Hymix Australia Pty Ltd

Case •

[2023] FWC 2457

•

22 SEPTEMBER 2023
[2023] FWC 2457

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.185 - Application for approval of a single-enterprise agreement

Hymix Australia Pty Ltd

(AG2023/2829)

DEPUTY PRESIDENT WRIGHT

SYDNEY, 22 SEPTEMBER 2023

Application for approval of the Hymix Australia Pty Limited Sydney Concrete Customer Centre Enterprise Agreement 2023

Introduction

  1. Hymix Australia Pty Ltd (the Employer) has made an application for approval of an enterprise agreement known as the Hymix Australia Pty Limited Sydney Concrete Customer Centre Enterprise Agreement 2023 (the Agreement) pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single enterprise agreement.

Transitional arrangements under the Secure Jobs, Better Pay amendment

  1. The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (Amending Act) made a number of changes to enterprise agreement approval processes in Part 2-4 of the Fair Work Act, that commenced operation on 6 June 2023.

  1. Under transitional arrangements, amendments made by Part 14 of Schedule 1 to the Amending Act in relation to genuine agreement requirements for agreement approval applications apply where the notification time for the agreement was on or after 6 June 2023. The notification time for the Agreement was 21 June 2023.

  1. Under transitional arrangements, amendments made by Part 16 of Schedule 1 to the Amending Act in relation to the better off overall test requirements for agreement approval applications apply where the agreement was made on or after 6 June 2023. The Agreement was made on 14 August 2023.

Section 188 requirements

  1. The Agreement covers employees of the Applicant working in the Sydney Metropolitan area who fall within the classifications under the Premixed Concrete Award and perform functions associated with the taking of, allocating, scheduling, and confirming customer orders as well as operating and keeping clean the Customer Centre facilities. The Agreement provides for four classifications, Customer Services Agent, Allocator/Scheduler, Senior Allocator/ Scheduler and Supervisor Allocator/Scheduler. The Form F17B declaration filed by the Applicant indicated that four employees are covered by the Agreement and that four employees voted in favour of the Agreement.

  1. Question 27 of the Form F17B declaration asked the Applicant to explain how the employees requested to vote on the Agreement have a sufficient interest in the terms of the Agreement, and are sufficiently representative, having regard to the employees the Agreement is expressed to cover.

  1. As the Applicant’s response to this question did not address the requirements of s.188(2) and paragraphs 17 and 18 of the statement of principles (SOP), the matter was listed for a mention/directions hearing on 7 September 2023.

  1. The Applicant was represented by Mr Scott Williams, NSW Head of Sales and Customer and Ms Lillian Leonardi, Human Resources. The employees covered by the Agreement were represented by Ms Nicole Wiles, Supervisor Allocator Customer Centre and employee bargaining representative.

  1. At the mention/directions hearing, Mr Williams and Ms Leonardi explained that the Applicant is owned by Henson Australia which has about 4000 employees in Australia including salaried employees on individual contracts and employees covered by other enterprise agreements. Most of the employees in classifications provided by the Agreement do not work in the Sydney Metropolitan area and are therefore not covered by the Agreement.

  1. One employee has resigned since the vote for the Agreement took place. The remaining three employees covered by the Agreement are respectively employed in the roles of Allocator/Scheduler, Senior Allocator/Scheduler and Supervisor Allocator/Scheduler. The Applicant is not intending to recruit more of these roles in Sydney. Mr Williams and Ms Leonardi advised that there are only two Customer Services Agents employed in Sydney and that the rest of the employees in these roles are in Brisbane. The Applicant pays these roles a salary which is above the Agreement rate of pay and therefore regards these roles as not being covered by the Agreement.

  1. Ms Wiles advised the Commission that she had been employed by the Applicant for approximately sixteen years, that she was involved in the development of a log of claims on behalf of employees and that there were three bargaining meetings before the vote took place.

  1. Despite the fact that the two Customer Services Agents employed in Sydney are paid more than the Agreement, these roles appear to be covered by the Agreement according to clause 1.2 of the Agreement. I note that these employees were not provided with the notice of employee representational rights (NERR), did not participate in bargaining and did not vote in relation to the Agreement.

  1. On 12 September 2023, my Chambers sent the following email to the parties which relevantly provided:

    Dear parties,

    I refer to the above matter which was listed before Deputy President Wright for a mention/directions hearing on 7 September 2023 to deal with the requirements of s.188(2) of the Fair Work Act 2009 (the Act) and paragraphs 17 and 18 of the statement of principles (SOP).

    During the hearing, you advised that Hymix Australia Pty Limited (Hymix) employs two Sydney based Customer Services Agents and pays these roles a salary which is above the Agreement rate of pay and therefore regards these roles as not being covered by the Agreement.

