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[2014] FWC 7123
Fair Work Commission
2014-10-24
Commissioner Lewin
Original judgment source is linked above.
[2014] FWC 7123 [Note: a correction has been issued to this document] [Note: An appeal pursuant to s.604 (C2014/7740) was lodged against this decision - refer to Full Bench decision dated 24 April 2015 [[2015] FWCFB 1832] for result of appeal.]
s.236 - Majority support determination
Construction, Forestry, Mining and Energy Union
Application for a majority support determination - all employees concerned want to bargain - application opposed by the employer - employer negotiating with other employees - whether group fairly chosen - whether majority support determination is "inappropriate"- whether scope order is "more appropriate" - whether reasonable to make determination.
[1] This decision concerns an application for a majority support determination made to the Fair Work Commission (the Commission) under s 236 of the Fair Work Act 2009 (the Act). The application has been made by the Construction, Forestry, Mining and Energy Union (the CFMEU).
[2] The CFMEU is a bargaining representative for 15 employees of Alcoa of Australia Limited (Alcoa) who are engaged as power station operators at the Anglesea electrical power generation station of Alcoa in Victoria.
[3] The relevant statutory provisions under which the application is made and is to be determined are set out below:
(1) A bargaining representative of an employee who will be covered by a proposed single-enterprise agreement may apply to the FWC for a determination (a majority support determination) that a majority of the employees who will be covered by the agreement want to bargain with the employer, or employers, that will be covered by the agreement.
(a) the employer, or employers, that will be covered by the agreement; and
(b) the employees who will be covered by the agreement.
237 When the FWC must make a majority support determination
(1) The FWC must make a majority support determination in relation to a proposed single-enterprise agreement if:
(a) an application for the determination has been made; and
(b) the FWC is satisfied of the matters set out in subsection (2) in relation to the agreement.
Matters of which the FWC must be satisfied before making a majority support determination
(i) who are employed by the employer or employers at a time determined by the FWC; and
(b) the employer, or employers, that will be covered by the agreement have not yet agreed to bargain, or initiated bargaining, for the agreement; and
(c) that the group of employees who will be covered by the agreement was fairly chosen; and
(d) it is reasonable in all the circumstances to make the determination.
(3) For the purposes of paragraph (2)(a), the FWC may work out whether a majority of employees want to bargain using any method the FWC considers appropriate.
(3A) If the agreement 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 (2)(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.
(4) The determination comes into operation on the day on which it is made."
[4] There is no dispute that the application is validly made in accordance with the statutory provisions, in particular ss 236(1) and (2). There is also no dispute that Alcoa has not yet agreed to bargain with the employees who are subject of this application or commenced bargaining for the relevant proposed enterprise agreement in relation to which the application has been made.
[5] The application is opposed by Alcoa. The grounds upon which Alcoa opposes the application are as follows:
[6] It is convenient to note at this point that the enterprise agreement in respect of which Alcoa has commenced bargaining is not the enterprise agreement proposed by the employees who are the subject of this application. The enterprise agreement in respect of which Alcoa has started bargaining would not cover the employees in respect of whom the majority support determination sought would be made.
[7] Historically, the Anglesea power station has been primarily associated with the supply of electrical power to the Point Henry aluminium smelter operated by Alcoa. Due to the impending closure of the smelter, the Anglesea power station will operate as a generator of electrical power for sale to the national electricity supply grid. Associated with the power station is an open-cut coal mine.
[8] The 15 employees for whom the CFMEU is a bargaining representative have each signed an individual petition evidencing their unanimous wish to bargain with Alcoa for a proposed enterprise agreement.
[9] On what is before me, I am satisfied that the relevant employees in respect of whom the determination is sought want to bargain.
[10] It seems to me that the critical issues to be determined in this matter are:
[11] In the case of Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union [2012] FWAFB 2206; (2012) 219 IR 139 (Cimeco), albeit in a different statutory context, a Full Bench of the Commission considered the proper approach to s 186(3) of the Act, which refers to a group of employees being "fairly chosen" for the purposes of making an enterprise agreement and approval by the Commission of an enterprise agreement.
[12] Before turning to the evidence, it is appropriate to refer at length to that decision, as follows:
"[10] The Tribunal's first task under s 186(3) is to establish whether the agreement covers all of the employees of the employer(s) covered by the agreement. If all of the employees are covered then s 186(3A) is irrelevant but the Tribunal must still decide whether the group of employees covered by the agreement (ie. all of the employers' employees) was "fairly chosen". In some circumstances it may not be fair to choose all of the employees of an employer as the group to be covered by an agreement. If all of the employees are not covered then the Tribunal must make a finding as to whether the group of employees covered by the agreement is geographically, operationally or organisationally distinct. Absent such a finding the Tribunal cannot properly perform its statutory task. Section 186(3A) provides that the Tribunal must take that matter (ie. Whether the group is geographically, operationally or organisationally distinct) into account and give it due weight, having regard to all other relevant factors. Finally, the Tribunal must state its reasons for concluding that the group of employees either was or was not fairly chosen.
