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[2021] FWC 1680
General information, not legal advice.
Fair Work Commission
2021-03-26
Original judgment source is linked above.
s.236 - Majority support determination
Majority support determination - whether a majority of the employees want to bargain - whether group of employees who will be covered by the agreement fairly chosen - whether reasonable in all the circumstances to make the determination - majority support determination made.
[1] The Australian Workers' Union (AWU) has made an application to the Fair Work Commission (Commission) pursuant to s 236 of the Fair Work Act 2009 (Cth) (Act) for a majority support determination in relation to employees of Alsco Pty Limited (Alsco) who work at its Cardiff branch and who are covered by the Dry Cleaning and Laundry Industry Award 2020 (Cardiff Production Employees). Alsco opposes the making of the majority support determination.
[2] I made directions for each party to file and serve witness statements, documents and submissions. The matter was set down for hearing on 25 March 2021.
[3] The AWU filed and served an outline of submissions, a witness statement made by Mr Paul O'Brien, Organiser for the AWU, and a witness statement made by Mr Samuel Wainwright, Campaign Organiser for the AWU. The AWU also filed a reply submission dated 25 March 2021, a reply statement from Mr O'Brien dated 25 March 2021 and a reply statement from Mr Wainwright dated 25 March 2021. Alsco filed a preliminary submission dated 12 March 2021 and a submission dated 19 March 2021. Alsco did not file any witness statements or documents, nor did it seek to adduce any evidence in the proceedings.
[4] Alsco requested that the application be determined on 'the papers'. The AWU agreed. Accordingly, the hearing was vacated and I have determined the application on the basis of the material filed by the parties.
[5] The role of a majority support determination is to commence the bargaining process when, among other things, there is majority support among employees to collectively bargain but their employer has not agreed to do so.[1]
[6] The effect of a majority support determination extends no further than to enliven the bargaining process under the Act, including the obligation on bargaining representatives to meet the good faith bargaining requirements under s 228 of the Act.[2]
[7] Disputes concerning the scope of a proposed enterprise agreement can be dealt with in bargaining or in an application for scope orders. However, the scheme of the Act does not envisage a role for a majority support determination in deciding the scope of bargaining or the scope of an enterprise agreement.[3]
Do a majority of the Cardiff Production Employees want to bargain?
[8] There are 46 Cardiff Production Employees.
[9] The AWU initially sought to rely on a number of petitions signed by the Cardiff Production Employees. Those petitions indicated that 70% (32 of 46) of the Cardiff Production Employees had signed a petition indicating that they wanted to negotiate an enterprise agreement with Alsco.
[10] Alsco objected to the petitions on a number of grounds, including that they may have been signed as a result of misleading representations made to the Cardiff Production Employees about the hourly rate of pay they would receive if they made an enterprise agreement with Alsco. As a result of these objections, I decided that it would be appropriate to determine whether a majority of the Cardiff Production Employees want to bargain for an enterprise agreement with Alsco by attending Alsco's Cardiff premises and asking the Cardiff Production Employees (by a show of hands) whether they wanted to bargain for an enterprise agreement. To that end, I attended Alsco's Cardiff premises with my Associate during the lunch breaks for the Cardiff Production Employees on 24 March 2021. There were no representatives of Alsco management or the AWU present at the meetings. I informed the Cardiff Production Employees that the AWU had applied for a majority support determination and gave them an explanation of what an enterprise agreement is. I then asked the Cardiff Production Employees to indicate (by a show of hands):
(a) whether they want to bargain with Alsco for an enterprise agreement; and
(b) whether they do not want to bargain with Alsco for an enterprise agreement.
[11] 35 Cardiff Production Employees attended the two lunch time meetings. All 35 Cardiff Production Employees indicated (by a show of hands) that they want to bargain for an enterprise agreement with Alsco. Zero Cardiff Production Employees indicated that they do not want to bargain with Alsco for an enterprise agreement.
[12] Accordingly, I am comfortably satisfied that a majority (35 of 46) of the Cardiff Production Employees want to bargain for an enterprise agreement with Alsco (s 237(2)(a) of the Act).
