Tobin Brothers Funerals Pty Ltd

[2017] FWC 4948

[2017] FWC 4948

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Tobin Brothers Funerals Pty Ltd
(AG2017/3118)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 22 SEPTEMBER 2017

Application for approval of the Tobin Brothers Funerals Enterprise Agreement 2017.

[1] Tobin Brothers Funerals Pty Ltd has applied for approval of the Tobin Brothers Funerals Enterprise Agreement 2017. The application for approval is supported by the Australian Workers’ Union which was a bargaining representative for the Agreement.

[2] Mr James MacLeod of Tobin Brothers filed a statutory declaration in support of the Agreement and Adrian Colebrook from the AWU filed a statutory declaration agreeing with Mr MacLeod’s declaration.

[3] The application was initially considered by Commissioner Lee who raised a number of concerns about the Agreement with the parties who responded to the matters raised. The application was then allocated to me and I listed the matter for hearing to determine whether the Agreement should be approved.

[4] At the conclusion of the hearing I advised that I would issue a decision in relation to the application and provide the parties with the opportunity to put before the Fair Work Commission any proposed undertakings and any submissions as to why I should accept the undertakings.

Statutory Framework

[5] The Fair Work Act 2009 provides that the Commission must approve an agreement which is not a greenfields agreement if the Commission is satisfied that:

(1) The agreement has been genuinely agreed to by the employees covered by the agreement. (s.186(2)(a))
(2) The terms of the agreement do not contravene section 55 (which deals with the interaction between the NES and enterprise agreements etc.) (s.186(2)(c))
(3) The agreement passes the better off overall test. (s.186 (2) (d))
(4) The group of employees was fairly chosen. (s.186(3))
(5) The agreement does not contain any unlawful terms. (s.186(4))
(6) The agreement does not include any designated outworker terms. (s.186 (4A))
(7) The agreement specifies a nominal expiry date which is no more than 4 years after the date the Commission approves the agreement. (s.186 (5))
(8) The agreement provides for a dispute resolution procedure conduct by the FWC or other independent person to settle disputes about the any matters arising under the Agreement and the NES and allows for representation of employees for that purpose. (s.186(6))

[6] Section 188 provides that an enterprise agreement has been genuinely agreed to if the Commission is satisfied that:

(1) There has been compliance with subsections 180(2), (3) and (5) (which deal with pre-approval steps) and s.181 (2) which provides that employees must not be asked to vote until 21 days after the last NERR has been given;

(2) The agreement was made in accordance with s.182 (1); and

(3) There are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

Matters raised with parties

[7] On 17 August 2017 an email was sent on behalf of Commissioner Lee to the parties raising a number of concerns:

1. The Agreement did not include a signature page with the address of the signatories. As a result a new signature page was submitted.
2. The initial statutory declaration advised that the NERR was not provided to employees until some 111 days after the date of notification. Mr MacLeod advised that the date in the statutory declaration was incorrect. He advised that at the conclusion of negotiations Tobin Brothers became aware that they had failed to provide a NERR prior to the commencement of bargaining and a NERR was provided on 21 June 2017. As a result a new statutory declaration was provided.
3. The dispute settlement term did not provide for the settlement of disputes in relation to the NES and limited employees’ rights to representation. Tobin Brothers undertook to apply the dispute resolution to settling disputes in relation to the NES and to enable employees to be represented by a person of their choosing for the purpose of settling disputes.
4. The flexibility term does not meet all the requirements of ss.202-203 of the Act and therefore the model flexibility term will apply.
5. The consultation clause does not comply with each of the requirements of s.205 of the Act and therefore the model consultation clause will apply.
6. Schedule 2 of the Agreement provided that individual position descriptions apply to certain named positions. None of these positions had rates of pay. Tobin Brothers advised that the positions were not intended to be covered by the Agreement.
7. Schedule 2 lists a number of classifications where the salary is commensurate to experience, including Branch manager, community specialist and administrative staff. In its initial response Tobin Brothers said that these positions were not intended to be covered by the proposed agreement. However it subsequently provided an undertaking that the salary ranges were as follows:

• Branch Managers - $75,000-$99,000, superannuation ranging between 11.5% and 15.5% and all managers are provided with a fully maintained company vehicle.



• Community Specialist - This is a casual position and the hourly rate is $58.37 plus superannuation of 10.5%.



• Administrative Staff - $50,500-$85,190, superannuation ranging between 9.5% and 13.5%.

