PR938967 AG828965 PR938967 Download Word Document AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION Workplace Relations Act 1996 s.170LJ certification of agreement Coles Myer Logistics Pty Ltd and Shop, Distributive and Allied Employees Association (AG2003/7407) COLES MYER LOGISTICS FOREST LAKE - CERTIFIED AGREEMENT 2003 Wholesale and retail trade COMMISSIONER RICHARDS BRISBANE, 8 OCTOBER 2003 Certification of Division 2 agreement with organisation(s) of employees - consideration as to whether clause 45 and Appendix A of the agreement provides for "exclusive representation" of SDA and offends against Part XA "Freedom of Association" of the Act - consideration of clause 8 Grievance Procedure - undertakings by the parties for purposes of s.170LV(1) - Grievance Procedure provides for representation by non-union representative and union representative other than SDA despite face meaning of clause 45 - undertakings to be advised to all employees covered by the agreement - all employees and inductees to be informed of the meaning of clauses 8 and 45- diagrammatic representation of clause 8 at Appendix to be re-drawn and re-distributed on ground it may compound scope for misunderstanding - concern over compliance with s.170LT(5) of the Act re genuine consent - consideration of clause 45 for purposes of offending against s.170LU(2A) of the Act re promotion of union membership at point of "recruitment" - Commission considers Full Bench authority on discretion in relation to being `satisfied' pursuant to Division 4 of Part VIB and s.170LU(2A) by way of MSA Security Officers Certified Agreement [2003] (AIRC, 15 September 2003) - Commission cannot be satisfied on a "generalised" basis and without information or regard to statutory context - Act's Objects are directory and require it to "ensure" freedom of association, other objects refer to "assisting" and "encouraging"- Commission therefore has obligation to consider information relating to operation of agreement clauses and statutory context in relation to issues under s.170LU(2A) and whether they offend Part XA "Freedom of Association" - undertakings provided by parties - revised information to be provided to all employees covered by the agreement and persons being recruited and inducted - copy of undertakings attached to certification certificate. DECISION [1] This is an application to certify an agreement pursuant to section 170LJ in Division 2 of Part VIB of the Workplace Relations Act 1996 (Cth) (the Act). The agreement is known as the Coles Myer Logistics Forest Lake - Certified Agreement 2003. [2] The Commission has had the benefit of hearing submissions from Mr M Guymer of the National Retail Association, representing the Applicant in this matter, and from Mr L Gillespie of the Shop, Distributive and Allied Employees Association. The Commission has examined the statutory declarations of Ms Heidi Kaineder, Employee Relations Advisor - Logistics for Coles Myer Logistics Pty Ltd, and Mr Ian Blandthorn, Union Official of the Shop, Distributive and Allied Employees Association. [3] Whilst noting the discussion below at paragraphs [9] to [40], the Commission is satisfied that the agreement meets the relevant requirements of the Act and the Australian Industrial Relations Commission Rules 1998 . [4] The Commission is satisfied that the agreement has been entered into in a manner consistent with the Act's requirements: · the employees have been given the relevant notice of the intention to enter into an agreement or to make an agreement; · the terms of the agreement were explained in an appropriate way to all the employees who are to be covered by it; · the agreement has been approved by a valid majority of employees at the relevant time; · the application has been lodged within the time period prescribed by section 170LM(2)(a) of the Act; and · The Shop, Distributive and Allied Employees Association has members employed by Coles Myer Logistics Pty Ltd. [5] Coles Myer Logistics Pty Ltd also meets the jurisdictional threshold in section 170LI of the Act. [6] The Commission is satisfied that the agreement meets the No Disadvantage Test as defined in the Act. [7] The agreement contains the necessary dispute settlement procedure. [8] The agreement specifies a nominal expiry date in accordance with the Act's requirements. [9] At the time of hearing, the Commission raised two concerns with the parties in relation to section 170LU(2A) of the Act. The first of these related to whether or not the agreement provided for `exclusive representation'. [10] In this regard, his Honour Senior Deputy President Watson made the following observations in Re Toyota Motor Corporation Australia Limited 1 : " [6] Section 170LU(2A) provides: " Despite section 170LT, the Commission must refuse to certify an agreement if the Commission is satisfied that it contains provisions that: (a) require or permit, or purport to require or permit; or (b) have the effect, or purport to have the effect, of requiring or permitting; any conduct that: (c) would contravene Part XA (whether or not the