“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v BRB Modular Pty Ltd - [2014] FWC 6388

[2014] FWC 6388 [Note: An appeal pursuant to s.604 (C2014/6975) was lodged against this decision - refer to Full Bench decision dated 27 March 2015 [[2015] FWCFB 1440] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.238—Scope order

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
BRB Modular Pty Ltd
(B2014/902)

COMMISSIONER RYAN

MELBOURNE, 7 OCTOBER 2014

Application for a scope order in relation to employees of BRB Modular - granted..

[1] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) has applied for a scope order pursuant to s.238 of the Fair Work Act 2009 (the Act). The AMWU is a bargaining representative for employees employed by BRB Modular Pty Ltd (BRB Modular). Negotiations for an enterprise agreement to replace the BRB Modular Pty Ltd Employee Collective Agreement 2009 (the current agreement) commenced in May 2014.

[2] The AMWU proposes an enterprise agreement which will cover employees who are covered under the Manufacturing and Associated Industries and Occupations Award 2010 (with the exclusion of supervisory and managerial employees) who perform work at the workshop located in Fairview Street, Kangaroo Flat, Victoria.

[3] The relevant section of the Act provides:

“238 Scope orders

Bargaining representatives may apply for scope orders

(1) A bargaining representative for a proposed single-enterprise 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

(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 to give notice of concerns

(3) The bargaining representative may only apply for the scope order if the bargaining representative:

(a) has taken all reasonable steps to give 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

When the FWC may make scope order

(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

(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

(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.

(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

(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.

[4] BRB Modular did not dispute that the AMWU had complied with the requirements of s.238(3). The Commission is satisfied and I so find that the AMWU has complied with s.238(3).

[5] I accept the correctness of the contention by BRB Modular that the Commission must be satisfied as to each of the matters set out in paragraphs (a) to (d) of s.238(4).

S.238(4)(a) - that the bargaining representative who made the application has met, or is meeting, the good faith bargaining requirements

[6] The evidence in this matter from both the AMWU and BRB Modular is that all of the bargaining representatives have been meeting, exchanging claims, responding to each other’s position and pursuing their own claims.

[7] The evidence satisfies the Commission that the AMWU has met and is meeting the good faith bargaining requirements of the Act.

S.238(4)(b) - that making the order will promote the fair and efficient conduct of bargaining

[8] I accept the correctness of the contention by BRB Modular that the conjunctive “and” between “fair” and “efficient” means that the Commission has to be satisfied that a scope order will both promote the fair conduct of bargaining and, at the same time, promote the efficient conduct of bargaining.

[9] BRB Modular relied on the Full Bench decision in United Firefighters’ Union of Australia v Metropolitan Fire & Emergency Services Board 1 (UFUA v MFESB) which said of s.238(4)(b):

“[54] In its submissions AiGroup sought to limit the circumstances in which an order might be made. We refer in particular to the submission that a scope order should not be made against the opposition of a bargaining representative unless one of the bargaining representatives is pursuing a scope for negotiations which is unfair. That submission must be rejected. It involves adding an additional requirement to those specified in ss.238(4)(b) and (c). If two parties to an application for a scope order advance alternative positions neither of which is objectively unfair but the tribunal is satisfied of the relevant matters and is disposed to make an order, it would be an error not to do so.

[55] 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 relevant consideration under s.238(4)(c) is whether the specified group is fairly chosen. It may be that a number of groupings might be fair – what this criterion requires is that the group which is included in the scope order is fairly chosen.”

[10] I note that about 7 weeks after the Full Bench decision SDP Richards issued a decision, APESMA v Australian Red Cross Blood Service 2, which adopted a different position to that of the Full Bench:

“[24]Section 238(4)(b) of the FW Act only requires me to be satisfied that the order I might make will promote fair and efficient conduct of bargaining, in a procedural sense. It does not require me to be satisfied that the order will make the conduct of the bargaining fairer still or more efficient than the conduct of the bargaining for the proposed Agreement. The threshold condition for an application is not a finding of unfairness and inefficiency in relation to the conduct of bargaining as it has been. This is unsurprising as issues of relative fairness and efficiency will often be in contest in matters of this kind.

[25] The order that FWA might make, however, must stand on its own terms, as it were, grounded in the evidence, and have the effect of promoting the fair and efficient conduct of bargaining.

[26]The requirement that an order must promote fair and efficient conduct of bargaining is a conjunctive requirement. An order by FWA, therefore, must manifest a capacity to promote both fairness and efficiency in the conduct of bargaining. In a definitional sense, the order must promote - in that it must excite - the principles of fairness and efficiency in relation to the conduct of bargaining. The plain words of the FW Act do not suggest more than this (and the Explanatory Memorandum provides no further guidance).”

[11] I note that the decision of SDP Richards in APESMA v Australian Red Cross Blood Service accords with the plain language of the Act whereas the Full Bench decision in UFUA v MFESB departs from the plain words of the Act and implies other words into the Act.

[12] What the Full Bench is effectively saying in its decision in UFUA v MFESB is that when Parliament used the words “that making the order will promote the fair and efficient conduct of bargaining” Parliament didn’t mean what it said rather Parliament meant to say “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”. Further, Parliament meant to say this because saying “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” is necessary to make the provision of s.238(4)(b) accord with the purpose of the Act.

[13] It is not unknown that the language of particular provisions of an Act may be unclear or if clear may not accord with the purpose of the Act and that Courts and Tribunals are left with the task of interpreting the language of an Act so as to give effect to the purpose of the Act.

[14] The interpretation of legislation is a subject matter that has received much attention from Parliament, the Courts and academics over time and the principles of statutory interpretation are well known. In the Australian context an oft quoted text is “Statutory Interpretation in Australia”, by Pearce and Geddes, now in its seventh edition (2011).

[15] The starting point for interpreting the Fair Work Act is s.15AA of the Acts Interpretation Act which was introduced in 1981 and is as follows:

“15AA. Interpretation best achieving Act's purpose or object

In interpreting a provision of an Act, the interpretation that would best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to each other interpretation.”

[16] This provision itself has been subject to judicial interpretation. In Mills v Meeking 3, Dawson J at para 19 said of the Victorian equivalent of s.115AA:

“The approach required by s.35 needs no ambiguity or inconsistency; it allows a court to consider the purposes of an Act in determining whether there is more than one possible construction. Reference to the purposes may reveal that the draftsman has inadvertently overlooked something which he would have dealt with had his attention been drawn to it and if it is possible as a matter of construction to repair the defect, then this must be done. However, if the literal meaning of a provision is to be modified by reference to the purposes of the Act, the modification must be precisely identifiable as that which is necessary to effectuate those purposes and it must be consistent with the wording otherwise adopted by the draftsman. Section 35 requires a court to construe an Act, not to rewrite it, in the light of its purposes.”

