Fair Work Commission|2022-06-02

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Marine Technicians Australia Pty Ltd [2022] FWC 1112 (2 June 2022)

s.236 - Majority support determination

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

Majority support determination sought - whether majority of proposed group support bargaining - whether group of employees geographically, operationally or organisationally distinct and whether unfair - findings made - statutory requirements met - reasonable that determination be made - determination issued.

[1] This matter concerns an application by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) for a majority support determination (MSD) pursuant to s.236 of the Fair Work Act 2009 (the Act). In very broad terms, a MSD may be made when the Commission is satisfied that a majority of a group of employees wish to bargain for an enterprise agreement, where the employer concerned has not agreed to do so. There are also other requirements, and these aspects are largely in dispute in this matter.

[2] The CEPU sought that a determination be made relating to a group of employees engaged by Marine Technicians Australia Pty Ltd (MTA or Respondent). MTA is a defence contractor providing marine-electrical services to the defence industry, specialising in shipbuilding, maintenance and sustainment, and engineering change work on defence vessels. MTA operates across four locations across Australia where MTA Trade and Trade Assistant employees regularly perform work. This includes work undertaken on the SEA1180 Offshore Patrol Vessel E-Package contract (SEA1180 contract) and related activity associated with Offshore Patrol Vessels (OPVs) being built at Osborne in South Australia. This work is the focus of the present application. The SEA1180 contract also involves MTA performing work on other OPVs being constructed at Henderson in Western Australia.

[3] During the course of proceedings in this matter, the CEPU revised the intended group of employees and conducted a further employee petition to seek the endorsement of the employees for the intended bargaining process and this application. Ultimately, the proposed group of employees was stated by the CEPU in the following terms:

"Electrical Trade and Trade Assistant employees, employed by MTA, based at Osborne South Australia, who usually perform work on or related to the SEA1180 Offshore Patrol Vessels."

[4] I observe that the revised group of employees contemplates four conjunctive elements:

Electrical Trade and Trade Assistant employees (electrical employees);

who usually perform work on or related to the SEA1180 Offshore Patrol Vessels.

[5] Amongst other matters, the CEPU relied upon the additional employee petition to support its contention that a majority of the relevant employees wished to commence bargaining for an enterprise agreement with MTA. This was the subject of a Report of the Commission on 21 March 2022 (Revised Commission Report). This report, with the concurrence of the parties, confidentially compared the names of the employees on the petition with a list of employees provided by MTA. The results were made available to the parties to inform the consideration of relevant statutory requirements.

[6] The CEPU is entitled to bring the application and the matter is properly before the Commission. However, MTA opposes the application on a number of grounds arising from the statutory requirements for the making of the MSD.

[7] Ultimately, I have concluded the MSD should be issued. My reasons and the consequences of that finding are set out in the Decision below.

[8] The MSD arrangements form part of the Act's enterprise bargaining provisions. In particular, they are part of the Commission's general role in facilitating bargaining in Division 8 of Part 2-4 of the Act.

[9] The objects of Part 2-4 of the Act are as follows:

(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and

(b) to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:

(i) making bargaining orders; and

(ii) dealing with disputes where the bargaining representatives request assistance; and

(iii) ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay.

[10] Sections 236 and 237 of the Act provide as follows:

(1) A bargaining representative of an employee who will be covered by a proposed single-enterprise agreement may apply to the FWC for a determination (a majority support determination) that a majority of the employees who will be covered by the agreement want to bargain with the employer, or employers, that will be covered by the agreement.

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

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

237 When the FWC must make a majority support determination

(1) The FWC must make a majority support determination in relation to a proposed single-enterprise agreement if:

(a) an application for the determination has been made; and

(b) the FWC is satisfied of the matters set out in subsection (2) in relation to the agreement.

Matters of which the FWC must be satisfied before making a majority support determination

(i) who are employed by the employer or employers at a time determined by the FWC; and

(ii) who will be covered by the agreement;

(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."

[11] MTA accepts that s.237(2)(b) has been met, however all the other prerequisites for the making of the MSD are in dispute. As a result, I need to consider whether the CEPU has satisfied the Commission that

A majority of the relevant employees (employed by MTA and who would be covered by the proposed enterprise agreement at the relevant time) want to bargain - s.237(2)(a)) of the Act - the majority support requirement.

The group of employees who will be covered by the agreement was fairly chosen, having regard to the factors in s.237(3A) - s.237(2)(b) of the Act - the fairly chosen requirement.

It is reasonable in all the circumstances to make the determination - s.237(2)(d) of the Act - the reasonableness requirement.

[12] If the Commission is satisfied that all of the requirements have been met, it would be required under s.237(1) of the Act to make the MSD. If one or more of the requirements is not met, there would be no basis to make such a determination.

