Falls Creek Resort Management

[2010] FWA 2847

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.185—Approval of Enterprise Agreement

Falls Creek Resort Management
(AG2010/8399)

State and Territory government administration
COMMISSIONER ROE	MELBOURNE, 19 MAY 2010

Application for approval of the Falls Creek Alpine Resort Management Board Outdoor Workers Enterprise Agreement 2009-2012 – application refused.

[1] An application has been made for approval of an Enterprise Agreement known as the Falls Creek Alpine Resort Management Board Outdoor Workers Enterprise Agreement 2009- 2012 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). Section 185 is in Part 2–4 of the Act which provides for the making of Enterprise Agreements between an employer and their employees who are employed at the time the agreement is made and who will be covered by the agreement. The application has been made by Falls Creek Alpine Resort Management Board (the Applicant). The Applicant is a non-budget funded Victorian Government Business Enterprise. The Agreement is a single-Enterprise Agreement. The Agreement only covers the outdoor workers as the indoor workers are covered by a separate Agreement.

[2] The application for approval was received by Fair Work Australia on 12 April 2010. On the same day correspondence was received from Craig Winter, Industrial Officer of the Australian Workers Union (AWU) advising that the AWU believed that the Agreement did not pass the Better Off Overall Test and sought that the matter be considered at a formal hearing. The Applicant attested to the fact that the AWU was a bargaining representative for the Agreement in the F16 application and the F17 declaration in support. 1 On 20 April 2010 my Associate wrote to the Falls Creek Alpine Resort Management Board advising them that I had made an initial examination of the Agreement and raising five issues of concern to which I asked them to respond by 28 April 2010. The five issues raised in the correspondence were as follows (headings were not in the original correspondence):

“1. The Notice of representational rights. The procedural requirements appear to be in order with one exception. That exception is that the F17 declaration completed by the employer states that the employees received the last notice of representational rights on 1 April 2009. This seems somewhat surprising given that the Fair Work Act was assented to on April 7 2009 and came into force from 1 July 2009. It would be appreciated if you could provide a copy of the notice provided if it is available or other information concerning the provision of the notice of representational rights.

2. The application of National Employment Standards. There are some matters concerning the relationship between the Agreement and the National Employment Standards which are of some concern. There are some matters which are covered by the National Employment Standards which are not included in the Agreement. Even though these matters do have application to employees under the Agreement, employees might think that they are not covered by those matters as the Agreement appears to be comprehensive. For example, the Agreement does not make it clear that casual employees are entitled to unpaid compassionate leave, that employees have entitlement in certain circumstances to refuse to work on public holidays, and that employees have rights to community service leave. This particular concern could be overcome by an undertaking signed by the employer and the bargaining representatives. Such an undertaking can be provided by email. The undertaking could read: “To avoid doubt the provisions of the National Employment Standards shall apply to employees covered by this Agreement. Where the Agreement provides employees with superior entitlements to those which are provided by the National Employment Standards the Agreement shall apply. Notwithstanding anything elsewhere in this Agreement casual employees shall be entitled to unpaid compassionate leave, employees shall be entitled to refuse work on public holidays as set out in the National Employment Standards and employees shall be entitled to community service leave as set out in the National Employment Standards. “

3. Does the clause on extraordinary hours conflict with the NES? The Commissioner has some concerns regarding whether the provisions of Section 55 of the Act concerning National Employment Standards are satisfied by the provisions of the Agreement in clause 9 Extra Ordinary Hours in the Snow Season. The Commissioner notes the explanation given in respect to this matter in the F17 Form.

4. Are the wage increases approved? The Commissioner notes that the wage increases are subject to Government approval. Has such approval occurred?

5. BOOT. The Commissioner has some concerns as to whether the Better Off Overall Test (BOOT) is met. The F17 form declared by the employer states that overtime rates are identified as the only term or condition which is inferior in the Agreement to the Award. However, it appears that the provisions in respect to call outs, work on weekends, mixed functions or higher duties, and arrangement of ordinary hours may disadvantage employees when compared to the Award. In addition it is very difficult to compare the salary rate which is inclusive of all allowances except for overtime and casual loading with the Award provisions. This is because it is difficult to estimate the value of allowance payments including overtime meal allowance to which an employee might have been otherwise entitled and in addition it is difficult to line up the classification levels in the Agreement with those in the Award given that the classification definitions are quite different. The Commissioner would like to draw the parties attention to the recent decision of the Full Bench of Fair Work Australia in Bupa Care Services Pty Ltd and other matters [PR995839] which is relevant to the issue of voluntary additional hours being worked without the payment of penalties as appears to be the case with the work in the snow season under this Agreement.

6. In order to assist the Commissioner in assessing the BOOT in respect to the Agreement it would be appreciated if the employer could provide a table aligning the classifications in the Award with those in the Agreement. That is, what is the classification level under the Agreement of each employee and what would their classification under the Award be. In addition it would be appreciated if the employer could advise some estimate of the incidence of application of the relevant Award allowances to the work employees undertake. Finally it would be appreciated if the employer could provide some calculations based on the actual hours worked during the last snow season or seasons which compare what the entitlements under the Award would have been compared to the entitlements under the Agreement for a sample of employees.”

[3] The Falls Creek Alpine Resort Management Board responded on 29 April 2010 2. That correspondence provided evidence which removed any concern I had about whether the wage increases were in fact agreed. The correspondence also provided substantial material as requested in point 6 of the correspondence quoted above to assist me in assessing whether the BOOT was met.

[4] The F17 Form provided by the Applicant demonstrated that the Agreement would cover 18 employees of whom 14 cast a valid vote, 13 of which were in favour of the Agreement. In proceedings it was confirmed that a substantial number of other employees were engaged during the snow season who would be covered by the Agreement but they were not engaged during the period leading up to the vote. The Agreement covers the outdoor employees only. The management and administrative employees are covered by a separate Agreement. The Agreement seeks to replace an earlier Agreement the Falls Creek Alpine Resort Management Board Outdoor Enterprise Agreement 2006.

[5] The Award which would have applied to employees had the 2006 Agreement not been in place would have been the Victorian Alpine Resorts Award 1999. In recognition of the relationship to the Victorian State Government, the industrial arrangements for the workers under the Falls Creek Alpine Resort Management Board have traditionally been different from those applicable to private sector workers in alpine resorts. The Modern Award which is applicable is identified on Fair Work Online as the State Government Agencies Administration Award 2010. The AWU submits that this is the applicable Modern Award. The Applicant submits that if a Modern Award is found to apply then the relevant Modern Award is the Miscellaneous Award 2010. Both the Applicant and the AWU agree that if the Applicant is not a trading corporation then the Victorian Alpine Resorts Award 1999 is the relevant award and there is no relevant Modern Award.

[6] On 29 April and 12 May 2010 the Applicant was represented with leave by Mr R Levin and the AWU was represented by Mr K Farouque with leave and by Mr C Winter and Mr Reilly. Evidence was given by:

1. Mr Justin Stanmore, an employee who would be covered by the Agreement;

2. Ms Leanne Kilpatrick, Human Resource Coordinator for the Applicant employer; and

3. Mr Chris Derrick, General Manager Operations for the Applicant employer.

[7] The AWU in proceedings raised an additional reason why the Agreement should not be approved which I had not raised in my correspondence (see paragraph 2 above). Clause 12 of the Agreement provides that “The provisions relating to redundancy in the Victorian Public Service will apply to Employees with more than one year of continuous service.” I have some doubts that this clause meets the requirements of Section 257 of the Act as to how documents may be incorporated into Agreements. This is because the clause does not make it explicit what document is being incorporated and whether it is interpreted as at the time of making the Agreement or whether it is incorporated as varied from time to time. The Statutory Declaration of the Applicant in the F17 Form states that the Agreement was distributed to each employee and that the NES was made available to employees in the lunchroom throughout the relevant period. However, there is no reference to the employees being provided with a copy of or being given access to the relevant document setting out the redundancy terms.

[8] With the exception of the five outstanding issues (viz. the notice of representational rights, access to the redundancy policy, the application of the NES, the consistency of the extraordinary hours clause and the NES and the BOOT) I was and am still satisfied that each of the requirements of ss.186, 187, 188 and 190 of the Act as are relevant to this application for approval have been met.

Notice of representational rights.