[11] At issue in these proceedings is the proper construction of the expression "fairly chosen" in s 186(3). The starting point is to construe the words according to their ordinary meaning having regard to their context and purpose.
[12] The words "fairly" and "chosen" have a variety of meanings, depending on the context. The Oxford Dictionary defines "chosen" to mean, among other things, "taken by preference, selected, picked out". The word "chosen" in the context of s 186(3) simply means selected to be covered by the relevant agreement.
[13] The word "fairly" is derived from the adverb "fair" and is a word of wide import. What is fair in a particular context is largely a matter of impression and judgment. Of the various definitions of "fairly" in The Oxford Dictionary the most apt in this context are:
"by proper means, legitimately, impartially, justly"; and
"with due regard to equity, candidly, impartially; without undue advantage on either side".
[14] It is also relevant to note that s 186(3) requires FWA to be satisfied that the group of employees covered by the agreement "was fairly chosen". We agree with the observation of Lawler VP in Re ANZ Stadium Casual Employees Enterprise Agreement 2009 that:
"… the group of employees to be covered by a proposed agreement is "chosen" when the employer and the main employee bargaining representatives agree on a particular scope or the bargaining representatives commence bargaining on a shared assumption as to scope (as is often the case when bargaining proceeds by reference to the terms of an existing agreement that is to be replaced by a proposed new agreement) … The time of the choosing is a factual issue to be determined in the usual way. The group of employees to be covered by a proposed agreement - the scope of the agreement - will typically be chosen at or shortly after the commencement of bargaining …"
[15] Section 186(3A) is also relevant. In circumstances where an agreement does not cover all of the employees of the employer(s) covered by the agreement s 186(3A) imposes an obligation on FWA, in deciding whether the employees were "fairly chosen", to "take into account" whether the group of employees covered by the agreement is geographically, operationally or organisationally distinct. To take a matter into account means that the matter is a "relevant consideration" in the Peko-Wallsend sense of matters which the decision maker is bound to take into account. As Wilcox J said in Nestle Australia Ltd v Federal Commissioner of Taxation:
"To take a matter into account means to evaluate it and give it due weight, having regard to all other relevant factors. A matter is not taken into account by being noticed and erroneously discarded as irrelevant."
[16] Curiously the Act does not specify how the matters in s 186(3A) are to be taken into account. The context and legislative history are relevant. In terms of the context each of the characteristics identified in s 186(3A) has a degree of objectivity about them. The selection of the group of employees to be covered by an agreement on some objective basis (as opposed to an arbitrary or subjective basis) is likely to favour a conclusion that the group was fairly chosen.
[17] The legislative history of these provisions is also instructive. For example, the Workplace Relations Act 1996 (Cth) (the 1996 Act) provided that collective agreements could be made covering a "single business" or "part of a single business". Section 322(3) of that act provided that "part of a single business" included:
"(a) a geographically distinct part of the single business; or
(b) a distinct operational or organisational unit within the single business."
[18] Hence, under the 1996 Act an agreement could be made in relation to a part of a business that was geographically, operationally or organisationally distinct, without any separate consideration of whether the group of employees covered by the agreement were fairly chosen.
[19] Given the context and the legislative history it can reasonably be assumed that if the group of employees covered by the agreement are geographically, operationally or organisationally distinct then that would be a factor telling in favour of a finding that the group of employees was fairly chosen. Conversely, if the group of employees covered by the agreement was not geographically, operationally or organisationally distinct then that would be a factor telling against a finding that the group was fairly chosen.
[20] It is important to appreciate that whether or not the group of employees covered by the agreement is geographically, operationally or organisationally distinct is not decisive, rather it is a matter to be given due weight, having regard to all other relevant considerations.
[21] It is not appropriate to seek to exhaustively identify what might be the other relevant considerations. They will vary from case to case and will need to be demonstrated to the satisfaction of the tribunal. The word "fairly" suggests that the selection of the group was not arbitrary or discriminatory. For example, selection based upon employee characteristics such as date of employment, age or gender would be unlikely to be fair. Similarly, selection based on criteria which would have the effect of undermining collective bargaining or other legislative objectives would also be unlikely to be fair. It is also appropriate to have regard to the interests of the employer, such as enhancing productivity, and the interests of employees in determining whether the group of employees was fairly chosen. In this regard, it is not only the interests of the employees covered by the agreement that are relevant; the interests of those employees who are excluded from the coverage of the agreement are also relevant. We note that there is a suggestion to the contrary in the oral submissions put on behalf of Cimeco when counsel submitted that:
"It was an erroneous approach to introduce the identification of the persons who were relevantly employed at the time of the making of the agreement for the purposes of testing the group chosen.
[22] To the extent that it is suggested that the interests of the excluded employees are irrelevant we reject that submission. In evaluating whether the group to be covered by the agreement has been fairly chosen it is entirely appropriate to have regard to the consequences of that choice, that is, which employees have been excluded from the agreement.
