Construction, Forestry, Maritime, Mining and Energy Union

[2019] FWCA 4809

[2019] FWCA 4809

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Construction, Forestry, Maritime, Mining and Energy Union
(AG2019/2027)

G JAMES GLASS & ALUMINIUM PTY LTD AND CFMEU UNION COLLECTIVE AGREEMENT 2018-2019

Building, metal and civil construction industries
COMMISSIONER HUNT	BRISBANE, 29 AUGUST 2019

Application for approval of the G James Glass & Aluminium Pty Ltd and CFMEU Union Collective Agreement 2018-2019

[1] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) has applied for approval of an enterprise agreement known as the G James Glass & Aluminium Pty Ltd and CFMEU Union Collective Agreement 2018-2019 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single-enterprise agreement. Within this decision, “Employer” refers to G James Glass & Aluminium Pty Ltd.

[2] In conjunction with the application in this matter, the CFMMEU made a separate application for the termination of the G James Glass and CFMEU Union Collective Agreement 2013 – 2016 (the 2013 Agreement), which nominally expired on 30 June 2016. The application was made pursuant to s.225 of the Act. The CFMMEU’s application for the termination of the 2013 Agreement was assigned Commission matter AG2019/2026. Both this matter and AG2019/2026 were allocated to me.

[3] Upon allocation to me, I noted to the parties that in addition to the CFMMEU, the 2013 Agreement covered the Australian Workers’ Union (AWU) and the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU). A copy of the material lodged in respect of AG2019/2026 was provided to the AWU and AMWU.

Concerns relevant to whether employees covered by the Agreement were fairly chosen

[4] I noted to all parties, including the AWU and AMWU, that the scope of the new Agreement did not include employees of the Employer working at two of the Employer’s worksites; one in Gympie, QLD and the other in Darwin, NT. Employees at those sites are covered by the 2013 Agreement.

[5] I noted that the CFMMEU had stated in the material filed in respect of matter AG2019/2026, “For those employees whose employment is not covered by the replacement agreement will have the protections of the relevant modern award.” I asked whether the Employer’s intention was that the terms and conditions of employment for the employees at the Gympie and Darwin sites would be fixed by the relevant modern award, or alternatively, had those relevant employees been advised that their existing employment conditions would be maintained?

[6] The CFMMEU responded to my chambers, stating that the Employer’s intention was that the 2013 Agreement “and other above-agreement arrangements that have been implemented since the expiry of the agreement” would continue to be applied to the employees at the Gympie and Darwin sites despite the application to terminate the 2013 Agreement. The CFMMEU confirmed that despite there being no requirement under the Act to conduct a vote of employees regarding the proposed termination of the 2013 Agreement, a vote of employees of all employees covered by the 2013 Agreement had been conducted with a view to giving relevant employees an opportunity to consider the proposed termination of the 2013 Agreement and in support of the matters that must be considered pursuant to s.226(b) of the Act.

[7] Both the AWU and AMWU wrote to my chambers and confirmed that they had members covered by the 2013 Agreement. Both the AMWU and AMWU did not oppose the termination of the 2013 Agreement. Both the AWU and AMWU also filed Form F18 statutory declarations seeking to be covered by the Agreement.

[8] After receiving the further material set out above I wrote to the parties and indicated that I remained concerned about what terms and conditions of employment would be applied to the employees at the Gympie and Darwin sites following the termination of the 2013 Agreement. I noted that the Form F24C statutory declaration of Mr Lewis Saragossi, CEO of the Employer stated that employees at the Gympie and Darwin sites, “…will have the protections of the relevant Modern Award.” Further, I was concerned about how the group of employees to be covered by the Agreement was ‘fairly chosen’ in accordance with s.186(3), (3A) of the Act. I indicated to the parties that this matter would be listed for conference before me to discuss both the termination of the 2013 Agreement and the approval of the Agreement.

Conference

[9] A conference was convened before me in Brisbane on 29 July 2019. Mr Ashley Borg, Senior Industrial Officer appeared for the CFMMEU. Mr Aaron Santelises, Industrial Advocate appeared for AWU. Mr Joshua Blundell-Thornton, Bargaining Industrial Officer appeared for the AMWU. Mr Stephen Keune, Company Secretary of the Employer appeared for the Employer.

[10] During the conference, the CFMMEU agreed that it would consider whether the application to terminate the 2013 Agreement was necessary or whether that application could be withdrawn. I directed the CFMMEU to provide further information about how the group of employees to be covered by the Agreement was ‘fairly chosen’.

