Tasmanian Water and Sewerage Corporation Pty Ltd T/A TasWater

[2016] FWC 1144

[2016] FWC 1144

The attached document wholly replaces the document previously issued with the code [2016] FWCA 1093 on 19 February 2016.

Associate to Commissioner Lee

Dated 22 February 2016

[2016] FWC 1144

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Tasmanian Water and Sewerage Corporation Pty Ltd T/A TasWater
(AG2015/7221)

TASWATER GENERAL EMPLOYEES (NORTHERN REGION) ENTERPRISE AGREEMENT 2015

Tasmania
COMMISSIONER LEE	MELBOURNE, 22 FEBRUARY 2016

Application for approval of the TasWater General Employees (Northern Region) Enterprise Agreement 2015.

[1] This matter involved an application for approval of an enterprise agreement known as the TasWater General Employees (Northern Region) Enterprise Agreement 2015 1 (the Agreement). The application was listed for hearing on 28 and 29 January 2016 to allow the Construction, Forestry, Mining and Energy Union (CFMEU), a bargaining representative for the Agreement, to be heard in relation to their objections to the approval of the Agreement. Mr David Dilger was granted permission to appear for Tasmanian Water and Sewerage Corporation Pty Ltd T/A TasWater (TasWater) and Mr Henry Pill was granted permission to appear for the CFMEU. On Friday 29 January 2016 I approved the Agreement in an ex-tempore decision shortly after the conclusion of the hearing. These are the written reasons for my decision to approve the Agreement.

Background

[2] On 23 December 2015 TasWater lodged an application for approval of the Agreement pursuant to s.185 of the Fair Work Act 2009 (the Act).

[3] The CFMEU in this matter filed a Form F18 – Statutory declaration of employee organisation in relation to an application for approval of an enterprise agreement (Form F18) on 19 January 2016 objecting to the approval of the Agreement on a number of grounds.

[4] The matter was listed for hearing and directions were issued for the CFMEU to file submissions and material in support of their objections to the application for approval. The CFMEU filed material in accordance with the directions. As part of that process the CFMEU lodged an amended Form18 which somewhat altered the initial grounds of objection.

[5] Form F18’s were also filed by the Australian Municipal, Administrative, Clerical and Services Union (ASU), Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and The Association of Professional Engineers, Scientists and Managers, Australia (APESMA)

[6] The ASU and the CEPU did not provide an answer to question 4 on the Form F18 as to whether they supported approval of the Agreement or not. Both the ASU and the CEPU sought to be covered by the Agreement.

[7] APESMA indicated that they supported approval of the Agreement and sought to be covered by the Agreement. Neither the ASU nor the CEPU appeared in the proceedings or expressed any view in relation to the objections raised by the CFMEU. Mr Lee Buntman appeared on behalf of APESMA on the first day of proceedings in order to urge me to seek an undertaking that would clarify that the Water Industry Award 2010 (the Award) was an incorporated term of the Agreement. Having been advised by me that I did not think that whether or not the Award was an incorporated term gave me a concern of the requisite type under s.190 of the Act, Mr Buntman no longer pressed the point, made no submission on the CFMEU application and did not take any further part in the proceedings.

[8] Ultimately there are three objections to approval of the Agreement pressed by the CFMEU. In summary the objections are that a Notice of Employee Representational Rights (NERR) was not issued within the timeframe required under the Act, that TasWater did not adhere to good faith bargaining principles throughout the bargaining process and the Agreement had not been genuinely agreed within the meaning of the Act.

The evidence

[9] Mr David Button provided evidence in the matter. Mr Button is employed by TasWater as a Wastewater Treatment Plant Operator and he is also a delegate for the CFMEU and has been since 2009. Ms Alexandra Garrott, the Department Manager Employee Relations and Lead Negotiator for TasWater also gave evidence.

[10] It is not in dispute that bargaining for the new Agreement commenced some time ago. It is apparent on the evidence that bargaining commenced in early November 2013. There is no dispute that a NERR which complies with the requirements of the Act was issued within the required 14 days of the employer initiating bargaining in November 2013 (NERR 1).