[9] The first outstanding matter concerns the notice of representational rights. On the F17 Form the CEO of the Applicant, Mr Ross Passalaqua affirmed that the last notice of representational rights under s. 173(1) was given to an employee on 1 April 2009. In the 29 April 2010 response of the Applicant to my concerns 3 the Applicant admits that “the official Notice of Representational Rights form as required by Section 174 of the Fair Work Act was not provided to employees as it was not available at the time negotiations…” began.

[10] The statements of Ms Kilpatrick and Mr Stanmore outline the process which the Applicant says demonstrates substantive compliance with Sections 173 and 174.

[11] Mr Stanmore 4 says that:

It is common knowledge who the two union members are.

Neither of the two union members known to Mr Stanmore were selected as employee representatives as they wanted the union representing them.

At the start of the process in March or April 2009 a notice was put up in the lunch room by management about representation at bargaining meetings. Mr Stanmore says that “the notice said that any employee can tell the Company that they appointed a representative on their behalf, or tell management that they will represent themselves.”

The AWU organiser’s name and number was also displayed somewhere; most likely on some other notice on the notice board but it was also in the power point slides that Leanne Kilpatrick used to brief employees on the negotiation process at the initial presentation to employees in March or April 2009.

He understands that management failed “to give each of us an official notice that since 1 July 2009 the Fair Work Act says we should have been given”. Mr Stanmore says that the notice “describes who represents employees on the negotiations, such as representing yourself or nominating someone else, and for union members that the union is automatically the representative when they nominate no one else.”

He spoke to 8 other employees who all confirmed that they would not have wanted anyone different to represent them had they been given the notice required under the Act and that they do not want the bargaining process reopened and want to keep the “current Agreement.”

[12] Ms Kilpatrick 5 says that:

Prior to 26 March 2009 a poster calling for nominations for employee representatives for the negotiation of the new Agreement was placed on the notice board. It is not clear from Ms Kilpatrick’s statement who did this.

On 26 March 2009 she met with outdoor workers to advise them of the negotiation and lodgement process for the Agreement and during the course of the meeting identified the nominations that had been received for employee representatives for the negotiations and advised that other nominations could still be received.

The call for nominations poster did not include anything about employees being able to nominate the union but Ms Kilpatrick says that she told employees this at the meeting of 26 March.

Ms Kilpatrick says that Nick Newton said that he was representing the union members and the employee reps said that they were representing the employees. It is unclear as to when Ms Kilpatrick claims this was said especially given that Mr Newton was not present at either the meeting on 26 March or the meeting on 1 April 2009.

The AWU official was not at the meeting of 26 March.

Workers at the meeting on 26 March verbally indicated their support for the employee representatives who had nominated in response to the poster. She informed the workers that the AWU would be involved unless otherwise advised by the outdoor workers.

The employee representatives were confirmed at the first meeting held to negotiate the Agreement which was held on 1 April 2009 and this is also stated in the minutes of that meeting which were provided by the Applicant in their response letter of 29 April 2010. There is no mention in the minutes of the AWU as part of the representative group. The only mention of the AWU is in the apologies for the meeting.

[13] The relevant extracts from the Act are as follows:

“173 Notice of employee representational rights

Employer to notify each employee of representational rights

(1) An employer that will be covered by a proposed Enterprise Agreement that is not a greenfields Agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who:

(a) will be covered by the Agreement; and

(b) is employed at the notification time for the Agreement.

Note: For the content of the notice, see Section 174.

Notification time

(2) The notification time for a proposed Enterprise Agreement is the time when:

(a) the employer agrees to bargain, or initiates bargaining, for the Agreement; or

………………

Note: The employer cannot request employees to approve the Agreement under Section 181 until 21 days after the last notice is given (see subSection 181(2)).

When notice must be given

(3) The employer must give the notice as soon as practicable, and not later than 14 days, after the notification time for the Agreement.

Notice need not be given in certain circumstances

(4) An employer is not required to give a notice to an employee under subSection (1) in relation to a proposed Enterprise Agreement if the employer has already given the employee a notice under that subSection within a reasonable period before the notification time for the Agreement.

How notices are given

(5) The regulations may prescribe how notices under subSection (1) may be given.

174 Content of notice of employee representational rights

Application of this Section

(1) This Section applies if an employer that will be covered by a proposed Enterprise Agreement is required to give a notice under subSection 173(1) to an employee.

Content of notice—employee may appoint a bargaining representative

(2) The notice must specify that the employee may appoint a bargaining representative to represent the employee:

(a) in bargaining for the Agreement; and

(b) in a matter before Fair Work Australia that relates to bargaining for the Agreement.

Content of notice—default bargaining representative

(3) If subSection (4) does not apply, the notice must explain that:

(a) if the employee is a member of an employee organisation that is entitled to represent the industrial interests of the employee in relation to work that will be performed under the Agreement; and

(b) the employee does not appoint another person as his or her bargaining representative for the Agreement;

the organisation will be the bargaining representative of the employee.

Content of notice—bargaining representative if a low-paid authorisation is in operation

(4) If a low-paid authorisation in relation to the Agreement that specifies the employer is in operation, the notice must explain the effect of paragraph 176(1)(b) and subSection 176(2) (which deal with bargaining representatives for such Agreements).

Content of notice—copy of instrument of appointment to be given

(5) The notice must explain the effect of paragraph 178(2)(a) (which deals with giving a copy of an instrument of appointment of a bargaining representative to an employee’s employer).

Regulations may prescribe additional content and form requirements etc.

(6) The regulations may prescribe other matters relating to the content or form of the notice, or the manner in which employers may give the notice to employees.

181 Employers may request employees to approve a proposed Enterprise Agreement

(1) An employer that will be covered by a proposed Enterprise Agreement may request the employees employed at the time who will be covered by the Agreement to approve the Agreement by voting for it.

(2) The request must not be made until at least 21 days after the day on which the last notice under subSection 173(1) (which deals with giving notice of employee representational rights) in relation to the Agreement is given.

(3) Without limiting subSection (1), the employer may request that the employees vote by ballot or by an electronic method.

186 When Fair Work Australia must approve an Enterprise Agreement—general requirements

Basic rule

(1) If an application for the approval of an Enterprise Agreement is made under Section 185, Fair Work Australia must approve the Agreement under this Section if the requirements set out in this Section and Section 187 are met.

Note: Fair Work Australia may approve an Enterprise Agreement under this Section with undertakings (see Section 190).

Requirements relating to the safety net etc.

(2) Fair Work Australia must be satisfied that:

(a) if the Agreement is not a greenfields Agreement—the Agreement has been genuinely agreed to by the employees covered by the Agreement; and

…………….

Note 1: For when an Enterprise Agreement has been genuinely agreed to by employees, see Section 188.

188 When employees have genuinely agreed to an Enterprise Agreement

An Enterprise Agreement has been genuinely agreed to by the employees covered by the Agreement if Fair Work Australia 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:

………

(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

…..

(c) there are no other reasonable grounds for believing that the Agreement has not been genuinely agreed to by the employees.

[14] The relevant parts of the notice in Schedule 2.1 of the Fair Work Regulations 2009 which specifies the form of the notice are as follows:

“[Name of employer] gives notice that it is bargaining in relation to an Enterprise Agreement ([name of the proposed Enterprise Agreement]) which is proposed to cover employees that [proposed coverage].

What is an Enterprise Agreement?

An Enterprise Agreement is an Agreement between an employer and its employees that will be covered by the Agreement that sets the wages and conditions of those employees for a period of up to 4 years. To come into operation, the Agreement must be supported by a majority of the employees who cast a vote to approve the Agreement and it must be approved by an independent authority, Fair Work Australia.

If you are an employee who would be covered by the proposed Agreement:

You have the right to appoint a bargaining representative to represent you in bargaining for the Agreement or in a matter before Fair Work Australia about bargaining for the Agreement.

You can do this by notifying the person in writing that you appoint that person as your bargaining representative. You can also appoint yourself as a bargaining representative. In either case you must give a copy of the appointment to your employer.

…………….

If you are a member of a union that is entitled to represent your industrial interests in relation to the work to be performed under the Agreement, your union will be your bargaining representative for the Agreement unless you appoint another person as your representative or you revoke the union’s status as your representative.

Questions?

If you have any questions about this notice or about Enterprise bargaining, please speak to either your employer, bargaining representative, go to or contact the Fair Work Australia Infoline on [insert number].”

