Fair Work Act 2009

s.236 - Majority support determination

[1] The Transport Workers' Union of Australia (TWU or the Applicant) is seeking a majority support determination pursuant to s.236 of the Fair Work Act 2009 (the Act) in relation to the employees of Broadspectrum (Australia) Pty Ltd (Broadspectrum or the Respondent) working in Western Australia in the Respondent's Court Security and Custodial Services (CS&CS) operations.

[2] Broadspectrum opposes the application on the basis that it is not reasonable in all the circumstances to make the determination (see s.237(2)(d) of the Act) and in the alternative, that the group of employees was not fairly chosen to the extent that it includes Client Service Managers (CSMs) and those roles should therefore be excluded from any such majority support determination (see s.237(c) of the Act).

[3] The central facts of the matter are not in dispute.

[4] Evidence was given by Mr Costi, Broadspectrum's Employee Relations Manager for South Australia, the Northern Territory and Western Australia.

[5] Mr Costi's evidence was that Broadspectrum is a facility services business that operates throughout Australia. In 2015 it established a business unit which became known as the Justice Business Unit (JBU). Its remit was to secure and perform work in the corrections and detentions industry.

[6] Around May 2016 the JBU recruited four employees.

[7] In June 2016 Broadspectrum lodged a bid for a contract with the Western Australian Government Department of Corrective Services. That contract was for operations concerned with CS&CS. In October 2016 Broadspectrum was advised that their bid had been accepted and work associated with the resultant contract commenced around late March 2017.

[8] Broadspectrum sought to make an enterprise agreement with the four JBU employees that it had engaged. On 5 July 2016 these four employees voted in favour of making an enterprise agreement entitled the JBU Enterprise Agreement 2016 (the JBU Agreement).

[9] On 18 November 2016 Commissioner Riordan approved the JBU Agreement [[2016] FWCA 8209].

[10] This decision was appealed by United Voice.

[11] On 15 February 2017 a Full Bench of the Commission [ [2017] FWCFB 871], upheld the appeal on procedural fairness grounds, quashed the original decision approving the JBU Agreement and remitted the application for the agreement to be approved to Deputy President Kovacic for determination.

[12] On 31 March 2017 Deputy President Kovacic issued his decision [ [2017] FWC 1818], finding that the JBU Agreement was not genuinely agreed to as required by s.186(2)(a) of the Act because the employees who made the agreement were not covered by the agreement at the time it was made. Consequently the JBU Agreement was not approved and the application for approval was dismissed.

[13] Broadspectrum appealed the decision of Deputy President Kovacic.

[14] On 8 August 2017 a Full Bench of the Commission issued a decision [[2017] FWCFB 3202] refusing to grant permission to appeal. Consequently Deputy President Kovacic's decision to not approve the JBU agreement stands.

[15] On 7 September 2017 the TWU filed this s.236 application for a majority support determination.

[16] On 3 October 2017 Broadspectrum filed an application in the Federal Court for Judicial Review under s.562 of the Act.

[17] A Full Court of the Federal Court has listed Broadspectrum's application for hearing on 6 March 2018.

[18] The evidence of Mr Cutrali, who is an Organiser for the Applicant, is that he arranged for CS&CS employees to sign a petition supporting bargaining with the Respondent for an enterprise agreement. The petition was circulated and signed over a two-week period from mid-October 2017.

[19] The petition was signed by 223 Broadspectrum CS&CS employees. There are approximately 300 CS&CS employees.

[20] Broadspectrum did not contest the fact that a majority of these employees wish to bargain for a new agreement.

[21] Broadspectrum has not yet agreed to bargain.

[22] The group of employees who signed the petition is the group that the Applicant seeks to be covered by a proposed agreement to be negotiated with Broadspectrum.

[23] The evidence of Mr Costi is that there are 16 CSMs whom have signed the petition.