[13] I observe that the consequence of the issuing of the MSD would include to:

Commence the bargaining process for an enterprise agreement;

Trigger the notification time within the meaning of s.173(2);

Require the employer to issue a notice of employee representational rights in accordance with s.173;

Make relevant the good faith bargaining obligations of s.228, and

• Potentially provide the capacity for parties to seek bargaining orders,[1] scope orders,[2] assistance with bargaining disputes[3] and orders to permit protected action ballots[4] as provided in Parts 2-4 and 3-3 of the Act.

[14] The making of an MSD does not require an employer to make an enterprise agreement, and this would not occur unless the employer subsequently proposes an agreement for the approval of the employees. The MSD also does not determine the scope of any agreement that is made. The scope is itself a matter for bargaining,[5] and potentially for determination of the Commission under s.238 of the Act. The broader context was also discussed by the Full Bench of the Commission in Alcoa of Australia Limited v Construction Forestry, Mining and Energy Union[6] stated:

"[31] The final point made by Alcoa concerning the "fairly chosen" consideration was that the Commissioner erred in failing to find that the working conditions of PSO6 employees were incompatible with typical terms of an enterprise agreement. This submission is, with respect, misconceived. The making of a majority support determination does not pre-suppose that an enterprise agreement will be made containing particular terms. It does not pre-suppose that an enterprise agreement will be made at all. To attempt to predict what the outcome of enterprise bargaining might be if a majority support determination is made, and then to have regard to that in deciding whether such a determination would be made, would involve the Commission taking into account an entirely speculative and irrelevant consideration. .... ... "

[15] The CEPU contends that the evidence provided to the Commission enables it to be satisfied that a majority of employees who would be covered by the agreement want to bargain.

[16] Further, the CEPU contends that the employees of MTA who will be covered by the agreement have been fairly chosen, in that they have not been selected on an arbitrary or discriminatory basis. That is, the scope has been determined by reference to employees who are geographically distinct, in that they work at Osborne in South Australia and not in WA where other employees are engaged. The Electrical Tradespeople and Trades Assistants concerned are also organizationally and operationally distinct in that they are a group of workers who perform electrical work on or connected to the offshore patrol vessels.

[17] The CEPU relies upon the organisational charts provided by MTA to demonstrate that the Respondent has organised itself on a regional (State) basis and the employment documents pertaining to each of the Electrical Trades and Trades Assistant employees engaged by MTA as confirming that the employees have a principal place of employment. This, it contends, is where the employees are based for present purposes.

[18] The CEPU contends that some other employers associated with the OPV project at Osborne are parties to site specific enterprise agreements and the situation at MTA fall within the scope of fairly defined groups in other matters.

Even if the Commission were to find that the group of employees to be covered by the proposed agreement was not geographically, operationally or organisationally distinct, the scope is still capable of being fairly chosen as it was not selected on an arbitrary or discriminatory basis. That is, the distinctiveness of the group was to be taken into account but was not decisive.

The finer details of the scope are a subject for negotiation during the enterprise bargaining, but the changes to the group proposed ought to address the concerns raised by the Respondent in their submissions.

[20] The CEPU contended that the Commission should find that it would be appropriate to issue the MSD and no proper basis not to do so had been provided by MTA.

[21] The CEPU led evidence from the following of its members/employees who are part of the employee group who were cross-examined:

• Liam McEgan -Qualified Electrician, Leading Hand of Ship 2;[7]
• Victor Ziegler - Qualified Electrician.[8]

[22] The CEPU also provided evidence from the following employees from amongst the group:

• Corey Van Der Tuuk - Qualified Electrician;[9]
• Heath Belton - Qualified Electrician;[10]
• Daniel Chapman- A Class Electrician;[11]
• Rohan Johnstone - A Class Electrician;[12]
• Mark Radivojevic - Qualified Electrician;[13]
• Khyle Humphrey - Qualified Electrician;[14]
• Kym Hollinshead - A Class Electrician;[15]
• David Gladwell - A Class Electrician;[16]
• Tyson Devries - A Class Electrician;[17]
• Keegan Armstrong - Qualified Electrician;[18]

[23] This evidence concerned their understanding of the basis of their engagement by MTA, work undertaken at Osborne or at other near locations on work associated with the OPV's, including starting work at Osborne on each occasion. I observe that the 2 employees,[19] who were cross-examined about matters including in relation to whether they had elected to work out of MTA's Sydney base and why this did not happen.

[24] In supplementary submissions, the CEPU contended that the scope of enterprise agreements applying to other work performed at the Osborne shipbuilding precinct[20] and in other related locations[21] provide a precedent for the Commission and further assurance that the proposed scope in the present matter is fairly chosen. These instruments included those applying to the Australian Submarine Corporation (ASC).

[25] MTA opposes the application and the making of the determination sought by the CEPU.

