Blue Star Pacific Pty Ltd v Communications Electrical Electronic Energy Information Postal Plumbing & Allied Services Union of Australia - [2009] FCAFC 187 - FCAFC 2009 case summary — Zoe

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Blue Star Pacific Pty Ltd v Communications Electrical Electronic Energy Information Postal Plumbing & Allied Services Union of Australia

[2009] FCAFC 187

Federal Court of Australia (Full Court)|2009-12-23|Before: Graham JJ, Gray J

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Source facts

Court

Federal Court of Australia (Full Court)

Decision date

2009-12-23

Before

Graham JJ, Gray J

Source

Original judgment source is linked above.

Judgment (39 paragraphs)

[1]

The application of s 340(2)(a) to the circumstances of the case 26 The case at first instance appears to have been put on the basis that there were two factors, each of which by itself would lead to the conclusion that Blue Star had not given its employees a reasonable opportunity to decide whether they wanted to approve the agreement. The two factors were the failure of Blue Star to conduct a meeting of all employees and the provision of a ballot paper referring incorrectly to the agreement as being for the period "2009 - 2011", when the agreement was in fact a four-year agreement. This was the wrong approach, because it neglected to examine the impact of those two factors, not only in conjunction, but in the context of all of the other circumstances of the case. The approach persuaded the primary judge to deal with the two factors separately. His Honour was persuaded that each of them, by itself, operated to dictate the conclusion that the opportunity given was not a reasonable one. 27 Although there was evidence on the basis of which the primary judge found that Blue Star's workforce was divided into a commercial construction division and a client services division, there was little attempt to investigate the significance of this. There was no clear evidence of the location of each of the sites at which employees in the commercial construction division were working. The evidence did disclose that one of those sites was on the Gold Coast, and that another, the North Lakes Health Precinct site, was about an hour's drive from Central Brisbane. The scattered nature of the sites, and their distances from the venue of any meeting might have an impact on the likely success of an attempt to hold a single meeting open to all employees. The cost and inconvenience of attempting to conduct such a meeting during working hours, together with the issue of transporting employees to a single venue, might have ruled out a meeting during those hours. The question whether employees would be available, and likely, to attend a meeting outside working hours would also have been relevant to the proposal to hold such a meeting. Similarly, there was no evidence as to the manner in which employees in the client services division operated. If Blue Star equipped them with vehicles, and they were intended to operate a mobile service, it might have been easier for them to attend a meeting than if they were stationed individually at the premises of customers of Blue Star, each for the purpose of maintaining the equipment of that customer. No attempt was made to explore this. 28 In addition, the evidence suggested that the original intention of Blue Star was to have a meeting to enable its management to persuade the employees that they should approve the agreement. This certainly appears to have been the approach adopted by Mr McInnes when he chose to visit sites instead of having a meeting. At no time does it appear that Blue Star's management saw its proposed meeting as an opportunity for employees to engage in free discussion amongst themselves about the merits of the agreement. Coupled with the practical difficulties of the distances between the various sites, the attitude of management diminishes the practical importance of the provision of a single meeting as a vehicle for providing a reasonable opportunity for the employees to decide. 29 In this context, the unexecuted plan of Mr Coombes to hold a meeting of some sort assumes less significance. It is not clear from the evidence whether Mr Coombes intended to invite employees from all sites to a single meeting at the ICB Central site, or only to meet with employees who were at that site, or at that site and adjacent sites. Failure to explore this issue fully in evidence leads to problems for the CEPU. If it had been the intention of Mr Coombes to conduct a meeting of all employees, this would suggest that he was confident that he could communicate with all those employees about the fact of such a meeting. If communication to that extent was possible, this might have led to an exploration of whether communication about the agreement itself, in the absence of any meeting, was also possible. The extent to which employees at any one site knew the identity of employees at other sites, or had the means of contacting those employees, was not made clear. To have clarified that issue in evidence would have meant that any question of Blue Star facilitating communication between employees at different sites could have been investigated. It is not possible to state a rule that an employer must always provide contact details of all employees to all other employees, in order to facilitate communication. Such an act might give rise to difficulties under privacy legislation. It might be possible for an employer to ask for volunteers who are prepared to be conduits for communication between employees at different sites, and to have their contact details made available for this purpose. Before it can be said that an employer must adopt this course, the extent to which communication between employees at different sites is already possible ought to be investigated. No such investigation appears to have been carried out in evidence in the present case. 30 Also neglected was the issue of communication by means of the CEPU. There was some evidence that the CEPU communicated with the employees who were its members about the terms of the agreement. Such communication is to be expected. There was also some evidence that the CEPU had provided written material for Blue Star's employees at sites at which they were working. Whether it did so at all sites was not made clear. There was no evidence about whether the CEPU had the capacity, or the opportunity, to provide such material at all sites. This left out of account an important element in the mix of factors bearing upon communication between employees, as an aspect of the reasonableness of the opportunity given by Blue Star to its employees. 31 Nor could the error in the ballot paper be considered in isolation. It is true that that error could have had significance. The one document employees were likely to read thoroughly among all those that they were given was the ballot paper. The other documents with which they were supplied were relatively long documents with lots of small print, which could tend to deter employees from a close reading. In particular, the information statement, consisting almost entirely of information apparently mandated by the Workplace Authority Director, pursuant to s 337(4)(d) of the Workplace Relations Act, is a document unlikely to be read closely by very many people at all. Employees who did look at the agreement, however, could not have been in any doubt as to its length. Its title made clear that the intended period of operation was "2009 - 2013". The specific provision about duration in cl 7 was buried to some extent in the fine print. Most significantly, however, any employee who cared to look at the table of wage rates in Appendix 2 to the agreement would have seen clearly that provision was made for wage increases on 1 July in each of the years 2009, 2010, 2011 and 2012. As the most significant aspect of an agreement could be taken to be the level of wages, it is likely that employees would have been prepared to leaf through the agreement and find out what they were to receive. Further, Blue Star did take steps to attempt to correct the misstatement in the ballot paper, by instructing its supervisors that they were to provide the correct information at morning meetings of employees. It was too late for those who had already voted, but there was no evidence that anybody who had voted had actually been misled into casting a vote that would not otherwise have been cast. Not all of the relevant circumstances were taken into account at first instance. Some circumstances that may have been relevant were not the subject of evidence. The result is that the CEPU did not establish that Blue Star had failed to give its employees a reasonable opportunity to decide whether they wanted to approve the agreement.

