Mining and Energy Union v
[2024] FWC 1623
•27 JUNE 2024
| [2024] FWC 1623 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.236 - Application for a majority support determination
Mining and Energy Union
v
Sojitz Gregory Crinum Pty Ltd
(B2023/1302)
| COMMISSIONER THORNTON | ADELAIDE, 27 JUNE 2024 |
Application for a majority support determination
Background
The Mining and Energy Union (MEU or the Applicant) have made an application to the Fair Work Commission (the Commission) under s.236 of the Fair Work Act 2009 (the Act) for a majority support determination (MSD) with respect to a group of employees of Sojitz Gregory Crinum Pty Ltd (the Respondent or the Employer).
In the Form F30 application, the group of employees who will be covered by the proposed enterprise agreement, is identified by the Applicant as follows:
“employees employed by the respondent who perform Production and Engineering work at the Crinum underground coal mine and are currently covered [by] the Black Coal Mining Industry Award 2019 in Schedule A.”
The Gregory Crinum Underground Mine (the Mine) is part of a larger mining operation referred to as the Gregory Crinum Complex, including open-cut and underground coking coal mines, located approximately 60 kilometres from Emerald in Queensland. The complex is owned and operated by the Sojitz group of companies (Sojitz).
The key issue in dispute in this matter is whether a MSD ought to be made in circumstances where the Respondent asserts a portion of their current workforce transferred from another employer and remain covered by an Enterprise Agreement that has not passed its nominal expiry date.
On 6 November 2023, Mr Shane Brunker, District Vice President of the Mining and Energy Union, Queensland District Branch, wrote to Mr Michael Morton, Site Senior Executive of the Gregory Crinum Underground Mine, seeking to “formally initiate bargaining with your company for an enterprise agreement”[1] pursuant to the Act and making clear that Mr Brunker would represent the Applicant in the bargaining negotiations.
On 26 September 2023, Mr Morton responded setting out aspects of the relevant history of the industrial arrangements that the Respondent says apply at the site. Mr Morton has since set out in a more fulsome way in an affidavit filed in these proceedings, the relevant history:
(a)From May 2021, Sojitz outsourced the operations of the Mine to Mastermyne Crinum Operations (Mastermyne);
(b)Employees of Mastermyne were covered by the Mastermyne Crinum Enterprise Agreement (the Mastermyne Agreement), that was created for and applied only to the employees employed at the Mine and engaged by Mastermyne to service their contract with Sojitz;
(c)On 19 October 2023, the parent company of Mastermyne announced that they would cease providing mining services under the contract effective of 21 October 2023;
(d)A short time thereafter, Sojitz decided to in-source the operations at the Mine;
(e)The employees were initially employed by an entity in the Sojitz group called Sojitz Gregory Mining Pty Ltd (Sojitz Gregory). Sojitz Gregory made offers of employment to all employees of Mastermyne working at the Mine and 17 (being all but 3 of the Mastermyne workforce) accepted the offer to commence employment with Sojitz Gregory immediately upon termination by Mastermyne;
(f)The employees’ service with Mastermyne was recognised by Sojitz Gregory for the purposes of calculating the entitlements of the transferring employees and leave accruals were also recognised and not paid out to employees by Mastermyne;
(g)The employees performed the same work they had for Mastermyne when employed by Sojitz immediately after their termination from Mastermyne;
(h)The Mastermyne Agreement continued to be applied by Sojitz Gregory to the employees that transferred from Mastermyne “on the basis it transferred with those Ex-Mastermyne Employees and covered them and Sojitz Gregory as the new employer”[2];
Given the unexpected withdrawal of Mastermyne, the Sojitz group did not have sufficient time to establish a separate entity to conduct operations at the Mine. It is the approach of the Sojitz group to create a separate legal entity for each part of its operations;
(j)On 26 June 2023, all employees working at the Mine were transferred again from Sojitz Gregory Mining Pty Ltd to the newly created entity Sojitz Gregory Crinum Pty Ltd (the Respondent); and
(k)As at 20 February 2024, 12 employees that transferred from Mastermyne continue to be employed with the Respondent.
In his correspondence to Mr Brunker, Mr Morton makes clear that “Sojitz does not agree to bargain for an enterprise agreement proposing to cover employees performing work at Crinum Mine”, referencing the Mastermyne Agreement as continuing to operate for transferring employees and its “wish” not to have “multiple different agreements at one site.” Mr Morton offers to revisit the issue “around the nominal expiry date of the Mastermyne Agreement.”[3]
Mr Brunker gave evidence in the matter on behalf of the Applicant. Mr Brunker disputed some of the evidence given by Mr Morton, including making general statements that no employees he spoke to had previously worked for Mastermyne or had been advised of a transfer of employment in their letters of offer of employment with Sojitz.