[17] The learned authors of Statutory Interpretation in Australia, 7th edn, at [2.10] at page 35 say of Dawson J’s decision:

“The second point made by Dawson J in the above extract from his judgement in Mills v Meeking is also an important one. Section 15AA and equivalent provisions do not permit courts to ignore the actual words of a statute. This was illustrated by acknowledgement of Kirby P in several cases in the New South Wales Court of Appeal that he was bound to give effect to the clear language of a statute although in his own opinion the result was anomalous or unfair. Dawson J’s second point was also echoed in the Full Federal Court decision in R v L (1994) 49 FCR 534; 122 ALR 464. In that case, Burchett, Miles and Ryan JJ commented (at 538; 468):

The requirement of s.15AA(1) that one construction be preferred to another can have meaning only where two constructions are otherwise open, and s.15AA(1) is not a warrant for redrafting legislation nearer to an assumed desire of the legislature: Trevisan v FCT (1991) 29 FCR 157 at 162; 101 ALR 26 at 31 per Burchett J.

What is the Purpose that S.238 has to accord with?

[18] Section 238 is in Division 8 of Part 2-4 of the Act.

[19] Section 169 which commences Part 2-4 provides a guide to the Part and relevantly provides:

“This Part is about enterprise agreements. An enterprise agreement is made at the enterprise level and provides terms and conditions for those national system employees to whom it applies. An enterprise agreement can have terms that are ancillary or supplementary to the National Employment Standards.

Division 8 provides for the FWC to facilitate bargaining by making bargaining orders, serious breach declarations, majority support determinations and scope orders. It also permits bargaining representatives to apply for the FWC to deal with bargaining disputes.”

[20] The broad purpose of Part 2-4 is also reflected in the objects of the Act as set out in s.3 which relevantly provides as follows:

“3 Object of this Act

The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:

(f) 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

[21] The Explanatory Memorandum (EM) to the Fair Work Bill contained both a general explanation of Part 2-4 as well as more specific explanation of the several divisions of Part 2-4. At paragraph 640 and 641 the EM says:

“Overview

640. Part 2-4 provides for the making of enterprise agreements through collective bargaining primarily at the enterprise level. It enables employers and employees, and their bargaining representatives, to bargain in good faith to make an enterprise agreement.

641. Employers and employees can make an enterprise agreement about permitted matters. Permitted matters include matters pertaining to the relationship between an employer and its employees, matters pertaining to the relationship between an employer and an employee organisation that will be covered by the agreement, deductions from wages and how the agreement operates.”

[22] In the general explanation the EM refers to scope orders as follows:

“651. If an employer does not agree to bargain with its employees, a bargaining representative for an employee may apply to FWA for a majority support determination. If FWA determines that there is majority support among employees for collective bargaining, the employer is required to bargain. If the employer still refuses to bargain, the employee bargaining representative may seek a bargaining order to require the employer to meet the good faith bargaining requirements. Where there is a dispute about which classes or groups of employees will be covered by the proposed enterprise agreement, FWA has power to make scope orders. A scope order is available on application by a bargaining representative. “

[23] The EM specifically explains the terms of s.238:

“Clause 238 – Scope orders

980. Subclause 238(1) allows a bargaining representative for a single enterprise agreement to apply for a scope order if the representative has concerns that bargaining for the proposed enterprise agreement is not proceeding efficiently or fairly because the agreement will not cover the appropriate employees, or will cover employees that is not appropriate for the agreement to cover.

981. Subclause 238(2) prohibits a bargaining representative applying for a scope order in respect of: a multi-enterprise agreement (including one for which a low-paid authorisation is in operation) or a single enterprise agreement in respect of which a single-interest authorisation is in operation.

982. A bargaining representative may only apply for a scope order if the representative:

has given a written notice to the relevant bargaining representatives setting out the concerns mentioned in subclause 238(1); and

has provided a reasonable time within which to respond to the concerns, and considers that the relevant bargaining representatives have not responded appropriately to the concerns.

983. These same preconditions apply for bargaining orders (except that for bargaining orders, FWA has the ability to waive the requirement to give the written notice of concerns). This requirement is included to encourage bargaining representatives to consider resolving issues surrounding the scope of a proposed enterprise agreement through the good faith bargaining process. It also ensures that it is no more expedient to obtain a scope order rather than a bargaining order.

984. Subclause 238(4) provides that FWA may make a scope order only if FWA is satisfied that:

the applicant bargaining representative has met or is meeting the good faith bargaining requirements;

making the order will promote the fair and efficient conduct of bargaining;

if the agreement will not cover all the employees of the employer and the group of employees that will be covered by the agreement is not geographically, operationally or organisationally distinct, the group of employees was fairly chosen; and

it is reasonable in all the circumstances to make the order.

985. A scope order must specify the employer(s) and the employees or classes or group of employees that will be covered by the proposed enterprise agreement. For example, a scope order may require an employer to include a class of employees in bargaining for a proposed agreement or exclude a class of employees from bargaining for an agreement. Alternatively, a scope order may require an employer to bargain collectively with different classes of employees in relation to separate agreements.

986. Subclause 238(7) provides that when FWA makes a scope order, it may also amend existing bargaining orders and make or vary other orders, determinations or other instruments made by FWA, or take other actions as it considers appropriate. This ensures that FWA may vary a majority support determination rather than allow it to be inconsistent with a scope order. Equally, FWA may extend the application of earlier bargaining orders issued in relation to bargaining for a proposed enterprise agreement, so that they continue to apply to the new proposed enterprise agreements as detailed in the scope orders.

Illustrative example David‘s Debt Services (DDS) is refusing to bargain collectively with its employees, who are in two Divisions – the Loans Division, and the Debt Recovery Division. Justine, a bargaining representative for the Debt Recovery employees, obtains a majority support determination that a majority of the employees at DDS want to bargain with the employer for a proposed enterprise agreement.

DDS, Justine and the bargaining representative for the Loans Division employees, Cath, commence negotiations. However, the different interests of the employees of the two Divisions mean that Justine and Cath cannot agree on their negotiating strategy.

Two months after the determination is made DDS applies for a scope order because it believes bargaining is not proceeding efficiently on the basis it is more appropriate for it to bargain separately with the employees of each Division.

FWA is satisfied that: DDS is meeting the good faith bargaining requirements; making the order will promote the fair and efficient conduct of bargaining; the two groups of employees are operationally distinct; and it is reasonable in the circumstances to make the order. FWA makes the scope order specifying DDS and the Debt Recovery Division employees in one proposed enterprise agreement, and DDS and the Loans Division employees in another proposed enterprise agreement. At the same time, FWA varies the majority support determination so that it applies to what are now the two proposed agreements.”

[24] There is nothing in the language of s.238 nor in the EM which immediately suggests that s.238(4)(b) which reads as “that making the order will promote the fair and efficient conduct of bargaining” can only make sense and only conform to the purpose of the Act if it is read as ‘that making the order will promote the fairer and more efficient conduct of bargaining than if the order was not made’.

[25] To assist in understanding the language of s.238 it is relevant to look at the provisions in Division 8 of Part 2-4 which relate to bargaining orders.

[26] Section 238(1) permits a bargaining representative to apply for a scope order where the bargaining representative has a subjective concern that that bargaining is not proceeding efficiently or fairly and that the reason for this concern is the scope of the proposed enterprise agreement.

[27] Section 229 which relates to applications for bargaining orders permits a bargaining representative to apply for a bargaining order under s.229(4)(a)(ii) where the bargaining representative has a subjective concern that “the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement”.

