Fair Work Act 2009

s.185 - Application for approval of a single-enterprise agreement

Application for approval of a single-enterprise agreement - standing of union to be heard in relation to Application.

[1] On 4 August 2017, Neptune Diving Services Pty Ltd (NDS) filed an application (Application) with the Fair Work Commission (FWC) pursuant to section 185 of the Fair Work Act 2009 (Cth) (FW Act) for the approval of the NDS Inshore Diving Enterprise Agreement 2017 (Proposed Agreement).

[2] On 11 August 2016, the FWC received correspondence from the Maritime Union of Australia (MUA) advising of its interest in this matter, and requesting a copy of the Form F16, Form F17 and Notice of Employee Representational Rights (NERR) filed by NDS. The MUA were subsequently provided with these documents on 17 August 2017.

[3] On 25 August 2017, the MUA advised the FWC that it seeks to be heard in relation to the Application, and filed a Form F18 stating that it objects to the approval of the Agreement.

[4] In correspondence to the FWC on 21 September 2017, the NDS asserted that, as it was not a bargaining representative for the Proposed Agreement, the MUA does not have a right to be heard in relation to the Application.

[5] On 3 October 2017, the parties were issued with directions (First Directions) which required NDS and the MUA to file submissions in respect of the MUA's standing to be heard in relation to the Proposed Agreement. On 10 October 2017, the MUA filed its submissions in accordance with the First Directions. A revised Form F18 was also filed, which asserted that the MUA was a bargaining representative for the Proposed Agreement pursuant to section 176(1)(b) of the FW Act.

[6] To assist the FWC to determine whether the MUA was a bargaining representative, the MUA was directed to file with the FWC on a confidential basis the membership records of members potentially covered by the Proposed Agreement (MUA Confidential List). NDS was directed to file with the FWC on a confidential basis a list of the names of the employees proposed to be covered by the Proposed Agreement (NDS Confidential List). This MUA Confidential List and the NDS Confidential List were made the subject of a Confidentiality Order in PR597187.

[7] On 27 October 2017, the parties were advised that a review of the MUA Confidential List and the NDS Confidential List revealed no commonality.

[8] Pursuant to the First Directions, the MUA requested the opportunity to make additional oral submissions. These submissions were heard on 10 November 2017.

[9] The MUA seeks permission to be heard as full participants in the matter. NDS objects to the MUA being heard in any capacity.

[10] There are four potential avenues by which an employee organisation might establish standing to be heard in relation to an application for approval of an proposed agreement:

(a) As a bargaining representative of one or more employees to be bound by the proposed agreement.[1]

(b) As a matter of procedural fairness if the employee organisation is able to establish a right, interest or legitimate expectation that it will be adversely affected by the decision.[2]

(c) If invited by the Commission in the exercise of its power under section 590 of the FW Act to inform itself.[3]

(d) On appeal, if the employee organisation can show a grievance, which will be suffered as a result of the decision complained of, beyond that of an ordinary member of the public.[4]

[11] The fourth avenue is only available on appeal and not at first instance. The fact that an employee organisation may have a right of appeal against a decision to approve an enterprise agreement does not of itself create a right to be heard in relation to the Application at first instance.[5]

Right to be Heard as a Bargaining Representative

[12] At the hearing held on 10 November 2017, the MUA indicated that, in light of the lack of commonality between the MUA Confidential List and the NDS Confidential List, the MUA no longer pressed a right to be heard as a bargaining representative.

Right to be Heard as a Matter of Procedural Fairness

[13] As a matter of procedural fairness, standing may be granted to an employee organisation who is not a bargaining representative if the organisation can identify a right, interest or legitimate expectation that might be affected, or potentially affected, by the decision to approve an agreement.[6]

[14] Whether an employee organisation which is not a bargaining representative has a right to be heard in relation to an application for approval of a proposed agreement will depend on the circumstances in each case.[7]

[15] The following rights have been held not to be sufficient to attract the right to be heard:[8]

• Right to represent industrial interests.

• Right for employees to be members.

• Right to be involved in bargaining for a successor agreement or right to advocate for improvements for the terms and conditions of employees in the industry more broadly.

