MTCT Services Pty Ltd
[2019] FWCA 4634
•16 JULY 2019
| [2019] FWCA 4634 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
MTCT Services Pty Ltd
(AG2018/6909)
MTCT SERVICES PTY LTD ESSO OFFSHORE AND ONSHORE MAINTENANCE SERVICES ENTERPRISE AGREEMENT 2018
Manufacturing and associated industries | |
COMMISSIONER CIRKOVIC | MELBOURNE, 16 JULY 2019 |
Application for approval of the MTCT Services Pty Ltd ESSO Offshore and Onshore Maintenance Services Enterprise Agreement 2018 – whether Company took “all reasonable steps” to provide material – whether casual employees “employed at the time”.
[1] An application has been made for approval of an enterprise agreement known as the MTCT Services Pty Ltd ESSO Offshore and Onshore Maintenance Services Enterprise Agreement 2018 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by MTCT Services Pty Ltd (the Company). The Agreement is a single enterprise agreement.
[2] For the reasons that follow, I have approved the Agreement.
Background
[3] The Agreement proposes to cover employees that perform mechanical and electrical maintenance services activities at the following facilities owned by ESSO Australia Pty Ltd:
(a) the Longford Gas Processing and Crude Stabilisation Plant and adjacent heliport located at Garretts Road, Longford, Victoria (Longford);
(b) the Long Island Point Fractionation Plant, located on Long Island Drive in Hastings, Victoria (LIP);
(c) the Barry Beach Marine Terminal located on Main Access Road, Agnes, Victoria (BBMT); and
(d) 23 offshore oil and gas platforms located in the Bass Strait (the Offshore Sites). 1
[4] The following unions were involved in the bargaining relating to the Agreement:
• the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU);
• the Australian Workers’ Union (AWU); and
• the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU);
(collectively the Unions).
[5] On 14 January 2019 the Unions’ representative wrote to my chambers advising that the Unions opposed the approval of the Agreement, and wished to be heard.
[6] The matter has a lengthy procedural history. My chambers made several requests for information pursuant to s.590, relating to matters of which I need to be satisfied in approving the Agreement. In addition, pursuant to the Unions’ request to be heard, the matter was programmed for a hearing and the filing of submissions. On 1 February 2019, the Unions filed an F52 Application for Orders to Produce. Those Orders were issued on 5 February 2019 and were requested to be set aside by the Company on 8 February 2019. I determined the issues relating to the Orders to Produce in my decision of 8 March 2019, 2 and accordingly issued orders, including a confidentiality order.3
[7] The matter went to arbitration hearing on 28 May 2019. Mr Terence Elliott and Mr Aaron Young gave evidence for the Company and were cross examined by the Unions. The matter was adjourned part-heard and subsequently listed for further hearing on 27 June 2019.
[8] On 24 June 2019, the Unions’ representative sent an email to my chambers as follows:
“We write to advise that on behalf of the Unions for which we act, we hereby withdraw all of our objections and submissions in this proceeding, and no longer wish to make any submissions or otherwise be heard in this matter.”
(the Unions’ Withdrawal)
[9] Following the Unions’ Withdrawal, the remainder of the hearing was conducted on 27 June 2019. The Company completed its closing submissions. The Unions did not attend.
[10] Notwithstanding the comprehensive nature of the Unions’ Withdrawal, in order to approve the Agreement I must be satisfied of my own accord of the mandatory criteria in the Act. The Unions filed substantial submissions on 1 February 2019 and 23 April 2019, filed evidence and cross-examined the Company’s witnesses. In determining this matter I have taken the Unions’ submissions, evidence and cross-examination into account, but have done so bearing in mind that the Unions have in principle withdrawn their submissions, and do not oppose the approval of the agreement.
[11] None of the Unions have filed form F18s or otherwise indicated that they wish to be covered by the Agreement.
Issues requiring determination
[12] The contentious aspects of the Agreement approval were identified through correspondence between the Commission and the Company, and the Unions’ submissions. These issues are:
(a) the Company’s compliance with the requirement to give the notice of employee representational rights (the NoERR) (s.173(1));
(b) the Company’s compliance with the requirement to provide materials during the access period (s.180(2));
(c) the Company’s compliance with the requirement to notify employees of the place of the vote (s.180(3));
(d) whether there is a valid majority in the vote to approve the Agreement;
(e) entitlement of casual employees to annual leave under the National Employment Standards (the NES);
(f) the better off overall test (the BOOT) in relation to modification of rosters (clause 34.3); and
(g) the correct signing of the Agreement.4
[13] I will deal with each of these issues separately.
