Bis Industries - [2019] FWCFB 8591

[2019] FWC 4184 [Note: This decision has been quashed - refer to Full Bench decision dated 23 December 2019 [2019] FWCFB 8591]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.185—Enterprise agreement

Bis Industries

(AG2019/261)

Deputy President Beaumont

PERTH, 5 JULY 2019

Application for approval of the Bis Enterprise Agreement 2018 – s 590 – whether the CFMMEU has a right to be heard – not a bargaining representative – no right to be heard – procedural fairness – when does procedural fairness dictate a party has a right to be heard when not a bargaining representative

An application has been made for approval of an enterprise agreement known as the Bis Enterprise Agreement 2018 (the Agreement). The application was made under s 185 of the Fair Work Act 2009 (Cth) (the Act) by Bis Industries (Bis). The Agreement is a single enterprise agreement.

The Mining and Energy Division of the Construction, Forestry, Maritime, Mining, and Energy Union (the Union) applied to the Fair Work Commission (the Commission) to be heard concerning the application. The basis for its application was that:

a)on the proper interpretation of the Agreement, it was a bargaining representative for the Agreement and therefore it had a right to be heard;
b)as a matter of procedural fairness, it had a right to be heard in accordance with:
i.the Full Bench decision in Construction, Forestry, Mining and Energy Union vCollinsville Coal Operations Pty Limited (Collinsville);[1] or

ii.the test established in Minister for Immigration v WZARH (WZARH);[2]

c)it was positioned to assist the Commission with the exercise of its statutory task, and the Commission ought, therefore, exercise its discretion under s 590 of the Act.

One of the pressing controversies between the parties was whether the Union was a default bargaining representative and therefore had a right to be heard. Clause 2 of the Agreement expressly excluded ‘Field Service Technicians’ from the Agreement’s coverage. The Union contended that at least one of its members was employed as an underground diesel fitter and as such was not, for the purpose of the Agreement, a Field Service Technician.

Accordingly, the Union stated that the member was an employee who will be covered by the Agreement for the purpose of s 176(b). As a member of the Union at the relevant time, and in the absence of the appointment of some other bargaining representative under s 176(c), the Union submitted it was the bargaining representative for the underground diesel fitter in relation to the Agreement.

However, having heard the evidence of the parties and having taken into consideration the submissions of both, I have concluded that the underground diesel fitter falls within the classification of Field Service Technician and therefore is not covered by the Agreement. It follows that the Union was not the default bargaining representative at the relevant time.

Thereafter the Union pressed that by way of procedural fairness its interest in the matter meant it ought to be heard. The Union said that the approval of the Agreement would have a direct and immediate affect on the rights and interest of the Union and its members.

The Commission’s attention was directed to what the Union referred to as ‘a new test as to whether procedural fairness ought to be followed’, submitting that the test in Collinsville had been supplanted by developments in procedural fairness and a right to be heard, as set out WZARH.

In making my decision, I asked the question - what is required to be provided to ensure that the decision concerning the Agreement’s approval is made fairly; does it require I provide the Union with an opportunity to be heard? This question was derived from the authorities concerning procedural fairness. I concluded that the Union did not establish an interest that would be directly affected by the decision to approve the Agreement. It follows that I am not required to provide the Union with an opportunity to be heard.

The Commission may choose to hear from an employee organisation or any other person about the approval of an agreement even though the organisation or person may not otherwise have a right to be heard. In this particular case, however, I choose not to hear from the Union. Reasons for this decision follow.

Background

Bargaining representatives for the Agreement

Ms Winter, Employee Relations Manager for Bis, gave evidence that negotiations for the Agreement commenced with a group of 50 employees at Bis’ Andoom operation. Initially, each crew nominated one bargaining representative to represent them in negotiations. Therefore, negotiations started with four nominated employee representatives.[3] However, following demobilisation, several positions were made redundant; including those held by three of the bargaining representatives.[4] Consequently, on 21- 22 January 2019, the remaining employees changed their nominated representative, nominating a fellow employee, who nominated himself also.[5]

A list of the remaining employees who would be covered by the Agreement was extracted from Bis’ system and attached to Ms Winter’s witness statement.[6]

The coverage of the Agreement

On 5 February 2019, Bis filed an application for approval of the Agreement. Clause 2 of the Agreement set out its coverage and application stating:

(a) This Agreement covers and shall apply to:
i.the Company; and
ii.all Employees who perform work in the mining (metalliferous and black coal), quarrying, road transport and manufacturing industries.

(b) This Agreement does not cover:
i.Supervisory or Managerial Employees;
ii.Employees engaged as Field Service Technician; or
iii.Any Employee engaged (now or in the future) to perform work covered by an in-term project or site specific enterprise agreement which is already in operation at the time this Agreement is approved by the Fair Work Commission.

The application before the Commission

Not long after Bis filed its application, on 14 February 2019, the Union contacted the Commission informing it that it had concerns about the Agreement and wished to be heard in respect of the application.[7]

On 17 May 2019, the Commission issued directions requiring the filing of an outline of submissions and any evidence from both the Union and Bis in respect of the Union’s s 590 application to be heard. Further, the Union was directed to provide the Commission with a list of its members who it said were covered by the Agreement (Member List) and similarly Bis was directed to provide its list of employees who it asserted would be covered by the Agreement (Agreement List).[8] Bis filed a further list of employees who it considered were field service representatives/technicians (Field Services List). The lists were provided to the Commission on a confidential basis.

The Union filed its outline of submissions on 24 May 2019. These were accompanied by the witness statement of Mr Keenon Endacott, Industrial Officer with the Union’s Northern Mining and Energy District. A supplementary witness statement of Mr Endacott was filed on 29 May 2019.

On 5 June 2019, Bis filed its outline of submissions and a witness statement from Ms Winter.

Framework regarding standing to be heard

Regarding an application under s 185 of the Act an employee organisation may establish standing to be heard because:

(a)it is bargaining representative of one or more employees to be bound by the proposed agreement;[9]
(b)as a matter of procedural fairness if the employee organisation is able to establish a right, interest or legitimate expectation that it will be adversely affected by the decision;[10] or
(c)it is invited by the Commission in the exercise of its power under s 590 of the Act to inform itself.[11]

Was the CFMMEU a bargaining representative for the Agreement?

