Fair Work Act 2009

s.236 - Majority support determination

Application for a majority support determination - Granted

[1] On 25 May 2020, the Australian Workers' Union (AWU) made an application (Application) pursuant to section 236 of the Fair Work Act 2009 (FW Act), for the Fair Work Commission (FWC) to make a majority support determination (Determination). The Determination would require Inpex Australia Pty Ltd (Inpex) to commence bargaining for a new enterprise agreement (Proposed Agreement).

[2] The Proposed Agreement would cover those employees of Inpex who are currently employed to perform work in the classifications of Operations Technicians (Trade and Processing), and Operations Technician (Services), under the Inpex Ichthys Operations Multi-Location Agreement 2014 (Employees).

[3] The parties participated in a conference on 11 June 2020 and agreed that the following issues should be determined in advance of the final determination of the Application.

1. The method by which the FWC should determine whether a majority of employees want to bargain.

2. Whether the Employees to be covered by the Proposed Agreement are fairly chosen.

[4] On 16 July 2020, and 17 July 2020, Inpex and the AWU respectively agreed that these two issues should be determined 'on the papers'.

[5] The Ichthys Operations Multi Location Agreement 2014 (Current Agreement) was made on 12 September 2014, when a majority of the employees voted in favour of the Agreement.[1] The nominal expiry date of the Current Agreement is 9 October 2018. [2]

[6] The scope of the Current Agreement was determined prior to the completion of the construction phase of the Ichthys project. This was prior to the production and supply of any LNG to customers.[3]

[7] Production of LNG for export to customers started in July 2018. [4]

[8] On 10 April 2018, Mr Conor Walker, Director, Operations, at Inpex (Mr Walker) wrote to the employees covered by the Current Agreement, informing them that Inpex did not intend to pursue the renewal of the Agreement.[5]

[9] On 22 April 2018, Mr Trevor Bavington, an A Shift Operations Technician, wrote to Mr Scott Innes, Mr Brett Woodland, and Mr Robert Mitchell of Inpex, stating that '100% of the group' (presumably the A Shift Operations Technicians) wished to bargain for a new enterprise agreement. [6]

[10] On or shortly after 15 June 2018, an email was forwarded to an Inpex supervisor, in which the author states that they had been in contact with the AWU in Perth that morning, to 'see how things were progressing with initiating a poll to determine if a majority of employees want to negotiate a new agreement.' [7]

[11] In June 2018, Mr Hitoshi Okawa, Director Corporate Coordination, and Mr Walker wrote to employees confirming that Inpex did 'not intend to instigate negotiations for replacing the 2014 Agreement'. In the letter, Mr Okawa and Mr Walker told employees that in light of employee concerns that Inpex might apply to terminate the Current Agreement that Inpex undertook not to do so for a period of two years from the nominal expiry date of the Current Agreement. [8]

[12] On 31 August 2018, it came to Inpex's attention that hard copy petitions seeking employee approval to commence bargaining had been distributed at various locations around the Project site, because a Laboratory Superintendent sent the petition to Melissa Gilmour, Manager HR Business Partner Operations.

[13] On 5 September 2018, Mr Craig Hoffmann, an Inpex Operations employee, sent an email to other Inpex Operations employees to survey their response to the question, "Do you wish to initiate the process of renegotiating your current EA?". [9]

[14] The nominal term of the Agreement expired on 9 October 2018. On that day, Mr David Dann, Inpex GM Onshore, received an email from Mr Wayne Ridley, an Inpex Operations Technician, advising that the informal poll had been conducted at 'all three facilities, ascertaining the appetite to renegotiate our EA.' In that email, Mr Ridley stated that 'the poll was conducted through the Inpex email system using a vote yes or no button' and that 'as of the 5 October, the result has passed the 50% +1 figure to renegotiate, with Onshore at approx. 57% yes, (97% yes of those who voted)'.[10]

[15] On 8 November 2018, Mr Danny Cain, Assistant Branch Secretary of the Maritime Union of Australia (MUA), wrote to members of the 'Offshore Alliance.' In relation to Inpex, the letter states that in light of strong support for negotiations for a new agreement, preparations for the lodgement of a majority support determination were underway, and employees are encouraged to complete and return an attached petition in support of bargaining. [11]

[16] On 20 November 2018, Mr Doug Heath, Offshore Alliance Organiser with the MUA WA Branch, sent an email addressed to 'all Inpex crew'. Mr Heath's email, amongst other attached documents, included a bargaining petition. Mr Heath requested recipients to forward the email to their work colleagues, requesting that they complete the bargaining petition, even if they had signed one previously.[12]