[6]

THE RELEVANT STATUTORY FRAMEWORK 34 Part 8 of the Workplace Act, which includes ss 326 to 351, is concerned with Workplace Agreements. Under s 326, an employer may make an individual transitional employment agreement (Individual Agreement) with a person whose employment will be subject to the Individual Agreement. Under s 327, an employer may make an employee collective agreement (Collective Agreement) with persons employed at that time in a single business of the employer, being persons whose employment will be subject to the Collective Agreement. Both Individual Agreements and Collective Agreements are Workplace Agreements. Section 333 provides that an Individual Agreement is made at the time when it is approved in accordance with s 340(1) and that a Collective Agreement is made at the time when it is approved in accordance with s 340(2). 35 Under s 333, a Workplace Agreement is made when it is approved in accordance with s 340. Under s 340(1), an Individual Agreement is approved if it is signed and dated by the employee and the employer and those signatures are witnessed. Under s 340(2) a Collective Agreement is approved if, relevantly: (a) the employer has given all of the persons employed at the time whose employment will be subject to the agreement a reasonable opportunity to decide whether they want to approve the agreement; and (b) where the decision is made by a vote, a majority of those persons who cast a valid vote decide that they want to approve the agreement. 36 Under s 342(1) of the Workplace Act, if an Individual Agreement or a Collective Agreement has been approved in accordance with s 340, the employer must, within 14 days after the approval, lodge the agreement with the Workplace Authority Director, who must decide whether the agreement passes the no disadvantage test. Section 346M provides that, if the Workplace Authority Director decides that the agreement passes the no disadvantage test, then the Workplace Authority Director must, relevantly, notify the employer of that decision. Section 347(1) relevantly provides that a Workplace Agreement comes into operation at the seventh day after the date specified in the notice under s 346M in relation to the agreement. However, despite that provision, a Workplace Agreement does not come into operation unless the requirements in s 340 have been met in relation to the agreement. 37 Section 351 provides that a Workplace Agreement that is in operation binds: · the employer in relation to that agreement; and · all persons whose employment is, at any time when the agreement is in operation, subject to the agreement. The significant effect of s 351 is that, for so long as a Collective Agreement is in operation, it will bind all persons whose employment is subject to the agreement, notwithstanding that some of those persons may not have been party to a decision to approve the agreement or might have voted against approving it. There is no such significance, of course, in the case of an Individual Agreement, which is made with a particular individual who must sign and date the agreement. That is to say, an employee who is bound by an Individual Agreement will be bound only because that employee has personally signed and dated the relevant agreement. It must be assumed that an employee would not sign and date an Individual Agreement if the employee did not approve it. 38 An analogy can be drawn between s 351 of the Workplace Act and s 411 of the Corporations Act 2001 (Cth), under which a scheme of arrangement can be binding on all members of a company or all creditors of a company by reason of the fact that the scheme has been approved by the requisite majority specified in s 411. However, before a creditor or member will be bound by the majority against the will of that creditor or member, the scheme must be approved by the Court. The Court will not approve a scheme if it is not fair and reasonable. There is no such supervisory protection for dissenting employees in relation to a Collective Agreement. 39 Other provisions of the Workplace Act relating to Workplace Agreements are designed to afford some protection in that regard. Thus, under s 334, an employee may appoint a person to be his or her bargaining agent in relation to the making of an Individual Agreement. Under s 335, an employee whose employment is or will be subject to a Collective Agreement may request another person, also referred to as a bargaining agent, to represent the employee in meeting and conferring with the employer about the making of the agreement. The employer must give the bargaining agent a reasonable opportunity to meet and confer with the employer about the agreement during the period beginning seven days before the agreement is approved in accordance with s 340 and ending when the agreement is approved. 40 Next, s 337 provides that, if an employer intends to have a Workplace Agreement approved under s 340, the employer must take reasonable steps to ensure that all eligible employees in relation to the agreement either have, or have had, ready access to the agreement, during the period beginning seven days before the agreement is approved and ending when the agreement is approved. The employer must also take reasonable steps to ensure that all eligible employees in relation to the Workplace Agreement are given an information statement at least seven days before the agreement is approved. The information statement must contain information about the time at which, and the manner in which, the approval will be sought under s 340, together with information about the effect of s 335 and any other information that the Workplace Authority Director requires. Under s 338 of the Workplace Act, all the employees at a particular time may make a waiver in relation to a Workplace Agreement. The waiver is made when all the employees sign the waiver. If a waiver has been made in relation to a Workplace Agreement, certain of the requirements of s 337 do not apply. 41 Division 11 of the Workplace Act, which includes ss 407 to 409, deals with the contravention of civil remedy provisions. Under s 407, the Court may order a person who has contravened a civil remedy provision to pay a pecuniary penalty. Under s 409, the Court may make an order declaring a workplace agreement is void or declaring that specific terms of a workplace agreement are void where there is a contravention of a certain civil remedy provision. 42 An employer contravenes s 337(8) if the employer lodges a Workplace Agreement with the Workplace Authority Director and the employer failed to comply with the requirement of s 337. An employer contravenes s 337(9) if the employer lodges a Workplace Agreement and the employer fails to take reasonable steps to ensure that all employees are given an information statement. An employer contravenes s 341(1) if the employer lodges a Workplace Agreement that has not been approved in accordance with s 340. Each of those provisions is a civil remedy provision for the purposes of Division 11. 43 A Workplace Agreement does not come into operation unless the requirements in s 340 have been met in relation to the agreement. However, failure to comply with the other requirements of the Workplace Act described above, apart from s 340, does not prevent a Workplace Agreement coming into operation. While such failure may not prevent a Workplace Agreement from coming into operation, the failure may nevertheless contravene a civil remedy provision giving rise to the penalties and sanctions provided for in Division 11.

