Utilities Management Pty Ltd T/A SA Power Networks
[2022] FWCA 3887
•7 NOVEMBER 2022
| [2022] FWCA 3887 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Utilities Management Pty Ltd T/A SA Power Networks
(AG2022/4164)
Utilities Management Pty Ltd Enterprise Agreement 2021
| Electrical power industry | |
| DEPUTY PRESIDENT MASSON | MELBOURNE, 7 NOVEMBER 2022 |
Application for approval of the Utilities Management Pty Ltd Enterprise Agreement 2021.
An application has been made for approval of an enterprise agreement known as the Utilities Management Pty Ltd Enterprise Agreement 2021 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Utilities Management Pty Ltd T/A SA Power Networks (the Applicant). The Agreement is a single enterprise agreement.
In making its application for approval of the Agreement, the Applicant requested in correspondence received by the Commission on 4 October 2022 that the Commission not approve the Agreement on or before 14 December 2022. The request was made to enable time for the Applicant to manage difficulties associated with reconfiguration of its payroll system that was required to reflect the new Agreement terms. The Applicant expressed concern that if approval of the Agreement was not delayed as sought, it may impact its ability to meet its back-pay obligations which are dealt with at clause 8.1 of the Agreement.
Correspondence was subsequently sent by my Chambers to the Applicant on 12 October 2022 setting out my preliminary concerns in relation to the Agreement. In that correspondence I also expressed my preliminary view that I saw no basis for the Commission to delay approval of the Agreement if it was otherwise satisfied that the Agreement was capable of approval. The responses subsequently provided by the Applicant to the Commission’s correspondence dated 12 October 2022 included submissions and proposed undertakings that addressed my concerns regarding approval of the Agreement. This left the matter of the Applicant’s request for a delay in approval of the Agreement to be determined.
The Applicant subsequently sought and was afforded an opportunity to be formally heard on its request for approval of the Agreement to be delayed. Written submissions were invited from the Applicant in response to which bargaining representatives were provided with an opportunity to file material in reply.
Should approval of the Agreement be delayed?
Applicant submissions
The Applicant submits that while s.186(1) of the Act states that the Commission “must approve the agreement….if the requirements set out in this section and section 187 are met’ the Act does not specify “when” the Agreement is to be approved. It also contends that s.589 of the Act confers a broad discretion on the Commission to determine how and when it may deal with matters before it and may make interim decisions in relation to matters before it on its own initiative or on application by a party.
The Applicant further submits that the word “may” where it appears in ss.589(1), (2) & (3) indicates that the power to issue decisions and interim decisions under s.589 of the Act is a discretionary power and that subject to consideration of any relevant matters, the Commission has the power under s.589 to grant the application to delay approval of the Agreement.
According to the Applicant there are several circumstances that weigh in favour of the Commission exercising its discretion to delay approval of the Agreement such that either;
the Commission makes a decision under s.589(1) of the Act to deal with the application for approval of the Agreement on or about 7 December 2022 such that the Agreement operates on and from 14 December 2022 (or another date to be determined by the Commission); or in the alternative
the Commission makes an interim decision under s.589(2) of the Act to approve the application for approval of the Agreement on or about 7 December 2022 such that the Agreement operates on and from 14 December 2022 (or another date to be determined by the Commission).
The Applicant notes that a delay of between 4-6 weeks is not significant in the context of protracted bargaining which has been ongoing since the notice of employee representational rights (the NERR) was issued on 5 June 2020. The Applicant also contends that the Commission should on the basis of various authorities, in determining whether to grant the Agreement approval delay application, take into account;
whether granting the delay application would be in the public interest[1] in circumstances where not delaying approval could result in significant and costly litigation;
whether granting the delay application would accord with the objects of the Act[2] which relevantly includes that the Act specifically provides workplace relations laws that are flexible for businesses[3], promote productivity and economic growth[4] and achieves productivity and fairness[5]; and
whether granting the delay application would accord with the objects of the relevant Part of the Act[6] in circumstances where the objects of Part 2-4 of the Act specifically enable collective bargaining in good faith for enterprise agreements that deliver productivity benefits[7].
