Inco Ships Pty Limited

[2017] FWC 3482

[2017] FWC 3482

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Inco Ships Pty Limited
(AG2015/6927)

COMMISSIONER CAMBRIDGE SYDNEY, 6 JULY 2017

Application for approval of the Inco Ships Pty Ltd Officer Collective Agreement 2015 Shipping Services.

[1] This Decision concerns an application for approval of an enterprise agreement known as the Inco Ships Pty Ltd Officer Collective Agreement 2015 Shipping Services (the Agreement). The application was made pursuant to s. 185 of the Fair Work Act 2009 (the Act). The application has been made by Inco Ships Pty Ltd (Inco). The Agreement is a single-enterprise agreement.

[2] This matter has had a long and difficult history. The application was lodged at Melbourne on 9 December 2015. The application was the subject of an Interim Decision issued by the Fair Work Commission (the Commission) on 16 March 2016 1 (the Interim Decision). The Interim Decision was subsequently the subject of a Decision of a Full Bench of the Commission issued on 26 May 20162 (the Full Bench Decision).

[3] Following the Full Bench Decision, further disputation arose between Inco and the two Unions that had been granted standing as interveners in the matter, The Australian Institute of Marine and Power Engineers (the AIMPE), and The Australian Maritime Officers’ Union (the AMOU). This disputation involved contested Summons for Production and related issues which were eventually resolved by further determinations of the Commission. In due course, the application proceeded to a Hearing held at Sydney on 6 June 2017.

[4] At the Hearing held on 6 June, Ms S Zeitz, solicitor, from Zeitz Workplace Lawyers continued her appearance on behalf of Inco. Mr N Niven together with Mr S Littlewood appeared for the AIMPE, and Ms J Thompson appeared via video link for the AMOU.

[5] In support of the application, Ms Zeitz introduced evidence by way of a statement of Cassandra Konnecke, made on behalf of Inco and dated 29 May 2017. Ms Konnecke was called as a witness, and she attested to the veracity of her statement which became Exhibit 3 in the proceedings. The AIMPE and the AMOU did not introduce any further evidentiary material at the Hearing held on 6 June. All Parties made oral submissions in elaboration of their respective documentary submission materials.

[6] At the Hearing of 6 June, the AIMPE and the AMOU (the Unions) advanced argument against approval for the Agreement. The basis for the Unions’ opposition to approval of the Agreement involved various identified pre-approval and process issues, together with an assertion that the Agreement did not pass the Better Off Overall Test (BOOT). Inco contested all of the various alleged deficiencies upon which the Unions based objection to any approval of the Agreement.

[7] As will become apparent, only one of the issues of contest has ultimately required detailed examination and determination. The Unions asserted that the Agreement could not be approved because the mandatory pre-approval requirement established by s. 180 (3) of the Act had not been met. This pre-approval step establishes a requirement that an employer must take all reasonable steps to notify relevant employees of the time, place and voting method of the ballot for the making of an enterprise agreement. Further, these reasonable steps must occur before the start of the access period. The access period being the seven day period immediately before the start of the voting process for the making of an enterprise agreement.

[8] The issue of an apparent failure to provide notification of the ballot in accordance with the notification requirements of s. 180 (3) of the Act was identified at an early stage of proceedings as a result of examination of the contents of Attachment 2 to the Form F17 (the Statutory Declaration of Cassandra Konnecke dated 8 December 2015). The date that voting for the Agreement commenced was 5 December 2015. Therefore, the access period commenced at 00:01:01 hours on 28 November 2015, and the reasonable notification steps prescribed by s. 180 (3) of the Act needed to have been taken on or before 27 November 2015.

[9] Attachment 2 to the Form F17 was a memorandum to relevant employees which provided notification of the time, place and voting method for the ballot commencing on Saturday, 5 December 2015, and this memorandum was dated 28 November 2015. Consequently, on its face, the notification provided by way of Attachment 2 to the Form F17 was not made by the start of the access period but during it.

[10] Despite this apparent, prime facie, failure to provide the ballot notification details by the start of the access period, Inco contended that earlier ballot notification details had been provided in respect to a ballot that was conducted on or about 21 November 2015. This ballot was essentially abandoned because of technical difficulties with electronic communication of ballot papers to all relevant employees. Therefore, the ballot which commenced on 5 December 2015, which resulted in the making of the Agreement, was, in effect, the second ballot conducted in respect to the Agreement. In these circumstances, Inco asserted that the ballot notification details provided in respect of the first (abandoned) ballot demonstrated that the employer had taken all reasonable steps to provide the required notification for the second ballot.