[7]

THE BLUE STAR COLLECTIVE AGREEMENT 44 Blue Star conducts an electrical contracting business in South East Queensland. The business is divided into two divisions, being the commercial construction division and the client services division. In February 2009, more than 40 employees were employed in the commercial construction division and about 14 employees were employed in the client services division. The construction division employees worked at a number of different sites in and around Brisbane including: · the Northlakes Health Precinct site; · the Polo Club site; · the ICB Central site; · the Browns Plain site; and · the Queen Street site. The Union had 21 members among Blue Star's commercial construction division employees and one or two among the client services division employees. 45 In late January 2009, a meeting took place at Blue Star's office in Meadowbrook. The meeting was convened by Mr David McInnes, the managing director of Blue Star, and was attended by employees from several of the sites mentioned above. There was discussion at the meeting concerning a proposed Collective Agreement between Blue Star and its employees. 46 Shortly before 12 February 2009, Blue Star sent to all its employees in both divisions a package of material consisting of the following: · a copy of a proposed Collective Agreement; · an information statement; · a waiver form; · a ballot paper; and · a self addressed envelope. The information statement enclosed in the package is a printed form provided by the Workplace Authority. It contains spaces for insertion of details as to voting on a proposed Collective Agreement. The information stated that a vote was to be held on 20 February 2009 by postal ballot. The information statement then said: Ballot papers with information statement, a self addressed stamped envelope to sender will be enclosed and the ballot papers will be opened at 1 pm on 20-2-09 and counted by (2) employee representatives at head office. 47 The ballot paper contained an error. It referred to the proposed agreement as "Employee Collective Agreement 2009-2011". In fact the proposed Collective Agreement is for four years from 2009 to 2013. 48 Several employees of Blue Star gave evidence concerning receipt of the package. Their evidence was relevant to the question of whether they were given a reasonable opportunity to decide whether they wanted to approve the proposed Collective Agreement. 49 Mr David Coombes is an employee of Blue Star and in January and February 2009 was working at the ICB Central site. At that time, there were only four employees at the ICB Central site. Mr Coombes attended the meeting with Mr McInnes held in late January. Mr Coombes received the package of documents described above on or about 9 February 2009. He tried to telephone several people to discuss the proposed Collective Agreement but did not have contact details for all of Blue Star's employees and he found it difficult to contact people outside working hours. He had a discussion at the ICB Central site about employees of Blue Star getting together to discuss the proposed agreement. As an employee in the construction section, Mr Coombes does not work with people in the Client Services Section and has very little contact with the employees in the Client Services Section. 50 At some time after 12 February 2009, the management of Blue Star sent a facsimile communication to each site indicating that there would be a meeting in Blue Star's office at Meadowbrook on Tuesday, 17 February 2009 to enable management to discuss the proposed Collective Agreement with all employees. Mr Coombes said that, because of the arrangement for such a meeting at Meadowbrook, the proposed get-together at the ICB Central site was called off. However, not long after that, Mr Coombes' foreman informed him that the meeting at Meadowbrook had been cancelled. Mr Coombes was disappointed because he had hoped to have an opportunity to discuss the proposed employee collective agreement with fellow employees. 51 Mr McInnes went to the ICB Central site on 17 February 2009 and asked the employees whether they had any questions in relation to the proposed Collective Agreement. Mr Coombes told Mr McInnes that he did not agree with certain aspects of the proposed agreement concerning rostered days off. Mr McInnes responded that, while he saw Mr Coombes' point, he thought that there should be more flexibility when it came to rostered days off. Mr McInnes told Mr Coombes that the employees had to vote by Friday, 20 February 2009 and that, if Mr Coombes did not like the proposed agreement, he could find a job elsewhere. 52 Mr Craig Brown is also an employee of Blue Star. He received the package of documents on 12 February 2009 and was aware that ballot papers had to be returned by Friday, 20 February 2009. Mr Brown was working at the ICB Central site, having been predominantly based there for the previous five months. Mr Brown posted his ballot paper on Wednesday, 18 February 2009. On the morning of 19 February 2009, he was informed by the foreman at the ICB Central site that the period indicated on the ballot paper for the proposed agreement was not correct and that the proposed agreement was in fact a four year agreement and not a 2 year agreement. 53 Mr Adil Wermizyari was an employee of Blue Star and in February 2009 was also working at the ICB Central site. He received the package of documents on or about 13 February 2009 and subsequently contacted the Union who advised him to fill out the ballot paper and send it back. Mr Wermizyari sent the ballot paper back in the reply paid envelope on 18 February 2009. After he had sent the ballot paper back, the foreman at the ICB Central site informed him that the ballot paper should actually have read that the collective agreement went for four years rather than two years. Prior to that time, and at the time that he voted, Mr Wermizyari thought that the proposed agreement was for two years. He did not vote in favour of the proposed agreement. 54 Mr Cyril Ormond was employed by Blue Star as an adult apprentice. He received the package of documents on 11, 12 or 13 February 2009. Mr Ormond was present at the meeting with Mr McInnes on Tuesday, 17 February 2009, at which Mr McInnes gave his views on the proposed agreement. Mr McInnes said that Blue Star was not signing on to the Union agreement and that, if any employee was unhappy with the deal, that employee could always quit and go and work for companies that have signed on to the Union agreement. Mr McInnes said in response to a question from Mr Ormond that he wanted to see a bigger gap between apprentices' wages and tradesmen's wages. Mr Ormond voted against the proposed agreement. 55 Mr Anthony May is also an employee of Blue Star. Mr May is a leading hand. He received the package of documents on 12 February 2009. On 16 February 2009 he attended a meeting at the offices of Blue Star at Meadowbrook to discuss the proposed agreement. There were about ten people there from a number of sites, but Mr May could not remember who was at the meeting. There were other people from different sites including people from the client services division. Mr May was aware as at 19 February 2009 that there was an error on the ballot sheet. 56 Mr Kelly Brasher is an employee within the service division of Blue Star. He received the package of documents on or about 12 February 2009. About two days after receiving the package, he was informed that the ballot paper had a "misprint" regarding the dates of the agreement. Mr Brasher also attended the meeting at Meadowbrook, on or about 16 February 2009, to discuss the proposed agreement. He said that he was advised by his project manager to attend the office to hear about the proposed agreement. 57 Mr Douglas Cane is an employee of Blue Star. He received the package of documents on 9 or 10 February 2009. At that time, he was at the Browns Plain site. He said that everyone at that site discussed the proposed agreement after receipt of the package. Mr McInnes went to the site on 17 February 2009 and gave his point of view in relation to the proposed agreement and said that there should be a gap between trades assistants and trades people. Mr McInnes also said that the proposed agreement was the best proposed deal and that, in the event that the industry picked up, he would be open to renegotiating some of the terms. He said that, if everyone else in the industry started paying their staff higher than under the proposed agreement, he would follow suit. Mr Cane sent his ballot paper back on 16 February 2009. He knew when he voted that the proposed agreement was a four year agreement. 58 Mr Chris Fletcher is an employee of Blue Star and in February 2009 was also working at the Browns Plain site. He was present at the meeting on the site on 17 February 2009 when Mr McInnes addressed everyone at the site. There were 6 employees present including Mr Fletcher. Mr McInnes said that he had done the numbers and that this was the best that he could offer. One of those present asked about an allowance for prescription glasses and a $1,000 cap on tool replacement. Mr McInnes said that he was prepared to look at those issues after the proposed agreement had been voted on. Mr Fletcher also recalled Mr McInnes saying that if the economic climate picked up in the next two years or so he would be happy to look at the agreement and then maybe negotiate pay rises. 59 On 19 February 2009 Mr David Frederick from Blue Star went to the Browns Plains site and discussed with employees the error on the ballot paper. The employees at the site signed a document saying that they had been informed and understood that the agreement was for four years and not for two years. 60 At 1pm on 20 February 2009, Ms Tania Linnegar, the secretary of Blue Star, along with Messrs Brasher and May, who had been appointed scrutineers, opened the self addressed envelopes and counted the ballot papers. After the count was completed, Mr May told Ms Linnegar that there were 38 votes in favour, ten votes against and one invalid vote. Ms Linnegar subsequently undertook a further count of the ballot papers and found two employees had voted twice in favour of the proposed agreement. She therefore excluded the duplicate votes and reported the final result to Mr McInnes. She reported that 59 valid voting papers were issued and 47 were received back. She reported that 36 employees voted in favour, 10 employees voted against and one vote was invalid. Thus, 12 employees did not vote. The number of votes in favour, 36, constituted a majority of the employees who voted and constituted a majority of all employees, whether they voted or not.

