National Union of Workers v Medication Packaging Systems (Australia) Pty Ltd

[2016] FWC 3910

[2016] FWC 3910

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.236—Majority support determination

National Union of Workers
v
Medication Packaging Systems (Australia) Pty Ltd
(B2016/567)

COMMISSIONER RYAN MELBOURNE, 7 JULY 2016

Majority support determination for employees of Medication Packaging Systems (Australia) Pty Ltd at the Oakleigh facility.

[1] The National Union of Workers (NUW) has applied for a majority support determination pursuant to s.236 of the Fair Work Act 2009 (the Act) in relation to employees of Medication Packaging Systems (Australia) Pty Ltd (MPS) performing warehousing functions at its Victorian operation.

[2] The application identified the group of employees as:

“The employees to be covered by the proposed enterprise agreement are all employees who are performing warehousing functions (including the supervisors in the warehouse) at the Employer's facility located at 29 Connell Road, Oakleigh VIC 3166. This group is geographically, operationally and operationally distinct.”

[3] MPS’s legal representative, Ms S. McAuliffe, advised the Commission that it opposes the application and set out the basis for objection as follows:

“1. There is a question as to whether s 237(a) of the Fair Work Act 2009 has been satisfied.

It is unclear as to whether employees to be covered by the agreement understood what they were signing when they indicated that they agreed to bargain.

2. There is a question as to whether s 237(2)(c) of the Fair Work Act 2009 has been satisfied:

a. MPS does not consider that the group of employees who will be covered by the proposed agreement was fairly chosen.

3. There is a question as to whether s 237(2)(d) of the Fair Work Act 2009 will be satisfied:”

[4] The NUW has obtained the signatures of 18 employees of MPS at the Oakleigh facility who state they want to bargain for an enterprise agreement covering warehouse workers and they want the NUW to represent them.

[5] MPS has not agreed to bargain for an enterprise agreement with the group of employees identified in the application.

[6] A hearing was conducted on 16 June 2016 at which the NUW was represented by
Ms E. Barrett and Ms McAuliffe represented MPS, by permission. Ms Ghariza SujakBakir, Organiser, gave evidence on behalf of the NUW and Mr Luke Fitzgerald, Chief Executive of MPS and Mr Rohan Woodward, National Operations Manager of MPS gave evidence on behalf of MPS.

Legislative framework

[7] The relevant sections of the Act in relation to this application are sections 236 and 237. They set out the matters about which the Fair Work Commission (FWC, the Commission) must be satisfied before making a majority support determination, in the following terms:

“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.

(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.”

“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) that 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.”

[8] I will deal with each of the legislative requirements in turn.

Section 237(1)(a)

[9] It was not disputed that the NUW has made an application for a majority support determination. In relation to the requirement under section 236(1), that the application is to be made by a bargaining representative of an employee who will be covered by a proposed single enterprise agreement, the NUW stated that, by virtue of section 176(1)(b), it is an employee organisation who is a bargaining representative of an employee who is a member of the NUW.

[10] I find that an application has been made by a bargaining representative of an employee who will be covered by the proposed agreement, namely, the NUW.
Section 237(2)(a) - a majority of employees want to bargain

[11] The NUW relies on a petition of the relevant employees which has been signed by 18 Victorian warehousing employees to prove that a majority of employees want to bargain. The NUW submitted that the petition should be accepted as a valid method of establishing a majority and cited as an example the decision in National Union of Workers v Cotton On Group Services Pty Ltd 1 (NUW v Cotton On).

[12] MPS argued that s.237(2)(a) is not satisfied as it is not clear whether the employees who have signed the petition understood what they were signing when they indicated that they agreed to bargain.

[13] I note that Mr Fitzgerald’s evidence was that there are 30 production employees in Victoria. 2 It would appear that a majority of the production employees in Victoria have signed the petition relied on by the NUW.

NUW submissions

[14] Ms Barrett submitted that Ms Bakir met extensively with the warehouse employees from the Victorian site on numerous occasions including on 9, 17, 18, 19, 30 March, 15, 18 April and 16, 19 May 2016 and informed them about the bargaining process, the role of the NUW in the workplace and the kinds of claims which can be bargained for. Ms Bakir also distributed written material about bargaining to the employees.

[15] Ms Barrett submitted that the evidence shows that employees actually signed two petitions in support of bargaining. The first one was not used because that would have involved identifying the relevant employee who collected those signatures. The second petition was signed by 18 employees and established that a majority of employees want to bargain for an agreement. There is no evidence that employees who signed the petition did not understand what they were signing.

