The Australian Workers' Union (NSW Branch) v Ensign Services (Aust) Pty Ltd T/A Linen Services Australia

[2021] FWC 6534

[2021] FWC 6534

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.238—Scope order

The Australian Workers’ Union (NSW Branch) v Ensign Services (Aust) Pty Ltd T/A Linen Services Australia
(B2021/976)

COMMISSIONER MCKENNA SYDNEY, 16 DECEMBER 2021

Application for a scope order

The following ex tempore decision, now edited with some revisions for publication, was given following the conclusion of the hearing on 9 December 2021.

[1] The Australian Workers’ Union (NSW Branch) (“the AWU”) has made an application pursuant to s.238 of the Fair Work Act 2009 (“the Act”) in which it seeks a scope order. The respondent to the application, Ensign Services (Aust) Pty Ltd trading as Linen Services Australia (“Ensign”), opposes the making of any such order and submits the application should be dismissed. Ensign was purchased from the Spotless Group Ltd on 1 April 2021 by a private equity company, namely Adamantem Capital.

[2] The AWU described the group of employees the subject of the application for the proposed scope order as employees of Ensign Services Pty Ltd who are engaged to perform work at its laundry operations at Somersby, Rosebery and North Rocks in NSW and whose classifications are covered by the Dry Cleaning and Laundry Industry Award 2020 (including employees to whom an enterprise agreement currently applies). I will refer to the modern award as “the Laundry Award” albeit it also has relevance to the dry-cleaning industry.

The statutory framework

[3] As to the statutory framework, ss.238 and 239 of the Act address matters concerning scope orders in the following way:

“238  Scope orders

Bargaining representatives may apply for scope orders

(1)  A bargaining representative for a proposed single-enterprise agreement (other than a greenfields agreement) may apply to the FWC for an order (a scope order) under this section if:

(a)  the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly; and

(b)  the reason for this is that the bargaining representative considers that the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover.

No scope order if a single interest employer authorisation is in operation

(2)  Despite subsection (1), the bargaining representative must not apply for the scope order if a single interest employer authorisation is in operation in relation to the agreement.

Bargaining representative to give notice of concerns

(3)  The bargaining representative may only apply for the scope order if the bargaining representative:

(a)  has taken all reasonable steps to give a written notice setting out the concerns referred to in subsection (1) to the relevant bargaining representatives for the agreement; and

(b) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and

(c)  considers that the relevant bargaining representatives have not responded appropriately.

When the FWC may make scope order

(4)  The FWC may make the scope order if the FWC is satisfied:

(a)  that the bargaining representative who made the application has met, or is meeting, the good faith bargaining requirements; and

(b)  that making the order will promote the fair and efficient conduct of bargaining; and

(c)  that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen; and

(d)  it is reasonable in all the circumstances to make the order.

Matters which the FWC must take into account

(4A)  If the agreement proposed to be specified in the scope order will not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding for the purposes of paragraph (4)(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.

Scope order must specify employer and employees to be covered

(5)  The scope order must specify, in relation to a proposed single-enterprise agreement:

(a)  the employer, or employers, that will be covered by the agreement; and

(b)  the employees who will be covered by the agreement.

Scope order must be in accordance with this section etc.

(6)  The scope order:

(a)  must be in accordance with this section; and

(b)  may relate to more than one proposed single-enterprise agreement.

Orders etc. that the FWC may make

(7)  If the FWC makes the scope order, the FWC may also:

(a)  amend any existing bargaining orders; and

(b)  make or vary such other orders (such as protected action ballot orders), determinations or other instruments made by the FWC, or take such other actions, as the FWC considers appropriate.

239  Operation of a scope order

A scope order in relation to a proposed single-enterprise agreement:

(a)  comes into operation on the day on which it is made; and

(b)  ceases to be in operation at the earliest of the following:

(i)  if the order is revoked—the time specified in the instrument of revocation;

(ii)  when the agreement is approved by the FWC;

(iii)  when a workplace determination that covers the employees that would have been covered by the agreement comes into operation;

(iv)  when the bargaining representatives for the agreement agree that bargaining has ceased.”

An overview of the parties’ evidence and submissions

[4] In support of its application a scope order, the AWU relied on evidence by Michael Kerley, an organiser. In his role as an AWU organiser, Mr Kerley represents certain members/employees employed by Ensign in its laundry operations within NSW. Among other matters, Mr Kerley’s evidence outlined some historical and more recent matters concerning industrial circumstances at three Ensign worksites, namely, Somersby, Rosebery and North Rocks. (There is a further/fourth laundry located in Punchbowl, NSW. The AWU’s application for a scope order does not include the Punchbowl because that site is considered to have circumstances different from the three nominated sites – being a position which effectively was echoed in the evidence for Ensign.)

[5] In opposing the AWU’s application a scope order, Ensign relied on evidence by Justin Chambers. Mr Chambers is Ensign’s NSW State Manager. Mr Chambers’ evidence addressed and described various matters concerning past and current industrial regulation relevant to laundries operated by Ensign across Australia and, more particularly, the laundries within NSW. In his evidence, Mr Chambers also challenged, or disagreed with, certain matters addressed in Mr Kerley’s evidence. Likewise, Mr Kerley disagreed with certain matters addressed in the evidence of Mr Chambers – particularly concerning their different views about efficiency-related considerations.

