FEDERAL COURT OF AUSTRALIA

Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia v Blue Star Pacific Pty Ltd [2009] FCA 750

INDUSTRIAL RELATIONS – employee collective agreement – requirements of the Workplace Relations Act 1996 (Cth) for approval of an employee collective agreement - reasonable opportunity to decide within the meaning of s 340(2) – obligation on employer to provide the employees concerned with an appropriate time and occasion to meet together as a group, to discuss the provisions of the proposed employee collective agreement - whether false and misleading information on the ballot paper deprived the employees of a reasonable opportunity to decide - whether the ballot was conducted in a manner that ensured only eligible employees took part in the ballot.

Workplace Relations Act 1996 (Cth)

Fair Work Act 2009 (Cth)

TWU v DHL Exel Supply Chain [2008] 174 IR 44

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355

The Commonwealth v Baume (1905) 2 CLR 405

R v Berchet (1688) 1 Show KB 106

Shop, Distributive and Allied Employees’ Association v Karellas Investments Pty Ltd (No 2) (2007) 166 IR 51; [2007] FCA 1425

ACTEW Corporation v Pangallo [2002] FCAFC 32

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165

Australian Nursing Federation v Alcheringa Hostel Inc (2004) 134 IR 446

Australian Crime Commission v NTD8 [2009] FCAFC 86

Bankstown Foundary Pty Ltd v Braistina (1986) 160 CLR 301

David Jones Limited v Willis (1934) 52 CLR 110

Rudi’s Enterprises Pty Ltd v Jay (1987) 10 NSWLR 568

Thorpe v South Australian National Football League (1974) 10 SASR 17

Ricegrowers Co-operative Mills Ltd v Bannerman (1981) 56 FLR 443

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321

Shop Distributive & Allied Employees’ Association v Karellas Investments Pty Ltd (2008) 166 FCR 562; [2008] FCAFC 42

John Holland Pty Ltd v Maritime Union of Australia [2009] FCA 437

Re Application by the Chief Commissioner of Police (Vic) (2005) 214 ALR 422; [2005] HCA 18

Carr v Finance Corporation of Australia Ltd (No 1) (1980) 147 CLR 246

Macquarie Dictionary (4^th ed)

Forsyth A and Stewart A, Fair Work – The New Workplace Laws and the Work Choices Legacy (The Federation Press, 2009)

COMMUNICATIONS ELECTRICAL ELECTRONIC ENERGY INFORMATION POSTAL PLUMBING & ALLIED SERVICES UNION OF AUSTRALIA v BLUE STAR PACIFIC PTY LTD (ACN 107 581 564)

QUD 59 of 2009

REEVES J

17 JULY 2009

DARWIN

THE COURT ORDERS THAT:

1.          A declaration that the respondent has not given all persons employed by it and who are entitled under s340 of the Workplace Relations Act 1996 (Cth) ( “the Act “ ) to decide whether they want to approve the proposed Blue Star Pacific Employee agreement 2009 – 2013, a reasonable opportunity to so decide, within the meaning of s340(2)(a) of the Act.

2.          A declaration that the Blue Star Pacific Employee agreement 2009 – 2013 has not been validly approved pursuant to section 340 of the Workplace Relations Act 1996 (Cth) (“the Act”).

3.          The time for filing and serving any notice of appeal against these orders is extended 21 days after the date of publication of the written reasons for decision.

4.          The parties are granted liberty to apply to speak to these orders.

5.          The matter is adjourned to a date to be fixed.

REASONS FOR JUDGMENT

INTRODUCTION

1                                             Sub-section 340(2) of the Workplace Relations Act 1996 (Cth) (‘the WR Act’), provided that:

(2)       An employee collective agreement or union collective agreement is approved if:

(a)        the employer has given all of the persons employed at the time whose employment will, or would but for the operation of an ITEA that has passed its nominal expiry date, be subject to the agreement a reasonable opportunity to decide whether they want to approve the agreement; and

(b)        either:

(i)         if the decision is made by a vote - a majority of those persons who cast a valid vote decide that they want to approve the agreement; or

(ii)        otherwise--a majority of those persons decide that they want to approve the agreement.

2                                             Under the WR Act, the approval of an employee collective agreement was significant because it was an essential prerequisite for such an agreement coming into operation; and once the agreement came into operation, it bound the employer and “all persons whose employment is, at any time when the agreement is in operation, subject to the agreement”: see s 351.  The agreement had this effect notwithstanding that particular employees may have voted against it being approved, or were not even employed at the time the agreement was approved.

3                                             Blue Star Pacific Pty Ltd (‘Blue Star’) claims it obtained approval from its employees in accordance with s 340(2) of the WR Act to an employee collective agreement.  It says it did this in a postal ballot of its employees which was concluded on 20 February 2009.  The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (‘the CSU’) challenges that claim in these proceedings.  It claims a declaration in the following terms:

A declaration that the Respondent has not given all persons employed by it and who are entitled under s.340 of the Workplace Relations Act 1996 (Cth) (the “Act”) to decide whether they want to approve the proposed Blue Star Pacific Employee agreement 2009 – 2013, a reasonable opportunity to so decide, within the meaning of s.340(2) of the Act. 

A declaration that the Blue Star Pacific Employee agreement 2009 – 2013 has not been validly approved pursuant to section 340 of the Workplace Relations Act 1996 (Cth) (“the Act”).

