Railtrain Pty Ltd

[2016] FWCA 1385

[2016] FWCA 1385 [Note: An appeal pursuant to s.604 (C2016/863) was lodged against this decision - refer to Full Bench decision dated 1 June 2016 [[2016] FWCFB 3153] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Railtrain Pty Ltd
(AG2016/2224)

RAILTRAIN PTY LTD RAIL/CIVIL MAINTENANCE & OPERATIONS PILBARA ENTERPRISE AGREEMENT 2016

Mining industry
COMMISSIONER ROE	MELBOURNE, 30 MARCH 2016

Application for approval of the Railtrain Pty Ltd Rail/Civil Maintenance & Operations Pilbara Enterprise Agreement 2016. Should the RTBU be noted as covered by the Agreement?

[1] An application has been made for approval of an enterprise agreement known as the Railtrain Pty Ltd Rail/Civil Maintenance & Operations Pilbara Enterprise Agreement 2016 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by the employer, Railtrain Pty Ltd. The Agreement is a single enterprise agreement.

[2] I identified some issues with the Agreement. Following correspondence Railtrain Pty Ltd provided signed undertakings on 1 March 2016 which addressed those concerns. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement. These undertakings will be taken to be a term of the Agreement. A copy of the undertakings is attached in Annexure A.

[3] I am satisfied that the requirements of Sections 182(1), 186(2)(a) and 188 are met. I can see no basis for concluding that there are reasonable grounds for believing that the Agreement has not been genuinely agreed to by the employees. The Agreement does not cover all of the employees of the employer however taking into account the factors in ss.186(3) and (3A) I am satisfied that the group of employees was fairly chosen.

[4] The Australian Rail Tram and Bus Industry Union (RTBU) provided the employer and FWC with an F18 Form seeking to be covered by the Agreement. The employer opposed the RTBU being covered by the Agreement.

[5] The parties provide the following Agreed Statement of Facts. A copy of the Agreed Statement of Facts is attached in Annexure B.

[6] The issue in dispute is whether or not the RTBU is entitled to represent the industrial interests of its member in relation to work that would be performed under the Agreement. Section 176 of the Act provides that:

176 Bargaining representatives for proposed enterprise agreements that are not greenfields agreements

Bargaining representatives

(1) The following paragraphs set out the persons who are bargaining representatives for a proposed enterprise agreement that is not a greenfields agreement:

(a) an employer that will be covered by the agreement is a bargaining representative for the agreement;
(b) an employee organisation is a bargaining representative of an employee who will be covered by the agreement if:

(i) the employee is a member of the organisation; and
(ii) in the case where the agreement is a multi-enterprise agreement in relation to which a low-paid authorisation is in operation—the organisation applied for the authorisation;
unless the employee has appointed another person under paragraph (c) as his or her bargaining representative for the agreement, or has revoked the status of the organisation as his or her bargaining representative for the agreement under subsection 178A(2); or

(c) a person is a bargaining representative of an employee who will be covered by the agreement if the employee appoints, in writing, the person as his or her bargaining representative for the agreement;
(d) a person is a bargaining representative of an employer that will be covered by the agreement if the employer appoints, in writing, the person as his or her bargaining representative for the agreement.

Bargaining representatives for a proposed multi-enterprise agreement if a low-paid authorisation is in operation

(2) If:

(a) the proposed enterprise agreement is a multi-enterprise agreement in relation to which a low-paid authorisation is in operation; and
(b) an employee organisation applied for the authorisation; and
(c) but for this subsection, the organisation would not be a bargaining representative of an employee who will be covered by the agreement;

the organisation is taken to be a bargaining representative of such an employee unless:
(d) the employee is a member of another employee organisation that also applied for the authorisation; or
(e) the employee has appointed another person under paragraph (1)(c) as his or her bargaining representative for the agreement; or
(f) the employee has revoked the status of the organisation as his or her bargaining representative for the agreement under subsection 178A(2).

(3) Despite subsections (1) and (2):

(a) an employee organisation; or
(b) an official of an employee organisation (whether acting in that capacity or otherwise);
cannot be a bargaining representative of an employee unless the organisation is entitled to represent the industrial interests of the employee in relation to work that will be performed under the agreement.

[7] Section 201(2) provides that:

“Approval decision to note that an enterprise agreement covers an employee organisation

(2) If:

(a) an employee organisation has given a notice under subsection 183(1) that the organisation wants the enterprise agreement to cover it; and
(b) the FWC approves the agreement;

the FWC must note in its decision to approve the agreement that the agreement covers the organisation.”

