S & D Logistics Pty Ltd
[2024] FWC 2056
•6 AUGUST 2024
| [2024] FWC 2056 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
S & D Logistics Pty Ltd
(AG2024/1013)
| COMMISSIONER WILSON | MELBOURNE, 6 AUGUST 2024 |
Application for approval of the S & D Logistics Pty Ltd Enterprise Agreement 2024
This decision concerns an application by S & D Logistics Pty Ltd for approval, pursuant to Part 2 – 4 of the Fair Work Act 2009 (FW Act), of an enterprise agreement, entitled the S & D Logistics Pty Ltd Enterprise Agreement 2024 (the 2024 Agreement). The agreement was “made” for the purposes of the FW Act on 18 March 2024.[1]
Approval of the 2024 Agreement is objected to by the Australasian Meat Industry Employees Union (AMIEU), chiefly on the grounds that it is not genuinely agreed and that the issue of a Notice of Employee Representational Rights in January 2024 was invalid.
A hearing in relation to the application for approval of the agreement was held on 29 May 2024, at which Mr Kyle Kutasi, solicitor, appeared for the Applicant and Mr Jason Schultz, Assistant Secretary, appeared for the AMIEU. Mr Kutasi appeared with permission, having been granted by me pursuant to s.596 of the FW Act.
Evidence was taken in the hearing from Ms Dawn Donaldson, a Director of S & D Logistics and the person who declared the Employer’s Support Declaration (the Form F17B), Mr Benjamin Wade, the Applicant’s General Manager and Ms Christy Guillermo, a manager of S & D Logistics. Mr David Tennenbaum, a forklift driver and member of the AMIEU gave evidence on behalf of the union.
After consideration of all relevant matters, I find that while the 2024 Agreement is not genuinely agreed, it may be approved through the provision of undertakings given pursuant to s.190 of the FW Act, in addition to undertakings already provided by S & D Logistics in relation to separate concerns.
BACKGROUND
The Agreement now before the Commission is the third endeavour of the Applicant since the start of 2023 to have an enterprise agreement apply to its employees.
On 9 March 2023, the Applicant and the AMIEU agreed to bargain and a NERR was subsequently issued by the Applicant on 20 March 2023.[2] The parties were unable to agree to the terms of an enterprise agreement. The parties refer to these matters as the First Agreement.
Efforts to bargain for an enterprise agreement resumed in October 2023, and an agreement was subsequently made on 21 October 2023, with 50 of 53 eligible employees voting in the ballot and 35 of those voting in favour of the making of the agreement (the Second Agreement). The Second Agreement was the subject of a decision by Deputy President Slevin on 24 January 2024, in which he refused approval of the agreement.[3]
Subsequently, on 31 January 2024, the Applicant issued a further Notice of Employee Representational Rights (the 2024 NERR), which states that “S & D Logistics Pty Ltd gives notice that it is bargaining in relation to a single-enterprise agreement S & D Logistics Pty Ltd Enterprise Agreement 2024 which is proposed to cover all employees of S & D Logistics Pty Ltd.”[4] Ms Donaldson’s Employer’s Support Declaration, (the Form F17B) describes the steps taken to circulate the January 2024 NERR to employees as, “NERR printed, issued to employees and placed on notice board”.[5]
On 14 February 2024, the AMIEU became aware of the distribution of the 2024 NERR and wrote to the Applicant requesting dates of bargaining meetings as well as informing the Applicant of the union’s availability for meetings. The AMIEU says that it did not receive a response from the Applicant about this correspondence.
On 22 February 2024, the Applicant commenced the access period as well as providing an explanation to employees of its proposed agreement. On 23 February 2024, a document was distributed by the Applicant to employees comparing the provisions within its proposed agreement with those of the applicable award. On 27 February 2024, there were discussions between unnamed representatives of the Applicant and 10 named individuals to “deal with the employee(s) understanding of the agreement”.[6]
On 28 February 2024, there was a meeting of employees to discuss the proposed agreement, at which Ms Guillermo, a manager of the Applicant and Tagalog speaker, was available to speak to staff of Filipino origin in their language. The Applicant’s submissions about the meeting, in its response to the Commission’s initial concerns correspondence includes that “all the employees attended (or were later informed of) an open meeting”.[7] (underlining added)
On 8 March 2024, the Applicant says that it provided employees with details of how to vote, which was followed on 15 March 2024 by the provision of login details for the purposes of voting.[8] The vote itself took place between 16 and 18 March 2024. The Form F17B employer’s declaration states that at the time of the vote, 55 employees were covered by the agreement, of whom 50 cast a valid vote with 35 of those voting to approve the agreement. Accordingly, the agreement was made on 18 March 2024.[9]
Also on 18 March 2024, a union organiser attended the worksites as part of a routine visit and was informed by Ms Donaldson that a vote for the enterprise agreement had been undertaken over the weekend.[10]
Later that day, the AMIEU lodged a s.240 application with the Fair Work Commission, which was assigned to Deputy President Easton. The AMIEU’s submissions in this matter put forward that it subsequently discontinued the s.240 proceedings, as it understood that its concerns could be raised through the agreement approval process.[11] In its discontinuance notification to the Commission, the AMIEU stated to the Applicant, as well as to Deputy President Easton’s Chambers that;
“The AMIEU as a bargaining representative will file our concerns in this matter as part of our Form F18.
