ISS Security Pty Ltd T/A ISS Facility Services

[2016] FWCA 7492

[2016] FWCA 7492

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

ISS Security Pty Ltd T/A ISS Facility Services
(AG2016/3892)

ISS FACILITY SERVICES NORTHERN TERRITORY AIRPORTS ENTERPRISE AGREEMENT 2016

Northern Territory
COMMISSIONER GREGORY	MELBOURNE, 18 OCTOBER 2016

Application for approval of the ISS Facility Services Northern Territory Airports Enterprise Agreement 2016.

Introduction

[1] This decision deals with an application for approval of an enterprise agreement known as the ISS Facility Services Northern Territory Airports Enterprise Agreement 2016 (“the Agreement”). The application is made under s.185 of the Fair Work Act 2009 (Cth) (“the Act”) by the Employer, ISS Security Pty Ltd T/A ISS Facility Services (“ISS”).

[2] Following the lodgement of the application, the Commission received a Form F18 – Statutory Declaration from the SA/NT Branch of the Transport Workers’ Union of Australia (“the TWU”), which indicated it did not support the application to approve the Agreement. It continued to detail various circumstances in support of its opposition to approval. The application was accordingly listed for hearing to deal with the TWU’s objection and the matter was heard on 16 September 2016. This decision deals with the various grounds of objection raised by the TWU.

[3] Mr Jed Moore appeared on behalf of ISS. Mr Edward Lawrie and Ms Elise McLay appeared on behalf of the TWU and Ms Erina Early and Ms Dianne Yali appeared on behalf of the Northern Territory Branch of United Voice. (United Voice also provided a Form F18 – Statutory Declaration which indicated it supported the application to approve the Agreement.) Mr Lawrie appeared by video link. The other participants appeared by telephone.

[4] It is also noted that the Commission’s initial assessment of the application and the terms and conditions contained in the proposed Agreement did not raise any issues to do with satisfaction with the relevant legislative provisions and the requirements of the “better off overall test.” However, it is also noted that the terms and conditions in the Agreement are, in large part, based on the underlying Award entitlements, with only a limited number of provisions in the Agreement providing benefits in excess of those contained in the Award. A list of those matters is set out in the Employer’s F17 Statutory Declaration at question 3.4.

[5] It is also noted by way of background that the proposed Agreement covers employees who are employed by ISS in the provision of cleaning and related services at the Darwin and Alice Springs airports in the Northern Territory. The Employer’s F17 Statutory Declaration indicates that 112 employees in total will be covered by the Agreement, if approved.

The Issues to Be Determined

[6] Section 186(1) of the Act sets out the various requirements that the Commission must be satisfied about before an Agreement can be approved. In the context of the present matter s.186(2) requires that the Commission must be satisfied that “the agreement has been genuinely agreed to by the employees covered by the agreement”. 1

[7] Section 188 of the Act continues to deal with when employees have genuinely agreed to an enterprise agreement. It states:

“188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre approval steps);

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

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.”

[8] No issues have been raised in the present matter in terms of compliance with the relevant requirements in ss.188(a) and (b). Therefore, the Commission is required to determine whether there are any other reasonable grounds for believing that the Agreement has not been genuinely agreed to by the employees.

The Evidence and Submissions

[9] The circumstances relied upon by the TWU are set out, in summary, in the Form F18 – Statutory Declaration provided by the Union. It answered “No” to question 4 in the document, “Does the Union support the approval of the Agreement by the Fair Work Commission?” 2 It then continued to detail the following matters in support of its opposition to approval of the Agreement:

“1. The Applicant advised the TWU on 30 March 2016 of their (the Applicant’s) intention to commence bargaining with respect to a replacement enterprise agreement.

2. The first meeting was held 6 April 2016 where ISS indicated that to retain the contract, staff would need to go back to award rates and drop allowances and reimbursements.

3. A second meeting was held on 27 April 16 and there was a third meeting in May.

4. The agreement was put to a vote on 2 June 2016.

5. Members were verbally advised by the CEO that a no vote would mean that they would lose their jobs and entitlements.

6. The TWU ran a “No” campaign on instruction of membership.

7. The proposed agreement was voted down; 54 “no” votes to 29 “yes” votes.

8. No further correspondence was received by the TWU nor have there been any negotiation meetings since the result of the first vote.