[26] MTA submits that the Commission cannot be satisfied that each of the relevant statutory requirements have been met. That is, based on the evidence that has been provided by the CEPU, the Commission cannot be satisfied that:

The majority requirement has been met as required by s.237(2)(a);

The group of employees who would be covered by the proposed agreement were fairly chosen as required by s.237(2)(c)); or

That it is reasonable in all the circumstances to make the MSD as required by s.237(2)(d).

[27] MTA further submits that the CEPU bears the onus of satisfying the Commission that it should make the determination. The evidence adduced by the CEPU provides no foundation for the satisfaction required under s.237(2)(c), nor does it provide a rationally probative base for a finding that the Applicant's cohort is fairly chosen.

[28] MTA contends that as a result, the Commission cannot make an MSD and accordingly the application should be dismissed.

[29] In terms of the majority support requirement, MTA contends that uncertainty in relation to majority support arises because the proposed scope is not fairly chosen, and this also supports its contentions in that regard. Further, the CEPU has led no evidence (aside from the confidential petitions which the Respondent has not seen) about the majority support issue. As such, there is no probative material before the Commission on which satisfaction of majority support can be based.

[30] As to the fairness requirement, the basis of MTA's position may be summarised as follows:

The group of relevant employees in the CEPU's new scope is not distinct in any of the relevant statutory senses. The relevant employees are not geographically distinct because the employees based at Osborne do not only work at Osborne.

They are not organisationally distinct because work on or related to the Offshore Patrol Vessels is conducted at Henderson, Western Australia and Sydney, New South Wales in addition to Osborne.

They are not operationally distinct because they are part of an integrated team of Trades Assistants and Electricians working at a number of locations on a number of projects to undertake the industrial or productive activity of providing marine-electrical services to the defence industry.

[31] MTA recognised that distinctiveness within the meaning of s.237(3A) is necessarily a relative, not absolute, concept, and necessarily requires a comparison between the employees who will be covered by the proposed agreement and those who will not. However, it contended that the CEPU had not demonstrated how the relevant employees are distinctive in comparison to the Respondent's other employees, in circumstances where it contended that:

The relevant employees perform work at various sites across States;

Work on the SEA1180 contract is performed across two different sites;

The relevant employees perform roles in an interconnected manner alongside the Respondent's other employees;

The relevant employees and the Respondent's other employees are mobile and prepared to work at different sites on any given day;

The relevant employees and the Respondent's other employees report through the same supervisory structure; and

The relevant employees and the Respondent's other employees have the same working conditions, and the same pay rates (where they are at the same level with the same experience).

[32] In relation to the remaining requirement, MTA submits that it is not reasonable in the circumstances for the Commission to issue an MSD, on the following basis:

"It is impossible to carve out 'Electrical Trade and Trade Assistant employees, employed by MTA, based at Osborne South Australia who usually perform work on or related to the SEA1180 Offshore Patrol Vessels'. Employees work across locations and having an enterprise agreement would therefore be confusing to apply in practice. For example, if an employee covered by the Applicant's proposed agreement were to perform temporary work in New South Wales, Western Australia or the Northern Territory, there would be confusion as to what terms and conditions apply to their employment because, during that time, they would not be performing work at Osborne and would not be working on the Offshore Patrol Vessels."[22]

[33] MTA also contends that the proposed group was unfair on the basis that it was arbitrary in the sense that other employees, not based at Osborne, would be included and it was not possible to carve out the group of employees as proposed by the CEPU.

[34] MTA led evidence from Mr Mark Brown, its National Operations Manager.[23] This evidence included the MTA operations at various sites in Australia, the work associated with the OPV's and the basis upon which the relevant employees were engaged.

[35] In supplementary submissions MTA contended that the other enterprise agreements referred to by the CEPU relevant to the ASC, are not location specific and not relevant given the different circumstances associated with its operations. Further, MTA contended that these do not represent a precedent in the sense relied upon the CEPU.

[36] I will deal with evidence concerning the employee petition later in this Decision.

[37] MTA is a defence contractor providing marine-electrical services to the defence industry, specialising in shipbuilding, maintenance and sustainment, and engineering change work on defence vessels. The current locations where MTA regularly performs work are Garden Island and Henderson in Western Australia, Potts Point in New South Wales, Osborne in South Australia, and Darwin in the Northern Territory. MTA has a support base, involving an office and consistent workforce, at each of these locations.

[38] MTA engage Trade and Trade Assistant employees (Electrical employees) at each of these worksites. However, MTA employees may also perform work at other sites wherever a ship can pull in for repair work.

[39] MTA's major clients include BAE Systems, Thales Australia, NSM, Serco and Lürssen.

[40] Of the 35 or so Trade and Trade Assistant employees based at Osborne, 4 have worked at other locations in South Australia. Further, employees in these classifications based at other MTA locations have travelled to South Australia to perform work on the SEA1180 Contract and other contracts in South Australia, before returning to their home base.