[28] In the case of an application under s.229(4)(a)(ii) for a bargaining order the Commission must pursuant to s.230(a)(ii) be satisfied that “the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement”.

[29] In the case of an application for a scope order under s.238(1) the Commission has to be satisfied pursuant to s.238(4)(b) “that making the order will promote the fair and efficient conduct of bargaining”.

[30] When ss229(4) and 238(1) are looked at together and ss.230(3) and 238(4) are looked at together it is clear that to make the respective applications the applicant need only have a subjective view about the efficiency and fairness of the bargaining process but that the Commission must make an objective assessment as to the existence of the criteria for the making of the respective order. In both ss.230 and 238 the criteria, which refer to the efficiency and fairness of the bargaining process, do not use comparative language and the context in which both criteria appear does not require the use of comparatives.

[31] Section 238(4)(b) uses words which all have simple meanings. The Macquarie Dictionary Online defines the following terms:

“Promote” means
1. to advance in rank, dignity, position, etc.
2. to further the growth, development, progress, etc., of; encourage.
3. to help to found; originate; organise; launch (a financial undertaking, publicity campaign, etc.).
“Fair” means adjective
1. free from bias, dishonesty, or injustice: a fair decision; a fair judge.
2. that is legitimately sought, pursued, done, given, etc.; proper under the rules: a fair game; a fair stroke; a fair fight.
3. moderately good, large, or satisfactory; not undesirable, but not excellent: a fair income; a fair education; a fair reputation.
4. marked by favouring conditions; likely; promising: in a fair way to succeed.
5. Meteorology
a. (of the sky) bright; sunny; cloudless to half-cloudy.
b. (of the weather) fine; with no aspect of rain, snow, or hail; not stormy.
6. unobstructed; not blocked up: a fair passage.
7. without irregularity or unevenness: a fair surface.
8. free from blemish, imperfection, or anything that impairs the appearance, quality, or character: a fair copy.
9. clear; easy to read: fair handwriting.
10. of a light hue; not dark: fair skin.
11. beautiful; pleasing in appearance; attractive.
12. seemingly good or sincere but not so: fair promises.
13. courteous; civil: fair words.
–adverb 14. in a fair manner: he doesn't play fair.
15. straight; directly, as in aiming or hitting.
16. favourably; auspiciously: to bid fair; speak fair.
17. Colloquial completely: I was fair flabbergasted; it fair took my breath away.
–noun Obsolete 18. that which is fair.
19. a woman.
20. a beloved woman; sweetheart.
–verb (t) 21. Shipbuilding to adjust or test the lines of curve of a hull, design, etc.
22. Obsolete to make fair.
–phrase 23. a fair cop, Colloquial the discovery of a wrongdoer in the act or with guilt apparent.
24. a fair cow, Colloquial anything regarded as disagreeable or difficult.
25. a fair treat, Colloquial excellently; splendidly.
26. a fair way, Colloquial a not inconsiderable distance.
27. fair and square, Colloquial
a. honest; just; straightforward: a fair and square deal.
b. directly; accurately: I hit him fair and square on the chin.
c. honestly; justly; straightforwardly: to be beaten fair and square.
28. fair call, Colloquial (an expression acknowledging the reasonableness of an attitude stated by another.)
29. fair crack of the whip, Colloquial (an appeal for fairness or reason.)
30. fair enough, Colloquial (an expression of agreement.)
31. fair's fair, (an exclamation offered as a plea for fair play.)
32. fair shake of the dice (or stick), Colloquial (an appeal for fairness or reason.)
33. fair suck (of the sav) (or sauce bottle), Colloquial (an appeal for fairness or reason.)
34. fair to middling, Colloquial reasonably good; so-so. [Phrase Origin: from cotton grading on the east coast of North America in the 1860s where grades went across the range, with one intermediate grade middling fair also called fair to middling]
35. give something a fair shake, Colloquial to attempt an activity, enterprise, etc., to the best of one's ability.
36. in a fair way to, likely to; on the way to: you're in a fair way to becoming an alcoholic, the amount you drink.
37. the fair, (an epithet of someone, man or woman, regarded as beautiful): Charles the Fair.

[Middle English; Old English fæger]
–fairness, noun

“Efficient” means 1. effective in the use of energy or resources.
2. adequate in operation or performance; having and using the requisite knowledge, skill, and industry; competent; capable.
3. producing an effect, as a cause; causative.

[Latin efficiens, present participle, accomplishing]
–efficiently, adverb

[32] By way of contrast:

“Fairer” is the word fair with the suffix “er” added

“er” means a suffix forming the comparative degree of adverbs, as in faster.

[Middle English, Old English -or]

[33] Dictionaries can be a helpful guide to understanding the language of an act but they must be used carefully. As the authors of Statutory Interpretation in Australia comment:

“The use of a dictionary to assist in the understanding of words used in an Act must not, however, result in the words of the Act being abandoned in favour of synonymous expressions. The legislature will have chosen a particular word and it follows that other like words have been considered and rejected.” ([3.30] page 95)

[34] As was noted by Underwood CJ in The Honourable Mr David Llewellyn v The Resource Management and Planning Appeal Tribunal 4:

“36 Although recourse to dictionaries is an accepted practice to ascertain the common meaning of a word (R v Peters (1886) 16 QBD 636 at 641), every word must be construed in the context of the legislation in which it appears and in accordance with its purpose as directed by the Acts Interpretation Act, s8A. As Anderson J said in Falconer v Pederson [1974] VicRp 24; [1974] VR 185 at 187:

"Mr Alston also referred to a number of dictionaries which gave a variety of meanings to the verb 'traffic', ... I do not think one can select any one of the several meanings given in the various dictionaries and attribute to the phrase 'traffic in' appearing in s32(a) that particular dictionary meaning, and leave it at that. One must interpret the phrase as used in its context, assisted as it may be, but not necessarily bound, by one of a variety of dictionary definitions."

[35] Having regard to the plain words used in s.238(4)(b) the plain meaning of each of the words used as well as the plain meaning of the whole of clause is readily ascertainable and easily understood. There is no need to use synonyms for the words used in s.238(4)(b) the words speak for themselves.

[36] It is difficult to understand how the Full Bench in UFUA v MFESB came to the conclusion that the words in s.238(4)(b) meant “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.”

[37] This conclusion appears to be in stark contrast to the decision of the Full Bench to reject the interpretation of s.238(4)(b) and (c) advanced by the AiGroup “that a scope order should not be made against the opposition of a bargaining representative unless one of the bargaining representatives is pursuing a scope for negotiations which is unfair.” As the Full Bench clearly stated:

“[54] That submission must be rejected. It involves adding an additional requirement to those specified in ss.238(4)(b) and (c). If two parties to an application for a scope order advance alternative positions neither of which is objectively unfair but the tribunal is satisfied of the relevant matters and is disposed to make an order, it would be an error not to do so.”

[38] Furthermore the Full Bench specifically decided against introducing a comparative test in relation to s.238(4)(c) when it said:

“[55] The relevant consideration under s.238(4)(c) is whether the specified group is fairly chosen. It may be that a number of groupings might be fair – what this criterion requires is that the group which is included in the scope order is fairly chosen.”

