The Australian Workers' Union v Debco Pty Ltd - [2011] FWA 4393

[2011] FWA 4393

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.236—Majority support determination

The Australian Workers’ Union
v
Debco Pty Ltd
(B2011/73)

COMMISSIONER BISSETT

MELBOURNE, 14 JULY 2011

Application for a majority support determination.

[1] This is an application by The Australian Workers’ Union (AWU) for a majority support determination pursuant to s.236 of the Fair Work Act 2009 (the Act).

[2] This decision deals with two preliminary matters that must be determined before the wishes of employees to be covered by the agreement can be ascertained. These are first whether The AWU can enrol as members those people it seeks to be covered by the agreement (and hence is a bargaining representative capable of making an application under s.236), and second whether the group of employees to be covered by the agreement has been fairly chosen.

[3] The Act provides:

236 Majority support determinations

(1) A bargaining representative of an employee who will be covered by a proposed single-enterprise agreement may apply to FWA for a determination (a majority support determination) that a majority of the employees who will be covered by the agreement want to bargain with the employer, or employers, that will be covered by the agreement.

(2) The application must specify:

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

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

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

(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.

[4] Section 236 requires that an application for a majority support determination be made by a bargaining representative of an employee who will be covered by the proposed agreement.

[5] A bargaining representative is defined at s.176 of the Act:

176 Bargaining representatives for proposed enterprise agreements that are not greenfields agreements

Bargaining representatives

(1) The following paragraphs set out the persons who are bargaining representatives for a proposed enterprise agreement that is not a greenfields agreement:

(a) an employer that will be covered by the agreement is a bargaining representative for the agreement;

(b) an employee organisation is a bargaining representative of an employee who will be covered by the agreement if:

(i) the employee is a member of the organisation; and

(ii) in the case where the agreement is a multi-enterprise agreement in relation to which a low-paid authorisation is in operation—the organisation applied for the authorisation;

unless the employee has appointed another person under paragraph (c) as his or her bargaining representative for the agreement, or has revoked the status of the organisation as his or her bargaining representative for the agreement under subsection 178A(2); or

(c) a person is a bargaining representative of an employee who will be covered by the agreement if the employee appoints, in writing, the person as his or her bargaining representative for the agreement;

(d) a person is a bargaining representative of an employer that will be covered by the agreement if the employer appoints, in writing, the person as his or her bargaining representative for the agreement.

Bargaining representatives for a proposed multi-enterprise agreement if a low-paid authorisation is in operation

(2) If:

(a) the proposed enterprise agreement is a multi-enterprise agreement in relation to which a low-paid authorisation is in operation; and

(b) an employee organisation applied for the authorisation; and

(c) but for this subsection, the organisation would not be a bargaining representative of an employee who will be covered by the agreement;

the organisation is taken to be a bargaining representative of such an employee unless:

(d) the employee is a member of another employee organisation that also applied for the authorisation; or

(e) the employee has appointed another person under paragraph (1)(c) as his or her bargaining representative for the agreement; or

(f) the employee has revoked the status of the organisation as his or her bargaining representative for the agreement under subsection 178A(2).

Requirement relating to employee organisations

(3) Despite subsections (1) and (2), an employee organisation cannot be a bargaining representative of an employee unless the organisation is entitled to represent the industrial interests of the employee in relation to work that will be performed under the agreement.

[6] To be capable of making an application for a majority support determination, the AWU must be entitled to represent the industrial interests of the employees proposed to be covered by the agreement with respect to the work they perform for Debco. The AWU must also have as a member at least one employee to be covered by the agreement.

Can the AWU make the application?

[7] Debco has an operation at Tyabb in Victoria where it is involved in the production and sale of growing media/potting mix.

[8] The AWU is seeking a majority support determination with respect to those employees of Debco who are involved in the production, maintenance, labouring and warehouse roles at Debco’s operation at Tyabb in Victoria. For ease of reference, this group of employees is referred to as being engaged in the production and sale of growing media/potting mix.

[9] Debco submits that the AWU is not entitled to represent the industrial interests of the employees of Debco proposed to be covered by the agreement and hence is not capable of making a valid application.

[10] Debco and the AWU agree that Debco and its employees subject to this application are covered by the Nursery Award 2010.

[11] It is necessary that this matter be determined first.

AWU Submission

[12] The AWU submits that it has coverage of the employees in question by virtue of its eligibility rule. Rule 5, Section 1, Part A, clause 1 states:

Every bona fide worker, male or female, engaged in manual or mental labour in or in connection with any of the following industries or callings, namely: Pastoral (otherwise than as a shearing contractor), woolclassing except where employed in a wool brokers store, agricultural, farming, horticultural, including the growing, picking and packing of edible fungi, viticultural, which includes employees in wineries (except in the State of South Australia), dairying, poultry farming, fruitgrowing, sugar growing, cane cutting, milling and refining, the handling and loading and storage for export and home consumption of grain, seed and manufactured sugar, except persons eligible to be members of The Waterside Workers Federation of Australia who perform work aboard ships and at the grain shipping terminal at Kwinana, Western Australia, the growing, cutting, production, processing and treatment of tea, flax... shall be eligible for membership of the Union.

