Gold Fields Australia Pty Ltd
[2022] FWCA 2034
•24 JUNE 2022
| [2022] FWCA 2034 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.222—Enterprise agreement
Gold Fields Australia Pty Ltd
(AG2022/833)
Gold Fields Companies Enterprise Agreement 2018
| Mining industry | |
| DEPUTY PRESIDENT BEAUMONT | PERTH, 24 JUNE 2022 |
Application for termination of the Gold Fields Companies Enterprise Agreement 2018 – termination agreed by majority vote – reasonable opportunity to decide
This decision concerns an application by Gold Fields Australia Pty Ltd (the Applicant), a gold mining company, for the termination of the Gold Fields Companies Enterprise Agreement 2018 (the 2018 Agreement)[1] under s 222 of the Fair Work Act 2009 (the Act). The nominal expiry date of the 2018 Agreement is 30 April 2022.
The Agreement applies to the Applicant and a number of its companies. The companies include Gold Fields Australasia Pty Ltd, Agnew Gold Mining Company Pty Ltd, GSM Mining Company Pty Ltd, St Ives Gold Mining Company Pty Ltd, and Gruyere Management Pty Ltd. Clause 2(b) of the 2018 Agreement provides that coverage does not extend to employees in construction roles employed by Gruyere Management Pty Ltd and employees in pastoral roles. As the Applicant is the current employer of some of the employees covered by the 2018 Agreement, it has standing to make the application.[2]
Coverage of the Agreement also extends to the employees of the abovementioned employers in the classifications prescribed in the 2018 Agreement. The employees covered include senior and executive level employees within the business. Whilst the Applicant has decided to negotiate and make a further enterprise agreement with its operational employees,[3] the scope of that new Agreement, the Gold Fields Companies Enterprise Agreement 2022 (the 2022 Agreement),[4] does not extend to senior and executive level employees. Absent the termination of the 2018 Agreement, the senior and executive level employees would remain covered by it.
It is noted at this juncture that whilst dealing with this application, I have concurrently dealt the Applicant’s applications under ss 185, 210 and 217 of the Act in respect of the 2022 Agreement.[5]
In response to the application, The Australian Workers’ Union (AWU), an employee organisation covered by the 2018 Agreement, filed submissions contending that there were issues with the application that the Commission should consider. Shortly stated, those issues included:
a) the Applicant’s evidence was insufficient to conclude that the termination was agreed to by the relevant employees because:
i.1734 employees who were to be covered by the 2022 Agreement were provided with a double-barrelled question which addressed the termination of the 2018 Agreement and the approval of the 2022 Agreement, in contrast to the question provided to the remaining 65 employees in senior and executive levels;
ii.there was a discrepancy in the numbers of employees who had voted, given that the Applicant had declared 1799 employees were covered by the 2018 Agreement and yet, in the Form F17 filed in support of the application for the approval of the 2022 Agreement,[6] the Applicant had pressed that 1735 employees were to be covered by the 2022 Agreement in circumstances the number should have been 1734, if one deducts the 65 employees excluded from coverage in the 2022 Agreement;
b) the employees did not have a reasonable opportunity to decide on the termination before the vote;
c) it was inappropriate for the Applicant to apply to terminate the 2018 Agreement at a time that it was actively seeking the approval of the 2022 Agreement.
Whilst the Commission extended the opportunity for both parties to file further materials and to be heard on the matter, both were content to have the matter determined on the papers. I decided that this was the appropriate course having had regard to the legislative requisites, the issues identified and observing that the material that accompanied the application complied with s 222(2) of the Act.
The application was supported by a Declaration from Mr Adrian Dinelli[7] and was accompanied by other supporting materials from the Applicant. The Declaration set out, among other things, that the employees covered by the 2018 Agreement were notified of the time and place of the vote and that of the valid votes cast, a majority of the employees approved the termination of the 2018 Agreement (1482 cast a valid vote and 1296 voted to terminate the 2018 Agreement).[8] The application was made in the requisite timeframe.[9]
Section 223 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s 222 of the Act. Section 223 of the Act states:
223 When the FWC must approve a termination of an enterprise agreement
If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:
(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and
(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and
(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and
(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.
