A Full Bench of the Fair Work Commission has held that certain errors in notices of employee representational rights (NERR) may be overlooked, despite previous case law suggesting that strict compliance with the form and content of the template NERR is essential.
In July 2015, Serco Australia Limited, an international service company, made an application for the approval of an enterprise agreement titled the Serco Immigration Services Agreement 2015.1
In accordance with the requirements of the Fair Work Act 2009 (Cth) (FW Act),2 Serco needed to demonstrate that it had given a valid NERR to each employee who would be covered by the Agreement. A NERR marks the commencement of bargaining under the FW Act and therefore must be valid for an eventual enterprise agreement to be approved.
The FW Act sets out strict requirements for the content and form of a NERR, including that a NERR must contain the content prescribed by the Fair Work Regulations 2009 (Cth) (Regulations), must not contain any other content and must be in the form prescribed by the Regulations.
The NERR Serco had issued to employees at the commencement of negotiations referred to Fair Work Australia rather than the Fair Work Commission. On this basis, Commissioner McKenna found that an obsolete version of the NERR had been issued and due to the prescriptive wording of the FW Act, that the Agreement could not be approved.
In her decision, Commissioner McKenna stated that she was bound by the decision of Peabody v Moorvale,3 in which a Full Bench of the Commission demonstrated how sensitive the Commission will be to any departure from the mandatory requirements for the form and content of a NERR. The Full Bench in Peabody adopted a strict interpretation of the requirements for compliance with the FW Act, stating “In our view, section 174(1A) is clear and unambiguous. There is simply no capacity to depart from the form and content of the notice template provided in the Regulations and failure to comply with these provisions would go to invalidity”.4
Given Serco had already met all the other legislative requirements and had ultimately reached an agreement with their employees, it sought leave to appeal Commissioner McKenna’s decision to a Full Bench, arguing that she had erred in reaching the conclusion that the NERR was invalid.5
Serco advanced a number of submissions in support of its appeal, but the Full Bench only considered its primary submission, namely, that the Commissioner erred in not treating the Acts Interpretation Act 1901 (Cth) (Interpretation Act) as being applicable to the Notice.
The Interpretation Act provides that where a statute alters the name of a body or alters the name of an office then a reference to the body or the office under the former name shall, except in relation to matters that occurred before the alteration took place, be construed as a reference to the body or the office under the new name. The Interpretation Act indicates that this will be the case unless the contrary intention appears.
The Full Bench acknowledged that the requirement for strict compliance contained in the FW Act considered in isolation, may indicate that a defective NERR could not be ‘saved’ by the application of the Interpretation Act.
However, it noted, among other things, that the FW Act contains an express statement that the Interpretation Act applies to it and, in addition, the FW Act states that:
- the body known immediately before the commencement of this subsection as Fair Work Australia is continued in existence as the Fair Work Commission.
Note: see also subjection 25B(1) of the Acts Interpretation Act 1901 (Cth).
The note was introduced at the same time as the section and indicates an intention that section 25B(1) of the Interpretation Act applies generally in respect of the name change.
Therefore, the Full Bench found in favour of Serco and overturned Commissioner McKenna’s ruling.
Bottom line for employers
In this particular case, the Full Bench made a concession for a superficial error in Serco’s NERR on the basis that there was clear legislative intention indicating that this type of error should not invalidate the Notice. However, the Commission is unlikely to make concessions for other superficial errors contained in a NERR. Due to the prescriptive nature of the FW Act provisions relating to NERRs, the Commission is likely to remain sensitive to any departure from the mandatory requirements in relation to form and content.
A failure to comply with the mandatory requirements will taint the whole process of bargaining for an agreement and effectively mean that whatever agreement is made will be incapable of being approved by the Commission. A fresh NERR will need to be issued, and the process will need to be recommenced. Aside from the additional time, cost and inconvenience associated with starting again, employers potentially stand to lose goodwill with employees and their bargaining representatives, provoking them to re-visit matters which were previously agreed, and prompting claims for backpayment of salary increases.