Protecting terms and conditions against attack

19 June 2012

A recent Fair Work Australia decision relating to an enterprise agreement variation is a clear indication that set terms and conditions are in jeopardy and workers' rights need further protecting.

Most people are familiar with the statutory regime for bargaining, and ultimately seeking approval, of enterprise agreements at established workforces.  There are a multitude of decisions coming from Fair Work Australia in relation to bargaining (consider the recent case of Endeavour Coal Pty Ltd v APESMA (Collieries Staff Division [2012] FWAFB 1981 ), the requirements for having an agreement made (Bland v CEVA Logistics (Australia) Pty Ltd [2011] FWAFB 7453) and finally the prerequisites to satisfy FWA (for example, the case of Woolworths Ltd trading as Produce and Recycling Distribution Centre [2010] FWAFB 1464 which considers the dispute resolution procedure).

But after the enterprise agreement is approved, how do we go about altering unsatisfactory terms and conditions?  And more pertinently for employees and unions, how do we go about defending employer claims attempting to remove terms and conditions?

Given the Fair Work Act 2009 does not limit the type of matters that can be varied (with the exception of ensuring the nominal expiry date does not exceed four years), it means that key terms and conditions can be 're-voted' at any time by employees.  It potentially leaves terms and conditions open for 'renegotiation' without the proper means to form agreement.

The Act is not entirely clear as to the role bargaining representatives play in terms of applications for variations to enterprise agreements, however, this issue was recently discussed in the Samaras Structural Engineers case [2012] FW 751, decided by FWA Deputy President Bartel.

The facts

In this case, the employer sought to vary its enterprise agreement, of which the CFMEU were a party.  The variations were to delay a pay increase by six months and to extend the nominal expiry date by six months.

It held a meeting, notice of which was given 'by word of mouth', with Deputy President Bartel accepting that not all the affected employees attended a meeting explaining the variations.  A letter was sent to affected employees with the phrase:

"A ballot will be held between 12.00 pm and 2.00 on Friday 23rd December.  Balloting will take place by telephone.  During this period you will be contacted by phone and asked whether you consent to the variation or not.  If you are unable to be contacted at that time and wish to make arrangements to vote, please contact George I Samaras…"

As specified in the letter, the employer engaged two employees (each the 'Ballot Collector' and 'Witness') to telephone the employees to ask what their vote was.  It was not anonymous, and the employees recorded a 'yes' or 'no' against each of the voting employees' name on a spreadsheet.  The ballot occurred between 10.00 am and 11.10 am, outside of the specified hours.

A majority of the employees voted for the variation.

The application

An application was made by the employer pursuant to section 210 of the Act, which allows employees and the employer to vary an agreement by approval.  At the time of making the application, a signed version of the varied agreement was not provided to FWA.

The law

For the variation to be approved, there are many similar steps to that of having an agreement struck in the first place, such as the reasonable notice requirement, consultation and a proper ballot process. 

However, agreement variation applications also attract a public interest consideration.  Commissioner Hampton's summary of the statutory elements in Community Support Incorporated & SA In Home Care Personal Support Worker & Service Coordinator Enterprise Agreement 2009 [2010] FWA 9145 were affirmed by Deputy President Bartel in this case, however, he also considered the good faith bargaining requirements of the Act to be relevant. 

The decision

In this case, the CFMEU objected to the approval of the variation on the grounds that:

• there was not genuine consent of employees
• the consultation process was flawed
• the ballot process was flawed;
• the application was incomplete in the failure to file a signed agreement, and
• the variation itself was not warranted.

Deputy President Bartel flatly rejected the union's final submission that the variation was not warranted because it is a consideration not open to him to take into account.

As to the submissions regarding the consultation and ballot processes, Deputy President Bartel ultimately concluded that because there was a lack of evidence that employees were in any way reluctant to cast a negative vote, he could not be satisfied the genuineness of agreement was compromised.  His Honour also found the change in ballot time to be a relevant factor, but that it did not undermine the legitimacy of the vote.

However, Deputy President Bartel went far to consider the failure of the employer to involve the CFMEU in its discussions with employees.  In his view, the failure to involve the union was "at least unwise and potentially problematic in meeting the good faith bargaining obligations of the Act", and on that basis, it is possible the consent of the employees was compromised.

Deputy President Bartel imported into his consideration the objects of the part of the Act to the "appropriate recognition of representatives appointed by each of the parties will be relevant to the assessment of the genuine agreement of employees".

However, he determined that the absence of evidence of the employer frustrating communication between the union and its members meant that he could not be satisfied there was an absence of genuine agreement to the variation.

Despite the deficiencies in the process, including the failure to involve the CFMEU, Deputy President Bartel determined there were not serious public interest grounds to prevent the approval of the variation.

His Honour did accept the union's argument that the employer did not file a signed copy of the variation, a requirement of the Act, however, allowed the employer to rectify this by filing it late.

What this means for unions

This case is important for unions because it recognises their integral role as bargaining representatives not only in the initial bargaining of an agreement, but in situations where employers might attempt to remove significant terms and conditions of employees.

Although ultimately unsuccessful in this case, the case put by the union highlighted the measures employers can go to in order to undercut terms and conditions. Unions need to actively scrutinise attempts by employers to undercut terms and conditions by varying enterprise agreements.  Moreover, the case highlights a ambiguity in the system which unions need to be wary of, and should take into consideration when representing members and fighting to protect their rights and entitlements.

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