Before traversing the concerns of the AWU and determining whether the legislative requisites are met, the background to the application warrants further attention.
Background to the application
The Applicant explained that on 30 November 2021 it commenced discussions with senior and executive level employees in the Perth office about its intention to remove E+ band and other senior employees from the scope of enterprise agreement coverage.[10]
Thereafter, on 28 January 2022, it commenced presentations to its senior and executive level employees about the proposed change in scope to the 2022 Agreement.
On 31 January 2022, the Applicant issued a Notice of Employee Representational Rights (NERR) to employees who would be covered by the proposed 2022 Agreement. A NERR was not provided to the senior and E+ band employees (executive level), who the Applicant was proposing to scope out of coverage from an enterprise agreement. Furthermore, a NERR was not provided to any pastoral employee.
From 8 February 2022, all employees who would be covered by the 2022 Agreement were provided with a PowerPoint presentation which explained that the Applicant was seeking to negotiate a new enterprise agreement and terminate the 2018 Agreement in early March 2022.[11]
The Applicant stated that on 11 February 2022, a ‘Frequently Asked Questions’ (FAQ) document was distributed to those employees via internal email confirming the date, time and method of the termination vote.[12] It is observed that whilst the Applicant refers to the FAQ as detailing the date, time and method of the termination vote, the FAQ was predominately focussed on the approval of the 2022 Agreement and simply read:
Voting will be open at 5am WST on Thursday, 3 March 2022 and will remain open until 8am WST on Thursday, 10 March 2022.[13]
From 23 February 2022, the Applicant conducted meetings with senior and executive level employees who were being removed from the 2022 Agreement coverage to explain the rationale for terminating the 2018 Agreement along with the expected impact on those employees.[14]
The Applicant noted that on the same date, it also provided a memorandum to all employees confirming the date, time and method of the termination vote, as well as 'how to vote' documents which confirmed the question employees would be asked in respect of the termination.[15] Human Resources teams at each of the Applicant’s sites discussed the contents of the memorandum at the next possible team meeting either later that afternoon or the next morning.[16]
On 2 March 2022, a memorandum was issued to all senior and executive level employees confirming the matters outlined during the presentations that occurred on/from 23 February 2022.[17] The memorandum read in part:
Gold Fields intention is to offer you a Common Law contract which will govern your employment moving forward, however, in order for your new contract to take effect the following must occur:
1. You accept the terms of your new Common Law contract;
2. The Gold Fields Companies Enterprise Agreement 2022 (New Agreement) is approved by a vote of personnel subject to the new Enterprise Agreement and then approved by the Fair Work Commission; and
3. The Gold Fields Companies Enterprise Agreement 2018 (Current Agreement) is cancelled by vote of employees currently subject to the Current Agreement and then approved by the Fair Work Commission.As you will not be subject to the New Agreement, you will remain subject to the Current Agreement unless the Current Agreement is cancelled by vote, which would interfere with the terms (and benefits) proposed in your Common Law contract. As a result, you have been invited (and are strongly encouraged) to vote in relation to the following question posed to you:
“Do you vote to terminate the Gold Fields Companies Enterprise Agreement 2018?”
The vote to terminate the 2018 Agreement took place between 3 March 2022 and 10 March 2022.[18] It is uncontroversial that the employees voting for the 2022 Agreement and for the termination of the 2018 Agreement were asked:
Do you vote to approve the Gold Fields Companies Enterprise Agreement 2022 and terminate the Gold Fields Companies Enterprise Agreement 2018?
The termination was overwhelmingly approved by 87% of the employees who voted. The Applicant reported that 1,482 employees voted, and 1,296 voted in favour of termination.[19]
The Applicant submitted that of the senior and E+ band level employees who voted on the termination, 59 employees voted in favour of the termination while only one voted against termination (the remaining senior and executive level employees did not vote).[20]
All reasonable steps to notify employees
Having considered the materials filed, I found that the Applicant took all reasonable steps to notify relevant employees of the vote to approve the termination of the 2018 Agreement in accordance with s 220(2) of the Act.