[24] His evidence is the CSM role is not the same as it was when Serco Australia Pty Limited (Serco), the previous contractor, had similar employees as supervisor under the Serco WA CS&CS & TWU Agreement 2015 [AE416207] (the Serco Agreement). He says that Broadspectrum has made the CSM role organisationally distinct from the Transport Officers by bringing them into the management team and offering the position as a salaried role. These roles are also structured to be outside the JBU Agreement because they are now managerial roles which reflect the changed way in which Broadspectrum is running the contract.

[25] Under cross-examination Mr Costi agreed that the CSMs are operational employees and that they work very closely at the various locations with the other employees.

[26] His evidence was that they are managers rather than supervisors and there is a supervisory level below the CSMs. The CSMs oversee rostering, have budget accountability, provide feedback to senior levels of management about the best modes of employment e.g. whether that is full-time or perhaps they need more part-time employees. They have responsibility for conducting performance management and have received training on this. They would not necessarily be a decision-maker for hiring and firing which would be signed off by the Contract Manager.

[27] The CS&CS employees are currently covered by the Corrections and Detention (Private Sector) Award 2010 [MA000110] (the Award) however they are also receiving all the additional benefits of the JBU Agreement other than some rosters which are not consistent with the Award.

[28] On the evidence the Commission should be satisfied that the majority of the Respondent's Western Australian CS&CS employees who will be covered by the agreement want to bargain.

[29] It is not in dispute that Broadspectrum has not yet agreed to bargain with these employees for an agreement.

[30] The group of employees who it is proposed will be covered by an agreement, the Western Australian CS&CS employees, are operationally and organisationally distinct from any other part of the Respondent's operations. This is a cohesive and readily identifiable group in relation to whom the Commission has previously approved enterprise agreements, for example the Serco Agreement.

[31] The Respondent's concern about CSM employees not being included in an agreement can be dealt with as part of bargaining for the proposed agreement. This is a very small group of employees who were covered by agreements with the previous contractor Serco.

[32] The Commission can and should be satisfied that the group of employees that is the subject of this application and whom will be covered by the enterprise agreement which the TWU and the employees want to negotiate with the Respondent, has been fairly chosen.

[33] As to the Respondent's position that it is not reasonable to make the majority support determination the Applicant submits that, there is presently no agreement that covers the employees and the desire of the majority of employees to bargain is an important consideration consistent with the Act.

[34] With respect to the Judicial Review lodged by the Respondent it should be noted that the circumstances the Respondent finds itself in is a consequence of its deliberate strategy to make an agreement with a small number of employees. The company could have at any time entered into negotiations with the TWU and its members for an agreement. In addition the Respondent lodged its application for Judicial Review three weeks after the TWU made this application for a majority support determination at which time it was seven weeks since the Full Bench had handed down its decision[1].

[35] The employees should not have to wait until possibly mid-2018 before they can commence bargaining with their employer simply because of a course of action the Respondent embarked upon which has failed to result in their preferred agreement being approved.

[36] If bargaining does commence and the Respondent has any concerns it can apply to the Commission if it is the case that the employees and/or the TWU are not bargaining in good faith.

[37] No weight should be given to the Respondent's commercial arrangements with the Western Australian Government. Those are matters for the Respondent and the Commission should not take these into account.

[38] The TWU submits the employees should not be paralysed because the Respondent's strategy to achieve an agreement has failed.

[39] The Respondent opposes the application on the basis that it is not reasonable in the circumstances to make the majority support determination and in the alternative that the group of employees was not fairly chosen to the extent that includes CSMs and those roles should therefore be excluded from any such determination.

[40] It is acknowledged that the employees want to bargain and so s.237(2)(a) of the Act has been satisfied.

[41] The course of action embarked on by the Respondent was nothing nefarious and seeking to make an enterprise agreement as it did was in no way inappropriate.

[42] The employees who signed the petition accepted their employment in March 2017 on the basis that the Respondent was seeking to have the JBU Agreement approved.

