Path Transit Pty Ltd

[2020] FWCA 4277

[2020] FWCA 4277

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Path Transit Pty Ltd
(AG2020/1728)

PATH TRANSIT PTY LTD BUS DRIVERS ENTERPRISE AGREEMENT 2019 - MORLEY

Passenger vehicle transport (non-rail) industry
DEPUTY PRESIDENT BEAUMONT	PERTH, 24 AUGUST 2020

Application for approval of the Path Transit Pty Ltd Bus Drivers Enterprise Agreement 2019 - Morley.

[1] Path Transit Pty Ltd (Path Transit) has made an application for the approval of an enterprise agreement known as the Path Transit Pty Ltd Bus Drivers Enterprise Agreement 2019 - Morley (the Agreement). The application was made under s 185 of the Fair Work Act 2009 (Cth) (the Act). The Agreement is a single enterprise agreement. The Transport Workers’ Union, WA Branch (TWU), is in support of the application. However, another bargaining representative, Mr Glenn Ferguson, of an association called ‘Transport Edge’ has objected to the Agreement being approved.

[2] Mr Ferguson has objected on three grounds. The first, the attempt by Path Transit to have the Agreement approved before matter B2020/30 was determined, constituted an abuse of process.

[3] Matter No. B2020/39 is an application by Mr Ferguson to obtain bargaining orders concerning negotiations for the Agreement. He has asserted that Path Transit was not bargaining in good faith, and the application for bargaining orders was on foot at the time this application was made. Mr Ferguson claims that the reason why the current application is an abuse of process is because the scheme of the Act is such that all bargaining is to be conducted in good faith, and completed, before any application is made to the Commission to approve an enterprise agreement.

[4] The second ground involves cl 11.9(b) of the Agreement, which Mr Ferguson asserts is detrimental to Path Transit employees when compared to the National Employment Standards (NES). Clause 11.9(b) reads:

Notwithstanding the above, should the Company beyond its control be forced to downsize (where service kilometres are reduced by at least fifteen (15%)), the Company may direct Employees to take:

a) up to 75% of their accrued annual leave entitlement where the Employee has accrued more than four (4) weeks annual leave and the Company gives at least four (4) weeks’ notice of the requirement.

b) Leave With Out Pay and the Company gives at least four (4) weeks’ notice of the requirement.

Note: the Company will consult with the TWU on the implementation process should these circumstances arise.

[5] Mr Ferguson submits that cl 11.9(b) amounts to a stand down of an employee, which can be triggered at any time, once Path Transit experiences a reduction of 15% in service kilometres travelled. Further, a reduction in service requirements of Path Transit’s business amounts to a downturn in business activity which may necessitate a reduction in staff numbers. This, claimed Mr Ferguson, would be dealt with via consultation, a major workplace change requirement and redundancy provisions under the Act. It followed, stated Mr Ferguson, the offending cl 11.9(b) could not be sustained against the NES and is incapable of fulfilling the objects of the Act, in particular s 3(b).

[6] The third, which did not appear in Mr Ferguson’s two sets of written submissions, but was presented at hearing, was that the insertion of cl 11.9(b) of the Agreement came about outside of good faith bargaining obligations.

[7] Mr Ferguson sought the adjournment of this application under s 185 of the Act, until such time that matter B2020/39 had been determined and bargaining had recommenced in adherence with good faith bargaining requirements. Mr Ferguson submitted, that as a matter of procedural fairness, the application for bargaining orders required determination before this matter.

Background

[8] On 17 January 2020, Mr Ferguson made an application for bargaining orders under s 229 of the Act (Matter No. B2020/39).

[9] On 20 May 2020, he filed submissions to the Commission seeking bargaining orders which would, among other things, require that bargaining meetings only proceed if all bargaining representatives were in attendance. This would have prevented Path Transit from meeting with the TWU, the default bargaining representative, absent the other bargaining representatives. The TWU had, due to a history of disputation with Mr Ferguson, formally advised Path Transit they would not attend bargaining meetings attended by Mr Ferguson. Mr Ferguson’s consternation arose from Path Transit meeting with the TWU separately to him and other bargaining representatives.

