MFCT Pty Ltd as trustee for Mildura Fruit Company Trust T/A Mildura Fruit Company (MFC)
[2011] FWA 2024
•12 APRIL 2011
[2011] FWA 2024 |
|
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
MFCT Pty Ltd as trustee for Mildura Fruit Company Trust T/A Mildura Fruit Company (MFC)
(AG2011/5253)
COMMISSIONER LEWIN | MELBOURNE, 12 APRIL 2011 |
Application for approval of the Mildura Fruit Company Enterprise Agreement 2011 - pre-approval requirements - employees eligible to vote - all reasonable steps to provide a copy of Agreement and incorporated materials - explanation of terms of Agreement - access period - employees must genuinely agree
[1] This decision concerns an application for approval of an enterprise agreement known as the Mildura Fruit Company Enterprise Agreement 2011 (the Agreement). The application is made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by MFCT Pty Ltd as trustee for Mildura Fruit Company Trust T/A Mildura Fruit Company (MFC). The Australian Workers’ Union (AWU) is a bargaining agent for the agreement. The agreement is a single-enterprise agreement. The Agreement applies to casual employees of MFC.
[2] The application was the subject of a hearing on 1 February 2011 as a result of Fair Work Australia receiving a submission from the AWU that the statutory requirements applicable to the making of an enterprise agreement under the Act have not been complied with.
[3] At the hearing Mr James Andrews of Victorian Employers’ Chamber of Commerce and Industry (VEECI), appearing for MFC, advised that MFC employ a core group of approximately 60 local casual employees that are offered seasonal employment each year. Prior to the hearing information was provided to the Tribunal advising that 62 employees were involved in the making of the Agreement; the MFC workforce is increased by the engagement of itinerant employees during the season; the number of employees whose employment will be covered by the Agreement will be between 100 and 200 depending upon the season; and at the time of voting for the Agreement there were only three casual employees engaged by and performing work for MFC.
[4] Mr Andrews described the process adopted by MFC for the making of the Agreement. MFC decided that it would take certain steps involving the 62 local employees who are engaged on casual employment from year to year, including the three casual employees engaged at the time of the making of the Agreement.
[5] At this point it is appropriate and convenient to refer to the relevant provisions of the Act which must be complied with in order for an enterprise agreement to be made which may be approved by Fair Work Australia.
[6] Section 188 of the Act makes it clear what is required for employees to have genuinely agreed to the terms of an enterprise agreement.
“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.”
[7] It will be observed that MFC must have complied with the provisions of ss.180(2), (3), (4) and (5), ss.181(2) and that part of s.182 which applies to a single enterprise agreement which is not a greenfields agreement, that is s182(1) in this case. These statutory provisions are set out in relevant order below.
“180 Employees must be given a copy of a proposed enterprise agreement etc.
…
Employees must be given copy of the agreement etc.
(2) The employer must take all reasonable steps to ensure that:
(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:
(i) the written text of the agreement;
(ii) any other material incorporated by reference in the agreement; or
(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.
(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.
(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).
Terms of the agreement must be explained to employees etc.
(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.
…
181 Employers may request employees to approve a proposed enterprise agreement
…
(2) The request must not be made until at least 21 days after the day on which the last notice under subsection 173(1) (which deals with giving notice of employee representational rights) in relation to the agreement is given.
…
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.”
[8] Mr Andrews stated, later in submissions of 16 February 2011, that by notice sent by post on 9 December 2010, the local casual employees were invited to a meeting on 15 December 2010 by MFC, where the proposed enterprise agreement would be explained to them and a copy provided. Mr Andrews also stated that those employees were advised in that notice that if they were unable to attend the meeting of 15 December 2010 a copy of the proposed enterprise agreement could be collected from MFC offices between 13 and 17 December 2010. Further, it was stated that those employees who attended the meeting of 15 December 2010 or collected an Agreement between 13 and 17 December 2010 would receive a ballot paper via post and that voting in a ballot to approve the Agreement would close on 6 January 2011. Prior to the hearing on 1 February 2011 MFC informed Fair Work Australia that 20 employees attended the meeting and six employees collected the draft Agreement from MFC, as provided for in the notice of 9 December 2010. Consequently, 26 employees received ballot papers via post. 18 employees voted, 13 votes were recorded in favour of the Agreement. The ballot papers were posted on 24 December 2010 and voting closed on 6 January 2011.
[9] Mr Patrick Reilly, who appeared at the hearing for the AWU, submitted that the steps taken by MFC accordingly do not satisfy the statutory requirement to take “all reasonable steps” to give or ensure access to a copy of the Agreement and the incorporated materials, being the Horticulture Award 2010. It was submitted that the access period between 13 and 17 December 2010 was insufficient for employees who were not rostered to work at MFC during that time, and could not attend the meeting on 15 December 2010 to obtain access to the Agreement.
