The Australian Workers' Union v Sodexo Remote Sites Australia Pty Limited

[2013] FWC 6892

[2013] FWC 6892

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.238 - Application for a scope order

The Australian Workers' Union
v
Sodexo Remote Sites Australia Pty Limited
(B2013/188, B2013/189)

COMMISSIONER HAMPTON ADELAIDE, 25 SEPTEMBER 2013

Applications for scope orders - concerns about fairness and efficiency of the bargaining process - whether notice provided to all relevant bargaining representatives - whether opportunity provided to employer to respond was reasonable in the circumstances - valid applications found - whether applicant meeting good faith bargaining obligations - whether change in national scope to separate two sites would promote fair and efficient bargaining - some limited grounds found - not appropriate to make the orders given the basis of the findings and the circumstances of each matter - applications dismissed.

1. Introduction and case outline

[1] The Australian Workers’ Union, SA Branch 1 (AWU SA) has applied for orders seeking to redefine the scope of a proposed national enterprise agreement which is presently being negotiated in relation to various workplaces of Sodexo Remote Sites Australia Pty Ltd. In particular, it has made two applications seeking that two work locations in South Australia, Prominent Hill and Olympic Dam respectively, be removed from the scope of the national agreement and subject to their own bargaining processes.

[2] Sodexo relevantly provides catering, cleaning, accommodation management, security and various other site services at major mining, construction and related remote on-shore sites across Australia. The proposed national agreement, if made, would cover over 2100 employees at 39 remote sites. 2

[3] The proposed national agreement has been subject to bargaining processes under the Act since mid April 2013 when Sodexo provided the required Notice of Employee Representational Rights.

[4] On 3 July 2013, the AWU SA made an application 3 seeking a bargaining order against Sodexo on the basis that the employer had not been bargaining in good faith.4 In particular, the AWU SA contended that Sodexo had failed to respond to an AWU log of claims for a separate agreement to apply at Prominent Hill, and had not considered the particular circumstances of those employees. Further, it contended that the employer had instead taken steps to put the proposed national agreement out to a vote.

[5] The good faith bargaining application was dismissed by the Hamberger SDP on 5 July 2013 5 on the basis of a jurisdictional deficiency6 with the application. His Honour also made observations to the effect that Sodexo had genuinely considered the claim for a separate agreement to apply at Prominent Hill and rejected that proposal, consistent with its good faith bargaining obligations.7

[6] The proposed national agreement was put to employees for endorsement between 4 and 6 July 2013 and was not approved by a majority of employees who voted.

[7] The present applications have been made under s.238 of the Fair Work Act 2009. This provision is found in Division 8 of Part 2-4 of Chapter 2 of the Act. Division 8 provides for the Fair Work Commission to facilitate bargaining by making bargaining orders, serious breach declarations, majority support determinations and scope orders. It provides:

“Bargaining representatives may apply for scope orders

(1) A bargaining representative for a proposed single-enterprise 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 must have given notice of concerns

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

(a) has given 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.”

[8] There is no contest that the AWU SA is a bargaining representative for present purposes.

[9] The principal concerns relied upon in each application are very similar and include the following:

● The bargaining is not proceeding fairly or efficiently on the basis that the proposed national agreement involves bargaining about employees that it is inappropriate to cover (i.e. employees at the sites concerned);
● The interests of the employees at each of the two sites are not adequately being taken into account; and
● The present need to take into account the views of over 2000 employees at 30 or more different sites in different States, and the different issues pertaining to each site, adds complexity to the negotiations that could be avoided. 8

[10] There is no real contest that the AWU SA holds those concerns 9 and I am satisfied that that they fit within the scope of s.238(1) of the Act.

[11] There is also no single interest employer declaration touching upon these matters.

[12] Sodexo however contends that the applications are not validly made as the AWU SA has allegedly failed to meet the notification requirements of s.238(3) of the Act. Further, Sodexo contends that none of the relevant requirements of s.238(4) are satisfied in the case of either application.

[13] It is necessary for the AWU SA to satisfy the Commission that the applications are valid and that the circumstances are such that an order can and should be made in each case.

[14] The parties provided comprehensive written and oral submissions in these matters. I have also heard evidence from the following:

Called by the AWU SA:

● Mr Marcus Hanson - Campaign Organiser - AWU SA;
● Mr Nikola Blazinic - Security Officer employed by Sodexo at Prominent Hill;
● Ms Zoe Floyd-Smith - Service Attendant/Chef employed by Sodexo at Olympic Dam; and
● Mr Justin McMillan - Service Attendant employed by Sodexo at Prominent Hill and bargaining representative.

Called by Sodexo (all internal positions):

● Mr David McGregor - Director of Transformation and Human Resources;
● Ms Brenda Hockey - Human Resources Business Partner;
● Ms Claire (Jenny) Collins - Industrial Relations and Policy Manager; and
● Mr Nigel Langford - Head of Regional Operations for SA and Victoria.

[15] United Voice appeared in these proceedings and indicated that it did not oppose either application.

2. The notification requirements - S.238(3)

[16] Section 238(3) requires, in effect, that prior to bringing these applications the AWU SA must have provided written notice of its concerns, that bargaining for the agreement is not proceeding efficiently or fairly, to each relevant bargaining representative.

[17] In addition to Sodexo and the AWU SA, it is now evident that the Australian Workers’ Union, WA Branch (AWU WA); United Voice, NT Branch and United Voice, SA Branch are all bargaining representatives within the meaning of the Act in relation to the national agreement. In addition, there are 21 employee bargaining representatives including two representatives at Prominent Hill and five at the Olympic Dam site.

