Philmac Pty Ltd
[2011] FWA 1639
•16 MARCH 2011
Note: An appeal pursuant to s.604 (C2011/3908) was lodged against this decision - refer to Full Bench decision dated 5 May 2011 [[2011] FWAFB 2668]for result of appeal.
[2011] FWA 1639 |
|
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Philmac Pty Ltd
(AG2011/72)
SENIOR DEPUTY PRESIDENT O'CALLAGHAN | ADELAIDE, 16 MARCH 2011 |
Philmac Production, Distribution and Maintenance Enterprise Agreement 2010 (South Australia).
[1] On 17 January 2011 Philmac Pty Ltd (Philmac) lodged an application for approval of the Philmac Production, Distribution and Maintenance Enterprise Agreement 2010 (South Australia) (the agreement), pursuant to section 185 of the Fair Work Act 2009 (the Act). The application was referred to me for consideration.
[2] On 1 February 2011 I issued Preliminary Findings, through which I indicated that, whilst I was satisfied that the agreement itself meet the requirements necessary for approval, I sought additional information about the process followed to reach the agreement. As the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and the Liquor, Hospitality and Miscellaneous Union (hereinafter referred to as United Voice or UV) had given notice that they sought to be organisations covered by the agreement. A copy of the Preliminary Findings was forwarded to those unions and to the 11 employee bargaining representatives nominated in the Form F16.
[3] On 4 February 2011 Philmac provided additional information about the process of advising employees of the agreement and the voting arrangements.
[4] Shortly after this, my office received expressions of concern from some Philmac employees over the voting process which was implemented by Philmac. I understand that these concerns were expressed on the basis that these employees wished to remain anonymous.
[5] It is relevant to note that the Employers Declaration (Form F17) advises that 194 employees will be covered by the agreement. Of these, 110 cast a valid vote and 69 voted in favour of the agreement.
[6] The application was the subject of a hearing on 25 February 2011. Notice of this hearing was provided to the AMWU, CEPU and UV, together with the 11 employee bargaining representatives. At this hearing Mr Richards, the Philmac General Manager-Organisational Development and Ms Collins, the Teamleader Human Resources and Payroll, appeared for Philmac. Mr Adley represented the CEPU, Mr Alford, the AMWU and Ms Harrison and Mr McRae represented UV.
[7] The Notice of Listing requested that Philmac arrange for at least two employee bargaining representatives to attend. Mr Buder and Mr Goldsworthy attended on this basis. Another employee bargaining representative, Ms Pagano also attended.
[8] I note that, prior to this hearing, I received a further advice from a Philmac employee who asserted that there was some impropriety in the selection of the employee bargaining representatives to attend this hearing.
[9] In this decision I have not disclosed the names of the Philmac employees who have continued to contact my office as I do not consider this to be either necessary or appropriate. My decision in this matter is not based on the advice these persons have provided to me and I have referred to this advice only for the sake of completeness.
[10] I also note that, subsequent to the 25 February 2011 hearing, Mr Richards provided further information in the form of copies of advices to employees and employee bargaining representatives. I have taken this information into account in reaching a conclusion.
[11] At the hearing on 25 February 2011 Philmac explained the agreement negotiation process. I have summarised this in the following terms.
[12] In 2010 Philmac negotiated an agreement proposal through a consultative committee process involving all the employee bargaining representatives and the three unions. This agreement proposal was put to an employee vote in late November or early December 2010 and was rejected by a substantial majority. Philmac were concerned at what appeared to be a number of voting irregularities.
[13] Philmac subsequently invited all its employees to provide feedback on specific issues including the duration of the agreement, wage increases, redundancy and rostering. Employees could also specify other concerns about the proposed agreement. This invitation was issued through a feedback form which employees were invited to return to Philmac. Employees were advised that discussions were occurring with bargaining representatives to determine any changes and offsets required.
[14] Some of the employee bargaining representatives were advised of this feedback invitation by e-mail and Philmac undertook to provide a copy of the feedback form to employee bargaining representatives to whom it could not be e-mailed.
[15] On 15 December 2010 Mr Richards provided an e-mail advice to the three unions and to certain of the employee bargaining representatives. In this e-mail Mr Richards summarised the employee feedback and advised:
“....
I have met with other Exec on these issues and we believe we can develop an improved position on many of these items to address the feedback & concerns without the need for conduct further bargaining at this stage. I am sure you all agree that if we can get an acceptable EA without drawing the process out for too much longer it would be to the benefit of all parties.
We are therefore developing a revised EA to be distributed to staff shortly so that we can conduct a re-vote as soon as possible albeit we have the upcoming Christmas holiday period to work within.
