CJ Manfield Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
[2011] FWA 3934
•4 JULY 2011
Note: Appeals pursuant to s.604 (C2011/5203, C2011/5204) were lodged against this decision - refer to Full Bench decision dated 31 October 2011 [[2011] FWAFB 6845]for result of appeal.
[2011] FWA 3934 |
|
DECISION |
Fair Work Act 2009
s 185 - Applications for approval of single-enterprise agreements
CJ Manfield Pty Ltd
v
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
(AG2011/406 and AG2010/24340)
DEPUTY PRESIDENT SAMS | SYDNEY, 4 JULY 2011 |
Application to approve an enterprise agreement - applicant seeks to withdraw application - no consent - whether application can be discontinued - no genuine agreement - unilateral mistake - whether Union knew of mistake - Union files identical agreement - applications discontinued and/or dismissed.
BACKGROUND
[1] On 20 December 2010, CJ Manfield Pty Ltd (‘the Company’) filed an application pursuant to s 185 of the Fair Work Act 2009 (‘the Act’), seeking the approval of Fair Work Australia (‘FWA’) of a single enterprise agreement to be known as the Manfield Colair and CEPU Electrical Division Northern Territory Enterprise Agreement Gove Alumina Refinery and Mine Site 2010-2012 (‘the Agreement’). The Agreement is to cover employees who work on the Rio Tinto Alcan (RTA) Refinery site at Gove, Northern Territory, who provide electrical and refrigeration services to the site. Negotiations leading to the Agreement were between the Company and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) (‘the Union’).
[2] Notwithstanding the support of the Union for the approval of the Agreement, I could not have imagined the controversy this application would subsequently generate when the matter was listed for a telephone hearing on 20 January 2011.
[3] Prima facie, the Application for Approval of the Agreement (Form F16), the Employer’s Declaration in Support of the Application (Form F17) and the Agreement’s terms and conditions, meet all of the statutory requirements for approval by FWA. It had been approved in a vote of 34 employees, of whom 29 voted in favour of the Agreement over a voting period of three days from 3 to 7 December 2010. This vote had been preceded by five earlier unsuccessful attempts at securing the employees’ approval of the agreement.
[4] At the telephone hearing, Mr K Francis appeared with Mr A Avila for the Company and Ms P Rogers with Mr T Gauldappeared for the Union, (because of a subsequent Union application about the same subject matter, I shall hereinafter refer to the parties as the Company and the Union, rather than the applicant and the respondent.) Mr Francis made a preliminary application seeking to withdraw the application on the basis that the Agreement contained a significant error in clause 41.1 in respect to breaks during a 10 hour shift. The disputed clause, which is the centrepiece of the competing arguments in this case, is recorded in the Agreement as follows:
“An employee who is required to work 2 or more hours overtime shall be allowed a crib time of 20 minutes at the prevailing overtime rate. For each four hours of overtime worked after that an employee is entitled to a further 20 minute crib break paid at the prevailing overtime rate.”
[5] It seems obvious enough that the effect of this clause is a requirement for employees to take three breaks, rather than the existing two, in a 10 hour shift. Mr Francis put that this outcome was never the intention of the Company, nor would the Company have ever agreed to such a provision. He described it as a ‘technical error’ or ‘oversight’, which needed correction.
[6] Ms Rogers opposed any withdrawal of the application on the basis that an agreement was made, under s 182 of the Act, when the employees voted to approve the agreement. This Agreement was therefore validly made and, unless there was some other statutory basis why the Agreement should not be approved, FWA is obliged to do so. In any event, Ms Rogers argued that the disputed clause was not an ‘error’ as it had been discussed by the parties and deliberately included in the Agreement after the second vote of employees had been unsuccessful.
[7] During the hearing, the Tribunal noted that, while some applications under s 185 of the Act had been discontinued by consent, I was not aware of any authority for the proposition (advanced by Mr Francis) that an application for approval of an enterprise agreement could be discontinued by an applicant, in the face of opposition to the discontinuance and following a valid vote of employees which had approved the agreement under s 182 of the Act. In short, the circumstances appeared to me to be unique and unparalleled; certainly under the terms of the present legislative regime. In view of these unusual considerations, I encouraged the parties to engage in further negotiations over whether some consensus might be reached over the disputed clause and, if it was necessary, to recommit the Agreement to another vote of the employees in light of any consensus reached. On that basis, the matter was adjourned for two weeks.
[8] On 3 February 2010, the Tribunal was advised in a further telephone conference that notwithstanding efforts to resolve the matter, the parties remained in dispute. Despite being provided with two authorities arguably supporting the Union’s primary contention, I indicated that I would not be making ‘a ruling on such a new and significant issue on the basis of simply a telephone conference between the parties’. In any event, Ms Rogers further proposed calling witness evidence as to what had occurred during the negotiations for the Agreement. For reasons of convenience and cost, it was decided to list the matter for formal hearing in Darwin on 19 and 20 April 2011. Accordingly, directions in preparation for the hearing were issued.
[9] For completeness, two other matters which occurred before the arbitration deserve mentioning. Firstly, on 24 February 2011, the Company filed and served a Notice of Discontinuance (Form F50) of the Application. On 7 March 2011, the Union filed its own application under s 185 of the Act, for the approval of the same Agreement as was voted upon by the employees on 17 December 2010 (AG2011/406). Notwithstanding the obvious difficulty of the Union’s application being filed well outside the 14 day time limit set by s 185(3) of the Act, the Form F17 - Employer’s Declaration in Support of Application for Approval of Enterprise Agreement and the terms of the Agreement itself were identical to the Company’s originally filed Agreement in AG2010/24340. This added a further overlay of complexity to these proceedings; although I understand entirely why the Union took that pre-emptive step. For convenience, both applications were joined at the hearing in Darwin. The Tribunal ruled that the evidence in one, would be the evidence in the other.
THE PROPOSITIONS OF THE COMPANY
[10] The Company advanced three propositions which were developed in written and oral submissions. These were:
Proposition 1 An applicant can withdraw an application at any time and for any reason by way of a Form F50 - Notice of Discontinuance under the Tribunal’s Procedural Rules.
Proposition 2 A necessary statutory prerequisite for the approval of the Agreement, namely, s 188(a)(i) of the Act, had not been satisfied so. Accordingly, the application must be dismissed.
Proposition 3 The Agreement is voidable at the request of the applicant given its unilateral mistake as to its terms and effect.
I shall come back to these propositions later.
THE EVIDENCE
[11] In support of their respective arguments, the following persons provided written and/or oral testimony:
• Kieran Charles Francis, Site Superintendent
• Trevor Lindsay Gauld, Union Organiser
• David John Hayes, Union Delegate
• Colin Stone, Union Delegate
• Michael Haire, Union Organiser
• Norman Darcy, Electrician
• Jim Stanley, Electrician
[12] Mr Francis had been employed as the site superintendent since June 2008 (he has since resigned from the Company) and while he had full responsibility for all industrial relations matters on site, his expertise in that regard was limited to ‘on the job’ experience.
[13] Mr Francis said that, historically, in the absence of a site enterprise agreement, the site had been regulated by the Electrical Engineering and Contracting Industries (Northern Territory) Award 2002 (the Award). He said the Company’s contract with Rio Tinto Alcan (RTA) imposes obligations in relation to hours of work, rostering and cost restrictions in relation to the performance of services under the contract.
[14] Mr Francis traced the history from May 2009 of negotiations with the Union for an enterprise agreement. He said it had been RTA’s preference that the Company have an enterprise agreement with its employees on site. He had directly negotiated with Mr Trevor Gauld, Organiser, Mr David Hayes, the Delegate and other delegates. Mr Francis said the first proposed agreement was rejected in a vote of employees on 26 June 2009. As a result of the changes to Federal industrial laws, he sought advice from the Electrical Contractors Association, Queensland (ECAQ). A second agreement was rejected by employees in October 2009. In each of three early draft agreements, the overtime rest periods, overtime meals and work breaks clauses were identical.
[15] Mr Francis said there had never been any request from the Union, or the employees, for a claim of three breaks during a 10 hour shift. However, Mr Francis said that in a meeting with Mr Gauld on 12 November 2009, he (Mr Francis) had said that the wording of the clause was less than clear and he asked if the Union could draft some clauses that were clear and made sense. His intention was to clarify the clauses - not change them. Mr Gauld subsequentlysent through eight emails between 12 and 13 November 2010, with proposed amendments to the Agreement. Mr Francis said he simply forwarded the emails to Ms Nicole Keating of the ECAQ and he did not read the proposed suggestions. He said that at about this time the Company’s contract with RTA was up for renewal. (While it was RTA’s preference to consolidate its electrical and mechanical maintenance with the one contractor, this did not eventuate.)