[10] According to Mr Davis, the Operations Manager for Path Transit, Mr Ferguson was invited and attended bargaining meetings on 26 November 2019, 5 December 2019, 12 December 2019, 27 February 2020, 5 March 2020 and 12 May 2020. 1 Mr Ferguson gave evidence that the only meeting where all bargaining representative were present was the first meeting on 26 November 2019.

[11] Mr Davis gave evidence in the hearing that Mr Ferguson was provided with written notes regarding all bargaining meetings and had the opportunity to raise claims and have those claims considered, and responses provided. Mr Davis said that three of the claims Mr Ferguson raised were included in the Agreement. 2

[12] Matter No. B2020/39 was allocated to Commissioner Williams, and called on for conference. It appeared uncontroversial that an outcome of the conference was that the parties would reconvene in private, with a view to continuing the negotiations or discussion about the negotiations.

[13] However, on 26 May 2020, relevant employees were notified of the timing and methodology of the vote; 3 on 3 June 2020 the Agreement was put to the vote,4 and on 4 June 2020, the Agreement was made.5

[14] On 8 June 2020, Path Transit advised the Chambers of Commissioner Williams, by letter, it had put an agreement to its employees, which had been approved by a majority ballot. 6 Path Transit advised that Mr Ferguson had been informed of this outcome on 5 June 2020 and that Path Transit would be making an application for the Agreement to be approved by the Commission.

[15] On 23 June 2020, Commissioner Williams decided 7 that, as the Agreement had been approved by the employees and bargaining was not currently happening, it was appropriate to adjourn the application for a bargaining order, until the application under s 185 had been determined.

[16] At the hearing, it was apparent that the application for bargaining orders had not only involved a conference before the Commission, but the parties had met in private conference to attempt to resolve matters.

The first ground

[17] While the application on foot pertains to the approval of the Agreement, there is value in traversing those provisions of the Act that deal with the application for bargaining orders.

[18] Section 229 of the Act addresses the circumstances in which a bargaining representative may apply for a bargaining order. Compliance with this provision is not in issue in these proceedings, and it not necessary to set out its terms. By virtue of s 230(1) of the Act, a bargaining order in relation to a proposed enterprise agreement may be made, if an application has been made; the requirements of s 230 have been met; and the Commission is satisfied that it is reasonable in all of the circumstances to make the order. The terms of s 230(1)(c) require that the Commission is satisfied that each of these conditions is met before deciding whether to make an order.

[19] The matters which a bargaining order must specify and the kinds of orders the Commission may make, are set out in s 231 of the Act.

[20] In NUW v CHEP Australia Pty Ltd 8 (CHEP Australia), the Vice President considered an application for orders that an employer cease to conduct an agreement ballot, until four meetings were held, and that the Union could reapply for further meetings if the parties had been unable to reach agreement. In his reasons for the decision, the Vice President observed:

[40] Within the scheme of Part 2—4 there are good faith bargaining requirements (s 228(1)), limitations on those requirements (s 228(2)), jurisdictional pre-requisites for applications and orders (ss 229 and 230), a broad discretion as to orders that can be made (s 230(1)), requirements that the Tribunal be satisfied as to certain matters (s 230(3)), requirements for orders (s 231) and consequences of an order being made (ss 232 and 233). In addition to good faith bargaining orders, Part 2—4 also deals with serious breach declarations, majority support determinations, scope orders, facilitating agreements, arbitrating a bargaining dispute, low paid bargaining and single issue employer authorisations.

[21] Turning to s 255 (contained in a general division of Part 2—4 which deals with ‘Other Matters’), the Vice President expressed the view that s 255 is an overarching limitation on making orders that require or have the effect of requiring certain conduct, processes or outcomes. However, when considering whether an order could be granted that delayed a vote on an enterprise agreement, the Vice President expressed:

[42] Section 255 clearly prevents the Tribunal from requiring an employee to vote against a proposed enterprise agreement. An order that would have the same effect is also not available. I do not believe that the limitation is necessarily confined to orders which relate to the outcome of bargaining. In some cases orders may infringe the section if they deal merely with process issues. Whether a particular order is contrary to s 255 depends on the nature of the order, and the effect of the order in the circumstances of the case.

