Australian Rail, Tram and Bus Industry Union v Loram Pty Ltd T/A Loram Pty Ltd

[2024] FWC 2414

[2024] FWC 2414

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.236—Majority support determination

Australian Rail, Tram and Bus Industry Union
v

Loram Pty Ltd T/A Loram Pty Ltd

(B2024/931)

COMMISSIONER TRAN MELBOURNE, 5 SEPTEMBER 2024

Application for a majority support determination – majority support determination granted

1. On 22 July 2024, the Australian Rail Tram and Bus Industry Union (RTBU/ the Union) applied under s 236 of the Fair Work Act 2009 (the Act) for a majority support determination to be made in relation to certain employees of Loram Pty Ltd (Loram/the Employer).

1. The RTBU is an organisation registered under the Fair Work (Registered Organisations) Act 2009 and says it is a bargaining representative of employees of Loram.

1. Loram has operations throughout the world. In Australia, the company operates in Western Australia, South Australia, New South Wales, Queensland and Victoria. Its work in Australia is rail track maintenance, particularly rail grinding.

1. The employees proposed to be covered by the agreement are not all of Loram’s employees. The employees proposed are those employees in the State of Victoria who operate the grinder, do general labour and those who operate and maintain the grinder. Loram says that there are 6 employees performing this work in Victoria, but a total of 134 nationally (with 83 who work primarily in Western Australia; 32 who work primarily in Queensland and 19 who work across NSW, South Australia and Western Australia).

1. In May 2024, the Victorian employees contacted the Union and began discussions about bargaining with their employer. On behalf of the employees, the Union asked Loram to start bargaining multiple times in June and July 2024. On 16 July 2024, Loram provided a clear response, saying:

“Loram considers that both the business and our employees are better off with these arrangements as they suit the environment we work in and our customer arrangements, so we do not see any need to change that at this point in time.”

1. So, the Union filed this application. Section 237 of the Act provides that the Commission must make a majority support determination if an application has been made and the Commission is satisfied of all matters in s 237(2). The full text of this section is appended to this decision.

1. Taking into consideration the factors in s 237 I have decided to grant the majority support determination sought by the Union. My reasons follow.

Commission Process

1. On 29 July 2024, I held a case management conference. I directed the parties to provide materials that would assist me to determine whether or not a majority of employees wanted to bargain.

1. In accordance with my directions, the Union confidentially filed an unredacted version of its petition to my Chambers, and filed and served a statutory declaration about the collection of the signatures on its petition together with a redacted version of the petition. Loram confidentially filed unredacted lists of all its employees in Australia and a list of employees working on rails in Victoria, including the names, state of work and job title to my Chambers, and filed and served a redacted version of the list together with a statutory declaration confirming the accuracy of the list.

1. My Chambers provided a report to the parties that indicated that:

·   62.5% (5 out of 8) of employees in Victoria seek to commence bargaining; or

·   83.33% (5 out of 6) of employees working on rails in Victoria seek to commence bargaining.

1. I also set directions and the parties filed submissions and witness statements in accordance with those directions.

1. However, with its reply materials the Union filed a further petition; confidentially filing an unredacted version only to my Chambers and filing and serving a redacted version appended to the witness statement of Mr Bryan Evans, Organiser. My Chambers compared this second petition with the lists earlier provided by Loram and provided a further report to the parties that indicated:

·   62.5% (5 out of 8) of employees in Victoria seek to commence bargaining; or

·   83.33% (5 out of 6) of employees working on rails in Victoria seek to commence bargaining.

1. I heard the matter on 22 August 2024.

1. Mr Evans gave evidence on behalf of the Union.

1. Mr Aaron Worth, Head of Operations for Loram, provided a witness statement on behalf of Loram. Mr Worth’s evidence was not challenged by the Union.

1. The Union prepared a hearing book, and I accepted the entirety of that hearing book into evidence.

The RTBU is a bargaining representative

1. Section 236 provides that a bargaining representative may apply for a majority support determination. It is not in dispute that the RTBU has standing to make this application and I find the RTBU to be a bargaining representative for the purposes of this matter.

The application specified Loram and the employees who will be covered by the Agreement

1. I am satisfied that the application meets the requirements of s 236(2) as it specified the employer – Loram Pty Ltd – and the employees who will be covered by the Agreement – as those employees who are based in Victoria, engaged on the Victorian rail networks and whose classifications cover those who operate the grinder and do general labour and those who operate and maintain the grinder (trades).

237(2)(a) – do a majority of the employees who are employed at a time determined by the Commission and who will be covered by the agreement want to bargain?

1. Under s 237(3), the Commission may work out whether a majority of employers want to bargain using any method that the Commission considers appropriate. The Explanatory Memorandum to the Act gives the example of a petition as a method[1] and numerous decisions of this Commission have relied on petitions to establish whether a majority of employees wish to bargain. Loram does not challenge that a petition is an appropriate method for the Commission to determine whether a majority of employees wish to bargain.