(emphasis added)

[13] The AWU argues that the work carried out by employees of Debco falls within the definition of ‘horticulture’. Further, the AWU submits that it has traditionally covered work performed in the nursery industry pursuant to this particular rule.

[14] The AWU submits that this is evidenced by the AWU being a party to the Horticultural (Nursery) Industry Award No. 30 of 1980 (a Western Australia NAPSA) and the Horticulture Industry (Nursery and Landscape) Award (a South Australia NAPSA).

[15] In the alternative, the AWU submits that it has coverage of the employees in question by virtue of Rule 5, Section 2, Part C, clause 7, paragraph (i) of its rules, which states:

Without limiting the generality of the foregoing or being limited in any way by the foregoing the following persons shall be eligible for membership of the Union:

...

Persons employed or usually employed in any establishment wholly or partly engaged in or connected with the manufacture, preparation and storage (or any of them) of Bone Dust, and other Artificial Manures and Fertilizers (and any of them), and of Acids, Alkalis and Chemicals of all kinds whether in liquid solid or gaseous form (or any of them), and work incidental thereto AND of persons employed in any type of labour in and around such establishment whose employment is incidental to the proper carrying out of the foregoing manufacture, preparation and storage (or any of them).

(emphasis added)

[16] The AWU submits that potting mix and mulch fall within the definition of ‘artificial manures and fertilizers’ and that the employees in question are engaged in the manufacture, preparation and storage of such.

[17] The AWU argues that the words artificial, manure and fertilizer should be given their ordinary meaning: artificial means ‘made by human skill and labour’; 1 manure is ‘any artificial or natural substance for the fertilising of soil’;2 and fertilizer ‘is a substance which fertilizes, an artificially prepared substance... added to soil to fertilize it’.3

[18] Given these definitions, the AWU submits that its rules entitle it to cover persons employed in or in connection with the manufacture, preparation, and storage of human-made substances used for making soil or plants fertile or productive. The potting mix and growing media prepared and stored by Debco, it submits, clearly falls within this definition.

[19] Alternatively, the AWU submits that it is entitled to represent the employees in question in accordance with Rule 5, Section 2, Part B, clause 6, which states:

Without limiting the generality of the foregoing or being limited in any way by the foregoing, persons engaged in any of the following Trades or Branches of Trades shall be eligible for membership of the Union:

Engineers, Fitters, Turners, Water Meter Fitters, Tool and Gauge Makers,...and any other Machine Operators or Mechanics employed in the Engineering, Locomotive, Shipbuilding, Rolling Stock, Aircraft, Munition and Iron Trades, or in any other Industry.

[20] The AWU says that the work performed by the employees of Debco requires the operation of machinery and therefore the employees fall within the scope of the rule that provides for the coverage of ‘Machine Operators...in any other Industry’.

Debco submission

[21] Debco submits that the company is involved in the ‘production and modification of growing media...It takes raw bark from trees and converts it into potting mix’. 4 The process is a manufacturing operation producing potting mix.

[22] Debco says the work performed by it and the classification of employees falls within coverage of the Nursery Award 2010.

[23] Whilst it agrees that the AWU has a legitimate interest in the Nursery Award 2010 and that its rules would appear to give it coverage of some aspects of the nursery industry, 5 it submits that the eligibility rules of the AWU do not extend to give it coverage of employees engaged in the production of growing media (or potting mix) and its interest in the Nursery Award 2010 does not indicate that it has coverage of all work in the industry.

[24] Debco submits that ‘horticulture’ is the ‘commercial cultivation of fruit, vegetables and flowers including berries, grapes, vines and nuts.’ 6 Whilst it concedes its products may be used in the horticulture industry, Debco argues that the supply of its product to the horticulture industry does not make Debco and its operations part of the horticulture industry.7

[25] Debco submits that potting mix is not an artificial manure or fertilizer but rather a media within which plants grow and to which other products (such as fertilizer) may be added to facilitate the growth.

[26] Debco further submits that the reference to ‘any other industries’ in the AWU rules must be read in the context of the specific industries mentioned in the eligibility rule and also in the context of the Industry Rule (Rule 6). The term ‘industries’ in the eligibility rule cannot extend the coverage of the union’s rules beyond the scope of the Industry Rule (Rule 6). On this basis, it argues that machine operators and mechanics mentioned in Rule 5 are only eligible to be members of the AWU to the extent that they are employed in the industries specified in Rule 6 of the AWU rules. 8

[27] On this basis Debco argues that the AWU is not entitled to represent the industrial interests of the employees in relation to work that will be performed under the agreement. As such it does not have standing to make the application for a majority support determination.

Consideration

[28] The question for determination is if the AWU is entitled to enrol as members employees of Debco involved in the production and sale of growing media/potting mix.

[29] The AWU submits that the production and sale of growing media/potting mix is work within the nursery industry and that the nursery industry falls within the broader horticultural industry.

[30] The AWU, in support of its proposition that the work so described is encompassed within the horticulture industry (and is therefore within its eligibility rules), relies on its respondency to the Horticultural (Nursery) Industry Award No. 30 of 1980 and the Horticulture Industry (Nursery and Landscape) Award.

