Caledonia Industrial Pty Ltd
[2023] FWCA 2878
•11 SEPTEMBER 2023
| [2023] FWCA 2878 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Caledonia Industrial Pty Ltd
(AG2023/2573)
CALEDONIA INDUSTRIAL PTY LTD ENTERPRISE AGREEMENT 2023
| Building, metal and civil construction industries | |
| COMMISSIONER HUNT | BRISBANE, 11 SEPTEMBER 2023 |
Application for approval of the Caledonia Industrial Pty Ltd Enterprise Agreement 2023
Caledonia Industrial Pty Ltd (the Employer) has applied for approval of an enterprise agreement known as the Caledonia Industrial Pty Ltd Enterprise Agreement 2023 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single-enterprise agreement.
The Fair Work Legislation Amendment (Secure Jobs, Better Pay Act 2022 (Cth) (the Amending Act) made a number of changes to enterprise agreement approval processes in Part 2-4 of the Act, commencing operation on 6 June 2023.
Under transitional arrangements, amendments made by Part 14 of Schedule 1 to the Amending Act in relation to genuine agreement requirements for agreement approval applications apply to where the notification time for the agreement was on or after 6 June 2023. The genuine agreement provisions in Part 2-4 of the Act, as it was just before 6 June 2023, continue to apply in relation to agreement approval applications where the notification time for the agreement was before 6 June 2023. Question 18 of the Form F17A provides that the notification time for the Agreement was 2 June 2023.
Under the transitional arrangements, amendments made by Part 16 of Schedule 1 to the Amending Act in relation to the better off overall test requirements for agreement approval applications apply where the agreement was made on or after 6 June 2023. The better off overall test provisions in Part 2-4 of the Act, as it was just before 6 June 2023, continue to apply in relation to agreement approval applications where the Agreement was made before 6 June 2023. Question 26.2 of the Form F17A provides that the Agreement was made on 17 July 2023.
The Fair Work Commission (the Commission) identified that the NERR appeared to omit some parts of the prescribed form, such as the words “employees that” which would ordinarily follow the words “which is proposed to cover”. I raised that the NERR was not in the prescribed form as required by s.174(1A) of the Act.
The Employer responded advising that words “employees that”, which was omitted from the NERR” was a typographical error in the drafting of the NERR. Were those words included, the NERR would have read:
“…which is proposed to cover employees that [are] Sheet Metal Workers and Insulators who are employed in the company’s Insultation and Cladding Division and performing onsite construction work.” (emphasis added by Employer)
The Employer submitted that whilst the NERR does not include “employees that [are]”, the addition of those words would not make a substantive difference to the meaning conveyed in the document. Each of the employees who received the document were engaged in those classifications such that they would at the very least understand that the notice applied to their employment, with the balance of the notice directing the employee to their rights in relation to the agreement. Importantly, the Employer argued there were no change to any part of the NERR insofar as it relates to the right to be represented.
Accordingly, the Employer submitted that the Commission should be satisfied that the purposes of the NERR, being “to ensure that all employees are aware that their employer intends to bargain for an enterprise agreement and that they are aware of their representational rights”[1] has been met as a matter of substance. Therefore, the Employer argued that this error is minor in nature.
Section 188 of the Act, as it existed prior to 6 June 2023, provided:
“188 When employees have genuinely agreed to an enterprise agreement
(1) An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre‑approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.
(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and
(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.”
As the notification time for the Agreement was before 6 June 2023, I am satisfied that in all of the circumstances and having regard to the Full Bench decision in Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others,[2] this constitutes a minor procedural or technical error for the purpose of s.188(2) of the Act, as it was just before 6 June 2023. Further, I am satisfied that the employees covered by the Agreement were not likely to have been disadvantaged by the error.
The AMWU’s objections
The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), in its Form F18, has opposed the approval of the Agreement on the basis that the Employer has not met the pre-approval requirements. The AMWU’s objections are summarised as follows:
· The Employer failed to recognise the AMWU bargaining representative and failed to notify that representative of the vote. The AMWU submitted that this conduct is in contravention of s.228(1)(e) of the Act.
