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[2017] FWC 4158
Fair Work Commission
2017-08-09
Commissioner Roe, Deputy President Clancy, President Clancy
Original judgment source is linked above.
s.236 - Majority support determination
Australian Municipal, Administrative, Clerical and Services Union
Application for a majority support determination - application opposed by the employer - whether group fairly chosen-determination made.
[1] On 19 December 2016, the Australian Municipal, Administrative, Clerical and Services Union, Vic Private Sector Branch (the ASU) made an application pursuant to s.236 of the Fair Work Act 2009 (Cth) (the Act) for a majority support determination.
[2] The ASU seeks a determination that a majority of Shine Lawyers' Victorian employees who are legal practitioners or covered by the Legal Services Award (2010) (the relevant employees), who will be covered by a proposed single-enterprise agreement, want to bargain with their employer.
[3] Shine Lawyers (Shine) has its principal place of business in Brisbane. It is a wholly owned subsidiary of Shine Corporate Ltd, which is listed on the Australian Securities Exchange. Shine has 40 branches which operate in Queensland (25 branches), Victoria (6 branches), New South Wales (8 branches) and Western Australia (1 branch). It also operates a wholly owned subsidiary in New Zealand. In the Australian operations, there are approximately 692 employees and of those, 110 are solicitors. Queensland is home to 483, or 70%, of Shine's employees.
[4] In Victoria, there are 98 Shine employees (approximately 13%) and 26 of these are solicitors.
[5] The organisational structure of the Shine business is pyramid-like. Each branch has support/administrative staff, paralegals and solicitors who report to their Branch Manager, who in turn reports to his or her General Manager. The General Manager then reports to the relevant State National Litigation Principal and General Manager. In the case of Victoria and NSW, the respective State National Litigation Principals report directly to the Executive Consultant. In Queensland and Western Australia, they report to a National General Manager who reports to the Shine Managing Director.
[6] Shine also has shared services said to be utilised by all offices in Australia, including; client engagement team, recoveries and settlements, people and culture, marketing and communications, finance, accounting and payroll, corporate services, firm precedents, IT services, work health and safety and project management.
[7] While it has 11 practice areas in total, Shine's work is predominantly in personal injury litigation. As to this work, it is said that while the compensable injury legislation tends to be jurisdiction-specific, the solicitors at Shine carry out their professional tasks in the same or similar manner.
[8] In terms of measuring performance, Shine has five KPIs; maximise damages awards, build strong teams, file velocity, work smart and attract new clients. There are a number of sub-measures for each KPI and Shine sets branch KPIs and personal employee KPIs. All fee earners in Australia are said to have the same KPIs and the same sub-measures. Performance against KPIs is monitored by managers and the leadership team.
[9] As outlined above, the ASU seeks a determination that a majority of Shine's Victorian employees who are legal practitioners or covered by the Legal Services Award (2010) (the relevant employees), who will be covered by a proposed single-enterprise agreement, want to bargain with their employer. In its application, the ASU said in the week ending 20 November 2016, it circulated a petition amongst employees in Victoria, a majority of which signed the petition indicating support for the ASU to be their bargaining representative and bargain for an enterprise agreement.
[10] On 23 January 2017, the Fair Work Commission (the Commission) was copied into correspondence from Shine's legal representative to the ASU, which sought full copies of the petitions signed by the relevant employees and the written material provided to them. It said access to the documents was necessary to enable Shine to test the ASU's allegations that a majority of the relevant employees wish to bargain for an enterprise agreement, and that the group has been fairly chosen. The following day, the ASU advised Shine it would not provide a copy of the material to it, but that it would provide the material to me at hearing.
[11] Following a conference on 25 January 2017, directions were issued for Shine to file submissions as to why it should be granted access to the petitions. However, on 1 March 2017, the ASU advised the Commission that the parties had reached a consent position on the terms of a draft Order for a secret ballot to be conducted by the Australian Electoral Commission (AEC) and noted that if the Order was made, the ASU would no longer seek to place reliance on its petition, obviating the need for the Commission to make a determination on Shine's application for a full copy of the petition.