[41] A significant part of MTA's current work is the offshore patrol vessel construction project (OPV Project). MTA has secured contracts with multiple clients for different scopes of work on the OPV Project. The SEA1180 Contract with Lürssen is the major contract but is just one part of the larger OPV project. MTA has also tendered for, and been awarded, other electrical trades work associated with those vessels, which is performed for different clients under different contracts. MTA undertakes other work both at the Osborne shipyard, and at client sites at other locations in Adelaide.

[42] The SEA1180 Offshore Patrol Vessel E-Package contract is a contract between MTA and Lürssen. Lürssen is the shipbuilder at the ASC shipyard in Osborne, SA, and at Henderson, WA.

[43] The contract is to provide electrical services for the building of 12 vessels. MTA's scope of works under the SEA1180 Contract for Lürssen includes:

the supply and installation of electrical cabling (including cable tray) for the entire vessel, for each of the 12 vessels, cable penetration inserts, and earth bonding; and

installation of client-supplied equipment under 25kg.

[44] There are two principal work locations under the SEA1180 contract. These are at Osborne and at Henderson. Ten of the 12 vessels are being built at Henderson and two are being built in Osborne. All vessels being constructed are the same design.

[45] As at May 2022, Ships 1 and 2 of the 12 are being built at Osborne, and Ships 3 and 4 are being built at Henderson. The MTA electrical work on ships 3 and 4 has not yet commenced. Ships 5 to 12 will also be built at Henderson, but no work has commenced on those ships. The SEA1180 Contract commenced in October 2019. Originally, the contract length was for two years. However, there have been delays. The current schedule supplied by Lürssen indicates completion of Ships 1 and 2 production works by the end of 2022.

[46] The MTA employees working on the vessels at Henderson perform the same work as the employees at Osborne.

[47] MTA is organised with a National Operations Manager, Mr Brown and four State Managers - WA, SA, NSW and the NT - who report to him.

[48] The majority of MTA's management, key work planning and support staff for the SEA1180 Contract are based in Henderson. MTA has some locally based administrative and engineering support resources at Osborne to support the Henderson head office.

[49] MTA has from time-to-time flown in employees from WA and other location to undertake work for the SEA1180 Contract and other contracts in South Australia. MTA also intends to have employees based in Osborne work on the OPV project in other States, including when the work on the SA-based ships concludes. The degree of movement during 2020 and 2021 was reduced due to the impact of the Covid-19 Pandemic and the control measures taken by governments.

[50] MTA electricians across all the sites where MTA employees work presently have the same general terms and conditions no matter where they are based or what project they are working on. This applies to the employees to be covered here. They are paid consistently across the four locations, depending upon qualifications and service.

[51] The Commission has been provided with employment offer documentation and standard employment contracts for all Electrical employees working for MTA, including those at Osborne and Henderson. With very limited exceptions utilised after this application was on foot, each of the employment offers for the Electrical employees provided to the Commission specify a principal place of employment. Further each contract provides the following in clause 7:

"(a) 'Your principal place of employment will be at the location described in Item 5 of the Schedule, or as otherwise reasonably requested by the Employer.'

(b) You may also be required to travel as reasonably necessary for the performance of your duties."

[52] The Electrical employees at Osborne have either Osborne or Adelaide specified in their offers of employment. The only Adelaide base, where the employees initially attend for work each day, is at Osborne.

[53] Employees working on the SEA1180 contract have been provided with a letter of appointment in relation to their work on that contract, which sits alongside their employment contract. That letter states the employees' duties 'shall include but are not limited to the duties as described in "your SEA1180 position description".

[54] Clause 2.7 of the MTA Employee Handbook[24] provides that 'it is a condition of your employment that you are prepared, whenever applicable, to travel to any other of our sites, which may include interstate or international travel.'

[55] There is a dispute about whether employees are informed as part their recruitment that they may be transferred or moved to other work locations. Mr Brown indicated that this was done on all occasions and Mr McEgan and Mr Ziegler denied that this had occurred in their case. No direct evidence as to what those particular employees had been told was provided by MTA and it unnecessary to make a finding on this aspect. There is also a dispute about the circumstances in which both Mr Ziegler and Mr McEgan expressed an interest in performing some work in Sydney for MTA. It is also not necessary for me to resolve that tension. The employment contract permits reasonable relocation of the principal place of employment and reasonable travel as is necessary for the performance of the duties. What is reasonable must be determined in each factual context. It is sufficient to find that the Electrical employees based at Osborne may be required to perform work on or in connection with the OPV project at other sites in SA and in other States and that Electrical employees based in other States have and will in the future work at Osborne.