1. Loram did initially challenge whether the first petition filed on 31 July 2024 had probative value. It also initially objected to the second petition filed on 20 August 2024, which attempted to cure some of the matters raised about the first petition. At the hearing however, to assist the Commission in dealing with this matter efficiently, Loram appropriately did not press its challenges or objections,

1. I determine that the time for the purposes of s 237(2)(a) is 30 July 2024, which was the date that Loram provided its list of employees to the Commission in accordance with my directions.[2] I am satisfied that the second petition, being the most recent available information to me, establishes that a majority of employees want to bargain.[3] I did so by comparing the names on the petition with the names of employees provided by Loram. I am also satisfied based on the evidence provided by Mr Evans in his second witness statement of 20 August 2024 that the petition is reliable evidence of employees’ wishes.

237(2)(b) – has employer that will be covered by the agreement not yet agreed to bargain?

1. It is not in dispute, and I am satisfied based on the evidence provided by Mr Evans, that Loram has not yet agreed to bargain.

237(2)(c) – are the group of employees who will be covered by the agreement fairly chosen, taking into account whether a group is geographically, operationally or organisationally distinct under section 237(3A)?

1. There is no dispute that the proposed agreement will not cover all of Loram’s employees; indeed, it covers only 6 out of a total 140 employees.

1. The Union says that the group is fairly chosen, as it was the group of employees who work in Victoria and who contacted the Union to assist them to bargain with Loram. The Union relies on the geographical distinctiveness of the group, being the only employees working in Victoria on rail grinding and related tasks, and that their operational and organisational distinctiveness flows from that geographical distinctiveness.

1. Loram says that the group is not ‘fairly chosen’. It says that the group was chosen arbitrarily based on the Union’s desires and divisional operations as Mr Evans’ patch is Victoria only. It also says that Mr Evans made no attempts to ascertain whether other employees in other states also wished to bargain. Mr Evans confirmed this under cross-examination. It says that the Union sought to narrow the scope to only those who want to bargain, and that they only comprise 4.29% of Loram’s workforce, thereby excluding more than 95% of the workforce.

1. Loram says that operationally, it has a national structure and organises its teams to specific customers. In Victoria, it has just one team as it has one primary customer – Metro Trains Melbourne. Other teams may work across states as a customer has a network that spans Qld, NSW, WA and SA. Loram also says that operationally, its employees are geographically mobile. Its employment contracts include a clause that it can change the employee's work location temporarily or permanently and may require employees to travel domestically and internationally. Also, it uses temporary transfers to backfill positions as needed.

1. Loram also made submissions regarding the impact of the proposed scope of the proposed agreement on its operations. I consider these matters relate to whether it is reasonable to make the determination, and so I address them below.

1. The Commission has a broad discretion when considering whether the group is fairly chosen[4] but must take into account whether the group is geographically, operationally or organisationally distinct. Geographical, operational or organisational distinctiveness is not decisive; the consideration is about whether the group is fairly chosen taking such distinctiveness into account.[5]

1. It is clear from the evidence of both parties that the group is at least geographically distinct. Further, Mr Worth’s evidence that the organisational and operational allocation of work to teams servicing a particular client reinforces that the Victorian employees are also operationally and organisationally distinct. Organisationally, the Victorian employees work together as a team, separate from other teams. Operational refers to an industrial or productive activity; operationally, the Victorian employees serve Loram’s only Victorian client. Mr Worth’s evidence is that there is mobility in the workforce. However, that mobility appears correlated to the client, and Mr Worth’s evidence is that there has been minimal transfers from or to the Victorian operations. I am satisfied that distinctiveness weighs in favour of the group being fairly chosen.

1. I must also consider whether the choice is fair – that is that it is not arbitrary or discriminatory. I was not taken to any discriminatory basis for the choice made, nor is any apparent. However, Loram does say the choice was arbitrary. Arbitrary is an adjective, which means based on random choice and not on reason.[6] I am of the view that the group was chosen on a rational basis– the location of employees – and in addition, that those employees sought the Union’s assistance in bargaining, which Mr Evans gave evidence of.

1. It is also appropriate to have regard to the interest of the employer and the interests of employees excluded from the group.[7] Loram does not want to bargain and has concerns about how bargaining will impact national employment conditions, cross-skilling, mobility, payroll systems and systemic efficiencies. I am of the view that these matters go to the whether it is reasonable to make the determination, rather than whether the group was fairly chosen.

1. I have no evidence about what employees who are not in the group – the rest of the Loram workforce – think about bargaining. Much was made of Mr Evans not seeking the views of employees in other states to suggest that the group chosen was not fair but nor did Loram provide me with any evidence that employees in other states wished to bargain with this group or to not bargain at all. I therefore do not give this consideration much weight.

1. I was not taken to any cases about whether the size of the group is relevant to whether they are fairly chosen. Enterprise agreements may cover at least two employees.[8] I do not give much weight to the size of the group in considering whether the group was fairly chosen.