[17] Between 22 November 2018, and 21 December 2018, Inpex conducted its own survey of its employees' views about a number of matters, including whether employees wished to bargain for a new agreement. Only 29% of respondents indicated that they would prefer to engage directly with Inpex. 26% of respondents indicated that they would prefer to engage directly with Inpex but did not have confidence in the process. 34% did not want to engage directly with Inpex and preferred to using a bargaining process or bargaining representative. [13]

[18] On 21 March 2019, Inpex wrote to employees regarding the results of the survey, acknowledging that the feedback showed that 'security of terms and conditions is a key motivation for those seeking a new agreement', and giving a further undertaking not to terminate the Current Agreement until 21 March 2023. [14]

[19] On 3 March 2020, Mr Zachary Duncalfe, AWU National Legal Officer, wrote to Mr Smith, formally requesting that Inpex commences bargaining with the AWU and other legitimate bargaining representatives for an enterprise agreement to replace the Current Agreement as soon as practicable. [15]

[20] On the same date, Mr Heath sent an email to 'All Offshore Inpex Crew'. In that email, Mr Heath stated that 'the Offshore Alliance and ETU have received support from 2/3 of the Inpex offshore workforce for the commencement of bargaining for an Enterprise Agreement'. Mr Heath's email attached Mr Duncalfe's letter of the same date with a blank petition.[16]

[21] On 11 March 2020, Mr Smith responded to Mr Duncalfe by letter, asking Mr Duncalfe to, 'provide clarification on the scope of the application of the proposed enterprise agreement, the subject of his request to bargain, so that Inpex can properly consider the request and respond accordingly'. [17]

[22] By letter dated 15 April 2020, Mr Duncalfe confirmed that the AWU seeks a replacement agreement that has the same or substantially similar scope as the Current Agreement. [18]

[23] On 16 April 2020, Mr Heath sent an email to 'All INPEX CPF and FPSO Crew (Inpex Onshore Crew Copied into Correspondence)'. The email indicated that the AWU intended to lodged a majority support determination application within seven days if Inpex did not agree to commence bargaining. The email says that the union anticipates a majority of the workforce will support collective bargaining to secure employees terms and conditions of employment and asks employees who haven't yet done so to complete an attached petition. [19]

[24] On 23 April 2020, Mr Smith responded to Mr Duncalfe to confirm that Inpex did not intend to engage in bargaining. [20]

[25] On 25 May 2020, the AWU filed the Application.

[26] Inpex does not wish to engage in enterprise bargaining and opposes the Application.

[27] Section 236 of the FW Act provides that:

(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.

(2) The application must specify:

(a) the employer, or employers, that will be covered by the agreement; and

(b) the employees who will be covered by the agreement."

[28] Section 237 of the FW Act provides that:

"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."

By what method should the FWC determine whether a majority of employees want to bargain?

[29] The making of a majority support determination confirms that the majority of the employees to be covered by a proposed agreement want to bargain with the employer towards such an agreement. The effect of a majority support determination is to require the commencement of the agreement bargaining process, but it neither requires that an agreement be reached nor dictates the terms of any such agreement.[21]

[30] Prior to making a majority support determination, the FWC must be satisfied that a majority of the employees who will be covered by the Agreement want to bargain.

[31] It is clear from the evidence of Mr Smith, that even before the Current Agreement expired, there has been interest among a portion of the workforce covered by the Current Agreement to commence bargaining for a new agreement. Notwithstanding undertakings by Inpex that it will not seek to terminate the Current Agreement, a number of employees appear to remain keen to secure and perhaps improve their terms, and conditions of employment with an in-term agreement.

[32] In working out whether a majority of employees want to bargain, the FWC may use any method it considers appropriate. In the Form F30 - Application for a majority support determination, the AWU proposed to provide the FWC on a confidential basis with signed individual petitions from employees covered by the Current Agreement.

[33] In its response to the Application dated 28 May 2020, Inpex sought access to the individual petitions collected by the AWU and proposed to be filed on a confidential basis with the FWC. Given that multiple applications for a majority support determination have been foreshadowed, but never lodged, Inpex is concerned that the petitions obtained by the AWU may not reflect the current and genuine views of relevant employees.

[34] The AWU refused to allow Inpex access to the individual petitions on the basis of individual privacy and freedom of association concerns.

[35] A conference was convened between the parties, and the parties agreed to make submissions with respect to the appropriate method for the FWC to determine whether a majority of employees want to bargain.

[36] The AWU submits that in the circumstances of the current matter, it would be appropriate for the FWC to determine whether a majority of employees want to bargain by one of two methods:

1. by the FWC comparing the number of petitions received by the AWU and confidentially provided to the FWC against an employee list, confidentially provided by Inpex to the FWC determine if, within the scope of the proposed agreement, the number of employees who have provided a completed bargaining petition exceeds the number of employees who did not (Petition Method); or

2. by ordering that a ballot of the relevant employees be conducted by the Australian Electoral Commission (AEC) (Ballot Method).