[16] During this process, the Agreement negotiations were suspended. Mr Francis said that, in the new contract, RTA was proposing a move from ‘2 weeks on, 2 weeks off’ to ‘4 weeks on, 1 week off with 10 hour shifts’. The terms of an enterprise agreement would need to reflect these changes. However, Mr Francis had not been confident of obtaining employee support for such a change. The Company won the tender and, in late March 2010, agreement was reached with RTA to move to a ‘19 days on, 9 days off, 10 hour shift roster’.
[17] Negotiations on the Agreement resumed with the Union on 22 March 2010, and detailed spreadsheets were compiled by Mr Francis and the Company accountant, Mr Avila. These were discussed with the Union. Mr Francis said that none of the spreadsheets made reference to three breaks in a 10 hour shift or an additional 20 minute break (or pay) after the shift. Mr Francis emphasised that no one from the Union, nor any employees, made such a claim during the negotiations.
[18] A new draft agreement was again rejected by employees on 5 and 6 May 2010. This Agreement now contained the disputed clause. The disputed clause was in another agreement rejected by employees on 1 July 2010, and in another agreement rejected in November 2010.
[19] On 16 August 2010, a document was sent to employees outlining the major benefits of the proposed Agreement. MrFrancis said that there was nothing in the document which referred, in any way, or costed an additional 20 minutes per day for a third break on a 10 hour shift. If it had been intended by the Company, it would have been a ‘huge selling point’. Mr Francis said that in subsequent ‘roll out’ meetings (lasting two hours in duration) it had never been suggested by the Company, nor any employee, that they would be entitled to three breaks during a 10 hour shift.
[20] Mr Francis said that in a meeting with the Union (Mr Hayes) on 27 September 2010, there was a brief discussion (10 seconds) about the rest and meal breaks clause. Mr Francis said that this was the only time during the entire span of the negotiations where consideration had been given to the clause. Mr Francis said Mr Hayes confirmed his understanding that with the 30 minute unpaid break, the clause would not apply in a 10 hour day. Mr Francis now believed he had made a mistake and had not read the clause carefully. His intention was to reword the clause - not change it. It would mean in addition to the unpaid break, a payment of 20 minutes for doing nothing.
[21] Mr Francis stressed that at no time did the Company ever suggest to their employees that they would be entitled to three breaks a day; at no time did it ever think it was proposing this change; it would never have done so; it was not part of the costing of the contract; and, in the context of a 10 hour shift, it was completely pointless and impractical. Mr Francis said the Agreement, with no substantive changes since the last ‘no’ vote, was put to employees and accepted in a vote between 3 and 7 December 2010.
[22] Work resumed on the site in the New Year and wage increases under the approved Agreement were paid from 27 December 2010. There was no change to the existing break arrangements and no one had asked for three breaks. However, in a toolbox meeting on 7 January 2011, attended by Mr Hayes, he said ‘somewhat out of the blue’ and with a hint of a smile on his face, ‘So when do we start our 3 breaks?’ Mr Francis deposed that this was the first time he had heard about the matter. He could not remember what he said to Mr Hayes’ question.
[23] Mr Francis said that, after this meeting, he met Mr Hayes in the office and asked him what he was talking about. He had said that as the guys work two hours’ overtime on a 10 hour shift, they are now entitled to three breaks. Mr Francishad replied that this was never (the Company’s) understanding or intention. It had never been discussed and had the Company known this was the effect of the clause, it would never have agreed to it - the cost was an additional $240,000 per annum.
[24] Mr Francisadded that the mechanical maintenance contractor for the site (United) also works 10 hour shifts under its own enterprise agreement. Its corresponding clause reads:
“Employees required to work more than two hours overtime continuous with ordinary hours (deemed 8 hours per day) shall be entitled to an additional paid crib break in respect of such overtime”.
[25] In cross examination, Mr Francis said that in his discussions with Mr Gauld there had been no mention as to the nature of the provision; just that the wording could be improved. Mr Francis said the ECAQ’s role was to ‘cut and paste’ the clauses proposed and incorporate them in a new agreement for discussion. It was intended to review the whole document later down the track. Then the tender process intervened.
[26] Mr Francis said the spreadsheets he and Mr Avila prepared were directly related to the Company’s contractual requirements. Mr Francis said the changes proposed by the Union had already ‘snuck in’, but were not noticed as to their impact. Mr Francis said that a number of management people had gone through the Agreement, including himself, Mr Avila and the ECAQ. Mr Francissaid when he had initially read the clause, he had obviously interpreted it wrongly.
[27] In re-examination, Mr Francis said that when he was looking at ways of improving the deal (after the rejections), he had never included a third break in a 10 hour shift. He said that when the ECAQ returned the amended draft, it was not accepted that these were the Company’s ‘desired clauses’. Mr Francisadded that there was no discussion, at any time, with the Union as to how the three meal breaks would work in practice.
[28] Mr Francis said that when he prepared the spreadsheets it was on the basis of the existing meal break provisions. Mr Francis said that the Company could not comply contractually with RTA if the clause was applied as contended for by the Union.
[29] Mr Trevor Gauld represented the Union and its members in the negotiations for the Agreement from around May 2009 until December 2010, when he was replaced by Mr Michael Haire. Mr Gauldsaid the negotiations for the Agreement took place through a combination of on and offsite meetings, phone conferences and individual phone conversations.
[30] Mr Gauldsaid that from 12 November 2009 to 30 November 2009, the Company had never raised any concerns over clause 41, when it was first discussed, sent to the Company or subsequently inserted into the draft Agreement. Mr Gauld recalled that in the meeting with Mr Francis on 12 November 2009, 15 items had been discussed, including the meal breaks clause. Mr Gauld hadhighlighted the comparison to the G3 Expansion Project (‘G3 Agreement’) where other employees were working alongside Manfield’s employees. Similar conditions were applied on that project.
[31] Mr Gauldclaimed that he had told Mr Francis that it was common in the industry to take a break at the end of the shift. Mr Gauld had gained the impression that Mr Francis understood the intent of the clause as he had, in fact, previously worked on the G3 Expansion Project. At the meeting, Mr Francis also told Mr Gauld that he was working with the ECAQ in preparing the Agreement. That same day, Mr Gauldemailed the draft clause to the Company. It read:
“1. Rest and Meal Breaks
34.1 Excluding shift workers, a meal period of thirty minutes unpaid time and a rest period of twenty minutes paid time shall be scheduled so as to split the work day into 3 work periods of approximately equal duration where practicable.
34.1 (sic) An employee who is required to work 2 or more hours overtime shall be allowed a crib time of 20 minutes at the prevailing overtime rate. For each four hours of overtime worked after that an employee is entitled to a further 20 minute crib break paid at the prevailing overtime rate.”
[32] On 30 November 2009, Mr Gauld received an email from Ms Keating (ECAQ) with a new draft with some changes. Clause 41 was not removed or amended. Mr Gauldagreed that from December 2009 to March 2010, the negotiations were ‘put on hold’ due to the contract renewal discussions.
[33] On 22 March 2010, Mr Gauld had a meeting with Mr Francis and later sent an email to him summarising the matters discussed and future action plans. The Union did not raise any issues with the draft clauses as he believed they had been considered by the Company and had been accepted. Two items had been discussed - roster arrangements and ‘fly-in fly-out’ arrangements.
[34] Mr Gauldsaid that on 31 March 2010, he received a draft agreement entitled ‘Revision 3’. It still contained the disputed clause. On 19 April 2010, a ‘Revision 4’ was provided; again it contained clause 41. Mr Gauldsaid that, at all times, the Company was responsible for drafting the various versions of the Agreement and the Union had never agreed to take responsibility for the drafting.
[35] Mr Gauld maintained that the Company had not raised any concerns or issues about clause 41 since the 12 November 2009 meeting. Revision 4 was put four times to the vote and on each occasion the Agreement contained the disputed clause.
[36] In a reply statement, Mr Gauldsaid that the list of claims provided by the Union in December 2009 and May 2010, did not include the rest and meal break provisions, as they had already been changed and inserted in the earlier draft Agreements.
