“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Motors TAS Pty Ltd
[2018] FWCFB 4584
•11 SEPTEMBER 2018
| [2018] FWCFB 4584 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Motors TAS Pty Ltd
(C2018/1607) (C2018/1449)
VICE PRESIDENT CATANZARITI | SYDNEY, 11 SEPTEMBER 2018 |
Appeals against decision ([2018] FWC 933) of Commissioner Lee at Melbourne on 5 March 2018 in matter numbers B2017/1219, B2017/1218 & B2017/1220.
[1] On 5 March 2018, Commissioner Lee issued a Decision 1 in which he considered three majority support determination applications which were lodged by the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU). The three applications concerned the following employees of Motors TAS Pty Ltd (Motors TAS):
a) All sales representatives employed at Motors TAS Pty Ltd located at 1 Don Road, Devonport TAS (matter B2017/1218);
b) All mechanics, mechanical apprentices and detailers at Motors TAS Pty Ltd located at 1 Don Road, Devonport TAS (matter B2017/1219); and
c) All sales representatives employed at Motors TAS Pty Ltd located at 60 Marine Terrace, Burnie TAS (matter B2017/1220).
[2] In respect of matters B2017/1218 and B2017/1220, the Commissioner determined to issue majority support determinations pursuant to ss.237(1) and (2) of the Fair Work Act 2009 (Cth)(Act). Motors TAS now seeks to appeal the Decision of Commissioner Lee and the majority support determinations issued in B2017/1218 and B2017/1220 for all sales representatives employed by Motors TAS at the Devonport 2 and Burnie3 sites.
[3] In respect of matter B2017/1219, the Commissioner was not satisfied of the matters prescribed by s.237(2) of the Act and refused to issue a majority support determination for all mechanics, mechanical apprentices and detailers at Motors TAS’ Devonport site. 4 The AMWU now seeks to appeal the Decision and Order5 of Commissioner Lee dismissing the majority support determination issued in B2017/1219 for all mechanics, mechanical apprentices and detailers at Motors TAS’ Devonport site.
[4] On 21 March 2018, the Decision and majority support determinations referred to above were stayed pending the determination of this appeal. 6
[5] On 18 May and 15 June 2018 we heard the appeals together. Ms Lucy Saunders, of Counsel, sought permission to appear for the AMWU and Mr A Pollock, of counsel, sought permission to appear for Motors TAS. Given the complexity of the appeals, we granted permission to appear for both parties. 7
The Decision
[6] It is necessary to refer to those parts of the Decision which are relevant to the Commissioner’s conclusion concerning the “fairly chosen” requirement in s.237(2)(c). At first instance, the AMWU submitted that it was appropriate to issue majority support determinations in respect of the sales representatives in the Burnie and Devonport sites, as well as the mechanics, apprentices and detailers in the Devonport site, because they had been fairly chosen.
[7] The Commissioner referred to the evidence of the AMWU, which indicated that each group was chosen because it was geographically and organisationally distinct, as “each of the groups [was] located at one of the Respondent’s five sites” 8 and that “they [were] operationally distinct,” because;
• the mechanics, apprentices and detailers performed maintenance and service work on vehicles and
• the salespersons were selling motor vehicles and dealing with operations and matters which were associated with the sale of motor vehicles. 9
[8] In particular, reference was made to the evidence of the AMWU Official Mr Lee, who stated that the basis for selecting the groups was as follows:
“My understanding is that at each site the business does mechanical servicing and detailing of cars (the mechanical group) and also sells cars (the sales group).
The sales group and the mechanical group are distinct employees. The mechanics work on the vehicles and the detailers clean the vehicles. On the other hand, the sales group wear shirts and ties and engage with the customers to sell cars. They work in separate areas and appear to have separate lunchrooms to the mechanics.” 10
[9] Having referred to the organisational charts of Motors TAS’ Burnie and Devonport dealerships, 11 and the evidence of Mr Bienefelt (State Manager Fixed Operations for Motors TAS) concerning the appropriateness of having an enterprise agreement for each respective group of employees,12 the Commissioner then adopted the Full Bench decision in Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union and Ors (Cimeco) in considering whether the groups of employees had been fairly chosen:
“[34]Cimeco set out the requirements for the Commission in determining the question of fairly chosen. Commissioner Roe in National Union of Workers v Cotton On Group Services Pty Ltd set out the requirements as follows;
[17] Both parties refer to the decision of the Full Bench in Cimeco Pty Ltd v CFMEU and Ors. That decision related to an agreement approval however the requirements in respect to fairly chosen are essentially the same for agreement approval and majority support determinations. Cimeco requires that the [Commission] in determining the question of fairly chosen:
• Evaluate and have regard to all the relevant factors.
