Australian Workers' Union, v Boral Limited
[2022] FWC 181
| [2022] FWC 181 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.238— Application for a Scope order
Australian Workers’ Union,
v
Boral Limited
(B2021/1235)
| DEPUTY PRESIDENT BULL | SYDNEY, 24 FEBRUARY 2022 |
Application for a scope order – whether group fairly chosen – whether scope order would promote fair and efficient bargaining, application opposed by employers –order not issued – application dismissed.
The Australian Workers Union (AWU) has filed an application with the Fair Work Commission (the Commission) pursuant to s.238 of the Fair Work Act 2009 (the FW Act) for a scope order for a proposed enterprise agreement.
[2] The AWU’s application (as a bargaining representative) names Boral Limited as the respondent to its application, however the evidence of Mr Angus Shedden Operations Manager NSW Metro Quarries employed by Boral Resources (NSW) Pty Ltd was that Boral Limited is a corporate entity and does not employ anyone capable of being covered by the AWU’s scope application.
While no application was made to amend the name of the respondent, it appears that the scope order is directed to Boral Resources (Country) Pty Limited and Boral Resources (NSW) Pty Ltd (Boral) as these two legal entities are party to the relevant existing enterprise agreement, the Boral NSW & ACT Country Quarry Operations Enterprise Agreement 2016 (the 2016 Agreement). This is supported in the AWU’s written reply submissions of 10 February 2022, which names in the proposed scope order sought, the two legal entities currently named as parties to the 2016 Agreement.[1]
During the arbitration of this matter, permission was granted (which was not opposed by the AWU) for Boral to be legally represented as per s.596(2)(a) of the FW Act.
The scope order application seeks to limit the scope of a proposed new enterprise agreement to Boral employees employed at the Peppertree Quarry located at Marulan South in NSW by excluding Boral employees at its other regional quarry sites in NSW and the ACT.
The parties are currently negotiating for a proposed agreement to replace the 2016 Agreement which commenced operation on 2 March 2017 and has a nominal expiry date of 1 March 2021 being four years from commencement.[2] The AWU was a bargaining representative for the 2016 Agreement and at clause 3 – Coverage, of the 2016 Agreement is stated to be as follows:
“3.1 This Agreement covers and applies to:
(a) Boral; and,
(b) the Employees; and
(c) the AWU.
3.2 To avoid doubt, this Agreement does not cover or apply to Boral employees who are not principally employed to work as quarry operators, plant operators or tradespersons (e.g. senior salaried employees such as Quarry Managers and Quarry Supervisors). Nothing in this Agreement prevents such employees referred to in this clause 3.2 from performing such duties and tasks as may be required to be performed at a Boral Quarry from time to time.”
The scope of the proposed agreement sought by the AWU would not cover employees who are employed at country quarries in NSW and the ACT, but a specific single quarry, namely the Peppertree Quarry in NSW, which is currently covered by the 2016 Agreement. The form of the scope order sought is:
“Employees of Boral Resources (Country) Pty Limited and Boral Resources (NSW) Pty Ltd who are engaged to perform work at its Peppertree Quarry in NSW and whose terms of employment are currently covered by the Boral NSW & ACT Country Quarry Operations Enterprise Agreement 2016.”[3]
Boral issued a notice of employee representational rights in early December 2020 for negotiations regarding the proposed replacement agreement and bargaining has since been ongoing. The AWU states in its Form F31 application that the scope of employees who will be covered by the proposed replacement agreement contains employees who are not ‘fairly chosen’ as required by s.183(3) and (3A)[4] of the FW Act and as a result bargaining cannot proceed fairly and efficiently.[5]
The scope order is opposed by Boral.
Submissions of the AWU
In seeking the scope order the AWU submits that the Peppertree Quarry employees are:
· organizationally,
· operationally and
· geographically
distinct from the other quarries included in the scope of the proposed replacement agreement that justifies a stand-alone Peppertree Quarry agreement.[6]
The AWU submits that at the first meeting concerning the proposed replacement agreement, the claim of the Peppertree Quarry employees to have a site specific agreement was raised.[7] The AWU states that the scope of the proposed replacement agreement has remained in dispute since the first enterprise agreement negotiation meeting in December 2020.[8]
The AWU submitted that the scope of the proposed replacement agreement was not ‘fairly chosen’ as:
·The proposed agreement covers country quarries, whereas the Peppertree Quarry is a metro quarry making it geographically different to the other quarries who will be covered by the proposed agreement.
·The Peppertree Quarry has a much higher workload and production level than other quarries covered by the proposed agreement.
·The Peppertree Quarry services the metropolitan market, not the country market.[9]
On 26 November 2021, the AWU wrote to Boral raising its concerns about the existing negotiations for the proposed replacement agreement. The correspondence stated:
“The AWU does not believe bargaining for the Proposed Agreement can proceed efficiently or fairly as the Company refuses to recognise the vast difference between the 13 Country Quarries and the PepperTree (sic) Quarry- we believe that the Peppertree Quarry is sufficiently geographically, operationally and organisationally distinct to justify a stand-alone agreement.