MPS submissions

[16] Ms McAuliffe submitted that the onus of proof is on the NUW to establish to the Commission's satisfaction that a majority of those employees want to bargain and that, in the absence of clear evidence that those employees did understand what they were signing, that NUW has not satisfied its burden of proof in that regard. 3

[17] Ms McAuliffe submitted that there is not yet sufficient evidence to demonstrate that a majority of those employees do, in fact, want to bargain and that MPS calls for another ballot to be conducted of employees and that as part of that, that a clear statement needs to be issued to the employees that would accompany those ballot papers. 4

[18] I am satisfied from the evidence of Ms Bakir that the employees were properly informed prior to completing the petition of what they were signing. I am further satisfied from the evidence of Ms Bakir that the 18 employees who signed the NUW petition wanted to bargain with their employer for an enterprise agreement.

[19] Accordingly, for the reasons set out above, the petition submitted by the NUW is considered to be an appropriate means of determining whether or not a majority of the group of employees want to bargain with their employer. As stated earlier, the petition establishes that a majority of the proposed group want to bargain. Therefore, I am satisfied that the requirements of s.237(2)(a) of the Act have been met.

Section 237(2)(b) - employer not agreed to/initiated bargaining

[20] MPS did not dispute the evidence which shows that the employer who will be covered by the agreement has not yet agreed to bargain, or initiated bargaining, for the agreement. 

[21] It was submitted by the union that, on the basis of the correspondence between the parties, MPS has not yet agreed to bargain or initiated bargaining, for the agreement.

[22] Taking into account all of the material before me, I am satisfied that section 237(2)(b) is met as MPS has not yet agreed to bargain, or initiated bargaining, for the proposed agreement.

Section 237(2)(c) - the proposed group was fairly chosen

[23] Whether or not the group of employees proposed by the union to be covered by the agreement was fairly chosen was the subject of extensive evidence and submissions by both parties.

[24] The NUW’s contention is that the group is geographically, operationally and organisationally distinct and therefore is a fairly chosen group.

[25] The NUW submitted:

“13. A number of potential groupings of employees in any one case may be fair. The FWC has held that there is no need for the group chosen to be any more or less fair than any other potential group; it is sufficient that the group is fairly chosen.

14. The Full Bench in Cimeco considered what was required for FWC to be satisfied that the group of employees be fairly chosen. This decision was subsequently summarised by Commissioner Roe as follows:

" .. . Cimeco requires that the Fair Work Commission in determining the question of fairly chosen:

• Evaluate and have regard to all the relevant factors.

• Focus on objective as opposed to arbitrary or subjective factors in concluding that a group is fairly chosen. If the selection was on arbitrary or discriminatory grounds or based on criteria which undermined legislative objectives, for example, if it undermined collective bargaining, then it would be unlikely to be fair.

• Consider that, where the group chosen is not the whole enterprise, if the group is geographically, operationally or organisationally distinct, this is a factor in favour of finding that the group was fairly chosen, however, it is not a decisive matter as all other relevant considerations must be evaluated.

• Consider that if the group is not geographically, operationally or organisationally distinct, (and is not the whole enterprise) this is a factor against a finding that the group is fairly chosen, however, it is not a decisive matter as all other relevant considerations must be evaluated.

• Consider that the interests of the employer and productivity and the interests of employees who are excluded from coverage may be relevant. That is the consequences of the choice of the group may be considered."

15. The NUW submits that, having regard to these factors, the group of employees who will be covered by the proposed enterprise agreement (Victorian warehouse employees) is fairly chosen.

16. The selection of the group (all warehouse employees at the only site in Victoria) is clearly on an objective basis (rather than being on an arbitrary or subjective basis this is a not uncommon way of defining the scope of enterprise agreements) and would not undermine any legislative objects.

17. The Victorian warehouse employees are geographically distinct from other employees of the Company because they are engaged at the one distinct facility (and the only one in Victoria). The fact that another employee works at the Victorian site does not mean the Victorian warehouse employees are not geographically distinct as the FWC may treat the notion of distinctness by reference to some other groups, not all other groups of employees (that is, the distinctness does not need to be absolute).