• Focus on objective as opposed to arbitrary or subjective factors in concluding that a group is fairly chosen. If the selection was on arbitrary or discriminatory grounds or based on criteria which undermined legislative objectives, for example, if it undermined collective bargaining, then it would be unlikely to be fair.
• Consider that, where the group chosen is not the whole enterprise, if the group is geographically, operationally or organisationally distinct, this is a factor in favour of finding that the group was fairly chosen, however, it is not a decisive matter as all other relevant considerations must be evaluated.
• Consider that if the group is not geographically, operationally or organisationally distinct, (and is not the whole enterprise) this is a factor against a finding that the group is fairly chosen, however, it is not a decisive matter as all other relevant considerations must be evaluated.
• Consider that the interests of the employer and productivity and the interests of employees who are excluded from coverage may be relevant. That is the consequences of the choice of the group may be considered.”
[10] Further, in respect of the question of “fairly chosen”, the Commissioner also adopted the decision in Construction, Forestry, Mining and Energy Union v Alcoa of Australia Limited (Alcoa): 13
“[71] When considering fairness to an employer of a selected group, there would need to be a clear and cogent case that the selection of the group would be sufficiently prejudicial to the productivity or efficient conduct of an employer’s business, in all the relevant circumstances, to outweigh a presumption that the Commission should facilitate bargaining for an enterprise bargaining agreement where the employees of the group unanimously wish to bargain.”
[11] The Commissioner then proceeded to consider whether the sales representatives in Burnie and Devonport were “fairly chosen” for the purposes of s.237(2)(c). In doing so, the Commissioner took into account the legislative objectives of the Act as follows:
“[38] It is convenient to first consider the applications relevant to the sales representatives in Burnie and Devonport. There was no evidence that the selection of the combined group of sales representatives for both Burnie and Devonport was based on criteria which undermined legislative objectives such as, for example, collective bargaining. Nor does the group appear to be discriminatory. I note the evidence of Mr Lee that the groups of sales representatives were selected because they “wear shirts and ties and engage with the customers to sell cars” could be considered a rather arbitrary basis of selection. However all of the circumstances have to be considered”
[12] The Commissioner accepted that it was “clear” the two sites of Burnie and Devonport were geographically distinct, and that the organisational charts support the view that the sales representatives were a distinct organisational group, 14 which was suggestive (although not determinative) of a finding that the sales representatives were “fairly chosen”. The Commissioner also found that there was no “clear and cogent case that the selection of the [sales representatives] would be sufficiently prejudicial to the productivity or efficient conduct of [Motors TAS’] business to outweigh the desire of the [sales representatives] to bargain”,15 largely because the impact the agreement might have on Motors TAS was speculative.
[13] The Commissioner was further satisfied that the petition of sales representatives demonstrated support for bargaining, despite one signature to the contrary, which alone did not weigh against a finding that the sales representatives were fairly chosen. 16 The Commissioner’s overall conclusion was that the sales representatives were “fairly chosen” for the purposes of s.237(2)(c). Satisfied of the matters listed in s.237(2), the Commissioner made majority support determinations for the sales representatives in B2017/1218 and B2017/1220 pursuant to s.237(1).17
[14] In relation to the mechanics, apprentices and detailers at the Devonport site, the Commissioner considered, for the purposes of s.237(2)(c), the legislative objectives of the Act:
“[43] To the extent that this group is located in Devonport, it is apparent that the group is geographically distinct and this weighs in favour of a finding that the group is fairly chosen. I am satisfied that the group chosen is not discriminatory or undermines the legislative objectives in some way. There is no evidence that could support such a finding.”