[37] Mr Gauld denied that the draft Agreement was ‘left with the ECAQ and CEPU’. The Union had not received the ECAQ’s contact details. The Union was not aware who the ECAQ representative was until after Ms Keating sent him draft clauses following his meeting with Mr Francison 12 November 2009.
[38] Mr Gauldsaid the Company’s prepared spreadsheets were ‘hopelessly inaccurate’ and he had regularly highlighted his concerns about them.
[39] MrGauld totally rejected Mr Francis’ inferences that the Union had acted dishonestly and ‘snuck in’ the disputed clause. The clause had been agreed and contained in numerous drafts. Mr Gauld also refuted Mr Francis’ claim that there was no discussion about the clause. The proposed clause and its application was discussed at the meeting on 12 November 2009.
[40] In oral evidence, Mr Gauld said that in the meeting on 12 November 2009, Mr Francis had suggested ‘tidying up’ the meal break clauses to make them clearer. While Mr Gauld had raised the G3 Agreement clause, he had not specifically sourced the actual wording from any agreement. He deposed that he had discussed the three breaks during a shift as one way of applying the clause, as the clause meant a third break after eight hours. He believed it was made very clear that it was the desire of the Union to have such a clause in place and that implementation would be determined through the onsite Consultative Committee. Mr Gaulddeposed that Mr Francis understood and acknowledged how the disputed clause would work.
[41] Mr Gauld agreed that the mechanical contractors’ agreement provides for a third break in excess of two hours’ overtime. He conceded he had no direct knowledge of the mechanical contractors working alongside Manfield employees.
[42] Mr David Hayes was previously a member of the EBA Negotiating Committee. He said that negotiations for the Agreement commenced around 30 June 2008. The early drafts of the Agreement contained a proposal from the Company as to overtime rest periods.
[43] Mr Hayes described the negotiating process as involving information sessions, exchanges of documents, on site meetings and votes of the employees. Mr Hayes recalled the suspension of the negotiations during the contract renewal process. He said that when the negotiations resumed in March 2010, the Company stated that it ‘needed to negotiate an agreement quickly and clearly’.
[44] Mr Hayes said he and another employee representative, Mr Stone, went through the Agreement, clause by clause, and that although there were clauses they were happy with, some needed redrafting and others needed to be added.
[45] On 14 March 2010, Mr Hayes and two other representatives, Mr Stone and Mr DavidAndersen, met with Mr Francis and they went through each of the clauses. Mr Hayessaid he suggested that, given the drafting work involved, Mr Francis obtain some help in the process. After many changes a draft was ready to be voted on, which included the disputed clause.
[46] The Agreement was unanimously rejected on 5 and 6 May 2010. Mr Hayes said that rosters and remuneration were still issues for the employees. On, or about, 15 June 2010, Mr Hayes, Mr Stone and Mr Francis met with Mr Ken Donovan, RTA Management, to discuss the new 19 days on / 9 days off and 58 hour week roster. Negotiations continued and some clauses were reworded. The disputed clause was not altered.
[47] A third vote was unsuccessful and, on 8 July 2010, Mr Hayes and Mr Gauld met with Mr Francis and Mr Roley Mott, Manfield Colair Management, to discuss ways of making the Agreement more attractive to employees. The Union proposed some trade-offs, i.e. leave loading, CIRT and an attendance allowance.
[48] Mr Hayes said that between July and October 2010, there was a lot of movement ‘to and fro’ and, at about this time, the Company changed clause 42, without involvement from the Union. A new draft Agreement was provided to the Union around 14 October 2010, which involved a significant number of major changes that had been made by the Company. The Union was concerned about the extent and effect of the changes. The Agreement was again voted down.
[49] Around 8 November 2010, Mr Francis emailed Mr Hayessuggesting the employees have another vote, as the Company was not prepared to negotiate any further. Mr Hayes met Mr Francis and told him the employees wanted to continue negotiations. The Company then decided to involve mediators in order to finalise the Agreement. A meeting with the mediators was held on 15 or 16 November 2010. Prior to the meeting, Mr Hayes said he emailed the employees’ list of concerns to Mr Francis, which included clause 42 Overtime Meals. During the mediation, an Agreement was reached, each clause had been reviewed and the Agreement was approved by employees between 4 and 7 December 2010.
[50] On 15 December 2010, Mr Hayes attended a meeting with Mr Haire, Mr John Bencic, Delegate, Mr Francis, Mr Brock Simon, Director, Mr Avila and, briefly, Mr Con Manfield. The primary purpose of the meeting was to discuss the process for lodging the Agreement with FWA.
[51] Mr Hayes said that when he returned to work on 6 January 2011, he asked employees if their smoko times and afternoon breaks had changed because the Company had proposed commencing the terms of the Agreement from 27 December 2010, prior to FWA approval. The employee he spoke to had said there had been no changes. He advised them to keep working as they had been under the previous arrangements.
[52] Mr Hayessaid that on 7 January 2011, he had attended a toolbox meeting with Mr Collins from senior management. An employee, who he could not remember, asked, ‘What is the go in regards to the afternoon break?’ Mr Hayes received a phone call that day from Mr Francis raising the problem the Company now had with the Agreement. A meeting was arranged for the next day. At that meeting, Mr Francis said there had been a typographical error in clauses 41 and 42. Mr Hayes disagreed and said it was industry standard and the Company had put the clause in the Agreement. Mr Hayes agreed to talk to the employees, which he did on 10 January 2011. The employees were of the view that as the Agreement had been agreed, voted on and signed by both parties, they were not prepared to change it.
[53] In a reply statement to Mr Francis’ evidence, Mr Hayes said that the additional 20 minute paid break is not an additional cost; it is a paid break during the shift. He rejected any suggestion the Union had ‘snuck in’ the clause. The Company had control of all the draft documents at all times. He added that the disputed clause was not a ‘huge selling point’ as it had already been discussed with the employees and voted upon previously.
[54] Mr Hayes claimed that the disputed clause was discussed a number of times during the negotiations. Mr Hayes said that, from his recollection, MrFrancisdid not attend the toolbox meeting on 7 January 2011, nor did he meet him later in the office. Actually, Mr Francis had phoned him.
[55] Mr Hayesrejected the suggestion that he had intentionally misled the Company. Indeed, the Company included the clause in the proposed Agreement at a time when he was not directly involved in the negotiations. Mr Hayessaid that the Union had later given the Company various options to consider. However, it had not responded.
[56] In oral evidence, Mr Hayes said that he and the employees had understood the disputed clause to provide three breaks in a 10 hour shift. When he met with Mr Francis on 8 January 2011, Mr Francis had said he would never have agreed to it, if that was how it was to apply. Mr Hayes could not recall if Mr Francis said on 27 September 2010, that he thought the third break kicked in for work in excess of 10 hours, not at 10 hours.
[57] The following three statements were tendered into evidence without requiring the deponents for cross examination.
[58] Mr Colin Stone, as a Union delegate, gave his account of the negotiations from the beginning of what had been a lengthy process. He agreed with the recollections of Mr Gauld and Mr Hayes and their responses to Mr Francis’ evidence. In particular, Mr Stone recalled a discussion in which Mr Gauld suggested the Manfield Agreement contain provisions similar to the G3 Agreement. He recalled Mr Francis saying, ‘Can you get something together and send it to me?’ Mr Stone believed that, from this conversation, Mr Francis understood the effect of the clause Mr Gauld was preparing and, while not committing to agree to it, he was prepared to look at draft wording. Mr Stone could not recall any other discussion about the disputed clause.
[59] Mr Michael Haire took over the Union Organiser’s responsibilities from October 2010. Mr Haire recalled the meeting with the Company on 15 December 2010, after the vote of employees to approve the Agreement had occurred. He said that neither party raised any concerns about clause 41.
[60] Shortly after the Agreement was lodged with FWA, Mr Haire said he had received a call from Mr Francis who said there was a ‘typo’ in clause 41 and he was seeking a correction before the Agreement was approved by FWA. He had said the problem was the clause provided either an additional break in a 10 hour shift or the Company pay an extra 20 minutes at overtime rates. He said there was no room in the budget to allow for this. As Mr Haire had not been involved in the earlier negotiations, he called Mr Hayes who had told him it was not a ‘typo’; the clause had been discussed with the Company and agreed to. Moreover, the Company had ‘borrowed’ some wording from clause 41 and put it into clause 42. He speculated that if they could not understand it, why would they use part of it in another clause?
