PR930503 PR930503 Download Word Document AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION Workplace Relations Act 1996 s.170LJ certification of agreement Application by Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia - Plumbing Division, SA Branch - and - Jaymel Airconditioning Pty Ltd (AG2003/1228) Various employees Plumbing industry SENIOR DEPUTY PRESIDENT O'CALLAGHAN ADELAIDE, 16 APRIL 2003 Certification of Division 2 agreement with organisation(s) of employees. DECISION [1] This decision deals with an application for certification of an agreement. The application was made by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia - Plumbing Division, SA Branch (`the CEPU') and Others, pursuant to section 170LJ of the Workplace Relations Act 1996 (`the Act'). [2] The agreement was to apply to Jaymel Airconditioning Pty Ltd. There was some confusion over the title of the agreement but the parties have advised that they intended that the agreement should be known as the Jaymel Airconditioning On-site Construction Enterprise Agreement SA 2003-2005 (`the agreement'). [3] The application was filed in the Commission on 13 March 2003 and was the subject of a hearing on 11 April 2003. At this hearing the CEPU were represented by Mr Lean and Jaymel Airconditioning Pty Ltd were represented by Mr Bleechmore, of the Airconditioning and Mechanical Contractors Association of SA Inc. [4] Clause 2 of the agreement states: "This agreement shall be binding upon: 2.1 JAYMEL AIRCONDITIONING Pty Ltd (the company) of 382 Richmond Road Netley in respect to its employees and subcontractors engaged in the occupation, industries and callings covered by the Plumbing Trades (Southern States) Construction Award 1999 and who are eligible to be members of the Communications, Electrical, Energy, Information, Postal, Plumbing and Allied Services Union of Australia whether members of the said organisation or not; and 2.2 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) (the Union) and its members and all employees and subcontractors engaged in the occupations, industries and/or callings covered by this Agreement." [5] The application for certification was made pursuant to Division 2 of Part VIB of the Act. [6] Section 170LH of the Act states: "This Division sets out requirements that must be satisfied for applications to be made to the Commission to certify certain agreements between employers who are constitutional corporations or the Commonwealth and: (a) organisations of employees; or (b) employees." [7] Section 170LI of the Act states: "(1) For an application to be made to the Commission under this Division, there must be an agreement, in writing, about matters pertaining to the relationship between: (a) an employer who is a constitutional corporation or the Commonwealth; and (b) all persons who, at any time when the agreement is in operation, are employed in a single business, or a part of a single business, of the employer and whose employment is subject to the agreement. Note: Section 5AA also allows agreements to be made on a different constitutional basis about matters pertaining to the relationship between an employer and employees. (2) The agreement must be made in accordance with section 170LJ , 170LK or 170LL." [8] The significance of these provisions in the consideration of an application for certification was considered by the Full Bench of the Commission in Atlas Steels and Others ( PR917092 ). In this decision the Commission stated: ..... "[17] As we have indicated each of the applications before the Deputy President was made under Division 2 of Part VIB of the Act. Section 170LH, which is the first section in Division 2 of Part VIB, says that " [T] his Division sets out requirements that must be satisfied for applications to be made to the Commission to certify certain agreements between employers who are constitutional corporations or the Commonwealth and; (a) organisations of employees; or (b) employees ." We have already set out s.170LI(1). That section requires that for an application to be made there must be an agreement "about matters pertaining to the relationship between....an employer.....and.....all persons.....employed in a single business.....of the employer...." In considering that requirement the Deputy President applied the test formulated by the High Court in R v Portus: Ex Parte ANZ Banking Group Limited and Others (Portus) 1 and affirmed by that Court in Re Alcan Australia Limited and Others; Ex Parte Federation of Industrial, Manufacturing and Engineering Employees (Alcan) 2 . That test is the one to be applied in construing the definition of " industrial dispute ." In Alcan the High Court in a unanimous judgment, speaking in the context of the definition of industrial dispute in s.4(1) of the Industrial Relations Act 1998 (the IR Act) , said: "And although there are some minor differences between that definition and the relevant definitions previously found in the Conciliation and Arbitration Act 1904 the requisite nature of the subject matter of a dispute remains precisely the same, namely, that it pertain to the employment relationship involving employers, as such, and employees, as such." 3 [18] There is a difference, which may be important, between the relevant part of the definition of industrial dispute in s.4(1) of the IR Act (which is relevantly in the same form in the Act) and the relevant terms of s.170LI(1) of