Incitec Pivot Limited
[2014] FWCA 3163
•30 MAY 2014
[2014] FWCA 3163 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Incitec Pivot Limited
(AG2014/946)
INCITEC PIVOT PORTLAND ENTERPRISE AGREEMENT 2013 - 2016
Manufacturing and associated industries | |
COMMISSIONER RYAN | MELBOURNE, 30 MAY 2014 |
Application for approval of the Incitec Pivot Portland Enterprise Agreement 2013 - 2016.
[1] An application for approval of the Incitec Pivot Portland Enterprise Agreement 2013 was made by Incitec Pivot Limited on 23 April 2014 and the application was accompanied by a Form F17 - Employer’s statutory declaration in support of an application for approval of an enterprise agreement which had been declared by Mr van der Merwe, Portland SSP Plant Manager.
[2] The Application identified that the Australian Workers’ Union (AWU) was a bargaining representative for employees in relation to the Agreement.
[3] The Form F17 contained the following question and answer:
“2.6 What steps were taken by the employer to explain the terms of the agreement, and the effect of those terms, to the relevant employees? See section 180(5) of the Fair Work Act 2009
Employees were issued with final copies of the proposed Agreement and a summary document (Appendix 5) on the 3'' of April 2014. Employees were freely able to discuss the proposed agreement with the leadership team, union representatives and the local HR representative. All employees were able to access all meeting minutes relating to the negotiation meetings in order to keep themselves informed of negotiation progress on a shared drive on the company server. Employees were encouraged to contact HR if they had any queries which could not be answered at a local level.”
[4] Appendix 5 to the Form F17 was a 5 page document set out in table format which gave a brief explanation of all 35 clauses and 9 Appendices of the enterprise agreement (the Summary).
[5] I raised a series of concerns with the content of the Agreement by letter dated 1 May 2014 addressed to both the employer and the AWU, as the bargaining representative for the Agreement. Incitec Pivot Ltd responded by letter on 6 May 2014. Prior to addressing each concern raised by the Commission and the relevant response from Incitec Pivot I note that the reply from Incitec Pivot contains the following introduction:
“I write in acknowledgement of your letter dated 1 May 2014 identifying a number of concerns with the proposed Incitec Pivot Portland Enterprise Agreement ('the Agreement'). I have now had an opportunity to review your letter and engage with key internal stakeholders on appropriate remedies to resolve those concerns.
Before embarking on a description of the remedial actions that we propose, I wanted to take the time to stress that Incitec Pivot Limited ('the Company') has at no stage sought to deceive our employees or act in any way that is anything less than honest, transparent and genuine. We value our employees and have openly and willingly worked with the Australian Workers Union as the employee's representative in efforts of securing the best and fairest outcome for all parties.
In order to address your concerns fully, we will respond to each in the order you have raised them.”
[6] I now turn to the issues by the Commission raised and the response of Incite Pivot.
1. Clause 13 - Incitec Pivot Policies and Procedures
[7] Issue of concern raised:
“Clause 13 of the enterprise agreement is in the following terms:
‘13. INCITEC PIVOT POLICIES AND PROCEDURES
13.1 Employees are required to comply with Incitec Pivot Limited policies and procedures where these impose a requirement on the Employee. Incitec Pivot Limited reserves the right to amend, revoke or replace its policies and procedures at its discretion, in accordance with what it considers are its business needs. Incitec Pivot Limited policies and procedures do not form part of this Agreement.
13.2 Any new policies and procedures that are expressly relevant to the Portland site and have a negative impact, for example a negative impact on an employee's entitlements and conditions, will be developed through consultation. This will be resolved through the Dispute Resolution Procedure as set out in clause 15 of this Agreement.
13.3 A copy of all policies and procedures (as amended from time to time) shall be made readily accessible to Employees at site.’
The Summary explained clause 13 as follows:
13. Incitec Pivot Policies and Procedures | This clause sets out employee obligations to comply with company policies and procedures. New policies directly relevant to Portland will be developed in consultation with employees. | This is a new clause. |
The plain words of clause 13 make it clear that if an employee fails to comply with a company policy or procedure even through a minor breach of such policy or procedure then the employee will have breached a term of the enterprise agreement.