[15] In summary the legislation says that I cannot be satisfied that there is genuine Agreement (Section 188) unless Section 181(2) is complied with and I cannot approve an Agreement under Section 186 unless I am satisfied it has been genuinely agreed to. Section 181(2) requires that voting cannot take place until at least 21 days after the notice under 173(1) is given. Section 173(1) clearly requires that the employer “must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee”. That notice must be given not more than 14 days after bargaining begins. The notice must meet the minimum content requirements of Section 175. In my view all this is unambiguous. I could have some discretion about how the notice is distributed. Notwithstanding the regulations I could have some discretion about how the notice is worded provided it substantially complied with the content requirements of Section 175. However, I have no discretion about the 21 day period and I have no discretion to waive the requirement for a notice which effectively communicates all the elements required by Section 175 to be given in some form.

[16] Mr Levin took me to a number of cases which he said supported the proposition that I had the discretion to approve the Agreement notwithstanding the fact that the notice in terms specified by the Act had not been issued. He referred to a number of decisions which related directly to the question of the provision of appropriate notices under the present legislation and the previous legislation. He also submitted that I should read Section 188 as not being mandatory but in my view Section 188(a) says that I must be satisfied that Section 181(2) has been complied with and Section 181(2) is expressed in mandatory terms. There is some discretion in determining compliance with some other aspects of Section 188(a) which refer back to “reasonable steps” but none in respect to this matter.

[17] Mr Levin referred to a recent decision of Commissioner Cargill concerning the approval of a United Group Rail Services Limited Agreement 6. In that decision what was at issue was the requirement under Section 173(1) that the employer “must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee”. As Commissioner Cargill correctly pointed out, Section 173(5) makes it clear that this does not mean that the notice must be specifically handed to each individual employee but that other options including the use of email and notice boards can be utlilised. Furthermore, the use of the term “reasonable steps” makes it clear that the circumstances must be taken into account. Commissioner Cargill found that the use of a notice board was reasonable compliance in the circumstances of that case. Commissioner Cambridge took a more restrictive approach concerning the approval of the Rebel Tenpin Pty Ltd Agreement7. In my view the decision of Commissioner Cargill does not help the Applicant’s case. If the failure in the present matter had been that the notice had not been handed to each employee but that other reasonable means to distribute the notice had been used then I would find that the requirements had been met. The problem in this case is different. The problem in this case relates primarily to the content of the notice.

[18] The decision of a full bench in 1997 concerning the certification of the Peak Hill Gold Mine Certified Agreement 8 under the previous legislation provided a similar degree of flexibility to that which Commissioner Cargill has allowed under the present Act. The provisions of Section 170LK of the Workplace Relations Act 1996 provided that:

“(2) The employer must take reasonable steps to ensure that every person employed at the time whose employment will be subject to the Agreement has at least 14 days’ notice, in writing, of intention to make the Agreement, and the Agreement must not be made before those 14 days have passed….

(4) The notice must also state that if:

(a) any person whose employment will be subject to the Agreement is a member of an organisation of employees; and

(b) the organisation is entitled to represent the person’s industrial interests in relation to work that will be subject to the Agreement;

the person may request the organisation to represent the person in meeting and conferring with the employer about the Agreement.”

[19] In the case considered by the full bench the initial written notice did not contain the information required by Section 173(4) concerning the right to union representation but the full bench found that there had been substantial compliance in that a subsequent notice was provided on the overhead transparencies at a briefing which were then placed on the notice board which did meet this requirement. The supplementary notice was provided more than 14 days prior to the voting and the making of the Agreement.

[20] I see nothing in these references which allows any flexibility from compliance with the mandatory provisions of the legislation. For this Mr Levin relied upon the decision of Commissioner Richards in 2004 concerning the certification of the Sheldon College Corporate Staff Certified Agreement 2004 9. This decision is a comprehensive survey of decisions of discretion available to the Tribunal. In this case the legislative provision Section 170LK(8) of the former Workplace Relations Act 1996 prohibited any variation of a proposed Agreement after the notice has been given and required the giving of a new notice to employees, a copy of the revised document and a maintenance of the requirement for a 14 day period prior to any vote if there was a variation to the Agreement document. The variation in this case was very minor and was of no substantial effect and Commissioner Richards made a decision to certify the Agreement notwithstanding that Section 170LK(8) had not been technically complied with. In support of this Commissioner Richards cited a number of authorities. He said that the Full Bench in May 1999 in Mobile Food Vans10 said that there was a need to look at the statutory intention which is “to be ascertained from the language of the relevant provisions, the objects of the whole statute, and the objects of the relevant Section”.

[21] Commissioner Richards acknowledged a decision of the Full Bench of the AIRC which was issued in February 2004, that is, shortly before his decision. The Full Bench rejected an appeal against a decision of Deputy President Hamilton.

“[3] The Deputy President accepted that the notice given by Austral complied with s.170LK(2). Section 170LK(4) requires that the notice comply with some additional requirements. The notice must state, first, that if any person whose employment will be subject to the Agreement is a member of an organisation of employees and, second, the organisation is entitled to represent the person's industrial interests in relation to work that will be subject to the Agreement then, third, the person may request the organisation to represent the person in meeting and conferring with the employer about the Agreement. The Deputy President was satisfied that the first two requirements had been fulfilled but that the third had not.

[4] The relevant part of the notice in question reads as follows:

"It is a requirement of the Act that we advise you that, as a person whose employment is to be subject to the proposed Agreement, you are entitled to be represented in relation to it by any registered industrial organisation of which you are a member, provided of course, that the organisation is itself entitled to represent you in relation to your position with Austral. If you decide to appoint an organisation of employees to represent you, then you will be required to notify us in writing accordingly and we will hold further discussions with them directly."

[5] As indicated, the Deputy President was not satisfied that the notice complied with the third requirement identified above. Specifically, he found that the notice did not state that the employees might request the organisation to represent them in meeting and conferring with the employer about the Agreement.

[6] There is no need to examine the decision in detail. It is sufficient to indicate the basis for the Deputy President's finding. He interpreted the last sentence of the notice as a stipulation that if an employee wished to appoint an organisation to represent him or her, the employee was required to notify the employer in writing. He found that by reason of this sentence, despite the other words of the relevant paragraph, the notice did not specify that an employee seeking to obtain union representation could do so by notifying the union. Relying on a decision in a case in which there were some similarities in the notice, Re Egan Bros Plumbing and Building Services Pty Ltd Enterprise Agreement,² he found that there is a significant distinction between notice of a right to seek representation by approaching an organisation on the one hand and notice of a right to seek representation subject to a requirement that the employer be notified that the right was being exercised on the other.

[7] It has been said that the requirements of s.170LK(4) are mandatory. That is so, in the sense that they are conditions that must be complied with for an Agreement with employees pursuant to the Act. It is only necessary to refer to the term "must" which appears in s.170LK(4) and a number of other parts of s.170LK. It should not be thought, however, that the words of the Section must be followed in every particular. Nor does it mean that a notice should use the words of s.170LK(4) precisely before it can be said that s.170LK(4) has been complied with.³ We were referred to a number of decisions in which notices were held to comply or not to comply with s.170LK(4). It would serve no useful purpose to compare in detail the large number of differently worded notices dealt with in the decisions. In each case the Commission is required to form a view about the notice in light of the wording and all of the relevant circumstances. Once it is accepted, as it must be, that the words of s.170LK(4) do not need to be reproduced verbatim in the notice, an element of judgment enters the decision. If different words are used, or if words are added, a question arises as to whether the notice meets the requirements of the Section.

[8] Nothing said on the appeal has persuaded us that we should grant leave to appeal. In particular we have not been persuaded that the decision involves any error of fact or law…….

[10] As the notice did not tell employees that they could themselves request representation from the organisation it did not comply with the requirements of s.170LK(4).”

[22] This statement from the Full Bench is I think directly relevant to the situation of this case. It reinforces my judgment that I might have discretion in respect to the wording of the notice and its manner of distribution but I have no discretion to waive the requirement for the effective distribution of a notice which effectively communicates all the elements required by Section 175.

[23] Commissioner Richards cited the High Court in Project Blue Sky v ABA 11:

“An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition.”