[39] In light of these two specific conclusions it is difficult to discern the reasoning behind the Full Bench saying of s.238(4)(b) that “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”.

[40] The Illustrative Example contained in the EM tells quite strongly against an interpretation of s.238(4)(b) which requires it to be read as ‘that making the order will promote the fairer and more efficient conduct of bargaining than if the order was not made’.

[41] Just because DDS has formed a subjective view that bargaining is not proceeding fairly and efficiently with Cath and Justine does not mean that objectively bargaining is not proceeding fairly and efficiently. It could quite well be the case that the bargaining processes in place have created a very fair and efficient bargaining process. What appears to be the real problem is that the outcomes sought by DDS are best achieved through splitting the bargaining and separating Debt Recovery from Loans.

[42] The interpretation of s.238(4)(b) advanced by the Full Bench in UFUA v MFESB would in some circumstances prevent the Commission from granting a scope order sought by DDS and this would be so if the making of the scope order only promoted a level of fair and efficient bargaining which was equal to or less than what was occurring at the time of the application.

[43] In stark contrast it would appear that the outcome identified in the Illustrative Example could always be achieved if s.238(4)(b) is interpreted without the comparator sought to be imposed by the Full Bench in UFUA v MFESB.

[44] It is permissible for a court or tribunal to read into an act words which aren’t there but the authorities make clear that there must be a real necessity to do so.

[45] The starting point concerning an inclination of a court or tribunal to read words into an act should be the warning given by Lord Mersey in an oft-cited passage from Thompson v Goold & Co 5:

“It is a strong to read into an Act of Parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do”.

[46] The “clear necessity” required by Lord Mersey has given way to a test which has regard to the purpose of the legislation.

[47] In Australian Education Union v Department of Education and Children's Services 6, in a matter involving the construction of an Act concerning the appointment of teachers, French CJ, Hayne, Kiefel and Bell JJ said:

“26. The disposition of this appeal turns upon the correct construction of s 9(4). The process of construction begins with a consideration of the ordinary and grammatical meaning of the words of the provision having regard to their context and legislative purpose.

28. The reasoning in the IRCwas informed by the view that it was desirable that the Minister have flexibility in the appointment of teachers and that Pt III of the Act might be "unnecessarily prescriptive" in its application to the ad hoc appointments of relief teachers in diverse circumstances. This approach, with respect, emphasised a judicially constructed policy at the expense of the requisite consideration of the statutory text and its relatively clear purpose. In construing a statute it is not for a court to construct its own idea of a desirable policy, impute it to the legislature, and then characterise it as a statutory purpose]. The statutory purpose in this case was to be derived from aconsideration of the scheme of the Act as a whole, the respective functions of Pts II and III of the Act, and the regulatory requirements of Pt IV of the Act.”

[48] More recently in Taylor v The Owners – Strata Plan No 11564 7 French CJ, Crenna and Bell JJ said:

“The principles

35. In Young Spigelman CJ suggested that the authorities do not warrant the court supplying words in a statute that have been "omitted" by inadvertence per se. Construing the words actually used by the legislature in "their total context", Spigelman CJ suggested that the process of construction admits of reading down of general words or giving the words used an ambulatory operation. His Honour cited Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation as an instance of the former and Bermingham v Corrective Services Commission (NSW) as an instance of the latter. In R v PLV his Honour expanded on his analysis in Young, observing:

"The authorities which have expressed the process of construction in terms of 'introducing' words to an Act or 'adding' words have all, so far as I have been able to determine, been concerned to confine the sphere of operation of a statute more narrowly than the full scope of the dictionary definition of the words would suggest. I am unaware of any authority in which a court has 'introduced' words to or 'deleted' words from an Act, with the effect of expanding the sphere of operation that could be given to the words actually used. ... There are many cases in which words have been read down. I know of no case in which words have been read up." (emphasis in original)

36. In Leys the Victorian Court of Appeal was critical of Spigelman CJ's characterisation of purposive construction as a process of construing "the words actually used" (emphasis in original). Their Honours said that the process requires the court to determine whether the modified construction is reasonably open in light of the statutory scheme and against a background of the satisfaction of Lord Diplock's three conditions. Their Honours questioned the utility of the distinction between "reading up" and "reading down" and rejected the proposition that a purposive construction may not result in an expanded operation of a provision.

37. Consistently with this Court's rejection of the adoption of rigid rules in statutory construction, it should not be accepted that purposive construction may never allow of reading a provision as if it contained additional words (or omitted words) with the effect of expanding its field of operation. As the review of the authorities in Leys demonstrates, it is possible to point to decisions in which courts have adopted a purposive construction having that effect. And as their Honours observed by reference to the legislation considered in Carr v Western Australia, the question of whether a construction "reads up" a provision, giving it an extended operation, or "reads down" a provision, confining its operation, may be moot.

38. The question whether the court is justified in reading a statutory provision as if it contained additional words or omitted words involves a judgment of matters of degree. That judgment is readily answered in favour of addition or omission in the case of simple, grammatical, drafting errors which if uncorrected would defeat the object of the provision. It is answered against a construction that fills "gaps disclosed in legislation" or makes an insertion which is "too big, or too much at variance with the language in fact used by the legislature".

39. Lord Diplock's three conditions (as reformulated in Inco Europe Ltd v First Choice Distribution (a firm))accord with the statements of principle in Cooper Brookes and McColl JA was right to consider that satisfaction of each could be treated as a prerequisite to reading s 12(2) as if it contained additional words before her Honour required satisfaction of a fourth condition of consistency with the wording of the provision. However, it is unnecessary to decide whether Lord Diplock's three conditions are always, or even usually, necessary and sufficient. This is because the task remains the construction of the words the legislature has enacted. In this respect it may not be sufficient that "the modified construction is reasonably open having regard to the statutory scheme" because any modified meaning must be consistent with the language in fact used by the legislature. Lord Diplock never suggested otherwise. Sometimes, as McHugh J observed in Newcastle City Council v GIO General Ltd,the language of a provision will not admit of a remedial construction. Relevant for present purposes was his Honour's further observation, "[i]f the legislature uses language which covers only one state of affairs, a court cannot legitimately construe the words of the section in a tortured and unrealistic manner to cover another set of circumstances."

40. Lord Diplock's speech in Wentworth Securities laid emphasis on the task as construction and not judicial legislation. In Inco Europe Lord Nicholls of Birkenhead observed that even when Lord Diplock's conditions are met, the court may be inhibited from interpreting a provision in accordance with what it is satisfied was the underlying intention of Parliament: the alteration to the language of the provision in such a case may be "too far-reaching". In Australian law the inhibition on the adoption of a purposive construction that departs too far from the statutory text has an added dimension because too great a departure may violate the separation of powers in the Constitution.

[49] In the same decision Gageler and Keane JJ in dissent said:

“65. Statutory construction involves attribution of legal meaning to statutory text, read in context. "Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning ... But not always." Context sometimes favours an ungrammatical legal meaning. Ungrammatical legal meaning sometimes involves reading statutory text as containing implicit words. Implicit words are sometimes words of limitation. They are sometimes words of extension. But they are always words of explanation. The constructional task remains throughout to expound the meaning of the statutory text, not to divine unexpressed legislative intention or to remedy perceived legislative inattention. Construction is not speculation, and it is not repair.