    Deputy President Wright expressed a preliminary view that Sydney based Customer Services Agents are likely to be covered by the Agreement regardless of whether they are paid a salary and advised that she would revert to the parties if she anticipated any issues approving the Agreement.

    Deputy President Wright has given further consideration to the matter and believes that it is unlikely that the requirements of s.188 of the Act have been met if the two Sydney based Customer Services Agents were not provided with a notice of representational rights under s.173(1) of the Act and were not provided with an opportunity to vote in relation to the Agreement. If this is the case, the Agreement cannot be approved.

  2. The email concluded by inviting the parties to make further written submissions if they believed that the requirements of s.188 had been met or to request a relisting of the matter. On 15 September 2023 Mr Williams sent an email to my Chambers advising that the Employer had no further information or evidence to provide.

Consideration

  1. I am required by s. 186(1) to approve the Agreement if the requirements in ss.186 and 187 are met. Section 186(2) requires me to be satisfied that the Agreement has been genuinely agreed to by the employees covered by the Agreement. To determine whether there has been genuine agreement, I must have regard to section 188 which provides:

    188  Determining whether an enterprise agreement has been genuinely agreed to by employees

    Statement of principles

    (1)The FWC must take into account the statement of principles made under section 188B in determining whether it is satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement.

    Sufficient interest and sufficiently representative

    (2)  The FWC cannot be satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement unless the FWC is satisfied that the employees requested to approve the agreement by voting for it:

    (a)  have a sufficient interest in the terms of the agreement; and

    (b)  are sufficiently representative, having regard to the employees the agreement is expressed to cover.

    Note:          In One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 (2018) 262 FCR 527, a Full Court of the Federal Court observed that whether an agreement has been genuinely agreed involves consideration of the authenticity of the agreement of the employees, including whether the employees who voted for the agreement had an informed and genuine understanding of what was being approved.

    Agreement of bargaining representatives that are employee organisations

    (2A)  The FWC cannot be satisfied that an enterprise agreement to which section 180A applies has been genuinely agreed to by the employees covered by the agreement unless the FWC is satisfied that the employer complied with section 180A in relation to the agreement.

    Where notice of employee representational rights was required

    (3)  Subsection (4) applies in relation to an enterprise agreement if an employer was required by subsection 173(1) (which deals with giving notice of employee representational rights) to take all reasonable steps to give notice in relation to the agreement.

    (4)  The FWC cannot be satisfied that the agreement has been genuinely agreed to by the employees covered by the agreement unless the FWC is satisfied that the employer complied with the following provisions in relation to the agreement:

    (a)  sections 173 and 174 (which deal with giving notice of employee representational rights);

    (b)  subsection 181(2) (which requires that employees not be requested to approve certain enterprise agreements until 21 days after the last notice of employee representational rights is given).

    Explanation of terms of the agreement

    (4A)  The FWC cannot be satisfied that the agreement has been genuinely agreed to by the employees covered by the agreement unless the FWC is satisfied that the employer complied with subsection 180(5) in relation to the agreement.

    Minor errors may be disregarded

    (5)  In determining whether it is satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement (including determining whether it is satisfied that an employer complied with the provisions mentioned in subsection (2A) or (4) or (4A)), the FWC may disregard minor procedural or technical errors made in relation to the following requirements if it is satisfied that the employees were not likely to have been disadvantaged by the errors:

    (a)  section 173 or 174 (which deal with notices of employee representational rights for certain agreements);

    (aa)  subsection 180(5) (which requires employers to explain the terms of agreements);

    (ab)  section 180A (which deals with agreement of certain bargaining representatives);

    (b)  subsection 181(2) (which requires that employees not be requested to approve certain enterprise agreements until 21 days after the last notice of employee representational rights is given);

    (c)  subsection 182(1) or (2) (which deal with the making of different kinds of enterprise agreements by employee vote).

    Regulations

    (6)  The FWC cannot be satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement unless the FWC is satisfied that the requirements (if any) prescribed by the regulations for the purposes of this subsection are met.

  1. As noted above, the Applicant disclosed during the hearing that it employs two Customer Services Agents in Sydney who it regards as not being covered by the Agreement. I expressed a preliminary view that these employees are likely to be covered by the Agreement and that it is unlikely that the requirements of s.188 of the Act have been met if they were not provided with a NERR and an opportunity to vote in relation to the Agreement.

  1. The Applicant did not provide any submissions indicating that it disagreed with my preliminary view, or any evidence that the two Customer Services Agents received a NERR and voted in relation to the Agreement.

  1. Based on the information provided by the parties, I find that the Applicant has two employees who are covered by the Agreement, being Customer Services Agents, who were not provided with a NERR as required by s. 173. I also find that these employees were not provided with a reasonable opportunity to vote on the proposed enterprise agreement in a free and informed manner and were not informed of the time, place and method for the vote as required by clauses 15 and 16 of the SOP.

