Dongwha Australia Pty Ltd
[2019] FWCA 5994
•29 AUGUST 2019
| [2019] FWCA 5994 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Dongwha Australia Pty Ltd
(AG2019/2405)
DONGWHA AUSTRALIA ENTERPRISE AGREEMENT 2019
Timber and paper products industry
COMMISSIONER BISSETT | MELBOURNE, 29 AUGUST 2019 |
Application for approval of the Dongwha Australia Enterprise Agreement 2019 – objection by individual bargaining agent – objection dismissed - agreement approved.
[1] Donghwa Australia Pty Ltd (Donghwa) has made an application to the Fair Work Commission (Commission) pursuant to s.185 of the Fair Work Act 2009 (FW Act) for the approval of the Dongwha Australia Enterprise Agreement 2019 (Agreement). The Agreement is a single enterprise agreement. The application was made on 5 July 2019.
[2] Following the making of the application Mr John Rolph, a bargaining representative for the Agreement, indicated that he had objections to the approval of the Agreement. Following some correspondence with Mr Rolph the application for approval of the Agreement was listed for conference before me on 8 August 2019. Prior to the conference my chambers wrote to Dongwha (copied to all bargaining representatives) to advise that I had a number of queries with respect to the Agreement and application for approval of the Agreement on which I sought a response.
[3] The issues on which I raised concern went to some information missing from the Form F16 – Application for approval of an enterprise agreement (Form F16), including details of all bargaining representatives; how the Agreement had been explained to employees; the length of the access period to the Agreement; access to voting; clause 24.1.2 of the Agreement that went to deductions from wages and the definition of a “shiftworker”.
[4] These issues gave rise to an amended Form F16 and Form F17 – Employer’s statutory declaration in support of an application for approval of an enterprise agreement (Form F17) and draft undertakings being provided by Donghwa.
LEGISLATIVE REQUIREMENTS
[5] Section 186 of the FW Act provides that the Commission must approve an agreement if the requirements in s.186 and s.187 of the FW Act are met. As is directly relevant to the application before me these requirements are:
1. That the Commission is satisfied that the agreement has been genuinely agreed to by employees covered by the agreement (s.186(2)(a));
2. The agreement passes the better off overall test (s.186(2)(d));
3. That the group of employees covered by the agreement have been fairly chosen (s.186(3));
4. The agreement contains a nominal expiry date no more than 4 years after the day of approval of the agreement (s.186(5);
5. The Commission is satisfied that approving the agreement would not be inconsistent with or undermine good faith bargaining by one or more bargaining representatives for a proposed enterprise agreement, or an enterprise agreement, in relation to which a scope order is in operation (s.187(2)).
[6] The good faith bargaining requirements are set out in s.228 of the FW Act as follows:
228 Bargaining representatives must meet the good faith bargaining requirements
(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:
(a) attending, and participating in, meetings at reasonable times;
(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;
(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;
(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative's responses to those proposals;
(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;
(f) recognising and bargaining with the other bargaining representatives for the agreement.
Note: See also section 255A (limitations relating to greenfields agreements).
(2) The good faith bargaining requirements do not require:
(a) a bargaining representative to make concessions during bargaining for the agreement; or
(b) a bargaining representative to reach agreement on the terms that are to be included in the agreement.
[7] Section 188 of the FW Act establishes when employees have genuinely agreed to an agreement as required by s.186(2)(a). Section 188 of the FW Act states as follows:
188 When employees have genuinely agreed to an enterprise agreement
(1) An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.
(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and
(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.
[8] Section 180 of the FW Act sets out the requirements that must be met before employees are requested to approve an agreement by an employer. Sections 180(2), (3) and (5) of the FW Act provide as follows:
180 Employees must be given a copy of a proposed enterprise 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.
(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:
(a) the time and place at which the vote will occur;
(b) the voting method that will be used…
(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.
[9] Section 181(2) of the FW Act requires that the request to approve an agreement not be made until at least 21 days after the last notice of employee representation rights (NERR) has been issued.
[10] If an application for approval of an agreement is made and the Commission has some concerns that it does not meet the requirements of s.186 or s.187 of the FW Act the Commission may approve the agreement with undertakings (s.190(1) and (2)).
