National Union of Workers v Murray Goulburn Co-Operative Co Limited T/A Murray Goulburn

[2017] FWC 5164

[2017] FWC 5164

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.236—Majority support determination

National Union of Workers
v
Murray Goulburn Co-Operative Co Limited T/A Murray Goulburn
(B2017/819)

DEPUTY PRESIDENT MASSON MELBOURNE, 17 OCTOBER 2017

Application for a majority support determination for employees of Murray Goulburn Co-Operative Co Limited trading as Murray Goulburn - Edith Creek, Tasmania.

[1] The National Union of Workers (NUW) made an application pursuant to s. 236 of the Fair Work Act 2009 (the Act) to the Fair Work Commission (Commission) for a majority support determination of employees of Murray Goulburn Co-Operative Co Limited (Murray Goulburn) employed at the Edith Creek, Tasmania site.

[2] The NUW presented a petition of employees of Murray Goulburn’s Edith Creek, Tasmania site to support their application.

[3] The application for the majority support determination was opposed by Murray Goulburn on two grounds:

Ground 1:

For the purposes of s. 237(2)(a) of the Act the Commission cannot be satisfied that a majority of the employees who will be covered by the proposed agreement want to bargain.

Ground 2:

For the purposes of s. 237(2)(d) of the Act it is not reasonable in all the circumstances to make the determination.”

[4] Murray Goulburn has given notice of its intention to close the Edith Creek site on 30 November 2017 and on which date it is planned that 73 of the 75 current employees will be terminated due to redundancy. The two remaining employees are likely to be terminated due to redundancy respectively on or by 15 December 2017 and on or by 30 March 2018 respectively.

[5] A conference of the parties was held by the Commission on 25 September 2017. The matter was not resolved during the conference.
[6] Directions were set, materials were filed, and the matter was listed for hearing on 16 October 2017.

[7] At the hearing on 16 October 2017, Mr D. Melling represented the NUW and Mr A. Lambert of Herbert Smith Freehills represented Murray Goulburn by permission. Mr M. Danaher gave evidence for Murray Goulburn.

Legislative framework

[8] The relevant sections of the Act in relation to this application are sections 236 and 237. They set out the matters about which 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.”

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

Section 237(1)(a)

[10] 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, it was not contested that the NUW, by virtue of section 176(1)(b) of the Act, is an employee organisation who is a bargaining representative of an employee who is a member of the NUW.

[11] I am satisfied that an application has been made by a bargaining representative of an employee who will be covered by the proposed agreement, namely, the NUW (s237(1)(a)).

Section 237(2)(a) - a majority of employees want to bargain

[12] I now turn to the question as to whether I can be satisfied that there is a majority of employees that want to bargain.

[13] The NUW provided a petition that contained 65 signatures that was collected in the period 1–7 September 2017.

[14] Murray Goulburn, in their written submission, raised concerns regarding the accuracy of the petition list having regard to some names that appeared on the petition which they stated were not employees. They also submitted that there was no evidence provided by the NUW as to the custody and control of the petition.

[15] In response to Murray Goulburn’s expressed concerns over the petition’s custody and collection, the NUW subsequently provided for the proceedings a copy of a Statutory Declaration prepared by Ms Julie Coad¹, an NUW delegate at the Murray Goulburn Edith Creek site. The Statutory Declaration detailed the process by which the petition was collected at the site and then returned to the NUW.

[16] Murray Goulburn was also requested by the Commission to provide a list of names of current employees as part of the proceedings to enable a cross check and verification of the petition list names. The list of employees 2 identified that as at 12 October 2017 there were 75 employees on site.

Consideration

[17] Having reviewed the evidence, I am satisfied that the custody and control of the petition list was appropriately managed by the NUW and no evidence was presented that raised any concerns regarding the manner in which the petition was conducted.

[18] I have also compared the list of names on the NUW petition and the list of current employees provided by Murray Goulburn. I am satisfied that as at 12 October 2017 there were 75 employees. Of those 75 employees, 58 signed the NUW petition.

[19] I am satisfied that as at 7 September 2017 a majority of employees expressed a clear desire for bargaining to occur (s237(2)(a)).

Section 237(2)(b) – employer has not agreed to bargain nor initiated bargaining

[20] It was not contested that Murray Goulburn has not yet agreed to bargain with its employees for an enterprise agreement and that it has not yet initiated bargaining for an enterprise agreement.

