Broadspectrum (Australia) Pty Ltd T/A Broadspectrum
[2018] FWC 1516
•14 MARCH 2018
| [2018] FWC 1516 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Broadspectrum (Australia) Pty Ltd T/A Broadspectrum
(AG2017/6403)
COMMISSIONER MCKINNON | MELBOURNE, 14 MARCH 2018 |
Application for approval of the Broadspectrum DMSS Enterprise Agreement 2017 – second notification time - notice of employee representational rights not issued within 14 days – application dismissed.
Introduction
[1] Application has been made for approval of a single enterprise agreement known as the Broadspectrum DMSS Enterprise Agreement 2017 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) by Broadspectrum (Australia) Pty Ltd (Broadspectrum).
[2] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) each oppose the application.
[3] The AMWU contends that Broadspectrum did not take all reasonable steps to give employees a Notice of Employee Representational Rights (NERR) in accordance with section 173(1) of the Act and accordingly the Agreement cannot be approved. The CEPU supports the AMWU’s position. Broadspectrum contends that it has met all of the relevant requirements for approval and seeks that the Agreement be approved without delay.
[4] Directions were issued and a hearing was conducted on 6 February 2018. During the hearing, an additional issue in relation to coverage of the Agreement arose and directions were issued for the filing of further submissions. A second hearing was held by telephone on 8 March 2018 and additional submissions were filed on 9 March 2018.
Submissions
[5] The parties generally agree as to the history of bargaining, including that there was a notification time in relation to the Agreement on 20 May 2016. The Agreement is intended to replace the Transfield Services Greenfields LMM Enterprise Agreement 2013-2016 (the Transfield Agreement).
[6] The AMWU contends 1 as follows:
1. Where the scope of a proposed enterprise agreement is contested, a NERR must be issued to the broader range of employees within the contested scope. 2
2. Coverage of storepersons (including at Broadspectrum’s Kapooka site) and non-materiel maintenance (salaried) employees was the subject of bargaining from June 2016 until around late November 2017. A NERR was required to be issued to employees in these classifications.
3. This was not done, with the result that not all reasonable steps were taken to give employees notice of their right to be represented in accordance with section 173 of the Act.
[7] Broadspectrum submits 3 as follows:
1. It initiated bargaining by advising the AMWU of its agreement to bargain on 20 May 2016.
2. During the period from 23 May 2016 – 30 May 2016, a NERR was issued to employees covered by the Agreement, predominantly by hand and by display on the noticeboard as well as by email or post for employees who were absent from work (the Notice).
3. On 14 June 2016 or 12 July 2016, Broadspectrum agreed to expand the proposed coverage of the Agreement to armoury employees based at Kapooka.
4. On 14 July 2016, armoury employees based at Kapooka were issued a copy of the Notice (the second Notice).
5. All reasonable steps were taken to give employees notice of their right to representation in bargaining. Where bargaining is for a replacement agreement that has a settled scope, it cannot be that a new NERR has to be issued every time coverage is put in issue. Otherwise, agreements where the issue of coverage was not resolved in bargaining could never be approved.
[8] It is agreed that neither storepersons at Kapooka nor any non-material maintenance employees were given a copy of the Notice. It also appears to be agreed that non-materiel maintenance employees (including production and procurement clerks, and schedulers) are not covered by the Agreement. 4
[9] The class of employees who will be covered by the Agreement at Kapooka is not agreed. The AMWU says it has sought to cover all employees performing “related work” at Kapooka, including storepersons and non-materiel maintenance employees. Broadspectrum says that its agreement to expand coverage to Kapooka was only in relation to armoury employees.
The Notice
[10] The Notice sets out the proposed coverage of the Agreement as follows:
“Broadspectrum (Australia) Pty Ltd gives notice that it is bargaining in relation to an enterprise agreement: Broadspectrum (LMM) Enterprise Agreement 2016, which is proposed to cover employees that are employed by the Company in relation to the provision of maintenance functions and the repair, overhaul and servicing of military equipment (both scheduled and unscheduled) as set out in the LMM contract, and consistent with the employee classifications set out in sub-clause 20.2 of Transfield Services Greenfields LMM Enterprise Agreement 2013-2016 (FWC ID: AE401695). The proposed enterprise agreement will not apply to the management and executive staff of the company; nor will it apply to the following employee classifications, prescribed by the Manufacturing and Associated Industries and Occupations Award 2010:
a) Supervisors/Trainers/Coordinators – Level II as defined in Schedule B – Classification Structure and Definitions; or
b) those engaged in the “professional field” as defined in subclause 3.1, paragraph (e) of the “vocational fields” definition.”
