Veolia Environment Services (Australia) Pty Ltd
[2012] FWA 8038
•17 SEPTEMBER 2012
Note: An appeal pursuant to s.604 (C2012/5506) was lodged against this decision.
[2012] FWA 8038 |
|
DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Veolia Environment Services (Australia) Pty Ltd
(AG2012/4134)
COMMISSIONER BOOTH | BRISBANE, 17 SEPTEMBER 2012 |
Veolia Environmental Services (Australia) Pty Ltd Gladstone Operations 2012-2014 Enterprise Agreement
[1] Veolia Environmental Services (Australia) Pty Ltd (the Applicant) lodged the Veolia Environmental Services (Australia) Pty Ltd Gladstone Operations 2012-2014 Enterprise Agreement on 21 March 2012. The Australian Workers Union (“AWU”) was a bargaining representative for the agreement. The AWU supported the approval of the agreement and gave notice that it wanted to be covered by it.
[2] The Tribunal’s consideration of this agreement raised a number of issues, both substantive and technical. Each needed to be resolved before approval could be given. The process therefore was somewhat complicated and required a number of direction conferences and several correspondences among the parties and FWA.
[3] The applicant was able to resolve all but one of these issues by giving undertakings.
[4] Approval then turned on the one remaining substantive issue, namely whether the Applicant has complied with Chapter 2 division 3 of the Fair Work Act 2009 (the Act) which deals with bargaining and representation during bargaining and in particular, whether the employer has complied in particular with sections 173 and 174 of the Act.
[5] These sections are outlined below.
173 Notice of employee representational rights
Employer to notify each employee of representational rights
(1) An employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who:
(a) will be covered by the agreement; and
(b) is employed at the notification time for the agreement.
Note: For the content of the notice, see section 174.
Notification time
(2) The notification time for a proposed enterprise agreement is the time when:
(a) the employer agrees to bargain, or initiates bargaining, for the agreement; or
(b) a majority support determination in relation to the agreement comes into operation; or
(c) a scope order in relation to the agreement comes into operation; or
(d) a low-paid authorisation in relation to the agreement that specifies the employer comes into operation.
Note: The employer cannot request employees to approve the agreement under section 181 until 21 days after the last notice is given (see subsection 181(2)).
When notice must be given
(3) The employer must give the notice as soon as practicable, and not later than 14 days, after the notification time for the agreement.
Notice need not be given in certain circumstances
(4) An employer is not required to give a notice to an employee under subsection (1) in relation to a proposed enterprise agreement if the employer has already given the employee a notice under that subsection within a reasonable period before the notification time for the agreement.
How notices are given
(5) The regulations may prescribe how notices under subsection (1) may be given.
174 Content of notice of employee representational rights
Application of this section
(1) This section applies if an employer that will be covered by a proposed enterprise agreement is required to give a notice under subsection 173(1) to an employee.
Content of notice—employee may appoint a bargaining representative
(2) The notice must specify that the employee may appoint a bargaining representative to represent the employee:
(a) in bargaining for the agreement; and
(b) in a matter before FWA that relates to bargaining for the agreement.
Content of notice—default bargaining representative
(3) If subsection (4) does not apply, the notice must explain that:
(a) if the employee is a member of an employee organisation that is entitled to represent the industrial interests of the employee in relation to work that will be performed under the agreement; and
(b) the employee does not appoint another person as his or her bargaining representative for the agreement;
the organisation will be the bargaining representative of the employee.
Content of notice—bargaining representative if a low-paid authorisation is in operation
(4) If a low-paid authorisation in relation to the agreement that specifies the employer is in operation, the notice must explain the effect of paragraph 176(1)(b) and subsection 176(2) (which deal with bargaining representatives for such agreements).
Content of notice—copy of instrument of appointment to be given
(5) The notice must explain the effect of paragraph 178(2)(a) (which deals with giving a copy of an instrument of appointment of a bargaining representative to an employee’s employer).
Regulations may prescribe additional content and form requirements etc.
(6) The regulations may prescribe other matters relating to the content or form of the notice, or the manner in which employers may give the notice to employees.
[6] During the process of resolving the various outstanding issues, the Tribunal received an email from one of the Applicant’s employees (“individual employee”) who expressed concerns in terms of a “complaint” about divergent pay scales for various employees. The “complaint” included a number of statements that could have affected the Tribunal’s consideration of the compliance with ss. 173 and 174. These statements included the following:
“After consultation with other employees I can confirm none of us saw the Schedule 2.1 – employee representative rights paperwork which was supposed to be on display in a prominent place with our work environment.