[12] On 10 March 2017, I issued an Order pursuant to s.237(3) of the Act that the AEC conduct a secret postal ballot, with the following posed to the relevant employees:
"The ASU has applied to the Fair Work Commission for a majority support determination. The Commission has decided that it is appropriate to conduct a ballot of eligible employees to ascertain whether a majority of employees in Victoria want to commence bargaining with Shine Lawyers Pty Ltd for an enterprise agreement.
Do you want to bargain for an enterprise agreement with your employer?"
[13] On 6 April 2017, the AEC provided the Declaration of Result, which indicated that 92 employees were on the roll of voters, with 61 declaration envelopes returned by eligible voters. Of those 61 votes, 59 voters answered "yes" and two voted "no." The Order of 10 March 2017 had stipulated that in the event the ballot results satisfy the requirements of s.237(2)(a) of the Act, any objection by the employer to the making of a majority support determination should be filed within seven days of the Declaration of Result.
[14] On 13 April 2017, Shine advised the Commission that it objected to the majority support determination being made on the basis that the group of employees who would be covered by the proposed enterprise agreement has not been fairly chosen per s.237(2)(c) of the Act.
[15] Directions were issued on 13 April 2017 for the filing of material and subsequently the matter was set down for hearing on 25 and 26 May 2017.
[16] At the hearing, I granted permission to Mr Bakri of Counsel to appear for the ASU and Mr Harrington of Counsel to appear for Shine. Mr Andrew Lewis (Organiser at the ASU) and Mr Jawad Chrara (Shine National Litigation Principal - General Manager New South Wales) gave evidence and were cross-examined. Following the hearing, the parties were directed to file final written submissions and final oral submissions were heard on 14 June 2017.
[17] The Act relevantly provides as follows:
(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."
[18] I am satisfied that the ASU is a bargaining representative for employees who will be covered by the proposed single-enterprise agreement and is, therefore, capable of making this application for a majority support determination. I am also satisfied that the employer, Shine, and the employees that will be covered by the proposed single-enterprise agreement, have been specified.
[19] I am satisfied that a majority of employees employed by Shine and who will be covered by the proposed single-enterprise agreement want to bargain. The Declaration of Result provided by the AEC indicates that of 92 employees, 59 voters, a majority, answered in the affirmative that they want to bargain. Therefore, the evidence before me is that 64% of the relevant employees want to bargain and this satisfies the requirement in s.237(2)(a) of the Act.
[20] I am satisfied that Shine has not yet agreed to bargain. The evidence of Mr Lewis was that since 5 December 2016, the ASU has been seeking that Shine agree to commence bargaining for an enterprise agreement and to date, it has not agreed. This was not disputed by Shine.
[21] It was submitted by Shine that the only "live" issue for the Commission to determine pertains to s.237(2)(c) and s.237(3A) of the Act.
[22] In its Outline of Submissions dated 27 April 2017, Shine submitted:
"12. The following principles ought be applied by the FWC in determining whether it is satisfied that the ASU has, or can, establish that the relevant group (in Victoria) it has chosen is geographically, operationally or organisationally distinct:
a) in order to determine whether the proposed group is geographically, operationally or organisationally distinct, the FWC should first determine the nature of the relevant enterprise the subject of the proposed agreement;
b) the concept of distinctness in s.237(3A) is not to be considered in an absolute sense, it is a matter of degree;
c) if the group of employees covered by the agreement was not geographically, operationally or organisationally distinct then that would be a telling factor against a finding that the group was fairly chosen;
d) the fairness with which s.237(2)(c) is concerned is fairness assessed in a practical way, not in some philosophical or abstract fashion;
e) the word 'fairly' suggests that the selection of the group was not arbitrary or discriminatory;
f) in assessing 'fairly chosen', the interests of the employer are to be considered, including questions of enhanced productivity and efficient conduct of the business;
g) as to fairness, the interests of those employees also excluded from the coverage of the agreement are relevant;
h) geographical distinctness is concerned with geographical separateness of the employer's various worksites;
i) the term 'operational' refers to an industrial or productive activity;
j) operational distinctness includes consideration of what operations the respective group of employees are engaged in; what are their respective functions. Factors such as required education, skills or experience may illustrate such distinctness;
k) the incidence of coverage of an enterprise overlays the operational configuration of an enterprise and does not determine that operational configuration;
l) the term 'organisation' refers to the manner in which the employer has organised the enterprise in order to conduct the operations;
m) in assessing organisational distinctness, the FWC may have regard to:
(i) the organisational configuration of the staffing establishment and where the proposed group sits in that configuration; and
(ii) whether the class of employees is organisationally distinct for the purposes of the differentiation and regulation of their terms and conditions of employment;
n) whether or not the group of employees to be covered by the agreement is geographically, operationally or organisationally distinct is not decisive. It is a matter to be given due weight, having regard to all other relevant considerations;
o) significant weight ought be given to the lack of distinctiveness in deciding whether the group was fairly chosen." (references omitted)
[23] Mr Chrara described the organisational structure of Shine in the terms outlined in paragraphs [3]-[6] above. He said the registered office and principal place of business is located in Brisbane and there are offices in Victoria, NSW, Queensland and Western Australia. Mr Chrara said the Australian offices are integrated through management lines and shared services and described the reporting lines. Mr Chrara agreed in cross-examination that it is the branch manager's responsibility to ensure that as an operational unit, the branch is meeting its targets and that at a State level, the State manager is responsible for ensuring State targets are met.