4                                             To put the CSU’s challenge in some context, apart from employee collective agreements, there was a number of other types of agreements provided for in Division 2 of Part 8 of the WR Act including: Australian workplace agreements (s 326); union collective agreements (s 328); union and employer greenfields agreements (ss 329 and 330 respectively); and multiple business agreements (s 331).  It is self evident that a union, like the CSU, would have preferred the workforce to enter into union collective agreements, with which it was directly involved, rather than employee collective agreements, with which it was not necessarily involved at all.

Three issues raised

5                                             In particular, the CSU claims that the employee collective agreement in question was not approved in accordance with s 340(2) for three reasons.  They are:

1                     In the circumstances, Blue Star did not give its employees a reasonable opportunity to decide whether they wanted to approve the agreement because it did not afford them the opportunity to meet and confer as a collective group;

2                    The ballot paper circulated by Blue Star was misleading in that it stated that the proposed agreement was to operate for a period of two years, when in fact, it was to operate for a period of four years; and

3                     The voting process used by Blue Star did not allow it to determine whether a majority of valid votes had been cast.

Decision and orders made

6                                             I heard this matter in Brisbane on 15 and 16 June 2009.  By 30 June 2009, I had come to a decision.  At the time, I was conscious of the fact that the WR Act was to be significantly altered by the Fair Work Act 2009 (Cth) which was to come into effect on 1 July 2009.  While s 340 was not significantly altered, the changes made to other provisions of the WR Act could have affected the orders I proposed to make.  To remove any doubt, I advised the parties of my decision on the afternoon of 30 June 2009 and made the orders sought by the CSU.  I gave that decision on the basis that I would provide my reasons at a later date.  These are those reasons.  I should add that since the WR Act is no longer in force, I have referred to the various sections of that Act in the past tense throughout these reasons.

FACTUAL BACKGROUND AND LEGISLATIVE SETTING

Blue Star’s business and employees

7                                             Blue Star conducts an electrical contracting business in South East Queensland.  That business is divided into two divisions: a commercial construction division and a client services division.  In February 2009, more than 40 employees were employed in its commercial construction division and about 14 in its client services division.  The construction division employees worked at a number of different sites in and around Brisbane, including: the Northlakes Health Precinct site; the Polo Club site; the ICB Central site; the Browns Plain site and the Queen Street site.  The CSU had 21 members among Blue Star’s commercial construction division employees and one or two among its client services division employees.

Blue Star sends its employees a package of material

8                                             On or about 12 February 2009, Blue Star sent to all its eligible employees a package of material which included the following:

·                    a copy of the proposed employee collective agreement (‘the proposed agreement’);

·                     an information statement;

·                     a waiver form;

·                     a ballot paper; and

·                     an ordinary self-addressed envelope.

9                                             In sending this package of material to its employees, Blue Star was endeavouring to comply with s 337 of the WR Act.  Among other things, that section required that all eligible employees are to have ready access to the proposed agreement for a period of seven days before the proposed agreement is approved.  

10                                          The expression ‘employee collective agreement’ came from s 327 of the WR Act which provided that:

An employer may make an agreement (an employee collective agreement) in writing with persons employed at the time in a single business (or part of a single business) of the employer whose employment will be subject to the agreement.

11                                          And, the expression ‘eligible employee’ was relevantly defined in s 336(b) as follows:

For the purposes of this Division, an eligible employee in relation to a workplace agreement is:

…

(b)          in the case of a collective agreement - a person employed by the employer whose employment will be subject to the agreement.

12                                          In addition to providing ready access to the proposed agreement, the employer was required to provide all eligible employees with an information statement during this seven day period: see s 337(2).  Under s 337(4)(a), this information statement was required to contain information about the time at which, and the manner in which, approval was to be sought for the proposed agreement.  Accordingly, the information statement Blue Star sent to its eligible employees stated as follows:

On … 20/02/09, the employer Blue Star Pacific Pty Ltd will:

…

Hold a vote to approve the making, variation or termination of the collective agreement by:

Postal Ballot – Ballot papers with information statement, a self addressed stamped envelope to sender will be enclosed and the ballot papers will be opened at 1pm on 20-2-09 and counted by (2) employee representatives at head office.

13                                          This explains why a ballot paper and an ordinary self addressed envelope were included in the package of material Blue Star sent out.  The inclusion of the waiver form arose from s 338 of the WR Act.  That section allows the employees to waive the seven day period mentioned above.  However, s 338 is of no significance in this matter because the CSU does not raise any issue about Blue Star’s compliance with it.

Blue Star arranges, and then cancels, a meeting of its employees to discuss the proposed agreement

14                                          Mr Brown, a leading hand electrician, who was then employed at Blue Star’s ICB Central site, gave evidence that, when he first received this package of materials he contacted a number of his fellow employees to discuss the proposed agreement.  He said they talked about arranging a meeting at the ICB Central site so they could get together and discuss the proposed agreement.  At the time, there were four employees employed at the ICB Central site.  However, at about the same time, the management of Blue Star sent a facsimile notice to all of its sites stating that a meeting of all its employees would be conducted at the Blue Star offices at Meadowbrook on Tuesday 17 February 2009, to discuss the proposed agreement.  Mr Brown said that upon receiving this notice of meeting, the proposed meeting at the ICB Central site was called off.  Not long after that, he said he was advised by his foreman that the Meadowbrook meeting had been cancelled.  As a result, he said there was no opportunity for the employees at the ICB Central site to meet and discuss the proposed agreement. 