The Applicant also contends that the practical effect of the orders sought by it is to ‘stay’ the application for approval of the Agreement to a later date. It follows in its submission that stay applications are generally determined by reference to the “balance of convenience”, which it submits favours the granting of the application to delay approval of the Agreement. The Applicant submits that unless the application to delay approval of the Agreement is granted, it is unlikely to have sufficient time to properly update its payroll systems prior to the commencement of the new Agreement. This could give rise to the Applicant breaching the terms of the Agreement and exposing it to claims for underpayment of wages.
To further support its application for a delay in approval of the Agreement, the Applicant states that it is prepared to provide undertakings to ensure that any employee whose employment ends after the date the Agreement was lodged for approval on 4 October 2022 and before it commences to operate, would receive the applicable back-pay as if the Agreement applied at the date of dismissal.
Bargaining representative submissions
The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), which is a bargaining representative for the Agreement, filed material in reply to the Applicant’s application to delay approval of the Agreement. In doing so it opposes the application for a delay in approval of the Agreement.
The CEPU submit that s.186(1) requires the Commission to approve an agreement if it is satisfied that the requirements of ss.186 & 187 are met. This is reinforced by a key object of Part 2-4 of the Act, that being s.171(b)(iii), which makes clear that the Commission must deal with agreement approval applications without delay.
Regarding the Applicant’s submissions on the exercise of discretion pursuant to s.589(1) of the Act, the CEPU submits that the present matter is not one where such discretion should be exercised. That is because the Applicant has not led evidence on the balance of convenience favouring its application for delay in approval of the Agreement. Furthermore, a delay would hold the potential to adversely affect employees who may have resigned, retired or been dismissed in the period between the Agreement application being filed and the date of operation of the Agreement following approval. That is because the enforceable entitlements of higher pay rates and backpay entitlements that would flow from approval of the Agreement would be foregone by reason of a decision to delay approval of the Agreement.
The CEPU also submit that a delay in approval of the Agreement would also potentially delay processing of backpay entitlements such that employees will not have the benefit of a significant backpay entitlement in the period preceding Christmas.
Consideration
Before turning to the determine whether a delay in approval should be granted, it is necessary to say something about the circumstances in which the application for delay in approval of the Agreement is made. Firstly, the concerns held by me regarding approval of the Agreement have been resolved through submissions and proposed undertakings provided by the Applicant such that I am satisfied that the requirements set out in ss.186 & 187 have been met. Consequently, I “must” now approve the Agreement.
The next point to be made is that while the Applicant has made various submissions regarding the technical challenges it confronts in implementing the Agreement from a payroll perspective, it has led no evidence to support that submission. Furthermore, there is no evidence before me of any communication between the Respondent and bargaining representatives prior to the filing of the application for approval of the Agreement that implementation of the Agreement would be problematic from a payroll perspective.
Finally, the parties commenced bargaining for the Agreement over 2 years ago. In these circumstances it is difficult to comprehend how the employer now finds itself in a position where it is unable to implement in a timely manner the outcome of bargaining. I note that according to its response at question 20 of the Form F17, the Applicant advised employees on 2 September 2022 that Agreement approval details would be sent out the following week. This suggests that the final form of the Agreement, including those elements impacting payroll requirements, were known to the Applicant at least two months ago. In proceeding to conduct a ballot for approval of the Agreement from 15-20 September 2022, it also ought to have been reasonably assumed by the Applicant that the Commission would deal with the application for approval of the Agreement in a timely manner, consistent with its statutory obligations.
Turning now to the matters raised by the Applicant in seeking that the Commission defer its approval of the Agreement. It is contended by the Applicant that s.186(1) of the Act does not specify when the Commission “must” approve an agreement and that there is a discretion conferred by s.589 of the Act for the Commission to delay approval even where it has reached the requisite satisfaction that the requirement of ss.186 & 187 have been met. It variously calls in support of that submission on the objects of the Act, the objects of Part 2-4 of the Act and that the balance of convenience favours a ‘stay’ of the decision. The Applicant also proposes undertakings to remedy any detriment that employees or former employees may suffer because of the Commission delaying approval of the Agreement.
