The Australian Workers’ Union

[2013] FWCA 4027

[2013] FWCA 4027

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.217—Enterprise agreement

The Australian Workers’ Union
(AG2013/6656)

ONEFORCE AND AWU MUSHROOM HARVESTING & SUPPORT STAFF AGREEMENT 2012

Agricultural industry
COMMISSIONER WILSON	MELBOURNE, 26 JUNE 2013

Application for variation of the Oneforce and AWU Mushroom Harvesting & Support Staff Agreement 2012.

[1] This matter concerns an application made by the Australian Workers Union (“the AWU”) under section 217 of the Fair Work Act 2009 (“the Act”). The application seeks for the Fair Work Commission to remove an ambiguity or uncertainty in the Oneforce and AWU Mushroom Harvesting and Support Agreement 2012 (“the Oneforce Agreement”).

[2] The Oneforce Agreement was approved by Commissioner Lewin on 3 May 2012 1 and was stated to operate from 11 May 2012, with a nominal expiry date of 30 March 20152. The employer of the persons to be covered by the Agreement was stated as Oneforce Group Australia Pty Ltd (“Oneforce”), and the AWU was indicated as a bargaining representative on behalf of employees3.

[3] In the course of the approval of the Oneforce Agreement, Oneforce provided written undertakings regarding annual leave for shift workers 4 and the AWU advised no concerns with the undertakings provided5.

[4] The AWU has now applied for certain amendments to be made to the Oneforce Agreement pursuant to section 217 of the Act. The amendments principally go to the issue of the name of the Oneforce Agreement and the employer bound by the Oneforce Agreement. It is said these changes are needed to reflect a transfer of business from Oneforce to a new employer.

Legislation

[5] Section 217 of the Act reads as follows:

217 Variation of an enterprise agreement to remove an ambiguity or uncertainty

(1) The FWC may vary an enterprise agreement to remove an ambiguity or uncertainty on application by any of the following:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

(c) an employee organisation covered by the agreement.

(2) If the FWC varies the enterprise agreement, the variation operates from the day specified in the decision to vary the agreement.

Background

[6] The background to the current application is as follows.

[7] At the time of the approval of the Oneforce Agreement it was expressed to be binding upon Oneforce, the AWU and employees of Oneforce working in Victoria in the classifications set out in the Oneforce Agreement, other than certain exempt employees set out in Clause 1.5.2 of the the Oneforce Agreement 6.

[8] At the time, Oneforce undertook certain labour hire activities in respect of the mushroom growing industry in Victoria. However this business has recently changed. The AWU’s grounds of application includes that Oneforce has recently sold part of its business to Action Workforce Pty Limited (“Action”). The part of the business that has been sold includes the contract to perform the work covered by the Oneforce Agreement and assets used in connection with the performance of the work.

[9] On 13 May 2013, Oneforce terminated the employment of the employees covered by the Oneforce Agreement and the employees had their employment transferred to Action MMX Pty Ltd (ABN: 61 153 481 200)), said to be a wholly owned subsidiary of Action Workforce Pty Ltd.

[10] While the AWU’s original application indicated employees would transfer to one of three related entities, this was subsequently clarified by the Applicant and the transferring employer, that there is only one ongoing entity, Action MMX Pty Ltd, and the application was amended accordingly.

[11] The evidence of Mr Paul Rixon, the Chief Executive Office of Action Workforce Pty Ltd includes the following;

“2. Ashley Services Group Pty. Ltd. is the company which holds the shares of Action. Its controlling shareholders and directors are also controlling shareholders and directors of Action.

3. On 13 May 2013 Action purchased the labour hire business being operated by Oneforce Group Australia Pty. Ltd. (“Oneforce) which is a party to the proceedings herein.

4. As part of the purchase transaction Ashley Services Group Pty. Ltd. has offered employment to the employees of Oneforce on the basis that those who accept the offer will be employed on the same wage and conditions with full continuity of service and continued accrual of statutory entitlements.

5. Since the purchase was completed on 13 May 2013 the Oneforce business has continued successfully and to the best of my knowledge and belief no employees covered by the Oneforce and AWU Mushroom Harvesting & Support Staff Agreement 2012 refused the offer of continuing employment with Ashley Services Pty. Ltd.

6. Action and Ashley Services Pty. Ltd. support the application herein as we believe it will ensure certainty and clarity for the employees who are predominantly from backgrounds where English is a second language.” 7

[12] Notwithstanding the reference in the above to employment offers being from Ashley Services Group Pty Ltd, the parties subsequently clarified that employment of the transferring employer would be with Action MMX Pty Ltd. I accept this to be the case for the purposes of deciding the amended application.

[13] The evidence of Mr Johnathon Wetherall, the Managing Director of Oneforce Group Australia Pty Ltd states;

“9. The Employees ceased to be employed by Oneforce Group on 13 May 2013.

10. Oneforce Group and the Employees were covered by the Agreement immediately before the Employees ceased to be employed by Oneforce Group.

