Whitehorse City Council

[2016] FWCA 8594

[2016] FWCA 8594

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Whitehorse City Council
(AG2016/5107)

WHITEHORSE CITY COUNCIL COLLECTIVE AGREEMENT 2016

Local government administration
COMMISSIONER GREGORY	MELBOURNE, 1 DECEMBER 2016

Application for approval of the Whitehorse City Council Collective Agreement 2016.

Introduction

[1] This decision deals with an application for approval of the Whitehorse City Council Collective Agreement 2016 (“the Agreement”). The application was made on 16 August 2016 by the Whitehorse City Council (“the Council”). The Agreement is a single enterprise agreement.

[2] It is noted at the outset that the application is supported by each of the Union bargaining representatives, being the Australian Nursing and Midwifery Federation (Victorian branch) (“ANMF”), the Australian Municipal, Administrative, Clerical and Services Union Vic/Tas Authorities & Services Branch (“ASU”) and the Association of Professional Engineers, Scientists and Managers, Australia (“APESMA”). There are also 5 individual employee bargaining representatives, none of which have indicated any objection to the Agreement being approved.

[3] It is also noted that the only issue identified by the Commission in its review of the application, and the terms and conditions contained in the proposed Agreement, concerns a potential issue about compliance with the requirements of the National Employment Standards as they apply to redundancy. The Council does not necessarily concede this point, but has offered to provide an undertaking, in any case, in response to the issue raised.

[4] On 16 August 2016 the Commission was contacted by an employee of the Council, Mr Daniel Ricciuti, who indicated he had concerns about both the processes involved in making the Agreement, and the terms of the Agreement itself. He set out these concerns in an email. The Commission then received a submission from the Council responding to the matters raised by Mr Ricciuti. He then provided a further email to the Commission on 14 October 2016 in response. He again provided further details in an email dated 24 October 2016.

[5] On 25 October 2016 the Commission sent an email to Mr Ricciuti, with a copy to the Council, indicating the Commission had considered the materials each had provided and now sought to clarify their intentions in regard to the application. It was indicated that one option would be to have the matter set down for hearing to enable further submissions and evidence to be provided. However, on 25 October 2016 the Commission received a further email from Mr Ricciuti indicating, “I am happy for you to deal with the application in an attempt to resolve this matter. Failing resolution, then a hearing can be scheduled.” 1 This decision accordingly now deals with the application.

The Evidence and Submissions

[6] The first issue raised by Mr Ricciuti concerns what he describes as an increase to the span of hours and the removal of penalty rates. He submits these changes will have a particular impact on staff working in the Council’s leisure facilities, and those employees were not provided with transparent information about the significance of these changes. He also submits that many of these employees will receive less income under the proposed Agreement, when compared with the Agreement that now covers them, being the Whitehorse City Council Collective Agreement 2012. 2

[7] He also submits he “found the process to be unfair,” 3 and highlights the fact that the documents and other material provided in conjunction with the Agreement comprised over 1000 pages, and employees were not able to remove copies from the workplace in order to go through them in detail. He also submits employees working in the leisure facilities, most of whom who work on a casual or part-time basis, were not provided with sufficient time to view these documents. He also described the 2 days provided as the voting period to be a “limited period,”4 which made it difficult to raise issues or make enquiries about the terms of the proposed Agreement.

[8] He also notes that in the information sent to employees, by way of providing an update about the negotiating process, there was no mention made of any changes in the arrangements to do with span of hours. In addition, the nominated employee representative for the leisure services area was on annual leave at the time he made enquiries about what was being proposed.

[9] He indicated, in conclusion, that he will suffer a reduction in pay as a consequence of the changes made to the span of hours and penalty rate arrangements, and the resulting impact in the leisure facilities area. He also submits this is in conflict with the terms of the Victorian Local Government Award 2015, 5 which provides that employees are not to suffer a reduction in take-home pay as a consequence of making the Award.

[10] The submissions provided, in response, on behalf of the Council state at the outset that it has complied with the relevant legislative requirements, and the Agreement satisfies the “better off overall” test.

