Rural Industries Research and Development Corporation T/A AgriFutures Australia

[2018] FWC 4058

[2018] FWC 4058

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Rural Industries Research and Development Corporation T/A AgriFutures Australia
(AG2018/333)

DEPUTY PRESIDENT KOVACIC CANBERRA, 6 JULY 2018

Application for approval of the AgriFutures Australia Enterprise Agreement 2017-2020.

[1] An application has been made for approval of an enterprise agreement known as the AgriFutures Australia Enterprise Agreement 2017-2020 (the Agreement). The application was made by the Rural Industries Research and Development Corporation T/A AgriFutures Australia (the Applicant) pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single enterprise agreement.

[2] On 11 May 2018 the Fair Work Commission’s (the Commission) Member Support Research Team sent an email to the Applicant setting out the Commission’s preliminary views regarding the Agreement.

[3] The Applicant responded on 17 May 2018. That response satisfactorily addressed the majority the issues raised by the Commission. However, a number of issues remained outstanding resulting in the Commission writing to the Applicant again on 1 June 2018 in the following terms:

“I refer to your email of 17 May. The Deputy President has considered the undertakings and responses provided.

The following issues remain outstanding:

Pre-approval requirements:

1. F17, Q 2.8: Notification and last NERR (more than 14 days between): At question 2.8 it is indicated that the date the last notice of representational rights (NERR) was given to the employees was on 13 April 2017, and that the notification time was on 19 February 2016. Clarification was sought; if dates were incorrect, you were invited to file a revised F17. The revised F17 indicates that notification time was 31 March 2017 and the last NERR was given 13 April 2017. The Deputy President asks that you clarify the new notification date and how the NERR was provided to employees (as this has been omitted from q 2.3 of the revised F17).

2. F17, Q 2. 6 (explanation of the agreement and effect of terms): The answer at q 2.6 states several staff meetings were held during the bargaining process, and all staff were encouraged to discuss any matters or concerns. The Deputy President requested that you provide further information at Q2.6 of the revised F17 detailing the steps taken by the employer to explain the terms of the agreement to the employees covered by the Agreement, as well as the effect of the Agreement on them (such as how the application of the relevant awards is varied). The Deputy President notes that the response and attached documentation detail the negotiation of the agreement, rather than explaining how the terms and the effect of the terms of the agreement were explained to employees. The Deputy President asks that you provide further information detailing the steps taken by the employer to explain the terms of the agreement to the employees covered by the Agreement, as well as the effect of the Agreement on them (such as how the application of the relevant Award is varied).

Better off overall Test (BOOT):

3. Salary barrier and overtime (Cl 20): The undertaking provided defining the salary barrier states that “the definition of Salary Barrier is defined as Grade 2”. This appears to have the effect of excluding every employee from overtime, as the classification pay structure commences at Grade 2. In contrast, the Australian Government Industry Award 2016 (‘the Award’) defines the salary barrier as “the minimum hourly rate payable to an employee at the AG Level 7 classification”. You are invited to provide a revised undertaking, clarifying the definition of salary barrier.

4. Abandonment of employment (Cl 52.3): The undertaking submitted in relation to abandonment includes the explanation of the apparent operation of the clause in addition to the undertaking requested. You are invited to provide a revised undertaking along the following lines “notwithstanding clause 52.3 of the EA, if an employee’s employment is terminated at the employer’s initiative, the employer will provide notice of termination in accordance with the NES”.

Could both revised undertakings please be provided in the one consolidated undertaking document (rather than separate undertaking documents)?

If undertakings are to be provided, please ensure they are signed by the employer and please ensure you seek the views of any bargaining representatives in relation to the issues raised. Any objections to the proposed undertakings should be raised with the Commission prior to the approval of the agreement.

Can a response to the above please be provided as soon as possible, but by no later than close of business AEST on Wednesday 6 June 2018.”

[4] On 7 June 2018 the Applicant responded in the following terms:

“Our responses to the Pre approval requirement are as follows:

F17, Q 2.8: Notification and last NERR (more than 14 days between):

We clarify that the notification date was 31 March 2017.

The NERR was emailed to all staff on 13 April 2017.

F17, Q 2. 6 (explanation of the agreement and effect of terms): Steps taken by the employer to explain the terms of the agreement to the employees covered by the Agreement

There was an initial all staff meeting to discuss EA, particularly any changes to the existing 2013-16 Agreement including updated salary rates.

Also, the staff nominated Krisha Tysoe to collect questions outside of meetings. Krisha was then the rep to liaise with the General Manager Corporate (Christine Quick) to get answers if anyone required additional clarification on any matter.

Steps taken by the employer to explain the effect of the Agreement on them (such as how the application of the relevant Award is varied).

There were extensive questions and answers for example - some conversations about items that staff particularly wanted left in such as the Healthy lifestyle payment. (this would not be available to our staff under the Australian Government award 2016). From discussions with staff who were present, the vibe around the whole EA was good. Therefore, I would say the “effect” of the Agreement was mild-medium. As opposed to high or low.”