We request for the Respondent to provide to the union a copy of the agreement voted on and all materials it relies upon to make its application.”[12]
On 3 April 2020, the AMIEU learned that the Applicant had lodged an application for approval of the agreement before the Commission. It then wrote to the Applicant and its solicitor, seeking copies of relevant documents so that it may lodge its Form F18.
When it lodged its form F18 on 4 April 2024, the AMIEU set out that it had not received the requested material from the Applicant.[13]
CONSIDERATION
Section 186(2) of the FW Act requires that the Commission be satisfied that a single-enterprise agreement which is not a greenfields agreement “has been genuinely agreed to by the employees covered by the agreement”, which in turn requires consideration of the provisions in s.188 as well as the Statement of Principles on Genuine Agreement.
Relevant to this matter, the Full Bench has held the following about the considerations about genuine agreement;
“[73] Section 186(2)(a) of the FW Act requires that the Commission be satisfied that the agreement was genuinely agreed. Section 188 goes on to set out certain matters that the Commission must take into account or be satisfied of in determining whether an agreement has been genuinely agreed. Relevantly for present purposes, s 188(1) requires the Commission to take into account the Statement of Principles made under section 188B in determining whether it is satisfied that the agreement was genuinely agreed.
[74] Further, s 188(4A) of the FW Act states the Commission cannot be satisfied that an agreement was genuinely agreed unless satisfied that the employer complied with s 180(5) of the FW Act. Section 180(5) requires an employer to take all reasonable steps to explain the terms of an enterprise agreement and the effect of those terms and ensure that the explanation is provided in an appropriate manner taking into the particular circumstances of the employees who will be covered by the agreement.”[14]
The Full Bench in The Australian Workers’ Union v Rigforce Pty Ltd summarised the means by which satisfaction of the requirements in s.180(5) may be reached;
“(1) whether an employer has complied with the obligation in s 180(5) depends on the circumstances of the case;
(2) the focus of the enquiry whether an employer has complied with s 180(5) is first on the steps taken to comply, and then to consider whether:
•the steps taken were reasonable in the circumstances; and
•these were all the reasonable steps that should have been taken in the circumstances;
(3) the object of the reasonable steps that are to be taken is to ensure that the terms of the agreement, and their effect, are explained to relevant employees in a manner that considers their particular circumstances and needs. This requires attention to the content of the explanation given; and
(4) an employer does not fall short of complying with the obligation in s 180(5) of the FW Act merely because an employee does not understand the explanation provided.”[15]
The requirements in ss.180(5) and (6) are these:
“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 employees employed at the time who will be covered by the agreement; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of those employees.
(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:
(a) employees from culturally and linguistically diverse backgrounds;
(b) young employees;
(c) employees who did not have a bargaining representative for the agreement.”
Relevant as well is Principle 18 of the Statement of Principles, which provides;
“An enterprise agreement will generally not have been genuinely agreed to by the employees covered by the agreement unless the agreement was the product of an authentic exercise in agreement-making between the employer(s) and employees in one or more enterprises, and the employees who voted for the agreement had an informed and genuine understanding of what was being approved.”
The Full Bench in Shop, Distributive and Allied Employees Association v Allen Family Pty Ltd t/a Subway Clare, Subway Findon, Subway Broken Hill, Subway Kadina, Subway Port Adelaide, Subway Port Pirie[16] (Re SDA) considered the meaning and application of Principle 18. Pertinent to the application of Principle 18, the appellant in that matter contended the apparent absence of any actual bargaining and thereby that the agreement was not an authentic exercise in bargaining.
About the Principles generally, the Full Bench considered;
“The important point to be made is that while the Commission is required to take into account the Statement of Principles in determining whether an agreement has been genuinely agreed, it does not operate as a set of mandatory rules that must be complied with by an employer absent which the Commission cannot be satisfied that an agreement has been genuinely agreed. Where an employer follows pre-approval steps that are consistent with the Statement of Principles, that would weigh more favourably towards a conclusion that an agreement has been genuinely agreed. The converse is equally true of course. The requirement to take into account the Statement of Principles does not displace the requirement to consider each of the other matters set out in s 188 in determining whether an agreement has been genuinely agreed.”[17]
In relation to the application of the principle to the matter then under appeal, the Full Bench laid out the matters that require being taken into account in making findings about Principle 18, as well as the status of the union in that matter as a bargaining representative;
“[95] The SDA contends that we must have regard to two distinct requirements in principle 18. First, the agreement must be a product of an authentic exercise in agreement-making between the employer(s) and employees and, second, the employees who voted for the agreement must have had an informed and genuine understanding of what was being approved. The SDA submits there is little evidence of either of those requirements being met and good reason to doubt them. The SDA points to the apparent absence of any actual bargaining which they contend indicates there was not an authentic exercise in bargaining. It also points out that the respondent was aware of the SDA’s status as a bargaining representative, did not notify or engage the SDA on commencement of ‘bargaining’ and simply ‘rolled out’ a finalised agreement at the same time as it distributed the NERR and Q&A Document to an industrially unsophisticated workforce.
[96] We readily accept that the process that led to the making of the Agreement does not appear to have involved any formal ‘bargaining’. That is hardly surprising in circumstances where no employees nominated a bargaining representative, be that an individual bargaining representative or the SDA. The fact that bargaining may not have occurred does not mean the Agreement was the product of an agreement-making process that lacked authenticity. Contrary to the SDA’s submission, Principle 18 does not require there to be an ‘authentic exercise in bargaining’ but rather the Agreement should be a product of an ‘authentic exercise in agreement-making’. The two terms are not to be read as one and the same thing.
