Independent Education Union of Australia-New South Wales/Australian Capital Territory Branch

[2020] FWC 1165

[2020] FWC 1165

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.236 - Application for a majority support determination

Independent Education Union of Australia-New South Wales/Australian Capital Territory Branch
(B2019/451)

DEPUTY PRESIDENT KOVACIC CANBERRA, 3 MARCH 2020

Bargaining – majority support determination – Commission satisfied that all the matters set out in s.237(2) of the Act have been met – determination made.

[1] The Independent Education Union of Australia – New South Wales/Australian Capital Territory Branch (IEUA – the Applicant) made an application on 7 June 2019 under s.236 of the Fair Work Act 2009 (the Act) seeking a majority support determination in respect of members working as teaching and non-teaching staff who are employed by Communities@Work (the Respondent) at the Galilee School (the School). The School is a registered non-government secondary school operated by the Respondent.

[2] The application was heard on 6 August 2019. Mr Iain Bailey, an Industrial Officer with the Applicant, appeared for the IEUA, while Mr John Wilson appeared with permission for the Respondent.

[3] Evidence for the IEUA was given by Mr Nicholas Mayo, a former teacher at the School, and Ms Lyn Caton, an Organiser with the IEUA.

[4] Ms Vanessa Hayes, the Respondent’s Head of Human Resources, gave evidence for Communities@Work.

[5] For the reasons set out below, I am satisfied that all the matters set out in s.237(2) of the Act have been met. In those circumstances, consistent with s.237(1) of the Act, the Commission must make the determination sought by the IEUA.

Background

[6] The Respondent’s website describes Communities@Work as “a social enterprise serving the community in the ACT and the wider capital region.” 1 The website describes the services provided by the Respondent as:

•  child care services, including early childhood education and care (long day care), out of school hours care, holiday programs, family day care and in-home care;

•  services for seniors and people with a disability, including the provision of transport, social inclusion, recreational and skills development programs through in-centre, in-home and in-community settings;

•  services for people experiencing hardship involving the provision of food, accommodation, clothing and other essential services;

•  qualifications and professional learning through the Respondent’s registered training organisation; and

•  the Galilee School. 2

[7] The organisation chart for the Respondent (as at July 2019) indicates that the Respondent’s Chief Executive Officer (CEO) reports to the Board of Directors and that the CEO has a number of direct reports, including the Directors of Social Programs, Lifestyle Services and Children’s Services, the Principal of the School and the Chief Financial and Operations Officer. 3

[8] The Respondent’s employees are currently covered by the Communities@Work Enterprise Agreement 2015 (the Agreement)  4 which passed its nominal expiry date on 28 February 2019. United Voice is covered by the Agreement.

[9] As to the events leading up to the IEUA’s application, on 17 January 2019 Ms Caton wrote to the Respondent’s Acting CEO seeking to initiate bargaining for a new agreement. The letter included the following:

“As per the Fair Work Act, I write on behalf of our IEU teacher members at Galilee School in order to initiate bargaining with Communities@Work for a new enterprise agreement following the expiration of the current agreement.” 5

[10] On 17 May 2019 the IEUA, via Mr Bailey, wrote to Ms Hayes regarding the commencement of bargaining. The letter included the following:

“Communities@Work has not yet agreed to commence bargaining for a new agreement to cover employees who work in the Galilee School.

The IEUA members wish to commence bargaining for an enterprise agreement that would apply to all employees engaged to work in the Galilee School, with the exception of the Principal.

Since April 2019, the IEUA has obtained signatures from employees working in the Galilee School to a petition that was framed in the following terms:

"We, the Teachers, Youth Workers, Counsellors, Administrative and General Employees of the Communities@Work's Galilee School, call upon our employer to immediately commence negotiations with the IEU to create an [sic] single Enterprise Agreement, covering all employees of the school. We hereby appoint to the IEU as our bargaining agent to this end.”

