), which provides that it does not apply if the Commission is satisfied that an employer’s main intention in making the single-enterprise agreement with the employees covered by it was to avoid being specified in a supported bargaining authorisation.
Section 243A(4) provides that the Commission must not make a supported bargaining authorisation in relation to a proposed enterprise agreement if the agreement would cover employees in relation to ‘general building and construction work’ (as this expression is defined in s.23B(1)).
Section 246 of the FW Act provides that if a supported bargaining authorisation is in operation, the Commission may provide assistance to the bargaining representatives, including on its own initiative. That assistance may include measures considered appropriate to facilitate bargaining that could be provided if it were dealing with a dispute.[6] Further, the Commission may direct a person to attend a conference if it is satisfied that they exercise such a degree of control over the terms and conditions of employment of the employees who will be covered by the agreement where their participation is necessary for the agreement to be made.[7]
This history and operation of this statutory framework was otherwise comprehensively considered by the Full Bench in Application by UWU, AEU and IEU,[8] and I need not repeat the discussion set out in that decision, which I have applied.
Consideration
There is no dispute that, for the purpose of s.243(1)(a) of the FW Act, the application has validly been made under s.242. The ASU is a registered employee organisation which is entitled to represent the industrial interests of relevant employees. It is also a default bargaining representative for the proposed agreement by virtue of their membership amongst such employees. Accordingly, the ASU has standing to make the application under s.242(1).
The application specifies the employers and employees who will be covered by the proposed agreement in accordance with s.242(2).
As to s.243(1)(c), I am satisfied (and it is not in contest) that some, if not many, of the employees who will be covered by the proposed agreement are represented by the ASU. The application is not made in relation to a proposed greenfields agreement and thus complies with s.242(3).
In respect of s.243(1)(b), which is concerned with whether I am satisfied that it is appropriate for the employers to bargaining together, I consider each of the matters the Commission is required to have regard to below.
The prevailing pay and conditions within the relevant industry or sector (including whether low rates of pay prevail in the industry or sector): s.243(1)(b)(i)
In Application by UWU, AEU and IEU, the Full Bench stated:
“[30] Second, the consideration identified in s 243(1)(b)(i) requires us to have regard to the ‘prevailing pay and conditions within the relevant industry or sector’. The reference to ‘the relevant industry or sector’ plainly indicates that the assessment required will extend beyond the pay and conditions of the employees to whom the authorisation sought will apply (unless the authorisation sought would encompass the entirety of the relevant industry or sector). That will mean that, in the normal course, an applicant for an authorisation might be expected to adduce evidence concerning prevailing pay and conditions within the relevant sector. ‘Prevailing’ is to be given its ordinary meaning; that is, ‘predominant’ or ‘generally current’.
[31] The words in parentheses in s 243(1)(b)(i) require consideration to be given as to whether ‘low rates of pay’ prevail in the industry or sector. It is to be noted that the legislature has chosen to use the expression ‘low rates of pay’ rather than refer to the ‘the low paid’ — the expression used in the former low-paid bargaining scheme, and also currently used in ss 134(1)(a) and s 284(1)(c). This indicates that some distinction in meaning is intended. ‘Low paid’ connotes the earnings of employees generally, but ‘low rates of pay’ has a more confined meaning that refers only to the amount an employee is paid for each defined period of working time (for example, an hour, day or week) or, in the case of pieceworkers, for each completed task or unit of work. The use of this different expression indicates that the approach adopted in the Practice Nurses decision and United Voice whereby ‘low paid’ was given the same meaning in s 243 as it had been in Annual Wage Review decisions made by reference to ss 134(1)(a) and 284(1)(c), with the benchmark being two-thirds of median adult ordinary-time earnings, should no longer be followed.
[32] We consider that, prima facie, ‘low rates of pay’ will prevail in an industry or sector if employees are predominantly paid at or close to the award rates of pay for their classification, since this is the lowest rate legally available to pay. This is implicit from the objects of the supported bargaining scheme in s 241, including to assist and encourage employers and employees to bargain and make agreements to meet their needs and to address constraints on their ability to do so. The needs of employees who are paid at award rates include improving their terms and conditions of employment in circumstances where there have been constraints on their ability to bargain. It is also implicit that supported bargaining is a means to assist employers and employees who have been constrained from bargaining to access productivity benefits, consistent with the overarching objects in s 171. Further, this approach finds some support in paragraph [984] of the REM which, in relation to s 243(1)(b)(i), states:
… the prevailing pay and conditions in the relevant industry – this is intended to include whether low rates of pay prevail in the industry, whether employees in the industry are paid at or close to relevant award rates, etc;…
(underlining added)
[33] However, in a particular case, it may be that a prevailing rate of pay which is at or close to the relevant award rate cannot be characterised as a ‘low rate of pay’ because the award rate itself is relatively high. For the reasons set out later in this decision, it is not necessary for us to consider this possibility in this matter, and it is best left for fuller consideration in an appropriate case.”
The majority of the employees engaged by the employers are generally paid by reference to the SCHADS Award classifications and rates, with some likely exceptions.
It is the case that some of the employees who would be covered are award reliant and low paid, applying any of the approaches discussed by the Full Bench in Application by UWU, AEU and IEU. As with that matter, it is unnecessary for me to determine in this case whether any higher classified employees are low paid for present purposes.