We hold that belief based on the following factors listed below:
PepperTree Quarry is a Metro Quarry, overseen by the Boral Metro Quarries manager.
PepperTree Quarry has a production level 500% higher than most of the other Country Quarries covered by the Proposed Agreement and its entire finished product is transported by rail directly into the Metro market and even the employees pay dockets state "Metro" on them.
The above indicates that the scope of the Proposed Agreement will not cover employees who are 'fairly chosen', and subsequently a stand-alone agreement is necessary to amend these issues.
The AWU therefore requests that Boral commences bargaining for a stand-alone agreement for the PepperTree Quarry on an urgent basis”[10]
The AWU contends that as per s.238(4)(a) of the FW Act it is meeting the good faith bargaining requirements.[11]
The AWU submitted as per s.238(4)(b) that the granting of the scope order will promote the fair and efficient conduct of bargaining as it will no longer be an issue in dispute between the parties and will reflect the wishes of employees at the Peppertree Quarry.[12] As it is the preference of the Peppertree employees to have a standalone agreement, this is said to demonstrate that the making of the scope order will promote ‘fair bargaining’.[13]
It is submitted by the AWU that the making of the order as sought will promote both fair and efficient bargaining as it will ensure that the replacement agreement is capable of being approved by the Fair Work Commission.[14]
In regard to s.238(4)(c), the scope order sought was said to reflect a group of fairly chosen employees as the Peppertree Quarry is said to be geographically, organisationally and operationally distinct.[15] It was the contention of the AWU that a single enterprise agreement covering the Peppertree Quarry is the only way of ensuring that the scope of the proposed replacement agreement to replace the 2016 Agreement covers employees who are ‘fairly chosen’.[16]
The Peppertree Quarry is a metro quarry overseen by a metro manager as opposed to the other quarries overseen by a country manager. Further, the Peppertree quarry has a production level 500% higher than most of the country quarries with the finished product being transported directly into the metro market.[17]
Despite the contention as set out in its application and the evidence of its witness, that employees covered by the 2016 Agreement were not fairly chosen, the AWU at the hearing accepted that the employee coverage of the 2016 Agreement was fairly chosen, but submitted that it is possible to have another grouping of employees that is also fairly chosen, which in this case is the group of Peppertree employees.[18]
It was submitted that the views of employees should carry greater weight than those of the employer and that there is no real or serious prejudice to Boral in the scope order sought.[19] The Peppertree Quarry employee views were those expressed in a petition attached to the evidence of Mr Burke.
Evidence of Mr Sean Burke
Mr Sean Burke, an AWU organiser provided a witness statement and was cross-examined on his evidence.[20] As an AWU organiser, Mr Burke is a bargaining representative for employees negotiating for a replacement enterprise agreement for the 2016 Agreement.
Mr Burke’s evidence was that during the initial negotiations in December 2020, he raised the issue of a separate agreement for Peppertree employees, and that this claim remained on foot at all times during the negotiations. Mr Burke disputed the evidence of Mr Shedden for Boral that the scope issue had been resolved during negotiations.[21] During cross-examination Mr Burke was unable to direct attention to any documentation that demonstrated that the proposed replacement agreement’s scope remained an outstanding issue after 22 April 2021, other than his written notice to Boral dated 26 November 2021, again raising the issue.[22]
Mr Burke’s evidence was that the reason Peppertree employees wanted a separate agreement was that the work they performed was organisationally and operationally distinct from the other quarries covered by the 2016 Agreement.[23]
Mr Burke’s evidence attached a petition from Peppertree employees which stated that they supported bargaining for a separate enterprise agreement.[24] Mr Burke stated that if the scope order was issued, then the proposed replacement agreement could be put out to vote and approved and a quick resolution would be able to be achieved for a separate agreement for the Peppertree employees.[25]
Submissions of Boral
Boral opposes the AWU scope order application and does not support the concept of a stand-alone enterprise agreement for its employees at its Peppertree Quarry in the Southern Highlands of NSW.
Boral’s evidence was that the existing 2016 Agreement covers its employees working at the following quarries:
NSW
•Marulan South (the Peppertree Quarry)
•Hall
•Johns River
•Grafton
•Currabubula
•Byrock
•Beryl
•Terramungamine
•Talbragar
•Orange
•Macksville
ACT
•Mugga[26]
When work first commenced at the newly acquired Peppertree Quarry in 2013 employees were covered by the Boral NSW & ACT Country Quarry Operators Enterprise Agreement 2012 which was later replaced by the 2016 Agreement with the coverage clause of both enterprise agreements being the same.
It was put that there have been no changes to the structure or operational circumstances of its business which could possibly change the 2016 Agreement from being fairly chosen to now being characterised as not fairly chosen due to continuing to cover employees at the Peppertree Quarry.
