Fair Work Act 2009

s.185 - Enterprise agreement

Teys Australia Southern Pty Ltd T/A Teys Australia Wagga

Application for approval of the Teys Australia Wagga Production Employees Agreement

• [1] An application has been made by Teys Australia Southern Pty Ltd (the Employer) pursuant to s 185 of the Fair Work Act 2009 (the Act) for approval of a single enterprise agreement known as the Teys Australia Wagga Production Employees Agreement (the Agreement).

• [2] Apart from concerns I raised with the Employer which have been addressed through undertakings later discussed, the Australasian Meat Industry Employees Union, a bargaining representative for the Agreement notified the Commission that it opposes approval of the Agreement on the following grounds:

• The dispute resolution procedure in the Agreement does not comply with the requirements of s 186(6) of the Act;

• The ordinary hours of work clause 13 may conflict with s 62 of the Act; and

• Signatures on the agreement purport to be employee representatives.

• [3] The AMIEU submits that the dispute resolution procedure at clause 33 does not meet the requirements of s 186(6) of the Act for two reasons. First, because the drafting of clause 33 means that it is confined to the resolution of disputes arising between individual employees and the Employer and does not provide for the settlement of disputes arising between an employee organisation and the Employer. The AMIEU states this is apparent from the definition of "you and your" as an employee at clause 2 and the language "if you ever have a complaint" and "in the first instance, please talk to your immediate Supervisor". The Employer submits this concern is unfounded, pointing to a number of agreements which have been approved by the Commission which have not made express references to employee organisations and the employer in their dispute settlement clauses. The Employer submits that the decisions referred to by the AMIEU, Energy Australia Yallourn Pty Ltd v AMWU[1] and CFMMEU v Mechanical Maintenance Solutions Pty Ltd[2], insofar as they are concerned with dispute resolution clauses in agreements, are concerned with the proper interpretation and application of such clauses, not any specific drafting requirements, and establish that such clauses must be read and applied as allowing for the settlement of disputes between employee organisations and an employer.

• [4] I agree with the Employer's contention as to the issue considered by the Full Court in Energy Australia and in Mechanical Maintenance Solutions but that is not the end of the matter. In Energy Australia the Full Court expressed the following view about the scope of the intended requirement imposed by s 186(6):

Clearly enough, the literal phrasing of each of par (3) of the model term and steps 1 and 2 in cl 28.1(a) is apposite to cover a dispute that involves only the employer and one or more employees. However, both the model term and cl 28 are intended to provide, as s 186(6)(a)(i) requires, "a procedure that requires or allows [the Commission] ... to settle disputes ... about any matters arising under the agreement" (emphasis added). Therefore, a literal construction of cl 28 that precluded any of the five unions that are parties to the Yallourn agreement from initiating a dispute about a matter arising under it for which it has a workplace right, would defeat the purpose which the first three paragraphs of cl 28 (preceding cl 28.1) and ss 186(6) and 341(1) required the dispute resolution process in the clause to serve.

. . . if the five unions themselves could never raise or pursue a dispute about their workplace rights, as employee organisations, covered by the Yallourn agreement within the meaning of ss 53(2), 172(1)(b) and 186(6)(a)(i), then cl 28 would not provide a procedure to settle a class of category 1 matters that could arise under the enterprise agreement. Accordingly, cl 28 would not comply with s 186(6).

Clause 28 itself defines category 1 matters as ones "that are in dispute, that go to the application or interpretation of this Agreement" and it states that it "facilitates access to [the Commission] for conciliation and, if necessary, arbitration" for those matters. The clause should be construed to ensure that it achieves that stated objective, and the requirements of s 186(6), in respect of all category 1 matters. [3] [Emphasis in the original]

• [5] The workplace rights of the organisations to which the Full Court is referring in the passages above, include the right to apply to the Court for an order under s 540(2) in relation to a contravention of, among others, s 50 - the prohibition on a person contravening a term of an enterprise agreement, or s 323(1)(a) - requiring an employer to pay an employee in full the amounts due to him or her in relation to the performance of work.