I accept that s.186(1) of the Act does not specify the timing of when the Commission “must” approve an agreement once satisfied in respect of ss.186 & 187 matters. Read in context however and by reference to the objects of Part 2-4 of the Act, the command in s.186(1) is clear in my view. The Commission must deal with an application for approval an agreement “without delay”[8]. That extends in my view to approval of an agreement once the Commission is satisfied in respect of ss.186 & 187 requirements. To delay approval of an agreement once satisfied of the statutory requirements being met would in my view be contrary to the objects of Part 2-4 of the Act.
Support for the above may also be seen in the Explanatory Memorandum to the Fair Work Bill 2008 (the EM) where the following was said;
“Clause 186 – When FWA must approve an enterprise agreement – general requirements
767. This clause provides that FWA must approve an enterprise agreement if the requirements of this clause and clause 187 are met. An enterprise agreement that has been made in accordance with clause 182 does not have any legal effect until it is approved by FWA. Therefore, an enterprise agreement cannot have effect at general law.
768. It is intended that FWA will usually act speedily and informally to approve agreements, with most agreements being approved on the papers within 7 days. This period has not been legislated, however, as there may be instances where approval takes longer because FWA has concerns about approving the agreement and it is necessary to seek further information from the bargaining representatives. FWA may hold a hearing, but it need not. An example of a case where FWA might hold a hearing is where there is insufficient information before it as to ordinary time working patterns to be satisfied on the papers that the agreement passes the better off overall test in relation to a group of employees covered by the agreement.” (my emphasis added)
The present matter before me is not a case where a hearing is required to obtain further information from the parties. As earlier stated, my concerns regarding approval of the Agreement have been addressed such that there is no impediment to the Agreement’s approval. To proceed with approval of the Agreement “without delay” would be entirely consistent with the objects of Part 2-4 of the Act, with such approach finding support in the EM.
The further point to be made regarding the timeliness with which the Commission “must” approve an agreement is that the Act permits parties to agree on prospective dates of operation of an agreement. Section 54(1) of the Act makes clear that an agreement will operate 7 days after approval of the agreement[9] or at a later date if specified in the agreement[10]. The legislature clearly envisaged that if parties wished to defer the operative date of an agreement once approved, it could be done by agreement of the parties. This tells against the capacity of the Commission to consciously defer issuing a decision to approve an agreement once satisfied as to the statutory requirements for approval having been met. To do so would in my view render s.54(1)(b) of the Act otiose.
Turning to the broad discretion the Applicant contends is conferred by s.589 of the Act, it is useful to set out that section of the Act, which states as follows;
“589Procedural and interim decisions
(1) The FWC may make decisions as to how, when and where a matter is to be dealt with.
(2) The FWC may make an interim decision in relation to a matter before it.
(3) The FWC may make a decision under this section:
(a) on its own initiative; or
(b) on application.
(4) This section does not limit the FWC’s power to make decisions.”
The primary point to be made regarding s.589 of the Act is that it is directed to “procedural” and “interim” decisions. The decision that the Applicant seeks be delayed, that of approval of the Agreement, is neither a “procedural” or “interim” decision. As such s.589 has no work to do for the reasons expanded on below.
I readily accept that s.589(1) confers a broad discretion to the Commission, but that discretion is confined to “procedural decisions” on “how, when and where” a matter is to be dealt with. I do not accept that the discretion conferred by s.589 extends to deliberately delaying a decision to approve an agreement in order to accommodate the request of one of the parties. A decision to delay the Agreement approval decision would not in my view be a procedural decision going to “how, when and where” a matter is to be dealt with. I have already dealt with the manner in which the matter is to be conducted, i.e., “how, when and where” the matter was to be dealt with. Correspondence was sent to the Applicant on 12 October 2022 setting out my concerns regarding approval of the Agreement. Those concerns were resolved, and the Agreement is now able to be approved. A decision to now approve the Agreement is not a “procedural” decision and as such s.589(1) is not relevant.
As regards the alternative path urged by the Applicant, that of issuing an interim decision pursuant to s.589(2), that section similarly has no work to do as there is no interim decision to be made. The requirements of ss.186 & 187 have been met which compels approval of the Agreement. Issuing an interim decision that fell short of approving the Agreement would be contrary to s.186(1) of the Act in circumstances where I am satisfied that the requirements of ss.186 and 187 have been met.
