Boeing Defence Australia Limited

[2018] FWC 4019

[2018] FWC 4019

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Boeing Defence Australia Limited
(AG2018/450)

BOEING DEFENCE AUSTRALIA LIMITED AVIATION TRADES ENTERPRISE AGREEMENT 2018 TO 2020

Manufacturing and associated industries
COMMISSIONER LEE	MELBOURNE, 6 JULY 2018

Application for approval of the Boeing Defence Australia Limited Aviation Trades Enterprise Agreement 2018 to 2020.

[1] An application has been made for approval of an enterprise agreement known as the Boeing Defence Australia Limited Aviation Trades Enterprise Agreement 2018 to 2020 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Boeing Defence Australia Limited. The Agreement is a single enterprise agreement.

[2] The application was lodged with the Fair Work Commission (the Commission) on 12 February 2018. At lodgement the Applicant lodged two copies of the Agreement, one with rates and allowances tables and one without. An attached cover letter outlined that on the last occasion the Applicant sought approval of its enterprise agreement, at the Applicants request, the wage rates were not published on the Commissions website on the basis of an undertaking provided by the Applicant. The Applicant indicated that it was willing to provide an undertaking in similar terms for this application. The Applicant noted that the reason for that request was that it must take all reasonable steps to maintain its commercial competitiveness in the market place and the defence contracting industry is small and labour costs are an integral part of responses to Government requests for tender.

[3] On 1 June 2018 the Commission wrote to the Applicant outlining my concerns in relation to the application. In this correspondence I sought confirmation as to which copy of the Agreement was voted on by employees and raised additional concerns in relation to the Agreement. On 8 June 2018 the Applicant provided written undertakings addressing my concerns in relation to the Agreement and confirmed that the copy of the Agreement voted on by employees contained rates of pay.

[4] On 13 June 2018 the Commission wrote to the Applicant advising that I was satisfied with the undertakings provided. I also advised that I was of the view that s.601(4) of the Act provides the Commission must publish an enterprise agreement approved by the Commission under Part 2-4 of the Act and that should the Agreement be approved the wage rates will be published as per s.601(4) of the Act.

[5] The Applicant responded on 14 June 2018 requesting that I reconsider my position in regards to publishing the wage rates. The correspondence drew my attention to a number of enterprise agreements which had been approved without the publication of wage rates, including the Applicants two previous agreements for its trades workforce. The Applicant reiterated its submissions that the defence contracting industry in Australia is small and competitive labour costs are an integral part of responses to Government requests for tender and that the Applicant is cognisant to take all reasonable steps to maintain its commercial competitiveness and protect job security for its employees.

[6] The Applicant submitted that s.601(4) of the Actis concerned with publishing “an” Agreement and that the Applicant was not asking for the Commission to refrain from publishing the Agreement, but simply to publish the Agreement without commercial in confidence information. Further, it was submitted that s.594 of the Act, which deals with confidential evidence, although not directly on point, is instructive. The Applicant submitted that the Commission may make orders in respect of prohibiting or restricting the publication of evidence or the whole or part of its decision in relation to a matter and the Commission is able to redact commercial in confidence information. The Applicant again confirmed it was willing to provide an undertaking in relation to the rates of pay.

[7] The Australian Workers’ Union (AWU) advised the Commission on 14 June 2018 that its position was that the Commission should publish the version of the Agreement approved by the relevant employees which included the rates of pay. Further, that even if I formed the view that the Act permits the redaction of the rates that the AWU do not accept there is a compelling reason for the rates of pay to be redacted.

[8] I subsequently listed the matter for Hearing, by Telephone on 19 June 2018. Ms Brunning appeared on behalf of the Applicant and Mr Crawford appeared on behalf of the AWU.