[31] The AWU is the only union party to the Horticultural (Nursery) Industry Award No. 30 of 1980 (Schedule B). The award has effect throughout the State of Western Australia and applies to all employees employed by the respondents in the classifications contained in Clause 5 - Wages of the NAPSA (clause 3). The classifications contained in the NAPSA are:

Trainee

Horticultural Employee Grade 1

Horticultural Employee Grade 2

Horticultural Employee Grade 3

Horticultural Tradesperson Grade 1

Horticultural Tradesperson Grade 2

Horticultural Tradesperson Advanced

[32] Each of the classifications is defined in clause 26 of the award:

“Trainee” shall mean an employee who has had no previous experience in the industry and is appointed as such for a maximum period of three months. Following the satisfactory completion of three months service, or lesser period as agreed, the employee shall be paid in accordance with the wage rate specified for a Horticultural Employee Grade 1.

“Horticultural Employee Grade 1” means an employee whose duties include the potting, packing and setting out of plants, the handling of seedlings, the picking, processing and packing of flowers, the collecting and despatching of stock for orders, the general maintenance of a Nursery and advising and attending to customers as required. Duties may require the operation of tractors, hoes and similar mechanical plant.

“Horticultural Employee Grade 2” means an employee, other than a Qualified Horticultural Tradesperson who is thoroughly conversant with nursery practices and whose duties may require pruning, grafting, budding, layering and seed sowing in addition to any other duties the person may be required to perform (including advising and attending to customers)...

“Horticultural Employee Grade 3” means an employee other than a Qualified Horticultural Tradesperson who is thoroughly conversant with nursery practices...

“Horticultural Tradesperson Grade 1” means an employee who has successfully completed a recognised apprenticeship in a branch or branches of the Horticulture Trade...

“Horticultural Tradesperson Grade 2” means an employee who has satisfied the requirements for a Grade 1 Tradesperson and who has a minimum of three years post apprenticeship experience...

“Horticultural Tradesperson (Advanced)” means an employee who has satisfied the requirements for a Grade 2 Tradesperson and who has completed post apprenticeship qualifications in horticultural sciences or management studies...

[33] It is beyond doubt that whilst the positions are titled ‘horticultural...’ and the trade qualification required is in a branch of horticulture the work performed is in the nursery industry.

[34] The AWU argues that this demonstrates that employees in the nursery industry are considered to be part of the broader horticultural industry and hence its eligibility rule that provides coverage of horticultural industry encompasses the nursery industry.

[35] The scope and parties bound clause of the Horticulture Industry (Nursery and Landscape) Award (Clause 1.4) is:

1.4.1 Except as provided in clause 1.4.2 this Award shall be binding on the industry of the occupations of all persons engaged in or in connection with the horticulture industry where the principal business of the employer, or the principal business of a section of an employer’s operations is in the nursery and/or landscape and/or gardening industry.

Without limiting the foregoing, engagement in or in connection with the nursery and landscape industry shall include but not be limited to the following activities; all forms of nursery business; all forms of landscaping and gardening; the establishment and maintenance of parks and gardens and interior plant scapes, domestic, commercial and rural irrigation (subject to the exclusions provided in clause 1.4.2.3); plant propagation and aquiculture.

1.4.2 This Award shall not be binding on:

1.4.2.1 Those persons subject to an agreement made pursuant to the Act, but only to the extent of any inconsistency.

1.4.2.2 Persons employed by the South Australian Government.

1.4.2.3 Persons wholly or substantially engaged in irrigation installation.

1.4.2.4 Persons engaged in work directly associated with or forming part of the preparation for the initial and continuous processing of foodstuffs, and not being the growing, harvesting or initial dispatch of foodstuffs.

1.4.2.5 Persons employed in the packaging and handling of horticultural products other than the growing, harvesting or initial dispatch of such products.

1.4.2.6 Persons bound to any other Award made pursuant to the Act.

(underlining added)

[36] The AWU submits that clause 1.4.1 of this award demonstrates that the nursery industry is considered part of the horticulture industry. The AWU is the only union party to this award, thereby demonstrating that the AWU does have the capacity to represent employees in the industry. Debco argues that paragraph 1.4.2.5 demonstrates that persons doing the kind of work performed by its employees would be excluded from the coverage of the award and hence the award provides no evidence of coverage by the AWU of the work performed by its employees. The AWU contends that the work of employees of Debco is in the production of growing media and associated despatch of that initial product and that this is not excluded by paragraph 1.4.2.5 of the award. Rather it says that paragraph 1.4.2.5 is directed to activities further along the supply chain such as re-packaging and retailing of the product.

[37] The classification descriptions in this award provide that the indicative duties for a Nursery Employee Level 2 include ‘mixing media, soils and agars’ and for a Nursery Employee Level 3 include the requirement to ‘operate soil mixing processing machinery’ (Schedule 1). Debco’s employees, on its own admission, are involved in the production of media through the processes of milling, screening, and composting. Whilst Debco was unable to enlighten me as to whether or not this production falls within ‘mixing’, I see no basis on which to narrow ‘mixing media’ such that it must exclude the work done by Debco employees.

