Australian Workers' Union, The
[2024] FWC 1190
•9 MAY 2024
| [2024] FWC 1190 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.236 - Majority Support Determination
Australian Workers' Union, The
(B2024/448)
| DEPUTY PRESIDENT O'KEEFFE | PERTH, 9 MAY 2024 |
Application for a majority support determination – application granted.
On 16 April 2024 the Australian Workers Union (the Applicant) applied for a majority support determination under s.236(1) of the Fair Work Act 2009 (Cth) (the Act). The Applicant contends that a majority of relevant employees who would be covered by a proposed enterprise agreement want to bargain with their employer, Enhanced Drilling Australia Pty Ltd (the Respondent).
Having received the s.236 application, on 17 April 2024 I issued directions to the parties to provide, in the case of the Applicant, copies of the petitions it asserted had been signed by the employees, a reference to the section of the Applicant’s rules which allowed it to cover those employees and any submissions it wished to make with respect to s.237(2) of the Act. The Respondent was directed to provide the names of the persons employed in the classifications specified by the Applicant, any submissions it wished to make with respect to s.237(2) of the Act and an indication of whether it opposed the making of a majority support determination. The parties complied with those directions and the Respondent indicated that it opposed the making of a majority support determination.
On 1 May 2024 I conducted a conference between the parties to attempt to resolve the matter. Arising from that conference, the parties indicated that they were happy for me to issue a decision based on the material already before me and with no requirement to examine the Applicant’s witness Mr Tony Hall.
Statutory Framework
Section 237 of the Act provides that the Commission must make a majority support determination in relation to a proposed single enterprise agreement if an application has been made under s 236, and where the Commission is satisfied of the matters in s 237(2). That section provides:
“237 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) that 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.
…”
In relation to s 237(2)(a), the Commission may determine whether a majority of employees want to bargain by using any method it considers appropriate (see s 237(3)).
If the proposed agreement will not cover all of the employees of the employer or employers covered by the agreement, the Commission must, in deciding whether the group of employees who will be covered was fairly chosen, take into account whether the group is ‘geographically, operationally or organisationally distinct’ (s 237(3A)).
On the material before me I find that the Applicant is a bargaining representative of the employees in question and is entitled under its registered rules to represent the industrial interests of those employees. The application specifies the employer and employees who will be covered by the agreement. As such, I am satisfied that a valid application has been made under s 236.
The first matter prescribed by s 237 is whether the Commission is satisfied that a majority of the relevant employees who are employed by the employer at a time determined by the Commission want to bargain (s 237(2)(a)). The Respondent submitted that the FWC should not be satisfied that such a majority existed. The Respondent submitted that:
(a) The Applicant did not include in the Application details regarding how and when the individual petitions were collected from the Offshore Employees.
(b) The Applicant has not provided evidence regarding the time span during which the petitions were collected.
(c) The material provided by the Applicant may not be the most current material available on which the FWC should make a decision.
(d) The Applicant also did not enclose the petitions to the Application (redacted or otherwise), so the Respondent has been unable to review the petitions for their veracity and authenticity.
(e) The Applicant has also not provided evidence regarding what explanation was provided to the offshore employees by the Applicant regarding the petition before seeking their signature and the context in which the signatures were sought. As such, there is no evidence that the employees understood the purpose and effect of the petition, and therefore, what they were signing their name to. If employees were not aware of the true nature and effect of what they were signing, then as implied in the findings in Textile, Clothing and Footwear Union of Australia v Jeanswest Corporation Pty Ltd [2014] FWC 1024 at [70], the petition results could not be relied upon.[1]
As per directions, the Applicant provided copies of the petitions signed by each of the employees. It also provided, as an annexure to the witness statement of Mr Tony Hall, a copy of the email sent by Mr Hall to the employees, which outlined in clear terms the purpose of the petition and the process that would be initiated if a majority of the employees voted in support of the Applicant bargaining with the Respondent. From that material it appears that the petitions were collected in mid-March 2024 and that the Applicant wrote to the Respondent one week later. I have compared the names on those petitions with the names provided by the Respondent and confirm that all of the petitions received came from employees of the Respondent. I find that Mr Hall’s email regarding the petition is clear in its message and appropriately sets out the reason the Applicant was conducting the petition, and the effect and actions which would flow from a majority yes response. As such, I am satisfied that this material addresses the concerns outlined in paragraph 8 above.