[9] The Applicant made submissions that employees covered by the Agreement are each provided with a copy of the enterprise agreement once approved which contains the wage rates and a copy is also available on the Applicant’s Intranet. 1 In response to the AWU’s position the Applicant submitted that it was not clear that there was any prejudice to AWU members as by keeping wage rates confidential the Applicant is trying to protect its business, ensure job security and best position themselves in the government contracting industry.2 The Applicant again referred to a number of instances where the Commission has approved enterprise agreements without publishing wage rates and referred to s.604 of the Act and also s.594, submitting that while not directly on point, it’s instructive in relation to the commercial in-confidence point.3

[10] In summary, the Applicant submitted that the rates of pay should remain confidential as it is operating in a small and competitive industry, there is no prejudice to the AWU members, an undertaking could be provided in the same terms as the Applicant’s previous enterprise agreements and the Commission’s position in relation to other enterprise agreements that have been made in the recent past without publication of rates of pay. 4

[11] I questioned the Applicant as to how I could accept an undertaking when I did not have a concern that the Agreement did not meet the requirements set out in ss.186 and 187 of the Act. 5 In response the Applicant submitted an undertaking could be provided in terms of whether the Agreement voted on by employees contained the wage rates. The problem with this submission is that the Agreement voted on by employees did contain the wage rates and this was confirmed by the Applicant.6 Consequently, I cannot accept an undertaking of the type suggested by the Applicant.

[12] The AWU submitted that there was no direct prejudice to the AWU members; however, their concern was on a “general industrial level”, in that they use rates in enterprise agreements for research purposes and they were concerned about establishing a precedent whereby rates are not published. 7 The AWU also referred me to a decision of Senior Deputy President Richards in Logan Moulders Pty Ltd8 where he observed “In circumstances in which the wage rates form part of the Agreement which was made, there is no discretion for Fair Work Australia (“FWA”) to not publish the Agreement without amendment. This is made sufficiently clear at s. 601 of the Act”.9 The AWU also referred me to the Explanatory Memorandum to the Fair Work Bill 2008 (Explanatory Memorandum) which includes the following at Items 2312 and 2313:

“2312. In order to promote transparency of decision-making subclause 601(4) provides that FWA must publish certain decisions and enterprise agreements (approved by FWA under Part 2-4) as soon as practical after making the decision or approving the agreement. Decisions and agreements must be published on FWA’s website or by any other means FWA considers appropriate.

2313. It is intended that the requirement to publish an approved enterprise agreement is not limited by copyright or other restrictions.”

[13] Subsequent to the hearing on 20 June 2018 the Applicant lodged an application for a confidentiality order pursuant to s.594(1) of the Act. The Applicant requested that the Commission make the following orders pursuant to s.594(1)(c) of the Act:

1. The wage rates set out at Schedule A of the Boeing Defence Australia Limited Aviation Trades Enterprise Agreement 2018 to 2020 (Agreement) are confidential (Confidential Material).

2. The Confidential Material shall not be published or made available for inspection.

3. Upon approval of the Agreement, the Applicant will publish an un-redacted copy of the Agreement on its internal secure intranet site and provide un-redacted copies of the Agreement to:

a. The Australian Workers’ Union;

b. Employees covered by the Agreement; and

c. The Fair Work Ombudsman.

[14] The Applicant set out its grounds for a confidentiality order which were as follows:

“•  “Section 594(1)(c) of the FW Act relevantly provides that:

The FWC may make an order prohibiting or restricting the publication of the following in relation to a matter before the FWC (whether or not the FWC holds a hearing in relation to the matter) if the FWC is satisfied that it is desirable to do so because of the confidential nature of any evidence, or for any other reason:

(c) matters contained in documents lodged with the FWC or received in evidence by the FWC in relation to the matter.

•  The Agreement is a document that was lodged with the Commission in a matter before it. The Commission’s published materials in relation to applications approving agreements speak to agreements being “lodged.”

•  For the reasons that follow, the Applicant submits that having regard to the commercial sensitivity of the wage rates at Schedule A, the publication of the Agreement should be restricted so that the wage rates are redacted.

•  The principles governing the operation of section 594 of the FW Act were considered by Deputy President Gostencnik in Bowker and Ors v DP World Melbourne Ltd and Ors[2015] FWC 4542.

•  The Deputy President relevantly said:

[15] Considerations of open justice and the administration of justice are clearly relevant to the exercise of discretion to make an order under section 594(1) of the Act. However, these considerations are not to be applied in a vacuum and need to be considered in the context of the express power to prohibit or restrict publication of certain material having regard to its confidential nature or for any other reason and the circumstances of a particular case.

…

[20] Ultimately, the question whether to make an order involves balancing the considerations of open justice and the interests of fairness and justice, taking into account how the order would affect each side.

•  The Applicant acknowledges and agrees with the importance of open justice and the administration of justice. However, in the circumstances of this matter, the orders sought by the Applicant are not inconsistent with those principles.