Mr Brunker’s evidence was that he undertook the task of compiling a petition to ascertain whether the majority of employees wished to bargain by meeting with employees outside of work hours on two occasions at the camp or in Emerald and “affording them the option of signing the petition for an agreement.”[4]
Signatures on the petition responded to the following statements:
“We, the undersigned, are employed by Sojitz Gregory Mining Pty Ltd (“Sojitz”) as production (including operators) will and engineering employees at the Crinum Underground Coal Mine (“Mine”). By signing this petition we confirm that we wish that the terms and conditions of employment for all production and engineering employees, employed by Sojitz at the Mine, to be covered by an enterprise agreement. We request that Sojitz issue a notice of employee representational rights to all production and engineering employees and commence bargaining with our representatives as soon as possible with the goal of including terms and conditions for a stand-alone enterprise agreement.”
Mr Brunker confirmed in his evidence that the petition was under his control at all times, and that he witnessed the employees sign the petition.
On 1 November 2023,[5] Mr Brunker again wrote to the Respondent advising they could find no evidence the Mastermyne Agreement transferred with any employees and made the point that even if that were correct, there exists at the worksite a “considerable number of new employees” not covered by any enterprise agreement. Mr Brunker confirmed that employees wanting to bargain had signed a petition and asked the company to again agree to commence bargaining for an agreement. The MEU put the Respondent on notice that should the Respondent not agree to commence bargaining, that they would seek a Majority Support Determination from this Commission.
On 6 November 2023, the Respondent again communicated in writing their refusal to commence bargaining, referencing their reasons in the correspondence of 26 September 2023.
The MEU then made their application to the Commission for a Majority Support Determination on 28 November 2023, relying on the petition referred to, asserting that the petition showed that a majority of employees who would be covered by the proposed enterprise agreement wished to bargain.
On 11 December 2023, Directions were issued requiring the Applicant to file in the Commission and serve on the Respondent a copy of the redacted petition. The directions also required that the Commission be provided with the unredacted version of the petition. The Respondent was directed to serve on the Applicant a redacted list of employees and file in the Commission an unredacted list of employees.
Both parties filed in accordance with the Directions. The Respondent also provided an unexecuted affidavit of Mr Morton. The Respondent made submissions that the employees covered under the Mastermyne Agreement should not be counted towards the employees who wished to commence bargaining.
On 12 January 2024, my Chambers provided a report to the parties advising that a comparison of the provided materials revealed the following:
“
· There are 88 employees on the employee list provided by Sojitz Gregory Mining.
· There are four names on the petition that do not appear on the Sojitz Gregory Mining employee list.
· 48 employee names and stated identities appear on both the final petition and the Sojitz Gregory Mining employee list.
· The petition records support from a majority of the relevant employees (48 of 88 – 54.5%).
[9] The respondent has set out in submissions, supported by an affidavit of Michael Joseph Morton, that in their view 12 employees of the group of 88 relevant employees are covered by another agreement currently in force. The respondent’s unredacted list of employees identifies those 12 employees. On a review of the MEU’s unredacted petition, the Commission has identified 3 employees in the group of 12 that the respondent claims are covered by another agreement.
[10] If those 12 employees are removed from the list of employees to be covered by any agreement, the number of relevant employees is reduced to 76. If the 3 employees on the MEU’s petition are removed from consideration, the number of employees who are to be covered by any agreement and who have indicated their support for bargaining is reduced to 45.
[11] In that case, the petition again records support from a majority of the relevant employees (45 of 76 – 59.21%).”
Further Directions were issued on 22 January 2024, requiring the Applicant to file in the Commission and serve on the Respondent a statutory declaration or affidavit confirming the steps taken, timing and circumstances surrounding the petition previously provided to the Commission. The Respondent was afforded an opportunity to make any amended or supplementary submissions in response to the Applicant’s materials and the Applicant was provided a further opportunity to reply.
Both parties filed in accordance with the Further Directions, however, the Applicant provided a statement, rather than an affidavit or a statutory declaration of Mr Brunker, and did not provide any submissions in reply.
It is not in dispute that the Applicant is the bargaining representative of some employees who would be covered by the proposed single enterprise agreement and has standing to make this application.
It is also not in dispute that this application for a Majority Support Determination specifies the employer that will be covered, being Sojitz Gregory Crinum Pty Ltd, and any employees who will be covered by the agreement, being those outlined above. Accordingly, I must make the determination if I am satisfied of the matters set out in s.237(2) of the Act.
The statutory requirements
The MSD arrangements form part of the Act’s enterprise bargaining provisions. In particular, they are part of the Commission’s general role in facilitating bargaining in Division 8 of Part 2-4 of the Act.