Background – Field Service Technicians/Representatives and Diesel Fitters

The exclusion in the Agreement at cl 2 concerned ‘Field Service Technicians’. That term was defined in cl 4 as:

… an Employee whose engagement is for the primary purpose of providing mechanical technical support to multiple sites or projects and therefore is not appointed to one project or roster. A Field Service Technician is often engaged to support the maintenance of dry hire mobile plant and may work from a home base with the use of a Company provided commercial vehicle.

Ms Winter gave evidence that within its underground business, Bis has a category of employee referred to as ‘field service representatives’.[12] She continued that this group of employees maintained underground equipment and mobile plant fleet.[13] The nature of the role was such that it required employees to work at both client locations and, from time to time, in one of the Bis’ workshops.[14]

In her evidence Ms Winter referred to the position description of a field service representative noting the document titled ‘Underground Field Services Position Description – Field Service Representative’ (the PD).[15] The PD set out the job title as ‘field service representative’. The purpose of the position was said to be ‘[T]o carryout [sic] repairs and preventative maintenance to all types of mobile and fixed plant onsite at coal mines both on the surface and underground’.[16] The PD required the position holder to meet several requirements including holding formal qualifications of ‘Mechanical trade’ and ‘R1109 maintenance of explosion protected diesel engine systems’.[17] As far as experience, skills, and knowledge was concerned, the position holder was required to have ‘[H]ydraulic and Pneumatic post trade qualifications, strong understanding of mining regulations, and underground mining experience’.[18]

Ms Winter stated that field service representatives had been employed under common law contracts which were underpinned by the Manufacturing and Associated Industries and Occupations Award 2010 (the Award). They were a distinct and known group within Bis due, in part, to the way they were engaged by Bis,[19] and that they were excluded from the Bis enterprise agreements.[20]

The category of field service representative, according to Ms Winter’s evidence, covered several classifications, including field service technicians and underground diesel fitters.[21]

Relevantly, the Field Services List appeared to include references to ‘field service technician’, ‘field service representative’, ‘underground diesel fitter’, ‘diesel fitter’, ‘product support technician’, and ‘commissioning representative’. A far column of the Field Services List, which was presented as a table, included the nomenclature of ‘field service technician’ for all positions except for those referred to as ‘field service leading hand’.

Included in the Field Services List were the names of two employees from the Member List.

During the hearing Ms Winter was asked in cross examination about the application of the Agreement to the employment of the position of underground diesel fitter. When asked whether the parties were on the same page that the Agreement did not apply to ‘Field Service Technicians’, Ms Winter responded ‘[C]orrect].[22]

It was Ms Winter’s evidence that the terms ‘field service representative’ and ‘field service technician’ were interchangeably used in the business.[23] Counsel again drew Ms Winter’s attention to her having articulated that a field service technician was different to an underground diesel fitter. Ms Winter said that the ‘field service technician or field service representative is the group, is a group, is a classification of employee within our business’.[24]

The cross examination continued with further exploration of the terms ‘field service technician’, ‘field service representative’, and ‘underground diesel fitter’:

Sorry, but someone can be employed as a field - go back to your statement if we can?‑‑‑Yes.
And your statement says that the category of field service representative includes two classifications, field service technician and underground diesel fitter?‑‑‑Mm‑hm.
So my read of that, your words, is that you could be a field service technician, you could be an underground diesel fitter, and you'd fall within the category of field service representative?‑‑‑Correct. So - - -
That's correct?‑‑‑Yes.
Okay, do you engage any employees at Narrabri Underground Mine?‑‑‑We engage field service representatives at Narrabri.
Any other employees?‑‑‑No.
You employ no other - - -?‑‑‑We employ a number of employees that fall under that classification of field service representative / field service technician that are at Narrabri.
Sorry, so - - -?‑‑‑There is no other employees outside of that classification.
No, sorry, so you have employees under the category of field service representative?‑‑‑Correct.
If you were to then go to the sub-category of either field service technician or underground diesel fitter do you employ anyone in either of those categories?‑‑‑Yes.
In both of those categories?‑‑‑Yes is my understanding.
Okay, so some as underground diesel fitters, some as field service technicians?‑‑‑Correct.[25]

Mr Endacott gave evidence that he represented the industrial interests of employees working for Bis in the Northern District Coalfields of New South Wales.[26] He stated that Bis employed persons working at coal mines in the Northern District Coalfields,[27] and that he understood there were five members of the Union working at Bis’ black coal mining operations.[28]

Having become aware, through reviewing the ‘Fair Work Commission’s Agreement Approval page’ that Bis had made an application for the approval of the Agreement, Mr Endacott said that he spoke with a Union member who worked for Bis under an employment contract, which Mr Endacott had reviewed.[29] Mr Endacott’s evidence was that the employment classification in the employment contract was that of ‘underground diesel fitter’.[30]

Attached to Mr Endacott’s witness statement was the contract which appeared to consist of a letter of offer and document titled ‘Employment Agreement’. What was evident from the documents was that the candidate was to be covered by the Award, and could choose to be paid in accordance with the Award or in accordance with Schedule 3, which set out an ‘Individual Award Flexibility Agreement’.[31] Insofar as the candidate was provided with information concerning her/his classification or position, the Employment Agreement stated ‘Bis Industries shall employ you in the position of Underground Diesel Fitter…’.[32] The location of the employment was said to be ‘initially Tomago’.

Mr Endacott thereafter referred to a further employment contract between Bis and an unnamed person, which in this case stated that the position was ‘Field Service Representative’.[33] The employment contract was annexed to Mr Endacott’s witness statement and the position reference was to that of a Field Service Representative; the work location was again Tomago.[34] The Award similarly covered the candidate, and again the candidate was provided with the option to be paid in accordance with the Award or an ‘Individual Award Flexibility Agreement’.[35]

A supplementary witness statement from Mr Endacott was received into evidence.[36] Attached to that witness statement was a redacted letter of offer and contract of employment said to have been obtained from a member of the Union.[37] That member was referred to as ‘Member 5’ from the Member’s List. On this occasion the initial work location was Narrabri.[38] Again, the candidate was informed in the contractual documentation of the Award coverage, the choice to be paid in accordance with the Award or an ‘Individual Award Flexibility Agreement’, and that the position was ‘underground diesel fitter’.[39]

Evidential issues

Bis objected to several paragraphs in the witness statement of Mr Endacott (paragraphs 12-13, 16-17). Primarily, its objections were based on hearsay and opinion, although other grounds were noted. Several paragraphs of Mr Endacott’s witness statement were struck out. Reasons for doing so were provided during the hearing. However, I declined to strike out those paragraphs regarding the contractual documentation although I cautioned the parties that the weight to be attributed to those paragraphs would be determined, once submissions were considered further.