•  As the Commission is aware, the employees covered by the Agreement were provided with the wage rates prior to voting on the Agreement and voted on a copy of the Agreement containing the wage rates. The Applicant has confirmed that it will provide the employees and the AWU with a full copy of the Agreement once it is approved and that full copy will also be published on the Applicant’s internal secure intranet. Restricting publication of the wage rates so that they are redacted when the Agreement is published on the Commission’s website does not prejudice the employees covered by the Agreement. This has been conceded by the AWU. The Applicant sees no prejudice to the AWU as the bargaining representative.

•  As set out in the correspondence to the Commission on 14 June 2018, the Applicant considers the wage rates set out at Schedule A to the Agreement to be confidential and commercially sensitive.

•  The Applicant is a key player in the defence contracting industry in Australia. That industry is small. There are approximately 6 prime defence contractors in Australia, all with the same customer, the Australian Defence Force. One of the sub markets of defence contracting work being aircraft trades and maintenance work (the type of work those employees covered by the Agreement generally perform) is even smaller and very competitive with only a few companies competing for the same work being Airbus Australia, Raytheon, BAE Systems Australia, Northrop Grumman Australia.

•  The Applicant is engaged in some of the largest and most complex defence projects in the country. The maintenance and support of sophisticated Australian Defence Force aerospace weapon systems on the fighter jet known as the Super Hornet and the Airborne Early Warning Wedgetail aircraft which are both used in ADF deployments. The Applicant is responsible for the serviceability and currency of these weapon systems which are an important element of the defence and sovereignty of Australia. Some employees covered by the proposed agreement are also involved in work associated with the heavy lift aircraft, the C17 which the Australian Government regularly deploys to humanitarian missions and to support deployments.

•  Another major project in which the Applicant is involved is next generation communications for the Australian Forces. Project Currawong is delivering an Australian designed and developed next-generation Integrated Battlefield Telecommunications Network which will provide secure wideband voice, data and video services over wireless and wired infrastructure between deployed forces and headquarters for land-based ADF personnel deployed around the world. It will improve the capacity, flexibility and responsiveness of the ADF information exchange during operations.

•  In awarding contracts for defence work, the Government pays particular attention to competitive labour rates. It is a substantial consideration in the award of contracts. The Applicant is concerned to maintain its commercial competitiveness, which is a key consideration for the Applicant as a major contributor to the defence industry in Australia.

•  The competition for work maintaining aerospace platforms is a small and competitive market and almost always the labour rates are the main component that will be judged to be the most important element of a bid (e.g. lowest cost wins). The market is so competitive such that even the manufacturers of aircraft (i.e. the Applicant for Super Hornet) is not guaranteed to win the maintenance contracts to maintain its own aircraft – i.e. Airbus could win the contract over the Applicant to maintain the Super Hornet. Labour costs are key. Maintaining confidentiality of these rates is an important part of the Applicant’s strategy to remain competitive in this market.

•  The proposed orders do not present any detriment to the employees to be covered by the proposed agreement.

•  But for the wage rates, the Agreement will otherwise be publicly available.

•  The commercial and confidential nature of the wage rates in these circumstances justifies the proposed redaction and the issuing of the confidentiality order sought.

•  Having regard to the above matters, the Applicant submits that it is reasonable and desirable for the Commission to grant the confidentiality orders outlined in Part 2.1 of this Application under section 594(1)(c) of the FW Act.” 10

[15] The matter was listed for a further Hearing, by Telephone before me on 22 June 2018. At the conclusion of the hearing I advised that having considered the materials filed and submissions made by the parties and the fact that confidentiality orders had been made by the Commission in certain circumstances, that in my view, I do not consider there is a power to redact the wage rates from the Agreement which is clear from the terms of s.601(4) of the Act. Further, that if I am wrong about that I do not consider that it is desirable and decline to make a confidentiality order even if I thought there was power to make the order under the Act. I indicated to parties that I would issue a decision approving the Agreement and that the wage rates would be published as part of that decision.

[16] I do not consider that it is possible, even if one thought it desirable, to not publish an enterprise agreement in totality, including in this case the wage rates, for the following reasons:

[17] Section 601 of the Act contains writing and publication requirements for the FWC’s decisions. Section 601(4) of the Act relevantly provides as follows:

“(4) The FWC must publish the following, on its website or by any other means that the FWC considers appropriate:

(a) a decision that is required to be in writing and any written reasons that the FWC gives in relation to such a decision;

(b) an enterprise agreement that has been approved by the FWC under Part 2-4.