66. Context more often reveals statutory text to be capable of a range of potential meanings, some of which may be less immediately obvious or more awkward than others, but none of which is wholly ungrammatical or unnatural. The choice between alternative meanings then turns less on linguistic fit than on evaluation of the relative coherence of the alternatives with identified statutory objects or policies.”

[50] It would appear that applying the tests for statutory interpretation (no matter how expressed by the High Court) to the language of s.238(4)(b) leads to a simple conclusion that the words used do accord with the policy purpose of the Act, the words do not lead to an outcome that would be contrary to the purpose of the Act, the words are used in a context where a comparative test is not required and the words used are simple enough that their meaning can be readily ascertained both within the context of s.238 and within the context of the Act as a whole.

[51] The Full Bench in UFUA v MFESB has rewritten s.238(4)(b) in a way which is too much at variance with the language in fact used by the legislature.

[52] The consequence of the Full Bench decision in UFUA v MFESB can be seen in decisions which apply that decision. In APESMA v Australian Red Cross Blood Service [2011 FWA 2914 at [66], Hampton C said:

“The applicant for a scope order must demonstrate that the making the order would promote, that is encourage and facilitate, bargaining that is fairer and more efficient than if no order was made.”

I only cite this decision because it stands in contrast to the decision of SDP Richards involving the same issue and the same parties and which I have cited earlier in this decision.

[53] The simple language of s.238(4)(b) does not require the Commission to reach a conclusion as to relative fairness or relative efficiency if an order is to be made under s.238.

[54] A further and real practical difficulty with introducing a comparator into s.238(4)(b) is that the presence of a comparator requires a standard to be adopted against which the comparator can work. Where the comparator is ‘fairer’ then a standard of what is ‘fair’ has to be set in order to test whether what will occur will be ‘fairer”. Similarly where the comparator is ‘more efficient’ then a standard of what is ‘efficient’ has to be set in order to test whether what will occur will be ‘more efficient”. The standard introduced into s.238(4)(b) by the Full Bench in UFUA v MFESB is the level of fairness and efficiency attached to the bargaining process at the time the application for a scope order is dealt with. This standard will be a movable feast as the standard will be different in every single application for a scope order.

[55] There is no objective standard of “fair” and or “efficient” in the approach adopted by the Full Bench in UFUA v MFESB against which a comparator of ‘fairer’ and ‘more efficient’ can be applied.

[56] Fair is a word which is value laden, it is a term of relativity and it is term which is used throughout the Act but is never defined in the Act. As the dictionary definition of “fair” makes clear this is a word with many meanings; it is a polysemy. The use of polysemy in legislation can give rise to ambiguity. As G.C. Thornton notes in his textbook Legislative Drafting, 4th edn, at 11 in relation to ambiguity of words:

“The second kind of ambiguity arises from the word itself and not from its use with other words. It arises when a word has more than one meaning, a circumstance which is known as polysemy. A moment’s thought or a glance at a dictionary serves as a reminder that polysemy, or multiple meaning of words, is common in our language. This is not necessarily a bad thing for it is economic if one symbol can serve to convey more than one meaning, and in all but a few cases the context will make clear the sense in which a word is being used. Nevertheless, a drafter must exercise a continuing care to ensure that the potential ambiguity of words with a multiple meaning is nullified by the context in which they are used.”

[57] The context in which the word fair is used within the Act means that it has different meanings in the different contexts in which it is used. For the purpose of Division 8 of Part 2-4 of the Act the word “fair” would appear to have the meaning of “moderately good, large, or satisfactory; not undesirable, but not excellent”.

[58] Attributing meaning to the word “fair” still does not resolve the practical issue of determining what is fair relative to what is not fair.

[59] The issue of relativity needs to be addressed by reference to an objective standard. The courts have dealt with issues of relativity when considering what is “reasonable” and what is “unreasonable” in the context of legislation which neither defines the term nor specifies the criteria to be considered in relation to the term.

[60] Courts have adopted the concept of what would an average citizen consider is reasonable. A similar approach can and should be adopted in relation to what is to be considered “fair and efficient conduct of bargaining”.

[61] The fact that there is no such person as the average citizen or the reasonable person on the Clapham Omnibus in the UK or on the No 96 Tram in Melbourne hasn’t prevented courts from constructing a test which has a strong degree of objectivity and as well as reflecting the social norm. As Gleeson CJ observed, during proceedings in the High Court, reference to the ‘man on the Clapham Omnibus”:

“It is a rhetorical form of objectifying a view about reasonableness”. 8

[62] The Full Bench in UFUA v MFESB has set a standard for comparing “fair” and fairer” and “efficient” and “more efficient” which appears to lack any sense of objectivity.

[63] The Full Bench in UFUA v MFESB has rewritten s.238(4)(b) in an impermissible manner.

[64] A final observation on the context of the Fair Work Act is necessary. Section 596(2)(a) of the Act shows that when Parliament wants to introduce a comparator in relation to efficiency then Parliament expresses itself quite clearly. Section 596(2)(a) reads as follows:

“596(2) The FWC may grant permission for a person to be represented by a lawyer or paid agent in a matter before the FWC only if:

(a) it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter; or”

[65] In circumstances where Parliament has used the term “more efficiently” in an Act then it is unlikely that when Parliament used the term “efficient” elsewhere in the same Act that they intended the word “efficient” to mean “more efficiently”.

[66] Parliament must be given some credit for having used different words in different sections to mean different things.

[67] There is a convention, which is well founded, that single members should follow decisions of Full Bench’s and it is a brave or foolish member who doesn’t. In this matter I will apply the plain language of s.238(4)(b) and not the words implied into s.238(4)(b) by the Full Bench in UFUA v MFESB.

[68] BRB Modular in its Respondent’s Closing Submissions summarised the bargaining process at paras 12 and 13 and concluded at para 14 that “the Applicant’s own evidence demonstrates nothing extraordinary about how bargaining proceeded, and on the contrary, has a high degree of normality.” At para 16 of its Respondent’s Closing Submissions BRB Modular contended that “the evidence demonstrates bargaining has occurred in an abundantly fair and efficient manner to date”.

[69] I agree with the conclusion that the bargaining process to date has been fair and efficient and this permits me to be satisfied that the parties will, if the AMWU application for a scope order is granted, conduct any bargaining in a fair and efficient manner.

[70] It is possible that the making of a scope order will promote fair and efficient bargaining which could be less fair, more fair or equally as fair and/or could be less efficient, more efficient or equally as efficient, or any combination of these degrees of fairness and efficiency, than if no scope order was made. However I do not need to determine the degree of fairness and efficiency which attaches to the bargaining that will occur if a scope order is made. I need to be satisfied that the making of a scope order will promote the fair and efficient conduct of bargaining and I am so satisfied.