…
We did not have the opportunity to elect a representative to be included in the bargaining process.”
[7] A further informal conference was conducted by the Tribunal to ascertain whether the representations made directly by the individual employee were material or not. Subsequently, Mr Sharpe, acting for the Applicant employer, advised FWA that he had personally attended a meeting, along with the AWU organiser, various managers from Veolia, the individual employee, and Veolia BSL cleaning staff. In the end, Mr Sharpe advised that all “pre-approval issues raised by the complainant before FWA have now been resolved”. The Tribunal accepts Mr Sharpe’s advice in this regard.
[8] I then sought the views of the parties and the individual employee as to approval of the agreement notwithstanding the omission of the paragraph about default representation.
[9] All parties (the company, the AWU and the individual employee) indicated that they supported approval of the agreement notwithstanding the omission of the clause.
[10] It is relevant to note here that the individual employee advised the Tribunal as follows:
“I do not wish this matter to be drawn out any further if that can be avoided.”
[11] The Tribunal, in the end, has not placed particular reliance on the “complaint” and other representations of the individual employee because resolution of the outstanding matter, although raised by the individual employee, in no way depends on the complaint, as discussed below.
[12] Following this series of events, Mr Sharpe provided written submissions on behalf of the employer.
[13] It is of note that this was not the only matter before me at the time in which this particular issue was raised. It was also raised in Ostwald Bros Pty Ltd 1. The employer’s representative was aware of Ostwald having been involved in that matter also.
Submissions
[14] The applicant acknowledges that the notice of employee representational rights did not include the following words which are prescribed by schedule 2.1 of the Regulations. The regulation incorporates the requirements of section 174(3) of the Act, extracted above. The regulation prescribes a default bargaining representative clause as follows:
“If you are a member of a union that is entitled to represent the industrial interests in relation to the work to be performed under the agreement, your union will be your bargaining representative for the agreement unless you appoint another person as your representative or you revoke the union’s status as your representative.”
[15] The applicant submits that the notice otherwise complied with the requirements of the Act. Those requirements include, for example, that the notice must be provided to employees within the 21 day period prescribed by section 181(2) of the Act.
[16] The applicant made submissions before I handed down my decision in Ostwald Bros Pty Ltd. In Ostwald the default bargaining representative clause was similarly not included in the notice.
[17] I invited the parties to make further submissions once that decision was published, and the applicant filed further submissions arguing that I should not follow Ostwald, pointing out some factual differences between the two matters.
[18] The applicant acknowledged that while this agreement is affected by the same error as occurred in the Ostwald matter, but argues that the absence of the default bargaining representative clause in the notice of representational rights is not necessarily fatal to the application for approval, a point made also in my decision in Ostwald.
[19] The applicant submits that in contrast to the facts in Ostwald, here there was no history of disputation with unions and “nor is there any disputation between the employees and employee whatsoever”. Further, the applicant submits that the agreement was approved by a majority of employees: of the 192 employees who will be covered by the agreement, 147 cast a valid vote. In its submissions, the employer argues that FWA can be satisfied that employees have genuinely agreed with the enterprise agreement pursuant to section 186(2)(a) because:
“the absence of any ‘contest’ or ‘controversy’ whatsoever in relation to ‘representational rights’ that the notice proscribed [sic] in regulation 2.05 (inclusive of its error) has in fact met its legislative purpose and any parliamentary intent.”
[20] The submissions urge consideration of the practical effect of not approving the agreement due to the rights accrued in anticipation of the approval:
“ … on the presumption of validity, the employer has taken steps to implement and apply the terms of the Agreement. The employer has provided the employees with a wage increase provided for in the Agreement, backdated to January 2012. Further the employer has increased the wage rate by 3% from 1 July 2012 in accordance with the terms of the Agreement. The employer has provided these beneficial terms and conditions to employees on the basis of its presumption of validity of the Agreement and due to the fact that ‘the Enterprise Agreement had been genuinely agreed to by the employees’…
If the Agreement were to be refused, the employees covered by the enterprise agreement would have no lawful basis for the retention of the entitlements which they have been provided on the presumption of validity of the Agreement.”
[21] The applicant submits that refusal to approve the agreement would leave the parties having to start the negotiation again, and that this cannot be the intention of Parliament, by reference to the objects stated in Part 2-4 of the Act. 2
Consideration
[22] I agree there are factual differences between this matter and Ostwald. The Tribunal must decide whether those factual differences should lead to a different conclusion as submitted by the applicant.