11. To the best of my knowledge, all Employees were offered and accepted employment with Action or an associated entity of Action on 13 May 2013.

12. Oneforce Group no longer employs anyone covered by the Agreement.” 8

[14] The Applicant also advised that the number of affected employees is approximately. 9 560.

Consideration

[15] The AWU submits that;

“6. The Agreement covered Oneforce and the Transferring Employees until immediately before the termination of the Transferring Employees’ employment with Oneforce and, as such, the Agreement covers the New Employers and the Transferring Employees, pursuant to paragraph 313(1)(a) of the FW Act.

7. No other enterprise agreement or modern award covers the New Employers in respect of the Transferring Work and, as such, any new non-transferring employees who perform the Transferring Work will be covered by the Agreement pursuant to subsection 314(1) of the FW Act.

8. The Agreement covered The Australian Workers’ Union (“AWU”) immediately before the termination of the Transferring Employees’ employment with Oneforce. As such, the Agreement covers the AWU pursuant to subsection 315(3) of the FW Act.

9. The New Employers, the AWU and Oneforce are in agreement that by operation of the above provisions, the Agreement covers the New Employers, the Transferring Employees and the AWU and will cover any new, non-transferring employees who perform the Transferring Work.

10. The Agreement is expressed to cover Oneforce and contains several residual references to Oneforce. However, due to the transfer of business, Oneforce will no longer employ any employees covered by the Agreement.” 10

[16] Section 217 of the Act is expressed as a power for the Fair Work Commission to “vary an enterprise agreement to remove an ambiguity or uncertainty on application” by one or more of the employers covered by the agreement; an employee covered by the agreement; or an employee organisation covered by the agreement. This is an application by the AWU, an employee organisation covered by the agreement.

[17] The main criterion within section 217 is whether or not there is an ambiguity or uncertainty which requires variation. The ambiguity or uncertainty expressed by the Applicants and by Action is that all those people who once were employed by Oneforce are now employed by Action or its subsidiaries and that there are no employees of Oneforce continuing to work under the Oneforce Agreement..

[18] The effect of the AWU’s argument is to say there will be ambiguity or uncertainty for employees knowing they work for Action endeavouring to locate their rights and entitlements under an agreement with a different employing entity named in the title. In particular the AWU submitted;

“11. The coverage and residual references to Oneforce will be susceptible to uncertain meaning, insofar as they will have a redundant meaning, and may cause confusion or uncertainty, particularly for the Transferring Employees and any new, non-transferring employees, who tend to come from non-English speaking backgrounds.”

[19] In the course of considering this matter the parties referred me to two relevant cases, namely Appeal by Tenix Defence Systems Pty Ltd 11 and ThyssenKrupp Elevators Australia Pty Ltd12.

[20] The earlier of the cases, from 2002, is an appeal matter in which section 170MD (6) of the Workplace Relations Act 1996 (Cth) required consideration. That decision addressed the issue of the proper construction and application of section 170 MD (6) as follows;

[27] Section 170MD(6) relevantly provides:

“The Commission may, on application by any person bound by a certified agreement, by order vary a certified agreement:

(a) for the purpose of removing the ambiguity or uncertainty”

[28] Before the Commission exercises its discretion to vary an agreement pursuant to s.170MD(6)(a) it must first identify an ambiguity or uncertainty. It may then exercise the discretion to remove that ambiguity or uncertainty by varying the agreement.

[29] The first part of the process - identifying an ambiguity or uncertainty - involves an objective assessment of the words used in the provision under examination. The words used are construed having regard to their context, including where appropriate the relevant parts of a related award. As Munro J observed in Re Linfox - CFMEU (CSR Timber) Enterprise Agreement 1997:

“The identification of whether or not a provision in an instrument can be said to contain an `ambiguity’ requires a judgment to be made of whether, on its proper construction, the wording of the relevant provision is susceptible to more than one meaning. Essentially the task requires that the words used in the provision be construed in their context, including where appropriate the relevant parts of the `parent’ award with which a complimentary provision is to be read.”

[30] We agree that context is important. Section 170MD(6)(a) is not confined to the identification of a word or words of a clause which give rise to an ambiguity or uncertainty. A combination of clauses may have that effect.

[31] The Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention.

[32] Once an ambiguity or uncertainty has been identified it is a matter of discretion as to whether or not the agreement should be varied to remove the ambiguity or uncertainty. In exercising such a discretion the Commission is to have regard to the mutual intention of the parties at the time the agreement was made.

[33] We agree with Tenix that the first step in dealing with a s.170MD(6)(a) application - the identification of an ambiguity or uncertainty - requires the determination of a “jurisdictional fact”. In Corporation of the City of Enfield v Developmental Assessment Commission the joint judgment of Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ described the term “jurisdictional fact” in these terms:

“The term `jurisdictional fact’ (which may be a complex of elements) is often used to identify that criterion, satisfaction of which enlivens the power of the decision-maker to exercise a discretion.”