18. The Victorian warehouse employees are also organisationally and operationally distinct from other employees of the Company. It is axiomatic that the Victorian warehouse employees are separate and distinct from managerial and administrative employees of the Company as they perform inherently different work and their employment is underpinned by different industrial instruments. The Victorian warehouse employees are also operationally and organisationally distinct from interstate warehouse employees for reasons including:

a. The lack of direct contact between Victorian warehouse employees and other warehouse employees.

b. Transfers of warehouse employees between the Victorian site and other sites are very rare.

c. Victorian warehouse employees report to their own shift supervisors rather than reporting directly to the same personnel as other warehouse employees.

d. Victorian warehouse employees only work morning and afternoon shifts but the company has foreshadowed introducing a night shift at its site in Queensland.

e. Victorian warehouse employees perform work for different customers to those at the interstate sites.

19. The Full Bench in BP Refinery held that

"It is in this way that the views of the employees become significant and prima facie carry greater weight than the subjective views of the employer unless, as in United Firefighters, there are particular circumstances in a given case that make a contrary conclusion appropriate upon a proper application of s.238."

20. There is no good reason in this case why the preferences of employees as to the appropriate collective should not be respected. Over 62% of the Victorian warehouse employees signed the petition in support of the enterprise agreement. The interests of those employees who have been excluded from the group are also a relevant consideration; however, in the absence of any evidence either way as to their views this can become a neutral consideration.” [citations omitted]

[26] Evidence was given for MPS by its Chief Executive Officer, Mr Luke Fitzgerald and its National Operations Manager, Mr Rohan Woodward that the group of employees was not fairly chosen as it was not organisationally or operationally distinct.

[27] MPS identified that its business is comprised of three production sites in Victoria, New South Wales and Queensland which are all “reliant on each other to process orders in an attempt to satisfy client expectations and delivery deadlines.” 5

[28] The evidence of Mr Woodward and Mr Fitzgerald in support of the group not being organisationally or operationally distinct can be summarised as follows:

● processing medications for clients can be carried out at any one of MPS’s three production facilities;
● work can be shifted from one state to another at short notice to ensure that daily dispatch deadlines are met;
● work can also be shared between sites when a big order needs to be processed in a tight timeframe;
● the same sorts of machines are used across the three sites;
● clients do not have a relationship with any particular state’s facility;
● shift start and end times are essentially the same in all 3 states, except that in Queensland, they have a 15 minute longer changeover.
● at times the business has had to shift work from one state to another to ensure its completion;
● pricing is centrally controlled;
● MPS’s workplace health and safety is all looked after centrally;
● there is online health and safety training package that everyone is expected to complete;
● MPS has an incentive scheme in place which applies the same criteria for production staff operating certain kinds of machines, regardless of where they are based;
● MPS has centralised administrative functions which are conducted by the head office in Queensland, including accounting, sales and marketing, reporting and information technology.

[29] An analysis of the evidence discloses that there is generally a lack of organisational distinctiveness or distinctness and a lack of operational distinctiveness or distinctness between the Victorian production facility and the production facilities in NSW and Qld. There are however some organisational and operational distinctions between Victoria and the other States, such as the fact that Victoria has a shift supervisor whilst other States have shift managers who are paid more. Some orders can only be processed in a certain location, for instance orders for Priceline have to be packed in Queensland. 6 The distinctions are minor compared to the similarities which exist.

[30] MPS concede that the Victorian production facility is geographically distinct from NSW and Qld facilities. MPS relied upon the Full Bench decision in CimecoPty Ltd v CFMEU and others 7 which said:

“[19] ……. if the group of employees covered by the agreement are geographically, operationally or organisationally distinct then that would be a factor telling in favour of a finding that the group of employees was fairly chosen. Conversely, if the group of employees covered by the agreement was not geographically, operationally or organisationally distinct then that would be a factor telling against a finding that the group was fairly chosen.”

[31] MPS contended that the in the present matter:

“….. that although these production workers are limited to production workers in Victoria and are therefore geographically distinct, it's our submission that that lack of distinction in terms of operationally or organisationally distinct outweighs any geographical isolation that those employees have.” 8

[32] MPS made the valid point that: “A tick against geographical distinction does not lead to a conclusion that the group has been fairly chosen.” 9 So much is clear from the Full Bench in Cimeco:

“[20] It is important to appreciate that whether or not the group of employees covered by the agreement is geographically, operationally or organisationally distinct is not decisive, rather it is a matter to be given due weight, having regard to all other relevant considerations.