9. On 27 June 2016 the Applicant informed members that they would be conducting another ballot on 7 July 2016.

10. The Applicant put a notice on their whiteboard (attached) advising that if there was a subsequent “no” majority all staff would lose their jobs at the end of the contract and lose their entitlements.

11. The ballot was conducted on 7 July 2016 and a yes vote was successful, 43 to 36.

12. It is the position of the TWU that the conduct of the Applicant in its notice and instruction to affected members constituted coercion that produced results that were adversely affected by unreasonable threats of job losses.

13. It is the position of the TWU that the Applicant should have properly informed the TWU of the relevant voting process and the intention to conduct a second vote on 7 July 2016.

14. It is the position of the TWU that the conduct of the Applicant included and amounted to unreasonable threats of job losses as well as a failure to properly communicate the voting processes to affected members.

15. Accordingly, the TWU submits that the Applicants s.185 application should be dismissed.” 3

[10] It also attached a photograph to the Form F18 – Statutory Declaration, which was indicated to have been taken in an ISS training room. The TWU submits it depicts Mr Greg Gately from ISS addressing employees in front of a whiteboard, which foreshadows job losses if the Agreement is not voted up, because the current contract at the Northern Territory airports would not be retained and extended for a further term as part of the current tender process. The TWU submits these circumstances, as detailed in its Form F18 – Statutory Declaration, raise real issues about whether it can be said that the proposed Agreement has been “genuinely agreed to” by the employees. It continues to submit that what occurred went beyond what might normally be expected in the “cut and thrust” of negotiations about the development and acceptance of a new Agreement by a group of employees, and the actions of ISS, in all the circumstances, left the employees in a position where they believed they had no option but to vote in favour of the Agreement.

[11] As indicated, the TWU also submits it was not informed by ISS that it intended to put the Agreement to a second ballot of employees. It contrasts this situation with what happened on the first occasion when a ballot was held, and submits this again goes to the issue of whether the employees can be said to have “genuinely agreed”.

[12] ISS submits, in response, that it has been upfront from “day one” 4 about the fact that the contract for the provision of cleaning services at the Northern Territory airports could be at risk if its operating costs were not curtailed, and the fact that the outcome of the enterprise bargaining negotiations provided a means to achieve this outcome. It submits that this continued to be emphasised throughout the bargaining process.

[13] It also submits that the notice about the second ballot was posted at appropriate locations in the workplace, and details were also emailed to each individual employee. In its submission it did not attempt to limit access to information or advice about the proposed ballot. It also submits there is no specific legal requirement to provide direct notice to a bargaining representative that a ballot is proposed to be held.

[14] In its submission the circumstances concerning the second ballot were openly and transparently discussed in the workplace, and there was never any attempt to restrict or limit access to information about what was occurring. It also submits that no employee was restricted in any way from seeking to discuss the issues surrounding the second ballot with their bargaining representatives.

[15] ISS also made reference to two decisions, which it submits provide support for its position. The first involves a decision of Deputy President Asbury, handed down in March last year, in Central Queensland Services Pty Ltd T/A BHP Billiton Mitsubishi Alliance [2015] FWC 1554 (“Central Queensland Services”). The second is a Full Bench decision, handed down in June this year, in the matter of the KCL Industries Pty Ltd [2016] FWCFB 3048, in which it submits the Full Bench indicated its support of the earlier decision of Deputy President Asbury.

Consideration

[16] In coming to a decision in this matter I have, firstly, had regard to the decision in Central Queensland Services. It contains a detailed review of previous decisions in which the Commission has considered whether employees can be said to have genuinely agreed to the terms of a proposed enterprise agreement. The circumstances involved in that matter are also similar, in some respects, to those in the present matter. The CFMEU alleged in opposing the application to approve the Agreement that on numerous occasions during the pre-approval process senior representatives of the business said to the employees that if the Agreement was not voted up the mine site would either be closed, or the employees would lose their jobs. The Agreement was also rejected in an initial ballot of employees and was then put to a vote on a second occasion.