the Act. That difference is that the definition of industrial dispute refers to " matters pertaining to the relationship between employers and employees " while s.170LI refers to " matters pertaining to the relationship between...an employer...and ...all persons who, at any time when the agreement is in operation, are employed in a single business, or a part of a single business, of the employer and whose employment is subject to the agreement ". The terms of s. 170LI(1) indicate that the nature of the matters is to be assessed by reference to the relationship between the employer and the employees to whom the agreement applies rather than by reference to a generalised notion of the relationship between employers and employees. The " matters " referred to in s.170LI(1) are matters pertaining to the employment relationship involving the employer bound by the agreement, as such, and the employees covered by the agreement, as such. [19] The principal submission made by the appellants is that, properly construed, s.170LI(1) does not require that every matter in an agreement must pertain to the relationship between the employer and employees. More particularly, it was submitted that a valid application might be made in relation to an agreement which contains matters pertaining to the relationship between the employer and employees and matters that not so pertaining provided the agreement as a whole could be characterised as being about matters pertaining to the relationship. Reliance was placed on the decision of Senior Deputy President Kaufman in Re Knox City Council Enterprise Agreement (No.4) 2001. 4 It can be seen that if this submission is correct it is not necessary to decide in this case whether the union fees clause and the union notification clause are each about matters pertaining to the relationship. [20] We see a number of difficulties with this construction of the section. In the first place, it appears to us that an agreement which contains provisions some of which are about matters pertaining to the relationship and some of which are about matters which do not so pertain cannot be described, at least without straining language, as an agreement about matters pertaining to the relationship. Secondly, this construction gives rise to uncertainty in the application of the section and of the Division. It requires a weighing-up or balancing of provisions which are about matters which do pertain and those which do not in order to reach a conclusion as to whether the agreement as a whole is about matters which pertain. That might involve difficult value judgments in particular cases. Thirdly, the construction contended for might lead to some irreconcilable results. Some agreements deal only with one or two matters. Others deal comprehensively with the terms and conditions of employment. An agreement containing one or two matters only, being matters which do not pertain to the relationship, could not be the subject of a valid application for certification. An agreement containing the same one or two matters, but also containing a large number of matters that do pertain to the relationship, could be the subject of a valid application for certification. The legislature is unlikely to have intended the section to operate in such a capricious way. All of these considerations tell against the submission. [21] Also, as was pointed out by Merkel J in Electrolux Home Products Pty Ltd v Australian Workers' Union, 5 the submission requires s.170LI(1) to be read as though it contained an additional word. The reasoning is set out in the following passage: "51 If one of the substantive matters provided for in the agreement is not within the required description and that matter is discrete and significant then the proposed agreement may properly be characterised as about matters that are within the relationship and a matter that is not. While it is arguable that s 170LI only requires that the agreement in question be characterised as one that is "substantially" or "primarily" about the requisite matters it would be inappropriate to add those words absent a clear legislative purpose in favour of that construction: see Saraswati v The Queen (1991) 172 CLR 1 at 22 per McHugh J." 6 We are unable to discern a legislative purpose which would justify reading down the clear words of the section. [22] It was pointed out in Electrolux that there are differences between the terms of s.170LI(1) and the terms of an antecedent provision in s.170MD(1)(a) of the IR Act. That section read: " Despite section 170MC, the Commission may refuse to certify an agreement if: in the case of any agreement - the Commission thinks that any of the terms is one that the Commission would not have power to include in an award (disregarding section 95)..." (emphasis added) We were taken to references to s.170MD in Victoria v The Commonwealth 7 . It may be accepted that by the use of the expression " any of the terms " in s.170MD(1)(a) the legislature intended that every term in an agreement was required to be a term which could be included in an award. We do not think it follows, however, that the language of s.170LI(1) was deliberately adopted, and more particularly that the term "any " where secondly appearing was not included to signify that an agreement providing for some matters which do not pertain might give rise to a valid application. Section 170MD(1) dealt with the Commission's