Submissions of Bis

Bis submitted that its cross examination of Mr Endacott demonstrated how the remaining evidence in his witness statement was unreliable and absent probative value. In this respect it referred, in short, to the following:

a)at paragraph 12 of his witness statement Mr Endacott gave evidence that the employment classification of the Union member he spoke to was that of ‘underground diesel fitter’. Under cross examination, Mr Endacott admitted that he did not ask the employee whether there was an exclusion in clause 2 of the Agreement that might apply to him.[40] Had the employee been called by the Union to give evidence directly this question could have been put to him;
b)under cross examination, Mr Endacott could not say for a fact whether the employee employed as an underground diesel fitter was currently engaged under a project or site specific enterprise agreement, which would also exclude the employee from coverage under cl 2(b)(iii) of the Agreement;[41]
c)at paragraph 14 of his original statement and paragraph 8 of his supplementary statement, Mr Endacott gave evidence about what the employees did not know about the Agreement. Had the employees been called to give evidence by the Union, questions could have been put to them regarding the classification of their roles and the reasons why they were not informed of the negotiations for the Agreement. The questioning could have clarified for the Commission the difference between the job titles (underground diesel fitter and field services representative) and the job classification of field service technician (which encompasses both of these job titles).

Submissions of the Union

The Union referred to its application for confidentiality orders in respect of the identity of its members who, it said, would be covered by the Agreement. It further observed that Bis consented to the confidentiality proposal on 29 May 2019, in the form of its consent to the draft order that was provided to the Commission on that same date (Draft Order). At the time Bis consented to the Union’s position on confidentiality it had had the opportunity to review the Union’s material, including both statements of Mr Endacott.

The Union submitted that the Commission had noted this consent position, and that the parties were advised confidentiality orders would be made if the Commission was of the view that they were necessary. The Union contended that while the Draft Order was not made, the consent basis on which it was provided was indicative of the agreed position of the parties in respect of the confidentiality of all employees involved in the proceedings. The Union continued that maintaining that confidentiality would not result in any prejudice to Bis. Further it was not until the hearing that Bis objected to Mr Endacott’s evidence, albeit Bis had Mr Endacott’s statements when it consented to the Draft Order.

The Union’s position was that the Commission ought to find significant probative value in Mr Endacott’s evidence for several reasons. First, the Commission is not bound by the rules of evidence, and the Union is unable to adduce the relevant evidence whilst maintaining the confidentiality of its members who it says, understandably, want to remain anonymous.

Second, the material in question is probative of issues that require determination and should be accorded appropriate weight. In this respect the Union stated that if Bis, did not, in fact, engage underground diesel fitters at the Narrabri Underground Mine, or at all, it was open to Bis to adduce evidence on the point, first in its written reply and later in the hearing.

Third, it was not contested that the employees in question were members of the Union and there was no suggestion that the employees were not members of the Union.

Fourth, to the extent that the hearsay objection was based on the contractual documents adduced through the witness statements of Mr Endacott, these were objective documents, drafted by Bis, and contain the representation between the contracting parties of the way in which the relevant employees were engaged.

Fifth, the contractual documents amount to business records for the purpose of s 69 of the Evidence Act 1995 (Cth). It follows, therefore, they fall under an exception to the hearsay rule.

Finally, given the consent position of the parties regarding the issue of confidentiality, the Union ought to have been put on notice as to Bis’ objections, and there were multiple opportunities for Bis to have done so. The Union advanced that where Bis had indicated its consent to the way in which the Union had dealt with confidentiality and its members, if limited weight was to be give to the evidence of Mr Endacott then the Union should be given further opportunity to file evidence to establish the relevant facts.

Submissions regarding right to be heard as a bargaining representative

Submissions of the Union

The Union submitted that under s 176(1)(b) an employee organisation will be the default bargaining representative of an employee who will be covered by the agreement if the employee is a member of the organisation and the employee has not appointed another person to be their bargaining representative in accordance with s 176(1)(c).

According to the Union, among the 30 Bis employees that are Union members, at least five are not covered by an enterprise agreement and perform work in the black coal mining industry. They are neither supervisory or managerial employees, and at least one is engaged as an underground diesel fitter, rather than as a field service technician.

The Union stated that the member who was an underground diesel fitter, will be covered by the Agreement for the purpose of s 176(b). As a member of the Union at the relevant time, and in the absence of the appointment of some other bargaining representative under s 176(c), the Union is a bargaining representative. The Union understood that no such appointment was made.

Submissions of Bis

Bis submitted that the Agreement will apply to Bis and all employees who perform work in the mining (metalliferous and black coal), quarrying, road transport and manufacturing industries. Excluded from its coverage was, amongst other employees, employees engaged as a Field Service Technician. It followed, according to Bis, it was not required to bargain for the Agreement with any employees engaged by it as Field Service Technicians.

At the commencement of bargaining, Bis said it identified the employees who would be covered by the Agreement and issued them with a Notice of Employee Representational Rights (Notice). Each of the identified employees responded to the Notice by nominating a fellow employee as a bargaining representative. The nominated bargaining representatives also self-nominated as a bargaining representative. As such, Bis denied that at the time of bargaining or in the making of the Agreement, there were any employees who could have been covered by the Agreement outside of those identified in the Agreement list.

Bis stated that on the basis that each employee who was to be covered by the Agreement nominated a bargaining representative, there was no default bargaining representative.