[6] Even though Ensign has issued (over staggered dates) a Notice of Employee Representational Rights (“NERR”) to employees at each of the three sites, bargaining has not been commenced, or has been suspended by Ensign, pending the outcome of this application by the AWU for a scope order. As such, there is considerable time-sensitivity to the determination of this application – hence this ex tempore decision following the conclusion of the proceedings earlier today.

[7] It is common ground between the AWU and Ensign that the provisions of s.238(1)-(3) and s.238(4)(a)of the Act have been satisfied. Given the common ground between the parties in such respects, it is unnecessary to address those provisions further in the decision.

[8] I now turn to the matters of substantive dispute arising from the application, including by reference to the evidence and submissions; the oral submissions substantially adopted and/or re-emphasised certain aspects of the detailed written submissions. The AWU seeks a scope order relevant to three sites in NSW (described by Mr Kerley as “a three-site single-enterprise agreement”), whereas Ensign currently proposes to make three discrete single-enterprise agreements with its employees at the three discrete sites located at Somersby, Rosebery and North Rocks.

Section 238(4)(b) - that making the order will promote the fair and efficient conduct of bargaining

[9] The parties disagreed on the question of whether making the proposed scope order will promote the fair and efficient conduct of bargaining.

[10] In no particular order, the evidence identified the industrial regulation that presently applies to Ensign’s laundry sites in NSW:

•  Somersby presently operates under the Ensign Services (Aust.) Pty. Ltd. Somersby Laundry Workers Enterprise Agreement 2018. The Somersby NERR was issued on 15 June 2021. The nominal expiry date for the Somersby Agreement was 11 October 2021.

•  Rosebery presently operates under the Ensign Services (Aust.) Pty. Ltd. Rosebery Laundry Workers Enterprise Agreement 2018. The nominal expiry date for the Rosebery Agreement is 1 January 2022. The Rosebery NERR was issued after this application was filed, but the specific date was not identified in the evidence. For his part, Mr Chambers did not recall an NERR having been issued for Rosebery.

•  North Rocks presently operates under the Laundry Award. While presently covered by the modern award, rather than an enterprise agreement, the North Rocks NERR was issued on 5 October 2021.

•  As to the fourth site – which, I reiterate, is not the subject of inclusion in the proposed scope order - Punchbowl also presently operates under the Laundry Award. There was no evidence of the issuing, or proposed issuing, of a Punchbowl NERR.

[11] Mr Chambers’ evidence was that it is correct to say that the existing Rosebery and Somersby enterprise agreements substantially, but not exclusively, incorporate provisions of the Laundry Award, nonetheless there are “substantial differences” between the conditions of employment for the laundries covered by the enterprise agreements not only as to rates of pay but also conditions of employment. As to conditions, Mr Chambers exampled clause 16 in the Rosebery Agreement which provides for outplacement services for employees made redundant; and, in oral evidence, also referred to arrangements that apply to taking leave. Contrary to the evidence and submissions in the AWU’s case, Mr Chambers’ statement of evidence (which eventually was not read on this particular issue) was that both the Rosebery Agreement and Somersby Agreement have a different classification structure to the Laundry Award. Mr Chambers’ evidence, including a table identifying certain pay-related matters, was that the rates of pay under the Somersby Agreement and Rosebery Agreement are “substantially different” as between each other and the Laundry Award-covered Punchbowl site and the North Rocks site. Mr Chambers added (without further elaboration) that, “on the basis of the commercial contracts entered into by the respective laundries, it is important the rate differential is not altered”. Mr Kerley did not dispute the accuracy of the table, but he regarded the arrangements as being “slightly different” in nature rather than amounting to substantial differences (for example, pay rate differences in the order of 20 to 70 cents - with that gap as against the enterprise agreements closing because of annual adjustments to the Laundry Award).

[12] An annexure to Mr Chambers’ written evidence identified as JC7 detailed a series of points about operational and geographic considerations in relation to the four NSW laundries i.e., including Punchbowl which is not the subject of the application for a scope order. Mr Chambers’ evidence otherwise summarised what he described as the “substantial operational differences” between the worksites as follows:

“18.1 Rosebery and Somersby are dedicated healthcare laundries servicing private hospitals;

18.2 North Rocks is a dedicated accommodation laundry servicing accommodation facilities;

18.3 Rosebery services customers from Nowra, Canberra, Wagga Wagga; Sydney based customers covering Northern Beaches, Eastern Sydney, South West Sydney and Southern Highlands.

18.4 Somersby [services] customers from Coffs Harbour and Port Macquarie; Sydney based customers covering North West Sydney, Western Sydney, Central Coast and Newcastle/Hunter region;

18.5 The industry of customers for North Rocks is different from both Somersby and Rosebery, being hospitality and the work is correspondingly different. Level 2 employees at North Rocks are generally processing heavier towelling and larger sheets (Queen, King and Super Kings) as well as different size pillowslips, food & beverage linen and customer specific products for the likes of [name] Hotel Sydney.