[8]

THE REASONS OF THE PRIMARY JUDGE 61 The primary judge considered that the purpose of s 340(2)(a) is to require an employer wishing to have its employees approve, and therefore be bound by, a collective agreement, to provide an opportunity for all the employees who would be affected by the proposed agreement to meet together as a group to discuss the provisions of the proposed agreement. His Honour considered that s 340(2)(a) places an obligation on such an employer to provide to the employees concerned an appropriate time and occasion to meet together as a group to discuss the provisions of the proposed agreement and to decide whether they wish to approve it. His Honour held that the circumstances of each case would dictate whether or not the employees should be offered an opportunity to meet together as one group or in a number of groups. The circumstances of each case would also dictate the form and location of that meeting or those meetings and whether or not a meeting could be conducted by the use of modern technology such as video or audio conference facilities. 62 The primary judge found that, in February 2009, Blue Star's employees were affected by the proposed agreement. His Honour observed that, at that time, Blue Star's business was a relatively small electrical contracting business split into two divisions, with the construction division operating on five or more sites. His Honour found that there was, therefore, little opportunity, in their daily work activities, for all of the employees to meet their fellow employees affected by the proposed agreement. However, the divisions of the business and all of the sites were located in and around Brisbane, within a relatively confined geographic area. His Honour concluded that, in those circumstances, the obligation imposed on Blue Star by s 340(2)(a) was to provide an opportunity for all of the employees affected by the proposed collective agreement to meet together at the same time and place and to discuss the proposed agreement as a group. His Honour considered that there was no evidence that Blue Star provided that opportunity to its employees and, therefore, concluded that Blue Star did not comply with the obligation imposed on it by s 340(2)(a). 63 The primary judge also concluded that the false information about the duration of the proposed agreement on the ballot paper was likely to affect employees in their respective decisions on whether to approve the proposed agreement. His Honour considered that the false information related to one of the essential parts of the agreement, namely, the duration of its operation. His Honour found that the false information was provided against a background of dire and uncertain economic conditions and an expectation that those conditions may change for the better in the next few years. His Honour concluded that the employees were likely to be adversely affected by the false information on the ballot paper about the period of operation of the proposed agreement, such that they were denied a reasonable opportunity to decide whether they wanted to approve the proposed agreement.