Alsco has not agreed to bargain or initiated bargaining
[13] It is not disputed, and I am satisfied on the evidence, that Alsco has not agreed to bargain, or initiated bargaining, for an enterprise agreement to cover the Cardiff Production Employees (s 237(2)(b) of the Act).
[14] I cannot make a majority support determination unless I am satisfied that the group of employees who will be covered by the proposed agreement (i.e. the Cardiff Production Employees) was fairly chosen (s 237(2)(c) of the Act).
[15] It is not in dispute that the proposed agreement will not cover all of the employees of Alsco. By reason of s 237(3A) of the Act, I must, in deciding whether the group of employees was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.
[16] The AWU contends that the group of employees was fairly chosen. Alsco made no submission as to whether the group of employees was fairly chosen.
"[13] The word "fairly" is derived from the adverb "fair" and is a word of wide import. What is fair in a particular context is largely a matter of impression and judgment. Of the various definitions of "fairly" in the Oxford Dictionary the most apt in this context are:
'by proper means, legitimately, impartially, justly'; and
'with due regard to equity, candidly, impartially; without undue advantage on either side.'"
● a Member's decision as to whether or not they are satisfied that the group of employees covered by an agreement was "fairly chosen" involves a degree of subjectivity and the exercise of a very broad judgment or value judgment, and in a broad sense can be characterised as a discretionary decision;
● once it has been determined that an agreement does not cover all of the employees of the employment, it is necessary for the Commission to make a finding as to whether the group of employees who are covered is geographically, operationally or organisationally distinct, and then take that matter into account and give it due weight, having regard to all other factors;
● if the group of employees covered by the agreement is 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;
● however while the question of whether the group of employees covered is geographically, operationally or organisationally distinct must be evaluated and given due weight having regard to all other relevant considerations, that is not a determinative consideration in that it is not necessary to make a finding that the group is geographically, operationally or organisationally distinct in order to be satisfied that it was fairly chosen;
● the selection of the group of employees to be covered on some objective basis, as opposed to an arbitrary or subjective basis, is likely to favour a conclusion that the group was fairly chosen;
● the relevant considerations will vary from case to case, but the word "fairly" suggests that the selection of the group covered was not arbitrary or discriminatory, so that for example selection based upon employee characteristics such as date of employment, age or gender would be likely to be unfair; and
● 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 agreement's coverage and the employees excluded."
[19] In most enterprises, there is unlikely to be only one fair manner of selecting the class of employees to be covered by an enterprise agreement. It may be the case that different classes of employees may be equally described as fair in the sense that no manifest unfairness arises from their selection. In the context of an application for a majority support determination, the Commission's task in ensuring that a group of employees was "fairly chosen" is not to determine the scope of an enterprise agreement, but to guard against unfairness by being satisfied that the group can be described, in all circumstances, as "fairly chosen".[8]
[20] Distinctness is not absolute and can be a matter of degree.[9] Distinctness necessarily requires a comparison between the employees who will be covered by the proposed agreement and those who will not.[10]
[21] Geographical distinctness is concerned with the geographical separation of the employer's various work sites or work locations, rather than a separation of workplaces within the same work site or work location.[11]
[22] As to operational distinctness, the term "operational" refers to an industrial or productive activity.[12] The performance of a different role, task, skill or function is not sufficient to establish operational distinctiveness.[13]
[23] The following propositions are relevant to the determination of whether a group of employees is organisationally distinct (references omitted):[14]
"● the term "organisation" refers to the manner in which the employer has organised its enterprise in order to conduct its operations;
● the performance by a group of employees of duties which are qualitatively different from duties performed by other employees may justify a conclusion that the group is organisationally distinct;
● however the mere performance by a group of employees of different tasks or roles to others may not be sufficient to render it organisationally distinct where the employees work in an integrated way with the other employees to perform a particular business function; and
● most businesses have organisation structures which will allow organisationally distinct groups to be identified."