· It is unclear to the AMWU whether the Employer explained the terms and effects of the Agreement sufficiently to two employees who are from non-English speaking backgrounds (NESB). The AMWU submitted that this is in contravention of s.180(5)(a) of the Act.
· It is unclear to the AMWU what method of vote was used, and in consideration of the low voter participation, the AMWU raised the issue of whether the Employer sufficiently complied with its obligations in respect of notification of the vote.
I invited the Employer to respond to the objections raised by the AMWU, as I considered it to be an important consideration as to whether I must approve the Agreement.
In respect to the first issue, the Employer denied that it failed to recognise the AMWU as a bargaining representative. The Employer submitted that the AMWU first made contact with the Employer about representing persons after bargaining had ceased and the access period for the first ballot on 16 June 2023 had commenced.
During the first ballot period, only three votes were cast (two in favour, one against). One employee informed the Employer that they did not receive the ballot notification. This was disputed by the organisation conducting the vote, however the Employer accepted the employee’s statement in good faith and arranged a fresh ballot.
The Employer did not consider that conducting a new vote in respect of the same proposed agreement involved further bargaining. The Employer’s position was communicated to the AMWU at the time.
The Employer submitted that the good faith bargaining rules are not relevant to the Commission’s decisions except insofar as it undermines the genuineness of agreement. It submitted that there is no evidence to suggest that any action was taken that would undermine the genuineness of the agreement.
In relation to the explanation of the Agreement to two NESB employees, the Employer noted that the demographic information regarding NESB employees within the Form F17A is incorrect. The two NESB employees had ceased employment prior to the second ballot and had been inadvertently recorded on the Form F17A.
For the avoidance of doubt, although from a NESB, the Employer advised that the two former employees were Australian citizens who had reasonable oral and written English skills which were regularly demonstrated in the employment context.
For the second ballot, conducted on 17 July 2023, the Employer was satisfied that everyone who was able to vote was afforded a reasonable opportunity to vote. Of 14 employees to be covered by the Agreement, 8 employees voted. It was submitted that the voter turnout is a reflection of employees lacking interest rather than of employees being deprived of a reasonable opportunity to vote.
Upon receipt of the Employer’s response, I invited the AMWU to provide further detailed submissions by 25 August 2023 if it held further concerns. No response was provided from the AWMU.
Accordingly, I have had regard to the material filed to date and I am satisfied that the Employer has met its obligations under ss.180(5)(a) and (228(1)(e)) of the Act.
Undertakings
The Commission raised other certain concerns regarding the Agreement with the Employer, and as a result, the Employer has provided written undertakings. A copy of the undertakings is attached at Annexure A. Pursuant to s.190(4) of the Act, I sought the views of the AMWU regarding the undertakings, allowing a period of two business days from receipt of the undertakings to provide any views. No views were provided.
I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement. Pursuant to s.190 of the Act, I accept the undertakings. In accordance with s.201(3) of the Act, I note that the undertakings are taken to be a term of the Agreement.
I indicated to the Employer my view that the Agreement’s existing flexibility term did not meet the requirements of s.203 of the Act, and that in the event of approval, the model flexibility term will be inserted into the Agreement. Pursuant to s.202(4) of the Act, the model flexibility term prescribed by Schedule 2.2 of the Fair Work Regulations 2009 is attached to the Agreement and is taken to be a term of it.
I have taken into consideration the material filed in the Commission. Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met. The Agreement does not cover all of the employees of the employer, however, taking into account s.186(3) and (3A) I am satisfied that the group of employees was fairly chosen.
The Agreement is approved and, in accordance with s.54 of the Act, will operate from 18 September 2023. The nominal expiry date of the Agreement is 11 September 2027.
COMMISSIONER
Annexure A – Undertakings
[1] Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others [2019] FWCFB 318 at [74].
[2] [2019] FWCFB 318.
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