[11] In February 2014, Ms Garrott became aware that the scope of the NERR1 issued in November 2013 had the effect of excluding from its proposed coverage a group of employees that were engaged by the former Onstream Corporation (the Onstream employees). As a result, Ms Garrott issued a further NERR (NERR 2). The evidence of Ms Garrott is that NERR 1 and NERR2 were sent to all employees of TasWater, whether they were included in the scope of the Agreement or not.

[12] There were 23 bargaining meetings with the Single Bargaining Unit throughout 2014. In November 2014 a proposed Agreement to cover all of TasWater was put to an employee vote which resulted in a majority NO vote.

[13] On 31 December 2014, the Unions made application for a scope order that would have the effect of requiring TasWater to bargain for three separate agreements.

[14] While the scope order was before the Fair Work Commission (the Commission) there was little or no bargaining, Ms Garrott described the period as “a hiatus”. The scope application was ultimately arbitrated by Deputy President Abey and a decision was issued in June 2015. The effect of the decision granting the Unions application was that there be bargaining for three separate agreements covering three different regions rather than just one agreement covering all of TasWater. The three regions are Southern Region, North Western Region and Northern Region. TasWater appealed the scope order decision of Deputy President Abey and sought a stay of the decision. The stay was not granted and ultimately the appeal was dismissed on 13 August 2015.

[15] On 17 July 2015, Mr Lambert from the CEPU sent an email to Ms Garrott and requested he be provided with the TasWater log of claims and questioned whether the appropriate NERR’s have to be reissued by TasWater. On 22 July 2015, Mr Crowley of APESMA sent an email to Ms Garrott asking if TasWater intend to issue new NERR’s to reflect the decision of Deputy President Abey. Ms Garrott responded to Mr Crowley that she did not consider it appropriate or necessary to issue a NERR at that time. Ms Garrott’s evidence is that she did not think it was necessary to issue another NERR because a NERR had already been issued to all employees in February 2014, and there had been frequent communications from TasWater to employees with a total of 60 enterprise agreement updates being issued since April 2014. In addition, there was no new group of employees who had entered or been removed from the bargaining who had not received the NERR in February 2014, the Single Bargaining Unit and their representation had not changed, and the coverage of each regionally based enterprise agreement would capture all employees that had already been the subject of bargaining since the issuing of the NERR on 26 February 2014.

[16] After the Full Bench rejected the appeal against Deputy President Abey, Ms Garrott elected to issue a further NERR. On 20 August 2015 she sent proposed draft NERR to the Unions for comment. APESMA was the only Union to provide a response. On 27 August 2015 Ms Garrott issued a further NERR (NERR 3) directed at each region respectively. The version of NERR3 that was issued did not directly reflect the scope order decision, because Ms Garrott realised that the scope order of Deputy President Abey, if applied literally, would have the unintended effect of once again excluding former Onstream employees.

[17] Ms Garrott’s evidence was that the reason she elected to issue the NERR3 in order to address the Single Bargaining Units concerns that there had been a hiatus in bargaining and it was a good opportunity to recommence the actual bargaining process afresh.

[18] A further proposed agreement was put to employees for a vote in November 2015. This proposed agreement was not approved by a valid majority of employees. Mr Button’s evidence was that TasWater did not meet with the Single Bargaining Unit or provide an opportunity for the delegates to discuss a further proposed agreement with them prior to the company putting a further proposed agreement out for ballot in early December. Ms Garrott’s evidence is that after the employees rejected the proposed agreement in November, TasWater then decided to increase the maximum payment cap for redundancy payable under the proposed agreement.

