Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Monadelphous Engineering Associates Pty Ltd

[2018] FWC 3081

[2018] FWC 3081

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.236—Majority support determination

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Monadelphous Engineering Associates Pty Ltd
(B2018/259)

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union
v
Monadelphous Engineering Associates Pty Ltd
(B2018/282)

COMMISSIONER SIMPSON BRISBANE, 5 JUNE 2018

Applications for Majority Support Determination – Making determination not reasonable in all of the circumstances – Applications dismissed

[1] This decision relates to applications made by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) under Section 236 of the Fair Work Act 2009 (the Act) for a majority support determination to undertake bargaining for an agreement to cover employees of Monadelphous Engineering Associates Pty Ltd (Monadelphous).

[2] The CEPU filed its application on 11 April 2018 (B2018/259) which was amended on 17 April 2018. The AMWU subsequently filed its application on 19 April 2018 (B2018/282) requesting it be heard at the same time as B2018/259 as both applications dealt with the same material issues. The matters were listed for directions on 20 April 2018. Directions were issued and the matters were listed for Hearing for Wednesday 30 May 2018 in Brisbane.

[3] The directions required the CEPU and the AMWU (the Applicants) to file an original unredacted version of the document entitled “Majority Support Petition” by 5pm Thursday 26 April 2018, and that Monadelphous produce to the Fair Work Commission (the Commission) an extract from its payroll records that identified each of the employees within its employment who fall within the functional categories specified in the application as at 19 April 2018, by 5pm Monday 30 April 2018.

[4] These directions were complied with by the parties except to the extent that the unredacted version of the “Majority Support Petition” was provided to the Commission by the CEPU on 4 May 2018. The parties filed witness statements and submissions in accordance with the directions.

[5] At the Directions Hearing Norton Rose Fulbright notified the Commission it intended to seek leave under s.596 to act on behalf of Monadelphous in both matters. The Applicant’s foreshadowed they would be objecting to Monadelphous being represented by a lawyer. I requested the parties provide submissions on this issue. I ultimately granted permission at the commencement of the hearing with reasons given in transcript.

[6] The Applicants relied on a witness statement of Mr David Hayes, 1 an Organiser of the CEPU. Monadelphous relied on one witness statement of Mr Stephen Rooke,2 the ER/IR Manager of Monadelphous who was not required by either Union for cross examination.

[7] The CEPU was represented by Ms K Inglis an Industrial Officer, and the AMWU was represented Mr J Blundell-Thornton, an Industrial Officer. Monadelphous was represented by Mr M Osborne of Norton Rose Fulbright Australia.

[8] The day before the hearing a request was made for Mr Hayes to provide additional oral evidence in response to the evidence of Mr Rooke. Mr Osborne objected to further evidence in chief from Mr Hayes as his opportunity to do so had passed, Mr Hayes’ evidence was by phone, and the element of surprise would be unfair. Mr Osborne did not object to reply evidence in response to Mr Rooke’s evidence. He submitted he should be entitled to recall Mr Rooke if necessary.

[9] Ms Inglis requested the Commission allow further evidence from Mr Hayes to be able to expand on the matter of how the petition was collated. Despite the objection I granted permission for Mr Hayes to provide further evidence on the matter as I concluded it was preferable to either proceeding without the evidence, or further delay in dealing with the matter.

[10] The petition provided by the Applicants included the following description of the group to be covered;

“…The proposed enterprise agreement would cover Employees covered by the Monadelphous Engineering Associates Pty Ltd Ichthys Onshore Construction Greenfields Agreement and who work at the employer’s operations at Ichthys Onshore LNG Facilities Project Bladin Point Darwin, NT.”

[11] Both the initial CEPU application and the amended CEPU application were internally inconsistent. The answer to question 1.2.2 in both applications described the employees to be covered as being;

“Employees who will be covered by the proposed agreement are those employees who are members, or who are eligible to be members of the CEPU, and who are employed by Monadelphous Engineering Services Pty Ltd, pursuant to the Monadelphous Engineering Pty Ltd Ichthys Onshore Construction Greenfields Agreement (“the Agreement”) at Bladin Point Darwin.”