[15] The Commissioner went on to note that the selection of mechanics, apprentices and detailers appeared to be “a rather arbitrary one” as Mr Lee’s evidence concerning his understanding of the organisational structure at Devonport had indicated that there was a “mechanical group” that also did “mechanical servicing and detailing of cars”. 18 In particular, the evidence of Motors TAS indicated that a number of employees who worked on the vehicles at the Devonport site did not fall within the group selected, for example the “technicians, accessory fitters, service advisors, apprentices and a car washer”.19
[16] In conclusion, the Commissioner was not satisfied that the “mechanics, apprentices and detailers” at the Devonport site had been “fairly chosen”, and accordingly the application for a majority support determination in B2017/1219 was dismissed. 20
Consideration
[17] For the reasons which follow we have determined to grant permission to appeal to Motors TAS and to refuse permission to appeal for the AMWU. We are of the view that the Motors TAS appeal raises issues of importance and general application of ss.236 and 237 of the Act, namely the Commission’s jurisdiction and whether the Commissioner could have validly made the majority support determinations in relation to the sales representatives at Motors TAS’ Devonport and Burnie sites. Before turning to our reasons for granting permission to appeal and upholding Motors TAS’ appeal, we deal with the AMWU’s appeal.
AMWU Appeal
[18] The AMWU’s application for a majority support determination concerned a proposed agreement that would cover “all mechanics, mechanical apprentices and detailers at Motor TAS Pty Ltd located at 1 Don Road Devonport”. The Commissioner concluded at [51] that, although this group was geographically district, it was not operationally or organisationally distinct. The Commissioner found that the union organiser, Mr Lee, had wanted to select an operationally distinct group, namely employees who worked on and cleaned vehicles, 21 but he did not succeed in doing so. The Commissioner concluded:
“By including only mechanics, apprentices and detailers the AMWU has left out a number of employees from the group who are involved in working on and cleaning the vehicles but do not fall into one of those (three) categories.” 22
[19] The Commissioner took into account that the chosen group was geographically distinct, but not operationally or organisationally distinct, without considering any of these circumstances to be dispositive. The Commissioner concluded that the selection of the group in these circumstances was “rather arbitrary” and not fairly chosen. We see no error in having reached this finding. It constituted a sufficient basis for the Commissioner to reject the application for a majority support determination in relation to the “mechanics, mechanical apprentices and detailers”. 23
[20] The AMWU contended that the actual and intended scope of its proposed determination extended to the entire Devonport service group, and that the Commissioner was wrong to confine his analysis to the words used in the AMWU’s application. This cannot be accepted. Both the AMWU’s application and its petition document referred to the group of employees subject to the proposed coverage of the agreement as “mechanics, mechanical apprentices and detailers.” This is not a case where loose drafting has been employed in the documents but the real and intended meaning is clearly something different. The meaning of the relevant words in the application and the petition is clear. It was appropriate for the Commissioner to determine the application by reference to these terms.
[21] The AMWU contended that the Commissioner erred by taking into account an irrelevant consideration, namely the desire of car detailers to be included in bargaining as part of his consideration of whether the group was fairly chosen. 24 However, the Full Court of the Federal Court in Aerocare makes clear that it is permissible to take into account the objective interests of the excluded group as a whole.25 Although the Commissioner referred to the evidence of “employees” and “car detailers” who wanted to be included in the coverage of the proposed agreement, and stated that he took this into account, he then proceeded to consider at [51] the various classes of employees that were and were not covered, including car detailers. Even if the Commissioner had taken into account the personal rather than group interests of the car detailers, it appears that these employees were included in the proposed group26 and that their wish to bargain would have told in favour of a finding that the group was fairly chosen, whereas the Commissioner decided that the group was not fairly chosen. Thus, any error affected the Commissioner’s consideration of a possible different conclusion, not the conclusion he actually reached. Furthermore, it is apparent from the Commissioner’s analysis from [44] to [52] that any consideration of the personal interests of car detailers received little if any weight. The Commissioner stated that his concern was that the group was simply a “group of different occupations who are geographically but not organisationally distinct,”27 and that the AMWU’s application had “left out a number of employees from the group who are involved in working on and cleaning the vehicle.”28
Motors TAS Appeal
[22] By its first and second grounds of appeal, Motors TAS submitted that the AMWU was not entitled to represent the industrial interests of the sales representatives at the Devonport and Burnie sites. Reference was made to ss.166(1) and (2) of the Fair Work (Registered Organisations) Act 2009 (Cth) to support the proposition that a union’s ability to represent an employee, or to act as a bargaining representative, is confined by its own eligibility rules. Motors TAS stated that it assumed the AMWU relied on Rule 1E of the AMWU Rules to act on behalf of the sales representatives:
“Without in any way limited or being limited by the sub-rules 1A, 1B, 1C, 1D, 1F, 1G, 1H and 1I, the Union shall also consist of an unlimited number of employees engaged in or usually engaged in the process, trade or business connected with or incidental to the manufacture, assembling or repairing of carriages, carts, wagons, trucks, railway cars, tram cars, motor cars, motorcycles, sidecars, aircraft and other vehicles used in air transit and all other vehicles or parts thereof and whether in wood and/or metal and/or other material, preparation for sale of motor vehicles (pre-delivery) and sale by auction of any motor vehicle, (including detailing work) and the rental of motor vehicles (including cleaning and detailing work but not clerical and customer service work) together with any persons appointed as officers of the Union and elected as members thereof.”