powers to refuse to certify an agreement. Section 170LI(1) deals with the type of agreement which may be the subject of an application for certification. The structure and wording of the provisions are so different that the use of " any of the terms" in one provision and not in the other is an unreliable indication of the intention of the legislature. [23] For all of these reasons we do not accept the proposition that s.170LI(1) should be construed to permit an application to be made to certify an agreement which contains provisions about matters which do not pertain to the relationship between the employer and employees. Deputy President Ives was therefore correct to conclude that an agreement to which s.170LI(1) applies which contains a provision about a matter which does not pertain to the relationship is not one which is capable of certification. It should be acknowledged, of course, that an agreement may contain provisions, which although not themselves about matters which pertain, are nevertheless incidental to matters which do. We have in mind provisions which are merely machinery or administrative in character 8 ." [9] These issues were further considered by the Full Bench of the Commission in NUW and others ( PR926554 ). In that decision the Commission endorsed the approach adopted in the Atlas Steels decision. [10] I consider that the reference to subcontractors contained in clause 2 of the agreement is central to the agreement. It purports to apply the agreement in its totality to subcontractors. Further, the agreement clauses relative to Wages and Allowances and Union Representation specifically reference subcontractors. No provision of the agreement expressly excludes application of the agreement to subcontractors. Whilst the agreement does not expressly purport to convert subcontract arrangements into employment contracts, it may well have that effect. [11] The inclusion of subcontractors raises issues relative to the potential to apply the agreement and the practical operation of the agreement to dispute resolution, enforcement and equity issues. It gives the agreement a fundamentally different character to that which generally applies to employment situations. [12] The parties conceded that the subcontractors who are proposed to be covered by the Agreement were not involved in the vote to endorse the agreement. [13] I consider that the reference in clause 2 Parties and Persons Bound to subcontractors means that the agreement cannot be described as being about matters pertaining to the relationship between the employer and the employees to be covered by it. [14] As the agreement seeks to regulate subcontracting arrangements which may apply alongside employment arrangements, I do not consider that the agreement can be consistent with section 170LH. [15] I have considered the extent to which I could certify the agreement, but not allow the reference to subcontractors to remain part of the agreement. I do not believe that this is possible because of the pervasive nature of the reference to subcontractors. [16] Further, in the Atlas Steels decision, the Full Commission concluded: "[42] There is one other matter to be dealt with. It concerns the course to be followed when an agreement is found to contain a clause which is an impediment to certification. In this case the Deputy President requested the parties to file agreements which had been amended to deal with various issues raised in his decision. The Deputy President's requirement that the parties amend clause 44 of the Mitre 10 Agreement is an example of this approach. With respect the approach is undesirable. Where a substantive amendment is required to remove an impediment to certification, that amendment must be brought about in the manner prescribed in the Act for the making of agreements. It is not permissible for agreements to be certified without approval by a valid majority of the persons employed at the time whose employment will be subject to the agreement. We note that in the union notification decision the Deputy President required the parties to amend a number of clauses in the Cadbury Schweppes Agreement and the Mitre 10 Agreement on grounds related to Part XA Freedom of Association of the Act. Although that part of the decision is not under appeal, our comments apply equally to it." [17] It is appropriate that I note that at the hearing of this application, the parties clarified various provisions and provided undertakings. The parties may choose to address these matters in any reconsideration of the agreement so as to make the subsequent approval process as simple as possible. [18] The application for certification of the agreement is dismissed. I confirm that I am prepared to facilitate an early hearing to consider certification of a replacement agreement and I invite the parties to contact my office in this respect. BY THE COMMISSION: SENIOR DEPUTY PRESIDENT Appearances: N Lean on behalf of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia - Plumbing Division, SA Branch. K Bleechmore Agent for Jaymel Airconditioning Pty Ltd. Hearing Details: 2003. Adelaide: April 11. Printed by authority of the Commonwealth Government Printer <Price code C> 1 (1972) 127 CLR 353 2 (1994) 181 CLR 96 3 Alcan at page 105 4 PR914635, 22 February 2002 at paras [29]-[32]. 5 [2002] FCA 1600 6 Electrolux at para [51] 7 (1996) 187 CLR 416 at 534 and 538 8 Electrolux at para [50]