[12] The amendment to the CEPU application amended the answer to question 2.2. Question 2.2 posed the question “How can the Commission be satisfied that the group of employees to be covered by the proposed agreement have been fairly chosen?” The initial CEPU application answered as follows:

“The group of employees to be covered by the proposed Agreement are the employees who are employed on the Project. The petition was circulated over a period of 2 weeks to ensure that all employees possible had an opportunity to sign or not, taking into account their roster cycle.”

[13] The amended CEPU application answered question 2.2 as follows;

“The group of employees to be covered by the proposed Agreement are the employees who will perform:

● On-site construction work;
● On site commissioning work
● Onshore marine construction work and construction related activities at the marine offloading facility at Blaydin (sic) Point

Within the Employer’s scope of work on the Project who work in any of the work classifications identified in clause 12 of the Agreement.”

[14] The amendment to question 2.2 on the CEPU amended application made it essentially consistent with the responses to Questions 1.2.2 and 2.2 in the AMWU application.

[15] At the commencement of the hearing I raised the inconsistency between what the CEPU application said, and what the petitions signed by employees said regarding the matter of who will be covered by the proposed agreement. The language in the CEPU application form appeared to be written as if the application were for a Protected Action Ballot Order. Ms Inglis explained this was an error and submitted that from all of the rest of the material the intention is clear.

[16] Ms Inglis proposed a further amendment to the amended application as follows:

“The employees to be covered are those covered by the expired agreement which is the Monadelphous Engineering Associates Pty Ltd Ichthys Onshore Construction Agreement.”

[17] I invited Mr Osborne to respond to the application and he did not oppose it. I exercised power under s.586 of the Fair Work Act 2009 to grant the application to further amend the application.

[18] I then invited the parties to provide the Commission with any further up to date information regarding the current make-up of the workforce and the parties advised they did not have any further information other than what had been filed.

Relevant Legislation

[19] The relevant statutory provisions under which the application is made and is to be determined are set out below:

“236 Majority support determinations

(1) A bargaining representative of an employee who will be covered by a proposed single enterprise agreement may apply to the FWC for a determination (a majority support determination) that a majority of the employees who will be covered by the agreement want to bargain with the employer, or employers, that will be covered by the agreement.

(2) The application must specify:

(a) the employer, or employers, that will be covered by the agreement; and

(b) the employees who will be covered by the agreement.”

“237 When the FWC must make a majority support determination

Majority support determination

(1) The FWC must make a majority support determination in relation to a proposed single enterprise agreement if:

(a) an application for the determination has been made; and

(b) the FWC is satisfied of the matters set out in subsection (2) in relation to the agreement.

Matters of which the FWC must be satisfied before making a majority support determination

(2) The FWC must be satisfied that:

(a) a majority of the employees:

(i) who are employed by the employer or employers at a time determined by the FWC; and

(ii) who will be covered by the agreement;

want to bargain; and

(b) the employer, or employers, that will be covered by the agreement have not yet agreed to bargain, or initiated bargaining, for the agreement; and

(c) that the group of employees who will be covered by the agreement was fairly chosen; and

(d) it is reasonable in all the circumstances to make the determination.

(3) For the purposes of paragraph (2)(a), the FWC may work out whether a majority of employees want to bargain using any method the FWC considers appropriate.

(3A) If the agreement will not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding for the purposes of paragraph (2)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

Operation of determination

(4) The determination comes into operation on the day on which it is made.”

[20] The list of employees supplied by Monadelphous as required by my directions included 632 names. I indicated to the parties at the hearing that I counted 435 names on the unredacted copy of the petition, which is consistent with the number referred to in the AMWU submission. Mr Hayes said in his statement that 408 employees signed the petition. He clarified in oral evidence that the number was tallied by the industrial officers and appears to be an error.

[21] I also advised the parties during the hearing that I found a few examples of employees appearing to have signed the petition more than once, and those persons should only be counted once. A further five employees only entered their first name on the petition. I have excluded those. I also advised the parties that approximately 60 names (61 precisely) appeared on the petition but did not appear on the Monadelphous list of employees. Taking those things into account at the time of the hearing the material filed showed that 366 names appeared on both the petition and the employee list, which represents approximately 58% of employees.