[19] On 1 December 2015, Ms Garrott sent an email to the four Unions advising of the change to the redundancy cap and seeking feedback by 4 December 2015. Mr Lambert responded on 2 December 2015 on behalf of the CEPU. Mr Lambert sought other changes and some further detailed drafting of the redundancy changes proposed and Ms Garrott responded to Mr Lambert on the same day. The CFMEU did not respond to the email of 1 December 2015. Ms Garrott rang Mr Washington from the CFMEU on 4 December 2015 at which time Mr Washington informed Ms Garrott that he “did not negotiate by email” and that he required more time to respond. Ms Garrott then emailed Mr Washington extending the timeframe for response to 7 December 2015. TasWater did not receive a response from the CFMEU.

[20] On 7 December 2015, Ms Garrott advised the four Unions by email that TasWater proposed to go to a further vote of employees with the amended Agreement. At around this time the ASU, the CFMEU and the CEPU made applications for protected action ballots (PAB) to be held. The Commission granted the ballot orders and on 4 December 2015 the Australian Electoral Commission (AEC) issued timelines for these ballots. Mr Button’s evidence is that the timetable for the vote for the PAB was between 11 December 2015 and 6 January 2016. The access period for the proposed Agreement opened on 7 December 2015 and voting commenced on 16 December 2015. On site voting and postal voting was used. On 23 December 2015 the AEC declared that there was a majority yes vote for the Agreement (108 employees voted for the agreement and 95 voted against the agreement).

Consideration of the objections raised by the CFMEU

[21] Did TasWater comply with its obligation to provide a NERR within the appropriate time frame in accordance with section 173(3) of the Act? Section 173 of the Act provides as follows:

“173 Notice of employee representational rights

Employer to notify each employee of representational rights

(1) An employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who:

(a) will be covered by the agreement; and

(b) is employed at the notification time for the agreement.

Note: For the content of the notice, see section 174.

Notification time

(2) The notification time for a proposed enterprise agreement is the time when:

(a) the employer agrees to bargain, or initiates bargaining, for the agreement; or

(b) a majority support determination in relation to the agreement comes into operation; or

(c) a scope order in relation to the agreement comes into operation; or

(d) a low paid authorisation in relation to the agreement that specifies the employer comes into operation.

Note: The employer cannot request employees to approve the agreement under section 181 until 21 days after the last notice is given (see subsection 181(2)).

When notice must be given

(3) The employer must give the notice as soon as practicable, and not later than 14 days, after the notification time for the agreement.

Notice need not be given in certain circumstances

(4) An employer is not required to give a notice to an employee under subsection (1) in relation to a proposed enterprise agreement if the employer has already given the employee a notice under that subsection within a reasonable period before the notification time for the agreement.

How notices are given

(5) The regulations may prescribe how notices under subsection (1) may be given.”

[22] It is clear from the evidence that three NERR’s were issued to all staff of TasWater, which included all staff of the Northern Region , the first in November 2013, the second in February 2014 and the third in August 2015. The scope order decision of Deputy President Abey took effect on 25 June 2015 and was corrected by a subsequent order on 3 July 2015. An appeal against that decision was dismissed on 13 August 2015 and a stay order against the decision was not issued. The CFMEU contend that TasWater was obliged to take all reasonable steps to issue the further NERR to all employees proposed to be covered by the Agreement as soon as is practicable and no later than 14 days after the scope order came into operation. As the scope order came into operation on the 25 June 2015, if the CFMEU’s interpretation of the Act is correct, a further NERR should have been issued to employees not later than 9 July 2015.

[23] The position of the CFMEU relies on a construction of s.173(3) of the Act such that the fact that the scope order is issued compels the employer to issue a further NERR within 14 days, irrespective of whether or not an earlier NERR was issued within 14 days of one of the other events contemplated in subsections a - d. On this point, Mr Pill submitted this interpretation must be correct because a scope order could only be made after one of the other events specified in s. 173(2) had taken place. I note however there could be a situation where an employer refused to bargain, perhaps because they disputed the scope, and a scope order application is then subsequently made and determined, this then would mean that the scope order would become the relevant notification time.

