Aerocare loses appeal: casuals excluded from agreement

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Aerocare loses appeal: casuals excluded from agreement

An aviation company has lost its appeal against a Fair Work Commission decision, after the Federal Court of Australia found it had short-changed its employees.

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An aviation company has lost its appeal against a Fair Work Commission decision, after the Federal Court of Australia found it had short-changed its employees. 

Casual employees excluded 

 
Aerocare Flight Support Pty Ltd provides aviation ground handling services. It had employed two categories of employees in the performance of those services – part-time employees known as PSEs and casual employees. Both the PSE employees and casual employees performed the same work, for the same supervisors, and in the same location. 
 
Under the Fair Work Act 2009 (Cth) (FW Act), an employer and its employees can make enterprise agreements, which regulate the terms and conditions of employment. To have effect, the enterprise agreement must be approved by the Fair Work Commission. 
 
Aerocare made the Aerocare Collective Agreement 2017 but excluded its casual employees from the group of employees to be covered by the agreement. When the commission refused to approve the agreement, Aerocare appealed the decision to a full bench. That appeal was also dismissed. 
 
Aerocare then made an application to the Federal Court of Australia. 

The law 

 
Section 186(3) of the FW Act relates to enterprise agreements made between employers and employees. It states that the FWC must be satisfied that the group of employees covered by the agreement was fairly chosen. 
 
If the agreement does not cover all employees, the FWC must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct, as per section 186(3A) of the Act. 

The question

 
The question was whether the group of employees covered by the 2017 agreement was fairly chosen by Aerocare. 

Arguments

 
Aerocare claimed that the commissioner was wrong in deciding he was not satisfied the group of employees covered by the agreement was fairly chosen.

It argued that the commissioner: 
  • focused on the work performed by the casual employees when he should not have 
  • failed to consider relevant considerations such as Aerocare’s legitimate business rationale for the chosen coverage
  • had regard to irrelevant considerations such as the exclusion of casual employees from bargaining a new agreement, and
  • had no evidence to suggest that the casual employees were excluded from bargaining for a new agreement.

Decision

 
Ultimately, the Federal Court of Australia dismissed Aerocare’s application. It argued that the nature of the work performed is not prohibited from being considered under s186(3A), whether in relation to geographical, operational or organisational distinctiveness.

It also considered that the exclusion of casual employees from the 2017 agreement did not automatically mean the group covered by the agreement was “organisationally distinct”. When determining the meaning of the expression ‘organisationally distinct’, the Federal Court relied on the term ‘organisation’, which refers to the manner in which the employer has organised its enterprise to conduct its operations. For a group to be organisationally distinct, it must have “qualitatively different” duties from another group within the company – not merely different tasks or roles. 
 
The court also found that the commissioner had not failed to take into account the considerations relating to Aerocare’s business structure and casual employee benefits. This is because these considerations were not “centrally relevant” to the question posed by section 186(3) of the Act. The court referred to this section as a “protective provision”, which ensures that a group of employees has the opportunity to participate in a collective bargaining process. It therefore does not matter that Aerocare gave its casual employees generous benefits; it is more important that they were included in the process of negotiating the 2017 agreement, from which they were ultimately excluded.    
 
The bottom line: Where an enterprise agreement has been drafted, an employer must ensure that the group of employees covered by the agreement has been fairly chosen. It is important that all relevant groups of employees are given the opportunity to participate in the collective bargaining process of the agreement.  
 
 
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