Textile Clothing and Footwear Union of Australia
[2012] FWA 7906
•20 DECEMBER 2012
[2012] FWA 7906 |
|
DECISION |
Fair Work Act 2009
s.236 - Application for a majority support determination
Textile Clothing and Footwear Union of Australia
(B2012/1448)
COMMISSIONER SPENCER | BRISBANE, 20 DECEMBER 2012 |
Application for majority support determination regarding employees of GSM Operations Pty Ltd T/A Billabong Australia.
[1] This decision is in relation to an application made by the Textile, Clothing and Footwear Union of Australia (the Applicant/TCFUA) under section 236 of the Fair Work Act 2009 (the Act) for a majority support determination to cover employees of GSM Operations Pty Ltd T/A Billabong Australia (the Respondent).
[2] Directions were set for the filing of written submissions and evidence. The matter was heard and further written submissions were provided finalising on 29 October 2012.
[3] Whilst not all of the submissions and evidence are referred to in this determination, all of such have been considered.
Legislation
[4] Section 237 of the Act sets out the legislative tests for a majority support determination:
237 When FWA must make a majority support determination
Majority support determination
(1) FWA must make a majority support determination in relation to a proposed single-enterprise agreement if:
(a) an application for the determination has been made; and
(b) FWA is satisfied of the matters set out in subsection (2) in relation to the agreement.
Matters of which FWA must be satisfied before making a majority support determination
(2) FWA must be satisfied that:
(a) a majority of the employees:
(i) who are employed by the employer or employers at a time determined by FWA; and
(ii) who will be covered by the agreement;
want to bargain; and
(b) the employer, or employers, that will be covered by the agreement have not yet agreed to bargain, or initiated bargaining, for the agreement; and
(c) that the group of employees who will be covered by the agreement was fairly chosen; and
(d) it is reasonable in all the circumstances to make the determination.
(3) For the purposes of paragraph (2)(a), FWA may work out whether a majority of employees want to bargain using any method FWA considers appropriate.
(3A) If the agreement will not cover all of the employees of the employer or employers covered by the agreement, FWA must, in deciding for the purposes of paragraph (2)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.
Operation of determination
(4) The determination comes into operation on the day on which it is made.
Applicant initial submissions
[5] The Applicant submitted that it is an employee organisation in accordance with the Fair Work (Registered Organisations) Act 2009. It noted the Respondent operates a clothing industry warehouse at 58 Kingston Road, Helensvale, Queensland. The Applicant has members employed by the Respondent.
[6] The TCFUA submitted that a majority of employees who will be covered by a proposed agreement want to bargain with the Respondent. It bases this submission on a petition that has been signed by 73 employees, that was provided to the Tribunal to allow comparison with a list of all employees (provided by the Respondent). It submitted that the Respondent has approximately 85 employees that will be covered by the proposed agreement. The Applicant obtained the signatures throughout July and August 2012; it submitted that this should not be viewed as having less weight than a petition being signed on a particular day.
[7] In relation to s.237(2)(b) the Applicant submitted that it has on a number of occasions, commencing in June 2012, made requests of the Respondent to commence bargaining. The Respondent has not agreed to these requests. Mr Darren Trask, an Organiser employed by the Applicant, gave evidence that a number of discussions occurred between himself and management of the company, which culminated in an email from Ms Lockyer, Senior Human Resources Consultant for the Respondent, confirming that the Company did not intend to enter into negotiations for an enterprise agreement. 1 It was further submitted that the Respondent had not issued a Notice of Employee Representational Rights in accordance with s.173 of the Act.
[8] Finally, the Applicant submitted that the group of employees that would be covered by a proposed agreement have been fairly chosen such as to satisfy FWA in accordance with s.237(2)(c). The group is employees who are members (or eligible to be members) of the TCFUA who are covered by the Textile, Clothing, Footwear and Associated Industries Award 2010 (the TCF Award). The employees are employed in the warehouse. The Applicant submits that the group are operationally and organisationally distinct.
Respondent initial submissions
[9] The Respondent submitted that it operates its primary distribution centre at 131 Millaroo Drive, Helensvale and a smaller centre at 1 Billabong Place, Burleigh Heads. Together those centres operate as an off-site storage and distribution facility. Employees at the centres are engaged in traditional distribution functions. It submitted that there are currently 159 employees employed in total across the centres.
[10] The Respondent agreed that the Applicant is a properly registered employee organisation. However it submitted that the Applicant cannot be a bargaining representative as defined in s.176 of the Act because it is not an organisation that is entitled to represent the industrial interests of the employees in relation to the work that would be performed under the proposed agreement. The Respondent acknowledged that there has been controversy as to coverage of employees performing the type of work in question, and submitted that the relevant unions are in fact the National Union of Workers (the NUW) and the Shop, Distributive and Allied Employees Association (the SDA).