provisions would in any case be void because of section 298Y); or (d) would, but for section 298C, contravene Part XA." " [7] The objectors' initially submitted that the agreement would result in discrimination in the terms and conditions of employment applied to its members. The terms of the agreement, however, require Toyota to apply the conditions within the agreement to all of its employees at Altona. Upon this being accepted by the objectors, their case was directed to the terms of appendix C of the proposed agreement, "Employee and Union Representation", and specifically the terms of clause 2.1 and the Problem Resolution and Disputes Avoidance Procedure in clause 4. " [8] Clause 2.1 provides: "The AMWU has sole union representation rights of all employees covered by this Agreement at the Toyota Manufacturing Site, encompassing all operations located on the site bounded by Doherty's Road, Grieve Parade, and Kororoit Creek, in relation to all matters comprehended by this Agreement". " [9] Clause 4 establishes a role for Employee Representatives within the Problem Resolution and Disputes Avoidance Procedure which, the objectors argued, limited their rights to representation in the disputes procedure to the AMWU in the context of clause 2.1. " [10] The objectors submitted that these provisions contravened Part XA of the Act, and in particular, s.298K(1)(b). Section 298K includes: "(1) An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, to all threatened to any of the following: .... (b) injure an employee in his or her employment." " [11] Section 298L includes: "(1) Conduct referred to in subsection 298K(1) or (2) is for a prohibited reason if it is carried out because the employee, independent contractor or other person concerned: .... (b) is not, or does not propose to become, a member of an industrial association." " [12] The objectors submitted that clause 2.1 and the Problem Resolution and Disputes Avoidance Procedure of the agreement requires conduct which injures employees, not members of the AMWU, in that they were deprived by the agreement of representation by a person of their choice in relation to all matters comprehended by the agreement. " [13] The AMWU and Toyota submitted that clause 2.1 and the Problem Resolution and Disputes Avoidance Procedure of the agreement did not require conduct in breach of Part XA of the Act. It was submitted by them the clauses complained of did not restrict the rights of employees to join, or not to join, an organisation " [14] Toyota submitted that the relevant clauses did not injure any employee in their employment. It submitted that it is necessary for the Commission to be satisfied that there existed an injury to employees resulting from a provision of the agreement. It submitted that there was no evidence of such an injury. In its submissions, Toyota also relied on the historical basis of clause 2.1 of Appendix C, specifically the 1991 Heads of Agreement between Toyota Japan, the Australian Council of Trade Unions, and various unions which provided for single union coverage of the Altona site. This agreement was said to be critical in securing the $500,000,000 investment by Toyota Japan in the Altona manufacturing operation and subsequent investments of similar magnitude. Decision on the Objection of Spencer, Strong and Allen " [15] In deciding this issue, I have had regard to the submissions of the parties, to the terms of the Act, including the objects of Part XA and decisions brought to my attention by the objectors [ The Employment Advocate and P. R. Dawson & Sons Pty Ltd Enterprise Agreement 1997-2000 and others, decision of McIntyre VP (Print Q6068) and CSR Humes Welshpool Agreement 1998 , decision of Laing C (Print R2803)], and a further decision raised with the parties during the course of proceedings [ Clout Engineering Fabrication and Mechanical On-site Construction Enterprise Agreement for New South Wales 1998/9 , decision of Munro J (Print Q7710)] " [16] Whilst I accept and apply the approach of Munro J to the determination of matters of the kind which arise in the present matter, the specific provision considered by His Honour in that matter is of a different form and effect to clause 2.1 in the Toyota agreement. As such, the decision of Munro J provides no direct guidance in respect to clause 2.1. " [17] The provisions considered by McIntyre VP and Laing C are, in my view, directly comparable to clause 2.1 in the Toyota agreement. In the former case the relevant clauses afforded exclusive representation of eligible employees to the union party to the agreements (albeit in relation to matters concerning wages, hours and conditions more generally, rather than in relation to matters comprehended by the agreement). In the latter case, the disputes settlement procedure provided exclusive representation by the union party to the agreement for purposes of that procedure. " [18] In his decision, McIntyre VP concluded that the clause contravened Part XA and he observed as follows: "I have come to the conclusion that (the above) clause 17.2 is an objectionable