[43] In my view, the better interpretation of the provisions is that an order that delays a vote, provided it be only for a short time and does not in substance deny employees the opportunity to vote for an agreement, is not precluded by s 255. In a given case the facts will need to be considered to determine whether intervention of this nature by deferring a vote has the effect precluded by s 255.

[22] While the decision of CHEP Australia may on its face not have apparent relevance to the application before me now, there is purpose for its inclusion. Path Transit submitted that if Mr Ferguson did not agree with the decision of Commissioner Williams, it was open to him to appeal that decision; however, he did not. It appeared somewhat perplexing, said Path Transit, that Mr Ferguson was asking the Commission to make a determination on bargaining orders, in circumstances where bargaining had concluded.

[23] At the hearing, Counsel for the Mr Ferguson submitted that matter No. B2020/39 had not been dealt with by the Commission at all. However, when questioned about this submission, Mr Ferguson reframed his submission in light of the evidence led and submissions made – that a conference had been convened to deal with the matter and further direction given. Counsel withdrew his submission noting that the Commission had not yet determined matter No.B2020/39.

[24] Returning to the submission of Path Transit, it is not without merit. It was evident that when matter No. B2020/39 was brought before the Commission, the parties were agreeable to convening a private conference with a view to furthering negotiations and resolving issues. If it were the case that Mr Ferguson was dissatisfied with the outcome of that discussion and considered that the conduct of Path Transit remained contrary to the requirements under s 228, it was open to him to have requested the matter be brought back on.

[25] Path Transit was obliged to, and did, notify its employees of the ballot to approve the Agreement. Evidently, Mr Ferguson (or Transport Edge as the case may be) had members whom he represented. Therefore, it was open to Mr Ferguson, on behalf of those he was representing, to have pursued orders that, like the case of CHEP Australia, may have led to the vote being delayed. The point is Mr Ferguson was not without recourse.

[26] Mr Ferguson expressed a feeling of having been hoodwinked- perhaps by both employer and the TWU. Nevertheless, I cannot discern from the submissions advanced that the conduct complained of precludes this Commission approving the Agreement.

[27] At the time that approval is sought from the Commission for an enterprise agreement, the agreement in question will have already been made by the employees, under s 182(1) of the Act. 9 An adjournment of this application is sought until matter No. B2020/39 is determined and bargaining is recommenced. Yet, there is no bargaining to be had when the Agreement is already made. Therefore, the first ground appears moot.

[28] The application before me now is to approve an enterprise agreement in accordance with Subdivision B, Part 2-4 of the Act. In that regard, s 186 obliges this Commission to approve that enterprise agreement if the requirements of ss 186 and 187 are met.

[29] Under s 186(2), the Commission must be satisfied relevantly that:

(a) if the agreement is not a greenfields agreement – the agreement has been genuinely agreed to by the employees covered by the agreement; and

(c) the terms of the agreement do not contravene section 5 (which deals with the interaction between the National Employment Standards and enterprise agreements etc); and

(d) the agreement passes the better off overall test.

[30] Again, one may note that s 186(2)(a) is necessarily speaking of an enterprise agreement that is made, as referred to in s 172 (2)(a).

[31] Section 188(1) of the Act states the circumstances in which the Commission may be satisfied that an enterprise agreement ‘has been genuinely agreed to by the employees covered by the agreement’.

[32] Section 186(3) provides, in relation to an agreement, that the Commission must be satisfied that the group of employees ‘covered by the agreement was fairly chosen’. In this regard, s 186(3A) provides:

If the agreement does not cover all of the employees of the employer … covered by the agreement, the FWC must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

[33] The remainder of the subsections in s 186, refer to the agreement not including unlawful terms, 10 not including any designated outworker terms,11 inclusion of a nominal expiry date,12 and a requirement for a term about settling disputes.13 Requirements which are met.

[34] There is no argument before me that the Agreement has not been genuinely agreed, and in all the circumstances I am satisfied it has, notwithstanding the ground of objection, advanced. However, there a remains an issue with cl 11.9(b) of the Agreement concerning both its content and inclusion. I now turn to consider the submissions on its inclusion.

