Barminco Limited

[2015] FWCA 219

[2015] FWCA 219

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222—Enterprise agreement

Barminco Limited
(AG2014/9820)

BARMINCO (MT LYELL) GREENFIELDS AGREEMENT 2013

Tasmania
COMMISSIONER LEE	MELBOURNE, 14 JANUARY 2015

Application for termination of the Barminco (Mt Lyell) Greenfields Agreement 2013 - termination objected to by The Australian Worker’s Union - s.223 - agreement terminated.

[1] On 7 November 2014 Barminco Ltd (the Applicant) made an application under s.222 of the Fair Work Act 2009 (the Act) seeking that the Fair Work Commission (the Commission) terminate the Barminco (Mt Lyell) Greenfields Agreement 2013 (the Agreement). The Agreement was approved by me on 23 August 2013. The nominal expiry date of the Agreement is 1 October 2015.

[2] In the course of the consideration of the application the Commission sought the views of The Australian Workers’ Union (the AWU), as required under s.223(d) the Act, for the purposes of taking those views into account in considering the appropriateness of the approval of the application for termination. The AWU have made submissions that the Agreement should not be terminated. Mr Robert Flanagan, Assistant Branch Secretary of the AWU, provided a statutory declaration providing evidence in support of that submission. A statutory declaration was filed by way of Form F24A of the Commission’s forms by Mr. Daniel Scasserra, Employee Relations Consultant for the Applicant. The Applicant has provided submissions and a further statutory declaration of Mr. Scasserra in support of the application. Both parties indicated they were content for the Commission to determine the matter based on the materials filed and did not seek a hearing.

[3] The relevant provisions under which the Commission considers the application referred to above are as follows:

“222 Application for the FWC’s approval of a termination of an enterprise agreement

Application for approval

(1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to the FWC for approval of the termination.

Material to accompany the application

(2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.

When the application must be made

(3) The application must be made:

(a) within 14 days after the termination is agreed to; or

(b) if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows.

223 When the FWC must approve a termination of an enterprise agreement

If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and

(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.

224 When termination comes into operation

If a termination of an enterprise agreement is approved under section 223, the termination operates from the day specified in the decision to approve the termination.

The application and associated evidence.

[4] Mr. Scasserra provided the Form F24A statutory declaration and provided an additional statutory declaration in response to matters raised by the AWU as part of the proceedings.

[5] The evidence Mr. Scasserra is that on 17 October 2014, a letter was sent to employees covered by the Agreement to their home addresses via express post as well as by email. The letter contained a communication notifying the employees of the Applicant’s intention to seek for employees to vote and agree to terminate the Agreement. The letter and a Frequently Asked Questions document that was attached to the letter were appended to the Form F24A.

[6] In summary, the letter to employees states that:

• The Applicant intends to seek to terminate the Agreement.



• The AWU has been advised of the Applicant’s intention.



• The Applicant is seeking to terminate the Agreement for a number of reasons. These include: mining operations have ceased; the Applicant’s contract with CMT to mine at Mt. Lyell has also concluded; as there is no contract in place, the terms of the Agreement are no longer acceptable; the contract and work has concluded; the termination of the agreement will not affect redundancy entitlements as these will be honoured in line with the Agreement.



• The vote method was an attendance ballot to be held at the Queenstown Motor Lodge on 27 October 2014 at 11 am.



• Employees would be paid 2 hours for attending the ballot.



• The letter included an email address and mobile phone numbers for Mr. Scasserra and the Project Manager, Werner Murach, should employees want to ask questions.



• The FAQ document included additional information as to what an enterprise agreement is, the fact that the Applicant has two enterprise agreements operating in Tasmania (one of which is the Agreement the subject of this application); a description of the process to be followed, clarification that voting is not compulsory but that employees are encouraged to vote, clarification that employees will be paid for 2 hours if they attend the ballot.

[7] The evidence of Mr. Scasserra is that employees were contacted at least 7 days prior to the vote and that there was no return undelivered mail and no objections on how the voting was being conducted raised by employees from 17 October to 27 October 2014 when the vote was conducted. Those not required to work have continued to be paid, making attendance easy for them. From 17 October 2014, the company was contacted by a small number of employees indicating they did not want to attend or participate in the voting.

[8] The voting process by way of attendance ballot was conducted and completed on 27 October 2014.

[9] 16 employees were covered by the Agreement at the time of the vote. Six of those employees cast a valid vote. Five of the 6 employees voted to terminate the Agreement.

[10] The application for approval of the termination of the Agreement was lodged with the Commission within 14 calendar days of the date of the termination of the Agreement.