[38] The Nursery Award - State 2003 9 is a Queensland award. It provides in its scope:

1.4.1 This Award applies to all employees for whom classifications and rates of pay are herein prescribed and to their employers engaged in the calling of Nursery Employees, Landscape Gardeners and other horticultural callings including Commercial Cut Flower Growing and excepting Market Gardening throughout the State of Queensland.

(underlining added)

[39] This scope clause indicates that nursery employees were, at least at the time the award was last varied, considered as falling within ‘horticultural callings’.

[40] The Plant Nurseries Award 10 is a Tasmanian award. It relevantly provides the following:

3. SCOPE

This Award is established in respect of the industry of plant nursery (as defined) and without limiting the generality of the foregoing shall include the growing of instant turf but excludes floriculturist (as defined).

5. AWARD INTEREST

(a) The following employee organisation has an interest in this award pursuant to section 63(10) of the Industrial Relation Act 1984:

The Australian Workers’ Union, Tasmania Branch

(b) The following employer organisation is deemed to have an interest in this award pursuant to section 62(2) of the Industrial Relations Act 1984:

The Tasmanian Chamber of Commerce and Industry Limited

(c) The following organisation is deemed to have an interest in this award pursuant to section 62(3) of the Industrial Relations Act 1984:

The Tasmanian Trades and Labor Council.

7. GENERAL DEFINITIONS

‘Plant Nursery’ means where the principle business of the employer includes the preparation of growing media for the growing of plant material, the growing of plant material, presentation of plant material for sale, selling of plant material (which may include the selling of garden and or household accessories).

[41] The classification descriptors in this award provide that a ‘Nursery Assistant Level 1’ undertakes a range of tasks including ‘preparation of media’. A Nursery Assistant Level 2 undertakes a range of tasks including ‘potting mixtures’.

[42] Whilst the phrase ‘preparation of growing media’ is used to describe the work of a plant nursery, I do not consider such a definition to be distinguishable from the production (which I take to be a process of preparation) of growing media.

[43] This award indicates that:

(i) the AWU has an interest in the nursery industry (although it does not prove coverage); and

(ii) the nursery industry includes preparation or production of ‘growing media’ and ‘potting mixtures’;

[44] Debco argues that the federal Horticulture Industry (AWU) Award 2000 is restricted in its coverage to the classic definition of horticulture, which is the cultivation of fruit, vegetable and flowers including berries, grapes, vines and nuts. It does not mention nursery work, hence demonstrating that the nursery industry and horticultural industries are to be distinguished. The Horticulture Industry (AWU) Award 2000, however, arose from the award simplification 11 of the Dried Fruits and Other Fruits Industry (AWU) Award 1999 and the Fruit and Vegetable Growing, Storing, Packing and Processing (AWU) Award 1999. In this respect it is not surprising that it does not extend to coverage of the nursery industry. It should also be noted that, prior to the making of the Nursery Award 2010 as part of the award modernisation process, there was no federal award that applied to the nursery industry. That the Horticulture Industry (AWU) Award 2000 does not specifically mention the nursery industry or nursery work is not indicative (much less conclusive) of AWU coverage of the type of work performed by the employees at Debco.

[45] From the award history outlined above, three matters become evident:

(i) the nursery industry and horticulture industry are clearly linked, with the nursery industry being a part of the horticultural industry; and

(ii) ‘growing media’ and ‘potting mix’ appear to be particular to the nursery industry; and

(iii) the AWU has an established history of interest (and active engagement) in awards covering the nursery industry.

[46] Horticulture Australia Limited (HAL) is an industry owned company that the Australian Government has contracted to deliver marketing and R&D services for the horticulture industry. The website of Horticulture Australia Limited 12 states that

Horticulture Australia Limited (HAL) is a not-for-profit, industry-owned company. It works in partnership with Australia’s horticulture industries to invest in research, development and marketing programs that provide benefit to industry and the wider community.

HAL invests almost $90 million annually in programs designed to align with the strategic investment priorities of Australia’s horticulture industries and the Australian Government’s Rural Research and Development priorities.

HAL receives recommendations on investment from Industry Advisory Committees (IACs) which provide industry specific experience and expertise.

IACs are committees of HAL that provide advice to the HAL Board. Membership is recommended to HAL by the Peak Industry Body (PIB) of each industry. The PIB is responsible for ensuring the skills required on an IAC are met by the persons they recommend.

As part of the Australian Government’s commitment to rural research and development, horticulture industries can access matching Commonwealth funding through HAL for research and development activities.

(underlining added)

[47] The information on this website clearly suggests that horticulture is not a single industry but made up of a number of industries (‘Australia’s horticultural industries’). The HAL website further lists the individual ‘industries’ that make up HAL. This includes Almonds, Avocados, Blueberries, Canned Fruit, Cut Flowers, Nursery, Potato and many more. The nursery industry body identified by HAL is the Nursery and Garden Industry Association.

[48] The information from HAL further reinforces my view that the nursery industry is part of the broader horticultural industry.