[61] Mr Haire held an offsite meeting of members on 28 January 2011, where the matter was discussed. Mr Haire had been told that morning, during a toolbox meeting, that Mr Peter Collins, Electrical Superintendent, had accused the employees of not reading or understanding the Agreement. Mr Collins had said, ‘no one understood the agreement better than me and Kieran (Francis)’.
[62] Two other employees, Mr NormanDarcy and Mr Jim Stanley also provided statements concerning this toolbox meeting, although neither of them included Mr Francis in the conversation as Mr Haire had recalled above.
[63] Mr Francis replied to each of the Union’s witnesses’ evidence as follows: Mr Francis agreed that clause 41 was not discussed at the meeting on 15 December 2010, because at that time he was not aware of its effect. Mr Francis agreed that the Company had ‘control’ of the draft documents, but said the documents were exchanged between the parties and it did not mean the Company agreed with each clause in each draft.
[64] Mr Francis stressed that when he had raised the issue of the meals and rest break clause, it was to do with whether Mr Gauldcould prepare clearer wording. He agreed Mr Gauld hadsaid he could make it similar to the G3 Agreement. Mr Francis had no problem with Mr Gauld sending him alternative wording to make the clause clearer. However, there was no agreement, nor did Mr Francis have any impression that the Company would be looking at three breaks in a 10 hour shift or 20 minutes paid overtime after a 10 hour shift. If he had known this, he would have told Mr Gauld not to bother, as the Company would not have agreed to it. (Mr Francisobserved that he had only worked for two weeks on the G3 Expansion Project.)
[65] Mr Francis said that, even if the Union believed that the Company agreed to insert the disputed clause, it was directly inconsistent with his own state of mind. Mr Francis said that at no time in any meeting or in any ‘roll out’ session did he, or anyone else, explain that the clause meant three breaks or 20 minutes overtime. Mr Francisagreed that the Company did not raise any issues or concerns with the clause after 12 November 2009. However, this was because he was unaware of its effect at that time or subsequently. Mr Francis denied being told or explained the effect of the clause and, even if he had, he would not have agreed to it.
[66] Mr Francishad not meant to impute any wrongdoing about the clause being ‘snuck in’. He meant its effect had ‘snuck in’ without any direct or specific attention from the Company. Mr Francisdid not necessarily dispute Mr Hayes’ version of events on the day of the toolbox meeting on 7 January 2011. He said he believed he attended the meeting at the beginning and left without signing the attendance sheet. Mr Francis could not recall Mr Hayessaying the clause was standard, but he did recall that Mr Hayes had said he would need to go back to the blokes and they were not willing to agree to change it.
SUBMISSIONS
For the Company
[67] In written and oral submissions, Mr M Follett of Counsel elaborated on each of the three propositions advanced by the Company.
[68] Mr Follett submitted that under the current statutory regime (unlike its predecessor), the applicant can withdraw its application, at any time, for any reason. Mr Follett contrasted the history of the power to withdraw an application to certify a collective agreement under the Workplace Relations Act 1996 (the ‘WR Act’) in circumstances which prevented an employer from withdrawing its agreement in order to end protected industrial action: See Australian Nursing Federation v Alcheringa Hostel Incorporated (2004) 134 IR 446 (Alcheringa). Section 339 of the WR Act specifically addressed this issue and prevented an employer withdrawing from a Union collective agreement before seeking employee approval. Mr Follett said that there is no equivalent provision to s 339 of the WR Act in the present Act. Section 588 of the Act is an important and entirely new provision dealing with discontinuing applications. This provision and the Form F50 only require a person who had made the application to discontinue it in accordance with any procedural rules of FWA. As the applicant had properly done so, that is the end of the matter. Even so, he highlighted s 585 of the Act which unequivocally brings s 185 applications within its purview.
[69] Mr Follett also noted that FWA has, on many previous occasions, allowed such discontinuances under s 588 of the Act: See Re Duet 28 Pty Ltd t/as T[Life] Kalgoorlie Collective Agreement[2011] FWA 30 (6 January 2011, Cloghan C); Re St Mary’s Rugby League Club Ltd Employees Enterprise Agreement[2010] FWA 9314 at [15]-[16] (McKenna C); Re Acco Australia Pty Ltd Enterprise Agreement 2009[2010] FWA 292 (McKenna C); Re Blue Hills Village Management (Liverpool) Enterprise Agreement 2010-2013[2011] FWA 1153 (McKenna C); Re Surex Surveyors Pty Ltd Enterprise Agreement 2010[2010] FWA 3872 (Sams DP); Re PL & CP Sloan Pty Ltd T/A Bakers Delight Forster Enterprise Agreement [2010] FWA 1263 (Sams DP).
[70] Secondly, Mr Follett submitted that in the present case there had been a failure to comply with s 188 of the Act. This was because the written text of the agreement given to the employees, was not the ‘agreement’ sought to be made by the employer. Consequently, the employees did not ‘genuinely agree’ to the Agreement as required by s 188 of the Act. Mr Follett said the Agreement sought to be made is not the agreement the applicant agreed to, nor consented to, and there was no agreement properly before the employees i.e. it was not an agreement within the meaning of the legislative provisions.
[71] Mr Follett further submitted that a careful consideration of the statutory scheme begins with a proposed agreement, an agreement and finally, an approved agreement. He said the Agreement proposed to be put to the employees is, in fact, not an agreement at all; rather, it is an ‘offer’. It begins with an idea, a concept or a desired outcome: See J.J. Richards & Sons Pty Ltd & Anor v Transport Workers’ Union of Australia[2010] FWAFB 9963. It is an offer that may be accepted or rejected. The fact that the Union may have agreed to the proposed agreement is of no consequence.
[72] Mr Follett added that under the WR Act it was necessary for an agreement reached with a union to be the same agreement approved by employees and certified by the Australian Industrial Relations Commission (‘AIRC’) (s 170LJ): See National Tertiary Education Industry Union v Monash University (2004) 134 IR 284 (‘Monash’).
[73] Mr Follett outlined the evidence in this case which he claimed demonstrated the following:
• at no time did the applicant ever offer three breaks in an ordinary shift;
• such a proposal was completely inconsistent with its contractual arrangement with RTA;
• the proposal would cause significant difficulties in terms of scheduling, workflow and additional costs. It was never identified or costed;
• it makes no sense at all to provide a paid 20 minute break at the end of a shift;
• it was never discussed or explained between the parties as to its impact;
• the Union kept ‘mum’ about its true impact;
• there is not a single document exchanged between the parties which records anything at all to do with the clause; and
• the applicant intended to offer a break for overtime in excess of two hours, consistent with the mechanical operators agreement at the site.
[74] Mr Follett further argued that the Agreement which must be the focus of s 180(2) of the Act was different to the Agreement that was distributed, voted on and lodged with FWA. As such, the written text of the Agreement could never have been distributed to any employee.
[75] Thirdly, Mr Follett proposed that if the ordinary common law principles of contract were to apply in this matter, then the disputed clause was a unilateral mistake capable of rectification by the Tribunal. This was particularly so, given the Union was aware of the mistake and deliberately refrained from bringing the mistake to the Company’s attention: See National Labour & Engineering Pty Ltd v Construction, Forestry, Mining and Energy Union (2003) 122 IR 75 (‘National Labour’) and Securitas Pty Ltd and Australian Liquor Hospitality and Miscellaneous Workers Union (Security Officers [Aviation] - Tullamarine Precinct), Certified Agreement 2001 (PR909786, 28 September 2001, Lacy SDP) (‘Group 4 Securitas’).
[76] In applying the evidence to this submission, Mr Follett said it was apparent from Mr Francis’ statement, that:
• the Company was fundamentally mistaken as to the meaning and effect of the disputed clause;
• the Union was aware of the mistake at all relevant times;
• the Union either deliberately misled, or refrained from bringing the true effect of the disputed clause to the Company’s attention; and
• none of the employees were under the impression that all of a sudden the Company had agreed to three breaks during an ordinary shift.
[77] Finally, Mr Follett put that, in these circumstances, the contract could be set aside or rectified. However, the rectification would amount to a substantial amendment, meaning the Agreement could not be approved. The only other remedy is to make the Agreement voidable at the applicant’s request.