Boral submits that the AWU has previously stated that a separate enterprise agreement was being sought as a means to enhance the AWU’s industrial leverage in negotiating the terms and conditions of employment for the Peppertree Quarry employees, which in Boral’s submission is not a justification to make a scope order.[27]
While the material removed from the Peppertree Quarry services the metropolitan markets it is not accepted by Boral that the Peppertree Quarry is a metropolitan quarry as it is situated the NSW Southern Highlands.[28]
It was submitted that all the quarries covered by the 2016 Agreement operate in the same or a similar manner, they all extract and handle the same or similar material. It is further put that the employees at the Peppertree Quarry carry out the same or similar work as other employees to be covered by the proposed replacement agreement.
Boral submitted that bargaining efficiency is not enhanced by moving from one to two enterprise agreements which would then require two sets of enterprise negotiations for no good reason. It was submitted that nothing has been put that indicates that the proposed scope order would promote the fair and efficient conduct of bargaining which has been underway since December 2020. Having one enterprise agreement covering all relevant employees was a fair an efficient method of negotiating the replacement enterprise agreement that is not made fairer or more efficient with Peppertree Quarry employees having their own enterprise agreement.
It was submitted that if the scope order was to be made, managerial resources would unfairly need to be directed to concluding the current proposed agreement negotiations, and in addition, commencing afresh negotiations for a second stand-alone agreement for the Peppertree Quarry employees. This would be inefficient as Boral has already expended time and money by allocating managerial resources to the current agreement negotiations, with management having spent over a year to date discussing a proposed replacement agreement to cover all employees.[29]
It was submitted by Boral that requiring the parties to negotiate two enterprise agreements rather than one is also likely to cause delay in resolving both agreements as the respective groups of employees will want to await the outcome of each other’s negotiations before finalising their own negotiations.[30]
It was also submitted that the AWU in pursuing its scope order well after extensive enterprise agreement negotiations have already been conducted was a breach of the AWU’s good faith bargaining obligations.[31]
Evidence of Mr Angus Shedden
Mr Angus Shedden is the Operations Manager - NSW Metro Quarries for Boral Resources (NSW) Pty Ltd and has previously worked as the Quarry Manager for the Peppertree Quarry, a position he occupied for approximately seven years. Mr Shedden stated that the Peppertree Quarry commenced operation in 2013.[32] Mr Shedden was subject to cross-examination.
Mr Shedden represents Boral at the replacement agreement negotiations and stated that Mr Burke of the AWU raised the claim of a standalone agreement for the Peppertree Quarry on 4 December 2020. Mr Shedden states that the AWU maintained this position for the first two agreement meetings, however at the third meeting it was explained by the AWU that one of the key reasons for seeking a standalone Peppertree Quarry agreement was due to classification structure concerns of the Peppertree employees. These concerns were worked through and resolved at the conclusion of a meeting held on 22 April 2021. Future meetings proceeded on the basis that the scope of the proposed replacement agreement would remain the same as the 2016 Agreement.[33]
Mr Shedden’s evidence was from 22 April 2021 all future correspondence and discussions between the parties concerning the proposed replacement agreement made no reference to the proposed agreement’s scope as being in dispute. The scope of the proposed replacement agreement was not referenced in any meeting minutes as an outstanding issue.
Mr Shedden states that the AWU stopped challenging the scope of the proposed agreement from 22 April 2021, and at all future enterprise agreement meetings the AWU did not raise the scope of the proposed agreement as an issue.[34] On this basis, Boral made a number of concessions that it would not otherwise have made if it was aware that the Peppertree employees were still pursuing the scope claim.[35]
On 21 October 2021, Mr Shedden commenced drafting a toolbox talk form to advise employees that an ‘in principle agreement’ had been reached.[36]
On 16 November 2021, Mr Shedden states that Mr Burke advised him by email that the Peppertree Quarry employees had voted in favour of a standalone agreement.[37]
Mr Shedden states he was present at the Peppertree Quarry on 8 December 2021 and during a discussion with two AWU delegates he was told by one delegate words to the effect that the main issue was the potential that the Peppertree employees might vote no to the agreement but be out voted by employees from the other sites.[38]
Mr Shedden did not accept that there was a ‘vast difference’ between the other quarries and the Peppertree Quarry. Mr Shedden’s evidence was that the 13 Boral quarries to be covered by the proposed replacement agreement including the Peppertree Quarry are all in regional areas. Mr Shedden stated that all the Boral quarries extract and handle similar raw material, and they all operate in the same or a similar way, and that the work all employees perform is the same or similar.[39]
Mr Shedden accepted that the Peppertree Quarry was the largest producing quarry and apart from requiring more equipment and employees, the jobs essentially remain the same as other quarries with lower production levels.[40]
Mr Shedden acknowledged that the bulk of Peppertree Quarry’s product is transported by rail, but stated that the quarry can also transport up to two loads of product by truck per day which is likely to increase in the next year or so. Further, the loading of a train or truck involves the same or similar work with both being loaded via a conveyor or front-end loader with employees ensuring the loaded product is free from contaminates and that the rail carriage or truck is not overloaded.
