Union of Christmas Island Workers

[2018] FWC 288

[2018] FWC 288

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.238—Scope order

Union of Christmas Island Workers
(B2017/818)

COMMISSIONER WILLIAMS PERTH, 22 JANUARY 2018

Application for a scope order.

[1] This decision concerns an application for a scope order made under section 238 of the Fair Work Act 2009 (the Act) by the Union of Christmas Island Workers (the UCIW). The respondent is Serco Australia Pty Ltd (Serco).

Background

[2] Serco has agreed to bargain for a proposed enterprise agreement which would cover a number of classifications of their employees who are employed on Christmas Island (the proposed Christmas Island Agreement). Serco however has not agreed that the proposed Christmas Island Agreement would cover the cleaners it employs on Christmas Island.

[3] Serco has also agreed to bargain for a national agreement (the proposed National Agreement) that would cover, amongst a number of other classifications, all cleaners its employs in all States and Territories of Australia including the cleaners Serco employs on Christmas Island.

[4] This application by the UCIW is for the Commission to issue a scope order that includes cleaners employed by Serco on Christmas Island in the scope of the proposed Christmas Island Agreement.

The evidence

[5] Evidence was given by the Secretary of the UCIW Mr Gordon Thomson (Mr Thomson) who is a resident of Christmas Island.

[6] There are approximately 25 cleaners employed by Serco who work and live on Christmas Island. These cleaners work at the North West Point Immigration Detention Centre Christmas Island (the Christmas Island Detention Centre).

[7] Serco’s Notice of Employee Representational Rights issued to employees on 19 May 2017 for the proposed Christmas Island Agreement has a scope covering employees who are warehouse employees, gardeners/ground persons, bus drivers, canteen employees and administrative support employees. Serco has subsequently agreed to tradespersons also being included in bargaining for the proposed Christmas Island Agreement.

[8] The cleaners employed by Serco on Christmas Island currently receive the majority of the benefits of the enterprise agreement that applied to the previous contractor whom employed the cleaners working at the Christmas Island Detention Centre. These benefits are contained in the Union of Christmas Island Workers and Resolve FM Enterprise Agreement 2011 [AE890857] (the Resolve Agreement). Serco asserts that whilst in 2014 it agreed to “...apply the contractual terms of the Union of Christmas Island Workers and Resolve FM Enterprise Agreement 2011 to all Serco Staff for Cleaning and Grounds employees” this agreement did not transfer and so is not legally binding on Serco. 1

[9] The wage rates, island allowances, other allowances, weekend ordinary hours penalty rates, annual leave loading and superannuation provided for in the Resolve Agreement are generally superior to those contained in the Serco Immigration Services Agreement 2015 [AE415701] (the 2015 Serco Agreement) which currently applies to cleaners employed by Serco other than on Christmas Island. The 2015 Serco Agreement expressly does not cover cleaners employed on Christmas Island.

[10] The UCIW wrote to Serco on 30 August 2017 setting out its concerns about the exclusion of the Christmas Island cleaners from the scope of the proposed Christmas Island Agreement.

[11] In regard to the proposed National Agreement there have been to date four bargaining meetings.

[12] At the second bargaining meeting on 20 and 21 September 2017 Serco responded to claims advanced by the UCIW bargaining representatives by advising amongst other things that;

•  No increase would be considered for the Christmas Island Remote District Allowance.

•  The only change to the agreement proposed by UCIW representatives Serco would consider was to pay the Christmas Island annual leave travel concession on a pro rata basis when not less than six months service is completed, instead of 12 months.

•  Should Christmas Island pursue claims on its own Serco would not honour any parts of any agreement claim previously mentioned as being agreed to in principle.

[13] Mr Thomson says the creation of any new disparity in conditions of employment between the cleaners employed on Christmas Island and their co-workers on Christmas Island who would continue to receive the superior wages and conditions from the Resolve Agreement will be a source of grievance to both groups of employees who are grouped together organisationally on the island.

[14] Historically for the purposes of setting wages and conditions Serco has agreed to group the Christmas Island cleaners together with the Christmas Island gardeners who also work at the Christmas Island Detention Centre. Serco and the UCIW agreed in 2015 to exclude the Christmas Island cleaners from coverage of the 2015 Serco Agreement. 2

[15] Historically cleaners, gardeners, ground persons, handy persons, tradespersons and some administrative employees employed at the Christmas Island detention centre have bargain together, represented by the UCIW.

[16] The UCIW is a geographically constituted union having coverage of all employees on Christmas Island other than police officers and having no coverage of employees outside of Christmas Island.

[17] Christmas Island is a remote location in the Indian Ocean, 300 km south of Java and 2600 km distant from Perth. The evidence of Mr Thomson was that Christmas Island is inhabited by people who have evolved a distinctive culture, enduring through times of racist colonial exploitation and developed through struggle against the colonial structure; struggle that was largely successful because of the combining of the ethnic Malay and Chinese majority under the banner of the UCIW and the advent of the Racial Discrimination Act 1975. Many of the workers employed by Serco now were active through those struggles. It is offensive to them that their hard-won industrial rights are not respected and that there more recently won conditions of employment should be damaged. One of those rights is the right for UCIW members to stick together whenever their industrial interests and their livelihoods are at stake.

