The AREEA has formally asked Employment Minister Michaelia Cash to restore “common sense” to agreement-making after an FWC full bench accepted the MUA’s argument that defects in bargaining notices meant it had to quash the approval of two non-union deals.

The industry group has written to Senator Cash, requesting she take “immediate action” by changing the Fair Work Regulations to allow tribunal members greater flexibility to avoid “overly technical” interpretations that require them to refuse approval of agreements.

The AREEA said a “simple”, “non-controversial” amendment is needed.

Its call follows yesterday’s FWC full bench decision in which the FWC quashed the approval of two enterprise agreements because the employer’s NERR provided the wrong telephone number, listing the FWO, rather than the Commission, as the point of contact.

Vice President Adam Hatcher, Deputy President Val Gostencnik and Commissioner Bruce Williams accepted there was a “complex and unusual factual scenario common to all three appeals” which raised “unusual issues” requiring “appellate scrutiny”.

The union and the maritime offshore oil and gas industry have been at loggerheads during a protracted bargaining round.

Commissioner Danny Cloghan approved the MMA Offshore Logistics Pty Ltd Enterprise Agreement in August last year, rejecting the MUA claims the agreement only covered a small number of employees not fairly chosen under s186 of the Fair Work Act (see Related Article).

Meanwhile, Deputy President Melanie Binet approved the DOF Management Australia Pty Ltd Marine Offshore Oil and Gas Industry Enterprise Agreement, which was voted up by just four employees.

Commissioner Julius Roe also approved the non-union Smit Lamnalco Australia Maritime Offshore Oil and Gas Industry Enterprise Agreement, negotiated with three casual employees, despite noting his “serious concerns about the authenticity of the bargaining process.”

MUA claimed agreements failed to meet genuinely agreed and NERR requirements
The MUA contended that all three agreements had been made as part of a “scheme” between several industry employers to “avoid” bargaining with the union and create a new industry standard of “inferior” employment conditions, leaving employees worse off.

It argued that the “genuinely agreed” requirement in s186(2)(a) was not satisfied and that the group of employees voting for the MMA Offshore Logistics was unfairly chosen.

The MUA argued Commissioner Cloghan erred in his decision and that there was insufficient evidence to establish that there was genuine agreement among employees.

It also said there was “an absence of robust or rigorous bargaining”.

The union also claimed that the DOF and Smit Lamnalco agreements were “legally incapable” of being approved because both failed to meet the NERR requirements set out at s174(1A).

The MUA claimed that the NERR in each case did not comply with the prescribed form in Schedule 2.1 of the Fair Work Regulations because the form contained an incorrect telephone number.

Instead of listing the contact details of the Fair Work Commission infoline, the NERR included the telephone number of the Fair Work Ombudsman.

Agreements struck to make new industry standards, says MUA
The MUA claimed that the agreements lacked the “necessary authenticity” and “moral authority” because their purpose was related to the industry, rather than enterprise bargaining, and establishing new industry standards.

It argued the appeals raised important questions about the proper interpretation and application of s186(2) and s185(3) and that the decisions were attended by “sufficient doubt” to warrant reconsideration.

The full bench rejected the MUA’s claims that the AREEA was using the three agreements to obtain template enterprise agreements in the offshore oil and gas industry, which undercut industry standards and conditions of employment and avoided bargaining with the union.

“[W]e do not consider that by itself is demonstrative of the employees covered by the agreements not having been fairly chosen or not having genuinely agreed to the agreements.

“Simply because a group of employers led by their employer association has engaged in a process akin to pattern bargaining in order to improve their commercial position does not mean that any resultant enterprise agreements are illegitimate and incapable of approval under the Fair Work Act,” it said.

The full bench maintained the MUA did not have the right to be heard and the “degree and nature” of its involvement in the proceedings was a matter within the discretion of the Commissioner under s590.

There was no procedural unfairness and refused to grant permission to appeal on these grounds, it said.

However, it upheld the MUA’s appeal on the NERR issues identified in the DOF and Smit Lamnalco agreements.

It said the MUA’s arguments were “well-founded” and pertained to the legal capacity of the Commission to approve agreements, which must be considered by a full bench.

The full bench considered the authority in Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union (CFMEU) and s174(1A), which establishes a “clear and unambiguous” requirement the form and content of the NERR be set out in the template provided in the Fair Work Regulations.

“There is no capacity to depart from the template”, the Peabody full bench said.

“Failure to comply with the form and content requirements makes the NERR invalid and the Commission cannot approve the enterprise agreement”, that bench said.

“In light of Shop, Distributive & Allied Employees Association v ALDI Foods Pty Ltd, we consider that the proper course is to follow Peabody and approach the NERR issue on the basis that a purported NERR which does not strictly comply with the prescribed form in Schedule 2.1 is invalid, and that an enterprise agreement which proceeds on the basis of an invalid NERR is incapable of approval,” the full bench said.

The statutory scheme and the authority in Peabody did not allow the full bench to exercise its discretion, it said.

The full bench observed that s174 did not require the prescribed content in the NERR to include the Commission’s infoline details, but until there is a legislative change, it is the Commission’s “duty” not to approve agreements where the NERR did not strictly adhere to the regulation’s requirements.

“It would be open to the Minister at any time to exercise the power in s173(5) and s796 to have a new form prescribed which omits the last paragraph which, for reasons which escape us, employers frequently fail to correctly reproduce in the NERRs which they issue.

“However, until that occurs, we consider that the Commission’s duty is to not approve enterprise agreements where the NERR issued by the employer does not strictly comply with the currently prescribed form in respect of that last paragraph,” it said.

The full bench concluded that the DOF and Smit Lamnalco agreements could not have been validly approved because the NERR’s issued were invalid and dismissed both agreements.

“Simple fix” needed: AREEA
AREEA says a simple fix is needed to resolve the problems arising from the requirement to strictly adhere to the prescribed form of the bargaining notice.

It is proposing to change Regulation 2.05 to require “substantial compliance” with the “content and the form” of the notice, noting this would be consistent with the Productivity Commission’s recommendation 20.1 in its review of the IR framework.

AREEA wrote to Senator Cash on January 17 in anticipation of the decision going against it.

The Maritime Union of Australia v MMA Offshore Logistics Pty Ltd t/a MMA Offshore Logistics (C2016/4902); The Maritime Union of Australia v DOF Management Australia Pty Ltd (C2016/4903); The Maritime Union of Australia, v Smit Lamnalco Australia Pty Ltd (C2016/4904) [2017] FWCFB 660 (1 February 2017)

This coverage is featured here in Workplace Express.