Section 50 of the Fair Work Act (the Act) provides as follows:
‘50 Contravening an enterprise agreement
A person must not contravene a term of an enterprise agreement.
Note 1: This section is a civil remedy provision (see Part 4-1).
Note 2: A person does not contravene a term of an enterprise agreement unless the agreement applies to the person: see subsection 51(1).’
Note 1 to s.50 refers to Part 4-1 of the Act which deals with the Civil Remedies provisions of the Act.
S.539 sets out the civil remedy provisions in the Act and in relation to each civil remedy provision identifies which persons can initiate court action for an in relation to a contravention of the civil remedy provision and sets out the maximum penalty that a court can order in relation to a breach of a civil remedy provision. Relevantly s539 provides as follows:
‘539 Applications for orders in relation to contraventions of civil remedy provisions
(1) A provision referred to in column 1 of an item in the table in subsection (2) is a civil remedy provision.
(2) For each civil remedy provision, the persons referred to in column 2 of the item may, subject to sections 540 and 544 and Subdivision B, apply to the courts referred to in column 3 of the item for orders in relation to a contravention or proposed contravention of the provision, including the maximum penalty referred to in column 4 of the item.’
Standing, jurisdiction and maximum penalties | ||||
Item | Column 1 | Column 2 | Column 3 | Column 4 |
4 | 50 (other than in relation to a contravention or proposed contravention of a term that would be an outworker term if it were included in a modern award) | (a) an employee; (b) an employer; (c) an employee organisation; (d) an inspector | (a) the Federal Court; (b) the Federal Circuit Court; (c) an eligible State or Territory court | 60 penalty units |
A “penalty unit” is defined in s.4AA of the Crimes Act 1914 as meaning $170.
The effect of clause 13 of the enterprise agreement is that where an employee breaches a company policy or procedure then because that also constitutes a breach of a term of the enterprise agreement the employee could be liable for a maximum court imposed penalty of $10,200.00!
The Summary does not explain to employees that this is the effect of clause 13.
The issue of concern in relation to clause 13 is that relevant modern award does not contain a provision which makes breach of a company policy or procedure a breach of a term of the award. Thus the enterprise agreement creates a significant disadvantage for employees vis a vis the award. Clause 13 of the enterprise agreement is clearly detrimental to employees and this has a significant impact on the application of the BOOT.
The employer and the employee bargaining representatives are to advise me in writing as to whether it was intended that clause 13 would operate according to its plain terms. If clause 13 was not intended to operate in accordance with its plain terms then what was the intended effect of clause 13?”
[8] The employer’s response:
“This clause in its entirety has been used in the Company’s agreements both past and present without issue. While it is neither our intention nor our practice to use this clause as a mechanism to invoke civil remedies, we none the less understand and appreciate your concerns.
We propose to resolve your concern by making an undertaking to modifying the clause as follows:
“The company has a range of policies and procedures that relate to the employment relationship and employees’ are required to take reasonable steps to inform themselves of the Company’s policies and procedures as they apply from time to time. The Company’s policies and procedures are not incorporated into this agreement. Where there is an inconsistency between the Company’s policies and procedures and this Agreement, this Agreement shall prevail. The Company reserves the right to vary its policies and procedures from time to time.”
2. Clause 22 - Recovery of Overpaid Monies
[9] Issue of concern:
“Clause 22 of the enterprise agreement is in the following terms;
22. RECOVERY OF OVERPAID MONIES
22.1 In cases where an Employee has been overpaid, lncitec Pivot Limited shall be entitled to recover such overpayment in full.
22.2 In all cases where overpayment has occurred, lncitec Pivot Limited shall as soon as reasonably practicable, advise the Employee concerned of both the circumstances surrounding the overpayment and the amount involved.
22.3 The Employee will be consulted on the proposed method of recovering such overpayment.
22.4 If an Employee owes any monies at the date of termination of their employment, he/she authorises the Company to deduct the amount of any monies owed from any outstanding wages owed to the Employee.
