Property Sales Association of Queensland, Union of Employees

[2010] FWA 5653

[2010] FWA 5653

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.238 - Application for a scope order

Property Sales Association of Queensland, Union of Employees
(B2010/3029)

Real estate industry
COMMISSIONER ASBURY	BRISBANE, 27 JULY 2010

Scope order for management and clerical staff at Ray White Shailer Park.

Background

[1] This is an application under s.238 of the Fair Work Act 2009 (the Act), by the Property Sales Association of Queensland Union of Employees (PSAQ) for an order determining the scope of an enterprise agreement. The respondent is said to be Ray Nicholson and Ray White Shailer Park. The grounds in support of the application state that there is a proposed agreement covering all employees of the Respondent including clerical, property management and sales persons who are to be paid on a commission only basis. It is further stated that the PSAQ has concerns that bargaining for the proposed agreement is not proceeding efficiently or fairly because the agreement will not cover appropriate employees or will cover employees that it is not appropriate for the agreement to cover.

[2] Under the heading “Particulars” the following statement appears:

“The proposed agreement covers salespeople who are to be paid on a commission only basis or a commission based pay structure. This structure has been laboriously negotiated into a form of regulation through the development of the Real Estate Industry Award 2010. The proposed enterprise agreement does not adequately address the checks and balances contained in the award and therefore cannot be applied to this form of employment.”

[3] The PSAQ contends in the application that the proposed agreement should cover property management staff and clerical staff.

[4] The application for a scope order was heard on 28 May 2010. At that hearing the parties outlined the background to the application, which can be summarised as follows. On Friday 21 May at 3.05 pm, the PSAQ lodged an application under s.240 of the Act, for FWA to deal with a bargaining dispute. That notification alleged that Mr Gannon of the PSAQ had contacted the Principal of the Respondent, Mr Nicholson, and advised that the PSAQ wished to represent employees in negotiations for an enterprise agreement. It was alleged that Mr Nicolson refused to meet with Mr Gannon and informed Mr Gannon that an agreement would be voted on by employees on Monday 24 May. Following a conference before FWA as presently constituted, on 24 May, it was agreed that a meeting would take place between Mr Nicolson and Mr Gannon.

[5] A meeting was held on Tuesday 25 May 2010 between Mr Nicholson and Mr French, who attended on behalf of the PSAQ, in lieu of Mr Gannon. No agreement was reached in relation to issues raised by the PSAQ, and on Tuesday 25 May, Mr French wrote to Mr Nicholson stating that the PSAQ intended to apply to FWA for a scope order. The letter also stated that:

“We are seeking separation of the sales staff from other employees of Ray White Shailer Park and for these sales people to be placed on individually negotiated employment agreements. Alternatively, and secondly, a separate enterprise agreement specifically reflecting the unique employment arrangements of commission based remuneration would be accepted to (but not preferred) by the salespeople involved.”

[6] The letter concluded with a request that Mr Nicholson delay the vote on the agreement proposed for Wednesday 26 May, until the matter could be progressed. 1 On 26 May an application for approval of the Ray White Shailer Park Enterprise Agreement 2010 (the Agreement) was lodged with FWA. On the same day, Livingstones Australia wrote to the PSAQ on behalf of Ray White Shailer Park, rejecting allegations that the bargaining process had not proceeded fairly and efficiently, and that it was inappropriate for the agreement to cover sales staff. The letter concluded by informing the PSAQ that the voting process for the Agreement would commence and be completed on Wednesday, 26 May 2010.2

Legislative provisions

[7] The case conducted by the PSAQ centred on s.187(2) and s.238 of the Act. Those provisions are as follows:

“187(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.

. . . .

238 Scope orders

Bargaining representatives may apply for scope orders

(1) A bargaining representative for a proposed single-enterprise agreement may apply to FWA for an order (a scope order) under this section if:

(a) the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly; and

(b) the reason for this is that the bargaining representative considers that the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover.

No scope order if a single interest employer authorisation is in operation

(2) Despite subsection (1), the bargaining representative must not apply for the scope order if a single interest employer authorisation is in operation in relation to the agreement.

