Health Services Union v Silver Chain Group Limited
[2021] FWC 4177
•7 SEPTEMBER 2021
| [2021] FWC 4177 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.238—Scope order
Health Services Union
v
Silver Chain Group Limited; Royal District Nursing Services of SA Limited; Access Care Network Australian Pty Ltd
(B2021/507)
COMMISSIONER PLATT | ADELAIDE, 7 SEPTEMBER 2021 |
Application for a scope order.
[1] On 2 July 2021, the Health Services Union, (HSU or the Applicant) as a bargaining representative, made an application under s.238 of the Fair Work Act 2009 (the Act) to the Fair Work Commission (the Commission) seeking a scope order in relation to bargaining with Silver Chain Group Limited (Silver Chain), Royal District Nursing Services of SA Limited (RDNS) and Access Care Network Australian Pty Ltd (ACNA) (together – the Respondents). On the same day, the HSU made an application under s.229 of the Act for a bargaining order against the same Respondents and requested that the matter be heard together with the s.238 application.
[2] On 7 July 2021, a directions conference was held in which the HSU sought interim orders on the basis that the ballot for the Silver Chain Group Limited National (Non Nursing) Enterprise Agreement 2021 (the Proposed Agreement) had begun on 7 July 2021. The HSU sought an interim order preventing the Respondents from taking steps to ascertain the outcome of the ballot, and further that the scope of the Proposed Agreement be confined to all employees, other than nursing employees, who perform work in South Australia and who are employed by RDNS.
[3] During the conference, I declined to grant the request to make an interim scope order, but instead ordered that the Respondents ensure that the balloting agent who had been engaged to conduct the ballot did not take steps to ascertain the outcome of the ballot until a contrary order had been issued by the Commission, or bargaining order application B2021/510 had been resolved. 1
[4] The substantive matter was listed for hearing on Wednesday, 14 July 2021. Directions were issued for the preparation of witness statements and an outline of submissions.
[5] After some issues concerning the conduct of the ballot, on Tuesday, 13 July 2021, the Respondents undertook that they would instruct the balloting agent to destroy the votes cast in the ballot conducted between 7-9 July 2021.
[6] On 13 July 2021, the Applicant’s representative discontinued the s.229 application seeking bargaining orders (B2021/510).
[7] A Hearing took place by videoconference on Wednesday, 15 July 2021. Given the discontinuance of the application for bargaining orders, the Hearing was confined to the HSU’s application for a scope order.
[8] Mr Dean and Mr Meehan (both of counsel) represented the Applicant and the Respondents respectively. Both sought permission under s.596(2)(a) – complexity and efficiency - and neither party opposed the other being represented. Permission was granted.
Background
[9] The HSU has been bargaining with Silver Chain for an enterprise agreement for some time.
[10] On 23 April 2021, the Applicant sought the Commission’s assistance by way of a s.240 Application. The matter was allocated to my Chambers and I conducted a number of conciliation meetings between the parties in an attempt to narrow the gulf between them. The question of scope arose in those proceedings. My understanding of the Applicant’s position (at that time) was that it was seeking an Agreement to cover RDNS employees in South Australia only. The Respondent sought to retain the current National Agreement.
[11] The Applicant advised that some of its members, who had previously been employed by the South Australian Government Domiciliary Care Business (Dom Care), were concerned that their existing terms and conditions of employment would be eroded under a ‘National’ Agreement. My understanding was that the Applicant was prepared to suspend its scope concerns until the details of the terms and conditions of employment that would apply to former Dom Care workers was evident.
[12] On 29 June 2021, the Respondent(s) advised that they proposed to put an Agreement to a ballot and that they did not wish to further participate in conciliation under the s.240 application. The s.240 proceeding ceased as a result.
[13] At the commencement of the Hearing, I advised the parties of my understanding of the positions concerning scope during the s.240 conciliation (as summarised above) to enable them to rebut or respond. No issue was taken with my summary.
[14] The scope order sought by the Applicant would confine the scope of the Proposed Agreement to those employees of RDNS performing work in South Australia. 2 This scope would result in a total cohort of about 500 persons, with approximately 180 of those persons being former Dom Care employees.