[21] It is not appropriate to seek to exhaustively identify what might be the other relevant considerations. They will vary from case to case and will need to be demonstrated to the satisfaction of the tribunal. The word ‘fairly’ suggests that the selection of the group was not arbitrary or discriminatory. For example, selection based upon employee characteristics such as date of employment, age or gender would be unlikely to be fair. Similarly, selection based on criteria which would have the effect of undermining collective bargaining or other legislative objectives would also be unlikely to be fair. It is also appropriate to have regard to the interests of the employer, such as enhancing productivity, and the interests of employees in determining whether the group of employees was fairly chosen. In this regard, it is not only the interests of the employees covered by the agreement that are relevant; the interests of those employees who are excluded from the coverage of the agreement are also relevant.

[22] …In evaluating whether the group to be covered by the agreement has been fairly chosen it is entirely appropriate to have regard to the consequences of that choice, that is, which employees have been excluded from the agreement.

[33] To the extent that MPS has suggested that the application of s.237(3A) can be satisfied by weighing the three elements of geographic, operational and organisational distinctness against each other to ascertain which way the weighting falls, is inconsistent with Cimeco. If the application of s.237(3A) could be achieved by a weighting exercise, then in the present matter the contention of MPS “that that lack of distinction in terms of operationally or organisationally distinct outweighs any geographical isolation that those employees have” would undoubtedly be correct. However, as Cimeco makes clear determining whether the group of employees has been fairly chosen requires more than taking into account the matters in s.237(3A).

[34] It is relevant to note the decision of Roe C in NUW v Cotton On:

“[28] I am satisfied that the group chosen is geographically and operationally distinct. I am satisfied that there is a degree of organisational integration and also a degree of distinctness. It is common for a national and multi-national enterprise to have a number of separate site specific agreements. It is also common for national and multi-national enterprises to have agreements which cover more than one site. Depending upon the circumstances the employees in either case can be fairly chosen. Where there is a separate site specific agreement it will be common for there to be a lack of organisational distinctness in respect to matters such as IT, planning, training of salaried staff and OHS systems as occurs in this case. These matters are commonly managed at an enterprise level. I am not satisfied that the degree of organisational integration between the Wacol distribution centre and other distribution centres renders the group chosen unfair.”

[35] If the Commission applied the weighting exercise contended for by MPS the result would render the group chosen by the NUW unfair.

[36] There is no requirement for the Commission to determine whether the group chosen is any more or less fair than any other potential group.  It is sufficient that the group is fairly chosen, as Roe C noted in NUW v Cotton On:

“[18] ….For the purposes of a majority support determination and for the purposes of agreement approval there is no requirement to decide what would be the fairer or the fairest group. There may be a number of alternative groups which could be fairly chosen.”

[37] In the present matter the group of employees who have been chosen by the Applicant to be covered by an enterprise agreement comprise the non-salaried employees employed at MPS’s sole production facility in Victoria. All of the employees in the chosen group perform production and or warehousing activities.

[38] The chosen group excludes:

● all non-salaried employees performing the same type of work at the MPS production sites in NSW and QLD,

● all other non-salaried employees of MPS employed outside of the Victorian production site.

● all salaried employees of MPS whether employed at the Victorian production site or employed outside of the Victorian production site. There are only two salaried positions at the Victorian production site, the Site Manager and the QA Officer.

[39] As already identified the chosen group is not in any significant way organisationally distinct or operationally distinct from the same group of employees in NSW and QLD. The chosen group is much more organisationally distinct or operationally distinct from the QA function and from the management function both within the Victorian production site and within the total enterprise. The chosen group is even more organisationally distinct or operationally distinct from the sales, administration, IT and management functions of the overall operations of MPS.

[40] The clearest distinction between the chosen group and the bulk of MPS’s other employees is the geographic separation between the Victorian production workers and the employees in NSW and QLD.

[41] In NUW v Cotton On Roe C said:

“[27] …The legislation specifically provides that a group which is geographically distinct but not organisationally or operationally distinct could be fairly chosen. The legislation does not say that the Fair Work Commission must take into account whether the group is geographically, operationally and organisationally distinct. If it is argued that the group is fairly chosen because it is geographically distinct that is not an argument based upon an extraneous or illegitimate characteristic. Effectively Cotton On is arguing that the group chosen is not operationally and organisationally distinct and therefore the group has not been fairly chosen. However, I am satisfied that if I were to find that the group is not operationally and organisationally distinct this would be a relevant factor in determining whether or not the group was fairly chosen but it would not be determinative.”