[17] Against this background the CFMEU submitted in Central Queensland Services that while s.188(c) provides a broad discretion to the Commission, the requirement for “genuine agreement” also requires informed consent and an absence of coercion. The CFMEU also conceded that there can be circumstances in which an Employer is required to make “stark comments” 5 in relation to the effect of voting for or not voting for a proposed Agreement, however, in such circumstances it is incumbent on the Employer to properly explain and justify any such comments.

[18] Deputy President Asbury summarised the CFMEU’s objection to the approval of the agreement in the following terms:

“[75] The CFMEU’s objection to approval is not made - at least expressly - on the basis that BMA intentionally set about to coerce, intimidate or otherwise misrepresent the circumstances to employees for the purpose of securing a ‘Yes’ vote. As I understand the case put by the CFMEU it is that BMA, through its managers, made statements that gave the impression that a “No” vote in relation to the agreement would directly or indirectly lead to the closure of the mine and consequently or independently the loss of jobs.” 6

[19] It was also concluded:

“[83] I am also of the view that the fact that an employer makes negative comments about the economic environment in which it is operating in an attempt to persuade employees to approve an enterprise agreement, is not of itself a reasonable ground on which to form a belief that an agreement has not been genuinely agreed. That an employer may exaggerate economic circumstances is also not of itself a sufficient basis to justify such a conclusion that agreement is not genuine. In the present case, there is evidence that information disseminated to employees by the CFMEU about the viability of Daunia Mine may have been exaggerated. In the cut and thrust of bargaining, some conduct of this kind from the participants is not inappropriate and it is certainly not a basis for finding that there are reasonable grounds for believing that an agreement is not genuinely agreed to by employees.

[84] What an employer is not permitted to do is to mislead and misinform employees or coerce or intimidate them in a way that interferes with their right to bargain or to be represented by a person of their choice, or so that they do not have the freedom to choose to approve or not to approve an enterprise agreement. I am unable to accept that this has occurred in the present case.” 7

[20] As indicated, the circumstances in the present matter are not dissimilar to those under consideration by Deputy President Asbury in Central Queensland Services. I am also satisfied that the Deputy President’s conclusions in that matter are also relevant in the context of this matter. In the first place I agree, based on my experience, that employers almost invariably at some point in an enterprise bargaining process make much of the difficult circumstances confronting the business at the time, and the consequent need for restraint in the forthcoming negotiations. Certainly this appears to be the case in the present matter with ISS making it quite clear that the probability of it retaining its contract to provide cleaning services at the Northern Territory airports was, in part, incumbent upon it reducing its costs through the enterprise bargaining process. Some of its positioning may well have been over stated, in the way that Deputy President Asbury contemplated in Central Queensland Services, but I am satisfied that this of itself does not mean the Agreement has not been genuinely agreed to by the employees.

[21] I am also not satisfied that ISS can be said to have been engaged in coercion, or to have been acting with an intent to mislead. The process of tendering for a new contract for the ongoing provision of services at the two airports was happening at the same time as the negotiations for a new enterprise agreement, and ISS appears to have been clear in its intent to ensure the outcome of the bargaining process placed it in the best position to secure a further contract at the airports.

[22] I am also satisfied that the following matters are of particular relevance in determining the application. Firstly, ISS appears to have been clear and open from the outset about the fact that its contract to provide cleaning services at the Darwin and Alice Springs airports could be in jeopardy if operating costs were not restrained. Its submissions indicated that the contract is to expire at the end of October 2016, and at the time of the hearing, no decision had been made about whether it would be renewed.

[23] The TWU also acknowledges in its Form F18 – Statutory Declaration that in the very first bargaining meeting in April 2016 ISS made clear that it was not contemplating an outcome from the negotiations that delivered enhanced benefits to employees, but was instead looking to reduce costs by restricting wage outcomes and the provision of some allowances.