[13] Similar statutory terms regarding the meaning of "fairly chosen" in other related statutory contexts have also been considered in United Firefighters' Union of Australia v Metropolitan Fire & Emergency Services Board [2010] FWAFB 3009; (2010) 193 IR 293 (UFU) and The Australian Workers' Union v BP Refinery (Kwinana) Pty Ltd [2014] FWCFB 1476 (Kwinana). On my reading of these Full Bench decisions, I discern consistency of approach with the principles expressed in Cimeco concerning the proper approach to the relevant provisions of s 237(2)(c) and I will determine this matter accordingly.
[14] The following persons filed witness statements and gave viva voce evidence at the hearing:
[15] There are no substantial conflicts in the evidence of a factual nature. In substance, the differences between the witnesses are matters of interpretation, definition, emphasis or reasoning. That is to say, the differences in the evidence, other than some matters of detail, are somewhat discursive (in the sense of directly or indirectly interpreting concepts addressed in the course of Commission decisions arising in the statutory context of applying the words "fairly chosen" to describe a group of employees to be covered by an enterprise agreement or a proposed enterprise agreement), and to some extent, opinion or judgement about matters the witnesses no doubt consider pertinent.
[16] I review some, but not all, of the factual information provided by the evidence, below. Nevertheless, I have taken all the evidence into account for the purposes of this decision and given each aspect due consideration in arriving at my conclusions.
[17] The employees who seek the determination through their bargaining representatives are not the subject of an enterprise agreement and never have been.
[18] The employees are part of what is described by Alcoa as a team or family within the operational and managerial structure of the power station. The employees have historically been award free and subject to individual common law contracts of employment.
[19] Alcoa designates the employees who are proposing the relevant enterprise agreement as Power Station Operators (PSOs). This descriptor was invented some years ago by Alcoa to replace a previous nomenclature relevant to positions within what Alcoa describes as the operative team or family.
[20] From time to time there have been employees variously described as PSO 2, 3, 4, 5 and 6. The relevant employees who would be covered by the proposed enterprise agreement and the determination sought are described by Alcoa as PSO4, PSO5 and PSO6. There are currently no PSO2 or PSO4 employees. Alcoa employs PSO3 employees who are subject to the supervision of PSO5 and PSO6 employees. PSO3 employees are covered by the Alcoa Point Henry Smelter and Anglesea Power Station Agreement 2011 (the Agreement), as would be any PSO2 employees, if such were currently or subsequently employed.
[21] Therefore, the relevant context is a situation where the proposed enterprise agreement, in respect of which the determination is sought, will not cover all of the employees of the employer.
[22] The PSO6, PSO5 (and PSO4) and PSO3 (and PSO2) employees, as variously employed from time to time, work in an organisational structure as follows:
[23] There are a number of employees of Alcoa at the power station and associated mine site who perform functions other than that of the Power Station Operator group.
[24] The PSO6, PSO5 and PSO3 employees, currently engaged, are based in the control room of the power station. The PSO3 employees have a desk and computer terminal inside the control room. PSO3 employees, however, largely perform duties outside the control room. PSO3 employees are not authorised to operate the control panel of the power station. Both the PSO6 and PSO5 employees are authorised to do so and are the principal operators of the control panel.
[25] Alcoa describes the PSO6 employees as having responsibilities which can be characterised as "managerial" as well as operational, including supervision of the PSO5 and PSO3 employees.
[26] In considering if a group of employees that will be covered by a proposed enterprise agreement was fairly chosen, for the purposes of s 237(2)(c) of the Act, the Commission must take into account whether that group of employees is geographically, operationally or organisationally distinct, having regard to s 237(3A) of the Act.
[27] This raises the question of what the geographical reference is for the evaluation of whether the PSO6 and PSO5 (and PSO4) employees can be described as distinct accordingly. While Alcoa's operations at Anglesea and Point Henry are covered by a single enterprise agreement they have some geographical distinction.
[28] However, I do not give that great weight in the circumstances, particularly as the Point Henry smelter is geographically close, nor do I attach great weight to the distinct geographic location of the Anglesea power station. This is due to my taking into account the imminent closure of the Point Henry smelter.
[29] Despite what might constitute potential points of geographic distinction in the particular circumstances between the Point Henry smelter and the Anglesea power station, my approach is to consider the relevant geographical location as confined to the operation of the power station and the associated mine at Anglesea. In my view, that is the relevant Alcoa enterprise in the circumstances which evolved from the decision to close the Point Henry smelter. Geographically, the area is relatively compact. I judge that, within the scope of that enterprise, the PSO6 and PSO5 (and PSO4) employees are not geographically distinct. Rather, in my view, they are geographically located with all of the relevant employees conducting the relevant enterprise for Alcoa at the Anglesea electrical power generation station. In particular, they are geographically collocated with the other Power Station Operators, that is, the PSO 3 (and PSO 2) employees.
[30] I will have regard to the weight that should be attached to this conclusion for the purpose of determining if the relevant group of employees was fairly chosen in all the relevant circumstances, below.
[31] The PSO6 and PSO5 (and PSO4) employees are in some ways operationally distinct within the enterprise as a whole and in other ways indistinct. The significant point of distinction is the particular and exclusive responsibility of PSO6 and PSO5 employees for the control function of the operation of the power station. In particular, continuous use of the control panel in the control room of the power station.