[97] Matters that will inform a view on the authenticity of the agreement-making process will include the genuineness of the enterprise and the workforce with which the agreement is made, whether the agreement was truly intended to cover and apply to the employees with whom it is made, and whether the agreement is merely a device to achieve a collateral industrial or commercial objective. The circumstances described in AWU v Workforce Logistics Pty Ltd constitute an archetypal example of an inauthentic exercise in agreement-making. In this case, there is no doubt that the respondent operates a genuine and well-established business enterprise and that the Agreement was made for the purpose of setting the terms and conditions of employment for current and future employees.
[98] As to one of the SDA’s particular complaints, being that the respondent was aware of the SDA’s alleged status as a bargaining representative, it does not follow from the SDA’s assertion of that status in April 2023 that the respondent was required to notify or engage with it at a later point in circumstances where no employee nominated or identified the SDA as their bargaining representative or contacted them to seek their assistance in bargaining. Moreover, no evidence was led in these proceedings that would establish that the SDA was a default bargaining representative at any point from the time the NERR was issued to the time when application for the approval of the Agreement was made.” (reference omitted)
Two of the objections raised by the AMIEU go to its contention that the 2024 Agreement was not genuinely agreed. The AMIEU argues it was a bargaining representative, which the Applicant failed to recognise, thereby preventing its involvement in the process leading to the agreement being made. It also argues there was no genuine agreement as the explanatory statements given to employees were misleading.
The AMIEU raises a further objection, going to pre-approval processes, about the validity of the 2024 NERR.
Those objections however, do not define whether or not the Agreement may be approved, including reasons associated with whether it was genuinely agreed.
In relation to the AMIEU’s genuine agreement objections – that there was a failure to recognise it as a bargaining representative and the explanations given to employees were insufficient or misleading – I find that neither are compelling enough to cause me to find the agreement was not genuinely agreed.
In relation to the first matter, pertaining to the status of the AMIEU as a bargaining representative, it may be found that the union was a bargaining representative as a matter of fact and that the Applicant recognised it as such, despite its submission in these proceedings to the contrary. The fact that the Applicant later did not engage with the AMIEU, before asking employees to vote to make the agreement, does not of itself lead to a finding that the 2024 Agreement was not genuinely agreed. My reasons for finding that the AMIEU was recognised by the Applicant as a bargaining representative are set out below.
In relation to the second matter, dealing with an insufficiency of explanation to employees, I find that S & D Logistics did not take all reasonable steps to comply with its obligations in s.180(5). In certain respects, that failure may be remedied through me exercising a discretion under s.188(5) to disregard minor procedural or technical errors in determining whether the 2024 Agreement is genuinely agreed; in others it may be remedied through the provision of undertakings by the Applicant.
Is the AMIEU a bargaining representative?
The 2024 NERR was provided to employees on 31 January 2024. Amongst other things it stated the required information about representation;
“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.”[18]
The Applicant argues;
“The AMIEU (‘the Union’) is not a bargaining representative under this Agreement.
The Union did not notify the Employer and/or their representative(s) in relation to bargaining pertaining to the NERR distributed in January 2024.
The Union notified a dispute pertaining to this very issue and it was listed before Deputy President Easton on 25 March 2024, wherein Mr Schultz of the Respondent Union stated that they (being the Union) did not know about the NERR and therefore subsequently failed to represent their members.
The Employer cannot know who is and is not a member of the Union. It is incumbent upon the Union to notify the Employer if it represents any employees, and it failed to do so.”[19]
The AMIEU submits on the subject that the Applicant was aware, in relation to the second agreement making processes, of the AMIEU’s status as a representative of employees in the workplace, and Mr Kutasi on behalf of his client, stated as such.[20] It further argues that it sought to engage with the Applicant once it had become aware the Applicant was progressing towards an enterprise agreement. It also submits that the Applicant was well aware that Mr Tennenbaum, who gave evidence in these proceedings, was a member of the union.
On 14 February 2024, the AMIEU wrote to a number of people, including Mr Kutasi, Mr Wade and Ms Donaldson, setting out that it was a bargaining representative for S & D Logistics employees and asking for the provision of dates on which bargaining meetings would be held. The union then put forward its availability and asked for a response by 3pm Friday, 16 February 2024.[21]
Following this communication, also on 14 February 2024 at 12:57 PM, Mr Schultz again wrote to Mr Kutasi, Mr Wade and Mrs Donaldson, stating he was aware the 2024 NERR had been issued and that “a new NERR is not required and is invalid as the first NERR does not lapse”, seeking retraction of the new NERR.[22]
Relevant to my consideration of this subject is that the Applicant itself held out to employees that the AMIEU was a bargaining representative for the 2024 Agreement. It stated the following to employees in its Explanatory Statement, circulated on 23 February 2024, at the start of the access period for the making of what became the 2024 Agreement;
“S & D Logistics Pty Ltd (hereafter, “S&D”) initiated a Bargaining Period in respect of discussions for an enterprise agreement (“EA”) on 29 January 2024.
As the trade union eligible to represent employees of S&D, regardless of actual membership, the Australian Meat Industry Employees Union (“AMIEU”) is the default bargaining representative for all employees for the duration of the bargaining period.