[21] The Commission is satisfied that the employer has not agreed to bargain nor initiated bargaining (s.237(2)(b)).

Section 237(2)(c) – fairly chosen

[22] It was not contested that that the group of employees who would be covered by the proposed agreement was identical in scope to that of the current agreement.

[23] I am satisfied that the group of employees who will be covered by the proposed enterprise agreement has been fairly chosen (s.237(2)(c)).

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

[24] The NUW submitted that the commission should find that it is reasonable in all the circumstances to make the majority support determination.

[25] While acknowledging the planned cessation of production at Edith Creek on 30 November 2017, the NUW submitted that this was no obstacle to bargaining. Reference was made to an analogous situation in AMWU v Top Cut Food Industries Pty Ltd 3 (Top Cut) in which Commissioner Lee determined that the limited time frame prior to site closure did not preclude the making of a majority support determination. Relevantly, the majority support determination was issued approximately five weeks prior to the closure of the site in question in that matter.

[26] The NUW further submitted that to the extent that the employer adheres to its anticipated timeframe, a small number of employees would still be required to remain on site beyond the end of November 2017.

[27] The NUW also submitted that the closure of the site may in any event not occur and that the employer is currently in the process of seeking potential buyers for the site. The NUW submitted that the Commission could not be certain there would be no employees on site and directed it to the reasoning of DP McCarthy in CFMEU v CBI Constructors Pty Ltd 4where it was stated by the Deputy President in that case:

“I have insufficient material before me to conclude that any agreement would cover no employees at all. Whilst the number of employees that may be covered by an agreement may be fewer than now, that in itself is not sufficient reason for the right to pursue an agreement to be curtailed.” 5

[28] The NUW also drew attention to the fact that there were a limited range of matters around which the NUW was seeking to bargain on. They were predominantly related to issues regarding redundancy and redeployment. The NUW submitted that bargaining in relation to these limited items should not act as a barrier to the employer simultaneously managing the closure of the Edith Creek site.

[29] While conceding there may be a point at which there would be no possibility of an agreement being made, the NUW submitted that that point had not been reached and given the analogous facts to that in Top Cut the Commission should issue a majority support determination.

[30] Murray Goulburn submitted that it was not reasonable in all the circumstances for the Commission to make the determination sought by the NUW. They summarised their reasons for this as:

• “It is highly improbable (if not impossible) that an enterprise agreement could be made, approved and become operational prior to Murray Goulburn ceasing its operations at Edith Creek in November 2017, and redundancies of the vast majority of the employees taking effect on 30 November 2017; and



• even if it was possible for an enterprise agreement to be made, there is no realistic opportunity for Murray Goulburn to obtain any meaningful productivity benefits or efficiency improvements given the unique circumstances.”  6

[31] Mr Danaher gave evidence that Murray Goulburn announced in around May 2017 that it had decided to close three of its manufacturing sites, one of which was the Edith Creek site in Tasmania, which would cease operations on 30 November 2017.

[32] Mr Danaher further stated that as at 12 October 2017 there were 75 employees covered by the current agreement, of which 73 of those employees would be terminated due to redundancy on 30 November 2017. The remaining two employees who may be required beyond that date would be released no later than 15 December 2017 in the case of one of those employees and 30 March 2018 in the case of the other employee. 7

[33] It was stated by Mr Danaher that the two employees who may be required to stay on beyond 30 November 2017 had not signed the petition. 8

[34] Mr Danaher was questioned during cross examination by Mr Melling as to the status of the potential sale of the site. Mr Danaher in his evidence stated:

• that the pursuit of a potential sale was recently announced at a community meeting;



• he was not aware of the details of the potential sale process; and



• while it was always possible there might be a sale before site closure, the Company was about to forward out notices to employees of their redundancy which would be effective 30 November 2017 and it was currently working to that planned timeframe.

[35] Mr Danaher also gave evidence: as to nature of the bargaining claims; that the claims would add cost; and the difficulty that Murray Goulburn would face in obtaining any productivity or efficiency benefits in a new agreement given the looming closure of the site. He also expressed the view that the time frame would make it unlikely, if not impossible, that an agreement could be negotiated, voted on and approved by the Commission prior to the vast majority of the redundancies occurring. 9

[36] Murray Goulburn submitted that there were both statutory requirements and practical matters that made it highly improbable (if not impossible) that an enterprise agreement could be negotiated, agreed to by employees, approved by the commission and become operative prior to the redundancies taking effect on 30 November 2017.

