According to a recent decision of the Full Court of the Federal Court of Australia (FCAFC), there is no universal or general requirement for employees to meet as a group or subgroups before voting on a collective agreement.
In Blue Star Pacific Pty Ltd v Communications, Electrical, Electronic Energy Information Postal Plumbing & Allied Services Union of Australia  FCAFC 187, the FCAFC upheld the validity of an employee collective agreement made in February 2009. It overturned the prior decision of the Federal Court of Australia (FCA). In its decision, the FCAFC held that a requirement to provide employees with a reasonable opportunity to decide whether they want to approve the agreement did not involve a requirement that an employer hold a meeting or meetings with employees.
The Communications, Electrical, Electronic Energy Information Postal Plumbing & Allied Services Union of Australia (CEPU) challenged an employee collective agreement that Blue Star Pacific Pty Ltd (Blue Star) was proposing to its employees in February 2009 (Agreement).
The CEPU argued that one of the reasons that the Agreement was invalid was because Blue Star failed to conduct a meeting with all employees to discuss the proposed Agreement as a group. The relevant circumstances identified by the CEPU regarding its argument were that:
- Blue Star's business had two divisions – a construction division and client service division
- the two divisions involved different work and the proposed Agreement had a different effect on each division
- there was no opportunity or ability for the employees to meet and discuss their views about the effect of the proposed Agreement, and
- Blue Star convened and then cancelled a general meeting of all employees, ultimately preventing employees from calling a meeting themselves.
The FCA agreed with the CEPU's arguments and found that Blue Star had not given its employees a reasonable opportunity to decide whether they wanted to approve the Agreement. The FCA also decided that section 340(2) of the Workplace Relations Act 1996 (Cth) (WR Act) imposed a general obligation on employers to provide an opportunity for employees to meet together as a group to discuss the provisions of the proposed agreement.
In three separate judgments, the FCAFC disagreed with the FCA's decision. The FCAFC held that section 340(2) of the WR Act did not impose universal or general requirement for employees to meet as a group or subgroups before voting on a collective agreement.
The FCAFC went on to say that the steps that an employer needed to take to comply with what is considered a "reasonable opportunity" under section 340(2) of the WR Act would differ depending on the circumstances of a particular case. Importantly, the considerations include whether a trade union is involved in the negotiations and communications with employees.
Gray J of the FCAFC also said that a meeting of employees cannot automatically discharge an employer's obligations to provide a reasonable opportunity, particularly in circumstances where the purpose of the meeting is for management to "sell" the agreement and not to provide employees with an opportunity to express dissent.
Since 1 July 2009, the Fair Work Act 2009 (Cth) (FW Act) has applied to the making, variation and termination of enterprise agreements. The FW Act requirements are different to those in the WR Act.
In particular, section 180 of the FW Act prescribes that an employer must take "all reasonable steps" to explain the terms and effect of the agreement in an appropriate manner taking into account the particular circumstances and needs of employees.
The Blue Star case is relevant to considering what "all reasonable steps" might be for an employer to take. It is unlikely that it is a general requirement in all circumstances to hold meetings with employees to explain the terms and effect of an agreement. Each particular workplace should have regard to their own circumstances and whether a meeting could appropriately discharge this obligation.
Additionally, the FW Act, requires employers to provide employees with a "reasonable opportunity" to consider a proposed termination of an enterprise agreement. Similarly, it is unlikely that this requires an employer to hold a meeting with employees for those employees to consider a proposed termination, but it depends on the circumstances of the workplace.
Tips for employers
Employers should consider carefully the provisions of the FW Act regarding enterprise agreements. In particular, an employer will need to consider, in light of its workforce, what "all reasonable steps" it should take to explain the terms and effect of an agreement. For some employers, "all reasonable steps" may require a meeting with employees, for other employers, a memo setting out the terms and explaining their effect may be sufficient. Importantly, employers should give employees an opportunity to clarify the operation and effect of the terms of the proposed agreement with the employer.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.