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[2012] FWA 3037
General information, not legal advice.
Fair Work Australia
2012-04-17
Original judgment source is linked above.
s.185 - Application for approval of a greenfields agreement
Construction, Forestry, Mining and Energy Union
Summary: whether dispute resolution clause provides representation for non-members - exclusive representation - requirements of s.186(6) of the Act - representation in consultation clause - restricted to delegates only - s.205(1)(b) of the Act - whether model consultation clause must be deemed or whether undertakings available in relation to a consultation term - is a defective consultation term in an agreement a consultation term for the Act's purposes?
[1] I have before me a number of greenfields agreements for each of which approval is sought under the Fair Work Act 2009 ("the Act'). The Agreements are as follows:
[2] The employers in each case were represented by the Australian Mines and Metals Association ("AMMA") with the exception of one agreement, the Casa Engineering (Brisbane) Pty Ltd Broadmeadow Sustaining Operations Project Union Greenfields Agreement (AG2012/850).
[3] The Agreements were made, in the context of the requirements of s.182(3) of the Act, with the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia ("CEPU"), Construction, Forestry, Mining and Energy Union ("CFMEU") and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union ("AMWU").
[4] I have raised with the parties that have made the Agreements the issues as to whether the Agreements meet the requirements of s.186(6) of the Act and s.205(1)(b) of the Act, which are set out further below.
[5] The Agreements as cited contain the following dispute resolution clause:
17.1 Objective of the Dispute Resolution Process
(1) Avoid the escalation of disputes or grievances; and
(2) Provide prompt resolution of issues of concern.
(a) Any disagreement or dispute in respect of any matters arising under the Agreement or the National Employment Standards (NES) will be dealt with as outlined in this clause 17.2.
(b) Subject to clause 17.2 (c), a disagreement or dispute will be dealt with as follows:
(1) The employee concerned shall raise the matter with the appropriate team leader for resolution.
(2) If not resolved, the employee may raise the matter with the supervisor/superintendent of the Employer for resolution.
(3) If the matter remains unresolved, either the employee or the supervisor/superintendent shall request a formal meeting with the Employer's most senior manager on the Project Site.
(4) At any stage of this process the employee may elect to have an employee representative in attendance.
(5) Once the Dispute Resolution Process has been invoked, both the employee and the Employer shall attempt in good faith to resolve the issue by utilising the above steps until resolution is achieved. In the event that resolution is not achieved, any party or the employee may refer the matter to Fair Work Australia for conciliation and/or arbitration.
(6) While the above process is being pursued, work shall continue as normal. Failure to work within the process described in this subclause and/or the failure of any employee to continue work as normal shall constitute a fundamental breach of the Agreement by the employee(s) involved.
(c) Any disagreement or dispute relating to demarcation of employee classifications or scope of work in relation to a matter under clause 22 will be dealt with as follows:
(1) The Party concerned shall informally raise the matter with the appropriate other Party or Parties for resolution.
(2) If not resolved, either Party shall require the other Party or Parties involved in the dispute or disagreement to attend a formal meeting to discuss the dispute.
(3) Any employees involved in the disagreement or dispute may, at any stage of this process, elect to have an employee representative in attendance.
(4) Once the Dispute Resolution Process has been invoked, all Parties involved shall attempt in good faith to resolve the issue by utilising the above steps until resolution is achieved. In the event that resolution is not achieved, but only in situations where disagreement or dispute has disrupted or adversely affected the Project or performance of any work on, related to or incidental to the Employer party's scope of work, any Party may refer the matter to Fair Work Australia for conciliation and/or arbitration.
(5) While the above process is being pursued, work shall continue as normal. Failure to work within the process described in this subclause and/or the failure of any employee to continue work as normal shall constitute a fundamental breach of the Agreement by the Parties or employees involved.
[6] On its face, the dispute resolution process set out above - which is common to the Agreements as cited - establishes that an employee may elect to have an "employee representative" in attendance at any stage in the dispute process. This is evident from clause 17.2(b)(4) and clause 17.2(c)(3) of the Agreement.
[7] Elsewhere, however, the Agreements make reference to an "Employee Representative".
[8] Clause 21 of the Agreements reads as follows:
(a) The Employer recognises the right of their employees to elect a representative(s) (Delegate) to represent them, and will recognise that the Delegate(s) can represent those employees industrially, provided they receive formal advice from the delegate's industrial Union that verifies the Union is both satisfied a proper election has occurred and the duly elected Delegate(s) is a person who can represent the industrial interests for employees of the Employer.