[18] Mr Thomson provided a number of copies of documents headed “Resolution of employee bargaining representatives in bargaining for the proposed Serco Immigration Services Agreement 2018 and the proposed Serco Christmas Island Ancillary Services Agreement 2017”. Each of these documents (the “Commitments of Support for the UCIW Scope Order Application”) included identical wording of a so-called resolution which in short said that having been provided information about the UCIW’s concerns and the reasons for this scope order application the signatory had no objection to the UCIW scope order application and full support was given to the making of the scope order sought by the UCIW. Each of these documents was signed.

[19] Mr Thomson’s evidence was that the signatories included all the bargaining representatives for the proposed Christmas Island Agreement and of the 22 bargaining representatives for the proposed National Agreement all had signed other than five individual bargaining representatives who did not respond to the information provided to them by the UCIW.

[20] One of the UCIW concerns is that the relative or comparative outcomes of bargaining would be worse for Christmas Island cleaners if they remain within the scope of the proposed National Agreement and this is likely to result in them losing significant conditions resulting in a reduction of conditions and pay.

[21] The UCIW also believes that Serco will have an unfair advantage in bargaining with the Christmas Island cleaners if they remain within the scope of the proposed National Agreement.

[22] A principal concern for the UCIW is the right of workers on Christmas Island to organise through the UCIW and for this union to bargain for an agreement that applies to employees on Christmas Island without having their interest diluted by a national agreement be respected.

[23] The UCIW acknowledges that the scope of an enterprise agreement is not dictated by the eligibility rules of a union.

[24] Serco has never previously bargained for an enterprise agreement with cleaners employed on Christmas Island. 3

[25] With respect to the bargaining meetings for the proposed National Agreement Mr Thomson has participated in one meeting through a telephone hook-up but has not attended the face-to-face meetings held in Sydney.

[26] Some of the UCIW members employed by Serco on Christmas Island who are bargaining representatives for the proposed National Agreement have attended bargaining meetings in Sydney and have accepted Serco’s offer to make partial payment for their airfares and accommodation.

[27] Mr Thomson views this arrangement as unfair because these employees from Christmas Island if they wish to participate in bargaining meetings face-to-face in Sydney have to pay some of the expense themselves. Serco proposed a limit on the costs it would pay and the airfares from Christmas Island to Perth in particular are very high.

[28] It is also problematic for the UCIW itself to participate in the Sydney negotiations face-to-face because they are not a wealthy union and the costs to attend are substantial. The UCIW will generally not accept assistance from companies for such purposes.

[29] Mr Thomson’s evidence is that Serco wrote to the Christmas Island gardening and cleaning employee bargaining representatives offering partial payment of their expenses to travel to the bargaining meetings for the proposed National Agreement to be held in Sydney but these employees did not attend because they could not afford it and were not willing to pay the out of pocket expenses they would incur if they travelled to and stayed in Sydney to attend the bargaining meetings. 4

[30] The UCIW in consultation with its members prepared and documented their position for bargaining concerning the proposed National Agreement. This position was provided to Serco on 27 August 2017. 5

[31] The UCIW position was also put forward at a caucus of the other employee bargaining representatives from around Australia involved in the negotiations for the proposed National Agreement. United Voice is the union with the majority of members involved and is representing their members employed at each of the mainland detention centres that would be covered by the proposed National Agreement.

[32] The UCIW position was tabled as part of the bargaining for the proposed National Agreement. That position does not deal with the scope of the proposed National Agreement.

[33] Also on 27 August 2017 Mr Thomson wrote to Serco’s legal representative Mr Paul Brown regarding the proposed Christmas Island Agreement setting out a comprehensive proposal for their consideration. The classifications referred to in the UCIW’s letter expressly included cleaners.

[34] Mr Thomson then on 30 August 2017 wrote to Mr Colin Graham (Mr Graham), Serco’s National Industrial Relations Manager – Justice and Immigration, regarding the scope of the proposed Christmas Island Agreement. This letter referred to both the bargaining for the proposed National Agreement and the bargaining for the proposed Christmas Island Agreement and explained that the UCIW was in dispute with Serco about Serco’s refusal to agree that cleaners be covered by the proposed Christmas Island Agreement.

[35] Mr Graham has been, and continues to be, involved in the bargaining for both the proposed National Agreement and the proposed Christmas Island Agreement.

[36] Mr Graham’s evidence under cross-examination is that he has been well aware of the UCIW’s position in relation to cleaners since September 2016 and acknowledge there has been an exchange of correspondence between Serco and the UCIW where the union has made it clear that it proposes to have cleaners covered by the scope of the proposed Christmas Island Agreement and equally Serco have explained that they propose to have the cleaners covered by the scope of the proposed National Agreement. Consequently he says the letter of 30 August 2017 came as no surprise to him. 6

[37] Mr Thomson’s evidence was that the 30 August 2017 letter to Mr Graham was copied to United Voice and he followed this up with a phone call to Mr Stephen Ball (Mr Ball) who was the leading employee representative for United Voice in the bargaining for the proposed National Agreement to confirm he had received it. Mr Ball said he would be able to give Mr Thomson a letter of support for the UCIW claim that the scope of the proposed National Agreement be changed to exclude cleaners employed on Christmas Island. This discussion occurred one or two days after the first bargaining meeting for the proposed National Agreement. 7

[38] On 7 September 2017 the UCIW filed this application for a scope order.