[11] Such undertakings may only be accepted if they are not likely to cause financial detriment to any employee covered by the agreement and they do not result in substantial change to the agreement (s.190(3)).
[12] I have considered all of these provisions of the FW Act in conjunction with the documents accompanying the application by Dongwha including the amended Form F17. I have also had regard to the submissions made by Mr Rolph (no other bargaining representatives having sought to be heard on the application).
[13] Mr Rolph has filed substantial material with the Commission, some of which go to specific objections to the Agreement and some which relates to the end of conciliation under s.240 of the FW Act.
[14] Following the conference before the Commission Mr Rolph was required to put his specific objections in writing. He filed these submissions on 18 August 2019. Dongwha indicated it did not seek to make any further submissions to the Commission but relied on the information filed.
ARE THE REQUIREMENTS OF SECTION 187(2) OF THE FW ACT MET?
[15] Mr Rolph objects to the approval of the Agreement on the grounds that he says Dongwha failed to bargain in good faith and that therefore the approving the Agreement would be inconsistent with or would undermine the good faith requirements of the FW Act. These appears to go to the requirements of s.187(2) of the FW Act.
[16] Mr Rolph put this on two main grounds. Firstly, Mr Rolph submits that, in the bargaining for the Agreement, Dongwha failed to give genuine consideration to claims made in relation to:
• The claimed rates of pay;
• The Agreement applying to all employees;
• The inclusion in the dispute resolution procedure of the Agreement principles relating to natural justice or timelines for completion of the procedure;
• Allowance provisions which maintained relativity with wages;
• Limitation of the use of information from surveillance cameras;
• The inclusion of provisions which preferenced Australian citizens and residents in employment;
• An allowance for general meetings of employees during the bargaining process;
• The payment of employee licensing costs;
• Additional levels for trades employees and maintenance of trades award relativities in the Agreement.
[17] Secondly, Mr Rolph says that bargaining in relation to the above matters was terminated by Dongwha on 19 June 2019 without notice and without agreement with the bargaining representatives that bargaining had ended and despite a request that a further conference in relation to an application pursuant to s.240 of the FW Act be scheduled. In unilaterally terminating the bargaining Mr Rolph says that Dongwha acted capriciously and in a manner likely to undermine the freedom of association of employees. Mr Rolph submits that Dongwha further acted capriciously and in a manner to undermine the freedom of association of employees in that Dongwha:
• Failed to provide employees and employee bargaining representatives with an opportunity to consider specific wording of the Agreement;
• Failed to invite the bargaining representatives to address meetings of employees;
• Failed to inform employees of false or misleading information;
• Failed to provide an “equitable balloting system” in that it failed to consult on the balloting process;
• Failed to provide the “prescribed minimum period between the conclusion of the Employees access period” and voting;
• Failed to provide a reasonable opportunity for casting of absentee votes.
[18] Mr Rolph also submits that Dongwha acted to stall and delay reaching a fair and equitable agreement to put financial pressure on employees to agree to its preferred terms and conditions.
[19] Section 186 and 187 of the FW Act sets out the circumstances in which the Commission must approve an Agreement. These include that the Agreement has been genuinely agreed to and that no person was coerced to agree to make the Agreement (s.186(2)(b)) and that it contain a term about settling disputes (s.186(6)). Section 187 of the FW Act requires that the Commission “must be satisfied that approving the agreement would not be inconsistent with or undermine good faith bargaining by one or more bargaining representatives for a proposed enterprise agreement...” (s.187(2)).
Consideration
[20] Much of Mr Rolph’s submissions were general in nature with little detail and no reference to the relevant provisions of the FW Act. I do take from Mr Rolph’s submissions a desire to see a much more engaged approach to bargaining where all differences are resolved and agreement reached that bargaining has concluded. His preference is to have all parts of the process agreed between the parties and the bargaining representatives involved in presentations to staff and engagement in the ballot process and vote count. This is reflected in Mr Rolph’s submissions that Dongwha did not give genuine consideration to a range of proposals put forward by himself (and other bargaining representatives) and acted capriciously in bargaining. Therefore, he submits, the requirements of s.187(2) of the FW Act have not been met and the Agreement is not capable of approval by the Commission.