[18] The AWU SA provided formal written notice of its concerns to Sodexo on 19 July 2013. It did not provide notice to any other bargaining representatives. It also lodged each application in the late afternoon of 24 July 2013 without receiving an actual response to the issues that it had raised from Sodexo in that particular period.

[19] The AWU SA knew that its sister branch, the AWU WA, and United Voice NT were bargaining representatives prior to giving the required notice to Sodexo. It knew that there were employee bargaining representatives, including potentially at the Prominent Hill and Olympic Dam sites, and more generally at other sites within the scope of the proposed national agreement. Despite requesting details of other bargaining representatives from Sodexo, it was not made aware of, or knew about, the identity of the employee bargaining representatives other than potentially those of its own members performing in that role. The AWU SA was also not aware of the fact that United Voice SA was also a bargaining representative, prior to lodging these applications.

[20] Given the requirements of the Act, the following issues arise.

2.1 Who are the relevant bargaining representatives for the purposes of the AWU SA giving notice of its concerns:

● AWU WA;

● United Voice SA;

● United Voice NT; and/or

● The various employee bargaining representatives?

[21] As outlined above, Sodexo is a bargaining representative and was given notice.

[22] The national office of The Australian Workers’ Union attended some initial bargaining meetings with Sodexo however it has not been suggested that it is a bargaining representative in its own right for present purposes.

[23] The question of the meaning of a “relevant” bargaining representative in this context was considered by the Full Bench in AMIEU v Woolworths Ltd. 10 That case involved an appeal of a decision rejecting a scope order application by the Australasian Meat Industry Employees Union (AMIEU) on the basis that it had failed to provide the requisite notice to the Shop, Distributive and Allied Employees Association (the SDA). The Full Bench said:

“[16] The SDA had apparently reached “in principle” agreement with Woolworths on a draft national agreement. It could be expected to have a view on the AMIEU’s concerns as a participant in the bargaining process and it might not have agreed to support an agreement with the revised scope. That would likely be a consideration of significance for Woolworths and in the bargaining. We think in this case, on any reading of s.238(3), that the SDA was a “relevant bargaining representative.” It needed to be included in the process by operation of the Act.”

[24] I do not understand that the Full Bench laid down general principles and I note that the relevance of the SDA was not in contention in the appeal. However, its approach provides guidance as to the assessment of relevance.

[25] Consistent with that approach, the consideration as to which representatives are relevant must be informed by the evident purpose of the provisions and the circumstances of each case.

[26] The requirements are that an applicant seeking scope orders must provide a notice to the “relevant bargaining representatives” of its concerns, provide those bargaining representatives with a reasonable opportunity to respond and then to consider the appropriateness of that response.

[27] The purpose of this notice must be to test whether, before the application is made to the Commission for orders, the bargaining process and scope which is the source of the concerns can be rectified by the reasonable endeavours of the bargaining representatives themselves, in a manner that conforms to the good faith bargaining process.

[28] This approach appears to be supported by the Explanatory Memorandum, which states:

“These same preconditions apply for bargaining orders (except that for bargaining orders, FWA has the ability to waive the requirement to give the written notice of concerns). This requirement is included to encourage bargaining representatives to consider resolving issues surrounding the scope of a proposed enterprise agreement through the good faith bargaining process. It also ensures that it is no more expedient to obtain a scope order rather than a bargaining order.” 11

[29] Given that purpose, relevance should be assessed having regard to whether the bargaining representative could be expected to have a view on the scope of bargaining and whose interests would need to be taken into account consistent with the good faith bargaining obligations. It is clear that not all bargaining representatives will be relevant in each case and in that context, the nature and degree of their interest should also be considered.

[30] The scope order applications seek the alteration of the single national agreement scope to, in effect, exclude two sites in South Australia. The initial consideration must therefore focus on whether each bargaining representative could be expected to have a view about a change to that national scope and whether their interests are sufficiently impacted. I leave aside for the moment the employee bargaining representatives and the awareness of the AWU SA of the identity of the various representatives.

[31] This means that the AWU WA, United Voice SA and United Voice NT would potentially be relevant. However, it is unlikely that that either the AWU WA or United Voice NT would have sufficient interest in this particular change of scope to be considered relevant. This is to be contrasted with the nature of the interest in the Woolworths case where the SDA had already reached an in-principal agreement with the employer and was likely to oppose the change of scope to exclude some of the employees.

[32] Although United Voice SA has now indicated that it does not object to the applications, it apparently has members in South Australia who would be covered by the national scope (and potentially at each of the two sites concerned) and could be expected to have a relevant view on the change of scope to exclude the two South Australian sites.

[33] The employee bargaining representatives, particularly those at the two sites concerned, would on face value also be expected to have a relevant view on the change of scope.

[34] On that basis, both United Voice SA and the employee bargaining representatives, particularly those at Prominent Hill and Olympic Dam, are potentially relevant for present purposes. I note that Sodexo did not expressly rely upon the employee bargaining representatives as part of its jurisdictional challenge. 12

[35] Sodexo met separately with each of the bargaining representatives and no collective meetings were conducted. The AWU SA was not informed about the involvement of United Voice SA by either that Union or Sodexo. It did know about the involvement of United Voice NT, due to the receipt of a log of claims, and that various employee bargaining representatives had been appointed. However, at the time of providing the notice it was not aware that United Voice SA was a bargaining representative; or, with some limited exceptions, where the employee representatives were located, or who they were. It sought details of the names and addresses of other bargaining representatives from Sodexo but this was refused. 13

[36] I note that the AWU SA called Mr McMillan as one of its witnesses in this matter and that he is both a bargaining representative and a member. It is likely that the AWU SA was aware that he was a bargaining representative at the time of giving the notice. 14 It is also the case that it was probably aware of other members who were bargaining representatives at that site.15 However, even if this is the case, their interests are ostensibly coexistent with those of the AWU SA.