Mr McInnes of Blue Star explains the proposed agreement at a site meeting

15                                          Nonetheless, Mr McInnes, the Managing Director of Blue Star, did attend a meeting at Blue Star’s Browns Plain site where all five employees who worked on that site were present.  Mr Cane, an electrician employed at that site, said that at that meeting, Mr McInnes explained the proposed agreement in these terms: “… there should be a gap between trades assistants and trades people ... that people were undercutting him when he was quoting … this collective agreement was the best proposed deal and in the event that the industry picked up that he would be open to re-negotiating some of the terms … if everyone else in the industry started paying their staff higher than his agreement, then he would follow suit.”  Another employee who attended the same meeting, Mr Fletcher, said Mr McInnes discussed the allowances for prescription glasses and tool replacement in the proposed agreement and added that: “if the economic climate picked up in the next two years or so … he would be happy to look at the agreement and then maybe re-negotiate pay rises”.

Ballot paper error – two year agreement when actually four years

16                                          It is common ground between the parties that the ballot paper that Blue Star sent to its employees was erroneously headed: “Blue Star Pacific Pty Ltd Employee Collective Agreement 2009 - 2011”.  In fact, the proposed agreement was to extend for a period of four years.  However, this did not appear from the front sheet of the proposed agreement, but from clause 7 in the body of the proposed agreement, which provided:

This Agreement will operate from the seventh day after the issuing of the notice by the Workplace Authority that the Agreement has passed the no-disadvantage test and shall apply for a period of 4 years or until replaced or cancelled.

17                                          On 18 February 2009, after the CSU detected this error in the ballot paper, its solicitors wrote to Blue Star pointing it out.  As a consequence, on 19 February 2009, representatives of the management of Blue Star went to its various sites and told those employees present that there was an error on the ballot paper and the proposed agreement was to operate for four years, not two years as stated. 

18                                          Mr Wermizyari, an electrician employed on the ICB Central site, said he was given this information by Mr Davidson, a foreman on that site, on 19 February 2009.  However, he said by that time he had already voted.  This is hardly surprising given that the votes had to be posted back to Blue Star in time for the count which was to be conducted at 1.00pm on 20 February 2009.  It appears that the vast majority of the employees were in a similar position to Mr Wermizyari because the evidence shows that only about 10 ballot papers were received on 19 and 20 February 2009.

19                                          Mr Wermizyari also gave evidence that before Mr Davidson told him about the error on the ballot paper, he thought the proposed agreement was to operate for two years. 

The conduct of the postal ballot

20                                          Ms Linnegar, the company’s secretary, said that when the self addressed envelopes were received by mail at Blue Star, they were placed in a locked filing cabinet.  On the morning of 20 February 2009, she said she removed the envelopes from that locked filing cabinet and placed them in a sealed ballot box.  According to Ms Linnegar, 59 ballot papers were issued by Blue Star and 47 were received back by mail.  In addition, on the morning of 20 February 2009, Ms Linnegar received two ballot papers by facsimile transmission.  The employees concerned had signed their names on these ballot papers. 

21                                          At 1.00pm on 20 February 2009, Ms Linnegar along with two employees, Mr Brasher and Mr May, opened the self addressed envelopes and counted the ballot papers enclosed.  After the count was completed, Mr May told Ms Linnegar that there were 38 ‘yes’ votes, 10 ‘no’ votes and 1 invalid vote. 

22                                          A short time later, Ms Linnegar undertook a further count of the ballot papers herself.  It appears that Mr Brasher and Mr May were not aware of this recount.  During this recount, Ms Linnegar noticed that the two employees who had faxed ballot papers to her had also submitted ballots by post.  Both of these ballots were for a ‘yes’ vote.  She therefore excluded those from the recount and reported the final result to Mr Dave McInnes, the Managing Director of Blue Star, in words to the following effect:

Dave, 59 ballots were issued, 47 were received back, 36 votes were yes, 10 votes were no and 1 vote was invalid, around 12 employees have not voted at all.  We have a valid majority.

The CSU casts doubt on the result of the postal ballot

23                                          It will be noted that Ms Linnegar’s recount reduced the number of ‘yes’ votes by two, to 36.  If anything, this alteration to the result of the ballot favoured the CSU.  However, the CSU has pointed to it to cast doubt on the conduct of the postal ballot and the absence of any independent scrutineers at the count.

24                                          To the same end, the CSU also called evidence from 13 eligible employees of Blue Star: Messrs Wermizyari, Brown, Cane, Ormond, Coombes, Sloan, Fletcher, James, Lillman, Wells, Vandermatt, Cumming and Alexander.  All of them gave evidence that they had voted ‘no’ to the proposed agreement and that they had either posted the self addressed envelope themselves to Blue Star, or had someone reliable do so on their behalf.  Obviously, none of these employees could vouch for the delivery of the self addressed envelope to Blue Star.  Furthermore, none of them had marked the self addressed envelope with his return address on the back of the envelope, so that it could have been returned to him if it were not delivered to Blue Star.

WERE BLUE STAR’S EMPLOYEES GIVEN A REaSONABLE OPPORTUNITY TO DECIDE WHETHER THEY WANTED TO APPROVE THE PROPOSED AGREEMENT?

Contentions

25                                          The first issue raised by the CSU in relation to s 340(2) is that: in the circumstances, Blue Star did not give the employees concerned a reasonable opportunity to decide whether they wanted to approve the proposed agreement because it did not afford them the opportunity to meet and confer on the proposed agreement as a collective group. 