S.238(4)(c) - that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen

[71] The leading authority on fairly chosen is the Full Bench decision in Cimeco P/L v CFMEU, AMWU and CEPU 9. Whilst that matter concerned s.186 of the Act the provisions considered are the same as in s.238(4)(c) and 238(4A). Relevantly the Full Bench said:

“[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 employer, 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. We note that there is a suggestion to the contrary in the oral submissions put on behalf of Cimeco when counsel submitted that:

‘It was an erroneous approach to introduce the identification of the persons who were relevantly employed at the time of the making of the agreement for the purposes of testing the group chosen.’ [citation omitted]

[22] To the extent that it is suggested that the interests of the excluded employees are irrelevant we reject that submission. In evaluating whether the group to be covered by the agreement has been fairly chosen it is entirely appropriate to have regard to the consequences of that choice, that is, which employees have been excluded from the agreement.”

[72] In relation to the operation of s.186(3A), which is in similar terms to s.238(4A), the Full Bench said:

“[16] Curiously the Act does not specify how the matters in s.186(3A) are to be taken into account. The context and legislative history are relevant. In terms of the context each of the characteristics identified in s.186(3A) has a degree of objectivity about them. The selection of the group of employees to be covered by an agreement on some objective basis (as opposed to an arbitrary or subjective basis) is likely to favour a conclusion that the group was fairly chosen.”

[73] The contention of BRB Modular was as follows:

21. Although the proposed scope appears, at first brush, to be ‘geographically distinct’, the Respondent submits organisational and operational distinctiveness outweigh ‘geographical distinctiveness’, and it ought not ‘carry the day’, as outlined in ANF v St John of God Health Care Inc ([2012] FWA 452, [191]).

22. The Respondent’s three Victorian sites are operationally and organisationally intertwined, significantly integrated and heavily reliant on each other to ultimately achieve the Respondent’s objectives of manufacturing, assembling and installing demountable buildings for customers. Put simply, one cannot function without the other two.

23. The Respondent’s evidence will outline the aforementioned integration between the three sites. Employees from all three sites regularly and invariably work side by side on projects both big and small, and/or are required to travel to customer sites to install the Respondent’s demountable products. Frequently, employees from all three sites will assist their fellow employees to complete relevant tasks as required and directed due to the inescapable time restrictions and deadlines required for the installation of the buildings on site.

24. The Respondent submits, based on this evidence, it will be demonstrably clear the requisite level of ‘distinctiveness’ is not evident. The site and/or group of employees are not a discrete group amenable to being ‘carved out’ of the Respondent’s operations or organisation.

27. The Applicant’s proposed scope will exclude all employees from the Kangaroo Flat and Somerton sites. The result will likely be inconsistency of terms and conditions applicable to the two groups and increased administrative and managerial inefficiencies for a relatively small employer primarily engaged in regional Victoria.

28. Furthermore, the result on the ‘excluded’ employees will mean a delay in the bargaining process already undertaken to date (in which the Applicant has been involved in every step of the way), due to the diversion of managerial and administrative resources in dealing with the ‘carved out’ scope of employees.

29. The Respondent submits there are no other discernible, logical and objective reasons why the Kangaroo Flat site ought to be “assessed as meeting the requirements of s.238(4)(c) of the Act” as per Commissioner Hampton’s aforementioned extract (at Para 25).

30. The Respondent submits the Applicant’s proposed scope is not ‘fairly chosen’ within the context of s 238(4)(c).”

[74] In its final written submissions in the matter BRB Modular did not address the evidence or make further detailed submissions but simply said:

“The Respondent relies on its Outline of Submissions and witness evidence regarding this factor.”

[75] The AMWU’s final written submission analysed the evidence of all of the witnesses to highlight the evidence which the AMWU contended supported its contention that the group of employees was fairly chosen.

[76] The evidence shows that:

BRB Modular operates out of 4 locations, 3 are in Victoria (Kangaroo Flat, Wood St, Bendigo and Somerton) and 1 is in Queensland (Crestmead).

BRB Modular proposes that there be 2 enterprise agreements. The scope of one enterprise agreement is to be for some of the Queensland employees. The scope of the other enterprise agreement is to cover employees in Victoria who are employed in the classifications of Labourer, Carpenter, Painter, Electrician, Truck Driver, Plasterer, Welder and Team Leader at the 3 sites. Other employees in Victoria are not to be covered by any enterprise agreement.

The AMWU proposes an enterprise agreement which will “cover employees who are covered under the Manufacturing and Associated Industries and Occupations Award 2010 (excluding supervisors and managers, etc) who perform work at the workshop located in Fairview Street, Kangaroo Flat”.

The Victorian and Queensland sites are all concerned with the manufacture of modular buildings in a factory environment and the installation of modular buildings on site. All aspects of the process of manufacturing a modular building is performed at a single location in Queensland. In Victoria separate parts of the process of manufacturing a modular building are performed at different sites.

The work performed at the Kangaroo Flat site is almost totally the manufacturing of the metal frames for the modular buildings.

The work performed at Wood St Bendigo is primarily the assembly of the metal frames into a building structure and then the addition of walls, roofing and internal fit out.

BRB Modular has not split its operations across several sites in Victoria in order to keep them separate but rather has utilised existing leases and properties whilst intending to bring all parts of the manufacturing process in Victoria together under one roof as soon as practicable.

BRB Modular has split its organisational structure into two with Queensland being designated as part of a Northern region and Victoria being designated as part of a Southern region and with each region having their own General Manager.

Each of the three sites in Victoria has its own site Manager.

Whilst employees employed at the Kangaroo Flat site predominantly work at that site they do work as required at the Wood St site and the Somerton site and onsite when installing modular buildings.

There is almost daily movement of staff between Kangaroo Flat site and the other sites but the number of employees who would work outside the Kangaroo Flat site on any one day is small.

Kangaroo Flat employees primarily work at other sites on metal fabrication related tasks.

[77] The way in which BRB Modular has organised its Victorian operations supports the position of the AMWU. In Queensland BRB Modular has a single operation on a single site yet by way of contrast BRB Modular has split its operation across three sites in Victoria with an apparent natural division occurring between the Kangaroo Flat site and the other sites.

[78] At its simplest there is a geographic separateness between the Kangaroo Flat site and the other 2 sites in Victoria. There is also a reasonably clear functional difference between the work done at the Kangaroo Flat site and the other sites. Finally the group of employees at the Kangaroo Flat site appear to fall into a discrete occupational grouping which is different from the occupational groups at the other sites. All of these factors support the contention of the AMWU that the group of employees at the Kangaroo Flat site are fairly chosen.

[79] As the Full Bench decision in Cimeco P/L v CFMEU, AMWU and CEPU makes clear it necessary for the Commission to consider the views of and have regard to the position of employees who are not to be covered by the scope order.

[80] In this matter BRB Modular introduced into evidence three petitions signed by employees. Three employees at the Kangaroo Flat site signed one petition, Exhibit R2, and 26 employees at the Wood St, site in Bendigo signed a petition, Exhibit R3, and 6 employees at the Somerton site signed a petition, Exhibit R4.

[81] The petitions were prepared by BRB Modular. The petitions were not initiated by the employees.

[82] The evidence of Mr Bell, Factory Manager at Kangaroo Flat was that the petition was sent to him by someone at the Melbourne office of BRB Modular. Mr Bell only showed the petition to the three employees who signed it and these 3 employees had been identified by Mr Bell as not being in the AMWU. One of the three was a team leader. The three employees were happy to sign it.