[24] Mr Chrara referred to a number of shared services and other functions that support Shine's practices nationally. He said the majority of employees who work in a shared service function are located in Brisbane and Toowoomba. Centralised services include; recoveries and settlements, people and culture (including recruitment and learning and development), marketing and communications, finance, accounting, payroll, corporate services, firm precedents, IT services, work health and safety and project management. Mr Chrara said there is also a centralised client intake function, located in Brisbane, which is responsible for accepting and managing new client intake across Australia. This Client Engagement Team prepares documentation for new matters, such as relevant authorities, a costs agreement and schedules relevant to the claim. It also completes the process of creating a file once a client has been seen.
[25] Mr Chrara also gave evidence that in his role as the National Litigation Principal - General Manager New South Wales, he is obligated to facilitate training courses nationally and that as a leader of the firm he is responsible for all the employees, not just those he manages on a daily basis.
[26] Mr Chrara said eligibility for a bonus is dependent upon both individual performance and the national team's performance and gave the example that even if employees in Victoria and NSW perform exceptionally well, no employee will receive a bonus if the firm does not meet its target.
[27] Shine submitted that 'organisation' refers to the manner in which the employer has organised its enterprise in order to conduct its operations[1] and that Victorian operations are not distinct from other Shine operations. It said that Victorian operations draw on the Shine Practice in respect of shared services and that operations of a branch are administered at a national level, albeit they are executed at a branch level.
[28] As outlined in paragraphs [3] and [7] above, Mr Chrara said that there are approximately 110 solicitors engaged by Shine nationally, mostly engaged in personal injury litigation and they carry out their tasks in the same or similar manner. Similarly, he said Shine support staff in all offices carry out their tasks in the same or similar manner. Mr Chrara said there are a number of specialist departments that operate along national lines, made up of administrative staff, paralegals, solicitors and/or team leaders who might report to a National Principal/Manager in a different location.
[29] Mr Chrara gave evidence that in his role as Shine National Litigation Principal - General Manager New South Wales, he is responsible for the management of Shine operations in NSW. He said part of his role is ensuring the operation and implementation of Shine's national processes in NSW, business growth in NSW and management of the NSW leadership team. Mr Chrara estimated he would have contact with his counterpart in Victoria at least once per week and assists with files in Victoria when requested. However, Mr Chrara also agreed in cross-examination that he does not regularly need to speak to Victorian employees who are not managers.
[30] Mr Chrara said there is some variation (albeit limited) in remuneration levels for employees in different States to account for differences in the legal market, specific business needs and local conditions and cost of living across jurisdictions. He conceded in cross-examination there is disparity in wages of employees employed in the same position.
[31] Shine submitted that there is uniformity in relation to how the business operates. It submitted the 'industrial or productive activity' is the practice of law with the aid of support staff carried out in every Shine branch and this is not distinct to Victorian branches or Victoria itself. Shine submitted the only point of distinction between State offices was the differing statutory regimes and the process they imposed, including where a particular statute might dictate a different process, function or approach to a claim.
[32] Mr Chrara stated that in his 10 years working for Shine in Queensland, NSW, Western Australia and spending time in Victoria, he has at no stage considered the workforce of a particular State to be distinct or separate. He expressed the view that Shine operates as one integrated national firm and it has never isolated its employees on the basis of geography.
