Stefanutti Construction Pty Limited

[2015] FWC 5309

[2015] FWC 5309

FAIR WORK COMMISSION

DECISION

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

Stefanutti Construction Pty Limited
(AG2015/1046)

COMMISSIONER RIORDAN SYDNEY, 6 AUGUST 2015

Application for approval of the Stefanutti Construction (On-Site Employees) Enterprise Agreement 2015 - 2019.

[1] This decision is in relation to an application under section 185 of the Fair Work Act, 2009 (the Act) by Stefanutti Construction Pty Limited for approval of the Stefanutti Construction Pty Ltd (on-Site Employees) Enterprise Agreement 2015 – 2019 (the Agreement).

[2] Mr Rod Grace, an Industrial Officer of the Master Builders Association of NSW (MBA) was the nominated bargaining representative of Stefanutti Constructions Pty Limited.

[3] The Construction Forestry Mining and Energy Union (CFMEU) was also a bargaining agent and has opposed the application to approve the Agreement.

Background

[4] Earlier this year the parties were involved in negotiations for a new Enterprise Agreement. On 17 March 2015, a ballot of employees in relation to the proposed agreement resulted in a 5-5 split. Further negotiations were planned.

[5] Mr Mitchell, a self-represented bargaining representative, contacted Mr Grace to seek advice as to how employees could change their bargaining representatives. Mr Mitchell also asked Mr Grace for an interpretation in relation to the application of the Fares and Travel Allowance clause of the Agreement (cl 6.1.4).

[6] A meeting took place between Mr Grace and all of the self-appointed bargaining representatives on 20 March 2015 at the MBA office in Unanderra to allow Mr Grace the opportunity to answer their questions in relation to bargaining representation.

[7] The next bargaining meeting was confirmed for 24 April 2015.

[8] Mr Kelly (CFMEU Organiser) attended this meeting, allegedly well after it had commenced. Mr Kelly challenged Mr Grace in relation to the meeting held on 20 March 2015 without the CFMEU. He alleged that it was an illegal bargaining meeting.

[9] Mr Grace denied this accusation and explained the purpose of the meeting that had been convened on 20 March 2015 and assured Mr Kelly that no negotiations had taken place.

[10] I accept the evidence of Mr Grace and Mr Mitchell that the discussions in relation to Clause 6.1.4 occurred at the meeting of 24 April 2015.

[11] On the afternoon of 24 April 2015, the Company advised its employees and the CFMEU that a ballot for a new agreement would be conducted on 4 May 2015 at 7am at the Stefanutti office. The Company also provided each employee with a copy of the proposed Agreement and a “How and When for Approval” form.

[12] On 4 May 2015, the ballot for the proposed agreement was conducted. 14 employees cast valid votes. 12 voted in favour of the Agreement. It would appear that 4 more employees voted in the second ballot compared to the first.

[13] A recent Full Bench decision of the Fair Work Commission (FWC) in CEPU v Mirait Technologies Australia Pty Ltd 1provided a useful summary of the required assessment to be conducted by the FWC in approving an agreement:

“[12] Before an enterprise agreement is approved, the Fair Work Commission (Commission) must be satisfied, in relation to a non-greenfields agreement, inter alia that the agreement has been genuinely agreed to by the employees covered by the agreement. Section 188 of the Act explains when employees have genuinely agreed to an enterprise agreement as follows:

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) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

[13] Given the structure of s.188 of the Act, it is apparent that the Commission must be satisfied of each of the matters identified therein before it can be said that an enterprise agreement has been genuinely agreed to by employees covered by the agreement. Relevantly, for present purposes, the Commission must be satisfied that each employer covered by the Agreement complied with ss.180(2), (3) and (5) of the Act, and that there are no other reasonable grounds for believing that the Agreement has not been genuinely agreed to by the employees.

[14] Section 180(2) of the Act provides:

Employees must be given copy of the agreement etc.

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

(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:

(i) the written text of the agreement;

(ii) any other material incorporated by reference in the agreement; or

(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.

[15] The access period referred to in s. 180(2) of the Act for a proposed enterprise agreement is the seven day period ending immediately before the start of the voting process referred to in s.181(1) of the Act. 2 Section 181 of the Act provides:

181 Employers may request employees to approve a proposed enterprise agreement

(1) An employer that will be covered by a proposed enterprise agreement may request the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it.

(2) The request must not be made until at least 21 days after the day on which the last notice under subsection 173(1) (which deals with giving notice of employee representational rights) in relation to the agreement is given.

(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.