[11] According to Broadspectrum, the Notice was issued to all employees covered by the Transfield Agreement, which does not include non-materiel maintenance employees or storepersons at Kapooka. These employees perform substantially different functions and for different purposes to those covered by the Agreement and in the case of storepersons, a separate enterprise agreement applies. 5
The Transfield Agreement
[12] The proposed coverage of the Agreement is similar to Clause 6 of the Transfield Services Greenfields LMM Enterprise Agreement 2013-2016 (Transfield Agreement), set out below:
“6.1 Except as provided in sub-clause 6.2, this Agreement will apply to all employees employed by the Company in relation to the provision of maintenance functions and the repair, overhaul and servicing of military equipment (both scheduled and unscheduled) as set out in the LMM contract. Classifications are set out in sub-clause 20.2 of this Agreement.
6.2 This Agreement will not apply to the management and executive staff of the Company. Nor will it apply to;
a) Supervisors/Trainers/Coordinators – Level II as defined in Schedule B – Classification Structure and Definitions; or
b) those engaged in the “professional field” as defined in paragraph (e) of the definition of “vocational fields” in sub-clause 3.1 of the Manufacturing and Associated Industries and Occupations Award 2010.”
[13] Subclause 20.2 and Attachment 1 to the Transfield Agreement contain additional information about employee classifications within its scope, based on the C5 to C13 classifications in the Manufacturing and Associated Industries and Occupations Award 2010 (the Award).
The Agreement
[14] The coverage of the Agreement is set out at clause 6, as follows:
“6.1 Except as provided in sub-clause 6.2, this Agreement will cover employees of the employed in any of the classifications listed in Attachment 1 (Table 1) of this Agreement, and who are performing maintenance functions, including the repair, overhaul and servicing of military equipment (both scheduled and unscheduled) as set out in the DMSS contract, and who are located at Kapooka NSW or any DMSS contract site.
6.2 This Agreement will not cover the following employees of the Company:
● clerical and administrative staff;
● management and executive staff;
● schedulers;
● production officers/planners;
● production clerks;
● purchasing/procurement clerks/officers;
● Supervisors/Trainers/Coordinators – Level II as defined in Schedule B – Classification Structure and Definitions; or those engaged in the “professional field” as defined in paragraph (e) of the definition of “vocational fields” in sub-clause 3.1 of the Manufacturing and Associated Industries and Occupations Award 2010.”
[15] Other than relevant extracts including a table of “Support Employment Categories” (Scheduler, Production Clerk, Senior store-person, Store-person and Procurement Clerk) and information about the stores function in relation to Retail Stores and Petrols, Oils and Lubricants, the terms of the DMSS contract are not before the Commission.
[16] On a plain reading, clause 6 of the Agreement has a narrower scope than the Transfield Agreement. For example, it covers employees “who are performing maintenance functions” as opposed to a broader potential group of employees covered by the Transfield Agreement and employed “in relation to the provision of maintenance functions”. It expressly excludes schedulers and production and procurement clerks from coverage, whereas the Transfield Agreement does not. That is not to say those positions are covered by the Transfield Agreement. There is insufficient material before me to reach a concluded view on that question and for the reasons that follow, it is not necessary for me to do so.
Relevant law
[17] Section 173 of the Act provides as follows:
“173 Notice of employee representational rights
Employer to notify each employee of representational rights
(1) An employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who:
(a) will be covered by the agreement; and
(b) is employed at the notification time for the agreement.
Note: For the content of the notice, see section 174.
Notification time
(2) The notification time for a proposed enterprise agreement is the time when:
(a) the employer agrees to bargain, or initiates bargaining, for the agreement; or
(b) a majority support determination in relation to the agreement comes into operation; or
(c) a scope order in relation to the agreement comes into operation; or
(d) a low paid authorisation in relation to the agreement that specifies the employer comes into operation.
Note: The employer cannot request employees to approve the agreement under section 181 until 21 days after the last notice is given (see subsection 181(2)).
When notice must be given
(3) The employer must give the notice as soon as practicable, and not later than 14 days, after the notification time for the agreement.
Notice need not be given in certain circumstances
(4) An employer is not required to give a notice to an employee under subsection (1) in relation to a proposed enterprise agreement if the employer has already given the employee a notice under that subsection within a reasonable period before the notification time for the agreement.