Reasonable opportunity to decide – s 223(a)
Section 223(a) of the Act provides that the Commission must approve the termination if satisfied that the employees were given a reasonable opportunity to decide that they want to approve the proposed termination of the agreement (see also s 220(2)(b)).
The Applicant submitted that the requirement to provide employees with a reasonable opportunity to decide on the termination, involves the employer allowing employees sufficient time to consider the effect of the termination on their terms and conditions between the time the request is made and the time of the vote.[21]
From a point of statutory construction, s 223(a) appears to be concerned with the reasonableness of the logistics and process for decision-making and voting rather than the substantive content of material being considered.[22]
In Carl Zeiss Vision Australia Holdings Limited,[23] (Carl Zeiss) the Deputy President addressed an argument that s 220(b) (and thereby section 223(a)) required compliance with more than logistical timeframes and requirements for approval but rather, an objective test of reasonableness. The Deputy President observed that the Explanatory Memorandum to the Fair Work Bill 2009 indicated, by way of example, that the provision may involve the employer ‘allowing employees sufficient time between making the request and the time of the vote to consider the effect of the termination on their terms and conditions’.[24] On this basis, the Deputy President concluded that s 223(a) lent itself to a view that issues relevant under it were concerned with the reasonableness of the logistics and process for decision-making and voting, rather than the substantive content of material being considered.
However, the Deputy President further noted in Carl Zeiss, that whilst preferring the aforementioned narrow construction of s 223(a), some decisions[25] of the Commission had adopted a broader construction, suggesting that ‘the lack of any explanation or incorrect explanation may well be a factor in a consideration as to whether there had been a reasonable opportunity’.[26] As it was, the Deputy President ultimately concluded that he did not need to determine whether purported misleading employer material fell strictly within the expression ‘reasonable opportunity to decide’ under s 223(a) because it would (if not relevant under s 223(a)) be relevant in the catch-all under s 223(d) which required the Commission to consider whether termination ‘is appropriate’.[27]
The Applicant, referring to the decision in Advanced Plumbing and Drains,[28] advanced that a period equivalent to the access period was found to be a sufficient amount of time for employees to consider the effect of termination on them.
The AWU submitted that the Applicant had not provided its employees a reasonable opportunity to decide on the termination before the vote. In respect to the steps that the Applicant declared it had taken on 30 November 2021, 28 January 2022, 23 February 2022 and 2 March 2022, presumedly regarding the information provided about the termination of the 2018 Agreement, the AWU observed that those steps were only taken in relation to 64 senior and executive level employees.
The Applicant pointed out that its evidence showed that it had notified all employees who were to be covered by the 2022 Agreement on or before 8 February 2022 of its intention to terminate the 2018 Agreement, and had made available details of the vote time, date and method from 23 February 2022, over seven days prior to the vote commencing.
Having preferred the narrow construction of s 223(a) as detailed by the Deputy President in Carl Zeiss, and in light of the sequence of events from the commencement of discussions on 30 November 2021 up until the time of the vote on and between 3 – 10 March 2022, I am satisfied that the employees were given a reasonable opportunity to decide that they wanted to approve the proposed termination of the 2018 Agreement. Whilst the FAQ appeared focused on the vote for the approval of the 2022 Agreement, in light of the evidence of Mr Dinelli and noting reference to the termination of the 2018 Agreement in the PowerPoint presentation provided on 8 February 2022, it remains that employees were given that reasonable opportunity.
The termination was agreed - ss 223(b) and (c)
Under s 221(1) of the Act, the termination of an agreement is agreed to when a majority of the employees who cast a valid vote approve the termination. Section 223 provides that the Commission must approve the termination if satisfied, amongst other factors, that the termination was agreed to in accordance with, in this case, s 221(1),[29] and there are no other reasonable grounds for believing that the employees have not agreed to the termination.[30]
The AWU submits that the Commission cannot be satisfied that the termination of the 2018 Agreement was agreed to by the relevant employees, on several grounds.