[37] In its submissions, Inpex raised numerous concerns in relation to the use of the Petition Method in this Application. These concerns are set out in detail in their submissions and include:

1. It is unclear whether the petitions to be relied upon by the AWU were sent to employees personal or work email addresses

2. The petitions to be relied on by the AWU may be have been sent from the MUA or the Offshore Alliance rather than the AWU.

3. It is unclear what employees were told would be done with the information in the petitions.

4. That the petitions to be relied on by the AWU may be too old to be relevant.

5. That not all relevant employees may have received a petition form.

6. That employees who signed the petitions to be relied on by the AWU may not still employed.

7. Employees who signed the petition may not have had the opportunity to subsequently revoke their petition if they wished to do so.

8. It is unclear what number of petitions expressed a desire to bargain.

[38] The Petition Method, whereby employee preference is captured in petitions and is provided on a confidential basis to the presiding Member which the Member compares with a list of current relevant employees provided by the employer is the most common mechanism used in the determination of majority support determinations.

[39] It is important to note that it is the Member, not the respondent employer who must be satisfied that a majority of employees are in favour of bargaining.

[40] Members are called upon on almost a daily basis to consider contested evidence. Members are typically appointed with significant prior forensic and industrial experience. Consequently, Members typically have the necessary expertise to accurately assess the credibility of the petition data provided on a confidential basis to the FWC. Where the Member is not satisfied that the petition or petitions clearly demonstrates a contemporaneous and clear desire on behalf of a majority of employees to bargain, the Member will not grant the relevant application.

[41] Employer concerns as to the framing of the petition questions, the type of data gathered or the timing of data gathering are typically addressed by the provision of a blank or redacted petition, as the AWU offered to do at the Conference conducted in relation to this matter.

[42] Concerns that employees have not freely expressed their own views and have been subject to verbal or physical pressure to sign a group petition is typically addressed by the use of individual petitions circulated by email such as occurred in this Application.

[43] Additionally, standard directions issued by my Chambers in applications of this type require the applicant to provide a statutory declaration as to the circumstances in which the petitions were collected. If this evidence was contested by the employer, the employer would have the opportunity to cross examine the declarant as to the contents of the statutory declaration at hearing. The same directions also require the employer to circulate to employees an invitation to be heard in relation to the Application. In addition an employer could call witnesses to attest that employees did not freely express their views, if in fact, such evidence existed.

[44] The most recent blank petition form which Inpex tendered, circulated as recently as 16 April 2020:

1. provided a clear and simple explanation of the purpose of the document;

2. required employees to expressly confirm that they completed the document freely and without pressure;

3. sought the employee's full name, work site, position and mobile number against which employee identity could be verified;

4. recorded the date on which the petition was signed.

[45] With access to this information and employee records provided by Inpex, the FWC would have sufficient information to address the reasonable concerns of Inpex in relation to the credibility and contemporaneity of the petitions without the identity of employees supporting bargaining being identified to the company.

[46] Inpex has made it clear to its workforce on a number of occasions that it does not wish to bargain for a new agreement. It has chosen to adopt a vigorous insistence on access to employee individual responses. It would not be unreasonable for individual employees to be concerned that the exercise of their statutory right to express a preference for bargaining if accessed by their employer might be viewed adversely. In the current labour market and economic environment, such sensitivities are likely to be particularly pressing for employees.

[47] I do not accept the assertion by Inpex that the AWU has connived to secure the use of the Ballot Method. The Ballot Method was not first proposed by the AWU and remains an alternative rather than their preferred method of determining the views of the majority. Nor do I accept that the FWC is not empowered to make orders to effect the Ballot Method. It is a method not irregularly utilised by the FWC in other applications of this type.[22]

[48] The Ballot Method addresses all the concerns raised by Inpex in relation to the independence and currency of employee preference. Furthermore, it also adequately addresses its concerns with regard to procedural fairness if it is not given full access to the petitions on which the AWU seek to rely. The Ballot Method addresses the AWU's privacy and freedom of association concerns.

[49] Subsection 237(3) of the FW Act does not give any primacy to the Petition Method or any other method to determine employee views. Subsection 237(3) of the FW Act leaves at the Member's discretion the determination of the appropriate method for ascertaining employee preference. The Member is not restricted to the method proposed by the applicant in the originating application. Often Members impose additional or alternative evidentiary requirements, for example, a requirement to provide a statutory declaration as to the circumstances in which the petition/s was obtained or a requirement to post a notice or distribute directions giving employees an opportunity to be heard in relation to the majority support application.

[50] In all the circumstances of this Application, I am satisfied that the Ballot Method is an objective and decisive way to conclusively determine whether a majority of employees, do in fact, want to bargain, and is the most appropriate way on the facts of this Application to determine whether a majority of employees want to bargain for a new agreement.