How notices are given
(5) The regulations may prescribe how notices under subsection (1) may be given.”
[18] In MSS Security Pty Ltd v Liquor Hospitality and Miscellaneous Union (MSS Security), a Full Bench of the Commission considered when the obligation to bargain and to issue a notice of representational rights (NERR) arises in the context of a contested protected action ballot order. 6
[19] MSS Security wassubsequentlyconsidered in Mermaid Marine Vessel Operations Pty Ltd v Maritime Union of Australia 7, where a Full Bench of the Commission made the following observations:
“[59] We do not accept that the misquote relied upon by the Appellant amounts to a misconstruction of the Act, nor did it alter the effect of the decision in MSS Security or result in a misapplication by the Commissioner of the decision. First, the reference to “broader scope” in the decision in MSS Security when considered in the context of the decision as a whole is clearly a reference to the Respondent’s proposed scope in that case. Secondly, for the reasons which follow, the misquoted paragraph did not lead to an improper application by the Commissioner of the decision in MSS Security.
[60] As to the second issue, we think the Appellant’s submission proposes a far wider proposition than that which is advanced in MSS Security. At [18] of MSS Secuirity, the Full Bench was considering the question of disputed scope in the context of whether an obligation to issue a NERR arose and if so whether it should be issued to employees within the broader or narrower scope. It was not making a statement of broader application. This seems clear when [18] is read with the paragraphs that immediately proceed and follow it, which for convenience we reproduce below:
[17] However, once an employer has agreed to bargain in relation to a group of employees within the scope of an agreement as proposed by a union or other employee bargaining representative, the employer is obliged to:
● issue a notice of representational rights to the employees within the scope of the agreement proposed by the union or other employee bargaining representative; and
● bargain in good faith in accordance with s.228.
[18] As the Full Bench in Stuartholme noted, “[t]he terms of [s.237] unambiguously suggest that bargaining may have commenced under the Fair Work Act even though the parties to the bargaining process are in disagreement about the scope of the proposed agreement.” Where there is a continuing disagreement between the bargaining parties as to the scope of the proposed enterprise agreement, the remedy for the party who wants a narrower scope is to seek a scope order pursuant to s.238. In the absence of such an order, bargaining will proceed on the basis of the broader scope, save that the parties are entitled to continue bargaining over the scope itself until such time as the scope of the proposed agreement is settled through bargaining or by the making of a scope order.
[19] It follows from the scheme of the FW Act that the obligation under s.173 is to issue a notice of representational rights to the broader class of employees even though the employer does not wish to have an agreement that extends that far. If it were otherwise, it would mean that an employer could always prevent an agreement having a broader scope than it desired by simply refusing or failing to issue notices of representational rights outside its desired scope. Such an outcome is inconsistent with the scheme of the FW Act.
[61] When read in context we think that the paragraph in issue in MSS Security should properly be interpreted as saying no more than a disagreement over scope may ultimately be settled either through bargaining, which may include protected industrial action, or by the making of a scope order. It must also be remembered that there is limited availability to scope orders. An application for a scope order is not an available remedy to resolve any disputes about scope per se. Before an application for a scope order may be made, a bargaining representative must have concerns that bargaining is not proceeding efficiently or fairly because that bargaining representative considers that the proposed agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover. Viewed in its proper context, a scope order is not a universal remedy for a dispute about scope, rather it is a remedy for bargaining that is not proceeding efficiently or fairly because of a bargaining representative’s view about employee coverage of a proposed agreement. Not every dispute about scope will have the effect of impeding bargaining in this way.” (footnotes omitted)
[20] In Maritime Union of Australia v Swire Pacific Ship Management (Australia) Pty Ltd 8 (Swire Pacific) a subsequent Full Bench of the Commission further clarified the effect of paragraph [19] in MSS Security as follows:
“[35] Thirdly, where scope of a proposed agreement is in dispute at the Notification Time, the NERR is to be given to employees within the broader scope of a proposed agreement.” (footnotes omitted)
[21] The facts in MSS Security were different to those in the present case. In MSS Security, a union sought to commence bargaining for an enterprise agreement in relation to certain employees and the employer agreed to bargain for a narrower group of employees. The effect was that at the notification time, there was a dispute over the scope of the proposed agreement. In this case, Broadspectrum initiated bargaining by its advice to the AMWU on 20 May 2016 that it agreed to bargain. In the days that followed, it issued the Notice reflecting its proposed scope for the Agreement. On 1 June 2016, the AMWU sought a broader scope for the Agreement. That is, the dispute as to scope arose 11 days after the notification time on 20 May 2016.