[34] Similarly in Re: CFMEU - Termination of Bargaining Periods, Lee and Madgwick JJ said:

“. . . the question presents as one of whether the Commission may have erred as to a `jurisdictional fact’, that is, the existence or non-existence of a state of affairs which was a statutory precondition to the Commission acting. . .”

[35] In the context of s.170MD(6)(a) the Commission must first identify the existence of an ambiguity or uncertainty before exercising its discretion to vary the agreement. We agree with the Full Bench in Re: CFMEU Appeal which described the existence of an ambiguity or uncertainty as “a necessary statutory prerequisite to any variation being made.”

[21] The second of these cases, from 2010, deals with an application before Senior Deputy President Richards to make certain changes to a collective agreement pursuant to section 217 of the Act. In that decision Senior Deputy President Richards summarised the approach to be taken in relation to an application under section 217 in the following way;

“[20] The relevant authorities provide guidance as to the appropriate approach to exercising jurisdiction of the kind contemplated by this application.

[21] The appropriate approach necessitates identification within the terms of the agreement of a discernable ambiguity or uncertainty. The process of identification is not a subjective one. The process of identification of an ambiguity or uncertainty “involves an objective assessment of the words used in the provision under examination” in their context.

[22] It is only after the jurisdictional fact (of the existence of an ambiguity or uncertainty being objectively apparent in the terms of the agreement) is established that FWA may then turn to consider whether to exercise its discretion to vary the agreement to remove the ambiguous and uncertain provisions (and to consider at the same time the appropriateness of the manner of the variation).

[23] It appears to me that this application arises in a particular context. That is, the concerns over the application clause only arise as a consequence of their having been a transfer of business within the meaning of s.311 of the Act, as the business of the old employer has been transferred to a related corporate entity (which appears to be the parent company).

[24] The argument put to me is that the application clause and title and other consequential references to a transferable instrument as defined in Item 2 of Part 2 of Schedule 3 of the TPCA Act gives rise to inherent uncertainty or ambiguity when the title of the transferable instrument and its application clause does not align with the corporate identity of the new Employer.

[25] In my view, there are likely to be very few circumstances in which the title and application circumstances in the transferrable instrument will have perfect alignment with the corporate identity of the new Employer in circumstances of a transfer of business.

[26] This is one such case.”

[22] The matter before Senior Deputy President Richards included a transfer of business within the meaning of section 311 of the Act. Whereas the matter before Senior Deputy President Richards concerned the transfer of the business of the employer to a related corporate entity, and one which appeared to him to be the parent company 13, the circumstances in the matter I am dealing with are to do with are a transfer of business between an old employer on the one hand and a new employer on the other hand (which is unrelated to the old employer).

[23] I agree that in all the circumstances there is ambiguity or uncertainty which will be removed by a variation to the Oneforce Agreement. The employees performing work once done by employees of Oneforce are now employees of a subsidiary of Action, which gives rise to the necessary “jurisdictional fact”, namely the identification of an ambiguity or uncertainty.

[24] I am satisfied that it is desirable to remove this ambiguity or uncertainty. Accordingly I will exercise my discretion to vary the Oneforce Agreement in the following respects sought by the Applicant;

[1] By deleting the title “ONEFORCE AND AWU MUSHROOM HARVESTING AND SUPPORT AGREEMENT 2012” and replacing it with “ACTION MMX AND AWU MUSHROOM HARVESTING AND SUPPORT AGREEMENT 2012”.

[2] By deleting clause 1.1 and replacing it with “This Agreement is titled the Action MMX and AWU Mushroom Harvesting and Support Agreement 2012”.

[3] By deleting the definition of “Agreement” in clause 1.3 and replacing it with “‘Agreement’ means the Action MMX and AWU Mushroom Harvesting and Support Agreement 2012”.

[4] By deleting the definition of “Company” in clause 1.3 and replacing it with “‘Company’ means Action MMX Pty Ltd (ABN 61 153 481 200).

[5] By deleting the word “Oneforce” in paragraph C19(a) and replacing it with the words “The Company”.

[6] By deleting the header on each page and replacing it with “Action MMX and AWU Mushroom Harvesting and Support Agreement 2012”.

[25] This variation shall operate from 27 June 2013.

COMMISSIONER

 1   [2012] FWAA 3765

 2   Ibid., [8]

 3 Ibid., [2] and [3]

 4   Ibid., [4]

 5   Ibid., [5]

 6   Ibid., clause 1.5.1

 7   Statutory Declaration of Paul Rixon, 6 June 2013

 8   Statutory Declaration of Johnathon Wetherall, 17 June 2013

 9   Email from Mark Diamond, 18 June 2013.

 10   AWU Grounds of Application, 27 May 2013

 11   PR917548, Ross VP, O’Callaghan SDP, Foggo C., 9 May 2002

 12   [2010] FWA 8732, Richards SDP

 13   [2010] FWA 8732, at [23]

Printed by authority of the Commonwealth Government Printer

<Price code C, AE893658  PR538104>