Monja Holdings Pty Ltd

[2018] FWC 5569

[2018] FWC 5569

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Monja Holdings Pty Ltd
(AG2018/2088)

VICE PRESIDENT HATCHER SYDNEY, 4 SEPTEMBER 2018

Introduction and factual background

[1] An application has been made by Monja Pty Ltd (Monja) for approval of the Monja Holdings Pty Ltd Enterprise Agreement 2018 (Monja Agreement) pursuant to s 185 of the Fair Work Act 2009 (FW Act). This decision concerns whether Monja complied with s 180(3) of the FW Act such as to permit the Monja Agreement to be approved.

[2] Section 180(3) of the FW Act provides:

(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:

(a) the time and place at which the vote will occur;

(b) the voting method that will be used.

[3] The “access period” referred to in the above provision is defined in s 180(4) as follows:

(4) The access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1).

[4] The voting process referred to in s 181(1) is the process whereby an employer requests relevant employees to vote to approve a proposed enterprise agreement.

[5] Section 180(3) is a “pre-approval step”, compliance with which is a necessary element for an enterprise agreement to have been “genuinely agreed”: s 188(a)(i). Such genuine agreement is a pre-requisite for the approval of an enterprise agreement: s 186(2)(a). Therefore an enterprise agreement cannot be approved if s 180(3) has not been complied with.

[6] In Construction, Forestry, Maritime, Mining and Energy Union and Ors v CBI Constructors Pty Ltd 1(CBI decision) a decision issued on 21 June 2018, the Full Bench said in relation to the determination of when, under s 180(4), the access period commences and ends:

“[42] The above considerations cause us to conclude that s 180(4) is to be construed on the basis that the access period consists of seven clear calendar days, and that by the application of s 36(1) of the AI Act 2 the access period ends at the end of the calendar day immediately preceding the day on which the voting process for a proposed agreement commences.”

[7] This Full Bench decision confirmed the longstanding position concerning the interpretation of s 180(4) established in McKechnie Iron Foundry (2010) 3 and Hydro Electric Corporation (2014).4 It did not represent the statement of any new legal proposition.

[8] The Form F17 statutory declaration made by Craig Brindson on 16 May 2018 that was filed together with the application for approval of the Monja Agreement states (at [2.8]) that voting for the agreement commenced on 15 May 2018. The access period therefore consisted of the seven clear calendar days of 8 to 14 May 2018. Compliance with s 180(3) required Monja to take all reasonable steps to inform relevant employees of the time, place and method of the vote by the start of the access period - that is, by the start of the calendar day 8 May 2018 (immediately after midnight on 7 May 2018). However, Mr Brindson’s statutory declaration, in response to the question (at [2.5)] “When did you notify the relevant employees of the date and place at which the vote was to occur and the voting method to be used?”, states the following: “On 8 May 2018, all employees were told that the vote would take place on Tuesday 15 May at the North Geelong Secondary School work site at 2.30pm. The vote was taken by a show of hands.” This would appear to mean that employees were not advised of the time, place and method of the vote until after the access period had begun.

[9] This apparent difficulty was identified in email correspondence from the Commission to Monja dated 19 July 2018, and Monja was invited to consider whether it wished to proceed with its application. In its correspondence in response dated 20 July 2018 Monja relevantly stated:

“Given that the agreement application is consistent with the Commission’s guidance material that was available at the time, the Applicant is of the view that they should not have to re-lodge the application in light of the decision.

The Applicant is therefore prepared to make submissions in light of the above, in the hope that in the interests of natural justice, the relevant Commission Member will exercise their discretion to approve the agreement…”

[10] Monja requested, in response to an invitation from the Commission, an opportunity to make further submissions in respect of the s 180(3) issue. Consequently, in correspondence dated 7 August 2018, Monja submitted the following (footnotes omitted):

“1. The Applicant provides the following submission in relation to the application for approval of the Monja Holdings Pty Ltd Enterprise Agreement 2017.

2. The Applicant submits that they have complied with their obligations pursuant to s 180(3) of the Fair Work Act 2009 (Cth) (the Act).

3. For the reasons contained herein, the Applicant respectfully submits that the Commission should exercise its discretion to approve the application.

Reasonable Steps

. . .

5. The Applicant notes that the Act does not ‘…require the employer to do, in absolute terms, the things set out’ in this subsection. Instead, the Act simply requires that all reasonable steps have been taken to notify the relevant employees of the vote by the start of the access period.

6. The Applicant submits that they have complied with section 180(3) of the Act in that they have taken ‘all reasonable steps’ to notify the relevant employees of the voting method from the start of the access period, based on the information available at the time.

7. As per the Form F17 submitted to the Commission, the Applicant took steps to notify all employees of the time, place and method of the vote on the morning of 8 May, 2018.

8. The Applicant did so, in good faith, based on information available at the time, including:

i. FWC Resource – Step by Step Guide to making a Single Enterprise Agreement that is not a Greenfields Agreement

ii. FWC Resource – Single Enterprise Agreement Date Calculator

iii. Previous Agreement Approval Decisions of the Commission

9. The Applicant submits that they acted in reliance upon the Fair Work Commission’s view at the time the Application was made - prior to the decision of Construction, Forestry, Maritime Mining and Energy Union and Ors v CBI Constructors Ltd, which was delivered on 21 June 2018.

10. The Applicant therefore submits that ‘reasonable steps’ for the purposes of s 180(3) of the Act should be assessed with reference to the ‘particular knowledge’ available to the parties at the time of the application.