Mr Shedden also stated that the Peppertree Quarry is not the only quarry that supplies product to the metropolitan market, with the Hall and Mugga quarries supplying product into the Canberra metropolitan market.
Mr Shedden states that it is not correct to state that the “entire finished product” from the Peppertree Quarry is “transported by rail directly into the Metro market,” as approximately 50% of the product extracted is only transported by rail as far as Picton on the rural urban fringe of Sydney. Most of the product is then transported by truck into the Sydney metropolitan market. Some of the product is also supplied into parts of the NSW Southern Highlands which are classed as regional rather than metropolitan areas.[41]
Consideration
The requirements for the making of a scope order are governed by the provisions of s.238 of the FW Act. Section 238 of the Act is in the following terms:
“238 Scope orders
Bargaining representatives may apply for scope orders
238(1) A bargaining representative for a proposed single-enterprise agreement (other than a greenfields agreement) may apply to the FWC for an order (a scope order) under this section if:
(a) the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly; and
(b) the reason for this is that the bargaining representative considers that the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover.
No scope order if a single interest employer authorisation is in operation
238(2) Despite subsection (1), the bargaining representative must not apply for the scope order if a single interest employer authorisation is in operation in relation to the agreement.
Bargaining representative must have given notice of concerns
238(3) The bargaining representative may only apply for the scope order if the bargaining representative:
(a) has given a written notice setting out the concerns referred to in subsection (1) to the relevant bargaining representatives for the agreement; and
(b) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and
(c) considers that the relevant bargaining representatives have not responded appropriately.
When the FWC may make scope order
238(4) The FWC may make the scope order if the FWC is satisfied:
(a) that the bargaining representative who made the application has met, or is meeting, the good faith bargaining requirements; and
(b) that making the order will promote the fair and efficient conduct of bargaining; and
(c) that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen; and
(d) it is reasonable in all the circumstances to make the order.
Matters which the FWC must take into account
238(4A) If the agreement proposed to be specified in the scope order 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 (4)(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.
Scope order must specify employer and employees to be covered
238(5) The scope order must specify, in relation to a proposed single-enterprise agreement:
(a) the employer, or employers , that will be covered by the agreement; and
(b) the employees who will be covered by the agreement.
Scope order must be in accordance with this section etc.
238(6) The scope order:
(a) must be in accordance with this section; and
(b) may relate to more than one proposed single-enterprise agreement.
Orders etc. that the FWC may make
238(7) If the FWC makes the scope order, the FWC may also:
(a) amend any existing bargaining orders; and
(b) make or vary such other orders (such as protected action ballot orders), determinations or other instruments made by the FWC, or take such other actions, as the FWC considers appropriate.”
As can be seen s.238 - Scope Orders lists a number of factors, which must be satisfied if a scope order is to be made. The factors relevant to this application are addressed below.
Section 238(1)
This subsection provides that a bargaining representative (in this case the AWU), may apply for a scope order where they have concerns that bargaining is not proceeding efficiently or fairly and the reason for this is that the proposed agreement will cover employees for which it is not appropriate for the agreement to cover. The AWU submissions set out its reasoning for the scope application and address the concerns it has and specifies why in its view the current proposed replacement agreement scope is not appropriate.
S.238(2)
This subsection is not relevant in this matter as it relates to situations where a single interest employer authorisation is in operation.
S.238(3) Notice requirements
Sub-section 238(3)(a) requires the AWU to have provided written notice to the relevant bargaining representatives for the proposed agreement that sets out its concerns. Sub-section 238(3)(b) of the Act requires that a reasonable time within which the other bargaining representatives are able to respond to the identified concerns is provided. Sub-section 238(3)(c) provides that the AWU must consider that the relevant bargaining representatives have not responded appropriately.
The Commission is satisfied that the correspondence of Mr Burke on behalf of the AWU of 26 November 2021 as a bargaining representative is evidence of written notice to Boral which sets out its concerns about bargaining not proceeding efficiently or fairly.[42] Boral responded on 3 December 2021 advising that it did not agree with the AWU’s view on the proposed scope, which the AWU does not accept as being an appropriate response.
The Commission is satisfied that requirements of s.238(3) of the FW Act have been met.
Section 238(4) then sets out when the Commission may make a scope order. The Commission must consider four criteria being whether:
the AWU is meeting the good faith bargaining requirements
the order sought will promote the fair and efficient conduct of bargaining,
that the group of employees specified was fairly chosen, and
it is reasonable in all the circumstances to make the order.
S.238(4)(a) Good Faith Bargaining
Section 238(4)(a) of the FW Act requires that the AWU must have met or is meeting the good faith bargaining requirements. The good faith bargaining requirements are set out at s.228(1) of the FW Act. Boral has submitted that the pursuit of a scope order at the ‘eleventh hour’ is a breach of the AWU’s good faith bargaining obligations.[43]
The evidence of Mr Burke was that the AWU had put Boral on notice prior to the actual commencement of the enterprise agreement negotiations that the Peppertree employees wanted to have their own separate agreement and that the employee petition was evidence of this.
