Fair Work Act 2009_

s.236 - Application for a majority support determination

Construction, Forestry, Mining and Energy Union

O'Keefe Heneghan Pty Ltd & Rocky Neill Construction Pty Ltd & Auslife Pty Ltd T/A KNF Construction.

[1] On 24 November 2016 the Construction, Forestry, Mining and Energy Union (CFMEU) lodged an application pursuant to s.236 of the Fair Work Act 2009 (the Act) for a majority support determination.

[2] The application relates to employees of O'Keefe Heneghan Pty Ltd and Auslife Pty Ltd and Rocky Neill Construction Pty Ltd T/A KNF Construction (KNF Construction) in the building and construction industry "in Northern New South Wales (specifically, all works in NSW north of Port Macquarie and south of the Queensland border".

[3] The application asserted that these employees are geographically and operationally distinct from other KNF Construction employees. The employees are on the Warrell Creek to Nambucca Heads Road Project operated by Ferrovial Agroman (Australia) Pty Ltd and Acciona Infrastructure Australia Pty Ltd who operate as a joint venture known as Acciona Ferrovial Pacifico JV (Pacifico).

[4] The CFMEU requested, in writing, on 4 November 2016, that KNF Construction commence bargaining. There was no response.

[5] The CFMEU states that the group of employees is fairly chosen, as required by s.237(2)(c) of the Act. It is consistent with KNF Construction's management structure, it is submitted.

[6] Between 11 and 22 November 2016, the CFMEU distributed a petition to all available workers which stated:

"We the undersigned employees of O'Keefe Heneghan Pty Ltd & Rocky Neill Construction Pty Ltd & Auslife Pty Ltd T/A KNF Construction, wish to negotiate an Enterprise Agreement with our employer to cover all work performed within New South Wales north of Port Macquarie. We request that the companies act to commence bargaining immediately, and negotiate in good faith. We nominate CFMEU to act as our bargaining representative in this matter."

[7] The application says that some 48 out of 60 relevant employees signed the petition. Accordingly, it is an appropriate method of the Commission determining majority support in accordance with s.237(3).

[8] KNF Construction has an agreement with employees which applies to all of its employees, KNF Construction Enterprise Agreement 2012 (AE899797). Its nominal expiry date is 15 February 2017.

[9] The application was listed for 12 December 2016. Mr T. Fischer and Mr D. Kelly appeared for the CFMEU. Mr B Rauf, of counsel and Mr D. Fleeton, solicitor appeared for KNF Construction. Mr Rauf and Mr Fleeton were granted permission to appear pursuant to s.596.

[10] I conducted a conciliation conference but it was apparent that KNF Construction would not consent to the CFMEU application. KNF Construction foreshadowed objections as to the CFMEU's coverage, whether the group of employees was fairly chosen and the use of the petition to determine majority support.

[11] Directions for the filing of written submissions and evidence were issued and the matter set down for hearing on 19 January 2017.

[12] The CFMEU's submission is that the complete petition, with names of employees and signatures, should be provided to the Commission on a confidential basis. KNF Construction should then provide to the Commission a list of employees who perform work in New South Wales, north of Port Macquarie. The Commission should then undertake the comparison to ensure that there is a valid majority of employees who have signed the petition.

[13] The CFMEU lodged witness statements from officials David Kelly and Dean Rielly which describe the process undertaken to collect the signatures to the petition.

[14] On 11 January 2016, solicitors for KNF Construction lodged an application for an order to produce in respect of the names and signatures on the petition. KNF Construction submits that this is necessary so that it can test the claim that a majority of employees have signed the petition. The Respondent should be given access to these documents so that it can make a submission to the Commission. Otherwise, it is submitted the Respondent will be denied procedural fairness. The order to produce was issued on 12 January 2017.

[15] On 12 January 2017 the CFMEU lodged an application to set aside or vary the Order that the names and signatures are made available to the Commission only. It is submitted that the disclosure of the names and signatures would be a risk to employees privacy and rights to freedom of association. It is submitted that there is no procedural unfairness in adopting the common procedure of the Commission comparing the two lists on a confidential basis.

