Qualia Wine Services Pty Ltd

[2015] FWC 5775

[2015] FWC 5775

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Qualia Wine Services Pty Ltd
(AG2015/3964)

COMMISSIONER LEWIN MELBOURNE, 20 AUGUST 2015

Application for approval of the Qualia Wine Services Pty Ltd Enterprise Bargaining Agreement 2015 – Notice of Employee Representational Rights – s.174(1A) of the Fair Work Act 2009 (Cth) – r.2.05 and Schedule 2.1 of the Fair Work Regulations 2009 (Cth) – Inclusion of content relating to low-paid bargaining authorisation – No low-paid bargaining authorisation in existence – No capacity to depart from the form and content of the notice provided in the Regulations.

Introduction

[1] On 15 July 2015, Qualia Wine Services Pty Ltd (Qualia) filed an application for approval of the Qualia Wine Services Pty Ltd Enterprise Bargaining Agreement 2015 (Agreement) pursuant to s.185 of the Fair Work Act 2009 (Cth) (Act). On 15 July 2015, the Australian Workers’ Union (AWU), being a union bargaining representative for the Agreement, filed a Form 18 – Statutory declaration of employee organisation in relation to an application for approval of an enterprise agreement (statutory declaration). The AWU declared that they did not support approval of the Agreement on the basis that they considered the Agreement did not pass the Better Off Overall Test (BOOT) and that the Agreement was not genuinely agreed to by the employees covered by the Agreement.

[2] On 29 July 2015, the Commission held a hearing of this matter. The purpose of the hearing was for the Commission to hear the AWU on the issues raised in its statutory declaration, and for Qualia to provide its response to those issues. The issues in dispute between Qualia and the AWU were narrowed, and the Commission directed the parties to file submissions in relation to the Full Bench of the Commission’s decision in Construction, Forestry, Mining and Energy Union v Tahmoor Coal Pty Ltd[2010] FWAFB 3510 (Tahmoor Coal). The Full Bench’s decision in Tahmoor Coal considers the good faith bargaining requirements under the Act.

Notice of Employee Representational Rights

[3] At the hearing on 29 July 2015, the Commission alerted the parties of its concerns with the Notice of Employee Representation Rights (NOERR) provided by Qualia to its employees and attached to the application for approval of the Agreement. The Commission noted that the NOERR contained the following:

“Fair Work Commission has granted a low-paid bargaining authorisation in relation to this agreement. This means the union that applied for the authorisation will be your bargaining representative for the agreement unless you appoint another person as your representative, or you revoke the union’s status as your representative, or you are a member of another union that also applied for the authorisation.”

[4] Qualia and the AWU confirmed that no low-paid bargaining authorisation was, or is, in existence. Accordingly, the Commission directed the parties to file submissions in relation to the NOERR and the Full Bench of the Commission’s decision in Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union[2014] FWCFB 2042 (Peabody). The Full Bench’s decision in Peabody considers the operation of s.174(1A) of the Act, which deals with the content and form of a NOERR.

[5] On 5 August 2015, the AWU filed in the Commission and served on Qualia its submissions as directed at the hearing on 29 July 2015. On 7 August 2015, Qualia filed in the Commission and served on the AWU its submissions and relevant attachments in accordance with the directions.

Relevant Statutory Provisions

[6] Section 174 of the Act prescribes the content and form of a NOERR. Section 174 of the Act is as follows:

“174 Content and form of notice of employee representational rights

Application of this section

(1) This section applies if an employer that will be covered by a proposed enterprise agreement is required to give a notice under subsection 173(1) to an employee.

Notice requirements

(1A) The notice must:

(a) contain the content prescribed by the regulations; and

(b) not contain any other content; and

(c) be in the form prescribed by the regulations.

(1B) When prescribing the content of the notice for the purposes of paragraph (1A)(a), the regulations must ensure that the notice complies with this section.

Content of notice—employee may appoint a bargaining representative

(2) The notice must specify that the employee may appoint a bargaining representative to represent the employee:

(a) in bargaining for the agreement; and

(b) in a matter before the FWC that relates to bargaining for the agreement.

Content of notice—default bargaining representative

(3) If subsection (4) does not apply, the notice must explain that:

(a) if the employee is a member of an employee organisation that is entitled to represent the industrial interests of the employee in relation to work that will be performed under the agreement; and

(b) the employee does not appoint another person as his or her bargaining representative for the agreement;

the organisation will be the bargaining representative of the employee.