[24] Commissioner Richards then cited a number of other authorities for the proposition that one has to look at the context and the consequences, injustice or inconvenience which might flow from strict compliance with a procedure and also at the impact of non-compliance and the seriousness of the non-compliance.

[25] Mr Levin for the Applicant then took me to the Objects of the Act (Section 3) and the Objects of Part 2-4 of the Act (Section 171). I accept that the Objects support a contention that the Tribunal should avoid excessive technicality and should facilitate the making of Agreements. However, I do not accept that the objective of dealing with applications for approval without delay means that there is an objective to approve things which do not meet the requirements of the Act. Dealing with applications and approving them are not the same thing. I do not think that the objective of being flexible for business can be read in isolation from other objective about fairness and the right to effective representation. I can find nothing in the Objects of the Act or of Part 2-4 that would enable me to discern a legislative purpose to allow me to validate an act which clearly does not comply with the conditions set down in the legislation. I am not moved from my conclusion that I could have some discretion about how the notice is distributed. Notwithstanding the regulations I could have some discretion about how the notice is worded provided it effectively communicates all of the content requirements of Section 175. However, I have no discretion about the 21 day period and I have no discretion to waive the requirement for the effective distribution of a notice which effectively meets all the content requirements.

[26] Mr Farouque for the AWU took me to a number of authorities which support the approach that I do not have discretion in this matter. The Full Bench in Re Alkane Exploration NL and others 12 adopted the position that substantial compliance with the notice provisions under the former legislation was acceptable and the exact words did not have to be used. Two members of that bench later said that they subsequently felt that even this degree of flexibility should not be allowed.13 Mr Farouque also referred to some decisions under the present legislation that confirmed that if there is no notice served the agreement cannot be approved14 and also that if the 14 day and 21 notice periods are not complied with the agreement cannot be approved.15

[27] There is no doubt from the evidence that the notification time (Section 173(2)) could be no later than 14 days after the first meeting (26 March 2009) referred to by Ms Kilpatrick 16. It is clear that at this time the employer initiated bargaining for the replacement Agreement. There is little doubt that the only actions which could constitute compliance with the notice requirements were the actions taken by Ms Kilpatrick leading up to and at the meeting on 26 March 2009 and between then and the first negotiation meeting on 1 April 2009. We therefore need to examine the evidence of what notice was given during that period.

[28] An examination of the evidence provided (see paragraph 11 and 12 above) allows me to make a finding that the method of distribution of the notice was adequate given the nature of the meetings held and the use of the notice board. In addition most employees were in attendance at the meeting on 26 March 2009 when the representatives were confirmed. 17

[29] I am also satisfied by the evidence that the employees were aware of the nature of an Enterprise Agreement, given that one was already in place and of the fact that renegotiation of the Agreement was going to take place and that to come into operation that new Agreement had to be supported by a majority of employees voting and that the Agreement then needed to be approved by an independent authority (second paragraph of Schedule 2.1 of the Fair Work Regulations 2009).

[30] However, I am not satisfied by the evidence that the process the employer undertook in late March 2009 made employees properly aware of their right to appoint a bargaining representative to represent them in bargaining for the Agreement or in a matter before Fair Work Australia about bargaining for the Agreement as required by Section 174(2). This is quite a different process from what occurred under the previous legislation. What the evidence shows in this case is that at best the employer asked employees to nominate to be appointed or elected (it is not clear which) to a consultative or negotiating committee for the new Enterprise Agreement. The Applicant was unable to produce a copy of the notice which was put up prior to the meeting of 26 March 2009. The evidence of Ms Kilpatrick about the notice and the discussion at the meeting of 26 March 2009 was:

“So the call was for those who were interested in being a representative in the negotiations in the meetings that would occur around the new agreement?---That's correct, yes.”

[31] Mr Stanmore and Ms Kilpatrick gave evidence that there was no vote for the representatives. Management accepted the names of those who had been put forward or who had put themselves forward and no one at the meeting of 26 March 2009 objected to the names which had been put forward at that stage.

[32] This process of selecting representatives to participate in negotiation meetings is important to ensure that there is genuine and good faith bargaining but it is not the same thing as advising employees of their right to appoint a bargaining representative. A bargaining representative (other than a union representing its members who have not elected to revoke the union’s status as their representative) only exists when they are appointed in accordance with Sections 176(1)(c) and 178. Essentially this means that the employee must in writing advise the employer. There is insufficient evidence that anyone other than the union has been appointed as a bargaining representative in this case. Mr Stanmore was nominated to represent employees in negotiation meetings and he did not see his role as extending beyond that. On the F16 form the employer indicated that there were non-union bargaining representatives and Mr Stanmore signed an F18 form witnessed by Ms Kilpatrick and Mr Stanmore signed the agreement. However, none of the other employees present at the negotiations are mentioned. There was nothing in the evidence or submissions to suggest Mr Stanmore did anything different or had any different status to the others. There was no suggestion that any of the employees advised the employer in writing that they were appointed as a bargaining representative.

[33] There is no evidence that the notice to employees either on the notice board or in the meeting of 26 March (or any other meeting in the following two weeks) advised employees of their rights to appoint a bargaining representative and how to do it. Section 174(5) makes it mandatory that the notice must explain that a bargaining representative must be appointed in writing with a copy of the appointment given to the employer. In summary there is inadequate evidence that the legislative purpose has been achieved. There is also no evidence that there was any information about the fact that bargaining representatives could have a role not just in the negotiation with the employer and in representing employees but also in proceedings before Fair Work Australia. This aspect is also a mandatory requirement (Section 174(2)(b)) and one for which there is a clear purpose consistent with the objects of the Act concerning the facilitation of the making of Agreements and bargaining in good faith.

[34] These failures are understandable given that this provision did not exist under the previous legislation and these negotiations began under the previous legislation. It is not mandatory for employees to appoint bargaining representatives. The process for negotiation of the Agreement undertaken by employees, the union and Falls Creek Alpine Resort Management Board was perfectly acceptable and could lead to an Agreement being approved. However, employees must be informed about their rights to have a bargaining representative and how they may be appointed. There are many reasons for this including the achievement of the objects of Part2-4 to facilitate the making of Agreements and bargaining in good faith. In the legislative scheme bargaining representatives can become important in situations where Fair Work Australia may be asked to intervene with good faith bargaining orders and the like.

[35] The final aspect which the notice must satisfy in this case is set out in Section 174(3). I am not satisfied by the evidence that all essential aspects of this requirement were met. There are three aspects of this.

Firstly, this requires that employees who are union members understand that the union is entitled to represent them and unless they take specific action the union will be their representative. One aspect of this appears to be satisfied in that the employer accepted that the union was a bargaining representative and would be able to attend negotiation meetings. The evidence also suggests that employees were made aware of this by the statements of Ms Kilpatrick to the meeting of 26 March 2009. 18

Secondly, it should be open to employees who are not union members to appoint the union as their bargaining representative. This possibility is clearly a possible outcome of the required notice. The evidence in this case is that employees were asked to nominate for the negotiating committee. There is no suggestion in this process that they might nominate the union even if they are not a union member whereas if the notice required had been given to employees then this outcome would have been possible. The legislative purpose has not been fulfilled. Furthermore, although Ms Kilpatrick says that she made it clear that the union would be involved and would represent union members, the fact that the union was not present at either the meeting on the 26 March or at the first meeting on the 1 April and that no union member was amongst the employee representatives notwithstanding that there are at least two union members does tend to undermine any message that any employee, whether a union member or not, could choose the union to represent it.

Thirdly, employees who are union members need to be advised that if they do not want the union to represent them they have to actually appoint another bargaining representative. This is where employees needed to understand the difference between a bargaining representative and an employee representative at the negotiation meetings. Ms Kilpatrick gave evidence that she informed the workers that the AWU would be involved unless otherwise advised by the outdoor workers. This suggests that all a union member would have to do is tell Ms Kilpatrick that they did not want the union involved. In fact the legislation requires that they would have to formally appoint in writing another bargaining representative. There is no evidence that employees were made aware of this and hence union members did not have the necessary information about how they could remove the union as their bargaining representative which is clearly a purpose of the legislation.

