FIP Electrical (NSW) Pty Ltd T/A FIP Electrical (NSW) Pty Ltd

[2017] FWC 3215

[2017] FWC 3215

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

FIP Electrical (NSW) Pty Ltd T/A FIP Electrical (NSW) Pty Ltd
(AG2017/1434)

COMMISSIONER ROE MELBOURNE, 13 JUNE 2017

Application for approval of the FIP Electrical Pty Ltd (Tasmania Division) Construction Enterprise Agreement 2017-2020 – Genuine Agreement.

[1] An application has been made for approval of an enterprise agreement known as the FIP Electrical Pty Ltd (Tasmania Division) Construction Enterprise Agreement 2017-2020 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by FIP Electrical (NSW) Pty Ltd (FIP). The Agreement is a single enterprise agreement.

[2] There are three employees who will be covered by the Agreement and they all voted to approve the Agreement. The Form F16 stated that were no employee bargaining representatives but that all three employees bargained on their own behalf. During the proceedings, it emerged that each of the employees signed a form appointing themselves as a bargaining representative. I am satisfied that under the Act, when an employee appoints themselves as a bargaining representative, they are a bargaining representative in exactly the same manner as if the employee appointed someone else as a bargaining representative. I am therefore satisfied that the answer on the Form F16 that there were no employee bargaining representatives was in error.

[3] An earlier application for the approval of the Agreement was made on 21 March 2017. That application was withdrawn on 3 April 2017. The reason for the withdrawal was that FWC advised the company on 22 March 2017, that the Notice of Representational Rights issued on 14 February 2017 was not consistent with the requirements of the Act. NECA on behalf of the Company forwarded the Notice of discontinuance on 3 April 2017, stating that “A signed form F50 is attached. Apologies for the delayed response. Mr Pirreca, the MD of FIP Electrical was unavailable all last week.” Mr Jarvis of NECA signed the notice on behalf of the company.

[4] Although the evidence on this point was not strong, I am prepared to accept the submission of NECA that the bargaining for the first agreement ceased when FWC advised the employer that the Notice of Representational Rights was faulty on 22 March 2017. The company then advised employees that they were prepared to start again on bargaining for the Agreement and issued the new Notice of Representational Rights on 23 March 2017.

[5] This Application was made on 24 April 2017. The Form F17 Statutory Declaration is dated 24 April 2017 and the Form F16 Statutory Declaration is dated 27 April 2017. The Form F17 states that the notification time and the last day of providing the Notice of Employee Representational Rights was 23 March 2017. The employer also states that voting commenced and concluded on 19 April 2017. They say that a meeting to explain the Agreement was held on 7 April 2017 and that the draft Agreement was handed to employees on 6 April 2017, along with a notice about the vote. A copy of the notice has been provided. That notice also advises employees that they can obtain a copy of the Award which is not incorporated but which is utilised for the BOOT from the company head office if they wish.

[6] Mr Pirreca, managing director of the company, gave evidence that:

• FIP Electrical (NSW) Pty Ltd has secured work on a project in Tasmania at the Royal Hobart Hospital.



• To date, none of the employees who might be covered by the Agreement have performed any work in Tasmania.



• On about 9 February 2017, he asked about 10 employees who he thought would be suitable for the work in Tasmania, if any of them would be willing to transfer to Tasmania. Three employees volunteered.



• The three employees have been engaged in preparatory work for the Tasmanian project since about 13 February 2017, including picking up site temporary boards, wire and repair boards ready for transfer to Tasmania and preparing switchboards and tagging electrical equipment.



• Initially the job will only require up to three employees but at its peak up to 20 may be engaged.

[7] There is no suggestion that continuity of employment was broken for those who volunteered to go to Tasmania to do the Royal Hobart Hospital job. There is also no suggestion that employment will cease when the Royal Hobart Hospital job comes to an end. Presumably, the employees may return to work in Sydney if there is no further work for the company in Tasmania when the job comes to an end.

[8] The CEPU provided a Form F18 in which they state that they were a bargaining representative but that they oppose the approval of the Agreement. The CEPU state that:

• The Agreement was not made with people who are covered by the scope of the Agreement.



• The Agreement contains prohibited terms and in particular Clause 13.1 which related to employer industrial action.



• The Agreement contains unlawful terms and the provision in Schedule A for definitions of work which are not in accordance with Tasmanian licensing regulations.



• The Agreement was not genuinely agreed to.

[9] The CEPU have given notice that should the Agreement be approved they wish to be covered by it.