The Respondent raised a further concern that it understood that only one of its offshore operators had expressed any interest in bargaining for an enterprise agreement and that no other offshore operator had expressed discontent with the employment terms and conditions provided by the Respondent. I am not persuaded that there is any relevance to this submission. The question to be answered is can the Applicant demonstrate that a majority of employees want to bargain with the Respondent. It is not unusual and indeed often the case that employees who wish to bargain do not express this desire directly to management but rather confide in their union. It is again not unusual and indeed often the case that the process for determining majority support is conducted in such a way as to shield the identities of the employees expressing such support, be it by confidential petitions submitted only to the FWC or – as suggested by the Respondent – a secret ballot conducted by an external provider. As such, the Respondent’s state of knowledge is usually not relevant to the FWC’s task of determining majority support.
The Respondent submits that there are a total of seven employees engaged in the specific classifications identified by the Applicant and I accept that this is the case. That being so, based on the petitions submitted to the FWC I am satisfied that a clear majority of employees wish to have the Applicant bargain with the Respondent.
As to the other requirements of s.237(2), there was no dispute that the Respondent has not yet agreed to bargain or initiated bargaining. This was confirmed by the Respondent in its submissions. As such, the requirement in s.237(2)(b) has been met.
As the proposed agreement would not cover all of the employees of the Respondent, the FWC must determine if the group was fairly chosen. With respect to the issue of fairly chosen as required by s.237(2)(c), the Respondent submitted that I should not be satisfied that this was the case. To satisfy the requirements of s.237(2)(c) the FWC must, as per s.237(3A), have regard to whether the group is “geographically, operationally or organisationally distinct.” The Respondent submitted as follows:
(a)The Respondent says that the Offshore Employees are not geographically or operationally distinct and note that a lack of distinctiveness is a factor telling against a finding that the group is fairly chosen.
(b)The Offshore Employees do not only perform their work offshore.
(c)The Offshore Employees also perform work at the Respondent’s workshop during
periods where offshore work is unavailable.
(d)The Respondent engages three employees who work solely at the workshop as
Workshop Technicians (the Workshop Employees).
(e)Whilst at the workshop, the Offshore Employees work alongside and perform similar work to the Workshop Employees. The Respondent says that there is a lack of geographical and operational distinction between the two sets of employees as a result.
(f)Further, the Respondent submits that the Offshore Employees are also not a geographically or operationally distinct group within themselves, as there can be significant geographical and operational separation between members of the Offshore Employees cohort.
(g)The Offshore Employees are not consistently based at the same work location together. The Offshore Employees can be split up to work at multiple offshore project locations at the same time and notably, can be serving different clients.
(h)There can be variance in the working conditions at each of these project locations, depending on the client’s rules for the project and the Respondent’s contract with that client.
The Respondent says that there is a lack of geographical and operational distinctiveness as a result.[2]
In support of point (a) above the Respondent cited the findings of the Full Bench in QGC Pty Ltd v Australian Workers’ Union [2017] FWCFB 1165 (QGC) at [42] which confirms that a lack of distinctiveness counts against a finding of fairly chosen. In support of point (e) the Respondent cited the findings of Deputy President Beaumont in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v South32 Worsley Alumina Pty Ltd [2021] FWC 3784 where at para [158] the Deputy President noted as follows:
“The Electrical employees are not geographically distanced or separated from their South32 co-workers. In Aerocare v TWU, the Full Bench found there was no appealable error at first instance where it was found that the relevant group of employees was not geographically distinct because the employees physically worked alongside other employees of the employer who would not be covered by the proposed agreement.”