18.6 I do not agree with the assertion of Mr Kerley in paragraph 14 of his statement that employees at Rosebery, Somersby and North Rocks perform identical work. Yes, they are all laundry workers. Both of the EBAs have the same Laundry Employee Level and Job Requirements and given that they both service Health and Aged Care customers the duties are definitely similar by nature. However, the work environment, equipment type and productivity requirements at each plant are different. Rosebery is slightly more complex with a different customer base including Department of Defence and sterile linen room, as opposed to Somersby that predominately just processes our general linen for the customer base.

18.7 Punchbowl is a dedicated uniform, workwear and safety mat laundry. It launders garments, as opposed to accommodation or healthcare linen, food industry uniforms; industrial workwear, safety mats, tea towels and small pieces for cafes. It is a small volume plant around 30 tonnes. It uses wash extractors (as opposed to continuous batch washers); standalone dryers; steam Tunnels for garments and small ironers for small pieces. Its operating hours are 6am to 2.30pm Monday to Friday.”

[13] Mr Kerley’s evidence, and the submissions for the AWU, identified reasons why the AWU has concerns that bargaining cannot proceed efficiently or fairly due to the scope of the three proposed agreements - including for reasons that employees working at Somersby, Rosebery and North Rocks perform the exact same/identical duties, with the same skill-sets, with parallel classification structures across two sites and because Ensign’s operations in NSW are operationally and organisationally identical to each other. (In that regard, the skills matrix was put into evidence by the AWU as was evidence of the common classification structure across the two enterprise agreements for the Rosebery and Somersby sites, a classification structure drawn directly from the Laundry Award – being the award classification structure that applies at the North Rocks site (and at Punchbowl)). In so submitting, the AWU referred to the observations of Hampton C in TWU v SouthLink Pty Ltd[2014] FWC 1361 at [26]-[27] as providing a useful summary of the inquiry to be undertaken by the Commission related to this factor. The AWU noted that while the three sites are geographically distinct, on occasion, employees from the three sites have worked at one of the other sites. The AWU submitted that this again indicates the similarity of the work at the three sites to one another and reduces the significance of the geographical separation between the sites.

[14] The AWU further submitted that, in contrast with its scope application, the scope of the agreements proposed by Ensign is not appropriate to the circumstances of the workforce. Although site-specific agreements have been made in the past, that does not mean it is the most appropriate coverage for enterprise bargaining at present. In cross-examination, Mr Kerley confirmed that the AWU had supported the approval of the two earlier enterprise agreements (including as to scope), but also explained why things had changed in the “journey” of enterprise agreement bargaining negotiations. For instance, Mr Kerley exampled pay rate increases in the enterprise agreements - which he described as being “all over the place” – as one of the factors that had led to the formation of the view about the desirability of having one consistent set of conditions. In so submitting, the AWU referred to what was said by the Full Bench of the Commission in AWU v BP Refinery (Kwinana) Pty Ltd[2014] FWCFB 1476 (“Kwinana”) at [29]. Moreover, as indicated by an employee petition which was in evidence, it is, the AWU submitted, “the clearly-stated wish of the majority of the employees across the three sites, that they be permitted to collectively bargaining as a unit under a single enterprise agreement”. The AWU submitted that, against the background of such considerations, making the order will, therefore, promote fair and efficient bargaining as it means the parties will be bargaining for an agreement capable of approval by the Commission.

[15] Ensign submitted that Commission should not be satisfied that granting the AWU’s application will mean that the bargaining between the parties will be fairer or more efficient. The Commission should be satisfied that if a scope order is made the bargaining will at least be fairer or more efficient, or both, than it would be if no order was made: United Firefighters’ Union of Australia v Metropolitan Fire & Emergency Services Board[2010] FWAFB 3009 (“the UFU Decision”) at [54]-[55]. Moreover, the Explanatory Memorandum to the Fair Work Bill 2009 at 777 explains in relation to the question of whether a group of employees is fairly chosen for the purposes of considering whether an enterprise agreement should be approved that:

“It is intended that in assessing whether a group of employees is fairly chosen, FWC might have regard to matters such as:

•  the way in which an employer has chosen to organise its enterprise; and

•  whether it is reasonable for the excluded employees to be covered by the agreement having regard to the nature of the work they perform and the organisational and operational relationship between them and the employees who will be covered by the Agreement.”

[16] Again relying on the UFU Decision, Ensign submitted that the onus rests on the AWU to demonstrate that the making of a scope order will encourage and facilitate bargaining which is fairer and more efficient than if no order is made. In attempting to discharge this onus, Ensign noted that the AWU asserted all employees of the respondent’s three relevant laundries perform the exact same work and their skill sets are identical; and on the assertion there is mobility of employees between the laundries. In rejecting the AWU’s assertions in such respects, Ensign relied on aspects of matters described in Mr Chambers’ evidence. In cross-examination, Mr Kerley conceded that the specific tasks might not be identical and that the AWU’s skills matrix constituted a general explanation rather than specific tasks; nonetheless, he said that roles such as ironing and pick-and-pack involve just that, regardless of the site.