[15] The Respondents submit that the scope of the Proposed Agreement be in the same terms as the Agreement put to vote in July 2021, as detailed below:
“2.1 This Agreement will cover:
2.1.1 The following employers:
(a) Silver Chain Group Limited, ABN: 77 119 417 018; and
(b) Royal District Nursing Service of SA Limited, ABN 21 588 603 824 (“RDNS”) – a wholly owned subsidiary of the Silver Chain Group Limited; and
(c) Access Care Network Australia Pty Ltd, ABN 39 601 017 430 (“ACNA”) – a wholly owned subsidiary of the Silver Chain Group Limited; and
2.1.2 Employees of Silver Chain Group Limited, RDNS and ACNA throughout Australia who are employed in the role categories and at the classification levels set out in Schedule 1; and
…..”
[16] From a geographical and numerical perspective, the Respondents’ proposed scope would include the following employees:
Evidence
[17] The Applicant submitted witness statements from:
• Mr Wilbur Jordan (Industrial Officer); 3
• Ms Louise de Plater (National Industrial Officer); 4
• Ms Rebecca Doecke (RDNS - Manager, Therapy Services); 5
• Ms Robyn Colhoun (RDNS – Personal Support Coordinator); 6
• Ms Teena Paparella (RDNS – Paramedical Aide); 7 and
• Ms Valerie Fleet (RDNS – Administrative Officer). 8
[18] The Respondents submitted witness statements from:
• Ms Jacci Sinclair (Group Manager, HR Services); 9 and
• Mr Warren Milward (One of the Respondents’ Bargaining Representatives). 10
[19] None of the RDNS employee witnesses (all of whom who were former Dom Care employees) were required to be cross-examined. Their evidence went to their role and the management structure, their understanding of the transfer arrangements that applied to former Dom Care employees and the potential impact of the Proposed Agreement upon them. I accept that depending on the contents of the Proposed Agreement it is possible that those employees may not continue to enjoy the conditions that have historically applied.
[20] It appears to me that the work performed by the former Dom Care employees is consistent with work performed in other parts of the Silver Chain Group, 11 but there are differences in the organisational structure.12
[21] I accept that the former Dom Care employees had not received increases in their pay since the transfer. 13
[22] Ms de Plater’s statement is largely focussed on the bargaining conduct. Other than the paragraphs under the title of ‘Scope’, Mr Milward’s statement is also focussed on the bargaining conduct.
[23] My observations of the parties’ conduct as to scope during the s.240 conferences I chaired are largely as recounted by Ms de Plater. That is, scope had always been an issue, but it was possible that it may have been resolved depending on the content of the proposed Agreement.
[24] The information about how the Dom Care employees became part of the Respondents’ group is primarily found in the evidence of Ms Sinclair and Mr Jordan and is largely not in dispute.
[25] I have ignored references to issues outside of the scope considerations before me contained in the material, recognising that as at the time of preparation there were more issues at stake.
[26] Silver Chain is a large predominantly Western Australian provider and has acquired RDNS. RDNS operates solely within the state of South Australia and provides health services to South Australians. In July 2018, the Government of South Australia outsourced “Dom Care” (i.e. in home care) operations performed by public sector workers. Approximately 180 workers previously employed by the State Government are now employed by RDNS. Their conditions of employment are generally superior to those enjoyed by other Silver Chain Group employees.
Transfer of Dom Care employees into RDNS
[27] Prior to the transfer in July 2018, the Dom Care employees were covered by the South Australian Modern Public Sector Enterprise Agreement: Salaried 2017 (SAMPSEA), which was an instrument made in accordance with s.79 of the Fair Work Act 1984 (SA). As a result of s.768AK of the Fair Work Act 2009 (Cth), the SAMPSEA becomes a ‘Copied State Agreement’ and continues to apply to the transferring Dom Care employees. As part of the agreement between the Respondents and the South Australian Government for the acquisition of Dom Care, RDNS gave a commitment that it would not vary these terms and conditions for a period of two years.
[28] Dom Care employees had an option of remaining within the South Australian public sector and being placed in a ‘pool’ for redeployment within the public sector.
[29] Dom Care employees were provided with information about the terms which would apply (including a written offer of employment) if they elected to transfer. The written offer contained the following term 14:
“If you accept this offer, the FW Act provides…
• any enterprise agreement that is already in operation at RDNS SA before you transfer and that covers your work at RDNS SA will not apply to you in relation to the transferring work; and
• if a new enterprise agreement commences at RDNS SA after your transfer and after a period of two years from your Commencement Date, that new enterprise agreement will cover you and the previous Agreement will cease to cover you. Please note that the FW Act provides that you will be given representational and bargaining rights, and an opportunity to consider and vote on any new enterprise agreement that is voted on after your commencement with RDNS SA.