[49] In Simon Richards Group Pty Ltd, 13 a Full Bench of the AIRC considered the principles relevant to the construction of eligibility rules of a registered organisation. The Full Bench found that

[33] It is well accepted that eligibility rules are not to be construed narrowly nor as though they have been crafted by skilled legal technicians (although there may be cases in which they have) but are to be regarded as the work of practitioners in industrial relations and to be understood in that context having regard to any relevant industrial usage. See, for example, R v Aird; Ex parte Australian Workers’ Union (1973), R v Cohen and Others; Ex parte Motor Accidents Insurance Board (1979). Words are not to be given a meaning restricted to their denotation at the time the rule was made but are to be interpreted in light of developments in industry. In this regard the authority which is most often cited is the judgment of the Federal Court of Australia in Cooperative Bulk Handling Limited v Australian Workers’ Union West Australian Branch Industrial Union of Workers and Another (1980).

(footnotes omitted)

[34] In the present context the following passage from the CBH Case requires careful consideration:

“In those circumstances his Honour sought to ascertain the common understanding among people concerned with shipping and stevedoring, particularly with respect to industrial matters therein, and the nature of the employment to which the term is ordinarily applied. In other words, he sought to ascertain the meaning or usage of the words. He sought evidence of that meaning from awards, agreements and judgments of various courts where the question had arisen for decision. It was a ground of appeal that his Honour was wrong in placing any or undue weight on industrial awards and agreements as an aid, but his Honour’s approach is, in our view, quite consistent with that referred to by the High Court, see for example R v Hickman; Ex parte Fox (1945) 70 CLR 598, per Dixon J at 613-4.”

(footnotes omitted)

[35] In CBH the Court was concerned with the meaning of the term “waterside worker” in the contemporary industrial context. To elucidate that meaning the Court had regard to awards, agreements, decisions and other materials current in industrial relations. If the question before us was the current meaning of the term “commercial traveller” that approach would be entirely appropriate. In this case, however, unlike the rule before the Court in CBH, the rule contains a definition of the occupation that the rule is intended to cover. It is a part of that definition which we must interpret. One might readily accept that the role of the commercial traveller has changed and that many of the functions carried out by travellers in days gone by are now carried out using modern methods of communication which reduce the need for travel. This change has been noted in a number of the decisions to which we have referred, notably Re Franklin Mint Pty Ltd. But it would not be permissible to interpret the rule accordingly unless persons performing such functions come within the definition which the rules have provided. For that reason the approach in CBH is of limited assistance in this case.

[50] In R v Cohen; Ex parte Motor Accidents Insurance Board, 14 Mason J (Gibbs, Stephen, Aicken JJ concurring) found that

[i]n considering whether the Board is engaged in “the business of insurance”, it should be recognized at the outset that we are concerned with the use of that expression in the eligibility clause of a trade union’s registered rules. The expression is, in such a context, no doubt intended to have a wide meaning and it should be interpreted and applied in accordance with its ordinary and popular denotation rather than with some narrow or formal construction. Thus the question is whether, as a matter of ordinary usage, the Board can properly be said to be in “the business of insurance”. 15

[51] In that same matter Barwick CJ found that

[t]he first matter to be decided, in my opinion, is the precise meaning and scope of the eligibility clause. There is no reason, in my opinion, to read it otherwise than in its natural and ordinary sense. There are, of course, occasions when one needs to be generous in the interpretation of documents prepared in the industrial field: cf. Reg. v. Commonwealth Conciliation and Arbitration Commission; Ex parte Melbourne and Metropolitan Tramways Board [1965] HCA 50; (1965) 113 CLR 228, at p 239 and the subsequent case [1966] HCA 32; (1966) 115 CLR 443, at p 452 . There is, however, nothing of that kind involved in the construction of the words of this eligibility clause. There is in the case of an eligibility rule the consideration that the employee himself must know whether or not he is qualified to join a particular industrial organization. This consideration underlines the necessity to give the words of the eligibility clause their ordinary significance as they would be understood by the employee. Further, in my opinion, there is no need to expand the area of the eligibility clause beyond the ordinary meaning of the words it employs. After all, the area for inter-union disputation about union coverage is already large enough and fraught with great peril to the national interest. 16

[52] On the basis of these authorities it is clear that the rules of the AWU should be given their ordinary meaning in an industrial context. The rule certainly should not be narrowed and in fact may be given a wide meaning. The industrial context within which the rule should be considered is determined by examining industrial documents such as awards and agreements and relevant industrial decisions.

[53] Neither party referred me to any decisions of Fair Work Australia or its predecessor that dealt with the AWU rules coverage in this particular area.

Finding

[54] I see no reason to read down the term ‘horticulture’ in the AWU rules such that it would exclude the nursery industry. The horticulture industry itself recognises that the nursery industry is part of the broader horticulture industry and I see no reason to depart from this view.

[55] That the nursery industry was not included in the Horticulture (AWU) Award 2000 does not mean that the nursery industry is not part of the horticulture industry. This is reflective of the fact that the nursery industry at that time was subject to industrial regulation at a state level and not at the federal level. There was in fact no federal award covering the nursery industry prior to the making of the Nursery Award 2010 as part of the award modernisation process. There are many ways of describing an industry from a broad to a much narrower level.