For the Union
[78] Mr M Wright of Counsel set out the history of the negotiations for the Agreement and noted that there had been a two day mediation to work through the Agreement ‘clause-by-clause’ before being ‘rolled out’ to employees. The Agreement was validly made under s 182(1) of the Act, when the employees voted to approve the Agreement and there was no defect in the approval process. Further, Mr Wright added that the terms of the Agreement met all of the statutory requirements and that, in these circumstances, FWA is required to approve the Agreement.
[79] As to the discontinuance argument, Mr Wright submitted that on the Company’s case there is a plain inconsistency in the Act; namely, s 185 of the Act obliges a bargaining representative to apply for approval of an Agreement once it is made, but the applicant is under no obligation to see it through. He put that this would frustrate the operation of s 183 of the Act. A better view of s 588 of the Act is that it no more than codifies the existing right of parties to discontinue proceedings, subject to considerations which arise under Alcheringa and Group 4 Securitas.
[80] Alternatively, Mr Wright said that as the Union had made an application for approval of the same Agreement, and subject to the time for filing the application being extended, the Company’s attempt to discontinue the application becomes irrelevant.
[81] As to the second proposition, it was put that in National Labour, a Full Bench considered an application by an employer to rescind a certified agreement on the basis that the employer had not agreed to certain terms of the Agreement. The Full Bench found that in order for an agreement not to have been validly made, there needed to be found some misconduct of a party. Additionally, there was no requirement on a Union’s part to provide an employer with an explanation of the terms of an agreement, or vice versa. It was said that the status of the Union as a bargaining representative, rather than a party, is simply not relevant. Mr Wright observed that if the Company was unaware of the nature of the disputed clause, then it was a situation of its own making.
[82] Mr Wright relied on the evidence, which he said demonstrated that:
• Mr Gauld provided the terms of the disputed clause to Mr Francis on 12 November 2009;
• Mr Francis failed to read or review the clause, rather, he sent it to the ECAQ;
• between 12 November 2009 and 27 September 2010, the applicant twice requested employees approve the Agreement containing the dispute clause;
• Mr Gauld explicitly referred to the nature and effect of the disputed clause during bargaining in November 2009;
• Mr Gauld believed Mr Francis had previously worked under similar terms;
• Mr Francis went through the Agreement ‘clause-by-clause’ numerous times; and
• an electrical superintendent said he knew the Agreement better than anyone.
[83] Mr Wright noted the substance of the Company’s argument was that, notwithstanding the express words of the proposal and after two years of extensive negotiations, somehow employees are to be aware of some unspoken intention of the employer. No such conclusion is available under contract law, equity or under Part 2-4 of the Act.
[84] In respect to the third proposition, Mr Wright submitted there is no basis to import common law principles into the approval process for enterprise agreements. He said that the Act covers the field in respect of the bargaining for, the making and the approval of enterprise agreements. Part 3-1 provides relief in respect of certain conduct, including misrepresentations.
[85] Mr Wright stressed that the Union denied any misrepresentation. For a unilateral mistake to be made out, the Company must demonstrate that the Union was aware of the mistake and took deliberate steps to ensure that the Company was not made aware of the mistake. Mr Wright referred again to the evidence of the Union at par 82 above and the Company’s own evidence. Mr Wright put that, at no time, was the Union aware of the Company’s misapprehension, let alone did it take deliberate steps to prevent the Company becoming aware of it. The Company’s submissions as to a unilateral mistake have no basis and are misconceived.
[86] Finally, Mr Wright said the Union seeks a further hearing as to costs.
In reply
[87] Mr Follett said, given its clear wording and reference to s 185 of the Act, it was not open for the Union to imply a limitation on s 588 of the Act. If the Union’s submission was right, many other decisions of FWA were wrong.
[88] As to the failure to comply with s 188(a)(i) of the Act, Mr Follett said the Union’s reliance on National Labour ignores the very different statutory context between s 170LJ of the WR Act and the current Act. Moreover, National Labour was not authority for the proposition advanced. The Full Bench merely said there was insufficient evidence to establish the employer’s representative was misled. If anything, National Labour supports the Company’s argument in that there was no evidence as to whether the ‘formed’ agreement was the same agreement submitted to employees for approval: See also Pampas Pastry v National Union of Workers and others (PR929936, 8 April 2003). In this case, the ‘formed’ agreement must be the agreement the employer desires to make. Mr Follett said it was not the Company’s case that the employees have to be aware, or unaware, of the employer’s subjective state of mind. The point is that if the two parties’ states of mind are different, there can be no agreement.
[89] Mr Follett noted that there was nothing repugnant about challenging an agreement at a later point in time where it had been made without jurisdiction: See Construction, Forestry, Mining & Energy Union v Mount Thorley Operations Pty Ltd (1997) 79 FCR 96. Mr Follett observed that if the Union was correct and an employer misplaced a decimal point in the print of an agreement distributed and voted on by employees, there was no way out. He said that such an outcome cannot be right.
[90] Mr Follett said that the Union merely asserted common law principles do not apply, without any supporting reasoning. Indeed, two Full Benches have considered similar arguments on this issue. While the Union relied on Taylor v Johnson (1983) 151 CLR 422 to restrict the applicability of a common law mistake, the Union’s submission was not a correct statement of the law.
CONSIDERATION
Withdrawal of Application / Discontinuance
[91] The Company filed a Notice of Discontinuance (Form F50) of its application on 24 February 2011, prior to the approval by FWA of the Agreement to which the application related. In my opinion, there can be no doubt that the Notice of Discontinuance was properly made under s 588 of the Act. That section is expressed as follows:
“588 Discontinuing applications
A person who has applied to FWA may discontinue the application:
(a) in accordance with the procedural rules (if any); and
(b) whether or not the matter has been settled.”
[92] Similarly, I consider that the Notice of Discontinuance was properly made on FWA’s Form F50 - a form made under Schedule 2 to the Fair Work Australia Rules 2010 (‘the Rules’) as contemplated by s 588(a) of the Act above. The form is as follows:
NOTICE OF DISCONTINUANCE
Fair Work Act 2009—s.588
The Applicant:
[ ] wholly discontinues this matter;
[ ] wholly discontinues this matter as part of a settlement agreement.
Date: |
Signature: |
Name: |
Capacity/Position: |
Service requirements
This notice must be served on the Respondent(s) as soon as practicable after it is lodged with FWA.
Note: Rules 9 and 10 deal with service.
As will be observed above, the Form F50 only requires the notice to be served on the other party. It does not require the other party/ies’ consent.
[93] I have formed the view that there is persuasive force to the Company’s argument that once an applicant to proceedings, including applications made under s 185 of the Act, files a Notice of Discontinuance under the Act, and before FWA has approved the application in proceedings convened for that purpose, such proceedings are brought to an end. Essentially, the application is withdrawn. I am fortified to this conclusion by a number of relevant matters.
[94] Firstly, an application made under s 185 of the Act must be made, and dealt with by FWA, in accordance with any procedural rules and any additional requirements relating to the application, as may from time to time, be made by FWA. So much so is evident from the all-encompassing reach of the Rules to applications made to FWA, as expressed in s 585 of the Act as follows:
“585 Applications in accordance with procedural rules
An application to FWA must be in accordance with procedural rules (in any) relating to applications of that kind.
Note 1: Certain provisions might impose additional requirements in relation to particular kinds of applications (see for example subsection 185(2)).
Note 2: FWA may, under section 587, dismiss an application that is not made in accordance with the procedural rules.”
[95] FWA’s Rules plainly relate to discontinuance of applications by the interrelationship of s 588 of the Act and Form F50 under FWA’s Rules. But, even if there was some doubt that a procedural rule of the kind of which discontinuance is an example, did not apply to applications for approval (of an enterprise agreement), it must surely be dispelled by the express reference to s 185(2) of the Act in Note 1 to s 585, which gives as an example the requirement under s 185(2) for the application to be accompanied by a signed copy of the enterprise agreement (s 185(2)(a)) and the required Form F17 - Employer’s Declaration in Support of Application for Approval of Enterprise Agreement.