However, as part of this offer of employment, RDNS SA will not take any action to replace the Agreement with a new agreement for a period two years from your Commencement Date.”
[30] A FAQ document provided the following information:
“Q: To assist staff to make an informed choice, could consideration be given to providing Domiciliary Care staff with information about any differences in pay and conditions between ongoing Domiciliary care staff who elect to stay and current RDNS SA staff?
A: If you stay with Domiciliary Care under RDNS SA, your terms and conditions won’t reduce as a consequence of the transfer. The terms and conditions under your Enterprise Agreement and Award will become binding on RDNS SA. RDNS SA guarantee to not vary material provisions or terminate the Enterprise Agreement and Award for at least two years after the transfer. Any future new Enterprise Agreements will be negotiated with you, your bargaining representative (which may be a union), and RDNS SA. Your views about any new agreement will have to be taken into account, and you’ll have the opportunity to vote on any new enterprise agreements, which is the same process that applies now.
Q: Will my pay drop after two years with RDNS SA?
A: Your current rate of pay is set in your Enterprise Agreement, and RDNS SA will be obliged to pay you no less than this amount. Any future new Enterprise Agreements will be negotiated with you. If this occurs, the negotiation process will be no different to the process that happens now. Your views about any new agreement will have to be taken into account, and any impacts will need to be considered. You’ll have the opportunity to be represented during the negotiations, and you’ll get to vote on any new Enterprise Agreement with RDNS SA. any new enterprise agreements, which is the same process that applies now.”
[31] Dom Care employees who elected to transfer to RDNS were paid a lump sum retention payment of $15,000.
[32] Those Dom Care employees who elected to transfer are now employed by RDNS.
[33] After the transition, on 9 July 2019, RDNS informed the former Dom Care employees of its intention to start bargaining for the Proposed Agreement. On 28 January 2020, a 'Q&A' document was provided to all former Dom Care which stated:
“Q: What is the intention of the Silver Chain Group / RDNS in relation to bargaining for the next NonNursing agreement as it relates to employees who work in community care in SA within RDNS and in particular those who were previously employed in DomCare with the South Australian State Government?
A: Subject to enterprise bargaining negotiations for a new agreement, the DomCare employees are intended to be integrated into the Silver Chain Group framework and its related industrial instruments. The implementation of this integration will form part of the enterprise bargaining process.”
[34] I was advised by the HSU that about 180 former Dom Care workers remain in the employ of RDNS, and that their conditions of employment are generally superior to those enjoyed by other Silver Chain Group employees.
[35] I understand that RDNS current employs approximately 500 persons in South Australia, including the former Dom Care workers.
[36] The Respondents’ current Agreement covers each of the Respondents and their non-nursing employees in each of the states and territories the Respondents operate in, being Western Australia, South Australia, New South Wales, Victoria and Queensland. A breakdown of these employees is below:
[37] At the time that the Dom Care employees transferred into the Respondents’ operations it was intended that, on the expiry of that two-year period, the Dom Care employees would be fully integrated into the RDNS and broader Silver Chain Group business. This would occur on the renegotiation of the Silver Chain Group Limited National (Non Nursing) Enterprise Agreement 2021,assuming the scope was retained.
Relevant Law
[38] The Act provides as follows:
“238 Scope orders
Bargaining representatives may apply for scope orders
(1) A bargaining representative for a proposed single-enterprise agreement (other than a greenfields agreement) may apply to FWC for an order (a scope order) under this section if:
(a) the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly; and
(b) the reason for this is that the bargaining representative considers that the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover.
No scope order if a single interest employer authorisation is in operation
(2) Despite subsection (1), the bargaining representative must not apply for the scope order if a single interest employer authorisation is in operation in relation to the agreement.
Bargaining representative must have given notice of concerns
(3) The bargaining representative may only apply for the scope order if the bargaining representative:
(a) has given a written notice setting out the concerns referred to in subsection (1) to the relevant bargaining representatives for the agreement; and
(b) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and
(c) considers that the relevant bargaining representatives have not responded appropriately.