In the absence of an agreement, S&D has determined to put forward its own agreement for employee consideration – the draft of which was provided to all on the same date of this letter. A ballot will soon be held to allow employees to approve the EA. At the conclusion of the ballot, if the EA is voted up it will be submitted to the Fair Work Commission for approval.”[23] (underlining added)
The context of this statement to employees is that it came after two prior statutory events: the notification the Applicant gave to employees on 31 January 2024, that it had “restarted the bargaining process” and the issuance, on the same date, of the 2024 NERR.[24] The significance of this context is that the statement to employees in the Explanatory Statement that the AMIEU “is the default bargaining representative for all employees for the duration of the bargaining period” can only refer to the 2024 Agreement processes. That is, the phrase “the duration of the bargaining period”, can only be construed as being the period of time which started with the giving of notice for restarting the bargaining process and the issue of the NERR. Inferentially, the period would finish at such future time as when an agreement had been made or bargaining had ended for some other reason.
I find then that S & D Logistics accepted the AMIEU was a bargaining representative in relation to the 2024 Agreement and held that out to employees in its Explanatory Statement, circulated to employees on 23 February 2024.
The failure of the Applicant to engage with the AMIEU, despite its status as a bargaining representative does not, of itself, and for the reasons articulated by the Full Bench in Re: SDA, set out above, automatically negate the authenticity of the Agreement.
The circumstance of the 2024 Agreement is set out in the Explanatory Statement given to employees: “In the absence of an agreement, S&D has determined to put forward its own agreement for employee consideration”.[25] I understand this statement, together with others made by the Applicant, to mean that it took the Commission’s decision in relation to the second agreement to be a matter of refusal for technical reasons and that it saw no utility in undertaking wholesale renegotiation of the agreement. Instead, the Applicant, for better or worse, was intent on putting a further agreement to ballot as soon as it could. None of these circumstances render the process as inauthentic. To the contrary, taking the whole process from the time of the first NERR in March 2023, to the time of the making of the third agreement, it may be said that the Agreement now before the Commission was the product of an authentic exercise in agreement making.
The Applicant’s conduct does not mean the positive findings that have to be made by the Commission, pursuant to s.186 (2) or s.188 (4A) regarding genuine agreement are unable to be made
Explanation given of proposed agreement
Mr Wade says that the 2024 Agreement is identical to the terms of the agreement considered in the proceedings before Deputy President Slevin.[26]
In a letter sent to its employees by Mrs Donaldson on 23 February 2024, three weeks after notification of the commencement of bargaining and distribution of the January 2024 NERR, she stated “… for some months now been discussing the possibility of an Enterprise Agreement to apply to our workplace. Due to a technical error, we have been forced to re-engage in this process.”[27]
The Explanatory Statement for the 2024 Agreement, circulated to employees the same day, set out why this was being done;
“In the absence of an agreement, S&D has determined to put forward its own agreement for employee consideration – the draft of which was provided to all on the same date of this letter. A ballot will soon be held to allow employees to approve the EA. At the conclusion of the ballot, if the EA is voted up it will be submitted to the Fair Work Commission for approval.
The purpose of this document and the associated links and attachments is to assist you in understanding what the effects of the EA will be and what it means for you. This in turn will assist you in making a decision as to whether you will vote for or against the EA when S&D puts it to a formal vote.”[28]
The AMIEU contests that the Explanatory Statement sufficiently explained the terms of the 2024 Agreement and effect of those terms. Its submissions on the subject are the following;
“37. The Explanatory Statement (the ‘ES’) provided by the Applicant as part of the application for the Third Agreement raises several concerns.
38. Firstly, it indicates that the Third Agreement, which was provided to employees, is a draft. The F17 provides that both the Third Agreement and the ES were provided to employees on 22 February 2024. There is no evidence that the Third Agreement moved beyond a draft nor was this communicated to the employees. This inference of the Third Agreement being a draft creates a concern that employees were giving consideration to an incomplete agreement due to being a draft that was open for further bargaining.
39. Secondly, the ES fails to explain the effect of any terms provided in the Third Agreement. The ES explains what an enterprise agreement is and provides links to the awards, but it does not explain the terms of the Third Agreement.
40. Specifically, the Third Agreement cl4 provides for the relationship between the award and the agreement. The ES on pages [3] and [4] indicates there is ‘No Material Difference’.
41. However, the Third Agreement provides that if there is any inconsistency, the Agreement prevails over that Award. This is an important point to consider when voting on an agreement. Neither cl4.1 nor cl4.2 effect were explained to employees.
42. cl5 of the Third Agreement provides for the relationship with the NES. Specifically, cl5.2 provides ‘no employee will suffer a detriment to their existing pay and conditions because of this Agreement’. The ES on pages [3] and [4] indicates there is ‘No Material Difference’ but fails to explain the term's effect to employees.
43. cl6 provides for the agreement's nominal expiry date to be 31 December 2024. The effect of this is not explained to employees in the ES.
44. cl7 provides a clause for ‘no extra claims’. The ES on pages [3] and [4] indicates there is ‘No Material Difference’ but fails to explain the term's effect on employees.
45. cl8 provides for employee engagement, specifically for ‘temporary fixed term/project employees.’ The ES on pages [3] and [4] indicates there is ‘No Material Difference’ but fails to explain the term's effect on employees.
46. cl9 provides for the remuneration of employees. Specifically, cl9.2 imposes and offset in excess of the minimum requirement to pay employees. Additionally, cl9.4 exempts deductions from annual leave payable but is silent on long service leave. The ES on pages [3] and [4] indicates it is more ‘Beneficial’ to employees. This is a significant term, and the ES fails to explain the term's effect on employees.
