TK Elevator Australia Pty Ltd
[2022] FWCA 1734
•27 MAY 2022
| [2022] FWCA 1734 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
TK Elevator Australia Pty Ltd
(AG2022/1412)
TK Elevator Australia Pty Ltd Queensland Enterprise Agreement 2021
| Building, metal and civil construction industries | |
| COMMISSIONER HUNT | BRISBANE, 27 MAY 2022 |
Application for approval of the TK Elevator Australia Pty Ltd Queensland Enterprise Agreement 2021
TK Elevator Australia Pty Ltd (the Employer) has applied for approval of an enterprise agreement known as the TK Elevator Australia Pty Ltd Queensland Enterprise Agreement 2021 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single-enterprise agreement.
The Fair Work Commission (the Commission) raised certain concerns regarding the provision of the Notice of Employee Representational Rights (NERR) with the Employer.
Subsections 173(1)-(3) of the Act relevantly provide:
“173 Notice of employee representational rights
Employer to notify each employee of representational rights
(1) An employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who:
(a) will be covered by the agreement; and
(b) is employed at the notification time for the agreement.
Note: For the content of the notice, see section 174.
Notification time
(2) The notification time for a proposed enterprise agreement is the time when:
(a) the employer agrees to bargain, or initiates bargaining, for the agreement; or
(b) a majority support determination in relation to the agreement comes into operation; or
(c) a scope order in relation to the agreement comes into operation; or
(d) a low‑paid authorisation in relation to the agreement that specifies the employer comes into operation.
Note: The employer cannot request employees to approve the agreement under section 181 until 21 days after the last notice is given (see subsection 181(2)).
When notice must be given
(3) The employer must give the notice as soon as practicable, and not later than 14 days, after the notification time for the agreement.
Subsections 181(1)-(2) of the Act relevantly provide that:
“181 Employers may request employees to approve a proposed enterprise agreement
(1) An employer that will be covered by a proposed enterprise agreement may request the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it.
(2) The request must not be made until at least 21 days after the day on which the last notice under subsection 173(1) (which deals with giving notice of employee representational rights) in relation to the agreement is given.”
The first concern raised was that the Employer’s response at Q18 of the F17 stated the NERR was emailed to employees on 8 April 2022, which is more than 14 days after the notification time, being 18 October 2021. This is not consistent with the requirements of s.173(3) of the Act.
The second concern raised was that the Employer’s response at Q18 of the F17 stated that the NERR was emailed to employees on 8 April 2022, which is not at least 21 days before voting commenced on 26 April 2022. This is not consistent with the requirements of s.181(2) of the Act.
I invited the Employer to advise its position as to whether the Employer’s provision of the NERR was in accordance with the Act, and if the Employer considered that its provision was not in accordance with the Act, to provide submissions relevant to s.188 of the Act.
The Employer provided the following submissions:
“NERR Timelines
Issue 1 – NERR was issued more than 14 days after the notification time
[…]
3. First, we are instructed that the notification time for the Agreement was 4 March 2022, not 18 October 2021. The Company has mistakenly listed the notification time for another of its proposed enterprise agreements in the Form F17, not the notification time for the Agreement.
4. Second, whilst we acknowledge that the NERR was not provided within 14 days of the actual notification time, being 4 March 2022, we submit that the lapse in time between when the NERR should have been issued, and when it was issued, did not cause any disadvantage to the employees who will be covered by the Agreement and, in turn, the Agreement was still genuinely agreed to.
5. In this regard, s. 188(2) of the FW Act provides that:
(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and
(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.
6. The Commission has clarified the operation of the power under sub-section 188(2) of the FW Act in Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others [2019] FWCFB 245 (Huntsman Decision).
7. In the Huntsman Decision, the Commission said that:
[74] As mentioned earlier, the determination of whether an error constitutes a ‘minor error’ within the meaning of s.188(2) calls for an evaluative judgment having regard to the underlying purpose of the relevant procedural or technical requirement which was not complied with and the relevant circumstances. Table 2 below (extracted from ACCI’s written submission at [61]) examines each of the procedural or technical requirements, considers the underlying purpose of these requirements and outlines some ways in which employees might be disadvantaged by a minor technical or procedural error:
Section Procedural or Technical Requirement Underlying Purpose of requirement How might employees be disadvantaged? S. 173(3) Issue the NERR as soon as practicable, no later than 14 days after the notification time. To ensure that the employees understand their representational rights within a reasonable period before bargaining commences thus allowing them to exercise those rights in a timely manner In the circumstances the employees may have received the NERR later than the 14 days thus period preventing them from attending initial bargaining meetings and thus effectively influencing the bargaining process even after they do participate
8. We are instructed that the employees who will be covered by the Agreement attended bargaining meetings after the issue of the NERR and thus had the opportunity to effectively influence the bargaining process through their participation. In turn, we submit that this procedural error was minor in that the employees who will be covered by the Agreement were unlikely to have been disadvantaged by the slight lapse in time between when the NERR should have been issued, and when it was issued. In turn, we submit that the Agreement was still genuinely agreed to.
9. It is therefore submitted that the Agreement was nevertheless genuinely agreed to by the employees and that the issues with the NERR were not likely to have disadvantaged the employees covered by the Agreement in relation to the requirements in s.173 of the FW Act.