[32] On my assessment of the evidence, the PSO6 and PSO5 and PSO3 employees, currently engaged, are operationally distinct and are identified as such in Alcoa's functional grouping of the PSO employees, which it describes as Power Station Operators. As are the vacant positions of PSO4 and PSO2. However, PSO2, 3, 4, 5 and 6 employees should be considered operationally indistinct from one another. That group as shown in the organisational chart, above, is the group of employees at the Anglesea location and in the enterprise who are responsible for the operation of the power station.
[33] On what is before me, operational responsibility for the power station is distinct from the mine operations and other functions necessary for the conduct of Alcoa's enterprise at Anglesea.
[34] In due course it will be necessary to give consideration to the coverage of one part of this operationally distinct group by the scope of an enterprise agreement which covers a large number of employees at Point Henry and Anglesea who have been so covered for many years, namely, PSO 3 and PSO2 employees and that Alcoa has commenced bargaining for a replacement of that Agreement.
[35] However, it is convenient to note in this respect that the incidence of coverage of an enterprise agreement overlays the operational configuration of an enterprise and does not determine that operational configuration.
[36] In addition to operating the control panel within the control room, PSO6 and PSO5 employees, as currently engaged, perform operational tasks at the power station outside the control room. I therefore proceed on the basis that the operational tasks performed by PSO6 and PSO5 employees, as engaged, are principally control functions within the control room and such employees also perform tasks intermittently outside of the control room of the power station of an operational nature. Some such tasks overlap with those of PSO3 employees.
[37] When the power station is operating outside standard hours the PSO6 employees are the most senior operational employees at the power station and the point of reference for emergency response. The PSO6 has recourse to contact the Operations Area Supervisor subject to availability.
[38] The PSO6 and PSO5, and PSO3, employees, currently employed, depending on the circumstances, have some limited ability to make purchases for Alcoa. PSO6, PSO5 and PSO3 employees have no disciplinary authority; however, PSO6s may make recommendations of this kind. PSO6 employees participate in the recruitment selection process to fill vacancies in the Power Station Operations Team (the PSO group).
[39] At all times, the terms and conditions of employment for PSO6 and PSO5 (and PSO4) employees have been determined exclusively by Alcoa. Those terms and conditions of appointment have not been the subject of individual or collective bargaining, which is distinct from the circumstances of the PSO3 (and PSO2) employees. However, the hours of work of PSO6, PSO5, (PSO4), PSO3 and (PSO2) employees have been the same and follow the same shift work pattern. Historically, the PSO6 and PSO5 employees have been treated by Alcoa as distinct from PSO3 (and PSO2) employees and from various other employees at the Anglesea power station. However, Mr Monahan noted that the calculation of the shift allowance, which forms part of the remuneration of the PSO6 and PSO5 employees, as currently engaged, is inherently related to the same methodology used for the PSO3 (and by extension PSO2) employees.
[40] On the evidence before me, the PSO6 and PSO5 (and PSO4) employees have been situated distinctly within the organisational configuration of the power station staffing establishment with respect to the determination of their terms and conditions of employment, when compared to PSO3 and PSO2 employees. The terms and conditions of employment for PSO3 (and PSO2) employees have been determined by bargaining for an enterprise agreement, for some time, whereas, although operationally within the same configuration, those of PSO6 and PSO5 (and PSO4) have not.
[41] The PSO6 and PSO5 employees are presently part of an operational group comprised of PSO6, PSO5 and PSO3 employees, with dormant PSO4 and PSO2 work descriptors. Alcoa has therefore distinguished the regulation of the terms and conditions of employment of PSO6 and PSO5 (and PSO4) employees, organisationally, from those of PSO3 (and PSO2) employees.
[42] On the evidence before me, I find that the PSO6 and PSO5 (and PSO4) employees are relevantly located geographically with the other employees of Alcoa engaged in the conduct of Alcoa's electrical power generation enterprise at Anglesea in Victoria. I find that within that enterprise, the PSO6 and PSO5 (and PSO4) employees form part of an operationally distinct group made up of employees described as PSOs or Power Station Operators of various functional levels. I have noted that, historically, this operational group has been identified as comprised of PSO levels 2 through 6 and that there are currently no employees engaged in this operational group at PSO4 or PSO2.
[43] Moreover, I find that historically the PSO6 and PSO5 (and PSO4) levels have been organisationally distinct for the purposes of the differentiation and regulation of their terms and conditions of employment. In my view, the overlay of the existing enterprise agreement, which regulates the terms and conditions of employment of PSO3 (and PSO2) employees, does not substantially distinguish the operational or organisational circumstances of the PSO6 and PSO5 (and PSO4) employees, except to the extent that it differentiates the determination of the remuneration and terms and conditions of employment of employees in the PSO organisational structure at PSO3 (and PSO2) employees from PSO6 and PSO5 (and PSO4) employees.