The Company’s compliance with the requirement to provide notice of the right to be represented
[14] Section 173 of the Act states:
“(1) An employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who:
(a) Will be covered by the agreement; and
(b) Is employed at the notification time for the agreement.
…
(3) The employer must give the notice as soon as practicable, and not later than 14 days, after the notification time for the agreement.”
[15] The “notification time” is the time when the employer agrees to bargain or initiates bargaining, which in this case was 11 October 2019. 5
[16] As noted at [3] above, the Company’s employees with respect to this Agreement are distributed across four sites. Employees at all sites other than Longford were emailed a copy of the NoERR on 15 and 16 October 2019. Copies of the NoERR were also posted in crib rooms at these sites. 6 With respect to the Longford employees, the Company gave evidence that it took alternative steps to distribute the NoERR, including:
(a) holding a meeting on 16 October 2018 and providing physical copies to the attendees; and
(b) placing the NoERR on noticeboards in the Company’s crib rooms. 7
[17] The Company submitted that it has complied with s.173. In support of its submission, the Company relied upon the following passage of National Tertiary Education Industry Union v University of New South Wales: 8
“Of course, what is a “reasonable step” will depend upon the circumstances of the particular employer and employees. It may be noted that s.173(1) does not impose an obligation to give notice to each employee, but, rather, to take “all reasonable steps” to give notice. This distinction ought to be seen as recognising that, in many circumstances, and inevitably in the case of a very large employer like UNSW, it will be practically impossible to ensure that every single employee receives the notice.”
[18] I accept the Company’s submission and on the basis of the material before me, I am satisfied that the Company took “all reasonable steps” to give notice of the right to be represented by a bargaining representative to each employee.
The Company’s compliance with the requirement to provide materials during the access period (s.180(2))
[19] Section 180(2) states:
“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.
[20] The Company’s evidence is that on 13 November 2018 all employees other than those at Longford were emailed a “Ballot Notice” and an explanatory handout which explained in clear terms that the materials could be accessed via Company intranet, or in hardcopy or electronic form by contacting supervisors and managers. 9 All offshore employees would have physical access to the materials as the employee changeover occurred on 20 and 21 November 2018.10 With respect to the Longford employees, the Company gave evidence that it took alternative steps to give access to the necessary materials, including:
(a) holding a meeting on 13 November 2018 and physically providing the materials; and
(b) leaving multiple copies of the material in crib rooms. 11
[21] The Company submitted that the requirement to take “all reasonable steps” in s.180(2) is characterised in the same way as outlined at [17] above. 12
[22] On the basis of the submissions and material before me I am satisfied that the Company took “all reasonable steps” and has complied with s.180(2).
The Company’s compliance with the requirement to notify employees of the place of vote (s.180(3))
[23] Section 180(3) mandates:
“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.”
[24] The Company’s evidence is that on 13 November 2018 all employees other than those at Longford were emailed a “Ballot Notice” which indicated that “voting will occur via SMS or Email or Attendance Ballot as detailed under the notification heading above”. 13 While no specific physical “place” is identified in the Ballot Notice, the Company submits that it is implicit that the “place” is electronic, and any physical vote would be a reserve option to be worked out with management, if a particular employee could not vote electronically.14 With respect to the Longford employees, the Company gave evidence that it took alternative steps to provide the Ballot Notice, including:
(a) holding a meeting on 13 November 2018 and physically providing the materials; and
(b) leaving multiple copies of the material in crib rooms. 15
[25] The Company submitted that the requirement to take “all reasonable steps” in s.180(3) is characterised in the same way as outlined at [17] above. 16 It submitted that it has complied with s.180(3). Alternatively, it submits that any failure to comply with s.180(3) is a “minor or procedural technical error” of no disadvantage to the employees, and that I should be satisfied nonetheless that the agreement was genuinely agreed.17
[26] On the basis of the submissions and material before me, I am satisfied that the Company took “all reasonable steps” and has complied with s.180(3). In any event, in the circumstances of this case I would view any failure in relation to this issue as minor and procedural, and I would exercise my discretion to waive the irregularity. 18
Whether there was a valid majority of votes in favour to approve the Agreement
[27] By s.182(1), an enterprise agreement is “made” when a majority of the employees who have been asked to approve the agreement under s.181(1), and who cast a “valid vote”, approve the agreement. By s.181(1), the Company may “request the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it”.
