Reserve Support Services Pty Limited T/A Reserve Support Services

[2019] FWC 6519

[2019] FWC 6519

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Reserve Support Services Pty Limited T/A Reserve Support Services
(AG2019/2247)

COMMISSIONER BISSETT MELBOURNE, 19 SEPTEMBER 2019

Application for approval of the Reserve Support Services Pty Ltd Enterprise Agreement 2019 - union seeking to be heard.

[1] Reserve Support Services Pty Ltd T/A Reserve Support Services (RSS) has made an application pursuant to s.185 of the Fair Work Act 2009 (FW Act) for approval of the Reserve Support Services Pty Ltd Enterprise Agreement 2019 (Agreement). The application was made on 26 June 2019.

[2] On 5 July and 18 July 2019 the CFMMEU sought access to the Form F16 and Form F17 in relation to the Agreement. Redacted copies of the forms were provided by the Commission on 19 July 2019. On 26 July 2019 the CFMMEU made an application for access to the unredacted Forms. As a result of the application and submissions the Commission granted the CFMMEU access to the Forms with some of the redactions removed but others remaining in place.

[3] The CFMMEU then sought to be heard on the application for approval of the Agreement. This is opposed by RSS.

[4] This decision deals with whether the CFMMEU should be heard on the application for approval of the Agreement only.

CFMMEU submissions

[5] The CFMMEU recognise that, to be heard, it is necessary for the Commission to exercise its discretion pursuant to s.590 of the FW Act to determine that it should be heard. It submits that the discretion under s.590 is broad.

[6] The CFMMEU said that the Agreement is intended to cover employees of RSS “at black coal mine sites”. The Agreement is to be read and interpreted in conjunction with the Black Coal Mining Industry Award 2010 (Award). The CFMMEU maintains a “particular and recognised interest” in the Award. Further, the CFMMEU submits that it represents the industrial interests of members in the black coal mining nationally and has significant membership amongst employees of coal mining operators and those of contractors and labour hire operators in the industry. The CFMMEU has a significant history of involvement in the sector and is party to numerous enterprise agreements.

[7] The CFMMEU submits that it has a high degree of familiarity with the Award and with working arrangements and terms and conditions in the sector generally. These, it submits, support a finding that it can provide valuable assistance to the Commission in considering this Agreement.

[8] The CFMMEU says that it can also provide valuable assistance to the Commission in the Commission carrying out its statutory responsibilities. As it is independent of the applicant for the Agreement it submits that the Commission will be able to balance out the views of the Applicant.

[9] The CFMMEU says that there is no detriment that would warrant the CFMMEU’s exclusion from the approval consideration. It says that the existence of a contradictor may enhance the “probative value of any evidence presented in the agreement approval process”.

[10] The CFMMEU says that it can assist in all aspects of the approval process including the requirements under ss.180(5), 186, 187 And 188 of the FW Act. It has provided a brief outline of matters of substance with respect to the application that it submits it will raise should permission be granted. These are:

•  The Commission cannot be satisfied that there was genuine agreement because not all reasonable steps were taken:

•  to provide employees with material incorporated into the Agreement;

•  to explain the terms of the Agreement and the effect of those terms;

•  in a form taking into account the circumstances of employees including whether the employees were represented by a bargaining representative.

•  That the Agreement was “incapable of being explained” due to it containing ambiguous and uncertain terms;

•  That there are concerns the Agreement may not be consistent with the NES;

•  There are issues in relation to whether the Agreement satisfies the better off overall test because:

◦  it includes the provision of below award rate classifications;

◦  it contains the capacity for loaded rates in respect to casual employees;

◦  the reduced consultation obligations;

◦  introduction of casual employment in production and engineering;

◦  the creation of “flat rate” and “labour hire employee” classifications;

◦  limiting redundancy payment situations;

◦  ability to alter classifications;

◦  discretion to alter hours of work; and

◦  abandonment of employment provisions.