When FWC may make scope order
(4) FWC may make the scope order if the FWC is satisfied:
(a) that the bargaining representative who made the application has met, or is meeting, the good faith bargaining requirements; and
(b) that making the order will promote the fair and efficient conduct of bargaining; and
(c) that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen; and
(d) it is reasonable in all the circumstances to make the order.
Matters which FWC must take into account
(4A) If the agreement proposed to be specified in the scope order will not cover all of the employees of the employer or employers covered by the agreement, FWC must, in deciding for the purposes of paragraph (4)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.
Scope order must specify employer and employees to be covered
(5) The scope order must specify, in relation to a proposed single-enterprise agreement:
(a) the employer, or employers, that will be covered by the agreement; and
(b) the employees who will be covered by the agreement.
Scope order must be in accordance with this section etc.
(6) The scope order:
(a) must be in accordance with this section; and
(b) may relate to more than one proposed single-enterprise agreement.
Orders etc. that FWC may make
(7) If FWC makes the scope order, FWC may also:
(a) amend any existing bargaining orders; and
(b) make or vary such other orders (such as protected action ballot orders), determinations or other instruments made by FWC, or take such other actions, as FWC considers appropriate.”
[39] If the preconditions set out in ss.238(1)-(3) are met, the Commission has the discretion to make an order after taking into account the factors outlined in ss.238(4)(a)-(d).
Section 238(4)(b): making the order will promote the fair and efficient conduct of bargaining
[40] In United Firefighters’ Union of Australia v Metropolitan Fire & Emergency Services Board, 15the Full Bench stated:
“The relevant consideration under s.238(4)(b) is whether the order will promote the fair and efficient conduct of bargaining. The implication is that the tribunal should be satisfied that if an order is made the bargaining will at least be fairer or more efficient or both than it would be if no order were to be made.”
[41] The premise that a scope order can only be made if otherwise the scope of the agreement would be “unfair” was dismissed by the Full Bench in UFU v MFESB 16:
“That submission must be rejected. It involves adding an additional requirement to those specified in ss.238(4)(a)(b) and (c). If two parties to an application for a scope order advance alternative positions neither of which is objectively unfair but the tribunal is satisfied of the relevant matters and is disposed to make an order, it would be an error not to do so.”
[42] The circumstances in which a scope order would lead to fairer and more efficient bargaining was explored further in The Australian Workers’ Union v BP Refinery (Kwinana) Pty Ltd, in which the Full Bench stated:
“[25] One can postulate circumstances where bargaining for two agreements for two groups would be more efficient than bargaining for a single agreement covering both groups. To give a single example, the evidence may establish that the two groups of employees have conflicting positions on issues that are important to them but not particularly important to the employer, as can arise where there are demarcation issues. In such a case, it may plainly be more efficient to have two separate agreements and avoid the effort and delay involved in resolving those issues for a single agreement.
[26] Intuitively, bargaining for two agreements for a group of employees will involve a degree of duplication of process and negotiation and thus be less efficient than bargaining for a single agreement to cover the same group. That is demonstrated in the present case by the identical programmes specified by the Company for the first bargaining meeting of each of the two groups. The lesser efficiency in such an approach is manifest. That is to say, in the particular circumstances of an individual case, it will not be open to decide that bargaining for two agreements will be more efficient than bargaining for one.”
Section 238(4)(c): that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen
[43] The requirements for s.238(4)(c) were set out by the Full Bench in UFU v MFESB:
“The relevant consideration…is whether the specified group is fairly chosen. It may be that a number of groupings might be fair – what this criterion requires is that the group which is included in the scope order is fairly chosen.”
[44] Section 238(4A) provides the factors that the Commission may take into account when determining whether the group was fairly chosen. In AWU v BP Refinery, the limits on s.238(4A) were set out as below:
“[11] The obligation on the Commission is to “take account” of geographical, operational or organisational distinctness in deciding whether the group to be covered by the proposed enterprise agreement was “fairly chosen”. A particular type of distinctiveness may not exist in respect of a proposed group in a particular case, and yet, having taken account of that absence, it may still be clear, that the group has been fairly chosen in all the circumstances of the particular case.’
….
[15] Enterprise agreements that cover all employees in a business are commonplace. Almost all such business will have organisation structures that will allow organisationally distinct groups to be identified. Many of those businesses contain operationally distinct groups. Yet it will rarely be the case that a ‘whole of enterprise’ group would be unfairly chosen.