[56] In relation to a potential move to Henderson in Western Australia when the OPV work concludes in Adelaide, some employees based at Osborne have been informed as follows in their offer of employment:

"Should you wish to remain on the SEA1180 Project when the project moves to Western Australia, a new assignment letter will be provided. Other than what is outlined in this letter of employment, all other terms and conditions of your employment shall be in accordance with your employment contract."[25]

[57] The opportunity for the relevant employees to follow the OPV work to Henderson and that a new assignment letter would be provided was confirmed by MTA.[26]

[58] The MTA operations at Osborne take place within the Osborne Naval Shipyard. Osborne is located near to Adelaide on the Lefevre Peninsula. The naval shipyard is a multi-user facility which has hosted the construction and/or maintenance of submarines, frigates and now the OPVs. The CEPU is party to a number of enterprise agreements that have applied or do apply to other employers and projects at Osborne including the ASC Shipbuilding Pty Ltd Enterprise Agreement 2017 -2020[27] and the more recent ASC Pty Ltd Enterprise Agreement 2021[28] Some of the employees in this matter[29] are aware that other wages and conditions apply at the Osborne shipbuilding precinct and seek to bargain for those arrangements.

[59] I observe that the ASC Pty Ltd Enterprise Agreement 2021 applies differently than the group proposed in this matter. That is, whilst it provides, at least in part, a location-based coverage, it applies more broadly and is not linked to the nature of the project work being undertaken. Clause 3 of that instrument provides:

This Agreement shall apply to the employment of all persons employed by ASC Pty Ltd (the Company or ASC or the Employer) located at 694 Mersey Road Osborne 5017 and its warehouse facilities, anywhere within Australia, Australian Territorial Waters or overseas locations in the classifications referred to in Clauses 16 (Weekly Rates) and 18 (Apprentices) of this Agreement."

[60] I also observe that the ASC Pty Ltd (Western Australia) Enterprise Agreement 2017-2021 provides, in effect, the following scope:

Following approval by the Fair Work Commission, this Agreement shall be binding upon the Company, in respect of the employment by it of all employees in any of the Classifications referred to in clause 12 (Weekly Rates) whose primary place of employment is within Western Australia and on all such employees."

[61] This is more akin to the form of location specific group contemplated in this matter; however, it again does not operate by reference to nature of the project work being undertaken as is the case with the proposed grouping here.

[62] In any event, I consider that whilst the scope and nature of these enterprise agreements provides some of the broad context in which the CEPU members wish to bargain, the assessment of the fairness of the group in this matter must be made having regard to the particular circumstances evident at MTA. I accept MTA's submissions on that aspect.

4. Satisfaction that the determination can and must be made

[63] The CEPU rely upon a revised employee petition conducted in early 2022 to support the notion that a majority of the employee group support the commencement of bargaining with MTA for an enterprise agreement.

[64] The petition was undertaken by reference to the following question:

"We, the undersigned employees of Marine Technicians Australia Pty Ltd, employed at Osborne South Australia for the SEA1180 Offshore Patrol Vessel E-Package contract, declare that we seek to negotiate an Enterprise Agreement with the employer. The employer, Marine Technicians Australia Pty Ltd, has not provided a Notice of Employee Representational Rights to negotiate any instrument. In accordance with Section 236, of the Fair Work Act 2009, we seek that Orders be issued and the application for a Majority Support Determination be made. Further we endorse the CEPU act as our Bargaining Agent."

[65] In the lead up to the issuing of the Further Commission Report on 21 March 2022, the parties provided materials to the Commission to enable a comparison to be conducted of the names of employees who had signed to support the petition and those employed by MTA at the time. For its part, MTA provided a list of employees in the following categories and numbers:

38 Employees who live in South Australia and usually perform work at Osborne;
5 Employees who live in states other than South Australia but sometimes perform work at Osborne on the Offshore Patrol Vessels;
21 Employees who live in states other than South Australia but sometimes perform work on or related to the Offshore patrol Vessels, and could at any time, be directed to work on the OPVs at Osborne;
14 Employees who are not currently performing work on the OPVs, but may be directed to perform work at Osborne on the OPVs;

[66] The petition was signed by 32 persons, with 29 of these completing the petition on 28 February 2022 and 3 on 2 March 2022. I have accepted this as the relevant time for the purposes of s.237(2)(a)(i) of the Act.

[67] The Further Commission Report concluded as follows:

"3. 31 employee names and stated identities appear on both the Petition and the employee list. All fall into category 2(a). No persons from categories 2(b), (c) or (d) signed the petition.

4. The petition records support for the stated proposition from a majority of the relevant employees (81.5%) in category 2(a).

5. The petition records support for the stated proposition from a minority of the entire employee list (39.7%) if all categories are taken into account.

6. Based upon the above information, the parties can calculate the other permutations, depending upon which of the various categories beyond category (2)(a) are included."