Consideration

It is not the case that a relevant employee nominated the Union as its bargaining representative. The evidence establishes that Bis issued Notices to the identified employees who would be covered by the Agreement, that those same employees nominated a fellow employee as a bargaining representative, and those bargaining representatives self-nominated.

Clearly, the choice of scope of a proposed agreement lies in the hands of the ‘parties’ to the proposed agreement. In this case those ‘parties’ were the relevant employees and Bis. From the outset it should be said that there is no evidence before me at this stage to suggest that the group chosen by the parties was based on anything other than a business-related characteristic as opposed to extraneous, or arbitrary criteria.[42]

How Bis determined to organise its labour within its organisation sits with it. Clearly, there is a historical approach where it is understood by the business that Field Service Technicians/Representatives form a group of employees that are employed pursuant to common law contracts and are Award covered. On the evidence before me I cannot discern anything which would inhibit Bis structuring itself in this way. It has managerial discretion to determine the classifications and groups within the business and the positions that fall within such scope. Accordingly, it is apparent the Notices were issued in accordance with the employment practices within its organisation and the understanding of the groups or classifications existing in the business at that time.

Therefore, much in this case turns on whether the Union was a default bargaining representative for the Agreement. It can be said, at a minimum, the Union considers that its member, who was referred to as Member 5 and was employed into the position of underground diesel fitter, was within the Agreement’s coverage at the relevant time given the content of cl 2.

I am of the view that the proper construction of cl 2 of the Agreement is that the Agreement coverage is such that it does not cover those employees engaged in the classification of ‘Field Service Technician’ as the term is understood in cl 4 of the Agreement.

The Union correctly identified the principles relevant to interpreting an enterprise agreement as those being set out in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited (Berri).[43] I do not intend to repeat those principles. And, while an enterprise agreement has not yet been approved, those same principles are undoubtedly useful, if not indispensable here. They are therefore adopted.

My first observation is that construction of the Agreement begins with the consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of the Agreement will turn on the language of the Agreement having regard to its context and purpose. In Berri, the Full Bench stated that context might appear from the text of the agreement viewed as a whole.

The Agreement at cl 7 speaks in the title of the clause of ‘classifications and remuneration’. Thereafter, at cl 7.1(a) it stipulates ‘[E]mployees may be engaged in any of the classifications referred to in the Schedules’. Five Schedules are set out at the end of the Agreement, and include Mining Industry, Quarrying Industry, Road Transport Industry, Manufacturing and Associated Industries and the Black Coal Industry, respectively. Within each of those Schedules are lists of classifications. Schedule 5 – Black Coal Industry, simply refers to various forms of Mineworker. There is, within the Agreement, predominately reference to ‘classifications’ rather than any reference to a ‘position title’.

In that context the reference to ‘Field Service Technician’ would appear to reference a classification or group rather than a position title. Support for this interpretation is garnered from the reference within the definition of ‘Field Service Technician’, to the ‘primary purpose of providing mechanical technical support to multiple sites or projects…’. There is no specified duties or responsibilities for a position. Instead there is the reference to ‘mechanical technical support’, a term which appears general and not limited by specific job titles.

When considering what the common intention of the employees and Bis was, that intention is to be identified objectively, by reference to that which a reasonable person would understand by the language used to express their agreement. On an objective basis, the term ‘Field Service Technician’, in the context of an Agreement, speaks of a classification rather than a position. It gives the impression, given its broad definition that it speaks of not one position, but of a group of positions that might sit under it.

To the extent the Agreement has a plain meaning or is ambiguous or susceptible of more than one meaning, regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity arises.

In this respect I have considered the Field Service List and observed its references to ‘field service technician’, field service representative’ in one of its columns, in addition to ‘underground diesel fitter’, ‘diesel fitter’, ‘product support technician’, and ‘commissioning representative’. However, at the end of a column of that same List was the nomenclature of ‘field service technician’ for all positions except for those referred to as ‘field service leading hand’. This again lends itself the interpretation that the Field Service Technician references a group or a classification rather than an individual position title.

Ms Winter’s evidence supports the conclusion that the ‘Field Service Technician’ as referred to in cl 4 of the Agreement referred to a classification or group rather than an individual position title. While at times there appeared to be confusion around the terms ‘field service representative’ and ‘field service technician’, Ms Winter’s evidence was that the terms were used interchangeably in the business.[44] The evidence at hearing was that historically Bis had organised its labour by employing Field Service Technicians under common law contracts.

When Counsel for the Union again drew Ms Winter’s attention to her having articulated that a Field Service Technician was different to an underground diesel fitter. Ms Winter said that the ‘field service technician or field service representative is the group, is a group, is a classification of employee within our business’.[45]

In Mr Endacott’s witness statements he referred to three sets of contractual documentation, two sets of which were purported to have been obtained from Union members who the Union contended were covered by the Agreement. The first set of contractual documents (Annexure KE-2) included an Employment Agreement that specified the appointment to the position of underground diesel fitter (employment contract (Annexure KE-2)), and the second set (employment contract (Annexure KE-4)) similarly referred to the appointment to the position of ‘underground diesel fitter’.

There were objections from Bis concerning the acceptance into evidence of such documents, and what weight should be afforded to the same. However, in the absence of any contention that the documentation was not that authored by Bis, and further observing that the contracts are capable of being interpreted without recourse to the subjective intent of the signatory employee, I am prepared to attach weight to them.

Both Annexures KE-2 and KE-4 were common law contracts that in effect informed the candidates their employment was underpinned by the Award. The contracts gave the candidate the choice to be paid in accordance with the Award or an Individual Award Flexibility Agreement. The contractual documents and the evidence of Ms Winter supports Bis’ contention that it has organised this particular part of its workforce differently to those covered by the Agreement.

The Union pressed the argument that, given the definition of Field Services Technician under the Agreement, a person who is engaged to provide support to one site, and who is appointed to one project, or one roster, will not be, for the purposes of the Agreement, a Field Service Technician.

The first part of the definition of Field Services Technician refers to ‘an employee whose engagement is for the primary purpose of providing mechanical technical support to multiple sites or projects and therefore is not appointed to one project or roster’. The Union submitted that the ordinary meaning of the word ‘engagement’ in the context of the Agreement was ‘… the act or state of engaging or being engaged’.[46] The Union stated that this particular meaning invoked two meanings of ‘engage’ that were relevant in the employment context – either to ‘employ or hire’ or ‘employ busily; occupy’.[47] The Union said that in the context of the Agreement, the first meaning ought to be preferred.