[42] I agree with the observation of Roe C.

[43] Any consideration of the relevant factors for determining whether the group of employees chosen by the NUW has been fairly chosen needs to be done in the context that the fairly chosen test is being applied under s.237 and not s.238 and not s.186. In Alcoa v CFMEU, 10 the Full Bench drew attention to the differences between s.237 and 238 as follows:

“[30] ………ss.237(2) and 238(4) both require consideration of the “fairly chosen” requirement, it should not be forgotten that majority support determinations and scope orders serve distinct purposes in the bargaining regime in Part 2-4 of the FW Act and give rise to differing considerations. This point was well made by the Full Bench in Liquor, Hospitality and Miscellaneous Union v Coca-Cola Amatil (Aust) Pty Ltd as follows:

‘[28] 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. However, once a determination is made, the bargaining process under the Act is enlivened, including the good faith bargaining requirements under s.228 of the Act.

[29] Where the bargaining raises a dispute about the scope of the agreement or agreements to be made and the classes or groups of employees to be covered by the proposed enterprise agreement or agreements, Fair Work Australia has power to make scope orders to determine which classes or groups of employees are to be covered. The scheme of the Act does not envisage a role for a majority support determination in determining the scope of bargaining or the scope of an agreement.’

. . .

[39] It should be noted, given the competing views of the parties as to the number and scope of agreements which should be made, that a majority support determination does not determine the scope of bargaining, any more than it determines the terms and conditions to apply. Once bargaining has commenced, s.238 is available to deal with disputes about the scope which impede bargaining. Unlike a majority support determination, a scope order can limit or extend the scope of bargaining, through a requirement to include or exclude a class of employees in bargaining for a proposed agreement or requiring bargaining collectively with different classes of employees in relation to separate agreements.”

[44] Just as there is a very real difference between the outcomes that flow from s.237 and s.238 there is a further very real difference between the outcomes that flow from s.186 and each of s.237 and s.238. Both s.237 and s.238 are concerned with the bargaining process for an enterprise agreement. Section 237 operates before bargaining has begun and if a majority support determination is made then bargaining must begin. S.238 operates whilst bargaining is underway and if a scope order is made it alters the focus of the bargaining process. The consideration of the fairly chosen test under s.186 occurs after the employer and some employees have made an enterprise agreement and in doing so have made it clear that the employer and the employees who approved the enterprise agreement want the enterprise agreement to cover only some employees and want the enterprise agreement not to cover some employees.

[45] If the bargaining process is looked at as a continuum then s.237 operates before the bargaining process starts, s.238 operates whilst the bargaining process is underway and s.186 operates after the bargaining process has concluded.

[46] It is obvious therefore that each of ss.237, 238 and 186 “serve distinct purposes in the bargaining regime in Part 2-4 of the FW Act and give rise to differing considerations.” 11

[47] There are a number of relevant factors to be considered in determining whether the group of employees chosen by the NUW is fairly chosen.

[48] It is relevant that MPS has not yet agreed to bargain with any of its employees for an enterprise agreement. It is also relevant that MPS have not yet initiated bargaining for any enterprise agreement with any of its employees.

[49] It is relevant that the NUW have been engaging with production employees in Victoria about the process for bargaining for an enterprise agreement. It is relevant that the NUW as a bargaining representative for some employees employed in Victoria wants to bargain with MPS for an enterprise agreement.

[50] It is relevant that the NUW have defined the chosen group as being all employees who are performing warehousing functions (which would include the supervisors in the warehouse) at MPS’s Victorian site at 29 Connell Rd, Oakleigh. It is relevant that the NUW have defined the chosen group as excluding the Site Manager and the site QA Officer. It is relevant that the Site Manager and the QA Officer perform very distinct functions which are distinctly separate from the functions performed by the chosen group.

[51] It is relevant that the chosen group represents 30 employees and that there are a further 83 employees in NSW and QLD who are performing the same functions as the chosen group but who have been excluded from the chosen group.

[52] It is relevant that the same production/warehousing operations are performed at each of MPS’s three production/warehousing sites.

[53] It is relevant that MPS have a separate Head Office from the three production/warehousing facilities. It is relevant that MPS have structured their operations so that they have three geographically distinct production/warehousing sites. It is relevant that the Head Office functions are distinctly separate from the functions performed by the chosen group.

