Flick Anticimex Pty Ltd
[2022] FWC 1705
•13 JULY 2022
| [2022] FWC 1705 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Flick Anticimex Pty Ltd
(AG2022/1620)
| COMMISSIONER LEE | MELBOURNE, 13 JULY 2022 |
Application for approval of the Flick Hygiene Services Enterprise Agreement 2022
Introduction
An application has been made for approval of an enterprise agreement known as the Flick Hygiene Services Enterprise Agreement 2022 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Flick Anticimex Pty Ltd (the Applicant) on 26 May 2022. The Agreement is a single enterprise agreement.
The matter was listed for hearing on 29 June 2022. At the conclusion of the hearing, I determined as follows:
“I am not satisfied this is a minor procedural error and, in circumstances where it is not in contest that section 180(3) was not complied with, then the ability to reach a state of satisfaction that the agreement has been genuinely agreed, having regard to the circumstances in 188(2)(a) and (b), it is not available to me, and, for that reason, the agreement cannot be approved and the application is dismissed.
I will provide full written reasons for this decision, but, for the benefit of your client, who is concerned about the time frame, and I understand that, then you have got that certainty going forward. Written reasons I will get out as soon as I possibly can.”[1]
I indicated that I would provide full written reasons for the decision made as soon as possible. What follows are those written reasons.
Background and Evidence
On 7 June 2022, my Chambers forwarded correspondence to the parties setting out a number of concerns about the application. It is not necessary to set out those concerns in full as the concerns were largely satisfied after further explanation from the Applicant, and the provision of an undertaking.
The exception was the concern that Q20 of the Form F17 indicates that employees were provided with details of the vote on 21 April 2022. Q25 of the Form F17 indicates that voting commenced on 22 April 2022. As such, the 7-day access period started on the first full day after 14 April 2022. Based on that information the concern raised with the Applicant was that it does not appear that the employer took all reasonable steps to notify the relevant employees of the voting details by the start of the access period for the Agreement per s.180(3) of the Act.
The response provided by the Applicant was:
“An email was sent to staff on 21 April 2022 outlining links to the proposed EA and how to vote. There were little changes in the EA from the last one and Branch Managers provided an update to staff of the changes.
As staff don’t always attend a branch every day, voting boxes were provided from 22 April to 6 May so those who were comfortable with the agreement could vote at their leisure. Also, staff were encouraged to speak with the manager or the HR Manager if they had any further questions.”
My Chambers sent further correspondence to the parties on 17 June 2022 and sought further information relevant to my concern relating to s.180(3), including any submissions pertaining to the discretion conferred under s.188(2). The Applicant provided the following written submissions in response:
“Section 180(3) of the Fair Work Act 2009 (Cth) requires:
(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:
(a) the time and place at which the vote will occur;
(b) the voting method that will be used.
The access period was proposed to be between 14 and 21 April 2022.
On 21 April 2022 employees received confirmation via email of the voting details and arrangements and the final EA. Toolbox meetings were also held to explain and discuss the proposed EA on 21 April 2022.
Voting opened at physical branches on 22 April 2022. Due to the intermittent visiting of the branches by employees depending on their roster, Flick had proposed a seven day voting period to ensure employees all had access to voting.
Flick recognised there was a timing issue with the access period.
For this reason the voting period was amended. On 29 April 2022 employees received a further email containing voting details and arrangements and the final EA. Voting remained open until 6 May 2022.
Flick recognises that the EA email on 21 April 2022 was not provided by the start of its proposed access period being 14 to 21 April 2022. With voting extended until 6 May 2022 the impact was diminished.
Section 188(2) of the Fair Work Act 2009 (Cth) states:
(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and
(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.
The changes in the EA are minor being:
(a) Insertion of a pandemic clause;
(b) A wage increase of 3%; and
(c) A flexible working clause.
The extended voting period remedied the error regarding the delayed confirmation of voting details on 21 April 2022, which was during - not before the access period.
Voting remained open from 22 April to 6 May 2022. Thus, the access period could be construed as from 21 April 2022 to 18 April 2022.
A further email confirming voting arrangements was sent by Flick to employees on 29 April 2022.