[17] On the topic of efficiency, Mr Chambers considered for his part that making the proposed scope order would diminish bargaining efficiency. Matters were described by Mr Chambers as follows:

“29. But for the current suspension of enterprise bargaining arising from the scope application before the FWC, bargaining had been proceeding smoothly and efficiently.

30. In my opinion, based on my experience in the enterprise agreement negotiations to date, if there is a move to one single enterprise agreement covering all 3 or 4 of the laundries, this will not be efficient and it will import delays. The delays will be significant arising from the need to coordinate representatives from each plant to attend and the union to engage with their members. The issue will be coordinating the various representatives across the three plants due to geographic spread. The log of claims is likely to differ for each plant which will also impact the time the negotiations will take.”

[18] In reply, the AWU referred to those parts of Mr Chambers’ evidence which was to the effect that bargaining for a single-enterprise agreement covering the three sites would create delays and there would be difficulties in coordinating representatives across all three sites. In expressing disagreement, the AWU submitted that bargaining for a single-enterprise agreement will be more efficient – as supported in the evidence of Mr Kerley and in the comments of the Full Bench in Kwinana at [26]-[28] as to bargaining for two agreements for a group of employees involving a degree of duplication of process and negotiation and thus be less efficient than bargaining for a single agreement to cover the same group. Mr Kerley, an organiser with extensive experience in organising laundry workers and negotiating enterprise agreements both in the laundry and other industries, gave evidence that, based on his experience, he considered bargaining for a single-enterprise agreement to cover numerous work sites is much more efficient than bargaining for multiple enterprise agreements for each site. Mr Kerley said this is because there are generally fewer meetings and the issues discussed between the parties are more focused and narrower. Mr Kerley added that, in this particular matter, the making of a scope order will also prevent the scope of the three agreements being an issue in dispute between the parties, which conceding that would be the result if the AWU’s scope application was dismissed. For his part, Mr Chambers indicated he did not have extensive experience in negotiating enterprise agreements and, as such, I tend to prefer Mr Kerley’s experience-based evidence or opinion as to what would lend to efficiency. In that regard, Mr Kerley said that the negotiations would typically involve a democratically-elected negotiation team – and this similarly might be expected with respect to the negotiations concerning the three laundries.

[19] The AWU submitted that the “lesser efficiency in such an approach [propounded by Ensign] is manifest. That is to say, in the particular circumstances of an individual case, it will not be open to decide that bargaining for two agreements will be more efficient than bargaining for one.” The AWU submitted that while it is true that bargaining for one agreement might see a greater cost in lost productive time on account of employee bargaining representatives from different groups attending bargaining meetings that deal only with issues relating to the other group, that need not be so if issues that concern only one group are dealt with in meetings where employee representatives of the disinterested group(s) do not attend. The AWU’s reply submissions continued that, in any event, it typically will be difficult to quantify what, if any, inefficiency arises from bargaining for a single-enterprise agreement in such a case.

[20] The AWU submitted there was nothing in the evidence that provided a rational foundation for a finding that the conduct of the bargaining for agreements as proposed by Ensign would be fairer or more efficient than it would for the single-enterprise agreement as proposed by the AWU. The evidence in relation to which of the competing proposals would better promote the fair and efficient conduct of bargaining was inclined slightly in favour of a single agreement, the AWU submitted.

Section 238(4)(c) and s.238(4A) - that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen

[21] By the operation of s.238(4)(c) and s.238(4A) of the Act, the Commission must be satisfied that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen. As to this, s.238(4A) identifies that if the agreement proposed to be specified in the scope order will not cover all the employees of the employer or employers covered by the agreement, the Commission must, in deciding for the purposes of s.238(4)(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.

[22] Here, not all employees of Ensign would be covered by the AWU’s proposed three-site single-enterprise agreement. As the submissions for Ensign described matters:

“2. The Respondent is a national industrial laundry business, operating 10 laundries in Australia. One in each of Queensland, Western Australia, South Australia, Northern Territory, two in Victoria and four in New South Wales.

3. It has enterprise agreements covering individual laundries in Western Australia, South Australia, Northern Territory and Victoria (2).

4. It has separate enterprise agreements operating at two of its laundries in New South Wales and it has initiated bargaining at a third laundry in NSW.”

[23] The AWU contended that the group of employees specified for the scope order is fairly chosen and, in so submitting, referred to, and relied upon, Cimeco Pty Ltd v CFMEU[2012] FWAFB 2206 at [19]-[21] and [35]. Proceeding against the background of Mr Kerley’s evidence, the AWU submitted that: (a) the work groups at the three sites are not operationally or organisationally distinct; (b) the employees at all three sites perform the exact same duties (albeit Mr Kerley in his cross-examination qualified that particular proposition somewhat); (c) all three sites share the exact same employment classification structure; and (d) during the COVID-19 crisis, employees were required to perform work at sites different from their normal place of work. Matters such as these, the AWU’s submissions continued that the geographic separation between the sites is not particularly significant. By way of elaboration, the AWU referred to passages from SouthLink at [49] and Kwinana at [18].