[44] In light of the above, I now turn to consider whether the relevant group of employees, PSO6 and PSO5 (and PSO4), were fairly chosen in the circumstances of this case as they apply at the Anglesea power station, in relation to the proposed enterprise agreement, to cover PSO6, PSO5 and PSO4 employees' terms and conditions of employment.
[45] As observed by the Full Bench in Cimeco, the relevant statutory question which must be answered in relation to the choice of a group of employees to be covered by a proposed enterprise agreement is one of fairness. It is therefore necessary for me to take into account the conclusions I have reached in relation to the geographical, operational and organisational circumstances and afford them due weight in the matrix of facts and circumstances of the enterprise, as I have identified it, in order to consider the fairness or otherwise of the selection of the group chosen for the relevant proposed enterprise agreement, which would be subject to the majority support determination sought.
[46] On what is before me, it is difficult to discern what unfairness there would be if an enterprise agreement, as proposed, were the subject of bargaining between Alcoa and the relevant employees. Clearly, there would be no unfairness for the PSO6 or PSO5 (or PSO4) employees.
[47] There is nothing before me which would lead me to conclude that bargaining for a proposed enterprise agreement for the PSO6 and PSO5 (and PSO4) employees would lead to unfairness for PSO3 (or PSO2) employees currently enjoying the coverage of an enterprise agreement. If the PSO6 and PSO5 (and PSO4) employees were able to bargain for a proposed enterprise agreement, all employees in the PSO structure would have equal opportunity to bargain in accordance with the Act. If there were to be issues of the scope of bargaining, the Act provides provisions for the regulation of such bargaining (see the provisions of s 238 of the Act).
[48] There is nothing before me upon which I could be satisfied that if the PSO6 and PSO5 (and PSO4) employees were to be able to bargain for a proposed enterprise agreement that other employees, who are not Power Station Operators, at the Anglesea power station, would be unfairly affected. Indeed, on what is before me, with the exception of professional and managerial employees at Anglesea, most employees are currently bargaining with Alcoa for a proposed enterprise agreement and currently enjoy the ability to do so, which is sought by the PSO6 and PSO5 (and in relation to PSO4) employees by this application.
[49] On what is before me, I am unable to discern a group of employees engaged at the Anglesea power station who are not currently bargaining for a proposed enterprise agreement for whom it would be unfair if the PSO6 and PSO5 (and PSO4) employees were able to bargain for a proposed enterprise agreement.
[50] No bargaining representative of other employees of Alcoa at Anglesea or individual employee has sought to intervene or make any submission to the Commission in relation to this aspect of the matter. While this aspect of the matter is noted, it is not appropriate to assign any weight to it, but rather, treat it as neutral having regard to the particular circumstances of the proceeding, which may or may not be well known among the other employees. Although, as an observation, it would seem highly unlikely that in an enterprise with a long history of industrial organisation, in which enterprise bargaining is currently underway, these proceedings would be unknown.
[51] It is highly relevant that the question of whether the selected group is fairly chosen is to be considered for a defined purpose; namely, as set out in s 237(1)(b) "in relation to the agreement".
[52] The consequence therefore is that the question, in compound form as between s 237(1)(b) and s 237(2)(c), is:
was the group of employees who will be covered by the proposed enterprise agreement fairly chosen in relation to the Agreement?
[53] Answering the question in accordance with the relevant statutory direction for the purposes of s 237 is somewhat more attenuated than a free floating question of fairness or otherwise without specific purposive conditioning by the relevant provisions of the Act.
[54] The question is whether it would be fair if, in relation to the enterprise agreement, as proposed, this chosen group is able to bargain accordingly, from among all of the relevant employees engaged in the enterprise of electrical power generation by Alcoa at the Anglesea power station and mine.
[55] In order to consider the fairness or otherwise of the choosing of the group of PSO6s and PSO5s (and PSO4s), it is necessary to specifically consider the scope of the majority support determination sought by the CFMEU. The CFMEU has proposed an enterprise agreement to cover the work of PSO6, PSO5 and PSO4 employees in the relevant circumstances.
[56] As noted, the position of PSO4 is dormant as there are currently no employees of this kind engaged at the power station. Historically, PSO4 employees were engaged in the operational group in which PSO2 through PSO6 employees have worked.
[57] The scope of the current Alcoa enterprise agreement does not include PSO4 employees. Neither is bargaining proceeding in this respect. In my view, although somewhat, but not entirely, hypothetical, the work of PSO4 employees fits within the power station operator stream and is operationally contiguous with the other PSO levels of Power Station Operators. Moreover, while that work is geographically co-located with the other levels of power station operator, it has been treated as organisationally distinct in the same way as PSO6 and PSO5 employees, as previously noted.
[58] Given the dormancy of the PSO4 level, and the nature of its organisational distinction, it is difficult to see how the inclusion of such work as a subject of bargaining enabled by a majority support determination would cause any more or less fairness or unfairness to any other employee of Alcoa at the Anglesea power station.