[22] I put the question to the CEPU and AMWU as to whether they were seeking one majority support petition sought by two bargaining representatives, or two separate majority support determinations. Both Unions submitted that the Commission should issue one majority support determination.

Applicants’ Evidence and Submissions

[23] In relation to the provisions of s.236 (1), the Applicants submitted they are employee bargaining representatives and therefore entitled to make this application. In relation to the provisions of s.236 (2), the Applicants submitted the F30 filed by the CEPU on 11 April 2018 as amended on 17 April 2018 (and further amended at the hearing), and the F30 filed by the AMWU on 19 April 2018 identifies the employer to be covered by the agreement and the employees to be covered by the agreement.

[24] Mr Hayes statement was admitted into evidence. 3 It included that in January members started to ask if a new agreement would be negotiated, and that the current Agreement expired on 4 February 2018.4 He said an EBA Committee was formed and a log of claims developed and was submitted to Monadelphous on 10 February 2018. He referred to a number of separate occasions involving correspondence exchanged with Monadelphous regarding bargaining, and that on 13 March 2018 Mr Rooke sent correspondence on behalf of Monadelphous advising it preferred for the current Agreement to remain in operation for the remainder of the Ichthys Onshore LNG Facilities Project Bladin Point Darwin, NT (the Project).5 The correspondence included the following:

“..In discussions with our clients, it has been confirmed that for most of the Monadelphous’ employees there is only a short amount of time remaining on the Ichthys Project.

Our preference is to allow the 2014 Agreement to continue in operation for our remaining time here. That will provide certainty for employees as to their remuneration and conditions and will guarantee a further wage increase for those few employees still here after 1 May 2018…”

[25] Mr Hayes further oral evidence was to the effect that given the make-up of the workforce the only way to capture the views of the workforce was on the worksite itself, and that a shift change was occurring within the period of days that the petition was collected and this gave the opportunity for all employees to be included. He said the meal breaks were taken within the CCP area.

[26] Mr Hayes conceded he was not on the Project during the days the petition was collected however didn’t feel that he needed to be given Union delegates were on the site. He said he instructed the delegates how to collect the petition, but did not personally witness the petition being signed by anyone, or what employees were told about the petition, or whether they were signed sitting in groups or individually. He said the petitions included dates that people signed the petition and the petition was collected on the days that correspond with the dates appearing next to the signatures on the petition.

[27] Mr Hayes accepted that he did not observe the distribution and collection of the petitions during meal breaks. Mr Hayes said he recalled receiving a letter from Mr Rooke dated 13 March 2018 and that this letter was the first official notification that Monadelphous preferred to continue under the existing agreement for their remaining time on the Project.

[28] The Applicants relied on Australian Manufacturing Workers’ Union (AMWU) v Veolia Water Operations Pty Ltd[2015] FWC 2561 (Veolia) where Commissioner Booth stated:

“There is significant case authority that a petition may be an appropriate way to work out whether a majority of employees want to bargain.” 6

[29] The AMWU provided a seven page written submission and said it relied on the evidence of Mr Hayes. The submission included that the AMWU wrote to Monadelphous on 15 January 2018 seeking to commence bargaining and on 16 February 2018 AMWU Organiser Mr Lloyd Pumpa sent a log of claims to Monadelphous and the AMWU received a response that Monadelphous were considering the claims. The response said Monadelphous would respond after internal discussions. Further correspondence was exchanged on 20 February and the AMWU subsequently received the 13 March 2018 correspondence from Monadelphous set out above.

[30] Both the CEPU and AMWU made very brief closing submissions referring to the material filed and briefly summarising their respective cases. Mr Blundell-Thornton submitted in relation to the custody of the petition the reality of the circumstances were it was practical for the delegates to distribute the petition, and it is unnecessary to observe employees signing the petition as this practice of itself could potentially give rise to separate issues relating to coercion. The AMWU submitted it was reasonable in all of the circumstances to grant the application as there was still work to be performed; however it was unclear how much.