[24] The AWU emphasised that it is not required to prove that the proposed scope order is the most fairly chosen or the only fairly chosen grouping of employees, just, the AWU submitted, that it is a fairly chosen grouping.

[25] Ensign submitted that the group of employees specified in the proposed scope order is not fairly chosen on the basis that the employees are not involved in a single laundry operation but, rather, in three separate and distinct laundry operations; if this application were granted, it would cover employees who are geographically, operationally and organisationally distinct. The scope of the current separate enterprise agreements covers laundry groups of employees that are appropriately chosen along distinct and rational operational lines, which Ensign prefers now (and for the future).

[26] Ensign submitted that Mr Chambers’ evidence demonstrates that laundry employees in each organisationally and geographically separate laundry fit squarely within each separate laundry processing operation. That is, the work of employees in each laundry is distinct from the operations of other laundries operated by Ensign. As such, the submissions for Ensign continued, the Commission should conclude that the laundry employees in NSW, if they were one group, would not be operationally distinct as the group covers a mixture of laundry employees in distinct geographic areas, servicing separate and distinct customer bases, performing different work with their own individual operating budgets. Ensign submitted that: “To describe them as one homogenous processing group a single laundry operation, as claimed by the applicant, is palpably misconceived” and that, instead, the employees are operationally and geographically distinct.

[27] Ensign submitted the laundries in NSW are (self-evidently) geographically distinct and that they are also operationally distinct, given the laundries have their own budgets that they are required to establish and achieve. The laundries have a workforce which, but for isolated circumstances arising from the COVID-19 lockdown, works only at their specific laundry. The operations of one laundry are, to no extent, integrated into the operations of any other laundry.

[28] As to employees transferring between different sites, I note Mr Chambers’ evidence was that production employees of the NSW laundries do not normally transfer between the laundries and that the “isolated and unique circumstances in which it has occurred does not establish a general practice”. In that regard, Mr Chambers’ evidence addressed, with some particularity, the circumstances where transfers or temporary redeployments between different sites had occurred, were offered (but not availed of) and/or otherwise were contemplated. Mr Chambers added that Ensign has no future plans to facilitate mobility of employees between the laundries. Although a casual pool of employees has been discussed in the past, local management has never been able to establish the pool with individuals willing to move across plants.

[29] In reply, the AWU characterised Ensign’s submissions on the fairly chosen point to be without a factual or legal foundation. In that regard, the AWU referred to aspects of Mr Chambers’ evidence-in-chief indicating matters including:

•  that the work undertaken by the employees at the three separate laundries that is “definitely similar by nature”;

•  that all employees share conditions of employment that are similar and almost identical across all three laundries, albeit claiming there are major differences in the duties and conditions of employment across all three sites (such as the existence of an outplacement service for redundant employees in the Rosebery enterprise agreement as one such major difference);

•  that the classifications structures of the three sites are “different”, but without elaboration on how the structure is “different” (albeit I note that the evidence about different classification structures was not eventually pressed by Ensign);

•  the different customer bases for the three laundries supporting the view the employees at the three laundries perform different duties at work, but without explanation as to how - if these differences are so significant - they can be captured by an almost identical employment classification structure;

•  the concession that some employees from the three laundries transferred their employment to another laundry and, during the COVID-19 pandemic, casual employees were offered an opportunity to work at laundry sites different from their regular site;

•  that Mr Chambers has an operational overview of the three laundries that are the subject of this application for a scope order (but does not have that organisational overview of Punchbowl).

[30] The AWU submitted that all these factors indicate that the three laundries are not of sufficient operational, organisational, or geographical distinction to prevent the making of the proposed order.

Section 238(4)(d) - it is reasonable in all the circumstances to make the order

[31] As to the matter of whether it is reasonable in all the circumstances to make the order, the AWU referred to the UFU Decision at [53] as referred to in Kwinana, including as to principles underpinning freedom of association in collective bargaining, and the implication from the legislative scheme that the collective choice of employees is significant. That is, “the views of the employees become significant and prima facie carry greater weight than the subjective views of the employer unless, as in United Firefighters, there are particular circumstances in a given case that make a contrary conclusion appropriate upon a proper application of s.238.”

[32] The AWU contended this case falls within the ordinary category in which the views of employees are significant and should carry greater weight than those of Ensign. The making of an order would, the AWU’s submissions continued, promote the legislative objectives concerning enterprise agreement-making. Last, on this topic, the AWU submitted that the views of the employees “should be given substantial weight in circumstances where they represent the preferences of a cohort of low-paid, blue-collar workers who are seeking access to the benefits of collective bargaining”. Moreover, there would be no real or serious prejudice to Ensign in making the proposed scope order.