provision because it requires or permits etc conduct that would contravene Part XA. It requires or permits etc various types of conduct. One example is sufficient. Clause 17.2 requires or permits etc the employer to recognise the CEPU as the exclusive representative of employees who are not members of the CEPU in matters concerning those employees' wages, hours, and working conditions. This conduct by the employer would, in my view, injure such employees in their employment (s.298K(1)(b)) because they are not members of an industrial association (s298L(1)(b); namely the CEPU. : " [19] Laing C concluded: "While it is also argued that the agreement is between the employer and the preferred eligible organisation and the employees are thereby only indirectly involved, it remains a fact that the employees are unable to access their representation of choice if they find themselves in the disputes resolution process. The valid majority argument cannot be sustained in the face of the specific requirements of Part XA. While it does not affect the employees' rights to be a member of one organisation as opposed to another it does limit their entitlements to representation in recognition of the particular role the organisation has under the s.170LJ agreement." " [20] In my view, a similar conclusion arises in relation to clause 2.1 in appendix C of the Toyota Agreement. Whilst clause 2.1 does not affect the rights of employees to join, or not join an organisation of their choice, the provision of exclusive representation of employees to the AMWU, does restrict their rights to representation in relation to any matters comprehended by the Agreement, including rights in relation to the Problem Resolution and Disputes Avoidance Procedure. In my view this restriction injures employees who are not members of the AMWU in the sense intended by s.298K(1)(b). " [21] Toyota relied in its submissions on the historical background of the proposed clause 2.1. This background does not assist its position in respect of the operation of s.170LU(2A) and Part XA of the Act. Section 170LU(2A) provides that if an agreement contains provisions requiring, or permitting, or purporting to permit (or having such effect), conduct contravening Part XA of the Act, the Commission must not certify the agreement. If such a contravention is found to arise from a provision of an agreement, as in the case in the present matter, the Act provides no scope for the Commission to consider whether the provision has a sound historical and/or continuing commercial, economic or other justification. The particular sections of the Act make no provision for public interest considerations as occurs, for example, in relation to a failure of an agreement to meet the no-disadvantage test [s.170LT(3 )]. Section 170LU(2A) and Part XA of the Act. Section 170LU(2A) provides no discretion to the Commission to have regard to the particular circumstances relied on by Toyota. " [22] Accordingly, I find that, pursuant to s.170LU(2A), but subject to S170LV, I must not certify the agreement, having regard to clause 2.1 of appendix C." [11] In view of this, the Commission queried clause 45 of the agreement in so far as it states that: "For the duration of this Agreement, Coles Myer Logistics Pty Ltd recognises the Shop, Distributive and Allied Employees' Association (Queensland Branch) Union of Employees as the Union that shall have the rights of representation of employees covered by this Agreement. This right to representation will extend to all terms and conditions of this Agreement ." (Emphasis added) [12] On the face of it, clause 45 is suggestive of a clause such as that considered by his Honour Senior Deputy President Watson, and which fell foul of Part XA of the Act. Appendix A, which is a diagrammatic representation of the Grievance Procedure, is of related concern, in that it is suggestive in its terms of "exclusivity" in relation to by whom an employee may be represented. [13] Upon discussion with the parties at the time of hearing, it was conceded that notwithstanding clause 45 and Appendix A of the agreement, employees, especially in relation to the operation of the Grievance Procedure at clause 8 of the agreement, were not restricted in their rights of representation under the agreement. That is, clause 45, if not in its words but in its operation, is not a clause that provides for the exclusive representation of the SDA in the manner that his Honour Senior Deputy President Watson found offensive to Part XA of the Act. [14] The reason for this was that the SDA and the Applicant's representative conceded that clause 8 enabled an employee to be represented by a person of his or her choice, and this need not necessarily be the union delegate (of the SDA 2 ) specified in the clause (or as represented in Appendix A to the agreement). [15] Clause 8 reads as follows: " GRIEVANCE PROCEDURE "Refer Appendix A; It is agreed that every endeavour will be made to amicably settle any grievance which may arise in the Distribution Centre by direct negotiation and consultation between