[33] Shine submitted that within Victoria, the number of separate offices or branches tends towards geographic diversity. Shine submitted it is arbitrary to work within the Victorian framework and that arbitrariness in the choice of group weighs heavily against the issuing of a majority support determination.[2] What binds the branches together, it was submitted, is the national integrated practice where there are six branches in Victoria with state management which feeds up to a national management tier. Shine submitted the national business does not seek to differentiate offices at a geographic state level.
[34] In closing submissions, Shine contended that where there is more than one geographic location in Victoria, the idea of geographic distinctness loses any real significance. Rather, Shine submitted that the relevant employees are not geographically distinct but are instead diverse, because they traverse six branches in Victoria.
[35] Mr Lewis said in his experience, "Shine's operations are independently administered at the State and Branch level to a significant degree."[3]
[36] Mr Lewis said he has been informed that the vast majority of employees in Victoria have almost nothing to do with employees in other States and do not work on interstate files, and that only three or four of the relevant employees may spend a substantial amount of time working on files from interstate. Mr Lewis noted that while the State manager has some interaction across jurisdictions with colleagues of similar or higher status on a regular basis, managers are not within the proposed coverage of the majority support determination.
[37] Mr Lewis said it was his understanding that there are virtually no shared services employees based in Victoria, though it receives shared services support from the Queensland offices of Shine. However, Mr Chrara's evidence was that there are settlement and recovery services based in Victoria and there is also a settlement recoveries employee in Western Australia who does exclusively Victorian work.
[38] In contrast to Mr Chrara's evidence, Mr Lewis said that based on conversations he has had with employees, there is already a high degree of disharmony within branches and State and national practice groups because of existing disparate and inconsistent terms and conditions of employment.
[39] The ASU submitted that organisational distinctness refers to the manner in which the employer has organised the enterprise in order to conduct the operations.[4] It submitted there is a degree of distinctness in an organisational sense, indicated by the fact that employees at a branch report to the branch manager and ultimately the State manager and the fact that the vast majority of Victorian employees are providing legal services to Victorian clients.
[40] The ASU accepted that at a national level there is a level of integration, as there would be in any nationally operated business but submitted that Shine has chosen to organise its business into branches and States that form part of the overall business, which is indicative of organisational distinctness. Furthermore, the ASU submitted the evidence of Mr Chrara under cross-examination, that various targets are set by Shine for branches and States and these are monitored by management at a branch and State level, points to organisational distinctness.
[41] Of shared services employees, the ASU referred to National Union of Workers v Cotton On Group Services Pty Ltd (NUW v Cotton On)[5] and the conclusion of Commissioner Roe that although there was a degree of organisational integration in relation to IT, planning, training and OHS systems, this is common and did not render the chosen group unfair.[6]
[42] Mr Lewis said he is aware that responsibilities among Shine's human resources team are allocated on a State by State basis, with an HR Business Partner responsible for overseeing Victorian operations, although he agreed that the HR Business Partner responsible for Victorian operations is also responsible for NSW operations. Mr Chrara challenged the assertion that responsibilities among Shine's human resources team are allocated on a State by State basis, stating it is dealt with at a national level, with almost all Shine's policies coming out of the head office in Queensland and applying nationally.[7]
[43] Mr Lewis' evidence regarding specialist departments said to operate along national lines was that he had been informed that none of Shine's Victorian employees work in any of these departments, save for three employees who work in Disability Insurance and one who does social justice work and is managed from Queensland.[8] When re-examined, Mr Lewis said his understanding was there are three staff in the Melbourne office who may work on medical negligence type files that originate from interstate and that the social justice team members had recently advised him that they had not done any work originating from interstate for some time. Mr Lewis said he had no knowledge of non-Victorian lawyers (i.e. interstate lawyers) working on Victorian files.