The Respondent, in support of point (f), noted the decision of the Full Bench in Australian Workers’ Union v BP Refinery (Kwinana) Pty Ltd [2014] FWCFB 1476 where at [13] the Full bench said:
“It was accepted that all of the employees in question work at the BP Refinery at Kwinana. The laboratory technicians work in a laboratory building within the refinery site some 200m distant from where the operators work. Geographical distinctness under s.238(4A) is concerned with the geographical separateness of the employer’s various worksites or work locations, not a separation of a few hundred metres within the same work site.”
The Applicant submitted that the group was fairly chosen and was operationally and organisationally distinct and addressed the concepts relevant to fairly chosen. The Applicant cited the finding in of the Full Bench in QGC where it was stated that distinctiveness for the purposes of s.237(3A) ‘is not absolute and can be a matter of degree’ and that whether ‘a group is organisationally, operationally or geographically distinct is not decisive but rather is a matter to be given due weight having regard to all of the other circumstances.’[3]
The Applicant further cited the finding of the Full Bench in INPEX Australia Pty Ltd v The Australian Workers’ Union [2021] FWCFB 1038 (Inpex) where at [33] the Full bench stated that ‘distinctiveness within the meaning of s237(3A) of the Act is necessarily a relative, not absolute concept, and necessarily requires a comparison between the employees who will be covered and those who will not.”
In further submissions, the Applicant cited the findings of the Full Bench in Cimeco Pty Ltd v CFMEU & Ors [2012] FWAFB 2206 (Cimeco) where at [8] the Full Bench stated as follows:
“A member’s decision as to whether or not they are satisfied that the group of employees covered by the agreement was ‘fairly chosen’ involves a degree of subjectivity or value judgment. Hence, in a broad sense that decision can be characterised as a discretionary decision.”
At [21] the Full Bench further stated:
“The word ‘fairly’ suggests that the selection of the group was not arbitrary or discriminatory. For example, selection based upon employee characteristics such as date of employment, age or gender would be unlikely to be fair. Similarly, selection based on criteria which would have the effect of undermining collective bargaining or other legislative objectives would also be unlikely to be fair.”
Finally, the Applicant drew upon the finding of the Full Bench in CFMEU v ResCo Training and Labour Pty Ltd [2012] FWAFB 8461 at [35] where the Full Bench held as follows:
“In most enterprises there is unlikely to be any one fair manner of selecting the class of employees to be covered by an enterprise agreement. Different scope provisions may be equally described as fair in the sense that no manifest unfairness arises from their application. That is not to say that the parties may have a particular preference or view about the scope and favour a different formulation. The tribunal’s task however is not to determine the scope clause. Its task is to guard against unfairness by being satisfied that the group can be described, in all the circumstances, as fairly chosen.”
Having made those submissions, the Applicant then turned to the specifics of the employees in the chosen group for this matter. The Applicant submitted, with respect to operational distinctiveness, as follows:
“The proposed agreement covers a discrete section of the employees of the Respondent known as the Offshore Crew. These employees are engaged in the following roles:
a. Electrician Offshore Operator;
b. Electrician Offshore Operator Supervisor;
c. Mechanical Offshore Operator; and
d. Mechanical Offshore Supervisor.
There are no employees of the Respondent who are engaged in the above roles, except for those covered by the proposed agreement.”[4]
With respect to organisational distinctiveness, the Applicant noted the findings in QGC with respect to “organisation” being taken to mean the manner in which the employer has organized its enterprise to conduct its operations. It submitted that the relevant employees are engaged to fulfill its contracts with operators in the hydrocarbons industry.
With respect to geographical distinctiveness, the Applicant noted that the employees work predominantly offshore and as such were geographically distinct from the Respondent’s other employees.