  1. I am required by s.188(1) to take the SOP into account when determining whether there has been genuine agreement. If the two Customer Services Agents had been given the opportunity to participate in the vote, this would have resulted in six employees exercising a vote in relation to the Agreement. As four employees voted in favour of the Agreement, the participation of two Customer Services Agents in the vote would not have affected the outcome, even if they had voted against it.

  1. If the procedural deficiencies in the Applicant’s approach were limited to failing to comply with clauses 15 and 16 of the SOP, a conclusion that there was genuine agreement is still open to the Commission having regard to the outcome of the vote. However, the effect of the Applicant’s failure to provide the NERR to two Customer Services Agents is that I cannot be satisfied that the Agreement has been genuinely agreed to because of s.188(4)(a), unless I find that this is a minor procedural or technical error under s.188(5)(a) and that the employees covered by the Agreement were not likely to have been disadvantaged by the error.

  1. Section 188(5) was inserted into the Act by the amending Act and is in similar terms as a previous provision, s. 188(2), which was considered by the Full Bench in Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others.[1] In that decision, the Full Bench stated that the determination of whether an error constitutes a ‘minor error’ calls for an evaluative judgment having regard to the underlying purpose of the relevant procedural or technical requirement which was not complied with, and the relevant circumstances.[2] The Full Bench went on to make a number of observations about the proper construction of s.188(2), including that the lower the level of non-compliance with a procedural or technical requirement the more likely it is to be characterised as a ‘minor error’, however this will depend upon the circumstances. Whether an incidence of non-compliance is characterised as a ‘minor error’ also depends on the nature of the requirement which has not been complied with. In assessing whether employees were not likely to have been disadvantaged by an error, it may be necessary to consider the particular circumstances of the employees concerned at the time the error occurred and the impact of the error on the subsequent course of bargaining including considering any steps taken by the employer to address the adverse impact of the non-compliance.[3]

  1. A table referred to in the decision, extracted from the written submissions of the Australian Chamber of Commerce and Industry, indicated that the underlying purpose of the requirements of ss.173 and 174 to provide employees with the NERR is to ensure that all employees:

  • are aware that their employer intends bargain for an enterprise agreement and that they are aware of their representational rights;
  • understand their representational rights within a reasonable period before bargaining commences thus allowing them to exercise those rights in a timely manner; and
  • understand the scope of the proposed agreement, who is the employer and what their representational rights are prior to the actual bargaining commencing.[4]

  1. The table further provides that employees may be disadvantaged by an employer not complying with the requirements of ss.173 and 174 because:

  • employees fail to understand and exercise their representational rights and effectively participate in the bargaining process;
  • employees may have received the NERR later than the 14 days thus period preventing them from attending initial bargaining meetings and thus effectively influencing the bargaining process even after they do participate;
  • the employer may have been incorrectly named within a complex group of companies thus creating real confusion resulting in employees failing to effectively participate in the bargaining. [5]

  1. The Full Bench noted that this table is not an exhaustive list of the circumstances in which a minor procedural or technical error might disadvantage the employees covered by the agreement.[6]

  1. The failure of the Applicant to provide the NERR to the Customer Service Agents was based on a wrongly held belief that they were not covered by the Agreement and on this basis, may be regarded as a procedural error. Although this may have been unintentional, the Applicant’s actions in this regard deprived the Customer Service Agents of the opportunity to effectively participate in and influence the bargaining process, which is fundamental to the process of enterprise bargaining under the Act. There is no evidence before me which enables me to form a view about the degree of interest that the Customer Service Agents may have had in relation to bargaining for the enterprise agreement.

  1. In the absence of this evidence, I am unable to conclude that the Customer Service Agents would not have participated in bargaining if they had been given the opportunity to do so. I am also unable to make any conclusions about whether the terms of the Agreement would have been different if the Customer Service Agents participated in bargaining. In these circumstances, and because of the potentially significant consequences of non-compliance, I find that that the failure of the Applicant to provide the Customer Service Agents with the NERR was not ‘minor’, and as such does not constitute a minor technical or procedural error for the purposes of s.188(5)(a) of the Act. I therefore cannot be satisfied that there has been genuine agreement because of s.188(4).

Conclusion

  1. As I am not satisfied that the requirements in s.186(2) are met, I am not required to approve the Agreement under s.186(1).

  1. The Application is dismissed.

DEPUTY PRESIDENT


[1] [2019] FWCFB 318.

[2] Ibid at [52].

[3] Ibid, [117]

[4] Ibid, [74]

[5] Ibid.

[6] Ibid, [75].

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