The objects of Part 2-4 of the act are as follows:
“171 Objects of this Part
The objects of this Part are:
(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and
(b) to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:
(i)making bargaining orders; and
(ii)dealing with disputes where the bargaining representatives request assistance; and
(iii)ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay.”
An application for a determination is made pursuant to s.236 of the Act, which provides as follows:
“236 Majority support determinations
(1) A bargaining representative of an employee who will be covered by a proposed single-enterprise agreement may apply to the FWC for a determination (a majority support determination) that a majority of the employees who will be covered by the agreement want to bargain with the employer, or employers, that will be covered by the agreement.
(1A)Despite subsection (1), a bargaining representative may not apply to the FWC for a determination if a supported bargaining authorisation that specifies the employee is in operation.
Note: While a supported bargaining authorisation that specifies an employee is in operation, an employer cannot bargain with that employee for any kind of agreement other than a supported bargaining agreement (see subsection 172(7)).
(2)The application must specify:
(a) the employer, or employers, that will be covered by the agreement; and
(b) the employees who will be covered by the agreement.”
Section 237 of the Act provides as follows:
“237 When the FWC must make a majority support determination
Majority support determination
(1)The FWC must make a majority support determination in relation to a proposed single-enterprise agreement if:
(a)an application for the determination has been made; and
(b)the FWC is satisfied of the matters set out in subsection (2) in relation to the agreement.
Matters of which the FWC must be satisfied before making a majority support determination
(2)The FWC must be satisfied that:
(a) a majority of the employees:
(i)who are employed by the employer or employers at a time determined by the FWC; and
(ii)who will be covered by the agreement;
want to bargain; and
(b)the employer, or employers, that will be covered by the agreement have not yet agreed to bargain, or initiated bargaining, for the agreement; and
(c)the group of employees who will be covered by the agreement was fairly chosen; and
(d)it is reasonable in all the circumstances to make the determination.
(3)For the purposes of paragraph (2)(a), the FWC may work out whether a majority of employees want to bargain using any method the FWC considers appropriate.
(3A)If the agreement will not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding for the purposes of paragraph (2)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.
Operation of determination
(4) The determination comes into operation on the day on which it is made.”
Of relevance to the consideration of the matters in dispute is section 58, which provides:
“Subdivision C—Interaction between one or more enterprise agreements
58 Only one enterprise agreement can apply to an employee
Only one enterprise agreement can apply to an employee
(1) Only one enterprise agreement can apply to an employee at a particular time.
General rule—later agreement does not apply until earlier agreement passes its nominal expiry date
(2) If:
(a)an enterprise agreement (the earlier agreement) applies to an employee in relation to particular employment; and
(b) another enterprise agreement (the later agreement) that covers the employee in relation to the same employment comes into operation; and
(c)subsections (3), (4) and (5) do not apply;
then:
(d) if the earlier agreement has not passed its nominal expiry date:
(i)the later agreement cannot apply to the employee in relation to that employment until the earlier agreement passes its nominal expiry date; and
(ii)the earlier agreement ceases to apply to the employee in relation to that employment when the earlier agreement passes its nominal expiry date, and can never so apply again; or
(e)if the earlier agreement has passed its nominal expiry date—the earlier agreement ceases to apply to the employee when the later agreement comes into operation, and can never so apply again.”
Matters in dispute and the cases of the parties
The MEU does not concede that there was an initial transfer of business and consequently, that the Mastermyne Agreement applies to any of the employees of the Respondent. They rely on the evidence of Mr Brunker that in discussion with the employees he spoke to, none of those employees were aware of any person who had previously been employed by Mastermyne.[6] The MEU does accept that the relevant employees previously employed with Sojitz Gregory came to be employed by Sojitz Crinum, the Respondent. The MEU does not accept, with the information currently available, that the Mastermyne Agreement has transferred such that it covers any employees.
The Applicant maintains that the cohort of employees to be covered by the proposed enterprise agreement have been fairly chosen because they work in the “single underground mine at Crinum for a single employer, Sojitz Gregory Crinum Pty Ltd and are all covered by Schedule A of the Black Coal Mining Industry Award 2019”[7] and that the Commission can be satisfied that all the other aspects of section 237(2) have been met.
The Respondent did not expressly address the matters dealt with in section 237(2)(a) and (b), but did not indicate there was any dispute with respect to those matters.
The Respondent ultimately accepted that the petition relied upon by the Applicant was at all times within the custody of Mr Brunker and otherwise did not challenge the validity of the petition. The initial dispute about the creation and reliability of the petition was not ultimately pressed by the Respondent following the filing of evidence from Mr Brunker.
The objections of the Respondent were focussed on subsections 237(c) and (d) of the Act and addressed why the Respondent says the group of employees was not fairly chosen and it is not reasonable in the circumstances to make the MSD.