47. cl10 provides for the Disputes Settlement Procedure. Specifically, cl’s10.3, 10.4 and 10.5 where the Applicant infers limitations to representation by ‘Further, the parties agree that it is in the best interest of both parties to achieve prompt resolution of disputes directly between the employee(s) concerned and the Company’. Further, the dispute process, apart from seeking assistance from the FWC, provides no indication of the level of assistance, i.e. conciliation, mediation and arbitration. The ES on pages [3] and [4] indicates there is ‘No Material Difference’ but fails to explain the term's effect on employees.
48. cl11 and cl12 provide for flexibility arrangements and consultation, respectively. The ES on pages [3] and [4] indicates there is ‘No Material Difference’ but fails to explain the term's effect on employees.”[29]
The AMIEU also submits that the Applicant misled employees about the involvement of the union in the bargaining process when it stated to employees in the Explanatory Statement that questions or concerns about the proposed 2024 Agreement could be directed either to the company or the union;
“Please review this document carefully before the vote takes place. Should you have any questions or concerns please contact:
Dawn Donaldson – Director, S&D – [phone number omitted]
Jason Schultz – Australian (sic) Meat Industry Employees Union [phone number omitted]”
The AMIEU says about this statement that it “wrongfully provides” the union was involved in establishing the Third Agreement.[30]
After consideration of all the material before me, I am of the view that these matters may be concluded in one of three ways;
a finding that the explanatory material is compliant with s.180(5);
the failure to comply with s.180(5) may be remedied through me exercising a discretion under s.188(5);
the provision of an undertaking pursuant to s.190.
A finding that the material is compliant with s.180(5)
Item 38 of the AMIEU’s objections set out above, referable to the claim that the proposed agreement was referred to as a “draft” and thereby “an incomplete agreement” and not final, is an overreach. The Applicant’s mandatory statement says to recipients that, in the absence of agreement, it has decided “to put forward its own agreement for employee consideration – the draft of which was provided to all on the same date of this letter” (underlining added). The expression that a draft has been provided is nothing more than a grammatically correct statement, that a draft has been provided for consideration of the employees. It is grammatically correct in the sense that, at that time, the draft had not been approved by the employees and thereby the 2024 Agreement had not been made. No further consideration is required in respect of this part of the AMIEU’s objection.
Items 40 and 41 of the AMIEU objections put forward that the Applicant has not explained the relationship between the 2024 Agreement and the referenced Awards. This is incorrect, as the body of the explanatory statement explains that the 2024 Agreement will incorporate the awards in their entirety, provided that where there is any inconsistency, the agreement will take precedence over the award. In the context of the provisions of the 2024 Agreement, no greater explanation is required to be given.
The failure to comply with s.180(5) may be remedied through me exercising a discretion under s.188(5)
Before turning to those matters, I note the caution about the discretion in what is now s.188(5) given by the Full Bench in CEPU v e2o Pty Ltd;
“[17] It should be noted that the power to rectify minor procedural or technical errors in s188(2) does not apply to all matters in ss 180, 186 and 188. Section 188(2) has no application in circumstances where the Commission is not satisfied that an agreement was genuinely agreed to in a general sense, as might arise in considering s 188(1)(c). The test is different in nature to other requirements in the Act, which provide for a discretion, or a means of rectifying any defects. Section 201 for example requires an agreement to contain a consultation and flexibility clause, and provides that if it does not or is not in the appropriate form then a model clause applies, and the defect does not prevent approval. Section 188(2) provides a limited discretion to deal with some ‘minor procedural or technical errors’ relating to the procedural requirements for agreements, and s 190 provides the limited circumstances in which undertakings may satisfy the Commission that particular concerns are met, namely where the undertaking is not likely to cause financial detriment to any employee covered by the agreement or result in substantial changes to the agreement. A more general discretion is contained in some provisions of the Act, such as s 387, or the public interest test in s 604.”[31]
The purpose and use of the former s.188(2) was discussed by the Full Bench in the matter of Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others (Huntsman).[32] In that matter, the Full Bench held that a failure to comply with a procedural requirement will constitute a “procedural error”, with a procedural requirement being one which requires an employer to follow a particular process or course of action.[33] A procedural error is to be distinguished from a technical error, which includes an obligation to comply strictly with the form and content of an instrument. While a single error may have both procedural and technical components, what constitutes a “minor” error calls for an evaluative judgement, having regard to the underlying purpose of the relevant procedural or technical requirement which has not been complied with and the relevant circumstances. The Full Bench then concluded this about the characterisation and determination of minor errors:
“7. Generally speaking, the lower the level of non-compliance the more likely it is to be characterised as a ‘minor error’. For example, informing the employees of the matters in ss.180(3)(a) and (b) just after the start of the 7 day access period (say 6 days before the start of the voting process) is likely to be a ‘minor error’ in most cases. But it will depend on the circumstances. If it is the first Agreement at the enterprise; the bargaining representatives are inexperienced and the employees are predominantly from a non-English speaking background, then it may not be a ‘minor error’. Conversely, only informing the employees of the time and place at which the vote will occur some 4 days before the voting process starts may be a ‘minor error’ where there is a history of bargaining at the enterprise; the Agreement is, in effect, a ‘roll over’ Agreement; the employer takes further active steps to remind employees of the time and date of the vote; and a high proportion of employees actually vote.”[34]
The AMIEU’s objections at items 42, 43 and 44 deal with relatively technical issues associated with the status of the National Employment Standards under the 2024 Agreement; the operative effect of the nominal expiry date; and the inclusion of a no extra claims provision in the 2024 Agreement.