[11] As already noted, the AWU made submissions and provided a further statutory declaration of Mr. Flanagan.

[12] In summary, Mr. Flanagan gave the following evidence in support of the AWU objection to the approval of the termination of the Agreement:

• The AWU is not satisfied that an attendance vote provided genuine opportunity to each of the 16 employees to participate in the ballot. That where the employees live and whether they were rostered to work would have a material impact on whether an attendance vote was appropriate. Union enquiries have established that the only employees in attendance were residents of Queenstown and that a postal ballot conducted by a third party may have been more appropriate (which goes to s.220(2)(b) of the Act);



• The temporary suspension of mining at Mt Lyell is not permanent and that there will be a resumption or partial resumption of work in 2015 at Mt Lyell.



• The effect of terminating the Agreement will be to remove benefits from potential future employees (a location allowance and a laundering provision) as neither of these provisions are contained in the Barminco (Tasmania) Enterprise Agreement 2012 (the Tasmania Agreement) which would apply if the Agreement is terminated. The loss of these benefits was not identified in the communication material to employees;



• That having regard to these factors as well as the fact that the parties have agreed to terms and conditions of employment to apply for a specified period of time, it is not in the public interest to terminate the agreement.

The first objection - The voting method and whether employees given a genuine opportunity to vote.

[1] The uncontested evidence is that all employees were advised of the time and place the vote would occur and the voting method to be used. Thus the requirement of section 220(2)(a) of the Act is satisfied.

[2] As to the method of voting, the Act does not specify a particular method of voting, nor that the vote be conducted by an independent third party. However, a consideration of the method of voting may have an impact, depending on the circumstances, as to whether the Commission can be satisfied that employees were given a reasonable opportunity to decide whether to approve the proposed termination of the Agreement.

[3] In this matter, the concerns of Mr. Flanagan as to whether employees had a reasonable opportunity to vote are speculative. There is no actual evidence that any employee was hindered in their ability to cast a vote. The evidence of Mr. Scasserra is that no employee raised a concern about the voting method. The vote took place in a motor inn in Queenstown which is next to the worksite at Mt Lyell, not at some remote location. Employees not required to work at the time were paid 2 hours to attend the vote. Employees completing temporary work at another site had the opportunity to attend the vote. The voting method employed in this case does not support a finding that employees were not given a reasonable opportunity to decide whether they wanted to approve the proposed termination.

The second objection - Mining operations at Mt Lyell are in suspension and not permanent.

[1] Mr Flanagan makes the claim that work will resume or partly resume at Mt. Lyell in 2015 (emphasis added). There is no evidence in support of this claim. However, the evidence of Mr. Scasserra does not rule out that the mine will re-open. His evidence is that the mines operator has not guaranteed mining operations will recommence. Further, Mr. Scasserra attests that the Applicant’s contract to mine has concluded; that the Applicant was to receive from the mines operator (in late November 2014 when the statutory declaration was made) the final payment of all outstanding monies owed including a bond which was set down at the time of the commencement of operations at the mine and that the Applicant does not have a contract in place to mine at My Lyell should the mine re-open and will have to re-tender.

[2] My consideration on this second objection is as follows. While it is possible the mine will re-open, it may not. If it does, the Applicant will have to re-tender and may not succeed with its tender. The contract that was the basis for the Agreement has ended. Considering the circumstances, I am not satisfied that it is inappropriate to terminate the agreement having taken into account this particular view of the AWU.

The third objection - Removal of benefits from potential future employees.

[3] This concern of the AWU related to the difference between the terms of the Agreement the subject of this application and the agreement they will be covered by if it is terminated (the Tasmania Agreement). It was not contested by the Applicant that the Tasmania Agreement will apply to future employees should the Agreement be terminated. The Applicant made no submissions on the loss of the allowance and the laundering provision claimed by Mr. Flanagan and I have assumed the claim is an accurate one. It is clear on the evidence that no mention of the allowance and laundering provision was made in the communication to employees. However, also relevant for the 16 employees still covered by the Agreement, the evidence of Mr. Scasserra is that all of them have been notified of redundancy but are continuing to be employed and paid and are waiting for redeployment to other sites. If the Applicant is successful in redeploying these employees to other sites the Agreement will no longer apply to them. Of course, if made redundant they will no longer be covered by the Agreement.

[4] This objection, aside from being a view I should consider pursuant to section 223(d) of the Act is relevant to a consideration as to whether employees were given a reasonable opportunity to decide whether they wanted to approve the proposed termination of the Agreement (s 220(2)(b) of the Act). The Explanatory Memorandum to theFair Work Bill at item 932, in reference to this provision notes: “This may, for example, involve the employer allowing employees sufficient time between making the request and the time of the vote to consider the effect of the termination on their terms and conditions.”