• Right for an officer of the employee organisation who is a permit holder to investigate suspected contraventions of the FW Act or terms of a proposed agreement.

• Rights which the employee organisation has under OHS legislation to represent employees and protect employees' interests.

[16] In Construction, Forestry, Mining and Energy Union (CFMEU) v Collinsville Coal Operations Pty Limited [2014] FWCFB 7940 (Collinsville Case), the Full Bench made it clear that the mere fact that an employee organisation has an ongoing relationship with its members and is entitled to represent their industrial interests is not a sufficient basis to conclude that the approval of an enterprise agreement will adversely affect a right, interest or legitimate expectation of that employee organisation.[9]

[17] Even a history of representation and membership at the worksite has been held to be, of itself, not enough to create a legitimate expectation that would attract a right to be heard.[10]

[18] Similarly, the fact that an employee organisation has amongst its interests, objections or expectations that it will obtain and maintain reasonable employment conditions for its members is an insufficient basis to create a right, interest or legitimate expectation which would found a right to be heard in relation to an application.[11]

[19] However, in Construction, Forestry, Mining and Energy Union v MGI Piling (NSW) Pty Ltd and Ors [2016] FWCFB 2654 (MGI Piling Case), the Full Bench recognised that an employee organisation may have a right to be heard if the proposed enterprise agreement displaces or alters the rights and obligations of an employee organisation vis-à-vis the employees conferred by the agreement which the proposed agreement replaces.[12] .

[20] The MUA has sought standing to be heard as a matter of procedural fairness based on inter alia its long established history of industrial representation in the inshore diving industry and the right of NDS employees to be members of the MUA. The approval of the Proposed Agreement will not interfere with these rights. The MUA has not identified any circumstances which distinguish this matter from the circumstances which existed in cases such as the Collinsville Case and the MGI Piling Case where standing to be heard as a matter of procedural fairness was refused. Unlike the situation in DOF Management Australia Pty Ltd [2016] FWC 3792, the MUA have not demonstrated that approval of the Proposed Agreement displaces or alters any right, interest or legitimate expectation vested in the MUA. I am therefore not satisfied that the MUA should be granted standing as a matter of procedural fairness.

Invited to be Heard Pursuant to Section 590 of the FW Act

[21] The final avenue by which the MUA might have an opportunity to be heard in relation to the approval of the Proposed Agreement is via section 590 of the FW Act. The FWC may, in the exercise of its powers under section 590 of the FW Act, choose to hear from an employee organisation about the approval of an agreement even though the employee organisation may not otherwise have a right to be heard.[13]

[22] Section 590 of the FW Act confers on the FWC a broad power to inform itself in relation to any matter in such manner as it considers appropriate, including (but not limited to) by inviting oral or written submissions from a person or organisation, by taking evidence under oath or affirmation and by requiring a person to provide copies of documents or records.[14]

[23] The MUA are no strangers to the issues under consideration in this matter. The MUA have a long established history of industrial representation in the inshore diving industry and the industrial right to represent NDS employees who would be covered by the Proposed Agreement. As a consequence, they have a high degree of familiarity with the reference award, the work arrangements in the inshore diving industry, and enterprise agreement terms and conditions similar to those contained in the Proposed Agreement. The MUA can provide a perspective independent of the author and proponent of the Proposed Agreement (NDS), who have a commercial interest in the Proposed Agreement being registered.

[24] The MUA has identified potential issues in relation to whether the Proposed Agreement was genuinely agreed, whether the Proposed Agreement passes the BOOT, whether a valid NERR was issued, and whether employees eligible to participate in the ballot for the agreement were wrongfully excluded.

[25] The MUA assert that the Proposed Agreement could not have been genuinely agreed, and cannot pass the BOOT, because it contains terms which are inferior to the reference award. A preliminary assessment by the FWC corroborated the MUA's concerns about whether the Proposed Agreement passes the BOOT. Some, but not all, of the concerns raised by the MUA may be addressed by undertakings which have been proposed by NDS, but not all issues identified to date have been resolved. I am satisfied that the MUA may provide information relevant to my deliberations as to whether the BOOT is satisfied, whether any undertakings are appropriate, and whether the Proposed Agreement was genuinely agreed.