The Respondent set out in their evidence and submissions the basis for their assertion that the Mastermyne Agreement transferred with the remaining 12 employees. The Respondent says that a transfer of business occurred between Mastermyne and Sojitz Gregory pursuant to section 311 of the Act because the employees’ employment with Mastermyne terminated, within three months of (or in this case immediately after) the termination the employees were employed with Sojitz Gregory, and the transferring employees performed the same or substantially the same work that the Respondent had previously outsourced which it then in-sourced. Consequently, the Respondent argues that the Mastermyne Agreement is a transferrable instrument. The Respondent then asserts another transfer occurred from Sojitz Gregory to the Respondent effective of 26 June 2023.
The Respondent argues that the group of employees to be covered is not fairly chosen because the Applicant has failed to articulate how the group of “unidentified persons”[8] can be fairly chosen and 12 employees covered by the Mastermyne agreement cannot form part of the group whilst that agreement continues to apply to them.
The Respondent also asserts that it is not reasonable in the circumstances to make the MSD because it is self-evident that if the determination is made and bargaining commences, employees covered by the Mastermyne Agreement will inevitably be making “claims against the Respondent relating to wages and conditions of employment in circumstances where clause 3.6 of the Mastermyne Agreement prohibits such conduct.”[9]
Further, the Respondent argues that “it could not have been parliament’s intention to allow employees to circumvent the provisions of ‘in-term’ enterprise agreements, merely by signing a petition for the purposes of majority support determination. Such an outcome would not only undermine the bargaining regime set up under the FW Act, but also create significant uncertainty for all employers who have finalised enterprise agreements with their employees.”[10]
In response, the MEU argued that no part of section 237 prevents an employee seeking a majority support determination in order to commence bargaining with their employer if they are already covered by an enterprise agreement.
Further, the MEU maintains that the ‘no-extra claims clause’ in the Mastermyne Agreement relates only to claims with respect to the pay and conditions contained in that agreement. They submit that any bargaining to replace the Mastermyne Agreement can have no impact on the terms and conditions in the current agreement as they apply to transferring employees, if any, until such time as the Mastermyne Agreement either expires or is terminated.
The MEU also argues that no extra claims clauses in enterprise agreements are invalid if they conflict with “certain employee rights under the Act.”[11] In support of their argument the MEU references the decision of the Full Federal Court in Toyota Motor Corporation Australia Ltd v Marmara[12] (Toyota) as authority for the proposition that no further claims clauses are invalid to the extent that they interfere with the operation of employee bargaining rights under the Act as they did in Toyota in respect of an application to vary the relevant enterprise agreement.
The Respondent asserts that the Toyota case can be distinguished because it involved an interpretation of the construction of the relevant ‘no extra claims’ clause and deals with an application to vary an in-term enterprise agreement. The Respondent drew attention to the following reasoning:
“Further, it is a conclusion which relates only to so much of the no further claims term as would stand in the way of Toyota and its employees taking advantage of the provisions in the FW Act that deal with the subject of the variation of an enterprise agreement. In other respects, there has been no challenge to the validity of that term, and nothing we have said should be understood as going beyond that context.”[13]
Transfer of business, the application of section 58 of the Act and the ‘no extra claims clause
It is useful to deal with the legal and practical basis for the particular arguments raised by the Respondent in support of their position that the MSD should not be made before I consider the components of section 237(2) of which I must be satisfied.
Transfer of business
As set out, the Respondent asserts there were two transfers of business that have resulted in the employment of a number of employees transferring from Mastermyne to two related entities of the Respondent. The Respondent asserts that the Mastermyne Agreement is a transferring instrument that continues to have application to the transferring employees. The Applicant says they could find no evidence that any employees had transferred from Mastermyne or that any transferring employees remain employed such that the Mastermyne Agreement has any continued application to the relevant employees.
Section 311 of the Act confirms that a transfer of business occurs when the employment of the relevant employee or employees are terminated, within three months of the termination they are employed by the new employer, the work performed by the employees is the same or substantially the same and there is a connection between the old employer and the new employer. With respect to the connection between the old and new employer, section 311(5) specifies that a connection exists between the old and new employer when the new employer ceases to outsource work to the old employer.
The Respondent relies on the evidence of Mr Morton with respect to establishing the transfers of business occurred. Mr Morton gave evidence that two transfers of business had occurred with the Mastermyne Agreement applying to the transferred employees as a transferrable instrument. Whilst I have no reason to doubt that evidence, I observe that it is not corroborated with supporting documents that I expect were available to the Respondent that could have evidenced the terms of any transfer, such as contracts or other agreements about the terms of the in-sourcing from Mastermyne to Sojitz, correspondence between those parties and contemporaneous communications with the transferring employees.