Monadelphous Evidence and Submissions

[31] Mr Rooke’s statement was admitted into evidence uncontested. His evidence included the following;

“17. Monadelphous’ work is nearing completion, in that nearly all of the construction work required to be completed by Monadelphous, on the MEC2 Package and the CCP3 Package has been completed.

18. Monadelphous engages employees who specialise in planning and forecasting likely timeframes for completion of work (Planners). They do this in conjunction with Monadelphous Project Managers.

19. Based on the information currently available to me from Monadelphous’ Planners, Monadelphous anticipates that its employee numbers on the Ichthys Project will start to decline from 24 May 2018 and Monadelphous will have no more employees remaining on the Ichthys Project by 16 August 2018.” 7

[32] Mr Rooke’s evidence also included that the current 2014 Agreement anticipated ongoing operation beyond the nominal expiry date and provides for increases in rates and allowances throughout the life of the Agreement at six monthly intervals. He said the most recent increase was on 1 May 2018, 8 and in his view a bargaining process would likely require the commitment of Monadelphous’ time and resources on a futile activity, given the work on the Project will come to an end likely before any new agreement could be approved by the Commission.9

[33] Monadelphous’ written submission confirmed the applications were opposed, that the onus was on the Applicants to satisfy the Commission that a majority support determination should be made and the applicants have not satisfied the requisite level of satisfaction required. The written submission traversed previous decisions of the Commission in Media, Entertainment and Arts Alliance 10, National Union of Workers v Cotton On Group Services Pty Ltd11and Australian Manufacturing Workers Union v Veolia Water Operations Pty Ltd12concerning the requirement for positive evidence in relation to administration, information provided, the basis on which signatures were obtained, free will, witnessing and custody. It was put by Monadelphous that the evidence of Mr Hayes was inadequate to meet the Applicants evidentiary burden that a majority of employees want to bargain.

[34] Monadelphous also made submissions setting out legal authority on the matter of whether the group was fairly chosen, however the further amendment to the CEPU’s application addressed in part issues in regard to this matter. The Applicants were criticised for not leading evidence on the issue.

[35] Monadelphous’ written submissions emphasised that the Applicants had led no evidence on whether it was reasonable in all of the circumstances to make the determination. It pointed to its evidence that Monadelphous would have no employees on the Project by 16 August 2018, and the current expired agreement had just provided a further six monthly increase to wages and allowances.

[36] In closing oral submissions Mr Osborne submitted Mr Hayes’ evidence was hearsay and should be ignored, and he did not have any direct knowledge about the custody of the petition, and further that both Applicants had it within their power to call direct evidence on the custody of the petition but did not do so.

[37] Mr Osborne also submitted that Mr Hayes’ evidence was that when Monadelphous communicated its position on 13 March 2018 he met with his members on 28 March 2018 where he attended site and relayed the message to a meeting and members made it clear they still wished to bargain. He said that is inconsistent with the evidence about when the petition was circulated.

[38] Mr Osborne submitted that the Applicants bear the onus of positively satisfying the Commission that the requirements of s.236 and s.237 are met. It was submitted firstly regarding s.236 that there is no evidence that either Applicant is a bargaining representative.

[39] It was submitted in closing that there was insufficient evidence regarding the custody of the petition. Mr Osborne referred to the decision in Veolia, and particularly paragraphs 38 and 41 of the decision in the context of custody and control given Mr Hayes concession that when the petition was circulated during lunch break and smoko the petition was therefore not in the custody and control of the delegates, and Mr Hayes did not know who had control of it. Paragraph 44 of the decision was also referred to concerning the Commission reaching the requisite level of satisfaction.

[40] It was also submitted there is no evidence as to what employees signing the petition were told. It was submitted that the second sentence on the petition was also inaccurate as Monadelphous had not refused to bargain, it merely expressed a preference to continue with the current agreement.

[41] It was submitted for Monadelphous that the Applicants have not submitted any evidence on whether the group is fairly chosen, and rely merely on what another Commission member decided when the 2014 Agreement was approved.

