Metalrig Pty Ltd
[2018] FWC 5588
•5 AUGUST 2018
| [2018] FWC 5588 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Metalrig Pty Ltd
(AG2018/2331)
VICE PRESIDENT HATCHER | SYDNEY, 5 AUGUST 2018 |
Application for approval of the Metalrig Pty Ltd Enterprise Agreement 2018 – Pre-approval steps – Non-compliance with s 180(3) – Agreement does not pass ‘genuine agreement’ test – Application for approval of agreement
Introduction and factual background
[1] An application has been made by Metalrig Pty Ltd (Metalrig) for approval of an enterprise agreement known as the Metalrig Pty Ltd Enterprise Agreement 2018 (Agreement). The application was made pursuant to s 185 of the Fair Work Act 2009 (the Act). This decision specifically concerns the issue of compliance with s 180(3) of the Act in order to permit the Agreement to be approved.
[2] Section 180(3) of the Act provides:
(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:
(a) the time and place at which the vote will occur;
(b) the voting method that will be used.
[3] The “access period” referred to in the above provision is defined in s 180(4) as follows:
(4) The access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1).
[4] The voting process referred to in s 181(1) is the process whereby an employer requests relevant employees to vote to approve a proposed enterprise agreement.
[5] Section 180(3) is a “pre-approval step”, compliance with which is a necessary element for an enterprise agreement to have been “genuinely agreed”: s 188(a)(i). Such genuine agreement is a pre-requisite for the approval of an enterprise agreement: s 186(2)(a). Therefore an enterprise agreement cannot be approved if s 180(3) has not been complied with.
[6] In Construction, Forestry, Maritime, Mining and Energy Union and Ors v CBI Constructors Pty Ltd 1(CBI decision) a decision issued on 21 June 2018, the Full Bench said in relation to the determination of when, under s 180(4), the access period commences and ends:
“[42] The above considerations cause us to conclude that s 180(4) is to be construed on the basis that the access period consists of seven clear calendar days, and that by the application of s 36(1) of the AI Act 2 the access period ends at the end of the calendar day immediately preceding the day on which the voting process for a proposed agreement commences.”
[7] This Full Bench decision confirmed the longstanding position concerning the interpretation of s 180(4) established in McKechnie Iron Foundry (2010) 3 and Hydro Electric Corporation (2014).4 It did not represent the statement of any new legal proposition.
[8] The Form F17 statutory declaration made by Christopher Lane on 31 May 2018 that accompanied the application for approval of the Agreement stated (at [2.8]) that voting for the agreement commenced on 17 May 2018. The access period therefore consisted of the seven clear calendar days from 10 May 2018 to 16 May 2018 inclusive. Compliance with s 180(3) required Metalrig to take all reasonable steps to inform relevant employees of the time, place and method of the vote by the start of the access period - that is, by the start of the calendar day 10 May 2018 (immediately after midnight on 9 May 2018). Mr Lane’s statutory declaration, in response to the question (at [2.5)] “When did you notify the relevant employees of the date and place at which the vote was to occur and the voting method to be used?”, relevantly stated the following: “Notification was given verbally upon handing agreement to staff on 10/5/18 @ 10.25am. A reminder text was also sent out on 11/5/18.” If correct, this would mean that employees were not advised of the time, place and method of the vote until after the access period had begun.
[9] This apparent difficulty was identified in email correspondence from the Commission to Metalrig sent on 19 July 2018, and Metalrig was invited to consider whether it wished to proceed with its application.
[10] On 27 July 2018 Metalrig provided a response to the above email which stated (omitting formal parts):
“Upon completing the form F17 I was aware of the timeframe of 7 days, which was met, however it was not 7 clear calendar days, it was 7 clear 24 hr periods. The agreement was handed out on the 10/5/18 @ 10.25am & voting commenced on the 17/5/18 @ 4pm.
The reason for voting on the 17/5/18 was due to a team of our staff leaving to work away. They were given the option to place a phone vote however they chose to vote prior to their departure as they were satisfied with the Agreement Draft.
The majority of staff voted on the 18/5/18 with a small remaining portion who voted on 21st and 22nd May, therefore the voting period was kept open for 6 calendar days.
As a result of the above and knowing the Agreement Draft ensures that Staff are paid above the award rate and working conditions are favourable, I feel the Agreement should be moved forward for processing and I feel restarting the whole process will frustrate many of our staff.
The changes from the initial agreement are mainly changes in Award rates, simplification of Award Codes & clearly states all allowances, penalty rates & working hours without any ambiguity which has been frustrating to employees in the past, particularly in relation to night works.
Please proceed.”
[11] In response to an invitation from the Commission, Metalrig provided further written submission on 21 August 2018, which relevantly stated:
“Please find attached Statutory Declarations from the three staff members who voted on 17/5/18 due to other work commitments despite the option to vote the following day 18/5/18, whichwould have been 7 clear calendar days.
As I am responsible for the management of this case, I apologise for the delayed response time as I have been away ill on several occasions over the past 6 weeks.
I have attached the invoice from Cayman Resorts to prove that the 3 staff who voted on 17/5/18… were required to work away. As stated in the statutory declaration, we were advised the job was delayed soon after receiving their votes…
I understand the position that you hold however in the instance, I do ask that a special exemption be given, due to the above 3 staff members being in agreeance with the Draft to date.”
[12] The three statutory declarations attached to the submission were made by employees of Metalrig who explained, consistent with the submission, that they chose to vote to approve the Agreement on 17 May 2018 because of work commitments during the remaining period of the voting process.
Consideration
[13] The material before me makes it plain that Metalrig did not take any step to inform relevant employees of the date, place and method of the vote to approve the Agreement by the start of the access period, which commenced at the beginning of the calendar day 10 May 2018. The statutory declarations made by the three employees to which I have referred does not affect the calculation of the access period; they merely confirm that the voting process commenced on 17 May 2018 as stated in Mr Lane’s statutory declaration.
[14] There is no power under the Act for me to grant a “special exemption” from the pre-approval requirement in s 180(3) as sought by Metalrig. The Commission simply does not have a discretion under the Act to approve an agreement where there has been non-compliance with s 180(3), even where the failure to comply is technical in nature or accidental and every other approval requirement is satisfied. It is clear that Metalrig operated on the basis of an incorrect legal understanding concerning the calculation of the access period in accordance with s 180(4). However I do not consider that it is open to find, where there has been a failure to take any step at all to notify employees of the time, place and method of the vote by the start of the access period because of an incorrect understanding of the law, that this constitutes the taking of all reasonable steps in compliance with s 180(3).
[15] I find that Metalrig did not comply with s 180(3), and accordingly I cannot be satisfied under s 186(2)(a) that the Agreement was genuinely agreed by the employees covered by it having regard to s 188(a)(i). The application for approval of the Agreement must therefore be dismissed. I note that it would be open to Metalrig to undertake again the pre-approval steps required in s 180 and request relevant employees to vote again to approve the proposed agreement pursuant to s 181. If it takes this course, Metalrig can then make a fresh application for approval of the agreement.
VICE PRESIDENT
1 [2018] FWCFB 2732
2 Acts Interpretation Act 1901 (Cth)
3 [2010] FWA 3171
4 [2014] FWC 4169
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