[33] While noting the AWU’s submissions about the views of employees being a significant factor when considering reasonableness and the views of employees carry greater significance than the subjective views of the employer, Ensign also noted an alternative conclusion may be appropriate in particular circumstances: Kwinana. Here, the petition upon which the AWU relied on in putting the views of employees is a petition by employees “alleged to be laundry employees at Rosebery, Somersby and North Rocks” – and which asks employees, to the effect, as to whether they wish to bargain collectively. While the employees who have signed the petition have indicated they wish to do so, the petition pages do not indicate the arguments that were put to the employees prior to them executing the documents; and there is no evidence before the Commission on that point from any employee or otherwise. Ensign submitted that the Commission should give little weight to a petition in circumstances where the proponent is not available for questioning.

[34] Ensign’s submissions indicated that it “has never resiled from its wish to bargain collectively”. In such respects, Ensign has and continues to bargain collectively not only in relation to Somersby, Rosebery and North Rocks but also Western Australia, South Australia, Northern Territory and for two separate enterprise agreements in Victoria for the two laundries in that State. The preference of employees for collective bargaining, which may or may not mean bargaining across three laundries, does not, of itself, establish such a group would be fairly chosen. Issues of mere inconvenience or the preference of the AWU with the bargaining process are not decisive as to whether a bargaining process is fairer or more efficient: United Workers Union [2020] FWC 3211 (the “UWU Decision”).

[35] Ensign submitted “there has not been any disputation or angst arising from the negotiation of either the Somersby or Rosebery” enterprise agreements. Indeed, the AWU is covered by both agreements. Ensign submitted that the “continuation of the national and NSW practice of separate agreements for each laundry is little more than an inconvenience to the AWU” – and that forms no part of the considerations s.238 of the Act. Mr Chambers’ evidence was that the granting of the application for the scope order will not make enterprise bargaining more efficient; the level of coordination required for operationally and geographically disparate laundries will make the bargaining less efficient. Last, Ensign submitted that seeking “leverage by increasing the bargaining power by weight of numbers” is not a valid basis to make a scope order. The AWU described Ensign’s reference to the UWU Decision as “quite ironic” as, it submitted, the case was not in point – but Ensign submitted the principles therein were relevant.

Consideration

[36] As I have noted earlier, it is common ground between the AWU and Ensign that there are no contested issues arising from the provisions of s.238(1)-(3) and s.238(4)(a)of the Act.

Fair and efficient conduct of bargaining

[37] As to s.238(4)(b) of the Act, I am satisfied that making the proposed scope order would promote the fair conduct of bargaining, in circumstances including that Ensign’s employees at the three worksites undertake broadly similar laundry work. That is, having regard to what arose in the AWU’s case and absent any other considerations, proceeding on the assumption that employees undertaking laundry-related work for the same employer, albeit at different sites, those employees might reasonably and/or objectively consider, in fairness, that they should be able to bargain simultaneously - effectively as one unit - with their employer for essentially the same minimum wages and conditions as their co-workers at other sites.

[38] I am also satisfied that making the proposed scope order would promote the efficient conduct of bargaining. On the other hand, it seems to me on the evidence in this case that there are inefficiencies that necessarily would attend separate enterprise bargaining negotiations for three discrete enterprise agreements as against one single-enterprise agreement to cover three sites – and this is so notwithstanding the evidence of Mr Chambers as to some employees not having, in effect, requisite IT skills or actual capability to personally participate in remote meetings (for example, because they do not have personal mobile telephones or smartphones). While the workplaces are in three different geographical locations, I take notice of the fact that it is commonplace for negotiations for a single-enterprise agreement to involve employees/bargaining representatives who are located at more than one workplace, and oftentimes considerably more in number than, as here, three workplaces – such as where there is a proposed single-enterprise agreement with national operation. I am not persuaded by the evidence and submissions in Ensign’s case that making the proposed scope order will necessarily or inherently import delays. And this is so notwithstanding my consideration of the evidence of Mr Chambers that: “The delays will be significant arising from the need to coordinate representatives from each plant to attend and the union to engage with their members. The issue will be coordinating the various representatives across the three plants due to geographic spread. The log of claims is likely to differ for each plant which will also impact the time the negotiations will take.” As Mr Kerley’s evidence based on his own experience indicated, negotiations for a singular enterprise agreement are likely to be more time-efficient rather than, as Ensign contended, less time-efficient. One practical effect of the evidence and submissions for Ensign is to have the Commission accept that making the proposed scope order will not promote the fair and efficient conduct of bargaining – with one corollary in Ensign’s case seemingly being that conducting effectively parallel bargaining for the laundries in triplicate would promote the fair and efficient conduct of such bargaining. I am not satisfied that conducting bargaining three times over – perhaps including the same lead negotiators for, respectively, the AWU on behalf of its members and, potentially at least, some of the same Ensign managerial employees, would lend itself to the efficient conduct of bargaining.

[39] Having considered all the parties’ evidence and submissions, I am satisfied, for the purposes of s.238(4)(b) of the Act, that making the order will promote the fair and efficient conduct of bargaining.