Bargaining representative must have given notice of concerns

(3) The bargaining representative may only apply for the scope order if the bargaining representative:

(a) has given a written notice setting out the concerns referred to in subsection (1) to the relevant bargaining representatives for the agreement; and

(b) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and

(c) considers that the relevant bargaining representatives have not responded appropriately.

When FWA may make scope order

(4) FWA may make the scope order if FWA is satisfied:

(a) that the bargaining representative who made the application has met, or is meeting, the good faith bargaining requirements; and

(b) that making the order will promote the fair and efficient conduct of bargaining; and

(c) that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen; and

(d) it is reasonable in all the circumstances to make the order.

Matters which FWA must take into account

(4A) If the agreement proposed to be specified in the scope order will not cover all of the employees of the employer or employers covered by the agreement, FWA must, in deciding for the purposes of paragraph (4)(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.

Scope order must specify employer and employees to be covered

(5) The scope order must specify, in relation to a proposed single-enterprise agreement:

(a) the employer, or employers, that will be covered by the agreement; and

(b) the employees who will be covered by the agreement.

Scope order must be in accordance with this section etc.

(6) The scope order:

(a) must be in accordance with this section; and

(b) may relate to more than one proposed single-enterprise agreement.

Orders etc. that FWA may make

(7) If FWA makes the scope order, FWA may also:

(a) amend any existing bargaining orders; and

(b) make or vary such other orders (such as protected action ballot orders), determinations or other instruments made by FWA, or take such other actions, as FWA considers appropriate.”

Submissions in support of application for scope order

[8] In support of the application for a scope order, the PSAQ submitted that its concerns in relation to the Agreement had not been addressed. Essentially those concerns are that the agreement covers three types of employees at Ray White Shailer Park:

• Clerical employees



• Property Management employees; and



• Real Estate Salespersons.

[9] According to the PSAQ, the views of property sales persons have been unfairly overridden by the numbers of other employees covered by the agreement. The PSAQ also raised concerns about a number of persons who participated in the ballot, on grounds including the relationship of those persons to the Principal of the Respondent, and their eligibility to vote in a ballot for an agreement. It was submitted that it is unfair that the interests of PSAQ members employed as property sales persons can be overridden in a situation where a person or persons who have no interest in the outcome of the agreement with respect to salespersons are allowed to vote on matters which affect salespersons. The PSAQ also maintained that there are a number of concerns about the validity of the terms of the agreement and whether such terms could be an agreement purporting to be made in accordance with the terms of the Real Estate Industry Award 2010 (the Award).

[10] The PSAQ submitted that the fact that the Agreement had been made and lodged for approval with FWA was not an impediment to the grant of a scope order. Section 238 of the Act is predicated on there being an order in force until an agreement is approved, rather than made, and this is consistent with the provisions of s.239(b)(ii). Whether or not the employer and the other parties proceed with an agreement being approved is a matter solely within their province. The parties to an agreement do not need to have that agreement approved, but can rather abandon an agreement. This is the outcome sought by the PSAQ which contends that there should be at least two agreements - one with persons who are real estate salespersons and one with persons who are employed in roles other than that of real estate salespersons.

[11] In relation to the requirements for a scope order in s.238(1) of the Act, PSAQ submitted that as a bargaining representative, it was concerned that bargaining was not proceeding efficiently or fairly because real estate sales persons should have been excluded from the Agreement. Bargaining was not efficient because it was not an effective use of resources to include persons in an agreement who were not interested in or affected by matters in the Agreement. The Respondent had presented the Agreement on a “take it or leave it” basis, and there was no bargaining or genuine negotiations. Section 238(2) is not relevant because there is no single interest employer authorisation in operation in relation to the agreement. As required by s.238(3) PSAQ had given written notice to the Respondent setting out its concerns in relation to the matters in s.238(1). It was submitted that given the urgency of the situation, created by the conduct of the Respondent, the time frame in which the notice had been given was reasonable. Employees of the Respondent approached the PSAQ on Thursday 19 May and joined the PSAQ on Friday 20 May.