[22] As Swire Pacific makes clear, the requirement to give a NERR to employees within the broader scope of a proposed agreement applies where scope is in dispute at the notification time for the Agreement. In my view, this is a necessary consequence of the requirement in section 173 to give the NERR to each relevant employee who is employed at the notification time for the agreement. 9
[23] At the notification time in relation to the Agreement on 20 May 2016, there was no dispute between the parties over scope. On the authority in Swire Pacific, the Notice issued between 23 and 30 May 2016 was given to the relevant group of employees in accordance with section 173.
[24] However, that is not the end of the matter. In Re Uniline Australia Limited 10 a majority of the Full Bench of this Commission observed as follows:
“[113]In our view there is no substance in these submissions. Artificial though it may be, an employer that discovers it had issued an invalid Notice, would cease bargaining with its employees and would agree to bargain or initiate bargaining afresh thus triggering a notification time and a new period within which a valid Notice may be issued. There is nothing in the Act which compels a conclusion to the contrary, except perhaps in circumstances where a majority support determination has been made. Where an employer initially agreed to bargain for an agreement with a particular scope and later agreed to bargain for an agreement with a broader scope, that agreement to bargain in our view, triggers a notification time and a requirement thereafter to issue a Notice to relevant employees who are to be covered by the broader scope agreement. We do not need, for present purposes to decide whether, having regard to s.173(4) such a Notice needs to give to employees who received a Notice for the proposed agreement with a more limited scope.”
[25] The Full Bench held thatwhere an employer agrees to bargain for a broader scope after the notification time, that agreement triggers a new ‘notification time’ and a related requirement to issue a new NERR to relevant employees. The fact that a NERR is given only to employees within the expanded scope (as opposed to employees who were within the original proposed scope) is not fatal to an application for agreement approval, as long as the NERR was given to employees within the original scope in a reasonable period before the new notification time. 11
[26] Broadspectrum initially contended that agreement to cover employees at Kapooka was reached on 14 June 2016. It later said that while it had reached agreement to revise the proposed scope on that date, internal approvals to give effect to the agreement meant that agreement was not reached until 12 July 2016 when the second Notice was given to employees.
[27] Broadspectrum was invited to provide evidence in support of its contention that agreement was reached in relation to employees at Kapooka after 14 June 2016. On 9 March 2018, it submitted that agreement was reached in relation to the expanded scope on 12 July 2016 and provided a revised F17 to that effect. However, it did not explain how, or why, the agreement to bargain for an expanded scope did not occur on 14 June 2016 as earlier submitted. Notes of a bargaining meeting on 12 July 2016 tendered in support of the submission record simply that a NERR will be sent to Kapooka and copied to the AMWU. 12 There is no additional insight into the nature of the discussion, or whether it was to confirm what was only an ‘in principle’ agreement on 14 June 2016.
[28] Activity trackers detailing the progress of negotiations on 14 June 2016, 29-30 June 2016 and as at 24 August 2016 all record in identical terms that Broadspectrum “agrees ‘in principle’ with incorporating Kapooka site into EA coverage clause.” A statutory declaration filed on 20 February 2018 on behalf of Mr Stephen Polzin, employee bargaining representative, refers to a discussion on 14 June 2016 about covering armourers at Kapooka by the Agreement and notes that the proposal was one “to which Broadspectrum agreed”. 13 On balance, the evidence supports a finding that agreement on the expanded scope was reached on 14 June 2016. While I do not discount the possibility that this was only an ‘in principle’ agreement that required formal approval to take effect, there is no evidence of that before me. I find that there was a second notification time in relation to the Agreement on 14 June 2016.
[29] On 14 July 2016, Broadspectrum issued the second Notice to armoury employees at Kapooka. It is not in dispute that the second Notice was not issued to any other category of employee at Kapooka or to any non-materiel maintenance employee. Whether it should have been depends on whether those categories of employee were the subject of a claim for coverage from the AMWU.
[30] The evidence establishes that a claim to cover non-materiel maintenance employees was in issue in bargaining between the parties from 1 June 2016.
