Lowday Enterprises Pty Ltd as trustee for the Lowday Family Trust
[2010] FWA 9508
•10 DECEMBER 2010
[2010] FWA 9508 |
|
DECISION |
Fair Work Act 2009
s 185 - Application for approval of a single-enterprise agreement
Lowday Enterprises Pty Ltd as trustee for the Lowday Family Trust
(AG2010/14908)
DEPUTY PRESIDENT SAMS | SYDNEY, 10 DECEMBER 2010 |
Lowday Enterprises Pty Ltd Single Enterprise Agreement 2010.
[1] This is a preliminary decision arising from an application made pursuant to s 185 of the Fair Work Act 2009 (‘the Act’), for the approval of Fair Work Australia (FWA) of a single-enterprise agreement to be known as Lowday Enterprises Pty Ltd Single Enterprise Agreement 2010 (‘the Agreement’).
[2] The Agreement was lodged on 8 October 2010, by Employment Advocacy Solutions, on behalf of Lowday Enterprises Pty Ltd as trustee for the Lowday Family Trust (‘the applicant’). The Agreement is to cover 11 employees engaged in the poultry industry as poultry collectors in Ripley, Queensland, who would otherwise be covered by the terms and conditions of the Pastoral Award 2010 [MA000035].
[3] Upon reviewing the terms of the proposed Agreement and the approval process documentation, I identified a number of concerns which I later raised with Mr J Yvanoff, who appeared for the applicant, at a telephone hearing of the application on 7 December 2010. A number of my concerns related to whether the Better Off Overall Test (BOOT) had been satisfied in respect to, inter alia, hours of work and a fixed hourly rate of $20.00. It is unnecessary for the purposes of this decision to further consider these matters as Mr Yvanoff undertook to provide the Tribunal with comparative calculations and undertakings under s 190 of the Act to satisfy my concerns.
[4] My immediate concern with the proposed Agreement relates to the answer to question 2.7 in Form 17, the Employer’s Declaration in Support of the Application, that the Agreement purports to cover 11 employees. However, only one employee cast a valid vote in support of the Agreement, despite Mr Yvanoff submitting that the employees were asked to cast their vote by way of a postal ballot process. Mr Yvanoff could not explain why only one of the employees cast a vote valid, notwithstanding that the answers to questions 2.4 and 2.5 were as follows:
2.4 Please specify the steps taken by the employer to ensure that the relevant employees were given, or had access to, the written text of the agreement and any other material incorporated by reference in the agreement during the 7 day period ending immediately before the start of the voting process: (s 180(2)(a)).
Employees were each sent a copy of the proposed agreement along with an explanatory letter detailing a postal ballot process. In addition the letter contained contact phone numbers that employees were able to call to discuss the contents of the Agreement. The contact numbers were that of my industrial relations advisor, EAS Pty Ltd.
2.5 Please specify the steps taken by the employer (as least 7 days before the start of the voting process to notify all relevant employees of the time and place at which the vote was to occur and the voting method to be used: (s 180(3)).
I engaged the services of my industrial relations advisor, EAS Pty Ltd, to conduct a postal ballot. All employees were sent a package containing an explanation letter, a copy of the Agreement, a ballot paper and a self addressed envelope to return their ballot. The letter contained within the employee’s package explained the postal ballot process and defined the voting period.
I hasten to add that I make no criticism of Mr Yvanoff in this regard.
CONSIDERATION
[5] The relevant sections of 186 and 188 of the Act are expressed as follows:
186 When FWA must approve an enterprise agreement—general requirements
Basic rule
(1) If an application for the approval of an enterprise agreement is made under section 185, FWA must approve the agreement under this section if the requirements set out in this section and section 187 are met.
Note: FWA may approve an enterprise agreement under this section with undertakings (see section 190).
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
(b) if the agreement is a multi-enterprise agreement:
(i) the agreement has been genuinely agreed to by each employer covered by the agreement; and
(ii) no person coerced, or threatened to coerce, any of the employers to make the agreement; and
(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and
(d) the agreement passes the better off overall test.
Note 1: For when an enterprise agreement has been genuinely agreed to by employees, see section 188.
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. (my emphasis)
[6] In my view, s 186(2) is not only a mandatory test to be applied by FWA in the enterprise agreement approval process, but it is a fundamental safeguard underpinning the legislature’s intention that employees are not to be coerced, pressured or unduly influenced into agreeing to the terms and conditions of their employment. Plainly, the key words are ‘genuinely agreed’. The definition of ‘genuinely agreed’ is set out in s 188 of the Act. For the purposes of this decision and to the extent necessary, I would rely on s 188(c) of the Act, as I have reasonable grounds for believing that the Agreement has not been genuinely agreed to by the employees.
[7] Even so, based on the material presently before me, I have grave doubts an Agreement voted on by a single employee and which purports to cover another 10 employees, could be said to have been ‘genuinely agreed to by the employees covered by the agreement’. This is putting aside the strict literal interpretation of s 186(2) that by the use of the plural ‘by the employees’ it is unlikely that an enterprise agreement could cover only one employee; let alone be voted upon by one employee to cover many other employees.