[39] Mr Thomson has participated in one of the bargaining meetings for the proposed National Agreement which was by telephone on 8 November 2017. The evidence of Mr Graham, which Mr Thomson concurs with, 8 is that during that phone call Mr Thomson advised that the UCIW had applied for this scope order which was to have the effect of cleaners employed on Christmas Island being included in the scope of the proposed Christmas Island Agreement. He sought the support of the other bargaining representatives to consequently limit the scope of the proposed National Agreement so that it excluded cleaners employed on Christmas Island. No other bargaining representative commented on this issue. Mr Graham’s evidence was that he then replied that Serco does not agree with the UCIW approach with respect to the application for the scope order and would await the outcome of the Commission proceedings.

[40] Serco has at all times been aware of the concern the UCIW has that the scope of the proposed Christmas Island Agreement should in their view include cleaners.

[41] The Commitments of Support for the UCIW Scope Order Application signed by the various employee bargaining representatives are undated. Mr Thomson’s evidence was that the documents for signature were drafted within days of 8 November 2017. 9 It was circulated to the five employee bargaining representatives for the proposed Christmas Island Agreement after 8 November 2017 the first signed copy of these was returned and received by Mr Thomson on 18 November 201710 and their signed copies had all been collected by 4 December 2017.11

[42] In cross-examination it was put to Mr Thomson that the signed, undated Commitments of Support for the UCIW Scope Order Application were obtained by the UCIW after the union had reviewed the evidence of Mr Graham filed in this matter and had been obtained to be responsive to that. Mr Thomson rejected that absolutely. 12

[43] I note that the UCIW outline of submission in this matter refers to the UCIW having secured a supporting resolution of employee bargaining representatives involved in the two proposed agreements. The submission says the employee bargaining representatives support the UCIW application for exclusion of Christmas Island cleaners from coverage of the proposed National Agreement and for their inclusion in the scope of the proposed Christmas Island Agreement. 13 Significantly this outline of submission was filed with the Commission on 14 November 201714 and it was two weeks later on 29 November 2017 that the witness statement of Mr Graham in this matter was filed with the Commission and served on Mr Thomson.

[44] Consequently I accept the evidence of Mr Thomson as to how and when the respective Commitments of Support for the UCIW Scope Order Application were signed.

[45] Serco’s challenge as to the timing of this was, in fairness to them, triggered by the fact that these documents were unfortunately not provided to Serco until the day before the hearing. 15

[46] The records maintained by Serco of the parties’ positions and the matters raised during the bargaining meetings for the proposed National Agreement show that the scope of that proposed agreement was not raised as an issue during those bargaining meetings. This is at odds with the evidence that Mr Graham was aware Mr Thomson raised the issue whilst participating in the 8 November 2017 bargaining meeting by phone.

[47] Mr Thomson disputes that if the cleaners employed on Christmas Island are covered by the proposed National Agreement this will encourage skill transfer and employee movement between Serco’s detention facilities nationally. For example cleaners employed by Serco on the “mainland” generally have not come to Christmas Island. 16

[48] Evidence for Serco was given by Mr Graham the National Industrial Relations Manager – Justice and Immigration. Mr Graham is responsible for assisting Serco with respect to industrial relations matters, including in the negotiation of agreements.

[49] On 5 May 2017 Serco informed all its employees working within the various immigration detention facilities of its intention to commence bargaining for the proposed National Agreement which would replace the 2015 Serco Agreement. Mr Graham has subsequently been involved in the negotiations of the proposed National Agreement.

[50] Mr Graham has arranged and attended a series of negotiation meetings for the proposed National Agreement which have taken place as follows:

•  28 to 31 August 2017 - four consecutive days in Sydney.

•  20 and 21 September 2017 - two consecutive days in Sydney.

•  26 October 2017 by teleconference.

•  8 November 2017 by teleconference.

[51] Serco has decided that cleaners it employs on Christmas Island will be included within the scope of the proposed National Enterprise Agreement. The reason for this decision includes,

•  The intention to have all cleaners employed by Serco who assist in the discharge of services pursuant to the Serco Immigration Services Contract engaged under a single enterprise agreement.

•  The intention to have a uniform base set of minimum conditions for all cleaners employed by Serco within the Serco Immigration Services Contract.

•  The encouragement of skill transfer and employee movement between detention facilities nationally.

[52] On 23 December 2013 the Department of Immigration and Border Protection (the Department) terminated the service contracts between it and Resolve FM Pty Ltd which up until then had been responsible for the employment of cleaners on Christmas Island. Serco did not take over, acquire or assume the business of Resolve FM Pty Ltd. No part of the business of Resolve FM Pty Ltd was transferred to Serco.

[53] Serco was approached by the Department to supplement the services provided on Christmas Island by fulfilling the requirement to provide maintenance services and cleaning services at the Christmas Island Detention Centre. Consequently Serco attempted to source qualified and experienced labour on Christmas Island including complying individuals who had been previously engaged as cleaners by Resolve FM Pty Ltd. Serco then engaged a number of cleaners previously employed by Resolve FM Pty Ltd on the basis that Serco would as a matter of contract match nominated conditions provided in the Resolve Agreement.

[54] Since first employing cleaners on Christmas Island in 2014 there had been no bargaining and no negotiations for any industrial instrument to cover them on Christmas Island until the negotiations commenced for the proposed National Agreement.

[55] On 16 September 2016 the UCIW by letter requested Serco commence bargaining for a group of employees employed on Christmas Island to included cleaners. 17

[56] Mr Graham replied on 13 October 2016 to Mr Thomson and the UCIW advising that Serco has not supplied them with a notice of intention to bargain nor otherwise initiated, commenced or agreed to bargain.

