Steelfab Unit Trust T/A Pacific Industrial Company (WA) Pty Ltd
[2024] FWC 1138
•1 MAY 2024
| [2024] FWC 1138 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Steelfab Unit Trust T/A Pacific Industrial Company (WA) Pty Ltd
(AG2024/893)
| DEPUTY PRESIDENT BELL | MELBOURNE, 1 MAY 2024 |
Application for approval of the Pacific Industrial Company Workshop Enterprise Agreement 2024 – Notification of Employee Representational Rights not issued – no genuine agreement – application dismissed
An application has been made for approval of an enterprise agreement known as the Pacific Industrial Company Workshop Enterprise Agreement 2024 (the Agreement). The application was made pursuant to s 185 of the Fair Work Act 2009 (the Act) by the employer Steelfab Unit Trust T/A Pacific Industrial Company (WA) Pty Ltd. The Agreement is a single enterprise agreement.
The application was lodged on 22 March 2024. Shortly after, correspondence was issued by Commission staff seeking a copy of the Notice of Employee Representational Rights (NERR). In response to that request, the employer candidly acknowledged that no NERR had been issued but outlined a number of matters seeking to demonstrate that genuine agreement had been reached. I describe these matters further below.
The matter was then allocated to me and, soon after, the employer proffered an undertaking for the purposes of s 190 of the Act. The substantive parts of the undertaking are:
“Notice of Employee Representational Rights
1. The Employer acknowledges that a Notice of Employee Representational Rights (NERR), in accordance with Section 173 [of the] Fair Work Act 2009 Cth, was not issued to Employees party to the Agreement within the required twenty-one (21) day period following the commencement of bargaining.
Genuine bargaining
2. The Employer undertakes that for the purposes of Section 188 of the Fair Work Act 2009 Cth, that genuine bargaining has occurred in the negotiation of the Agreement.
Bargaining of the Agreement occurred over a seven (7) month period with a total of nine (9) bargaining meetings with Employee representatives. The Enterprise Agreement was voted on twice, with the first vote held on the 18th December 2023 resulting in a majority 'no' vote and the second vote held on the 14th March 2024 being a majority 'yes' vote.Notwithstanding the omission of the NERR, the Employer has taken all other procedural steps to form a single-enterprise Agreement in accordance with the Fair Work Act 2009 Cth.”
Through further correspondence with the employer, I am satisfied that the explanation given in the undertaking, above, is accurate, although I note that the NERR was not issued at all (not simply within the required fourteen day period). The failure to issue the NERR was not deliberate – it appears to have simply been overlooked and, once bargaining was underway, never revisited. The employer provided copies of bargaining minutes, statements from bargaining representatives and other material to demonstrate what I would describe (to use a neutral term) as genuine bargaining from 10 August 2023. I am also satisfied that, despite the failure to issue a NERR, the parties were informed – and aware of – their right to be represented by a bargaining representative. In this case, this conclusion is fortified by the fact that an initial vote was conducted – which failed – and then further bargaining occurred that delivered a result acceptable to the parties. The final vote approving the Agreement involved 27 employees voting (out of 35), of whom 25 voted in favour.
For bargaining before the first vote, the initial notification time under s.173(2) was 10 August 2023. On any measure, the genuine agreement requirements are those applying on and from 6 June 2023.[1] All references to the legislation below are to the Act after 6 June 2023 unless otherwise stated.
Section 188 of the Act sets out the matters applicable to whether an enterprise agreement is “genuinely agreed”. Section 188(1) requires the Commission to “take into account” the statement of principles made under s 188B. Paragraph 1 of the Statement of Principles on Genuine Agreement addresses a requirement for the employer to ensure that employees are informed, at the notification time, of (among other matters) the employees’ rights to be represented in bargaining for the agreement, including by an employee organisation or by another bargaining representative of their choice, and how to exercise those rights: paragraph 1(b). Compliance with s 173(1) in issuing a NERR will be “taken to” satisfy item 1(b): paragraph 2 of the Statement of Principles on Genuine Agreement. By implication from paragraph 2, the requirements of paragraph 1 can be satisfied without compliance with the NERR requirements, although the nature and degree of non-compliance and the circumstances of the matter at hand would be relevant to the overall assessment of whether there was genuine agreement for the purposes of s 188(1).