11. Furthermore, the Applicant respectfully suggests that in fairness to the parties concerned, the Application should be assessed in relation to the prevailing standard at the time the Agreement was lodged – whereby employees could be notified of the vote 7 calendar days prior to it occurring.

….

18. It must be noted that the information relied upon by the Applicant, at the time of obtaining the advice, and indeed at the time of lodgement, was correct for all intents and purposes. The advice was not simply ‘incorrect’, but was correct based on the prevailing view of the Fair Work Commission at the time.

19. The Applicant also respectfully disagrees with the notion that the ‘source of the incorrect advice is irrelevant’. This should not be the case where the Fair Work Commission has a statutory obligation to ‘[provide] assistance and advice about its functions and activities.’ The Applicant submits that as the statutory authority responsible for approval of enterprise agreements, the advice and assistance provided by the Commission, as one of its lawful functions, should be able to be relied upon.

Conclusion

20. Finally, the Applicant respectfully disagrees that that the Commission has no discretion in relation to such matters when determining whether or not the statutory requirements have been met in light of the requirements of s 180(3) of the Act.

21. Pursuant to s 577 of the Act, the Commission is required to exercise its powers in a manner that is ‘fair and just,’ and ‘avoids unnecessary technicalities’. The Applicant respectfully submits that in the interests of natural justice, the Commission should have due regard to the circumstances prevailing at the time the Application was lodged.

22. The Applicant also notes that employees to be covered by the Agreement concerned were provided with access to the Agreement more than two weeks prior to the vote. As such, employees had ample opportunity to consider the Agreement prior to voting, and would not be disadvantaged by an approval in the circumstances.

23. In light of the above, the Applicant therefore requests that the Commission find that the Applicant has ‘taken all reasonable steps’ to notify the employees of the vote at the commencement of the access period, based on the ‘correct’ information that was available from the Commission at the time of lodgement.”

Consideration

[11] It is clear that Monja took no step at all to inform relevant employees of the time, place and method of the vote to approve the Monja Agreement by the start of the access period, which commenced at the beginning of the calendar day 8 May 2018.

[12] The written submissions of Monja in substance raise three points, with which I will deal in turn. First, Monja submits that its notification of the time, place and method of the vote on 8 May 2018 constituted the taking of “all reasonable steps” having regard to the information available to it at the time. I do not accept that it is open to find, where there has been a failure to take any step at all to notify employees of the time, place and method of the vote by the start of the access period because of an incorrect understanding of the law, that nonetheless all reasonable steps have been taken in compliance with s 180(3). Additionally, and in any event, it cannot be accepted that Monja’s incorrect understanding of the law was derived from advice or information disseminated from the Commission itself:

(1) As earlier explained, the CBI decision confirmed rather than altered the longstanding position concerning the interpretation of s 180(4) which had been adopted in decisions of the Commission/FWA dating back to 2010.

(2) It is not correct that the “Making a Single Enterprise Agreement - Step by step guide to making a Single Enterprise Agreement that is not a greenfields agreement” on the Commission’s website as it was at all relevant times prior to the CBI decision supported the approach taken by Monja; rather it was consistent with the longstanding position that was confirmed in the CBI decision. It made clear that the notification of the time, place and method of the vote had to occur by the start of the access period (at p.10), and gave the following example to demonstrate that the access period consisted of the 7 calendar days prior to the date of the commencement of the vote (at p.11):

“Example

If an employer plans to request that employees vote on the proposed agreement on Wednesday 25 February 2015, the access period will run from the morning of Wednesday 18 February 2015 to the evening of Tuesday 24 February 2015.”

(3) Likewise the “Enterprise Bargaining Benchbook” on the Commission’s website as it was at all relevant times prior to the CBI decision made clear (at p.89) that notification of the time, place and method of the vote had to occur by the start of the access period, and used the following example to demonstrate that the access period consisted of the 7 clear calendar days prior to the date of the commencement of the vote:

“Example

If an employer plans to request that employees vote on the proposed agreement on Wednesday 25 February 2015, the access period will run from after midnight Tuesday 17 February 2015 to midnight Tuesday 24 February 2015.”

(4) The Commission’s date calculator on the website at the relevant time correctly identified the date of the first day of the access period. It did not state that the notification of the time, place and method of the vote could occur during that day, although it may be accepted that the position may have been clearer if it had specified that the notification had to occur before that date.

[13] Second, it is not open “in fairness to the parties concerned” to approve the application on the basis of “the prevailing standard at the time the Agreement was lodged”. The Commission does not have any discretion to depart from the proper interpretation of s 180(3) and (4). To do so would involve the Commission exceeding its jurisdiction. In any event, as already explained, the position articulated in the CBI decision was the “prevailing standard” at the time Monja’s application for approval of the Agreement was lodged.

[14] Third, s 577 does not assist Monja’s position. The section concerns the manner in which the Commission must perform its functions and exercise its powers; it does not itself confer any power on the Commission. In particular, there is nothing in s 577 which empowers the Commission to determine applications for approval of enterprise agreements other than as required by ss 186 and 187.

[15] I find that Monja did not comply with s 180(3), and accordingly I cannot be satisfied under s 186(2)(a) that the Agreement was genuinely agreed by the employees covered by it having regard to s 188(a)(i). The application for approval of the Agreement must therefore be dismissed. I note that it would be open to Monja to undertake again the pre-approval steps required in s 180 and request relevant employees to vote again to approve the proposed agreement pursuant to s 181. If it takes this course, it can then make a fresh application for approval of the agreement.

VICE PRESIDENT

 1   [2018] FWCFB 2732

 2   Acts Interpretation Act 1901 (Cth)

 3   [2010] FWA 3171

 4   [2014] FWC 4169

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