LMATS Pty Ltd
[2022] FWCA 809
•8 MARCH 2022
| [2022] FWCA 809 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
LMATS Pty Ltd
(AG2021/9283)
LMATS (NSW/QLD) Collective Agreement 2022-2025
| Manufacturing and associated industries | |
| DEPUTY PRESIDENT ASBURY | BRISBANE, 8 MARCH 2022 |
Application for approval of the LMATS (NSW/QLD) Collective Agreement 2022-2025
LMATS Pty Ltd (the Applicant/ Employer) applies to the Fair Work Commission (the Commission) for approval of an enterprise agreement known as LMATS (NSW/QLD) Collective Agreement 2022-2025 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single enterprise agreement.
During the course of approval of the Agreement an administrative error was identified in clause 9 of the Agreement relating to types of employment. Additionally, an issue was identified by me in relation to the coverage clause of the Agreement. LMATS Pty Ltd filed an application pursuant to s 217 of the Act to vary the Agreement on the basis that these errors created an uncertainty or ambiguity in the Agreement. It is to that application I turn first.
Section 217 Application
The first uncertainty or ambiguity is said to arise in relation to clause 9 which provides for categories of employment as follows:
“9. Employment categories
An employee will be employed in one of the following types (as described in MA000010 - Manufacturing and Associated Industries and Occupations Award 2020):
· Full-time – As described in Section 12 of the Award
· Part-time as described in Section 13 of the Award
· Casual as described in Section 14 of the Award”
An error was identified during the course of approval of the Agreement that the references in clause 9 of the Agreement to clauses in the Manufacturing and Associated Industries and Occupations Award 2020 (the Award) are not correct, and the clauses of the Award referred to in clause 9 of the Agreement do not actually relate to categories of employment.
The Applicant submits that this error creates uncertainty and ambiguity in relation to the categories of employment provided by the Agreement as the clauses do not refer to the correct clauses of the Award which provide a description of the relevant category of employment. Accordingly, the Applicant seeks a variation to clause 9 to refer to the correct clauses in the Award.
An uncertainty or ambiguity is also said to arise in relation to clause 2 which provides for the coverage of the Agreement as follows:
“2. Parties Covered and Scope of Agreement
The parties covered by this agreement are:
· LMATS Pty Ltd ABN 41 107 100 925 (Company) and
· Employees employed at NSW & QLD Branches on the day of this agreement being approved by Fair Work Australia; whom are employed under the Manufacturing and Associated Industries and Occupations Award 2020 (the Award) and engaged in the Non-Destructive Testing, Mechanical testing, metallurgy, Inspection field and supporting administration staff. And
· The employee’s choice of Association (if nominated)”
I raised a concern I had that clause 2 of the Agreement was unclear as it appeared to only cover employees employed on the day of the agreement being approved and was not expressed to cover employees employed subsequent to the Agreement being approved. I expressed a provisional view that the clause as currently worded creates an uncertainty as it appeared that employees engaged in the future would not be covered by the Agreement, only those who were employed at the time the Agreement was approved. I also put to the Applicant that if this was not the intention of the Parties, a further application could be made pursuant to s.217 of the Act to vary the Agreement to remove an uncertainty or ambiguity created by the clause.
In response to this issue, the Applicant filed a further application under s.217 of the Act. The Applicant submits an uncertainty or ambiguity arises due to the wording of the clause, and the Applicant seeks to vary the clause to remove the reference to employees employed on the day of the approval of the Agreement, and seeks the following variation:
“2. Parties Covered and Scope of Agreement
The parties covered by this agreement are:· LMATS Pty Ltd ABN 41 107 100 925 (Company) and
· All LMATS employees employed at NSW & QLD Branches whom are employed under the Manufacturing and Associated Industries and Occupations Award 2020 (the Award) and engaged in the Non-Destructive Testing, Mechanical testing, metallurgy, Inspection field and supporting administration staff. And
· The employee’s choice of Association (if nominated)”
A question that the s 217 application raises is whether the Agreement can be varied in the manner sought by the Applicant as part of my consideration of approval of the Agreement. The answer to that question is yes in my view for the reasons that follow.
Section 217 provides for the variation of enterprise agreements to remove ambiguity or uncertainty as follows:
(1) FWC may vary an enterprise agreement to remove an ambiguity or uncertainty on application by any of the following:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.
(2) If FWC varies the enterprise agreement, the variation operates from the day specified in the decision to vary the agreement.
There are a number of conditions precedent necessary for the exercise of discretion under s 217. An application must have been made by one of the parties set out in ss 217(1)(a)-(c). The application has been made by LMATS Pty Ltd which is the employer that is covered by the Agreement thus satisfying that requirement. There must also be an enterprise agreement that is the subject of the application. In the present case the Agreement has not yet been approved however that is not a barrier to the use of s 217 for the following reasons;
An enterprise agreement is defined at s 12 of the Act to mean;
(a) A single-enterprise agreement; or
(b) a multi-enterprise agreement.