Fairly chosen

[40] As to s.238(4)(c) and s.238(4A) of the Act, concerning the fairly chosen criterion, I am satisfied, on balance, that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen, taking into account whether the group is geographically, operationally or organisationally distinct.

[41] The group for the proposed scope order work in three sites located within NSW, namely in Somersby, Rosebery and North Rocks. As noted earlier, there is a fourth NSW site in Punchbowl, which is not the subject of inclusion in the application. Nothing of any particular substance was advanced in either party’s case about Punchbowl, notwithstanding the reference in Mr Chambers’ evidence that read: “… if there is a move to one single enterprise agreement covering all 3 or 4 of the laundries, this will not be efficient and it will import delays” (my underline). The three laundries which are the subject of the AWU’s scope application are located within NSW and, on the evidence before me, they are the only laundries for which Ensign has issued NERRs. Thus, in circumstances where Ensign has operations in other States and Territories, the group in this case is geographically distinct – albeit only in the sense that the group of three sites is within NSW and that group of three workplaces within that State comprise the only workplaces that Ensign has (presently) indicated a preparedness to bargain to introduce a new and/or a replacement enterprise agreement. Punchbowl appears to operate organisationally in a different way from the other three laundries. For example, organisationally-speaking, Mr Chambers has managerial overview of the three laundries which are the subject of the AWU’s application, but he does not have that role for Punchbowl. Apart from that, the workplaces of Somersby, Rosebery and North Rocks are themselves quite some distances apart within NSW. Mr Chambers’ evidence helpfully set out in an annexure matters including distances between the sites and travel-type times.

[42] As noted earlier, the AWU submitted that: (a) the work groups at the three sites are not operationally or organisationally distinct; (b) the employees at all three sites perform the exact same duties; (c) all three sites share the exact same employment classification structure; and (d) during the COVID-19 crisis, employees were required to perform work at sites different from their normal place of work. Despite the AWU’s submissions, the evidence of Mr Chambers indicated that the work at each of the three sites has its own operational distinctiveness, including when considering matters such as the respective client bases, the location of those clients and the nature of the laundering undertaken.

[43] In the end, the evidence indicates to me that the operations at the three sites site involve - no more and no less - the laundering of clients’ items. Those clients include private hospital clients, accommodation facilities clients, hospitality clients such as hotels, government-type clients and health/aged care-type clients. The clients’ laundry items identified in the evidence included (with certain site-specific differentiation) towelling, sheets, pillowslips, customer-specific products, food and beverage linen, sterile linen and general linen. Given that the group of employees who will be covered by the proposed scope order performs Ensign’s clients’ laundry work, I incline to the view that the cohorts of employees at Somersby, Rosebery and North Rocks are not operationally distinct in that the essence of their common work involves, or is directly related to, laundering clients’ items.

[44] Mr Chambers’ evidence indicated that each of the three sites has its own individual operating budget, albeit I note that would not be unusual with any business having different site locations. The evidence as to whether the group of three sites is organisationally distinct was not particularly well-developed in the cases presented by either party. For example, there was no organisational chart or evidence of a similar nature. All that was really before the Commission in organisational terms - apart from, perhaps, Mr Chambers’ evidence describing more accurately characterised operational-type considerations concerning the different laundries - was that Mr Chambers does have organisational overview for the three subject laundries but not for Punchbowl. However, to the extent that the AWU relied on the classification structure being organisationally identical for employees, the Laundry Award at Schedule B dealing with laundry classifications (relevant to North Rocks) and, respectively, the Somersby Agreement and the Rosebery Agreement at Schedule 2, as that schedule addresses classification levels, is relevantly identical rather than involving what involving, for example, “substantial differences”. In consequence of the relevantly identical classification provisions presently applying at the three sites, making the proposed scope order would not give rise to potential unsettling of the existing classification/organisational structure across the three sites – although, if there was an appetite for it between the parties, the classification/organisational structure could of course be the subject of future bargaining between the parties. The fact of the same classification structure presently being applicable to the employees at the three sites tends to favour the AWU’s submissions concerning the making of a scope order when considered in the context of the operational and organisational criteria in s.238(4A) and the question of whether the group of employees that will be covered was fairly chosen.

[45] The AWU placed reliance on the contention that employees moved between the different sites. That is, the AWU focussed a not-inconsiderable part of its case concerning employee mobility between sites on circumstances that were particular to COVID-19-related exigencies in 2020. However, Mr Chambers’ evidence, while acknowledging that had been some employee relocations across sites, indicated that relocation occurrences were such a rarity and particular to their own circumstances as not to be relevant or of any great weight, I consider, to the overall questions to be determined. Ultimately, I did not consider matters concerning employees relocating to be particularly relevant because, considered in the context of Mr Chambers’ evidence, I was am not persuaded by the AWU’s employee mobility-type submissions.

Reasonable in all the circumstances to make the order

[46] As to the matter of whether it is reasonable in all the circumstances to make the order, the AWU referred to authorities in positing that the collective choice of employees is significant. In this regard, the AWU’s case referred to a petition completed by various employees. Mr Kerley’s evidence also outlined, in a hearsay way, what were said to be the employees’ wishes for a single-enterprise agreement to operate across Somersby, Rosebery and North Rocks. Mr Kerley’s evidence was that the petition showed that the majority of employees across the three laundry sites have indicated that they wish to be covered by a single-enterprise agreement and employees believe that the most appropriate grouping for a new enterprise agreement should include all three laundries.