The Summary explained clause 22 as follows:
22. Recovery of Overpaid Monies | This clause sets out the procedure to be applied for recovering overpayments. | This is a new clause. |
The first concern in relation to clause 22.4 is that the right to recover unpaid debts is not limited to matters which pertain to the employment relationship. Clause 22.4 clearly goes beyond what is permitted by s.172 of the Act. The plain words of clause 22.4 permit the employer to deduct from the final wages of an employee any debt whatsoever owed by the employee to the employer even if that debt arose outside of the employment relationship.
The second concern with clause 22.4 is that it permits a deduction from wages in circumstances where such a deduction may not be reasonable.
Section 326(1) of the Act provides as follows:
“326 Certain terms have no effect
Unreasonable payments and deductions for benefit of employer
(1) A term of a modern award, an enterprise agreement or a contract of employment has no effect to the extent that the term:
(a) permits, or has the effect of permitting, an employer to deduct an amount from an amount that is payable to an employee in relation to the performance of work; or
(b) requires, or has the effect of requiring, an employee to make a payment to an employer or another person;
if either of the following apply:
(c) the deduction or payment is:
(i) directly or indirectly for the benefit of the employer, or a party related to the employer; and
(ii) unreasonable in the circumstances;
(d) if the employee is under 18—the deduction or payment is not agreed to in writing by a parent or guardian of the employee.”
The absolute right given to the employer by clause 22.4 to deduct whatever monies the employer claims are owed by the employee may very well mean that in some circumstances the deduction is unreasonable in the circumstances. The rights of the employer are not qualified in any way whatsoever. There is nothing which suggests that the employer has to identify the amount to be deducted or the reason for the deduction before actually deducting monies from the final pay of an employee. There is nothing in clause 22.4 which permits the employee an opportunity of challenging the reasonableness of the deduction before it occurs. The only apparent remedy for an employee would be to commence proceedings in a court to recover monies wrongly deducted from their final pay.
Clause 22.4 has no counterpart in the relevant modern award and thus the presence of clause 22.4 weighs against the enterprise agreement passing the BOOT.”
[10] Employer’s response:
“Again, this clause in its entirety has been used in the last eight Company agreements certified by the FWC. We have not sought to deliberately circumvent the requirements of the Fair Work Act (Section 326) and Fair Work Regulations (Regulation 2.12) and were operating under the belief that this clause was not of concern.
As far as intention, it is the Company’s position and past practice that deductions would only relate to the employment relationship and would primarily be used to address accidental overpayments; deductions for notice not served and deductions for loan’s (usually education loans). However, the clause is deliberately broad in framing as it is impossible for the Company to itemise or predict all possible applications.
However, in light of your concerns we propose that we make an undertaking to modify clause 22.4 as follows:
‘If an employee owes any monies relating to the employment relationship at the date of termination of their employment, he/she authorises the Company to deduct the amount of any monies owed from any outstanding wages owed to the Employee. The employee will be consulted on the quantum and purpose of the deduction prior to the final pay being processed.’
3. Clause 16.1 -Termination of Employment
[11] Issue of concern raised:
“Clause 16.1 requires employees to give 4 calendar weeks’ notice if the employee wants to terminate the employment relationship. The relevant award provision is clause 22.2.
‘22. Termination of employment
22.1 Notice of termination is provided for in the NES.
22.2 Notice of termination by an employee
The notice of termination required to be given by an employee is the same as that required of an employer except that there is no requirement on the employee to give additional notice based on the age of the employee concerned. If an employee fails to give the required notice the employer may withhold from any monies due to the employee on termination under this award or the NES, an amount not exceeding the amount the employee would have been paid under this award in respect of the period of notice required by this clause less any period of notice actually given by the employee.’
The effect of clause 22.2 of the award is that the period of notice required to be given by an employee is:
Period | ||
Employee’s period of continuous service with the employer at the end of the day the notice is given | Period | |
1 | Not more than 1 year | 1 week |
2 | More than 1 year but not more than 3 years | 2 weeks |
3 | More than 3 years but not more than 5 years | 3 weeks |
4 | More than 5 years | 4 weeks |
The requirements of clause 16.1 of the agreement are far more onerous for an employee than the notice requirements under the award. This raises a significant issue in relation to the BOOT.
An appropriate undertaking would satisfy the concern of the Commission.