[59] In order to consider the approach to the issue of fairness or unfairness to Alcoa arising from the selection of the PSO6 and PSO5 (and PSO4) employees as employees whose employment would be covered by the proposed enterprise agreement, in respect of which the majority support determination would be made, I have sought guidance from decisions of the Full Bench of this Commission, and its predecessors, which, in different, but related, statutory contexts, have touched upon that consideration.
[60] In Kwinana, the Full Bench of the Commission considered the operation of s 238 of the Act in relation to scope orders. While a critical axis upon which those statutory provisions operate is the "fair and efficient conduct of bargaining", which is not a matter expressly identified in ss 236 and 237 of the Act, the concept of a group which is fairly chosen forms a relevant consideration for the determination of an application made under s 238 of the Act.
[61] The Full Bench in Kwinana referred to the decision in UFU in the following terms:
"[44] In accordance with the approach laid down in United Firefighters, prima facie, if the group proposed by the Union is reasonable it should have been preferred unless there was some good reason to prefer the two groups proposed by the Company over the single group preferred overwhelmingly by the employees. That is, unless there are factors relating to the fairness and efficiency of bargaining and or demonstrated prejudice to the employer's business operations that make it more reasonable to accept the employer's application, notwithstanding the contrary preference of employees, weight should be accorded to the views of the employees.
[45] The Company relied upon a history of separate agreements going back to 1997 and the fact that the two groups have different educational profiles and largely performed different tasks.
[46] Those matters, without more, do not provide a justification for preferring the scope sought by the Company over the scope sought by the employees in deciding which order is more reasonable to make (cf s.238(4)(d)).
[47] There was nothing in the evidence to demonstrate how the Company would be prejudiced in the fairness and efficiency of bargaining, or in its business operations, through an enterprises agreement for the combined group proposed by the Union rather than separate agreements that had existed for many years. It follows that there was no proper basis to prefer the application of the Company."
[62] As referred to above, in Cimeco, the Full Bench in that matter addressed the issue of what would be relevant when considering fairness in the choice of employees selected was as follows:
"It is not appropriate to seek to exhaustively identify what might be the other relevant considerations. They will vary from case to case and will need to be demonstrated to the satisfaction of the tribunal. The word "fairly" suggests that the selection of the group was not arbitrary or discriminatory. For example, selection based upon employee characteristics such as date of employment, age or gender would be unlikely to be fair. Similarly, selection based on criteria which would have the effect of undermining collective bargaining or other legislative objectives would also be unlikely to be fair. It is also appropriate to have regard to the interests of the employer, such as enhancing productivity, and the interests of employees in determining whether the group of employees was fairly chosen. In this regard, it is not only the interests of the employees covered by the agreement that are relevant; the interests of those employees who are excluded from the coverage of the agreement are also relevant. We note that there is a suggestion to the contrary in the oral submissions put on behalf of Cimeco when counsel submitted that:
'It was an erroneous approach to introduce the identification of the persons who were relevantly employed at the time of the making of the agreement for the purposes of testing the group chosen.'"
[63] In applying the reasoning of these decisions in the context of an application for a majority support determination under s 236 of the Act and to determining the requisite satisfaction under s 237(2), one must have regard to the difference between a situation in which bargaining is sought by a majority support determination and where bargaining is extant but, allegedly, not proceeding fairly and or efficiently in relation to a proposed enterprise agreement and an order is sought under s 238.
[64] Nevertheless, arising from the decisions referred to above, it seems to me that the fair selection of a group of employees for bargaining in relation to a proposed enterprise agreement, with respect to the interests of the relevant employer, falls to be considered as follows: would there be any prejudice to the productivity or efficiency of the business operations of the employer's enterprise?
[65] Any such prejudice must be evaluated and accorded due weight along with other relevant considerations.
[66] In Kwinana, the Full Bench of the Commission said as follows:
"[29] The right of employees to bargain collectively is a right recognised in ILO Convention 87 Freedom of Association and Protection of the Right to Organise (1948) and ILO Convention 98 Right to Organise and Collective Bargaining (1949) both of which have been ratified by Australia. It is a right that was foundational to the enterprise bargaining regime first introduced to the federal industrial legislation in 1993. It is implicit in the right to bargain collectively that the preferences of employees as to the appropriate collective should be respected unless there is some good reason under the legislation to decide otherwise - a reason that relates to the conduct an efficiency of bargaining or to the efficient operation of the employer's business. It is, after all, the employees who are in the best position to determine the collective that best suits their legitimate interests.
[30] In United Firefighters [2010] FWAFB 3009 the Full Bench said (at [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."
[31] It is in this way that the views of the employees become significant and prima facie carry greater weight than the subjective views of the employer unless, as in United Firefighters, there are particular circumstances in a given case that make a contrary conclusion appropriate upon a proper application of s.238."
The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:
(f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; and
[69] Section 171 of the Act sets out the objects of Part 2-4 Enterprise Agreements of the Act as follows:
(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and
(b) to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:
(ii) dealing with disputes where the bargaining representatives request assistance; and
(iii) ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay."
[70] In my view, the statutory objects of facilitating enterprise bargaining and the wishes of a group of employees who propose an enterprise agreement are to be given some weight when considering whether a group of employees was fairly chosen in relation to a proposed enterprise agreement.
