MJC Fire Protection Pty Ltd

[2016] FWC 3904

[2016] FWC 3904

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

MJC Fire Protection Pty Ltd
(AG2016/2817)

COMMISSIONER ROE MELBOURNE, 17 JUNE 2016

Application for approval of the MJC Fire Protection Pty Ltd Enterprise Agreement 2016 - 2020. Section 188 genuine agreement. Agreement not approved.

[1] An application has been made for approval of an enterprise agreement known as the MJC Fire Protection Pty Ltd Enterprise Agreement 2016 - 2020 (the Agreement). The application was made pursuant to Section 185 of the Fair Work Act 2009 (the Act). It has been made by MJC Fire Protection Pty Ltd. The Agreement is a single enterprise agreement.

[2] The CEPU objected to the approval of the Agreement on two grounds. Firstly, the CEPU submit that there are a number of BOOT issues. Secondly, the CEPU submit that the Agreement was not genuinely agreed to by the employees covered by the Agreement.

[3] Otherwise I am satisfied and it is not in dispute that the requirements of Sections 186 and 187 as are relevant to this application for approval have been met. The Agreement does not cover all of the employees of the employer, however, taking into account the factors in Section 186(3) and (3A) I am satisfied that the group of employees was fairly chosen.

BOOT issues

[4] In respect to the BOOT issues I note that the rates of pay are more than 50% above the Plumbing and Fire Sprinklers Award 2010 rates except for first and second year adult apprentice rates which are respectively 6% and 17% above the Award rates. I am satisfied and it is not in dispute that the Plumbing and Fire Sprinklers Award 2010 is the relevant Award for the purposes of the BOOT. I am satisfied that these higher rates ensure that employees are better off overall notwithstanding the issues raised by the CEPU, save for the following matters.

[5] The provisions of the Agreement for the extra week of annual leave for continuous shift workers are inferior to the Award. Prior to approving the Agreement I would therefore require an undertaking that:

“In lieu of clause 50.2 of the Agreement the definition of continuous shiftworker as follows shall apply:

continuous shiftworker means an employee engaged to work in a system of consecutive shifts throughout the 24 hours of each of at least six consecutive days without interruption (except during breakdown or meal breaks or due to unavoidable causes beyond the control of the employer) and who is regularly rostered to work those shifts.”

[6] I would also require an undertaking that Clause 34.1(a) of the Award shall apply as follows:

“In addition to the entitlement to annual leave in the NES, employees who work or are required to be on call for any part of 26 weekends or more in any year of employment are entitled to an additional week’s annual leave on the same terms and conditions.”

[7] The Agreement at Clause 18.1.4 provides that apprentices who fail will not receive productivity allowance payments until they have passed the previous year’s training and will re-take the subjects or re-sit the exams in their own time. Productivity allowance is not provided for in the Agreement and the requirement to re-sit exams or re-take subjects in the apprentice’s own time disadvantages the apprentice when compared to the Award. Prior to approving the Agreement I would therefore require an undertaking that Clause 18.1.4 not apply.

[8] The Agreement at Clause 11.1.4 provides for employees to meet the cost of lost tools in certain circumstances including theft during working hours. This could be a significant disadvantage to employees when compared to the Award. The disadvantage could outweigh the other advantages of the Agreement in some cases, particularly for adult apprentices whose rates are not particularly high and for those who had been employed for a relatively short period. Prior to approving the Agreement I would therefore require an undertaking that Clause 11.1.4 not apply or in the alternative not apply to apprentices, casual employees or employees with less than one year of service.

[9] The parties agreed that the reference in Clause 27.3.1 to superannuation is in error and the reference should be to redundancy. This matter could also be rectified by an undertaking.

Genuine Agreement issues

[10] An Agreement cannot be approved unless the Fair Work Commission is satisfied that the agreement has been genuinely agreed to by the employees covered by the agreement (Section 186(2)(a)). This is further defined by Section 188 of the Act:

“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 the FWC 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.”

[11] The main points of evidence concerning the agreement process are as follows:

a. The notification time for bargaining for the Agreement was 7 December 2015. The F17 Statutory Declaration signed by Mr Mark Caldwell as a director for the company states that all employees were given the notice of representational rights on 7 December 2015. However, Mr Mark Caldwell gave evidence in proceedings that employees, other than Mr Sawyer, were in fact issued with the notice of representational rights within approximately one week of 7 December 2015. No attempt was made to provide Mr Sawyer, who worked with Mr Allen Caldwell (Mr Mark Caldwell’s father) at the Pascoe Vale site, with the notice until 18 January 2016. Most of the other employees worked at sites in the Dandenong area.