[5] Against that background, on 12 June 2018 the Commission listed the application for telephone hearing on 19 June 2018. The Notice of Listing stated among other things that “A number of issues remain outstanding. These include how the effect of the agreement was explained to employees; an explanation as to the amended dates provided in the revised F17; and the salary barrier definition.” On the morning of the hearing, the Applicant forwarded to the Commission a copy of a presentation given to employees in March 2017 to help explain the provisions of the Agreement and also a revised undertaking in respect of the salary barrier definition.

[6] At the telephone hearing Mr John Harvey (Managing Director), Ms Belinda Allitt (General Manager Communications and Capacity Building) and Ms Louise Heaslip (General Manager Business and Finance) all appeared for the Applicant. The following individual bargaining representatives also appeared at the hearing – Mr Michael Beer, Ms Kirsty McKee, Ms Krisha Tysoe, Mr Duncan Farquar and Ms Alison Hetherington (who no longer worked for AgriFutures and whose appearance was not objected to by anyone).

[7] At the hearing, Mr Beer, Ms Hetherington and Ms Allitt outlined the opportunities which employees had to ask questions during the negotiations for the Agreement. More specifically, Ms Allitt stated among other things that there was no group presentation at the end of the process. Beyond that, Ms Tysoe stated that she felt the Agreement was explained really well during the group sessions convened during the bargaining process such that there was nothing left to be explained when the proposed agreement was circulated to employees at the commencement of the access period.

[8] Also at the hearing, Ms Heaslip provided clarification of the notification time referred to in the revised Form F17 filed by the Applicant, indicating that the confusion as to dates is likely to have arisen from the Applicant’s relocation from Canberra to Wagga Wagga and the associated loss of staff/corporate memory. The revised undertaking regarding the definition of salary barrier was also discussed with a draft further revised undertaking forwarded to the Commission following the hearing.

The statutory framework

[9] The relevant provisions of the Act are set out below:

“180 Employees must be given a copy of a proposed enterprise agreement etc.

…

Terms of the agreement must be explained to employees etc.

(5) The employer must take all reasonable steps to ensure that:

(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and

(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.

186 When the FWC must approve an enterprise agreement—general requirements

Basic rule

(1) If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.

Note: The FWC may approve an enterprise agreement under this section with undertakings (see section 190).

Requirements relating to the safety net etc.

(2) The FWC 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

(b) if the agreement is a multi-enterprise agreement:

(i) the agreement has been genuinely agreed to by each employer covered by the agreement; and

(ii) ...

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 the FWC 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) …”

Consideration of the issues

[10] In Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd 1 (One Key) Justice Flick stated as follows in respect of the requirements imposed by s.180(5) of the Act:

“103 ... The requirement imposed by s 180(5) to “take all reasonable steps to ensure that … the terms of the agreement, and the effect of those terms, are explained” is an important obligation imposed upon an employer to ensure that employees are as fully informed as practicable. The requirement is not a mere formality. Whatever steps may be necessary will depend upon the facts and circumstances of each particular case; but those steps are not satisfied by a person reading - without explanation - the terms of an agreement to an employee.” 2 (Underlining added)

[11] In this case there is no material before the Commission indicating that the Applicant took any steps to explain the terms of the Agreement and their effect to employees covered by the Agreement. To the contrary, Ms Allitt’s statement at the hearing that there was no group presentation at the end of the process suggests that the Applicant took no steps to do so. As to the presentation forwarded by the Applicant to the Commission on 19 June 2018, I note that it was given to employees in March 2017, which is several months before the access period commenced on 16 November 2017. While I accept that in this case the bargaining process was an inclusive one, that does not obviate the need for an employer to comply with s.180(5) of the Act which, as noted by Justice Flick in One Key, “is an important obligation imposed upon an employer.”

[12] Accordingly, consistent with s.188(a)(i) of the Act I cannot be satisfied that the Agreement was genuinely agreed to by employees and therefore cannot approve the Agreement as the requirement in s.186(2)(a) is not satisfied.

[13] As an aside, I would indicate that the undertakings proffered by the Applicant following the hearing would have addressed the Commission’s concerns in respect of the salary barrier definition issue.

Conclusion

[14] For the reasons outlined above, the Agreement cannot be approved as the requirement in s.186(2)(a) of the Act is not satisfied. Accordingly, the application will be dismissed. An order to that effect will be issued in conjunction with this decision.

Appearances:

J. Harvey with B. Allitt and L. Heaslip for the Applicant

M. Beer on his own behalf

K. McKee on her own behalf

K. Tysoe on her own behalf

D. Farquar on his own behalf

A. Hetherington on her own behalf

Telephone hearing:

2018

Canberra and Perth

April 3

Printed by authority of the Commonwealth Government Printer

<PR608850>

 1 [2017] FCA 1266

 2   Ibid at paragraph 103