In terms of the EA being genuinely agreed to:
(a) Flick took all reasonable steps to ensure that during the access period for the agreement, the employees were given a copy of the written text of the agreement, and any other material incorporated by reference in the agreement or that the employees had access through the access period to those materials. It did so by providing in email form on 21 April 2022 the final EA and holding toolbox talks with employees regarding the minor amendments to the EA. Flick also provided employees access to online resources regarding the NES at that time and provided contact points to employees for any concerns or queries.
(b) Flick took all reasonable steps to notify the employees, by the start of the access period for the agreement, of the time and place at which the vote will occur and the voting method. The email of 21 April 2022 and reminder on 29 April 2022 was explicit as were the toolbox talk discussions on 21 April 2022 that voting would be held physically at the relevant branches which employees were based and would remain open for a period to address different shifts and attendance patterns of staff ensuring access.
(c) Flick took all reasonable steps to ensure that the terms of the agreement, and the effect of those terms, were explained to the employees and the explanation was provided in an appropriate manner, taking into account the particular circumstances and needs of the relevant employees. Following bargaining from January 2022, written confirmation of the final EA and toolbox talks highlighting the relevant 3 changes were communicated to staff.
(d) Flick provided the last NERR on 17 January 2022. Thus, Flick did not request the employees to approve the enterprise agreement until 21 clear days after the last notice of employee representational rights was given;
(e) A clear majority of the employees who voted (84 of 109) voted in favour of the EA; and
(f) Flick submits there are no grounds for believing that the agreement has not been genuinely agreed to by the employees.
Considering:
(a) the lengthy engagement process regarding the EA from January 2022 until voting closed on 6 May 2022;
(b) the minor amendments to the EA; and
(c) the level of employee engagement by way of voting (being 109 out of 253);
(d) the voting period being at first 7 days and then 14 days;
Flick submits that a minor procedural error regarding the access period made no difference in the circumstances and did not disadvantage any employee.
Flick notes it did not receive any employee feedback or concerns regarding the adjusted voting timeframe.
Further there was more than ample time for employees during the seven and then 14 day voting period to raise questions or obtain further information from Flick regarding the EA and determine whether they wished to vote in favour. Due to the extended voting period there was no prospect of any employee being unaware of or missing the voting opportunity during the 14 day period.
Flick submits that the extended voting period remedies the access period error and that there was not disadvantage to the employees concerned. As such Flick requests that the Commission approve the EA.”
I remained concerned regarding s.180(3). In particular, I was concerned that this was not a minor error as contemplated under s.188(2). The matter was therefore listed for hearing on 29 June 2022 to deal with this issue. Prior to the hearing the Applicant provided the following further submissions:
“We understand that Commissioner Lee took exception to the wording in our submissions referring to the procedural deficiency as minor. Flick Anticimex takes its obligations seriously and pursued a new enterprise agreement to the benefit of staff, including to ensure wage increases for staff. It accepts there was a procedural deficiency in the timing of the access period and the notification of the voting place and time and other arrangements (under s 180(3)). It deeply apologises for that deficiency. It was a simple timing mistake, not intentional and relevantly Flick’s internal HR was under existing strain from negotiating another enterprise agreement at the same time.
Flick Anticimex maintains that the agreement would have been genuinely agreed but for that procedural deficiency. As outlined in the prior submissions the majority of employees voted in favour of the enterprise agreement and it considers the elongated voting over a fourteen day period ensured all who wished to vote did so. The purpose of s 180(3) is to ensure employees have the ability to attend voting, that ability was not adversely impacted by the procedural deficiency due to the elongated voting period.
We note that as paragraph [76] of Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others [2019] FWCFB 318 (Ross J, Hatcher VP, Saunders DP, 18 January 2019) states a minor procedural deficiency under the relevant explanatory memorandum is ‘employees being informed of the time and place for voting on the proposed enterprise agreement or the voting method that will be used for the agreement just after the start of the access period rather than by the start of the access period (subsection 180(3))’ Flick admits that the notification was at the end of the access period, but submits that the fourteen day voting period reduces the severity of this procedural deficiency. There are no aggravating factors such as this being the first enterprise agreement or language difficulties. Rather this is essentially a roll over agreement including a wage increase.