Despite Mr Burke’s evidence given during cross-examination that there were two negotiations on foot, one for Peppertree and one for the other quarries, the written correspondence tendered before the Commission detailing the progress of negotiations did not support the contention that a claim for a separate agreement for Peppertree employees was being maintained at all times during the negotiations.
Emails sent by Mr Burke to Boral representatives on 4 May 2021, 3 November 2021 and 11 November 2021, fail to make any reference to the scope of the proposed agreement still being a matter in dispute.[44] It is not until 26 November 2021, that the AWU again raise the issue of a standalone agreement for the Peppertree employees stating that the scope of the proposed replacement agreement will not cover employees who are fairly chosen.
While the scope application has been made at a late stage in the negotiations, it is not as existed in Capral Limited and Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union (AMWU) and Others,[45] a decision referred to by Boral, where one hour after the proposed enterprise agreement was offered to the employees for vote, that a scope application was made.
In this case Mr Burke states that the scope claim was never withdrawn, whereas Boral’s evidence was that it understood that the scope claim had been resolved. Ultimately, the evidence before the Commission does not rise to a level to conclude that the AWU has not met or is not meeting the good faith bargaining requirements, notwithstanding the lack of clarity on the AWU’s scope claim.
It would have been far preferable had the AWU made its scope application once having been advised by Boral that it intended to maintain the same agreement coverage for the proposed replacement agreement as the 2016 Agreement. The fact that this did not occur is not necessarily a failure by the AWU to bargain in good faith.
S. 238(4)(b) Promotion of the fair and efficient conduct of bargaining
As outlined above, the AWU submits that the making of the scope order as sought will promote the fair and efficient conduct of bargaining.
Boral disputes that the proposed scope order will promote the fair and efficient conduct of bargaining, stating that such an order would lead to more inefficiencies and unfairness in bargaining.
As was stated in the Full Bench decision of United Firefighters' Union of Australia v Metropolitan Fire & Emergency Services Board[46]:
“The relevant consideration under s.238(4)(b) is whether the order will promote the fair and efficient conduct of bargaining. The implication is that the tribunal should be satisfied that if an order is made the bargaining will at least be fairer or more efficient or both than it would be if no order were to be made.”
The requirements of s.238(4)(b) of the FW Act were further considered in The Association of Professional Engineers, Scientists and Managers, Australia v Australian Red Cross Blood Service and others.[47] In that decision, Hampton C considered the approach upon which the assessment required in s.238(4)(b) should be based, stating as follows:
“[65] It is not necessary that the present bargaining be considered to be unfair or inefficient however findings to that affect would clearly be relevant and would be conducive to a finding that the requirements of this provision may be met by an alternative scope for bargaining.
[66] The applicant for a scope order must demonstrate that the making of the order would promote, that is encourage and facilitate, bargaining that is fairer and more efficient than if no order was made. That assessment is to take into account the interests of all relevant parties who are subject to the bargaining process, not just those who are seeking the order, and involve the weighing up of the relevant considerations touching upon the issue.”
The AWU submits that should the requested scope order be granted it will promote the fair and efficient conduct of bargaining as the scope of the proposed agreement will no longer be an issue in dispute.[48] Other than the submission that the proposed order will resolve the scope dispute, nothing further was put by the AWU as to how the order sought would promote the fair and efficient conduct of bargaining.
It is self-evident that where a scope order application is made it is due to a dispute between the parties, hence the resolution of the scope dispute by the Commission in itself cannot be said to be a significant factor for the granting of the application. A decision of the Commission on the scope dispute whether in favour of the AWU or not, will resolve the issue for the purposes of the current agreement negotiations.
It was not established that the work performed by employees at the Peppertree Quarry or that the conditions under which they work were sufficiently different from that at the other Boral quarries that making the scope order as sought would promote the fair and efficient conduct of bargaining.
Further, it is accepted as was stated in The Maritime Union of Australia v Qube Logistics (SB) Pty Ltd[49], that if an application for a scope order is to be made, it ought to be taken at an early stage of the bargaining process if it is to satisfy the requirement that it would promote efficient bargaining. In this instance, while having raised the issue at the commencement of the enterprise agreement negotiations, the AWU has filed its scope order application some 12 months after agreement negotiations commenced, meaning that there would be inefficiency created if bargaining had to recommence based on the granting of the AWU’s scope order application.
It was not made clear in the evidence of Mr Burke including in cross-examination, on what basis a quick resolution would be able to be achieved for a separate agreement for the Peppertree employees.
The evidence before the Commission does not provide any foundation for a finding that having two agreements as proposed would promote the fair and efficient conduct of bargaining as opposed to a single agreement, being the status quo. Nor was there any evidence that the existing bargaining negotiations were not proceeding fairly and efficiently.
S.238(4)(c) Fairly Chosen
Section 238(4)(c) states the Commission may make a scope order if satisfied that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen.
