Eptec Pty Ltd
[2018] FWC 5576
•24 AUGUST 2018
| [2018] FWC 5576 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Eptec Pty Ltd
(AG2018/2142)
| Vice President Hatcher | SYDNEY, 24 AUGUST 2018 |
Application for approval of the Eptec Pty Ltd Submarine/Surface Ships South Australia Enterprise Agreement 2018 – Pre-approval steps – Non-compliance with s 180(3) – Agreement does not pass ‘genuine agreement’ test – Application for approval of agreement
Introduction and factual background
An application has been made by Eptec Pty Ltd (Eptec) for approval of the Eptec Pty Ltd Submarine/Surface Ships South Australia Enterprise Agreement 2018 (Eptec Agreement) pursuant to s 185 of the Fair Work Act 2009 (FW Act). This decision concerns whether Eptec complied with section 180(3) of the FW Act such as to permit the Eptec Agreement to be approved.
Section 180(3) of the FW Act provides:
(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.
The “access period” referred to in the above provision is defined in s 180(4) as follows:
(4) The access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1).
The voting process referred to in s 181(1) is the process whereby an employer requests relevant employees to vote to approve a proposed enterprise agreement.
Section 180(3) is a “pre-approval step”, compliance with which is a necessary element for an enterprise agreement to have been “genuinely agreed”: s 188(a)(i). Such genuine agreement is a pre-requisite for the approval of an enterprise agreement: s 186(2)(a). Therefore an enterprise agreement cannot be approved if s 180(3) has not been complied with.
In Construction, Forestry, Maritime, Mining and Energy Union and Ors v CBI Constructors Pty Ltd[1] (CBI decision) a decision issued on 21 June 2018, the Full Bench said in relation to the determination of when, under s 180(4), the access period commences and ends:
“[42] The above considerations cause us to conclude that s 180(4) is to be construed on the basis that the access period consists of seven clear calendar days, and that by the application of s 36(1) of the AI Act[2] the access period ends at the end of the calendar day immediately preceding the day on which the voting process for a proposed agreement commences.”
This Full Bench decision confirmed the longstanding position concerning the interpretation of s 180(4) established in McKechnie Iron Foundry (2010)[3] and Hydro Electric Corporation (2014).[4] It did not represent the statement of any new legal position.
The Form F17 statutory declaration made by Lawrence Ronald Rob on 21 May 2018 that was filed together with the application for approval of the Eptec Agreement states (at [2.8]) that voting for the agreement commenced on 18 May 2018. The access period therefore consisted of the seven clear calendar days of 11 to 17 May 2018. Compliance with s 180(3) required Eptec to take all reasonable steps to inform relevant employees of the time, place and method of the vote by the start of the access period - that is, by the start of the calendar day 11 May 2018. However Mr Rob’s statutory declaration, in response to the question (at [2.5)] “When did you notify the relevant employees of the date and place at which the vote was to occur and the voting method to be used?”, states the following: “A memo explaining the voting process and contact for any questions was distributed by hand and email on 11th May 2018. This memo is attached to this application”. The “memo” referred to was not actually attached to the application for the approval of the Eptec Agreement, or the statutory declaration, but it is not in dispute that it was only distributed to employees during the course of 11 May 2018 - that is, after the start of the access period.
This apparent difficulty was identified in correspondence from the Commission to Eptec dated 19 July 2018, and Eptec was invited to consider whether it wished to proceed with its application. In its correspondence in response dated 24 July 2018 Eptec relevantly stated:
“…We reaffirm our support for the Agreement and to proceed with the application.
Accordingly we wish to provide additional information below and to seek the support of the FWC:
1. Eptec made an application to FWC for approval of the Agreement in good faith and in compliance with the FWC Regulations as well as the FWC's 'Key Date' calculator at the time of submission. A copy of the FWA calculator has been submitted and is again attached which demonstrates compliance at that time.
2. The Agreement was executed in full consultation with our employees a month prior to the date of 'The CBI Decision' and it is very unfair on our employees to seek to retrospectively apply the new interpretation and ongoing wages impost.
3. We provide the following further clarification to assist the FWC to register this agreement in the form of actual timelines of events. These timelines demonstrate that the employees formally accepted the Agreement by voting in favour of the agreement on 18th May 2018, this was reaffirmed in writing by each individual employee signing the document 3 days after the collective vote was held. Eptec have submitted to FWC both the original collective vote outcome as well as the Agreement signed by all employees:
a. Distributed revised EA to employees, 11th May 2018
b. Voting by all employees (as one collective group), 18th May 2018
c. EA signed by employee representatives, 18th May 2018
d. EA signed by each employee 21st and 22nd May 2018
4. If necessary Eptec are willing to ask its employees to re-sign the Agreement now and to appear before the FWC together with the employee representatives to affirm the employees continued support for the Agreement.
5. During negotiations the Agreement presented our employees with an increase of 2% following registration, in the normal course of events they could reasonably expect the Agreement to have been registered (as previously experienced) within 2-4 weeks. Hence they would be benefitting from the increase since mid-June.