[24] The starting point to construction is to construe the words of s. 173(2) and (3) according to their ordinary meaning having regard to their context and legislative purpose. Context includes the existing state of the law and the mischief it was intended to remedy.  2

[25] The term “notification time” is expressed in the singular. Each of the subsections in s.173(2) are clearly alternative triggers for the notification time as they are separated by the disjunctive “or”. TasWater contend that as “notification time” is expressed in the singular there is only one notification time that occurs for each Agreement. The CFMEU contend that there could be a number of separate notification times within the one period of bargaining and that when a new circumstance arises, such as in this case the making of a scope order, that there is a new notification time triggering the need for a new NERR to be issued within the 14 day period.

[26] A literal approach to construction favours the interpretation proposed by TasWater. That is, that there is only one notification time for each agreement even if two events under s.173 (a) to (d) occur at different points of time during the bargaining. However, if this is correct this could lead to an outcome where for example, an employer had agreed to bargain for a group of employees, and issued a NERR to those employees within the employers preferred scope. If a scope order is subsequently made which expanded the scope to include additional employees, then not supplying these additional employees with a NERR within 14 days would on the TasWater construction, be in accordance with the legislative requirement. However, this would be an absurd result where it is clear that the giving of the NERR is significant in the scheme of enterprise bargaining. 3

[27] In that context, it could not have been the intention of the Parliament that the notification time would only occur once, even if that meant that some employees would never receive a NERR. Further context is provided by a consideration of s.173 as a whole, particularly s. 173(4). This section clearly provides a mechanism to allow employers relief from having to supply another NERR to employees within the 14 day period after an event that has occurred, provided that a NERR was already given earlier and provided it is within a reasonable time. If the construction favoured by TasWater was correct, there would be no need for 173(4) to be there. Consideration of the Explanatory Memorandum provides support for this construction. Item 702 of the Fair Work Bill Explanatory Memorandum provides as follows:

“702. Subclause 173(4) does not require an employer to give a notice of employee representational rights to an employee if the employer has already given the employee a notice within a reasonable period before the notification time for the agreement. For example, if an employer issues an employee with a notice at the time the employer agrees to bargain, the employer is not required to issue another notice to that employee if a scope order subsequently varies who will be covered by the agreement, provided the notice was issued within a reasonable period of the scope order.”

[28] If for example, the scope of the coverage of the Agreement had expanded as a result of a scope order being made, the 14 day period would remain relevant. Otherwise, it would be possible to have an agreement approved where employees who had been added into the scope, did not receive a notice until, for instance, 21 days before they were requested to vote to approve the proposed enterprise agreement, regardless of the length of the bargaining period. This would result in this group being without a notice for an entire negotiation period and would not be consistent with the object of this part of the legislation which is to ensure that all employees to be covered by an agreement are provided with important information about the bargaining process.

[29] Having regard to the foregoing, the proper construction of s.173 is that the issuing of a scope order triggers the need to issue a NERR within 14 days of the scope order being issued. This requirement exists even if there was an earlier initiation of bargaining and a NERR provided at that earlier time. However, s.173(4) provides that, notwithstanding that obligation, it is not necessary to issue another notice within 14 days if an earlier notice was issued within a reasonable period before the notification time.

[30] In the circumstances of this case, the last NERR issued was to all employees of TasWater, including Onstream employees in February 2014. That means the relevant period in this matter is approximately 16 months.

[31] In Richers Transport Pty. Ltd  4 Commissioner Spencer found in the circumstances of the case that, 6 months was a reasonable period of time. In making that determination the Commissioner considered the context of the negotiations, the level of involvement and engagement of employees and the level of communication that was occurring both by employee representatives and the company.

[32] In this matter, the period of time is 16 months. This is a significant period of time and of itself weighs against a finding that it is reasonable. However, whether a period of time is reasonable or not depends on the particular circumstances in existence. It is not the case that a reasonable period of time is a fixed amount irrespective of circumstances. In other words, what is a reasonable period in one matter may not be reasonable in another. In this matter there was a high level of communication about the bargaining process throughout the relevant time period. All employees of TasWater received each of the NERR’s issued. Further, the evidence of Ms Garrott is that there is a low level of employee turnover at TasWater.