26                                          Mr Friend, on behalf of the CSU, identified the relevant circumstances as follows:

a)       Blue Star’s business was divided into two divisions;

b)      The two divisions were engaged in different work and the proposed agreement had a different effect on each division;

c)       There was no opportunity or ability for the employees to meet and exchange views about the effect of the proposed agreement.

d)      Blue Star convened; and then cancelled, a general meeting of all employees, thus forestalling and ultimately preventing employees from calling such a meeting themselves. 

27                                          In support of this contention, Mr Friend relied upon the decision of Smith FM in TWU v DHL Exel Supply Chain (‘TWU’) [2008] 174 IR 44 at [19] and [22] as follows:

It is usual to construe a statutory reference to “decide” or “decision” as one which refers to an intended form of manifestation or expression of mental processes, and not just to a mental process of “deciding” (cf. Ricegrowers Co-operative Mills Ltd v Bannerman (1981) 38 ALR 535 at 543–544, Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 335). In my opinion, in a context referring to a decision to be taken by the members of a group of employees on whether to adopt proposed conditions of employment which will bind that group collectively, and not just bind those employees who accept an agreement, the natural reference of these words in s 340(2)(a) and (b) is to an overt process of taking and recording the group’s collective decision. The language of paragraph (a) confirms this, by referring to “all of the persons” and “whether they want to approve the agreement”. These plural terms, in effect, compress the meanings of “each and all of the persons”. The natural meaning of the paragraph is that the “reasonable opportunity” is to be afforded to the whole of the group whose approval is required to be sought as well as to each of its members. The “reasonable opportunity” relates to the “manner” or procedure in which the employer obtains the decision of the group. A process of decision-making must be afforded to all of the members, and all of them are to be given a reasonable opportunity to participate in the process in which a majority of the group’s individual decisions is obtained.

…

The object of the provisions of ss 337 and 340(2), is to allow all the eligible employees to be aware of the proposed manner for seeking a majority approval of the agreement which will bind them all, so that they can discuss its contents, take individual and collective advice, and assist each other to arrive at their collective decision. In my opinion, the construction submitted by DHL Exel, would allow an employer to follow procedures inconsistent with this object, and is inconsistent with the objectives of the Act generally which support collective decision-making by employees (cf. s 3 paragraphs (d), and (e)).

28                                          In response, Mr Boyce, on behalf of Blue Star, submitted that the employees concerned had been given a reasonable opportunity to decide in accordance with        s 340(2) because each individual employee had been given an opportunity to cast a vote in the postal ballot.  Mr Boyce submitted that s 340(2) did not require Blue Star to call a meeting of its eligible employees concerned, or to provide for any form of communication or discussion between them.  He submitted the word ‘collective’ in the expression ‘employee collective agreement’ was a reference to the valid majority vote.

Consideration

29                                          Since this matter essentially involves a question of statutory construction, it is appropriate to begin by referring to the High Court’s decision in Project Blue Sky Inc v Australian Broadcasting Authority (‘Project Blue Sky’) (1998) 194 CLR 355.  There the High Court held that a legislative provision should be construed: “by reference to the language of the instrument viewed as a whole”; by considering: “the context, the general purpose and policy of a provision and its consistency and fairness ...”, and beginning by: “… examining the context of the provision that is being construed”: at [69].  In the same case the High Court also held that: “a court construing a statutory provision must strive to give meaning to every word of the provision” (at [71]) and referred to the decision of The Commonwealth v Baume (1905) 2 CLR 405 at 414 whereGriffith CJ cited R v Berchet (1688) 1 Show KB 106 [89 ER 480] to support the proposition that it was “a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent”.

30                                          It follows from these principles that s 340(2) should be construed by reference to its context, language and purpose.  As indicated in Project Blue Sky, I will begin by considering the context of s 340(2).  It occurred in Part 8, Division 4 of the WR Act: Workplace Agreements - Pre-lodgement Procedure.  The divisions immediately following Division 4 dealt with lodgement (Division 5), the fairness test (Division 5A) and the operation of workplace agreements and the persons bound (Division 6).  Most of the sections in Division 4 have already been mentioned above, however to recount, they are: s 336 which defined eligible employee; s 337 which dealt with providing employees with ready access to the proposed agreement and an information statement; s 338 which dealt with the waiver of the seven day period; s 339 which placed a prohibition on withdrawing from a union collective agreement; s 340 itself and s 341 which provided that an employer must not lodge an unapproved agreement. 

31                                          Of these provisions, s 338 is not relevant in these proceedings: see [13] above.  As to s 337, in Shop, Distributive and Allied Employees’ Association v Karellas Investments Pty Ltd (No 2) (‘Karellas’)(2007) 166 IR 51; [2007] FCA 1425, Graham J observed that s 340(2)(a) of the WR Act could not be simply concerned with timeliness, nor access to the relevant employee collective agreement, because those matters were covered by s 337: see at [49]-[50].  I respectfully agree with his Honour’s observations in this regard.  Section 340(2)(a) must therefore serve some other purpose, apart from timeliness or ensuring access to the proposed agreement.