[68] The evidence reveals that, with one potential caveat, the employees in categories (b), (c) and (d) nominated by MTA did not, at the relevant time, fall within the group as defined by the CEPU. That is because these employees were not based at Osborne. The most natural notion of "based at Osborne" is that Osborne (or Adelaide) is the employee's principal place of employment. Mr Brown had no difficulty identifying which of the employees were based at Osborne and Henderson respectively for example. Even if a broader view was taken to include the relevant employees who are working from Osborne at the relevant time (which I do not consider is appropriate), this would not substantially impact upon the present assessment. That is, there were 4 or 5 employees who would otherwise fit within the scope of the group and were temporarily working at Osborne when the petition was conducted, but their principal place of employment was elsewhere.[30]. The category (c) and (d) employees would not be considered to fall within the employee group at the relevant time. That is, they were not based at Osborne in any sense.

[69] I am also satisfied that the 31 employees in category (a) who signed to support the petition fell within the employee group at the relevant time and would be covered by the proposed enterprise agreement.

[70] If the 4 or 5 (temporarily relocated) employees are excluded, the clear majority of the employees in the group (81.5%) supported the petition. If those additional employees were included, the majority would be less but remains a clear majority. That is, even on that basis, almost 75 % of the employees within the group supported the petition.

[71] I am also satisfied that the petition represents the views of the employee group to seek to bargain with MTA and this should be utilised for the purposes of s.237(3) of the Act. In written submissions MTA contended that there was a lack of cogent evidence. However, the Further Commission Report was based upon material that was provided, by consent, to the Commission for the purposes of making a comparison. MTA had access to the petition (with names redacted) and to a supporting affidavit provided by the CEPU. This supports the finding that the petition reasonably represents the view of the relevant employees.

[72] As a result of the above findings, I am satisfied that the majority support requirement has been met.

[73] The fact that some employees in categories (b), (c) and (d) may also work on the Offshore Patrol Vessels and be relocated to Osborne from time to time is however relevant to the other requirements.

The approach to the assessment of the fairness of the chosen employee group

[74] It is common ground that the group proposed to be covered by an enterprise agreement does not cover all employees of MTA. As a result, s.237(3A) of the Act is engaged and I must consider and make findings as to whether the group has been fairly defined having regard to whether the employee group is geographically, operationally or organisationally distinct.

[75] Having regard to the approach adopted by the Commission and the Court to such matters, the following principles arise.

[76] The Commission must be satisfied as to all of the statutory prerequisites and if so, is obliged to make the MSD. The Commission must also take account of the relevant statutory considerations and an applicant has the responsibility to satisfy the Commission that the MSD should be issued. This satisfaction may be drawn from the relevant material before the Commission.

[77] Generally, the selection of the group of employees to be covered by an enterprise agreement on some objective basis (as opposed to an arbitrary or subjective basis) is likely to point to a conclusion that the group was fairly chosen.[31]

[78] Depending on the circumstances of the particular case, there may be more than one way of fairly choosing the group of employees to be covered by a proposed enterprise agreement. Different scope provisions may be equally described as fair in the sense that no obvious unfairness arises from their application.[32]

[79] If a group of employees is geographically distinct, operationally distinct or organisationally distinct, each of those factors will tell in favour of a finding that the group is fairly chosen. Absent other relevant considerations, those factors not only make it "possible to find that a group of employees was fairly chosen", they make it more likely that such a finding will be made.[33] The absence of a relevantly distinct grouping of employees would be a factor telling against a finding that the group of employees was fairly chosen.[34] However, whether or not the group of employees covered by the proposed agreement is geographically, operationally or organisationally distinct is not decisive, rather it is a matter to be given due weight, having regard to all other relevant considerations.[35]

[80] The role of the Commission is not to determine the scope of the enterprise agreement, but rather to guard against unfairness by being satisfied that the group can be described, in all the circumstances, as fairly chosen. When determining whether a group of employees has been fairly chosen, the Commission may have regard to matters such as:
- the way in which the employer has chosen to organise its enterprise, and
• whether it is reasonable for the excluded employees to be covered by the enterprise agreement, having regard to the nature of the work they perform and the organisational and operational relationship between them and the employees who will be covered by the enterprise agreement.[36]

[81] In considering fairness to the employer, the wishes of the relevant group of employees to bargain should be given significant weight in the absence of a countervailing case that the selection of the group would be prejudicial to the productivity or efficient conduct of the employer's business.[37]

[82] The relatively recent decision of the Full Bench in INPEX Australia Pty Ltd v The Australian Workers' Union[38] (Inpex) also provided guidance to the approach to be adopted to the concepts in s.237(3A) of the Act as follows:

• Distinctiveness within the meaning of s 237(3A) of the Act is necessarily a relative, not absolute, concept, and necessarily requires a comparison between the employees who will be covered by the proposed agreement and those who will not."[39]

• Geographical distinctiveness includes a consideration of the work location(s) of those would be covered and other employees of the employer who would fall outside of the proposed coverage.[40]

• As to operational distinctiveness, the term "operational" refers to an industrial or productive activity. The performance of a different role, task, skill or function is not sufficient to establish operational distinctiveness.[41]

• As to organisational distinctness, 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 weigh in favour of 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 other employees to perform a particular business function.[42]

Is the group of employees geographically, operationally or organisationally distinct?