[57] In November 2016 the UCIW filed a majority support determination in the Commission. Following discussions with the UCIW Serco then agreed to bargain with respect to the following classifications of persons employed by it on Christmas Island,

•  Warehouse employees,

•  Gardeners/ground persons,

•  Bus drivers,

•  Canteen employees,

•  Administrative support offices.

[58] These classifications would be covered by the proposed Christmas Island Agreement.

[59] Serco did not however agree to bargain with respect to cleaners employed on Christmas Island. Shortly afterwards Serco issued a Notice of Employee Representational Rights for the group of classifications above.

[60] Serco has not yet had any discussions or negotiations with the UCIW and/or employees on Christmas Island employed in the above classifications.

[61] None of these classifications fall within the scope of the current 2015 Serco Agreement. None of these classifications are intended to come within the scope of the proposed National Agreement.

[62] The current 2015 Serco Agreement covers classifications of,

•  Detention services officer,

•  Detention support worker,

•  Detention service manager,

•  Catering assistant,

•  Chef and head Chef.

[63] Serco proposes that all these classifications be covered by the proposed National Agreement.

[64] The only other group of employees Serco employs on Christmas Island that it wishes to be covered by the proposed National Agreement are cleaners.

[65] Serco has commenced negotiations with cleaners employed on Christmas Island by virtue of the employee bargaining representatives from Christmas Island participating in the bargaining meetings for the proposed National Agreement.

[66] Mr Graham has attended each of the bargaining meetings for the proposed National Agreement. It is the intention of the bargaining parties to continue with negotiations with a view to making the new National Agreement in 2018. A further bargaining meeting was to occur on 4 December 2017.

[67] There are five employee bargaining representatives who have been involved in bargaining for the proposed National Agreement who have purported to represent the interests of employees on Christmas Island, one of whom is Mr Thomson.

[68] Other than for the comments made by Mr Thomson at the fourth meeting on 8 November 2017 Mr Graham says no employee bargaining representative has raised any issue nor made submissions with respect to the scope of the proposed National Agreement.

[69] As Mr Thomson said on 27 August 2017 Serco was provided with the details of the UCIW position or claims for the proposed National Agreement.

[70] Whilst the UCIW filed this application on 7 September 2017 the union to Serco’s knowledge has not made any application for a scope order in relation to the proposed National Agreement.

[71] Mr Thomson by telephone at the 8 November 2017 bargaining meeting for the proposed National Agreement said that the UCIW had applied for a scope order to include Christmas Island cleaners in the proposed Christmas Island Agreement and was seeking the support of the bargaining representatives to consequently limit the scope of the proposed National Agreement to exclude Christmas Island cleaners.

[72] The total number of attendees at the bargaining meetings for the proposed National Agreement including representative of employees on Christmas Island is in the vicinity of 16 to 18 employee bargaining representatives and eight representatives from Serco. Other than the comments by Mr Thomson on 8 November 2017 no other bargaining representative has raised any issue with respect to scope of the proposed National Agreement.

[73] Bargaining for the proposed National Agreement has been and is progressing in good faith according to Mr Graham.

[74] Serco’s view is that having cleaners who work on Christmas Island included in the proposed National Agreement will create the potential for uniformity and consistency of conditions for cleaners and other classifications across the national business of Serco. To the extent cleaners employed on Christmas Island, who enjoy, as a matter of contract nominated benefits that were previously contained in the Resolve Agreement; these contractual benefits would continue to operate to the benefit of those Christmas Island employees. Any agreement that in future has application to a Serco employee may be read in conjunction with both the National Employment Standards (NES) and/or the individual’s contract of employment. Accordingly, any higher contractual or NES benefit would prevail over the terms of any matters negotiated on a national level and included in the proposed National Agreement.

[75] The negotiations for the proposed National Agreement present an opportunity for Serco to have all cleaners under a common national agreement.

[76] Mr Graham’s evidence was that if a scope order was made as the UCIW seeks this opportunity would be lost and Serco would suffer the prejudice of having to duplicate negotiations and to attempt to make another enterprise agreement, potentially on different terms as compared to the proposed National Agreement, in the context of the negotiations for the proposed Christmas Island Agreement.

[77] Under cross-examination Mr Graham clarified that what Serco seeks is that all the cleaners it employees in detention centres regardless of location have a uniform base set of minimum conditions, but this does not mean that the actual conditions of all cleaners will be identical because some may have actual conditions above this base set of minimums. 18

[78] Specifically with respect to the cleaners employed on Christmas Island Mr Graham’s evidence was that Serco would continue to honour the terms of the contracts they have entered into with each of those employees so they would continue to receive the conditions prescribed in their contracts which may be above whatever minimums might be finally negotiated in the proposed National Agreement. 19

Submissions

The Applicant

[79] UCIW submit that the Commission, having regard for the evidence that the employees whom would be covered by their proposed scope for the proposed Christmas Island Agreement are a geographically distinct group of employees, should determine that the group of employees they seek to be covered by the proposed Christmas Island Agreement is fairly chosen.

[80] The UCIW submit that the very existence of and the nature of the Union of Christmas Island Workers, which is a union only able to enrol employees employed on Christmas Island as members, underscores the fact that the employees on Christmas Island are a geographically distinct group. These circumstances are unique.

[81] Christmas Island is a remote location and there are real practical difficulties travelling between Christmas Island and other parts of Australia.