Section 238(4A) states that if the scope order sought will not cover all of the employees of the employer that for the purposes of determining whether the group of employees who will be covered by the scope order was ‘fairly chosen’ under s.238(4)(c) the Commission must take into account whether the group is geographically, operationally or organisationally distinct.
In Cimeco Pty Ltd v CFMEU & Ors (Cimeco),[50] the concept of “fairly chosen” was discussed by the Full Bench albeit under s.186(3) of the Act as follows:
“[19] Given the context and the legislative history it can reasonably be assumed that if the group of employees covered by the agreement are geographically, operationally or organisationally distinct then that would be a factor telling in favour of a finding that the group of employees was fairly chosen. Conversely, if the group of employees covered by the agreement was not geographically, operationally or organisationally distinct then that would be a factor telling against a finding that the group was fairly chosen.
[20] It is important to appreciate that whether or not the group of employees covered by the agreement is geographically, operationally or organisationally distinct is not decisive, rather it is a matter to be given due weight, having regard to all other relevant considerations.
[21] It is not appropriate to seek to exhaustively identify what might be the other relevant considerations. They will vary from case to case and will need to be demonstrated to the satisfaction of the tribunal. 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. It is also appropriate to have regard to the interests of the ARTC, such as enhancing productivity, and the interests of employees in determining whether the group of employees was fairly chosen. In this regard, it is not only the interests of the employees covered by the agreement that are relevant; the interests of those employees who are excluded from the coverage of the agreement are also relevant…”
The Full Bench in QGC Pty Ltd v The Australian Workers’ Union[51] (QGC) adopted the reasoning of the Full Bench in Cimeco, albeit in relation to a majority support determination, stating:
“[42] For the Commission to reach a state of satisfaction necessary to make a majority support determination, it must be satisfied that the group was fairly chosen and in considering whether the group was fairly chosen, it must take into account, by virtue of s.237(3A), whether the group is geographically, operationally or organisationally distinct. Distinctiveness is not absolute and can be a matter of degree. Distinctiveness on one of those bases is a factor telling in favour of a finding that the group is fairly chosen. Conversely if the group of employees is not geographically, operationally or organisationally distinct, then that is a factor telling against a finding that the group is fairly chosen. Whether or not 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.”
The position presented by the AWU in its oral closing submissions was somewhat different from the initial position as advised to Boral[52] and as also stated in its evidence.[53] Mr Burke’s evidence was that bargaining for the new agreement could not proceed efficiently or fairly as the scope of the proposed agreement was not fairly chosen.[54]
Whereas it was previously argued that the existing scope of the 2016 Agreement was not fairly chosen,[55] it was accepted by the AWU during the hearing that the existing scope meets the definition of fairly chosen, however the AWU submits that the scope it proposed is also fairly chosen and being the desire of Peppertree employees must carry significant weight.
Geographic distinctiveness
Geographical distinctiveness relates to the group of employees with respect to whom the scope order is sought. The Full Bench decision in QGC contemplates geographical distinctiveness in single locations or geographical subsets of the total business.[56]
The Peppertree quarry is regionally based and is located some 180kms from the Sydney GPO, based in rural Marulan.
The originating application for the scope order (Form F31) makes reference to the Peppertree Quarry being ‘a metropolitan’ quarry. While the Peppertree Quarry supplies product to the Sydney metropolitan area, it cannot be categorised as a metropolitan quarry based on its location outside the Sydney metropolitan area.
However, irrespective of whether the Peppertree Quarry is categorised as a metropolitan or regional quarry, its employees the subject of the proposed scope order, are clearly a geographically distinct group.
Operational distinctiveness
The Full Bench in QGC held that the term ‘operational’ refers to an industrial or productive activity. The degree of distinctiveness in an operational sense refers to “an industrial or productive activity”. It does not refer to the performance of a “different role, skill, task or function”.[57]
Based on the evidence before the Commission, it is not possible to conclude that the group of employees covered in the scope order application are operationally a distinct group of employees. While there may at best be some operational differences they could not be described as significant.
Organisational distinctiveness
The Full Bench in the decision of Aerocare Flight Support Pty Ltd v TWU[58] stated that guidance may be obtained as to how to interpret and apply the expression “organisationally distinct” in s.186(3A) of the FW Act from decisions concerning the use of the same expression in ss.237(3A) and 238(4A) of the FW Act. The Full Bench went on to list a number of relevant propositions:
• the term “organisation” refers to the manner in which the employer has organised its enterprise in order to conduct its operations;
• the performance by a group of employees of duties which are qualitatively different from duties performed by other employees may justify a conclusion that the group is organisationally distinct;
• however, the mere performance by a group of employees of different tasks or roles to others may not be sufficient to render it organisationally distinct where the employees work in an integrated way with the other employees to perform a particular business function; and
• most businesses have organisation structures which will allow organisationally distinct groups to be identified.[59]
The Full Bench in Australian Worker’s Union v Job Connect Recruitment Pty Ltd t/a Job Connect[60] reaffirmed the above when stating:
“ … the term “organisation” refers to the manner in which the employer has organised its business in order to conduct its business, that most businesses have organisational structures which allow organisationally distinct groups to be identified, and that the performance by a group of employees of duties which are qualitatively distinct may be a marker that the group is organisationally distinct. Organisational distinctiveness will weigh in favour of, but not be conclusive as to, whether the group of employees covered by an agreement is fairly chosen.”