I will firstly address some of the submissions of the Respondent with which I disagree. Firstly, there is a suggestion that as the offshore employees can from time to time work alongside the workshop employees, they are therefore not geographically distinct. While I note the case findings cited, I find that the work of the offshore employees is such that it is performed in a geographically distinct manner – being offshore – and that such time as is spent in the workshop usually only arises, as is conceded by the Respondent, due to a lack of offshore work. Put another way, the primary function of the offshore employees is to work offshore, and work in the workshop is incidental to the primary function. The Respondent makes another argument on this issue being that the group of workers is not geographically distinct as due to the nature of the work, the individual employees themselves work in geographically distinct locations rather than all together. I am not persuaded that this is a compelling argument. I find that the group is geographically distinct in that all of them are clearly working both offshore and away from the Respondent’s offices and workshop when performing their primary function. Given the nature of the assessment that the FWC is required to make in this matter being, as per Inpex, an exercise in relative rather than absolute concepts and as per Cimeco one that involves a degree of subjectivity or value judgment, I find the group of employees is geographically distinct.
A finding that the group chosen is geographically distinct will provide the FWC a level of comfort that the group is fairly chosen. However, I will also consider the issue of operationally and organisationally distinct. The Respondent, as set out above, regards the group as not operationally distinct, although it relies somewhat on its arguments with respect geographically distinctiveness to advance this submission. For example, it says that as the offshore employees perform similar work to the workshop employees when in the workshop, those two groups should not be regarded as operationally distinct. However, as I found above, the FWC needs in this particular case to be mindful that the time spent in the workshop is merely incidental to the primary function of the offshore employees. As such, I find that the analysis should perhaps focus on the primary work that the offshore employees do and how that fits within the operations of the Respondent.
The Applicant contends that the work of the chosen group is operationally distinct and involves offshore work in the hydrocarbons industry. While I accept that the chosen group do indeed work offshore, the issue does not end there. If I turn to the findings of the Full Bench in QGC, a useful distinction between operational and organisational is provided at [44] as follows:
“The term “operational” refers to an industrial or productive activity...(t)he term “organisation” refers to the manner in which the employer has organised its enterprise in order to conduct those operations.”
Based on the background material supplied by the Respondent, which was not challenged by the Applicant, the Respondent’s business involves the supply of specialist drilling technology to the offshore oil and gas industry. It employs a total of fourteen people in Australia, which appear to be split between three in its workshop, four in its office and seven engaged offshore. Given this, I find it difficult to accept that the offshore employees are operationally distinct as they form an integral part of the total operations of the Respondent.
The Respondent made no submissions with respect to the issue of operational distinction. The Applicant’s submission was essentially that the work of the chosen group involves offshore work for clients of the Respondent in the hydrocarbons industry, which I accept is the case. Given this, I am of the view that the group can be regarded as organisationally distinct. It seems to me that the Respondent has organized its activities into what I will call administrative support being the office staff, technical support being the workshop staff and operators, being the chosen group.
In summary, taking into account the geographical and organisational distinctiveness of the chosen group I am satisfied that the group has been fairly chosen, notwithstanding that it may not be operationally distinct.
I now turn to the issue of 237(2)(d) and whether it is reasonable in all of the circumstances to make a majority support determination. The Respondent submitted that it was not reasonable. It submitted a number of reasons as to why this was the case, as follows:
(a)The Respondent submits that its productivity and efficiency would be unfairly affected by the bargaining process.
(b)The Respondent has no prior history with enterprise agreements in relation to the Offshore Employees, and the Respondent currently negotiates its terms of employment via individual negotiations.
(c)The Respondent says that the Offshore Employees’ remuneration is already highly commercial and competitive, and all of the Offshore Employees are paid well above the minimum standards of the Hydrocarbons Award.