Third ground

[35] Counsel for Mr Ferguson submitted cl 11.9(b) had been included in the Agreement outside of the good faith bargaining process. Path Transit submitted that the clause had been put to bargaining representatives prior to a vote, including Mr Ferguson, and all were able to put forward their views. Mr Ferguson gave evidence that he was made aware of cl 11.9(b) 10 days or so prior to the Agreement being pushed through to a vote. He said it was sent to bargaining representatives in an email and he was asked to comment.

[36] Path Transit contended that an obligation to agree with a claim or proposal, or to make concessions, was not a good faith bargaining requirement. The contention is uncontroversial.

[37] In short, there is no merit in the objection advanced by Mr Ferguson. My view would remain unchanged even if bargaining was on foot, which it is not. When the task before the Commission is considered, namely an assessment of the application under s 185, the third ground appears to have no bearing whatsoever on the considerations required by ss 186 and 187 of the Act.

Second ground

[38] Mr Ferguson took issue with the content of cl 11.9(b) arguing that it was detrimental to the employees when compared to the NES.

[39] Both Path Transit and the TWU held the view that cl 11.9(b) was not detrimental when compared to the NES and it did not exclude the NES. The evidence of Mr Davis, and the submissions of Path Transit and the TWU, was that the consultation provision of the Agreement and redundancy provision continued to operate notwithstanding cl 11.9(b). That is, the clause did not abrogate the obligations of Path Transit in relation to consultation (cl 21) nor remove an employee’s entitlement to redundancy (cl 22).

[40] Both these parties considered cl 11.9(b) would operate to avert job losses (redundancy) and provide alternative options to the business in circumstances where a reduction of services occurred which was outside Path Transit’s control. Path Transit submitted that cl 11.9(b) was included in the Agreement in direct response to the potential of service reduction during the current COVID-19 pandemic, where for example, in response to a community outbreak, the WA government may order a reduction in public transport services.

[41] Path Transit submitted that if the Commission viewed cl 11.9(b) as excluding or displacing the NES, then it was open to the Commission to invite an undertaking to address the issue, or alternatively, Path Transit could rely on cl 4.4 of the Agreement. Clause 4.4 of the Agreement reads:

The NES shall apply to this Agreement. In accordance with section 61 of the FW Act, where the NES is more beneficial to an Employee, the NES will prevail over this Agreement to the extent that the NES provides a more favourable outcome to the Employee.

[42] Having considered the submissions, evidence and the operation of cl 11.9(b), cl 21, cl 22 and cl 4.4, I am satisfied that cl 11.9(b) does not contravene s 55 of the Act. In the event that it does, I am nevertheless satisfied that cl 4.4 operates in such a manner so as to address the issue, and therefore approval of the Agreement is not precluded.

Conclusion

[43] Path Transit was made aware of other issues in the Agreement concerning clauses on abandonment of employment, annual leave accrual, cashing out of annual leave and part-time employment. Path Transit has provided written undertakings in response. In compliance with s 190(4) of the Act, the views of bargaining representatives regarding the undertakings proffered will now be sought.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

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 1 Witness Statement of Brendan Davis (Exhibit A1) [4].

 2 Witness Statement of Brendan Davis (Exhibit A1) [4].

 3   Form F17 Employer’s declaration in support of an application for an approval of an enterprise agreement (other than a greenfields agreement) Q2.6.

 4   Form F17 Employer’s declaration in support of an application for an approval of an enterprise agreement (other than a greenfields agreement) Q2.9.

 5   Form F17 Employer’s declaration in support of an application for an approval of an enterprise agreement (other than a greenfields agreement) Q2.9.

 6   Glenn Ferguson [2020] FWC 3289 [4].

 7   [2020] FWC 3289.

 8   [2009] FWA 202.

 9   ALDI Foods Pty Limited v Shop, Distributive & Allied Employees Association [2017] HCA 53, [44].

 10 Section 186(4).

 11 Section 186(4A).

 12 Section 186(5).

 13 Section 186(6).