Mr Brunker said in his evidence that his members had provided him with copies of their letter of offer at the time they were employed by Sojitz Gregory and the offers did not mention a transfer of business. None of those documents were placed into evidence.
There is insufficient evidence on which I can rely to make a definitive decision as to whether the transfers of business occurred as a matter of fact. I proceed to decide this matter on the basis there was likely a transfer of business. I accept the evidence of Mr Morton and on face value it appears that the employment of the Mastermyne employees was terminated, they were offered and accepted employment, initially with Sojitz Gregory and then later with the Respondent, immediately following termination, they perform the same work for each employer and the requisite connection exists because Sojitz ceased to outsource the work to Mastermyne. However, for the reasons I set out below, it is not necessary that I make a final decision in that regard.
Application of section 58 in these circumstances
In considering the Respondent’s objections, I have considered the impact of section 58 of the Act on these circumstances.
In general terms, section 58 makes clear that if an earlier agreement applies to an employee in relation to particular employment, then a later agreement comes into operation that also covers the employee in the same employment, then the later agreement cannot apply to the employee until the earlier agreement passes its nominal expiry date at which time the earlier agreement no longer applies to the employee and can never apply to the employee again.
The Respondent cautioned that it would be erroneous to take into account section 58 of the Act in reaching a view with respect to whether it was reasonable in the circumstances to make the MSD. They argued that a MSD can only enliven the commencement of bargaining and does not otherwise set the scope of the bargaining or pre-determine that an Agreement will be reached after the bargaining process has taken place. The Respondent’s position in this matter is articulated by the Full Bench in Alcoa of Australia Limited v CFMEU[14] (Alcoa), when it said: “To attempt to predict what the outcome of enterprise bargaining might be if a majority support determination is made, and then to have regard to that in deciding whether such a determination would be made, would involve the Commission taking into account an entirely speculative and irrelevant consideration.”[15]
In support of this argument, the Respondent relies on comments from the Full Bench of Fair Work Australia in Liquor, Hospitality and Miscellaneous Union v Coca-Cola Amatil (Aust) Pty Ltd[16]: “Division 8 also contains a variety of processes designed to facilitate agreement making. Within those processes, the role of a majority support determination is to commence the bargaining process, when there is majority support among employees to collectively bargain, when their employer has not agreed to do so. The effect of a majority support determination itself extends no further.”[17] Further, the making of “a majority support determination does not determine the scope of bargaining, any more than it determines the terms and conditions to apply”[18] and “[t]he making of a majority support determination does not pre-suppose that an enterprise agreement will be made containing particular terms. It does not pre-suppose than an enterprise agreement will be made at all.”[19]
It seems to me that on one hand the Respondent is asserting that it is not reasonable in all the circumstances to make the MSD because it will trigger bargaining and an outcome from the bargaining process may be a second enterprise agreement that will have initial application to only a part of the employee cohort that would otherwise be covered by the Agreement. The Respondent wishes to avoid that outcome. However, on the other hand, the Respondent submits that in accordance with the authority in Alcoa, it is incorrect to have regard to any predicted outcome from a bargaining process in deciding whether to make a MSD as the Commission would be taking into account a speculative and irrelevant consideration.
Section 58 of the Act, in my view, anticipates circumstances such as those in this matter, and should an agreement be reached in this bargaining, it is likely that section 58 will apply to allow for the co-existence and application at the enterprise of the Mastermyne Agreement to the remaining transferred employees and any new Agreement covering the remaining employees, until the nominal expiry date of the Mastermyne Agreement.
Considering the application of section 58 to these circumstances does not amount to predicting the outcome of enterprise bargaining and having regard to that in deciding whether a MSD should be made. The comments of the Full Bench in Alcoa, referenced above, concern a particular argument about the suitability of a classification of employees to inclusion in an enterprise agreement. The Full Bench held that the argument was “misconceived”[20] because the Commission was being asked to consider whether an enterprise agreement could or should contain a particular classification of employee and take that into account in refusing to make the MSD. The role of the Commission when an application for a MSD is made is to reach a view as to whether they are satisfied of the considerations contained in section 237(2) of the Act. If they are, then a MSD must be made. The MSD once made can do no more than commence the bargaining process.
No extra claims clause
The Respondent argued that a MSD should not be made because it would result in employees covered by the Mastermyne Agreement unlawfully infringing the ‘no-extra claims’ clause in that Agreement by seeking extra pay and conditions whilst the Mastermyne Agreement continued to apply to them.
The relevant clause in the Mastermyne Agreement provides as follows:
“3.6 Up to the nominal expiry date of this agreement, the Employees will not pursue any extra claims relating to wages or conditions of employment.”