Reserve Support Services submissions

[11] RSS says that the CFMEU is not a bargaining representative for the Agreement and hence has no automatic right to be heard.

[12] RSS says that the Commission should not exercise its discretion to hear form the CFMMEU because it would be an anathema to the framework for enterprise bargaining, the CFMMEU has no direct interest in the matter and the CFMMEU’s claim as a contradictor “runs at loggerheads with the principles and spirit of enterprise bargaining, particularly in the case of small business”.

[13] In particular, RSS says that the CFMMEU has no members employed by RSS, was not a bargaining representative for the Agreement and hence has no direct interest in the matter currently before the Commission.

[14] Relying on the decision in Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Limited 1 (Collinsville) and the objects of Part 2-4 of the FW Act RSS says that its employees are free to determine how they are to be represented in bargaining. No employee appointed the union as a bargaining representative and it is clear that employees of RSS do not wish to have the CFMMEU representing them.

[15] Further, RSS says the CFMMEU only has a broad and indirect interest in the Agreement. In this case there is no history of CFMMEU involvement with RSS and its employees. RSS says that the circumstances of the application currently before the Commission are analogous to the circumstances in the decision in Collinsville where the Full Bench said that “it was not enough, without more, to point to the status of the CFMEU as an employee organisation with a history of representation at the workplace or in the industry.” RSS says that the CFMMEU’s history in the sector is insufficient to allow it to be heard.

[16] RSS submits that the “very notion of a Union with only an indirect interest, wishing to oppose an Agreement of a small business employer…flies in the face of the right of a small business employer to work with its employees to reach an enterprise bargaining agreement…”. RSS submits that both it and its employees are capable of responding to any issues raised by the Commission with respect to the approval process and that the CFMMEU has no direct knowledge of that process such that it could assist the Commission in this task.

[17] RSS submits that it is a matter of the Commission to determine if the Agreement meets the requirements of the FW Act such that it might be approved and it can provide whatever assistance, clarification or undertakings considered necessary by the Commission for this task.

[18] For these reasons RSS submits that the Commission should to exercise its discretion to hear from the CFMMEU.

CFMMEU in reply

[19] The CFMMEU says that the authority in Collinsville for the proposition that a right or interest said to be affected by an application is to be understood in the context of the enterprise bargaining provisions of the FW Act has been supplanted by the decision in Regional Express Holdings Limited v Australian Federation of Air Pilots 2 (Regional Express) where it was made clear that in considering the legislative context the proper approach is to consider the FW Act as a whole. Taking this into account the CFMMEU submits that the preference for collective bargaining evident in the objects of Part 2-4 of the FW Act supports hearing from the CFMMEU. In doing so the Commission can consider the merits in full rather than from one party with vested interests and which would be contrary to collective bargaining.

[20] The CFMMEU submits that there is no special provisions or process in the making of an agreement under the FW Act where the business is a small business such that the level of scrutiny given to an agreement should be any different depending on the size of the business.

[21] Further, the CFMMEU submits that the statutory context preferences collective bargaining and the benefits that flow from that. In particular it says that those benefits are “likely to be limited in circumstances where a small number of employees make an agreement which may cover a much larger workforce” and will be absent where bargaining has not occurred. It submits that confining a decision to approve an Agreement to submissions from one of the parties in bargaining is contrary to the preference for collective bargaining.

[22] The CFMMEU submits that a union is capable of being “aggrieved” by a decision to approve an agreement even if it has no members. What matters, it submits, is procedural fairness.

[23] The CFMMEU submits that because it has no direct interest in the matter is no reason to deny a right to be heard. It says that if it had a direct interest it would not need to ask that the Commission exercise its discretion to hear from it. Had it members who had voted against the Agreement it would not need to seek permission to be heard as it would be a bargaining representative and would have right to be heard.

