Commission rejects ‘deficient’ enterprise flexibility agreement

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Commission rejects ‘deficient’ enterprise flexibility agreement

The Full Bench of the Industrial Relations Commission has refused to approve the implementation of an enterprise flexibility agreement (EFA) at an Australian Meat Holdings Pty Limited workplace in Rockhampton, as it considered that there were "a number of important deficiencies in the process for the negotiation of the (agreement)" and "in the ways the employees covered by the agreement were informed and consulted about the agreement".

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The Full Bench of the Industrial Relations Commission has refused to approve the implementation of an enterprise flexibility agreement (EFA) at an Australian Meat Holdings Pty Limited workplace in Rockhampton, as it considered that there were "a number of important deficiencies in the process for the negotiation of the (agreement)" and "in the ways the employees covered by the agreement were informed and consulted about the agreement". ( Australasian Meat Industry Employees Union v Australian Meat Holdings Pty Ltd [1999] FCA 696 (25 May 1999) (Commonwealth: Federal Court of Australia) [83%])

Australian Meat Holdings (AMH) had been negotiating with the AMIEU about the introduction of significant changes in work arrangements and terms and conditions of employment (Workplace Relations Act 1996) at its Queensland plants for over twelve months. Industrial disputation had occurred in relation to these negotiations. (Australasian Meat Industry Employees Union v Australia Meat Holdings Pty Ltd [1999] FCA 292 (25 March 1999))

While negotiations were to continue towards an enterprise agreement at the Rockhampton site, the Commission decided that the work arrangements proposed by AMH were to be trialed and monitored by a member of the Bench, Commissioner Leary. (Australasian Meat Industry Employees Union v Australia Meat Holdings Pty Ltd [1999] FCA 292 (25 March 1999))

The agreement, negotiated through a Consultative Committee with no union representation, was accepted by the workforce at a secret ballot, however, the union refused to accept the result. Another ballot was held with the understanding that the union would not be a party to the agreement if it was agreed by employees, and that the agreement would be an ‘EFA’. The ballot was successful.

(Meat and Live-stock Industry Legislation Repeal Act 1995)

In its decision refusing to accept the EFA, the Full Bench identified three main problems:

1. Confusion as to the role of the Consultative Committee

The Committee believed that its role was to create a discussion document which was to be the subject of negotiation between the AMH and AMIEU which was to be certified as an agreement with the AMIEU as a party. The result, however, was that "the most significant and contentious parts of the EFA were not the subject of proper and meaningful negotiation". The Full Bench also had reservations about the extent to which the role of the Committee was explained to employees.

2. Not satisfied that reasonable steps were taken to inform employees about the terms of the EFA and to explain the effects of those terms:

"In circumstances where significant changes to the terms and conditions of employment were under consideration, we do not consider that the measures taken were sufficient to inform employees to be covered about the terms of the proposed agreement and the effect of those terms. We have reached this conclusion despite the steps taken to inform employees by the display of the proposed agreements on the plant noticeboard and the reading out and explanation of the terms of the agreements at the meetings and despite the understanding which the employees would have gained about the proposed work arrangements through the working of the trial at the plant".

The Full Bench noted that:

  • copies of the agreement were not given to employees to take home and study or seek advice about;
  • no detailed explanation was given to employees about the differences between the terms and conditions in the award and the EFA:
  • no document was circulated to employees comparing the relevant provisions; and
  • union officials were excluded from attending some of the meetings at which the agreement was presented and explained to employees.

The Full Bench was also particularly critical of "the fact that a distinction was not made between the processes which were intended to lead to an agreement between AMH and AMIEU and the processes followed after it was decided by the Company to pursue an EFA".

3. Not satisfied that the employees genuinely agreed to be bound by the EFA:

"In the circumstances of this case, and having regard to the deficiencies in the negotiation process and the opportunity given to employees to consider and take advice on the agreement before voting, we consider that the consent given by a majority of employees at the plant cannot be said to be genuine".

The Full Bench also expressed concerns about whether the AMIEU was given a reasonable opportunity to take part in the EFA negotiations as required by section 170ND(7), but decided that it did not have to come to a conclusion in relation to section 170ND(7) in light of its findings in relation to section 170NC.

The Full Bench also held that the deficiencies with the Rockhampton EFA went to its foundations and could not be corrected as set out in section 170NF(3), and that further negotiations were required. The Bench also noted that it had not yet dealt with other requirements of section 170NC such as the ‘no disadvantage test’.

 

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