Whilst the no extra-claims clause on its face could be said to prevent any further claims relating to wages and conditions “up to the nominal expiry date of this agreement”[21] when considering the scheme of the Act the clause cannot be relied on to prevent employees who may be covered by the Mastermyne Agreement from commencing bargaining for a replacement agreement during the nominal life of the current agreement. Bargaining for a replacement agreement whilst an ‘in-term’ agreement applies is a common occurrence.
I agree with the Applicant’s submission that the no-extra claims clause can only have application to prevent further claims with respect to the pay and conditions that apply pursuant to the Mastermyne Agreement during the life of that agreement. The no-extra claims clause in the Mastermyne Agreement has no relationship to or bearing on the terms that may be negotiated in a replacement agreement. I do not accept the submission of the Respondent that the no-extra claims clause prevents the employees that may be covered by the Mastermyne Agreement from bargaining for a replacement agreement.
The Act does not prevent bargaining for a replacement agreement during the life of a current agreement or prescribe or limit the time at which bargaining for a replacement agreement can commence. The Act only places limits on when protected industrial action can take place during a bargaining process, prescribing that no protected industrial action can occur before an enterprise agreement reaches its nominal expiry date.[22] The no-extra claims clause cannot operate to prevent the employees that may be covered by it from bargaining in an effort to secure a new, replacement agreement that by virtue of the operation of section 58 of the Act cannot apply to them until the expiration of the Mastermyne Agreement.
With respect to the arguments advanced by each party referencing the Full Court of the Federal Court in Toyota, I agree with the Respondent that this matter is distinguishable. The matter of Toyota considered whether a no-extra claims clause “was invalid to the extent it precluded the employer and employees from utilising the provisions of the FW Act to vary an enterprise agreement.”[23] In this matter, the Respondent is seeking to rely on the no-extra claims clause to prevent the employees covered by the Mastermyne Agreement from bargaining for a new agreement, not from varying or otherwise altering the Mastermyne Agreement.
The existence of a no-extra claims clause in an ‘in-term agreement’ that may have application to employees seeking the MSD, does not prevent those employees from seeking to commence bargaining for a replacement agreement, addressing pay and conditions that may apply to them in a future (or later) agreement.
Satisfaction that the determination can and must be made
If the Commission is satisfied that all of the requirements of section 237(2) have been met, section 237(1) requires the Commission to make the determination.
Section 237(2)(a) – majority of employees employed and who will be covered by the agreement want to bargain
The MEU relies upon the petition of employees carried out in October 2023 to support the claim that a majority of the relevant employees support the commencement of bargaining with the Respondent for an enterprise agreement.
Prior to the issuing of the Commission’s Report, dated 12 January 2024, the parties provided material to the Commission to enable a comparison to be undertaken of the names of the employees who had signed the petition and those employed by the Respondent.
The petition submitted into evidence was signed by 48 persons with the employees signing the petition on 19, 20 and 26 October 2023. The Respondent provided a list of 88 employees employed to do production and engineering work at Crinum Mine as of 20 February 2024. Once the Respondent provided a list of employees a comparison was able to be conducted of the names of employees who had signed the petition and those employed by the Respondent at the time.
As referenced above, the Commission’s Report concluded that 54.5% of employees had signed the petition confirming they wished to bargain. If 3 employees that the Respondent has identified as being employees transferred from Mastermyne are removed from the petition, then the majority of employees who wish to bargain increases to 59.21%. On either analysis, the comparison of the two records reveals a majority of employees, being more than half, wish to bargain for an enterprise agreement.
Whilst the matter needs no final conclusion, I am not convinced that transferring employees ought to be removed from consideration as to whether there is majority support, despite the submissions in that regard by the Respondent.
Section 58, as previously discussed, anticipates these circumstances and makes clear that any later agreement that comes into effect and covers an employee cannot apply until any earlier agreement that applies to an employee has passed its nominal expiry date. On this basis, it is likely that the employees covered by the Mastermyne Agreement will later be covered by any new agreement, should it be made, after the nominal expiry date of the Mastermyne Agreement. This supports a conclusion that any employees currently covered by the Mastermyne Agreement will be covered by any new agreement and should not, therefore, be excluded from seeking majority support for bargaining.
The terms of section 237(2)(a)(i) and (ii) form part of the considerations that if met, mandate the making of a MSD. This section makes clear that the Commission must be satisfied that a majority of employees who are employed by the employer, and who will be covered by the agreement, want to bargain. The transferring employees are employed by the employer and, considering section 58 of the Act, will be covered by any agreement, if made, once the Mastermyne Agreement has passed its nominal expiry date.
As I have found a majority of employees wish to bargain, whether the transferring employees are included in the petition or not, there is no need to make any findings with respect to the appropriateness of their inclusion in the petition.
I am satisfied that a majority of employees who will be covered by the agreement want to bargain.