[37] Murray Goulburn also referred to the Top Cut decision in which a majority support determination was issued in similar factual circumstances.

[38] It was submitted by Murray Goulburn that the Commission is not bound to reach the same conclusion as was reached in Top Cut for the following reasons:

• The decision in Top Cut was reached by reference to selective objects of the legislation;



• The Commission in Top Cut appeared to have focused on the practical difficulties rather than the regulatory requirements in concluding an agreement; and



• The question of whether a majority support determination is reasonable in a particular matter is to be considered on a case by case per the reasoning of the Full Bench in CBI Constructors Pty Ltd v CFMEU 10.

[39] I was specifically referred by the Respondent in their submissions to CBI Constructors v CFMEU as authority for the position that, in cases such as the present matter, evidence of the planned redundancy of the workforce may be “manifestly relevant to whether or not it was reasonable to make the majority support determination” 11.

[40] In relation to the statutory steps required to put an agreement in place, Murray Goulburn submitted:

• If the majority support determination was issued then the Company would have up to fourteen days to issue employees with a notice of employee representation rights (s173(3));



• The company would be unable to put any agreement to ballot until at least 21 days following the issuing of the last notice of employee representational rights (s 181(2));



• The agreement, if made, would then need to be submitted to the Commission for approval within fourteen days of being made (s185(3)(a)); and



• The agreement, once having been assessed as compliant with the Act through the agreement approval process, could not come into operation until at least seven days after the date of Commission approval (s54(1)(a)).

[41] While conceding that some of those steps could be accelerated, Murray Goulburn submitted that with all the statutory requirements taken together it would be highly improbable that an agreement could be made and approved within the timeframe imposed by the current announced site closure date.

[42] With respect to the objects of the Act, Murray Goulburn drew attention to s171 (a) of the Act where it states that an object of this part of the Act was to:

“(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements to deliver productivity benefits”. 12

[43] Further it was submitted that section 3 of the Act provides the overall objects of the Act which include;:

“The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promote national economic prosperity and social inclusion for all Australians by;

(a) providing workplace relations laws that are fair to working Australians, are flexible for businesses, promote productivity and economic growth for Australia’s future economic prosperity and take into account Australia’s International Labour obligations; and…

(f) achieving productivity and fairness through an emphasis on enterprise level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action”. 13

[44] Murray Goulburn submitted that, given the unique circumstances of this matter, there was no prospect of it obtaining any meaningful productivity benefits of any kind in respect to its Edith Creek site. By the time that any potential agreement could commence operation it was highly likely in its view that all except potentially two of the current 75 employees would have ceased to have been employed.

[45] It was further submitted by Murray Goulburn that in the circumstances where it was unable to extract any meaningful productivity or efficiency benefits, to be compelled to bargain would be contrary to the objects of the Act in s3 (a) and (f) and s171(a). Rather, it was submitted that productivity losses would flow from the deployment of internal resources to bargaining and the potential for protected industrial action would arise.

[46] Having regard to all of the circumstances, Murray Goulburn submitted that the commission could not be satisfied that it was reasonable to make the majority support determination and that the NUW’s application should be dismissed.

Consideration

[47] I am satisfied on the evidence that Murray Goulburn plans to close the Edith Creek site on 30 November 2017. While the potential sale of the site remains a live option for Murray Goulburn there was no evidence before me on which I can be satisfied that a sale was likely to occur prior to the planned cessation of operations and closure of the site on 30 November 2017. I therefore disregard the potential sale of the site as part of my considerations.

[48] I am also satisfied that Murray Goulburn’s plan is for 73 of the current 75 employees to be terminated due to redundancy on 30 November 2017. Of the remaining two employees, one will finish on or by 15^th December 2017 and the final remaining employee will finish on or by 30 March 2018.

[49] On the basis of Murray Goulburn’s site closure timetable, I am satisfied that it is likely there will be at least two employees engaged on site up until 15 December 2017. I don’t regard the Respondent’s evidence that the two employees likely to be retained beyond 30 November 2017 did not sign the petition as a significant issue in my consideration.

[50] The timeline and circumstances in the present case are distinguishable from those I was referred to by the Respondent in the matter before Deputy President Gooley in AMWU v APC Storage Solutions Pty Ltd 14where she stated “I do not consider it reasonable in all the circumstances to compel an employer to commence bargaining for an enterprise agreement which cannot be made”15.