That petition has been signed by 16 current employees of the Galilee School and the Union understands this to represent a clear majority of the relevant employees.

In circumstances such as these where the employer has not yet agreed to bargain for an enterprise agreement, the Union can make an application to the Fair Work Commission for a majority support determination under s236 of the Fair Work Act 2009 (Cth).

…

Notwithstanding the right to make application for a majority support determination, it remains the Union’s preference to commence bargaining amicably and efficiently without the need to involve the Commission. To this end the Union requests written advice from Communities@Work that it agrees to commence bargaining for an enterprise agreement covering all employees (other than the Principal) engaged to work in the Galilee School.

In the event that such written advice is not received by 5pm on 3 June 2019, the Union will proceed to make application to the Fair Work Commission for a Majority Support determination.” 6

[11] On 5 June 2019 Mr Wilson responded on behalf of the Respondent in the following terms:

“I am instructed as follows in relation to your letter to Vanessa Hayes, my client’s Head of Human Resources, of 17 May 2019:

1. My client does not agree, and will not agree, to commence bargaining for an enterprise agreement in the limited coverage referred to in the third last paragraph of your letter.

2. My client has for many years regulated the employment of most of those employed by it under a single enterprise agreement and intends to do so for the foreseeable future.

3. My client notes that it is not required to bargain for the kind of agreement that your organisation seeks even if your organisation obtains a majority support determination.

4. If and when my client decides to initiate bargaining to replace the Communities@Work Enterprise Agreement 2015 your organisation will, of course, be the ‘default’ bargaining representative for such of its members who are employed at the time.

5. Given the above, my client respectfully suggests that it would not serve any good purpose for your organisation to proceed with the application that you foreshadow.” 7

[12] As previously mentioned, the IEUA’s application was lodged on 7 June 2019.

[13] In subsequent developments, on 14 June 2019 the IEUA filed a statutory declaration by Ms Caton which had a copy of the petition signed by employees attached (a redacted version of the petition was served on the Respondent by the IEUA). The petition had 16 signatures, including Mr Mayo’s. On 24 July 2019 the Respondent provided to the Commission a list of employees employed at the School. A reconciliation of those two lists indicates that 15 names appeared on both lists (Mr Mayo being the exception). Only one name appeared on the list of employees but not as a signatory to the petition.

The statutory framework

[14] Sections 236 and 237 of the Act deal with majority support determinations. These provisions are set out below.

“236 Majority support determinations

(1) A bargaining representative of an employee who will be covered by a proposed single-enterprise agreement may apply to the FWC for a determination (a majority support determination) that a majority of the employees who will be covered by the agreement want to bargain with the employer, or employers, that will be covered by the agreement.

(2) The application must specify:

(a) the employer, or employers, that will be covered by the agreement; and

(b) the employees who will be covered by the agreement.

237 When the FWC must make a majority support determination

Majority support determination

(1) The FWC must make a majority support determination in relation to a proposed single-enterprise agreement if:

(a) an application for the determination has been made; and

(b) the FWC is satisfied of the matters set out in subsection (2) in relation to the agreement.

Matters of which the FWC must be satisfied before making a majority support determination

(2) The FWC must be satisfied that:

(a) a majority of the employees:

(i) who are employed by the employer or employers at a time determined by the FWC; and

(ii) who will be covered by the agreement;

want to bargain; and

(b) the employer, or employers, that will be covered by the agreement have not yet agreed to bargain, or initiated bargaining, for the agreement; and

(c) that the group of employees who will be covered by the agreement was fairly chosen; and

(d) it is reasonable in all the circumstances to make the determination.

(3) For the purposes of paragraph (2)(a), the FWC may work out whether a majority of employees want to bargain using any method the FWC considers appropriate.

(3A) If the agreement will not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding for the purposes of paragraph (2)(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.

Operation of determination

(4) The determination comes into operation on the day on which it is made.”