[24] All the Cardiff Production Employees work at Alsco's Cardiff premises. Other employees including drivers, administration staff, and managerial employees also work at, or from, Alsco's Cardiff premises.
[25] Alsco also operates its business from other premises. For example, there is a separate application by the AWU for a majority support determination in relation to Alsco's employees at its Wollongong branch who are covered by the Dry Cleaning and Laundry Industry Award 2020.
[26] Because employees other than the Cardiff Production Employees work at Alsco's Cardiff premises, the Cardiff Production Employees are not completely geographically distinct from all other employees of Alsco. However, the Cardiff Production Employees are geographically distinct from other employees of Alsco who perform work covered by the Dry Cleaning and Laundry Industry Award 2020. In all the circumstances and having regard to the notion that distinctness is not absolute and can be a matter of degree,[15] I am satisfied that the Cardiff Production Employees are to some extent geographically distinct and this weighs in support of a conclusion that the group of employees was fairly chosen.
[27] All the Cardiff Production Employees are covered by the Dry Cleaning and Laundry Industry Award 2020. They all work within Alsco's laundry operations in work groups such as in-sort, wash room/bay, ironing, mats, and folding. They all fall within the classification of 'laundry employee' (level 1, 2, 3 or 4) under the Dry Cleaning and Laundry Industry Award 2020 (Schedule B). It follows that all the Cardiff Production Employees are engaged in the discrete industrial or productive activity of operating a commercial laundry.
[28] The Cardiff Production Employees are operationally distinct from other Alsco employees at the Cardiff site, who are not covered by Dry Cleaning and Laundry Industry Award 2020. Those other employees undertake different work such as administration, driving, or managerial duties and are not directly engaged in the industrial or productive activity of operating a commercial laundry.
[29] There is limited evidence as to the nature of the work and the industrial or productive activity in which Alsco's employees are engaged at its other sites. For example, there is no evidence before me as to the work undertaken by Alsco's employees at its Wollongong branch or the industrial or productive activity undertaken at that branch. There is limited evidence as to Alsco's Footscray branch. That evidence is in the form of an enterprise agreement which applies to Alsco's Footscray branch, a copy of which is annexed to Mr Wainwright's statement. The Alsco Pty Ltd (Footscray branch) Production Workers Enterprise Agreement 2017 (Footscray Agreement) covers employees of Alsco who work at its Footscray premises and who are engaged in a classification which falls within the classification structure set out in clause 5.2 and Schedule A of the Footscray Agreement. Clause 5.2 provides that employees are to be classified as grade 1, 2, 3 or 4 and a detailed description of each grade and classification is set out in Schedule A. It is clear from Schedule A to the Footscray Agreement that it covers employees who are engaged in the industrial or productive activity of operating a commercial laundry. By way of example, a grade 4 employee is a "grade 2 or 3 employee who is appointed for the purpose of directing and controlling a section of the laundry (production) operation".
[30] For the reasons given, I find that the Cardiff Production Employees are engaged in the same industrial or productive activity as Alsco's employees who are covered by the Footscray Agreement.
[31] Although the Cardiff Production Employees are operationally distinct from the other Alsco employees at the Cardiff site, they are not operationally distinct from Alsco's employees who are covered by the Footscray Agreement. It follows that the Cardiff Production Employees are not operationally distinct from all other employees of Alsco. This weighs against a conclusion that they were fairly chosen.
[32] There is limited evidence or material before me as to organisational distinctness. I do not have an organisation structure or any other evidence as to how Alsco structures its business.
[33] Mr Wainwright's statement includes the following relevant information:
"Based on my observations, Alsco's laundry employees are organisationally separate and fall under a part of the business known as "Production". This work area is organisationally distinct from other employees of the enterprise, such as drivers, administration staff and management.
While there are several work groups within the laundry operations (such as in-sort, wash room, ironing, mats, folding), each of these functions fall within the classification of a laundry worker under the Award."