If the Commissioner is concerned about the level of voting of employees Flick consider this can be explained by reports by its employees that they were threatened by internal union representatives who chose not to partake in negotiations nor have their union partake in negotiations to vote against or not vote regarding the enterprise agreement in question. Thus any concern about the level of voting participation over the fourteen day voting period should not be considered as reflecting the level of deficiency under s 180(3). There was no deprivation of rights for Flick employees covered by the enterprise agreement due to the extended fourteen day voting period.
Flick submits that the enterprise agreement has been genuinely agreed to by the employees covered by the agreement. Flick is also anxious that employees who are covered by the enterprise agreement are waiting for the promised pay increases within the agreement (as we currently receive numerous emails and phone calls and enquiries each week as to the status of the agreement) the longer this process within the Commission takes and in these economic times it is concerned for the financial benefit of its employees, namely it is anxious they should receive the pay increases as quickly as possible within the enterprise agreement.”
During the hearing the Applicant’s representative, Ms Sowden, provided further submissions which in summary included:
· acceptance that there was an oversight in terms of the timing of the vote, which is regrettable, and that the Applicant apologises for that;
· submissions that the extended voting period of 14 days is quite extensive and that the Applicant:
“did provide really almost excessive opportunity for voting, if I can use that sort of florid language, and so we say that that really does mitigate any of the deficiencies in terms of the timing, and that means that there is genuine agreement because there was more than adequate opportunity for voting, and that's really what the focus - and obviously providing the seven clear days is to ensure that people have sufficient notice of location for voting, et cetera”;
· that the extended voting period overcomes the potential disadvantage that employees may have been at by virtue of the deficiency in the timeframes;
· that “…it appears to Flick that there was some pressure brought to bear on employees to try and discourage them from voting or approving the agreement, and it considers that that has had an impact on the level of voting”;
· that the voting was accessible at the locations where employees were based;
· acceptance that there was a low level of participation in the vote, but that it was not due to any sort of procedural deficiency;
· that as the Agreement was essentially a “roll over” Agreement, there is often lower levels of engagement of employees in those circumstances; and
· that the 14-day voting period provided is suggestive that the voting outcome is the best that could be achieved.[2]
As to whether the error was a minor error, the following submissions were made:
“I think the elongated timing means that the deficiency, although in usual circumstances would, I accept, not be regarded as minor, in these particular circumstances where there is a very extended voting period, very accessible to staff at their required location, we maintain that it is minor in these circumstances, having regard to that extended period.”[3]
Law to be applied
The relevant provisions of the Act are as follows:
“180 Employees must be given a copy of a proposed enterprise agreement etc.
(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:
(a) the time and place at which the vote will occur;
(b) the voting method that will be used.”
“188 When employees have genuinely agreed to an enterprise agreement
(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and
(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.”
“186 When the FWC must approve an enterprise agreement—general requirements
Basic rule
(1) If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.
Note: The FWC may approve an enterprise agreement under this section with undertakings (see section 190).
Requirements relating to the safety net etc.
(2) The FWC 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
(b) if the agreement is a multi‑enterprise agreement:
(i) the agreement has been genuinely agreed to by each employer covered by the agreement; and
(ii) no person coerced, or threatened to coerce, any of the employers to make the agreement; and
(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and
(d) the agreement passes the better off overall test.
Note 1: For when an enterprise agreement has been genuinely agreed to by employees, see section 188.
Note 2: The FWC may approve an enterprise agreement that does not pass the better off overall test if approval would not be contrary to the public interest (see section 189).
Note 3: The terms of an enterprise agreement may supplement the National Employment Standards (see paragraph 55(4)(b)).
Requirement that the group of employees covered by the agreement is fairly chosen
(3) The FWC must be satisfied that the group of employees covered by the agreement was fairly chosen.
(3A) If the agreement does not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.
Requirement that there be no unlawful terms
(4) The FWC must be satisfied that the agreement does not include any unlawful terms (see Subdivision D of this Division).
Requirement that there be no designated outworker terms
(4A) The FWC must be satisfied that the agreement does not include any designated outworker terms.
Requirement for a nominal expiry date etc.