[82] It is submitted that the issue of scope needs to be resolved before bargaining continues and this will facilitate and promote bargaining.

[83] With respect to efficiency in bargaining for the proposed Christmas Island Agreement bargaining has not yet commenced. And it seems that Serco anticipate not commencing that bargaining until the proposed National Agreement is resolved.

[84] Under the current situation with cleaners on Christmas Island being part of the bargaining for the proposed National Agreement the Christmas Island cleaners’ concerns get very little attention.

[85] The UCIW submits that in the bargaining for the proposed National Agreement the weight of votes of cleaners employed in mainland detention centres and of the detention services officers employed in all detention centres would vastly overwhelm the votes by the 25 cleaners employed on Christmas Island.

[86] Serco’s preferred scope for the proposed National Agreement including coverage of cleaners employed on Christmas Island has given the company an unfair advantage in bargaining with these employees.

[87] The Christmas Island cleaners wish to be covered by the proposed Christmas Island Agreement and bargain for a new agreement alongside their fellow Christmas Island workers from the Christmas Island Detention Centre. This would reflect the historical position.

[88] There is also unfairness in the Christmas Island cleaners being part of the bargaining for the proposed National Agreement because of their geographical remoteness from the rest of Australia which limits their representatives advancing their interests in bargaining. The UCIW which is based on Christmas Island has been unable to travel to Sydney to attend the face-to-face bargaining meetings for the proposed National Agreement.

[89] The UCIW acknowledges that this application only deals with the scope of the proposed Christmas Island Agreement not the scope of the proposed National Agreement. The UCIW believes that if the Commission grants the scope order it has sought and includes cleaners within the scope of proposed Christmas Island Agreement then Serco should respect that decision and from then on focus its efforts concerning the cleaners employed on Christmas Island on the proposed Christmas Island Agreement. 20

The Respondent

[90] Serco submit the evidence demonstrates that there is bargaining ongoing at a national level which has been proceeding in a manner which is fair and efficient. That bargaining for the proposed National Agreement has proceeded on the basis of an assumed scope which included cleaners employed on Christmas Island but any disagreement about scope is still open to be resolved through negotiation between the parties.

[91] Serco points out that this application only concerns the proposed Christmas Island Agreement’s scope. There is no application before the Commission concerning the scope of the proposed National Agreement. 21

[92] Serco submits the onus is on the UCIW to demonstrate that making the order it seeks would promote fairer or more efficient bargaining than is currently occurring.

[93] Serco submits that whatever the UCIW fears or concerns about the outcome of bargaining speculation as to these outcomes is not a matter the Commission can have regard for in determining the scope order application because the outcomes of bargaining are uncertain and not known. Rather the Commission is to take account of the likely impacts of making the order on the bargaining itself, not on the outcomes of that bargaining.

[94] Serco recognises that in this case either party could argue that the particular scope they propose involves a group of employees who will be covered by the agreement that was fairly chosen. 22

[95] Serco submits that the business rationale for including cleaners employed on Christmas Island in the proposed National Agreement, as explained in Mr Graham’s evidence, demonstrates this is a logical and not an arbitrary decision.

[96] The scope of the proposed National Agreement has not been part of the bargaining for that agreement. Bargaining for the proposed National Agreement has been fair and efficient and is continuing.

[97] It would not be reasonable to make the scope order the UCIW seeks because this will impact upon and potentially upset bargaining that is already underway in relation to the proposed National Agreement.

[98] Serco operates a national business serving the needs of a single client that being the Department. There is a high level of consistency across Serco’s national business. There is a rational basis for having all Detention Service Officers, catering staff and cleaners subject to a national enterprise agreement that is formulated and agreed through a national bargaining framework. There can be no rational foundation for the exclusion of a small number of cleaners employed by Serco on Christmas Island. Such exclusion would not lead to efficient bargaining, it would not be fair. Consequently Serco submits the application should be dismissed.

The Legislation

[99] Section 238 of the Act prescribes when the Commission may make a scope order.

“238 Scope orders

Bargaining representatives may apply for scope orders

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

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

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

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

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

Bargaining representative to give notice of concerns

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

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

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

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

When the FWC may make scope order

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

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

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

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

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

Matters which the FWC must take into account

(4A) If the agreement proposed to be specified in the scope order will not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding for the purposes of paragraph (4)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

Scope order must specify employer and employees to be covered

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

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

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

Scope order must be in accordance with this section etc.

(6) The scope order:

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

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

Orders etc. that the FWC may make

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

(a) amend any existing bargaining orders; and

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

Relevant principles

[100] The principles which can be gleaned from past decisions that are relevant to the determination of an application for a scope order were summarised by Deputy President Sams in the decision of AMWU v Qantas Airways Limited t/a Qantas [[2017] FWC 1526] as follows,

“[165] Perhaps a useful starting point is the general approach framed by the Full Bench in BRB Modular v AMWU in the following passage found at paras 53-54:

[53] The scope of an agreement is an open question in many enterprise bargaining exercises. It is frequently a topic of competing claims, discussion and negotiation. Rarely will it be possible to say that one scope proposal is wrong and another correct. There may be justifications for a preference one way or another. Hence it is usually the case that the scope is left to the bargaining parties to determine in the context of the overall enterprise bargaining framework. The reasonableness of making a scope order should be considered against that background.