[10] I issued directions on 1 February 2011 to the AWU to file submissions in the Tribunal and serve those submissions on MFC relating to whether the employees who voted for the Agreement were employees who were eligible to vote in a ballot to approve the Agreement. I issued directions on 1 February 2011 to MFC to file submissions in response to the AWU’s submissions on the subject in the Tribunal by 22 February 2011. I did so because it seemed to me that in these particular circumstances I should give consideration to the provisions of s.181(1) of the Act.
[11] Having regard to the provisions of s.181(1) of the Act, which specifies that the employer may request, “employees employed at the time who will be covered by the Agreement to approve the Agreement by voting for it”, an issue arose. The issue is as to which persons were eligible to vote in a ballot to approve the Agreement. Were the persons eligible to vote limited to the three casual employees who were engaged in December 2010 or did eligibility to vote extend to all of the 62 casual employees who would be offered employment under the terms of the Agreement in the forthcoming season? Both the AWU and MFC submit that the extended electorate of 62 persons as described was appropriate.
[12] The question identified immediately above was addressed by Vice President Lawler on 16 December 2010 in University of New South Wales (Professional Staff) Enterprise Agreement 2010 decision [[2010] FWAA 9588] at [66] as follows:
“Having regard to the context and purpose of the FW Act as a whole, in my view, a casual employee will be entitled to participate in a vote for an enterprise agreement that will cover them if, at the time specified in s181, they have been employed as a casual on a regular and systematic basis (and with no basis for supposing that this will not continue) or if their current engagement extends for a period beyond the close of voting such that, in either case, it could be said that they “will be covered by the agreement” within the meaning of s.181.”
I intend to follow the reasoning of the Vice President and the submissions of the parties to the effect that the appropriate electorate for the purposes of a ballot to approve the Agreement was the 62 employees to whom the notice of 9 December 2010 was addressed by MFC.
[13] At the hearing of 1 February 2011 and subsequently in written submissions, the AWU sought that the Tribunal find that the requirements of s.180(2) of the Act, as set out below, have not been met:
“Employees must be given copy of the agreement etc.
(2) The employer must take all reasonable steps to ensure that:
(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:
(i) the written text of the agreement;
(ii) any other material incorporated by reference in the agreement; or
(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.”
[14] The AWU submitted that only three of the relevant employees were rostered to work at MFC over the “access period”, as defined by the Act, for the Agreement which coincided with the Christmas period. It would seem also that for those employees who were unable to attend the meeting of 15 December 2010 there was no explanation of the terms of the Agreement. The AWU submitted that due to the requirement to attend the MFC office, when not rostered to work and during the Christmas period, for the purposes of obtaining a copy of the Agreement, the Applicant cannot be considered to have satisfied ss.180(2) and (4) the Act.
[15] The period in which an employer is obliged to provide a copy of the written text of an agreement and any incorporated materials is known as the “access period” which is defined by s.180(4) of the Act. The “access period” for the purpose of the Agreement proposed by MFC to the relevant employees was between 17 and 23 December 2010. Clearly, the notice of 9 December 2010 did not refer to the access period as defined by the Act, but rather stated that for those employees, not able to attend on 15 December 2010, access would be available between 13 and 17 December 2010.
[16] In submissions, Mr Perry Hill, General Manager MFC, also stated that in addition to the efforts mentioned above a copy of the draft Agreement was still available for collection from the MFC office until 23 December 2011. Mr Hill stated that a copy of the Horticulture Award 2010 was available and accessible at the MFC office.
[17] It will be observed that the statutory provisions cited previously impose various mandatory obligations upon MFC in relation to the making of the Agreement. Included among those obligations are four which give rise to consideration in the facts of this case.
[18] The first is the obligation to take “all reasonable steps” to “give” or ensure access to a “written text” of the Agreement, to the relevant employees being those whose employment will be covered by the terms of the Agreement. The second obligation is to “give” or ensure access to those employees any other material incorporated by reference in the Agreement. The third obligation is to provide a explanation of the terms of the Agreement to relevant employees, having regard to s.180(5) of the Act. The fourth is the obligation to provide an opportunity for the relevant employees to vote to approve the Agreement.
[19] It is therefore necessary first to consider whether the steps taken by MFC constituted “all reasonable steps” to “give” or ensure access to the written text of the Agreement and the incorporated materials to the relevant employees.
[20] In order to reach a conclusion in relation to the those issues it is appropriate to consider whether or not it would have constituted a reasonable step, in the process for the making of the Agreement, to have provided the written text of the Agreement and the incorporated materials directly to the relevant employees. This could reasonably have been done in the letter of 9 December 2010, which included the invitation to the meeting of 15 December 2010, at which, it was stated, the terms of the Agreement would be explained, as required by s.180(5), to the employees.