[83] The evidence before the Commission, including that provided by MTA, enables me to generally understand the circumstances of those employees based at Osborne and those employed by MTA elsewhere that would be relevant to this assessment. This evidence also enables me to understand the manner in which MTA operates in connection with the Electrical employees and the OPV work more generally.

[84] As outlined earlier, the chosen group now comprises

Electrical Trade and Trade Assistant employees;

who usually perform work on or related to the SEA1180 Offshore Patrol Vessels.

[85] This scope must be read as whole and each element satisfied.

[86] MTA does not suggest that the group of employees is unfairly chosen because it (only) includes Electrical Trade and Trade Assistant employees. That is, MTA also engages non-electrical workers at its sites but this is not the basis of the objections. Rather, the objections are more broadly based on where and what the electrical employees are working on and how this is organised. This also includes that the group composition creates uncertainty given the operations and organisation of MTA's work. This also relates to the distinctiveness or otherwise of the group and I turn to that aspect first.

[87] Although there would be relevant electrical employees who would come and go from the Osborne site from time to time, I do consider that there is any great uncertainty associated with the present scope. That is, the occupational category of the employees (Electrical Trade and Trade Assistant employees employed by MTA) is clear. "Based at Osborne" would, for reasons earlier discussed, apply to those employees whose employment is principally based at that location given the circumstances evident at MTA. The nature of the work (usually perform work on or related to the SEA1180 Offshore Patrol Vessels) is not without room for some conjecture but would include all of the work being performed at present by the Osborne-based electrical employees, including that performed at other sites in SA as it is related to the OPVs, and any work they might otherwise do related to the OPVs in other States or the NT. The group would also cover these workers if they were engaged on non-OPV related work from time to time, provided that all of the 4 conditions (including that they usually perform OPV related work) applied.

[88] This indicates that the composition of the group can be identified at any time with reasonable certainty.

[89] However, s.237(3A) of the Act requires that the Commission have regard to whether the group is (relevantly) distinct in forming the view as to its fairness. The group is not completely distinct from other employees engaged by MTA. This is clear from the factual findings made earlier in this Decision. However, for reasons outlined earlier, the notion of being distinct in the present context is relative.

[90] There is an element of geographical distinctiveness as the group of employees concerned must, by definition, be based at Osborne. These employees are assigned to work from that location and have assignment letters confirming this fact. Further, where clause 7 of the employment contracts was to be applied to change their principal place of employment, new assignment instruments would be utilised. However, they are not completely geographically distinct in the sense that other electrical employees attend at Osborne to perform the relevant work from time to time. If the principal place of employment for these (visiting) employees does not become Osborne, they would not fall into the intended coverage.

[91] There is an Osborne (or SA) operation that is being undertaken to substantially perform MTA's electrical work as part of the build of the first 2 OPVs. It also has a Stated-based Manager and local supervision. This provides an operational and organisational framework that is relevant. However, the group is also part of a broader national operation and organisation that is engaged on the OPV work more generally including the work on the remaining 10 OPVs. There are electrical employees engaged at other locations doing (and will do) the same work on the other OPVs and this also militates against a finding that the group is organisationally or operationally distinct.

[92] As a result, I find that there are elements of geographical distinction, and this is relevant. However, the group as presently defined is not substantially operational and organisational distinct in the sense contemplated by s.237(3A) of the Act.

[93] My findings above do not determine the fairly chosen requirement but must be taken into account and given weight.

[94] Self-evidently, the proposed group comprises employees who are Electrical Trade and Trade Assistant employees employed by MTA, based at Osborne South Australia and who usually perform work on or related to the SEA1180 Offshore Patrol Vessels. The composition of the employees who seek to bargain with MTA can be identified and there is a basic rationale associated with that scope. These employees are all based at the one location performing work on or connected with a major ship building project and have an interest in bargaining for an enterprise agreement in light of the local ship building arrangements.

[95] The scope of the proposed group is not without consequences for MTA's employment arrangements, and it may not be that which is sought by MTA or necessarily the ideal basis to negotiate an enterprise agreement. However, it is not arbitrary or discriminatory in the sense considered in the authorities. Those elements of geographical distinction that exist do, given all of the circumstances evident here, collectively provide a rational basis for the proposed group. The interests of those employees who have been left out, principally those Electricians who work on the OPV project but not based at Osborne, is important but does not lead to unfairness.