• [6] Moreover, the Full Court add that if the agreement there in issue was to be construed as not allowing an employee organisation covered by it to raise a dispute about the operation of the agreement:

. . . then the Yallourn agreement could not comply with s 186(6) because it would not:

provide[] a procedure that requires or allows the [Commission], or another person who is independent of the employers, employees or employee organisations covered by [it] to settle disputes ... about any matters arising under the agreement.[4] [Emphasis in original]

• [7] Thus, as here, where an agreement, when approved, will cover an employee organisation because it has given the requisite notice under s 183 of the Act, the dispute settlement term of the agreement must accommodate the organisation raising relevant matters under the procedure. If it cannot do so, then as the Full Court noted, such an agreement could not comply with s 186(6).

• [8] Section 186(6) of the Act requires an agreement to contain a dispute resolution procedure. The procedure must have two elements. First it must allow the Commission or a person independent of persons covered by the agreement to settle disputes about matters arising under the agreement and in relation to the National Employment Standards. Second, it must allow for the representation of employees covered by the agreement for the purposes of the procedure. Clause 33 of the Agreement contains both elements but does not contemplate employee organisation-initiated dispute. A literal construction of clause 33 would confine its operation only to disputes initiated by employees covered by the Agreement, and not by the Employer or an employee organisation covered by it. The AMIEU will have the same workplace rights vis-à-vis the Agreement as those identified by the Full Court in Energy Australia. If clause 33 does not permit the AMIEU to initiate disputes, then the Agreement will not contain a dispute settlement term as required by s 186(6). True it is that if a dispute settlement provision of an agreement can properly be construed as containing the requisite features, then satisfaction as to the requirement in s 186(6) may be achieved. In that respect however, in the instant case, it is only by reading words into the provision which are not there that the clause could have the effect of including the AMIEU. That is not the role of the Commission in dealing with an approval application.

• [9] The relevant question is whether I am satisfied that the requirement, relevantly in s 186(6), is met. I am concerned that it is not met by reason of the narrow operation of clause 33 discussed above. I will allow the Employer an opportunity to provide an undertaking which meets my concern.

• [10] The decisions of the Commission to approve agreements which the Employer contends contain provisions which are similar to clause 33 of the Agreement and which the Employer has referenced are of little assistance. The decision in the Shanks Electrical Pty Ltd Enterprise Agreement 2022-2026[5] did not concern an agreement that covered or would cover an employee organisation and so the involvement of an organisation in the dispute settlement procedure was not required. The decision in The Cake Syndicate Pty Ltd (trading as Susan Day Cakes) Enterprise Agreement 2021-2024[6] concerned a dispute settlement term which was materially different. The provision allows for dealing with disputes by following a particular procedure therein set out and is not confined to the initiation of the dispute by employees as is plainly the case with clause 33. Moreover, the provision allows for "either the employer or the employee, or a representative of the employee" to refer a dispute to the Commission. The provision in the Cake Syndicate case was in all material respects in the same form as that considered in Energy Australia. In contradistinction, clause 33 is confined to circumstances if "you [an employee] ever have a complaint".

• [11] The decision in the Hilton Foods Australia Pty Limited Truganina Victoria and the Australasian Meat Industry Employees' Union Agreement 2021[7] concerned a dispute settlement clause which provided for the process for resolving disputes including, relevantly, that the dispute "will, where possible, be discussed by the affected team member and their Team Leader". The clause was not confined to the subject matter of the dispute as being able only to be agitated by an employee.

• [12] The decision in the Inghams Enterprises (Lisarow) Enterprise Agreement 2021[8] does not in terms confine the initiation of disputes under the procedure to employees. There is a difference between steps in a procedure which contemplate some discussion between an employee and a supervisor or higher management on the one hand, and the terms of the dispute settlement procedure confining the initiation of a dispute to employees only. In the Peerless Holdings Pty. Ltd. and the Australasian Meat Industry Employees Union (Evans Street) Enterprise Agreement 2022 decision[9], clause 1.3 of that agreement described persons who are covered by the agreement as "parties" bound. Clause 6.1 of the agreement did not confine the terms in which a dispute might arise. It simply provided that "the event of a dispute in relation to a matter arising under this Agreement and or the National Employment Standards, in the first instance the parties will attempt to resolve the matter at the workplace by discussions". How such a dispute might arise is not confined to circumstances where an employee has a complaint. The parties therein referred to are the parties who are described to be bound by the agreement and who are also parties to the dispute that has arisen.

• [13] As for the decision in the Teys Beenleigh Production Employees Agreement[10] in which that agreement contains a provision which is identical to clause 33 of this Agreement, as is evident on the face of the decision, it concerned an uncontested application. And as is common with applications of that kind, satisfaction as to the various approval requirements is expressed in the decision as having been reached, without reasons for that conclusion. One cannot discern on the face of the decision, whether the issue which is here raised was considered, much less if it was considered, why the requisite state of satisfaction was nevertheless reached.

