Orange City Council, Civic Square Enterprise Agreement 2001-2003 [2001] NSWIRComm 1059 (24 September 2001)

Last Updated: 6 November 2001

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: McLEAY C

24 September 2001

Matter No IRC 4781 of 2001

Orange City Council, Civic Square Enterprise Agreement 2001-2003

Application by Orange City Council for approval of an enterprise agreement

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D E C I S I O N

This is an application by Orange City Council ("the Council") for approval of an enterprise agreement to be known as the Orange City Council, Civic Square Enterprise Agreement 2001-2003. The parties to that agreement are the applicant represented by Mr P Bell, the Environmental Health and Building Surveyors Association of NSW ("the EHBSA") represented by Mr I Robertson, the Local Government Engineers Association ("the LGEA") represented by Mr G Brock and 89 employees represented by Mr M McFadden. Mr M Barnes, solicitor, sought leave to intervene on behalf of the Federated Municipal and Shire Council Employees' Union of Australia, New South Wales Division ("the MEU").

The application was accompanied by a comparison and compliance statement in affidavit form signed by Mr Bell. Because of the individual employees being parties to the agreement, the Deputy Industrial Registrar provided a comparison report pursuant to section 36(5) of the Industrial Relations Act 1996.

Mr Bell, Mr Brock and Mr Robertson appeared at a mention before me on 7 August, and each made submissions in support of the agreement being approved. The matter was listed for hearing on 6 September, and each employee party to the agreement was provided with written notice of the listing.

At the hearing, Mr Bell, Mr Brock and Mr Robertson confirmed their support for the agreement. Mr McFadden added his endorsement. Mr Barnes had no submissions to make on the merits of the agreement.

The agreement is to be read in conjunction with the Local Government (State) Award 2000.

Mr Bell submitted that it had been the intention of the Council to negotiate with the three relevant unions, with the aim of reaching an agreement with the Council and the three unions as parties. When the MEU withdrew from negotiations, the Council decided to continue negotiations with the EHBSA, the LGEA and other employees, who would have been represented by the MEU, directly.

Mr Barnes submitted that the proposed agreement could not be approved because of a number of shortcomings in the process as required by the Act. It was therefore necessary to hear from the parties in regard to the issues raised by Mr Barnes, and to consider each of these issues.

CONSIDERATION

Section 35(1) of the Act reads as follows:

35.   Approval of enterprise agreement by Commission

(1)   The Commission is to approve each enterprise agreement lodged for approval, but only if the Commission is satisfied that:

(a)   the agreement complies with all relevant statutory requirements (including the requirements of this Part and of the Anti-Discrimination Act 1977), and

(b)   in the case of an agreement that covers employees to whom State awards would otherwise apply---the agreement does not, on balance, provide a net detriment to the employees when compared with the aggregate package of conditions of employment under the State awards, and

(b1)   in the case of an agreement that covers employees to whom Federal awards would otherwise apply---the employees are not disadvantaged in comparison to their entitlements under the Federal awards, and

(b2)   in the case of an agreement that covers employees to whom no State or Federal award would otherwise apply---the agreement does not, on balance, provide a net detriment to the employees when compared with the aggregate package of conditions of employment under a State or Federal award that covers employees performing similar work to that performed by the employees covered by the agreement, and

(c)   the parties understand the effect of the agreement, and

(d) the parties did not enter the agreement under duress.

Mr Barnes submitted that the proposed agreement could not be approved because not all relevant statutory requirements had been fulfilled, as required in section 35(1) (a).

Section 31 reads relevantly as follows:

31.   Parties to an enterprise agreement

(1)   An enterprise agreement may be made between:

(a)   the employer or employers of the employees for whom it is made, and

(b)   one or more industrial organisations representing any of those employees.

An industrial organisation may represent only employees who are, or are eligible to be, members of the organisation.

(2)   An enterprise agreement may also be made between:

(a)   the employer or employers of the employees for whom it is made, and

(b)   the employees at the time the agreement is made.

Note.

Section 36 (4) provides that the agreement must be approved by at least 65% of the employees at a secret ballot. Section 36 (5A) provides that an industrial organisation can become a party to the agreement.

Mr Barnes submitted that the proposed agreement was in a hybrid form not available under the Act. He suggested that the proposed agreement did not fit within the parameters of either sub-section (1) or sub-section (2) of section 31, and, as a consequence, was outside the parameters of the legislation. Mr Bell submitted that the proposed agreement satisfied the requirements set out in sub-sections (1) and (2), and there was no clash between them.

There is nothing in section 31 that requires the sub-clauses to be read exclusively. That is, an agreement may be between an employer and one or more unions, it may be between an employer and its employees, and I a satisfied that these are not alternatives which exclude the possibility of an agreement being between the employer on the one hand, and unions and employees on the other. It would not be necessary for employees to be parties where the employees were members of, or were eligible to be members of, the union parties. In this case, the employee parties are eligible to be members of the MEU. The MEU has chosen not to be a party to the agreement. The employees, at least some of whom are members of the union, have chosen to proceed with the agreement.

Mr Bell submitted that section 36 (5A) specifically allows both employees and a union to be parties to a single agreement. He argued that it would be inconsistent if section 31 did not allow the kind of agreement specifically allowed in section 36. I agree with this view.