(d)A significant majority of the Offshore Employees, five out of the seven, had a performance appraisal in March-April 2024, and only one employee raised concerns about their employment terms and conditions. No offshore operator has formally or in writing requested directly to the Respondent to commence enterprise agreement negotiations.
(e)The total annual remuneration of the full-time Offshore Employees averages approximately $160,800.90 per year (exclusive of superannuation). Although, the annual remuneration does fluctuate based on how much offshore work an Offshore Employee undertakes.
(f)The Respondent says that it is highly unlikely that an enterprise agreement will result in substantive improvements to the Offshore Employees’ employment terms and conditions.
(g)However, the bargaining process would impose a substantial time and monetary burden on the Respondent for what is a small business with a very limited sized workforce.
(h)Further, the Respondent does not have its own dedicated HR personnel. The bargaining process will place undue pressure on the Respondent’s limited management team.
The Respondent says that the burden that the bargaining process will place on it is wholly disproportionate to any benefit that the Offshore Employees are likely to receive from the bargaining process. As such, the Respondent’s productivity and efficiency would be unfairly affected by the bargaining process.[5]
In its submissions, the Applicant addresses a number of these propositions. With respect to items (c), (d) and (e), the Applicant submits that these are not relevant considerations for the FWC in performing its functions under s.237. The Applicant further submits that with respect to item (g), the size of the workforce is irrelevant and that the Act, as per s.172(6), only requires there to be two employees to allow the making of an enterprise agreement. In other submissions, the Applicant notes that the FWC has found (see Re Australian Licenced Aircraft Engineers Association [2013] FWC 4267 at [13] and AMWU v Top Cut [2017] FWC 2798 at [20] and [23]) that where it is clear that a majority of employees wish to bargain, that is reasonable to make a majority support determination.
I will address each of the Respondent’s submissions on the reasonableness of making an order in turn. The first submission is that productivity and efficiency would be unfairly affected by the bargaining process. This submission is not expanded by the Respondent. If it takes the view that the actual process of bargaining – as opposed to the outcomes of bargaining - will impede efficiency, then I refer to the objects of the Act, particularly s.3(f), which states as follows:
“…achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; and…”
It is clear that the Act places an emphasis on collective bargaining at the workplace level and sets conditions to ensure that employers, employees and employee organisations can engage in such bargaining, and in good faith. Clearly the parliament was aware that bargaining does indeed take time, effort and resources, but then so does individual bargaining – the Respondent’s current practice. It may well be argued that collective bargaining is more efficient as, particularly in this case, it is likely that there will be one bargaining representative for the employees presenting one set of claims, as opposed to multiple and potentially competing claims from individuals.
If the Respondent’s objection is that it is the outcomes of bargaining that will impact productivity then it should be remembered that enterprise level bargaining is a two-way street that allows the employer to make claims for productivity gains and, again as opposed to individual bargaining, gets a guarantee that those provisions that deliver such gains will apply equally across the workforce. As such, I do not find that this objection – in either of its iterations - warrants a finding that making a majority support determination would be unreasonable.
The second of the Respondent’s submissions is that the Respondent has no prior history with enterprise agreements in relation to the Offshore Employees, and the Respondent currently negotiates its terms of employment via individual negotiations. With this submission I again refer to the objects of the Act and the particular object set out above. It is clear that the focus of the Act is on collective and not individual bargaining. While it may be the case that this is the first experience the Respondent has with enterprise agreements, that is no impediment to the making of a majority support determination.