[11] The CFMMEU filed an amended Form F17 statutory declaration of Mr Saragossi with respect to the approval of the Agreement. Mr Saragossi confirmed that the Agreement would not cover employees at the Gympie and Darwin sites or ‘administrative staff’ and stated in part:

“The employees at these sites are geographically and operationally distinct to the rest of the workforce that is covered by agreement, and manufacture lower-priced products for the cottage sector in or around those geographical areas.”

Withdrawal of termination application

[12] On 9 August 2019 the CFMMEU withdrew its application to terminate the 2013 Agreement in matter AG2019/2026. The effect of the withdrawal of the application is that the Employer’s relevant employees in Gympie and Darwin remain covered by the 2013 Agreement.

Opportunity for employees excluded from Agreement to provide views on ‘fairly chosen’

[13] On 16 August 2019 I wrote to the parties through my chambers and indicated that despite Mr Saragossi’s amended statutory declaration, I held the view that employees of the Gympie and Darwin sites should be given an opportunity to provide their views on the approval of the Agreement and the proposed continued application of the 2013 Agreement to the employees of the Gympie and Darwin sites. I did so because of the obligation required in s.186(3) that the Commission “must be satisfied that the group of employees covered by the agreement was fairly chosen.”

[14] I directed that copies of the following email be provided to all employees at the Gympie and Darwin sites covered by the 2013 Agreement along with copies of the application in this matter and Mr Saragossi’s amended statutory declaration:

"An application has been made by the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) for the Fair Work Commission to approve the G James Glass & Aluminium Pty Ltd and CFMEU Union Collective Agreement 2018-2019.

A copy of the application is attached, together with the employer’s amended statutory declaration, and the Agreement.

The matter has been allocated to Commissioner Hunt.  The Commissioner notes that the Agreement is to cover all employees of various entities of G James in the Northern Territory and Queensland, except for locations in Gympie and Darwin.

If the Agreement is approved, employees in Gympie and Darwin will remain covered by the G James Glass and CFMEU Union Collective Agreement 2013 – 2016.

The Commissioner is required, pursuant to s.186(3A) of the Fair Work Act 2009 to be satisfied that if the Agreement does not cover all of the employees of the employer, the group of employees covered was fairly chosen.  The Commission must consider whether the group of employees chosen is geographically, operationally or organisationally distinct.

Mr Lewis Saragossi of G James Glass has sworn a statutory declaration to the effect that employees at the Gympie and Darwin locations are geographically and operationally distinct to the rest of the workforce that is covered by the Agreement, and manufacture lower-priced products for the cottage sector in or around those geographical areas. 

The Commissioner is interested of the views of employees in the Gympie and Darwin locations, and whether such employees agree that the location(s) are geographically or operationally distinct, or have opposing views.  Submissions are welcome and employees may provide their views to Commissioner Hunt’s chambers by no later than 4:00pm, Wednesday, 28 August 2019.    The Fair Work Commission publishes a benchbook on enterprise agreements, and the relevant consideration may be found here:     

[hyperlink]

The Commissioner notes that the CFMMEU, the AMWU and the AWU all support the approval of the Agreement.  Any views submitted by employees will be forwarded by Chambers to the three unions and to G James Glass for their consideration, and potentially further submission to the Commission in consideration of approval of the Agreement.”

[15] On 21 August 2019 the Employer submitted to my chambers a statutory declaration of Mr Stephen Keune, Company Secretary of the Employer, identifying 15 employees at the Gympie and Darwin sites covered by the 2013 Agreement that had been provided with a copy of the above email, the application in this matter and Mr Saragossi’s amended statutory declaration.

[16] I did not receive any correspondence from any of the employees at the Gympie and Darwin sites covered by the 2013 Agreement regarding this matter within the timeframe provided for their views to be submitted to chambers.

Fairly chosen

[17] The requirement that the group of employees covered by the Agreement must be fairly chosen is set out in ss.186(3) and 186(3A) of the Act, which provide as follows:

“186 When the FWC must approve an enterprise agreement—general requirements

…

Requirement that the group of employees covered by the agreement is fairly chosen

(3) The FWC must be satisfied that the group of employees covered by the agreement was fairly chosen.

(3A) If the agreement does not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.”

[18] Mr Saragossi has provided to the Commission an unchallenged statutory declaration to the effect that the relevant employees in Gympie and Darwin are geographically distinct, and they assist to manufacture lower-priced products for the cottage sector in and around Gympie and Darwin, as opposed to the employees to be covered by the Agreement.

[19] In light of the employees in Gympie and Darwin having a direct opportunity to communicate to my chambers any concerns that they too should be covered by the Agreement, and receiving no response, I accept Mr Saragossi’s uncontested statement.