[54] As we have said above, a consideration of reasonableness requires a full consideration of all of the circumstances and a level of satisfaction that the order requiring the parties to adopt a particular scope of an enterprise agreement in their ongoing bargaining is objectively justified. We are not satisfied that the applicant has established that it is reasonable in all the circumstances to make the scope order. We are satisfied that bargaining can continue and it remains open to the parties to continue to consider the scope of the agreement in the overall context. (My emphasis)

[166] A number of other general principles have been developed in the body of jurisprudence dealing with scope order applications. These include the following:

1. By the inclusion of the word ‘may’ in the heading to s 238(4) of the Act, the Commission is to exercise its discretionary powers after determining whether all of the criteria in ss (a)-(d) are satisfied. As all of the criteria must be satisfied (by use of the disjunctive word ‘and’ separating each criterion), it must follow that if one of the criterion is not met, then a scope order cannot be made. The converse is true; that is, if all of the ss (4) criteria are met, the Commission may make a scope order.

2. The scope of a proposed enterprise agreement is a matter that can itself be the subject of bargaining by the parties for their agreement. In Stuartholme School and Others; The Corporation of the Trustees of the Roman Catholic Archdiocese of Brisbane t/as Brisbane Catholic Education Office and Others v Independent Education Union of Australia [2010] FWAFB 1714, a Full Bench of Fair Work Australia (as the Commission was then styled) said at para 21-22:

[21] The second difficulty is that there is Full Bench authority, not referred to by the majority in Ford, which strongly suggests the scope of a proposed agreement can be a proper subject for bargaining under the Fair Work Act. In Liquor, Hospitality and Miscellaneous Union v Coca-Cola Amatil (Aust) Pty Ltd (Coca-Cola) a Full Bench considered an appeal against the refusal of a member of Fair Work Australia to make a scope order. In the course of its decision the Full Bench noted that there was disagreement between the negotiating parties as to the scope of any agreement or agreements to be made. The situation is concisely set out in this paragraph:

“[32] Against this background, we turn to consider the competing interpretations of a s.237(2)(b) majority support determination, which arise because the LHMU and Coca-Cola have different bargaining positions as to the number and scope of agreements which should be made in relation to the relevant employees. The LHMU seeks a single agreement covering all employees, while Coca-Cola seeks three agreements covering various specified groups of employees. None of the agreements cover one small group of employees. There is a dispute as to the scope of the agreement or agreements to be made.”

[22] Despite the disagreement as to scope, there is no indication in the decision that because of that disagreement bargaining had not commenced. To the contrary, the Full Bench approached the appeal on the basis that a scope order might be applied for after bargaining had commenced. (My emphasis)

See also MSS Security v LHMU at paras 17-19.

3. Consideration of the views of employees may be taken into account. However, this does not mean that such views are given any greater weight than the other factors to be considered by the Commission under the other subsections. In UFU v MFESB, the Full Bench of Fair Work Australia said at para 53:

[53] As recorded above, it was submitted by the UFUA and the ACTU that particular weight should be given to the views of employees because of, for example, legislative policy imperatives concerning freedom of association. While we generally agree with that submission it requires some qualification. The power to make a scope order is predicated on disagreement between bargaining representatives. The discretion to resolve that disagreement is to be exercised as provided for in ss.238(4) and (4A). While those provisions do not assign priority to the views of employees, in applying the provisions it is necessary to have regard to the overall context. The legislative scheme supports collective bargaining principles and the Fair Work Act encourages freedom of association and collective bargaining. It may be implied from the legislative scheme that the collective choice of employees is significant. It must be said, however, that while weight should be given to the views of the employees potentially affected, it may be that a proper consideration of the matters specified in ss.238(4) and (4A) in a particular case may make it appropriate to make a scope order contrary to the views of the employees potentially affected. (My emphasis)

See also: TWU v Chubb.

4. It is improper to use a scope order application to address a bargaining representative/s’ good faith bargaining concerns, which are more properly considered under s 228 of the Act. In BRB Modular v AMWU a Full Bench of the Commissions aid at para 52:

[52] We have made the observation above that the major complaints raised by the AMWU go to the conduct of the Respondent in the negotiations and that they are, in essence, allegations that the Respondent was not engaging in good faith bargaining. It is apparent, therefore, that the Appellant was attempting to use the vehicle of a scope order application to address good faith bargaining concerns. It was an improper vehicle to ventilate those concerns. (My emphasis)

5. The onus rests on the moving party to demonstrate that the making of a scope order will encourage and facilitate bargaining which is fairer and more efficient than if no order is made. In UFU v MFESB, the Full Bench said at para 55:

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

See also: Tasmanian Water at 158.

6. Issues of mere inconvenience or preference with the bargaining process are not decisive to whether a bargaining process is fairer or more efficient. In Shinagawa I said at para 28:

[28] Mr Stewart deposed, and it was not disputed, that the negotiations for the 2008 agreements were conventional, without any disputation or angst over the outcome of two separate agreements. Moreover, the respondent’s management in 2005 had made no complaint when the two agreements concept was proposed. In my view, this history relevantly demonstrates that any perceived difficulties arising from two agreements on site, is largely speculative and is probably little more than an inconvenience, rather than a real impediment to securing appropriate and fair industrial outcomes.

See also: Royal District Nursing v HSU at para 53 and Tasmanian Water at paras 115-120.