The Applicant’s case

[15] The IEUA submitted that its coverage extended to those employees in respect of whom the majority support determination was sought. As to the requirements set out in s.237(2) of the Act, the Applicant submitted that:

•  having regard to the petition it had filed, the Commission could be satisfied that a majority of employees who will be covered by the proposed agreement wanted to bargain [s.237(2)(a)];

•  the Respondent’s correspondence of 5 June 2019 made it clear that the Respondent did not and would not agree to bargain for the proposed agreement [s.237(2)(b)];

•  the group of employees who would be covered by the proposed agreement was fairly chosen for a number of reasons including that:

- employees engaged to work at the School perform work principally and primarily for the School, adding that these employees did not perform work for the Respondent’s other operations or the other services provided by the Respondent,

- as such, these employees were organisationally and operationally distinct in the sense that they were solely engaged in the delivery and support of school education,

- the School’s two campuses were used exclusively for the delivery of functions directly related or ancillary to the provision of school education, the only employees who performed work at these campuses were those employees engaged to work at the School and the Respondent did not use either of the School’s campuses for the delivery of its other community and social services,

- accordingly, the School was geographically distinct, and

- federal and ACT government funding for the School, which amounted 98% of the School’s total net recurrent funding in 2017, must by law be applied solely for the purpose of operating the School, thereby reinforcing that the School was organisationally and operationally distinct; and

•  no reason had been suggested as to why it would not be reasonable in all the circumstances to make the majority support determination.

[16] The IEUA further submitted that for the above reasons the Commission must grant the application. Beyond that, the IEUA disputed key elements of the Respondent’s submissions, contending inter alia that:

•  it was clear from the petition that the agreement sought was a single enterprise agreement covering employees of the School;

•  there was no meaningful operational connection between the operation of the School and the Respondent’s other activities, adding that the Respondent could take a decision to cease any of its non-School related activities at any time without any direct impact upon the operation of the School;

•  the fact that the Respondent employed teachers at both the School and its early learning centres did not support a finding that the School was organisationally indistinct from the operations of the early learning centres;

•  the Respondent’s suggestion that 16 employees would be ‘hived off’ lacked force given the accepted understanding that majority support determinations did not determine the scope of bargaining;

•  in considering whether the group was fairly chosen the Commission need only be satisfied that the group to be covered was not unfair, adding that the Commission was not required to determine whether the proposed coverage was preferable to some other potential configuration; and

•  the fact that the Respondent preferred an agreement with a different scope was not a factor that weighed against the making of a majority support determination.

[17] In support of its submission the IEUA relied on the decision in QGC Pty Ltd v Australian Workers’ Union, The (QGC) 8.

[18] Key aspects of the IEUA’s oral submissions included that:

•  the Commission could be satisfied that the School was operationally and organisationally distinct, conceding that there were questions as to whether the School was geographically distinct;

•  the Commission should reject the Respondent’s “all roads lead to Rome” submission;

•  the Respondent’s organisational structure chart 9 which showed separate line managers for key aspects of the Respondent’s operations, including the School, was evidence of the School’s organisational distinctiveness;

•  Ms Hayes conceded in her oral evidence that Communities@Work was divisible when she attested that it could cease some activities and continue others;

•  the School was necessarily operationally distinct given the strict requirements attached to federal and Territory government funding for the School, teacher accreditation requirements and the requirement to deliver curriculum;

•  social contact with other staff and participation in Communities@Work events by staff of the School was not a reasonable ground to refuse its application;

•  the existence of centralised corporate services was not a factor which told against the School’s organisational and operational distinctiveness;

•  the evidence in this case did not point to the group of employees who would be covered by its proposed agreement not having been fairly chosen;

•  it was clear from Mr Bailey’s letter of 17 May 2019 that what was sought was a single enterprise agreement covering employees at the School;

•  there was nothing before the Commission indicating that it was not reasonable in the circumstances to make the determination sought;

•  it was not unusual for community organisations to offer a range of different services, adding that this of itself did not make those services operationally or organisationally indistinct;

•  the Commission should not have regard to the fact that only 3% of the Respondent’s employees would be covered by the determination if made, adding that the scope of an agreement was not determined by a majority support determination; and

•  against that background, the Commission was required to make the determination sought.