[44] On operational distinctness, the ASU submitted that it refers largely to the legislative differences between Victoria and other States.[9]
[45] The ASU submitted there is a degree of distinctness in an operational sense and "operational distinctness" refers to "an industrial or productive activity" and does not refer to the performance of a "different role, skill, task or function"[10] by an individual employee or group of employees. It submitted in the present matter, the main "industrial or productive activity" performed by the relevant employees is the provision of legal services (including administrative support) in Victoria concerning Victorian personal injuries practice areas.[11] The ASU submitted that there is a degree of distinctness between personal injury statutory schemes in each state and that under cross-examination, Mr Chrara accepted that he would not expect Victorian solicitors practising in workers compensation to understand the workers compensation system in NSW, Queensland or Western Australia.[12]
[46] The ASU submitted there is an appreciable difference between the industrial or productive activity that is conducted in Victoria when compared to other States. It also submitted that it was made clear in Cotton On Group Services Pty Ltd v National Union of Workers (Cotton On v NUW)[13] the distinctness is a matter of degree rather than an absolute. In this regard, it noted some of the relevant employees work on interstate files but that Mr Chrara had conceded that only three or four Victorian employees worked on interstate files and that these files were not 100% of those employees' practice. Furthermore, the ASU submitted that the limited direct contact Victorian employees have with interstate employees, as opposed to the contact employees within the State have with each other, militates in favour of finding operational distinctiveness.
[47] The ASU submitted that geography was its strongest point "because it is unimpeachable."[14] It submitted that geographic distinctness is concerned with the geographical separateness of the employer's workplaces. The ASU submitted that there is absolute distinctness in the geographical sense. It said the Victorian branches are a sub-set of Shine's workplaces, which are geographically distinct to those located interstate and the branch located in New Zealand.
[48] The ASU submitted that it is well-established that the chosen group of employees can work in a single location or in a geographical subset of the total business and be geographically distinct, relying on QGC Pty Ltd v The Australian Workers' Union (QGC).[15]
[49] Shine made submissions as to the weight which should be attributed to Mr Lewis' evidence. It submitted it is unidentified hearsay, uninformative and does not compel the Commission to reach the 'required satisfaction' as to 'fairly chosen.' It submitted Mr Lewis acknowledged that he knew next to nothing, on a first hand basis, as to the local or national operations of Shine and what he knew was confined to Victoria and its operations. It submitted that because the hearsay was unsourced, it is unclear if it is second-hand or third-hand or even more remote. Shine submitted in that context and absent corroboration, the hearsay is inherently unreliable where there is no other corroboration of a relevant assertion.[16]
[50] As to the evidence of Mr Lewis that "Shine's operations are independently administered at the State and Branch level to a significant degree",[17] Shine submitted it is a lay opinion, tendentious and not supported by objective evidence.
[51] As to these submissions of Shine, to a large extent, I have not found it necessary to rely on the evidence of Mr Lewis in reaching the conclusions I outline below.
[52] Shine also submitted that a Jones v Dunkel[18] inference should be drawn. It submitted that the ASU failed to explain why it did not call any employees of Shine to give direct evidence, and consequently the inference should be drawn that such evidence would not have assisted the ASU. As to this, the ASU submitted the circumstances do not arise for an inference to be drawn, that there is little evidence in conflict and that it largely relies on the evidence of Mr Chrara supporting the requisite level of distinctness. The ASU submitted the Jones v Dunkel inference can only be drawn where there is a conflict in the evidence on particular issues and there is an unexplained failure to call someone to explain that conflict.[19] It said Shine did not articulate with specificity what inferences are sought to be drawn and the inference cannot be drawn on a global level.[20] I find the ASU's submissions to be compelling and decline to draw an adverse inference.
[53] As to Mr Chrara's evidence regarding the potential implications of a Victorian enterprise agreement,[21] the ASU submitted that not much can be made of Shine's claimed concerns about implications flowing from disparate and/or inconsistent terms and the evidence falls well short of establishing the countervailing case of prejudice.[22] In any event, it relied on Alcoa of Australia Limited v Construction, Forestry, Mining and Energy Union (Alcoa v CMFEU)[23] to submit that to attempt to predict what the outcome of enterprise bargaining might be if a majority support determination is made and then to have regard to that in deciding whether such a determination would be made would involve the Commission taking into account an entirely speculative and irrelevant decision.[24]
[54] I have had regard to a number of previous decisions of the Commission in determining this application.