[23] Motors TAS submitted that Rule 1E excludes employees engaged in retail sales of new and used vehicles from the AMWU’s coverage, which is evidenced from the objective circumstances surrounding the amendment to rule 1E which inserted the terms “pre-delivery” and “sales by auction”, 29 as well as the wording of the provision:
• the express limitation of pre-delivery and sale work to sales “by auction” (thereby impliedly excluding sales by other methods, including retail sales);
• the absence of any reference to retail sales of motor vehicles or customer service functions relating to motor vehicle sales; and
• the carve out from businesses engaged in motor vehicle rentals of “clerical and customer service work”, which suggests that Rule 1E is not intended to extend to retail sales of motor vehicles.
[24] Whilst it is true that the coverage issue was not raised by Motors TAS at first instance, the Commissioner could not be “relieved” of his statutory task 30 for the reasons recorded below.
[25] The statutory task that was before the Commissioner is set out under ss.236-7 of the Act. Section 236 provides that a bargaining representative of an employee who will be covered by a proposed single-enterprise agreement may apply to the Commission for a majority support determination. Section 237 provides that “if an application for a determination has been made”, and the Commission is satisfied of the matters in s.237(2), the Commission must make a majority support application. In the appeal, Motors TAS contended that the AMWU was not a bargaining representative of any of the sales representatives, because its registered rules do not allow it to enrol such employees as members. It said that no valid application had been made under s.236, and that accordingly there was no basis for the Commissioner to proceed to consider the matters in s.237 or to make a majority support determination. Section 176 concerns who may be a bargaining representative for a proposed enterprise agreement. It states:
“176 Bargaining representatives for proposed enterprise agreements that are not greenfields agreements
Bargaining representatives
(1) The following paragraphs set out the persons who are bargaining representatives for a proposed enterprise agreement that is not a greenfields agreement:
(a) an employer that will be covered by the agreement is a bargaining representative for the agreement;
(b) an employee organisation is a bargaining representative of an employee who will be covered by the agreement if:
(i) the employee is a member of the organisation; and
(ii) in the case where the agreement is a multi‑enterprise agreement in relation to which a low‑paid authorisation is in operation—the organisation applied for the authorisation;
unless the employee has appointed another person under paragraph (c) as his or her bargaining representative for the agreement, or has revoked the status of the organisation as his or her bargaining representative for the agreement under subsection 178A(2); or
(c) a person is a bargaining representative of an employee who will be covered by the agreement if the employee appoints, in writing, the person as his or her bargaining representative for the agreement;
(d) a person is a bargaining representative of an employer that will be covered by the agreement if the employer appoints, in writing, the person as his or her bargaining representative for the agreement.
…
(3) Despite subsections (1) and (2):
(a) an employee organisation; or
(b) an official of an employee organisation (whether acting in that capacity or otherwise);
cannot be a bargaining representative of an employee unless the organisation is entitled to represent the industrial interests of the employee in relation to work that will be performed under the agreement.
….”