[43] The employees are currently enjoying terms and conditions which are superior to the Award.

[44] It is not reasonable that Broadspectrum be denied the opportunity to exhaust legal avenues of appeal in circumstances where it would be deleterious to the Respondent if a new agreement was imposed upon it by protected industrial action which would then prevent the JBU Agreement applying to the employees, by virtue of s.58 of the Act, if the Judicial Review is subsequently decided in the Respondent's favour.

[45] There has been no undue delay in seeking the Judicial Review and the Respondent was entitled to take a prudent amount of time to get that matter prepared and filed. With a hearing of the Judicial Review on 6 March 2018 the point under review will shortly be decided.

[46] The words in s.237(2)(d) of the Act must be given work to do in the context of s.237 as a whole and this is a case where it is indeed not reasonable for the Commission in the circumstances to issue a majority support determination.

[47] As to the question of whether the group of employees has been fairly chosen no evidence has been led as to this in the context of the Respondent's operations, as distinct from Serco's operations. The CSM role at Broadspectrum is distinct from the other roles and has been elevated to be part of the management team.

[48] For these reasons the Respondent submits the application should be dismissed.

[49] Section 237 of the Act sets out the circumstances in which the Commission must make a majority support determination.

"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

(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."

[50] Based on the evidence I am satisfied that as at the date of the hearing a majority of the employees working in the CS&CS operations who are currently employed by Broadspectrum and who will be covered by the agreement want to bargain with the Respondent for an agreement.

[51] I am also satisfied that Broadspectrum has not yet agreed to bargain or initiated bargaining for the agreement.

[52] A Full Bench of the Commission in Construction, Forestry, Mining and Energy Union v ResCo Training and Labour Pty Ltd [ [2012] FWAFB 8461] considered how the Commission is to determine whether a group of employees is fairly chosen as follows,

"[31] A useful discussion of the history and operation of legislative requirements relating to the coverage of agreements is contained in the Full Bench decision of Cimeco Pty Ltd v CFMEU and Others (Cimeco).

"[19] Given the context and the legislative history it can reasonably be assumed that if the group of employees covered by the agreement are geographically, operationally or organisationally distinct then that would be a factor telling in favour of a finding that the group of employees was fairly chosen. Conversely, if the group of employees covered by the agreement was not geographically, operationally or organisationally distinct then that would be a factor telling against a finding that the group was fairly chosen.

[20] It is important to appreciate that whether or not the group of employees covered by the 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.

[21] It is not appropriate to seek to exhaustively identify what might be the other relevant considerations. They will vary from case to case and will need to be demonstrated to the satisfaction of the tribunal. The word 'fairly' suggests that the selection of the group was not arbitrary or discriminatory. For example, selection based upon employee characteristics such as date of employment, age or gender would be unlikely to be fair. Similarly, selection based on criteria which would have the effect of undermining collective bargaining or other legislative objectives would also be unlikely to be fair. It is also appropriate to have regard to the interests of the employer, such as enhancing productivity, and the interests of employees in determining whether the group of employees was fairly chosen ..."

[33] In our view the scope of the Agreement is primarily a matter for the parties in the negotiation for an agreement. Enterprise agreements commonly cover sub-groups of employees in the workforce. Indeed it is very rare in our experience that all employees of a private sector employer would be covered by a single enterprise agreement. A common basis for differentiation is employees of a particular occupation or group of occupations that are considered to be sufficiently similar to warrant coverage under one agreement. We caution against the assumption that because an agreement does not cover all employees there are therefore grounds for challenging approval of the agreement on the basis that the coverage is unfair. It is likely that cases involving unfair coverage will not be common. The coverage clauses considered in Cimeco are not present in many agreements with respect to which approval is sought.