1. Last, there is no need for the group chosen to be the fairest group.

1. On balance, I am of the view that the group was fairly chosen. The group has geographical, operational and organisational distinctiveness, being located in Victoria and as a team, servicing the Victorian clients of Loram. I do not find any arbitrariness in the choice.

237(2)(d) – is it reasonable in all the circumstances to make the determination?

1. In assessing ‘reasonableness’, I make a broad evaluative judgement, having regard to all the circumstances.

1. Loram had significant concerns about the impact of this small group bargaining being prejudicial to the productivity or efficient conduct of their business. A majority support determination is about starting bargaining. It constrains and affects nothing else in the bargaining process – not even scope or coverage. What may arise from bargaining is unknown and all bargaining representatives can make claims, including employers. So, for example, Loram’s concern that the limited scope was prejudicial as it could affect productivity, hamper mobility or cause division because Loram otherwise had a national approach could be addressed in bargaining. In relation to Loram’s concern that bargaining could lead to practical inconsistencies, the Commission has said that there is an element of conjecture where issues about additional administrative burdens arise.[9]

1. In contrast, the collective choice of employees is significant in the legislative scheme.[10] Weight should be accorded to the views of employees who wish to bargain.[11]

1. I am of the view that there is significant majority support of a fairly chosen, distinctive group of employees who wish to bargain with their employer. There will be hurdles and issues in that bargaining, but the legislative scheme allows for the choice of employees to be given significant weight to start the bargaining process. So, I am of the view that it is reasonable in all the circumstances to make the determination.

Order

1. I determine that a majority of employees of Loram, who will be covered by a proposed single enterprise agreement want to bargain. The employees proposed to be covered by the agreement are those employees in the State of Victoria who operate the grinder, do general labour and those who operate and maintain the grinder. The group of employees are not all the employees of Loram, and I am satisfied that the group of employees was fairly chosen.  

1. The employer who will be covered by that agreement is Loram Pty Ltd T/A Loram Pty Ltd, and I am satisfied that they have not yet agreed to bargain.

1. I am also satisfied that it is reasonable in all the circumstances to make the determination.

1. I therefore make the Majority Support Determination. Under s 237(4) of the Act, this determination comes into operation on the day on which is it made, being 5 September 2024.

COMMISSIONER

Appearances:

C Parsons for the RTBU.
T Spence of Counsel, instructed by HopgoodGanim lawyers, (with permission) for Loram.

Hearing details:

22 August 2024.
In Melbourne and via Microsoft Teams.

Appendix 1: Section 237, Fair Work Act 2009 (Cth)

When the FWC must make a majority support determination

Majority support determination

(1)The FWC must make a majority support determination in relation to a proposed single - enterprise agreement if:

(a)an application for the determination has been made; and

(b)the FWC is satisfied of the matters set out in subsection (2) in relation to the agreement.

Matters of which the FWC must be satisfied before making a majority support determination

(2)The FWC must be satisfied that:

(a)a majority of the employees:

(i)who are employed by the employer or employers at a time determined by the FWC; and

(ii)who will be covered by the agreement;

want to bargain; and

(b)the employer, or employers, that will be covered by the agreement have not yet agreed to bargain, or initiated bargaining, for the agreement; and

(c)the group of employees who will be covered by the agreement was fairly chosen; and

(d)it is reasonable in all the circumstances to make the determination.

(3)For the purposes of paragraph (2)(a), the FWC may work out whether a majority of employees want to bargain using any method the FWC considers appropriate.

(3A)If the agreement will not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding for the purposes of paragraph   (2)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

Operation of determination

(4)The determination comes into operation on the day on which it is made.

[1] Fair Work Bill 2008 Explanatory Memorandum at [979].

[2] Kantfield Pty Ltd v Australian Workers Union {[2016] FWCFB 8372 at [35].

[3] Kantfield at [37].

[4] Alcoa of Australia Pty Limited v CFMEU[2015] FWCFB 1832 at [24], referring to the decision in CFMEU v John Holland Pty Ltd [2015 FCAFC 16 at [60], [62] which considered this phrase in the context of s 186(3) but the Full Bench said that it saw no reason to take a different view of the same phrase when applying it to s 237(2)(d).

[5] QGC Pty Ltd v Australian Workers’ Union, The[2017] FWCFB 1165 at [43]; Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union and others[2012] FWAFB 2206 at [20].

[6] Oxford Paperback Dictionary (1996) Oxford University Press at 33.

[7] Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union and others[2012] FWAFB 2206 at [21].

[8] See s 172(6) of the Act.

[9] See Australian Workers' Union, The v QGC Pty Limited[2016] FWC 6671 at [123].

[10] See for example United Firefighters Union v Metropolitan Fire and Emergency Services Board[2010] FWAFB 3009, which was in relation to s 238 – scope orders but was referred to with approval in Alcoa of Australia Pty Limited v CFMEU[2015] FWCFB 1832 at [27] in relation to s 237 matters.

[11] CFMEU v Alcoa of Australia Limited[2014] FWC 7123, affirmed on appeal in Alcoa of Australia Pty Limited v CFMEU[2015] FWCFB 1832 at [27].

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