[24] The CFMMEU says that a decision to hear from it should not be bound up with an argument as to whether it is a contradictor in a legal sense. The relevant question is whether it is appropriate for the Commission to inform itself by hearing from the CFMMEU. The CFMMEU submits that there are a number of decisions of the Commission where members have decided that an independent perspective would assist in the decision making process and some decisions where members have determined it would not.

RSS in reply

[25] RSS takes issue with virtually all of the submissions of the CFMMEU. In particular it submits that:

•  the decision in Regional Express does not supplant the authority in Collinsville and, in any event the approach to the statue in Collinsville was entirely orthodox;

•  the legislature did intend for small business to enter into enterprise agreements without hindrance;

•  the Form F17 clearly indicates that there are only 8 employees covered by the Agreement;

•  the right to be heard on appeal does not equate to the right to heard on approval of an agreement;

•  the CFMMEU has no members employed by RSS and its interest in this matter is all the more remote than that considered in Collinsville;

•  any rights asserted by the CFMMEU should not undermine the right of parties to enter into a non-union collective agreement.

Consideration

[26] It is agreed that the CFMMEU was not a bargaining representative with respect to the Agreement. It therefore requires permission to be heard by the Commission. Section 590(1) of the FW Act provides that the Commission may inform itself in any way it sees fit. It is well accepted that this discretion includes the ability to grant a party with no automatic right to be heard with permission to be so heard. For a party to be given permission to be heard there must be some basis for such an application to be made and some direct benefit to the Commission in carrying out its statutory responsibilities.

[27] The process of approving an agreement made between an employer and employee is not achieved through some cursory gaze over paperwork submitted by (commonly) the employer involved in the bargaining. Even if the application for approval is made by a bargaining representative who was not the employer (as it may be – see s.185(1) of the FW Act) the employer statutory declaration 3 provides the critical information that informs the decision making of the Commission.

[28] On receipt of an application the Commission must approve the agreement if the requirements of s.186 and s.187 of the FW Act have been met. This requires a determination, amongst other things, that the Agreement was genuinely agreed to and it not contravene s.55 of the FW Act. In deciding if the Agreement was genuinely agreed to, there are a number of additional considerations, including compliance with timeframes and that all reasonable steps have been taken to explain the terms of the agreement to employees. The statutory responsibility and the implications of the approval of an agreement (in terms of the rights and responsibilities that arise from it for both employer and employees) are not minor or trifling in nature.

[29] The objects of the FW Act (as may be seen as relevant to agreement making) include:

3 Object of this Act

The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:

(a) providing workplace relations laws that are fair to working Australians, are flexible for businesses, promote productivity and economic growth for Australia's future economic prosperity and take into account Australia's international labour obligations; and…

…….

(f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; and

(g) acknowledging the special circumstances of small and medium-sized businesses.

[30] Provisions in relation to the making of enterprise agreement are found in Part 2-4 of the FW Act. The objects of that Part are:

171 Objects of this Part

The objects of this Part are:

(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and

(b) to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through…

…..

(iii) ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay.

[31] RSS says that the decision in Collinsville stands for the proposition that an “interest” in a matter is not sufficient to attract the right to be heard. The CFMMEU says that this has been overtaken by the decision in Regional Express and that the Full Bench in Collinsville failed to consider the FW Act as a whole but rather concentrated on the enterprise bargaining provisions and their predecessor.

[32] The decision in Collinsville stands for the proposition that a union that is not a bargaining representative does not have the right to be heard. This much is clear. Under the heading of “Right to be heard other than as a bargaining representative” the Full Bench said:

[64]  We are not persuaded that having that interest or expectation articulated by the CFMEU…gave rise to a right to be heard in the application for the approval of the Agreement.

[33] The Full Bench went on to say:

[69] That an employee organisation has an ongoing relationship with its members who might become covered by an agreement and has a role under its rules in representing those members is not relevant in the context of a right to be heard in relation to the approval of an agreement. 4 The FW Act does not confer a right on employee organisations (other than in the case of the greenfields agreement) to be covered by an agreement if it was not a bargaining representative. Likewise, the FW Act does not confer upon an employee organisation a role in enterprise bargaining under the FW Act outside of its status as a bargaining representative. The mere fact that an employee organisation has an ongoing relationship with its members and is entitled to represent their industrial interests is not a sufficient basis to conclude that the approval of an enterprise agreement will adversely affect a right, interest or legitimate expectation of that employee organisation.