[28] The evidence in the F17 is that 265 employees will be covered by the Agreement; 255 cast a valid vote; and 214 voted to approve the Agreement. 19 All of the employees under the Agreement are employed on a casual basis.20 This raises the issue as to which casual employees were “employed at the time” for the purpose of s.181(1).21
[29] The phrase “employed at the time” has received some consideration by the Federal Court of Australia in National Tertiary Education Industry Union v Swinburne University of Technology (Swinburne) and a limited number of subsequent cases before this Commission. 22 The Company’s primary submission is that the case before me is analogous to McDermott Australia Pty Ltd v AWU & AMWU (McDermott),23 such that the Company’s casual employees should be deemed “ongoing”, and therefore “employed at the time” even if they were not specifically engaged on a work shift at that time. If I were to accept the Company’s primary submission, I would find the majority of employees voted for approving the agreement, as set out in the F17: 214 out of 255.
[30] It is worth noting at this juncture that there is no dispute before me that the employees the subject of this application are engaged as “casuals”. It is also uncontroversial that the orthodox concept of casual employment is that the employer has no obligation to continue to offer work to the employee; likewise, the employee has no reciprocal obligation to offer work on an ongoing basis. The essence of the Respondent’s submission, as I comprehend it, is that in this instance, the preferred view is to treat the “casuals” as “ongoing” employees.
[31] In McDermott, a Full Bench of the Commission overturned a first instance decision wherein the Commissioner relied upon Swinburne to find that the casual employees, who “were not actually engaged in work or being paid at that time…were not employed at the time”. 24 The Full Bench said at [35]:
“In our view it would be inappropriate and counter intuitive to disenfranchise casual employees of a right to vote on an agreement that determines their wages and conditions on the basis that they were not rostered on to work on the day/s of the vote, or during the 7 day access period. There are obvious implications for voting manipulation adopting this approach. Swinburne is not authority for the proposition that a casual employee is only “employed at the time” they are rostered to work and are being paid. Swinburne eschewed the proposition that employed at the time included “usually employed”.”
[32] The Full Bench determined that in the circumstances, the request to vote could be directed to employees who were “employed at the time” even if they “were not rostered on to work on the day/s of the vote, or during the 7 day access period”. 25 The 36 employees who voted were found to have been employed, due to unique aspects of the employment relationship that justified that conclusion.
[33] In CFMMEU v Noorton Pty Ltd T/A Manly Fast Ferry (Noorton), 26 the Full Bench considered McDermott and made the following comments:
“[32] During the appeal, Noorton referred to the decision in McDermott Pty Ltd v the Australian Workers’ Union and Anor in aid of the Deputy President’s conclusion that the cohort of casual employees who were asked to vote were employed at the time. Whilst we may have some misgivings about the correctness of McDermott, it is unnecessary for us to express a concluded view. The decision is plainly distinguishable on the facts. The critical conclusion in McDermott was that the casual employees “accepted on-going employment” with McDermott as evidenced by the employer’s payroll records and the evidence of Mr McMahon, and as such they were employed by McDermott at the time the Agreement was made. Their employment comprehended work within McDermott’s scope of work for the Project. Unlike the facts in Swinburne, the casual employees were employed at the time, they were not in a cohort of “likely to be engaged” or “usually employed.” The reasoning adopted by the Full Bench in McDermott might be said to be more akin to a conclusion that the relevant employees were not “casual employees” at all but rather were “ongoing employees” who had accepted “ongoing employment”.
[33] There was no evidence before the Deputy President that the casual employees who were asked to vote to approve the Agreement accepted ongoing employment with Noorton. As we have already observed, there was no evidence about the nature of the casual employment of the employees or the terms under which these employees were engaged. The decision in McDermott therefore provides no assistance.”
[34] In NUW v Lovisa Pty Limited (Lovisa), in dealing with a majority support determination, Deputy President Colman made the following comments with respect to McDermott and the observations above in Noorton: 27
“As I said in the first decision, in CFMMEU v Noorten, another Full Bench expressed misgivings about the correctness of McDermott, but found it unnecessary to form a concluded view on the matter, noting that ‘the critical conclusion in McDermott was that the casual employees “accepted on-going employment” with McDermott … and as such they were employed by McDermott at the time the Agreement was made.’ The Full Bench in Noorten observed that the reasoning adopted by the Full Bench in McDermott could be said to be more of a conclusion that the relevant employees were not casual employees at all, but rather ongoing (permanent) employees. I agree with this observation. But in any event, the present case is distinguishable from McDermott. The circumstances of this case contrast starkly with those in McDermott, as in that case employees would, pursuant to clause 8 of the enterprise agreement, work a cycle of 21 days on duty and 21 days off duty. In this matter there is no evidence of any guarantee of work.”