b. Between 13 January 2016 and 20 January 2016 eight employees signed a notice nominating Jason Caldwell to be their bargaining representative for the MJC Fire Protection Pty Ltd Enterprise Agreement 2016-2020. Jason Caldwell did not nominate himself to be his own bargaining representative. Mr Jason Caldwell is the son of the director of the business, Mr Mark Caldwell. Mr Mark Caldwell was present when all except for one employee signed the form nominating Mr Jason Caldwell as bargaining representative. Mr Sawyer signed on 18 January 2016. Mr Sawyer did not have any contact with Mr Jason Caldwell during the bargaining period and it was Mr Mark Caldwell who asked him to sign the form on 18 January 2016 appointing Mr Jason Caldwell.

c. Mr Mark Caldwell says that at the same time as he asked Mr Sawyer to sign the notice appointing Mr Jason Caldwell as the bargaining representative, he also gave Mr Sawyer a copy of the notice of representational rights. He says that this was the first occasion when he attempted to provide Mr Sawyer with the notice. Mr Sawyer says that he was only given one piece of paper, the appointment form and he was never given the notice of representational rights.

d. When Mr Mark Caldwell approached Mr Sawyer on 18 January 2016 he was working on a job. Mr Caldwell did not ask Mr Sawyer to stop working. Mr Mark Caldwell says that he tried to explain to Mr Sawyer what the appointment notice was. Mr Mark Caldwell says that he encouraged Mr Sawyer to read the notice of representational rights but that Mr Sawyer was not interested. He does not suggest that he attempted to explain the content of the notice. Mr Sawyer says that he was only given one piece of paper and that was the nomination form. He denies that he was given the notice of representational rights or that there was any attempt to give him that notice. Mr Sawyer says that the nomination form was not explained to him and that he did not read the form because he was busy. Mr Sawyer says that Mr Jason Caldwell was not mentioned in the conversation. Mr Sawyer says that if he knew that the form was to appoint Mr Jason Caldwell as his bargaining representative rather than the union he would not have signed.

e. Mr Sawyer has been a member of the CEPU for 36 years.

f. Mr Mark Caldwell declared in the F17 Statutory Declaration that he provided employees on 7 March 2016 with copies of the Agreement and a notice which set out the date, place and method of voting along with a ballot paper. The date of the vote was stated to be 4 April 2016 and the place was specified as the Northcote site. However, in evidence Mr Mark Caldwell conceded that the copies of the Agreement and the notice about the vote were provided to employees, other than Mr Sawyer, at various dates within a week or two of 7 March 2016. Mr Mark Caldwell says that at some stage during this period he tried to give Mr Sawyer a copy of the Agreement but that Mr Sawyer made his opposition to an Agreement not involving the union clear. Mr Mark Caldwell says that Mr Sawyer made it clear that he followed the union policy. Mr Sawyer denies that he was offered the Agreement or the notice concerning voting at any stage prior to the vote on the Agreement.

g. Mr Mark Caldwell declared in the F17 Statutory Declaration that there were 10 employees who would be covered by the Agreement and that 10 employees voted and 9 voted in favour of the Agreement. However, in proceedings Mr Caldwell accepted that Mr Sawyer did not vote and was not given the opportunity to vote. Mr Caldwell said that he assumed that Mr Sawyer would have voted against the Agreement if he had had the opportunity. Mr Caldwell accepted that only 9 of the 10 employees voted.

h. On 8 March 2016 and 9 March 2016 eight employees signed a notice that “we the undersigned understand that the CEPU (Plumbing – Victorian Branch) has approached our company - MJC Fire Protection Pty Ltd wishing to negotiate with the company in connection with an enterprise agreement. We do not want the union involved in any negotiations with the Company. We wish to negotiate with the company by ourselves”. This document was signed after the commencement of the 7 day access period on 7 March 2016. There were no negotiations and no changes were made to the Agreement after 7 March 2016. Mr Sawyer did not sign the notice but Mr Jason Caldwell did. Mr Mark Caldwell agreed that around this time he was aware that Mr Sawyer was not supportive of the Agreement and wanted to follow union policy.

i. During the period from 7 December 2015 and 7 March 2016 Mr Jason Caldwell, Mr Sawyer and some other employees were members of the CEPU. It is not disputed that their work as sprinkler fitters fell within the coverage of the CEPU. The members of the union other than Mr Jason Caldwell and Mr Sawyer signed both the notice appointing Mr Jason Caldwell as bargaining representative and the notice of 8 and 9 March advising that they did not want the union involved in the negotiations. Two employees were engaged after the notification time but prior to the ballot and they participated in the ballot but did not sign either notice. There was no requirement to issue these two employees with the notice of representational rights.

j. The CEPU is covered by the existing agreement involving the employees and MJC. The CEPU was involved in the bargaining of the existing agreement and supported that agreement.

k. The employees who will be covered by the Agreement, including Mr Sawyer, receive their pay slips and other communications from the company administration by email on a regular basis. Mr Mark Caldwell agrees that the notice of representational rights, the copies of the Agreement and the notice in respect to time and place and method of voting could have been provided to employees by email. Mr Mark Caldwell says that it did not occur to him.