[54] It is relevant that MPS has arranged its production/warehousing operations so that there is a high degree of organisational and operational unity across all three production/warehousing sites.

[55] There are clearly relevant factors which tend to support the contention of MPS that the chosen group has not been fairly chosen and there are clearly relevant factors which tend to support the contention of the NUW that the chosen group has been fairly chosen.

[56] The factors which support the NUW’s contention that the chosen group has been fairly chosen certainly disclose that the NUW has chosen a group of MPS employees on an objective basis. There is nothing arbitrary or subjective about the chosen group. The chosen group represents a significant majority of employees in Victoria. In this sense the selection of Victorian employees and the exclusion of non-Victorian employees is a simple application of the geographic separation which exists within the MPS business between the three production sites. The separation of the 30 Victorian wages staff from the 2 Victorian salaried staff represents is a sound basis for separating employees for the purpose of enterprise bargaining.

[57] Having considered all of the relevant factors I conclude that the chosen group was fairly chosen by the NUW.

[58] Having considered all of the relevant factors I am satisfied that, for the purposes of section 237(2)(c), the proposed group of employees will be covered by the agreement, was fairly chosen.

Section 237(2)(d) - it is reasonable in all of the circumstances

[59] MPS made a confused submission concerning the operation of s.237(2)(d). Rather than attempt to summarise the MPS submission on s.237(2)(d) I repeat in full what was put to the Commission by Ms McAuliffe:

“PN612. Ms McAuliffe: Commission Roe in that same case, went on in paragraph 22 to refer to the decision of Cotton On v MWU (sic) and that was the decision made at first instance, and this is where if I might, Commissioner, I'd like to move to the requirements of section 237, sub (2), sub (d), where the Commission is required to also consider whether or not making the determination is reasonable in all the circumstances. The Commission observed there that – my apologies, I may have given you the wrong paragraph number – it was a reference back to Commissioner Roe – sorry, I'm referring you to paragraph 22 of the decision of Commissioner Roe, which is the NUW v Cotton On Group at first instance. So the commentary is by Commissioner Roe about the decision in BP Refinery, and not the other way around. So Commissioner Roe there says that, "The decision in BP Refinery is authority for the proposition that if there was an application for a majority support determination to cover all the warehouses which could be covered, and this was opposed on the grounds that a single warehouse should be preferred because it's geographically distinct, this would not be a compelling argument unless there were particular features or circumstances associated with that distinctiveness which would render the broader group one that's not fairly chosen."

PN613: Now what I'm asking you to do here, Commissioner, is take that and apply it to the reverse scenario, and I'm asking you to presume that this statement would be flipped and stated in the opposite way if it was talking about the situation that we have here.  What it's saying there is that in the BP Refinery case there were two groups who were combined, or proposed to be combined under the agreement, and saying that if there was one of those groups that was geographically distinct, that wasn't enough to say that that group needed to be isolated and that it could only be fairly chosen if it was isolated.  So what we'd ask the Commissioner to do in this case is say, well, yes, there is evidence of geographical distinctiveness but that that is not sufficient to therefore lead to a conclusion that this group has been fairly chosen.

[60] The problem with the submission of MPS on s.237(2)(d) is that the submission is focussed on the determination of whether the chosen group is fairly chosen and that is not the focus of s.237(2)(d). Even the reliance on paragraph 22 of the decision of Roe C in NUW v Cotton On is misplaced as the Commissioner was there considering the operation of s.237(2)(c). Roe C didn’t start to consider the operation of s.237(2)(d) until paragraph 45 of his decision.

[61] NUW submitted that making the determination would be reasonable in all the circumstances and that any objections of MPS “need to be evaluated in the context of that Full Bench emphasised in Alcoa. 12 That is, that the making of the majority support determinations do not determine the scope of the bargaining or the scope of an enterprise agreement (parties can instead apply for a scope order which gives rise to different considerations) nor do they pre-suppose an enterprise agreement will be made containing particular terms.”13

[62] The operation of s.237(2)(d) only comes into play if the Commission is satisfied the chosen group has been fairly chosen. 14 In AWU v BP Refinery (Kwinana) Pty Ltd15 the Commission, in considering all of the circumstances of the case gave greater weight to the views of employees than to the views of the employer:

“[30] In United Firefighters [2010] FWAFB 3009 the Full Bench said (at [53]):