7. Evidence which is said to support the making of a scope order which is speculative, hypothetical or presupposes outcomes of bargaining, is unhelpful to the task of determining whether a scope order should be made. In APESMA v Red Cross, Hampton C said at para 70:

[70] On balance, I am not persuaded that the granting of the scope order would promote fairer or more efficient negotiations in this matter. The evidence reveals that at this point in time many of the considerations supporting the application are largely speculative, and weighing up all of the considerations it has not been demonstrated that the making of a scope order would meet the requirements in s.238(4)(b) of the Act given all of the circumstances of this matter.

See also: FSU v BWA at 54.

8. The history of bargaining between the parties is a relevant consideration to whether a scope order should or should not be made (status quo). In TWU v Chubb, Asbury DP said at para 69:

[69] I have also given consideration to the following circumstances, which in my view, weigh against the making of a scope order in this case. The status quo is that there are separate agreements to cover each of Chubb’s Queensland Depots. The TWU is seeking to alter the status quo. I do not accept the argument that because Chubb has not filed a competing application for a scope order, that less weight should be placed on the maintenance of the status quo. This is not a case where the issue of the scope of the proposed agreement is causing disputation and has stalled the negotiations. On the case advanced by the TWU, the granting of a scope order will increase disputation by strengthening the capacity of Nerang AVOs to take protected industrial action, presumably with the involvement of Moorooka AVOs.

See also: Shinagawa; TWU v Chubb at 26, NUW v Linfox at 60, FSU v BWA at 101-104 and Tasmanian Water at 157-158.

9. Seeking leverage by increasing the bargaining power by weight of numbers is not a valid basis to make a scope order. In TWU v Chubb, Asbury DP at 60:

[60] In relation to s.238(4)(b), I am unable to be satisfied in the circumstances of this case that making a scope order will promote the fair and efficient conduct of bargaining. It is apparent from the evidence that the TWU is seeking a scope order principally for the purpose of strengthening the bargaining position of Nerang AVOs by reducing the capacity of Chubb to use AVOs from Moorooka to cover any periods of protected industrial action taken by Nerang AVOs. The view of the TWU and its members that this will increase the fairness of bargaining is subjective and I do not accept that enhancing the bargaining strength of Nerang AVOs to assist them to take more effective protected industrial action against Chubb, is a valid basis upon which I could find that bargaining would be fairer or more efficient if a scope order was made.”

Consideration

s.238 (1)

[101] The UCIW is a bargain representative for both the proposed Christmas Island Agreement and the proposed National Agreement. I am satisfied that the UCIW is a bargaining representative that has concerns that bargaining is not proceeding efficiently or fairly because the proposed National Agreement will cover cleaners employed by Serco on Christmas Island which is not appropriate and because the proposed Christmas Island Agreement will not cover appropriate employees, being the cleaners employed by Serco on Christmas Island.

s.238 (3)

[102] I am satisfied that by sending its letter dated the 30 August 2017 to Mr Graham which deals with the scope of the proposed Christmas Island Agreement, the UCIW has taken all reasonable steps to give a written notice setting out its concerns to Serco and has given Serco a reasonable time within which to respond to those concerns. I am also satisfied that the UCIW does not consider that Serco’s bargaining representatives have responded appropriately.

s.238 (4) and s.238 (4A)

[103] I am satisfied that the UCIW the applicant in this matter has met, or is meeting, the good faith bargaining requirements. There has been no submission made nor evidence to the contrary.

[104] A necessary precondition on the Commission exercising the discretion to make a scope order is that the Commission is satisfied making the order will promote the fair and efficient conduct of bargaining. A Full Bench of the Commission in UFU v MFESB [[2010] FWAFB 3009] held at [55] with respect to this consideration that “The implication is that the tribunal should be satisfied that if an order is made the bargaining will at least be fairer or more efficient or both than it would be if no order were to be made.”

[105] In this case, the evidence as to the conduct of bargaining has concerned the bargaining for the proposed National Agreement. This is because bargaining for the proposed Christmas Island Agreement has not yet begun.

[106] The remoteness of Christmas Island is a matter of fact. For employee bargaining representatives working on Christmas Island to attend the Sydney bargaining meetings for the proposed National Agreement in person they must fly first to Perth and then from Perth to Sydney. It is a notorious fact known to all parties that commercial flights from Christmas Island to Perth and vice versa are limited to usually only two days a week. Consequently there is both a significant financial cost and a significant time commitment for an employee bargaining representative from Christmas Island to attend bargaining meetings in Sydney in person, even allowing for the financial contribution to their costs offered by Serco. The length of time an employee would be away from Christmas Island to attend meetings in Sydney, held over up to four consecutive days is prohibitive because of the added travel time required. The evidence is these difficulties have caused employee bargaining representatives working on Christmas Island to not attend the Sydney bargaining meetings in person, which is a reasonable and unsurprising response to the situation.

[107] Not practically being able to participate in these bargaining meetings in person is unfair because of the disadvantage that results. For example the alternative, participation by telephone, restricts the opportunity for those bargaining representatives to have informal discussions before and after the formal meetings, or during breaks, with other bargaining representatives whether they be from Serco or are employee bargaining representatives from other locations. Telephone participation also denies the opportunity for bargaining representatives from Christmas Island to develop relationships through social interactions outside of the bargaining sessions, e.g. over the lunch break or after hours, with other bargaining representatives. All of these informal interactions can in a number of ways be beneficial in the bargaining process but are not available to those who do not attend in person.