The first ground concerns the use of the double-barrelled vote question by the Applicant. The AWU submitted that if employees were asked a double-barrelled question, then the termination of the 2018 Agreement was not agreed because employees were not able to provide their response freely or accurately. The AWU said this was because the employees voting for the approval of the 2022 Agreement and the termination of the 2018 Agreement, were limited to answering the question in the following terms:
a) Yes, to the termination of the 2018 Agreement and yes, to the approval of the Agreement’
b) No, to the termination of the 2018 Agreement and no, to the approval of the Agreement.
In effect, the AWU submitted, that the Applicant had denied its employees the opportunity to answer each question directly, with the result that the employees who wanted to answer ‘yes’ to one question and ‘no’ to another were prevented from giving such responses.
It is evident that the voting question provided to employees contained two discrete propositions. The first, that the relevant employee votes yes to the approval of the 2022 Agreement and at the same time yes to the termination of the 2018 Agreement (Proposition One). The second, the relevant employee votes no to the termination of the 2018 Agreement and no to the approval of the 2022 Agreement (Proposition Two).
On a fair reading of the voting question, it is clear that a voter may:
a) agree with Proposition One and vote in support of that proposition (Yes Vote);
b) agree with Proposition Two and vote in support of that proposition (No Vote); or
c) simply not vote at all.
With respect to the senior and executive level employees they were simply asked:
Do you vote to terminate the Gold Fields Companies Enterprise Agreement 2018? YES or NO[31]
Section 220(1) of the Act sets out that an employer covered by an enterprise agreement may request the employees covered by the agreement to approve a proposed termination of the agreement by voting for it. It is evident from the questions asked of the voting cohort that this occurred. I do not consider that use of the double barrelled question detracts from that conclusion.
The second ground relied upon by the AWU, was that concerning the discrepancy in the voting numbers. The AWU had observed that the Applicant declared 1799 employees were covered by the 2018 Agreement and yet in the Form F17 filed in support of the application for the approval of the 2022 Agreement,[32] the Applicant had pressed that 1735 employees were to be covered by the 2022 Agreement in circumstances where the number should have been 1734 if one deducted the 65 employees excluded from coverage in the 2022 Agreement. The Applicant responded that in error, one pastoral employee was invited to vote on the termination, albeit that employee was not covered by the 2018 Agreement and therefore was not required to be given an opportunity to vote on its termination. In all the circumstances, particularly given a significant majority voted in favour of approving the termination of the 2018 Agreement, I do not consider that the error materially affected the voting result and therefore it does not give rise to a belief that the employees have not agreed to the termination.
The AWU submitted that in respect of employees making an informed decision about the termination of the 2018 Agreement, it was not clear from the evidence before the Commission what information the Applicant had provided to the employees to enable them to make such choice.
The Applicant submitted that there was no express requirement in the Act for an employer to explain the effect of termination on the employees’ terms and conditions. Further, there were no specific prescribed steps to be taken to give effect to the ‘reasonable opportunity’.[33] However, I would note that s 223(c) clearly provides the Commission with latitude to consider whether there are other reasonable grounds for believing that the employees have not agreed to the termination. And as was observed by the Deputy President in Carl Zeiss, the consideration of whether it is appropriate to terminate the 2018 Agreement (see s 223(d)) acts as a ‘catch-all’ allowing the Commission to take into consideration the views of the employee organisation covered.[34]
The Applicant undertook several steps to provide an explanation to senior and executive level employees about the effect the termination of the 2018 Agreement would have on their terms and conditions of employment. In respect of the remaining employees, those employees were to be covered by the 2022 Agreement. The Applicant submitted that it agreed with the submissions of the AWU, that those employees covered by the 2022 Agreement would be unaffected by the termination of the 2018 Agreement, in light of the 2022 Agreement having been made by the employees at the same time. In this context, the information provided to employees who would be covered by the 2022 Agreement about the termination, insofar as it was relevant, was appropriate. There is no evidence before me to suggest that it was misleading or deficient. And it is understandable why the focus of the Applicant’s communication to that cohort was predominately about the making of the 2022 Agreement, with a lesser focus in the written materials on the termination of the 2018 Agreement.