[19] Mr Mayo in his witness statement 10 set out his interaction with other staff and activities of the Respondent whilst he was employed as a teacher at the School. Among other things, Mr Mayo deposed that:

•  he could only recall a few occasions when he observed non-School employees of the Respondent present in the teaching space at the School’s Holder campus;

•  during his employment as a teacher with the Respondent contact with other staff of the Respondent was incidental and became increasingly sporadic and infrequent; and

•  it was his experience that staff and students of the School were not involved in other activities conducted by the Respondent, adding that he did not have contact with the Respondent’s Early Learning Centres.

[20] Mr Mayo also deposed that the petition provided to the Commission by the IEUA was signed by seven on the School’s employees at the meeting with Ms Caton on 8 April 2019 and that after that meeting he personally invited the School’s remaining staff to sign the petition and coordinated the collection of signatures. Mr Mayo further deposed that since the application in this matter was filed with the Commission he had resigned from his employment at the School and had been advised that the School had employed a new Youth Worker.

[21] In his oral evidence Mr Mayo largely disputed that there was any interaction between staff at the School and the Respondent’s other employees. For instance, Mr Mayo attested that he had no interaction with the Respondent’s corporate services area and that he was not aware of the corporate services provided to the School by the Respondent. Mr Mayo also attested that:

•  he was not sure that the School was an inseparable part of the whole as the Respondent managed a number of distinct programs; and

•  the School operated independently in terms of its day-to-day activities, though he acknowledged that the School’s activities, ethos and values related to the Respondent’s broader vision.

[22] I would note that I consider Mr Mayo’s responses under cross-examination to at times have been somewhat contrived or evasive. In particular, I found Mr Mayo’s inability to comment on aspects of the Respondent’s activities, e.g. Mr Mayo attested that he was unable to comment on whether the Respondent was a social enterprise, improbable in circumstances where he had worked for the Respondent for some eight years (initially as an Outreach Officer and then as a teacher at the School). Indeed, at one point the Commission was moved to ask Mr Mayo to focus on the questions put to him, respond directly to those questions and in doing so avoid searching for “cute” answers. For these reasons, the weight I have attached to Mr Mayo’s evidence is diminished.

[23] In her witness statement 11 Ms Caton set out among other things the chronology of events leading up to the IEUA’s application. Included in that chronology were the following events:

•  on 17 December 2018 IEUA members at the School passed a motion confirming that they wished for the union to represent them in negotiations for a new enterprise agreement;

•  on 17 January 2019 she wrote to the Respondent’s then Acting CEO, Ms Lee Maiden, seeking to initiate bargaining for a new agreement;

•  on 28 February 2019 she was advised by IEUA members employed at the School that the Respondent had not yet issued a Notice of Employee Representational Rights (NERR), with members in late March 2019 further advising that this remained the situation;

•  on 29 March 2019 she emailed Ms Hayes asking when a NERR would be issued and advising that a meeting with IEUA members at the School was scheduled for 8 April 2019;

•  at the meeting of IEUA members on 8 April 2019 a motion was passed directing the Union to take the necessary steps to initiate a majority support determination application for the commencement of bargaining for an enterprise agreement covering all employees engaged to work at the School except the Principal with a petition also formulated and endorsed by members at that meeting;

•  on 13 May 2019 she received the completed petition signed by 16 employees of the School;

•  on 17 May 2019 the IEUA wrote to the Respondent providing notice of its intention to seek a majority support determination, with the Respondent’s representative responding on 5 June 2019 stating inter alia that the Respondent did not agree “to commence bargaining for an enterprise agreement in the limited coverage referred to in the third last paragraph of your letter”; 12 and

•  on 7 June 2019 the IEUA’s application was filed with the Commission, with the School’s Principal also writing to employees on that day confirming the Respondent had not agreed to any bargaining.