[11] The Respondent submitted that it does not employ any employees at the centres to perform any work outlined in Rule 4(e) of the TCFUA Rules, extracted below:
(e) Without limiting the generality of any part of this rule, all persons wholly or partly engaged or usually engaged in or in connection with designing, preparing, patternmaking, manufacturing, making, processing, repairing, altering, trimming, clocking, pressing, finishing and/or selling from factory outlets the whole or any part of:
i any male or female garment;
ii any article of wearing apparel whatsoever, made from material of any description;
iii any article of neckwear;
iv handkerchiefs;
v any fashion accessory whatsoever.
[12] The Respondent also referred to Rule 4(1)(iii):
(l) Without limiting the generality of any part of this rule, all persons other than electrical workers, and fitters (including persons performing the job of fitters where these persons are described as mechanical and fabrication tradespersons, and including howsoever ‘fitters’ are termed in the future), wholly or partly engaged or usually engaged in or in connection with:
(iii) receiving, dispatching, packing, unpacking, storing and/or otherwise handling goods at any premises referred to in any other part of this rule, or any premises where any of the processes or activities referred to in any other part of this rule occurs.
[13] The Respondent submitted that Rule 4(l)(iii) does not apply, as the distribution functions are not performed at a premises referred to in another part of Rule 4 nor where any of the processes and activities referred to in any other part of Rule 4 occur.
[14] Accordingly, the Respondent submitted that the relevant employees are not eligible to be members of the TCFUA under the Union Rules. If that is the case, the Applicant is not eligible to represent the industrial interests of the employees and is therefore not a bargaining representative as defined in s.176. The Applicant is therefore unable to properly make the current application.
[15] The Respondent also made submissions regarding the remaining factors in s.237, should the Tribunal find that the Applicant is a bargaining representative entitled to make the application.
[16] Regarding s.237(2)(a), the Respondent submitted that the Applicant had underestimated the number of “relevant employees”. It submitted that it had 159 employees working at the distribution centres and expected to recruit more prior to the hearing. This number is significantly higher than the 85 estimated by the TCFUA. The Respondent submitted that it had not seen the petition to verify the 73 signatures cited by the Applicant, but noted that regardless, 73 is not a majority of 159.
[17] On the issue of whether the group of employees that would be covered by a proposed agreement was fairly chosen, the Respondent noted the Applicant’s submission that an agreement would cover employees who are members (or eligible to be members) of the TCFUA or who are covered by the TCF Award. Regarding membership, the Respondent referred to its previous submissions discussed above. Regarding Award coverage, it submitted that it is reviewing the application of the TCF Award in light of the fact that no manufacturing or design work is currently performed at the centres. The Respondent also submitted that excluding administrative employees may mean that the group was not fairly chosen.
[18] Finally, the Respondent agreed that it had not agreed to bargain or initiated bargaining.
Applicant submissions in reply
[19] In response to the Respondent’s submissions, the Applicant made reply submissions primarily focussed on the issue of whether the Applicant is a bargaining representative entitled to represent the industrial interests of the employees. The Applicant submitted that the relevant test for determining whether it is a legitimate bargaining representative is by considering the Applicant’s rules relating to eligibility. It submitted that a “generous, non-restrictive, liberal approach” should be taken to the construction of eligibility rules. 2
[20] The Applicant noted that while the Respondent submitted that it is primarily a retailer; authorities suggest that an enterprise can operate in more than one industry. 3 It submitted that the Respondent designs and sources the manufacture of clothing and footwear and this puts it within the realm of the Applicant’s rules. Contrary to the Respondent’s submissions, the Applicant submitted that it is aware that employees engaged in ‘design’ for the clothing and accessory lines are employed at the Burleigh Heads premises. The Applicant also submitted that employees engaged in picking and packing fall into its eligibility rules by virtue of the terms “preparing”, “processing” and “finishing” as they relate to headwear, footwear, garments and fashion accessories. Employees engaged in the repair of watches, wetsuits and boots would also be eligible.
[21] Finally, in its reply submissions the Applicant referred to the statutory context and submitted that s.176 of the Act “enshrines the ability of an employee to appoint any person as his or her bargaining representative.” 4 The Applicant notes that the Respondent is not aware of any other Union active at its premises and submitted that it knows of no other Union that contests its ability to organise at the premises. It submitted that employees have indicated that they want the Applicant to represent them in relation to bargaining. As such, it submitted that it would be a denial of an employees’ right to representation and freedom of association to deny the Applicant the right to represent the relevant employees.