[16] It follows that the weight to be attached to the geographical, operational or organisational distinctness of groups with a broader group will be neutral in determining whether an order ought be made, unless there are particular features of, or circumstances associated with, that distinctness that render the broader group one that is not fairly chosen.”
Section 238(4)(d): it is reasonable in all the circumstances to make the order
[45] The final criteria that the Commission must consider in order to exercise its discretion is whether it is reasonable in all the circumstances to make the order. In BRB Modular Pty Ltd v "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union, 17 the Full Bench explained the requirements of s.238(4)(d) as follows:
“In our view, the requirement that it is reasonable to make a scope order is an important element of the tests required to be applied by the Commission. An application of the test will necessarily be bound up in the peculiar circumstances of the matter, but it requires a full consideration of those circumstances and a level of satisfaction that the order requiring the parties to adopt a particular scope of an enterprise agreement in continuing their bargaining is objectively justified.
….
[53] The scope of an agreement is an open question in many enterprise bargaining exercises. It is frequently a topic of competing claims, discussion and negotiation. Rarely will it be possible to say that one scope proposal is wrong and another correct. There may be justifications for a preference one way or another. Hence it is usually the case that the scope is left to the bargaining parties to determine in the context of the overall enterprise bargaining framework. The reasonableness of making a scope order should be considered against that background.”
[46] I have also reflected on the principles espoused by Deputy President Sams contained in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Qantas Airways Limited 18as detailed below:
• The inclusion of the word ‘may’ in the heading to s.238(4) infers a discretion subject to the pre-conditions being met.
• The scope of an agreement is a matter that can be the subject of bargaining.
• Consideration of the views or employees may be taken into account, but have no greater weight than other factors.
• It is improper to use a scope order application to address good faith bargaining concerns.
• The onus rests on the moving party to demonstrate the making of a scope order will encourage and facilitate bargaining which is fairer and more efficient.
• Issues of mere inconvenience or preference with the bargaining process are not decisive to whether a bargaining process is fairer of more efficient.
• Evidence which is speculative, hypothetical or presupposes bargaining outcomes is unhelpful to the task of determining whether a scope order should be made.
• The history of bargaining is a relevant consideration.
• Seeking leverage by increasing bargaining power by weight of numbers is not a valid reason to make a scope order.
Submissions
[47] The Applicant made submissions in support of the order sought initially in respect of its application for an interim order and then in the substantive matter. I have taken both of these submissions as they relate to the scope issue, together with the oral submissions made at the Hearing. They are summarised below:
• The HSU is a bargaining representative in respect of the Agreement, and accordingly has standing to make the application.
• The HSU is meeting its good faith bargaining obligations.
• As a result of the very distinct industrial conditions and histories of the South Australian and Western Australian workforce, the scope and content of the Proposed Agreement has been controversial. The bargaining has been attended by a bargaining dispute and by industrial action.
• The Commission must be satisfied that the order would promote fair and efficient bargaining for an agreement.
• Bargaining has not been fair nor efficient for reasons largely related to the demographics of the Respondents’ workforce. The Respondents comprise of three distinct corporate entities. The South Australian workforce has a distinct history and distinct industrial arrangements. They are also employed by a distinct corporate entity (RDNS). The Respondents have sought to negotiate a single enterprise agreement. The effect of this approach is that the Western Australian workforce entirely predominates the electorate of any ballot. There are approximately 2,000 Western Australian workers compared to approximately 500 South Australian workers (of which 180 are former Dom Care employees). These demographics result in a situation in which the voices of the South Australian workforce are effectively “drowned out”. I was referred to the decision of Commissioner Crib in Australian Nursing and Midwifery Federation. 19
• Bargaining has not been proceeding efficiently because of the relatively limited focus on the distinct interests of the South Australian workforce.
• The Illustrative Example contained in clause 986 of the Explanatory Memorandum to the Fair Work Bill 2009 makes clear that where a divergence of industrial interests amongst the workforce is exacerbating the bargaining process, it will be appropriate for a scope order to be made.
• The Commission must be satisfied scope contended for is “fairly chosen” having regard to whether the cohort is geographically, operationally or organisationally distinct. 20
• A group which is objectively (as opposed to arbitrarily) chosen is likely to be fairly chosen. 21
• The cohort has a long history of having very different industrial conditions. In the case of the RDNS employees, by a separate stream in the agreement and in the case of the former Dom Care workers, by a copied state instrument.