I will update you on if what & when things progress & in the meantime please get back to Susan or myself with any further questions.
Regards.........................Paul”
[16] On 17 December 2010 Mr Richards sent a further e-mail to the three unions and to certain of the employee bargaining representatives. This stated:
“Further to my email below, we have now completed an update of the EA which we believe addresses major areas of concern from recent feedback. Also attached is a covering memo which summarises these changes & outlines the voting process from this point. As mentioned in the memo, it is we circulated these documents to individuals before year end so that any compensation pay for the July-Dec period could be taken up as part of the 2010 calendar year (ie Philmac’s Financial Year). Therefore, these documents as well as an official voting slip & reply paid envelope are in the process of being sent to employee’s home addresses so we can achieve a re-vote over the Christmas / New Year period as outlined.
Both myself and Susan will be in the office next week so please get back to us if you have any questions.
Thanks again for your feedback & support in developing the revised EA.
Regards.........................Paul” (sic)
[17] The agreement vote was conducted by post. On 17 December 2010 Philmac forwarded to all its employees, an explanation of the revised agreement, a copy of the agreement proposal, a ballot paper and reply paid envelope.
[18] I note that, following the afternoon shift on 17 December 2010 Philmac employees commenced their Christmas closedown, and that work resumed on 4 January 2011. The voting period was from 31 December 2010 to 5.00 pm on 5 January 2011. Votes could be posted or placed directly in the ballot box at the Philmac premises.
[19] I also note that Philmac received advice about the voting method from Fair Work Australia but am unaware of whether this advice was provided by the Fair Work Australia advice line or the Fair Work Ombudsman's advisory function. I make no criticism of this advice.
[20] There are two issues about which I must be satisfied in order for the agreement to be approved.
[21] Firstly, s.187 relevantly states:
“187 When FWA must approve an enterprise agreement—additional requirements
Additional requirements
(1) This section sets out additional requirements that must be met before FWA approves an enterprise agreement under section 186.
Requirement that approval not be inconsistent with good faith bargaining etc.
(2) FWA must be satisfied that approving the agreement would not be inconsistent with or undermine good faith bargaining by one or more bargaining representatives for a proposed enterprise agreement, or an enterprise agreement, in relation to which a scope order is in operation.”
[22] In this respect, I need to be satisfied that the approach adopted by Philmac following the initial negative vote was consistent with the good-faith bargaining requirements.
[23] Secondly, s.186(2)(a) states:
186 When FWA must approve an enterprise agreement—general requirements
....
Requirements relating to the safety net etc.
(2) FWA must be satisfied 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
....”
[24] Further, s.188 deals with the concept of genuine agreement in the following terms:
“188 When employees have genuinely agreed to an enterprise agreement
An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if FWA is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.”
[25] In these respects the issue is whether the postal ballot, sent out on the last day of work and over the Christmas period, enabled genuine employee agreement to be achieved.
[26] In considering both these issues, it is appropriate to note at the outset that it is clear to me that Philmac has progressed this matter with the intention of finalising the agreement in a timely fashion. I can discern no malice with respect to the selection of bargaining representatives to appear at this hearing and it is simply a question of whether the actions taken meet the requirements of the Act.
[27] Philmac assert that its actions meet these requirements. Philmac assert that the documentation provided to me after the hearing on 25 February 2011 was evidence of "an ongoing and systematic dialogue with EVERY employee bargaining representative so that they were aware of & invited to participate in feedback and discussion on what (if any) changes needed to be made to the subsequent EA" 1
[28] Philmac assert that the voting process reflected advice from FWA and was consistent with the requirements of the Act. With respect to the vote itself, Philmac advised that counting was overseen by both management and employee bargaining representatives and that the votes counted were deemed to be valid votes.
[29] The UV, AMWU and CEPU have indicated that they are satisfied that, as bargaining representatives, they were adequately consulted with respect to the revised agreement proposal. The unions did not oppose the approval of the agreement.
[30] Employee bargaining representatives, Mr Buder and Mr Goldsworthy advised that they were participants in a bargaining committee but that this committee did not meet after the initial negative vote. Notwithstanding this, both Mr Buder and Mr Goldsworthy indicated that they had discussions with various other employee bargaining representatives and Management relative to the proposed changes to the agreement.
[31] Ms Pagano advised that she worked on the night shift and that she was not consulted about the proposed agreement changes, nor made aware of the voting arrangements prior to 17 December 2010. Further, she advised that at least a number of night shift employees were not aware of the vote as a result of the timing of the ballot over the Christmas holiday period and that, unlike the day and afternoon shift employees, who were able to access new or replacement voting slips on their return to work on 4 January 2011, the night shift employees were not able to do so before the close of the ballot.