[56] That the nursery industry has its own modern award is not determinative of whether or not the nursery industry is part of the horticulture industry for the purpose of the AWU rules. The relationship between the horticultural industry and the nursery industry was not subject to any decision in the award modernisation process. A modern award for the nursery industry separate to a horticulture award does not imply that there is no relationship between the two industries.

[57] There is no basis to suggest that the nursery industry is somehow distinct from the horticultural industry. Rather, whilst it is an identifiable industry in its own right, it is also a part of the broader horticultural industry. The history of industrial regulation, the classifications of employees and the information from Horticulture Australia Limited reinforces this view.

[58] I therefore find that the nursery industry comes within the horticultural industry as it is used in the eligibility rules of the AWU.

[59] Debco agrees that its employees are covered by the Nursery Award 2010. The nursery industry is defined in that award as including

the production and modification of growing media and clearing, treating or preparing of land for the propagation, planting, growing, cultivation, maintenance, sales and distribution or treating of plant material and associated products. 17

[60] The relevant AWU eligibility rule states that

[e] very bona fide worker, male or female, engaged in manual or mental labour in or in connection with any of the following industries or callings, namely:...horticulture... shall be eligible for membership of the Union

[61] I therefore find that the AWU can enrol as members those employees it seeks to be covered by the proposed agreement with Debco.

[62] Given these findings I do not need to consider if the AWU can enrol those employees as members under the alternative rules as it has put forward.

[63] For the purpose of s.176(3) of the Act the AWU is entitled to represent the industrial interests of the employees in relation to work that will be performed under the proposed agreement.

[64] Section 176(1)(b)(i) enables the AWU to be a bargaining representative for an employee who is a member of the AWU. I find, based on the information provided to me by the AWU that it is a bargaining representative in accordance with the requirements of the Act.

[65] The AWU is therefore competent under s.236(1) of the Act to make the application or a majority support determination for the employees concerned.

Majority support determination

[66] Section 237(1) of the Act (set out in full above) requires that a majority support determination be made if the matters specified in s.237(2) have been met. In this case it requires that I am satisfied that:

At a time determined by me, the majority of employees of Debco who will be covered by the agreement wish to bargain; and

That Debco has refused to bargain; and

That the group of employees has been fairly chosen; and

It is reasonable in all of the circumstances to make the determination.

The majority of employees wish to bargain

[67] Pending the resolution of other matters this issue is yet to be determined.

Debco has refused to bargain

[68] There is no dispute that Debco has refused to bargain.

The group of employees to be covered by the proposed agreement

[69] The AWU’s initial application indicated that the group of employees it seeks to be covered by the proposed agreement is those employees employed by the Respondent who are engaged in the production, maintenance, labouring and warehouse roles at the Tyabb site. During these proceedings the AWU indicated that it wished to redefine the group of employees to be covered by the proposed agreement by excluding from the identified group six named employees (the disputed employees) occupying specific positions. Whilst the AWU named specific employees it wished to exclude from the proposed agreement I consider that it is, in fact, seeking to exclude the individuals in the context of the positions they occupy.

[70] The Act requires that, in determining if the group of employees to be covered by the agreement is fairly chosen, I must take into account whether the group (to be covered by the agreement) is geographically, operationally or organisationally distinct.

[71] Debco argues that the disputed employees are neither geographically, operationally nor organisationally distinct (and by implication nor is the group of employees to be covered by the agreement). Debco submits that all employees in the operations area of the business should be covered by the proposed agreement except for the National Operations Manager.

[72] Section 236 of the Act makes it clear that an application for a majority support determination can only be made by a bargaining representative of employees. It is therefore the AWU’s proposal as to who should be covered by the agreement that is the starting point for my consideration of those matters under s.237(2).

[73] For the purposes of determining this matter both the AWU and Debco made submissions and provided witness statements from a range of employees (both the disputed employees and non-disputed employees). Evidence was taken from the witnesses on 28 June 2011.

[74] As a simple matter of construction I consider that if the disputed employees form a group that is geographically, operationally or organisationally distinct then the group of employees to be covered by the agreement will also fit this description. For this reason and for ease I will in the first instance determine if the disputed employees are distinct in one of the ways required.

[75] It is agreed that the National Operations Manager should be excluded from the Agreement.

[76] The AWU submits that the six disputed employees can be geographically, operationally or organisationally distinguished on the basis that they exercise supervisory authority, are paid an annual salary and participate in management meetings.

[77] The disputed employees have a number of characteristics in common. This is obvious from their witness evidence. This evidence however demonstrates that not each of the six shares all of the characteristics:

Five of six employees report directly to the National Operations Manager.

Five of the six do not receive payment for working overtime. One of the six receives payment for overtime worked on a weekend but not during the week.

None of the six are required to clock in and out using the finger scanning system.

Five of the six attend weekly management meetings.

Two of the six can institute minor disciplinary action.

Five of the six are paid a salary which incorporates payment for all hours worked.

One of the six received additional payment for any weekend work.

