Construction, Forestry, Mining and Energy Union v Sparta Mining Services Pty Ltd (No 2)
[2017] FWCFB 781
•14 FEBRUARY 2017
| [2017] FWCFB 781 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
v
Sparta Mining Services Pty Ltd
(No 2)
(C2016/1740)
VICE PRESIDENT HATCHER |
|
Appeal against decisions [2016] FWC 3100 dated 5 July 2016 and [2016] FWCA 4528 dated 6 July 2016 of Commissioner Spencer at Brisbane in matter number AG2016/2507.
[1] On 10 October 2016, we issued an earlier decision in this matter (Construction, Forestry, Mining and Energy Union v Sparta Mining Services Pty Ltd 1) (First Appeal Decision). The First Appeal Decision arose from an appeal by the Construction, Forestry, Mining and Energy Union (CFMEU) against two decisions2 of Commissioner Spencer concerning an application made pursuant to s.185 of the Fair Work Act 2009 (FW Act) by Sparta Mining Services Pty Ltd (Sparta). In that application, Sparta sought approval of the Sparta Mining Services Pty Ltd Enterprise Agreement 2016 (Agreement). Over various objections raised by the CFMEU, the Commissioner approved the Agreement with certain undertakings. The appeal was advanced on grounds pertaining to the approval requirement in s.186(2)(a) of the FW Act, as explicated in s.188.
[2] In the First Appeal Decision, we concluded, among other matters, as follows (footnote omitted):
“[15]We consider that the Commissioner erred in her consideration as to whether s.180(2) had been complied with for three reasons:
(1) The First Decision did not deal at all with the question of whether Sparta had complied with s.180(2) in relation to the industry codes of practice referred to in cl.6.1.
(2) The Commissioner treated the fact that Sparta had not yet developed any policies which it could give or provide access to for the purpose of s.180(2) as determinative with respect to cll.6.2 and 14.4.2. However the policies of relevance to the obligations under these provisions were primarily those of the operators of coal mines to which Sparta provided labour, as Mr Jansen accepted in his evidence. The question of whether s.180(2) was complied with in relation to these policies was likewise not dealt with in the First Decision.
(3) The Commissioner erred by relying on paragraph 5 of the undertakings with respect to the issue of compliance with s.180(2). Because the Commissioner never identified any concern that this element of the “genuinely agreed” requirement in s.186(2)(a) had not been satisfied, the jurisdictional prerequisite in s.190(1)(b) for the application of s.190 to this issue was not fulfilled. Further and in any event, paragraph 5 of the undertakings was incapable of addressing any concern that may have existed about compliance with s.180(2). The statutory purpose of s.180(2) is clear: where a proposed enterprise agreement contains, as material incorporated by reference in the agreement, entitlements or obligations derived from an external document, that document is to be provided to employees to be covered by the agreement before they vote upon it so that they know what the content of those entitlements or obligations are when they consider whether to approve the agreement. That is why compliance with s.180(2) is an element of the requirement for an enterprise agreement to have been “genuinely agreed” by the employees who voted upon it. A failure to provide any such external documents is not answered or addressed by providing employees with the documents after they have voted and after the agreement has already taken effect.”
[3] In addition, the First Appeal Decision noted the following matters (footnote omitted):
“[29]Two additional factual matters emerged during the hearing of the appeal, largely in response to inquiries from the bench. The first was that the three employees who voted upon the Agreement were no longer employed by Sparta, but were now employed by another labour hire company at the same coal mine sites. Whether this other labour hire company was of a Lacedaemonian character was not disclosed. Second, Sparta now employs approximately 40 employees.
[30] Those facts (which were not disputed by Sparta) give rise, we consider, to arguable grounds for concluding that the Agreement was not genuinely agreed to by the employees. They are capable of giving rise to the inference that the vote in favour of the Agreement by the three employees was not authentic because the employees were selected to be employed by Sparta purely for the purpose of making the Agreement, the provisions of the Agreement were not intended to apply to the three employees, and the employees were not to continue to be employed by Sparta after the Agreement was approved.
[31] In light of those facts, we consider that it would be in the public interest and would enhance confidence in the agreement approval process for the rehearing to involve a reconsideration of the requirements of s.186(2)(a) and s.188(c). In order that this issue be re-determined appropriately, we consider that it will be necessary to allow Sparta and the CFMEU to adduce further evidence if they wish to do so.”
[4] Relevantly, the outcome of appeal was that permission for the CFMEU to appeal was granted, and the matter was referred to the Commissioner for the purpose of re-determining whether the approval requirement in s.186(2)(a) of the FW Act was satisfied having regard to: (1) the requirement in s.188(a)(i) for compliance with s.180(2); and (2) the requirement in s.188(c) for the Commission to be satisfied that there are no reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees. We ordered that for the purpose of the re-determination process, Sparta and the CFMEU were permitted to adduce further evidence. Our orders also provided that the matter was to be returned to this Full Bench for the making of any further orders as may be necessary after the Commissioner had made findings.