[11] It acknowledges that the proposed Agreement does increase the span of hours for employees employed in the leisure facilities area, and at another community centre, when compared with the existing 2012 Agreement. However, it submits it took all reasonable steps to ensure the terms of the Agreement, and its impact, were explained to employees, including those working in the leisure facilities area. It points specifically to a summary document provided to employees at the start of the access period, which expressly states that the span of hours is to be increased. It also notes this was highlighted in bargaining updates provided to staff during the bargaining process. It also denies that penalty rates have been removed, although it does acknowledge the availability of penalty rates may be reduced for some leisure facilities staff, due to the increase in the span of hours. It also submits that a number of information sessions were held with employees to explain the terms of the Agreement, and how it would affect them. It notes Mr Ricciuti registered to attend one of these sessions, but was eventually unable to attend because of car problems.

[12] It also denies it has engaged in any acts of coercion in regard to the voting process. However, it acknowledges that in the negotiations it was made clear that if an Agreement was concluded by the end of July 2016 it would be possible for the wage increases provided for in the Agreement to be operative from September 2016. It submits that in these circumstances there is no evidence of coercion and, instead, the employees involved were simply left with a realistic choice, that being to vote in favour of the Agreement on the basis proposed, or to reject that position and continue with the process of bargaining and negotiation.

[13] It also submits the Council took all reasonable steps during the access period to ensure employees had access to a copy of the Agreement. It notes it was made available on the intranet and in other common information distribution areas. In addition, all employees had access to the Agreement during a clear nine day access period prior to the vote commencing. Employees were also able to download the Agreement from the intranet, or could request that their supervisor provide them with a copy. Staff in the leisure facilities area also had access to a computer for general use during their shift.

[14] It also submits Mr Ricciuti could have raised any of these issues during the bargaining process with the nominated bargaining representative, or could have nominated himself as a bargaining representative.

Consideration

[15] In coming to a decision in this matter I have had regard to the written submissions provided to the Commission by Mr Ricciuti, and by the Council. I have also had regard to the content of the Form F17 Employer’s Statutory Declaration provided by Ms Pauline Bennett, Manager Organisation Development. It details the steps taken to provide access to the proposed Agreement for employees, and what was done to notify them of the date and place at which the vote was to occur. It also sets out the steps taken to explain the terms of the Agreement and, in this context, notes that information sheets for each work area were distributed, and this included the Leisure Facilities Facebook page being updated with relevant information from time to time.

[16] It also acknowledges that “The Arts and Recreation Department has a high number of younger employees working within Leisure Facilities. The explanation of the terms of the agreement to these employees was made via; an information session; information was posted on the Leisure Facebook page; and an “area specific” information sheet was distributed to work or home emails or to standard mail address if the employee did not have an email address.” 6

[17] The Statutory Declaration also indicates that 780 employees cast a valid vote in the ballot, with 599 voting to approve the Agreement, meaning just over 75% of those who voted supported the Agreement being approved.

[18] In terms of the area specific information that was distributed to employees in different parts of the organisation it is also noted that the update distributed to employees in the leisure facilities area, under the heading “What this means for you,” specifically indicated that the span of hours was to increase.

[19] Section 186 of the Fair Work Act 2009 (Cth) (“the Act”) makes clear that before an Agreement can be approved the Commission must be satisfied that it passes the “better off overall” test. Section 193 continues to state:

“193 Passing the better off overall test

When a non greenfields agreement passes the better off overall test

(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.”

[20] This clearly requires that the Commission carry out a comparison between the terms and conditions contained in the proposed Agreement and those contained in the underlying Award, being in this case the Victorian Local Government Award 2010. However, by way of contrast it does not require the Commission to carry out a comparison between the terms of the proposed Agreement, and those contained in an Agreement now in place and covering the employees. In this case this is the Whitehorse City Council Collective Agreement 2012.

[21] I have no reason to doubt the submissions made by Mr Ricciuti that because of the particular shifts he works in the leisure facilities area he will be impacted financially by the changes to the spread of hours in the 2016 Agreement. I also understand and acknowledge that this is obviously of concern to him. However, as indicated the Commission’s task in dealing with this application does not require it to compare the terms of the proposed Agreement with an existing Agreement. It is instead required to compare the terms in the Agreement with those in the underlying Award.