[35] In the present case, the Company pointed to the following circumstances in support of its submission that, as in McDermott, its employees should be considered “ongoing”: 28
a. “there are a cohort of onshore employees who work on a regular 9 day shift structure at the onshore sites (Onshore Employees) and a cohort of employees who work a “2 weeks on/2 weeks off” roster at the offshore locations (Offshore Employees);
b. for both the Onshore Employees and Offshore Employees, payments were made during the period in respect of their employment of all of the 265 employees (including for example the payment of income protection, redundancy fund and long service leave contributions for the off-duty Offshore Employees, even though those employees were not physically “at work”); and
c. to the extent that a number of offshore employees were on their “off-duty swing” or other employees were absent during the voting period or on secondment to ESSO, they nevertheless remained employed at the time, even though they were not necessarily performing work, by way of the totality of the employment relationship having regard to considerations like the nature of the expectation of employment, continuing existence of employees on the Applicant’s books, roster pattern and work cycles as detailed in the Elliott Statement: see the factually analogous circumstances of those employees considered by the Full Bench in McDermott.”
[36] The Company relies upon the evidence of Mr Elliott and Mr Young to support this submission.
[37] In coming to my conclusion, I have also had regard to the comments of the Full Bench in Noorton and those of Deputy President Colman in Lovisa as to the correctness of McDermott. Respectfully, I agree with those comments. I have also had regard to the Company’s submissions regarding Workpac v Skene. 29 Ultimately, I am not persuaded that the facts of this case are sufficiently analogous to McDermott such that the Company’s employees should be characterised as “ongoing”. The Company produced a series of sample employee contracts. In my view, notwithstanding the facts listed at [35], clause 2.2, which is found in all of these contracts and is reproduced below, is incongruous with a finding that the casual employees are engaged as “ongoing”:
“Your first casual engagement under this Contract will commence on the date set out in item 8 of the Schedule (Effective Date). However, as a casual employee, each casual shift that you work is a separate period of employment. There is no guarantee under this Contract that you will be offered any pattern or number of casual shifts, or that you will be offered any casual shifts at all.”
(Underline emphasis added).
[38] For the reasons above, in the circumstances of this case, the Company’s primary submission is not made out.
[39] The Company alternatively submitted that if I were to find, as I have above, that its employees were not “employed at the time” unless they were engaged on a work shift “at the time”, there would nonetheless be a majority of employees who voted for approval. In support of this submission, the Company submitted that “the time” which is relevant is “the request” under s.181(1), and that this is limited to the first day of voting. 30 The basis of this argument is unclear to me, as is its utility to the Company’s case.
[40] In any event, during an exchange between the Company’s representative and the Commission, the Company acknowledged that it was open to me to adopt an alternate view, in line with the obiter of Justice Jessup at [25] of Swinburne, that the “requested group” under s.181(1) should also include those employees who are “employed at the time” of the access period. 31 In my view, in the circumstances of this case the “requested group” should also include those employees “employed at the time” up to the end of the voting period. I am not persuaded that there is any reason to read down “the request” in the manner suggested by the Company, in circumstances where to do so would exclude otherwise eligible employees from the voting process. If I am wrong as to the scope of “the requested group” such that it can only include those “employed at the time” of the access period and the first day of voting, I am satisfied in this case that there would nonetheless be a majority of employees who voted in favour of approval, as demonstrated at [41] below.
[41] On the material before me, it is apparent that:
(a) 242 employees were engaged on a shift at least once from the beginning of the access period to the conclusion of the first day of voting (23 Absent Employees); and
(b) 256 employees were engaged on a shift at least once from the beginning of the access period to the conclusion of the voting period (9 Absent Employees).
[42] I am satisfied that on either “requested group” (a) or (b), there are a majority of valid votes in favour of approval. However for the reasons outlined at [40] above, my view is that the relevant “requested group” is that in (b). Even if I were to assume that the 9 Absent Employees in “requested group” (b) all voted (invalidly) in favour of approval, such that those votes should be discounted from both the total valid votes (255) and the votes in favour (214), there would be a majority of 205 votes in favour out of 246 total valid votes.
[43] I note that the F17 was provided on the basis of the Company’s primary submission based on McDermott, which I have rejected. Notwithstanding this, I am satisfied based on the above that there is a majority of employees who have validly voted in favour of approval.
[44] On the basis of the majority in “requested group” (b) outlined above, s.182(1) is satisfied.
Entitlement of casual employees to annual leave
[45] Section 186(2)(c) requires that in approving an enterprise agreement, the Commission must be satisfied that:
“the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc)”.
[46] Section 55 in turn provides that an enterprise agreement “must not exclude the National Employment Standards or any provision of the National Employment Standards”.