6. The FWC should note the Agreement is based on the existing Federal EA for Eptec with little or no change to employment conditions, except for hourly rates of pay and the duration of the Agreement. Employees are therefore focussed on benefitting from the new Agreement as soon as possible and negotiations held were very simple, revolving purely around the pay scales. Eptec have referenced the existing Federal EA in their application to FWC…”
Attached to Eptec’s correspondence was a printout from the “Single enterprise date calculator” on the Commission’s website with the relevant dates for the pre-approval steps for the Eptec Agreement entered. It shows that, once 18 May 2018 had been entered as the date when voting will commence, the calculator stated: “The access period must start on 11 May 2018”. The calculator does not identify the date by which compliance with s 180(3) is necessary.
Eptec requested, in response to an invitation from the Commission, an opportunity to make further oral submissions in respect of the s 180(3) issue. Accordingly a hearing of the matter occurred before me on 17 August 2018. The hearing was attended by Mr Joe Viglione, the Chief Executive Officer of Eptec, as well as two employee bargaining representatives, Mr Byron George and Mr Alan Ryan. At the hearing Mr Viglione submitted the following:
- an earlier proposed agreement had been put to a vote and rejected on 27 April 2018;
- modifications to the proposed agreement were agreed to, and on 11 May 2018 employees were informed that there would be another vote on 18 May 2018;
- after the vote in favour of the Eptec Agreement on 18 May 2018, all the employees put their signatures on an additional page under the statement “We the undersigned confirm that the vote taken for this enterprise agreement was correct and proper, and accept the signed document by our two representatives Alan Ryan and Byron George” in the period 21-22 May 2018.
Mr Viglione also adverted to the benefits to Eptec, its employees and the public interest which would flow from approval of the Eptec Agreement.
Consideration
It is clear that Eptec took no step at all to inform relevant employees of the time, place and method of the vote to approve the Eptec Agreement by the start of the access period, which commenced at the beginning of the calendar day 11 May 2018.
The written and oral submissions of Eptec in substance raise three points, which I deal with as follows:
(1)Eptec submitted that it relied in good faith on the Commission’s date calculator on its website, which stated that the access period commenced on 11 May 2018. There are two responses to this submission. First, the date given by the date calculator for the commencement of the access period was actually correct, since as earlier explained, the access period did commence at the start of 11 May 2018. The calculator did not state that the notification of the, time, place and method of the vote required by s 180(3) could occur during 11 May 2018. Thus, contrary to what was stated in the recent decision in Civica BPO Pty Ltd[5], the date calculator did not actually provide incorrect information, although it may be accepted that the position would have been clearer if the date calculator had additionally specified that for practical purposes the s 180(3) notification had to occur before 11 May 2018. Second, and in any event, I do not consider that it is open to find, where there has been a failure to take any step at all to notify employees of the time, place and method of the vote before the start of the access period because of an incorrect understanding of the law, that this constitutes the taking of all reasonable steps in compliance with s 180(3).
(2)The submission that it was “very unfair on our employees to seek to retrospectively apply the new interpretation” must be rejected for at least three reasons. First, the CBI decision did not involve any new interpretation of s 180(4), as earlier explained, but affirmed the existing interpretation that has been applied since 2010. That interpretation was correctly explained in the “Enterprise Bargaining Benchbook” and the “Making a Single Enterprise Agreement - Step by step guide to making a Single Enterprise Agreement that is not a greenfields agreement” documents appearing on the Commission’s website at all times relevant to the Eptec Agreement. Second, even if the CBI decision did determine that s 180(4) had not previously been interpreted and applied correctly, there would be no basis to now ignore what is and always has been the proper interpretation of s 180(4). Third, there is no power in the FW Act to overlook or waive a failure to comply with an approval requirement for an enterprise agreement on fairness grounds.
(3)The signatures of all employees confirming their approval of the Eptec Agreement which were obtained in the period 21-22 May 2018 appears to be relied upon by Eptec as a further process of voting to approve the agreement which commenced 10 days after the notification of the time, place and method of the vote on 11 May 2018. However that cannot operate to resolve the difficulty. Assuming that the process of employees signing the Eptec Agreement on 21-22 May 2018 constituted a vote to approve the agreement for the purpose of s 181 of the FW Act, there was no evidence that any notification of the time, place and method of this vote was given at all let alone given in compliance with s 180(3).
As earlier explained, compliance with s 180(3) is a necessary prerequisite for the approval of an enterprise agreement. The FW Act does not confer any discretion upon the Commission to approve an agreement where s 180(3) has not been complied with, even if the failure to comply is technical in nature or accidental and every other approval requirement is satisfied. In this case, it is clear that s 180(3) was not complied with.
The application for approval of the Eptec Agreement must therefore be dismissed. I note that it is open to Eptec to seek approval of the agreement by employees a second time in accordance with the relevant requirements of the FW Act (including s 180(3)) and then to make a new application to have the agreement approved.
VICE PRESIDENT
Appearances:
J. Viglione on behalf of Eptec Pty Ltd
B. George, bargaining representative
A. Ryan, bargaining representative
Hearing details:
2018.
Sydney:
17 August.
<PR700096>
[1] [2018] FWCFB 2732
[2] Acts Interpretation Act 1901 (Cth)
[3] [2010] FWA 3171
[4] [2014] FWC 4169
[5] [2018] FWC 4376
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