[20] On the information before the Commission, I am satisfied that the employees covered by the Agreement was fairly chosen as I accept that in comparison to other employees of the Employer, the employees covered by the Agreement are geographically and operationally distinct.

Unions to be covered by the Agreement

[21] The CFMMEU, AWU and AMWU, being bargaining representatives for the Agreement, have given notice under s.183 of the Act that each of the CFMMEU, AWU and AMWU want the Agreement to cover each of them. In accordance with s.201(2) and based on the statutory declarations provided by the organisations, I note that the Agreement covers the CFMMEU, AWU and AMWU.

[22] Clause 2.1 of the Agreement states, “This Agreement remains in force until 2^nd July 2019. The Agreement will continue to apply beyond its expiration date until it is replaced by another agreement.” Consequently, an issue arises that if I approve the Agreement, then the Agreement will have already passed its nominal expiry date at the time that the Agreement comes into operation.

[23] Section 186 of the Act sets out matters that, if met, require that the Fair Work Commission (the Commission) must approve an agreement. Section 186(5) of the Act states:

“Requirement for a nominal expiry date etc.

(5)  The FWC must be satisfied that:

(a)  the agreement specifies a date as its nominal expiry date; and

(b)  the date will not be more than 4 years after the day on which the FWC approves the agreement.”

[24] The same issue was considered by Deputy President Gostencnik in Veolia Environmental Services (Australia) Pty Ltd. 1 In that matter, an agreement had been made on 8 April 2015, with a nominal expiry date of 23 May 2015. Due to an application to vary a predecessor agreement that was brought and then discontinued, the application to approve the agreement could not be considered until after the nominal expiry date had already passed. It was determined on 9 July 2015, with the Deputy President identifying that there could be two constructions of s.186(5)(b) of the Act.

[25] The Deputy President said the following about s.186(5)(b) of the Act: 2

“[12] It seems to me there are two possible constructions of this provision. The first is that an agreement must have a date as its nominal expiry date, being any date, provided that date is no more than four years after the day on which the Commission approves the agreement. This will allow a nominal expiry date to be a date before the Commission approves the agreement or before the agreement commences to operate.

[13] The second construction is that there are two elements to the nominal expiry date requirement. First, the date must be after the date on which the Commission approves the agreement. Secondly, that date cannot be more than four years after the date of approval. On this construction an agreement may have a nominal expiry date that is before the date on which the agreement commences to operate so long as it is after the agreement is approved. This is because an agreement does not commence to operate any earlier than 7 days after it is approved.

[14] The first construction appears to be consistent with ordinary grammatical meaning of the language in section 186 (5) of the Act, although it is odd that it would be permissible for an agreement to nominally expire, in effect, before the Commission has approved it and before it has commenced to operate. The second construction requires reading the word “after” in paragraph 186 (5)(b) as affecting both the outer limit of the nominal expiry date and the period within which that date may be set, namely between the date of approval and four years later. Moreover, the second construction raises the prospect that where parties agree that an agreement will have a short nominal life (as is the case here) that a delay in approval will result in that date having passed before approval is given.

[15] Ultimately, I have concluded that it is appropriate to apply the ordinary grammatical meaning with the result that the Agreement may specify a nominal expiry date, which is a date before the Agreement is approved and before it commences to operate. There does not seem to be anything in the provisions of Part 2-4 of the Act, in the objects of that Part or in the object of the Act, which would suggest a departure from the ordinary grammatical meaning. The Agreement once approved will continue to operate until it is replaced by another agreement or terminated in accordance with the provisions of Part 2-4.”

[26] I concur with the Deputy President’s above reasoning, allowing an agreement to be approved, even if the nominal expiry date of the agreement pre-dates the date of the approval. In my view, so long as the nominal expiry date is a date later than the day the agreement is made between an employer and employees, it matters not if the Commission approves an agreement on a date later than the nominal expiry date.

[27] Quite simply, the nominal expiry date of the Agreement the subject of this application, that being 2 July 2019, is not more than 4 years after the day the Commission approves the Agreement, that being 29 August 2019. It is a very odd scenario that the Agreement will operate, but will never have been an in-term agreement, and will only ever operate as a nominally expired agreement. I am satisfied, however, that s.186(5)(b) of the Act has been met.

[28] In light of the above and taking into consideration the material filed in the Commission, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.

[29] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 5 September 2019. The nominal expiry date of the Agreement is 2 July 2019.

COMMISSIONER

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 1   [2015] FWCA 4606.

 2 Ibid. [12] – [15].