[8] It is accepted that the RTBU has given notice in accordance with Section 201(2) and that the conditions in Section 176(1)(b) are met by the RTBU and the Member did not appoint another bargaining representative or revoke the authority of the RTBU. Therefore, I must note that the RTBU is covered by the Agreement provided the condition in Section 176(3) is met.

[9] I must note that the RTBU is covered if it is entitled to represent the industrial interests of its Member in relation to work that will be performed under the Agreement.

[10] Railtrain have submitted that there are two questions embedded within Section 176(3) namely: (1) Is the RTBU entitled to represent the industrial interests of the Member covered the Agreement? and (2) Is RTBU entitled to represent the Member’s industrial interests in relation to work that will be performed under the Agreement?

[11] Railtrain submit that the phrase “in relation to work that will be performed under the Agreement” would have no work to do if the provision was simply about the issue of union eligibility. Railtrain submit that in some sections of the Act the phrase “entitled to represent the industrial interests” is used whilst in others the longer phrase found in Section 176(3) is used.

[12] Railtrain referred to the Full Bench decision in Uniting Church in Australia Property Trust t/as Blue Care and Wesley Mission Brisbane v Queensland Nurses Union of Employees ([2014] FWCFB 1447). In that decision the Full Bench upheld the approach taken by Deputy President Asbury to Section 176(3). The Deputy President noted that:

“The approach to the application of this section is to consider whether the organisation claiming status as a bargaining representative has a member or members who will be covered by the Agreement and has constitutional coverage by virtue of its rules, in relation to work that will be performed under the Agreement by that member or members.” (Quoted at Paragraph 10 of the Appeal decision ([2014] FWCFB 1447))

[13] Railtrain also referred to the following observation of Justice Perry in the Federal Court decision in ResMed Ltd v AMWU ([2015] FCA 360 at [57]).

“Secondly and consistently with this, s 176 of the FW Act defines when an employee organisation is a bargaining representative of an employee. Satisfaction of the eligibility rules of the employee organisation is not sufficient. As is apparent from the earlier analysis, an employee organisation will not be the bargaining representative for a person who has revoked the status of the organisation as her or his bargaining representative, or has appointed another person (ss 176(1)(b) and (c) of the FW Act). Section 176(3) further limits the extent to which an employee organisation can represent the industrial interests of employee members providing that an employee organisation cannot be a bargaining representative of an employee unless it is entitled to represent the industrial interests of the employee “in relation to work that will be performed under the agreement.” As a consequence, while an employee organisation can be a bargaining representative only for employees who it may legitimately represent under its rules, this does not mean that it will in fact be a bargaining representative for all such employees. Yet the submissions for ResMed assume that it suffices in this context for an employee merely to satisfy the eligibility rules of the employee organisation in order for the employee organisation to “represent” her or him in an application under s 236, contrary to the manner in which the regime in Part 2-4 otherwise operates.”

[14] I am satisfied that the observations of DP Asbury and Justice Perry mean nothing more, in respect to the matter before me, than that FWC must determine whether the RTBU has under its eligibility rules coverage in relation to the work that will be performed under the Agreement by that member. It would be contrary to the plain reading of Section 176(3) to insert the word “and” or “or” after the word “employee” in the following phrase: “entitled to represent the industrial interests of the employee in relation to work that will be performed under the agreement.” It is apparent that the purpose of Section 176(3) is to prevent a union from acting as a bargaining representative for a member if the work that the member will perform under the relevant enterprise agreement does not fall within the scope of that union’s eligibility rules. In this context the phrase “in relation to work that will be performed under the agreement” has work to do.

[15] I do not consider it helpful to construct two separate tests as suggested by Railtrain. Union eligibility rules are of either an occupational or industry character. If the rule is of an occupational character then a person might be eligible to join a union because of their usual occupation but they may be employed by an employer to perform work which does not include that occupation. In such circumstances the union would not be eligible to be a bargaining representative because it would not be entitled to represent the industrial interests of the employee in relation to the work that will be performed.

[16] Where the union rule is of an industry nature then it is the industry of the employer which will determine eligibility. If the industry of the employer falls within the eligibility rule then it follows that the union will be entitled to represent the industrial interests in relation to the work that will be performed by the employee. However, it is possible for an employer to be in more than one industry. The industry or industries of the employer in relation to the work covered by a particular Agreement might be different from the industry or industries of the same employer covered by a different Agreement. For example, maintenance employers performing work for the mining industry are in some cases engaged in the Mining Industry, in some cases they are engaged in the Manufacturing or Maintenance Industry and in other cases they are engaged in both industries.