32                                          Section 340(2) was also preceded by s 340(1).  That section detailed how an AWA ie, an agreement in writing between an employer and an employee as an individual (see s 326), was approved or made: see s 333(a).  It provided that the employer and the employee approved the agreement by signing and dating it and having those signatures witnessed.  This follows the traditional means of making an agreement in writing between two parties.  There is a clear distinction between a more traditional agreement of this kind and a collective agreement under the WR Act, cf: ACTEW Corporation v Pangallo [2002] FCAFC 325 at [33].  Once an AWA was duly signed and witnessed under s 340(1), notwithstanding other provisions of the WR Act that may have affected the operation of the AWA eg, the fairness test in Part 8, Division 5A, neither the employer nor the employee could escape the consequences of signing the AWA by saying that he or she did not read the agreement, or know, or understand its contents: see Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [42]-[45]. 

33                                          In this respect, it is worth noting that there was no provision in s 340(1) or (2) that required the employee to have read and understood the proposed AWA or collective agreement before he or she signed the agreement.  While s 337 clearly required the employer to provide timely access to the proposed AWA or collective agreement, it was obviously encumbent upon the employees to read it and ensure they understood it before signing it or voting (or otherwise indicating) to approve it.  This was reinforced by the fact that under s 340(1)(c) no additional obligation was placed on the employer where the employee was under the age of 18 years.  In that instance, an appropriate adult person had to consent to the underage employee signing the AWA and, it must be inferred, ensure that the underage employee had read and understood the agreement.  It follows, in my view, in relation to both sub-sections, that the usual legal consequences applied once the agreement was signed or approved ie, it was binding notwithstanding a failure of any employee to read it, or understand its provisions.  It follows further from these contextual considerations, that s 340(2)(a) must serve some other purpose.

34                                          There is also a distinction between the course available under s 340(1) and that available under s 340(2) which provides some indication as to the purpose of               s 340(2)(a).  It is this.  In theory, an employer could have all of its employees progressively sign the same AWA under s 340(1).  If it did, it would achieve the same outcome as would be achieved by the approval of an employee collective agreement under s 340(2) viz an agreement which is universally binding on all its employees.  However, to obtain this by the AWA course under s 340(1), the employer would effectively need to obtain unanimous support for the agreement.  Moreover, the employer would not achieve another significant benefit that is obtained from the approval of an employee collective agreement, viz the agreement binding all future employees for the period of its operation. 

35                                          Instead of obtaining unanimous support for an AWA – a task that is obviously open to unreasoned veto by one or more employees and is much more demanding on the employer – an employer may obtain the benefit of an agreement that is universally binding on all its employees by obtaining majority support for an employee collective agreement under s 340(2).  Furthermore, that course provides the employer with the significant benefit mentioned above, viz an agreement that is binding on all future employees for the period of its operation.  It therefore stands to reason, in my view, that s 340(2) is directed to placing some further obligation on the employer when it seeks to obtain these benefits by way of an employee collective agreement.  

36                                          Finally, on the question of context, there is the juxtaposition of s 340(2)(a) and  s 340(2)(b).  On this aspect, Mr Boyce submitted that the expression ‘reasonable opportunity to decide’ in s 340(2)(a) referred, in this matter, to the opportunity to cast a vote in the postal ballot conducted by Blue Star under s 340(2)(b)(i).  I do not agree.  I consider that the opportunity to cast a vote in the postal ballot is provided for by       s 340(2)(b)(i) itself, together with s 337, particularly s 337(4)(a), which required Blue Star to inform each employee that the approval would be sought by a postal ballot.  If I am correct in this, s 340(2)(a) would serve no purpose if it also was directed to that end.  This construction is, therefore, contrary to what was said in Project Blue Sky about striving to give meaning to every provision: see [29] above. 

37                                          Next, I turn to consider the language of s 340(2)(a).  To recap, s 340(2)(a) relevantly provides that: “the employer has given all of the persons employed at the time whose employment will be subject to the agreement a reasonable opportunity to decide whether they want to approve the agreement”. 

38                                          Before turning to consider the various words and expressions used in               s 340(2)(a), it is convenient to mention two matters.  First, in Karellas, Graham J pointed out that there was nothing in the relevant Minister’s Second Reading Speeches or any Explanatory Memorandum to indicate what may have been intended by the use of the phrase “a reasonable opportunity to decide” in s 340(2)(a) of the WR Act: see Karellas at [51].  Secondly, I consider the use of the word “collective” in the expression ‘employee collective agreement’, to which s 340(2) relates, is of some significance in construing that subsection.  That word is relevantly defined in the Macquarie Dictionary (4^th ed) as follows:

1. formed by collection .2. forming a collection or aggregate; aggregate; combined. 3. relating to a group of individuals taken together. 5. a collective noun. 6. a collective body; aggregate 7. Government a unit of organisation or the organisation in a collectivist system. 8. a communal enterprise or system, working towards the common good, as opposed to one admitting competition between individuals.

Applying this definition, the word ‘collective’ suggests that the agreement is to be that of the group of employees taken together.

39                                          Turning to the words in s 340(2)(a) itself.  First, the section begins with words ‘the employer has given’.  In my view, these words were clearly intended to place an obligation on the employer to give its employees ‘the reasonable opportunity’ to which the section is directed. 

40                                          Secondly, Mr Boyce referred me to a decision of the Australian Industrial Relations Commission in Australian Nursing Federation v Alcheringa Hostel Inc (2004) 134 IR 446, which dealt with s 170LE of the Workplace Relations Act 1996 (Cth) (since repealed).  That section contained a provision (in sub-section (c)) to the following effect: “the employer gives all of the persons so employed a reasonable opportunity to decide whether they want to make the agreement or give the approval …”.  This provision is obviously in similar terms to s 340(2)(a), at least in relation to the critical words ‘reasonable opportunity to decide’.  The Commission made the following observations about the words in that subsection (at [25]):

In considering this aspect of the matter it is convenient to begin by determining the meaning of the words gives all of the employees of the relevant class an opportunity to decide.  The word give is a word of very wide purport.  In the context of s 170LE the meanings most apposite are to grant permission or enable.  The word reasonable is an adjective meaning endowed with good reason, agreeable to reason or sound judgment, not exceeding the limit prescribed by reason, not excessive.  The noun opportunity has the meaning an appropriate or favourable time or occasion.