[37] It is reasonably clear that to be relevant, the bargaining representatives must have been appointed or acting as default representatives at the time the notice was provided. However, is it necessary that, in this case, the AWU SA was aware of the identity of the other bargaining representatives in order for them to be relevant?

[38] Sodexo relies upon the following view taken by the Commission in the AMIEU vWoolworths case at first instance: 16

“[88] In short, there is no statutory support in the FW Act for the public identification, at a prima facie level (putting aside any challenge in relation to coverage) of a bargaining representative or of the bargaining representatives. For reasons that will become clear, a bargaining representative therefore must act with care and by its own due diligence, it appears, in order to identify all the bargaining agents on the bargaining terrain for purposes of ensuring it meets the requirements of s.238(3) of the FW Act (or otherwise for purposes of meeting the good faith bargaining requirements of the FW Act generally).”

[39] I leave aside whether there is an implied obligation to identify bargaining representatives to each other in order that they can meet their good faith bargaining obligation to recognise and bargain with other representatives. 17 This is not presently relevant.

[40] The AMIEU vWoolworths decision at first instance also involved issues associated with the non-provision of notice to another employer identity (Woolworths (South Australia) Pty Ltd) that was not known to the AMIEU, and the AWU, which was known to the AMIEU but did not play any active role in the negotiations and was effectively acting in concert with the SDA. The learned Senior Deputy President observed as follows:

“[115] Whilst the basis for distinguishing “relevant” bargaining representatives from all bargaining representatives in the bargaining process might be fraught, in my view it would at least extend to those bargaining representatives who are complicit (directly or indirectly) in the “concerns” which have been the subject of the written notice under s.238(3) of the FW Act. It is because they are complicit in manner I have described that a bargaining representative is ascribed the identity as a “relevant bargaining representatives” for the purpose of the section.

.....

[119] I have not found Woolworths (South Australia) Pty Ltd or the AWU to be “relevant bargaining representatives” because of the submergence of their identity and interests for all practical purposes with Woolworths Ltd and the SDA respectively. The AMIEU’s failure to give those bargaining representatives (Woolworths (South Australia) Pty Ltd and the AWU) written notice of its concerns does not enliven an issue under s.238(3) of the Act.”

[41] Those observations were said in passing, but are illustrative of the approach adopted by His Honour to this issue. 18 The question of which bargaining representatives are relevant in this context has also been considered in other matters.

[42] For example, in Construction, Forestry, Mining and Energy Union v Veolia Environmental Services (Australia) Pty Ltd, 19 the Commission held that appointed bargaining representatives were relevant because their responses on issues about negotiations for separate State agreements, which were in their final stages, would be significant.20 In terms of the difficultly with knowing of the appointment and identity of the representatives, the Commission noted that the applicant union was aware of these representatives and relied upon their support, but took no steps to establish whether other representatives had been appointed or to provide them with notice.21

[43] In “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) - WA Branch v Airflite Pty Ltd, 22 the Commission considered that the employee bargaining representatives were not relevant in part because their names were not known to the applicant and they did not form part of its bargaining process with the employer.23

[44] There is accordingly, some recognition in the decisions of this Commission that the awareness of an applicant about the existence of other bargaining representatives is a consideration. The degree of connection to the scope issues is also apposite. Further, there would appear to be at least some obligation upon an applicant in these circumstances to exercise due diligence to ascertain the identities and circumstances of other bargaining representatives who might be relevant.

[45] However, any view that all bargaining representatives would be relevant, even where the applicant could not know of their involvement, would not be consistent with the earlier decisions of the Commission or with the apparent intention of the Act.

[46] In terms of those bargaining representatives that were known to the AWU SA, I consider that the interests of the AWU WA and United Voice NT are sufficiently discrete, from the concerns of the AWU SA and the proposed scope changes, for them to be considered relevant for the purposes of giving notice in each case. In terms of Mr McMillan and any other representatives who were known by the Union because they were members, their interests are sufficiently coexistent for them also not to be relevant bargaining representatives for the present purposes of giving notice.

[47] As a result, I am satisfied that the AWU SA notified all relevant bargaining representatives of their concerns.

2.2 Did the AWU SA give Sodexo a reasonable time within which to respond to the written concerns relied upon to support the applications and if so;

Did the AWU SA consider that Sodexo has not responded appropriately?

[48] The evidence reveals that the AWU SA first advised Sodexo that it was seeking a separate agreement for the Prominent Hill site on 5 June 2013. It formally raised that proposed outcome in relation to Olympic Dam for the first time on 16 July 2013. 24

[49] On 13 June 2013, the AWU SA wrote to Sodexo and raised concerns about the bargaining process, the request for the negotiation of a separate agreement for Prominent Hill, and linked that request to concerns about the fair and efficient conduct of negotiations without specifying the entire basis of those concerns. Sodexo responded to and rejected the Union’s position on 20 June 2013. 25

[50] On 16 July 2013, the AWU SA wrote to Sodexo advising that it was seeking a separate agreement for Olympic Dam and the reasons for that approach. This referred to the promotion of more fair and efficient negotiations and the factors leading to the view that the site should be treated differently, but did not expressly deal with some of the concerns over the existing bargaining process now relied upon. That correspondence also sought a range of responses to a list of factual questions.