[10] The rates of pay in the Agreement for employees other than apprentices are close to 60% above the Electrical, Electronic and Communications Contracting Award 2010 (the Award) rates. Generally, the conditions are comparable to the Award. The couple of matters that are less than the Award are adequately compensated for by the higher rates. Junior apprentice rates are at least 16% above the Award rates. Adult apprentice rates are at least 5% above the Award rates. I am satisfied that there are no BOOT or NES issues.

[11] I am not satisfied that two of the concerns raised by the CEPU would prevent the approval of the Agreement.

• I do not consider that Clause 13.1(g) which is a stand down clause is a prohibited term. It is a provision which reflects the circumstances in which stand down is permitted in Section 524 of the Act.



• I do not consider that even if the definitions of work are not in accordance with Tasmanian licensing regulations, this means that the term is an unlawful term as defined by Section 194 of the Act.

[12] However, for the reasons which follow I consider that the CEPU is correct that the Agreement was not made with people who are covered by the scope of the Agreement and that there are consequent issues about genuine agreement.

[13] The Agreement states that its coverage is defined as following in Clause 5:

“This Agreement will apply to all employees of FIP Electrical (Tasmania Division) Pty Ltd in respect of the employment of employees whose classifications appear in this Agreement and shall only apply to the employers operations and work carried out in the State of Tasmania.”

[14] FIP Electrical Pty Ltd (Tasmania Division) (ABN 62 066 085 578) is the same company with the same ABN as FIP Electrical (NSW) Pty Ltd. The three employees said to be covered by the Agreement were employees of FIP Electrical (NSW) Pty Ltd and were working in NSW and covered by the FIP Electrical (NSW) Pty Ltd Construction Enterprise Agreement 2015 (the NSW Agreement) [[2015] FWCA 8714] [AE417144]. The Scope of that Agreement is as follows:

“5. SCOPE & APPLICATION OF AGREEMENT

a) This Agreement applies to the Company in respect of employees falling into the classifications specified in Schedule 'A' when they perform work anywhere in the County of Cumberland.

b) If the Company has secured work outside of the County of Cumberland, an employee whom normally works within the County of Cumberland:

i) Will be paid at the rates outlined in this agreement if specifically requested by the Company to work on that site; or

ii) May be offered work at that location at the rates that apply for that area and if applicable,

taking into account the payment of the living away from home allowance; or

iii) May determine that redundancy would be more appropriate

c) Site/Project Allowances will be paid:

i) Where such an allowance is provided for by the Fair Work Commission in an Enterprise Agreement which applies to the Company.”

[15] On its face, the NSW Agreement covers employees when working outside the Sydney area provided those employees normally work within the Sydney area and they are not made redundant. This is reinforced by the fact that the NSW Agreement contains definitions and other provisions for distant work which is work which would make it necessary for the employee to live and sleep elsewhere than at home. The NSW Agreement has a nominal expiry date of 16 December 2019.

[16] The NSW Agreement defines employees in the definitions clause as follows:

“Employee means an employee of the Company Divisions performing construction work within the scope of this Agreement extending to anywhere within the area of the County of Cumberland.”

[17] The County of Cumberland is essentially the greater Sydney area. The NSW Agreement excess travel schedule considers work at sites such as Newcastle which is not in the County of Cumberland.

[18] The provision in Clause 5(b)(ii) of the NSW Agreement is not absolutely certain and may raise some potential BOOT issues but the Agreement has been approved and applies to those who fall within its scope. I am satisfied that the provision means that employees who fit within the circumstances in Clause 5(b)(ii) remain covered by the NSW Agreement, notwithstanding that they may be paid a different rate.

[19] The following questions arise from these circumstances:

(a) Are the three employees who made the Agreement still covered by the NSW Agreement?

(b) Did the three employees who made the Agreement, fall within the scope of the Agreement at the time that they bargained and voted for it? If the answer to that question is no, then are those who voted “employees employed at the time who will be covered by the Agreement”?

[20] I am not satisfied that the definition of employee restricts the scope of the NSW Agreement. The scope is determined by the scope clause and it includes those who work outside of Sydney, provided that they normally work in Sydney. I am therefore satisfied that the NSW Agreement applies to work outside of the Sydney area, provided the employee is normally engaged to work in the Sydney area and they are not made redundant. These preconditions apply to the three employees. As the three employees are still covered then because only one agreement can apply to an employee at a particular time, Section 58 of the Act would mean that the NSW Agreement continues to apply until its nominal expiry date to the three employees. As a consequence, the requirement of Section 181(1) of the Act that the employees who vote are “employees employed at the time who will be covered by the agreement” could not be met. Furthermore, there would be reasonable grounds for believing that there was not a genuine agreement because those who have no real stake in the Agreement would have determined the conditions and wages for those who have a real stake in the Agreement. The Agreement would cover prospective new employees who would not be covered by the NSW Agreement if they had not normally worked in Sydney from the time of their engagement. However, the three employees will not be covered by the Agreement until the nominal expiry date of the NSW Agreement.