[22] The Applicant also made written closing submissions. These submissions largely reiterated the submissions above regarding a majority of employees seeking to bargain, and whether the Applicant was a bargaining representative entitled to represent the industrial interests of the employees.
Respondent submissions in reply
[23] The Respondent maintained that the application was not valid as the TCFUA is not entitled to represent the industrial interests of the Respondent’s employees. It submitted that it is not a business in the textile, clothing and footwear industry, but is instead predominantly in the retail industry. The Respondent does not dispute the Applicant’s interpretation of its rules, but submitted that there has to be the requisite connection between the function performed and the workplace being in the TCF industry. 5
[24] The Respondent submitted that retail operations account for 68% of the company’s turnover. The distribution centres in question operate as off-site storage and distribution facilities. It submitted that while up until 29 February 2012 some minor manufacturing was performed (printing T-shirts), this has now ceased. It maintains that no manufacturing or design work is undertaken at the facilities. 6
[25] The Respondent pointed to evidence given at the hearing that the facilities are essentially storage and distribution facilities where stock is picked and packed in much the same way as it would be at a Coles or Woolworths distribution centre. 7
Conclusion
[26] Whilst the Union urged the Tribunal to take a generous approach to the construction of the eligibility rules, the evidence did not support the TCFUA eligibility rule that all persons (at the distribution centre) “were wholly or partly engaged in or in connection with designing, preparing, patternmaking, manufacturing, making, processing, repairing, altering, trimming, clocking, pressing, finishing and or selling” any garments, apparel, fashion accessories etc.
[27] The Affidavit of Mr Bradley Pont, National Distribution Manager, described the operations:
“The Respondent is predominantly a retailer with 140 stores located in Australia operating under the following brands: Australian Surfer HQ, Bay Action, Billabong, Beach Culture, Core Surf & Skate, Element, Hurley Manly, Jetty Surf, Kahuna Beach, Kirra Surf, Local Knowledge, Rush, S-Cape, Surf Dive ‘n’ Ski, Surfection, Surf Sports Underground, Surf Vision, Tigerlily.
The Respondent currently employs approximately 1549 employees in its retail stores with this likely to increase to approximately 2500 before the Christmas period. The retail operations account for approximately 68% of total turnover.
The Respondent also has a smaller wholesale arm to its business which accounts for 32% of its turnover and employs approximately 349 employees in this area of the business.
The Distribution Centre operates as an off-site storage and distribution facility for both the Respondent’s retail stores and wholesale arm of the business. There is no manufacturing or design work undertaken at the Distribution Centre.
The following classifications of employees are engaged at the Respondent’s warehouse facility:
Warehouse Administration Assistant;
Warehouse Cleaner;
Storeperson;
Storeperson – Team Leader;
Warehouse Supervisor;
Warehouse Manager.
Position descriptions for some of these roles are contained in “Annexure BP1”.
The total number of employees engaged at the Respondent’s warehouse facilities as at the date of making this affidavit is 159. The Respondent intends to further recruit approximately 10 to 20 employees in its warehouse facility by 21 September 2012.
Previously, some minor manufacturing was performed at the Respondent’s warehouse facility. This involved the printing of t-shirts. However, all manufacturing processes at the Respondent’s warehouse facility ceased as of 29 February 2012.” 8
[28] In relation to the work done in the warehouse/distribution centre, Mr Pont stated in evidence, that it is a traditional warehouse environment in terms of the functionality of the process. He agreed the one point of difference may be in terms of the one watch repairer they have at Helensvale. He works on after sale products that may have been damaged in some way. He also stated they have one wetsuit repairer in the Burleigh Warehouse not employed by the Respondent. 9
[29] Mr Pont in cross-examination acknowledged there was a Production team comprised of head office staff. However he refuted that the Production team were involved in producing or manufacturing garments. He stated “[T]here’s no production within Australia that I’m aware of” 10. He further stated that the design of garments and production of samples was done predominantly in China.11
[30] Mr Pont’s evidence was that the warehouse simply receives and sends out goods. He agreed they had various textile products but they “have literally hundreds of suppliers overseas that manufacture those products”. 12 He also confirmed in re-examination that the watch repairers were employed under a different entity (than GSM Operations). In addition he stated that the “designers” at the Burleigh Heads site, as far as he had knowledge did not engage in design, but the sourcing of their products from China.
[31] In assessing the eligibility rules by way of their “broad...but ordinary or popular denotation”, the evidence of the work does not marry with that in the eligibility rule.
[32] The Respondent submitted it is predominantly a retailer. There was no conclusive evidence that employees were involved in design or manufacture or any of the other processes set out in the eligibility rule.