[96] I do not consider that the impact of the proposed grouping upon MTA's employment arrangements, whilst relevant, in the context of the entire circumstances, leads to unfairness. These aspects are also relevant to the reasonableness requirement discussed below.

[97] Having regard to the findings as the distinctiveness, and the other circumstances outlined above, I find on balance that the group has not been defined unfairly for present purposes.

[98] This satisfies the fairly chosen requirement.

[99] Section 237(2)(d) of the Act requires the Commission to consider whether it is reasonable in all of the circumstances to make the determination.

[100] The assessment to be made is a broad evaluative judgment that is in the nature of a discretionary decision having regard to all of the circumstances.[43]

[101] There is substance in the concerns held by MTA that a separate arrangement at its Osborne site may reduce some flexibility in transferring employees without having to have regard to differing rates and different conditions across its workforce. It is also the case that if an enterprise agreement were made in line with the existing scope, it might result in having employees on the same sites (where relevant employees are visiting without being transferred) being entitled to different wages and conditions of employment. As a general rule, this is not desirable.

[102] However, as the authorities make clear, it is not appropriate as part of this exercise to presume that an enterprise agreement must be made, or that if made, it will be agreed with the proposed scope. This is a matter for bargaining.

[103] In that regard, I have also taken into account that the detailed definition that might be made in an enterprise agreement could remove or significantly reduce the implications of having the visiting employees fall outside of the scope. That is, the parties might agree that an enterprise agreement would cover all Electrical employees of MTA who work at or from Osborne and who usually perform work on or related to the OPV project. The parties might also agree a scope that limits the coverage of any enterprise agreement to work by the Osborne based employees that is on or related to the OPV project in South Australia so that the coverage does not extend when these employees visit other locations. There are of course other permutations that might form the basis of any agreed scope.

[104] The fact that an enterprise agreement might be made and apply only to the 2 SA constructed OPVs is more significant. As observed by the Full Bench in Donnybrook Holdings Pty Ltd t/a TES Electrical v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia,[44] MTA can if it wishes, avoid any "schism" by bargaining with its whole workforce of Electricians, which may be done by also issuing a notice of employee representational rights to all of them, or by seeking a scope order pursuant to s 238 of the Act where any bargaining is not in fact proceeding efficiently or fairly, to include the OPV Electrical employees more generally in the bargaining.[45]

[105] MTA did not contend that the fact that the OPV work in South Australia will have a finite life should militate against the making of an MSD in the present circumstances and I do not consider that this of itself, or in combination with other factors, makes the MSD unreasonable.

[106] I am satisfied that it is reasonable in all of the circumstances to make the MSD.

[107] Given that I am satisfied that all of the statutory prerequisites have been met, I am obliged by s.237(1) of the Act to make the MSD in this matter. The Determination[46] is being issued in conjunction with this Decision.

[108] The consequences of the MSD have been noted earlier in this Decision.

J Rogers for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

B Watson of Herbert Smith Freehills, with permission for Marine Technicians Australia Pty Ltd.

[5] See also Donnybrook Holdings Pty Ltd t/a TES Electrical v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2021] FWCFB 1825 at [23].

[20] Including the ASC Shipbuilding Pty Ltd Enterprise Agreement 2017 -2020.

[21] The ASC Pty Ltd (Western Australia) Enterprise Agreement 2017-2021.

[25] Letter of offer to Mr McEgan - Exhibit CEPU13.

[26] The evidence of Mr Brown - transcript PN250. To PN254.

[29] For example, Mr Chapman - exhibit CEPU3.

[30] The evidence of Mr Brown - transcript PN345 and PN346 and the documentary evidence in exhibit CEPU11 and CEPU12.

[32] The Australian Workers' Union v BP Refinery (Kwinana) Pty Ltd [2014] FWCFB 1476. See also National Union of Workers v Cotton On Group Services Pty Ltd [2014] FWC 6601, at [30].

[33] Kuhle Pty Ltd v Bus and Coach Drivers Association Incorporated [2020] FWCFB 5505 at [32].

[34] QGC Pty Ltd v The Australian Workers' Union [2017] FWCFB 1165 at [42].

[35] Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union and others [2012] FWAFB 2206.

[36] Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union and others [2012] FWAFB 2206.

[37] Alcoa of Australia Limited v Construction, Forestry, Mining and Energy Union [2015] FWCFB 1832.

[43] Alcoa of Australia Limited v Construction, Forestry, Mining and Energy Union [2015] FWCFB 1832 at [24].

[45] Donnybrook Holdings Pty Ltd t/a TES Electrical v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2021] FWCFB 1825 at [23].

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Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Marine Technicians Australia Pty Ltd [2022] FWC 1112

At a glance

Court

Decision date

Source

Judgment (207 paragraphs)

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Marine Technicians Australia Pty Ltd [2022] FWC 1112 (2 June 2022)

Parties

Legislation Cited (1)