[21] The Agreement in contrast “shall only apply to the employers operations and work carried out in the State of Tasmania”. The employees had not been carrying out work in the State of Tasmania at the time the Agreement was negotiated and made. It is expected that they will carry out work in the State of Tasmania at some time in the future. The word “and” in this context means that two conditions must be met; the employers operations must be in the State of Tasmania and the work must be carried out in the State of Tasmania.

[22] NECA argued that the phrase “shall only apply to the employers operations and work carried out in the State of Tasmania” should be read as meaning “shall only apply to the employers operations in the State of Tasmania or to work carried out in the State of Tasmania.” I do not consider that this is consistent with the plain meaning of the words considered in context. In my view, the plain meaning is that the work must be carried out in the State of Tasmania for it to be covered by the scope of the Agreement.

[23] I accept that it is possible that the preparatory work which has been conducted by the employees in Sydney may be in support of or in preparation for operations in Tasmania. However, the more natural meaning of the employers operation in Tasmania is that the work is physically conducted in Tasmania. I consider that if the mutual intention of the parties was to include preparatory work done in another location, then the Agreement would have said that. Even if the more strained meaning of the “employers operations” is accepted, it is not possible, consistent with the plain meaning of the words, to find that the “work of the employees” has been carried out in Tasmania. I am therefore satisfied that the employees were not engaged in work within the scope of the Agreement at the time it was negotiated and made.

[24] I am not satisfied that the Agreement has been genuinely agreed to (Section 188(b) of the Act) because the Agreement was not made by a majority of those employees who cast a valid vote. Those employees are defined in Section 181(1) of the Act as “the employees employed at the time who will be covered by the agreement”. The term “who will be covered by the agreement” is about those employees, employed by the employer who will be covered by the agreement as a necessary consequence of the agreement being made. For this to occur, the work of the employees who vote must fall within the scope of the agreement at the time of the vote.

[25] For these reasons, I cannot approve the Agreement.

[26] Although it is not strictly necessary, I will briefly deal with another concern.

[27] The employer also provided a copy of a notice “Representation Election Form” which was provided to each employee on 30 March 2017. Three forms were provided, one for each of the employees who voted for the Agreement. Each form is personally addressed to the named employee at the beginning of the notice and then again in the slip at end of the notice. The individual employee name has been typed in both places in the same font as the rest of the notice.

[28] The Form refers to a Notice of Representational Rights which had been provided to all employees on 23 March 2017. It states that “to date the Company has not received any notices from any employees indicating a wish to be represented in the current negotiations. The Company is requesting employees (if you are not members of the Union or if you are a member of the Union) to sign at the appropriate place below to indicate preference for representation.”

[29] At the bottom of the notice is a slip which has the name of the employee filled in. It reads: “I (name of employee included), Have received, read and understood the Notice of Employee Representation Rights provided to me on (14/02/2017). I hereby indicate my preference in relation to representation during the negotiation of the FIP Electrical (NSW) Pty Limited (Tasmania Division) Single Enterprise Agreement 2017 as follows:” The employee is then told to place a cross in one of four boxes which are: “revoke the union rights, represent yourself, appoint other (insert name), union as bargaining representative”. Each of the employees has indicated “represent yourself”.

[30] In my view, the notice appointing a bargaining representative contradicts the Notice of Representational Rights. An employee who is a member of a union is specifically not required to advise the employer that they want the union to be their bargaining representative. The notice provided by the employer specifically requires such notification. I agree that the notice does not say that the form must be completed but handing employees a form which is filled in with their name and asking them to fill it in, creates a strong inference that employees were effectively required to complete the form. This process directly undermines the Notice of Representational Rights because it would give a union member the impression that they had to nominate the union if they wanted the union to be their representative. In my view, this calls into question whether the Agreement was genuinely agreed to. However, it is not necessary to decide this question.

[31] The application for approval of the Agreement is dismissed.

COMMISSIONER

Appearances:

G Jervis of National Electrical and Communications Association for FIP Electrical (NSW) Pty Ltd.

M Anderson of Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia - Tasmanian Branch.

Hearing details:

2017.

Melbourne – Sydney – Hobart (by video link):

9 June 2017.

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