Beyond claims at a general level and an obvious dissatisfaction as to the outcome of the bargaining in that not all claims made by him or other bargaining representatives were agreed to there is little evidence that Dongwha has not met the good faith bargaining requirements or, more importantly, that approval of the Agreement would undermine good faith bargaining. As is clear in s.228(2) of the FW Act good faith bargaining does not require concessions or agreement as to what should be contained in an agreement. That not all claims were settled or settled to the satisfaction of Mr Rolph is therefore not evidence of any inconsistency with or an undermining of good faith bargaining.
[21] In terms of those matters raised by Mr Rolph that go to specific wages and conditions of employment whilst I do not accept that the material before the Commission demonstrates that Dongwha did not give genuine consideration to the proposals put forward by the bargaining representatives (but rather that there was no agreement reached as to the claims made) I have also considered whether those matters affect the better off overall test (BOOT) and have concluded that they do not. Whether relativities that currently exist in and between awards or within an existing agreement are maintained in the Agreement before the Commission for approval is not, of itself, a BOOT consideration (or one relevant to good faith bargaining) and is not evidence of a failure to bargain in good faith.
[22] As to those matters where Mr Rolph says that Dongwha acted capriciously or unfairly in ways that undermine freedom of association and collective bargaining, the material before me does not support such a conclusion (although I have considered the access period issue further below). The actions of Dongwha in proceeding to ballot without the agreement of the bargaining representatives or in not inviting the bargaining representatives to address employee meetings has not been explained such that I could be convinced that I could conclude it was capricious or would undermine freedom of association.
[23] Whilst the bargaining appears to have come to an end there is nothing before me that suggests that bargaining representatives were denied the capacity to talk to the employees each represented (noting that this is all a bargaining representative does represent – they have no right or responsibility to a broader group of employees to be covered by the Agreement). Whilst there is no evidence before me that the bargaining representatives were involved in discussion as to how the ballot would occur, in circumstances where there is no claim that the ballot process (as opposed to the number of employees balloted) itself was unfair does not support a conclusion that the conduct of Dongwha was capricious or that it undermined freedom of association and collective bargaining.
Conclusion
[24] For these reasons I am satisfied that the requirements of s.187(2) of the FW Act have been met.
WAS THE AGREEMENT GENUINLEY AGREED TO BY EMPLOYEES?
[25] Section 180 of the FW Act is set out above.
Provision of information in relation to voting (s.180(3))
[26] Section 180(3) of the FW Act requires that by the start of the access period employees be notified of the time and method of voting on the Agreement. The access period is defined in s.180(4) as the 7-day period ending immediately before the start of the vote.
[27] In Construction, Forestry, Maritime, Mining and Energy Union and Ors v CBI Constructors Pty Ltd 1 (CBI Constructors) the Full Bench of the Commission considered how the 7-day period was to be counted. It found that “immediately” before the start of the voting process means the end of the calendar day which first precedes the day on which voting starts.
[28] In this case voting occurred on 28 June 2019. Based on the authority of CBI Constructors (with which I agree) the 7-day access period ended on 27 June 2019 and therefore must have commenced on 20 June 2019.
[29] In its Form F17 Dongwha indicated that that employees were advised on 20 June 2019 that the access period would commence at 9.30am on 21 June 2019 and end at 9.30am on 28 June 2019 prior to the voting process. Employees were also advised on 20 June 2019 on the place and method of voting. The advice as to the method and place of voting was therefore provided during and not by the start of the access period. This represents a breach of the provisions of s.180(3) of the FW Act which would, in the past, have rendered the Agreement incapable of approval as it could not have been considered to have been genuinely agreed to.
[30] Section 188(2) of the FW Act provides that an Agreement may be found to be genuinely agreed within the meaning of s.188(1) if the Commission is satisfied that it would have been genuinely agreed to but for minor technical errors in relation to the requirements (relevantly) of s.188(1)(a) (which requires compliance with s.180(2), (3) and (5).