[11] The circumstances presented in this instance have some important similarities with the circumstances that were examined by a Full Bench of the Commission in the matter of CFMEU v Australian Mining Supplies Company Pty Ltd  3(AMSC). In the AMSC case notification was provided on 11 October 2016, for a ballot to occur on 21 October 2016. However, difficulties arose such that the ballot of 21 October 2016 could not be held, and the ballot was rescheduled for 27 October 2016. On 25 October 2016, AMSC advised relevant employees that the ballot which had originally been scheduled for 21 October, would be held on 27 October 2016. In these circumstances, the Full Bench held that; “AMSC cannot rely on the notice that was given on 11 October 2016 because that did not constitute advice of the time at which the vote to approve the agreement actually occurred.”4

[12] The Full Bench in the AMSC case further stated:

“[14] Section 180(3) requires that the employer take “all reasonable steps” to provide the required notification. The meaning usually assigned to that expression was discussed by the Full Bench in Maritime Union of Australia v Northern Stevedoring Services 2 (albeit in the different context of the use of the expression in a provision of an enterprise agreement):

“[33] The expression “all reasonable steps”, and the case authorities concerning that and similar expressions were discussed at length in the decision of the Industrial Relations Commission of NSW in Court Session Bluescope Steel Ltd v The Australian Workers' Union, New South Wales ([2004] NSWIRComm 222; 137 IR 176 at [67]- [71]). The following propositions may be derived from the Court’s analysis:

● reasonable steps are what a reasonable man or woman would regard as being reasonable steps in the circumstances which apply;

● the obligation to take “reasonable steps” depends on the particular circumstances existing at the time the obligation arises; and

● a requirement to take all reasonable steps does not extend to all steps that are reasonably open in some narrow or theoretical sense (such as, for example, matters not directly within the particular knowledge or experience of a relevant party).

[34] Additionally in Parland Pty Ltd & Ors v Mariposa Pty Ltd ([1995] TASSC 91; (1995) 5 TASR 121 at 133) the Tasmanian Supreme Court said, in relation to a requirement for a party to use its best endeavours to achieve a particular object, that a failure to take a particular step had to be assessed by reference to its materiality to the failure to achieve the relevant object. The Court said:

‘In any event quite apart from authority it would seem to me to be an untenable proposition that a party could be held to have failed to satisfy a condition requiring it to use its best endeavours in relation to an application because it failed to take some particular step if in fact the application would have been unsuccessful even had that step been taken.’ ”

[15] In this case, there is no evidence that AMSC took any steps at all to notify the relevant employees of the time, place and method of the vote which actually occurred prior to the commencement of the access period. It was not submitted by AMSC that what was reasonable in this case was for it to take no steps whatsoever, and there was nothing in the evidence before the Commissioner, or before us, which suggested that there was no reasonable step which AMSC could have taken to provide the requisite notification to employees by the start of the access period.”

[16] The unavoidable conclusion is that the pre-approval step in s.180(3) was not complied with, and there was no basis upon which the Commissioner could have been satisfied that the requirement for the genuine agreement of employees in s.186(2)(a) had been met. In those circumstances the Commissioner had no power to approve the Agreement (there being no residual discretion to approve an agreement which did not comply with s.186(2)(a), and no power to waive non-compliance with s.180(3)), and erred in doing so.”

[13] I am obliged to follow the reasoning and conclusions established by the Full Bench in the AMSC case. Consequently, even if there was proper notification made of the time, place and voting method to be used in the first ballot (which the employer abandoned), that notification cannot be relied upon as any step to notify the relevant employees of the time, place and method of vote which actually occurred with the ballot that commenced on 5 December 2015. Further, as was established in the AMSC case, there was no evidence in this instance that the employer took any steps at all to notify the relevant employees of the time, place and method of the vote which actually occurred prior to the commencement of the access period.

[14] The only step that was taken to provide notification of the ballot that actually occurred and upon which the Agreement was made, was the memorandum dated 28 November 2015. The evidence has subsequently revealed that that memorandum was provided to relevant employees on 30 November 2015. Therefore, as there was no step taken by the employer to provide notification of the time, place and method of voting by the start of the access period for the Agreement, the pre-approval step in s. 180 (3) was not complied with, and there was no basis upon which the Commission could be satisfied that the requirement for genuine agreement of employees in s. 186 (2) (a) had been met.

[15] The pre-approval requirements are mandatory. The Commission does not have discretion to approve an agreement which did not comply with s. 186 (2) (a), nor does it have power to waive non-compliance with s. 180 (3) of the Act.

[16] Consequently, as the Agreement has not been made in accordance with the relevant pre-approval requirements of the Act the application must be dismissed.

COMMISSIONER

Appearances:

Ms S Zeitz solicitor from Zeitz Workplace Lawyers appeared for Inco Ships Pty Ltd.

Mr N Niven with Mr S Littlewood appeared for The Australian Institute of Marine and Power Engineers.

Ms J Thompson appeared for The Australian Maritime Officers’ Union by video link from Melbourne.

Hearing details:

2017.

Sydney and Melbourne (video hearing):

June, 6.

 1   [2016] FWC 1637

 2   [2016] FWCFB 3370

 3   Construction, Forestry, Mining and Energy Union v Australian Mining Supplies Co Pty Ltd [2017] FWCFB 2236.

 4 Ibid @ [12].

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