(b) The Delegate(s) is first and foremost an employee and is therefore required to discharge their normal duties and obligations as an employee. Before leaving their normal duties to perform any delegate duties, the Delegate(s) shall first seek permission from the Employer. Such permission shall not be unreasonably withheld.
(c) The Employer will not subject any Delegate to any material disadvantage in his/her present employment or future employment opportunities due to them having performed the role of a Delegate on the Project.
(d) The Employer shall, where requested by the Delegate(s), provide him/her with reasonable facilities to produce and store electronic documents, photocopy a reasonable number of documents and send and receive documents via a facsimile or other electronic means, where the Employer possesses such a machine. Nothing in this subclause requires the Employer to supply the Delegate(s) with dedicated office space to perform their delegate duties.
(e) The Employer will, where it needs to consult with the Union and/or its employees, shall first consult with the appropriate Delegate(s), duly recognised by the Union(s).
(f) Where the Employer is involved in any industrial proceeding that involves a member(s) of the Delegate's Union, the Delegate(s) shall be entitled to attend those proceedings without deduction from their Ordinary Time Earnings.
(g) The Delegate(s) shall, upon application to the Employer, be permitted to take up to five (5) days of non-cumulative leave in any year to allow them to attend formal courses that promote the practice of sound industrial relations. (sic)
[9] The AMMA filed submissions on behalf of the various employers who had made the Agreements (except in relation to Casa Engineering (Brisbane) Pty Ltd Broadmeadow Sustaining Operations Project Union Greenfields Agreement (AG2012/850). The general thrust of the AMMA's submissions was that clause 21 of the Agreements does not define the term "employee representative" but merely creates another species of employee representative which should not be confused with and is distinguishable from the "employee representative" referred to in the dispute resolution procedure. The thrust of the submission is that I should read the expression "employee representative" in clause 17 of the Agreements broadly, and not by reference to clause 21 of the Agreements, which is headed "Employee Representatives" and which concerns employee representatives who are delegates of a union.
[10] While this construction is not without merit, it is not entirely persuasive. This is because clause 21 of the Agreements is not headed "Delegates" or "Role of Delegates". The clause is headed, instead, "Employee Representatives". Employee representatives, either as a wider or a differentiated group of representatives, are not otherwise defined in the Agreements.
[11] It appears to me to follow that an employee representative for the purposes of the dispute resolution clause is or will be likely to be taken to be a delegate of the relevant union who can represent an employee's interests industrially. In either case, I cannot be satisfied to the requisite degree as I must (see below) that the term in the Agreements about settling disputes allows for representation of all employees.
[12] I am further inclined to adopt this construction because there is compounding confusion as to representational functions elsewhere under the Agreements. In regards to the consultation procedures under the Agreements, which I discuss further below, representation for employees is only available by way of "employees' delegates".
[13] Returning to clause 21 of the Agreements, the construction I have preferred above gives rise to issues for the purposes of s.186(6)(b) of the Act.
[14] Section 186(6)(b) of the Act reads as follows:
(6) FWA must be satisfied that the agreement includes a term:
(b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.
Note 1: FWA or a person must not settle a dispute about whether an employer had reasonable business grounds under subsection 65(5) or 76(4) (see subsections 739(2) and 740(2)).
Note 2: However, this does not prevent FWA from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4).
[15] It appears to me in circumstances where an employee may only be represented in a disputes resolution procedure by a delegate of the union that the requirements of s.186(6)(b) of the Act could not be met. This is because an employee who is not a member of an employee organisation would not be able to avail themselves of the services of an employee representative (in the manner they are described under the heading "Employee Representatives" in clause 21 of the Agreements). That is, an employee who is not a member of the union would not be eligible for representation from the union and as a result would not be allowed representation under the dispute resolution process set out in the Agreements.
[16] Consequently, the disputes resolution procedure - because I am not satisfied that the procedure allows for the representation of employees by an un-prescribed kind of representative - cannot be taken to be a term that allows for the representation of all employees covered by the Agreements for the purposes of that procedure.
[17] It must follow, therefore, that the Agreements cannot be approved owing to the operation of s.186(1) of the Act, which reads:
(1) If an application for the approval of an enterprise agreement is made under section 185, FWA must approve the agreement under this section if the requirements set out in this section and section 187 are met.
[18] Nonetheless, s.190(1)(b) of the Act states that where FWA has a concern that an agreement does not meet the requirements set out in s.186 it may except undertakings for the purposes of s.190(2) of the Act.