[55] In Cimeco Pty Ltd v CFMEU & Ors (Cimeco),[25] the concept of "fairly chosen" was discussed by the Full Bench, in the context of s.186(3), as follows:
"[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..."[26]
[56] Commissioner Roe in NUW v Cotton On articulated the following in relation to the Commission's task of determining the question of "fairly chosen" in the context of s.237(2)(c) of the Act:
"[17] Both parties refer to the decision of the Full Bench in Cimeco Pty Ltd v CFMEU and Ors. That decision related to an agreement approval however the requirements in respect to fairly chosen are essentially the same for agreement approval and majority support determinations. Cimeco requires that the Fair Work Commission in determining the question of fairly chosen:
[57] Commissioner Roe also said that for the purposes of a majority support determination, "there is no requirement to decide what would be the fairer or the fairest group. There may be a number of alternative groups which could be fairly chosen."[27] He made the comment that issues of scope may arise and that the scope of the agreement may be different at the conclusion of bargaining from when a majority support determination was issued.[28]
[58] Commissioner Roe proffered that the "legislation specifically provides that a group which is geographically distinct but not organisationally or operationally distinct could be fairly chosen. The legislation does not say that the Fair Work Commission must take into account whether the group is geographically, operationally and organisationally distinct."[29] He went on to note that if he were "to find that the group is not operationally and organisationally distinct this would be a relevant factor in determining whether or not the group was fairly chosen but it would not be determinative."[30]
[59] The decision of Commissioner Roe in NUW v Cotton On was affirmed on appeal in Cotton On Group Services Pty Ltd v National Union of Workers.[31]
[60] Most recently, the reasoning in Cimeco was adopted by the Full Bench of the Commission in QGC in the context of s.237(2)(c) of the Act:
"[42] For the Commission to reach a state of satisfaction necessary to make a majority support determination, it must be satisfied that the group was fairly chosen and in considering whether the group was fairly chosen, it must take into account, by virtue of s. 237(3A), whether the group is geographically, operationally or organisationally distinct. Distinctiveness is not absolute and can be a matter of degree. Distinctiveness on one of those bases is a factor telling in favour of a finding that the group is fairly chosen. Conversely if the group of employees is not geographically, operationally or organisationally distinct, then that is a factor telling against a finding that the group is fairly chosen. Whether or not a group is organisationally, operationally or geographically distinct is not decisive but rather is a matter to be given due weight having regard to all of the other circumstances." [32]
[61] Therefore, having regard to these authorities, 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. Further, the consideration of whether the relevant employees were fairly chosen, taking into account whether they are geographically, operationally or organisationally distinct, is to be undertaken bearing in mind that the concept of distinctness in s.237(3A) of the Act is not absolute, but rather may be a matter of degree.
[62] It is also salient to bear in mind that the making of a majority support determination is not an exercise in determining the scope of any final agreement but instead involves determining the starting point for bargaining and the group for the notice of representational rights.[33]
s.237(3A) of the Act - is the group geographically distinct?
[63] I am satisfied that Shine Lawyers' Victorian employees who are legal practitioners or covered by the Legal Services Award (2010) are geographically distinct from other workers employed by Shine. There is significant distance between the Victorian branches of Shine and those in other States and Mr Chrara's evidence does not persuade me that it is common for employees to move from State to State.
[64] While noting Shine's branch structure means there is more than one geographic location within Victoria, I am not persuaded this means the relevant employees cannot be considered geographically distinct. While it might be said that there is further geographical distinction within Victoria due to the branch structure, it was noted by Commissioner Roe in NUW v Cotton On, there may be a number of alternate groups which could be fairly chosen.[34] Further, the Full Bench decision in QGC contemplates geographical distinctness in single locations or geographical subsets of a total business.[35]
s.237(3A) of the Act - is the group operationally distinct?
[65] Adopting the meaning that the Full Bench in QGC gave to "operational," I consider the "industrial or productive activity" engaged in by Shine to be the practice of law with accompanying administrative support. For much of the legal work carried out, the only real distinction as far as Victoria is concerned, lies in the application of the Victorian statutory schemes and processes for personal injuries.
[66] While it would seem some there are other operational tasks performed in other areas of legal practice with attendant national leadership on a national basis, the involvement of the relevant employees in these seems minimal. Further, the contact between the relevant employees and employees in other States also appears minimal.