[36] The process whereby the employer in this case called for nominations for employee representatives to participate in bargaining is not an uncommon one. It is not clear how these representatives were elected but what is clear is that they were nominated to the employer and in my view there is a possible implication from this sort of process that the employer had some sort of veto on how many representatives and who would be accepted as a representative. This may in some circumstances create some issues about genuine and good faith bargaining. This is probably one reason why the legislation provides each and every employee with the right to nominate an independent representative. Of course an election run by the employees or their union is an effective way to determine bargaining participants. However, an election run by and in the presence of the employer would be unlikely to satisfy requirements for independence. Furthermore, the legislation provides that notwithstanding an election an individual employee might still choose to nominate themselves as a bargaining representative. A proper election process makes it less likely that this will occur.

[37] No great injustice will occur should the process of notification and voting be repeated in this case. Certainly it will cause some inconvenience to the employer and to some employees. However, the breaches of the legislative requirements are not minor technicalities. The High Court restricted the circumstances in which a mandatory legislative requirement might be waived to circumstances where “there can be discerned a legislative purpose” to support such an approach. 19 In this case the legislative intent is clearly not satisfied for the reasons I have detailed and hence the inconvenience is unfortunate but cannot be avoided. There are clear legislative purposes for the requirements in respect to the representation notice. Significant injustice and breach of the objects of the legislation could occur if the notice is not provided in the manner prescribed.

[38] I do not doubt Mr Stanmore’s evidence 20 that employees don’t want the Agreement to have to go to another vote and his evidence that they wouldn’t have made a different decision concerning representation even if they had received a proper notice at the time. However, we can’t turn back the clock. We cannot exclude the possibility that had the notice been properly issued that either employees or the AWU might have behaved differently at the time. It is clear from Mr Stanmore’s evidence that prior to making his statement he was informed by the management or by management’s solicitors that the Agreement may have to be voted on again because of the failure to provide the required notice. I make no criticism of this. Mr Stanmore in his statement then set out what he understood from this advice was the effect of the proper notice. His understanding is summarised in paragraph 11 above. The fact that his understanding does not include some of the essential elements which I have outlined above (particularly at Paragraphs 30-34) reinforces my conclusions.

[39] I see no evidence that there was any deliberate attempt by the management in this case to deny workers their rights or to avoid their obligations under the legislation. I think that in good faith the management thought that they had complied with the essence of a fair representation and negotiation process since the process was similar to what they applied in finalising the previous Agreement.

[40] Notwithstanding the fact that I have found that I cannot approve the Agreement because of the failure to provide the required representation notice I intend to deal with the other aspects in order that the parties can avoid problems and delays in resubmitting the Agreement at a later date.

Access to the redundancy policy.

[41] The evidence of Justin Stanmore, an employee involved at all stages of the negotiation of the Agreement and of Leanne Kilpatrick 21 who is the Human Resources Coordinator responsible for the negotiation of the Agreement for the Applicant was that the redundancy policy referred to in clause 12 of the Agreement was not distributed to employees, that a copy of the policy was not made available to the negotiators of the Agreement, that a copy of the policy was not made available in the lunchroom, that in the briefings provided to employees about the proposed Agreement the content of the policy was not outlined, and that no advice was given to employees either in writing, in meetings or on notice boards about the nature of the policy or where or how the policy could be accessed. Evidence was given that a computer with internet access was available to employees in the lunchroom and that all employees used the lunchroom each day.

[42] There is no dispute that the clear intention of the parties was that the redundancy policy was sought to be “incorporated by reference in an Agreement” and therefore the “employer must take all reasonable steps to ensure” that employees are given a copy of this document (Section 180(2)(a)) during the access period OR that “employees have access throughout the access period for the Agreement to a copy of those materials.” (Section 180(2)(b)). The access period was at the end of March and early April 2009. Mr Levin for the Applicant conceded that Section 180(2)(a) was not met but argued that Section 180(2)(b) was met by the provision of access to the computer and internet.

[43] I find that this is not “all reasonable steps” to ensure access. An employee obviously has access to public documents through libraries, the internet and help lines. The legislation does not simply say that the documents must be publicly accessible. The legislation is clearly intended to require that employees be positively given the material or be directed to where they can access the material without significant effort on the part of the employee being required. This is clearly not an unreasonable requirement. No steps were taken to advise the employees where they might find this material or to advise them that to understand the Agreement they might need to read this material. This is particularly relevant when the actual title of the document is not present in the Agreement and the document is not something with which employees would be generally familiar.

[44] I find that the Agreement cannot be approved because of the failure to implement Section 180(2) which must be satisfied for Section 188 and Section 186 to be satisfied.

[45] Mr Farouque for the AWU submitted that the circumstances surrounding the redundancy policy were also a breach of Section 180(5) which requires the employer to take all reasonable steps to ensure that the effect of the terms of the Agreement are explained to relevant employees. Mr Faroque is correct in that employees cannot understand the effect of the terms of an Agreement if they are not even aware of where they might find the document which outlines those terms. This is also a mandatory requirement for the approval of an Agreement.

The application of the National Employment Standards.

[46] The Applicant has provided an undertaking in the form I suggested which in my view overcomes this problem. I would accept this undertaking. I do not believe that it represents a substantial change to the Agreement and no employee will be disadvantaged as a result of the undertaking. The bargaining representatives have been consulted about the undertaking. 22

Does the clause on extraordinary hours conflict with the NES?

[47] Clause 9 of the Agreement allows for up to 12 additional hours per week to be “worked at ordinary rates and not as overtime” during the snow season. I was concerned that this might conflict with the NES and Section 62 of the Act which prevents an employer from requesting or requiring an employee to work more than 38 hours per week unless those hours are reasonable. In determining whether it is reasonable or not Section 62(3) sets out a number of matters which must be taken into account as follows:

“(3) In determining whether additional hours are reasonable or unreasonable for the purposes of subSections (1) and (2), the following must be taken into account:

(a) any risk to employee health and safety from working the additional hours;

(b) the employee’s personal circumstances, including family responsibilities;

(d) whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, working additional hours;

(e) any notice given by the employer of any request or requirement to work the additional hours;

(f) any notice given by the employee of his or her intention to refuse to work the additional hours;

(g) the usual patterns of work in the industry, or the part of an industry, in which the employee works;

(h) the nature of the employee’s role, and the employee’s level of responsibility;

(i) whether the additional hours are in accordance with averaging terms included under Section 63 in a Modern Award or Enterprise Agreement that applies to the employee, or with an averaging arrangement agreed to by the employer and employee under Section 64;

(j) any other relevant matter.”

[48] As the additional hours are capped, rostered, regulated by an Agreement and relate to the particular nature of the industry I am satisfied that criteria (a), (c), (e), (g), (h), and (i) are satisfied. I am satisfied that criteria (d) is satisfied if the Agreement passes the BOOT and hence that matter is only relevant if the BOOT is not satisfied. Criteria (b) and (f) are satisfied by the undertaking given in respect to the application of the NES to employees notwithstanding the terms of the Agreement. I am therefore satisfied that provided the BOOT is met there is no conflict between Clause 9 of the Agreement and the NES.

BOOT – Relevant Award.

[49] The first matter which must be established is the relevant Award. As outlined in Paragraph 5 above there is no doubt that the relevant Award for the purpose of the no disadvantage test and the previous Agreement was the Victorian Alpine Resorts Award 1999 (1999 Award). The Modern Award which is applicable is identified on Fair Work Online as the State Government Agencies Administration Award 2010. The Alpine Resorts Award 2010 is also clearly a Modern Award which must be considered. The Applicant submits that if a Modern Award applies it is the Miscellaneous Award 2010. The AWU suggests that the State Government Agencies Administration Award 2010 may have application.

[50] In the creation of the Alpine Resorts Award 2010 submissions were received from the AWU and from Australian Ski Areas Association. The AWU in that process argued that the Victorian Alpine Resorts Award 1999 23 should be seen as a benchmark whereas the Australian Ski Areas Association24 argued that the Victorian Alpine Resorts Award 1999 should not be within the coverage of the Modern Award because of its linkage to the Victorian Public Sector. The submission of the Australian Ski Areas Association was that at the three main Victorian Ski Resorts there were 118 employees in summer rising to 305 employees in winter of the Alpine Resorts Boards which operated under the 1999 Award whereas there were 198 employees in summer rising to 1602 employees in winter employed at those three resorts by the private companies. The AWU submitted a draft of the Award which included a Part 7 which effectively preserved the conditions for the Victorian Alpine Resorts Management Boards who were covered by the 1999 Award for the next five years.