[9]

SECTION 340 WAS SATISFIED 64 Section 340(2), of course, imposes no obligation on an employer. Section 341 creates an obligation, in the sense that an employer contravenes s 341 if the employer lodges a Workplace Agreement where that agreement has not been approved in accordance with s 340. However, mere failure to comply with s 340(2) does not of itself constitute a contravention of any obligation. The consequence of failure to comply with s 340(2), however, is that the relevant Collective Agreement is not approved. It is only a Collective Agreement that has been approved in accordance with s 340 that must be lodged with the Workplace Authority Director. Further, under s 347, a Workplace Agreement will not come into operation until after the issue of a notice under s 346M. Thus, the sanction for non-compliance with s 340(2) is that the Collective Agreement will not come into operation and will not be binding. 65 The requirement for all of the persons employed, whose employment will be subject to the agreement, to be given a reasonable opportunity to decide whether they want to approve the agreement may not be satisfied if, for example: · the material provided to the employees is unintelligible or incomprehensible; · the material is in a language that would not be understood by the persons employed; · the material is printed in a size that is illegible; · the material is provided in circumstances that are likely to mislead or deceive the recipients of the material. However, the provisions of s 340(2) do not mandate a meeting of employees who may be affected by a collective agreement. 66 The primary judge erred in concluding that there was a failure to satisfy the prerequisites of s 340(2) by reason only of the absence of a meeting of the affected employees as a group. Accordingly, it is necessary for the Full Court, on appeal, to reach its own conclusion as to whether or not the persons employed by Blue Star whose employment would be subject to the proposed Agreement were given a reasonable opportunity to decide whether they wanted to approve the agreement. 67 The only relevant matter in the circumstance of this case is the incorrect reference to the proposed agreement on the ballot paper. It is common ground that the ballot paper sent to employees of Blue Star erroneously stated that the proposed agreement was to operate for the period 2009 to 2011. No other information concerning the content or effect of the agreement was contained in the ballot paper or in the information statement provided to employees pursuant to s 337. While the statement on the ballot paper was erroneous, that error must be considered in context. There has been no suggestion of any other misstatement. In particular, there was no suggestion that the copy of the proposed Collective Agreement misstated its terms or was otherwise misleading or deceptive as to its effect. 68 The proposed agreement is by no means a simple document. It consists of some 37 clauses and three appendices. The total agreement occupies some 42 pages. However, an employee who read the agreement could be in no doubt that it was for a four year period. 69 Thus, clause 2 of the agreement states that its title is: Blue Star Pacific Pty Ltd (South East Queensland) Employee Collective Agreement 2009-2013 Further, clause 7 then states that the agreement will operate from the seventh day after the issuing of the notice by the Workplace Authority that the agreement has passed the no disadvantage test and is to apply for a period of four years or until replaced or cancelled. In addition, Appendix 2 contains rates of pay showing, in explicit terms, different rates for each of the years beginning 1 July 2009, 1 July 2010, 1 July 2011 and 1 July 2012. Thus, it is clear enough that a person who chose to read the agreement would be able to determine that it was for a four year period. There was no failure on the part of Blue Star, by reason only of the error on the ballot paper, to give its employees a reasonable opportunity to decide whether they wanted to approve the proposed agreement.

[14]

The primary judge's decision 72 The primary judge held, firstly, that the appellant was required to, but did not give, its employees a reasonable opportunity to decide whether they wanted to approve the proposed agreement because, in all the circumstances, it did not afford them the opportunity to meet together at the same time and place and discuss the proposed agreement as a group (see Communications Electrical Electronic Energy Information Postal Plumbing & Allied Services Union of Australia v Blue Star Pacific Pty Ltd [2009] FCA 750 at [62.1]). Secondly, his Honour held, at [62.2], that the employees were likely to be adversely affected by false information on the relevant ballot paper about the period of operation of the proposed agreement, such that they were denied a reasonable opportunity to decide whether they wanted to approve the proposed agreement. 73 It was common ground between the parties that s 340(2)(b) of the Act as then in force did not mandate that a meeting be held in order to enable a decision to be made by a majority 'that they want to approve the agreement' as held by Graham J in John Holland Pty Ltd v The Maritime Union of Australia [2009] FCA 437 at [19]. 74 However, at [35] the primary judge held that s 340(2) was directed at placing some further obligation on the relevant employer when it sought to obtain the benefit of an employee collective agreement. 75 At [38] the primary judge held that the use of the word 'collective' in the expression 'employee collective agreement' to which s 340(2) related was of some significance in construing that subsection. 76 At [42] the primary judge recorded his respectful agreement with an observation of Smith FM that the 'reasonable opportunity' to which s 340(2)(a) of the Act referred was one to be afforded to the whole of the group whose approval was required to be sought as well as each of its members. In TWU v DHL Excel Supply Chain (Australia) Pty Ltd (2008) 174 IR 44 ('TWU') Smith FM had expressed the opinion at [19]: 'It is usual to construe a statutory reference to "decide" or "decision" as one which refers to an intended form of manifestation or expression of mental processes, and not just to a mental process of "deciding" …'

[23]