However, s 188(1) is not the end of the matter. Section 188(4) provides that the Commission “cannot” be satisfied that the agreement has been genuinely agreed to by the employees covered by the agreement unless the FWC is satisfied that the employer complied with (among other matters) sections 173 and 174 (which deal with giving notice of employee representational rights).
Sections 173 and 174 were not complied with, because no NERR was ever issued. Accordingly, the requirements of s 188(4) are not met.
Despite s 188(4), by section 188(5),the Commission “may” nonetheless be satisfied the agreement was genuinely agreed by disregarding any “minor procedural or technical errors made” in relation to (as relevant) ss 173 and 174. Such “minor” errors may be disregarded if the Commission is satisfied that the employees were not likely to have been disadvantaged by the errors.
The employer (supported by employee bargaining representatives) made submissions that no employees were disadvantaged and the bargaining process was conducted in a fair manner. While I would be prepared to accept those submissions, they are only relevant “if” the errors in question were “minor”.
The Full Bench in Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others[2019] FWCFB 318 considered the predecessor to s 188(5) prior to amendments made by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) taking effect on 6 June 2023.
Wherever the boundaries might lie for what might constitute a “minor” procedural or technical error, that is a matter I need not address. A failure to issue a NERR at all is not, in my opinion, a minor procedural or technical error. Section 173(4) appears to contemplate the only circumstance where a failure to issue a NERR might be excused, but that is where the employer has already given a NERR previously (which must have also been given in a reasonable time prior to the actual ‘notification time’).
As the failure to issue a NERR is not a “minor” error of the relevant kind, the absence of disadvantage to any employee for the purpose of s 188(5) is moot.
As set out above, the employer proffered undertakings aimed at curing the absence of a NERR. In CFMMEU v Mechanical Maintenance Solutions Pty Ltd[2020] FWCFB 1918, the Full Bench stated at [36] (footnotes omitted):
“Finally, the fourth contention of error raises the same argument that was considered and authoritatively rejected in the recent (3 March 2020) Full Bench decision in CFMMEU v Karijini Rail Pty Ltd. We do not consider that permission to appeal should be granted to allow the CFMMEU to advance this argument again a few weeks later before a differently constituted Full Bench in the hope of obtaining a different response. It should be emphasised that Karijini is not authority for the proposition that any instance of non-compliance with s 180(5) is curable by undertakings. Clearly a wholesale failure to comply of the type dealt with in CFMEU v One Key Workforce Pty Ltd is not capable of rectification. But, for example, a concern arising from the making of a representation by the employer that a specific term of a proposed agreement is more beneficial than it actually is might, in some but not all circumstances, be addressed by an undertaking to apply the term in the more beneficial way represented by the employer. In this case, there was a failure by the employer to explain that a small number of more beneficial terms in the pre-existing instruments had been excluded by the Agreement. The undertakings addressed this concern by restoring the more beneficial terms for the purpose of the Agreement. This was entirely consistent with the reasoning in Karijini.”
The matter before me is not a case of a misrepresentation about a particular condition or right in an enterprise agreement that might be ‘cured’ by an undertaking to make good that representation. The non-issuance of the NERR is not a representation capable of being cured but is an unerasable historical fact of a mandatory step that did not occur. Moreover, the failure to issue a NERR is a matter that the statute specifically commands the Commission to find that satisfaction of genuine agreement “cannot” be reached. Even if an undertaking under s 190 was capable of addressing the absence of a NERR (which I do not consider it can), I would decline to accept such an undertaking having regard to the clear intent of the statutory scheme concerning the issuance of a NERR.
It follows from s 188(4) that I “cannot” be satisfied that the Agreement was genuinely agreed. The “basic rule” for approval in s 186(1) is therefore not met, because I am not satisfied that the Agreement was genuinely agreed for the purposes of s 186(2)(a) and 188(4).
The application for approval of the decision is dismissed.
DEPUTY PRESIDENT
[1] The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) made a number of changes to enterprise agreement approval processes in Part 2-4 of the Fair Work Act. Those changes broadly commenced operation on 6 June 2023, subject to various transitional arrangements which are not applicable to the present application.
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