[83] Mr Nihill, Factory Manager at the Wood St site, gave evidence that he spoke to employees at the Wood St site about the bargaining process and that he invited the employees to sign the petition. In answer to a question from the Commission , Mr Nihill said:

PN1078: I was under instructions to speak to our staff about where we are in the process of the collective agreement and what the application for two separate agreements is going - how that's going to affect them.

It was in this context that the petition was produced by BRB Modular and given to the 3 site managers for them to invite employees to sign the petition.

[84] The evidence from BRB Modular is that the petition was not made known to the AMWU or to members of the AMWU. The petitions clearly show that the first employees to sign the petition did so on 14 July 2014 and the last signed it on 17 July 2014, only one day before the hearing in this matter.

[85] The view within BRB Modular is that if the AMWU is granted a scope order then this will lead to there being two separate enterprise agreements in Victoria with different terms and conditions of employment. The evidence of Mr Waring was that it would not be possible for there to be two enterprise agreements with the same terms and conditions.

[86] Whilst BRB Modular management gave evidence as to the views of its employees and in particular the views of its employees as expressed through the petitions, BRB Modular led no evidence from any of the employees who signed the petition.

[87] In the context of this matter and in the context of how the petitions were created, explained and signed I have very real doubts that the petitions are a genuine expression of employees preference for the scope of a single enterprise agreement as proposed by BRB Modular.

[88] There is another matter which I consider relevant in relation to the fairly chosen test.

The scope of coverage of the agreements proposed by each of the AMWU and BRB Modular clearly and deliberately excludes some of the employees of BRB Modular.

[89] Whilst the desire of BRB Modular is to make an agreement to cover its Victorian workforce the coverage of the proposed enterprise agreement is less than the coverage of the current agreement. The existing agreement covers employees employed anywhere in Australia in the classifications of Factory/Yard Labourer, Tradesperson-Carpenter, Tradesperson-Painter, Tradesperson-Welder, Tradesperson-Electrician, Leading Hand(up to 6), Supervisor, Office Employee Level 1 and Office Employee Level 2. The proposed new agreement covers the same classifications but only in Victoria.

[90] From the perspective of BRB Modular the group of employees covered by the current agreement was fairly chosen and the group of employees to be covered by the proposed agreement was also fairly chosen, even though the coverage of the proposed agreement is significantly less than the coverage of the current agreement.

[91] The observation to be made is that the application of the fairly chosen test is not an “either / or” test. It is not the case that if one group of employees meets the fairly chosen test then all other groups must fail the fairly chosen test. Rather there can be multiple combinations of workers all of which may meet the fairly chosen test.

[92] The group of employees chosen by the AMWU to be covered by its scope application is based upon applying two discriminators. The first discriminator is the geographic location of the Kangaroo Flat site vis a vis the geographic location of all other sites. The second discriminator is based on the type of work performed by employees at that site. The AMWU proposes a scope for an enterprise agreement which is limited to employees who are covered by the Manufacturing and Associated Industries and Occupations Award excluding supervisors and managers and excluding clerical and administrative employees. The result is that the AMWU does not seek to have an agreement which covers employees at the Kangaroo Flat site who are employed in the classification of Supervisor, Office Employee Level 1 or Office Employee Level 2. The group of employees sought to be covered by the AMWU proposed agreement would be employees employed at the Kangaroo Flat site currently employed in the in the classifications of Factory/Yard Labourer, Tradesperson-Welder and Leading Hand(up to 6).

[93] The combination of classifications chosen by the AMWU for inclusion in its proposed agreement is certainly a discrete group of workers within BRB Modular.

[94] Having considered all of the circumstances of this matter I conclude that the group of employees who are proposed to be covered by the scope order in this matter is fairly chosen.

S.238(4)(d) - it is reasonable in all the circumstances to make the order.

[95] The cumulative effect of the operation of s.238(4) means that even if the Commission is satisfied as to the matters in s.238(4)(a), (b) and (c) the Commission must then consider each of these matters as well as all the circumstances of the matter before the Commission can come to a concluded view that it it reasonable in the all the circumstances to make the scope order sought.

[96] In addition to the matters raised in s.238(4)(a), (b) and (c) BRB Modular also contend that a relevant circumstance is the timing of the application.

The Timing of the Application

[97] BRB Modular contended that the application was made too late.

[98] The application in this matter was made after 4 bargaining meetings had taken place and in circumstances where the AMWU’s claim for a separate agreement for the Kangaroo Flat site had been raised at the first bargaining meeting.

[99] BRB Modular relied upon RTBU v ARTC 10 where Cambridge C said:

“[59]There appears to be an inescapable inefficiency attached to the pursuit of a scope order at a point in time after the enterprise bargaining negotiations have progressed. Logically, in order to ensure that enterprise bargaining is undertaken with efficiency any issue regarding the scope of the proposed agreement needs to be resolved before time, money and energy is spent in negotiation of the particular terms of a proposed agreement. Consequently there is a very strong prospect that any scope order which is not made at or shortly after the commencement of the bargaining process will fail to satisfy the requirement that it would promote the efficient conduct of bargaining.”

[100] In that matter the four unions representing employees served a joint log of claims on ARTC and the issues of scope of any agreement was specifically addressed in the log of claims. The unions identified two groups of employees which required separate agreements with the remainder in a third agreement. ARTC advised the Unions in writing that it rejected any separate agreement or agreements for any of the classifications that had been identified in the Unions’ log of claims. Bargaining nevertheless continued and at least six further meetings took place before the RTBU made an application under s.238.

[101] In the context of the matter before him the comment of Cambridge C is understandable but as a general proposition it is not consistent with the plain language of the Act and the purpose of s.238 as explained in the EM.

[102] The Act very clearly deals with the timing of an application for a scope order.

[103] Theoretically an application for a scope order can be made any time after the employer, pursuant to s.176(2)(a) gives a Notice of Employee Representational Rights to employees. Where the employer issues a Notice of Employee Representational Rights to employees the employer is required to identify the group of employees to be subject to a proposed enterprise agreement. This may immediately give rise to a dispute between the employer and some employees as to the scope of the proposed enterprise agreement.

[104] Practically, an application for a scope order can only be made after the bargaining process has begun. This is so because the condition precedent for the making of an application for a scope order is that the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly.(s.238(1)(a)) This concern could only be made out after bargaining has commenced. Further the applicant for a scope order is required to have given the employer notice of their concerns and also to have given the employer an opportunity to respond to those concerns.

[105] Additionally the EM at para 983 explains the purpose behind the requirement to give notice:

“This requirement is included to encourage bargaining representatives to consider resolving issues surrounding the scope of a proposed enterprise agreement through the good faith bargaining process. It also ensures that it is no more expedient to obtain a scope order rather than a bargaining order. “

[106] It would certainly be at odds with the both the purpose and the scheme of s.238 for a bargaining representative to make an application for a scope order without having tried to resolve the scope of the proposed agreement through the bargaining process.

[107] In the present matter the AMWU presented a log of claims to BRB Modular at the first bargaining meeting on 6 May 2014. The log contained a claim for a separate agreement for Kangaroo Flat.

