Jocon (SA) Pty Ltd
[2011] FWA 6758
•30 SEPTEMBER 2011
[2011] FWA 6758 |
|
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Jocon (SA) Pty Ltd
(AG2011/11706)
SENIOR DEPUTY PRESIDENT O'CALLAGHAN | ADELAIDE, 30 SEPTEMBER 2011 |
Jocon (SA) Pty Ltd Enterprise Agreement 2011.
[1] On 26 August 2011 Jocon (SA) Pty Ltd (Jocon) lodged an application for the approval of the Jocon (SA) Pty Ltd Enterprise Agreement 2011 (the agreement). The application was referred to me for consideration.
[2] The agreement is between Jocon and its employees who work in nominated building trade functions. The application advised that there were no employee organisations (unions) as bargaining representatives for the agreement. The application did not nominate any employee bargaining representatives. The Employer’s Declaration (Form F17) advised at paragraph 2.1(b) that bargaining was initiated by the employer with all employees on 22 June 2011 and that a notice of employee representational rights was issued on that date.
[3] On 31 August 2011 the Construction, Forestry, Mining and Energy Union (CFMEU) provided the following advice:
“The CFMEU is led to believe that the bargaining process used for the approval of this agreement (Jocon (SA) Pty Ltd Enterprise Agreement 2011) has not been consistent with the provisions of the FWA Act 2009 and we would like the matter listed for a hearing so that these concerns could be raised. We feel that the Good Faith Provisions as well as the procedural provisions have not been adhered to. .....”
[4] As a result of the CFMEU concerns and a number of issues associated with the content of the agreement itself, the application was the subject of hearings on 8 and 23 September 2011. Mr Earls of the Master Builders Association of South Australia appeared for Jocon and Mr D Roberts appeared for the CFMEU.
[5] At the initial hearing Jocon provided to me, on a confidential basis, a list of the names of the 13 people who voted on the agreement. I interpose that according to the Form F17 filed by the employer, there were 13 employees to be covered by the agreement, and all 13 voted in favour of the agreement. However, at the hearing, Jocon advised that four of these persons were not employees but were subcontractors to whom it was proposed that employment under the agreement would be offered in the future. The CFMEU provided to me, also on a confidential basis, a list of three Jocon employees who were covered under the agreement and who were members of the union. On this basis alone, I was satisfied that the CFMEU had standing to appear and be heard in this matter.
[6] The evidence provided to me at the hearings was contradictory.
[7] Jocon provided me with a petition signed by 11 persons which advised:
“We the undersigned, confirm we:
1. Received a Notice of Representational Rights on or about 22 June 2011 relating to the proposed Jocon (SA) Pty Ltd Enterprise Agreement 2011 (the agreement)
2. Were provided with an opportunity to have other representation in negotiating for the agreement and declined to do so.
3. Negotiated in good faith with our employer over the terms of the proposed agreement and were satisfied with the negotiations that took place for the agreement
4. Received an explanation of the terms and effect of the agreement from our employer and understood the terms and effect of the agreement
5. Were provided with more than eight days’ notice of the time, place and voting method to be used when balloting for the agreement
6. Were given access to the agreement and any documents incorporated by reference into the agreement
7. Freely consented to the agreement and wish for the agreement to be approved by Fair Work Australia without any further delay.” 1
[8] In addition, Mr Druisian, the Managing Director of Jocon gave evidence that:
“I held preliminary discussions with my employees in or about February 2011, regarding upcoming negotiations for a replacement agreement. At the time, I asked my employees whether or not they wished for third party representation, including the CFMEU, once bargaining began.
All employees indicated that they did not want any third party involvement.
This position was consistent with what had occurred when we made the last employee collective agreement.
I was approached by Aaron Cartledge of the CFMEU in or about June or July 2011, and had a conversation with him in words to the following effect
He said What’s happening with your EBA?
I said We’re getting a draft done with the MBA, I’ll be presenting it to my guys soon
He replied I wouldn’t mind having a copy of the document, do you mind sending me a copy of it when it’s done?” 2
[9] Mr Druisian’s evidence was that no employee requested that the CFMEU become involved and that he was not aware of who was, or was not a union member.
[10] Mr Druisian’s evidence was that:
“In or about August 2011, after I had already issued the agreement to employees and set a date for the ballot, an employee of mine, John Evans, provided me a draft agreement in the name of the Company which had been presented to him by a union official.
These are the only contacts that I had with the CFMEU regarding the agreement.
The ballot for the agreement was a secret ballot and there was unanimous acceptance of the agreement. Three people were included in the secret ballot who were not in fact employees. There people were subcontractors working for me who intended to become employees whose views I wished to gauge.