[51] The exposure draft of the Award was issued by the Full Bench in May 2009. In the statement in respect of this 25 the Full Bench determined “The draft Alpine Resorts Award 2010 covers the seasonal snowsports industry in particular, though it will also have application to alpine resorts that operate over the summer season…. We have also decided not to make any special provision in relation to alpine resorts management boards.”26

[52] In my view this is a clear reference to the AWU submission for a separate schedule to the Award to cover the conditions for the Victorian Alpine Resorts Award. I do not read it as a decision to exclude the alpine resorts management boards from the coverage of the Modern Award. The whole approach of the Full Bench was to ensure that the whole of an industry (or in some cases occupations) should be covered by a Modern Award and generally the Full Bench was reluctant to grant exceptions pressed by various parties. In the decision of the Full Bench on the Stage 3 Modernisation of 4 September 2009 there was no further comment concerning the coverage of the Award.

[53] The Applicant in these proceedings argued that the Alpine Resorts Award 2010 could not cover the Applicant for two main reasons; firstly because the Applicant is not a trading corporation and secondly because the coverage of the Award is restricted to employers “who operate an alpine resort” which is defined as “an establishment whose business amongst other things, includes alpine lifting”. 27 I will deal with the first ground later but the meaning of the second ground was to some extent canvassed by the President in the proceedings which created the Modern Award (emphasis added).

“JUSTICE GIUDICE: Mr Harmer, I wonder if you have any submission to make about the issue raised as to the coverage of the Award, in particular the definition of alpine resort.

MR HARMER: The definition is satisfactory to the Australian Ski Areas Association, your Honour. The resort operators measure their productivity and market share by reference to ski lift hours or trips and all of the alpine resorts operate ski lifts and it would appear to be a significant distinguishing feature compared to other employers in the region of which there obviously are some. The unique circumstances we face and I apologise if this is not directly in response to your question, your Honour, but in response to comments made by some of the unions, we cannot emphasise too much how much the exigencies of the weather can devastate our business and how much poor weather in terms of lack of snow and the reporting of it can reduce demand for our product to such a significant extent as to render the resorts non-viable in some seasons.

JUSTICE GIUDICE: Yes, Mr Harmer, I was particularly interested in the definition and the submission that was made about the requirement that the resort include alpine lifting. The suggestion seemed to have been made that there would be other resorts that don't include alpine lifting which would be covered by other Awards and that was the issue that I was interested in your submission on.

MR HARMER: In our respectful submission, your Honour, there would be no alpine resorts involved in the ski industry as we understand it that does not involve ski lifts, so I am unable to assist with the nature of any resort operating in the ski areas that would fall into that category. There are, of course, your Honour, for example in Jindabyne there are operations that might be described as resorts in terms of accommodation and things of that nature which some other facilities, but they do not operate in the ski area and do not fall under the intended coverage of the exposure draft.

JUSTICE GIUDICE: And with the exception of lifting, do those resorts or other establishments provide the same or similar services to the public as the resorts covered by this Award.

MR HARMER: The example I just used, your Honour, was talking about lower areas of altitude, so they're not operating in the precise region, they're not as heavily impacted by snow and they're not providing any of the services associated with skiing that we are dealing with, in our respectful submission, your Honour.

JUSTICE GIUDICE: Thank you.” 28

[54] I think that the words of the President make it clear that the term establishment in this Award should not be read so narrowly as to imply that the employer must operate the ski lifts directly itself for the employer to come within the scope of the Award. Rather the term is to describe the nature of the resort and to exclude those where there are not operating ski lifts. In this case there was undisputed evidence that the Falls Creek resort includes many ski lifts and that the ski lifts are operated under a contract controlled by the Applicant. A separate company is contracted to operate the lifts. The Falls Creek Alpine Resort is an establishment whose business amongst other things includes alpine lifting and the employer the Falls Creek Alpine Resort Management Board Board is clearly an employer who along with others operates the Falls Creek Alpine Resort. It is clear that the Falls Creek Alpine Resort Management Board Board is the principal employer at the Resort and has by Statute been given the responsibility for the management and operation of the alpine resort which includes alpine lifting.

[55] I am therefore satisfied that if the Applicant is a trading corporation then its outdoor workforce is covered by the Alpine Resorts Award 2010. The reference Award for transitional purposes is the 1999 Award. I did consider the applicability of the State Government Agencies Administration Award 2010. That Award only applies to employees in the classifications defined in that Award. The classifications are restricted to administrative, technical and professional employees. None of the outdoor workers could properly fit these definitions.

[56] In the event that the Applicant is not a trading corporation then they are excluded from the Alpine Resorts Award 2010 because clause 4.5 states “The Award does not cover employees who are covered by a State reference public sector Modern Award, or an Enterprise instrument (within the meaning of the Fair Work (Transitional provisions and consequential amendments Act 2009 (Cth)), or employers in relation to those employees.”

[57] The Award Modernisation Full Bench dealt with this matter in respect to the Metropolitan Fire and Emergency Services Board (MFESB) in Victoria in determining to create a Modern Award for firefighting. In responding to the submissions that MFESB was not a “national system employer” within the meaning of the Act the Full Bench said:

“[67] However, in United Firefighters' Union of Australia and Others v Metropolitan Fire and Emergency Services Board 31 a single judge of the Federal Court held that the MFESB is a constitutional corporation by virtue of its trading activities. No party sought to challenge that decision and there is no contrary authority. We have therefore proceeded on the basis that the MFESB, being a constitutional corporation, is covered by the Award modernisation process under Part 10A of the WR Act and will not be covered by the State reference public sector Award modernisation process provided for in Schedule 6A to the Transitional Act.” 29

[58] The Full Bench further considered the matter in making the Modern Award in December 2009:

“[43] A key issue canvassed in submissions was the status of the Victorian Firefighting Industry Employees Interim Award 2000¹¹ (Victorian Firefighting Award) and whether a Modern Award made as part of the current process under Part 10A of the WR Act is capable of covering the Metropolitan Fire and Emergency Services Board (MFESB).

[44] For reasons that we have already given, we have proceeded on the basis that the MFESB is a constitutional corporation.¹² In submissions made shortly after the publication of the exposure draft, the United Firefighters’ Union of Australia (UFUA) argued that the MFESB was part of the “State reference public sector transitional Award modernisation process” provided for in Schedule 6A of the Transitional Act and, consequently, not part of the current Award modernisation process under Part 10A of the WR Act. We disagree. Relevantly, the State reference public sector transitional Award modernisation process only applies to a “State reference public sector employer”. That expression is defined in item 2(3) of Schedule 6A of the Transitional Act as “a State reference employer that is a State public sector employer as defined in Section 30A of the FW Act”. A “State reference employer” is defined in item 2 of Schedule 2 and item 2A(4) of Schedule 3 to the Transitional Act to mean “an employer that is a national system employer only because of s.30D of the Fair Work Act.” Assuming the MFESB is a constitutional corporation, it is a “national system employer” by virtue of that fact¹³ and therefore cannot be a “State reference employer” because it is not a national system employer “only” because of s.30C of the Fair WorkAct 2009 (Fair Work Act).” 30

[59] I find that the Applicant is in the same position as the MFESB. It has a similar relationship to the Victorian Government. Hence if I find that the Applicant is a trading corporation then it is covered by the 2010 Modern Award and if it is not a trading corporation then it is covered by the 1999 Award.

[60] Mr Derrick, General Manager Operations, of the Applicant 31 gave evidence that the principal activity of the Applicant which has been established as a statutory authority under the Alpine Resort (Management) Act 1997 (Vic) is to keep the alpine resort facilities and services operating for the benefit of members of the public. The board does not receive appropriated funds from Government. Mr Derrick gave evidence that the board generates its revenue from service charges, gate entry fees, site rentals, on charged legal fees, ski patrol contributions, and permit fees.

[61] Mr Levin for the Applicant accepted that the Applicant is a statutory authority and a body corporate. 32 The employees are not public servants. Mr Levin provided a written submission which helpfully surveyed the import of the major High Court and Federal Court decisions concerning what constitutes a constitutional or trading corporation. A wide range of not for profit organisations such as the Red Cross, Universities, the fire brigade, and the football league have been found to be constitutional corporations by the High Court. The Federal Court has found that a local council is not a trading corporation primarily because its functions are predominately governmental in nature. The trading activities were found to be so inconsequential and incidental to the primary functions and activity that they prevented the Council from being a trading corporation.