It was established to the Commission’s satisfaction that in the main, the product from the Peppertree Quarry is transported to the metropolitan market by rail or truck distinguishing it from the other quarries. Further the Peppertree Quarry is by far the largest of the Boral quarries.
Despite these differences, the evidence did not demonstrate that the manner in which Boral conducts its quarrying operations at the Peppertree Quarry separates and distinguishes in any material way the Peppertree Quarry from what occurs at its other quarries. The destination of its product and how its arrives at that destination is not of itself indicative of employees at the Peppertree Quarry being organisationally distinct. The duties and responsibilities of employees and the way in which the work is conducted at the Peppertree Quarry was not shown to be materially different from what occurs at the other quarries.
It is accepted as put by the AWU, that it is possible that both the existing scope of the 2016 Agreement and that now proposed by the AWU can be fairly chosen. As stated in the Full Bench decision of The Australian Workers’ Union v BP Refinery (Kwinana) Pty Ltd[61]
“Where the Commission is dealing with a single application for a scope order, it may be open in a particular case to find that the group proposed to be covered was fairly chosen notwithstanding that there may have been another grouping that could also have been fairly chosen. When there are competing applications it will often be the case that the alternative groupings can both be regarded as fairly chosen.”
The concept of distinctiveness in s.238(4A) of the Act is not absolute, but rather a matter of degree. It is a matter to be given due weight, having regard to all other relevant considerations. whether or not the group of employees covered by the proposed scope order is geographically, operationally or organisationally distinct is not decisive in determining whether a group of employees is fairly chosen.
The Commission has found above that the group of employees subject of the proposed scope order at the Peppertree Quarry is geographically distinct, while not being satisfied that the group is operationally or organisationally distinct.
As stated by the Commission in Australian Rail, Tram and Bus Industry Union v Australian Rail Track Corporation (ARTC)[62]:
“The use of the disjunctive conjunction “or” means that there is no requirement that in order to be fairly chosen the group needs to satisfy all three areas of specified potential distinction. Indeed, it is quite conceivable that a group could be fairly chosen if it was established to be only one of either geographically, operationally or organisationally distinct. Further, there is clear potential that a group could be held to have been fairly chosen even if it did not satisfy any one of the areas of specified distinction.”
The Commission is satisfied due to the geographical distinctiveness that the group of employees subject of the proposed scope order represents a fairly chosen group taking into account s.238(4A) of the Act.
However as stated above, a finding that a group of employees is distinct from other employees because of either, where they work (geographically), what work they perform (operationally), or because of the structure of the organisation in which they work (organisationally), is a factor permitting a scope order to issue, it is not determinative as to whether a scope order should issue.
Section 238(4)(d) Reasonable in all the circumstances
The Commission is also required to be satisfied that it is reasonable in all the circumstances to make the order sought.
This requirement requires an overall assessment of the various aspects of the application including consideration of any other relevant factor or circumstance which should be considered before a scope order is made or refused.
The Commission accepts that the scope of the proposed agreement reflects the wishes of the Peppertree employees, albeit not necessarily all relevant Peppertree employees. The employee petition is not a recent document, with the latest signature being dated 14 October 2020, some 15 months ago. Further it was accepted by Mr Burke that it did not include all Peppertree employees and that some employees who had signed were no longer Boral employees and one employee had signed the petition twice. Despite these deficiencies the petition represented employee views at the time it was conducted, and there was no evidence that these views had since altered to the degree that it was still not at least the majority view held by employees. At the same time other than the employee petition, there was no direct evidence given by any Peppertree Quarry employee in the proceedings.
In applying what the Full Bench stated in Cimeco,[63] the Commission should also have regard to the interests of the excluded employees, that is the employees at the other Boral sites. In this matter neither party provided any or sufficient material for the Commission to draw any conclusion on this subject.
There was no evidence that the interests of the Peppertree employees were being disregarded by Boral in the enterprise agreement negotiations or that the views of other quarry employees were being afforded more weight, as is sometimes summitted in scope applications.
Having found that the group of employees chosen are fairly chosen on the basis that they are a geographically distinct group, it is not in the Commission’s view a significantly persuasive factor in considering whether a scope order should issue as all Boral quarries are located at distinct geographical sites.
The scope of the enterprise agreement coverage at Boral quarries has remained the same since 2013, that is, a single enterprise agreement has applied. In approving the 2016 Agreement the Commission was satisfied that the group of employees was fairly chosen.[64] The same conclusion was reached by the Commission for the predecessor agreement.