Taking into account the meanings set out in the preceding paragraph, the condition in s 170LE(c) will be fulfilled, in our view, if the employer gives, in the sense of permitting, all of the employees of the relevant class the appropriate occasion to decide whether they want to give their approval to the agreement.  Clearly the meaning that we attribute to the words used in the statute cannot replace the statutory test.  It does however, provide a guide to its intent. (emphasis added)

In my view, these observations provide some assistance in construing the similar words in s 340(2)(a).

41                                          Thirdly, (further to the observations above), the word ‘reasonable’ when used in legislation is usually taken to mean reasonable in all the relevant circumstances of the case: see Australian Crime Commission v NTD8 [2009] FCAFC 86 at [62] and the cases there cited.  See also: Bankstown Foundary Pty Ltd v Braistina (1986) 160 CLR 301 at 308-309 re reasonable care, David Jones Limited v Willis (1934) 52 CLR 110 re reasonable fitness for the purpose, Rudi’s Enterprises Pty Ltd v Jay (1987) 10 NSWLR 568 at 575-576 re reasonable time and Thorpe v South Australian National Football League (1974) 10 SASR 17 re reasonable notice.

42                                          Fourthly, the expression “all of the persons employed” and “whether they want to approve the agreement” were considered by Smith FM in TWU: see TWU at [19], set out at [27] above.  There, his Honour considered they meant: “that the “reasonable opportunity” is to be afforded to the whole of the group whose approval is required to be sought as well as to each of its members.”  I respectfully agree with these observations. 

43                                          Finally, there are the words ‘to decide’.  In Ricegrowers Co-operative Mills Ltd v Bannerman (1981) 56 FLR 443 at 453, Northrop J, albeit in a somewhat different context, viz administrative decision making, drew a distinction between the word ‘decision’ and the process of ‘deciding’.  He said:

In the present case, I do not find it necessary to give any definitive meaning to the word “decision” appearing in s. 13(1) of the Judicial Review Act.  The mere thought processes taking place in the mind of the person when considering whether or how to exercise a power or to perform a duty of an administrative character under an enactment do not, in my opinion, constitute a decision.  In addition to thought processes, there must be some overt act by which the conclusions reached as a result of those thought processes are manifested.  The manifestation may take many different forms.  It may take the form of a verbal or written communication of the conclusion to the person affected.  It may take the form of action taken to give effect to the conclusion.  It may take the form of no action being taken when otherwise a definite action would have been taken.  (emphasis added)

I respectfully agree with the distinction his Honour has drawn, albeit, as I have already pointed out, in a different context.  Notwithstanding the different context, I consider this distinction arises in s 340(2).  In my view, the words ‘to decide’ in s 340(2)(a) are referring to the thought process taking place in the employees’ minds when considering whether to vote for or against approving the proposed agreement.  This is to be contrasted with the word ‘decision’ in s 340(2)(b) which, I consider, is referring to the manifestation of the outcome of that thought process by engaging in the physical process of casting votes for or against the approval of the proposed agreement.  If I am correct in this, it provides a further basis for distinguishing between the requirements of ss 340(2)(a) and 340(2)(b) to that set out in [36] above.

44                                          I should add that in this regard, I respectfully disagree with the observations of Smith FM in TWU in so far as his Honour may be equating the words ‘decide’ and ‘decision’ and distinguishing them from the mental process of ‘deciding’: see TWU at [19] set out at [27] above.  In other words, I consider the words ‘to decide’ and the word ‘deciding’ refer to the mental process of deciding and the word ‘decision’ refers to the manifestation of the outcome of the mental process of deciding.  This is what I consider Northrop J said in Ricegrowers.  Further, I do not consider anything said in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 335 is to the contrary.  I would add that this disagreement may well be explained by the fact that his Honour was addressing a quite different issue in TWU to the one that arises here.  In TWU, the employer conducted a formal ballot for the approval of the proposed employee collective agreement and obtained an unfavourable result.  It then took a second informal vote by show of hands at a staff barbeque which was in favour of the proposed agreement.  Thereafter, the employer sought to rely upon the second informal vote.  The main issue was whether the employer could do so.  For present purposes, the question in this case is whether the employer afforded the employees the opportunity required by s 340(2)(a), not the validity of the approval process under s 340(2)(b). 

45                                          Taking into account these aspects of the context and language of s 340(2)(a) and the various indications as to its purpose mentioned above, I consider the purpose of the subsection is to require an employer wishing to have its employees approve and, therefore, be bound by an employee collective agreement, to provide an opportunity for all the employees who will be affected by the proposed agreement, to meet together as a group, to discuss the provisions of the proposed agreement.  This provides the subsection with a purpose additional to, and beyond those mentioned above: being provided with timely access to the proposed agreement; reading and understanding the proposed agreement; specifying the requirements for an individual agreement between an employer and an employee; or providing for a means of ascertaining whether the majority of the employees approve of the proposed agreement by voting (as in this case) for or against it.  Consistent with this purpose and its context and language, I therefore consider that the sub-section is to be construed to place an obligation on such an employer, to provide the employees concerned with an appropriate time and occasion to meet together as a group, to discuss the provisions of the proposed agreement and to decide whether they wish to approve it. 