[34] I accept that the Cardiff Production Employees perform duties which are qualitatively different from the duties performed by the other Alsco employees at the Cardiff site. However, I do not have any evidence or material before me as to whether the Cardiff Production Employees work in an integrated way with any other Alsco employees to perform a particular business function. In the absence of any such material, I cannot be satisfied that the Cardiff Production Employees are organisationally distinct.[16] This weighs against a conclusion that they were fairly chosen.
[35] It is important to bear in mind that the ultimate question for determination under s 237(2)(c) is whether the group of employees who will be covered by the proposed enterprise agreement was fairly chosen. Whether the group is geographically, operationally or organisationally distinct must be taken into account and given due weight when the enterprise agreement will not cover all the employees of the employer, but those factors are not determinative of the question of whether the group was fairly chosen. Other relevant considerations must also be evaluated and given due weight.
[36] I have taken into account and given due weight to my findings in relation to geographical, operational and organisationally distinctness. I also give weight to the following considerations:
the Cardiff Production Employees are all covered by the same industry award and they include all the laundry production employees at Alsco's Cardiff site. Selecting all the laundry production employees at one site is a legitimate and objective basis on which to choose a group of employees for coverage by an enterprise agreement. The Cardiff Production Employees have not been put together as a group arbitrarily, capriciously or on a discriminatory basis; and
Alsco made an enterprise agreement at its Footscray site which covers the same, or very similar, classifications as will be covered by the proposed enterprise agreement for its Cardiff site. The Commission must have been satisfied that the group of employees covered by the Footscray Agreement was fairly chosen in order to approve that agreement.
[37] Having given due weight and consideration to the matters set out above, I am satisfied that the group of employees who will be covered by the proposed enterprise agreement (i.e. the Cardiff Production Employees) was fairly chosen. The factors which weigh in favour of a finding of fairly chosen outweigh the considerations which weigh against such a conclusion.
Is it reasonable in all the circumstances to make the determination?
[38] Alsco submits that it is not reasonable in all the circumstances to make a majority support determination when a campaign proceeded for seven months prior to any vote, employees were shown at least two enterprise agreements that have been in existence for an extended period of time, together with a flyer which contains a rate of pay in a different organisation in excess of $26 per hour, for the purpose of eliciting support for an enterprise agreement at its Cardiff site. Alsco also submits that the employees may have been led to believe that, if they were covered by an enterprise agreement with Alsco, they would receive an hourly rate of pay of no less than $26, in addition to a range of other terms and conditions contained in other enterprise agreements that have not been the subject of any discussions with Alsco. I do not accept these submissions.
[39] First, the flyer prepared by the AWU and distributed to the Cardiff Production Employees is not misleading, inaccurate or otherwise objectionable. It contains the following material statements:
Below is the current pay rate under the 'Dry Cleaning and Laundry Award 2019' compared with pay rates at laundries with union-bargained Enterprise Agreements.
Dry Cleaning and Laundry Award 2019 - Laundry Level 2 hourly rate $20.48 per hour;
Alsco Footscray EA - Laundry Level 2 rate $22.18 per hour. That is $1.70 more per hour, $59.5 more per week, $3,094 more per year;
Ensign Northcote EA - Laundry Level 2 rate $26.93 per hour. That is $6.45 more per hour, $225.25 more per week, $11,739 more per year;
Laundry workers are some of the hardest workers in the country. That's why the AWU believes you deserve more than minimum wage; and
To get on board with the movement for better pay and conditions, talk to your AWU delegates."
[40] The flyer does not promise or suggest that the Cardiff Production Employees will receive any particular rate of pay if they bargain with Alsco for an enterprise agreement. It makes an accurate comparison between the rates of pay under the applicable award and rates of pay under other enterprise agreements in the industry in which Alsco operates.
[41] Secondly, I accept the unchallenged evidence given by Mr O'Brien and Mr Wainwright in their witness statements in relation to their communications with the Cardiff Production Employees. Alsco had an opportunity to cross examine Mr O'Brien and Mr Wainwright, or to call evidence from employees, but it elected to do neither.