[62] In deciding the question of whether it is a trading corporation or not the following has been established by the Courts: 33

Trading does not have to be the predominant activity but it must be substantial and not merely peripheral. It is a question of fact and degree.

Trading is not just buying and selling but it also includes activity to earn a revenue and trade in services.

The making of a profit is not a perquisite to trade.

The ends to which the corporation seeks to serve by trading are irrelevant to its description and so trading for a public purpose will not exclude the activity.

Regard must be had for the intended purpose of the corporation but a corporation that carries on trading activities can be found to be a trading corporation even if it was not originally established to trade.

The commercial nature of an activity is an element to be considered.

[63] The objects of the Board are defined in the Alpine Resorts Act. The Board is charged with the “development, promotion, management and use of the resorts”. In doing so it has to have regard to environmental, economic, cultural and equity of access considerations. It is specifically required to provide services in the nature of garbage disposal, water supply, gas, drainage, sewerage, electricity, roads, fire protection, snowmaking, and transport and to “charge contributions for the provision of such services.” It is also required to attract investment and collect fees prescribed by regulations.

[64] Collecting fees or rates does not make an activity trading unless specific goods or services are provided directly as a consequence of the charge. It is clear from the objects of the Board that they are empowered to charge contributions for the provision of specific services. The Applicant in this case charges some fees for which specific goods or services are not provided. For example annual service charges account for 39% of revenue according to Mr Derrick 34 and these Mr Levin submits are general charges similar to Council rates which do not guarantee the provision of any particular goods or services to the individual paying the fee. However, my view is that the charging of entry fees is likely to be a trading activity in that a person cannot enter the area controlled by the Applicant during most hours of the snow season without paying a fee and upon payment of that fee they receive a specific service and that is an entitlement to access the alpine resort and park their vehicle in the car park and access visitor services. The evidence of Mr Derrick is that 25% of the revenue comes from gate entry fees. There may be other fees and charges which could be regarded as trading activity such as trail fees and vehicle permits but it is not necessary to consider these given that entry fees clearly constitute a substantial and not merely peripheral part of the revenue and activity of the Applicant.

[65] Mr Levin argued that the primary purpose of the Board is to focus on environmental, climate change, ecological and cultural heritage considerations and that the economic considerations, although mentioned in the objects, are only relevant to the extent that the Board must collect revenue that is sufficient for it to carry out its main objectives. I cannot read the objects in this manner. It is clear that “development, promotion and management” and the “use of the resorts primarily for alpine recreation and tourism” are the overriding objectives. It is true that the Applicant is charged with doing this in a sustainable manner but economic purposes are not relegated to a lesser position in the objectives. It is true that the Board does not make a profit. It is true that the Board is charged with promoting visitation during all seasons but only charges gate entry fees in the snow season. It is true that the Board undertakes a number of important activities for which it does not charge specific fees. It is true that the Board does not operate a for profit sideline business such as the ski lifts or stores or accommodation.

[66] On balance I am inclined to the view that the Applicant is a trading corporation, however, I do not need to make a final decision in respect to this matter.

[67] Any finding I might make about whether or not the Applicant is a trading corporation could ultimately be challenged in another place and therefore for the purpose of the BOOT I will look at the Agreement when compared to both the 1999 Award and the 2010 Modern Award. For reasons outlined in the next section it is not necessary for me to determine whether or not the Applicant is a trading corporation since the outcome of the BOOT is the same regardless of which of the two relevant Awards is applicable.

BOOT - Is the test satisfied?

[68] Under the Victorian Alpine Resorts Award 1999 and under the Agreement ordinary hours during the ski season can be at any time 24 hours per day 7 days per week. Under the 1999 Award work in the snow season before 7am (can be moved to 6am by Agreement) and after 7pm or on Saturdays or in excess of 8 hours in one day or in excess of 38 hours in one week shall be paid at 1.5 times for the first two hours and double time thereafter. Work on Sundays is double time and work on public holidays is double time and a half.

[69] Under the Agreement work can occur for up to 10 hours in any one day (extendable to 12 hours by Agreement) and up to 50 hours in a week without payment of overtime penalty and no penalty is payable for work of up to 50 hours on weekends, public holidays or before 7am or after 7pm. Under the Agreement overtime after the 50 hours is paid for at time and half only.

[70] For the purpose of the BOOT the worker under the Agreement in the snow season who worked 50 hours in a week would generally receive 10 hours less pay than under the Award. The employer would often be able to organise the roster in such a manner that the first two hours of the extra 12 hours available at ordinary time under the Agreement do not occur on a Sunday however this cannot be guaranteed to be the case. Work before 6am and after 7pm will in some cases be part of the extra 12 hours work at ordinary time under the Agreement. However, this will not always be the case. An employee might be required to work 50 hours of which 20 might be before 7am and after 7pm, 20 might be on the weekend and the remaining 10 might be between 7am and 7pm on a weekday. The shortfall in paid hours in this case would be up to 35 hours. Similarly an employee might work 10 hours each day Monday to Wednesday between 7am and 7pm and then 10 hours on Saturday and on Sunday. The shortfall in paid hours in this case would be 21 hours pay.

[71] There is one public holiday in the snow season and if an employee worked under the Agreement they could lose a maximum of 15 hours pay under the Agreement when compared to the Award for a 10 hour shift.

[72] The potential differences would be even greater in the cases where an employee agrees to work a 12 hour shift.

[73] Call outs under the Award are paid a minimum of 4 hours work at time and a half (ie minimum 6 hours pay). If an employee works for more than two hours they receive double time after the first two hours. Saturday and Sunday call outs have slightly different provisions. Under the Agreement the minimum payment is generally less and is two hours plus travel time at overtime rates (time and a half).

[74] Overtime in excess of 50 hours in the snow season and in excess of 38 hours at other times is paid at time and a half for all hours whereas under the Award it is double time after two hours.

[75] The Applicant produced a spread sheet 35 which compared the situation under the 1999 Award and the Agreement based upon an employee working an average of 50 hours per week in the snow season. In practice many employees work considerably less than 50 hours on average during the snow season. Unfortunately my examination of this spread sheet reveals the following problems:

The Award rates used for comparison in Exhibit L6 are the 2005 rates and hence they understate the rates by $59.17 per week or $1.56 per hour. This understatement also affects the calculations of the Award value of shift penalties, casual loading and overtime penalty. The variations to the allowances which have occurred between 2005 and 2008 have also not been included.

The extra 12 hours per week overtime and the allowance for work on weekends has been valued at 24 hours additional pay under the Award. This assumption would cover most situations based on current working patterns. For example, 10 hours on Sunday (double time) and 10 hours on each of 4 week days (8 hours at time and a half). However, if two days were worked on the weekend then the assumption would break down as the total extra hours pay would be 19 on the weekend and 6 during the week making a total of 25. So the calculation of the overtime is understated by up to one hour in such a senario.

The allowance for work outside of 6am to 7pm on a weekday has been based upon an assumption of one hour for snow clearers, five hours for ticket sellers, five hours for carpark attendants, and 2 hours for ski patrollers. The AWU disputed the reasonableness of these assumptions. In cross examination of Mr Derrick it was established that on at least some occasions workers were engaged for more hours outside the spread of Award hours than in these assumptions. Mr Derrick gave evidence that snow clearers did work from 4am and up until 11pm; 36 that car park attendants did work up until 12 midnight37 and that gate entry officers worked well into the evening.38

The assumption in respect to call outs is based upon the estimated incidence of such call outs during the previous seasons. This assumption could change if the work practices change.

The work on the Queens Birthday holiday is not allowed for in the calculations.

The line up of the classification in the Award and the Agreement which has been used to construct Exhibit L6 places trades workers and certain operators of machinery at too low an Award level. This significantly understates the Award rate for the purpose of comparison for these workers.

[76] The Applicant’s spread sheet showed that based on the assumptions, of the 55 employees 6 casual or seasonal employees would have been worse off under the Agreement than under the Award. Three of the permanent employees would also have been worse off based upon their earnings in the snow season but the Applicant submitted that this would have been more than offset by their additional income in the rest of the year. The fact that overtime is paid at time and half beyond 50 hours work in the snow season and beyond 38 hours work in the rest of the year could also disadvantage employees in the off season compared to the Award which provides for overtime to be double time after two hours. However, the evidence of Mr Derrick was that very little overtime was worked in the off season.