Nor do I accept that the authorities relied on by the Applicant are on point in relation to the matter before me. While they certainly support the Applicant’s argument that s.589 confers a broad discretion to the Commission, which I readily accept, the authorities do not deal with approval of an enterprise agreement where the statutory requirements for approval of an agreement have been met. For example, the decisions in Peter French v The Good Guys Discount Warehouse[11] (French) clearly involved a procedural decision going to “how, when and where” the Commission would deal with an unfair dismissal application in circumstances where a stay of the proceedings was sought pending the outcome of separate Federal Court proceedings. Similarly, in Kylie Green v Northern Territory Commissioner for Public Employment[12] the Commission was similarly considering a stay of unfair dismissal proceedings that was sought pending the outcome of a police investigation into the conduct that led to the employee’s dismissal.
Were I to accept, as the Applicant contends, that there is a discretion conferred by s.589 of the Act to delay approval of the Agreement, I would decline to do so for the reasons set out below.
Firstly, contrary to the submissions of the Applicant, I find no support in the objects of the Act to support such a course of action. While on one view a delay in approving the Agreement might be argued as giving effect to the object of flexibility for business[13], such delay does not promote productivity and could not be seen as being “fair” to employees that would be covered by the Agreement, particularly those who may leave the Applicant’s employment during the period of delay and thereby miss out on an enforceable entitlement that would otherwise flow to them. I similarly reject that object 3(f) is supportive of the application to delay approval of the Agreement.
Secondly, a delay in approval of the Agreement holds the potential to adversely affect employees including those who may leave the Applicant’s employment during the period of delay. The undertakings offered by the Applicant to address that potential impact is no answer as I am unable to accept such an undertaking. That is because I do not hold concerns that the Agreement does not meet the requirements of ss.187 & 187[14]. Any commitment by the Applicant to remedy that potential adverse impact that sat outside the Agreement would of course be a matter for the Applicant, but such a commitment would be unenforceable as a term of the Agreement.
Finally, the Applicant likens the delay in approval of the Agreement being sought as akin to a ‘stay’ and that the balance of convenience favours the grant of the ‘stay’. This submission appears to ignore that the principles for granting a stay, as set out by the Full Bench in Edghill v Kellow-Falkner Motors Pty Ltd[15], are the principles to be applied when considering the stay of a decision already made and under appeal. In my view those principles are not relevant in the present matter. The ‘stay’ sought in the matter presently before me is not a stay in relation to a decision already made but rather, is sought in respect of a decision that ‘must’ be made where the statutory pre-requisites for approval of the Agreement have been met.
It follows from the foregoing that I decline to delay approval of the Agreement.
Conclusion
The Employer has provided written undertakings. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement. The undertakings are taken to be a term of the Agreement.
Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.
I note that several clauses may be inconsistent with the National Employment Standards. Given the National Employment Standards precedence clause at clause 8.1 of attachment 2 to the Agreement, I am satisfied that the more beneficial entitlements of the NES will prevail.
The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, the Association of Professional Engineers, Scientists and Managers, Australia and the Australian Municipal, Administrative, Clerical and Services Union being bargaining representatives for the Agreement, have given notice under s.183 of the Act that they want the Agreement to cover them. In accordance with s.201(2) I note that the Agreement covers these organisations.
The Agreement is approved and, in accordance with s.54 of the Act, will operate from 14 November 2022. The nominal expiry date of the Agreement is 31 December 2023.
DEPUTY PRESIDENT
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Annexure A
[1] John Holland Queensland Pty Limited v Construction, Forestry, Mining and Energy Union[2014] FWC 3583 at [24].
[2] Kylie Green v Northern Territory Commissioner for Public Employment [2022] FWC 1302 at [31].
[3] Fair Work Act 2009, section 3(a)
[4] Ibid
[5] Ibid, section 3(f)
[6] Kylie Green v Northern Territory Commissioner for Public Employment [2022] FWC 1302 at [31].
[7] Fair Work Act 2009, section 171(a)
[8] Fair Work Act 2009, section 171(b)(iii)
[9] Ibid section 54(1)(a)
[10] Ibid section 54(1)(b)
[11] [2017] FWC 3545
[12] [2022] FWC 1302
[13] Fair Work Act 2009, section 3(a)
[14] Ibid, section 190(1)(b)
[15] [200] AIRC 785, at [5]
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