[47] Ensign submitted that the petition is “alleged to be laundry employees at Rosebery, Somersby and North Rocks”, but there was nothing at all to suggest the petitioners were not laundry employees at these sites. Ensign also submitted that the petition pages do not indicate the arguments that were put to the employees before they signed the petition and there is no evidence on that point; and little weight should be given in circumstances where “the proponent is not available for questioning”.

[48] I note that the pages of the petition all have a header reading: “Majority Support Petition (to negotiate an Enterprise Agreement)”. The words in the preamble then read: “We, the undersigned, being laundry and maintenance workers at Somersby, Rosebery and North Rocks employed at Ensign Services (Aust) Pty Ltd T/A Linen Services Australia, hereby confirm that we wish to collectively bargain with our employer in relation to a proposed enterprise agreement. We nominate the Australian Workers’ Union (AWU) NSW Branch to act as our bargaining representative.” The dates recorded in the petition pages include dates principally in late-May and July 2021. Relevantly, one of the petition pages identifies that the petition was signed by employees whose work area was Somersby. It is common ground that the Somersby NERR was issued on 15 June 2021 – and a petition page with the work area identified as Somersby bears dates of signing on 5 July 2021. As such, at least in relation to Somersby employees, Ensign had already agreed to bargain through the issuing of the Somersby NERR on 15 June 2021; and so the petition referred to something different from just wishing to commence bargaining. True it is that there was scant or no evidence around the circumstances of the petition but it, in effect, speaks for itself. I infer that the petition is, as the AWU’s case contended, an indication of the wish of the employee-petitioners at Somersby, Rosebery and North Rocks - being what Mr Kerley characterised as a majority of relevant employees - to collectively bargain with Ensign in relation to a proposed single-enterprise agreement.

[49] While the AWU and a large number of employees across the three laundries would prefer to collectively bargain with Ensign for a proposed single-enterprise agreement, Ensign would prefer to have site-specific discrete bargaining and a discrete enterprise agreement for each of the Somersby, Rosebery and North Rocks sites – consistently with Ensign’s site-specific approach to other enterprise agreements. Among other matters, Ensign submitted that the “continuation of the national and NSW practice of separate agreements for each laundry is little more than an inconvenience to the AWU” – and inconvenience forms no part of the considerations in s.238 of the Act. Ensign also submitted that seeking “leverage by increasing the bargaining power by weight of numbers is not a valid basis to make a scope order.” While I have considered all the evidence and the submissions of the parties, I considered as persuasive the submission made by the AWU that the views of the employees (as expressed through the petition) “should be given substantial weight in circumstances where they represent the preferences of a cohort of low-paid, blue-collar workers who are seeking access to the benefits of collective bargaining”. Moreover, I accept the AWU’s submissions that there would be no real or serious prejudice to Ensign – or, in any event, no persuasive evidence of real or serious prejudice - in making the proposed scope order.

[50] I am satisfied it is reasonable in all the circumstances to make the proposed scope order.

Conclusion

[51] Ensign submitted “there has not been any disputation or angst arising from the negotiation of either the [existing] Somersby or Rosebery” enterprise agreements and the AWU is covered by both agreements. It is to be noted, however, that even though Ensign has issued NERRs to employees at each of the three sites commencing from mid-June 2021 (in the case of Somersby and on later dates for the other two sites), bargaining has not been commenced pursuant to any of the three sites’ NERRs, or bargaining has been suspended by Ensign, pending the outcome of this application (being an application that was filed on 11 October 2021, and which subsequently was the subject of directions proposed with the consent of the parties and culminating in the final round of materials being filed and served earlier this week [being the week commencing 6 December 2021]. I reiterate the time-sensitivity that this factor concerning the non-commencement and/or cessation of all bargaining, notwithstanding the earlier issuing of NERRs for the three sites (albeit in relation to Ensign’s site-specific proposed agreements), presents in determining this application and the corollary of today’s ex tempore decision.

[52] Although the AWU submitted that this application for a scope order involved a “straightforward matter”, I would not necessarily characterise it in that way - for there were various matters in Ensign’s case which may well have involved considerations which did not favour the AWU’s application. Nonetheless, having regard to the foregoing consideration of the statutory provisions, the authorities to which reference was made, and the parties’ evidence and submissions thereto, I am satisfied a scope order should be made. Accordingly, a scope order will issue in relation to the AWU’s application in this matter [an order - PR736623 - was issued on 9 December 2021]. The proceedings are otherwise concluded.

COMMISSIONER

Appearances:

T Craven of The Australian Workers’ Union (NSW Branch) for the applicant.

J Douglas of Maddison & Associates for the respondent.

Hearing details:

2021.
Sydney (by video):
9 December.

Printed by authority of the Commonwealth Government Printer

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