[16] On 13 January 2017, I enquired of the parties by email whether agreement could be reached on the procedure of the Commission's comparing the two lists on a confidential basis. KNF Construction did not consent so the issue was listed for a telephone conference on Tuesday, 17 January 2017.

[17] The CFMEU provided the list of names and signatures to my chambers on 16 January 2017. Further witness statements were lodged by Mr Kelly and Mr Reilly attesting to the bona-fide manner in which the petitions were completed.

[18] A compromise proposal that the names and signatures be viewed by legal representatives only, on a confidential basis, was rejected by KNF Construction following the 17 January telephone conference.

[19] It was agreed that the hearing on 19 January would focus on the order to produce.

[20] Mr T. Fischer appeared for the CFMEU. Mr S. Prince, of counsel and Mr D. Fleeton appeared for KNF Construction. Mr Prince was granted permission to appear pursuant to s.596.

[21] The matters to be considered when the Commission is asked to make a majority support determination are contained in s.237 which provides:

"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."

[22] Since the CFMEU had provided the signatures and names to the Commission, the argument became one as to whether a confidentiality order should be made so that they would not be provided to KNF Construction. ss.593 and 594 relevantly provide:

(1) The FWC is not required to hold a hearing in performing functions or exercising powers, except as provided by this Act.

(2) If the FWC holds a hearing in relation to a matter, the hearing must be held in public, except as provided by subsection (3).

(3) The FWC may make the following orders in relation to a hearing that the FWC holds if the FWC is satisfied that it is desirable to do so because of the confidential nature of any evidence, or for any other reason:

(a) orders that all or part of the hearing is to be held in private;

(b) orders about who may be present at the hearing;

(c) orders prohibiting or restricting the publication of the names and addresses of persons appearing at the hearing;

(d) orders prohibiting or restricting the publication of, or the disclosure to some or all of the persons present at the hearing of, the following:

(ii) matters contained in documents before the FWC in relation to the hearing.

(4) Subsection (3) does not apply to the publication of a submission made to the FWC for consideration in an annual wage review (see subsection 289(2)).

(1) The FWC may make an order prohibiting or restricting the publication of the following in relation to a matter before the FWC (whether or not the FWC holds a hearing in relation to the matter) if the FWC is satisfied that it is desirable to do so because of the confidential nature of any evidence, or for any other reason:

(a) evidence given to the FWC in relation to the matter;

(b) the names and addresses of persons making submissions to the FWC in relation to the matter;

(c) matters contained in documents lodged with the FWC or received in evidence by the FWC in relation to the matter;

(d) the whole or any part of its decisions or reasons in relation to the matter.

(2) Subsection (1) does not apply to the publication of a submission made to the FWC for consideration in an annual wage review (see subsection 289(2))."

[23] The CFMEU submits that provision of the names and signatures to the Commission is sufficient for the purpose of s.237. It is the Commission which has to "work out whether a majority of employees want to bargain using any method the Fair Work Commission considers appropriate." (s.237(3))

[24] This is a hotly contested area. The CFMEU submits that the provision of the names of signatories is likely to lead to adverse action. One application, alleging a breach of s.346 has been lodged in the Commission arising from the attempt to commence bargaining.

[25] Provision of the information would be a breach of the employees' right to freedom of association. It is in the public interest that employees are able to express their support for bargaining freely without fear of retribution.

[26] There is no unfairness to KFN Construction. They can cross-examine witnesses who are the officials but it would be oppressive to subject each employee to questioning.

[27] It is submitted that an allegation of potential disadvantage and/or retribution to employees is without foundation and based on no evidence.

[28] KNF Construction relied on the general approach of the Commission in proceedings that each party is to be accorded procedural fairness. It is desired to test the petition process, and the signatures and names are necessary to do this. Otherwise KNF Construction will not be able to properly run its case.

[29] In any event, KNF Construction submits that the petition process was unsound and that a ballot is necessary to test whether there is majority support.

[30] A witness statement of Kevin O'Keefe, the Managing Director of KNF Construction, was tendered which focusses on the "fairly chosen" objection and the lack of information that KNF Construction has with respect to the petition.