The FWC must do so as soon as practicable after making the decision or approving the agreement.”

[18] Section 601(5) of the Act provides as follows:

“(5) Subsection (4) does not apply to any of the following decisions or reasons in relation to such decisions:

(a) a decision to issue, or refuse to issue, a certificate under paragraph 368(3)(a);

(c) a decision to issue an entry permit under section 512;

(d) a decision to impose conditions on an entry permit under section 515;

(e) a decision to issue, or refuse to issue, an exemption certificate under section 519;

(f) a decision to issue, or refuse to issue, an affected member certificate under section 520;

(g) a decision or reasons in relation to which an order is in operation under paragraph 594(1)(d).”

[19] Section 594 of the Act is in the following terms:

“594 Confidential evidence

(1) The FWC may make an order prohibiting or restricting the publication of the following in relation to a matter before the FWC (whether or not the FWC holds a hearing in relation to the matter) if the FWC is satisfied that it is desirable to do so because of the confidential nature of any evidence, or for any other reason:

(a) evidence given to the FWC in relation to the matter;

(b) the names and addresses of persons making submissions to the FWC in relation to the matter;

(c) matters contained in documents lodged with the FWC or received in evidence by the FWC in relation to the matter;

(d) the whole or any part of its decisions or reasons in relation to the matter.

(2) Subsection (1) does not apply to the publication of a submission made to the FWC for consideration in an annual wage review (see subsection 289(2)).”

[20] It is apparent from the terms of s.601(4)(b) that the Act mandates that an enterprise agreement must be published through the use of the word “must”. I agree with the observation of Senior Deputy President Richards above that this makes clear the requirement to publish the entire Agreement. 11 It is also noteworthy that subsection (4) makes a distinction between “a decision” and “any written reasons” in (a) and “an enterprise agreement” in (b). Subsection (5) then allows in effect for exemptions from the requirement to “publish” set out in subsection (4) in relation to decision or reasons made under specific provisions of the Act. The exemption in (5) relates only to “decisions or reasons in relation to such decisions”. It does not appear to contemplate providing an exemption from the mandate in (4)(b) to publish an enterprise agreement. However, subsection (5) is expressed to apply to subsection (4) generally. If the intent of the legislature was that it have no relevance to (4)(b) it could have expressed subsection (5) to apply only to subsection (4)(a). Despite this, the language in subsection (5) is entirely concerned with decisions or reasons in relation to such decisions. There is no reference at all to enterprise agreements.

[21] It is not apparent that s.601(5) provides any basis for exempting the Commission from the general requirement in s.601(4)(b) to publish an enterprise agreement that has been approved. This construction is also consistent with the Explanatory Memorandum which notes that s.601(4) is to promote transparency of decision making and that the requirement to publish an enterprise agreement is not limited by copyright or other restrictions.

[22] Further, considering the terms of s.601(5) it is apparent that the matters referred to in s.601(5)(a)-(f) are clearly not relevant to an application for approval of an enterprise agreement. If I am wrong as to my construction of the terms of s.601 set out above, the only subsection in (5) that could possibly be relevant to the publication of enterprise agreement is subsection (5)(g) which refers to decisions or reasons in relation to which a confidentiality order is in operation under s.594(1)(d) of the Act.

[23] Section 594 is the source of power for the Commission to make an order prohibiting or restricting the publication of certain matters. The question is whether or not s.594 provides a power for the Commission to make an order to not publish wage rates that are a part of an enterprise agreement that has been made and approved. At the first hearing in relation to this matter, Ms Brunning for the Applicant thought that it did not as the section appeared to be directly on point to evidence and that Schedule A to the enterprise agreement, which contains the wage rates, is not evidence. 12 I agree with that submission. In any event, it is apparent that ss.594(1)(a) and (b) do not hold any relevance to the matter under consideration here.