[24] In her oral evidence Ms Caton attested among other things that she had been advised by IEUA members at the School that they do not have interaction with the Respondent’s other employees, adding that those Youth Workers at the School with whom she had had contact had not indicated to her that they performed other activities for the Respondent. Ms Caton also attested that she contacted Ms Lyndal Ryan of United Voice to advise her of developments.

The Respondent’s case

[25] The Respondent contended that the central issues to be determined in this case were:

(1) whether a majority of employees who would be covered by the proposed agreement wanted to bargain; and

(2) if (1) above was made out, whether the group of employees was fairly chosen and it was reasonable in the circumstances to make the determination.

[26] With regard to the first issue, the Respondent submitted that the Commission could not be satisfied of the matters at s.237(2)(a) of the Act as it was not clear from the petition as to whether all, some or any of the signatories wanted to bargain for an agreement which was limited in its application to the School or for an agreement which had wider application.

[27] As to the second issue, the Respondent contended that the group of employees was not fairly chosen given its nature and structure as a social enterprise, adding that its interests as the employer, the issue of productivity and the interests of those employees who were excluded from coverage should also be considered. The Respondent submitted that it was in its interest to have an integrated agreement covering all its employees and that making the determination sought would have a detrimental effect on productivity as inter alia it would divert resources to negotiating an agreement which would apply to less than 3% of its workforce.

[28] More specifically, the Respondent posited that the group of employees who would be covered by the agreement were not:

•  geographically distinct as it did not operate on the basis of having separate, discrete geographical locations but rather its geography was across Canberra, highlighting that part of the School was conducted in rooms located at Holder where it also provided seniors related, transport related and registered training organisation services and where its corporate services area was located;

•  operationally distinct as the services it provided formed part of an integrated and interrelated operation providing community services to residents of the ACT and surrounding region, adding that all employees should be viewed as collectively supporting the organisation’s overall purpose of delivering quality community services of social value and practical benefit;

•  organisationally distinct for a number of reasons, including that:

- the School emerged from Galilee Inc which focussed on providing for the foster care of children in the ACT and the realisation that a good number of adolescent foster children under its care were having difficulty coping with or fitting in with mainstream secondary schooling,

- teachers at the School performed very similar work to the teachers working in its various early learning centres, adding that the Education Services (Teachers) Award 2010 13 (the Award) applied to both cohorts of teachers,

- employees working at the School were dependent on other employees of the Respondent, particularly employees working in its corporate services area, for the successful performance of their work,

- employees working at the School regularly interacted with other employees of the Respondent, particularly in relation to payroll and finances to run the School,

- there were no barriers to social interaction between employees working at the School and other employees of the Respondent, and

- employees working at the School were all accountable to and reported to the Respondent’s management in the same way as the Respondent’s other employees.

[29] At the hearing the Respondent submitted that based on the evidence in this case the Commission could not be satisfied that a majority of employees who would be covered by the proposed agreement wanted to bargain, highlighting that there was no evidence from an employee of the School to the effect that they wanted to bargain for an agreement that just covered the School or regarding what was explained to employees when they signed the petition. The Respondent also referred to Ms Caton’s letter of 17 January 2019 (see paragraph [9] above) and submitted that if what was intended was simply a replacement agreement for the current Agreement then the IEUA did not come within a “bull’s roar” of establishing that a majority of the Respondent’s over 600 employees wished to bargain for an agreement. The Respondent noted that were the Commission not to agree with it in respect of its submissions regarding s.237(a) of the Act, it would have to concede that s.237(b) of the Act was satisfied.