If the CFMEU approached me and advised me that they were bargaining representatives for their members I would have held discussions with them. However, on the basis of employees express wishes to not involve the union, the conduct of the negotiations and the unanimous vote for the agreement, I was not aware that they were representing any particular employee. 3
[11] Mr Druisian confirmed that he had invited Jocon employees at one site to sign a petition 4 and had arranged for another employee to do the same at a second site.
[12] Finally, Mr Druisian provided advice about how the agreement applied to normal working arrangements and the extent to which it exceeded the "better off overall test".
[13] Mr Cartledge is the Assistant Secretary of the SA Divisional Branch of the CFMEU. His evidence was that:
“On 1 August 2011, I spoke to Mr Lui Druisian, who I believe to be the owner of Jocon Constructions (“the Applicant”) to ask about the prospect of negotiating a new enterprise agreement as the current one was set to soon expire. Mr Druisian told me that he was getting a draft proposal together to this end and that he would call me once it was ready.
On the same day, whilst onsite, I was asked by workers employed by the Applicant if the CFMEU could be involved to help negotiate with the Applicant on their behalf.
Approximately a week and a half later, I called the Applicant to ask how the draft proposal was going. Mr Druisian told me that the Master Builders Association of South Australia (“the MBA”) was drawing it up and that he was just waiting on them.
I then phoned Mr Tom Earls from the MBA and enquired about this agreement and he replied he was still waiting on further instructions from the Applicant.
A further two weeks went by and I got a phone call from a worker saying that they had been told to sign an agreement that they were given.
On or about 31 August 2011, whilst attending a Watpac site with Mr Mark Gava, a group of workers expressed to us that they had been given a document and were told there would be no discussions and that if they wanted they could leave the company or agree to the terms. The workers expressed fear that if they spoke up to their employer (the Applicant), their employment would be terminated.
I then had a brief discussion with Mr Druisian about this and he said words to the effect that it was “too bad - the agreement was already done”. I then asked him about his commitment to discuss the agreement with me, to which I got no reply.” 5
[14] Mr Cartledge’s evidence was that he understood that he had been recognised as a bargaining representative and that he would be involved in the negotiation process. His evidence was that:
“Did Mr Drusian at any time state that he was not going to negotiate with the CFMEU or that the CFMEU had no bargaining representational rights?---No, he certainly didn't suggest that to me and if he did I would have tried to seek a remedy because we do have members there and I was approached by employees to give them a hand, although they were very reluctant to want to come out and say that amongst other employees, but certainly a couple of them at least had indicated to me that they would rather us involved because they knew they would get a better result.
Why do you think that Mr Drusian might not have wanted to negotiate or certainly give you an indication that you didn't have any - sorry, so you felt that you were a bargaining representative for the negotiations of those employees?---I certainly thought - took at face value that when I was given the commitment that I would have some discussions about the document and us having members in this company, that I believe that in good faith we would actually sit down and go through the document and be able to have some input in that document.” 6
[15] Mr Cartledge advised that he had asked employees if they received notices of employee representational rights and was advised that they did not recall receiving these notices. Additionally, some employees have expressed concern to him that their union membership could be held against them in the allocation of overtime.
[16] Mr Cartledge’s evidence was that employees had told him that they were effectively forced to vote in favour of the agreement.
Findings
[17] Part 2-4 of the Fair Work Act 2009 (the FW Act) sets out the agreement making process. Critical to this process is the capacity of employees to be represented in the course of reaching an agreement. The bargaining process commences with the issuing of a notice of employee representational rights. Notwithstanding the advice provided to Mr Cartledge, I have relied on the advice of Ms Stefani, who completed the Form F17, to the effect that this notice was issued to employees on 22 June 2011.
[18] Section 176 establishes that, if an employee is a member of a union, that union is the default employee bargaining representative unless the employee appoints another bargaining representative or revokes the status of the union in writing, consistent with s.178A.
[19] There is no evidence that establishes to me that, at any time before the agreement was made on 19 August 2011, any employees appointed another bargaining representative or revoked the status of the CFMEU. The employee petition arranged and conducted by Jocon after the vote does not alter the standing of the CFMEU before that vote.
[20] I have consequently taken it that the CFMEU was a default employee bargaining representative for at least some of the employees to be covered by the agreement.
[21] Leaving aside issues of the content of the agreement which I will briefly touch on later, ss186 and 187 set out a range of considerations which, if met, require the approval of the agreement.
[22] Section 186(2)(a) is relevant to this situation:
“186 When FWA must approve an enterprise agreement—general requirements
....
Requirements relating to the safety net etc.
(2) FWA must be satisfied that:
(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; and
....”