[8] I am fortified to this conclusion by reference to the provisions of the Act dealing with majority support determinations and scope orders in respect to proposed single-enterprise agreements (s 236-239). Throughout these sections the words used are ‘employees’ and ‘majority of the employees’. No reference is had to the singular ‘employee’. Given this, there does not appear to me to be any legislative intention that majority support determinations or scope orders would be able to be made involving one employee.
[9] Regrettably, I am unaware of any authority of FWA on the direct issue I have been required to consider under this application. However, in a decision of Cambridge C in Margin Brothers Pty Ltd t/a Campbell IGA Friendly Grocer [2010] FWA 2105 (‘Margin Brothers’), the Commissioner expressed concern that majority support for an enterprise agreement might be less than the majority of the employees to be covered by it and may ‘open the prospect for undemocratic outcomes’. It seems however, that the Commissioner felt constrained by s 182(1) of the Act which states that an ‘agreement is made when a majority of those employees who cast a valid vote to approve the agreement’. I refer to paras [8] and [9] of the Commissioner’s decision:
[8] According to the Declaration, the Agreement, if approved, would apply to 23 employees in total, 17 of which were under 21 years of age. Only 10 of the 23 employees voted in the ballot to approve the Agreement and 9 voted in support of the Agreement. FWA raised concern that apparently a significant number of employees did not vote, such that there were sufficient numbers who did not vote to potentially change the outcome of the ballot. Ms Grant referred to the provisions of subsection 182 (1) of the Act which states:
182 When an enterprise agreement is made
Single-enterprise agreement that is not a greenfields agreement
(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.
[Emphasis added]
[9] Consequently the Agreement was made in compliance with subsection 182 (1) of the Act. In passing it should be noted that these provisions create significant potential for agreements to be made without majority support of the employees who are to be covered by the agreement and thus open the prospect for undemocratic outcomes. In this instance the concerns raised by FWA were related to the provisions of s. 188 of the Act and whether FWA could be satisfied that the Agreement had been genuinely agreed to by the employees.
[10] In my opinion, the concerns of Cambridge C, with which I respectfully agree, have even greater force in this case. I cannot imagine that the legislature intended that the Act would permit an enterprise agreement to be approved by FWA on the basis that it was ‘genuinely agreed to by the employees’, in circumstances where a single employee voted to approve the agreement covering many other employees. Margin Brothers may be distinguished in one other respect. While the Commissioner felt bound to accept the express terms of s 182(1), I do not feel so bound. The relevant words in s 182(1) - a majority of those employees who cast a valid vote - cannot, in my view, apply to one vote cast to approve the agreement. In other words, applying the principles of statutory construction, one valid vote in support of an agreement, out of one vote cast, cannot constitute a vote of the majority of employees as is generally understood by the plain, ordinary English meaning of the language used in the subsection.
[11] In a later decision, Hampton C in Delcorp (SA) Pty Ltd t/a De Luca’s On the Park [2010] FWA 2952 (‘Delcorp’), considered an application for the approval of an enterprise agreement which had been made by the vote of one employee. The applicant was in the process of establishing a new coffee and wine bar. In rejecting the application, the Commissioner said at paras [14] and [15]:
[14] It was clear that the new coffee and wine bar would employ more than the single employee cited in the application. It was also evident that the bar was not yet operational and this raised the question as to whether the agreement was validly made under the Act.
[15] This is an important question given that considerable emphasis is placed by the Act upon the process leading to the agreement. This is evident from the various information, negotiation and endorsement requirements of the Act that are designed to enable the employees to form an informed and genuine position on any proposed agreement. It is also evident that the Act provides that this assessment and endorsement is to be made (except in the case of a greenfields instrument) by those who are employed at the time and who will be subject to the agreement. A process whereby that endorsement is made by a single employee on behalf of a group of employees who are yet to be employed must be carefully considered.
[12] Obviously, the decision in Delcorp may be distinguished to the facts of this case in that this Agreement was voted on by one employee to cover 10 other existing employees; not voted on by one employee to cover yet to be employed employees. Nevertheless, I consider the Commissioner’s observation that careful consideration should be given to an agreement made by a single employee in the last sentence of par 15 above to be particularly apposite to the matter before me.
[13] That said, I do not consider, at this stage, it would be fair to the employer, and possibly the employees, to dismiss this application under s 186 or 188 of the Act. I propose to adopt a somewhat unusual course in respect to further progressing this matter. There does not appear to me to be any impediment in the Act, in particular in s 181, for me to direct that there be another ballot of employees, in anticipation of a more decisive outcome, one way or the other and for FWA to be satisfied that the Agreement was genuinely agreed to by the employees.
[14] Accordingly, I direct that a new ballot of employees to consider approving this Agreement be conducted within 28 days. I do not intend to direct the method of voting, but would emphasise that it must be compliant with s 180 of the Act and I must be satisfied that all of the other preapproval processes under the Act have been met. In this respect I further direct the applicant to file fresh answers to questions 2.4, 2.5, 2.6 and 2.7 of Form 17 as soon as practicable after the vote of employees (assuming the vote is to approve the Agreement). Consequent upon that advice and being satisfied all of the other requirements of the Act have been met, I will consider approving the Agreement in chambers. The parties will be advised accordingly.
DEPUTY PRESIDENT
Appearances:
Mr J Yvanoff, Employment Advocacy Solutions
Hearing details:
2010
SYDNEY
7 December
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