Section 36 sets out the special requirements relating to enterprise agreements to which employees are parties.

(1)   An enterprise agreement under which employees are a party is not to be approved unless the requirements of this section have been complied with.

(2)   Before or at the time the employer first undertakes formal negotiations with the employees for the purposes of an agreement, the employer is to advise the Industrial Registrar in writing of the following:

(a)   that an enterprise agreement is proposed or under negotiation,

(b)   the State or Federal awards or enterprise agreements that then apply to the employees.

(3)   The Industrial Registrar is to advise such persons or bodies as are prescribed by the regulations of the proposed enterprise agreement.

(4)   The enterprise agreement must be approved in a secret ballot by not less than 65% of the employees who are to be covered by the agreement at the time the ballot is conducted.

(5)   The Industrial Registrar must, after the enterprise agreement is lodged for approval, prepare a report for the Commission comparing the conditions of employment under the agreement and the conditions of employment that would otherwise apply to the employees under relevant State or Federal awards. If there are no relevant State or Federal awards, the report is to outline any relevant employment conditions of the employees.

(5A)   The Commission must, by its order, make an industrial organisation a party to the enterprise agreement if it is satisfied that:

(a)   the industrial organisation represents any of the employees covered by the enterprise agreement, and

(b)   the industrial organisation has notified the Commission of its intention to become a party to the agreement by lodging a notice to that effect with the Industrial Registrar at any time before the Commission approves of the agreement under this Part, and

(c)   an employee covered by the agreement is a member of the industrial organisation and has requested the industrial organisation to become a party to the agreement.

The Commission may direct that the name of an employee who made that request is not to be disclosed to the employer or other person.

(6)      (Repealed)

The Council advised the Industrial Registrar that the proposed enterprise agreement was under negotiation by the filing of the requisite Form 15 completed and signed by Mr Bell n 12 June 2001. Mr Barnes argued that the timing of the Form did not satisfy the requirements of sub-section (2), as negotiations had commenced in February 2001 with the employees, in accordance with the evidence of Mr McFadden.

The negotiations commenced with a meeting of the Staff Committee in February to discuss proposed changes to the then existing agreement. The Staff Committee is not a union committee, and members are neither delegated nor elected by the union. This meeting therefore represents the first formal negotiations directly with employees, Mr Barnes submitted. Mr Bell argued that the Staff Committee meetings represented a preliminary discussion stage. Mr Bell submitted that the formal negotiations commenced in April when a draft document was provided to each of the three relevant unions. At that time the Council was of the view that the three unions would be parties to the agreement. It was only after the MEU withdrew from the negotiations that the Council decided to negotiate with its employees directly in place of the MEU, while continuing to negotiate with the EHBSA and the LGEA. It was at that time, submitted Mr Bell, that the Form 15 was filed.

Mr Brock and Mr Robertson accepted that the formal negotiations commenced at the time the at the draft document was provided to the unions. Neither f them had been involved in any discussions prior to that time, and accepted that the Staff Committee meetings had been of a preliminary nature to the formal negotiations.

I am of the view that the use of the word "formal" in sub-section (2) is a deliberate acknowledgment that negotiations of an informal or preliminary nature may take place prior to formal negotiations commencing. If negotiations such as those which took place at the workplace Staff Committee level were not recognised as being of a preliminary nature, the word "formal" would have no work to do. I am satisfied that formal negotiations commenced with the three unions at the time the draft document was provided to them by the Council. Formal negotiations with the employees commenced only after the MEU made it clear that it did not wish to be a party to the agreement. This was in early June. I am satisfied that the Form 15 advice to the Industrial Registrar was provided "before or at the time the employer first undertakes formal negotiations with the employees for the purposes of an agreement" as required by sub-section (2).

Mr Barnes expressed concern that the Industrial Registrar had not provided advice to parties pursuant to sub-section (3) of section 36. The Commission's file did not show evidence that such advice had been provided. Mr Brock, Mr Robertson and Mr Barnes noted that their organisations did not require further advice as at the time of the hearing. I accepted that the Labor Council of New South Wales ought to be advised and the Deputy Industrial Registrar subsequently undertook this task. That correspondence was dated 6 September and included the following paragraph:

Any objections to the approval of the enterprise agreement are to be notified in writing to Commissioner McLeay within seven days of the date of this letter.

Further information was provided on 11 September. No objection to the approval of the enterprise agreement has been received from the Labor Council.

I am satisfied that the notifications of listing of the matter issued by my office to the EHBSA, the LGEA and the MEU together with the notification to the Labor Council of NSW by the Deputy Industrial Registrar constitute the notifications required by sub-section (3) of section 36.

There was no dispute by the MEU as to the conduct of the secret ballot. Nor were any issues raised in regard to the form and content of the agreement.

CONCLUSION

The Commission is satisfied that the application meets all the requirements of the Industrial Relations Act 1996 and the current enterprise agreement principles.

In particular, I am satisfied that section 31 raises no impediment to the proposed agreement being made in its current form, that is, between the employer, two unions and 89 employees being parties to a single agreement.

The Commission approves the Orange City Council, Civic Square Enterprise Agreement 2001-2003. That agreement is to operate from 24 September 2001, remaining in force for a period of 3 years.

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