(5) The FWC must be satisfied that:
(a) the agreement specifies a date as its nominal expiry date; and
(b) the date will not be more than 4 years after the day on which the FWC approves the agreement.
Requirement for a term about settling disputes
(6) The FWC must be satisfied that the agreement includes a term:
(a) that provides a procedure that requires or allows the FWC, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes:
(i) about any matters arising under the agreement; and
(ii) in relation to the National Employment Standards; and
(b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.
Note 1: The FWC or a person must not settle a dispute about whether an employer had reasonable business grounds under subsection 65(5) or 76(4) (see subsections 739(2) and 740(2)).
Note 2: However, this does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4).”
The leading decision which deals with the correct application of s.188(2) is Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others (Huntsman),[4] a copy of which was provided to the Applicant prior to the hearing. Aspects of the consideration in Huntsman which are relevant to circumstances in this matter include the following:
“In order for an agreement to have been genuinely agreed to under s.188(2) the Commission must be satisfied as to the matters in paragraphs 188(2)(a) and (b). The matters in paragraphs 188(2)(a) and (b) are cumulative requirements (so much is clear from the use of the conjunctive ‘and’). The Commission must be satisfied as to both matters before it can be said that the agreement has been genuinely agreed.”
…
The Revised Explanatory Memorandum sets out the following examples of ‘minor procedural or technical errors’:
· employees being informed of the time and place for voting on the proposed enterprise agreement or the voting method that will be used for the agreement just after the start of the access period rather than by the start of the access period (subsection 180(3));
· employees being requested to approve a proposed enterprise agreement on the 21st day after the last [NERR] was given, rather than at least 21 days after the day on which the last [NERR] was given (subsection 181(2));
· the inclusion of the employer’s company logo or letterhead on a [NERR];
· the inclusion of additional materials that are stapled with a [NERR]; or
· minor changes to the text of the [NERR] that had no relevant effect on the information that was being communicated in it (for example, the [NERR] may say to contact a particular person in the human resources department rather than ‘contact your employer’).’[5]
In relation to the first example given the relevant procedural requirement is set out in s.180(3):
(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:
(a) the time and place at which the vote will occur;
(b) the voting method that will be used.
The ‘access period’ is ‘the 7-day period ending immediately before the start of the voting process’ (s.180(4)). It follows that the requirement to notify employees of the time and place at which the vote will occur and the voting method is to be met at least 7 clear days before the start of the voting process.
Whether a failure to comply with s.180(3) constitutes a ‘minor error’ depends on the extent of the non-compliance and the circumstances. Generally speaking, the lower the level of non-compliance the more likely it is to be characterised as a ‘minor error’. So, informing the employees of the matters in s.180(3)(a) and (b) ‘just after the start of the access period’, say 6 days before the start of the voting process, is likely to be a ‘minor error’ in most cases; but in some circumstances it may not be. For example, if it is the first agreement at the enterprise, the bargaining representatives are inexperienced and the employees are predominantly from a non-English speaking background, then it may not be a ‘minor error’.
It may also be the case that what appears to be a more significant instance of non-compliance may still be categorised as a ‘minor error’, depending on the particular circumstances. For example, only informing the employees of the ss.180(3)(a) and (b) matters 4 days before the voting process starts may be a ‘minor error’ where all of the relevant employees actually voted.
It is also important to distinguish between the requirements in ss.180(3)(a) and (b). It seems to us that the need to inform employees of the time and place of the vote (i.e. s.180(3)(a)) is more significant than informing them of the ‘voting method’ (i.e. s.180(3)(b)). The first requirement may impact on the employees’ capacity to participate in the voting process, the second may not.”[6]
Consideration
It is not in contest that s.180(3) was not complied with in this case. The notification of the vote occurred on 21 April 2022. However, voting commenced the very next day, on 22 April 2022. The 7-day access period started on the first full day after 14 April 2022. Therefore, it is apparent the employer did not take all reasonable steps to notify the relevant employees of the voting details by the start of the access period for the Agreement per s.180(3) of the Act.
Absent the provisions of s.188(2), that would be the end of the matter as s.180(3) is not complied with and therefore the Commission could not be satisfied the Agreement is genuinely agreed to having regard to s.188(1)(a)(i). However, s.188(2) provides a discretion for the Commission to find that an agreement has been genuinely agreed to if it is satisfied of the existence of the circumstances set out in in s.188(2).