[8] At the hearing I raised with the parties the following:

1. The Agreement applies to all Melbourne based staff except those listed in Schedule 1. There is no Schedule 1. This is in contrast to the statutory declaration which states that the Agreement applies in Victoria and NSW. While not raised at the hearing the in answer to another question the statutory declaration states that the Agreement covers all employees.

Again while not raised at the hearing, the NERR provides that the Agreement was proposed to cover employees currently covered by the 2014 Agreement. The 2014 Agreement expressly excluded the management team; creative communications team; Tobin Family members; community education; Echuca team and Murray Valley Crematoria. The categories of employees Tobin Brothers said are excluded from the Agreement are broader than were excluded by the 2014 Agreement. The finalised Agreement of course had a wider scope than the 2014 Agreement. Further casual catering staff were not listed in the 2014 Agreement but are covered in the Agreement and they were given a NERR which told them they were not to be covered.

2. How is this reconciled with the advice that the Agreement does not apply to certain classifications? I was advised by Mr Colebrook at the hearing that the excluded employees were not issued with a NERR nor did they participate in the bargaining. Further it was put that all employees knew that these employees were not intended to be covered by the Agreement.

3. How can I be satisfied that the Agreement was genuinely agreed to by employees given the contradiction between the words of the Agreement and the advice I am told was given to employees. This is particularly relevant given no NERR was given to employees until after the bargaining for the Agreement had concluded. At the hearing it was proposed that this issue could be resolved if an undertaking which set out the classifications which are to be excluded from the Agreement was provided.

4. Clause 2.7 is unclear. Is the wage increase that applies from 1 July 2017 already incorporated into the wage rates in schedule 2? Further, while this was not raised at the hearing, the clause is worded such that it implies that the other wages increases are already incorporated into the rates in schedule 2.

5. In relation to the classifications without wage rates I was advised that the minimum rate for the Community Specialist – Full Time was the same as a funeral planner and this can be ascertained from the reference to funeral planners in the description of the position. Therefore the minimum rate was $66,000 for the first year and $67,050 for the second year. I asked how I could be satisfied that the employees genuinely agreed to the Agreement given it included no rates of pay for some classifications. I was advised that the existing employees were aware of their existing rate of pay and that they were aware that they would receive the increase provided in the Agreement.

Documents filed with the Commission

[9] Attached to Mr MacLeod’s statutory declaration was an email sent to “all staff” on 21 June 2017. It advised that Tobin Brothers was required to issue a NERR prior to holding a vote and that as that had not occurred the vote which had taken place on 12 June 2017 was invalid and a new vote was required. Attached to the email was a NERR. Staff were advised that voting for the Agreement would take place on 14 July and close on 21 July and that further information would be provided.

[10] On 26 June 2017 an email was again sent to all staff. It attached the EBA and the policy manual and the procedures document. It advised that voting would commence on Friday 14 July 2017. It further advised that voting information would be forwarded to all staff on 14 July 2017. It provided an explanation of the Agreement. There was no reference to the scope of the Agreement in the email explaining the Agreement.

[11] On the same day an email was sent to all staff advising of the place and method of voting. Voting was to be by email. On 13 July 2017 another all staff email was sent advising that voting would commence the next day and that they would receive an email with their voting options.

[12] The Statutory Declaration filed by Mr MacLeod sets out the steps taken to explain the terms of the Agreement and the effect of the terms:

“The agreement was emailed to all staff and the AWU and AWU representatives at Tobin Brothers followed up with all categories of staff summarizing the terms of the agreement and discussing the updates to the agreement.”

“The AWU and AWU representatives at Tobin Brothers met with staff to discuss the Agreement prior to discussing with management.

Consideration

[13] In correspondence and at the hearing Tobin Brothers and the AWU contended that the Agreement had a narrower scope than the words in clause 2.2 provide i.e. they contended that the Agreement did not cover “management team; the creative communications team; Tobin family members; community education; IT Project officer; creativity and innovation officer; and chef/catering manager.” These employees were excluded from the process and it is submitted should be excluded from the Agreement. (the excluded employees)

[14] If that is true then a number of issues arise. If that is not true and the Agreement applies to all employees then the issues discussed at paragraphs [17] – [25] and [32] are not relevant to a consideration of whether the Agreement should be approved however paragraphs [25] – [30] remain relevant.