The need for a meeting 91 The submission of the respondent is that the circumstances of an individual case will dictate whether a meeting of affected employees was necessary for an employer to be able to claim compliance with s 340(2)(a) of the Act. I respectfully agree. 92 Relevant circumstances might include: · the making by an employee or employees of a timely and reasoned request for such a meeting before eligible employees were called upon to decide whether they wanted to approve the agreement or not. · an unreasonable refusal of an employee's request for the provision of lists of all the employees who were eligible to make a decision and their respective contact details. · a significant change in the composition of the workforce near to the time for the making of the decision. 93 Counsel for the respondent readily conceded that there would be no case for a meeting to be held if the employer had provided lists of all employees who were eligible to make a decision and their respective contact details, to all of the eligible employees. It was said that in those circumstances, it would be a matter for the employees to determine whether they wanted a meeting and to convene one themselves if they thought it desirable to do so. 94 Whilst considerable emphasis was placed upon the fact that agreements requiring approval under s 340(2) of the Act, whether employee collective agreements or union collective agreements, were described as 'collective' agreements, I must say that I do not consider that the use of the word 'collective' necessitates that a meeting of employees be called or held before a decision may be taken. Counsel for the respondent conceded as much. As I see it, the word 'collective' in the expression 'collective agreement' simply reflects the fact that if the agreement comes into operation it will apply to an employee's relations with the relevant employer whether or not such employee formed part of the requisite majority and whether or not such employee was employed by the employer at the time of the relevant decision. 95 It is common ground that no requests were made by eligible employees to the appellant seeking the convening by it of a meeting or meetings of eligible employees before the decision was taken on the question of whether or not the agreement in this case should be approved. It was also common ground that no request was ever made by any employee to the appellant seeking the provision of names, addresses and contact details for other eligible employees. 96 The respondent relied upon the following alleged facts, submitting that the appellant was 'obliged to facilitate a meeting of all employees whose employment [the appellant] wished to have governed by the proposed agreement …', in the circumstances of this case: (a) The appellant had two groups of employees with different interests because they worked in different sections of the business which operated in different ways; (b) the effect on each group of employees was potentially different. Since the employer had chosen to have them covered by one agreement it was necessary to allow them to discuss its effect on each other; (c) the appellant had represented that it would arrange a meeting, of all employees, to discuss the terms of the proposed agreement but did not proceed to hold such a meeting. In reliance on that, the employees took no step to hold their own meeting/s. By saying that it would conduct a meeting and then not doing so the appellant effectively prevented a meeting from occurring. 97 At [7] and [14] the primary judge said: '7 Blue Star conducts an electrical contracting business in South East Queensland. That business is divided into two divisions: a commercial construction division and a client services division. In February 2009, more than 40 employees were employed in its commercial construction division and about 14 in its client services division. The construction division employees worked at a number of different sites in and around Brisbane, including: the Northlakes Health Precinct site; the Polo Club site; the ICB Central site; the Browns Plain site and the Queen Street site. The CSU had 21 members among Blue Star's commercial construction division employees and one or two among its client services division employees. … 14 Mr Brown, a leading hand electrician [intended, so it would seem, as a reference to a Mr Coombes], who was then employed at Blue Star's ICB Central site, gave evidence that, when he first received this package of materials he contacted a number of his fellow employees to discuss the proposed agreement. He said they talked about arranging a meeting at the ICB Central site so they could get together and discuss the proposed agreement. At the time, there were four employees employed at the ICB Central site. However, at about the same time, the management of Blue Star sent a facsimile notice to all of its sites stating that a meeting of all its employees would be conducted at the Blue Star offices at Meadowbrook on Tuesday 17 February 2009, to discuss the proposed agreement. Mr Brown [Coombes] said that upon receiving this notice of meeting, the proposed meeting at the ICB Central site was called off. Not long after that, he said he was advised by his foreman that the Meadowbrook meeting had been cancelled. As a result, he said there was no opportunity for the employees at the ICB Central site to meet and discuss the proposed agreement.'

[24]

98 In relation to the holding of meetings the appellant alleged that: (a) on Friday 13 February 2009, an email was sent to Project Managers advising that a meeting of eligible employees was to be held at the appellant's Meadowbrook office to discuss the proposed Agreement on 16 February 2009 at 2.00pm. Eligible employees were notified accordingly; (b) on Monday 16 February 2009, at around 8.00am, Mr McInnes further considered the appropriateness of the meeting that day, given the appellant's office location in Meadowbrook, and the location of employees' work/construction sites at other locations. Mr McInnes advised Mr Michael Walsh, Construction Manager, to advise Project Managers on eligible employee work/construction sites that eligible employees did not have to attend the meeting that day and instead Mr McInnes would be visiting each of the work/construction sites the next day (17 February 2009) to discuss the proposed Agreement; (c) the meeting of 16 February 2009 went ahead anyway but it was only attended by 10 to 15 eligible employees. Discussed at this meeting was the respondent's log of claims, the proposed Agreement and the documentation issued by the respondent in which the respondent urged eligible employees to vote against the approval of the proposed Agreement. Specifically discussed at this meeting was the 4 year nominal term of the proposed Agreement; (d) on Tuesday 17 February 2009 Mr McInnes and Mr Walsh attended each of the various individual work/construction sites. Meetings were held with eligible employees on each site, as a group, and the matters discussed in the preceding paragraph were again discussed and employee questions were answered. 99 Mr Cane, an electrician who worked primarily at the Browns Plains site, cast his vote against approval of the agreement. In his affidavit affirmed 30 April 2009 he said at paragraphs 5 and 6: '5. I recall that everyone at work discussed the collective agreement. 6. Mr David McInnes came out to site on the 17th February 2009 and gave his point of view in relation to the collective agreement. …'

[28]

Misinformation 103 Undoubtedly, a judgment as to whether or not 'a reasonable opportunity to decide' has been given will require consideration of the likely effect that misinformation given by an employer may have had upon an employee's decision to vote one way or another, in the absence of any evidence as to the actual effect of such misinformation on the minds of any of the appellant's employees. A trivial misstatement in a document put around by an employer could hardly amount to a failure by the employer to give all of the persons employed at the time whose employment would be subject to the proposed employee collective agreement a reasonable opportunity to decide whether they wanted to approve the agreement or not. Lack of any evidence whatsoever from employees who approved the agreement, expressing dissatisfaction with the outcome that was secured as a result of a majority of those persons casting valid votes deciding that they wanted to approve the agreement, would be a matter that may properly be taken into account in deciding the significance of any misstatement. If the minds of the relevant employees were or were likely to be contaminated by misinformation about the proposed agreement and its effect then it could be said that such employees were denied a 'reasonable opportunity to decide' whether they wanted to approve it. The ultimate consequence that may flow from a failure by an employer to give 'a reasonable opportunity to decide' is an irrelevant consideration. Whether an employer has or has not given all of the persons employed at the time whose employment would be subject to the agreement a reasonable opportunity to decide whether they wanted to approve the agreement or not should be capable of being determined immediately prior to the decision being taken. (see per Graham J in Shop, Distributive and Allied Employees' Association v Karellas Investments Pty Ltd (No 2) (2007) 166 IR 51 at [49]-[51] and [54]-[55]). 104 The Court was invited to proceed with the appeal on the basis that on Thursday 12 February 2009 each eligible employee of the appellant received a copy of the proposed employee collective agreement, an information statement containing, inter alia, information about the time at which and the manner in which the approval of the proposed employee collective agreement would be sought under s 340 of the Act, a ballot paper, a waiver form and a reply paid envelope. There was no issue as to timeliness in respect of the provision of these documents to eligible employees. In the circumstances, it is unnecessary to consider the terms of the waiver document which employees were invited to sign and the terms of s 338 of the Act. 105 There are several copies of the proposed employee collective agreement in the appeal books. The cover of the proposed agreement provided as follows: 'Workplace Relations Act 1996 EMPLOYEE COLLECTIVE AGREEMENT BETWEEN BLUE STAR PACIFIC PTY LTD (SOUTH EAST QUEENSLAND) ABN: 93 107 581 564 "THE EMPLOYER" AND "ITS EMPLOYEES" BOTH PRESENT AND FUTURE'