[96] Secondly, while s 588 of the Act is an entirely new provision, on its face, it is a less onerous statutory basis for discontinuing applications made under the Act. It can be obviously distinguished from corresponding provisions in other jurisdictions and under different statutory regimes which may require the consent of all parties and/or the leave of the Court or Tribunal. Below, I offer a few examples to demonstrate this point. This is so because there may be costs implications for the other party/ies in the event of proceedings which are discontinued, without consent. Form 29 of the Federal Court Rules is as follows:
Form 29
IN THE FEDERAL COURT OF AUSTRALIA
(insert location of registry) REGISTRY
No. (insert file no) of (insert year)
(Insert names and descriptions of parties) |
Applicant |
Respondent |
NOTICE OF DISCONTINUANCE
(Order 22 rule 2)
The applicant *discontinues the proceeding/*discontinues the proceeding in respect of claim numbers [numbers] of the application.
(Complete if consent has been obtained)
*The discontinuance is by consent.
(Note: The following details bounded by two horizontal lines must appear at the foot of the first page of the document. After completion of the document, please cut and paste the details as required so that they are correctly located.)
Filed by the Applicant | |
D.X: | |
Name: | Telephone: |
Address for Service: | Fax: |
(Complete if consent on terms has been obtained)
*The discontinuance is by consent on the following terms [specify in numbered paragraphs the terms of the consent].
(Complete if leave of the Court has been obtained)
*The discontinuance is in accordance with the leave of the Court granted on [date].
Notes in relation to costs
Note 1 Under subrule 3 (1) of Order 22, a party who discontinues a proceeding, or a part of a proceeding, without the leave of the Court and without the consent of the other party or parties, is liable to pay the costs of the other party, or parties, occasioned by the proceeding or the part of the proceeding that is discontinued.
Note 2 Under subrule 3 (1) of Order 22, a party who discontinues a proceeding, or a part of a proceeding, without the leave of the Court but with the consent of the other party or parties, is, unless the terms of the consent otherwise provide, liable to pay the costs of the other party, or parties, occasioned by the proceeding or the part of the proceeding that is discontinued.
Date:
[Signed, applicant or his solicitor]
*Date:
*[Signature of consenting respondent or respondent’s solicitor]
(If the discontinuance is by consent, each party, or the party’s solicitor, must sign the notice of discontinuance.)
*Omit if not applicable
Version 2
[97] Form 33 of the Uniform Civil Procedure Rules issued by the Supreme Court of New South Wales, are as follows:
Form 33 (version 1)
UCPR 12.1
NOTICE OF DISCONTINUANCE
COURT DETAILS | |
Court | |
#Division | |
#List | |
Registry | |
Case number | |
TITLE OF PROCEEDINGS | |
[First] plaintiff | [name] |
#Second plaintiff #Number of plaintiffs (if more than two) | |
[First] defendant | [name] |
#Second defendant #Number of defendants (if more than two) | |
FILING DETAILS | |
Filed for | [name] [role of party eg plaintiff] |
#Filed in relation to | [eg plaintiff's claim, (number) cross-claim] [include only if form to be eFiled] |
#Legal representative | [solicitor on record] [firm] |
#Legal representative reference | [reference number] |
Contact name and telephone | [name] [telephone] |
NOTICE DETAILS | |
1 #The [role of party] discontinues the whole of these proceedings.
#The [role of party] discontinues these proceedings so far as they concern [role of party or parties being discontinued against].
2 The [role of party] does not represent any other person.
3 #Each active party consents to the discontinuance.
#This notice of discontinuance has been filed with the leave of the court granted on [date].
SIGNATURE | |
#Signature of legal representative | |
#Signature of or on behalf of party if not legally represented | |
Capacity | [eg solicitor, authorised officer, role of party] |
Date of signature | |
#TERMS OF DISCONTINUANCE | |
#Consent to the proceedings being discontinued is given on the following terms:
1 [ ]
2 [ ]
#NOTICE OF CONSENT |
[Role of other party]
#Signature of legal representative | |
#Signature of or on behalf of party if not legally represented | |
Capacity | [eg solicitor, authorised officer, role of party] |
Date of signature |
[repeat as required for each additional party]
[98] The former Rules of the Industrial Relations Commission of New South Wales (now repealed) provided as follows:
“138 Discontinuance
(1) A party may, before the beginning of the hearing of any proceedings, discontinue the proceedings so far as concerns the whole or any part of any application made by that party:
(a) where the party or the party’s solicitor certifies that the party does not represent any other person and all other parties having an address for service in the proceedings consent, or
(b) with the leave of the tribunal.
(2) Leave of the tribunal may be given in Chambers without the appearance of any person.
...
139 Withdrawal of process in the nature of defence, reply etc
(1) A party raising any matter in process by way of a defence or reply or in a subsequent process may withdraw that matter at any time.
(2) Subrule (1) does not enable a party to withdraw, without the consent of another party or the leave of the tribunal, an admission or any other matter operating for the benefit of that other party.
...
140 Terms of leave
A tribunal may give leave under Rule 138 or Rule 139 on terms.
...
141 Mode of discontinuance or withdrawal
(1) Except with leave of the tribunal, a discontinuance or withdrawal under Rule 138 or Rule 139 must be made by filing a notice stating the extent of the discontinuance or withdrawal.
(2) Where the discontinuance or withdrawal is by consent, the notice under subrule (1) must bear the consent of each consenting party.”
[99] Finally, s 339 of the WR Act is an entirely different provision and was obviously designed to ensure that an employer could not unilaterally withdraw from a Union collective agreement:
“Prohibition on withdrawal from union collective agreement
(1) An employer that has made a union collective agreement must take reasonable steps to seek approval for the agreement under section 340, within a reasonable period after the agreement was made.
(2) Subsection (1) is a civil remedy provision.”
[100] It will be abundantly clear that the above examples of requirements as to consent and leave of the Tribunal are not evident under s 588 of the Act or in Form F50 of FWA’s Rules. To my mind, this is a significantly less obligatory provision for discontinuing applications than previously existed.
[101] Thirdly, I note that there have been numerous examples, including before me, of s 185 applications being discontinued, either by way of correspondence filed with FWA, or the filing of the Form F50 - Notice of Discontinuance. Presumably, these matters were all discontinued by consent, although it is not apparent from all of the decisions of FWA recording the outcome that consent was obtained by the other parties. Of itself, this may not be determinative of the present matter. However, the point is that the procedural basis for discontinuing other s 185 applications has not been dependent on either gaining the consent of the other parties or the leave of the Tribunal.
[102] For these reasons, I am satisfied that the application has been properly discontinued and the proceedings have been brought to an end. Consequently, the application for approval of the Agreement has been withdrawn. Axiomatically, there can be no Agreement for FWA to approve.
The effect of the Union’s alternative application
[103] The Tribunal also has before it an identical Agreement as that lodged in matter AG2010/24340. It is accompanied by the original Form F17 lodged by the Company. There are three differences in the documentation filed by the Union. These are:
- the Union is the applicant;
- the date of the application, 7 March 2011 is some three months after the Agreement was made; and
- the Company’s representative has not signed the Agreement.
[104] To accept the Union’s application would require an exercise of discretion by FWA to extend the time for filing the application well beyond the 14 day time period specified by s 185(3)(b) of the Act if the Tribunal considers it fair to do so.
[105] Of course, there is no statutory impediment to a Union lodging a s 185 application. However, while I understand the tactical reason as to why the Union filed its own identical application to the one sought to be discontinued, I do not believe that the dispute between the parties can be cured or resolved by accepting a de facto application of this kind. In addition, there is a further technical difficulty with the Union’s application in that the Agreement annexed thereto is not signed by the Company’s authorised representative, or at all. This is a mandatory requirement of Reg 2.06A(2) which requires a signed copy of the Agreement (s 185(2)(a) of the Act) to be signed by the employer covered by the Agreement.
[106] For the reasons I have expressed, I would decline to exercise my discretion to extend the time for filing of the application. It would not be fair to do so, given the extraordinary circumstances surrounding the substance of the issues in dispute between the parties.
Propositions 2 and 3
[107] Notwithstanding that I would conclude these substantive proceedings on the basis that they have been properly discontinued under the Rules of FWA, I intend to make some further observations and findings in respect of the arguments put by the Company regarding Propositions 2 and 3.
[108] Before doing so, let me say this. In my assessment, there was an unfortunate confluence of circumstances which satisfies me that Mr Francis had:
• never intended to agree to the intent of the disputed clause;
• never would have agreed to a provision of this kind;
• merely asked Mr Gauld to provide draft wording to make the clause clearer; and
• made a genuine mistake.