In all of the circumstances, it has not been demonstrated there is any basis to establish that it would be reasonable to make the scope order.
The Commission is required to be satisfied that each of the-requirements of (a) to (d) of sub-s.238(4) are met for the making of any scope order. Satisfaction of one or more of the criteria is not enough. Having concluded that the making of the scope order would not promote the fair and efficient conduct of bargaining, the Commission is in any event prevented from making the order sought.
While it is accepted that the AWU is meeting its good faith bargaining requirements and the group of employees is fairly chosen for the reasons provided above, I am not satisfied that the order as sought would promote the fair and efficient conduct of bargaining, or that it is reasonable to issue the scope order as sought.
Having considered the matters as set out under s.238(4) of the FW Act, the Commission declines to issue the scope order as sought by the AWU, the application is therefore dismissed.
DEPUTY PRESIDENT
Appearances:
T Craven – Industrial Officer for The Australian Workers' Union
J Donnelly – Solicitor - National Workplace Lawyers
Hearing details:
Conducted by Microsoft Teams
2022
15 February
[1] The AWU written submissions of 13 January 2022 at [2] erroneously refer to “employees of Boral Limited who are engaged to perform work at its Peppertree Quarry …”
[2] The Commission approval decision [2017] FWCA 1051 at [5] refers to a commencement date four years from the date of approval whereas clause 6.1 states the nominal expiry date is fours years from the commencement date
[3] AWU’s written reply submissions of 10 February 2022 at [3], an original reference to a 2018 agreement was corrected at [2]
[4] Form F3 at 2.1.1(5). The references to s.183(3) and (3A) are taken to be ss.186(3) and 186(3A) of the FW Act
[5] During the hearing this position was not maintained
[6] Form F31 at 2.1.3(2)
[7] AWU’s written submissions of 13 January 2022 at [24]; Witness statement of S. Burke of 13 January 2022 at [11]
[8] Ibid at [7]
[9] Form F31 at 2.1.1(7)
[10] Attachment SB1 to witness statement of S. Burke of 12 January 2022
[11] AWU’s written submissions of 13 January 2022 at [21]
[12] Ibid at [25], [28-29]
[13] AWU’s reply submissions of 10 February 2022 at [4]
[14] Ibid at 2.1.2(2) and (3)
[15] Form F31 at 2.1.3(2)
[16] Form F31 at 2.1.1(8)
[17] AWU’s written submissions of 13 January 2022 at [32]
[18] AWU’s reply submissions of 10 February 2022 at [8]
[19] Ibid at [37]
[20] Mr Burke appeared by telephone only, (while in his motor vehicle) as he stated his camera was not working
[21] Reply witness statement of S. Burke of 10 February 2022 at [9]
[22] Attachment SB1 to S. Burke’s witness statement of 12 January 2022
[23] Witness statement of S. Burke of 12 January 2022 at [18]
[24] SB3 to witness statement of S. Burke of 12 January 2022
[25] Reply witness statement of S. Burke of 10 February 2022 at [11]
[26] Boral’s written submissions of 17 December 2021 at [5]
[27] Boral’s written submissions of 3 February 2022 at [31]
[28] Boral’s written submissions of 17 December 2021 at [27]
[29] Boral’s written submissions of 3 February 2022 at [80]
[30] Ibid at [83]
[31] Boral’s written submissions of 17 December 2021 at [44]
[32] Witness statement of A. Shedden of 3 February 2022
[33] Ibid at [14]
[34] Ibid at [30]
[35] Ibid at [39]
[36] Ibid at [23]
[37] Ibid at [28]
[38] Ibid at [35]
[39] Ibid at [44]
[40] Ibid at [45]
[41] Ibid at [50-52]
[42] Although not stated, it is assumed that the AWU was the sole bargaining representative for employees
[43] Boral’s written submissions of 17 December 2021 at [44]
[44] See attachments AS1, AS7 and AS8 of A. Shedden’s witness statement of 3 February 2022
[45] [2010] FWA 3818
[46] [2010] FWAFB 3009 at [55]
[47] [2011] FWA 2914
[48] AWU’s written submissions of 13 January 2022 at [25]
[49] [2018] FWC 1688 at [70]
[50] [2012] FWAFB 2206
[51] [2017] FWCFB 1165
[52] AWU’s correspondence of 26 November 2020 to Boral
[53] Witness statement of S. Burke of 12 January 2022 at [13]
[54] Ibid at [3]
[55] Form F31 at 2.1.1(5)
[56] [2017] FWCFB 1165 [47]
[57] Ibid at [44]
[58] [2017] FWCFB 5826 at [27]
[59] References omitted
[60] [2019] FWCFB 5132 at [21]
[61] [2014] FWCFB 1476 at [18]
[62] [2012] FWA 6329 at [36]
[63] [2012] FWAFB 2206 at [21-22]. See also comments of DP Sams in Australian Rail Track Corporation [2016] FWCA 7012 at [81]
[64] [2017] FWCA 1051 at [3]
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