In relation to item 42, the 2024 Agreement states in relation to Clause 5 (Relationship with the National Employment Standards), that the NES prevails to the extent of any inconsistency with the agreement provisions, whereas the explanation given to employees omits to state this. An explanation should have been given to employees in respect of this provision. The failure of the Applicant to do so was a minor procedural or technical error. The error likely did not mislead employees and in any event the 2024 Agreement properly states it is to operate subject to the provisions of the NES.
As to item 43, the explanation given to employees in respect of Clause 6 (Date and Period of Agreement), which incorporates the nominal expiry date, being 31 December 2024, was only that there is “no material difference”. Such is factually incorrect, given that it is only the 2024 Agreement which contains a nominal expiry date. Such explanation should have been given to employees but was not. The failure of the Applicant to do so was a minor procedural or technical error. There is no obvious disadvantage to employees caused by the error.
In relation to item 44, Clause 7 (No Extra Claims) the explanatory statement does not deal with the introduction of such a clause or its import. Again, an explanation in respect of this clause should have been given to employees. The failure of the Applicant to do so was a minor procedural or technical error. There is nothing before me that would suggest the presence of the clause is contrary to anyone’s intent during bargaining or that omission of a reference to it in the explanatory statement caused detriment to anyone.
Taken together these omissions are not significant and are not likely to have deprived employees of the information they needed in order to make an informed decision about the proposed agreement. It is appropriate in my view to accept that each is a minor procedural or technical error within the meaning of s.188(5) of the FW Act. Under that section, the Commission may receive undertakings if it “has a concern that the agreement does not meet the requirements set out in sections 186 and 187” (s.190(1)(b)) and if it is satisfied that an undertaking accepted under s.190(3) “meets the concern” (s.190(2)).
With respect to AMIEU items 42, 43 and 44, it is appropriate I exercise the discretion within s.188(5) of the FW Act in order to be satisfied nonetheless of genuine agreement, notwithstanding the identified errors.
The provision of an undertaking pursuant to s.190
Items 45, 46, 47 and 48 of the AMIEU objections deal with more substantial issues that would not properly be resolved through the provisions of s.188(5). In my view, these items require remedial action to be taken by the Applicant, as each is unable to be characterised as a minor procedural or technical error.
Having found that the Agreement is not genuinely agreed, the Agreement may nonetheless be the subject of an undertaking from S & D Logistics and received by the Commission, pursuant to s.190. Under that section, the Commission may receive undertakings if it “has a concern that the agreement does not meet the requirements set out in sections 186 and 187” (s.190(1)(b)) and if it is satisfied that an undertaking accepted under s.190(3) “meets the concern” (s.190(2)).
In this regard, the concern I hold stems from s.186(2), which requires the Commission, before approval of an enterprise agreement, to be satisfied that “the agreement has been genuinely agreed to by the employees covered by the agreement”.
The AMIEU’s concern in respect of item 45 refers to the inclusion in Clause 8 (Employee Engagement) of the category of employment entitled “temporary fixed-term/project employee”. That category is not a feature of either Award. yet the explanation given to employees about the clause in respect of both Awards is that there is “no material difference”.
An undertaking should be provided by the Applicant in these terms;
“CLAUSE 8 EMPLOYEE ENGAGEMENT
S & D Logistics undertake that no employee will be engaged in the category of temporary fixed-term/project employee as referred to in Clause 8.”
In respect of item 46, the AMIEU is concerned about two matters in Clause 9 (Remuneration).
First, Clause 9.2 provides for the offsetting of payments to employees, in excess of the minimum requirements of the 2024 Agreement, “against any liability, claim, or entitlement that an Employee may claim against the Company with respect to the employment”. No such provision is in either Award, with the explanation given to employees about Clause 9 being this: “Refer Schedule A. Employees Better Off Overall” and “Beneficial”.
In order to reflect that explanation, an undertaking should be provided by the Applicant in these terms;
“CLAUSE 9 REMUNERATION
The provisions of Clause 9.2 will not be relied upon and will be of no effect.”
Further, the AMIEU objects to Clause 9.4 preventing deductions upon termination of employment from payments made in respect of accrued annual leave, while not applying in the same way in relation to long service leave payments made upon termination. For the same reasons as expressed in relation to Clause 9.2, an undertaking should be provided by the Applicant in these terms;
“CLAUSE 9 REMUNERATION
S & D Logistics will implement Clause 9.4 on the basis that it provides;
9.4 In determining any termination payment, the Company may deduct from the payment any balance of outstanding monies owing to the Company (excluding annual leave and long service leave payable upon termination).”
In respect of item 47, the union’s objection is to the explanation given about the differences between the dispute settlement procedure as set out in the 2024 Agreement (Clause 10) and those within the Awards. Again, the Applicant explained the 2024 Agreement in these respects as being of “no material difference”, which is obviously incorrect.
For example, each award provides;
“The parties may agree on the process to be followed by the Fair Work Commission in dealing with the dispute, including mediation, conciliation and consent arbitration.
If the dispute remains unresolved, the Fair Work Commission may use any method of dispute resolution that it is permitted by the Act to use and that it considers appropriate for resolving the dispute.”[35]
In contrast the 2024 Agreement provides on the subject that “Where a matter cannot be resolved in accordance with the above, nothing shall prevent either party from referring the matter to the Fair Work Commission (FWC) for assistance.”
This matter is to be resolved by the provision of an undertaking in the following terms;
“CLAUSE 10 DISPUTE SETTLEMENT PROCEDURE
Clause 10 of the Agreement will not be relied upon and will be of no effect. Instead, disputes arising in relation to any matter arising under the Agreement and/or the National Employment Standards (NES) shall be dealt with in accordance with the provisions of the applicable Award (Storage Services and Wholesale Award 2020, Clause 32; Clerks – Private Sector Award, Clause 40).”