[108] BRB Modular contended that:

“The Applicant’s claim for a separate scope was submitted, discussed, considered and ultimately denied from the outset of bargaining”.

[109] The evidence of Mr Miller under cross examination from BRB Modular was as follows:

“PN242 Mr Barkatsas: Okay, so your evidence is as I'm saying then that therefore you were given an opportunity, you firstly tabled your log of claims. You were given an opportunity to discuss that. The response wasn't given immediately. There was time between that tabling and then a response in the third meeting?---Mr Miller: Mm'hm.

...

PN270 Mr Barkatsas: All right, now with respect to you mentioned, I think your words were that the scope was a priority claim. Was that right?---Mr Miller: That's correct.

PN271. And it was effectively tabled as part of the log in the very first meeting?---That's correct.

PN272: So we don’t have a date at this point in evidence just yet but I think you may have said it was early May, or mid, sometime in May?---No, it was earlish May.

PN273. So we've established it was a priority claim. It was a key claim for your members and your organisation and it was tabled at the very first meeting. Is that right?
---That's correct.

PN274. And by the third meeting on your evidence there was a response to that? Or there was discussion, sorry, beforehand about that and you outlined the importance of that claim? Is that correct?---Yes, in those first two meetings, yes.

PN275. First two meetings, yes, and in the third meeting which is potentially may have been a fortnight later and we'll get the - I guess the timelines will be in evidence soon enough. But at the third meeting a response was given to you?---In regards to that claim?

PN276. Yes?---No, it was probably - - -

PN277. I think it was your evidence a response was given to all claims, wasn't it?---To all claims, yes.

PN278. All outstanding claims which included the scope claim?---Yes.

...

PN341 Mr Barkatsas: And bargaining commenced in early May and scope of the agreement was one of your key items and was tabled at the very first meeting. However, this application wasn't made until 26 June. Is that correct?---Mr Miller: Again without that information in front of me I would have to have a look.

PN342. It's a document of the commission, Commissioner. The applicant's application was filed on 26 June.

PN343. So despite the claim for scope being tabled at the very first meeting being discussed you continued to participate in bargaining right up until the very end and granted it may have ended earlier than you expected or had hoped. However, this application wasn't made until after bargaining had ceased. Would you agree with that?---I thought the information that was exchanged between yourself and Dave Vroland - - -

PN344. Yes?---- - -and it was obviously forewarned at one of the negotiation meetings by myself that the AMWU would be looking at its capabilities or abilities under the Act.

PN345. So you advised that - - -?---And that was prior to the meeting on the 20th.

PN346. So earlier than the final meeting you had advised or you were aware of the capability to make this application to the Fair Work Commission?---We had forewarned the company that we were going to look at our legal options.

PN347. You had forewarned the company but you didn't do anything until 26 June?
---Well, there was a process that needed to be followed and I was led by the advice of Dave Vroland that we needed to meet certain requirements or criteria to continue down this line.

...

PN1456 Mr Barkatsas: Was there a response to any claims that were put forward in the first meeting? Was there any - - -?---Mr Waring: I mean, I think we had general discussion both for the employee claims and for the union claims. I think obviously, you know, as an employer I guess we had positions on certain claims and I guess, you know, addressing the - - -

PN1457: Were those positions relayed or sorry, communicated at the time?---Yes, certainly. I think from the first claim as far as the scope I think we were, you know, quite emphatic in regard to not wanting to entertain that just purely due that we didn’t believe the, you know, it was a relevant claim.”

[110] I also note from Exhibit A2 that in the email exchange between the AMWU and VECCI on 18 and 19 June 2014 the AMWU specifically addressed the issue of scope of a separate agreement for the Kangaroo Flat site. The response from VECCI contained the following:

“In short, we are instructed to reject your union’s request to bargain for a separate agreement.”

[111] The evidence of the AMWU was led from both Mr Miller and Mr Harrison and relevantly is as follows:

“PN152. Mr Vroland: What sort of response did you get to that claim in the first meeting? ---Mr Miller: I don't believe there was any initial response from the company in the very first meeting in regards to that claim. There was more about an explanation of the claims.

...

PN162 Mr Vroland: But in the course of that did the company provide a response to the AMWU's log of claims?---Mr Miller: Not at that particular time.

...

PN166 Mr Vroland: After those meetings did the AMWU hold discussions with its members?---Mr Miller: Not at that particular time because there was nothing to report back on because we hadn't received any responses back from - in regards to our claims.

...

PN184 Mr Vroland: What was the response on the claim with respect to scope, number one?---Mr Miller: All other claims it was not given sufficient response other than to those claims that had costs and the answer, the response that we got off the company was basically that we know what these claims pertain but the answer is no, to words to that effect.

...

PN540 Mr Vroland: What was the response from the company as Danny addressed the log of claims?---Mr Harrison: That they would take them on board and get back to us sort of thing, I think.

...

PN565 Mr Vroland: I think we've really got to the start of the meeting. How did the meeting progress?---Mr Harrison: We've gone on into the log of claims. The company is reading them out and saying, "No, we don't want to have a separate agreement for the multiple different sites" and whatever in regards to log one, the claim.

PN566. Did they give reasons as to why they didn't want a separate agreement?---Because of duplicating the process.”

[112] The email communication from VECCI as bargaining representative of BRB Modular to the AMWU on 19 June 2014 appears to be the first formal written response from BRB Modular on the issue of the scope of the enterprise agreement.

[113] The very fact that the AMWU only made an application after receiving the written response from BRB Modular is both appropriate and timely. At the very least there is clear evidence that the AMWU were pursuing the claim for a specific scope of an enterprise agreement through the bargaining process as they were required to do.

[114] In this matter the earliest proper time for the AMWU to make an application for a scope order was after they received the written response from BRB Modular.

[115] It was appropriate for the AMWU to have made its application for a scope order shortly after 19 June 2014 and an application made on 26 June 2014 cannot be described as a dilatory.

[116] The timing of the application is a matter that the Commission can have regard to as part of all of the circumstances of the matter. In the present matter the timing of the application does not weigh against the making of a scope order. Rather it would weigh, although only slightly, in favour of the making of a scope order.

Conclusion

[117] Having considered each of the matters in s.238(4)(a), (b) and (c) and being satisfied as to each of those matters and considering the matter raised by s.238(4)(d), I am satisfied that the scope order as sought by the AMWU should be granted.

COMMISSIONER

Appearances:

D. Vroland on behalf of the Applicant.

N. Barkatsas, VECCI, on behalf of the Respondent.

Hearing details:

2014.

Melbourne:

July 18, 25.

1 [2010] FWAFB 3009.

2 [2010] FWA 3911.

3 [1990] HCA 6.

4 [2007] TASSC 21(cited in Statutory Interpretation in Australia at [3.30].

5 [1910] AC 409 at 420 (cited in Statutory Interpretation in Australia at [2.32] at page 55.

6 [2012] HCA 3.

7 [2014] HCA 9.

8 Cattanach & Anor v Melchior & Anor B22/2002 [2003] HCATrans 564.

9 [2012] FWAFB 2206.

10 [2012] FWA 6329.

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