46                                          Thereafter, I consider the word ‘reasonable’ comes into play to determine the content of the basic obligation outlined above.  That calls for a consideration of all the relevant circumstances of each case.  The sorts of circumstances that will probably fall to be considered may include: the size of the employer’s operations, the number of employees involved and the geographic distribution of those employees.  The circumstances of each case will therefore dictate whether or not the employees should be offered an opportunity to meet together as one group, or in a number of groups and the form and location of that meeting, or those meetings.  The circumstances may also dictate whether or not a meeting could be conducted by the use of modern technology such as a video or audio conference facility. 

47                                          In this case, Blue Star is a relatively small electrical contracting business.  In February 2009, 57 of its employees were affected by the proposed agreement.  This is not a particularly large number of employees.  Blue Star’s business was split into two divisions, with the construction division operating on five or more sites.  There was, therefore, little opportunity in their daily work activities for all of the employees to meet their fellow employees affected by the proposed agreement.  However, all of these divisions and sites were located in and around Brisbane, within a relatively confined geographic area.  Given all these circumstances, I consider that the obligation imposed on Blue Star by s 340(2)(a) in this case required it to provide an opportunity for all of the employees affected by the proposed agreement to meet together at the same time and place and discuss the proposed agreement as a group. 

48                                          There is no evidence that Blue Star provided this opportunity to its employees.  To the contrary, Blue Star actually called a meeting of all of the relevant employees at its Meadowbrook site on Tuesday 17 February 2009, to discuss the proposed employee agreement and later cancelled that meeting.  I therefore conclude that Blue Star did not comply with the obligation imposed on it by s 340(2)(a). 

49                                          This conclusion would be enough to dispose of this matter in favour of the CSU, but in case I am wrong in this conclusion, I will briefly consider the other two issues raised by the CSU. 

DID THE ERROR ON THE BALLOT PAPER DEPRIVE THE EMPLOYEES OF A REASONABLE OPPORTUNITY TO DECIDE WHETHER THEY WANTED TO APPROVE THE PROPOSED AGREEMENT?

50                                          In Karellas, Graham J held that: “… if the minds of the relevant employees were or were likely to be contaminated by misinformation about the … agreement and its effect then it could be said that such employees were denied a ‘reasonable opportunity to decide’ whether they wanted to approve it”: see at [49].  In Karellas, Graham J did not have any evidence before him as to the actual effect of the alleged misinformation on the minds of any of the employees concerned.  Nonetheless, his Honour held in favour of the applicant on the basis of the likely effect that the alleged misinformation had upon an employee’s decision to vote one way or another: see at [54].  These aspects of the decision were upheld on appeal to the Full Court: see Shop Distributive & Allied Employees’ Association v Karellas Investments Pty Ltd (2008) 166 FCR 562; [2008] FCAFC 42 as follows (at [54]):

By its cross-appeal, Karellas contends that the trial judge erred in finding that it breached s 341 of the Act.  Karellas submits that such a finding was not open to his Honour in the absence of evidence concerning the effect of the information on the employees.  His Honour had regard to the likely effect of the information on employees.  We consider that his Honour was correct to do so.  An employee who is given false and misleading information that may affect his or her decision on whether to approve an agreement is, by the very provision of that information, denied a reasonable opportunity to decide whether to approve the agreement.  That is, because there is information available to the employee which has the capacity to distract him or her on voting on the agreement and from considering its actual effect.  A decision that is capable of being affected by false and misleading information is not a decision about approving the agreement, but a decision about extraneous matters not given effect to by the agreement.

51                                          In this case, it is common ground that the ballot paper erroneously stated that the proposed agreement was to operate for the period 2009 to 2011.  This information was plainly false because clause 7 of the agreement actually provided the agreement was to operate for a period of four years (see [16] above).  With one exception, I am in the same position as Graham J in Karellas, in that I do not have any evidence of the actual influence of this false information on any of the employees.  The exception is Mr Cane.  He said in his affidavit that this false information did not worry him because he: “knew it was a four (sic: year) agreement.”  In contrast, Mr Wermizyari said that before he was told about the error in the ballot paper, he thought the proposed agreement was for two years.  However, neither he nor any of the other employees called to give evidence by the CSU said whether this false information affected his vote.  Perhaps this is not surprising because it should be recalled that they all voted ‘no’ to the proposed agreement.  The question, then, is whether this false information about the proposed agreement was likely to affect any of the employees in his or her decision on whether to approve the proposed agreement. 

52                                          In my view, this false information was likely to have that effect.  It related to one of the essential parts of any agreement ie, its period of operation.  In quantative terms, it represented twice the period of time during which the proposed agreement was to operate, ie four years instead of two years.  It was therefore not trivial or insignificant.  In this respect, it is worth noting that the maximum period allowed under the WR Act has fluctuated between three and five years and currently stands at four years under the Fair Work Act: see Forsyth A and Stewart A, Fair Work – The New Workplace Laws and the Work Choices Legacy (The Federation Press, 2009) p 106.  Furthermore, this false information was provided against a background of dire and uncertain economic conditions and an expectation that those conditions may change for the better in the next few years.  Indeed, this expectation appears to have been a factor playing upon Mr McInnes’ mind because he expressed it to the employees at the Browns Plain site meeting: see [16] above. 