In respect of item 48, the AMIEU’s objection is that Clause 11 (Flexibility Arrangements) and Clause 12 (Consultation) are insufficiently explained to employees, with each being stated as having “no material difference” to the award that would otherwise apply.
Despite this statement each term has material differences. For example, Clause 11 permits flexibility arrangements to be terminated through the giving of written notice of not more than 28 days, whereas the Award in each case permits termination of an individual flexibility arrangement through the giving of 13 weeks notice.[36]
The consultation term in the 2024 Agreement differs, as it does not invite the views of employees, when introducing major changes to regular rosters or hours of work, and it is unclear as to whether the requirement to consult extends to those matters. The Commission has already notified the parties that the model consultation term will apply as a term of the 2024 agreement if approved and no further action is required in respect of that matter.
The issue in relation to Clause 11 (Flexibility Arrangements), will be resolved through the provision of an undertaking in these terms;
““CLAUSE 11 FLEXIBILITY ARRANGEMENTS
Clause 11 will not be relied upon and will be of no effect. Instead, Flexibility Arrangements shall be dealt with in accordance with the provisions of the applicable Award (Storage Services and Wholesale Award 2020, Clause 5; Clerks – Private Sector Award, Clause 5).”
NERR notification time
The parties contest the legitimacy of the 2024 NERR, with the AMIEU putting forward that it is unnecessary given the issue of the 2023 NERR, as well as it being a device to circumvent the AMIEU’s right to represent its members. It further argues that, as the 2024 NERR is not valid, the notification time should be recognised as 30 January 2023.[37]
The Applicant argues about this matter that the issue of the 2024 NERR was necessitated by it noticing a change in the scope of the agreement proposed to be put to employees (essentially being that the Applicant no longer wanted to have the AMIEU named in the title of the agreement).[38]
The majority in the Full Bench matter of Uniline Australia Ltd[39] expressed the view that “[o]nce an application is made to the Commission, bargaining for the agreement has concluded albeit that the agreement might not be approved for a variety of reasons”[40] Subsequently, the Full Bench in Re AWU (The Brisbane Convention & Exhibition Centre Union Collective Agreement 2009) dealt with this question further, referring to the view expressed in Uniline;
“[14] Various decisions of the Commission have dealt with the question of whether bargaining comes to an end when an agreement is ‘made’ pursuant to s.182(1). In AMWU v. Broadspectrum (Australia) Pty Ltd the majority of the Full Bench said:
The parties’ submissions in this appeal were premised on two propositions about which they did not disagree. The first was that once an agreement is “made” pursuant to s 182(1), the bargaining process that gave rise to that agreement comes to an end. That proposition is derived from a decision of a single member of the Commission in AMIEU v Coles Supermarkets Australia Pty Ltd. That specific proposition has not yet been endorsed judicially or at the Full Bench level, although we note that in the Full Bench decision in Uniline Australia Limited the majority said that bargaining ended upon lodgement of an application for approval of an agreement (presumably one “made” in accordance with s 182 rather than merely a purported agreement). For the purpose of this appeal we shall assume, without deciding, that the proposition is correct. (footnotes omitted)
[15] It is not necessary or desirable for us to reach a concluded view as to whether in this case, bargaining is no longer occurring as a result of an agreement being ‘made’ pursuant to s.182(1). An application for approval of the proposed agreement is presently before the Commission. The AWU has indicated that it may take issue with the approval application. In the course of determining the application for approval it will be necessary for the Commission to consider whether the statutory prerequisites for approval, including whether an agreement has been made under s182, have been met. In doing so the Commission will have the benefit of evidence and submissions which directly deal with those issues. We consider it appropriate in the circumstances to leave those issues to be dealt with in the approval application rather than deal with them here. We turn then to consider whether it is reasonable in the circumstances to extend the default period.”[41]
I consider it appropriate to take the same approach and not determine the objection raised by the AMIEU. It is not said that the application for approval before me is invalidly made for any reason, including the status of the 2024 NERR and I determine that application on the basis of the relevant provisions of the FW Act.
CONCLUSION
For the reasons set out above, I am not satisfied that the Agreement has been genuinely agreed to by the employees covered by the Agreement.
Having found that the Agreement is not genuinely agreed, the 2024 Agreement may nonetheless be approved through;
the exercise of discretion in s.188(5), in respect of the AMIEU objections in items 42, 43 and 44 of its Outline of Submissions; and
with the provision of undertakings from S & D Logistics, pursuant to s.190, in relation to the AMIEU objections in items 45, 46, 47 and 48.
In relation to any undertakings given under s.190, the Commission may receive undertakings if it “has a concern that the agreement does not meet the requirements set out in sections 186 and 187” (s.190(1)(b)) and if it is satisfied that an undertaking accepted under s.190(3) “meets the concern” (s.190(2)). In this regard, the concern I hold stems from s.186(2) which requires the Commission, before approval of an enterprise agreement, to be satisfied that “the agreement has been genuinely agreed to by the employees covered by the agreement”.
I am satisfied that the undertakings now sought from the Applicant are not likely to cause financial detriment to any employee covered by the 2024 Agreement or result in substantial changes to the Agreement (FW Act s.190(3)).