• The HSU seeks an order that would alter the scope of the Proposed Agreement such that it covers non-nursing RDNS employees who perform work in South Australia. This cohort is fairly chosen as they are geographically distinct in that they are all based in South Australia. They are operationally distinct in that they have separate hierarchies, they utilise different reporting systems, they have very different work practices and utilise a different model of care, and have different funding levels. They are organisationally distinct in that they operate under a different brand and, most fundamentally, have a different employer.
[48] The Respondents’ submissions are summarised below:
• The Applicant has not satisfied the requirements of s.238(1) which is necessary to enliven the Commission’s jurisdiction.
• The Applicant did not give the bargaining representatives a reasonable time to respond to their concerns as required by s.238(3)(b).
• The Commission should not exercise its discretion to make the order sought as the Applicant’s bargaining offer dated 2 June 2021 contained a scope in the manner proposed by the Respondents.
• The Commission should decline to make the order sought because:
• the employees of RDNS in South Australia who would be covered by the proposed scope order are not geographically distinct because some, but not all, South Australian based employees would be covered;
• the work performed by the RDNS employees is not operationally distinct from that performed by other employees to be covered by the Proposed Agreement;
• the order sought, if granted, would mean that most of the employees who are presently covered (including employees based in Western Australia, South Australia, New South Wales, Victoria, Queensland and the Australian Capital Territory) by the Proposed Agreement would be excluded from coverage, effectively disadvantaging the significant majority of employees covered in favour of the minority of employees in South Australia. Consequently, the group of employees who would be covered would not be fairly chosen (s.238(4)(c));
• the order would significantly alter the settled position in respect of approximately 296 non-nursing RDNS employees who are presently covered by the Silver Chain Group Limited National (Non-Nursing) Enterprise Agreement 2017, along with employees of Silver Chain Group in Western Australia and other states. The HSU has not advanced any positive merit case for a change to this settled position on coverage, which has subsisted since 2011;
• the order would not promote the fair and efficient conduct of bargaining. On the contrary, the order would undermine the premise upon which the bargaining has proceeded since 2 June 2021, when the HSU compromised its position on scope. Moreover, the order would require that the Respondents recommence the process of bargaining in respect of the employees who would be removed from coverage under the Proposed Agreement;
• the HSU has engaged in very significant delay in bringing proceedings for a scope order. On its own evidence, it could have done so many months ago, when it was actively representing that the employees of RDNS in South Australia should have a separate agreement to other employees within the Silver Chain Group; and
• the Commission should regard the issue of coverage as no longer actively is dispute, as the coverage clause in the Proposed Agreement put to ballot is in precisely the same terms as the HSU’s offer on 2 June 2021.
Consideration
[49] I deal firstly with the requirements of s.238(1).
[50] There is no dispute that the Applicant is a bargaining representative, nor that the Proposed Agreement is a single enterprise agreement and not a greenfields agreement.
[51] I accept that the Applicant has concerns that bargaining for the agreement is not proceeding efficiently or fairly because of the effect of the proposed coverage of the agreement has resulted in an impasse over the scope that issue is preventing efficient conduct of bargaining.
[52] In respect of the requirements of s.238(2) of the Act, there is no submission that a single interest employer authorisation is in operation.
[53] With respect to the requirements of s. 238(3) of the Act, I observe that on 26 February 2021, the HSU presented a marked-up copy of the Proposed Agreement to the Respondents, 22 in which it contained an alteration to the title to reflect that it would be the ‘RDNS South Australia Enterprise Agreement 2020’. I note, however, that the scope provision remained unchanged. I have assumed that to be a drafting error. Mr Jordan contends that the issue of scope was raised verbally on a number of occasions and this is consistent with my observations in my conduct of the s.240 application as detailed earlier in this decision.
[54] It is noted that the Respondents, by its written submission dated 12 July 2021, contend that the Applicant did not give it sufficient time to responds its scope concerns. This submission appears to concede that written advice was given by the Applicant is respect of its scope concerns.
[55] Whilst poorly drafted, I am prepared to accept that the Applicant (through its correspondence on 26 February 2021 and emphasised through its oral communications), has met the requirements of s238(3).
[56] In my view the Respondent has had a reasonable time to responded to those concerns and in the view of the Applicant, the Respondent has not responded appropriately.
[57] I find that the requirements of s.238(3) have been met.