The above conclusions weigh in favour of making the authorisation sought.
Whether the employers have clearly identifiable common interests: s.243(1)(b)(ii)
In Application by UWU, AEU and IEU, the Full Bench stated:
“[34] Third, the expression ‘common interests’ used in s 243(1)(b)(ii) in connection with the employers the subject of an authorisation application is one of wide import, and on its ordinary meaning extends to any joint, shared, related or like characteristics, qualities, undertakings or concerns as between the relevant employers. The diversity of the non-exhaustive list of ‘examples’ of common interests in s 243(2) gives contextual support to the breadth of meaning which we assign to the expression. The common interests must be ‘clearly identifiable’, that is, plainly discernible or recognisable, but need not be self-evident.”
In this case, there is material before the Commission about the circumstances of each of the employers and this demonstrates that there are relevant factors present that represent, or provide the context for, clearly identified common interests.
Geographic location
The employers are both located in Melbourne, Victoria.
Nature of the enterprises to which the agreement will relate
The employers are both not-for profit organisations providing community legal services.
Terms and conditions of employment in the enterprises
The terms and conditions of employment are similar but do vary; however, they are based upon the same modern award and are influenced to some degree by the same predecessor instrument.
Common funding and regulatory arrangements
Both employers are heavily reliant upon funding from the Commonwealth and Victorian Governments. They are subject to largely common regulatory arrangements.
Having regard to each of the above findings, the existence of the clearly identifiable common interests weighs in favour of making the authorisation sought.
Whether the likely number of bargaining representatives for the agreement would be consistent with a manageable collective bargaining process: s.243(1)(b)(iii)
The likely number of bargaining representatives in this matter is likely to be small and a manageable collective bargaining process is also to be expected.
This consideration weighs in favour of granting the authorisation sought.
Any other matters the Commission considers appropriate: s.243(1)(b)(iv)
I consider it appropriate to have regard to four additional matters. The first is that the affected employers support the application and wish to bargain together. None of the employees that would be affected has advised the Commission that they oppose the making of the authorisation sought. This is of significance having regard to the prohibition upon employers engaging in bargaining for any type of agreement other than a supported bargaining agreement once an authorisation is in operation (s.172(7)(b)), and weighs in favour of making the authorisation.
The second matter is that this application concerns a workforce which is predominately female. I also observe that the SCHADS Award is presently subject to a gender underevaluation proceeding before a Full Bench of the Commission.
Granting the authorisation sought would open the prospect of improving rates of pay of a largely female dominated workforce, which would be consistent with that part of the object of the FW Act in s.3(a) concerned with the promotion of gender equality. This weighs in favour of the making of the authorisation.
Third, there is a history of bargaining as a sector here and the Employers have indicated a strong preference for support in order to engage in effective bargaining. That support may arise on a number of levels and includes the support that employers will derive from being able to bargain collectively with the assistance of the Commission pursuant to s.246 of the FW Act. The granting of the authorisation will for this reason be consistent with the statutory object in s.241, and this weighs in favour of making the authorisation.
Fourth, all of the employers are heavily reliant upon Government funding. The making of the authorisation will more readily facilitate their participation in the negotiations. This also weighs in favour of granting the application.
I observe that in some circumstances, the grouping of a small number of employers within a proposed authorisation of this kind, from amongst a much wider cross-section of employers in a sector, may need to be considered in the present context. However, the history of bargaining and the exclusion of the employers (by the vote of their employees) from the VCLC EA provides an objective explanation here and the issue does not need to be further considered as part of this application.
Conclusions and the Authorisation
On the basis of my consideration of the matters specified in s.243(1)(b) of the FW Act, I am also satisfied that it is appropriate for the Employers and Employees that will be covered by the proposed multi-enterprise agreement to bargain together.
None of the restrictions in s.243A on making supported bargaining authorisations applies here. The parties are covered by the SCHADS Award and there is no relevant single-enterprise (or other enterprise) agreement applying.
The Authorisation and proposed agreement would not cover employees in relation to ‘general building and construction work’.
Because the requirements in paragraphs (a), (b) and (c) of s.243(1) of the FW Act are each satisfied, and none of the restrictions in s.243A applies, I am required by s.243(1) to make the supported bargaining authorisation sought by the ASU. The authorisation is made by a separate order[9] that is being published concurrently and, in accordance with s.243(4), will operate from the date of this decision.
DEPUTY PRESIDENT
Appearances:
S Shepherd with K Daruwalla, T Sullivan, D Goldsworthy, C Watson and A Butchers for the Australian Municipal, Administrative, Clerical and Services Union.
J Tresise with J Ellis and A Ryan for Young People's Legal Rights Centre Inc.
N Morales for Inner Melbourne Community Legal Inc.
Hearing details:
2024
September 13
MS Teams Video.
[1] I also observe that the Legal Services Award 2020 does not cover those employed in community legal services– clause 4.3.
[2] Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) – Schedule 3 subitem 20A(4).
[3] [2024] FWCFB 110.
[4] [2024] FWCA 1623 – approved on 3 May 2024.
[5] Section 184 of the FW Act.
[6] Section 246(2) of the FW Act.
[7] Section 246(3) of the FW Act.
[8] [2023] FWCFB 176.
[9] PR779216
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