[38]

116 In the circumstances of this case the minds of the relevant employees were not and were not likely to be contaminated by the misdescription of the proposed agreement as contained on the ballot paper. In my opinion the likely effect of the misdescription could not be said to be such that employees were denied a 'reasonable opportunity to decide' whether they wanted to approve the proposed agreement. 117 There was evidence below that a number of eligible employees were conscious of the error in the description of the agreement as recorded on the ballot paper at the time when they voted, but they voted against the adoption of the agreement and were uninfluenced by the misdescription. Others gave evidence that they were made aware of the misdescription of the agreement on the ballot paper but had already cast their votes at the time when they became so aware. Such persons all voted against the approval of the agreement and were not led into error by the misdescription. 118 Two witnesses called by the appellant had the misdescription of the agreement as recorded on the ballot paper drawn to their attention before the ballot closed on 20 February 2009. One such employee, Kelly Brasher, was informed by a colleague of the misdescription approximately two days after he received the ballot paper, around 14 February 2009, and another, Anthony May, learnt of the misdescription on Thursday 19 February 2009. Neither witness was cross-examined as to his awareness of the misdescription at the time when he cast his vote and neither witness was asked whether he voted for or against approval of the agreement. Furthermore, neither witness was asked whether he was misled by the misdescription into voting as he did. 119 The ballot papers were apparently drafted by the appellant's Company Secretary, Tania Linnegar. It would appear that a total of 59 packages, which included a ballot paper, were issued to the appellant's employees and 47 ballot papers were returned before the close of the poll at 1.00pm on 20 February 2009. Thirty-six of the votes cast were for the approval of the proposed agreement, 10 votes were against the approval of the agreement and one vote was deemed to be invalid. In the circumstances the requisite majority was obtained. 120 It seems to me not unreasonable to assume that an employee whose employment would be subject to the agreement, if it was approved by the requisite majority, would refrain from voting 'blind'. Rather, one would anticipate that employees with the skills possessed by the appellant's employees would look to see 'what was in it for me' before making a decision as to whether he or she wanted to approve the agreement. They could be expected to look at the schedule of wage rates in the proposed agreement. It was, in my opinion, abundantly clear that the schedule of rates contained in the Wages Schedule set out on page 18 of the agreement was one which covered the ensuing period of four years and not just two years. Putting to one side the possibility that an eligible employee may have read the title of the agreement as recorded in clause 2 of the agreement and/or the date and period of its operation as recorded in clause 7, I cannot accept that the misdescription of the agreement, as recorded on the Ballot Paper, would be likely to lead any eligible employee into error in voting for the approval of the agreement on the basis that its life was limited to two years rather than the four year life mentioned in the agreement itself when the wage rates in the Wages Schedule clearly covered a four year period. 121 I am respectfully of the opinion that the learned primary judge fell into error in concluding that the appellant's eligible employees were likely to be adversely affected by the misdescription of the employee collective agreement as recorded on the ballot paper. Furthermore, in my opinion the learned primary judge was in error in finding, in the circumstances recorded above, that a reasonable opportunity to decide had not been given by the appellant to its employees because it failed to hold a meeting for its employees to discuss the proposed agreement as a group. There had been no reasoned request for a meeting, no requests, reasonable or otherwise, for the provision of lists of eligible employees and their respective contact details and no recent changes in the composition of the workforce. All eligible employees had a full copy of the proposed agreement to peruse and consider before deciding whether or not they wanted to approve it. 122 For the above reasons I consider that the appeal should be allowed, the declarations made by the primary judge on 30 June 2009 should be set aside and an order should be made for the dismissal of the respondent's application filed 27 February 2009. 123 It may be observed that on 22 July 2009 the Workplace Authority notified the employer's association that its employee collective agreement had passed the no-disadvantage test. The date of issue of the notice was recorded as 20 July 2009 and the notice recorded that the agreement would start operating on the seventh day after the date of issue of the notice. 124 However, a letter dated 20 July 2009 (sic) would appear to have been sent on behalf of the Workplace Authority Director purporting to advise that the earlier notification that the agreement had passed the no-disadvantage test was 'of no effect' by virtue of the declarations made by the primary judge on 30 June 2009. No doubt that notification of 'non effect of previous notice' will itself have no effect if the Court orders that the declarations made by the primary judge be set aside, as I have proposed. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.

Parties

Applicant/Plaintiff:

Blue Star Pacific Pty Ltd

Respondent/Defendant:

Communications Electrical Electronic Energy Information Postal Plumbing & Allied Services Union of Australia

Legislation Cited (5)

Corporations Act 2001(Cth)

Fair Work Act 2009(Cth)

Fair Work (Registered Organisations) Act 2009(Cth)

Workplace Relations Regulations 2006(Cth)

Workplace Relations Act 1996(Cth)

Cases Cited (9)

The nature and history of the proceeding 1 The principal question in this appeal is whether the appellant, Blue Star Pacific Pty Ltd ("Blue Star") has complied with the obligation imposed on it by s 340(2)(a) of the Workplace Relations Act 1996 (Cth) ("the Workplace Relations Act"). Blue Star was proposing to its employees an employee collective agreement. Before submitting that agreement for approval, Blue Star was required to give all of the persons it employed at the time whose employment was to be subject to the agreement a reasonable opportunity to decide whether they wanted to approve the agreement. 2 The appeal is from a judgment of a single judge of the Court, published as Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia v Blue Star Pacific Pty Ltd [2009] FCA 750. On 30 June 2009, his Honour made a declaration to the effect that Blue Star had not complied with its obligation under s 340(2)(a) of the Workplace Relations Act and a declaration that the proposed agreement, the Blue Star Pacific Employee Agreement 2009 - 2013 had not been approved validly pursuant to s 340. His Honour's reasons for judgment were published on 14 July 2009. Declarations substantially in the form made by his Honour were sought in the proceeding at first instance by the respondent to this appeal, the Communications Electrical Electronic Energy Information Postal Plumbing & Allied Services Union of Australia ("the CEPU"), an organisation of employees registered pursuant to the Workplace Relations Act at the time, and now pursuant to the Fair Work (Registered Organisations) Act 2009 (Cth).