[30] As to whether the group of employees who would be covered by the Agreement had been fairly chosen, the Respondent contended that when regard was had to its definition of a ‘social enterprise’, i.e. “[a] social enterprise applies its earned revenue to achieve social, cultural, community economic and/or environmental outcomes” 14, that it was not a divisible entity as all elements of the organisation were still doing the ‘”one thing”. The Respondent submitted that the focus of the School on disadvantaged youth formed part of its broader vision and services such that it would be wrong to consider the School distinct from the rest of the organisation. Beyond that, the Respondent submitted that:

•  the School was not geographically distinct, emphasising that at Holder the School shared rooms with other aspects of its operations; and

•  the School’s operational distinctiveness amounted to no more than the fact that employees of the School were involved in teaching.

[31] Finally, the Respondent reiterated that were the determination sought by the IEUA to be made it would be required to negotiate an enterprise agreement for 3% of its workforce.

[32] For all the above reasons, the Respondent submitted the IEUA’s application should be dismissed.

[33] Ms Hayes in her witness statement 15 provided both an overview of the School and the Respondent’s organisational structure and how the School fitted into that structure. Key aspects of Ms Hayes’ witness statement included that:

•  the School had continued to operate in the Respondent’s ‘hands’ since 2016 when Galilee was amalgamated into the Respondent;

•  the School operated at two different locations, i.e. New Haven in Kambah (Years 7-9) and Holder (Year 10);

•  until recently a number of the Respondent’s other services operated out of the buildings that it was licensed to use at New Haven, including its general maintenance team and its ‘Yellow Van’ service, though the Respondent’s maintenance work was outsourced in November 2016 and the Yellow Van service was rebadged in July 2018 with staff relocated to the Respondent’s Holder building;

•  the School occupied four rooms within the Respondent’s Holder building, with a number of the Respondent’s other services and its corporate services staff also located within the building;

•  the training room at the Holder building was used by the School as well as by the Respondent’s registered training organisation and for training staff;

•  Youth Workers employed at the School sometimes ran non-School related training sessions and gave presentations to other staff on subjects such as restorative justice and behavioural management techniques;

•  employees at the School reported in the main to the Principal who in turn reported to the Respondent’s Executive (i.e. the CEO, Chief Finance and Operations Officer and the Executive Officer, Finance);

•  the School was entirely reliant on the Respondent’s corporate services section for a number of essential services, including payroll services, recruitment, finance and contract management services and human resource functions;

•  the School was financially dependent on the Respondent which currently allocated around $300,000 from its general revenue to the School;

•  teachers at the School were covered by the Award, as were early childhood teachers employed by the Respondent;

•  there was a high degree of interaction between employees at the School and the Respondent’s other employees, adding among other things that employees of the School were invited to key social events such as the Christmas party and BBQs; and

•  teachers at the School were required to undertake ACT Teacher Quality Institute training, as were the Respondent’s early childhood teachers.

[34] In her oral evidence, Ms Hayes provided a detailed overview of the services located at the Respondent’s premises at New Haven, Kambah and Holder, the layout of the Respondent’s Holder premises and the interaction between School staff and other employees of the Respondent. Noteworthy aspects of Ms Hayes’ evidence in that regard included that:

•  Youth Workers from the School had been asked to both provide training to other employees of the Respondent on de-escalating behaviours and run sessions on mentoring and wellness issues;

•  she spoke to staff at the School at least weekly, adding that she would be in the classroom at the School’s Holder campus once a week “just helping out”; and

•  School staff consulted with the Respondent’s corporate services area regarding various terms and conditions related issues.