[15] The evidence before me is contradictory. For example, despite the submission that the excluded employees did not participate in the Agreement approval process, the notices referred to in paragraph [9] were distributed to “all staff”. Now subject to being satisfied that “all staff” included relevant casual employees, these documents on their face support a finding that the excluded employees were provided with a NERR; were advised of the time and date and method of voting; and were provided with a copy of the Agreement and other documents; and were provided with an explanation of the Agreement. However it was put to me at the hearing that these employees were not a part of the process. Whether they were given a vote is unclear from the documents.

[16] If the excluded employees were in fact included I would need to be satisfied that the “all staff” email list included all employees to be covered by the Agreement and that all staff to be covered by the Agreement were given an opportunity to vote. Tobin Brothers would also need to make submissions on the impact of the conflict between the proposed scope in NERR and the Agreement given these documents were provided to employees at the same time.

S.188 Genuine Agreement

[17] The Full Bench in KCL Industries Pty Ltd 1 discussed the approach taken by the Commission to the issue of whether employees had genuinely agreed to an enterprise agreement and I adopt the reasoning set out in the decision.

[18] The Agreement in its current terms applies to all Melbourne based employees. However if I accept the submission of Tobin Brothers and the AWU that the excluded employees were in fact excluded from the process then I am not satisfied that the excluded employees who on the face of the Agreement are covered by the Agreement were during the access period provided with a copy of the Agreement or had access to the Agreement (s.180 (2)). Further I am not satisfied that the employer took all reasonable steps to notify the excluded employees at the commencement of the notice period of the time and place at which the vote would occur or the voting method to be used (s.180 (3)). The excluded employees were also not provided with an opportunity to vote (s.181 (1). Further they were not provided with NERR at least 21 days before the vote (s.181 (2)). Further the employer took no steps to ensure that the terms of the agreement and the effect of these terms are explained to the excluded employees (s.180 (4)).

[19] In addition the coverage of an agreement is relevant to all employees including those who were not excluded from the process.

[20] It is clear that prior to the finalisation of the negotiations, employees were not given a NERR. Therefore employees were not notified at this time of the scope of the Agreement. When the NERR was given, the scope of the NERR was broader than, (accepting the submissions of the parties) the “intended” scope of the Agreement but narrower than provided for in clause 2.2. The scope of the Agreement can of course change as a result of bargaining. Though given the history of these negotiations, it is not clear that this in fact occurred, particularly as the NERR was not given out until after negotiations had concluded.

[21] It is difficult to see how in this case the employer explained the terms of clause 2.2 to the employees. Presumably, as was put at the hearing, the employees who the Agreement was intended to cover were told that the Agreement did not apply to certain employees despite what the Agreement said. I note that this submission is inconsistent with the emails sent by Tobin Brothers which were addressed to all staff.

[22] On the evidence before me I am not satisfied that the employer took all reasonable steps to explain the terms of the Agreement in particular the scope of the Agreement. Therefore I am not satisfied that the employer had complied with s.180 (4) of the Act.

[23] The Full Bench in Communications Electrical, Information, Postal, Plumbing and Allied Services Union and another v Main People Pty Ltd 2 described the scope of an enterprise agreement, in the context of considering undertakings to vary the scope of an agreement, as “one of its fundamental features”.3

[24] It was submitted that the employees who are within the intended scope of the Agreement were told of its limited scope. The Agreement, if approved in its current form, covered a wider range of employees. Their consent to the Agreement was based on incorrect information. The information was not insignificant. Further the excluded employees who were within the actual scope of the Agreement were never given a chance to approve or not approve the Agreement or have any say in the negotiations for the Agreement. The exclusion from the process of a group of employees who will be covered if the Agreement is approved provides reasonable grounds for believing that the agreement had not been genuinely agreed to.

[25] For the reasons set out above I am also not satisfied that the agreement was genuinely agreed to by the employees covered by the Agreement. One because ss.180 (2) and (3) were not complied with in relation to the excluded employees; two because I am not satisfied that s.180 (5) was complied with in relation to all employees; and three because I am satisfied that there are reasonable grounds for believing that the Agreement was not genuinely agreed to by the employees.

Classifications without rates of pay – the BOOT and genuine agreement

[26] I have also formed the view that the failure to include rates of pay for certain classifications which have classification descriptors means that the Commission cannot be satisfied, in relation to employees in those classifications, that they are better off. I also drew the attention of the parties at the hearing to the issue of the relevant award for the purpose of assessing whether clerical employees were better off. It is not clear that the Funeral Industry Award 2010 as opposed to the Clerks Private Sector Award 2010 is the appropriate award.