[17] The Member was employed by Railtrain as a Rail Worker Level 4 under the Agreement. The work that is performed by a Rail Worker Level 4 includes the work listed in Appendix 1 to the Agreement. The work performed by the Member included performing maintenance work on Fortescue Metals Group’s (FMG) rail rolling stock and carrying out maintenance work on FMG’s rail system. The Member would have continued to perform these duties under the Agreement.

[18] Mr Butler for Railtrain gave evidence that FMG privately owns and operates its railway system. The FMG system is not an open access railway system. The system is not interconnected with other railway systems. Mr Butler says that:

“All of Railtrain’s employees in the Pilbara are “fly in- fly out” workers doing either track maintenance or train driver work on railways which are owned and operated by mining companies and are exclusively within the Pilbara above the 26^th parallel (South).” (Statement of Mr Butler paragraph 42)

[19] Railtrain concedes that it is generally engaged in the rail industry. (See F16 Form) However, it says that it’s contracts with FMG in the Pilbara are in the mining industry.

[20] The RTBU submitted that the following statement of the Full Federal Court in CFMEU v CSBP ([2012] FCAFC 48 at paragraphs 48 and 49) is authority for the proposition that union rules must be interpreted broadly and that the fact that other unions may also have coverage is largely irrelevant to the interpretation of the rules.

48. It may be accepted that the eligibility rules of a trade union must be broadly construed; and that the scope of a membership clause should not be read narrowly or read down by reference to the membership clauses of other industrial organizations: R v Cohen; Ex parte Motor Accidents Insurance Board [1979] HCA 46; (1979) 141 CLR 577 at 587 per Mason J. It may also be accepted that it is not relevant to the construction of the Eligibility Rule that there may be another industrial organisation that might be a more natural representative of a given employee: Electrical Trades Union of Australia v Waterside Workers Federation of Australia [No 2] (1982) 59 FLR 78 (at 87); 42 ALR 587, 595.
49. That having been said, one should not accede to attempts to promote exorbitant claims which, if allowed, would render otiose the efforts of those who laboured long and hard to produce explicit statements intended to mark out the scope of a union’s coverage of occupations in the workplace.

[21] I agree with that submission.

[22] The coverage rule of the RTBU is Rule 4. The relevant sub-rules for present purposes are 4(1)(ii) and 4(1)(iii).

“(1) The following shall be eligible to become members of the Union:-

(i)

…….

(ii) an unlimited number of employees employed in or in connection with the Railway and Tramway industry or industries governed and controlled directly by the Governments of the Commonwealth of Australia and the States of Queensland, New South Wales, Victoria, South Australia, Western Australia and Tasmania, or indirectly by such Governments, or any of them through Commissioners, Boards, Managers, Directors, or other means, and also all railway systems in the Commonwealth of Australia owned and controlled by private persons or companies, and the Secretary and/or any employee of the Railway Institute established by or under the direction or with the approval of the Commissioners, Boards, Managers, Directors or other controlling authorities of any of the railway systems in the Commonwealth of Australia; and

(iii) (a) an unlimited number of railway employees (adult or junior, male or female) who become and remain members of the Union and persons who while being members of the Union retire from the railway industry upon the ground of ill health or having reached retiring age and whose membership has not been terminated pursuant to these Rules;

(b) for the purposes of sub-paragraph (iii)(a) above, "Employee" or "Railway Employee" means any officer or employee employed by any Railway Department and also any officer or employee employed in any railway system in the Commonwealth owned or controlled by private persons or corporations other than officers in a supervisory position employed at an annual rate of salary and shall include the Secretary or any employee of any Railway Institute established by or under the direction or with the approval of the Railway Commissioner or other controlling authority of any railway system in the Commonwealth and "Railway industry" has a corresponding meaning; and

…..

(2) Each of the paragraphs numbered (i) to (iv) in Sub-Rule 4(1) shall be interpreted separately. Accordingly, each paragraph shall neither limit nor be limited by the provisions of any other paragraph.”

[23] The RTBU argues that Rule 4(1)(ii) entitles the RTBU to cover employees employed in or in connection with “all railway systems in the Commonwealth of Australia owned and controlled by private persons or companies.” Rule 4(1)(iii) entitles the RTBU to cover railway employees who become or remain members of the union. Railway employees include any employee employed in any railway system in the Commonwealth owned or controlled by private persons or corporations other than officers in a supervisory position employed at an annual rate of salary.

[24] The Member worked in the FMG railway system. His duties included maintenance work on FMG wagons and rail lines. This is the work he would have continued to do under the Agreement. The Agreement covers work in the Pilbara region where the FMG railway system is located and this is in the Commonwealth of Australia.