In Ostwald, I found as follows
[38] It is clear from the authorities that a defect or irregularity in the notice, or in the giving of the notice, does not necessarily invalidate the process such that the agreement cannot be approved. It is also clear that in some circumstances, a defective or irregular notice or defective or irregular process may indeed invalidate the notice and hence mean that an agreement cannot be approved.
[39] The Tribunal’s task is to consider the purpose of the clauses prescribed for the notice and whether the omission of the prescribed paragraph would render the notice invalid. In determining the purpose, the Tribunal must have regard to the language of the relevant provision and the scope and object of the whole statute.
[23] The decision in Ostwald also considered case law as it applied to provision of a defective or irregular notice. In particular, in Galintal where the Full Bench considered the context and purpose of the Notice:
“The context and purpose of these provisions are important. Imposing a requirement for employers to notify its employees of their rights of representation is obviously seen by the legislature as an essential ingredient of fair bargaining and agreement making under the Act. So too is the notion of employees being free to exercise their choice of representation. In some workplaces employers may be negative or even hostile to union representation. Negotiations may be quite adversarial.
The requirement in s.181(2) is that employers advise employees of their rights and allow the specified time for employees to make whatever choice they wish to make. If an employer fails to advise employees of their rights in the manner specified the requirement is not satisfied. (Emphasis added)
[24] The applicant submits that in Ostwald, “FWA also undertook an analysis of a practical approach to the effect of the absence of the omitted clause upon the question whether or not genuine agreement had been reached”
[25] In my view these submissions elevate the practical approach to the deficient notice beyond the decision in Ostwald. At the conclusion of my decision I wrote:
[68]If I am wrong in my conclusion that giving notice of the default bargaining representative is an essential part of giving valid notice, then Mr Herbert’s urging of a practical approach would require consideration of whether the agreement had been genuinely agreed by the employees.
[26] The decision in Ostwald starts from a consideration of the context and purpose of the provision. When considering context and purpose I wrote:
[63] I have concluded that the legislature had a clear intention that certain information be provided to employees during bargaining. In this case, the information was not provided, whether by the prescribed words or other words that adequately conveyed the same intent.
[27] The applicant’s submissions suggest that the facts of this matter mean I should approve the agreement because:
- there is no dispute between the parties;
- there was a bigger margin in the vote than in Ostwald;
- extra benefits have already been given to employees in terms of the agreement.
[28] Turning to these issues, I am required to consider whether to approve an agreement where there is a defective notice. The test is not whether the process of reaching the agreement involved no contest or controversy: many agreements are approved where there is contest or controversy, even a vigorously adversarial contest, to adopt the words used in Galintel. The test must relate to whether employees could know about their right to appoint a default bargaining agent. It is the notice that conveys information about that right.
[29] The extent of employee participation in the vote and the proportion of employees who voted for the agreement are not factors that prove or disprove what would have happened in the event that the default bargaining representative clause had been given as part of the notice. Parliament’s intent is not merely that a notice be given. The notice serves a purpose of aiding employees to exercise their statutory bargaining rights, and the intent is realised, as the Full Bench said in Galintel, by the inclusion of the necessary terms.
[30] The fact that the applicant has acted on the terms of the agreement in anticipation of its approval is an important matter for both the employer and employees. However, it cannot overcome the legislative requirements. The giving of a valid notice is a statutory obligation that falls on the employer pursuant to s.173(1). The validity of the notice is an element in FWA’s consideration of the agreement and its approval. An employer, acting in anticipation of approval, cannot overcome its statutory obligations. Nor can anticipatory action displace the statutory obligations imposed on this Tribunal pursuant to ss.186(2), 187 and 188(c), among others.
[31] I have concluded the legislative requirements are that certain information be provided to employees during bargaining. A notice that does not contain the relevant, prescribed information, or at least information to like effect, is a defective notice. The defect cannot be cured by the absence of dispute, the presence of a sizeable majority, or consideration of the implication to parties.
[32] The conclusion that must be reached on the facts of this matter is that the employer has not complied with section 173 because the employer has not taken all reasonable steps to give to each employee a notice including the right to be represented by a bargaining representative.
[33] The agreement is not approved.
COMMISSIONER
1 [2012] FWA 6450. An appeal pursuant to s.604 (C2012/5010) has been lodged against this decision
2 s.171 states the objects of that Part
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