A single-enterprise agreement is defined in s 12 of the Act to mean “an enterprise agreement made as referred to in sub-section 172(2)”. Section 172(2) of the Act relevantly states that;
“An employer, or 2 or more employers that are single interest employers, may make an enterprise agreement (a single enterprise agreement):
(a) with the employees who are employed at the time the agreement is made and who will be covered by the agreement: or
……………………”
An enterprise agreement is made pursuant to s 182(1) of the Act in the following circumstances;
“(1)If the employees of the employer or each employer, that will be covered by a proposed single-enterprise agreement that is not a greenfields agreement have been asked to approve the agreement under subsection 181(1), the agreement is made when a majority of those employees who cast a valid vote approve the agreement.”
It is apparent on the material filed with the application for approval of the Agreement that employees were requested by LMATS Pty Ltd to approve the Agreement by voting on it (s 181(1)) in a ballot conducted on 16 December 202 to 21 December 2021. A valid majority of employees who participated in the ballot approved the Agreement which was made on 21 December 2021 (s 182(1)). As the Agreement was made on 21 December 2021 it follows that it is an enterprise agreement made pursuant to s 172(2) and as defined under s 12 of the Act. As it is an enterprise agreement as defined under the Act, I am satisfied that it may be varied pursuant to an application made under s 217 of the Act.
Returning now to the merits of the application, I find that clause 9 of the Agreement creates an ambiguity and uncertainty as it refers to clauses of the Award which do not relate to the categories of employment provided by the Agreement.
Further, I also find that clause 2 of the Agreement creates an ambiguity or uncertainty on the basis that the clause as currently drafted means that the Agreement only covers employees employed at the time of the approval. Further, there would be an uncertainty for employees engaged by LMTAS Pty Ltd in the future as to whether the Agreement covered their employment or not. I also note that the variation does not involves a substantive change to the coverage of the Agreement but rather clarifies that the Agreement covers all employees of LMATS Pty Ltd who the Agreement expresses to cover, and not just those employees who were employed at the time the Agreement was approved.
The Agreement is consequently varied as follows:
“(i) by deleting the existing clause 9 of the Agreement and inserting the following clause:
9. Employment categories
An employee will be employed in one of the following types (as described in MA000010 - Manufacturing and Associated Industries and Occupations Award 2020):
· Full-time – As described in Clause 9 of the Award
· Part-time as described in Clause 10 of the Award
· Casual as described in Clause 11 of the Award”
(ii) by deleting the existing clause 2 of the Agreement and inserting the following clause:
2. Parties Covered and Scope of Agreement
The parties covered by this agreement are:· LMATS Pty Ltd ABN 41 107 100 925 (Company) and
· All LMATS employees employed at NSW & QLD Branches whom are employed under the Manufacturing and Associated Industries and Occupations Award 2020 (the Award) and engaged in the Non-Destructive Testing, Mechanical testing, metallurgy, Inspection field and supporting administration staff. And
· The employee’s choice of Association (if nominated)”
An Order is also issued simultaneously with this Decision varying the Agreement from the date it is approved[1].
Application for approval of the Agreement
Undertakings were also provided by the Employer in response to concerns the Commission held in relation to whether the Agreement passes the better off overall test. A copy of the Undertakings is attached as Annexure A to this decision. I am satisfied that the effect of accepting the Undertakings is not likely to:
(a) cause financial detriment to any employee covered by the Agreement; or
(b) result in substantial changes to the Agreement.
The views of each person or organisation the Commission knows is a bargaining representative for the Agreement have been sought in relation to the Undertakings. Pursuant to subsection 190(3) of the Act, I accept the Undertakings. In accordance with s.201(3) of the Act, a copy of the Undertakings will be attached to the Agreement and forms part of the Agreement.
Clause 3 of the Agreement commences from the date of its approval. This is inconsistent with s.54 of the Act which states that an enterprise agreement approved by the Commission operates from 7 days after the agreement is approved, or if a later day is specified in the agreement, that later day. Accordingly, the Agreement will operate 7 days from the date of this decision.
I am satisfied, based on the information set out in the Form F16 Application for approval of an enterprise agreement, the Form F17 Employer declarations in support of an application for approval of the Agreement and responses to requests for further information provided by the Applicant, that each of the requirements of ss.186, 187 and 188 as are relevant to this application for approval have been met. The Agreement does not cover all the employees of the Applicant, however, considering s.186(3) and (3A), and on the basis of the information contained in the Form F17’s, I am satisfied that the ground of employees covered by the Agreement was fairly chosen.
The Agreement is approved in accordance with s.54 of the Act and will operate from 15 March 2022. The nominal expiry date of the Agreement is 8 March 2026.
DEPUTY PRESIDENT
Annexure A
[1] PR739144.
Printed by authority of the Commonwealth Government Printer
<AE515252 PR739075>
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