[12] In this case the CEPU argues that:

• Section 180(2) was not complied with because during the access period the employer did not take “all reasonable steps to ensure” that an employee who will be covered by the Agreement, Mr Sawyer, was either given a copy of the agreement or had access throughout the access period to a copy of the agreement.
• Section 180(3) was not complied with because the employer did not take all reasonable steps to notify Mr Sawyer by the start of the access period of the time and place at which the vote will occur and the voting method which will be used.
• Section 180(5) was not complied with because the employer did not take all reasonable steps to ensure that the effect of the terms of the Agreement were explained to Mr Sawyer.
• Section 181(2) was not complied with in that Mr Sawyer was not given notice of representational rights and Mr Sawyer was employed at the notification date which was 7 December 2015.
• Section 182(1) is not met because Mr Sawyer did not have the opportunity to vote. The F17 Statutory Declaration of the employer states that 10 employees were covered by the Agreement and all 10 voted. The employer now concedes that only 9 of the 10 employees voted and that the employer assumed Mr Sawyer would have voted against the Agreement.
• Section 188(c) is not met because there are other reasonable grounds for believing that the Agreement has not been genuinely agreed to by employees. In particular the CEPU refer to breach of good faith bargaining requirements by excluding the CEPU from bargaining notwithstanding that they were a bargaining representative at the notification time and continued to be a bargaining representative until around the beginning of the access period. The CEPU also argues that the employee bargaining representative was not sufficiently independent of the employer and that this is a reasonable ground for finding that there has not been genuine agreement.
• The CEPU also argued that employees had not been advised of the application for the approval of the Agreement as required by the legislation. I do not consider this matter further as there is no reason to doubt the evidence of the company that they took reasonable steps to advise employees of the application.

[13] I am satisfied that no steps were taken to provide Mr Sawyer with the notice of representational rights within 14 days of the notification time. For the reasons I have given in Uniline Australia Limited 1 the requirements of Section 188(a)(ii) are not complied with unless the notice is issued within 14 days of the notification time. As no steps were taken to issue the notice to Mr Sawyer within that time period the requirements of Section 188(a)(ii) are not met. The purpose of the legislation is to ensure that employees are advised of their rights within reasonable time so that they, or their chosen representative or their default union representative can participate in bargaining and/or influence the progress of bargaining before things are settled or the die is cast. Mr Sawyer was denied this opportunity as he was not given advice of his rights until 18 January 2016 (if Mr Mark Caldwell’s evidence is accepted). In the period between 7 December 2015 and 18 January 2016 Mr Mark Caldwell organised almost all the other employees to sign a notice appointing Mr Jason Caldwell as the bargaining representative as an alternative to bargaining with the union. If I am wrong in concluding that there is a breach of Section 188(a)(ii) then in the circumstances of this case I consider that the failure to provide the notice in a timely manner as required by Section 173(3) provides another reasonable ground for believing that the agreement has not been genuinely agreed to by the employees as required by Section 188(c).

[14] There is conflicting evidence as to whether or not Mr Sawyer was given a notice of representational rights on 18 January 2016. I prefer the evidence of Mr Sawyer that he only received one piece of paper on that day and that was the notice he signed which nominated Mr Jason Caldwell as the bargaining representative. Mr Sawyer’s evidence was consistent and I consider that he would recall if there had been more than one piece of paper. I do not consider that Mr Mark Caldwell provided a credible explanation as to why there was no attempt to provide Mr Sawyer with the notice of representational rights prior to the time when he was seeking signatures on Mr Jason Caldwell’s nomination form. For this reason I do not accept that all reasonable steps were taken by the employer to provide Mr Sawyer with a copy of the notice as required by Section 173 and Section 188(a)(ii). In circumstances where Mr Sawyer was not aware of his rights because he had not received the notice of representational rights, his evidence that he did not understand the effect of the notice he signed appointing Mr Caldwell as employee bargaining representative is persuasive. In these circumstances, given that Mr Sawyer had not been provided a valid notice of representational rights his appointment of Mr Jason Caldwell as a bargaining representative cannot be valid.