[12] In relation to s.238(4) it was submitted that the PSAQ is meeting good faith bargaining requirements, and had attempted to meet the Respondent and engage in discussions about its concerns. Further, the making of the scope order would promote efficiency, in the sense of the primary definition of that term: effective in the use of energy or resources. A scope order would also be effective, in that it would enable the PSAQ to invoke s.187(2) of the Act in any proceedings where approval of the Agreement was sought, to argue that the bargaining process had been undermined. A scope order would also be effective in circumstances where the Agreement had been voted on, because if the Respondent sought approval of the Agreement without addressing the concerns of the PSAQ, the PSAQ could apply for a bargaining order, to require the Respondent to continue to bargain with the PSAQ. The Respondent should not be permitted to hold up the consequences of the unfairness – an agreement which has been voted upon by employees – as an answer to the legitimate concerns of the PSAQ.

[13] It was also submitted that the fact that the Agreement had been voted on and lodged with FWA for approval, did not prevent the Respondent from deciding not to support its approval.

Submissions in opposition to the application for scope order

[14] For the Respondent, it was submitted that the application by the PSAQ smacked of bad faith and should be seen as a tactic for interrupting the bargaining process and causing dissent. It was further submitted that the Agreement had not been put to employees on a “take it or leave it” basis, and had been subject of considerable discussion. In relation to the contentions that the Respondent had not complied with pre-approval requirements, it was submitted that all provisions of the Act necessary for approval of the Agreement had been met. The allegations about irregularities with respect to the voting process were rejected by the employer. There is no deficiency in the technical content of the Agreement, when it is compared to the Award.

[15] It was also pointed out that the PSAQ was stating on the one hand that it wanted a separate agreement for salespersons, and on the other hand, that it wanted individual agreements for salespersons. It is not unusual for an enterprise agreement to cover different categories of employees, and there was nothing so extraordinary or unique about the terms and conditions of the Award with respect to salespersons, that would warrant them being covered by a separate agreement.

[16] Having made the Agreement, the parties to it were entitled to seek approval, and a scope order made at this point, could have no impact on an Agreement already made and lodged with FWA. It was also submitted that s.187(2) of the Act did not only operate in circumstances where a scope order had been made.

[17] In relation to the requirements of s.238, it was submitted that the written notice of concerns provided by the PSAQ did not contain sufficient detail to enable the employer to respond, and that the issues raised by the Union in the meeting differed to those it had raised in these proceedings. The Award included employees leasing, renting or selling real estate, and it was not efficient that a small business with 18 employees should be required to have more than one agreement. In the time frame during which employees had the Agreement for consideration, no employee had raised concerns about the issue of wanting individual agreements. This matter had only been raised at the last minute, when the PSAQ had become involved.

[18] It was also submitted that it would be inappropriate for FWA to grant an application for a scope order after the Agreement had been voted on. The bargaining process had ended and there was no room for negotiation.

Conclusions

[19] The scheme of the FW Act with respect to enterprise agreements, draws a distinction between proposed agreements and agreements which are made. Chapter 2, Part 2-4 - Division 3 deals with bargaining and representation during the bargaining process. Essentially the provisions enable employers and employees who are bargaining for a proposed enterprise agreement, to appoint bargaining representatives. An employer that will be covered by a proposed agreement is required to notify employees of their right to be represented by a bargaining representative, and the content of the notification is prescribed. Further, employees must not be requested to approve a proposed agreement for a period of 21 days after the notice is given. It is clear that these provisions are intended to give employees a reasonable time frame in which to decide whether they wish to appoint a bargaining representative, and to make that appointment.

[20] Sub-division A of Division 4, Chapter 2 Part 2-4 of the FW Act sets out pre-approval steps and requires that employees be given a copy of a proposed agreement, or access to a copy, and provided with an explanation about the terms of the proposed agreement at the commencement of or during the seven day period prior to voting on the agreement. Employees must also be given seven days notice of the time and place at which the vote for a proposed agreement will be held.

[21] By virtue of s.182(1) of the Act, a proposed enterprise agreement is made when a majority of employees who cast a valid vote, approve the agreement. If an agreement is made, s.185 provides that a bargaining representative for the agreement must apply to FWA for approval of the agreement, within 14 days of the agreement being made. The pre-approval steps set out above are mandatory, and provide the basis upon which FWA is to be satisfied that an agreement which has been made, has been genuinely agreed to by employees who are covered. If FWA is not satisfied in relation to these matters, an agreement must not be approved.