53                                          For these reasons, I consider the employees were likely to be adversely affected by the false information on the ballot paper about the period of operation of the proposed agreement, such that they were denied a reasonable opportunity to decide whether they wanted to approve the proposed agreement within the terms explained by the Full Court in Karellas: see [51] above. 

WAS THERE A MAJORITY OF THE VALID VOTES CAST?

54                                          On this third issue, the CSU contends that the words in s 340(2)(b): “persons who cast a valid vote” required Blue Star to adopt a process which ensured that only the eligible employees were able to cast a vote in the postal ballot.  Of course, s 340(2)(b)(i) allows the employer to choose the manner or process by which it obtains the approval of the eligible employees to the proposed agreement: see John Holland Pty Ltd v Maritime Union of Australia [2009] FCA 437 at [19] per Graham J.  In this case, consistent with this observation, Blue Star chose to conduct a postal ballot.

55                                          In my view, the words ‘valid vote’ in s 340(2)(b)(i), in this context, mean a vote that is cast by an eligible employee and one that clearly indicates that employee’s intention to vote for, or against, the approval of the proposed agreement.

56                                          The CSU’s main complaint about the process used by Blue Star is that it did not allow it to check that the ballot papers returned to it by post were cast by eligible employees.  According to the CSU, this was so because Blue Star did not require each employee returning a ballot paper to put his or her name, or other details, on the self addressed envelope provided to them.  Thus, it claimed, there was no means of checking each envelope against a list of eligible employees to ensure the person who cast the vote in each case was an eligible employee. 

57                                          In my view, Blue Star did use a system that effectively ensured that only eligible employees could cast a vote in the postal ballot.  I consider this was achieved by the distinctive nature of the self addressed envelope that was sent to each eligible employee and in which they were to return their vote.  Ms Linnegar described the self addressed envelopes as follows:

The thing that was very distinct about them was they had a large blue return address stamp on the back that’s got Blue Star Pacific and the address.  We wouldn’t receive any other mail that had that stamp on it because it’s for outgoing mail, and the front had a – had a pre-printed label on it.  So with the stamp and the label, it made them very, very distinct, especially the stamp, which is a one-off that was – that we have had made.

58                                          Ms Linnegar gave evidence that 57 eligible employees were sent ballot papers and 47 of these distinctive self addressed envelopes were returned to Blue Star.  Given the distinctive nature of these self addressed envelopes and the fact that they were only despatched to the 57 eligible employees involved, it would follow that the 47 self addressed envelopes that were returned could only have come from an eligible employees.  Of course, it would have been possible for a person to duplicate these distinctive envelopes, but that would require some prior knowledge of their form and access to the special “one-off” stamp that Blue Star used to prepare them.  I do not understand CSU to be alleging any malpractice of this kind in its challenge to the postal ballot.  I therefore consider that Blue Star used a process which ensured that eligible employees, and only eligible employees, cast the votes in the postal ballot.

59                                          Finally, on this aspect, I do not consider the discrepancies in the vote pointed to by the CSU detracts from this conclusion (see [23]-[24] above).  Firstly, the discrepancy of two votes in the ‘yes’ votes ie initially 38 and later 36, was adequately explained by Ms Linnegar’s evidence that she undertook a re-count and discovered the two facsimile votes that had been included twice.  Secondly, the evidence of the CSU that 13 employees had voted ‘no’ when only 10 ‘no’ votes were recorded in the official result could easily be explained by mistake on the part of the employees as to how they voted, or a mistaken belief that they had posted the vote back to Blue Star, when they had not.  In any event, I do not consider this discrepancy has any bearing upon the validity of the system used by Blue Star to ensure that only eligible employees cast votes in the postal ballot. 

60                                          For these reasons, I reject this aspect of the CSU’s challenge to the approval of the proposed agreement.

CONCLUSION

61                                          In summary, I have concluded that:

62.1     Blue Star was required to, and did not, give its employees a reasonable opportunity to decide whether they wanted to approve the proposed agreement because, in all the circumstances, they did not afford them the opportunity to meet together at the same time and place and discuss the proposed agreement as a group.

62.2     The employees were likely to be adversely affected by the false information on the ballot paper about the period of operation of the proposed agreement, such that they were denied a reasonable opportunity to decide whether they wanted to approve the proposed agreement.

62.3     Blue Star did adopt a process which ensured that only eligible employees were able to cast votes in the postal ballot.

62                                          For these reasons, I made the declarations sought by the CSU on 30 June 2009.

63                                          Before leaving this matter, I should record that after I reserved my decision on 16 June 2009, Mr Boyce submitted some further written submissions.  I did not give him any prior leave to do this and he did not seek leave before doing so.  I rejected those submissions and have not considered them in this decision.  In my view, this practice should be strongly condemned.  As the High Court said in Re Application by the Chief Commissioner of Police (Vic) (2005) 214 ALR 422; [2005] HCA 18 at [54]:

Where leave has not been given publicly for supplementary submissions and evidence, the provision of such material to court registries without permission of the court, publicly signified, is a derogation from the principle of the open administration of justice.  It should not occur.  If new points of importance arise in the case whilst a matter stands for judgment, the proper course (unless statute or court rules permit otherwise) is for the proceeding to be relisted so that an application to enlarge the record can be made and determined in open court.

See also: Carr v Finance Corporation of Australia Ltd (No 1) (1980) 147 CLR 246.

Associate:

Dated:         14 July 2009