[12] The employer’s response:
“Once again, this clause in its entirety has been used in the Company’s agreements both past and present without issue. This clause was initially incorporated to satisfactorily accommodate for our monthly payroll and manage the risk of employee’s being overpaid. For example, an employee only required to provide one week’s notice and having been paid their month’s salary may be overpaid by one week as we pay 2 weeks in arrears and 2 weeks in advance.
To satisfactorily resolve this issue, we need to ensure we have a suitably geared Recovery of Overpaid Monies clause (as discussed below) and have the minimum notice period being two (2) weeks, even for employee’s who has less than 12 months service. We acknowledge that this is still in excess of the NES, however believe this is a fair and reasonable proposition.
We propose to resolve your concern by making an undertaking to modifying clause 22.2 as follows:
‘The notice of termination required to be given by an employee is:
Period of Continuous Service | Notice period |
Not more than 3 years | 2 weeks |
More than 3 years, but not more than 5 years | 3 weeks |
More than 5 years 4 weeks | 4 weeks |
If the employee is over 45 years old and has completed at least 2 years’ continuous service with the employer, they are entitled to an extra week of notice. | |
If the Employee does not give the required notice, he/she authorises the company to withhold or deduct from his or her termination pay the equivalent amount of remuneration in lieu.’
4. Clause 23.3 - Superannuation
[13] The issue of concern raised:
“Clause 23.3 provides that the default fund for superannuation contributions is “IPE”.
It is not possible on the information supplied so far for the Commission to be satisfied that clause 23.3 is not an unlawful term within the meaning of s.194 of the Act. Relevantly, s.194 of the Act provides as follows:
‘194 Meaning of unlawful term
A term of an enterprise agreement is an unlawful term if it is:
(h) a term that has the effect of requiring or permitting contributions, for the benefit of an employee (the relevant employee) covered by the agreement who is a default fund employee, to be made to a superannuation fund or scheme that is specified in the agreement but does not satisfy one of the following:
(i) it is a fund that offers a MySuper product;
(ii) it is a fund or scheme of which the relevant employee, and each other default fund employee in relation to whom contributions are made to the fund or scheme by the same employer as the relevant employee, is a defined benefit member;
(iii) it is an exempt public sector superannuation scheme.’
The employer is required to advise the Commission as to whether IPE has a MySuper product. The employer must also identify “IPE” by its full name.
[14] The employer’s response:
“The Company’s superannuation fund, Incitec Pivot Employees Superannuation Fund ABN 68569795856 was approved as a MySuper product on 19 December 2013. The unique identifier for that product is 68569795856660. A copy of the certificate of approval is attached.
We propose to resolve your concern by making an undertaking to modify clause 23.3 as
follows:
‘Should an Employee not nominate a superannuation fund, the Company contribution will be paid into the Incitec Pivot Employees Superannuation Fund.’”
5. Clause 35 - Definition of Immediate Family
[15] The issue of concern raised:
“Clause 35 of the agreement provides a number of definitions. The Commission has a concern in relation to the definition of “Immediate Family” which is as follows:
Immediate Family means the Employee's spouse, de facto partner, child, parent, grandparent, grandchild or sibling. Immediate family also includes the child, parent, grandparent, grandchild or sibling of the Employee's current spouse or de facto partner.
This definition has direct relevance to the entitlement of employees to personal/carers leave and compassionate leave.
The definition is significantly different from and inferior to the definition of “immediate family” in the Act.
The definition of “Immediate Family” in clause 35 of the agreement has the effect of removing part of the NES entitlements of employees. The definition has the effect of either excluding the operation of part of the NES or creating a detrimental effect on employees in relation to their NES entitlements.
Sections 55 and 56 of the Act deal with this issue.
‘55 Interaction between the National Employment Standards and a modern award or enterprise agreement
National Employment Standards must not be excluded
(1) A modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards.
Terms expressly permitted by Part 2-2 or regulations may be included
(2) A modern award or enterprise agreement may include any terms that the award or agreement is expressly permitted to include:
(a) by a provision of Part 2-2 (which deals with the National Employment Standards); or
(b) by regulations made for the purposes of section 127.
Note: In determining what is permitted to be included in a modern award or enterprise agreement by a provision referred to in paragraph (a), any regulations made for the purpose of section 127 that expressly prohibit certain terms must be taken into account.