[42] It was repeated that the Applicants bear the onus and have not led any evidence on the matter of the reasonableness of making the determination in all of the circumstances, and have chosen not to contest the evidence of Mr Rooke. Mr Rooke’s evidence was to the effect that Monadelphous work on the Project was almost done, had started to demobilise and will have no employees on the Project by 16 August 2018.

[43] It was submitted the two logs of claims indicate a desire to pursue a whole range of issues and that will take several months. Further, given it is a brownfields agreement, there will need to be a process for a ballot and then filing with the Commission approval process and the cumulative process will take several months and outlast the employment of any employee on the Project. It was put that the existing expired Agreement contemplated a further wage increase after it expiry for these circumstances.

[44] Pay rates and allowances are provided for in clause 13, and clause 16 provides for escalation and directs to appendix 3 rates and allowances. All rates and allowances other than daily travel provide for a further increase from 1 May 2018.

[45] It was put that being required to bargain was an exercise in futility, in pursing negotiations for an agreement that is never going to apply to an employee, and will be a complete waste of time. Further when the Agreement was made it was agreed with the Unions on the basis that it included a pay rise after the nominal expiry date.

[46] It was put that the demobilisation is on foot and creates a dynamic where the group of employees is ever decreasing and it is not reasonable to make the determination where the makeup of the workforce is changing.

Consideration

Section 236

[47] Monadelphous criticised the Unions’ failure to call evidence of their standing as bargaining representatives. Section 176(1)(a) of the Act provides that an employee organisation is a bargaining representative of an employee who will be covered by an agreement where the employee is a member of the organisation. Mr Hayes’ evidence was replete with references to members. Whilst it is true the AMWU did not call witness evidence in support of its having membership, from my own knowledge and familiarity with the Project I am aware that is heavily unionised. The likelihood that the AMWU does not have a member amongst the hundreds of signatures on the petition is so improbable, that I am not prepared to accept the notion as a realistic possibility. On that basis I am satisfied both Unions are bargaining representatives.

[48] I am also satisfied the applications specify the employer and employees who will be covered and on that basis s.236 is satisfied.

Section 237(2)(a) - Majority of employees want to bargain

[49] The Applicants have argued in regard to section 237(2)(a) they relied on the redacted copy of the petition provided to the Commission on 26 April 2018 and the original copy provided on 4 May 2018.

[50] I have considered the respective arguments concerning the custody and control of the petition and I am satisfied on the basis of the petition that a majority of employees who are currently employed by the employer and who will be covered by the agreement want to bargain. Petitions are commonly accepted by the Commission, and the language in the petition made explicit what employees were being asked to sign.

[51] Unlike the circumstances in Veolia the Commission has been provided the original petition as signed. I am satisfied on balance the signatures were collected over the three days and on the dates appearing next to the signatures on the petition, and this would have been overseen by the Union delegates at smoko and lunch breaks as Mr Hayes understood was the case.

[52] There is simply no evidence before the Commission of anything untoward in the manner in which the signatures were collected and on that basis any suggestion otherwise is merely speculation.

Section 237(2)(b)- Employer not yet agreed to bargain

[53] The Applicants submitted that section 237(2)(b) is also satisfied as it is evident from correspondence from Monadelphous on 13 March 2018 that the employer has not yet agreed to bargain for an enterprise agreement.

[54] Monadelphous submitted the proper characterisation of its position was not that it refused to bargain but instead that its preference was to continue to operate for the remainder of the Project under the existing Agreement. For the purposes of s.237(2)(b) that is a distinction without a difference and on the facts s.237(2)(b) is satisfied.

Section 237(2)(c)- Fairly Chosen

[55] The Applicants submitted that section 237(2)(c) has been complied with as the group of employees sort to be covered by the agreement are fairly chosen.