[51] On the same day, the AWU SA also wrote a very similar letter to Sodexo in relation to Prominent Hill.

[52] On 17 July 2013, Sodexo and the AWU SA met, and amongst other matters, discussed the proposal for the two separate agreements. Later that day, the AWU SA wrote to Sodexo about each of the two sites and confirmed the request that they be subject to separate negotiations and notified the employer that it would be filing scope order applications.

[53] Later on 17 July 2013, Sodexo responded to the AWU SA and confirmed its earlier views that it was not appropriate to have separate agreements for Prominent Hill or Olympic Dam and further outlined the basis of its position on that issue. This included the contention that the proposed national agreement scope was not contrary to the fair and efficient conduct of negotiations. In addition, the response confirmed that it had made its final offer in relation to the proposed national agreement and intended to put a revised proposal to employees within the next four weeks. Finally, Sodexo confirmed an offer to discuss site specific matters outside of the bargaining process. 26

[54] On 18 July 2013, the AWU SA again wrote to Sodexo and in a series of letters sought further information about the original ballot and the follow-up with bargaining representatives and employees after the vote rejected the proposed agreement (the good faith bargaining information requests). It also foreshadowed bringing a bargaining order application based upon the alleged lack of an appropriate response on those issues.

[55] Sodexo apparently wrote to the AWU SA on 19 July 2013 raising concerns about the number and nature of the good faith bargaining information requests.

[56] The concerns underpinning each of these applications were formally notified to Sodexo late in the afternoon (5.31pm SA time) on Friday 19 July 2013. In separate correspondence relating to each site, it also sought a response by 4.00pm 24 July 2013 but indicated that if Sodexo considered the timeframe was unreasonable, to advise what alternative was proposed and why.

[57] On 19 July 2013, the AWU SA also consolidated the good faith bargaining information requests and sought an urgent response including a date by which any response could be provided.

[58] On 22 July 2013, Sodexo acknowledged the various letters of 18 and 19 July by email and indicated that it would respond as soon as reasonably practicable.

[59] On 23 July 2013, the AWU SA followed up with Sodexo in relation to the good faith bargaining information requests. It did not specifically deal with the scope order concerns. Sodexo replied by email on 24 July at 4.50pm (SA time) and indicated that its response to the information requests and the other matters would be provided by the end of that week or early in the week after.

[60] These applications were filed with the Commission at 4.50pm (SA time) on 24 July 2013 and this precisely coincided with the email from Sodexo outlined above. These applications were served upon Sodexo shortly thereafter.

[61] I note that Mr Marcus Hanson, the Campaign Organiser for the AWU SA, contended in evidence that there may have been a meeting, or at least some discussion, on 24 July 2013 with Sodexo. However, he was uncertain about the details and there is no other evidence to support that event taking place. On balance, I find that such did not occur.

[62] I add for completeness that Sodexo formally replied to the allegations about good faith bargaining, the scope issues and the information sought by the AWU SA on 30 July 2013. For reasons outlined above, it did so in the knowledge that the scope order applications had already been filed.

[63] Whether a reasonable timeframe has been provided for a response to the scope order concerns is a matter of judgment in the particular circumstances of each case. The various circumstances must also be assessed in the context of the evident statutory purpose of this step as discussed earlier in this decision. Further, although the broad factual context is very important, it is the period between the giving of the written notice of the concerns and the making of the applications that must be considered as being reasonable. Finally, there is no capacity for the Commission to waive the requirements and this adds emphasis to the importance of this step.

[64] In these matters, the relevant period is from late afternoon on Friday 19 July until late afternoon on Wednesday 24 July 2013.

[65] Those circumstances tending to support the notion that the period was reasonable in these matters include:

● The request for a separate agreement in relation to Prominent Hill had been known for some weeks prior to the notice;
● The broad concerns now relied upon by the AWU SA had been advised to Sodexo through previous discussions and correspondence;
● In general terms, the same concerns as relied upon in terms of Prominent Hill are also relied upon in relation to the other application concerning Olympic Dam;
● The concept of having the two separate agreements had been discussed on 17 July 2013 and had been comprehensively rejected by Sodexo, on grounds relating to the concerns relied upon by the AWU SA, prior to the giving of the notice;
● Sodexo was on notice from 17 July 2013 that the concerns were raised in the context of likely scope order applications;
● The timeframe for the response was advised by the AWU SA at the time of giving notice and Sodexo was invited to suggest an alternative if that was considered to be unreasonable (which it did not do); and
● The indication by Sodexo that a response would be provided later that week was provided after the nominated time of 4.00pm and (coincidently) at the same time as the application was filed.

[66] Those matters militating against the notion that a reasonable opportunity was provided include:

● Some of the actual concerns to be relied upon were not formally provided to Sodexo prior to late on Friday 19 July 2013;
● The request for Olympic Dam to be subject to a separate agreement was made only a few days prior to the notice;
● The period provided was in effect only three week days and two weekend days;
● The good faith bargaining information requests were comprehensive and made in parallel with the notice and with the same timeframes; and
● Although there was an earlier indication that Sodexo proposed to put the national agreement out to ballot again, no formal notice of that intention had been provided before the applications were filed.

[67] In most circumstances, a period of the duration provided here would not be reasonable. However, on balance, I consider that the AWU SA provided a reasonable opportunity to Sodexo to respond to its concerns given the particular circumstances in which that opportunity was given. In particular, the fact the proposals had been comprehensively discussed and rejected by Sodexo prior to the giving of the notice, is significant in terms of what was reasonable.