[58] I turn now to the requirements of s.238(4).
[59] There is no evidence before me which leads me to conclude that the Applicant has not met or is not meeting the good faith bargaining requirements. The Applicant’s conduct in the s.240 proceedings before me confirms this view.
[60] I am satisfied that the making of an order dealing with the current scope impasse will promote the fair and efficient conduct of bargaining.
[61] The next two issues are whether the group has been fairly chosen and whether it is reasonable in the circumstances to make the order. This is the nub of this matter.
[62] Whilst the Proposed Agreement covers a number of employers, the services provided by those entities appears to be consistent and I am not persuaded that the corporate structure of the Silver Chain Group is an appropriate basis to determine this matter. I am not persuaded that the work performed by the former Dom Care employees is substantially dissimilar to that provided by the existing RDNS cohort.
[63] It is not in dispute that the provisions of the SAMPSEA are more beneficial to the transferring Dom Care employees than the employment arrangement presently in place at the RDNS.
[64] The former Dom Care employees have had the benefit of an agreement that was reached between the Respondents and the South Australian Government in respect of the transferring Dom Care employees, which had the effect of preserving the more beneficial arrangements for a minimum of two years. I note that thus far it has not been proposed that the overall entitlements of the former Dom Care employees be reduced, rather that future increases would be deferred until their grandfathered entitlements are exceeded. This outcome was not expressly detailed in the transfer correspondence provided to employees. Ultimately, the impact of the scope provision on their remuneration going forward will depend on what is agreed during the negotiations, subject to the effect of any prior representations.
[65] Dom Care employees were put on notice prior to their transfer that they would be “integrated” into the larger entity. They were also aware of the comparative terms and conditions of employment and the two-year post transfer preservation, and that they were also eligible for a ‘transfer payment’. The former Dom Care employees were not expressly advised that their integration could result in a prolong period of wage stagnation.
[66] The former Dom Care employees made a positive choice to transfer to the RDNS. They had an alternative option of remaining under the employ of the South Australian Government with potential redeployment or a redundancy package. This is a factor relevant to the s.238(4) considerations.
[67] The Applicant contends that the former Dom Care employees voice will be “drowned out” by the numerically greater number of other employees who will be eligible to vote and thus not be in a position to preserve the conditions of employment presently.
[68] I note the tension between the decisions of Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Qantas Airways Limited 23 and Australian Nursing and Midwifery Federation24 with respect to the impact of the cohort sizes on bargaining outcomes. In this case, however, the former Dom Care employees will be drowned out in both scope proposals, albeit less so under the Applicant’s proposal.
[69] It is not in dispute that South Australian employees are numerically less than the sum of all other employees under the Respondents’ proposed scope. It is noted that the Dom Care employees (approximately 180) are numerically less that the balance of the RDNS employees (approximately 320) that would be covered under the Applicant’s proposed scope and significantly less that the total number of employees proposed to be covered. I accept that this position impairs the former Dom Care workers’ capacity to preserve the existing arrangements in the absence of support from other bargaining participants. The end result is that the former Dom Care employees will not be in a position, in their own right, to self-determine the outcome of bargaining under both of the scope proposals. This is a factor relevant to the s.238(4) considerations.
[70] It is noted that the side effect of the Applicant’s order would be to displace the current arrangements of the approximately 320 persons who are not former Dom Care employees. This is also a relevant s.238(4) consideration. I have no information about their views on this application.
[71] The Applicant referred to the decision in Tasmanian Water and Sewerage Corporation Pty Ltd T/A TasWater v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia. 25 In that matter TasWater had replaced and consolidated the resources of four separate legal entities and had sought to replace three separate industrial instruments with one. The Respondent sought to preserve the status quo. At first instance the Commission found:
“(There is) one compelling factor which tips the balance in favour of granting the application. The status quo in terms of industrial instruments is three regional EAs. It is TasWater that seeks to alter the status quo and as such bears the onus of convincing the SBU and employees as to the validity of this position. [It] has failed to do so.”
[72] The Appeal Bench did not disturb the decision.
[73] Other than the impact on the bargaining power of the former Dom Care employees there is no compelling reason to disturb the scope that currently exists and is reflected in the Respondents’ proposed scope.