Section 237(2)(b) – employer to be covered by the Agreement not yet agreed to bargain
Section 237(2)(b) has been satisfied. No party disputes and the evidence clearly demonstrates that the Respondent has in writing on two occasions, refused to commence bargaining with the employees.
Section 237(2)(c) – the group of employees who will be covered by the agreement was fairly chosen
Section 237(2)(c) of the Act has the effect that the Commission is not permitted to make the MSD unless it is satisfied that the group of employees who will be covered by the proposed agreement was fairly chosen. In making a determination with respect to whether the group was fairly chosen, if the agreement does not cover all of the employees of the employer, the Act requires that the Commission take into account the matters in section 237(3A), whether the group is geographically, organisationally or operationally distinct.”[24] Considerations of fairly chosen are not limited to the above consideration, but consideration must be had to whether the group of employees is geographically, organisationally or operationally distinct.
The decision of the Full Bench in INPEX Australia Pty Ltd v The Australian Workers’ Union[25] (Inpex) provided guidance to the approach to be adopted to the concepts in s.237(3A) of the Act as follows:
·“Distinctiveness within the meaning of s 237(3A) of the Act is necessarily a relative, not absolute, concept, and necessarily requires a comparison between the employees who will be covered by the proposed agreement and those who will not.”[26]
·Geographical distinctiveness includes a consideration of the work location(s) of those would be covered and other employees of the employer who would fall outside of the proposed coverage.[27]
·“As to operational distinctiveness, the term “operational” refers to an industrial or productive activity. The performance of a different role, task, skill or function is not sufficient to establish operational distinctiveness.”[28]
·“As to organisational distinctness, the term “organisation” refers to the manner in which the employer has organised its enterprise in order to conduct its operations. The performance by a group of employees of duties which are qualitatively different from duties performed by other employees may weigh in favour of a conclusion that the group is organisationally distinct; however, the mere performance by a group of employees of different tasks or roles to others may not be sufficient to render it organisationally distinct where the employees work in an integrated way with other employees to perform a particular business function.”[29]
The Respondent did not make any submission contrary to that of the MEU, that is, they did not assert that the employees were not geographically, organisationally or operationally distinct.
I accept the evidence of the MEU that the cohort of employees to be covered by the proposed agreement work in the single underground mine, for a single employer, are covered by Schedule A of the Black Coal Mining Industry Award titled “Production and Engineering Employees” and work in production and engineering.
The Respondent’s submissions with respect to whether the group of employees was fairly chosen were directed to the consideration they say the Commission ought to have to give greater weight to the prejudice to the employer’s business operations than the wishes of the majority of the employees to bargain in considering fairness.
In the matter of Alcoa, the Full Bench of the Commission confirmed as being without error the reasoning of the Commissioner in the first instance, who found in “considering fairness to the employer, the unanimous wish of the relevant group of employees to bargain should be given significant weight in the absence of a countervailing case that the selection of the group would be prejudicial to the productivity or efficient conduct of the employer’s business.”[30]
The only expression of prejudice advanced by the Respondent in this matter appeared in the correspondence of Mr Morton of 26 September 2023 wherein he expressed that “Sojitz does not wish to have multiple different agreements at one site”.[31] Upon questioning during oral submissions, the Respondent did not offer further examples of prejudice to the productivity or efficient conduct of their business.
I accept that managing two different industrial instruments for a distinct group of employees could cause inconvenience, some confusion and otherwise have an impact on the efficient conduct of the Respondent’s business. However, I note that on the employer’s case, given the purported transfer of business, they are currently managing the application of two different industrial instruments to the two different cohorts of employees – a group to whom the Mastermyne Agreement applies and the other to whom the Black Coal Mining Industry Award applies.
The MEU drew the Commission’s attention to the 76 employees employed in production and engineering at the mine that are not covered by an agreement[32] of whom a majority have made clear their wish to bargain with their employer. The MEU assert that to prevent those employees from bargaining would not meet the objectives of the Act to “encourage enterprise bargaining”[33]. In making this submission I understand the Applicant to be asserting that greater weight ought to be given to the wishes of the majority of employees in considering fairness.
In this matter, there is not the unanimous result from the petition that was the case in the matter of Alcoa, however I note the size of the workforce here is larger. Despite the majority of employees seeking majority support in this case being certainly short of unanimous, it remains that a majority of employees have expressed their wish to bargain with their employer. It is also an established fact that the Mastermyne Agreement applies to only a portion of the workforce and a significant majority of employees in production and engineering remain covered by the pay and conditions in the Black Coal Mining Industry Award.
The Respondent has raised legitimate issues with respect to the impact on productivity and efficiency in having two industrial instruments apply to the relevant employees for a period of time. I have considered their concern but have weighed that against the fact that the Respondent is already in the position about which they express concern.