[24] Secondly, a proposed Agreement was then put to a ballot of employees in early June 2016, but was voted down by a substantial majority of 54 to 29 votes. The second ballot then took place approximately 5 weeks later. On this occasion the Agreement was voted up, albeit by a relatively small majority of 43 to 37. However, the TWU submits that the employees did not genuinely agree at this time because they had been told their jobs, and/or their accrued entitlements, would be lost if the Agreement was not supported.

[25] However, it is significant that almost half of the employees who participated in the ballot voted to oppose the proposed Agreement. This outcome works against the suggestion that the employees had been pushed into a corner, or left in a position where they believed they had no option but to vote in favour of the Agreement. Certainly, the numbers of employees in the “Yes” camp had grown in number from when the first ballot was conducted, and the number of “No” votes had diminished. However, a still significant number of 37 employees voted “No” in the second ballot. As indicated, this situation works against the suggestion that the employees had somehow been coerced, or left with the belief that they had no option but to vote in favour of the Agreement.

[26] The TWU also points to the fact that it was not told that a second ballot was to be conducted, and this is further evidence of an intention by ISS to mislead or deny the opportunity for “genuine agreement.” However, there is nothing in the relevant legislation that expressly requires that an employer provide notice to a bargaining representative that it intends to conduct a ballot of employees in regard to acceptance of a proposed Agreement. In this context I refer to the provisions contained in s.176 and s.181 of the Act, which deal particularly with the circumstances in which an employer may request that employees approve a proposed enterprise agreement.

[27] However, I acknowledge that the failure by an employer to provide notice to a bargaining representative of a proposed ballot may be a relevant consideration, in all the circumstances, in considering whether employees can be said to have “genuinely agreed”.

[28] However, in the present matter it is clear that notices about the intention to hold a second ballot were posted in relevant workplaces. The submissions provided on behalf of ISS also indicate that each individual employee received direct notification by email about the intention to hold a second ballot. In these circumstances the employees had the opportunity to contact the TWU, or any other bargaining representatives, if they wished to discuss or seek advice about the ballot, and the voting process. There is no evidence of anything that prevented them from doing this. In addition, they had been involved with the Union in the course of the initial ballot and the various bargaining meetings that took place, so they were clearly aware of their ability to involve the Union in these processes.

[29] ISS may well have decided not to inform the TWU about the intended second ballot in the hope that this might prevent the TWU from mobilising, at an early stage, opposition to the vote. However, I am also satisfied that ISS complied with its obligations under the Act in requesting employees to approve the proposed Agreement and, as part of this process, those employees had the opportunity to involve or consult with their bargaining representatives if they wished. Again, I am not satisfied that these circumstances provide evidence to support the contention that the Agreement has not been genuinely agreed to by the employees.

Conclusion

[30] I am satisfied, in conclusion, that each of the requirements of ss.186, 187 and 188 of the Act, as are relevant to this application for approval, have been met. The Northern Territory Branch of United Voice and the SA/NT Branch of the Transport Workers’ Union of Australia, being bargaining representatives for the Agreement, have both given notice under s.183 of the Act that they want the Agreement to cover them. In accordance with s.201(2) of the Act I note that the Agreement covers these organisations.

[31] The Agreement is approved and in accordance with s.54(1) will operate from 25 October 2016. The nominal expiry date of the Agreement is 30 June 2020.

COMMISSIONER

Appearances:

Mr Jed Moore appeared on behalf of ISS Security Pty Ltd t/a ISS Facility Services.

Ms Erina Early and Ms Dianne Yali appeared on behalf of United Voice.

Mr Edward Lawrie and Ms Elise McLay appeared on behalf of the Transport Workers’ Union of Australia.

Hearing details:

2016.

Melbourne, Adelaide (by video link), Darwin (by telephone), Sydney (by telephone)

16 September.

 1   Fair Work Act 2009 (Cth).

 2   Form F18 – Statutory declaration of employee organisation in relation to an application for approval of an enterprise agreement, signed by Elise McLay on 12 July 2016.

 3   Ibid.

 4   Transcript at [PN23].

 5   Central Queensland Services Pty Ltd T/A BHP Billiton Mitsubishi Alliance [2015] FWC 1554 at [41].

 6 Ibid at [75].

 7   Ibid at [83]-[84].

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