[67] On balance, I am satisfied there is a degree of operational distinctness, but it is not significant.
s.237(3A) of the Act - is the group organisationally distinct?
[68] I have noted the meaning that the Full Bench in QGC gave to "organisation". It concluded the term refers to the manner in which the employer has organised its enterprise in order to conduct its operations.
[69] As to Shine's proposition that there is a lack of organisational distinctness, I have noted the shared services comprising recoveries and settlements, people and culture (including recruitment and learning and development), marketing and communications, finance, accounting, payroll, corporate services, firm precedents, IT services, work health and safety and project management. I have also noted there is a centralised client intake function located in Brisbane and that there are management and reporting lines feeding into a national structure.
[70] The counter argument of the ASU points to the branch and State structure, said to be indicative of organisational distinctiveness and the monitoring of the various performance targets, at least initially, at branch and State level.
[71] On balance, I am satisfied there is a degree of organisational distinctness inherent in Shine's branch and State structures that is not cancelled out by the level of integration described, such that it would render the choice of the relevant employees unfair.
[72] Notwithstanding my findings above, whether or not the group of employees covered by the agreement is geographically, operationally or organisationally distinct is not decisive. It is a matter to be given due weight, having regard to all other relevant considerations.[36]
[73] As outlined above, in Cimeco it was said that what the other relevant considerations are will vary from case to case and the word 'fairly' suggests that the selection of the group was not arbitrary or discriminatory. Shine submitted the selection of the relevant employees was entirely arbitrary and informed by the convenience of the ASU. It submitted that one effect of the arbitrariness of the group chosen was the exclusion of Shine employees performing the same work in different geographical locales. Shine submitted it is entirely appropriate for the Commission to have regard to the consequences of confining the group of employees to Victoria and to consider like-employees excluded from the proposed agreement and that this was a relevant consideration.
[74] Shine also submitted that in assessing the question of 'fairly chosen,' the Shine business interests and imperatives are to be considered, particularly the efficient conduct of its business.[37] Shine submitted regard should be had to the evidence of the national integrated practice. It relied on Mr Chrara's evidence that if Victoria was to be covered by an agreement, there may be adverse commercial and operational implications for Shine and submitted no attack was made on this evidence.
[75] Shine further submitted its Victorian operations are not stand-alone and distinct. It said the legal work done and services shared emanate from a nationally integrated Shine business model and granting the application for a majority support determination would not complement or assist the national business, but would instead have a fracturing or fragmenting effect on its model.
[76] The ASU submitted that it should be accepted that it matters not whether a national agreement or branch by branch agreement would result in a more fairly chosen group, as the question to be answered is whether or not the group that is proposed by the Applicant in this application is fairly chosen within the meaning of s.237.[38]
[77] The ASU submitted that in light of The Australian Workers' Union v BP Refinery (Kwinana) Pty Ltd (Kwinana)[39] and Alcoa v CMFEU the Commission would need to be satisfied of a clear countervailing case that the selection of the group would be prejudicial to the productivity or efficient conduct of the Shine business, but Shine has failed to establish any such prejudice.
[78] As to Mr Chrara's evidence that there may be adverse commercial and operational implications for Shine if Victoria was to be covered by an agreement, the ASU submitted the evidence was speculative and of no probative value.
[79] The ASU submitted that Cimeco and John Holland Pty Ltd v CFMEU[40] give a very narrow meaning to the fairly chosen requirement and provide that the requirement is there to guard against arbitrariness and discrimination, of which there was none present.[41]
[80] The ASU submitted there has been an objective and reasonable basis for the seeking of a Victorian based agreement. It submitted Mr Lewis gave unchallenged evidence that the scope of the proposed agreement reflects the group of employees who have approached the ASU and sought its assistance as a bargaining representative. It submitted this is entirely consistent with the Act's bargaining scheme and that his evidence countered Shine's submission that the relevant employees have been arbitrarily chosen.
[81] As to the submissions relating to the selection of the relevant employees, I accept the evidence of Mr Lewis in this respect and am not persuaded the choice of the relevant employees was arbitrary, such that it offends Cimeco.
[82] As to the Shine submission that it is entirely appropriate for the Commission to have regard to the consequences of confining the group to Victoria and to consider the exclusion of Shine employees performing the same work in different geographical locales, there was no evidence beyond the assertion of Mr Chrara that there may be disharmony if Victorian-based employees receive different terms and conditions.