[31] In Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others 2 the Full Bench of the Commission considered the scope of s.188(2) of the FW Act. The Full bench concluded, in part, that the consideration available under s.188(2) was only relevant if the Commission is not satisfied that an agreement has been genuinely agreed within the meaning for s.188(1) as a result of errors made in relation to the requirements in s.188(1)(a) or (b) as is relevant in this case).
[32] I am not satisfied that the agreement in this case has been genuinely agreed to because Dongwha has failed to meet the requirements of s.180(3) in that it has failed provide employees with details of the method and place of voting by the start of the access period. It is necessary to consider if this can be cured under s.188(2) of the FW Act.
[33] Dongwha says that it intended at all times to meet the requirements of the FW Act and considered that it gave seven clear days’ notice of the access period – it running from 9.30am on 21 June 2019 to 9.30am on 28 June 2019, prior to the vote which occurred at 10.00am on 28 June 2019.
[34] Of those employees eligible to vote 79 out of 90 (88%) did so. Of those who voted for the Agreement (79 out of 90 employees), 46 voted to approve the Agreement (58.2%). On the basis of the number of eligible employees who did vote I am satisfied that the error in the provision of the information as to the place and method of voting did not impact on the ability of people to participate in the voting.
[35] I am satisfied that the error made by Dongwha in the provision of information as to the time and method of voting was therefore a minor procedural error because it did not properly understand the definition of a “day” for the purposes of this provision of the FW Act as explained CBI Constructors.
[36] I have therefore decided that this minor procedural error is not a bar to the approval of the Agreement.
Did all employees have an opportunity to vote?
[37] Mr Rolph says that employees on leave at the time of the ballot were not given an opportunity to cast an absentee vote. Mr Rolph also suggested that the number of employees eligible to vote was not in accordance with information provided by Dongwha to the Workplace Gender Equality Agency (Agency) in the compulsory reporting by Dongwha to that Agency.
[38] Dongwha submits that, of those employees who did not vote three were on annual leave and “out of the area” (i.e. had travelled to Sydney or interstate); four were on compassionate, personal or other leave and four were off shift and did not attend to vote.
[39] Mr Rolph has not produced any evidence that employees who wished to exercise their vote were unable to do so. Whilst it would be preferable for there to be some form of absentee voting so that all employees could engage in the process if they so choose, voting is not compulsory and I can make no assumptions about how those who did not vote would have voted. I am not satisfied that the voting process meant that the Agreement was not genuinely agreed to.
[40] Further, I am satisfied, on the basis of a staff list provided by Dongwha, that only those covered by the Agreement were allowed to vote.
Explanation of the terms of the Agreement
[41] Dongwha have provided an amended Form F17 in which they have provided additional detail as to the steps taken to explain the terms of the Agreement to the affected employees.
[42] I am satisfied by this additional information that Dongwha have taken all reasonable steps to explain the effect of the Agreement to the relevant employees and that the explanation was provided in a manner appropriate to the needs of the employees. I am there satisfied that the requirements of s.180(5) of the FW Act have been met.
Timing of request for approval
[43] I am satisfied that employees were not requested to approve the Agreement until 21 days after the last notice of employee representational rights was given.
Conclusion
[44] For these reasons I am satisfied that the requirements of s.188 of the FW Act have been met.
UNDERTAKINGS
[45] In the course of considering the Agreement for approval I identified two matters of concern. The first in relation to the definition of “shiftworker” for the purposes of the NES and the second in relation to some deductions of wages.
[46] Dongwha has provided written undertakings. A copy of the undertakings is attached in Annexure A. Pursuant to s.190(3) of the FW Act I accept the undertakings and they are taken to be terms of the Agreement. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.
DOES THE AGREEMENT PASS THE BETTER OFF OVERALL TEST?
[47] I am satisfied that the Agreement, with the undertakings, does pass the better off overall test and the requirements.
CONCLUSION
[48] For the reasons given above and subject to the Undertakings, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 of the FW Act as are relevant to this application for approval have been met and I must approve the Agreement.
[49] Accordingly, the Agreement is approved and, in accordance with s.54 of the FW Act, will operate from 5 September 2019. The nominal expiry date of the Agreement is 1 March 2023.
COMMISSIONER
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ANNEXURE A
1 [2018] FWCFB 2732.
2 [2019] FWCFB 318.
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