[24] However, s.594(1)(c) provides for “matters contained in documents lodged with the FWC or received in evidence by the FWC in relation to the matter”. This provision is expressed broadly and an enterprise agreement could fall within its broad definition of a document lodged with FWC. However, s.601(5)(g) does not refer to s.594 in general. It specifically refers to s.594(1)(d) which allows for confidentiality orders in respect to decisions or reasons in relation to the matter. An enterprise agreement cannot be properly considered to be a decision or reasons in relation to a matter. Therefore, it appears on this construction that there is no power to make a confidentiality order in the terms sought by the Applicant.

[25] I accept the submission of the Applicant in this matter that the Commission has not published wage rates that have appeared in enterprise agreements on other occasions. Where this has been done, a question arises given the construction of the terms proposed above as to the source of the power to do so. If there is a source of power, it could only be from s. 594 of the Act. It was not submitted that there was any other power within the Act that could be relevant.

[26] If I am wrong in my determination that the Act does not provide the Commission with a power to not publish wage rates in an enterprise agreement I have also considered whether it is appropriate to make the confidentiality order sought by the Applicant.

[27] The submissions supporting the making of the confidentiality order are set out above. I agree with the submissions of the Applicant as to the approach the Commission should take in considering whether or not to make an order. In particular the approach taken by Deputy President Gostencnik in Bowker and Ors v DP World Melbourne Ltd and Ors 13 as set out in the Applicant’s submissions in paragraph [14] above which speak of the balancing exercise involved in reaching a decision.

[28] It is clear from the foregoing consideration of the relevant terms of the Act and the Explanatory Memorandum that the legislature favoured transparency for both decisions and enterprise agreements. The order sought will still allow for transparency in respect to the bulk of the terms of the Agreement. However, the effect of the order is that there will be no transparency in respect to the wage rates and allowances within it. While wage rates are but one component of the enterprise agreement, they are an important part of any enterprise agreement. If there are no wage or salary rates that are enforceable terms under the enterprise agreement, it is not possible for the Commission to reach a state of satisfaction as to whether employees are better off overall. If the wage rates are not published there is no ability for the world at large to examine the basis upon which the Commission was satisfied that employees would be better off overall. Further, employees or prospective employees of the employer covered by the enterprise agreement will not be able to access the wage rates from the Commission website. They will need to rely on accessing them from the employer and or the union if they are a member of the union. These considerations weigh strongly against making the order sought by the Applicant.

[29] I have taken into account the submissions as to the nature of the particular industry and whether the rates of pay are confidential and commercially sensitive. Dealing with the latter point first, there is nothing in the Agreement that is lodged to suggest that the wage rates which are a part of that Agreement were treated as confidential. The wage rates are simply Schedule A to the Agreement. They have been circulated to all employees covered by the Agreement as a part of the Agreement approval process. There is no basis to consider them to be confidential. On the first point, I have considered the submissions as to the structure of the industry in which the Applicant is a competitor. In the absence of any submissions to the contrary, I accept that the Applicant is involved in a competitive industry with a small number of participants. I also accept that many of the projects in which the Applicant is involved in tendering for are important projects for the Australian Government and that the labour cost component is a significant factor in the success or otherwise of the Applicant as one of the competitors in that industry. However, in the Australian economy, industries in which there are a small number of competitors and/or industries in which labour costs are an important component to their competitive position is not uncommon. I do not accept that there is any unique characteristic of the industry in which the Applicant is involved such as to tip the balance to making the order sought.

[30] Having considered the particular circumstances in this matter and balancing the considerations of open justice and the interests of fairness and justice the balance favours not granting the order sought.

[31] I am not satisfied that is desirable to grant the confidentiality order sought and decline to make the order.

[32] A decision approving the Agreement will be issued separately.

COMMISSIONER

Appearances:

M Brunning for the Applicant

S Crawford for The Australian Workers’ Union

Hearing details:

2018

Melbourne (By Telephone):

19, 22 June.

 1   PN8

 2   PN9 and PN19

 3   PN20

 4   PN41

 5   PN42 – PN44

 6   PN45 – PN48

 7   PN53 – PN55

 8   Logan Moulders Pty Ltd [2010] FWAA 8632

 9   [2010] FWAA 8632 at [7]

 10 Form F1 – Application for confidentiality order pursuant to s.594 (1) of the Act at [12] – [28]

 11   [2010] FWAA 8632 at [7]

 12   PN59 – PN61

 13   Bowker and Ors v DP World Melbourne Ltd and Ors[2015] FWC 4542 at [15] and [20]

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