[22] Provisions relating to scope orders are found in Chapter 2, Part 2-4 Division 8, Subdivision C of the Act. Division 8 generally deals with FWA’s general role in facilitating bargaining. Section 238 makes it clear that a bargaining representative for a proposed agreement may make an application for a scope order. It is clear from the section that scope orders are directed at the bargaining process and to ensuring that it is efficient and fair. It is also the case that FWA must be satisfied that if an order is made, bargaining will be at least fairer or more efficient or both, than it would be if no order were to be made. 3

[23] In the present case, the PSAQ’s application for a scope order was made on 26 May 2010. On that date, the bargaining to which the scope order would relate effectively ceased, and the Agreement was made. In my view, a bargaining representative cannot make an application for a scope order once an agreement has been made. At the point it is made an agreement is no longer proposed. Further, when an agreement is made, a bargaining representative must apply for FWA approval of the agreement. This occurred in the present case, and the employer’s bargaining representative applied for approval of the Agreement on 26 May 2010.

[24] Thus on the date that the PSAQ applied for a scope order, it was no longer the case that the PSAQ was a bargaining representative for a proposed agreement, as provided in s.238(1). Even if an application for a scope order can be lodged at the point an agreement is made, or thereafter, I am not satisfied that the present case is one which justifies the exercise of the discretion to make such an order. In particular, I am not satisfied that making an order in the current circumstances, will promote the fair and efficient conduct of bargaining.

[25] An application for FWA approval of the Agreement has been made, and the applicant is entitled to have that application considered against the requirements of the FW Act. The practical result of a scope order being made in circumstances where bargaining has advanced to the stage of an agreement being voted on, and an application for FWA approval made, would be that the parties would be required to start the entire bargaining process again, with a different group or groups of employees. If the scope order is not granted, the agreement will be tested against the requirements of the Act. The PSAQ has made assertions about irregularities in the pre-approval processes for the Agreement and in relation to its substantive terms, but at this stage has not provided any evidentiary material to support those assertions, other than a copy of the Agreement. The approval process will necessarily canvass many of the issues about which the PSAQ has made assertions, and will provide an opportunity for the Union to put material before FWA to support its assertions.

[26] In all of the circumstances, I am not satisfied that if an order is made, the bargaining will be fairer or more efficient, or both, than would be the case if the Agreement was tested against the requirements of the Act.

[27] I accept that the PSAQ would be in a stronger position to oppose approval of the Agreement if a scope order was made, because s.187(2) would operate so that FWA could not approve the Agreement on the basis that approval would undermine good faith bargaining. In this regard the Explanatory Memorandum to the Fair Work Bill makes it clear that s.187(2) is intended to deal with a situation where a bargaining representative has made an application for FWA approval of an enterprise agreement that is not expressed to cover all of the employees and the employer specified in a scope order. 4 However, I do not accept that it would be appropriate to issue a scope order for this reason, in circumstances where the Agreement has been made, simply to put the PSAQ in a stronger position to oppose the approval of the Agreement.

[28] In short, there is an application for approval of the Agreement before FWA, and the parties to that Agreement are entitled to have it considered against the criteria for approval under the FW Act. Although the PSAQ is no longer a bargaining representative for a proposed agreement, the PSAQ is still a bargaining representative, and as such has other rights including the right to advance arguments about whether the Agreement should be approved by FWA.

[29] The PSAQ has made assertions in relation to concerns about the pre-approval processes for the Agreement, and its substantive terms. The concerns of the PSAQ may be legitimate. However, once the Agreement is made, the appropriate forum in which those concerns can be addressed is in the application for approval. The PSAQ has indicated that it seeks to be heard in the approval of the Agreement and has corresponded with the Registrar of FWA in this regard.

[30] The application by the PSAQ for a scope order under s.238 of the FW Act is dismissed. I Order accordingly.

COMMISSIONER

 1   Exhibit 1.

 2   Exhibit 2.

 3   United Firefighters’ Union of Australia and Others [2010] FWAFB 3009 at [55].

 4   The Parliament of the Commonwealth of Australia, House of Representatives, Fair Work Bill 2008 Explanatory Memorandum, page 124 paragraph 788.

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