The primary judge's reasons for judgment 12 In [5] of his reasons for judgment, the learned primary judge summarised the three claims before him that the agreement in question was not approved in accordance with s 340(2) in the following terms: 1 In the circumstances, Blue Star did not give its employees a reasonable opportunity to decide whether they wanted to approve the agreement because it did not afford them the opportunity to meet and confer as a collective group; 2 The ballot paper circulated by Blue Star was misleading in that it stated that the proposed agreement was to operate for a period of two years, when in fact, it was to operate for a period of four years; and 3 The voting process used by Blue Star did not allow it to determine whether a majority of valid votes had been cast. 13 At [34]-[35], his Honour drew attention to the differences between an individual agreement between the employer and each employee and a collective agreement. In the case of an individual agreement, to achieve a result similar to a collective agreement, the employer would need to obtain unanimous support. Even so, future employees would not be bound. A collective agreement, binding on all employees as well as future employees, could be achieved by securing majority support under s 340(2). For this reason, his Honour expressed the view at [35] that "s 340(2) is directed to placing some further obligation on the employer when it seeks to obtain these benefits by way of an employee collective agreement." At [38], his Honour considered that the use of the word "collective" in the expression "employee collective agreement" was significant in construing s 340(2). At [41], his Honour expressed the view that the word "reasonable" in legislation is usually taken to mean reasonable in all the relevant circumstances of the case. At [42], his Honour expressed agreement with the conclusion of Smith FM in TWU v DHL Exel Supply Chain (Australia) Pty Ltd [2008] FMCA 604 (2008) 174 IR 44 at [19] that: the "reasonable opportunity" is to be afforded to the whole of the group whose approval is required to be sought as well as to each of its members. 14 At [43]-[44], the primary judge cited the judgment of Northrop J in Ricegrowers Co-operative Mills Ltd v Bannerman (1981) 56 FLR 443 at 453 and declined to follow the observations of Smith FM in TWU at [19] in relation to the meaning of the phrase "to decide" in s 340(2) of the Workplace Relations Act. His Honour took the view that the words "to decide" were referring to the thought process taking place in the employees' minds when considering whether to vote for or against approving the proposed agreement. In contrast, the word "decision" in s 340(2)(b) was the manifestation of the outcome of that thought process by voting for or against the approval. 15 At [45], the primary judge said: Taking into account these aspects of the context and language of s 340(2)(a) and the various indications as to its purpose mentioned above, I consider the purpose of the subsection is to require an employer wishing to have its employees approve and, therefore, be bound by an employee collective agreement, to provide an opportunity for all the employees who will be affected by the proposed agreement, to meet together as a group, to discuss the provisions of the proposed agreement...Consistent with this purpose and its context and language, I therefore consider that the sub-section is to be construed to place an obligation on such an employer, to provide the employees concerned with an appropriate time and occasion to meet together as a group, to discuss the provisions of the proposed agreement and to decide whether they wish to approve it. 16 At [46]-[48], his Honour discussed whether such an obligation was "reasonable" in the circumstances of this case. The circumstances to which his Honour referred were: Blue Star's business is relatively small; 57 of its employees were affected by the proposed agreement; the business was split into divisions, so that there was little opportunity for the employees to meet their fellow employees in the course of daily work activities; all of the divisions and sites were located in and around Brisbane, within a relatively confined geographic area. His Honour concluded that, in those circumstances, Blue Star was required to provide an opportunity for all of its employees affected by the proposed agreement to meet together at the same time and place to discuss the proposed agreement as a group. 17 At [50]-[53], his Honour then discussed whether the misinformation on the ballot paper was such as to deprive the employees of the required reasonable opportunity. His Honour referred to the judgment of Graham J in Shop Distributive and Allied Employees' Association v Karellas Investments Pty Ltd (No 2) [2007] FCA 1425 (2007) 166 IR 51 at [49], affirmed by the Full Court on appeal in Shop Distributive and Allied Employees' Association v Karellas Investments Pty Ltd [2008] FCAFC 42 (2008) 166 FCR 562, in which it was held that, if the minds of the relevant employees were or were likely to be contaminated by misinformation about the agreement and its effect, it could be said that such employees were denied a reasonable opportunity to decide whether they wanted to approve the agreement. In the present case, the primary judge found that the ballot paper erroneously stated that the proposed agreement was to operate for the period 2009-2011. This was plainly false, because cl 7 of the agreement provided that it was to operate for a period of four years. His Honour found that this false information was likely to have affected the employees in their decision whether to approve the proposed agreement. His Honour said that the actual term of the agreement was twice the period represented on the ballot paper. The difference was not trivial or insignificant. The false information was provided against a background of uncertain economic conditions and an expectation that those conditions may change for the better in the next few years, an expectation that Mr McInnes had expressed to some of the employees at a meeting. 18 The primary judge then discussed the third issue at [54]-[60]. His Honour rejected the challenge to the approval of the proposed agreement on the basis that the ballot had not been conducted validly. His Honour's conclusion on this issue is not challenged in this appeal.

(1981) 56 FLR 443

(2007) 166 IR 51

(2008) 166 FCR 562

(2008) 174 IR 44

[2008] FCAFC 42

[2009] FCA 437

[2007] FCA 1425