[23] The concept of genuine agreement is addressed in s.188 which 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 FWA 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.”
[24] I am satisfied that each of the requirements in s.188(a) and (b) are met. The only issue goes to whether, in this situation, there are other reasonable grounds to doubt that the agreement was genuinely agreed to by the employees.
[25] Mr Druisian’s advice that three subcontractors were included in the vote is inconsistent with the list of persons who voted 7 which advises that four of the 13 persons who voted were not employees. Irrespective of this, I do not consider this so invalidates the process that it represents a basis upon which to conclude that there was no genuine employee agreement. What it does mean however, is that only the position of the actual employees can be taken into account. I have noted that these employees all voted in favour of the agreement. However, at least a third of those employees are CFMEU members. I am satisfied their bargaining representative was told that he would be given the agreement on at least two occasions and I have accepted the evidence of Mr Cartledge to the effect that he understood that he would be included in the negotiation process. I also accepted the evidence of Mr Cartledge that some employees had sought his assistance.
[26] Section 228 sets out the good faith bargaining requirements that a bargaining representative for a proposed agreement must meet. This section states:
228 Bargaining representatives must meet the good faith bargaining requirements
(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:
(a) attending, and participating in, meetings at reasonable times;
(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;
(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;
(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;
(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;
(f) recognising and bargaining with the other bargaining representatives for the agreement.
(2) The good faith bargaining requirements do not require:
(a) a bargaining representative to make concessions during bargaining for the agreement; or
(b) a bargaining representative to reach agreement on the terms that are to be included in the agreement.”
[27] On the evidence before me, I have concluded that Jocon did not meet these requirements and that its actions were directed at excluding the CFMEU from the negotiation process. Whilst Jocon may have understood that this reflected the views of its employees, the reality is that the CFMEU was a legitimate bargaining representative and had alerted Jocon to its interest in this matter.
[28] The CFMEU had the capacity to seek a bargaining order pursuant to s.229. Had this been done, the involvement of the union may have been clarified at an earlier date. However, I have accepted that the CFMEU was entitled to rely on the advice provided to it by Jocon to the effect that it would be provided with the draft agreement when this was received from the Master Builders Association. I have concluded that advice was deliberately misleading. Further, it had the effect of stopping the CFMEU from being able to exercise its rights to enforce the good faith bargaining obligations.
[29] In Philmac Pty Ltd 8 a Full Bench observed:
“.... The ACTU and the unions argued that, although s.187(2) only applies to agreements in relation to which a scope order is in operation, whether or not the good faith bargaining requirements in s.228 have been met may be relevant to determining whether the agreement has been genuinely agreed to by employees as required by s.188. In the circumstances it was not necessary to decide this issue, but our tentative view is the good faith bargaining requirements may be relevant in deciding whether there has been genuine agreement.”
[30] I have adopted this approach. The CFMEU was stopped from being able to participate in the agreement making process. I have concluded that Jocon provided information to Mr Cartledge which had the effect of keeping the CFMEU out of the agreement making process until the employees voted on the agreement. I have concluded that these actions were deliberate and deprived employees of being able to rely on the CFMEU to negotiate on their behalf and that this was inconsistent with the significance which the FW Act attaches to employee representation.
[31] A failure to bargain in good faith does not in my view mean that the Tribunal is obliged to conclude that there was no genuine employee agreement. Each situation will need to be considered on its merits.
[32] In this matter, though I have concluded that the employer was on notice that the union sought to be involved in the negotiations. Mr Druisian was aware of communications between at least one employee and the union. Jocon excluded the union from the negotiation process unfairly. I am unsure what views the employees had about the agreement put to them for approval. The employee petition 9 potentially suffers from the same defect as concerns about the agreement voting process. In my opinion these factors represent a reasonable basis upon which to doubt that the agreement was genuinely agreed to by employees. Accordingly, I am not satisfied that the requirements in s.186 are met and I decline to approve the agreement.
[33] Jocon and the CFMEU also have conflicting views over various clauses of the agreement itself. Given the conclusion I have reached, and notwithstanding the potential for the agreement to be remade in the same terms, I do not consider it appropriate to address these issues at this time.
SENIOR DEPUTY PRESIDENT
Appearances:
T Earls appearing for Jocon Pty Ltd.
D Roberts appearing for the Construction, Forestry, Mining and Energy Union.
Hearing details:
2011.
Adelaide:
September 8 and 23.
1 Exhibit J2
2 Exhibit J3, paras.4-7
3 Exhibit J3, paras.12-15
4 Exhibit J2
5 Exhibit C2, paras.2-8
6 Transcript PN411-412, 23 September 2011
7 Exhibit J1
8 [2011] FWAFB 2668
9 Exhibit J2
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