[68] I turn to the related question of the AWU SA’s consideration of Sodexo’s response to the concerns outlined in the notice. The only response to those concerns, between the time of giving notice and the making of the applications, was on 22 July 2013 when Sodexo acknowledged the correspondence and indicated that a response would be made in writing as soon as reasonably practicable.

[69] Importantly, s.238(3)(c) of the Act in this case requires an assessment of whether as a fact the AWU SA considered that Sodexo had not responded appropriately. It does not require me to assess whether that view was objectively reasonable.

[70] The position of the AWU SA is that the lack of a response to the actual issues raised in the notice, by the time of making the application, was considered to not be an appropriate response. Although the reasonableness of that was challenged, it is not seriously in dispute that this was so and in any event is supported by the evidence. In that regard, Sodexo did raise the proposition that instructions had been given by Mr Marcus Hanson to launch these proceedings before the formal notice was provided to Sodexo. However, it is clear from the evidence that the AWU SA took the view that in the absence of a positive response by 4.00pm on 24 July 2013 (or potentially such later time if a reasonable request was made by the time), it would make the applications.

[71] For reasons previously outlined, I note that in effect, the substantive concerns and the grounds for seeking the scope orders had already been raised and rejected by the time that the (formal) notices were given.

[72] On that basis, I am satisfied that the requirements of s.238(4) as they apply to the giving of notice and related requirements have been met in both cases.

3. Satisfaction that orders can be made - S.238(4)

[73] The orders can be made in each case only if the Commission is satisfied that each of the requirements of s.238(4) is met. In this matter, the following issues arise.

3.1 Has the AWU met, or is meeting, the good faith bargaining requirements - s.238(4)(a)?

[74] The good faith bargaining requirements are established by s.228 of the Act in the following terms:

“S.228 Bargaining representatives must meet the good faith bargaining requirements

(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:

(a) attending, and participating in, meetings at reasonable times;

(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;

(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;

(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;

(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;

(f) recognising and bargaining with the other bargaining representatives for the agreement.

(2) The good faith bargaining requirements do not require:

(a) a bargaining representative to make concessions during bargaining for the agreement; or

(b) a bargaining representative to reach agreement on the terms that are to be included in the agreement.”

[75] It is necessary for the AWU SA to satisfy the Commission that it was meeting, or is now meeting, these obligations.

[76] Sodexo contends that the AWU SA has failed to met its good faith bargaining obligations by:

● Making a multitude of vexatious requests for information from Sodexo;

● Failing to give written notice of its concerns to other relevant bargaining representatives;

● Failing to uphold the in-principal agreement reached at the directions conference of the Commission on 30 July 2013;

● Indicating that, contrary to recommendation of the Commission made in the lead up to this hearing, bargaining would need to start afresh if the scope orders were to be made;

● Refusing, until recently, to confirm whether it had additional claims; and

● Failing to bargain in good faith with the other bargaining representatives?

[77] I have considered each of these matters and the bargaining more generally and I am satisfied that the AWU SA has been, and is, meeting its good faith bargaining obligations in relation to both applications.

[78] I do not consider that the information requests by the AWU SA were vexatious, albeit that they could have been simplified. The delay in providing final details of the union’s claims is an issue but not so as to be contrary to its obligations.

[79] There was an in-principle agreement reached at the directions conference concerning how the negotiations would be continued given the timing and hearing of the applications by the Commission. That agreement required the parties to discuss and confirm the consequential details and these could not apparently be agreed at that time. There have however been further discussions between these parties.

[80] Given the absence of agreement about progressing negotiations at that time, I did issue certain recommendations. The response by the AWU SA to those recommendations was not as described by Sodexo. I accept that Mr Marcus Hanson indicated on behalf of the Union that further negotiations would be appropriate to deal with any local issues. 27 This is not inconsistent with the recommendations and ironically, is one consideration that must be taken into account in terms of the efficiency of the alternative scopes.

[81] In terms of the provision of notice to, and bargaining with, the other representatives, this was limited by Sodexo’s approach to the disclose of the information and the negotiations more generally. The AWU SA took reasonable steps to seek that information and to have discussions conducted on a collective basis. The fact that this could not occur could hardly be held against the AWU SA in the present context.

3.2 Would making the orders promote fair and efficient bargaining - s.238(4)(b)?

[82] The AWU SA contends that the orders would promote fairness and the efficient conduct of the negotiations on the following basis:

● There is no uncertainty about the scope of employees at each of the two sites;
● The employees at the two sites are not mutually dependent upon each other or any of the other mining sites within the national scope;
● The employees at the two sites want local agreements;
● The issues being raised in the 37 other sites for the national agreement are different;
● The cohort at each of the two sites is small in the context of the national scope and their interests are being swamped and this would not occur under separate agreements;
● The capacity of the AWU SA members at each site to take protected action was curtailed by the national scope;
● The apparent desire of Sodexo to standardise the conditions and wages across its Australian on-shore sites risks the erosion of existing conditions at the two sites; and
● There have been no common meeting of bargaining representatives of all sites and the change in focus will permit the relevant local representatives to properly participate in the negotiation process.