[42] Mr O'Brien has been attending Alsco's Cardiff site since 2013 and is very familiar with the site and its operations. Mr O'Brien discussed with the Cardiff Production Employees the differences between an enterprise agreement and the modern award. Mr O'Brien also attended the Cardiff site on 28 January 2021 and again on 26 February 2021 to obtain signatures on petitions to support the application for a majority support determination. Mr O'Brien obtained more than 30 signatures for the petitions on his 28 January 2021 visit. The purpose of his 26 February 2021 visit was to follow-up on the process and to obtain any further signatures for the petitions from employees who had not already provided them. Mr O'Brien explained the petition to the employees before they signed it. Mr O'Brien did not tell the Cardiff Production Employees or otherwise lead them to think that they would receive a pay rate of $26 per hour or any other specific conditions of employment if they decided to bargain with Alsco for an enterprise agreement.
[43] Mr Wainwright has made a number of visits to Alsco's Cardiff site since about July 2020 to hold discussions with AWU members. During those discussions Mr Wainwright spoke to the Cardiff Production Employees about the potential benefits of negotiating an enterprise agreement, including the right to bargain for improved pay. Mr Wainwright explained the purpose of the petition to the Cardiff Production Employees. Mr Wainwright showed the Cardiff Production Employees enterprise agreements that apply to other commercial laundries, but at no point did he promise employees that they would definitely or automatically receive pay increases bringing them up to the level of Alsco's employees at its Footscray site. Mr Wainwright did not tell the Cardiff Production Employees that they would receive any particular rate of pay or other conditions of employment as a result of agreeing to seek an enterprise agreement with Alsco.
[44] Thirdly, there is nothing wrong or inappropriate about representatives from the AWU meeting with members over an extended period of time to discuss the possibility of seeking to bargain for an enterprise agreement, nor was it inappropriate of the AWU to provide the Cardiff Production Employees with copies of enterprise agreements which apply at other commercial laundries, including a commercial laundry operated by Alsco at Footscray.
[45] I am satisfied that it is reasonable in all the circumstances to make the majority support determination sought by the AWU. It is plain that a clear majority of the Cardiff Production Employees want to bargain with Alsco for an enterprise agreement. They are paid award rates[17] and want the opportunity to bargain with Alsco for an enterprise agreement. Whether an enterprise agreement is made and the terms of any such agreement is a matter for the parties to address in their negotiations. I am satisfied that making the determination would be consistent with the object of "achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations" (s 3(f) of the Act). There are no particular circumstances in this case which weigh against the reasonableness of making the determination.
"A majority of the Cardiff Production Employees want to bargain with Alsco Pty Ltd for an enterprise agreement."
[47] Pursuant to s 237(4) of the Act, this majority support determination comes into operation on 26 March 2021.
[1] LHMU v Coca-Cola Amatil (Aust) Pty Ltd [2009] FWAFB 668 at [28]
[4] Cimeco Pty Ltd v CFMEU & Ors [2012] FWAFB 2206 at [12]
[8] CFMEU v ResCo Labour & Training Pty Ltd [2012] FWAFB 8461 at [35]
[9] QGC Pty Ltd v AWU [2017] FWCFB 1165 at [42]
[10] INPEX Australia Pty Ltd v AWU [2021] FWCFB 1038 at [33]
[11] AWU v BP Refinery (Kwinana) Pty Ltd [2014] FWCFB 1476 at [13]
[13] INPEX Australia Pty Ltd v AWU [2021] FWCFB 1038 at [35]
[14] Aerocare Flight Support Pty Ltd v TWU; ASU at [27]
[15] QGC Pty Ltd v AWU [2017] FWCFB 1165 at [42]
[16] INPEX Australia Pty Ltd v AWU [2021] FWCFB 1038 at [37]- [39]
[17] Statement of Paul O'Brien dated 12 March 2021 at [19]; statement of Samuel Wainwright dated 12 March 2021 at [22]
Printed by authority of the Commonwealth Government Printer
Australian Workers' Union
Alsco Pty Limited [2021] FWC 1680