[109] In observing Mr Francis in the witness box, I found him to be a thoughtful, helpful and cooperative witness. I have little reason to doubt the genuineness of his evidence as to his lack of understanding of what the disputed clause stood for. In some respects, Mr Francis has been placed in an invidious and very embarrassing position when the fruits of many months of negotiations ended up in the situation now faced by the parties. Notwithstanding that Mr Francis had some suspicions as to what the Union knew about the disputed clause, he did not sheet all the blame on the Union and its officials. During his evidence, he made open and forthright admissions. I believe him to be a witness of credit. In making this finding, I do not wish to imply that Mr Francis’ evidence should be preferred over the Union’s version of events. This is so because I consider that much of the conflicting evidence can be attributed to misunderstandings between the persons involved, rather than a real disagreement as to what was said or not said.
[110] I mentioned earlier a confluence of unfortunate circumstances. For me, these circumstances inform and explain the background to the present problem. They include, inter alia:
• Mr Francis’ admitted inexperience in industrial relations matters;
• the suspension of negotiations for over four months while contractual negotiations with RTA were being undertaken;
• an obvious concentration of the Company representatives on these contract negotiations;
• Mr Francis’ referral of the drafting to the ECAQ;
• the failure of the ECAQ to properly advise the Company of the intent of the disputed clause; and
• the four previous unsuccessful attempts at securing employee approval of the Agreement.
[111] In addition, two other matters are apposite to this background. Firstly, I do not accept the submission that the Union had explained to Mr Francis the true intent and effect of the disputed clause. On one view, it was not obliged to do so, and I completely understand that submission. However, at best, the evidence would suggest that Mr Francis misunderstood what Mr Gauld had said about the drafting coming from the G3 Agreement and that the Union misunderstood what Mr Francis might have known and understood about that Agreement’s terms. I accept Mr Francis’ evidence that he had asked Mr Gauld for draft wording to make the provision clearer to understand; not to turn the clause into something completely different. In any event, while the Agreement may have been reviewed ‘clause-by-clause’ it does not necessarily follow that each of the clauses were closely and carefully examined as to their effect and implications. Secondly, Mr Francis’ evidence is supported by the fact that, prior to the vote of employees, there is not a single note, email, meeting minutes or any documented communication from, or by anyone directly involved, as to the specifics of the disputed clause. Turning then to Propositions 2 and 3.
Was the proposed Agreement ‘genuinely agreed’?
[112] Section 188 of the Act provides that FWA must be satisfied that the Agreement was ‘genuinely agreed’ to by the employees to be covered by it. Section 188 states as follows:
“188 When employees have genuinely agreed to an enterprise agreement
An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if FWA 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.”
[113] As will be evident, s 180(2) of the Act is to be read in conjunction with s 188. Section 180 is expressed as follows:
“180 Employees must be given a copy of a proposed enterprise agreement etc.
[...]
Employees must be given copy of the agreement etc.
(2) The employer must take all reasonable steps to ensure that:
(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:
(i) the written text of the agreement;
(ii) any other material incorporated by reference in the agreement; or
(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.”
[114] Section 182 of the Act is also a relevant consideration in this case. That section is expressed as follows:
“182 When an enterprise agreement is made
Single-enterprise agreement that is not a greenfields agreement
(1) If the employees of the employer, or each employer, that will be covered by a proposed single-enterprise agreement that is not a greenfields agreement have been asked to approve the agreement under subsection 181(1), the agreement is made when a majority of those employees who cast a valid vote approve the agreement.
Multi-enterprise agreement that is not a greenfields agreement
(2) If:
(a) a proposed enterprise agreement is a multi-enterprise agreement; and
(b) the employees of each of the employers that will be covered by the agreement have been asked to approve the agreement under subsection 181(1); and
(c) those employees have voted on whether or not to approve the agreement; and
(d) a majority of the employees of at least one of those employers who cast a valid vote have approved the agreement;
the agreement is made immediately after the end of the voting process referred to in subsection 181(1).
Greenfields agreement
(3) A greenfields agreement is made when it has been signed by each employer and each relevant employee organisation that the agreement is expressed to cover (which need not be all of the relevant employee organisations for the agreement).”
[115] The Union’s principal argument is that an Agreement is made when the employees vote by majority to approve it. On a plain reading of s 182 of the Act, this submission is undoubtedly correct. However, in my judgement, that cannot be the end of the matter. In my view, s 182 must be read in conjunction with the pre-approval steps set out in the preceding sections 173 to 181 and having regard to the overall statutory context and purpose of Part 2-4 of the Act: See Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355.
[116] There can be no doubt that, statutorily and conceptually, an agreement which is put to employees for a vote of approval is a ‘proposed’ agreement. So much so is evident from the heading to s 180 of the Act, ‘Employees must be given a copy of a proposed enterprise agreement etc.’ Moreover, the words ‘proposed agreement’ also appear in ss 180(4), 181(1), 182(1) and (2) and elsewhere.
[117] When viewed in this way, it seems only logical that if the ‘proposed’ agreement is one that is ‘prepared’ by the employer, then it must be a proposal which the employer truly intends to offer its employees. If it were otherwise, it would amount to misleading conduct by the employer. In other words, it is an offer which the employer is prepared to make in good faith and, knowing what it is, it proposes to offer the employees. Put another way, the written text of the agreement offered to employees must be in accord with the employer’s intended offer. On the evidence in this case, this was plainly not the position. Thus, I find myself in accord with Mr Follett’s second proposition that the proposed Agreement fell foul of s 180(2) of the Act. Consequently, the Agreement is not able to be approved, due to a failure to comply with the pre-approval processes required by the Act.
[118] In developing the argument a little further, given the ordinary, usual and industrial meaning of the term ‘agreement’ and having regard to its context and purpose under the Act: See CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, I cannot accept that there had been an ‘agreement’ between the Company and its employees.
[119] ‘Agreement’ is defined in the Macquarie Concise Dictionary, Fifth Edition as:
“1. the act of coming to a mutual arrangement. 2. the arrangement itself. 3. unanimity of opinion; harmony in feeling [...]. 4. the state of being in accord; concord; harmony; conformity [...] 6. in agreement, united in a point of view.”
[120] It follows that an ‘agreement’ could not have been put to employees for a vote of approval from 5 to 7 December 2009. Notwithstanding that the employees voted for the proposed Agreement, it was a vote which, in my view, had no validity. Moreover, I apprehend that the Agreement could not have been ‘genuinely agreed’ as required by s 188 of the Act, if the employees had a view of one of its essential terms and the Company had an entirely opposite view. I ask, rhetorically, how could this possibly be a proposed agreement, let alone a concluded agreement?
[121] In Monash, a Full Bench of the AIRC determined as follows:
“[43] In this case, an agreement was made between Monash and the two unions, the CFMEU and the CEPU. It was an agreement made in accordance with the requirements of s.170LJ(1). The agreement so made was, therefore, "the agreement" for the purposes of s.170LJ(2) and s.170LJ(3). The agreement so made was "the agreement" for which an application for certification was made. What the employees had to approve under s.170LJ(2) was that agreement, i.e. the agreement that was made under s.170LJ(1). What, under s.170LJ(3), the employer had to take reasonable steps to ensure that the employees were given access to was that agreement, i.e. the agreement that was made under s.170LJ(1).
[44] In his first decision, the Deputy President made a finding that "the Agreement as voted on by the employees, was that which did not contain a reference to the NTEU, albeit that the written document provided to the employees erroneously included such a reference".40 It was a finding that was based upon the facts before him. Those facts included the acceptance by the NTEU that the employees who voted were aware and had been told that the NTEU was not a party to it. We can find no reason to disagree with such a finding.
[45] It follows that the agreement that was approved by the relevant employees was a different agreement to that which was made under s.170LJ(1). It was not in the same terms as that which was the subject of the application. It was not in the same terms as the agreement certified by the Deputy President. The agreement that was the subject of the application and the agreement that was subsequently certified both contained specific provisions which named the NTEU as a party. This was "the agreement" which, for there to be a valid application for its certification, had to have been approved in accordance with the requirements of s.170LJ(2). According to the Deputy President's findings, however, it was not the agreement that was approved by the relevant employees. It cannot, therefore, be said that "the agreement" which was the subject of the application was "approved by a valid majority" of the relevant employees. The agreement which was the subject of the application for certification was not approved at all by those employees.