[22] It is not uncommon in my experience for a new Agreement to contain changes from a previous Agreement, some of which might be of benefit to employees and some which provide more benefit to the employer. In addition, some employees may gain a greater benefit than others. It is obviously unfortunate in such situations for those who are negatively or detrimentally affected, but that is the reality of bargaining, as all involved endeavour to reach a mutually agreed outcome through processes of claim and counter claim, compromise and concession and, hopefully, agreement.

[23] Mr Ricciuti also make reference to the provisions in the Local Government Industry Award 2010 in clause 2.4 which state “Neither the making of this award nor the operation of any transitional arrangements is intended to result in a reduction in the take-home pay of employees covered by the award.” 7 However, this commitment only applied at the time the Award was made and, in any case, is not applicable in the context of the terms contained in any Agreement made over and above the underlying Award.

[24] Mr Ricciuti also submits the employees were coerced into accepting an outcome, in that if they did not vote to approve the Agreement they would be denied back pay. He submits that what occurred went beyond what might normally be expected in the cut and thrust of negotiations about the development and acceptance of a new agreement, and the actions of the Council left employees in a position where they believed they had no option but to vote in favour of the Agreement.

[25] This again raises a potential issue in terms of what the Commission must be satisfied about before an Agreement can be approved. For example, s.186(2) of the Act requires that the Commission must be satisfied that “the agreement has been genuinely agreed to by the employees covered by the agreement”.

[26] Section 188 of the Act continues to deal with when employees can be said to have “genuinely agreed.” It states:

“188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre approval steps);

(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

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

[27] The Council has made reference in its submissions to the decision in National Tertiary Education Industry Union v Commonwealth of Australia and Another [2002] FCA 441 in support of its submission that “coercion” only exists when employees are denied being given an option other than to Act in a certain way. It submits this is not the case in the present matter and the employees had a clear choice of options.

[28] I have also had regard to the decision of Deputy President Asbury, handed down in March last year, in Central Queensland Services Pty Ltd T/A BHP Billiton Mitsubishi Alliance [2015] FWC 1554 (“ Central Queensland Services”). (It is also noted that a subsequent Full Bench decision handed down in June this year in KCL Industries Pty Ltd [2016] FWCFB 3048 indicated its support of the decision in Central Queensland Services.)

[29] In relation to s.188 of the Act the Deputy President made reference to the Full Bench decision in Ostwald Bros Pty Ltd v Construction, Forestry, Mining and Energy Union [2012] FWAFB 9512 and the following extract, in particular, at [80]:

“[80] Section 188 of the Act does not provide a wide general discretion for determining whether employees have genuinely agreed to an enterprise agreement focussed at the point of approval. Rather it requires specific actions to have been undertaken (in ss.188(a) and (b) at specified times in advance of approval), with s.188(c) then requiring satisfaction that there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees. Section 188(c) of the Act, although itself a broad discretionary consideration, is an additional matter about which Fair Work Australia needs to be satisfied and relates to grounds other than those arising in relation to the ss.188(a) and (b) matters.”

[30] The decision continues to set out a detailed review of previous decisions in which the Commission has considered whether employees can be said to have genuinely agreed to the terms of a proposed enterprise agreement. Deputy President Asbury concluded at [65]:

“[65] The approach to considering whether employees at genuinely agreed has been discussed at number of cases considerings.188 (c) and similar provisions in earlier versions of the legislation and can be summarised as follows:

• In deciding whether there are no other reasonable grounds for believing that an agreement has not been genuinely agreed to be employees who will be covered, the circumstances to be considered are those that existed when the agreement was voted on.



• A consideration of all relevant circumstances revealed by the material before the Commission, at the time the Commissions considers the application for approval is required, in order to ascertain whether there are reasonable grounds for rejecting the genuineness of the agreement;



• Circumstances including the provision of material or information to employees which has the character of being misleading or intimidating, or where approval is affected by a material non-disclosure, or there is a scheme underpinning the agreement about which employees are not informed, will be relevant to the Commission’s assessment of whether the agreement has been genuinely agreed by the employees;



• Genuine agreement requires that the consent of employees was informed and that there was an absence of coercion.