[5] There are no particular prescribed steps to be taken to give effect to the reasonable opportunity, including no prescribed minimum time period between the making of the request and the time of the vote. However, irrespective of the lack of prescription in the legislation as to what is required of employers in providing a reasonable opportunity within the meaning of s 220(2)(b) of the Act the Explanatory Memorandum example lends support for the proposition that employees would, among other things, need to consider the effect on their terms and conditions as part of their reasonable opportunity to decide whether to approve the termination. In that context, while there is no express requirement for the employer to explain the effect on the employees’ terms and conditions of the termination, the lack of any explanation or misleading or incorrect explanations may well be a factor in a consideration as to whether there has been a reasonable opportunity.

[6] In this case, the evidence of Mr. Scasserra is that he wanted to have an attendance vote in order to explain further, face to face, the reasons the Applicant sought to terminate the Agreement. In my view, an explanation provided on the same day of the vote is unlikely to provide sufficient time for employees to consider the effect of the termination and would tend towards a finding there has not been a reasonable opportunity. However, the employees were provided with the letter and attached FAQ document at least a week before the vote. The only information in those documents about the effect on the employee’s terms and conditions is, firstly, in answer to the question: “Does Barminco have a current enterprise agreement in Tasmania? A. Yes, Barminco has two enterprise agreements operating in Tasmania.” and secondly as part of the answer to the question, “Why is Barminco doing this? A. Your agreement to terminate the enterprise agreement will not have any impact on your redundancy entitlements as this will be honoured in line with the agreement” This information is not at all clear. The two enterprise agreements are mentioned but there is no explanation as to whether or not the Tasmania Agreement will apply to the employees if the Agreement is terminated and if so, what difference will that make? Where it states redundancy payments will be honoured in line with the Agreement, this gives rise to a further question, which agreement? The Agreement that is to be terminated or the Tasmania Agreement which, it would seem, though it is not explained in either the letter or the FAQ, will cover the employees in the event the Agreement is terminated. Further, it is evident that the allowance and laundry issue is not dealt with at all.

[7] Overall, while the information provided to employees via the letter and the FAQ is very clear about the reasons the Applicant seeks the termination of the Agreement, the time, place and method of the vote as well as statutory process to be followed in terminating an agreement, it is confusing and lacks information as to the effect on employees terms and conditions, with the exception of the assurance about the redundancy entitlement. Of course, it is not surprising that the Applicant focussed on the redundancy entitlement in the communication material, as the employees have all been “notified of redundancy”. 1 In the context of this matter, this is an important consideration. As the employees were notified of redundancy, their concern with terms and conditions is likely to be focussed on that aspect. It appears the redundancy entitlement in the Tasmania Agreement is in the same terms as those of the Agreement. They will therefore be covered by the terms of that agreement for the purposes of redundancy. In any case, the redundancy payment is identical to the National Employment Standards and so irrespective of the assurance of the Applicant to honour redundancy entitlements; the quantum of payment is apparently the same under either the Agreement or the NES.

[1] Considering all of the circumstances of this matter, I am not satisfied that the lack of clarity of the explanation to employees, particularly given the circumstances where they have been notified of redundancy is sufficient basis to find that the employees did not have a reasonable opportunity to decide whether they wanted to approve the proposed termination. Any failings in the communication need to be considered against all of the other factors.

The fourth objection-the public interest.

[1] The fourth objection raised is that it would not be in the public interest to terminate the Agreement. However, there is no requirement in the Act for the Commission to consider the public interest in deciding whether or not to terminate an agreement. On raising this point the AWU may have confused the requirements for an application under this provision with applications to terminate an agreement under s.225 of the Act where the public interest is a consideration (s.226(a)).

Conclusion

[2] It is clear from the above that I have considered the requirements of s.223(a)-s.223(d) of the Act. Having done so, I am satisfied that each of the requirements in s. 223(a) and (b) are met. In respect to s.223(c) I am satisfied that there are no other reasonable grounds for believing that employees have not agreed to the termination. In respect to s.223(d), I have also taken into account the views of the employee organisation, the AWU, covered by the Agreement and having done so consider that it is appropriate to approve the termination. Therefore, I must approve the application for the termination of the Agreement as made under s.222 of the Act.

[3] I note that the Applicant in its letter to employees proposed that the Agreements termination would be effective from 7 November 2014. That will not be the case. Given the requirements of s.224 of the Act, the termination of the Agreement operates from the date of the publication of this decision.

COMMISSIONER

 1   Mr Daniel Scasserra statutory declaration (21 November 2014), [12]

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