[83] Similarly, as to the Shine submission that granting the application for a majority support determination would have a fracturing or fragmenting effect on the national business model and may have adverse commercial and operational implications, there was (again) no evidence beyond the assertions of Mr Chrara.
[84] My consideration of these two Shine submissions is guided by the statement of the Full Bench in Alcoa v CFMEU:
"The making of a majority support determination does not pre-suppose that an enterprise agreement will be made containing particular terms. It does not pre-suppose that an enterprise agreement will be made at all. To attempt to predict what the outcome of enterprise bargaining might be if a majority support determination is made, and then to have regard to that in deciding whether such a determination would be made, would involve the Commission taking into account an entirely speculative and irrelevant consideration." [42]
[85] I regard Mr Chrara's evidence relating to these two submissions as speculative.
[86] Although Shine initially opposed the making of a majority support determination on the basis that the Commission cannot be satisfied that it is reasonable in all the circumstances to make the determination,[43] it later indicated that it did not press this as a stand-alone ground.[44] Despite making no submissions on reasonableness, Shine stated it does not concede reasonableness.[45]
[87] Regardless, I must be satisfied it is reasonable in all the circumstances to make the determination sought. On the basis of the material before me and taking into account the evidence, submissions and conclusions I have made in relation to s.237(3A) of the Act and the question of whether the relevant employees were fairly chosen discussed in paragraphs [72]-[85] above, I consider it reasonable in all the circumstances to make the determination sought.
[88] As all of the requirements of s.237(2) of the Act have been met, I am obliged, pursuant to s.237(1) of the Act, to make the determination. A determination will issue with this decision and will operate from the date of this decision.
Y Bakri of Counsel for the Australian Municipal, Administrative, Clerical and Services Union.
N Harrington of Counsel for Shine Lawyers Pty Ltd.
[1] QGC Pty Ltd v The Australian Workers' Union [2017] FWCFB 1165 at [44].
[2] Transcript, 14 June 2017, PN 101 and Respondent's Outline of Closing Submissions at [32]-[33].
[4] QGC Pty Ltd v The Australian Workers' Union [2017] FWCFB 1165 at [44] and Applicant's Outline of Closing Submissions, dated 7 June 2017 at [25].
[7] Transcript, 25 May 2017, PN 476.
[9] Transcript, 14 June 2017, PN 387.
[10] QGC Pty Ltd v The Australian Workers' Union [2017] FWCFB 1165 at [44].
[11] Applicant's Outline of Closing Submissions, dated 7 June 2017 at [33].
[12] Transcript, 25 May 2017, PN 558.
[14] Transcript, 14 June 2017, PN 416.
[16] Respondent's Outline of Closing Submissions, dated 9 June 2017 at [10].
[19] Transcript, 14 June 2017, PN 434.
[20] Transcript, 14 June 2017, PN 435.
[22] Transcript, 14 June 2017, PN 295.
[24] Transcript, 14 June 2017, PN 293.
[27] [2014] FWC 6601 at [18].
[32] QGC Pty Ltd v The Australian Workers' Union [2017] FWCFB 1165 at [42].
[33] National Union of Workers v Cotton On Group Services Pty Ltd [2014] FWC 6601 at [19].
[35] QGC Pty Ltd v The Australian Workers' Union [2017] FWCFB 1165 at [47].
[36] Cimeco Pty Ltd v CFMEU & Ors [2012] FWAFB 2206 at [20]
[37] CFMEU v Alcoa of Australia Ltd [2014] FWC 7123 at [71].
[38] Transcript, 14 June 2017, PN 213.
[41] Transcript, 14 June 2017, PN 318.
[42] Alcoa of Australia Limited v Construction, Forestry, Mining and Energy Union [2015] FWCFB 1832 at [31].
[43] Respondent's Outline of Submissions, dated 27 April 2017 at [5].
[44] Respondent's Outline of Closing Submissions, dated 9 June 2017 at [2] and Transcript, 14 June 2017, PN 198.
[45] Transcript, 14 June 2017, PN 198.
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Australian Municipal, Administrative, Clerical and Services Union
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(1959) 101 CLR 298