(3) The National Employment Standards have effect subject to terms included in a modern award or enterprise agreement as referred to in subsection (2).
Note: See also the note to section 63 (which deals with the effect of averaging arrangements).
Ancillary and supplementary terms may be included
(4) A modern award or enterprise agreement may also include the following kinds of terms:
(a) terms that are ancillary or incidental to the operation of an entitlement of an employee under the National Employment Standards;
(b) terms that supplement the National Employment Standards;
but only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the National Employment Standards.
Note 1: Ancillary or incidental terms permitted by paragraph (a) include (for example) terms:
(a) under which, instead of taking paid annual leave at the rate of pay required by section 90, an employee may take twice as much leave at half that rate of pay; or
(b) that specify when payment under section 90 for paid annual leave must be made.
Note 2: Supplementary terms permitted by paragraph (b) include (for example) terms:
(a) that increase the amount of paid annual leave to which an employee is entitled beyond the number of weeks that applies under section 87; or
(b) that provide for an employee to be paid for taking a period of paid annual leave or paid/personal carer’s leave at a rate of pay that is higher than the employee’s base rate of pay (which is the rate required by sections 90 and 99).
Note 3: Terms that would not be permitted by paragraph (a) or (b) include (for example) terms requiring an employee to give more notice of the taking of unpaid parental leave than is required by section 74.
Enterprise agreements may include terms that have the same effect as provisions of the National Employment Standards
(5) An enterprise agreement may include terms that have the same (or substantially the same) effect as provisions of the National Employment Standards, whether or not ancillary or supplementary terms are included as referred to in subsection (4).
Effect of terms that give an employee the same entitlement as under the National Employment Standards
(6) To avoid doubt, if a modern award includes terms permitted by subsection (4), or an enterprise agreement includes terms permitted by subsection (4) or (5), then, to the extent that the terms give an employee an entitlement (the award or agreement entitlement) that is the same as an entitlement (the NES entitlement) of the employee under the National Employment Standards:
(a) those terms operate in parallel with the employee’s NES entitlement, but not so as to give the employee a double benefit; and
(b) the provisions of the National Employment Standards relating to the NES entitlement apply, as a minimum standard, to the award or agreement entitlement.
Note: For example, if the award or agreement entitlement is to 6 weeks of paid annual leave per year, the provisions of the National Employment Standards relating to the accrual and taking of paid annual leave will apply, as a minimum standard, to 4 weeks of that leave.
Terms permitted by subsection (4) or (5) do not contravene subsection (1)
(7) To the extent that a term of a modern award or enterprise agreement is permitted by subsection (4) or (5), the term does not contravene subsection (1).
Note: A term of a modern award has no effect to the extent that it contravenes this section (see section 56). An enterprise agreement that includes a term that contravenes this section must not be approved (see section 186) and a term of an enterprise agreement has no effect to the extent that it contravenes this section (see section 56).
56 Terms of a modern award or enterprise agreement contravening section 55 have no effect
A term of a modern award or enterprise agreement has no effect to the extent that it contravenes section 55.’
The effect of s.56 is that the definition of “Immediate Family” in clause 35 has no effect to the extent that it excludes persons who would fall within the definition of “immediate family” under the Act.
Whilst this legally deals with the conflict between clause 35 of the agreement and the operation of the NES it doesn’t address the practical effect that flows from having a deficient definition within the agreement.
The very presence of the definition of “Immediate Family” in clause 35 of the agreement operates to misrepresent to employees their entitlement to access carers leave and compassionate leave. It may very be the case that such a misrepresentation is caught by s.345 of the Act which provides as follows:
‘345 Misrepresentations
(1) A person must not knowingly or recklessly make a false or misleading representation about:
(a) the workplace rights of another person; or
(b) the exercise, or the effect of the exercise, of a workplace right by another person.
Note: This subsection is a civil remedy provision (see Part 4-1).
(2) Subsection (1) does not apply if the person to whom the representation is made would not be expected to rely on it.’
The concern with clause 35 can be addressed through the employer offering an appropriate undertaking to the Commission.”