[71] When considering fairness to an employer of a selected group, there would need to be a clear and cogent case that the selection of the group would be sufficiently prejudicial to the productivity or efficient conduct of an employer's business, in all the relevant circumstances, to outweigh a presumption that the Commission should facilitate bargaining for an enterprise bargaining agreement where the employees of the group unanimously wish to bargain.
[72] Alcoa suggests, through the evidence of Mr Monahan, that the PSO6 employees should be characterised as senior managers. In this respect, no doubt some comfort is sought by analogue with the decision in UFU in relation to the identity of certain "officer" levels in the Metropolitan Fire Brigade.
[73] On my evaluation of the evidence, the description of PSO6 employees as senior managers is not apt generally or in the particular context of the operation of the Anglesea power station. Moreover, I do not think there is any relevant analogue between the operational or organisational structure of the Anglesea power station and the Metropolitan Fire Brigade, as far as I can discern from a reading of the relevant decision.
[74] In my view, in the relevant operational and organisational framework of the Anglesea power station, the senior management positions are clearly identified in the organisational chart referred to above as Power Station Manager and Operations Area Supervisor.
[75] It is clear that for historical and other reasons Alcoa prefers not to bargain with the relevant employees. When considering fairness to the employer in relation to the bargaining for a proposed enterprise agreement in the context of an application under s 236 of the Act, unanimously supported by the relevant employees, the preference of the employer not to bargain is a problematic consideration.
[76] It is self-evident that the mischief which s 236 of the Act sets out to address is an employer's preference not to bargain for an enterprise agreement where a majority of relevant employees wish to do so. It would therefore be somewhat at odds with the statutory scheme to simply determine that a group of employees who unanimously wish to bargain for the proposed enterprise agreement was not fairly chosen because the employer prefers not to bargain for the enterprise agreement proposed.
[77] However, the evidentiary basis upon which an employer submits that a group of employees is not fairly chosen, evaluated objectively, could give rise to a finding that bargaining with the selected group would be prejudicial to the efficiency or productivity of the employer's business in an individual case and that this should outweigh the apparent intention and purpose of the legislation to facilitate enterprise bargaining.
[78] I have considered the evidence accordingly.
[79] The evidence of Alcoa is that demarcation or other disputes could arise from bargaining for the proposed enterprise agreement. My evaluation of the evidence is that this proposition is highly speculative and the subjective opinion of Mr Hutton, a witness for Alcoa. Moreover, at least in relation to demarcation disputes, the witness, in my judgement, was not fully informed of the nature of such disputes.
[80] As for other disputes, as I understand the evidence, it is based upon speculation of what might be agreed as a result of bargaining for the proposed enterprise agreement and potentially anomalous outcomes for different employees, for example, as between PSO3 and PSO2 employees and PSO6, PSO5 and PSO4 employees. I consider I should decline to determine the application by giving any weight to what the relevant employees and Alcoa might choose to agree to, if anything, for a proposed enterprise agreement, in order to determine if the selected group of employees was fairly chosen and are able to bargain in good faith. Predicting whether any enterprise agreement will be made or what the particular terms and conditions of a putative enterprise agreement would be require extraordinary perception not supported by any evidence.
[81] Perhaps more importantly, there is nothing in the evidence before me of a probative kind to support a conclusion that the selected group of employees would be any less productive or efficient as Power Station Operators if a determination were made that those employees who wish to bargain, were fairly chosen, and were able to bargain in good faith for a proposed enterprise agreement. Moreover, if an enterprise agreement were made, I am unable to discern how this would be unfair to Alcoa or how it would be that the enterprise would be disadvantaged in terms of productivity or efficiency, on the basis of the evidence before me for the reasons stated above.
[82] Having regard to all of the above, I am satisfied that there has been and continues to be no unfairness in the selection of the group of employees whose employment would be covered by the terms of the proposed enterprise agreement or as between the selected group, Alcoa and any other employees of Alcoa at the Anglesea power generation enterprise.
[83] Moreover, I consider the group selected to be fairly chosen. The employees are part of an operational group, of whom some are able to bargain for an enterprise agreement in accordance with the relevant objects of the legislation. It is fair to the selected group and not unfair to Alcoa or any other employee in the relevant circumstances that the chosen group should be able to bargain for a proposed enterprise agreement commensurately with the objects of the legislation.
[84] Indeed, on what is before me, of all the relevant considerations, the selection of the PSO6, PSO5 (and PSO4) level employees, who among the other PSOs are not currently covered by an enterprise agreement, is a choice which is coherent with the functional and operational activities of those employees, the Power Station Operators.
[85] In my judgement, the selection of the relevant employees does not exclude any Power Station Operators from enterprise bargaining or impose any burden on the relevant operational group or other employees below professional or clearly designated managerial levels, as previously identified, and does not prejudice the efficiency or productivity of Alcoa's electrical power generation enterprise at Anglesea.
[86] I turn now to consider whether it is reasonable to make the determination sought by the application.