[56] This was based on the fact that the group of employees chosen for the proposed agreement is exactly the same as those employees identified in the coverage of the 2014 Agreement. The Applicants referred to the approval of the existing 2014 Agreement by the Commission on 28 January 2014 where in the decision Commissioner Steel stated;

“I am satisfied that each of the requirements of ss. 186, 187, 188 and 193(3) of the Act as are relevant to the application have been met. (emphasis added)”

[57] The Applicants submitted that this previous decision by Commissioner Steel demonstrates that the group of employees covered by this majority support determination application was fairly chosen as it replicates the group of employees previously determined as fairly chosen by the Commission.

[58] Monadelphous submitted that it would not be appropriate for the Commission to simply adopt the decision of another member of the Commission in a separate application. I have had regard to the proposed group proposed to be covered in both applications taking into account the considerations in s.237(3A). I am satisfied taking those matters into account that the group is fairly chosen.

Whether reasonable in all of the circumstances to make the determination

[59] The Applicants submitted that given both unions and employees have satisfied all the prior requirements, it is submitted that it would be reasonable in all circumstances to make the determination, in compliance with section 237(2)(d).

[60] Neither the CEPU or AMWU made initial submissions specifically addressing in any detail the question of whether their respective applications satisfied s.237(2)(d). Nor did the witness statement of Mr Hayes which was the only evidence in the Applicants’ respective cases. The written submissions of Monadelphous included submissions on why it would be unreasonable in all of the circumstances, and the evidence of Mr Rooke included the uncontested evidence that the workforce numbers would start to decline from 24 May 2018 and Monadelphous will have no more employees remaining on the Project by 16 August 2018. His evidence also addressed the fact of the workforce recently receiving a further six monthly increase to wages and allowances in accordance with the schedules to the 2014 Agreement.

[61] I will not repeat the other evidence and submissions in closing summarised above concerning the reasonableness issue, suffice to say Monadelphous put a compelling case as to why it would be unreasonable in all of the circumstances for it to be required to commence bargaining so close to the conclusion of its contracted work on the Project. Following Monadelphous’ closing its oral submissions at the hearing I asked both the CEPU and AMWU whether they wished to make any submission in reply and they elected not to.

[62] In the circumstances there is nothing before me to contradict the evidence of Mr Rooke. The parties have not provided me with any authorities on where the Commission has considered s.237(2)(d) in any detail.

[63] In the ordinary course where the other elements of s.237(2) have been met, it would be expected that satisfaction of ss.237(2)(d) follows. However s.237 (2)(d) must have work to do. The circumstances on the particular facts of this case are quite unusual and the consideration under s.237 (2)(d) has become central to determining the matter.

[64] Monadelphous has presented positive evidence and substantive argument as to why it would not be reasonable in all of the circumstances to make the determination. That evidence and submissions have included the current demobilsation of its workforce, the pending conclusion of its contracted work on the Project and the time and resources that would be wasted on negotiations when it is most unlikely those negotiations will be capable of producing any outcome in the limited remaining time available.

Conclusion

[65] Monadelphous’ evidence and argument has really not been challenged in any meaningful way by the Applicants. I have been persuaded by that evidence and argument that the Applicants have not met the onus on them to satisfy the Commission that it would be reasonable in all of the circumstances to make the determination. It is for that reason that I have decided to decline the two applications. On that basis the applications are dismissed.

COMMISSIONER

Appearances:

Mr J. Blundell-Thornton appearing for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)

Ms K. Inglis appearing for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU)

Mr M. Osborne of Norton Rose Fulbright appearing for the Respondent

Hearing details:

2018,

Brisbane:

May 30

Printed by authority of the Commonwealth Government Printer

<PR607574>

 1   Exhibit 1.

 2   Exhibit 2.

 3   Exhibit 1.

 4   Exhibit 1 para 9.

 5   Exhibit 1 para 21.

 6   Automotive, Food, Metals, Engineering, Printing and kindred Industries Union, known as the Australian Manufacturing Workers’ Union (AMWU) v Veolia Water Operations Pty Ltd [2015] FWC 2561 para [31] .

 7   Exhibit 2 para 17-19.

 8   Exhibit 2 para 22

 9   Exhibit 2 para 27.

 10   [2014] FWC 8898.

 11   [2014]FWC 6601.

 12   [2015] FWC 2561.