[83] Sodexo contends that the making of the scope orders would not meet the requirements of s.238(4)(b) on the following grounds:

● Sodexo’s interests as the employer are relevant and the achievement of a single national agreement is desirable as it provides the necessary degree of flexibility to meet its existing contractual obligations, secure new contracts and provide job security to its employees as demand changes at various sites;
● There is a relief roster system that involves employees working across various sites and the maintenance of common provisions assists in that regard;
● The range of classifications and working arrangements at the two sites are not unique to either of the sites;
● A significant number of important terms that are being pursued are common to all of the employees under the national scope;
● At present, all 39 on-shore sites operate on a single national agreement, with the exception of Olympic Dam, which has an agreement which is very similar to the national agreement;
● The AWU SA’s views about the scope are not representative;
● The bargaining process is in its late stages and a change to the scope would not promote efficiency; and
● The current process of negotiations is not unfair or inefficient as bargaining has been taking place with each of the bargaining representatives and there is no obligation that this occur simultaneously.

[84] The scope of the present national negotiations comprehends some 39 different sites and in the order of 2150 employees. All of these sites and employees are presently covered by the Sodexo Remote Sites Onshore Employee Collective Agreement 2008 28 (the 2008 collective agreement), with the exception of Olympic Dam, which is covered by the Sodexo Olympic Dam Employee Collective Agreement 200829(the Olympic Dam agreement).

[85] Although the precise numbers do vary, there are in the order of 83 employees at Prominent Hill and 145 employees at Olympic Dam. Sodexo also has relief pools that are drawn on to fill vacancies and the pool operating in relation to its South Australian and Victorian sites is in the order of 60 employees. As at the end of August 2013, the numbers drawn from this pool were small in terms of the Prominent Hill and Olympic Dam sites (a total of three). The total national relief pool was over 300 employees and many of the other sites within the national scope had a higher utilisation of relief employees. 30

[86] The membership of the AWU SA at Prominent Hill is 19 and it has 11 members at Olympic Dam.

[87] In addition to the various union bargaining representatives, there are 21 employee bargaining representatives including two representatives at Prominent Hill and five at the Olympic Dam site. As outlined earlier, Sodexo has sought to deal with each of the bargaining representatives separately and it has conducted separate meetings or had individual communications with most of these representatives. I do note that some joint meetings involving Sodexo, the AWU SA and the AWU WA were conducted early in the negotiations.

[88] Sodexo put a proposed national agreement to employees in early July 2013 and this was not approved by a majority of the employees who voted. 31 Following that vote, there have been some limited further discussions with bargaining representatives, and Sodexo has sought feedback from employees and has developed a revised proposal for a national agreement. Subject to the outcome of these applications, Sodexo intends to put that revised proposal to employees for approval in early October this year.

[89] The requirements of s.238(4)(b) are that making the order will promote the fair and efficient conduct of bargaining. Having regard to that requirement, the objects of the Act and the authorities cited by the parties, 32 I consider that this assessment should be based upon the following approach.

[90] It is not necessary that the present bargaining be considered to be unfair or inefficient however findings to that end would clearly be relevant and would be conducive to a finding that the requirements of this provision may be met by an alternative scope for bargaining.

[91] The applicant for a scope order must demonstrate that the making of the order would promote, that is encourage and facilitate, bargaining that is fairer and more efficient than if no order was made. That assessment is to take into account the interests of all relevant parties who are subject to the bargaining process, including those who are seeking the order, the other party (in this case the employer) and other bargaining representatives, and involve the weighing up of the relevant considerations touching upon the issue.

[92] In terms of the interests of the employees, this will include consideration of the extent of common issues, the divergence of circumstances and apparent interests, and the consequences of the various proposals in relation to the scope of the negotiations. Where minority interests are said to be involved, this will involve consideration of whether those interests are sufficiently different and whether they are at risk of being overridden by the majority who have different interests. 33

[93] The relevant considerations may also include the progress of negotiations and their status at the time of making the decision, and the history of industrial regulation in relation to the employees subject to the bargaining process.

[94] I have considered the various contentions of the parties and the overall circumstances of these matters against this approach.

[95] It is convenient to start with a consideration of the present negotiations and the features touching upon fairness and efficiency in that context. The national negotiations are more complex than those that might be conducted at a single site due the number of bargaining representatives, their location and the logistics involved. That complexity does not of itself lead to unfairness or otherwise, but is a consideration particularly in terms of the capacity for individual bargaining representatives to fully participate in the process.

[96] However, capacity for the bargaining to comprehend a single agreement and for a single process to be conducted has significant efficiencies for Sodexo and those bargaining representatives with interests across multiple sites. A site by site approach for example would be very time and resource intensive.

[97] I do have some reservations about the fairness of the present process. The fact that the negotiations have been conducted in a manner whereby the bargaining representatives have not had access to the positions of other bargaining representatives is in my view not necessarily conducive to fair bargaining. This does not mean that such negotiations cannot be conducted with different discussions happening in parallel, 34 however the complete isolation until very recently of the positions advanced by the various unions and individual bargaining representatives from one another, is an issue. This does not necessarily mean that the scope of the negotiations must change; rather, it is a consideration to the extent that a change in scope might impact upon any unfairness.