[15] Mr Mark Caldwell concedes that Mr Sawyer was not provided with a copy of the Agreement or the notice concerning the voting or the opportunity to vote or an explanation about the effect of the Agreement. These accepted facts are contrary to what is stated in the F17 Statutory Declaration. There are a number of other important matters where the evidence directly contradicts the F17 Statutory Declaration. It is in this context that I conclude that the employer failed to take all reasonable steps to provide Mr Sawyer with a copy of the Agreement or the notice concerning the voting or the opportunity to vote or an explanation about the effect of the Agreement. This information could have been provided to Mr Sawyer in a timely manner by email. In this context I do not accept that reasonable steps were taken even if I was to accept the evidence of Mr Mark Caldwell. I accept that Mr Mark Caldwell may have intended to provide Mr Sawyer with a copy of the Agreement and found Mr Sawyer to be hostile to the idea of a non-union Agreement. However, this does not constitute reasonable efforts to provide Mr Sawyer with a copy of the Agreement. I prefer the evidence of Mr Sawyer that he did not refuse to accept a copy of the Agreement and the notice concerning the vote. I accept the evidence of Mr Mark Caldwell that he did not feel that Mr Sawyer would be receptive to hearing from him about the Agreement. Taken together this leads to me to the conclusion that Section 188(a)(i) is not satisfied.

[16] It is not necessary to determine the issue of whether or not Mr Jason Caldwell was a bargaining representative independent from the employer. The fact that he is the director’s son does not establish the necessary lack of independence. However, the fact that it was the director not Mr Jason Caldwell who canvassed Mr Sawyer to get his son nominated as Mr Sawyer’s bargaining representative does raise some questions. Mr Jason Caldwell was unwell on the day of the hearing of this matter and it would be unfair and inappropriate to draw any conclusions without hearing form Mr Jason Caldwell.

[17]
I am satisfied that because Mr Sawyer’s appointment of Mr Jason Caldwell as his bargaining representative was not valid, the CEPU was Mr Sawyer’s bargaining representative during the period from 7 December 2015 until the Agreement was made. I am also satisfied that Mr Jason Caldwell was a member of the CEPU between 7 December 2015 and 7 March 2016 and did not appoint another person to be his bargaining representative during that period. I accept that on 8 or 9 March 2016 Mr Jason Caldwell effectively revoked the CEPU’s status as his bargaining representative by signing the petition. Mr Krajewski on behalf of MJC Fire Protection argued that I should infer that Mr Jason Caldwell had revoked the CEPU status at an earlier time when he accepted appointment as a bargaining representative on behalf of a number of other employees. I do not accept that submission. There will be situations where an employee is appointed as a bargaining representative for other employees whilst the union remains as the default bargaining representative for the appointed employee. For example this could occur where a number of non-union employees appoint the local union delegate as their bargaining representative. I do not consider that there is sufficient evidence before me to conclude that Jason Caldwell revoked the CEPU status as his bargaining representative.

[18] I am satisfied and it is not contested that all of the negotiations for the Agreement took place between the notification time, 7 December 2015, and the start of the access period on 7 March 2016. I am satisfied that Mr Mark Caldwell on behalf of the company sought to exclude the CEPU from those negotiations. He was actively involved in the process where employees signed a form nominating Mr Jason Caldwell as a bargaining representative. He considered that this process excluded the CEPU as a bargaining representative. I am satisfied that the CEPU was in fact the bargaining representative for Mr Jason Caldwell and Mr Sawyer. The exclusion of the CEPU from the bargaining process in these circumstances provides strong grounds for concluding that Agreement was not genuinely agreed to by employees. Of course it is possible that the inclusion of the CEPU in the bargaining process may not have changed the outcome of the bargaining process. However, I can only be satisfied that there has been genuine agreement in circumstances where employees have had the opportunity to be represented in accordance with the Act. That opportunity was denied in this case.

[19] I am not satisfied that the requirements in each of Section 188(a), (b) or (c) have been met. The exclusion of the CEPU from the bargaining in circumstances where a valid notice of representational rights was not issued to Mr Sawyer and in circumstances where the CEPU was the default representative for at least one of the employees during the period between notification time and the beginning of the access period leads me to conclude that there are other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees (Section 188(c)). The failure to provide Mr Sawyer with the opportunity to vote would not have altered the outcome of the ballot, however, in the context of the overall bargaining it discredits the validity of the ballot process (Section 188(b)). For the reasons discussed earlier I am satisfied that a number of the procedural requirements in Section 188(a) have not been met.

[20] I am not satisfied that the agreement has been genuinely agreed to by the employees covered by the agreement and therefore I cannot approve the Agreement. The application is dismissed.

COMMISSIONER

Appearances:

Mr R Krajewski and Mr M Caldwell appeared for the Applicant.

Mr P Coffey and Mr P McCrudden appeared for the CEPU.

Hearing details:

2016

Melbourne by video to Sydney

June 14

 1   [2016] FWC 2973.

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