the parties to this Agreement. It is recognised that from time to time, a need may arise where an employee may seek a support person to accompany them. To facilitate the settlement of any such grievance the following channel of communication shall apply: Should any matter arise that causes the employee concern, that employee shall raise the matter with the responsible line manager. If the matter is not settled to the satisfaction of the employee, within 24 hours of first raising the matter, the employee shall draw it to the attention of the elected delegate (where relevant). The matter shall then be discussed between the employee, the line manager and the elected delegate (where relevant). If not satisfactorily settled, within 7 days, the delegate (where relevant) shall approach the next level of management for further discussion. The matter shall then be discussed between the employee, the employee's line manager, the elected delegate (where relevant) and the next level of management. If the matter is still not resolved, within 7 days, the elected delegate (where relevant) shall advise the appropriate union official as nominated by the State Secretary of the Union. Discussions shall then be held between the nominated representative of the Company and the appropriate union official. The elected delegate, the employee and appropriate line manager may be involved at this level. If the matter is not settled it shall be submitted to the Industrial Relations Commission which will conciliate with the parties to resolve the issue, or failing settlement by conciliation, shall arbitrate to resolve the issue., "At all times, it is agreed that while the grievance procedure is in process, the status quo shall prevail and work will proceed normally." [16] In essence, the parties to the agreement confirmed that clause 8 of the agreement provides for any employee to be represented in the Grievance Procedure, and more generally still, by any person whether they be a member or a union or not, and whether they be a delegate or a member of the SDA or not. That is, despite clause 45 and Appendix A, the role of the SDA delegate arises only where it is " relevant ", that is, where it is requested. [17] The Commission directs that the parties to this agreement notify in writing all the employees who are covered by this agreement, and include in future induction documentation, the explanation of clause 45 of the agreement. This is necessary for reason that this explanation of clause 45 is not immediately evident on its reading. Appendix A of the agreement only compounds the scope for misunderstanding by employees. [18] The Commission is concerned that in the absence of this explanation it is open to question whether the Act's requirements, particularly in relation to genuine consent 3 , have been given effect. Section 170LT(5) of the Act is in the following terms: " 170LT Certifying an agreement "(1) If an application is made to the Commission in accordance with Division 2 or 3 to certify an agreement, the Commission must certify the agreement if, and must not certify the agreement unless, it is satisfied that the requirements of this section are met. [...] "(5) If the agreement was made in accordance with section 170LJ or Division 3, a valid majority of persons employed at the time whose employment would be subject to the agreement must have genuinely approved the agreement. " (Emphasis added) [19] That is, in order that agreement making be "fair and effective ", as section 3(e) of the Act in part requires the Act to provide , a valid majority of employees must genuinely approve the agreement in question. This much has been determined by Vice President Ross in Re Grocon Pty Ltd Enterprise Agreement (Victoria) 4 . [20] Consequently, the explanation to be given to employees about the operation of clause 45 of the agreement must be articulated in a clear and prominent manner. A re-drafted version of the diagrammatic representation of the grievance procedure at Appendix A must also be distributed, as it is also suggestive of a degree of exclusivity that clause 8 and clause 45 do not, on the submissions of the parties, purport to represent. [21] The parties have 28 days from the date of this Decision in which to provide this information to the workforce (of some 550 employees). A copy of the documentation in this regard should also be lodged with the Commission, upon its distribution to the workforce. [22] In relation to other matters, clause 45 of the agreement also reads: "It is the policy of the Company that it shall strongly recommend that all employees covered by this Agreement shall join the Shop, Distributive and Allied Employees' Association (Queensland Branch) Union of Employees. This includes positively promoting union membership at the point of recruitment and strongly recommending that all employees remain members of the Shop, Distributive and Allied Employees' Association (Queensland Branch) Union of Employees. "All new employees covered by this Agreement shall upon induction be given an application form to join the Shop, Distributive and Allied Employees' Association (Queensland Branch) Union of Employees and any appropriate literature provided by the Union." (Emphasis added) [23] Section 170LU(2A) of the Act reads: "(2A) Despite section 170LT, the Commission must refuse to certify an agreement if the Commission is satisfied that it contains objectionable provisions (within the meaning of section 298Z)." (Emphasis added) [24] Section 298Z of the Act relevantly reads: "[...] 