[25] I am satisfied that the words in Rule 4(1)(ii) “all railway systems in the Commonwealth of Australia owned and controlled by private persons or companies.” Must be read in conjunction with the opening words of Rule 4(1)(ii), “an unlimited number of employees employed in or in connection with the Railway and Tramway industry”. This sub-rule is an industry rule and the description of the industry colours the rest of the sub-rule. The fact that the coverage of the union is about the Rail and Tramway Industry is reinforced in a number of other Rules including the Objects Rule and the organisational structure of the union and its divisions. The sub-rule refers essentially to three parts of the Railway and Tramway industry namely – the publicly owned and controlled part of the industry, the privately owned and controlled part of the industry and the Railway Institutes. The Railway Institutes are clearly a creature of the rail industry even though they do not operate railway services which is why they are separately mentioned.

[26] The same applies to Rule 4(1)(iii). It is an industry rule with considerable overlap with Rule 4(1)(ii). The reference to persons who retire from the Railway Industry clearly implies that the persons were employed in the Railway Industry prior to retirement. This sub-Rule must also be considered in the context of the Railway industry.

[27] If the RTBU does not have coverage under Rule 4(1)(ii) then it will not have coverage in respect to Rule 4(1)(iii). That rule is narrower because it does not include the words “or in connection with.” If the RTBU does have coverage under Rule 4(1)(ii) it may have coverage under Rule 4(1)(iii) but it will be unnecessary to determine that question.

[28] It is self evident that the Member worked performing maintenance work in or in connection with a railway system that is owned and controlled by a private company which is located within the Commonwealth of Australia. However, I am satisfied that unless Railtrain is engaged in the Railway Industry in respect to the work covered by the Agreement, the RTBU is not eligible to be a bargaining representative for the Member.

[29] Railtrain submit that the work is in the mining industry not the railway industry.

[30] Railtrain submit that the RTBU is not a party to other similar agreements. Railtrain point to submissions made during the process of creating the Rail Industry Award 2010 and Mining Industry Award 2010. Railtrain submit that the RTBU did not seek to assert an interest in the Mining Award or to assert that the private railway systems in the Pilbara were covered by the Rail Award. I am satisfied that the exclusions in the Rail Industry Award and the inclusions in the Mining Industry Award ensure that the work of Railtrain in the Pilbara is covered by the Mining Industry Award or the Manufacturing and Associated Industries and Occupations Award and not the Rail Industry Award. The RTBU supported the relevant exclusions from the Rail Industry Award for private mining railway systems and their inclusion in the Mining Industry Award.

[31] I accept the submission of Railtrain that the history of award coverage is relevant to the proper interpretation of union rules. (AMWU v ResMed [2016] FWCFB 22 at paragraph 81) This is because Awards were historically based upon industrial disputes which were in turn linked to union eligibility. The connection has been weakened under current legislation but the history is still relevant. The exclusion of private mining railway systems which are not interconnected and or available for general use has been a feature of relevant rail awards for many years. The inclusion of such private mining railway systems in the mining industry has also been a feature of relevant mining awards for many years.

[32] The RTBU has not sought to assert that it has a right to cover employees of FMG, Rio Tinto or BHP who operate or maintain their private mining railways in the Pilbara. They have effectively accepted that they operate in the Mining Industry. The RTBU argued that those companies like Railtrain who are contracted by FMG, Rio Tinto or BHP to do that work are in a different situation. The RTBU argue that they operate in the Rail Industry and not the Mining Industry.

[33] I am satisfied that Railtrain generally operates in the Rail Industry. However, the Agreement is in the Mining Industry and or the Manufacturing/Maintenance Industry and that part of Railtrain’s operations covered by the Agreement are confined to the Mining Industry and or the Manufacturing/Maintenance Industry. I am therefore not satisfied that the RTBU is entitled to represent the industrial interests of the Member in relation to work that will be performed under the agreement.

[34] The RTBU being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants the Agreement to cover it. However, because I am not satisfied that the conditions of Section 176(3) are met I will not note that the Agreement covers the organisation.

[35] The Agreement was approved on 30 March 2016 and, in accordance with s.54, will operate from 30 May 2016. The nominal expiry date of the Agreement is 30 March 2020.

COMMISSIONER

Appearances:

M Follett of counsel for Railtrain

C Fogliani of counsel for RTBU with K Singh

Hearing:

2016

Melbourne and video link to Perth

March 10 and 29

Printed by authority of the Commonwealth Government Printer

<Price code G, AE418076  PR577619>

Annexure A

Annexure B