[1] On 8 January 2010 Leane Electrical Pty Ltd (Leane) lodged an application for approval of the Leane Electrical Pty Ltd Enterprise Agreement 2009-13 (the agreement), pursuant to section 185 of the Fair Work Act 2009 (the Act). The application was referred to me for consideration.

[2] On 21 January 2010 I issued preliminary findings in which I detailed a number of questions about the process followed to reach the agreement. These preliminary findings also made reference to correspondence received from the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) to the effect that the CEPU had members who would be covered by the agreement and disputed the extent to which the process followed was consistent with the requirements of the Act. My preliminary findings invited Leane to request a hearing or to provide written material in response to these issues.

[3] Leane elected to provide written information. In addition, the CEPU provided further material detailing its concerns with the agreement making process. Having considered all of this material, I determined that a hearing was required.

[4] The matter was subsequently considered at a hearing on 15 February 2010. At this hearing Leane was represented by Mr Sims, and by Ms Collins of the National Electrical Contractors Association. The CEPU was represented by Mr Wilder. In addition to submissions and the provision of documents, some of which were provided to me in confidence, evidence was given by Mr Flayle, an employee representative on the Leane Enterprise Bargaining Agreement Committee (the employee committee). I have taken all of the material before me into account in reaching a conclusion on this issue.

[5] The background to the matters in dispute is significant.

[6] Leane has some 32 employees proposed to be covered by the agreement. On about 17 July 2009 Leane issued three notices to each employee. The first of these states:

"Now that we are entering an official bargaining period in respect of our 2009 to 2013 enterprise agreement, we are required under the new fair work Australia Legislation to provide you with the following documents:

Please complete the Representational Rights form by Friday the 24th of July and return to our office. Your enterprise committee is currently representing you and if you are happy for them to continue, please add "Enterprise Committee" and sign and date the form.

Please contact me should you need to discuss this in any way.

[7] I have referred to this advice as the "covering advice".

[8] Attached to this covering advice was the notice of employee representational rights in the form specified in Schedule 2.1 of the Fair Work Act Regulations 2009. Also attached to this covering advice was the following pro forma advice:

I, _________________________ confirm that I have received notice of my representational rights in relation to the Leane Electrical Pty Ltd Enterprise Agreement 2009.

I confirm that I do not wish to be represented in bargaining by my union. Instead, I choose to appoint __________________________ as my bargaining representative.

Signed _____________________________

Date _______________________________"

[9] I have referred to this as the "revocation instrument".

[10] Each of the 32 Leane employees returned this revocation instrument. Leane acknowledges that it had asked various employees to return this form but advises that it did not require employees to complete the form so as to preclude them from utilising the CEPU as their bargaining representative.

[11] With one exception, all 32 employees returned the revocation instrument and specified that they chose either the employee committee or nominated employee representatives as their bargaining representatives. In one case the revocation instrument was completed without the addition of a nomination as a bargaining representative. On the basis of the confidential information provided to me by the CEPU I am satisfied that at least three of the employees are members of the CEPU.

[12] The CEPU position is that these members were discouraged from retaining the CEPU as their bargaining representative. There is however, no evidence that supports this assertion.

[13] The Leane employee representatives on the employee committee subsequently met with the CEPU to discuss the agreement making process, but resolved to pursue agreement discussions with Leane management without further involving the CEPU.

[14] The agreement was subsequently negotiated and was put to a secret ballot and endorsed by a 28 to 1 majority.

[15] I am satisfied that the agreement itself meets the requirements of the Act, including the requisite "no disadvantage test".

[16] At issue firstly, is the standing of the CEPU. In this respect I am satisfied that the CEPU has members to be covered by the agreement and that in these circumstances it is appropriate to allow the CEPU to intervene in the approval process.

[17] Secondly, the CEPU argues that the agreement cannot be approved because the process surrounding the issuing of the notices of employee representative rights was seriously flawed and did not meet the requirements of the Act. I have considered this issue shortly.

[18] In the alternative, the CEPU argued that, if I was satisfied that the requisite agreement making process was followed such that the agreement could be approved, then any decision to approve the agreement should note that the agreement covers the CEPU on the basis that it was, for at least some time, a bargaining representative. Given the conclusion I have reached in this matter, it is not necessary that I deal with this last argument.

[19] Subsection 173(1) states:

Employer to notify each employee of representational rights

(1) An employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who:

(b) is employed at the notification time for the agreement.

Note: For the content of the notice, see section 174."

[20] Schedule 2.1 prescribes the form of this notice and Regulation 2.4 sets out how the notice is to be given to employees.

[21] I have considered the extent to which either of the two documents attached to this notice changed the character of the notice or the notice giving requirement.

[22] The covering advice is particularly significant in this respect, in so far as it asserts that Leane is legislatively obligated to provide to employees both the notice of employee representative rights and the revocation instrument.

[23] Section 174 of the Act specifies the content of the notice of employee representational rights. The CEPU is the default bargaining representative for member employees, but also this section explains that for the appointment of a bargaining representative, other than a default representative, an instrument of appointment must be provided to the employer.

[24] Section 178A deals with the revocation of the appointment of bargaining representatives in the following terms:

"178A Revocation of appointment of bargaining representatives etc.

(1) The appointment of a bargaining representative for an enterprise agreement may be revoked by written instrument.

(2) If a person would, apart from this subsection, be a bargaining representative of an employee for an enterprise agreement because of the operation of paragraph 176(1)(b) or subsection 176(2) (which deal with employee organisations), the employee may, by written instrument, revoke the person's status as the employee's bargaining representative for the agreement.

(3) A copy of an instrument under subsection (1) or (2):

(a) for an instrument made by an employee who will be covered by the agreement - must be given to the employee's employer; and

(b) for an instrument made by an employer that will be covered by a proposed enterprise agreement - must be given to the bargaining representative and, on request, to a bargaining representative of an employee who will be covered by the agreement.

(4) The regulations may prescribe matters relating to the content or form of the instrument of revocation, or the manner in which the copy of the instrument may be given."

[25] I note that the regulations do not provide further guidance in this regard.

[26] Section 188 states:

"188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if FWA is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);

(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees."

[27] I have concluded that, whilst Leane may not have intended to do so, the material sent out to employees on 17 July 2009 fundamentally changed the character of the notice of employee representational rights. The covering advice required employees to complete the revocation instrument. This covering advice gave employees the option of identifying a bargaining representative. However, the revocation instrument left employees with no choice other than to select a representative different to the CEPU in order to comply with the employer requirement that the revocation instrument be completed and returned.

[28] Had the covering advice simply attached the revocation form as an option for employees to complete, I would have arrived at a different conclusion, but it is the mandatory nature of the requirement to return a form which relinquishes union representation that causes primary concern.

[29] In reaching this conclusion, I have noted that there is no evidence of coercive behaviour on the part of the employer, or the employee committee representatives, and it is simply the documentation provided to employees that causes concern. The Act is quite specific in terms of the necessary requirements for information to be provided to the employees to set out their rights to access a representative of their choice. I consider that documentation which qualifies these rights causes concern that these requirements have not been met. As a result, I am not satisfied that, in terms of section 188 (c), the necessary representational rights had been specified to employees in an appropriate written form. Accordingly, I am not able to approve the agreement.

[30] If Leane and its employees repeat the agreement making process, new notices of employee representational rights will need to be issued. I have noted the agreement was endorsed by a very substantial majority, and it may well be that an identical agreement is again presented for approval in the near future.

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

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