The third, fourth and fifth objections are essentially that the Respondent pays competitive rates and the employees have not objected or requested higher rates. As to the first part of these objections, I accept the Applicant’s submissions and I refer to and adopt the findings of Deputy President McCarthy in CFMEU v CBI Constructors as follows:
“These terms and conditions, CBI argues, are current and competitive. The assertion seems to be that as the actual terms and conditions are current and competitive then that is not reasonable in all the circumstances for me to make the MSD. This to me seems to misunderstand the nature of bargaining and the role of FWA in MSD applications. It is not for FWA to make any judgments at all about the appropriateness or otherwise of the terms and conditions applying or of any sought, particularly at this juncture. FWA’s role is limited to ascertaining whether a majority wanted to bargain for an enterprise agreement that would cover them.”[6]
As to the second part of the objections, I say again as I have said above that the fact that employees have not complained to the Respondent is neither unusual nor relevant. They have indicated by their petitions that they wish to bargain. While the Respondent may have preferred feedback on conditions via another channel, it is nonetheless the case that the employees have now spoken, and in a manner consistent with the requirements of the Act.
The sixth objection is that the Respondent says that it is highly unlikely that an enterprise agreement will result in substantive improvements to the Offshore Employees’ employment terms and conditions. While that may well be the spirit in which the Respondent intends to approach the negotiations, it is not for the FWC to speculate – based on little knowledge of the parties’ intentions or strategies - about the likely outcome of bargaining and make a decision on the reasonableness based on its speculative assessment of the potential outcome.
The seventh and eighth objections are largely the same as the first interpretation of the first objection as set out above and I do not intend to expand on what I have said other than to note that as a member of the FWC I have received applications for, and approved, agreements where the Respondent has less employees than would be covered by the proposed agreement in this matter. The ninth of the Respondent’s objections appears to be an amalgam of the first, seventh and eight objections and so I do not propose to address it any further than I have in dealing with those prior objections.
In summary, I find that there are no issues that have been raised with me or of which I am aware that would suggest to me that it is not reasonable to make the majority support determination sought by the Applicant. The application thus meets the requirements of s.237(2)(d). The only issue remaining is to decide the date for the purposes of s.237(2)(a)(i). The Applicant submits that this date should be 13 March 2024. With respect to this, the Full bench in Kantfield Pty Ltd v AWU [2016] FWCFB 8372 (Kantfield) at [35] said as follows:
“The power to apply a time-based limitation is confined to section 237(2)(a)(i) and not section 237(2)(a) more broadly. That is, the power to apply a point-in-time limitation in section 237(2)(a)(i) is directed to fixing the time at which the FWC is to determine who are the persons employed only. Therefore, it does not confer a broader power to “fix” historical or future points in time for other aspects of section 237.”
[31] It is also clear as set out in Kantfield at [37] that the decision should be made based on the most current material available to the FWC. In this instance, that material is as per the Applicant’s petitions as submitted to the FWC. In AWU v Woodside Energy Ltd Deputy President Binet stated in support of adopting, for the purposes of s.237(2)(a)(i), the day the union involved finished collecting petitions as follows (citations removed):
“In CEPU v South32 Deputy President Beaumont followed the decisions in both Kantfield Pty Ltd v AWU and National Union of Workers v Lovisa Pty Ltd, and determined that the time for the employee cohort to be fixed was the date when the union ‘ceased garnering signed petitions’.”[7]
Taking into account all of these findings I therefore determine the date for the purposes of s.237(2)(a)(i) to be 13 March 2024, being the day on which the Applicant received the last of the employee petitions.
Conclusion
As I am satisfied that the requirements of s.237(2), have been met, and having determined the date for the purposes of s.237(2)(a)(i) is 13 March 2024, I am required by s.237(1) to make a majority support determination. The determination is issued separately in PR774614.
DEPUTY PRESIDENT
[1] See Respondent Submissions at paragraphs 17 -26.
[2] See Respondent Submissions at paragraphs 36 – 45.
[3] QGC v The Australian Workers’ Union [2017] FWCFB 1165 at [42].
[4] See Applicant’s submissions at paragraphs 33 – 34.
[5] See Respondent submissions paragraphs 48 – 56.
[6] CFMEU v CBI Constructors[2010] FWA 2164 at [17].
[7] AWU v Woodside Energy Ltd[2023] FWC 249 at [345].
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