[35] Other key aspects of Ms Hayes’ oral evidence included that:

•  the recurrent funding grants received from the federal and Territory governments in respect of the School could only be used for the purposes of the School;

•  the Respondent’s financial contribution to the School went to things such as rent, maintenance, utilities, information technology and the internet and also funded some programs such as excursions and TAFE programs for students;

•  the Respondent was required to produce separate annual reports for the School 16 in accordance with its government funding obligations, adding that the School was not the only part of the Respondent which had its own reporting requirements and that the School was still included in the Respondent’s annual report;

•  the Principal of the School reported to her in respect of some human resources issues;

•  a decision by the Respondent to cease its community transport services for example was unlikely to impact on the continuation of the School, conversely a decision to close the School was unlikely to affect the Respondent’s other services;

•  various components of the Respondent’s activities would not be able to operate independently in the absence of the corporate services provided by the Respondent;

•  the Respondent was very different to a number of religious bodies which operated both schools and charitable arms, highlighting that Catholic schools, Catholic Care and St Vincent de Paul were each separate financial and reporting entities of the Catholic Church whereas the Respondent was one financial entity and one organisation with one enterprise agreement; and

•  everyone at Communities@Work, i.e. both employees and volunteers, wore the same uniform – a black and gold polo top.

The Issues to be Determined

[36] It is not disputed that the IEUA is eligible to make the application for a majority support determination.

[37] The matters which the Commission must be satisfied of before making a Majority Support Determination are set out in s.237(2) of the Act. I will deal with each of those matters separately.

(a) A majority of employees who are employed by the employer or employers at a time determined by the FWC and who will be covered by the agreement want to bargain

[38] As noted above, the Respondent submitted that it was not clear from the petition as to whether all, some or any of the signatories wanted to bargain for an agreement which was limited in its application to the School or for an agreement which had wider application. The IEUA contended that it was clear from the petition that the agreement sought was a single enterprise agreement covering employees of the School.

[39] I do not consider the Respondent’s contention on this issue to be made out when regard is had to:

•  the preamble to the petition signed by employees at the School which calls on the Respondent to “immediately commence negotiations with the IEU to create an [sic] single Enterprise Agreement, covering all employees at the school” 17 (underlining added);

•  Mr Bailey’s letter of 17 May 2019 which states that “IEUA members wish to commence bargaining for an enterprise agreement that would apply to all employees engaged to work in the Galilee School, with the exception of the Principal” 18 (underlining added); and

•  Mr Wilson’s response of 5 June 2019 to Mr Bailey’s letter in which he stated inter alia that “[m]y client does not agree, and will not agree, to commence bargaining for an enterprise agreement in the limited coverage referred to in the third last paragraph of your letter.” 19

[40] Accordingly, in circumstances where 15 of the persons who signed the petition appeared on the list of 17 employees employed at the School provided by the Respondent, I am satisfied that as at 24 July 2019 (i.e. the date the list of employees was provided to the Commission by the Respondent) the majority of employees at the School who would be covered by the agreement proposed by the IEUA want to bargain.

(b) The employer that will be covered by the agreement has not yet agreed to bargain

[41] It is clear from Mr Wilson’s response of 5 June 2019 (see paragraph [11] above) that the Respondent has not agreed to bargain with the IEUA. I also note the Respondent’s concession at the hearing regarding this consideration, i.e. that if the Commission did not agree with its submissions in respect of s.237(a) that it would concede this requirement was satisfied (see paragraph [29] above).

(c) The group of employees who will be covered by the agreement was fairly chosen

[42] In National Union of Workers v ePharmacy Pty Ltd 20 Deputy President Gostencnik said as follows in respect of this consideration:

“[32] As to the question whether the group of employees who will be covered by the proposed enterprise agreement was fairly chosen, there is no need for the group of employees to be the fairest group that could be chosen; it is sufficient that the group is fairly chosen. If, as is the position in the instant case, the proposed enterprise agreement will not cover all the employees of the employer, in deciding whether the group of employees who will be covered was fairly chosen, I must take into account whether the group of employees is geographically, operationally or organisationally distinct.