[74] I was also referred by the Applicant in Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union and Others, 26and the proposition that the differing standards in the ‘model of care’ was a factor to be taken into account in determining of a group whether it was fairly chosen.27
[75] Whilst I accept the organisational structure throughout the Silver Chain Group may vary and that different data recording systems may be in use, I am not persuaded in this case that any differences in ‘model of care’ justify separating out the RDNS employees.
[76] The matter of National Union of Workers v Linfox Australia Pty Ltd 28 (Linfox) appears to have some similarities to the matter before me. The National Union of Workers (NUW) made an application for a scope order in relation to a proposed agreement to replace the Linfox Road Transport and Distribution Centres National Agreement 2011. That agreement covered approximately 3,000 employees at 146 sites. A large proportion of employees were members of the Transport Workers’ Union (TWU). The NUW sought a separate agreement for the warehouse portion of Linfox’s Truganina site. Bargaining for such an agreement would involve both the Australian Workers’ Union (AWU) and the TWU. Linfox opposed the scope order, seeking to retain a single national enterprise agreement. Two of the reasons advanced to support the NUW’s contention that bargaining was not proceeding efficiently or fairly were that a significant minority of the total number of employees to be covered by the proposed national agreement were effectively being denied a “real voice” in the negotiations and that the site-specific concerns were effectively being ignored. Commissioner Roe was not satisfied that granting the scope order would make the conduct of bargaining fairer or more efficient and declined to make a scope order.
Conclusion
[77] I have found that the requirements of ss.238(1)-(3) have been met.
[78] I have found that the Applicant is meeting their good faith bargaining requirements and that the making of the order will promote the fair and efficient conduct of bargaining as per s.238(4).
[79] Whilst this case is very finely balanced and reasonable minds may differ, I have found on the information before me that the group of employees who will be covered by the Agreement (as proposed by the Respondent) has been fairly chosen. This finding results from:
• The manner in which the Dom Care transfer was conducted and the option for former Dom Care employees to remain in the public service.
• I am unable to identify significant differences in the work performed by the former Dom Care employees as compared to the RDNS employees - noting that there are differences in organisational structure and data collection.
• The impact of the scope proposed by the Applicant on the RDNS cohort who would be displaced from their current Agreement coverage.
• The fact that under either the Applicant’s or the Respondents’ scope option, the former Dom Care employees will not be in a position (numerically) to determine their bargaining outcome.
• That the Respondents’ scope represents the status quo and that I am not persuaded by the Applicant to disturb the same.
• The Respondents’ proposed scope is geographically distinct.
[80] I find that the scope as proposed by the Respondents has been fairly chosen.
[81] In order to break the impasse that is preventing the fair and efficient conduct of bargaining, I find that it is appropriate in the circumstances to make the order sought by the Respondents. Taking these matters into consideration, I am not persuaded to alter the status quo in respect of the Agreement coverage, and I believe that it is reasonable to issue an order that the scope of the Proposed Agreement will be that set out above in paragraph [15].
COMMISSIONER
Appearances:
P Dean for the Applicant
S Meehan for the Respondents
Hearing details:
2021.
Adelaide:
July 14.
Printed by authority of the Commonwealth Government Printer
<PR731736>
1 PR731425
2 Applicants Outline of Submissions dated 12 July 2021 paragraph 34
3 Exhibit A5 and a Supplementary Statement Exhibit A6
4 Exhibit A7
5 Exhibit A1
6 Exhibit A2
7 Exhibit A3
8 Exhibit A4
9 Exhibit R2 and Supplementary Statement Exhibit R3
10 Exhibit R1
11 Exhibit A2, Paragraph 35
12 Exhibit A1 Paragraph 13-15
13 Exhibit A3 Paragraph 22
14 See Exhibit R2 Paragraph 15
15 [2010] FWAFB 3009 at [55]
16 Ibid at [54] This position was confirmed by the Full Bench in BRB Modular Pty Ltd v "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)[2015] FWCFB 1440
17 [2015] FWCFB 1440 at 19
18 [2017] FWC 1526
19 [2016 FWC 610
20 s.238(4A), Fair Work Act 2009
21 Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union[2012] FWAFB 2206 (Ross J, Hamilton DP, Spencer C, 12 April 2012) at [16]
22 Exhibit A1, Attachment WJ03
23 [2017] FWC 1526
24 [2016 FWC 610
25 [2015] FWCFB 5906
26 [2012] FWAFB 2206
27 [2016] FWC 610 at [128-131]
28 [2013] FWC 9851
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