[19] Each of the above cited Agreements also includes a consultation clause in the following general terms:
(a) The Employer shall advise, as soon as practical after making the decision, the employees' Delegate(s) (if a Delegate(s)exists) and the employees of:
(2) any action it intends to take likely to have a significant effect on employees.
(b) In discussing any significant change with its employees, the Employer will:
(1) explain the nature of the change and the reason(s) for it;
(2) discuss any impact this is likely to have on the employees;
(3) explain the steps it will take to minimise the impact of the decision on the employees;
(4) consider any issues/matters raised by the employees affected; and
(5) consider whether any issue/matter raised by the employees affects either its decision or the steps it will take to minimise the impact of the decision on the employees.
(c) After completing the step in subclause 23 (b) (5), if the Employer amends it's significant change proposal, it will repeat the steps set out in subclause 23 (b) at least once more. (sic)
[20] Section 205(1)(b) of the Act reads as follows:
Consultation term must be included in an enterprise agreement
(1) An enterprise agreement must include a term (a consultation term) that:
(b) allows for the representation of those employees for the purposes of that consultation.
[21] Each of the above cited Agreements stipulate that consultation will be extended to employees in their own discrete right and to Delegates (presumably as defined in clause 21 of the Agreements).
[22] Nowhere does clause 23 allow for the representation of employees other than by the employees' delegates. The employees' delegates are those representatives who are described at clause 17 of the Agreements under the heading "Employee Representatives". They are employee representatives who are delegates of the union which can represent the industrial interests of the relevant employees.
[23] Consequently, in my view, the requirements of s.205(1)(b) of the Act cannot be met as employees are only afforded representation by way of a delegate of a union, and not by a non-prescribed form of representation.
[24] Other than in relation to the two issues I have explored above, there are no other issues (other than what appear to be procedural issues - such as absent Form F21s and incomplete Form F20s which can be addressed on a case by case basis) that create an obstacle to the approval of the Agreements as cited.
[26] But the situation is somewhat more complicated in relation to the deficiency identified in relation to the consultation term.
[27] The submissions of the AMWU, supported by the CFMEU and CEPU, contended that it is only in circumstances when an enterprise agreement does not include a consultation term that the model consultation term is taken to be a term of the agreement. Demonstrably, the AMWU argued, the Agreements subject to consideration all include a consultation term and any deficiency should be cured by way of an undertaking under s.190 of the Act:
The AMWU strongly submits that the model consultation clause should not be adopted. It is not the case that the Agreements do…'not contain a consultation clause' as set out under section 205(2) of the Act. There is a consultation clause in each Agreement. The AMWU submits that an Undertaking which satisfies section 205(1)(b) is the most appropriate means of rectifying any concern in relation to section 205(1)(b).
[28] This line of argument is not without its difficulties.
[29] The AMWU contended that in the absence of deeming the model consultation clause, FWA should accept an undertaking from the relevant employers as to the operation of the consultation clause. But s.190 of the Act, which concerns the circumstances in which FWA may approve an enterprise agreement with undertakings, only applies where the tribunal has a concern that an enterprise agreement does not meet the requirements set out in s.186 of the Act and s.187 of the Act. The requirement to have a consultation term arises in s.205 of the Act.
[30] It follows that a deficiency in relation to the consultation term cannot be cured by way of an undertaking under s.190 of the Act.
[31] Given that s.205(1) of the Act states that an enterprise agreement must include a consultation term, should an agreement therefore not be approved where its consultation clause is defective?
[32] Section 205 (1) of the Act states that "an enterprise agreement must include a term (a consultation term) that..." performs certain work as set out in s.205(1)(a) of the Act and s.205(1)(b) of the Act.
[33] A consultation term in an enterprise agreement which does not perform the statutorily required work set out in s.205(1)(a) of the Act and s.205(1)(b) of the Act would not be a consultation term for the Act's purposes.
[34] It appears to me, therefore, that on this approach s.205(2) of the Act rectifies or cures all errors and deficiencies in a consultation term in an agreement by way of enabling FWA to deem, in effect, the model consultation term in s.205(2) of the Act into the enterprise agreement (in substitution for the defective term). This construction, incidentally would allow s.205 to be read conformably with s.190 of the Act.
[35] On the basis of this reasoning, I will act in accordance with s.205(2) of the Act and the model consultation term as set out in Schedule 2.3 of the Fair Work Regulations 2009 will be taken to be a term of the agreement.
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