[16] The employer’s response:
“Based on our review of your letter, we have inferred that your concern with the drafting of the Immediate Family definition in clause 35 is the reference to ‘current spouse or de facto partner’. If this is not the essence of your concern, we would be appreciative of further clarification.
The incorporation of the word ‘current’ was not intended to limit or reduce any access to Entitlements as prescribed by the Act or NES. It would appear to be an anomaly in drafting as opposed to a conscious decision to modify the definition.
We propose to resolve your concern by making an undertaking to modify clause 3 5 as follows:
‘Immediate family’ means the Employee ‘s spouse, de facto partner, child, parent, grandparent, grandchild or sibling of the employee, or a child, parent, grandparent, grandchild or sibling of the Employee’s spouse or de facto partner.
[17] The proposed undertakings addressed the concerns of the Commission in all but one aspect. The proposed undertaking in relation to clause 35 of the Agreement was insufficient. Following further communication with Incitec Pivot the final undertakings offered by Incitiec Pivot satisfied the concerns of the Commission.
Consideration
[18] What is clear from the response from Incitec Pivot Ltd to the Commission’s concern is that Incitec Pivot Ltd did not understand the effect of the plain meaning of the words of the Agreement. It is also apparent that Incitec Pivot Ltd did not meet the requirement of s.180(5) to take all reasonable steps to explain the effect of the terms of the Agreement to employees. In fact how could Incitec Pivot Ltd met the requirements of s.180(5) when it didn’t understand the meaning of the terms of the Agreement.
[19] The importance of s.180(5) is that it requires the employer to “take all reasonable steps to ensure that the terms of the agreement and the effect of those terms are explained to relevant employees”. Unless this obligation is both taken seriously and is met by the employer then employees will be voting on whether or not to approve an enterprise agreement without necessarily understanding the effect of the agreement when it is in operation.
[20] Non compliance with s.180(5) should mean that an application for approval of an enterprise agreement is dismissed. However the real issue is the difficulty of ascertaining whether the employer has complied with the requirements of s.180(5).
[21] The Commission should be able to rely upon the statutory declaration of the employer (Form F17) in which the employer specifically swears that the employer took all reasonable steps to explain the terms of the agreement and the effect of those terms to relevant employees.
[22] In the present matter the employer has through a statutory declaration declared that the employer took all reasonable steps to explain the terms of the agreement and the effect of those terms to relevant employees and even included a document which set out the explanation given. Unfortunately that statutory declaration was made by a person who did not understand the terms of the enterprise agreement. The statutory declaration was true insofar as the deponent believed it to be true but in fact the employer had not taken all reasonable steps to explain the terms of the agreement and the effect of those terms to relevant employees simply because the employer did not understand the terms and the effect of the terms of its own agreement.
[23] It is not sufficient for an employer to say, after employees have voted to approve an enterprise agreement, that the employer “has at no stage sought to deceive our employees or act in any way that is anything less than honest, transparent and genuine.”
[24] Compliance with s.180(5) is necessary.
[25] A number of issues arise where an employer has not explained the terms of the agreement and the effect of the terms of the agreement to the relevant employees.
[26] The most obvious is that non compliance with s.180(5) may lead to a situation where the Commission refuses to approve the enterprise agreement for non compliance with a critical precondition for approval.
[27] Another consequence of not taking all reasonable steps to explain the terms of the agreement and the effect of those terms to relevant employees is that the relevant employees may not be in a position to genuinely agree to the agreement.
[28] The authorities make clear that the requirement in s.180(5) does not go so far as to require the employer to explain every term of the agreement or the effect of every term of the agreement to the relevant employees. 1 However what constitutes satisfaction of the requirement imposed by s.180(5) will vary depending on the circumstances of each case.2 Finally the nature of the explanations given or the lack of explanations given may directly impact on the genuineness of any subsequent vote by employees to approve the agreement.3
[29] A third consequence of not giving employees an explanation of the terms and the effect of the terms of an enterprise agreement is that if the enterprise agreement is approved by the Commission then the enterprise agreement operates according to its plain language and not necessarily as the employees or employer may have thought it would. In RACV Road Service Pty Ltd v AMWU 4(RACV v AMWU) a Full Bench said in relation to the interpretation of clauses of an enterprise agreement:
“[33]We now turn to the specific grounds of appeal advanced by the Appellant and make some observations that are not already addressed above. We agree with the Appellant that the Commissioner erred in relying on evidence of past conduct of the Appellant in construing the meaning of cl.13.6(b) of the Agreement. The evidence relied upon fell well short of establishing a common understanding of the meaning of the provision or the common intention of the parties to the Agreement. In this context the Commissioner’s reliance on the obligations of the Appellant to explain the terms of the Agreement during the approval process is also misplaced. The Commissioner said:
“Where as in the present case, no specific explanation was given by the RACV to employees as to the term or the effect of the term of clause 13.6(b) of the current Agreement then objectively the intent and meaning of clause 13.6(b) given by both the RACV and employees and the AMWU must be the same as it had prior to the current Agreement.”