One of the six is paid monthly, the others fortnightly.

[78] I am concerned, based on the evidence, that attempting to distinguish a group of employees on the bases identified by the AWU may not provide certainty as to who is and is not covered by the agreement, particularly in circumstances where the identified characteristics are not common to each of the disputed employees. An offer by the employer to pay an annual salary to a non-disputed employee and acceptance of such by that employee will move that person into the excluded group of employees. Likewise a decision of the employer to introduce senior operator positions which may have some supervisory responsibilities (as has been proposed) 18 may also lead to the exclusion of employees who would otherwise be covered by the agreement. On this point it is noteworthy that the Nursery Award 2010 allows employees at all levels of Grade 2 and above in the classification structure to have some supervisory responsibilities. In general, the employees to be covered by the agreement would be at grade 2 and 3 of the Nursery Award 2010. Whilst I am conscious of the AWU’s desire to have only ‘hands on’ and not ‘management’ employees covered by the proposed agreement I am not convinced that the exclusions proposed by the AWU will result in a group of employees who are fairly chosen.

[79] The AWU submits that a group of employees may be fairly chosen even if they do not fall into one of the groups specified in s.237(3A). The Full Bench in United Firefighters’ Union of Australia v Metropolitan Fire & Emergency Services Board 19(UFUA)found that:

[55] The relevant consideration under s.238(4)(b) is whether the order will promote the fair and efficient conduct of bargaining. The implication is that the tribunal should be satisfied that if an order is made the bargaining will at least be fairer or more efficient or both than it would be if no order were to be made. The relevant consideration under s.238(4)(c) is whether the specified group is fairly chosen. It may be that a number of groupings might be fair – what this criterion requires is that the group which is included in the scope order is fairly chosen. This issue is also dealt with in s.238(4A), which we discuss shortly.

[56] We disagree with the UFUA’s suggestion that as a matter of statutory construction preference ought to be given to agreements that cover as much of an enterprise as possible. Section 238 permits a scope order which does not apply to the whole enterprise. In such a case the tribunal, in deciding whether the group is fairly chosen, must take into account whether the group is distinct in one of three specified respects. It may follow that if the group is not distinct in one of those respects it may not have been fairly chosen, but it does not necessarily follow in all circumstances. For present purposes it is not necessary to speculate upon the circumstances in which the conclusion might not follow.

[57] Section 238(4A) provides that if the scope order will not cover all of the employees of the employer, the tribunal must, in deciding whether the group was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct. We shall deal with this question first, since it is clear that neither party seeks an order which would cover all of the MFESB’s employees.

[80] Whilst the Full Bench in that matter did not provide any guidance as to when a group that is not distinct in any of the three respects outlined in s.237(3A) might be fairly chosen I am not convinced, because of the uncertainty inherent in the circumscription proposed by the AWU, that this is one of those circumstances.

[81] Whilst the Full Bench in UFUA found that the views of employees in determining the coverage of an agreement should be taken into account this is not a consideration that can be given weight in this matter. While the wishes of the disputed employees are known through their evidence, the wishes of all of the other employees that may be covered by the agreement are not known. Evidence given by some of the employees who will be covered by the agreement as to the true wishes and motivations of the disputed employees is highly subjective and speculative and therefore can be given little weight.

[82] The AWU submits that including the disputed employees will have adverse implications for the fair and efficient conduct of bargaining. That may be so but it is not a matter I am required to take into account in determining an application under s.236 of the Act. It is relevant to making a scope order under s.238 of the Act but not to a majority support determination. Under s.238 fair and efficient conduct of bargaining is a separate consideration to whether or not the group to be covered by the agreement is fairly chosen. If the fair and efficient conduct of bargaining was a required consideration under s.236 it is reasonable to expect it would have been listed as a matter I must take account of in making a determination. It is not.

[83] The AWU further submits that the evidence of the Debco employees who gave evidence on behalf of the AWU is that all of the disputed employees ‘act in some position of authority over the included employees and many possess the ability to take disciplinary action against the included employees.’ 20 This, it submits, creates a conflict of the type identified by the Full Bench in UFUA. On this matter I prefer the evidence of the disputed employees that only two of them have the authority to take disciplinary action against an employee and then only for minor matters. In UFUA it was the case that the employer (MFESB) was seeking to exclude some management groups from the scope of the proposed agreement. In those circumstances the Full Bench observed that:

Speaking generally there can be no doubt that such a conflict exists. To some extent the workplace relations system is based on the potential for conflict between employers and employees. In a world of corporations the employee manager stands in the shoes of the employer for many purposes including dispute prevention and resolution and the negotiation of terms and conditions of employment. We accept the potential for an entrenched conflict of interest to arise based on managerial responsibility if agreement coverage of operational employees extends into the senior management ranks. We recognise the potential for such conflict to arise even at the lower levels of management but we have in mind conflicts of interest of a more substantial character arising at senior management levels. We also have no doubt that conflict of interest considerations may be relevant in deciding whether the making of an order would promote the fair and efficient conduct of bargaining, whether the group was fairly chosen and whether it is reasonable to make an order. 21

[84] Whilst this is a relevant consideration, the determination of who should and should not be covered by the agreement must be made with reference to the circumstances of the particular matter. It is not the case at Debco that there is a group of employees who can be excluded on the basis of the title of their position which indicates some level of management authority (as was clearly the case in UFUA). It is also not the case that, in a workforce of around 30 employees, the ‘management’ or ‘supervisory’ role of the disputed employees results necessarily in a substantial reduction of time spent on day to day ‘hands on’ duties by those employees. In fact, the evidence of the excluded employees is that they spend a substantial amount of time undertaking hands on work. These are all relevant considerations in determining whether or not the group of employees has been fairly chosen.