Findings
[32] I have initially considered whether the consultation process which led to the finalisation of the agreement proposal occurred in a fashion which permits the approval of the agreement. In this respect it is appropriate that I categorically affirm that, on the information before me there is nothing that permits the conclusion that Philmac have deliberately set out to avoid compliance with the Act. However, the Act requires that I form a conclusion about whether the essential requirements of the bargaining process have been met.
[33] The good faith bargaining requirements referenced in s.187(1) and (2) are set out in the following terms:
“228 Bargaining representatives must meet the good faith bargaining requirements
(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:
(a) attending, and participating in, meetings at reasonable times;
(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;
(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;
(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;
(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;
(f) recognising and bargaining with the other bargaining representatives for the agreement.
(2) The good faith bargaining requirements do not require:
(a) a bargaining representative to make concessions during bargaining for the agreement; or
(b) a bargaining representative to reach agreement on the terms that are to be included in the agreement.”
[34] The only issues which cause concern in this respect go to whether Philmac met the requirements of subsection (f) in bargaining with the bargaining representatives for the agreement and the requirements of subsection (b) in disclosing relevant information in a timely manner.
[35] In the hearing on 25 February 2011 Philmac agreed that it engaged in discussions with only some of the employee representatives. Further, Philmac advised that the process adopted after the initial "no" vote was not designed to re-engage the whole bargaining process but was fundamentally based on the feedback forms received from employees.
[36] The advice provided to me by Ms Pagano was that, as a night shift employee bargaining representative, she was not consulted by Philmac and was unaware of the ballot proposal until she received the postal ballot material. I have noted that Ms Pagano was sent at least one e-mail on 17 December 2010 enclosing the revised agreement, explanatory memorandum and voting information. However, in the context of the advice provided by Ms Pagano, I cannot conclude that this represents a negotiation process consistent with the requirements of s228.
[37] There is nothing in the Act that restricts an employer from seeking feedback from employees about an agreement proposal. However, s.228 clearly envisages a consultation process which provides all employee bargaining representatives with the opportunity to put, and to respond to proposals made by other bargaining representatives in recognising and bargaining with those other bargaining representatives. Whilst there is no requirement that agreement be reached, or that concessions be made, it is necessary that this information exchange process occurs.
[38] I do not consider that the employee feedback process can be taken to usurp or replace the continuing requirement for consultation to be available to all the employee bargaining representatives. I am not satisfied that the process applied by Philmac provided an opportunity for all of the employee bargaining representatives to be made aware of Philmac’s revised proposals that may have been put by other bargaining representatives both before and after the employee survey. Further, the advice to employees suggests consultation with employee bargaining representatives, which in fact, is not entirely accurate.
[39] As a consequence, I am unable to conclude that the good-faith bargaining requirements have been met so as to enable the agreement to be approved.
[40] The second issue relates to the postal voting arrangement implemented by Philmac and the extent to which I can be satisfied that the employees covered by the agreement genuinely agreed to it.
[41] The only issue here is whether, pursuant to s.188(c) the sending out of a postal ballot on 17 December 2010, the day the Christmas annual leave break commenced, enabled an appropriately fair opportunity for employee input to the voting process.
[42] The Act does not prescribe that particular forms of ballots must be implemented. In normal circumstances I consider that a postal ballot represents an inherently fair and appropriate voting method. In this case, the only issue goes to whether the provision, without any effective prior advice, of information by post, after the annual leave break had commenced and during the Christmas period, meant that the integrity of the vote was prejudiced.
[43] Given my earlier findings I have expressed only a preliminary reservation in this respect in that the low vote return and Ms Pagano’s advice of concerns on the part of certain of the night shift employees gives rise to an element of doubt about the extent to which there was an adequate opportunity for genuine employee agreement in this circumstance.
Conclusion
[44] For the reasons I have set out, the application for approval of the Philmac Production, Distribution and Maintenance Enterprise Agreement 2010 (South Australia) is refused.
[45] The fundamental issue which underpins this refusal does not necessitate the revision of the agreement proposal itself, but rather the implementation of the consultation process required by s.228. It may be that, having instituted that process, even only briefly, Philmac again seek employee endorsement of the current agreement proposal for a postal ballot with a subsequent application for approval. Alternatively, that consultation process may result in changes being made to the current agreement proposal.
SENIOR DEPUTY PRESIDENT
Appearances:
P Richards and S Collins representing Philmac Pty Ltd.
J Adley for Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.
N Alford for “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU).
L Harrison and B McRae for United Voice.
Hearing details:
2011.
Adelaide:
February 25.
1 Philmac e-mail to FWA of 25 February 2011
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