[34] Nevertheless as part of the approval process the tribunal needs to be satisfied that the group of employees covered by the agreement is fairly chosen by reference to the other classes of employee who might have been included in the agreement and the various classes who are included. In determining this question the tribunal is required to consider whether the group of employees is geographically, operationally or organisationally distinct. The inclusion or exclusion of a particular group may operate unfairly in one way or another and this will depend on a consideration of all the circumstances.

[35] In most enterprises there is unlikely to be only one fair manner of selecting the class of employees to be covered by an enterprise agreement. Different scope provisions may be equally described as fair in the sense that no manifest unfairness arises from their application. That is not to say that the parties may have a particular preference or view about the scope and favour a different formulation. The tribunal's task however is not to determine the scope clause. Its task is to guard against unfairness by being satisfied that the group can be described, in all the circumstances, as fairly chosen." (Reference omitted)

[53] The group of employees who will be covered by the agreement is all those employed on CS&CS operations under the contract Broadspectrum has with the Western Australian Government.

[54] This group of employees is not all of the employees of Broadspectrum. I am satisfied that this group of employees the Applicant has identified whom would be covered by the agreement is in this case operationally and organisationally distinct.

[55] The Commission's role as the Full Bench held above is not to determine the scope of the agreement but rather to guard against unfairness, by being satisfied that the group of employees who will be covered by the agreement can be described as fairly chosen. Is also well established that there may be a number of different groupings of employees that could each be said to have been fairly chosen.

[56] The Commission should guard against the impermissible conflation of issues for consideration in majority support determinations with those relating to scope orders.[2]

[57] The concerns Broadspectrum has raised about the CSMs being included in the group of employees to be covered by an agreement are concerns the parties can deal with in any negotiations for an agreement and if not resolved in the negotiation can be the subject of a s.238 scope order application to the Commission if need be. In all of the circumstances however these concerns do not in my view demonstrate that the group of employees who will be covered by the agreement were not fairly chosen.

[58] I am satisfied that the group of employees who would be covered by the agreement were fairly chosen.

[59] Broadspectrum submit the Commission should exercise the discretion it has under s.237(2)(d) of the Act to not make a majority support determination because it is not reasonable to do so in all of the circumstances.

[60] It is submitted that to make the majority support determination would deny Broadspectrum the opportunity to exhaust its legal avenues of appeal in its endeavour to have the JBU Agreement approved. The Respondent's concern is that if a determination is made this may lead to the employees taking protected industrial action in support of an alternative agreement. The Respondent may not be able to tolerate concerted protected industrial action and would have little choice but to accept an alternative agreement. If such an alternative agreement was then approved by the Commission before the JBU Agreement is approved this would prevent the JBU Agreement applying to the employees, as a consequence of s.58 of the Act. This would have negative consequences. The Respondent would bear the cost of protected industrial action and in all likelihood additional cost arising from an agreement that has terms inconsistent with the basis on which it entered into the contract with the Western Australian Government.

[61] Whilst Broadspectrum submit the Judicial Review, to be heard in early March 2018, will soon be determined there is no certainty as to when a decision on that will be issued. There is also no certainty that decision will be an end to the matter. There could be further legal proceedings whatever the outcome of the Judicial Review.

[62] Whilst the concerns Broadspectrum has are legitimate ones the context is that the difficulties it has experienced to date in approving the JBU Agreement are not of the employees' making. It is not apparent why Broadspectrum's right to seek a judicial review should override the employees' right to seek a majority support determination. In my view there is no good reason why the employees' and Broadspectrum's respective rights to pursue particular courses of action should be interfered with instead of them being allowed to run their natural course. It is my view that in all the circumstances it is reasonable to make the determination and I will now do so.

[63] I will make a majority support determination as the Applicant has sought which will come into operation on today's date. A Determination [PR598415] to that effect will now be issued in conjunction with this decision.

[1] Broadspectrum Limited t/a Broadspectrum v United Voice [ [2017] FWCFB 3202].

[2] Alcoa of Australia Limited v Construction, Forestry, Mining and Energy Union [2015] FWCFB 1832 at [30].

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