298Z Removal of objectionable provisions from awards and certified agreements (5) An objectionable provision is: (a) a provision (however described) of an award or a certified agreement that requires or permits any conduct that would contravene this Part or that would (if Division 2 were disregarded) contravene this Part; or (b) a provision (however described) of a certified agreement that requires payment of a bargaining services fee. (6) For the purpose of determining whether a provision of an award or certified agreement is an objectionable provision, it does not matter whether that provision is void because of section 298Y. (7) In subsection (5): permits includes: (a) purports to permit; and (b) has the effect of permitting ; and (c) purports to have the effect of permitting. requires includes: (a) purports to require; and (b) has the effect of requiring ; and (c) purports to have the effect of requiring. [...]" (Emphasis added) [25] The statutory requirement that falls upon the Commission is that it be " satisfied " that a clause does not have " the effect of " either " permitting " or " requiring " a contravention of Part XA of the Act. [26] These matters have been subject to previous decisions of the Commission as currently constituted 5 . In these decisions, the Commission has previously expressed its concern as to whether or not particular clauses, which have operated at the sensitive point of recruitment, could give rise to a perception on the part of the person seeking to be employed (in this case in a Coles Myer facility) that membership of a union (the SDA in this case) may be a condition of employment, or otherwise advantage his or her prospects of employment relative to another (prospective) employee. [27] For purposes of exercising its discretion as to whether or not the Commission is " satisfied " in relation to section 170LU(2A) of the Act, the Commission must have regard to the statutory context in which that discretion is to be exercised, among other sources of information and evidence that may be before it 6 . That is, in essence, it is not possible for the Commission to be " satisfied " by reason of an assumption or a presumption alone. [28] This much was said by the Full Bench in its consideration of how the Commission is " satisfied " for reason of section 170LT(3) of the Act: "We think this statutory context, like the presence of the words "significant" and "important" in s.170MW (3)(b) 7 , indicate that the decision-maker must have some basis for his or her satisfaction over and above generalised satisfaction." 8 [29] Section 170LU(2A) of the Act is also a section within Division 4 of Part VIB of the Act. The statutory expressions of the discretion in sections 170LT and 170LU are virtually identical. The same obligation, therefore, falls upon the Commission in relation to the Commission being " satisfied " as to the " effect of " a provision in a certified agreement in relation to any contravention of Part XA. That is, a decision-maker, the Commission in this regard, cannot be satisfied in some generalised manner as to whether or not a clause in an agreement does or does not have the effect of permitting conduct in contravention to Part XA of the Act. The Commission must exercise its discretion based on the evidence before it about the intended operation of the clause or clauses in contention, in addition to having regard to the statutory context (which is examined below) in which that discretion must be exercised. [30] The above obligations fall upon the Commission in each instance in which it must exercise its discretion in relation to any matter - in this case section 170LU(2A) - that arises under Division 4 of Part VIB of the Act. [31] In respect of section 170LU(2A), the statutory context involves furthering the objects of the Act and Part VIB of the Act. In this regard the object of the Part, in section 170L of the Act, provides: "The object of this Part is to facilitate the making, and certifying by the Commission, of certain agreements, particularly at the level of a single business or part of a single business" [32] The relevant principal object of the Act contained in section 3 is: "The principal object of this Act is to provide a framework for cooperative workplace relations which promotes the economic prosperity and welfare of the people of Australia by: [...] (f) ensuring freedom of association, including the rights of employees and employers to join an organisation or association of their choice, or not to join an organisation or association;" [33] Importantly, Object 3(f) of the Act is directive in that it requires