[85] Debco’s submission on this matter is that, if there is going to be an agreement covering employees of Debco, it should cover all operations employees except for the National Operations Manager. If that is Debco’s preferred outcome it perhaps should have considered negotiating with the AWU when the AWU first sought to commence bargaining. Debco, as is its right, chose not to. That decision has brought the matter to where it is today.

[86] It is not relevant that there may be some other group of employees to be covered by the agreement that could also be seen as being ‘fairly chosen’. The starting point for the decision on whether or not the group to be covered by the agreement is fairly chosen is to consider the group proposed by the AWU in its application. In this respect, whilst Debco has raised a number of issues for consideration it is in the context of the AWU application that these must be considered.

[87] I have taken into account all of the material and evidence presented in this matter. For the reasons outlined above I do not consider that the AWU application provides for a group of employees to be covered by the agreement that is fairly chosen. I consider however, that there is, with a slight adjustment to the AWU proposal, the capacity to ensure that the group of employees to be covered by the agreement is fairly chosen taking into account their geographical, operational or organisational placement.

[88] Such a proposal would see the National Operations Manager and those direct reports to that position excluded from the group of employees to be covered by the agreement. 22 This would exclude those who are directly accountable to the National Operations Manager regardless of how they are paid of whether or not they supervise others. The employees to be excluded from the group to be covered by the agreement have a distinct role within Debco. The exclusion of this group would see excluded five of the six positions sought by the AWU.

[89] The group of employees to be covered by the agreement is therefore all of the operations staff excluding the National Operations Manager and those positions that report directly to the National Operations Manager employed by Debco at Tyabb. This group of employees is fairly chosen taking into account operational and organisational characteristics.

It is reasonable in all of the circumstances to make the determination

[90] As the wishes of the employees to be covered by the agreement is not yet finalised this matter cannot be addressed.

Do the majority of employees wish to bargain?

[91] Having determined that the AWU is competent to make the application and the group of employees to be covered by the agreement it is now possible to proceed to determine if that group of employees wishes to bargain.

[92] The matter will be called back on to finalise the method of determining the process by which the employees may indicate if they wish to bargain.

Union meeting with employees

[93] The parties have agreed that the AWU may meet with employees who wish to meet with it prior to the vote to determine if they wish to bargain. An issue arose as to where this meeting might occur. Debco submits the meeting should be in the conference room, while the AWU wishes it to be held in the ‘smoko’ area. Debco submits that the meeting room can be accessed without employees being seen by management. While the ‘smoko’ area is in the car park and can be seen from the manager’s office it is not Debco’s preference that customers should see a meeting occurring in the area.

[94] I have inspected the site and consider that the AWU should be permitted to meet with employees who wish to meet with it in the ‘smoko’ area. Employees gather in this area already and a meeting with the union representatives will create no more of an impression on customers using the car park as does smoking in the area.

[95] Any such meeting should be held the day before the meeting of employees at which employees will be asked to indicate if they wish to bargain. In this respect there should be no meetings with employees held by Debco management or the AWU on the day of the employee ballot.

COMMISSIONER

Appearances:

P. Reilly for the The Australian Workers’ Union.

D. McLaughlan, G. Ward and P. Jaeschke for Debco Pty Ltd.

Hearing details:

2011.

Melbourne.

2 & 18 May.

2011.

Tyabb.

28 June.

1 Concise Macquarie Dictionary.

2 Concise Macquarie Dictionary.

3 Shorter Oxford Dictionary.

4 Debco submission, 5 May 2011, paragraph 8.

5 Debco submission, 5 May 2011, paragraph 10.

6 Debco submission, 5 May 2011, paragraph 19.

7 Whilst Debco also considered a number of other industries mentioned in the AWU rules that are not pressed by the AWU are not canvassed in this decision.

8 The AWU Industry rule includes horticulture.

9 AN140192.

10 AN170077.

11 Item 51 of Part 2 of the Workplace Relations and Other Legislation Amendment Act 1996.

12 PR921909 (30 August 2002).

14 [1979] HCA 46; (1979) 141 CLR 577.

15 (1979) 141 CLR 577, 587.

16 (1979) 141 CLR 577, 580.

17 Clause 4.2(b).

18 Transcript PN 420-5.

19 [2010] FWAFB 3009.

20 AWU submissions 14 June 2011 paragraph 31.

21 [2010] FWAFB 3009, [67].

22 The effect of this is that the leading hand position, occupied by Mr Brewer, will be within the group of employees to be covered by the agreement.

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