[31] I accept Broadspectrum’s submissions that it understood the AMWU’s claim in relation to coverage of employees at Kapooka to relate only to armoury employees, not storepersons. On its face, the AMWU’s claim in relation to Kapooka appears wider in scope than that understood by Broadspectrum and could extend to storepersons. However, that proposition is tempered somewhat by references to the LMM contract in the AMWU’s proposed version of a replacement agreement as well as the AMWU’s 1 June 2016 table of claims and activity trackers which separately refer to the claims for coverage at Kapooka and coverage of non-materiel maintenance employees (both clerical and stores). 14
[32] While it is possible that the claim in relation to coverage at Kapooka, either as sought by the AMWU or as agreed to by Broadspectrum, was affected by a fundamental misunderstanding between the parties, I consider it unlikely in circumstances where bargaining had been ongoing for a lengthy period, was between experienced industrial parties and no evidence was led that any potential issue of this kind was either identified or discussed until after the agreement was made.
[33] Be that as it may, by the second notification time, the AMWU had made a claim for the Agreement to have a broader scope than that proposed by Broadspectrum. Broadspectrum gave the second Notice to armoury employees at Kapooka, and did not give it to any non-materiel maintenance (either clerical or stores) employees. The effect was that reasonable steps were not taken to give all relevant employees notice of their right to be represented in bargaining as required by section 173(1) of the Act.
[34] Further, the period between the second ‘notification time’ and the issue of the second Notice was more than 14 days. In this respect, the requirements of section 173(3) were not met in relation to the second Notice.
[35] The Act confers no discretion on the Commission to extend or waive the requirements in the Act in relation to the giving of notice under section 173. 15
[36] The result is that the Agreement cannot be approved.
Other approval issues
[37] The relevant modern award in relation to the Agreement is the Manufacturing Award. Taking the terms of the Agreement as a whole, on balance I am satisfied the Agreement passes the better off overall test.
[38] The consultation term at clause 9 of the Agreement does not expressly invite employees to give their views about a change to regular rosters or ordinary hours. The model consultation term would have applied as a term of the Agreement had it been approved.
[39] Clause 19.2 of the Agreement deals with redundancy and appears to exclude the National Employment Standards to the extent that it provides a less beneficial entitlement to redundancy pay for employees with between 12 and 16 months’ service. Broadspectrum offered an undertaking in relation to the concern, and had the Agreement been capable of approval, I would have accepted the undertaking pursuant to section 190.
[40] The coverage clause of the Agreement appears to rely in part on an understanding of certain terms of the DMSS Contract. If so, it is not apparent on the material before me what information about those terms was provided to relevant employees when the Notice or the second Notice was issued. This potentially raises a concern about whether the Agreement was genuinely agreed having regard to the requirements of section 180(2) of the Act. However, the issue was not argued in any detail before me and I make no finding about it.
[41] Subject to the issues identified above, I am otherwise satisfied that each of the relevant requirements in ss.186, 187, 188 and 190 in relation to this application for approval were met.
Conclusion
[42] As the requirements of section 173 of the Act were not met, the Agreement cannot be approved. The application is dismissed.
COMMISSIONER
Appearances:
D Dal Bon on behalf of the Applicant
M Nicolaides on behalf of the AMWU
Hearing details:
2018.
Melbourne:
February 6, March 8.
<PR601156>
1 AMWU submissions: 29 January 2018; 5, 6 & 26 February 2018; 9 March 2018
2 MSS Security Pty Ltd v Liquor Hospitality and Miscellaneous Union[2010] FWAFB 6519
3 Broadspectrum submissions: 25 January 2018; 5 & 20 February 2018; 6 & 9 March 2018
4 AMWU submission, 27 February 2018; Audio recording of Hearing on 8 March 2018
5 Transfield Services Defence Stores Riverina Murray Valley Agreement 2014, AE410992
6 [2010] FWAFB 6519 from [15] to [19]
7 [2014] FWCFB 1317
8 [2014] FWCFB 2587
9 National Tertiary Education Industry Union v Swinburne University of Technology [2015] FCAFC 98 at [24]
10 [2016] FWCFB 4969
11 Fair Work Act 2009 (Cth), s.173(4)
12 Attachment A1 to the Form F17 Statutory Declaration signed 9 March 2018
13 Broadspectrum submissions, 20 February 2018 at Attachment A7
14 AMWU Documentation to Accompany the AMWU’s Outline of Submissions, Tab 2
15 Transport Workers' Union of Australia v Hunter Operations Pty Ltd[2014] FWC 7469; [2016] FWCFB 4969
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