[87] Alcoa submitted that it is not reasonable to make a majority support determination in all of the circumstances because "the proper order for the CFMEU to seek in the circumstances is not a MSD [majority support determination], but a scope order pursuant to section 238 of the FW Act". Alcoa submitted that where bargaining has already commenced for a majority of employees at the workplace, a majority support determination is not an appropriate tool to alter the scope of bargaining at the workplace. In this respect, Alcoa refers to the explanatory memorandum to the Fair Work Bill 2008, as follows:
"Clause 237 - When FWA must make a majority support determination
978. This clause requires FWA to make a majority support determination if an application for the determination has been made and FWA is satisfied that:
[88] I find this submission to be misconceived. Scope orders are the subject of s 238 of the Act. On my reading of the Act, the relevant statutory provisions require that an application for a scope order may only be made by a bargaining agent in relation to bargaining which is extant. In my view, no such application may be made where an employer has not agreed to bargain and no majority support determination has been made for the relevant proposed enterprise agreement.
[89] Alcoa has agreed to bargain for a proposed enterprise agreement to cover up to 49 of the employees engaged at the Anglesea power station. The CFMEU is not a bargaining representative of those employees. The PSO6 and PSO5 (and PSO4) employees are not the subject of the proposed enterprise agreement for the 49 other employees. It is clear that this circumstance is envisaged by the explanatory memorandum to the Fair Work Bill, at the last sentence of the second dot point, as shown above.
[90] I accept that the bargaining for the proposed enterprise agreement with other employees at the Anglesea power station is a relevant consideration. It seems to me that the explanatory memorandum clearly contemplates that the application made by the CFMEU is of a kind envisaged under the statutory scheme rather than as Alcoa characterises it "inappropriate" in the relevant circumstances.
[91] Indeed, Alcoa's submission seems to equivocate somewhat on this aspect of its opposition to the application:
"The EM notes that a party is not prevented from applying for a majority support determination even where a scope order would be more appropriate, and this is not in dispute."
[92] Alcoa made reference to the decision of the Full Bench in Liquor, Hospitality and Miscellaneous Union v Coca-Cola Amatil (Aust) Pty Ltd (2009) 191 IR 124 (Coca-Cola Amatil), in which the Full Bench observed that majority support determinations do not determine the scope or disputes about the scope of bargaining. It follows that in this matter, a majority support determination cannot do so. Rather, all that the majority support determination sought can effect is an obligation upon Alcoa to bargain with the representatives of the relevant employees in good faith. Alcoa or the bargaining representatives of the employees who would be covered by the majority support determination are not required to make an agreement or to agree upon the scope of bargaining for any such agreement.
[93] In my view, Alcoa erroneously conflates the majority support determination sought with a scope order. The majority support determination sought by the CFMEU can have no legally definitive consequence for the scope of bargaining for the proposed enterprise agreement contemplated by the employees who want to bargain. However, once a majority support determination is made, provided the relevant statutory requirements are met, an application for a scope order may be made in relation to bargaining for the proposed enterprise agreement in respect of which the majority support determination is made.
[94] As with my consideration of whether the group was fairly chosen, of itself, the preference of Alcoa not to bargain does not mean that it would be unreasonable to make the order.
[95] The history of the terms and conditions of employment of the relevant employees was described in the evidence of Mr Monahan, who was asked if those terms and conditions of employment were arrived at by bargaining or individual negotiations with the employees.
[97] No doubt bargaining, either individually or collectively, with the relevant employees in relation to their terms and conditions of employment, will be a new and different development for Alcoa. As noted by the Full Bench of the Commission, above, the Commission must give due weight to the wishes of employees who propose to bargain. Additionally, the objects of Part 2-4 of the Act provide a framework to facilitate and enable enterprise bargaining.
[98] It is also of note that while discretion is provided to the Commission, in relation to the satisfaction required by s 237(1)(b) and 237(2) of the Act, it is mandatory for the Commission to make a majority support determination when the Commission is relevantly satisfied.
[99] The applicable legislative provisions indicate a strong policy framework in favour of enterprise bargaining, subject to the relevant considerations, particularly in light of of s 3 and the relevant words of s 169, referring to Division 8, and s 171 of the Act.
[100] In the circumstances of this case, where all of the relevant employees unanimously want to bargain, the group of employees was fairly chosen and there is no objective basis upon which it is possible to be satisfied that the productivity or efficiency of the employer's business would be unfairly affected by bargaining with those employees, it is difficult to see how it would be other than reasonable to make the majority support determination sought to enable bargaining in accordance with the policy objectives of the legislative scheme.
[101] For all of the above reasons, I find it would be reasonable to make the majority support determination sought in this matter.
[102] In light of all my conclusions, as stated above, I will make a majority support determination.
[103] The majority support determination will specify Alcoa of Australia Limited as the employer and will specify the employees as employees of Alcoa of Australia Limited who are employed at the Anglesea power station in the classifications of Power Station Operator 4 (PSO4), Power Station Operator 5 (PSO5) and Power Station Operator 6 (PSO6).
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(2012) 219 IR 139
(2010) 193 IR 293
(2009) 191 IR 124