• Section 188(c) is only a basis for finding that an agreement is not genuinely agreed to if there are found to be reasonable grounds for this belief. This requires a consideration of the soundness of the agreement.



• The requirement for genuine agreement considered in conjunction with the objects of the Act in relation to agreement making betokens a concern with the authenticity and moral authority of an agreement.”

[31] The Deputy President concluded by indicating:

“[84] What an employer is not permitted to do is to mislead and misinform employees or coerce or intimidate them in a way that interferes with their right to bargain or to be represented by a person of their choice, or so that they do not have the freedom to choose to approve or not to approve an enterprise agreement. I am unable to accept that this has occurred in the present case.”

[32] As indicated already I am not satisfied that the employees in this matter can be said to have been coerced or intimidated into approving the Agreement. A proposal to backdate wage increases to a certain date, if an agreement is accepted by a particular point in time, is an approach that is often pursued by employers in enterprise agreement negotiations. The employees involved have a choice to accept that proposal or reject it and continue to negotiate. This does not constitute coercion, but rather is just part of the “argy-bargy” that typically occurs in agreement negotiations.

[33] Mr Ricciuti is also concerned about the 2 day voting period, which he submits made it difficult to digest and understand the terms and conditions in the draft Agreement. However, I am satisfied that the Council provided sufficient opportunities throughout the process, including through the specific updates provided to different parts of the organisation, to provide employees with enough information and enough opportunities to take issue with what was being proposed, if they chose to do so. Just over 75% of the 780 employees who participated in the ballot voted in favour of the Agreement being approved. I am not satisfied, in conclusion, that the evidence exists to indicate there are reasonable grounds for believing the Agreement has not genuinely been agreed to by employees.

[34] Mr Ricciuti also takes issue with some of the reasons advanced by the Council for the changes it proposes. He refers in this context to rate capping, increased competition, the increasing cost of utilities, and a Council directive to decrease expenditure and increase income. He takes issue with these justifications. However, I refer again to the decision of Deputy President Asbury when she stated:

“[74] I am also of the view that when considering whether employees have been coerced, intimidated, mislead or misinformed in relation to agreeing to the terms of an agreement, there is no requirement that the conduct of the person or persons involved was intentional. All that is required is that the Commission be satisfied that, in addition to the matters in s. 188(a) and (b), there are other reasonable grounds for believing that the agreement has not been genuinely agreed by employees.” 8

[35] I agree with the views expressed by the Deputy President. In my experience employers almost inevitably at some point in an enterprise bargaining process make much of the difficult circumstances confronting the organisation at the time, and the consequent need for restraint in the negotiations. Similarly, other parties involved in the process attempt to play down the significance of the claims they are pursuing. While some of this positioning may well be overstated I am not satisfied that it, of itself, means the final agreement has not been genuinely agreed to by the employees.

Conclusion

[36] I am otherwise satisfied that each of the requirements in ss.186, 187, 188 and 190, as are relevant to this application for approval, have been met. The undertaking that has been proposed by the Council is accepted and will now be taken to be a term of the Agreement. It is attached in Annexure A. The Agreement is accordingly approved and will operate from 8 December 2016. The nominal expiry date of the Agreement is 8 December 2019.

[37] The ANMF, the ASU, and APESMA, being bargaining representatives for the Agreement, have each given notice under s.183 of the Act that they want the Agreement to cover each of the organisations. In accordance with the provisions contained in s.201(2) of the Act I note that the Agreement covers each of those organisations.

COMMISSIONER

Attachment A

 1   Email correspondence from Mr Daniel Ricciuti to Fair Worm Commission, dated 25 October 2016.

 2   AE896528.

 3   Email correspondence from Mr Daniel Ricciuti to Fair Work Commission, dated 16 August 2016.

 4   Ibid.

 5   MA000132.

 6   Form F17 – Employer’s statutory declaration in support of an application for approval of an enterprise agreement, of Ms Pauline Bennett, signed 11 August 2016 at [2.7].

 7   MA000112.

 8   Central Queensland Services Pty Ltd T/A BHP Billiton Mitsubishi Alliance [2015] FWC 1554 at [74].

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