[98] I have reviewed the evidence as it applies to the considerations more generally and I also find as follows:

● There are some different issues being pursued by the various employee interests at various sites however the major matters deal with common themes;
● All sites, with the exception of Olympic Dam, are currently subject to the same enterprise agreement terms;
● The Olympic Dam agreement is different to the 2008 collective agreement in some terms including the base wages levels, the wage payment period and the absence of a service award payment. 35 However, the coverage of classifications, the shift and related provisions and the substantive conditions more generally are very similar to the 2008 collective agreement;

There are differences in terms of the Long Service Leave and workers compensation arrangements between the different States and Territories. Accordingly, these apply to all sites and where relevant to agreement terms have been accommodated to date in the 2008 collective agreement and are not a significant factor in the present context;

● There are some differences between the operations of Prominent Hill and Olympic Dam from each other and from some other sites, however, they are not unique in terms of the other sites within the national scope;
● The functions covered, the shift arrangements and the classifications of employees at the Prominent Hill and Olympic Dam sites are also found in some other sites within the national scope;
● There is a significant level of support from employees for the negotiation of separate agreements at Prominent Hill and Olympic Dam, however it is not possible given the indirect nature of the evidence, to ascertain the precise level of that support;
● There is no evidence that the issue of separate agreements had been raised by any bargaining representatives, other than with respect to Prominent Hill and Olympic Dam sites;
● Given the similar starting point in terms of existing enterprise agreement conditions and the fact that the operational and other features of the two sites are not unique, the extent of the difference of employee interests evident at Prominent Hill and Olympic Dam is not significant;
● The rejection of, and the relatively low voter participation for, the originally proposed agreement was probably the result of a range of factors, including the concerns about the terms of the agreement, the extent of the wage adjustments proposed, concerns about the lack of local negotiations in some cases, and the method of voting used (telephone);
● A common set of minimum conditions across its on-shore operations would assist Sodexo in terms of the ease of transferring employees, its use of the relief pool, the common application of management systems within the on-shore business, and its tendering for new or continued contracts. This is a legitimate business interest. However, it should be noted that the exchange of staff (to and from the two sites concerned and with other sites) is relatively limited and Sodexo operates with different agreements in at least some other operational parts of its business; and
● Sodexo has a legitimate business interest in having an enterprise agreement in place at the earliest opportunity, particularly at Olympic Dam, given the present tendering of the work in question.

[99] The fact that the scope applications have been taken out relatively late in the negotiation process, particularly in relation to Olympic Dam, has an impact in terms of the efficiency of potentially having to change the scope to in effect require two additional processes. This is despite the fact that the negotiations and proposals to date can and should be used as the starting point should the orders be made.

[100] To the extent there are different interests between the employees otherwise covered by the national scope and those at Prominent Hill and Olympic Dam respectively, this is a factor. The impact upon bargaining power is also relevant. However, there is little evidence to support the proposition that those differences are objectively significant. Further, the fact of different interests by itself does not mean that the scope should be altered in circumstances where it is feasible to cater for those differences within the existing scope of negotiations. For example, it is entirely feasible that different existing conditions and circumstances can be recognised in any national approach. 36

[101] On balance, I find that a change in the scope as proposed in each application would marginally improve the aspect of unfairness that I consider is present in the existing process and be more efficient at least in terms of the immediate bargaining process at Prominent Hill and Olympic Dam. That is, it would potentially be more effective and more efficient to have the bargaining representatives at these sites participate in a local process and in that way promote the fair and efficient conduct of negotiations. However, that change in scope would impact upon the overall efficiency of the process and would not of itself guarantee that a more open bargaining process was adopted. Further, the difference of interests between these employees and the others in the national scope is also not objectively significant.

[102] There are accordingly, some grounds to meet the requirements of s.238(4)(b) of the Act in each case. However, the nature and limited basis of these findings is a significant consideration in terms of whether orders should ultimately be made.

3.3 Has the group of employees who would be covered by the agreement specified in each scope order been fairly chosen - s.238(4)(c) and s.238(4A)?

[103] Given that the agreement scope proposed in each of the scope orders would not cover all employees of Sodexo, s.238(4A) of the Act requires that I must for this purpose take into account whether the group is geographically, operationally or organisationally distinct. 37 That is, I must consider and give weight to these considerations as fundamental elements when determining the fairness of the proposed scope.38

[104] The AWU SA has proposed the following scope in relation to each order:

“This Agreement shall apply to Sodexo Remote Sites Pty Ltd (“the Company”) in respect of all employees (excluding employees on supported wage systems) of the Company in relation to all work performed at the Prominent Hill/Olympic Dam mine site and facilities that provide services to the Prominent Hill/Olympic Dam mine site engaged in the classifications contained in this Agreement to provide catering, cleaning, facilities management and related services in classification or positions that are junior to the position or classification known in June 2013 as “Assistant Project Manager”. 39

[105] Although there is some transfer of employees between sites, there is no general rotation of staff and both Prominent Hill and Olympic Dam sites are geographically distinct from each other and from the other sites within the national scope.

[106] The scope of the national agreement being proposed by Sodexo is as follows:

“This Agreement shall apply to Sodexo Remote Sites Pty Ltd (“the Company”) in respect of all employees (excluding employees on supported wage systems or those covered by a site specific enterprise agreement) employed throughout Australia engaged in the classifications contained in this Agreement to provide catering, cleaning, facilities management and related services to the onshore resources and construction industry which includes but is not limited to operations such as construction, mining, milling, smelting, refining and processing of minerals and hydrocarbons.”  40

[107] I understand that the reference to the exclusion of site specific enterprise agreements is not intended to exclude employees at the Olympic Dam site. Rather, it would appear to recognise the impact of current enterprise agreements in line with s.58 of the Act. 41

[108] The fact that each of the proposed scopes do not include all employees at the various sites, is indicative of the fact that there are differences between the operational roles of the excluded employees in each case.

[109] The essential question here is whether the group who would be comprehended by each of the proposed scope orders was fairly chosen. I am satisfied that this is so in each case.

[110] Although probably not a direct consideration, I also find that the scope of the proposed national agreement is fairly chosen.