The Union continued that on the first definition of ‘engagement’, the evidence established that Member 5:

a)   is engaged by Bis as an underground diesel fitter;[48]
b)   is engaged to ‘fix diesel equipment;[49]
c)   works only on the one site;[50] and
d)   is not covered by an enterprise agreement.[51]

On the interpretation advanced in its submission, the Union submitted that Member 5 will be covered by the Agreement if it is approved.

The evidence before me in the form of Member 5’s employment contract (Annexure KE-4) established that the candidate was ‘employed’ in the position of ‘Underground Diesel Fitter’. There was no reference to the turn of phrase ‘whose engagement is for the primary purpose of providing mechanical technical support’. However, given the position title referred to in the employment contract, it is reasonable to infer that an employee in the position of underground diesel fitter would be positioned to provide mechanical technical support and that this may be their primary purpose for the engagement. I see nothing controversial in accepting the Union’s proposition that ‘engagement’ in the context of the first sentence of the definition within the Agreement refers to employment.

The Union contended that Member 5 worked only on one site and therefore fell outside of the scope of the definition of Field Services Technician in the Agreement. Reliance was placed on Mr Endacott’s evidence that ‘Member 5 was employed to work at the Narrabri Underground… Member 5 only works at that location’.[52] In addition, the Union pointed to the employment contract (Annexure KE-4) which stated ‘[Y]ou will initially be based at Narrabri, NSW although you may be required to work at Bis Industries’ other locations’, and the evidence of Ms Winter in cross examination where she said the following:

Okay, and those underground diesel fitters working at Narrabri do they work exclusively at the Narrabri Underground Mine?‑‑‑At present they are initially allocated to Narrabri Mine. They are employed to work in the Narrabri Gunnedah region.

Have they done any work at any other mine apart from Narrabri Underground Mine?‑‑‑I don't know.

You don't know?‑‑‑I don't know. I don't know where they worked previously. I just know who is currently based at Narrabri.

Have you in the one year that you've been engaged by Bis had any operations other than the Narrabri Underground Mine in that region that those employees would have worked at?‑‑‑Not to my knowledge.[53]

The employment contract (Annexure KE-4) clearly articulates the ‘initial’ base and then informs the candidate that Bis can require them to work at other locations. Further, regarding roster, Schedule 3 of the employment contract (Individual Award Flexibility Agreement) provides, in short, that the anticipated rostered work cycle will be an average of 40 ordinary hours worked Monday to Friday, and Bis may vary the hours of work, rostered hours, and work cycle having regard to operational requirements. The body of the employment contract (Annexure KE-4) does not appear to set a roster but states, in effect, that ordinary hours are rostered between Monday to Sunday in accordance with the applicable shift roster.

What is evident from the employment contract (Annexure KE-4) and the employment contract (Annexure KE-2) is that there is an initial base, but no appointment to one project, and that Bis has ensured its retention of flexibility concerning working hours by not committing to an appointed roster.

I have considered the evidence of Mr Endacott and have attributed some weight to what he has said. Of course, I have balanced the probative value of the evidence against that which is prejudicial. I further acknowledge the concerns of Bis regarding its objections to Mr Endacott’s evidence in his supplementary witness statement and have duly considered all objections to evidence.

I observe, that at times, Mr Endacott’s evidence is based on assertions rather than being grounded upon the contractual documents which are annexed to his witness statement. To this end, Mr Endacott has stated that ‘Member 5 is employed to work at the Narrabri Underground’ and ‘[T]hat was the location at which Member 5 was employed to be based at’.[54] The candidate at the time clearly signed a contract that spoke of an ‘initial base’. Weight must be given to the contractual document in preference to that which is asserted by Mr Endacott, because it is the contract that reduces to writing the agreement that was forged between the candidate, in this case said to be Member 5, and Bis; not Mr Endacott’s impression of the relationship between the parties.

The Union has advanced that its evidence establishes that the underground diesel fitters (not limited to those whose contractual documentation was provided at Annexures KE-2 and KE-4) hired by Bis working at the Narrabri/Gunneday region or the Tomago region do not fall within the definition of Field Service Technician. Based on the evidence before me I am unable to reach that conclusion. It is noted that consideration included both evidence and submissions with regard to the use of a company vehicle.

I have found that in the circumstances of this case, the members referred to by the Union are excluded from the Agreement’s coverage. Therefore, it is the case that the Union is not a bargaining representative for the Agreement and has no right to be heard in that capacity.

RIGHT TO BE HEARD OTHER THAN AS A BARGAINING REPRESENTATIVE

Procedural fairness

Submissions of the union

The Union advanced that it and its members would be affected by the approval of the Agreement and that, as a matter of procedural fairness, it ought to be heard in relation to its objections to the approval of the Agreement.

It continued that unlike the circumstances in Collinsville, it and its members had been excluded from the Agreement making process, and the exclusion had directly affected their interests. One may recall that in Collinsville the members of the Construction, Forestry, Mining and Energy Union (CFMEU) had appointed alternate bargaining representatives under s 176(1)(c), therefore removing the CFMEU’s status as a default bargaining representative.

According to the Union, it had members who were employees of Bis and who were not currently covered by an enterprise agreement. The same employees worked across various mine sites in several roles, some of which may be excluded by the coverage of the Agreement, and some, which the Union submitted, were not.

The Union thereafter observed that because it did not know that bargaining was occurring, in that absence of that knowledge, it had no ability to exercise its right as a bargaining representative to the Agreement to make an application for a scope order. As such, the Union and its members had been precluded from participating in a process that directly affected their interests.

Under the Act, the Commission is obliged to consider whether the group of employees covered by an enterprise agreement has been fairly chosen. In this respect, submitted the Union, the Commission must consider whether the group is geographically, operationally or organisationally distinct.[55] Given these matters that the Commission is required to take into account, the Union advanced that it was necessary to consider not only the circumstances of the employees covered by the Agreement, but the circumstances of those who are not. A decision as to whether the group was fairly chosen is of a kind that, according to the Union, directly affects the rights and interests of the Union and its relevant members.