Content of notice—bargaining representative if a low paid authorisation is in operation

(4) If a low paid authorisation in relation to the agreement that specifies the employer is in operation, the notice must explain the effect of paragraph 176(1)(b) and subsection 176(2) (which deal with bargaining representatives for such agreements).

Content of notice—copy of instrument of appointment to be given

(5) The notice must explain the effect of paragraph 178(2)(a) (which deals with giving a copy of an instrument of appointment of a bargaining representative to an employee’s employer).”

[7] Schedule 2.1 of the Fair Work Regulations 2009 (Cth) (Regulations) sets out the required form and content of a NOERR as follows:

“Notice of employee representational rights

(regulation 2.05)

Fair Work Act 2009, subsection 174(6)

[Name of employer] gives notice that it is bargaining in relation to an enterprise
agreement ([name of the proposed enterprise agreement]) which is proposed to cover
employees that [proposed coverage].

What is an enterprise agreement?

An enterprise agreement is an agreement between an employer and its employees that will be covered by the agreement that sets the wages and conditions of those employees for a period of up to 4 years. To come into operation, the agreement must be supported by a majority of the employees who cast a vote to approve the agreement and it must be approved by an independent authority, Fair Work Commission.

If you are an employee who would be covered by the proposed agreement:

You have the right to appoint a bargaining representative to represent you in bargaining for the agreement or in a matter before Fair Work Commission about bargaining for the agreement.

You can do this by notifying the person in writing that you appoint that person as your bargaining representative. You can also appoint yourself as a bargaining representative. In either case you must give a copy of the appointment to your employer.

[If the agreement is not an agreement for which a low-paid authorisation applies—include:]

If you are a member of a union that is entitled to represent your industrial interests in relation to the work to be performed under the agreement, your union will be your bargaining representative for the agreement unless you appoint another person as your representative or you revoke the union’s status as your representative.

[If a low-paid authorisation applies to the agreement—include:]

Fair Work Commission has granted a low-paid bargaining authorisation in relation to this agreement. This means the union that applied for the authorisation will be your bargaining representative for the agreement unless you appoint another person as your representative, or you revoke the union’s status as your representative, or you are a member of another union that also applied for the authorisation.

[if the employee is covered by an individual agreement-based transitional instrument—include:]

If you are an employee covered by an individual agreement:

If you are currently covered by an Australian Workplace Agreement (AWA), individual transitional employment agreement (ITEA) or a preserved individual State agreement, you may appoint a bargaining representative for the enterprise agreement if:

● the nominal expiry date of your existing agreement has passed; or

● a conditional termination of your existing agreement has been made (this is an agreement made between you and your employer providing that if the enterprise agreement is approved, it will apply to you and your individual agreement will terminate).

Questions?

If you have any questions about this notice or about enterprise bargaining, please speak to either your employer, bargaining representative, go to or contact the Fair Work Commission Infoline on [insert number].”

Consideration

[8] The AWU submits that the NOERR is invalid because it contains a statement that is incorrect and represents a departure from the mandatory requirements of the content and form of a NOERR prescribed by s.174(1A) of the Act and Schedule 2.1 of the Regulations, as considered by the Full Bench in Peabody. Therefore, the AWU submits, the Agreement cannot be approved by the Commission.

[9] Qualia submits that a close comparison of the NOERR accompanying the application for approval of the Agreement with the statutory criteria prescribed by s.174 of the Act does not render the NOERR invalid in these circumstances. Qualia submits that the NOERR accompanying the application for approval of the Agreement does not suffer from the kind of defects illustrated in a line of decisions, including Peabody, relating to deficiencies of NOERR.  1

[10] Qualia submits that the NOERR in this matter contains the content and form prescribed by the Act and by the Regulations, including:

● The proposed coverage of the Agreement;

● The ‘what is an enterprise agreement’ information;

● The right to appoint a bargaining representative;

● The default status of a union as bargaining representative for union members; and

● The ‘questions’ provision, informing employees where to contact for further information.