[46] It follows that there has not been satisfaction of the requirements of s.170LJ(2) and that there was, therefore, no valid application before the Commission.
[47] For present purposes, we are prepared to accept that, under s.111 of the Act, an application for certification may be allowed to be amended. However, in our view, in this case, allowing such an amendment would have been of no assistance. Even if the application were allowed to be amended so that the agreement for which certification was sought was the agreement as approved by the employees, the requirements of s.170LJ(2) would still not have been satisfied. Section 170LJ(2) required approval of "the agreement", i.e. the agreement made in accordance with s.170LJ(1). The agreement approved by the employees was not "the agreement" so made. Further, whilst we can accept, for the purpose of s.170LJ(3), that Monash took reasonable steps to ensure that, at least 14 days before approval was given, the employees had access in writing to "the agreement", i.e. the agreement made in accordance with s.170LJ(1), that agreement was not the agreement approved by the employees. It cannot, in our view, be said that reasonable steps were taken to ensure that the agreement approved by the employees was one to which they had been given access in writing 14 days before the approval was given by them. There would, in our view, have been no basis for exercising any discretion under s.111 to allow an amendment to the application.
[48] Section 170LV is also of no assistance. That section is not available unless there is a valid application for certification before the Commission. In any event, we do not consider that the terms of the undertaking remedy the vice in the agreement lodged for certification and certified by the Deputy President. Paragraph (a) does no more than reflect what was said to have happened at the voting stage. It is only evidence as to the knowledge and/or belief of the employees at the time they were casting a vote. Paragraph (b) was not adopted by the CFMEU and/or the CEPU. Paragraph (c) is meaningless. There is no ambiguity or uncertainty caused by the reference to the NTEU in the agreement. It plainly states that the NTEU is bound by it.
[49] The error in this case was one of jurisdiction. Either the Commission had jurisdiction to hear and determine the application for certification or it did not. It is generally considered that leave to appeal should be granted in cases which raise a question as to the Commission's jurisdiction. That, however, is not an immutable rule. In this case, however, we do not consider that it would be in the public interest that the error be allowed to stand. In the circumstances, we grant leave to appeal, uphold the appeal and quash the Deputy President's decision to certify the Agreement.”
[122] While Monash was decided under a different statutory regime, it seems to me that the decision stands for the logical and sound proposition that an enterprise agreement voted upon by employees must be the same agreement the parties understood they had agreed upon. Based on the evidence in the present case, that is manifestly not the position. When viewed in this way, the agreement voted on by the employees was not an agreement at all. Logically, the employees could not have ‘genuinely agreed’ to the Agreement - a statutory prerequisite to the Agreement being approved by FWA.
[123] Notwithstanding the submissions of the Union as to the binding effect of s 188 of the Act, once the employees had voted for the Agreement’s approval, there is still a third process of approval by FWA before the Agreement is legally in effect and enforceable. I would wish to add that, given there was no evidence of any claim by the Union or the employees for a third break during a 10 hour shift, it seems a very strange, if not perverse result of the negotiations, that that is what ultimately occurred. It is difficult to see, in these circumstances, how such an Agreement could possibly have been ‘genuinely agreed’ by the employees.
Is this a case involving a unilateral mistake?
[124] The principles of unilateral mistake were helpfully summarised in Freight & Logistic Services Pty Ltd v Pogroske [2007] VSC 392. At page 7 Kaye J of the Supreme Court of Victoria said:
“20 The second submission on behalf of the defendants is based on the doctrine of unilateral mistake. Essentially it was submitted that, if the letter of 27 September constituted a binding agreement between the parties, the defendants would be entitled, in equity, to have the agreement set aside on the basis of unilateral mistake. The circumstances in which an agreement may, in equity, be set aside on the basis of a mistake made by one of the parties to the agreement, has been the subject of a number of authorities to which I was referred in the course of submissions, including the decision of the High Court in Taylor & Ors v Johnson.[6] See also Deputy Commissioner of Taxation (NSW) v Chamberlain;[7] Tlais v Tlais.[8] For the purposes of this application, the parties accepted as applicable the following statement of principle by Kenny JA in Leibler & Ors v Air New Zealand Limited & Anor (Nos 2):[9]
“The principles which govern an application for rectification of a contract on the ground of unilateral mistake can be briefly stated. If (1) one party, A, makes an agreement under a misapprehension that the agreement contains a particular provision which the agreement does not in fact contain; and (2) the other party, B, knows of the omission and that it is due to a mistake on A’s part; and (3) lets A remain under the misapprehension and concludes the agreement on the mistaken basis in circumstances where equity would require B to take some step or steps, depending on those circumstances, to bring the mistake to A’s attention; then (4) B will be precluded from relying on A’s execution of the agreement to resist A’s claim for rectification to give effect to A’s intention ... .” ”
[125] For the reasons I will shortly state, I think this is the least persuasive of the Company’s arguments. There are two steps of investigation involved in establishing the principle of unilateral mistake:
• The knowledge of one party of the mistake; and
• A failure on the part of that party to take steps to bring the mistake to the mistaken party’s attention.
[126] The evidence of the Union witnesses was that they had, at all material times, been aware of the effect of the disputed clause. If the Union’s evidence is accepted, the first step of the principle of unilateral mistake is obviously established. As to the second step, the Union says it did not fail to take steps to bring the matter to the Company’s attention because it was not obliged to and, in any event, the Company must have, or should have, known what the effect of the disputed clause was. In addition, the Union vigorously denied any wrongdoing or deliberate act of falsely misrepresenting the true effect of the clause.
[127] On one view, the Union’s submissions may well be a ‘double-edged sword’. It begs the questions why the Company was never served with a claim of three breaks in a 10 hour shift, and secondly, why there is not a single recorded reference of the matter ever being discussed internally within the Union or with the Company? That said, while there may have been a fleeting conversation about the clause itself (on 12 November 2009), I am not satisfied that its true effect had ever been discussed; let alone made apparent.
[128] However, on the state of the evidence, I do not think I can safely find that the Union deliberately set out to avoid informing the Company of the true effect of the clause. Its officials and delegates may themselves not have fully comprehended the impact of the words used. There was no evidence as to whether the Union had told its members that the final vote for the Agreement was based on the unexpected windfall. It does, however, seem circumstantially curious that after three earlier unsuccessful votes (5-6 May 2010, 22 June - 1 July 2010 and 29 October - 4 November 2010) with the identical disputed clause in the Agreement and with little else being different, that the vote of employees was overwhelmingly in favour of approving the Agreement. Perhaps it merely reflected ‘negotiation fatigue’. In any event, a smile on Mr Hayes’ face and his later query of ‘when do we start the three breaks’ or the hearsay evidence of what was said at the farewell party on 7 January 2011, in my view, is insufficient to sustain a conclusion that the Union had deliberately set out to trick or mislead the Company.
[129] Nevertheless, I do not see how the Union’s case is assisted by the conversations between Mr Francis and Mr Gauld in relation to the mechanical operators’ agreement. The corresponding clause in their Agreement is markedly different to the disputed clause (see evidence of Mr Francis). In any event, it was referred to as an alternative starting point in order that a clearer understanding of what was intended might be achieved by redrafting the clause. Moreover, I do not understand the mechanical operators to enjoy a paid 20 minute period at the end of each shift. If this be so, then it is contrary to the Union’s proposition that the disputed clause merely brought the electrical employees into line with their mechanical counterparts.
[130] In conclusion, I consider that the statutory instruction in s 577 of the Act for FWA to:
“[...] perform its functions and exercise its powers in a manner that:
a) is fair and just; and [...]
d) promotes harmonious and cooperative workplace relations”
requires me to find that it would not be fair and just, nor would it be in the interests of promoting co-operative workplace relations, to resolve the present impasse between the parties in the manner pressed upon me by the Union. That said, I would strongly encourage the parties to recommit to a new process of reaching an agreement which may subsequently be put to employees and approved by FWA, having regard for all the statutory requirements under the Act.
[131] For all the foregoing reasons, these proceedings are concluded. Application AG2010/24340 is discontinued, or otherwise dismissed. Application AG2011/406 is dismissed. Orders reflecting these findings will be issued contemporaneously with this decision.
DEPUTY PRESIDENT
Appearances:
Mr M Follett of Counsel for the applicant
Mr M Wright of Counsel for the respondent
Hearing details:
SYDNEY
2011
19 April
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