[33] The evidence of Ms Michelle O’Neil, National Secretary of the Victorian-Queensland Branch of the TCFUA was that:
“The industries in or in connection with which the Union is registered is in Rule 3, which are the textile, clothing and footwear industries, including those parts referred to in Rule 4.” 13
...
“It is my view that the employees of the Respondent engaged at its Distribution Centre are eligible to be members of the Union.” 14
[34] Further Ms O’Neil stated:
“The rules relating to eligibility for membership of the Union is in Rule 4. All persons wholly or partly engaged in or in connection with industries, mills, factories, places or work, products or processes as listed in rule 4(a) are eligible to be members of the Union. All persons wholly or partly engaged in or in connection designing, preparing, patternmaking, manufacturing, making, processing, repairing, altering, trimming, blocking, pressing, finishing or selling from factory outlets of a variety of products, including headwear (in rule 4(c)), footwear (in rule 4(d)), garments, apparel and fashion accessories (in rule 4(e)) are eligible to be members of the Union. All persons engaged in receiving, dispatching, packing, unpacking, storing and/or otherwise handling goods at any premises referred to in any other part of the rule, or any premises where any of the processes or activities referred to in any other part of the rule are eligible to be members of the Union.” 15
[35] The Respondent is engaged on the evidence in the retail industry and operates a distribution centre (in support of the retail stores), where product (designed and manufactured overseas) is packed, dispatched and distributed.
[36] Whilst Rule 4(1)(iii) refers to “receiving, dispatching, packing, unpacking, storing and or otherwise handling goods” it must be emphasised that as per the Rule, these functions are to be performed by “persons...engaged in...industries: mills, factories, places of work, products or processing in Australia”. The work characterising those industries is:
“Without limiting the generality of any other part of this rule, all persons wholly or partly engaged or usually engaged in or in connection with designing, preparing, patternmaking, manufacturing, making, processing, repairing, altering, trimming, blocking, pressing, finishing and/or selling from factory outlets the whole or any part of footwear of every description including but not limited to boots, shoes, slippers and wood lasts.” 16
[37] In terms of the construction of the eligibility rule as set out by the Union, to cure any ambiguity it was submitted to, first return to the industry. On the material provided, the industry is retail. This is so on the basis of the processes, the employees are engaged in, which are not those as set out in the Rules relating to manufacture, or design etc. Whilst the products are fundamentally textile, the functions of dispatch etc, are not in connection with the industries or functions in the eligibility rule, accordingly coverage is not caught by the Rule.
[38] The work of the Respondent is not connected with those processes. The Respondent is engaged in the retail industry. None of the above functions are performed save for very limited watch repairs and a swimsuit repairer (but not employed by the Respondent). Accordingly in terms of Rule 4(e) the nature of the duties of dispatching etc undertaken by the Respondent is not connected with an industry of the type described in Rule 4(a) or in connection with a process incorporated in Rule 4(c), (d) or (e). Accordingly the relevant coverage of the Respondent’s employees is not made out.
[39] Further based on the number of employees provided in evidence, the number of entries on the petition in support of bargaining is not commensurate with a majority that is more than half of the employees employed. Accordingly FWA is not satisfied on the current material that the tests for a majority support determination in s.237 have been made out.
[40] The application for the majority support determination is therefore dismissed. I Order accordingly.
COMMISSIONER
Appearances:
O Tran for the Applicant.
C Dowling of the National Retailers Association for the Respondent.
Hearing details:
21 September 2012, Brisbane.
Final written submissions:
Applicant, 16 October 2012.
Respondent, 29 October 2012.
1 Affidavit of Darren Trask, attachment “DT2”.
2 Submissions in reply of the Applicant, dated 17 September 2012 at paragraph 9.
3 Submissions in reply of the Applicant, dated 17 September 2012, citing R v Isaacs; ex parte Transport Workers’ Union (1985) 159 CLR 323.
4 Submissions in reply of the Applicant, dated 17 September 2012 at paragraph 24.
5 Closing submissions of the Respondent, dated 9 October 2012 at paragraph 13.
6 Closing submissions of the Respondent, dated 9 October 2012 at paragraphs 15-18.
7 Closing submissions of the Respondent, dated 9 October 2012 at paragraph 23.
8 Statement of Bradley Pont, at paragraphs 3-9.
9 Transcript at PN416.
10 Transcript at PN423.
11 Transcript at PN424.
12 Transcript at PN480.
13 Statement of Michelle O’Neil at paragraph 5.
14 Statement of Michelle O’Neil at paragraph 14.
15 Statement of Michelle O’Neil at paragraph 6.
16 Applicant submissions in reply, at paragraph 8 referencing the Applicant’s rules at Rule 4(d).
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