[51] In APC Storage Solutions, at the time of the AMWU’s application the evidence was that there was only one employee and likely to be only one employee for the duration of the project. That is not the case in the present matter and, as I have found above, there are likely to be at least two employees engaged on the Edith Creek site up until 15 December 2017. I am therefore unable to conclude that, as at the date of this decision, an agreement cannot be made within that timeframe.

[52] I do however accept that the time constraints imposed by the 30 November 2017 site closure date combined with the clear position of Murray Goulburn on the NUW bargaining claims weigh heavily against the prospects of a new agreement being made. I also accept that the statutory steps required in obtaining approval of a new agreement compound the challenge of securing a new agreement that will come into operation within the planned closure timeframe. The NUW clearly acknowledge the difficulties raised by Murray Goulburn in securing a new agreement and are under no illusion as to their prospects.

[53] The fact that the prospects of securing a new agreement may be low does not mean however that it is unachievable. I am unable to conclude that an agreement simply cannot be made within the timeframe available to the parties.

[54] As to the prospects of Murray Goulburn securing productivity improvements through bargaining for a new agreement I accept they may be low, however, I cannot exclude the possibility that Murray Goulburn might be able to negotiate changes through bargaining that would be to its benefit. The bargaining framework is such that both parties are entitled to pursue claims and it is not the Commission’s role in this matter to speculate either on the claims that may be advanced or on the final bargaining outcome, if any, which might be achieved.

[55] I have also weighed Murray Goulburn’s arguments regarding the broader objects of the Act along with the position stated by Vice President Watson in The Australian Licenced Aircraft Engineers Association  16 where he stated that “the objects of the Act clearly encourage bargaining where a majority of employees wish it to occur”17. I do not believe in the present case that the Act’s broader objects regarding productivity conflict with the object of encouraging bargaining. Relevant to my consideration of this point is that the ability of Murray Goulburn to pursue particular items during bargaining is not constrained.

[56] I am not required to be satisfied that it would be impossible to make and register an agreement before I could find that it was unreasonable in the circumstances to issue a majority support determination. The practicality of making and obtaining the approval of an agreement are certainly relevant considerations that need to be weighed with other factors.

[57] Consistent with the approach in CFMEU v CBI Constructors I have weighed the various considerations including the looming closure of the Edith Creek site and the difficulties of reaching a new agreement within the available timeframe. I am not however satisfied that the practical and legislative difficulties raised by Murray Goulburn in making and obtaining approval of an agreement are sufficient in all the circumstances to outweigh the clear desire of employees to bargain.

[58] I am consequently satisfied that it is reasonable in all the circumstances to issue the majority support determination as sought by the NUW (s237 (2)(d)).

Conclusion

[59] I am satisfied that a majority of the relevant employees who will be covered by the proposed agreement wish to bargain for an enterprise agreement as at 7 September 2017. I am also satisfied that each of the paragraphs (b), (c) and (d) of s 237(2) of the Act have been made out. As a result, pursuant to s237 (1) I must make a majority support determination which will operate from the date of decision.

[60] The determination in this matter will be issued separately.

DEPUTY PRESIDENT

Appearances:

Mr D Melling for the National Union of Workers.

Mr A Lambert of Herbert Smith Freehills for Murray Goulburn Co-Operative Limited.

Hearing details:

2017

October 16

Melbourne

1 Exhibit A1, Statutory Declaration of Julie Coad, dated 14 October 2017.

 2   Exhibit R1, Witness Statement of Mr. Michael Danaher, dated 10 October 2017.

 3   AMWU v Top Cut Food Industries[2017] FWC 2798.

 4   CFMEU v CBI Constructors Pty Ltd[2010] FWA 2164.

 5 Ibid at [18].

 6   Respondent Submissions, dated 10 October 2017at [7]

 7   Exhibit R1at paras 4 and 6.

 8   Exhibit R1 at para 3.

 9   Exhibit R1at para 8 and 9.

 10   CBI Constructors Pty Ltd v CFMEU[2011] FWAFB 7642.

 11   Ibid at [39]

 12 Respondent Submissions at [20].

 13 Respondent Submissions at [21].

 14   [2014] FWC 2576.

 15   AMWU v APC Storage Solutions Pty Ltd[2014] FWC 2576 at [14].

 16   [2013] FWC 4267.

 17   Ibid at [13]

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