The undertakings required to be given by the Applicant must be in the following or not dissimilar form and are to be given in addition to those already given;[42]
“S & D Logistics Pty Ltd undertakes the following to the Fair Work Commission in relation to the S & D Logistics Pty Ltd Enterprise Agreement 2024;
1. CLAUSE 8 EMPLOYEE ENGAGEMENT
S & D Logistics undertake that no employee will be engaged in the category of temporary fixed-term/project employee as referred to in Clause 8.
2. CLAUSE 9 REMUNERATION
The provisions of Clause 9.2 will not be relied upon and will be of no effect.
3. CLAUSE 9 REMUNERATION
S & D Logistics will implement Clause 9.4 on the basis that it provides;
9.4 In determining any termination payment, the Company may deduct from the payment any balance of outstanding monies owing to the Company (excluding annual leave and long service leave payable upon termination).
4. CLAUSE 10 DISPUTE SETTLEMENT PROCEDURE
Clause 10 of the Agreement will not be relied upon and will be of no effect. Instead, disputes arising in relation to any matter arising under the Agreement and/or the National Employment Standards (NES) shall be dealt with in accordance with the provisions of the applicable Award (Storage Services and Wholesale Award 2020, Clause 32; Clerks – Private Sector Award, Clause 40).
5. CLAUSE 11 FLEXIBILITY ARRANGEMENTS
Clause 11 will not be relied upon and will be of no effect. Instead, Flexibility Arrangements shall be dealt with in accordance with the provisions of the applicable Award (Storage Services and Wholesale Award 2020, Clause 5; Clerks – Private Sector Award, Clause 5).”
Upon approval, the Model Consultation Term will be taken to be a term of the 2024 Agreement (see FW Act, s.205).
I am satisfied that all other relevant requirements for the approval of an enterprise agreement have been met and that the 2024 Agreement passes the Better Off Overall Test.
Pursuant to s.190(4) I now seek the views of the Applicant and each bargaining representative about this proposed undertaking, as well as those given by S & D Logistics dated 17 April 2024. For the avoidance of doubt the Australasian Meat Industry Employees Union is such a bargaining representative. Any such views must be provided to the Commission and all other bargaining representatives by no later than 4 PM Friday, 9 August 2024, after which my final consideration for approval of the Agreement will be given.
COMMISSIONER
Appearances:
K. Kutasi, for the Applicant
J. Schultz & D. Tennenbaum, for the AMIEU
Hearing details:
29 May.
2024.
Final written submissions:
5 June 2024 - AMIEU
12 June 2024 - Applicant
[1] Notice of employee representational rights; Digital Hearing Book, p.29.
[2] AMIEU Outline of Submissions, [5]; Digital Hearing Book, p.553.
[3] [2024] FWC 203.
[4] NERR; DHB, p.29.
[5] Applicant’s Form F17B; Digital Hearing Book, p.20.
[6] Applicant’s Response to Commission’s concerns, item 4(iv); Digital Hearing Book, p.66.
[7] Ibid.
[8] Form F17B, Questions 24 – 25; DHB, pp.24 – 25.
[9] Ibid, Question 29, p.27.
[10] AMIEU Outline of Submissions, [5]; DHB, p.544.
[11] Ibid, [27], p.555.
[12] Ibid, Attachment 4, p.565.
[13] Ibid, [29], p.556.
[14] Shop, Distributive and Allied Employees Association v Allen Family Pty Ltd t/a Subway Clare, Subway Findon, Subway Broken Hill, Subway Kadina, Subway Port Adelaide, Subway Port Pirie [2024] FWCFB 48,
[15] [2019] FWCFB 6960.
[16] [2024] FWCFB 48.
[17] [2024] FWCFB 48, [76].
[18] NERR; DHB, p.29.
[19] Applicant’s Response to Commission’s concerns, item 1; DHB, p.65.
[20] AMIEU Outline of Submissions, [57]; DHB, p.559 and p.578.
[21] Ibid, Attachment 1, p.562.
[22] Ibid, Attachment 3, p.564.
[23] S & D Logistics Pty Ltd Enterprise Agreement 2024 Explanatory Statement; Digital Hearing Book, p.39.
[24] Wade First WS, Annexure 2; DHB, p.497.
[25] S & D Logistics Pty Ltd Enterprise Agreement 2024 Explanatory Statement; DHB, p.39.
[26] Second Witness Statement of Ben Wade, [4]; Digital Hearing Book, p.513.
[27] Correspondence to Employees, 23 February 2024; Digital Hearing Book, p.44.
[28] S & D Logistics Explanatory Statement; DHB, p.39.
[29] AMIEU Outline of Submissions; DHB,pp.558 – 559.
[30] Ibid, p.559.
[31] [2019] FWCFB 4023.
[32] [2019] FWCFB 318, [318].
[33] Ibid, [117] (2) – (3).
[34] Ibid, [117].
[35] Storage Services and Wholesale Award 2020, clause 32.5 and 32.6; Clerks – Private Sector Award, clauses 40.4 and 40.5.
[36] Storage Services and Wholesale Award 2020 Award, Clause 5.11; Clerks – Private Sector Award, Clause 5.11.
[37] AMIEU Outline of Submissions, [65] – [71]; DHB, pp.560 – 561.
[38] Applicant’s Submissions in Reply, [5] – [8]; Digital Hearing Book, pp.503 – 504.
[39] [2016] FWCFB 4969.
[40] [2016] FWCFB 4969, [115].
[41] [2023] FWCFB 213.
[42] S & D Logistics Pty Ltd, Undertaking – Section 190, 17 April 2024; Digital Hearing Book, p.68.
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