The Union submitted that the interests of it and its members extended beyond the two examples. The approval of the Agreement would adversely affect the interests of the Union and its members through:

a)excluding the Union and its members from participating in bargaining for this Agreement;
b)ostensibly preventing the Union and its members from bargaining with the rest of the workforce for at least the duration of the Agreement’s term;
c)purportedly excluding the relevant Union members from being covered by the Agreement;
d)entrenching a division in the workforce that will necessarily dictate that alternate terms and conditions apply to different groups of workers across the workforce, including the relevant Union members; and/or
e)fixing terms and conditions for part of the workforce, against which the terms and conditions of the balance of the workforce, engaged on employment contracts, will likely be measured.

The Union contended that the preceding examples demonstrated that the approval of the Agreement would have a direct and immediate effect on the rights and interest of the Union and its members. The Union said it had established that the principle of procedural fairness required that it be heard.

Continuing with its contentions regarding procedural fairness the Union directed the Commission’s attention to what it referred to as ‘a new test as to whether procedural fairness ought to be followed’. The Union submitted that the test in Collinsville had been supplanted by developments in procedural fairness and a right to be heard, as set out in WZARH.[56]

In short, the Union submitted that the first step in the new test was to determine whether there was no clear contrary intention to the applicability of procedural fairness. Second, it must be determined whether the Union and its members will be affected by the decision; noting that the new test is not limited to a direct affect. Third, once it has been determined that procedural fairness is required in the circumstances, it is necessary to consider what is required in order for the decision to be fairly made given the legal framework.

Regarding the first step, the Union stated that the Act shows no evidence of legislative intent to fetter the applicability of procedural fairness. It will, as will its members, under the second step, be affected by the decision in the ways traversed at paragraphs 79 – 83 of this decision. And, what is required, when one considers the third step, is that the Union should be heard on any matter that may have bearing on a decision to approve the Agreement or otherwise.

Submissions of Bis

It was Bis’ submission that as the Union was not a bargaining representative, the principles in Collinsville remained applicable. The decision in WZARH it said, did not alter that. Bis made reference to the following extract where the High Court stated:

The ‘legitimate expectation of a person affected by an administrative decision does not provide a basis for determining whether procedural fairness should be accorded to that person or for determining the content of such procedural fairness. It is sufficient to say that, in the absence of a clear, contrary legislative intention, administrative decision-makers must accord procedural fairness to those affected by their decisions.[57]

Bis submitted that the Union’s contention based on the abovementioned extract from WZARH was:

a) procedural fairness must be granted by an administrative decision maker to a person if they will simply be ‘affected by’ a decision;[58] and
b) once that ‘affect’ has been established, procedural fairness requires that that person should be heard on any matter that may have a bearing on the administrator’s decision.[59]

Bis stated that this was a fanciful interpretation of the decision in WZARH, which should not be adopted by the Commission. It continued that in WZARH the majority of the High Court went on to express the relevant test as follows:

Recourse to the notion of legitimate expectation is unnecessary and unhelpful. The real question is what is required to ensure that the decision is made fairly in the circumstances having regard to the legal framework within which it is to be made.

Bis submitted that if the Union’s interpretation about the application of principles in WZARH is correct, it was still not the case that being ‘affected by’ a decision, of itself, was sufficient. In WZARH the applicant had a direct interest in the outcome and therefore it was not necessary for the High Court to consider the question of when a person might properly be regarding as having been ‘affected by’ a decision. Bis argued that it should not be inferred from the absence of any discussion by the High Court concerning this question that any assertion of being affected would be sufficient.

Developments regarding procedural fairness in administrative law

Subsequent to the hearing, the Full Bench published its decision in the matter of Construction, Forestry, Maritime, Mining and Energy Union v Mechanical Maintenance Solutions Pty Ltd (Mechanical Maintenance).[60] Given this development, the parties were provided with a further opportunity to file supplementary submissions. Those submissions have been considered in arriving at my decision.

Consideration

The Union contended that the exclusion from the negotiation process for the Agreement in effect negated its ability to apply for a scope order, or to challenge that the group was fairly chosen as referred to in s 186(3). In respect to s 186(3), the Union advanced that a decision as to whether the group was fairly chosen directly affected the rights and interests of the Union and its relevant members.

The Union submitted that it had been excluded from the Agreement making process and the exclusion had directly affected its interests. However, it is not apparent that there was, at any stage, an obligation upon Bis to include the Union in the negotiations for the Agreement. Afterall, none of the relevant employees appointed the Union has their bargaining representative, and it has been determined that the Union was not a bargaining representative under s 176(1)(b).

The Full Bench in Collinsville stated that the right, interest or legitimate expectation that is said to be affected by the application before it, must be identified and understood against the framework of enterprise bargaining and agreement making established by the Act.[61] Furthermore, whether an employee organisation, which is not a bargaining representative, has a right to be heard, in the sense that there is a requirement that procedural fairness be accorded to it in relation to the application for the approval of an agreement will depend on the circumstances in each case.[62]

While there have been developments around the concept of legitimate expectation and its utility – namely that it is apt to mislead, is unsatisfactory and superfluous and confusing, in the decision of Mechanical Maintenance,[63] the Full Bench clearly articulated what was required of administrative decision makers and their obligation to accord procedural fairness:

…Administrative decision-makers, including Members of the Commission must accord procedural fairness to those affected by decisions they make. What is required is to ensure the decision is made fairly and is determined by reference to the circumstances of a given case having regard to the legal framework under which the decision is to be made. The legislative framework discussed in Collinsville Coal was then, and remains relevant to that assessment in the context of an enterprise agreement approval application. In that context the focus of the enquiry is not on what was promised or is expected, rather it is on what should be provided in the circumstances of the case to ensure the decision is made fairly.[64]

Further, with respect to the decision in Collinsville the Full Bench observed:

Collinsville Coal should not be taken as endorsing the notion that the existence of some legitimate expectation conditions or will separately found a right to be heard in an administrative proceeding and relevantly in an application for the approval of an enterprise agreement. The Full Bench in Collinsville Coal was responding to the case put by the CFMEU that it had a legitimate expectation. As is evident from the passages from the judgment of McHugh and Gummow JJ in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam reproduced in the above extract and on which the Full Bench in Collinsville Coal relied, the requirement to afford procedural fairness is not conditioned on the notion of a legitimate expectation, and the question whether a person in a given case has a right to be heard is determined by reference to that which fairness requires in all the circumstances of the case.[65]

The Full Bench then proceeded to consider the High Court’s decision in WZARH, which the Union expressed had supplanted Collinsville and created a ‘new test as to whether procedural fairness ought to be followed’. In WZARH the High Court stated:

Indeed, reference to the concept of legitimate expectation may well distract from the real question; namely, what is required in order to ensure that the decision made fairly in the circumstances having regard to the legal framework within which the decision is to be made.[66]

The Full Bench in Mechanical Maintenance concluded that the notion of legitimate expectation or the legitimate expectation of a person affected by an administrative decision is not a touchstone of the requirement that a decision-maker accord procedural fairness to a person affected by an administrative decision.[67]

In Collinsville the Full Bench spoke of the right or interest that would be adversely affected by the decision to approve the agreement.[68] In WZARH the High Court expressed that administrative decision-makers must accord procedural fairness to those affected by their decisions.

Following on from this, the question before me is – what is required in order for the decision concerning the Agreement to be made fairly, am I required to provide the Union with an opportunity to be heard?[69] Clearly that depends, amongst other matters, on the statutory context, and whether the Union has an interest that would be adversely affected.[70]

The Union emphasised that when determining whether it and its members would be affected by a decision the affect was not limited to a direct affect. However, the Full Bench made the further observation that it was uncontroversial that the common law obligation to accord procedural fairness to a person affected by an administrative decision arises when the person is directly affected by such decision.[71] The Full Bench stated that with regard to that which is affected, it was not limited to a legal right, or a proprietary, financial or reputational interest.[72] Furthermore it was not the kind of individual interests that a person had that was relevant; rather, it was the manner in which it is apt to be affected.[73]

It is evident that the Agreement does not cover all of Bis’ employees. While the classification of Field Service Technician is excluded from the scope of the Agreement, this exclusion in and of itself cannot, in my view, provide the Union with an interest of the kind traversed in the authorities.

The consideration of whether the group was fairly chosen requires the Commission to consider whether the group of employees covered by the agreement are geographically, operationally or organisationally distinct. If it were the case that they were, then that would be a factor telling in favour of a finding that the group of employees was fairly chosen.[74] 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.[75]

It is important to appreciate that whether 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.[76]

Referring the Explanatory Memorandum, the Union stated the Commission may have regard to:

…whether it is reasonable for the excluded employees to be covered by the agreement having regard to the nature of the work they perform and the organisational and operational relationship between them and the employees who will be covered by the agreement.

The Union contended that where the Commission is required to consider whether the exclusion of employees is reasonable, there is no legitimate basis upon which these employees, and their union representative, can be precluded from participating in the hearing of a matter which directly considers their position.

In Cimeco, the Full Bench expressed that it was appropriate to have regard to 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.[77]

The Full Bench continued that to the extent it was suggested the interests of the excluded employees were irrelevant the submission was rejected.[78] In evaluating whether the group to be covered by an agreement had been fairly chosen, it was entirely appropriate to have regard to the consequences of that choice, that is, which employees had been excluded from the agreement.[79]

Bis submitted that the Union’s argument as to whether the employees covered by the Agreement were fairly chosen, effectively sought to contend that any enterprise agreement which did not cover the entirety of a workforce ought to be considered prejudicial to those parts of the workforce not within the scope. However, the Union contended that contrary to that which was submitted by Bis, they were not advancing that employees excluded from the coverage of an agreement would be prejudiced by the making of that agreement. The Union clarified that its submission as to the ‘test’ required, was whether the interests of those excluded employees were directly affected by the making of the agreement. It followed, according the Union, procedural fairness required that they therefore be heard in respect of the application to have the Agreement approved for these reasons.

It is uncontroversial that it is appropriate for the Commission to have regard the interests of those employees who are excluded from agreement coverage.[80] However, an obligation to take into account the interests of the excluded employees for the purpose of determining whether the group was fairly chosen, does not in turn mean that this required consideration establishes that on each occasion the interest of the Union is adversely affected by the decision to approve, without something more. Whilst interests are to be taken into account, it does not mean they have been directly affected by the decision to approve the Agreement.

The evidence before me establishes that Bis considers that within its organisation, the classification of Field Service Technician encompasses a group of positions that have been, and are, organisationally distinct. It employs that group under common law contracts underpinned by the Award. There is no evidence before me to suggest the terms of appointment for the classification of Field Service Technician are inferior to those terms that otherwise would be accorded to the classification, were it included in the Agreement coverage. Based on the evidence before me it is not apparent that the approval of the Agreement affects the terms and conditions of the Field Service Technicians’ employment, or for that matter, the Union’s representative role concerning those employees who are members.

The Union submitted that the Agreement will fix terms and conditions for part of the workforce, against which the terms and conditions of the balance of the workforce, engaged on employment contracts, will likely be measured. In my view, this argument has no substance. It presupposes that there is something manifestly wrong with an organisation’s decision to utilise different ways of engaging its employees or setting the terms and conditions of their employees’ employment. This in and of itself does not found a basis for establishing that the Union has an interest such that it attracts a right to be heard.

In a similar vein, the Union referred to the Agreement’s approval as entrenching a division in the workforce that will necessarily dictate that alternate terms and conditions apply to different groups of workers across the workforce, including the relevant Union members. Clearly, however, it sits with a business to determine, within the confines of the law, how it structures its workforce and the terms and conditions that will be afforded to it.

The Union referred to the decision to approve the Agreement negating its ability to apply for a scope order, and in addition submitted that the Act purportedly expressed a preference for collective bargaining.

It is uncontroversial that a bargaining representative for a proposed agreement will have standing to be heard in relation to an application for an agreement approval. The Act grants privileges and place obligations on a bargaining representative for a proposed agreement.[81] This includes standing to apply for a scope, bargaining, and other orders, and a majority support determination.[82] The decision to approve the Agreement does not in any way exclude the Union or its members from participating in the processes that have been established under the Act to bargain for an enterprise agreement.