[77] If allowance is made for the error in the Award rates used for comparison then only 19 of the 55 workers would be better off in the snow season when comparing the Agreement with the Award. If allowance is made for the incorrect classification line up and for the possibility of increased incidence of weekend work, work in the early mornings and into the evenings and or increased use of call outs then the number who would be better off would be reduced further.

[78] The decision of the Full Bench in Bupa 39 reminds us that we must look at what the Award says and what the Agreement says to make the comparisons. Just because workers are not asked to work after a certain time now we cannot assume that is how they will work in the future. Another factor in this case is that the Agreement provides for a range of rates at each classification level and this is the current practice for the Applicant. As a result the employees most at risk of being disadvantaged are employees who have had only a limited period of service with the Applicant. The proportion of workers at lower classification levels and at the starting point in the wage range for each classification level may well change in the future. It is what the Award and the Agreement permit to be done which has to be the basis for comparison.

[79] Notwithstanding that it is what the Agreement allows which is determinative for the BOOT, what is current practice can in my view assist in determining if an undertaking could be utilised to ensure the BOOT is met. So for example, if no employee ever worked after a certain time at present then the employer might give an undertaking that employees will not work after that time during the life of the Agreement or that if the decision was taken to work after that time additional payments would be made. Similarly if based upon current work arrangements only a small group of employees were not better off then an undertaking to address their potential disadvantage could be considered. In such a case I might consider an undertaking which involved calculation of entitlements under the Award and those under the Agreement and a commitment and a process to rectify any difference. However, I do not think that this sort of arrangement is generally satisfactory if it needs to be applied to a large proportion of the workforce or common situations. I say this because there can be no certainty that the process will be implemented.

[80] The Applicant offered during proceedings to make an undertaking in respect of the workers at the lower levels in the pay bands. The Applicant offered such an undertaking because Exhibit L6 showed that they were the only workers who would be potentially worse off. For the reasons outlined above I believe that the categories of workers who could be worse off is wider than that submitted by the Applicant. The Applicant offered to undertake that a fortnightly calculation would be conducted to compare the entitlements for a worker under the Award when compared to their entitlements under the Agreement and then pay any difference to ensure that the workers on lower levels of the pay bands were in fact better off 40. I may have been prepared to consider such an undertaking in the event that I was convinced that it was unlikely that any employees would ever be worse off in practice under the Agreement and/or if I was convinced that only a small group of employees would ever be at risk of being worse off under the Agreement. However, in the circumstances as they now are I doubt that such an undertaking would be reasonable and the breadth of undertaking required would probably amount to a significant change to the Agreement which is not permitted by the legislation.

[81] The snow season rates in the Victorian Alpine Resorts Award 1999, the Alpine Resorts Award 2010 and the Agreement is as set out in the following table with the alignment of Award and Agreement classifications broadly based upon the Applicant’s submission: 41

Agreement (Minimum Rates)	1999 Award (note: includes resort allowance which is paid for all hours worked but does not include industry allowance of $22.45 p/w or 59 cents p/hr)	2010 Modern Award
Band 1 $14.51	Training $15.50
Band 2 $16.18	Resort Worker 1. $17.56	Resort Worker 1. $15.98
Band 3 $17.87	Resort Worker 2. $18.18	Resort Worker 2. $16.61
Band 4 $20.10	Resort Worker 3. $18.48	Resort Worker 3. $17.20
Band 5 $22.33 (Trades)	Resort Worker 4. $18.78	Resort Worker 4. $18.17
Band 6 $26.80	Resort Worker 5. $19.20	Resort Worker 5. $18.77
Band 7 $30.71	Resort Worker 6. $19.49	Resort Worker 6. $19.37 (trades)
Trades. $19.70	Resort Worker 7. $19.90

[82] As noted earlier there are some problems with the alignment of classifications proposed by the Applicant.

[83] If the Alpine Resorts Award 2010 is the reference Award then the situation is somewhat different from that which applies to the 1999 Award. Under the 2010 Award the difference between the Award paid hours and the Agreement paid hours for 50 hours work amounts to 10 hours in the snow season. The public holiday is still an issue however the issue of weekend and early morning and evening work is not. Call outs is not an issue. The payment of overtime under the 2010 is the same as under the 1999 Award; that is double time after 2 hours. A Resort Worker Level 1 under the 2010 Award for 50 hours work in the snow season would earn $958.80 whereas under the Agreement they would earn $809.00. A tradesperson under the 2010 Award for 50 hours work would earn $1162.20 whilst under the Agreement the tradesperson would earn $1116.50. This is without taking into account other factors such as the sewerage treatment plant allowance under the 2010 Award which is not present in the Agreement. Higher duties pay is available after two hours work at the higher level under the Modern Award whereas it is only available after one day under the Agreement and may not be payable at all in cases where it is related to training or skill development. In comparison without taking into account any of the other allowance related issues (apart from the resort and industry allowances), or extra allowance for work outside span of hours or on a Sunday a Resort Worker Level 1 under the 1999 Award for 50 hours work in the snow season would earn a minimum of $1076.05 which is significantly more than the $809 minimum under the Agreement. A tradesperson under the 1999 Award would similarly earn $1204.45 when compared to $1116.50 minimum under the Agreement. There is also potential disadvantage under both Awards for workers in the off season if they were to be asked to work very significant amounts of overtime.

[84] The Agreement provides for better personal and parental leave than either of the Awards do, however, I do not believe that this is sufficient to ensure each employee is better off overall if their remuneration is potentially significantly less.

[85] The transitional provisions of the Modern Award have to be taken into account for the purpose of the BOOT. After making allowance for the effect of the transitional provisions I am satisfied that the conclusions which I reached earlier in respect to the failure of the Agreement to meet the BOOT if the 1999 Award was determined as the relevant Award therefore apply equally if the Alpine Resorts Award 2010 is the relevant Award.

Conclusion.

[86] I cannot approve the Agreement as the notice of employee representational rights was not provided as required by Act. I urge the parties to complete the process required by the Act and to resubmit an Agreement for approval as soon as possible. In doing so the parties will need to pay some attention to ensuring that the redundancy document is properly incorporated into the Agreement. They will also need to consider the issues raised in respect to meeting the Better Off Overall Test.

COMMISSIONER

1 Also accepted in submissions PN757.

2 Exhibit L3.

3 Exhibit L3.

4 Exhibit L1.

5 Exhibit L2.

6 Print 989596; 9 October 2009.

7 Print 993037; 29 January 2010.

8 Print 3675.

9 Print 944163.

10 Print R4465, paragraph 24.

11 194 CLR 355, 28 April 1998.

12 P0936 Dec 915/97M Print P3675.

13 Print S9378 and PR 921590.

14 (2009) FWA 1154 VP Lawler and (2009) FWA 73 SDP Watson.

15 (2010) FWA 2465 Commissioner Gooley.

16 Exhibit L2.

17 Evidence of Ms Kilpatrick PN597.

18 Exhibits L1 and L2.

19 Project Blue Sky v ABA (194 CLR 355 28 April 1998).

20 Exhibit L1 and see paragraph 10 for a summary.

21 Exhibits L1, L2 and L7.

22 PN751.

23 Submissions 18 and 26 March 2009.

24 Submission 8 April 2009.

25 May 22 2009, Print 52009.

26 Paragraphs 220 and 222.

27 Clauses 3.1 and 4.1 of the Alpine Resorts Award 2010.

28 Transcript of 30 June 2009 Award Modernisation Full Bench.

29 (2009) AIRCFB 865 PT392009, Melbourne, 25 September 2009.

30 (Melbourne, 4 December 2009) [2009] AIRCFB 945 PR122009.

31 Exhibit L5.

32 PN927.

33 Steytler P in Aboriginal Legal Service of Western Australia v Lawrence (No2) (2008) WAR 450; 252 ALR 136 at (68).

34 Exhibit L5.

35 Exhibit L6.

36 PN202 to PN211.

37 PN211 to PN217.

38 PN231.

39 PR995839.

40 Evidence of MR Derrick, PN153.

41 Exhibit L3.

Printed by authority of the Commonwealth Government Printer

[2010] FWA 2847

19 MAY 2010