4. Is it reasonable in all of the circumstances to make the orders - s.238(4)(d)?

[111] A positive finding in relation to the requirements of s.238(4)(a), (b) and (c) of the Act is an important consideration in terms of whether it is reasonable in all of the circumstances that the orders be made. It is also necessary to consider whether any discretion to make orders should be exercised.

[112] In this matter, although I have found that the making of the orders would promote the fair and efficient conduct of negotiations to some degree, the relevant findings were made on balance and the potential improvements to the bargaining process are marginal and somewhat indirect. Further, there are also efficiency consequences associated with the proposed change of scope and the effective conduct of what would become three bargaining processes.

[113] I have also considered the status and conduct of the present bargaining process, the degree of commonality of interests amongst the employees concerned, and the capacity for the employees to collectively accept or reject the revised proposed national agreement in a ballot which would otherwise take place shortly.

[114] I have also had regard to the timing of each request for the change in scope, the impact upon Sodexo and the other bargaining representatives, and the history of industrial regulation concerning these parties.

[115] In all of the circumstances of each case, it is not reasonable that the orders be made at this time. I am also not persuaded that it would be appropriate to exercise any discretion to make the orders given those same circumstances.

[116] Two additional comments should be made regarding these matters.

[117] All parties should be careful in their explanation of this decision to employees. That is, in order for employees to make a genuine decision about any proposed agreement in the present context, it is desirable that the employees are informed not only of the outcome of this decision, but the essential findings.

[118] Further, in the event that the foreshadowed ballot for the national agreement does not receive majority employee approval, I would recommend that the relevant parties seek the assistance of the Fair Work Commission to more directly facilitate negotiations pursuant to s.240 of the Act.

[119] The present applications are dismissed.

Appearances:

J Hanson of the Australian Workers’ Union, SA Branch.

A Cochrane of the Australian Mines and Metals Association for Sodexo Remote Sites Australia Pty Limited.

L Harrison and later P Dean for United Voice, SA Branch.

Hearing details:

2013:

September 12.

 1   The application was lodged in the name of The Australian Workers’ Union, however it was made by the SA branch and the proceedings were ultimately conducted on that basis.

 2   Sodexo 3.

 3   B2013/1013.

 4   Section 228 of the Act.

 5   In transcript following an expedited hearing.

 6   The failure to provide Sodexo with notice of the concerns in relation to the alleged failure to meet the good faith bargaining obligations (s.229(4)(b) of the Act).

 7   Transcript of proceedings before SDP Hamberger - PN666.

 8   Notice provided to Sodexo on 19 July 2013. There are other grounds of the two applications set out in the initiating documents.

 9 It is sufficient that the concerns are in relation to the matters in s.238(1)(b) and that they are not fanciful or asserted for the purpose of attracting jurisdiction see: AMIEU v Woolworths Ltd[2009] FWA 849 per Richards SDP.

 10   [2010] FWAFB 1625.

 11   Explanatory Memorandum to the Fair Work Bill 2009 at Item 983.

 12   Transcript PN1220 to PN1222. Ms Cockrane for Sodexo did however later refer to the circumstances of some individual bargaining representatives (PN1295).

 13   AWU1 at par 34 and 35.

 14   Transcript PN377.

 15   Transcript PN374.

 16   AMIEU v Woolworths Ltd[2009] FWA 849 per Richards SDP at par [88].

 17   S.228(1)(f) of the Act.

 18   These aspects were obiter and were not considered by the Full Bench.

 19   [2010] FWA 9211, 30 November 2010 per Cartwright SDP.

 20 Ibid at par [14].

 21 Ibid at par [15].

 22   [2010] FWA 1723, 2 March 2010 per Cloghan C.

 23 Ibid at par [32].

 24   The evidence about whether the separate claim for Olympic Dam was raised earlier than that is uncertain.

 25   Sodexo 4 - JC13.

 26   Sodexo 4 - JC17.

 27   Marcus Hanson - PN373.

 28 AC317498.

 29 AC321791.

 30   Sodexo 3: BH-1 and BH-4.

 31   28% of employee voted in the July 2013 ballot. That proportion was higher at both Prominent Hill and Olympic Dam sites.

 32   Including United Firefighters’ Union of Australia v Metropolitan fire & Emergency Services Board[2010] FWAFB 3009; The Association of Professional Engineers, Scientists and Managers, Australia and others v Australian Red Cross Blood Service[2011] FWA 2914; Royal District Nursing Service Limited v Health Services Union of Australia and Australian Nursing Federation[2012] FWAFB 1489.

 33   See Royal District Nursing Service Limited v Health Services Union of Australia and Australian Nursing Federation[2012] FWAFB 1489 and the decision at first instance - Health Services Union of Australia and Australian Nursing Federation v Royal District Nursing Service Limited [2011] FWA 8033 at pars [56] to [70].

 34   This was acknowledged by the AWU SA - transcript PN156.

 35   A retention bonus is paid at the Olympic Dam site however this is not part of the Olympic Dam agreement, it is being reviewed and has operated administratively to this point.

 36   The 2008 collective agreement did so through different schedules. An approach that provided increases based upon existing rates is also conceivable as part of a national agreement.

 37   Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union and others[2012] FWAFB 2206.

 38   The concept of “taking into account” is comparable to “must have regard to” and in that context see: R v Hunt: Ex parte Sean Investments Pty Ltd [1979] HCA 32.

 39   Taken from each of the originating applications.

 40   Proposed agreement as provided to employees in relation to the July ballot.

 41   In general terms, s.58 preserves the application of an existing enterprise agreement during its nominal life and a later agreement cannot apply until after that time. Both the 2008 collective agreement and the Olympic Dam agreement have passed their nominal expiry dates.

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