The Union submitted that it and its members were excluded from participating in the bargaining for the Agreement and therefore its, and its members’ rights had been affected. That position is, however, unsupported by the legislation for enterprise agreement making. In an enterprise agreement approval, it is the employees who are to be covered by the proposed agreement, and their bargaining representatives who will be affected by the decision to be made. The Union will not be covered by the Agreement, and it cannot be said to be affected by the decision as the term is understood for the purposes of giving rise to a right to be heard.

At any given time, the Union could have taken steps to have initiated bargaining on behalf of its members. It did not. Had it have done so, it could have addressed the issue of scope. It did not have to wait, was not obliged to wait, and was not precluded from, initiating bargaining at any time before or after the making of the Agreement. And now, it would appear it seeks to agitate its position on the basis that it missed the horse that bolted.

I have concluded that in the absence of the Union establishing an interest that would be directly affected by the decision to approve the Agreement, providing the Union with an opportunity to be heard is not required.

Section 590(1) of the Act

The Commission may choose, in a particular case, to hear from an employee organisation or any other person about the approval of an agreement even though the organisation or person may not otherwise have a right to be heard.[83] I hold the view that the Commission’s deliberations may, at times, be assisted by a considered contribution from a contradictor.

The Union submitted that there is a utility in hearing from it as it was able to provide the Commission with the perspective of parties specifically excluded from the agreement making process. I find this submission neither compelling nor relevant to that which I must determine.

The Union further advanced that it has a detailed knowledge about the industry and the operation of the Black Coal Mining Industry Award 2010, and in this respect, would be of assistance to the Commission. However, the Commission is positioned to conduct this evaluative process and in doing so is able to properly inform itself without recourse to the Union for assistance on this occasion.

DEPUTY PRESIDENT

Appearances:

Ms E Sarlos for the CFMMEU

Ms K Reid for Bis Industries

Hearing details:

Perth, Thursday, 6 June 2019

[1] [2014] FWCFB 7940.

[2] (2015) 256 CLR 326.

[3] Witness Statement of Kathryn Winter (Exhibit R1) (Winter Statement) [19].

[4] Ibid [20] – [21].

[5] Ibid [22].

[6] Ibid [21]; Annexure KW-5.

[7] Closing Submissions by the CFMMEU – Mining and Energy Division [1]-[2].

[8] Winter Statement; Annexure KW-5

[9] Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Limited[2014] FWCFB 7940 [16] (Collinsville).

[10] Ibid [72].

[11] Ibid [48], [75].

[12] Winter Statement [10].

[13] Ibid.

[14] Ibid.

[15] Ibid [10] Annexure KW-1.

[16] Ibid.

[17] Ibid.

[18] Ibid.

[19] Winter Statement [13].

[20] Ibid.

[21] Ibid [11].

[22] Transcript PN [287] – [291].

[23] Ibid [318].

[24] Ibid [325].

[25] Ibid [326] – [337].

[26] Witness statement of Keenon Endacott (Endacott Statement) [3].

[27] Ibid [4].

[28] Ibid [8].

[29] Ibid [12].

[30] Ibid.

[31] Ibid; Annexure KE-2.

[32] Ibid.

[33] Endacott Statement; Annexure KE-3.

[34] Ibid.

[35] Ibid.

[36] Supplementary Witness statement of Keenon Endacott (Supplementary Endacott Statement).

[37] Supplementary Endacott Statement; Annexure KE-4.

[38] Ibid.

[39] Ibid.

[40] Transcript PN [192] – [194].

[41] Ibid [211] – [212].

[42] John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union [2014] FCA 286 [27]-[30]; Maritime Union of Australia v Toll Energy Logistics Pty Ltd[2015] FWCFB 7272 [65].

[43] [2017] FWCFB 3005.

[44] Transcript PN [318].

[45] Ibid [325].

[46] Bruce Moore (ed), The Australian Concise Oxford Dictionary (Oxford University Press, 4^th ed, 2004) 460.

[47] Ibid.

[48] Supplementary Endacott Statement [3]; Annexure KE-4.

[49] Transcript PN [218].

[50] Supplementary Endacott Statement [5]; Annexure KE-4; Transcript PN [343]-[346].

[51] Transcript PN [308] – [312].

[52] Supplementary Endacott Statement [5].

[53] Transcript PN [343] – [346].

[54] Supplementary Endacott Statement [5].

[55] Fair Work Act 2009 (Cth) s 186(3A).

[56] (2015) 256 CLR 326.

[57] WZARH (2015) 256 CLR 326, 330 (emphasis added).

[58] CFMMEU’s Outline of Submissions dated 24 May 2019 [48]-[49].

[59] Ibid [52].

[60] [2019] FWCFB 3585.

[61] [2014] FWCFB 7940 [65].

[62] Ibid [72].

[63] [2019] FWCFB 3585.

[64] Ibid [22].

[65] Ibid [18].

[66] WZARH (2015) 256 CLR 326, 335.

[67] [2019] FWCFB 3585 [22].

[68] [2014] FWCFB 7940 [72].

[69] WZARH (2015) 256 CLR 326.

[70] Ibid.

[71] [2019] FWCFB 3585 [23].

[72] Ibid.

[73] Ibid.

[74] Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union; The Australian Workers’ Union; “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2012] FWAFB 2206 (Cimeco).

[75] Ibid.

[76] Ibid.

[77] Ibid [21].

[78] Ibid [22].

[79] Ibid.

[80] Ibid [21].

[81] Collinsville [2014] FWCFB 7940 [16].

[82] Ibid.

[83] Ibid [48], [75].

Printed by authority of the Commonwealth Government Printer

Actions

Download as PDF Download as Word Document

Citations

Bis Industries [2019] FWCFB 8591

Most Recent Citation

Bis Industries [2019] FWCFB 8737

Cases Citing This Decision

1

Bis Industries [2019] FWCFB 8737

Cases Cited

7

Statutory Material Cited

0

Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Limited [2014] FWCFB 7940

Saeed v Minister for Immigration and Citizenship [2010] HCA 23

John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union [2014] FCA 286