[31] Mr Prince relied on the decision of Commissioner Lewin in Peter Hankin v Plumbers Supplies Co-Operative Ltd T/A Plumbers Supplies Co-Op and Others [2014] FWC 8402. It is a decision which was made in the context of an anti-bullying application. The Commissioner does summarise the general approach of the Commission with respect to confidentiality orders as follows:

[25] I refer to the decision of Commissioner Bissett in Justin Corfield in which the Commissioner referred to the matter of Day v Smidmore and Others (No 2) (2005) 149 IR 80; [2005] NSWIRComm 406 (Smidmore). Smidmore is a decision of the New South Wales Industrial Relations Commission in Court session, which considered the making of confidentiality orders in that forum. The terms of the relevant legislation in exercising the discretion in that forum were substantially similar to those of this Commission. Commissioner Bissett summarised the approach of courts and tribunals in weighing the principle of open justice with any embarrassment or distress felt by a party to proceedings as follows:

"As was explained in Smidmore, mere embarrassment, distress or damage by publicity is not a sufficient basis to grant such an application."

[26] Further, the key argument made by the Respondents is that it is the allegations or the nature of the allegations that should dispose the Commission to grant the confidentiality orders sought. Such arguments were considered in in Smidmore and rejected as follows:

"[32] ... we do not consider that it would ordinarily be desirable to make a nondisclosure order only because a person was embarrassed or distressed by allegations made in proceedings. The paramount consideration, in our opinion, remains the principle of open justice. Non-disclosure orders, such as pseudonym orders, merely to protect persons from injury, hurt, embarrassment or distress would be inimical to the ordinary rule that courts should conduct their proceedings 'publicly and in open view'...

"[33] As Kirby P observed in John Fairfax Group Pty Ltd (Receivers and Managers Appointed) v Local Court of NSW (1991) 26 NSWLR 131 at 142-143:

'It has often been acknowledged that an unfortunate incident of the open administration of justice is that embarrassing, damaging, and even dangerous facts occasionally come to light. Such considerations have never been regarded as a reason for the closure of courts, or the issue of suppression orders in their various alternative forms … A significant reason for adhering to a stringent principle, despite sympathy for those who suffer embarrassment, invasions of privacy or even damage by publicity of their proceedings is that such interests must be sacrificed to the greater public interest in adhering to an open system of justice. Otherwise, powerful litigants may care to think that they can extract from courts or prosecuting authorities protection greater than that enjoyed by ordinary parties whose problems come before the courts and may be openly reported.'"

[27] I am not satisfied that it is desirable for the Commission to make confidentiality orders for the hearing to be held in private, for the publication of the names of persons attending the hearing to be prohibited or restricted, or for the prohibition or restriction of the publication of the names of any persons referred to in decisions in relation to this matter. This is because the mere embarrassment, distress or damage that may be caused to the Respondents by the publication of these allegations is not sufficient to displace the presumption in favour of the open administration of justice."

[32] The Commissioner, in this case, was however, dealing with whether names and other details relevant to the case should be published. The question here is whether an employer is entitled to the signatures and names of its employees who have signed a petition in support of a majority support determination.

[33] I accept that, as a general rule, the Commission will seek to ensure that both parties are accorded natural justice and procedural fairness. In respect of notices to produce, the Commission makes a judgment, with respect to material sought, based on relevance and whether it is considered as necessary for a party's case. See for example the Full Bench decision in Clermont Coal Pty Ltd and Others v Troy Brown and Others [2015] FWCFB 2460.

[34] It is important to note that the Act, in s.237, gives a broad discretion to the Commission to determine the method of judging "majority" and judging whether that method has revealed majority support. The legislature made a clear policy choice in favour of the Commission's discretion, as opposed to an automatic ballot option.

[35] It is also important to note that a majority support determination is only a first step in the bargaining process. It does not mean that an employer has to make concessions or reach agreement.

[36] The confidential comparison of lists method is widely used as the method of determining majority support. Of course, this is usually by consent, either whole or partial. I was not referred to a decision of the Commission where the provision of signatures and names has been dealt with on an interlocutory basis as a result of a notice to produce.