Are the employees to be covered by the Proposed Agreement fairly chosen?

[51] The FWC must be satisfied that the group of employees to be covered by the proposed agreement was fairly chosen. If the agreement will not cover all employees of the employer, the FWC must take into account whether the group covered is geographically, operationally and/or organisationally distinct from other employees of the employer. Having determined whether the group is geographically, operationally, and/or organisationally distinct, the FWC must take that into account and give it due weight having regard to all the other factors.[23]

[52] While the question of whether the group of employees to be covered by the Proposed Agreement is geographically, operationally and/or organisationally distinct must be evaluated, and given due weight, it is not a determinative consideration. It is not necessary to make a finding that the group is geographically, operationally, and/or organisationally distinct in order to be satisfied that a group of employees was fairly chosen.[24]

[53] The word 'fairly' implies that the selection of the group is not arbitrary or discriminatory and is made on some objective basis.[25] In this regard, it is appropriate to have regard to the interests of the employer, such as enhancing productivity, and the interests of both the employees included in the agreements coverage and employees who are excluded.[26] Selection criteria based on employee characteristics such as gender would be unlikely to be fair. Selection criteria which would have the effect of undermining collective bargaining or other legislative objectives are also unlikely to be fair.[27]

[54] The Proposed Agreement proposes to cover two classifications of employees. Operations Technicians (Trade and Processing) and Operations Technicians (Services). This is the same two classifications covered by the Current Agreement.

[55] At the time the Current Agreement was approved the Member approving the Current Agreement was satisfied that the group of employees covered by the Current Agreement was fairly chosen.

[56] Inpex has led evidence that the Current Agreement has previously applied to employees working overseas and that employees are not performing work in these locations at present. Inpex has not explained how this now makes the group of employees covered by the Current Agreement no longer geographically, operationally or organisationally distinct. In fact, arguably if the Proposed Agreement will only apply to workers located in Australia, the group of employees proposed to be covered by the Proposed Agreement is, in fact, more geographically distinct.

[57] Inpex also asserts that the employees currently covered by the Current Agreement perform substantially different work to that performed by employees covered by the Current Agreement at the time it was made. They have not provided any evidence that this new work is no longer operationally, organisationally or geographically distinct, only that it is different.

[58] Inpex, on its own admission, is content for the Current Agreement to continue to apply, presumably because it is in its interests to do so.

[59] There is no evidence before me to suggest that the selection of the Employee Group is fairly characterised as either arbitrary or discriminatory.

[60] There is no evidence, before me, to suggest that the Employee Group is not fairly chosen and I am satisfied that the Employee Group was fairly chosen.

[61] An order regarding the conduct of a ballot to be conducted by the AEC will be issued with this Decision.

[1] Witness Statement of Garry Smith at [2].

[19] Witness Statement of Garry Smith at [44]-[48].

[21] Liquor, Hospitality and Miscellaneous Union v Coca-Cola Amatil (Aust) Pty Ltd [2009] FWAFB 668, [25].

[22] Australasian Meat Industry Employees Union v Western Meat Processors (PR709802, 27 June 2019, Beaumont DP); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2019] FWC 4157; Transport Workers' Union of Australia Followmont Pty Ltd T/A Followmont (PR708489, 20 May 2019); Independent Education Union of Australia v Glenvale Education Incorporated T/A Glenvale School (PR703152, DP Hamilton, 13 December 2018); Finance Sector Union of Australia (PR701846, SDP Hamberger, 29 October 2018); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Downer EDI Engineering Power Pty Ltd (PR598393, Williams C, 6 December 2017).

[23] Construction, Forestry, Mining and Energy Union v Alcoa of Australia Ltd [2014] FWC 7123 citing Cimeco Pty Ltd v CFMEU [2012] FWAFB 2206; [2012] 219 IR 139; Cotton on Group Services Pty Ltd v National Union of Workers [2014] FWCFB 8899.

[24] Cimeco Pty Ltd v CFMEU [2012] FWAFB 2206; [2012] 219 IR 139 at [20]; Aerocare Flight Support Pty Ltd t/a Aerocare Flight Support v Transport Workers Union of Australia; Australian Municipal Administrative Clerical and Services Union [2017] FWCFB 5826, [26].

[25] Cimeco at [21], Aerocare Flight Support Pty Ltd t/a Aerocare Flight Support v Transport Workers Union of Australia; Australian Municipal Administrative Clerical and Services Union [2017] FWCFB 5826, [26].

[26] Aerocare Flight Support Pty Ltd t/a Aerocare Flight Support v Transport Workers Union of Australia; Australian Municipal Administrative Clerical and Services Union [2017] FWCFB 5826, [26].

[27] Construction, Forestry, Mining and Energy Union v Alcoa of Australia Limited [2014] FWC 7123 citing Cimeco [21].

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