[47] The Agreement provides that casual employees are not entitled to annual leave. 32 The Modern Awards incorporated by the Agreement relevantly define a “casual employee” as one “engaged as such”.33 This definition, in conjunction with the Agreement, may operate so as to exclude from annual leave entitlements those employees who are not “casual employees” as the term was determined by the Full Court of the Federal Court of Australia in Workpac Pty Ltd v Skene.34 This decision found that employees described as casual employees engaged “in continuous employment rather than those in irregular, intermittent, occasional or discontinuous employment” are not “casual employees” within the meaning of s.86 of the Act and may be entitled to annual leave under the NES.35
[48] The Company provided an undertaking to address this issue, numbered 3 at Annexure A below this decision.
[49] I am satisfied that the undertaking provided addresses this issue.
The BOOT in relation to modification of rosters (clause 34.3)
[50] Section 186(2)(d) requires that in approving an enterprise agreement, the Commission must be satisfied that “the agreement passes the [BOOT]”.
[51] Clause 34.3 of the Agreement provides for onshore (Part A) employees to work the same work roster and off-duty roster arrangements as the “Client’s employees”, “where required by the Employer”. I requested submissions as to how the BOOT would be satisfied in circumstances where clause 34.3 was used to modify employees’ ordinary hours and span of hours in clauses 34.1 and 34.2.
[52] The Company provided an undertaking to address this issue, numbered 2 at Annexure A below this decision. I am satisfied that the undertaking provided addresses this concern.
Correct signing of the Agreement.
[53] The Agreement copy provided upon lodgement by the Company did not detail the addresses of the signatories as required by reg 2.06A of the Fair Work Regulations2009.
[54] A correctly signed signature page of the Agreement was provided to my chambers on 21 February 2019. I am satisfied that this has addressed this issue.
Conclusion
[55] I am satisfied that each of the requirements of ss.186, 187, 188 and 190 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.
[56] The Agreement was approved on 16 July 2019 and, in accordance with s.54, will operate from 23 July 2019. The nominal expiry date of the Agreement is 30 November 2021.
COMMISSIONER
Annexure A
1 Statement of Terrence Elliot dated 11 February 2019.
2 [2019] FWC 1422.
3 Transcript PR705515; PR705516.
4 Issues (c)-(g) raised in email from chambers to parties dated 24 January 2019; issues (a) and (b) raised in Unions’ Submissions.
5 F17 dated 7 December 2018, 2.8.
6 F17 dated 7 December 2018 2.3; Transcript PN1585.
7 Witness Statement of Aaron Young dated 8 May 2019.
8 [2011] FWAFB 5163 at [10] citing [2010] FWAA 9588 at [24].
9 F17 dated 7 December 2018, Appendices 2 & 3.
10 Company Submissions dated 11 February 2019.
11 Witness Statement of Aaron Young dated 8 May 2019.
12 Transcript PN1617-1618.
13 Witness Statement of Terence Elliot dated 11 February 2019; Witness Statement of Aaron Young dated 8 May 2019; Company Submissions dated 11 February 2019 and 23 April 2019.
14 Company submissions dated 11 February 2019.
15 Witness Statement of Aaron Young dated 8 May 2019.
16 Transcript PN1617-1618.
17 Company Submissions dated 11 February 2019 citing Huntsman Chemical Company Australia Pty Limted T/A RMAX Rigid Cellular Plastics & Others [2019] FWCFB 318 (“Huntsman”).
18 See Huntsman[2019] FWCFB 318.
19 F17 dated 7 December 2018 2.10.
20 F17 dated 7 December 2018 4.3.
21 See National Tertiary Education Industry Union v Swinburne University of Technology (2015) 232 FCR 246 (“Swinburne”).
22 Swinburne (2015) 232 FCR 246.
23 [2016] FWCFB 2222.
24 McDermott Australia Pty Ltd [2016] FWC 1113 at [25]-[26] citing Swinburne (2015) 232 FCR 246.
25 McDermott at [35].
26 [2018] FWCFB 7224.
27 [2019] FWC 2885 at [19].
28 Company Submissions dated 11 February 2019; Company Submissions dated 8 May 2019.
29 [2018] FCAFC 131.
30 Transcript PN1777; PN1781; PN1788; PN1793; PN1806; PN1809.
31 (2015) 232 FCR 246.
32 Agreement clause 41.1.
33 Agreement clause 8.1; see Electrical, Electronic and Communications Contracting Award 2010, cl 10.3(a); Manufacturing and Associated Industries and Occupations Award 2010, cl 14.1.
34 [2018] FCAFC 131.
35 Ibid [164].
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