[37] Adequacy of the petition has usually been determined as a part of the overall case. So that the Commission might order a ballot to determine a majority support because it is not satisfied that the petition reveals majority support. This is after all the evidence has been heard, especially the cross-examination of the union officials.

[38] There are some cases where the employer has scrutinised the signatures and names on the petition, e.g. Bissett C in United Voice v Berkeley Challenge Environmental Services Pty Ltd [2011] FWA 3422; Lee C in Transport Workers Union of Australia v GTS Freight Management Pty Ltd [2012] FWA 6677; Williams C in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Monadelphous Engineering Associates Pty Ltd [2010] FWA 6357. It is not clear whether this was by consent or not. In Transport Workers' Union of Australia v Darling Downs Express [2015] FWC 2658, Spencer C allowed the Union to inspect the list of employees provided by the employer after a protracted process. This was an unusual case where the union ultimately withdrew its application.

[39] In The Australian Workers' Union v Kantfield Pty Ltd T/A Martogg & Company [2016] FWC 6473 Ryan C allowed the respective counsel to check the lists. There was extensive evidence about the petition and a subsequent ballot. In Australian Nursing and Midwifery Federation v Mark Moran at Little Bay Pty Ltd T/A Moran Little Bay [2016] FWC 1981 McKenna C relied on a comparison of the names on the two lists which were provided under seal. The employer opposed the use of the petition and provided extensive submissions and evidence which sought to attack the validity of the petition. The Commissioner determined the matter based on this evidence. In National Union of Workers v Cotton On Group Services Pty Ltd [2014] FWC 6601, Roe C undertook an extensive analysis of the various lists which were then the subject of comment by the parties. He based his decision on a detailed analysis of all the circumstances. In National Union of Workers' [2015] FWC 3473 (Lee C) and "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v Veolia Water Operations Pty Ltd [2015] FWC 2561 (Booth C) the petitions appear to have been provided in a non-redacted form. Both members determined that the petitions were not an appropriate method of judging majority support because of evidence about the collection and custody of the signatures.

[40] These cases show that the Commission makes a decision under s.237 taking account of the submissions and evidence. I can find nothing which requires the names and signatures on a petition to be provided to the employer on an interlocutory basis. In the circumstances of this case, I do not think it appropriate or necessary for a final determination of the matter for KNF Construction to view the names and signatures.

[41] The risk to employees' right to freedom of association in a hotly contested bargaining dispute is real. It would require, in my view, the Commission to be convinced by a specific submission as to the use they would be put for the Commission to provide them to the employer. No such submission has been made by KNF Construction.

[42] I am not satisfied that there would be procedural unfairness to KNF Construction in the Commission examining the signatures and names on the petition. Nor would there be procedural unfairness to KNF Construction for it to be required to provide a list of employees, covered by the application, to be examined by the Commission on the same basis.

[43] KNF Construction will have an opportunity to cross-examine the CFMEU officials on the circumstances around the collection of the petition and make appropriate submissions.

[44] Ultimately the Commission must make an overall judgment as to whether the petition is an appropriate method of determining majority support based on the full case, not on a piecemeal basis.

[45] I am therefore satisfied that a confidentiality order should be made with respect to the petition. I will also order that KNF Construction provide to the Commission, on the same basis, a list of employees covered by the application. The relevant date for the purpose of s.237(2)(a)(i) is the date of this decision. The matter will then be listed for substantive evidence and submissions as soon as possible.

1. That the petition containing names and signatures of employees of KNF Construction provided to the Commission on 16 January 2017 be treated as confidential to the Fair Work Commission and not provided to KNF Construction.

2. That KNF Construction provide a list of employees, with classification/work area, covered by application B2016/1245 and employed as at 9 February 2017, to the Commission by Close of Business, Friday 17 February 2017. The list shall be treated as confidential to the Fair Work Commission and not provided to the CFMEU.

3. The matter is listed for hearing on Thursday, 23 February 2017.

B. Rauf of counsel and S. Prince of counsel with D. Fleeton, solicitor for KNF Construction.

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