10. On this basis, we respectfully request that the Commission treat this error as a minor procedural error under s. 188(2) of the FW Act for the purpose of considering the Application for approval of the Agreement.
Issue 2 – the NERR was not issued at least 21 days before voting commenced
[…]
12. The Commission identified that, in the Form F17, the NERR was stated to be emailed to employees on 8 April 2022, which does not appear to be at least 21 days before voting commenced on 26 April 2022.
13. Section 188(2) of the FW Act is again relevant, as is the Huntsman Decision.
14. In addition, the Commission’s decision in Grizzly Engineering Pty Ltd Enterprise Agreement 2018 (V2) [2019] FWCA 805 (Grizzly Engineering) is also directly relevant to the issue at hand.
15. In Grizzly Engineering, the Commission said that:
[2] The employer did not request employees to approve the agreement at least 21 after the day on which the last notice of employee representational rights was given to relevant employees, as required by s181(2) of the Act. Rather, the approval request came 20 days after the last notice was given. However, I am satisfied that in the circumstances, and having regard to the decision of the Full Bench in Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others, this constitutes a minor procedural or technical error for the purposes of s188(2)(a). Further, I am satisfied that the employees covered by the agreement were not likely to have been disadvantaged by the error. As a result, I am satisfied that the Agreement has been genuinely agreed within the meaning of s 188(2) of the Act.
16. The underlying purpose of the requirement to comply with the requirements in s.181(2) is to provide employees with a minimum period of time for the bargaining process to occur before voting on an agreement.
17. Employees may be disadvantaged in circumstances where the period is cut short preventing the employees from effectively appointing bargaining representatives and participating in genuine good faith bargaining.1 In the present Application, the period was cut short from 21 to 18 days. Importantly, we are instructed that this did not preclude the employees from exercising their right to appoint a bargaining representative nor from participating in good faith bargaining.
18. It is submitted the employees were not disadvantaged by the error and that the error did not have any connection with the employees’ ability to make an informed decision to genuinely agree to the terms of the proposed Agreement. During the access period the employees had access to both the Agreement and the incorporated award. The purpose of the obligation imposed on employers by s.180(5) of the FW Act is to enable the relevant employees to cast an informed vote: to know what it is they are being asked to agree to and to enable them to understand how wages and working conditions might be affected by voting in favour of the Agreement. This we submit was the situation at the time the employees voted on the Agreement.
19. Employees were informed as to the date, time, place and method of voting and the effect the Agreement which they were voting on would have on their wages and the percentage increases that they would be receiving and what their actual hourly rate of pay would be for each of the wage increases under the Agreement. There was no misrepresentation or confusion as to the base rate the wage increases would be calculated upon as the Wages Schedule clearly identified the calculation and the actual amount of the percentage increases. The filed F17 Statutory Declaration by Fiona Morgan provides details as to the steps taken by the Company to enable the employees to have access to relevant documents, the time periods given for consideration as to the terms of the proposed Agreement, which in turn enabled the employees to make an informed decision as to whether to approve the Agreement at the time voting commenced.
20. In turn, we submit that this procedural error was minor in that the employees who will be covered by the Agreement were unlikely to have been disadvantaged by the slight reduction in time between when the NERR was issued and when the Agreement was voted on. As well, we submit that the facts and timelines considered in the present Application are similar to those considered in Grizzley Engineering and therefore, the Agreement was still genuinely agreed to.
21. On this basis, we respectfully request that the Commission treat this error as a minor procedural error under s. 188(2) of the FW Act for the purpose of considering the Application for approval of the Agreement.”
Pursuant to s.188(2) of the Act, the Commission may still be satisfied that the Agreement would have been genuinely agreed to within the meaning of s.188(1), but for minor procedural or technical errors made in relation to the requirements of s.173 and s.181, if the Commission is satisfied that “the employees covered by the agreement were not likely to have been disadvantaged by the errors”. Therefore, a procedural error made in relation to the requirements in s.173(3) and s.181(2) can be ameliorated by a finding that employees were not likely to have been disadvantaged by the error.
I have had regard to the response provided by the Employer. I am satisfied that employees covered by the Agreement were not likely to have been disadvantaged by the error. I am satisfied that it is appropriate to exercise the discretion in s.188(2) of the Act to find that the Agreement was genuinely agreed to by the employees covered by the Agreement.
I have taken into consideration the material filed in the Commission. I am satisfied that each of the requirements of ss.186, 187, and 188 as are relevant to this application for approval have been met. The Agreement does not cover all of the employees of the employer, however, taking into account s.186(3) and (3A) I am satisfied that the group of employees was fairly chosen.
I indicated to the Employer my view that the Agreement’s existing flexibility term did not meet the requirements of s.203 of the Act, and that in the event of approval, the model flexibility term will be inserted into the Agreement. Pursuant to s.202(4) of the Act, the model flexibility term prescribed by Schedule 2.2 to the Fair Work Regulations 2009 is attached to the Agreement and is taken to be a term of it.
The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) being a bargaining representative for the Agreement has given notice under s.183 of the Act that it wants the Agreement to cover it. In accordance with s.201(2) of the Act I note that the Agreement covers the CEPU.
The Agreement is approved and, in accordance with s.54 of the Act, will operate from 3 June 2022. The nominal expiry date of the Agreement is 30 September 2024.
COMMISSIONER
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