[33] Distinctiveness on one, or all, of these bases is not determinative, but will be a factor weighing in favour of a finding that the group of employees was fairly chosen.” 21

[43] At the hearing the IEUA conceded that the group of employees who will be covered by the proposed agreement was not geographically distinct. Accordingly, the issue becomes whether that group is operationally and/or organisationally distinct. The evidence before the Commission indicates that:

•  the Respondent has structured itself such that its various services are reflected in separate streams which report to the CEO, with the School being one of eight streams (inclusive of the finance and operations stream) reporting to the CEO;

•  operational and/or organisational interaction between staff of the School and the Respondent’s other staff, with the possible exception of corporate services staff, appears to be ad hoc rather than a regular occurrence;

•  a decision by the Respondent to cease some of its other services was unlikely to impact on the continuation of the School and conversely a decision to close the School was unlikely to affect the Respondent’s other services; and

•  there appears to be little, if any, operational interaction between teachers at the School and those teachers working in the Respondent’s early learning centres.

[44] In short, the evidence points to the School being both operationally and organisationally distinct in that the work performed by teachers and other staff at the School was directed overwhelmingly towards the education of students. While it is not disputed that the Respondent provides corporate services to the School, that does not in my view diminish the School’s operational and organisational distinctiveness when compared to the other services provided by the Respondent. As such, I am satisfied that the group of employees who will be covered by the agreement was fairly chosen.

(d) It is reasonable in all the circumstances to make the determination

[45] The Respondent’s contention that making the determination sought would require it to bargain in respect of an agreement covering 3% of its workforce in my view reflects its preference to have an agreement covering all its employees. The Respondent also submitted that its interests as the employer and the issue of productivity should also be considered. While I note the Respondent’s contention/preference, I would also observe that the practical effect of a majority support determination is that the Respondent will be required to bargain in good faith with the IEUA as the bargaining representative for most, if not all, of the School’s employees. However, as per s.228(2) of the Act, the good faith bargaining requirements do not require “a bargaining representative to reach agreement on the terms that are to be included in the agreement.” Further, the making of a majority support determination does not preclude the parties from agreeing that the scope of any agreement should be wider than just employees working at the School. This would be one way of the Respondent pursuing its interests/preference. Finally, there is nothing before the Commission to suggest that bargaining for an agreement covering employees of the School would be either less or more efficient that bargaining for an agreement to cover all of the Respondent’s employees.

[46] Beyond the above, the Respondent also submitted that the interests of those employees who were excluded from coverage should also be considered. However, there is no evidence before the Commission as to what the interests of those employees might be and whether they have any view as to whether they wish to negotiate one agreement covering all of the Respondent’s employees or an agreement not including employees working at the School. Suffice to say, there does not appear to be any impediment to those employees seeking to bargain with the Respondent should they chose to do so.

[47] Having regard to the above analysis, I am satisfied that it is reasonable in all the circumstances to make the determination sought.

Conclusion

[48] In summary, the Commission is satisfied that all the matters set out in s.237(2) of the Act have been met. In those circumstances, consistent with s.237(1) of the Act, the Commission must make the determination sought by the IEUA. The Determination has been issued separately.

Appearances:

I. Bailey for the Applicant.
J. Wilson for the Respondent.

Hearing Details:
Canberra
2019

Printed by authority of the Commonwealth Government Printer

<PR717209>

 1   Exhibit 3 at Attachment A

 2   Ibid

 3   Ibid

 4   AE417905

 5   Exhibit 2 at Attachment LC7

 6   Ibid at Attachment LC8

 7   Ibid at Attachment LC9

 8   [2017] FWCFB 1165

 9   Exhibit 3 at Attachment A

 10   Exhibit 1

 11   Exhibit 2

 12   Ibid at Attachment LC9

 13   MA000077

 14   Exhibit 3 at Attachment A

 15   Exhibit 3

 16   Exhibits 4 and 5

 17   Exhibit 2 at Attachment LC8

 18   Ibid

 19   Ibid at Attachment LC9

 20   [2015] FWC 3819

 21   Ibid at [32]-[33]