[26] It is apparent from the Decision that the Commissioner did not have regard to whether an application had properly been made pursuant to s.236 and made no finding about whether the AMWU was entitled to represent the industrial interests of the sales representatives at the Devonport and Burnie sites as a bargaining representative pursuant to s.176 of the Act. We note that Motors TAS did not raise any contention before the Commissioner that the AMWU did not have coverage of the relevant employees, and in cases where the question of coverage is uncontentious, it is not uncommon for the Commission to proceed on the basis that the application was properly made. The Act does not direct that the Commission reach a state of satisfaction in relation to the question of whether a valid application has been made under s236; but equally, it makes clear that a determination under s.237 can only be made ‘if an application for the determination has been made”. In our view, this clearly contemplates a valid application properly made under s.236 of the Act.
[27] A serious question has now been raised on appeal as to whether the AWMU’s rules extend to coverage of the sales representative, and accordingly whether the application was properly made. Our attention was drawn to Rule 1E, which covers employees engaged in the sale by auction of any motor vehicle but not otherwise. Motors TAS contends that its sales representatives do not sell cars by auction and do not otherwise perform work covered by the AMWU’s rules. Ordinarily, an appellant is not permitted to raise new arguments on appeal that could have been raised below. But in this case, the argument in question goes to jurisdiction. If the AMWU’s rules do not cover the Motors TAS’ sales representative, the Commissioner had no power to make a majority support determination.
[28] In these circumstances, we have concluded that the Commissioner failed to take into account a relevant consideration, namely the coverage of the AMWU’s rules and whether they extend to the sales representatives of Motors TAS. We note the AMWU’s contention before us on appeal that it has not had an opportunity to put a case in answer to Motors TAS’ contentions on the scope of the AMWU’s rules. The hearing of the appeal before us was not an appropriate forum for this to occur. Accordingly, we will not determine the question of coverage (and jurisdiction), but rather, having noted the error arising from the failure of the Commissioner to take into account a relevant consideration, the appropriate course is that we quash that part of the Decision which determines the applications for majority support determinations in B2017/1218 and B2017/1220, and remit the AMWU’s applications to the Commissioner to rehear. This will also allow the parties to lead further evidence about the nature of work performed by the sales employees and to make submissions as to interpretation and application of the relevant rules.
[29] For these reasons we have determined that the Commissioner’s Decision in relation to B2017/1218 and B2017/1220, and the Orders he made in those matters, were affected by error, and that permission to appeal should be granted. It is unnecessary to deal with the other grounds of appeal.
Conclusion
[30] Permission to appeal is refused to the AMWU and the AMWU appeal in C2018/1607 is dismissed.
[31] Permission to appeal is granted to Motors TAS and Motors TAS’ appeal in C2018/1449 is upheld. We order as follows:
(1) That part of the Decision in ([2018 FWC 933]) which determines the applications for majority support determinations in B2017/1218 (PR600861) and B2017/1220 (PR600874) is quashed.
(2) The majority support determinations made in B2017/1218 (PR600861) and B2017/1220 (PR600874) are quashed.
(3) Matters B2017/1218 and B2017/1220 are referred to Commissioner Lee for rehearing.
VICE PRESIDENT
Appearances:
Ms L. Saunders, of Counsel, for the AMWU
Mr A. Pollock, of counsel, for Motors TAS
Hearing details:
2018
Melbourne.
15 June
Final written submissions:
Outline of Submissions for the AMWU dated 4 June 2018
Outline of Submissions for Motors TAS dated 13 June 2018
Printed by authority of the Commonwealth Government Printer
<PR609698>
1 [2018] FWC 933.
2 PR600861.
3 PR600874.
4 [2018] FWC 933 at [61].
5 PR600872.
6 PR601360.
7 s.596(2)(a) of the Act.
8 Decision at [13].
9 Ibid.
10 Decision at [14].
11 Decision at [23]-[26].
12 Decision [29]-[32].
13 [2014] FWC 7123.
14 Decision at [39].
15 Decision at [40].
16 Decision at [41].
17 Decision at [59], [60] and [62].
18 Decision at [44].
19 Decision at [45].
20 Decision at [61].
21 Decision at [48].
22 Decision at [41].
23 Decision at [44] – [47].
24 Decision at [50].
25 [2018] FCAFC 74 at [24]-[26].
26 Decision at [51].
27 Decision at [49].
28 Decision at [51].
29 Re AMWU unreported, AIRC, 24 July 2003, PR935231.
30 CFMEU v Deputy President Hamberger and Anor (2011) 195 FCR 74 at [102].
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