[11] The Full Bench’s decision in Peabody highlights the strict application of s.174 of the Act. The Full Bench held:

“Subsection 174(1A) uses language in mandatory form and goes to some length to make it clear that there can be no departure from the content or form of the Notice prescribed in the Regulations. As mentioned earlier, s.174(1A) provides that a Notice must contain the prescribed content, must not contain any other content and must be in the form prescribed.” 2

[12] Subsections 174(1A) and 174(1B) were enacted by the Fair Work Amendment Act 2012 (Cth) (Amendment Act). The Explanatory Memorandum to the Amendment Act provides:

“145. Under the FW Act employees are entitled to be represented in bargaining for a proposed enterprise agreement by a bargaining representative of their choice, including an employee organisation. The FW Act requires an employer to give notice to each employee to be covered by a proposed enterprise agreement of their right to be represented in bargaining for an enterprise agreement by a bargaining representative. Section 174 of the FW Act provides for the content and form of notice of employee representational rights.

146. Item 8 would insert new subsections 174(1A) and 174(1B) to provide that a notice of employee representational rights must only contain the content prescribed by the regulations (which must comply with the requirements of section 174), must not contain any other content and must be in the form prescribed by the regulations. Item 7 would amend the heading to section 174 to clarify that the section deals with both content and form requirements.

147. This amendment responds to Panel recommendation 19. The amendment is intended to eliminate confusion about whether employers may modify the content or form of the notice of employee representational rights. The amendment would make clear that the notice must contain only the content prescribed by the regulations and no other content except that which the regulations require an employer to insert or omit.” (emphasis added)

[13] The effect of a defective NOERR is that it will render an agreement incapable of approval. The Full Bench held in Peabody that:

“The consequence of failing to give a Notice which complies with the content and form requirements of s.174(1A) is that the Commission cannot approve the enterprise agreement. We note that this does not prevent the employer from recommencing the bargaining process, completing the pre-approval steps (including the giving of valid Notices) and making application to have the resultant enterprise agreement approved by the Commission.

In our view s.174(1A) is clear and unambiguous. There is simply no capacity to depart from the form and content of the notice template provided in the Regulations. A failure to comply with these provisions goes to invalidity.” 3

[14] Qualia submit that there was an omission to remove a paragraph which the form and content rules expressly allow the employer to remove, despite the mandatory language within s.174(1A) as examined by the Full Bench in Peabody. Further, Qualia submits that although they do not disagree with the construction of s.174(1A) and the legislative purpose for which it was enacted, that the rigid application of s.174(1A) espoused by the Full Bench in the previously identified line of decisions need not apply in these circumstances.

[15] On the materials before me, I find that Qualia’s failure to omit the content relating to a low-paid bargaining authorisation in the NOERR renders the NOERR invalid and as a consequence the Commission cannot approve the Agreement. The terms of s.174(1A) of the Act as interpreted by the Full Bench in Peabody contains a proscription that there is no capacity to depart from the content and form of a NOERR prescribed by the Regulations. The regulations prescribe that if a low-paid authorisation applies to the agreement, the content relating to low-paid authorisations is to be included. The regulations therefore prescribe that in the relevant circumstances Qualia were required not to include the paragraph relating to a low-paid bargaining authorisation, as no such authorisation was in existence at the time the NOERR was provided to the employees to be covered by the Agreement.

Conclusion

[16] For the reasons identified above, I consider I am bound to follow the Full Bench’s dicta in Peabody and find that the NOERR which Qualia provided to employees to be covered by the Agreement to be defective, rendering the Agreement incapable of approval by the Commission. However, I note the Full Bench’s obita which provides that this does not prevent the employer from recommencing the bargaining process, completing the pre-approval steps (including the giving of a valid NOERR) and making application to have the resultant enterprise agreement approved by the Commission.

[17] As I have found that the Agreement is incapable of approval by the Commission, I am not required to consider the other issues raised by the AWU.

[18] An Order dismissing Qualia’s application for approval of the Agreement will accompany this decision.

COMMISSIONER

Appearances:

Ms N Howells Schramm of VECCI for the Applicant

Ms L Aksu and Mr A Algate for the Australian Workers’ Union

Hearing details:

2015

Melbourne

27 July 2015

Final written submissions:

7 August 2015

 1   Otswald Bros Pty Ltd v Construction, Forestry, Mining and Energy Union [2012] FWAFB 9512; Veolia v The Australian Workers’ Union[2013] FWCFB 269; Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union[2014] FWCFB 2042; The Australian Maritime Officers’ Union v Harbour City Ferries Pty Ltd[2015] FWCFB 3337

 2   Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union[2014] FWCFB 2042, [18]

 3   Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union[2014] FWCFB 2042, [45]-[46]

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