• [14] The AMIEU also submits that clause 33 does not meet the requirements of s 186(6)(b) of the Act to allow for the representation of employees covered by the agreement "for the purpose of that procedure" as it only provides that an employee is entitled to a representative "[a]t any of the meetings". The AMIEU submits the Commission cannot be satisfied the Agreement complies with s 186(6)(b) unless it allows an employee to be represented for all purposes of the procedure. The Employer rejects this contention, submitting the Agreement can be approved in its current form without undertakings. The Employer refers to an identical procedure contained in the Teys Beenleigh Production Employees Agreement[11] which was approved by the Commission in December 2021 without any objections being raised by the AMIEU, any concerns being raised by the Commission, or any Undertakings required.

• [15] As to the decision cited, the observations about that decision in [13] are apposite. That aside, the AMIEU's contentions are rejected. Clause 33 of the Agreement allows for representation at "any of the meetings". This is the only mention of "meetings" in clause 33. The five stages through which disputes are to be progressed make no mention of meetings although talks with the various persons or bodies described therein might well qualify as meetings. In my view it is plainly the case that the reference to "any of the meetings" is a reference to the various stages through which the dispute must be progressed. Understood in this way, this aspect of clause 33 of the Agreement is consistent with the requirement in s 186(6)(b).

• [16] The AMIEU submits clause 13 conflicts with s 62 of the Act, which provides that the maximum weekly hours of work for full-time employees is 38 hours per week, by stating that ordinary hours are up to 40 hours in any one week. The AMIEU argues this cannot be the case as the additional 2 hours worked are subject to an employee's right to refuse additional hours under s 62(3) of the Act. The AMIEU further submits paragraph 3 of clause 13, which provides that only work outside 40 hours will be paid overtime or penalty rates, conflicts with s 62. The Employer submits clause 13 is not contrary to s 62 of the Act for the following reasons:

• the first paragraph of clause 13 makes it expressly clear that if an employee is working a 40 hour roster, that roster will be comprised of 38 ordinary hours and "two reasonable additional hours";

• nothing in the Act compels an employer to pay overtime rates if an employee works more than 38 hours per week, rather the obligation to pay overtime after 38 hours is imposed by the Meat Industry Award 2020 and employees will be better off overall under the Agreement; and

• the right to reasonably refuse additional hours is maintained by the NES precedence clause.

• [17] The AMIEU's contention about clause 13 is rejected. Clause 13 provides that standard ordinary working week will be a 38 or 40 hour week and that a 40 hour week is made up of 38 ordinary hours and two reasonable additional hours. Nothing in the provision removes an employee's right to refuse to work the additional two hours if those hours are not reasonable additional hours when considered in light of the matters that must be taken into account for the purposes of determining whether the additional hours are reasonable or unreasonable in s 62(3) of the Act.

• [18] Following a Mention before me on 11 April 2022, the AMIEU confirmed it no longer presses its objection relating to the Agreement's signature page.

• [19] As noted earlier, the Employer has provided written undertakings in response to other concerns raised in my review of the Agreement. The undertakings are currently the subject of consultation with known bargaining representatives, and I am presently satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement. If accepted the undertakings will be taken to be a term of the Agreement.

• [20] Subject to the undertakings referred to above, I am presently satisfied that each of the requirements of ss 186, 187, 188 and 190 as are relevant to this application for approval have been met save for the s 186(6) requirement.

• [21] The AMIEU being a bargaining representative for the Agreement, has given notice under s 183 of the Act that it wants the Agreement to cover it. If I approve the Agreement, then in accordance with s 201(2) I will note in the approval decision that the Agreement covers the organisation.

• [22] I will allow the Employer a period of 7 days from the date of this decision to provide an additional undertaking to meet my concern about the requirement in s 186(6). Before providing any written undertaking, I require the Employer to consult the known bargaining representatives and to advise my chambers as to the outcome of that consultation.

[2] [2019] FWCFB 3585.

[5] [2022] FWCA 1166

[6] [2022] FWCA 1100

[7] [2022] FWCA 1092

[8] [2022] FWCA 695

[9] [2022] FWCA 554

[10] [2021] FWCA 7187

[11] [2021] FWCA 7187.

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