[34]It will be rare that a common understanding or objectively ascertained common intention will be shown by the absence of words. This might show a common inadvertence, however that is not the same thing. Even less so, when combined with the clear and unambiguous language of cl.13.6(b). The question whether the Appellant adequately explained the terms of the agreement to employees during the approval process does not result in a common understanding or common intention in relation to the application of cl.13.6(b) of the Agreement. Moreover, the fact that the Respondent made limited use, or no use at all, of the provision in the past, is not a basis for reading down the operation of cl.13.6(b).
[35]Furthermore there is nothing ambiguous about cl.13.6(b) that would have compelled resort to the evidence and the evidence should not have been relied upon by the Commissioner to contradict the ordinary plain meaning of cl.13.6(b).”
[30] The logic of the Full Bench decision in RACV v AMWU is that once approved an enterprise agreement will operate in accordance its plain meaning and if that plain meaning was not explained to the employees before they voted to approve the agreement then the only course of conduct would be to challenge the validity of the approval process by commencing an action in the courts.
[31] The only effective way of avoiding a repeat of the outcome in the RACV matter is for the Commission to very carefully examine whether s.180(5) has been complied with and then carefully consider the plain meaning of the terms of the agreement. In the present matter this is what I have done.
[32] The letter to Incitec Pivot from the Commission raised the Commission’s concerns based upon the plain language of the terms of the enterprise agreement.
[33] The letter of response from Incitiec Pivot together with its proffered undertakings is based upon the intended effect of the agreement (as intended by Incitec Pivot) rather than the plain language of the agreement.
[34] The effect of the undertakings if accepted by the Commission will mean that the explanation given to employees about the terms and the effect of the terms of the agreement is in accord with the meaning of the agreement as altered by the undertakings.
[35] The F16 in this matter only identified one bargaining representative for employees and that was the AWU. I have sought the views of the AWU in accordance with s.190(4) of the Act.
[36] In all of the circumstances of this matter I am satisfied that each of the requirements of ss186, 187 and 188 as are relevant to this application for approval have been met.
[37] The undertakings given by Incitec Pivot in relation to the abovementioned clauses of the Agreement have become terms of the Agreement in accordance with s.191(1) of the Act and are appended at Appendix A.
[38] The Australian Workers’ Union, being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants the Agreement to cover it. As required by s.201(2) I note that the Agreement covers the organisation.
[39] The Agreement is approved and, in accordance with s.54(1), will operate from 6 June 2014. The nominal expiry date of the Agreement is 30 November 2016.
COMMISSIONER
APPENDIX A
1 National Tertiary Education Industry Union v University of New South Wales, [2011] FWAFB 5163, McDonald's
Australia Pty Ltd and Shop, Distributive and Allied Employees’ Association,[2010] FWAFB 4602.
2 National Tertiary Education Industry Union v University of New South Wales,[2011] FWAFB 5163, at 33/
3 Galintel Rolling Mills Pty Ltd T/A The Graham Group [2011] FWAFB 6772 at [40] and Bland v CEVA Logistics (Australia) Pty Ltd[2011] FWAFB 7453 at [43] and Eyre Peninsula Old Folks Home Inc re Eyre Peninsula Old Folks Home Health Services Employees Enterprise Agreement 2010 [2011] FWA 1402 at [23] - [29].
4 [2014] FWCFB 1629.
Printed by authority of the Commonwealth Government Printer
<Price code J, AE408106 PR550544
0
1
0