The Applicant notes the actual impact of termination on employees is not a factor which the Commission is required to consider in an application under section 222 of the Act. However, by way of observation, I do not consider that the Commission is precluded from turning its attention to such ‘impact’ when assessing whether it is satisfied of those matters in ss 223(c) or (d).
Was it inappropriate for the Applicant to apply to terminate the 2018 Agreement and seek the approval of the 2022 Agreement at the same time – s 223(d)
Section 223(d) of the Act requires the Commission to consider whether it is appropriate to approve the termination of an enterprise agreement taking into account the views of the employee organisation covered.
The issue which now arises is whether, in these circumstances, it is appropriate to terminate the 2018 Agreement where that termination has been agreed by the Applicant (and employers) and unanimously by employees, but the AWU has expressed concern over the approval of the termination.
Regarding the appropriateness of approving the termination, the AWU expressed it was inappropriate in the circumstances for the Applicant to actively seek the approval of the 2022 Agreement whilst seeking to terminate the 2018 Agreement. Expanding upon this argument, the AWU observed that approximately 95% of the 2018 Agreement covered cohort would be covered by the proposed 2022 Agreement, once approved. Therefore, 95% would be unaffected by the termination of the 2018 Agreement, yet their vote responses would unfairly dictate the minimum wages and employment conditions of a small minority of 65 impacted employees. The AWU continued that without the 2018 Agreement, the 5% minority would have no enterprise agreement or award minimum wages or conditions of employment, except the one pastoral employee who would be left with only the basic conditions of the Pastoral Award 2020.
Leaving aside the pastoral employee, given that employee was inadvertently included in the termination vote, the Applicant submitted that in circumstances where it was considered likely the 2022 Agreement would be finalised and approved prior to the nominal expiry date of the 2018 Agreement (the agreement it was replacing), it was entirely appropriate for the Applicant to seek to terminate the 2018 Agreement at the same time as employees were asked to vote to approve the 2022 Agreement. This, pressed the Applicant, would ensure the terms and conditions contained in the 2022 Agreement would apply from the approval date.
In Carl Zeiss, the Deputy President considered the Object of the Act (s 3) and the Objects of this Part, namely Part 2-4 (s171), when determining the appropriateness of termination. The Deputy President expressed that he did not consider that the Objects created a statutory presumption against termination of an enterprise agreement.[35]
The Deputy President continued that the Act expresses the objective of promoting collective bargaining in good faith at the enterprise level, those objectives are then reflected in a detailed statutory scheme which (without being exhaustive) imposes both rights and obligations concerning the negotiation of agreements, the content of agreements, the approval of agreements by the Commission, the continued operation of agreements beyond their nominal expiry date, and the termination of agreements (also by Commission approval).[36]
In relation to termination of single enterprise agreements, the statutory scheme expressly provides for termination by consent of the employer and employees (section 222, as in this instance) or on application by one of the parties (section 225).
As observed in Carl Zeiss, the tests governing the exercise of the Commission’s discretion differ between consent and ‘contested’ applications.[37] A more rigorous test (including the public interest) applies to s 225 (contested) applications.[38] While the views of objecting parties are relevant and must be considered (for example, in deciding whether termination is appropriate), the scheme of sections 222 and 223 (consent applications) places weight on the existence of agreement and the facts surrounding the expression of that agreement.[39]
Under s 220 of the Act, the approval of an agreement termination is by way of employee vote. It is trite to say that the implication arising from this form of democratic decision making is that some employees voting for the approval of a termination may agree with the termination and some may not – ultimately however, the majority view prevails if the votes are valid.[40] The evidence before me does not suggest that votes casts were in anyway invalid.
However, the Act also appears to conceive that there may be some circumstances where notwithstanding the approval of the majority, there are reasonable grounds for believing that the employees have not agreed to the termination, have not had a reasonable opportunity to decide to approve, or it is not appropriate to approve the termination in light of a relevant employee organisation’s views. In those circumstances, arguably the Commission must not approve the termination given the statutory requisites in s 223 are not met.