[5] On 15 December 2016, the Commissioner issued a decision 3 pursuant to the referral by the Full Bench. That decision records that additional evidence was adduced by Sparta and the CFMEU in proceedings before the Commissioner following our referral after the First Appeal Decision. Further, there was consideration in the Commissioner’s decision of authorities which post-dated the Commissioner’s original approval of the Agreement, including KCL Industries Pty Ltd4, and a Federal Court Full Court decision which post-dated the First Appeal Decision, namely, Shop, Distributive & Allied Employees Association v ALDI Foods Pty Ltd.5
[6] The conclusion of the Commissioner’s detailed consideration of the matters remitted to her included the following:
“[124]…Similar to the circumstances in KCL, the employees who voted on the Agreement were paid at a rate and had terms and conditions above those actually contained in the Agreement, which would not apply to new starters, and further, the 3 employees who voted on the Agreement only filled 2 of the 5 classifications under the Agreement. In the circumstances of this matter, it is not considered that the employees had a genuine stake in the Agreement. The comments in the ALDI Decision regarding agreements made in relation to existing enterprises and with existing employees working in them, coupled with Mr Jansen’s evidence that the employees were selected from Spartan for the purpose of making an enterprise agreement, also go to the genuineness of the agreement by the employees.
[125] For the reasons as stated above it is determined that the Commission cannot be satisfied that the Agreement has been genuinely agreed to by the employees, and therefore the requirement under s.188(c) is not met.
[126] Given the finding on s.188(c), a mandatory requirement for the approval of the Agreement has not been met; the Agreement was incapable of approval and therefore, given this, it is proposed that an Order for the revocation of the approval Decision should issue (to be affirmed by the Full Bench). The findings on s.180(2) are simply provided to discharge all matters. Given the evidence that is now currently before the Commission, it is determined that the Applicant has not taken reasonable steps to give a copy of, or ensure access to the documents incorporated by clauses 6.1, 6.2 or 14.4.2, and therefore the requirement in s.188(a)(i) for compliance with s.180(2) has not been met. The approval requirement in s.186(2)(a) of the Act has not been satisfied.
[127]The matter is referred to the Full Bench.”
[7] Consequent upon the Commissioner’s decision, correspondence was forwarded to Sparta and the CFMEU, which read, in part:
“On 15 December 2016 Commissioner Spencer issued her decision ([2016] FWC 8520) pursuant to the Full Bench’s reference in its decision of 10 October 2016 ([2016] FWCFB 7057 at [38]). In the Commissioner’s decision, it was found that in respect of the Sparta Mining Services Pty Ltd Enterprise Agreement 2016 (Agreement), the approval requirement in s.186(2)(a) was not satisfied.
In light of the Commissioner’s decision, the Full Bench now invites the parties to provide written submissions within 21 days addressing the question of whether the Full Bench should act on the findings of the Commissioner by:
(1) quashing the Commissioner’s earlier decisions of 5 July 2016 ([2016] FWC 3100) and 6 July 2016 ([2016] FWCA 4528); and
(2) dismissing the application for approval of the Agreement (AG2016/2507).
If either party wishes to have the opportunity to put further oral submissions to the Full Bench, it may request this in writing, and the request will be considered by the Full Bench.”
[8] By letter dated 2 February 2017, Sparta advised through its solicitors that it did not propose to lodge any written submissions and did not wish to have the opportunity to make further oral submissions.
[9] In its written submissions of 3 February 2017, the CFMEU said:
“8. An enterprise agreement can only be approved if the requirements set out in the FW Act are satisfied. Section 186(2)(a) is one such requirement.
9. On rehearing the matter, the Commissioner found that the requirement of s.186(2)(a) had not been satisfied. That finding is fatal to the Agreement. That finding renders the Agreement incapable of approval.”
[10] The CFMEU further submitted that the appropriate course is for the Full Bench to quash the initial decisions concerning the approval of the Agreement, and dismiss the application for approval of the Agreement.
[11] We agree with and adopt the findings made by the Commissioner on the referral and, on that basis, we accept the CFMEU’s submission as to the appropriate disposition of the appeal.
Orders
[12] We order as follows:
(1) The CFMEU’s appeal is upheld.
(2) The Commissioner’s decisions of 5 July 2016 ([2016] FWC 3100) and 6 July 2016 ([2016] FWCA 4528) are quashed.
(3) The application for approval of the Sparta Mining Services Pty Ltd Enterprise Agreement 2016 (AG2016/2507) is dismissed.
VICE PRESIDENT
Final written submissions:
2 February 2017 - Sparta Mining Services Pty Ltd.
3 February 2017 - Construction, Forestry, Mining and Energy Union.
1 [2016] FWCFB 7057
2 [2016] FWC 3100 and [2016] FWCA 4528
3 [2016] FWC 8520
4 [2016] FWCFB 3048, (2016) 257 IR 266
5 [2016] FCAFC 161
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