[33] Considering the context of the negotiations, the level of communications and involvement of bargaining representatives and the low level of employee turnover, I am satisfied that the employer had already given employees a NERR within a reasonable period before the notification time in accordance with s. 173(4) of the Act.

[34] I note for completeness that there was an alternative argument put by TasWater that bargaining had in fact ceased and then recommenced on 13 August 2015. It followed that if that was the case, that TasWater had issued the third NERR within the 14 day period. The CFMEU rejected the proposition that bargaining ceased and recommenced as not being supportable on the evidence. I agree with the submissions of the CFMEU on that point. The evidence does not support a finding that the bargaining ceased and recommenced. I note that Mr Dilger for TasWater would not indicate whether their submission was that I should make a finding that bargaining did cease and recommence. Rather, the submission appeared to be that it was open to me that make that finding.

Have employees genuinely agreed to the agreement?

[35] The CFMEU submits that TasWater’s decision to hold the ballot for the current proposed Agreement at a time when the CFMEU were already conducting a protected action ballot was capricious or unfair conduct for the purposes of s.228 (e). To the extent that good faith bargaining principles may have not been followed, this may be relevant to the question as to whether employees have genuinely agreed to the Agreement.

[36] I agree with the submissions of TasWater that, the decision of Deputy President Asbury in Central Queensland Services Pty Ltd T/A BHP Billiton Mitsubishi Alliance 5is instructive in considering this objection. Taking into account the principles considered by Her Honour in that decision I am satisfied that in the circumstance of this case that there is no evidence of coercion, there was an independent vote conducted by the AEC, there were opportunities to vote in person and by postal ballot and there is no evidence of any misleading conduct by TasWater. Further, that the CFMEU were involved throughout campaigning for a NO vote to the Agreement and the CFMEU did not raise any concern about alleged confusion with TasWater prior or during the vote. There is no reason a concurrent voting process cannot be conducted and the situation (the concurrent vote) was not unique to the CFMEU.

Was there a failure to comply with good faith bargaining requirements?

[37] The CFMEU submitted that there was a failure to meaningfully consult with the Single Bargaining Unit between the rejection of the second proposed Agreement and the announcement of the ballot for the third proposed Agreement. It is submitted that this failure amounts to a failure to give genuine consideration to the proposals of the CFMEU as required by s.228 (d) of the Act.

[38] There is simply no evidence to support this contention. The CFMEU did not notify TasWater of any concerns about a failure to bargain in good faith. The first time it was raised was in Mr Pill’s letter of 22 January 2016. The facts are that Ms Garrott did contact the bargaining representatives seeking a response to TasWater’s change in position of redundancy. This included the CFMEU and there was no response from Mr Washington. When contacted by phone, Mr Washington advised that he did not negotiate by email and sought further time to respond. Ms Garrott agreed to the further time. No response was forthcoming. No request was made for anything else to occur.

[39] There is no evidence of a failure to comply with the good faith bargaining requirements.

Conclusion

[40] It is for these reasons that I indicated in the decision issued on 29 January 2016  6 that I was satisfied that the requirements of the Act had been met and that the Agreement was approved.

COMMISSIONER

Appearances:

Mr D Dilger for Tasmanian Water and Sewerage Corporation Pty Ltd T/A TasWater (TasWater)

Mr H Pill for the Construction, Forestry, Mining and Energy Union (CFMEU)

Mr L Buntman for The Association of Professional Engineers, Scientists and Managers, Australia (APESMA)

Hearing details:

2016.

Melbourne.

January 28, 29.

Final written submissions:

29 January 2016.

 1   AE417622

 2   Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union (CFMEU)[2014] FWCFB 2042 [11] See Alcan (NT) Alumina Pty Ltd v Commissioner for Territory Revenue(Northern Territory) (2009) 239 CLR 27 at [14]; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408.

 3   [2014] FWCFB 2042 [20]

 4   [2014] FWC 7271

 5   [2015] FWC 1554

 6   [2016] FWCA 613

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