It is noted that the cohort who voted on the termination but were not covered by the 2022 Agreement, were senior and executive level employees. While the AWU has highlighted the plight of this group (as detailed in paragraph [46]), there is no evidence before me to suggest that there was some form of manipulation or other inappropriate conduct to give rise to a view that this ‘sub-group’ was, for example, disenfranchised or that their vote was inappropriately procured. The Applicant observes that of the senior and executive level cohort who voted on the approval of the termination, a majority approved the termination. Whilst the AWU’s consternation has been considered, it does not dissuade from a conclusion that it is appropriate to approve the termination.[41] The group of senior and executive level employees may still, after all, avail themselves of legislative provisions which allow for bargaining and the making of an enterprise agreement, including those that compel an employer to bargain.
Conclusion
On the facts before me, I am satisfied that a majority of employees voted in favour of the termination of the 2018 Agreement by way of a confidential and anonymous vote. The statutory requirements have been met and there are no reasonable grounds for believing that the employees have not so agreed. The Commission approves the termination.
Under s 224 of the Act a termination operates from the day specified in the decision to terminate the agreement. No date has been specified by the Applicant or employees. I consider it appropriate for a short period to be provided before the termination comes into effect to enable the Applicant and employees to prepare themselves. I have also considered the fact that a considerable period of time has elapsed since the employees voted to terminate the 2018 Agreement on 10 March 2022. In all the circumstances, I consider an appropriate date to be 1 July 2022, being a week from today. The termination of the 2018 Agreement will operate from 1 July 2022, and an Order[42] will be published to this effect.
DEPUTY PRESIDENT
[1] [2018] FWCA 4110; AE429177; PR608925.
[2] Fair Work Act 2009 (Cth) s 222(1) (the Act).
[3] [2022] FWCA 1158; AE515568; PR739944 (2022 Agreement).
[4] Ibid.
[5] [2022] FWCA 1158.
[6] 2022 Agreement (n 3).
[7] Form F24A – declaration in support of termination of an enterprise agreement Mr Adrian Mark Dinelli (Dinelli Declaration).
[8] Ibid.
[9] The Act (n 2) s 222(3).
[10] Dinelli Declaration (n 7) [2.1].
[11] Ibid [2.1], Attachment B Presentation (8 February) Slide 20.
[12] Ibid [2.2], Attachment D.
[13] Ibid [2.2], Attachment D Page 1.
[14] Ibid [2.1].
[15] Ibid Attachment C.
[16] Ibid [2.2], Attachment E, Attachment F, Attachment G.
[17] Ibid [2.1], Attachment C.
[18] Ibid [2.3].
[19] Ibid [2.4].
[20] Applicant’s Submissions, [17]..
[21] Ibid [19].
[22] Carl Zeiss Vision Australia Holdings Limited [2017] FWCA 5825, [39] (Carl Zeiss).
[23] Ibid.
[24] Explanatory Memorandum Fair Work Bill 2009 (Cth) [932].
[25] Barminco (Mt Lyell) Greenfields Agreement [2015] FWCA 219, [20] (Barminco) (Commissioner Lee), cited in Advanced Plumbing and Drains [2015] FWCA 8740, [26] (Deputy President Kovacic) (Advanced Plumbing).
[26] Carl Zeiss (n 22) [40].
[27] Ibid [41].
[28] Advanced Plumbing (n 25) [32].
[29] The Act (n 2) s 223(b).
[30] Ibid s 223(c).
[31] Dinelli Declaration (n 7) Attachment G.
[32] 2022 Agreement (n 3).
[33] Barminco (n 25) [20].
[34] Carl Zeiss (n 22) [41].
[35] Ibid [83].
[36] Ibid.
[37] Ibid [84].
[38] Ibid.
[39] Ibid.
[40] The Act (n 2) s 221(1).
[41] The Act (n 2) s223(d).
[42] PR743035.
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