In this case, I give greater weight to the interest of the employees to bargain, as evidenced by the petition, when considering whether the group has been fairly chosen, than any prejudice to the Respondent that has not been articulated in any detail or supported with evidence. I give the interests of the employees greater weight also considering the objects of the Act with respect to enterprise bargaining including to “provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits”.[34]
I do not accept the submission of the Respondent that the employees who signed the petition are unidentifiable and am satisfied that the group of employees who will be covered by the Agreement have been defined with sufficient clarity.
The group of employees to be covered by the proposed agreement are both organisationally and operationally distinct as they perform a different industrial and productive activity in the mine, distinct from work performed by other employees and undertake qualitatively different work in production and engineering. In summary, for the reasons set out, I am satisfied that the group of employees to be covered by the Agreement has been fairly chosen.
Section 237(2)(d) – whether it is reasonable in all the circumstances to make the determination
The assessment to be made with respect to reasonableness in the circumstances is a broad evaluative judgment that is in the nature of a discretionary decision having regard to all of the circumstances.[35]
The Respondent submitted that it is not reasonable in the circumstances to make the determination because 12 employees remain covered by the Mastermyne Agreement on account of two transfers of business and those employees are not entitled to bargain with respect to their pay and conditions of employment whilst a valid agreement applies to them that contains a ‘no-extra claims clause’. I have addressed these considerations earlier in the decision. Whilst I have approached the consideration of the issues in this matter on the basis that the transfers of business occurred, I have found that the ‘no-extra claims clause’ does not prevent any employees covered by the Mastermyne Agreement from bargaining for a replacement agreement or otherwise make it unreasonable for the MSD to be made.
As I have found no impediment in the scheme of the Act to transferring employees subject to a transferring instrument seeking a MSD to commence bargaining for a replacement agreement and clearly no limitation on the vast majority of employees not covered by an Agreement to commence bargaining should a majority of them wish to bargain, I find that it is reasonable in all of the circumstances to make the MSD.
The determination
Given that I am satisfied that all of the statutory prerequisites have been met, I am obliged by s.237(1) of the Act to make the MSD in this matter. The Determination[36] is being issued in conjunction with this Decision.
COMMISSIONER
Appearances:
C Newman for the Mining and Energy Union.
T Spence, instructed by V Lac of Franklin Athanasellis Cullen Lawyers, with permission for Sojitz Gregory Crinum Pty Ltd.
Hearing details:
Adelaide (Video via MS Teams)
2024
23 February.
[1] Letter of S Brunker to M Morton, dated 16 September 2023 - Annexure SB1 to the Statement of Mr Shane Brunker.
[2] Affidavit of Mr Michael Morton, dated 20 February 2024, at paragraph 12.
[3] Letter of M Morton to S Brunker, dated 26 September 2023 – Annexure SB2 to the Statement of Mr Shane Brunker.
[4] Statement of Mr Shane Brunker, undated, at paragraph 13.
[5] Letter is undated but date is confirmed in the statement of Mr Shane Brunker at paragraph 16.
[6] Statement of Mr Shane Brunker at paragraph 9.
[7] Applicant’s Outline of Submissions at paragraph 10 c.
[8] Respondent’s Outline of Submissions, at paragraph 20.
[9] Respondent’s Outline of Submissions in Reply at paragraph 15.
[10] Ibid, at paragraph 16.
[11] Applicant’s Outline of Submissions at paragraph 18.
[12] [2014] FCAFC 84.
[13] Ibid at [111].
[14] [2015] FWCFB 1832 (‘Alcoa’).
[15] Alcoa at [31].
[16] [2009] FWAFB 668 as extracted in Alcoa.
[17] Alcoa at [30] referencing Liquor, Hospitality and Miscellaneous Union v Coca-Cola Amatil (Aust) Pty Ltd (‘Amatil’) at [28].
[18] Ibid, Amatil at [39].
[19] Alcoa at [31].
[20] Ibid.
[21] Mastermyne Crinum Enterprise Agreement 2021 at clause 3.6.
[22] See sections 413(6) and section 417 of the Act.
[23] Respondent’s Outline of Submissions in Reply at paragraph 11.
[24] Section 237(3A) of the Act.
[25] [2021] FWCFB 1038.
[26] Ibid at [33].
[27] Ibid - drawn from [34].
[28] Ibid at [35].
[29] Ibid at [37].
[30] Alcoa at [27], referring to [2014] FWC 7123 at [71].
[31] Statement of Mr Shane Brunker at annexure “SB2”.
[32] This is qualified by whether a transfer of business occurred, which is not accepted the Applicant.
[33] Applicant’s Outline of Submissions at paragraph 22.
[34] Section 171(a) of the Act.
[35] Alcoa at [24].
[36] PR776274.
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