As set out earlier, the decision in Huntsman makes clear that an error, in this case a procedural error, must both be minor and employees were not likely to have be disadvantaged by the error (emphasis added).
In Huntsman, what was to be considered a minor error in respect of s.180(3) was clearly referrable to the extent of non-compliance. The lower the level, the more likely it is to be characterised as minor. The Full Bench considered an example where notification to the employees of the vote, 6 days before the vote, or in other words, just after the start of the access period, would likely to be considered minor. A further example is contemplated where 4 days’ notice is given, which while more significant, may be considered minor where all of the employees actually voted.
The comments of the Full Bench are consistent with the revised Explanatory Memorandum which gave an example of employees being advised of the vote “just after the start of the access period” as an example of a minor error. Of course, these examples are not rules but rather provide guidance on the proper application of s.188(2).
The facts in this matter differ considerably from the types of examples contemplated above. The notification of the vote was not just after the start of the access period, it was at the very end of the access period. Further, the vote outcome was far from a situation where all employees voted, or even close to that outcome. Rather the vote outcome was one where only 109 of the 253 employees covered by the Agreement cast a valid vote, and 84 of those 109 employees voted to approve the Agreement.
Therefore, only 48% of those covered actually voted, with 77% voting in favour of the Agreement. This is a long way from the circumstances contemplated in the second example in Huntsman as a possible scenario in which a procedural error under s.180(3) would be considered minor.
Taking into account all of the circumstances, I am not satisfied the error is a minor error, as contemplated in s.188(2)(a). As I am not satisfied the error is a minor procedural error, I am not satisfied that the Agreement is genuinely agreed taking into account the matters in s.188(2).
As to whether employees are not likely to have been disadvantaged, I have taken into account that the Applicant sent out a further email, a day before the vote was to close, extending the voting period for a further 7 days. I agree with the Applicant this would likely have an effect of reducing somewhat the disadvantage of the lack of notice. However, given the very low voter turnout, I am not satisfied that employees covered by the Agreement were not likely to have been disadvantaged.
As outlined above, just prior to the hearing the Applicant provided hearsay evidence to the effect that:
“If the Commissioner is concerned about the level of voting of employees Flick consider this can be explained by reports by its employees that they were threatened by internal union representatives who chose not to partake in negotiations nor have their union partake in negotiations to vote against or not vote regarding the enterprise agreement in question. Thus any concern about the level of voting participation over the fourteen day voting period should not be considered as reflecting the level of deficiency under s 180(3). There was no deprivation of rights for Flick employees covered by the enterprise agreement due to the extended fourteen day voting period.”
This submission does nothing to assist me in reaching a state of satisfaction that the error was not likely to have been disadvantageous to employees. To the contrary, it suggests there was a level discontent with the terms of the Agreement. While it may have been a “roll over” agreement, it would seem apparent on the submissions of the Applicant that it was not a ballot in which there was a lack of interest from the employees as to the outcome. Having considered the circumstances, I am not satisfied that employees covered by the Agreement were not likely to have been disadvantaged.
Conclusion
It is not in contest that the Applicant did not comply with the requirements of s.180(3). I am not satisfied that, notwithstanding that error, that the Agreement was nevertheless genuinely agreed taking into account the discretion afforded in s.188(2) as I am not satisfied that the error is a minor error. Nor am I satisfied that the error was one where, in all the circumstances, employees were unlikely to have been disadvantaged by it. I am therefore not satisfied the Agreement is genuinely agreed having regard to s.188(1)(a)(i). Therefore, the Agreement does not meet the mandatory requirement of s.186(2)(a) and cannot be approved. The application is dismissed.
COMMISSIONER
Appearances:
L Sowden, for the Applicant.
Hearing details:
2022.
Melbourne (via Microsoft Teams):
June 29.
[1] Transcript at PN73-PN74.
[2] Transcript from PN18-PN49.
[3] Transcript at PN60.
[4]Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others (Huntsman) [2019] FWCFB 318.
[5] Revised Explanatory Memorandum at [47].
[6] Huntsman at [43] and [76]-[81].
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