[70] In similar vein, that an employee organisation has amongst its interests, objects or expectations, that it will obtain and maintain reasonable employment conditions for its members, is in the context of the bargaining framework established by the FW Act, an insufficient basis for there to arise a right, interest or legitimate expectation and thereby a conferral on the employee organisation of a right to be heard in relation to an application to approve an enterprise agreement.

…

[72] Whether an employee organisation which is not a bargaining representative has a right to be heard in relation to an application for the approval of an agreement will depend on the circumstances in each case. In this case, when the rights, interests or expectations asserted by the CFMEU are understood in the legislative context, it is clear that the CFMEU has not established any right, interest or legitimate expectation that would be adversely affected by the decision to approve the Agreement which would give it a right to be heard.

[73] We are therefore not persuaded that the Senior Deputy President erred in not giving the CFMEU the opportunity to be heard or to lead evidence in relation to its opposition to the approval of the Agreement.

…

[75] We would make the observation however, that the Commission may choose, in a particular case, to hear from an employee organisation or any other person about the approval of an agreement even though the organisation or person may not otherwise have a right to be heard. The Commission has a broad power to inform itself in relation to any matter in such manner as it considers appropriate, including by inviting oral or written submissions from a person of organisation. 5  In this case the Senior Deputy President chose to exercise that power by permitting the CFMEU to be heard on the question of whether the Agreement passed the BOOT.

[34] In Collinsville the CFMMEU (as it is now) argued that its right to be heard arose because it had some right, interest or legitimate expectation that might be affected by the proceeding. The Full Bench said that the interest or legitimate expectation said to be effected by the application for approval of the Agreement had to be “understood against the framework of enterprise bargaining and agreement making established by the FW Act.” 6 The Bench went on to consider the statutory framework and then said that “The legislative history of the agreement making and approval provisions in the FW Act is the relevant contextual consideration in this regard.”7

[35] I am not convinced, in this respect, that the CFMMEU has mounted a sustainable argument that the decision in Collinsville has been overtaken by that in Regional Express. The Full Bench in Collinsville did not confine itself as the CFMMEU suggest. In any event the CFMMEU ultimately rely on the objects of Part 2-4 of the FW Act in relation to collective bargaining to advance its argument as to the appropriate context within which its application to be heard should be determined.

[36] The CFMMEU has no right to be heard. By the same token, Collinsville does not stand for the proposition that the CFMMEU should not be heard. Rather, it recognises the discretion granted to the Commission. The Commission has “a broad power” to inform itself as it sees fit. In this regard the Commission may choose to hear from an employee organisation in relation to the approval of an agreement.

[37] The CFMMEU asks that, in this matter, I do just that.

Is the size of the business relevant in determining if the CFMMEU should be heard?

[38] The objects of the FW Act should not be read out of context. Whilst an object of the Act is to “acknowledge the particular circumstances of small…businesses” 8 there is nothing in Part 2-4 of the FW Act to suggest that the obligations on small businesses and their employees in agreement making or in the approval of an agreement are any less stringent than they would otherwise be. There is nothing in the objects of the FW Act or Part 2-4 to suggest that the rigour applied to agreement made without a union bargaining representative should be any different to those where the union is at the bargaining table.

[39] Where the FW Act has determined that particular provisions will apply to small businesses different to those applying generally, these have been clearly articulated. For example, in unfair dismissal provisions (Small Business Fair Dismissal Code and minimum employment period) and in relation to the requirement to made redundancy payments under the NES (the small business exemption).