the Act to " ensure " freedom of association. This contrasts with a number of other objects, which are couched in less directive terms, such as " assisting " and " encouraging ". [34] The statutory context also provides that where the Commission has grounds under sections 170LT and 170LU for refusing to certify an agreement, the parties to the agreement may provide undertakings pursuant to section 170LV(1) in relation to the operation of the agreement. [35] Given the statutory context outlined above and the obligations that fall upon the Commission in relation to section 170LU(2A) of the Act in light of the decision of the Full Bench as discussed, the Commission must examine the operation of clause 45 of the agreement to ensure, beyond some generalised level of satisfaction, that it does not have the effect of permitting a contravention of Part XA of the Act. [36] There was nothing put to the Commission at the time of the hearing to enable it to exercise its discretion other than in some generalised manner, and then only on the basis of assertions from the Bar Table. [37] The parties consequently agreed to provide undertakings in relation to the operation of clause 45 so far as it related to the information and company policy position presented to persons who are seeking to be employed at the Coles Myer facility at the point of recruitment. [38] The terms of the undertakings relevant to this matter are as follows: "The parties to the Coles Myer Logistics Forest Lake - Certified Agreement 2003 undertake that no prospective employee will be misled intentionally or inadvertently by way of either oral comment or documentation put to them into believing that employment with Coles Myer Limited is dependent upon becoming or not becoming a member of a union, or any particular union; and "The practices in employment forms and other Coles Meyer documentation will clearly and unambiguously articulate the undertaking made out immediately above, and will make appropriate reference to the intent of Part XA "Freedom of Association" of the Workplace Relations Act 1996." 9 [39] As these undertakings go to the operation of the agreement on which the workforce at the Coles Myer facility have voted, the Commission also asks that these undertakings be provided to all persons who are (to be) covered by this agreement, as well as to persons who are at the point of recruitment or induction. In view of the fact that some 550 employees may be affected, this must be done within 28 days of the date of this Decision. [40] A copy of the undertakings in relation to both matters raised in relation to section 170LU(2A) of the Act will be referred to in the certificate of certification and appended to the same. [41] The agreement will be certified with effect from the Commission's decision in transcript given on the day of hearing, 1 October 2003, to operate in accordance with its terms, remaining in force until 5 August 2005. [42] The parties must advise the Commission immediately if it is not their intention to accept the above undertakings as sought. [43] The Commission has powers pursuant to section 170LV(2) of the Act in circumstances in which parties fail to carry out undertakings, even although an agreement has been certified. BY THE COMMISSION: COMMISSIONER Appearances: Guymer M for the Applicant Gillespie L for the Shop, Distributive and Allied Employees Association Date and place of hearing: Brisbane, 1 October 2003 Printed by authority of the Commonwealth Government Printer <Price code D> 1 AIRC, 30 September 1999 [Print R9645]; See also Re PR Dawson & Sons Pty Ltd Enterprise Agreement 1997 - 2000 & Ors (AIRC, 11 September 1998 [Print Q6068]); Re Daviwell Pty Ltd Enterprise Agreement 1997 - 2000 (AIRC, 11 September 1998 [Print Q6112]); Re CEPU and Das Services Enterprise Agreement 1997 (AIRC, 2 March 1999 [Print R2646]); Re SDA - Domino's (WA) dial-a-pizza Agreement 1998 (AIRC, 22 July 1999 [Print R6382]); Re Transport Workers' FCL (Transport) Enterprise Agreement 1997 & Ors (AIRC, 21 June 2000 [Print S7276]); and Re Independent Supermarkets Certified Agreement 2002 (AIRC, 7 November 2002 [PR924380]) 2 The Commission observes that there is no definition clause in the agreement, and is therefore reliant on clause 45 for purposes of identifying "the Union" as it is referred to in the agreement. 3 Section 170LT(5) of the Act 4 AIRC, 12 February 2003 [PR927672] 5 Re Sheraton Brisbane Hotel and Towers - LHMU - Employee Relations Agreement, 2003 (AIRC, 4 July 2003 [AG825611 PR933921]); Re Liquorland Hotels Agreement 2003 (AIRC, 28 July 2003 [PR935354]) and (AIRC, 14 August 2003, [AG826974 PR936109]); Re Academic & General Staff Pty Ltd (General Staff in Higher Education) Agreement 2003 (AIRC, 15 August 2003 [AG827173 PR936403]) 6 Re MSA Security Officers Certified Agreement [2003] (AIRC, 15 September 2003 [AG823747 PR937654]) see for example at [63] and [64] 7 Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 per Gleeson CJ, Gaudron J and Hayne J 8 Op Cit 6 at [72] 9 undertakings were proposed by Coles Meyer - Transcript at PN73 - PN74