[16] Section 180(3) provides:

(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:

(a) the time and place at which the vote will occur;

(b) the voting method that will be used.

[17] Section 180(5) provides:

(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.”

[14] The CFMEU have raised a number of objections as to why the Fair Work Commission (FWC) should not approve the Agreement. The Union believe that Stefanutti have not complied with s 180(5) and 186 (3) of the Act.

[15] The CFMEU have argued that they were not made aware of the change to clause 6.1.4. Further, an employee of Stefanutti Construction Pty Limited who wishes to remain anonymous, has filed a statutory declaration that he has not had the variation to the original proposed Agreement explained to him. The evidence of this employee has not been challenged. There is some confusion between the parties in relation to who has the responsibility to explain the modified Agreement to the employees.

[16] In response to a question, Mr Grace has advised me that the MBA believes that Mr Kelly carried the responsibility to advise his member of the variation to clause 6.1.4, not the employer.

[17] A Full Bench of the FWC examined this issue in McDonalds Australia Pty Ltd v Shop Distribution and Allied Employees’ Association; 3

“[29] These extracts reveal a number of errors. First, the Commissioner has not accurately stated the test under s 180(5)(a). The heading and introductory paragraphs of this aspect of the decision express the test as an absolute requirement to ensure particular outcomes are achieved. The section does not establish any such requirement. It requires only that the employer take reasonable steps to ensure that the terms and conditions are explained to employees. In misstating the test the Commissioner erred.

[30] Secondly there is no requirement in the Act that there be a full explanation of the terms of the agreement prior to the employer requesting employees vote on an agreement. The requirement in s 180(5)(a) is that the employer take reasonable steps to ensure that explanations are provided. Under s 180(1) the employer must comply with this requirement before requesting employees to approve an enterprise agreement. In our view these provisions do not preclude explanations being given during the access period. It is open to an employer to make arrangements for subsequent explanations prior to requesting employees to vote. If the arrangements are reasonable steps, s 180(5)(a) is satisfied.

[31] Thirdly there is no impediment in the Act to collaborate with bargaining representatives to provide relevant explanations. The Commissioner rejected certain explanations because they were given by the SDA. In some cases SDA documents were communicated by McDonald’s by electronic means. In our view the Commissioner was quite wrong to disregard these steps. In our view an employer would be taking reasonable steps to ensure terms are explained to employees if it collaborated with a bargaining representative to arrange for this to be undertaken.

[32] Considering the evidence for ourselves we are satisfied that the employer took reasonable steps to ensure that the agreement was explained to employees. The documents produced by the SDA and McDonald’s were comprehensive and detailed. They clearly satisfy the obligations of the employer. Again, we commend the collaborative approach of the parties.”

[18] There appears to have been no collaboration between the parties in relation to the required explanation. Mr Kelly gave an explanation of the original Agreement to the employees before the first ballot. He was not afforded the same opportunity prior to the second ballot. As a result, and in accordance with the decision in McDonalds v SDA, the onus to provide the explanation of the modified Agreement falls to Stefanutti.

[19] Therefore, Stefanutti Construction Pty Limited has failed to satisfy one of the mandatory pre ballot steps in the process, ie, they have not taken reasonable steps to ensure that the modified terms of the Agreement were explained to all employees.

[20] The issue in relation to s 186 has recently been examined by the Full Court of the Federal Court of Australia in National Tertiary Education Industry Union v Swinburne University of Technology; 4

“[24] Indeed, in my view, the legislative must be taken to have made the contrary assumption. The architecture of these provisions inescapably involves the perception that those who are provided with a copy of the agreement and are requested to vote, on the one hand, need not be the same as those who were, at some previous point, notified of their representational rights, on the other hand. Those to whom a request under s181(1) should be addressed are confirmed, in my view, to those who are employed at that time. No other conclusion makes sense of the statutory scheme.”

[21] The CFMEU’s argument that casuals who have previously worked for Stefanutti Construction Pty Limited and who will work for them in the future should have participated in the ballot is not supported by this decision. The Federal Court has determined that only those employees employed at the time of the ballot are entitled to vote.

Conclusion

[22] Stefanutti have not complied with s 180(5) of the Act. As a result the application for approval of the Stefanutti Construction Pty Ltd (on-Site Employees) Enterprise Agreement 2015 – 2019 must fail.

[23] The application is rejected.

COMMISSIONER

 1   [2015] FWCFB 5078

 2  

 3  [2010] FWAFB 4602

 4 [2015] FCAFC 98

Printed by authority of the Commonwealth Government Printer

<Price code A, PR570130>