[26] The MUA also assert that employees eligible to participate in the ballot for the Proposed Agreement were wrongfully excluded from the ballot process. The particulars of this assertion have not been fully ventilated, as the appropriate forum for this is the substantive hearing. However, a different view in relation to eligibility to participate in the ballot might explain the lack of commonality between the MUA Confidential List and the NDS Confidential List. I am therefore satisfied that some inquiry into this issue ought to be made, and that the MUA are in a position to assist the FWC in this regard.

[27] While the MUA may be able to provide information in relation to the BOOT and the NERR in the form of written submissions, the issues of genuine agreement and the eligibility of employees to participate in the ballot are likely to require both the opportunity to lead witness evidence and cross-examine witnesses.

[28] By permitting the MUA to make submissions, lead any evidence which it does have and cross-examine witnesses, the FWC can properly inform itself in relation to the matters which have been raised and satisfy itself that the requirements for the approval of the Proposed Agreement have been fully met. If, as NDS assert, the MUA's concerns are without merit then this will be easily established by NDS in the substantive hearing of this Application.

[29] The FWC is required to ensure that the Proposed Agreement complies with the FW Act and the resolution of the concerns which have been identified should be conducted with transparency and appropriate rigor:

"Employee organizations with a legitimate interest in the industry and occupations covered by the Agreement may assist in the resolution of these issues of concern. In this way, a process involving open, diligent and comprehensive scrutiny should provide for the correct outcome, and also enhance the broader confidence in the Commissions enterprise agreement approval role."[15]

[30] In the particular circumstances of this matter, I am therefore satisfied that the MUA has established a basis upon which it should be invited to be heard. Thus, the MUA shall be entitled to appear and be heard in respect to the proceedings. The MUA shall be provided with an opportunity to ventilate the issues of concern that have been identified, and to call and cross-examine witnesses in relation to those issues. It is my view that a proper examination of these issues will assist the FWC in the discharge of its statutory function. The grant of standing is not intended, and shall not be used, to unreasonably delay the expeditious determination of the Application.

[31] Directions will be issued following this decision to provide for the final determination of the Application. The parties shall be at liberty to apply for such confidentiality orders they believe are appropriate in the circumstances.

A Pollock of Counsel for Neptune Diving Services Pty Ltd.

T Slevin of Counsel for the Maritime Union of Australia.

[1] Fair Work Act 2009 (Cth), section 176(1) and Construction, Forestry, Mining and Energy Union (CFMEU) v Collinsville Coal Operations Pty Limited [2014] FWCFB 7940 at [16].

[2] CFMEU v Collinsville Coal Operations Pty Limited [2014] FWCFB 7940 at [72].

[4] Tooheys Ltd v Minister for Business and Consumer Affairs [1981] FCA 121; (1981) 36 ALR 64; CEPU and AMWU v Main People Pty Ltd [2014] FWCFB 8429; Construction, Forestry, Mining and Energy Union (CFMEU) v Collinsville Coal Operations Pty Limited [2014] FWCFB 7940 at footnote 13; and Inco Ships Pty Ltd v The Australian Institute of Marine and Power Engineers and The Australian Maritime Officers' Union [2016] FWCFB 3370 at [15].

[5] Inco Ships Pty Ltd v The Australian Institute of Marine and Power Engineers and The Australian Maritime Officers' Union [2016] FWCFB 3370 at [15].

[6] CFMEU v Collinsville Coal Operations Pty Limited [2014] FWCFB 7940 at [53] and [72].

[12] CFMEU v Collinsville Coal Operations Pty Limited [2014] FWCFB 7940 at [71] and Construction, Forestry, Mining and Energy Union v MGI Piling Pty Ltd and Ors [2016] FWCFB 2654 at [19].

[13] CFMEU v Collinsville Coal Operations Pty Limited [2014] FWCFB 7940 at [75].

[14] Fair Work Act 2009 (Cth), section 590.

[15] Inco Ships Pty Ltd [2016] FWC 1637 at [25].

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