[21] Before reaching the required conclusion it is relevant to note that the mandatory statutory requirement is for “all reasonable steps”, which is a significantly greater requirement than simply reasonable attempts to ensure that the written text of the Agreement and anything incorporated by reference are given to the relevant employees or access provided thereto.
[22] It is difficult to see how it could be considered unreasonable for MFC to take the step of giving the relevant employees a copy of the written text of the Agreement and the incorporated materials as a part of the written communication of 9 December 2010. I therefore find that MFC did not take all reasonable steps to ensure that the relevant employees were given the written text of the Agreement and the incorporated materials. This is particularly so in the circumstances of this case where it was known that an overwhelming number of the relevant 62 employees would not be at the workplace during the making of Agreement and may have been otherwise engaged.
[23] However, as will have been observed there is an alternative to giving the relevant employees the written text of the Agreement and the incorporated materials, which is provided for by s180(2)(b). It is therefore necessary to consider whether MFC took all reasonable steps to ensure that the relevant employees had “access” to the written text of the Agreement and the incorporated materials during the “access period”, as defined in the Act.
[24] The notice of 9 December 2010, addressed to the relevant employees, states that access to the written text of the Agreement would be available either at the meeting of 15 December 2010 or from the company’s office between 13 and 17 December 2010. The question which therefore must be considered is whether or not, in the circumstances of this case, such steps constitute all reasonable steps to ensure that the relevant employees had access to the written text of the Agreement and the incorporated materials. I am not satisfied that it does. While at the hearing it was submitted that additional access to that provided for by the terms of the notice of 9 December 2010 was available, employees who were unable to attend the meeting of 15 December 2010 would have had no knowledge of the matters referred to by Mr Hill which are recited at paragraph [16] of this decision and therefore, in my view, no access to the written text of the Agreement and incorporated materials during the access period, within the meaning of the Act.
[25] On the face of it there would seem to be no doubt that the notice, which was sent to the relevant employees on 9 December 2010, would have been the only information about the terms of the Agreement received by an employee who was unable to attend the meeting of 15 December 2010. It follows, therefore, that MFC did not fulfil the statutory requirement to explain the terms of the Agreement to all relevant employees as prescribed by s.180(5) of the Act. There is no suggestion that an explanation of the terms of the Agreement was available other than at the meeting of 15 December 2010. It would have been reasonable, in the circumstances, for an explanation of the terms of the Agreement to be provided in writing to the 62 employees to whom the notice for the meeting of 15 December 2010 was provided.
[26] Moreover, it is somewhat critical to a conclusion that the relevant employees genuinely agreed to the terms of the Agreement that they were provided with an opportunity to vote in the ballot to approve the Agreement. In the circumstances it is important to note that in accordance with the notice of 9 December 2010 an employee would only receive a ballot paper if they attended the meeting of 15 December 2010 or collected an Agreement from the company’s office between 13 and 17 December 2010. Employees who did neither were not provided with a ballot paper, which could reasonably have been done by post. In light of all of the above it follows that the 62 relevant employees cannot be taken to have genuinely agreed to the Agreement in the manner prescribed by the Act.
[27] I should say that the situation arising above is simply an unfortunate consequence of procedural inadequacies in the process for the employees genuinely agreeing to the Agreement rather than any calculated attempt by MFC to avoid the requirements of the Act in relation to the making of the Agreement. In my view, MFC has not acted in bad faith. However, it is exceedingly important that the appropriate procedures that give rise to genuine agreement by employees to the terms of an enterprise agreement prescribed by the Act should be observed. Not to do so would undermine the enterprise level collective bargaining objective of s.3 of the Act.
[28] In my view, it cannot be said that the relevant 62 employees have genuinely agreed to the Agreement that is the subject of the application if by misadventure only 26 employees have been provided with an opportunity to vote in the ballot for the approval of the Agreement, access to the written text of the Agreement and incorporated materials has been inadvertently limited and a significant number of employees have not been able to have the benefit of an explanation of the terms of the Agreement.
[29] I therefore cannot approve the Agreement. Finally, I can say by way of observation that the text of Agreement passes the better off overall test and but for the reasons expressed above would have been approved. The employees whose employment would be covered by the Agreement would be better off overall if employed under the terms of Agreement than if employed exclusively under the terms of the Horticulture Award 2010.
[30] I should also observe that in my view the provisions of s.180(5) of the Act are of particular relevance in this case. Whilst MFC is able to take such steps as it considers are appropriate to meet the statutory requirements for the approval of the agreement, given the particular circumstances and needs of the employees who may not be attending the workplace over the period when the Agreement is made, a procedure which provides a copy of or access to the written text of the agreement and a written explanation of the terms of the Agreement during an access period as defined by the Act and provides the opportunity for all of the relevant employees to vote in the ballot would seem to fall within the scope of all the reasonable steps and other requirements of the Act.
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