[108] Not having these opportunities that attending the bargaining meetings in Sydney in person provides unfairly disadvantages the Christmas Island employee bargaining representatives in pursuing the interests of the Christmas Island cleaners. A further disadvantage is that participating by telephone from Christmas Island involves a risk of technical problems with the connection, as Mr Thomson experienced during the 8 November 2017 meeting, which involves some unfairness and potentially some inefficiency in the conduct of bargaining if meetings need to be adjourned or what was said needs to be repeated to deal with these problems. 23 The disadvantages in this case are a consequence of the unique location of Christmas Island.

[109] For some of the employee bargaining representatives from Christmas Island the conduct of bargaining to date for the proposed National Agreement has not been fair because they have not in practice been able to attend the meetings in Sydney in person and so have been disadvantaged.

[110] If the scope order as sought by the UCIW was issued all of the employee bargaining representatives for the Christmas Island Agreement would be on an equal footing and none advantage or disadvantaged compared to the others because they are all working on Christmas Island. All of the Christmas Island employee bargaining representatives would be negotiating with the Serco bargaining representatives in the same circumstances whether that is through in-person face-to-face bargaining meetings on Christmas Island or by meetings conducted by phone. The conduct of bargaining would be fairer for the employee bargaining representatives from Christmas Island in this situation than it has been for them in the bargaining for the proposed National Agreement where their situation is different from other groups of employees. For these reasons I am satisfied that making the scope order will promote fairer conduct of bargaining.

Is the group of employees who will be covered fairly chosen?

[111] I am satisfied on the evidence and, it is not disputed, that the group of employees who will be covered by the proposed Christmas Island Agreement if the scope order sought by the Applicant was granted was fairly chosen. As required by subsection 238 (4A) of the Act I have taken into account the fact that the proposed Christmas Island Agreement will not cover all of the employees of Serco but that the group of employees who would be covered by the proposed agreement if this application is granted is a geographically distinct group.

Is it reasonable to make the order in all the circumstances?

[112] I accept based on the evidence and submissions of the UCIW that the cleaners employed by Serco on Christmas Island would prefer to be covered by the proposed Christmas Island Agreement. I also accept that the majority of the other employee bargaining representatives involved in the negotiations for the proposed National Agreement support the UCIW in this application.

[113] The historical context is that cleaners employed on Christmas Island have not previously been involved in negotiations for an agreement other than one which was limited to employees on Christmas Island. They have not historically been involved in negotiations for a national agreement.

[114] Serco has submitted that there are a number of negative consequences for it if the scope order sought was granted which are relevant considerations.

[115] While Serco has legitimate practical reasons for wanting to have all cleaners covered by a single national agreement the circumstances are that Serco has acknowledged that the current cleaners employed on Christmas Island will retain their existing terms and conditions and that in all likelihood these will be different from the final minimum conditions negotiated for cleaners covered by the proposed National Agreement. This reality in practice erodes some of the notional benefit to Serco of having all its cleaners, including those employed on Christmas Island, covered by a single agreement.

[116] Serco is already committed to bargaining for both the proposed Christmas Island Agreement as well as the proposed National Agreement and including the cleaners employed on Christmas Island in the scope of the proposed Christmas Island Agreement in circumstances where the negotiations for this agreement have yet to commence will not be burdensome for Serco. Indeed the particular interests of the Christmas Island cleaners will have much in common with the other classifications of employees employed by Serco on Christmas Island whom Serco has agreed would be covered by the proposed Christmas Island Agreement. Consequently in my view including the cleaners employed on Christmas Island in the scope of the proposed Christmas Island Agreement will have only a limited impact on Serco.

[117] Finally if the order was issued and Serco then agrees that cleaners employed on Christmas Island will not be covered by the scope of the proposed National Agreement removing this subgroup of cleaners from the scope of the proposed National Agreement will not in any way derail, disrupt or delay the bargaining for the National Agreement. Removing a somewhat anomalous subgroup of employees from the bargaining may in fact promote more efficient bargaining for the proposed National Agreement.

[118] Considering all of the circumstances I am satisfied that it is objectively justified to make the scope order requested. I am satisfied it is reasonable in all the circumstances to exercise the discretion to make the particular scope order sought by the UCIW.

[119] An order [PR599533] to that effect will now be issued in conjunction with this decision.

COMMISSIONER

Appearances:

G. Thomson from the Union of Christmas Island Workers.

P. Brown of Baker McKenzie solicitor for Serco Australia Pty Ltd.

Hearing details:

2017.

Perth:

December 14.

 1   Email from Mr Tony Voss of Serco to Mr Gordon Thomson, 3 March 2014, Transcript at PN111 to PN118.

 2   See clause 3(d) and 17(e) of the Serco Immigration Services Agreement 2015 [AE415701].

 3   Transcript at PN119.

 4   Ibid., at PN139 to PN142.

 5   Exhibit R1 at paragraph 26 and attachment CG4.

 6   Transcript at PN485.

 7   Ibid., at PN208.

 8   Ibid., at PN196.

 9   Ibid., at PN237.

 10   Ibid., at PN238.

 11   Ibid., at PN224.

 12   Ibid., at PN234.

 13   UCIW outline of submission at paragraph 28.

 14   Transcript at PN260.

 15   Ibid., at PN268 and PN272.

 16   Ibid., at PN339 to PN342.

 17   Exhibit R1, attachment CG1.

 18   Transcript at PN383, PN392 and PN406.

 19   Ibid., at PN396.

 20   Ibid., at PN574 and PN575.

 21   Ibid., at PN524 to PN528.

 22   Ibid., at PN507 to PN518.

 23   Ibid., at PN195.

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