‘[53] As recorded above, it was submitted by the UFUA and the ACTU that particular weight should be given to the views of employees because of, for example, legislative policy imperatives concerning freedom of association. While we generally agree with that submission it requires some qualification. The power to make a scope order is predicated on disagreement between bargaining representatives. The discretion to resolve that disagreement is to be exercised as provided for in ss.238(4) and (4A). While those provisions do not assign priority to the views of employees, in applying the provisions it is necessary to have regard to the overall context. The legislative scheme supports collective bargaining principles and the Fair Work Act encourages freedom of association and collective bargaining. It may be implied from the legislative scheme that the collective choice of employees is significant. It must be said, however, that while weight should be given to the views of the employees potentially affected, it may be that a proper consideration of the matters specified in ss.238(4) and (4A) in a particular case may make it appropriate to make a scope order contrary to the views of the employees potentially affected.’

[31] It is in this way that the views of the employees become significant and prima facie carry greater weight than the subjective views of the employer unless, as in United Firefighters, there are particular circumstances in a given case that make a contrary conclusion appropriate upon a proper application of s.238.” 16

[63] There is a significant difference between the present matter and the matter in
AWU v BP Refinery. In that matter 87% of the group of employees chosen by the AWU signed the petition in favour of a single agreement covering two groups of employees who had previously been covered by separate agreements. BP Refinery applied for a scope order for two separate agreements one for each group of employees. In the present matter a majority of employees at MPS’s Victoria site have signed the NUW petition but a minority of employees have not signed the petition. The views of the minority of employees at MPS’s Victoria site who did not sign the NUW petition are not known, nor is it known what are the views of the production employees employed at MPS’s other two production sites in NSW and QLD. In the present matter MPS specifically did not bring forward any “evidence about the interests of the employees who are not going to be covered by this agreement”. 17

[64] The other significant difference between the present matter and both AWU v BP Refinery and the United Firefighters case is that both of those two matters concerned applications for scope orders. In other words in those matters the employer had already agreed to bargain and the question to be determined was the scope of the bargaining. In the present matter a majority of production workers at MPS’s Victoria site want to bargain with MPS for an enterprise agreement but MPS does not want to bargain with any of its employees let alone the specific group identified by the NUW in this matter. Whilst the fairly chosen group in this matter wants to start the bargaining process, the process if started can go in any direction that the bargaining parties take it or the direction of bargaining may be set by the Commission making a scope order on application by a bargaining representative. Even if bargaining starts it does not mean that an enterprise agreement will be made. In circumstances where a fairly chosen group want to start the bargaining process and where MPS will have the capacity as a bargaining representative to seek a scope order so that bargaining is for an enterprise agreement that includes other production employees and even other non-production employees then in all of the circumstances of this matter it is reasonable that the Commission make the majority support determination sought by the NUW.

Conclusion

[65] Accordingly, having been satisfied as to the matters set out in sections 237(2)(a), (b), (c) and (d), and, as I have found that an application has been made (s.237(1)(a), the FWC is required to make the majority support determination sought by the NUW (s.237(1)).

[66] A majority support determination will be issued separately. The determination will come into operation on the day on which it is made, namely, 7 July 2016.

[67] As a result of the determination being issued, the Employer must now take all reasonable steps to issue a notice of employee representational rights to each relevant employee as required by sections 173 and 174 of the Act. I note that s.173(3) requires, in effect, that the notice be issued within 14 days of the determination being made.

COMMISSIONER

Appearances:

Ms E. Barrett for the National Union of Workers

Ms S. McAuliffe for Medication Packaging Systems (Australia) Pty Ltd

Hearing details:

2016.

Melbourne:

16 June

 1   [2014] FWC 6601.

 2   Exhibit R1 at para 5.

 3   Transcript at PN614 and PN618.

 4   Ibid at PN622.

 5   Exhibit R2 at para 14.

 6   Transcript at PN165.

 7   [2012] FWAFB 2206.

 8   Transcript at PN564.

 9   Transcript at PN610.

 10   [2015] FWCFB.

 11   Alcoa of Australia Limited v CFMEU[2015] FWCFB 1832 at [30].

 12   Alcoa of Australia Limited v CFMEU[2015] FWCFB 1832.

 13  Exhibit A2, para 21 and 22.

 14   AWU v BP Refinery (Kwinana) P/L[2014] FWCFB 1476 at [39].

 15   [2014] FWCFB 1476.

 16   Ibid at [30]-[31].

 17   Transcript at PN97.

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