[40] Even if it was correct and by virtue of being a small business some different considerations were to be given in either approving the Agreement or considering the application of the CFMMEU to be heard, the material before the Commission does no more than demonstrate that, at the time the Agreement was made, the Agreement covered eight employees. This does not tell me the size of the business. It may have any number of employees not covered by the Agreement.

[41] There is no provision in the FW Act to conclude that it recognises “the special circumstances of a small business and its capacity to enter into [an agreement] without hindrance” 9 although it is not clear what hindrance RSS suggests. What will affect that Agreement approval is the requirements of the FW Act.

[42] Given my findings that there are no express provisions which indicate differential treatment for small business in agreement approval processes I am not convinced that the size of the business is a relevant consideration in determining if the CFMMEU should be heard.

Is any appeal right that may accrue to the CFMMEU a relevant consideration?

[43] This question was dealt with by the Full Bench in Inco Ships Pty Ltd v The Australian Institute of Marine and Power Engineers and The Australian Maritime Officers’ Union 10 (Inco Ships). I accept the reasoning in Inco Ships. The right of appeal that the CFMMEU may have has no direct bearing on the discretion I might exercise to hear from the union pursuant to s.590(1) of the FW Act.

Should the CFMMEU be given the right to be heard to ensure “rigorous scrutiny” of the Agreement?

[44] The Commission is given a responsibility under the FW Act. That is to approve an agreement if it meets the requirements of the FW Act. The task before the Commission is independent of who may have made the application and whether it is supported by multiple parties or supported by some and opposed by others. The rigour required to be applied to the task does not change. It is the same whether the CFMMEU supports an agreement before the Commission for approval or opposes such approval. It would not expect any lesser rigour, I’m sure, just because it might support approval. It is, after all, the Commission that must be satisfied that the requirements of the FW Act have been met.

[45] This should not be taken as meaning that the Commission might not gain assistance from the perspective that the CFMMEU may bring to the matters to be considered by the Commission.

[46] Whilst I appreciate the desire of RSS to have its application dealt with as quickly as possible given its view that the Agreement does meet all of the requirements of the Act for approval it is difficult to understand the basis of its objection to its processes and the Agreement being put under scrutiny.

[47] There can be no detriment in having issues identified and properly resolved in the approval process. Given the CFMMEU’s history in the industry I am satisfied that it may assist in the consideration of the content of the Agreement.

Issues identified

[48] The CFMMEU has identified a number of issues with the Agreement that it says go to whether the Agreement has been properly made and whether it meets the better off overall test. In this respect I note the classification of “flat-rate” worker in the Agreement.

[49] The matters raised by the CFMMEU in this regard warrant further scrutiny. Its submissions may assist the Commission in undertaking its task in considering the Agreement for approval.

Conclusion

[50] Whilst I accept that the CFMMEU has no right to be heard in the approval of the Agreement I am satisfied, in this case and in particular given the novel classification introduced by the Agreement, that I should exercise my discretion in accordance with s.590(1) of the FW Act to hear from it with respect to the approval of the Agreement.

[51] The application will be listed for mention and programming.

COMMISSIONER

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 1   [2014] FWCFB 7940 at [65].

 2 [2017] HCA 55.

 3   Form F17.

 4   See CFMEU v Hamberger and Anor (2011) 195 FCR 74 in which Katzmann J discusses the meaning of “will be covered” in s.172 of the Act and concludes at [69]-[79] that persons not yet employed but who might in the future be covered by an agreement are not within the class of persons “who will be covered”; See also Mermaid Marine Vessel Operations Pty Ltd v MUA [2014] FWCFB 1317 at [73]-[74] and CBI Contractors Pty Ltd v CFMEU [2011] FWAFB 7642 at [22]-[23]

 5 Section 590 of the FW Act.

 6   [2014] FWCFB 7940 at [65]

 7 Ibid at [67].(underlining added)

 8 Section 3(g) of the FW Act.

 9   RSS submissions, 19 August 2019, paragraph 28. (underlining added)

 10   [2016] FWCFB 3370 at [15]