Classifications without classification descriptors

[27] None of the excluded employees’ positions have descriptors or rates of pay. It is therefore not possible to determine if these employees would be better off under the Agreement.

Genuine Agreement – no rates of pay

[28] I am also satisfied that these omissions provide a reasonable basis for believing that the Agreement was not genuinely agreed to by employees.

[29] I was advised that employees whose classifications, but not the pay rates, were included were told that they would receive a pay rise on their existing rates of pay. It is not clear that the Agreement does include such a provision. As I set out above clause 2.7, which provides for wages increases, is unclear. Further the submission suggests that an employee’s only interest in an Agreement is his or her own circumstances.

[30] At the hearing I put to the parties that employees have an interest in other employees’ terms and conditions 4 but there was no response to this proposition.

[31] While the High Court’s decision in Burwood Cinemas was made in an entirely different context the comment by Starke J 5 is still relevant:

“Industrial disputes are, as a rule, collective disputes. They may arise between two sets of workmen, as in the case of demarcation or discipline disputes. Or, as is more common, between employers or a class of employers on the one side and a large aggregation of workmen on the other. In the latter case the dispute often relates to the terms on which future employment shall be given, not only to men then employed, but to all men who may subsequently be engaged in the trade or calling in which the dispute has arisen.”

[32] For similar reasons employees in enterprise bargaining have an interest in not only their own pay rates and conditions but the pay rates and conditions on which other employees are engaged.

S. 186(3) Fairly Chosen

[33] Given the Agreement, if approved, covered all employees, no submission was made to enable the Commission to make a finding, if a more limited scope applied, whether the group of employees was fairly chosen. This will need to be addressed by Tobin Brothers if it seeks to give an undertaking which narrows the scope of the Agreement.

Conclusion

[34] I have formed the view that the Agreement in its current form cannot be approved. Tobin Brothers seeks to remedy these issues by providing undertakings. I will provide the parties with an opportunity to consider this decision and for Tobin Brothers to give any undertakings it considers would remedy the defects. I will provide the parties with an opportunity to make submissions as to why any such undertakings are able to remedy the defects and meet the requirements of s.190 (3) of the Act. If no undertakings are provided then the application for approval of the Agreement will be dismissed.

[35] Finally I would say that this is a very unfortunate situation as the Agreement has many positive provisions. In reaching this decision I do not impugn the intentions of the parties. I am however concerned about the inconsistency between the submissions made at the hearing and the information in the statutory declaration and the documents attached to that declaration.

[36] I am also concerned about the confusion about the scope of the Agreement. Agreements are legal documents which set employees minimum terms and conditions. The scope of an Agreement is vital as it determines who the employer has obligations to under the Act. Further it permits employees excluded from the proposed scope to seek orders from the Commission if they wish to be included in the Agreement. Importantly it determines who is entitled to appoint bargaining representatives; to participate in the process and to vote on the Agreement. These are important rights and obligations.

[37] I am also concerned that bargaining for the Agreement occurred without employees being given the NERR. This is an important document which advises employees of their rights. When these employees were finally given the NERR they were presented with a finalised agreement and were told it would be put to the vote. While it may be that in fact all employees knew that bargaining was taking place, the failure to provide them with the NERR at the commencement of bargaining denied them the rights set out in the NERR.

[38] As I discussed with the parties at the hearing a number of clauses in the Agreement are unclear. This is not a desirable situation. I also note that the Commission when approving the predecessor agreement raised with the parties the concerns set out above about the dispute resolution procedure, the consultation clause and the flexibility clause. Despite this the same omissions were repeated in this Agreement. If Tobin Brothers decides not to make undertakings I urge the parties to undertake a careful review of the Agreement to ensure it is clearly sets out the terms and conditions which they intend applying to the employees prior to seeking approval of a replacement agreement.

Directions

[39] Tobin Brothers are directed to file and serve on the AWU any proposed undertakings and submissions in support of those undertaking by noon on 28 September 2017.

[40] The AWU is directed to advise by noon on 2 October 2017 if they support the undertakings if any.

DEPUTY PRESIDENT

Appearances:

D. Macken for the Applicant

A. Colebrook for The Australian Workers’ Union

Hearing details:

2017.

Melbourne:

20 September 2017.

 1   [2016] FWCFB 3048 at [23]-[30]

 2 [2015] FWCFB 3048

 3   Ibid at [35]

 4   Burwood Cinema Ltd v Australian Theatrical & Amusement Employees' Association (1925) 35 CLR 528 (1 May 1925)

 5   Ibid at page 548

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