DECISION

Fair Work Act 2009
s.604—Appeal of decision

Construction, Forestry, Maritime, Mining and Energy Union; The Australian Workers’ Union
v
LS Precast Pty Ltd
(C2018/7041)

Appeal against decision recorded in Transcript (18 October 2018 at PN75) and decisions [2018] FWC 7163 & [2018] FWCA 7392 of Commissioner McKinnon at Melbourne on 22 November 2018 & 4 December 2018 respectively in matter number AG2018/4643.

Introduction and background

[1] On 22 August 2018, LS Precast Pty Ltd (LS Precast) made application to the Fair Work Commission (Commission) under s.185 of the Fair Work Act 2009 (Act) for the approval of an enterprise agreement. The LS Precast Pty Ltd Enterprise Agreement 2018 1 (Agreement) was made on 20 August 2018.2 The Agreement was approved by Commissioner McKinnon on 4 December 20183 (Approval Decision) following the findings made by the Commissioner on 22 November 20184 (22 November Decision). In the course of arriving at the 22 November and Approval Decisions, the Commissioner dealt with an application by the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) and The Australian Workers’ Union (AWU) (collectively the “Unions”) to be heard in relation to the application. The Commissioner determined to hear further from the Unions in respect of whether the Agreement passed the better off overall test but not otherwise (Section 590 Decision) (collectively the “Decisions”).5 The Unions have lodged an appeal against the Decisions pursuant to s.604 of the Act.

[2] The Agreement relates to a precast facility that was being constructed in Benalla, regional Victoria. 6 The precast facility is now operational, but it was not operational when the Agreement was made on 20 August 2018.7 LS Precast is a company that appears to have been incorporated on 26 April 20188 and self-evidently it has no history in precast concrete manufacturing. Seven part-time employees were engaged as labourers at the time the Agreement was made and each employee voted to approve the Agreement.9 LS Precast anticipates that once the precast facility is fully operational, the number of employees covered by the Agreement could exceed 220.10 As at 8 November 2018, LS Precast had employed two additional full-time production operators to work at the facility. By the time the appeal was heard on 21 January 2019, one of the original employees had resigned with the other six and the two additional production operators continuing to be employed on a full-time basis. In addition, there had been an additional eight production operators employed and one store person.11

[3] The seven employees who voted on the Agreement were employed by LS Precast on 25 July 2018. 12 Four of the employees were previously engaged by Phabcast Pty Ltd (Phabcast) and had their employment “transferred” to LS Precast.13 Phabcast had earlier made14 then later discontinued an application for the approval of an enterprise agreement.15 On 27 July 2018, by which time all employees had signed contracts of employment, LS Precast issued a Notice of Employee Representational Rights (NERR).16 The Unions were not bargaining representatives for the Agreement and no other employee bargaining representatives for the Agreement had been appointed.17 The Agreement was distributed on 9 August 2018, the access period commenced on 13 August 2018 and a vote to approve the Agreement occurred on 20 August 2018.18

The Decisions the subject of appeal

Section 590 Decision

[4] The Unions opposed the approval of the Agreement and asked the Commissioner to exercise the discretion under s.590 to permit the Unions to participate in the approval proceeding and to make submissions in opposition to the application for approval. The CFMMEU had filed detailed written submissions setting out the nature of its objections. 19 The Commissioner determined that she would not hear further from the Unions except in respect of the question whether the Agreement passed the better off overall test (BOOT).20

22 November Decision

[5] In the 22 November Decision, the Commissioner dealt with the Unions’ submissions concerning the BOOT.

[6] In so doing, the Commissioner made the following findings:

•  the Agreement provided pay rates 30.15% to 35.47% above those contained in the Concrete Products Award 2010 (Award); 21

•  the casual conversion clause of the Agreement (clause 4.7) was no less beneficial to employees than the Award; 22

•  the alteration of the span of hours in the Agreement was more beneficial than the Award; 23

•  the amount of notice required to change hours of work and rostered shifts (clause 10.4) was less beneficial than the Award; 24

•  clauses relating to rostered days off (RDOs) were not detrimental to employees when compared with the Award; 25

•  meal breaks under the Agreement are potentially more detrimental to employees when compared with the Award; 26

•  the redundancy clause of the Agreement was less beneficial to employees than the Award; 27

•  the meal allowance under the Agreement was less than under the Award, however the higher rates of pay were “sufficient to compensate for this detriment”; 28 and

•  the classification structure of the Agreement aligned with the mechanisms for progression contained in the Award in relation to training. 29

[7] Having considered each of these factors and in weighing those factors which the Commissioner found to be less beneficial than the Award, the Commissioner was satisfied that as at test time, relevant employees would be better off overall under the Agreement if an undertaking was given to address the identified concern in relation to redundancy. 30

[8] The Commissioner also considered other agreement approval requirements and concluded:

•  each of the pre-approval steps and timeframes relating to the making of the Agreement were met; 31

•  the Agreement and its effect were explained to employees through the agreement making process; 32

•  each of the employees involved over the period in which the Agreement was made were employees who will be covered by the Agreement; 33

•  the material did not give rise to concerns of the nature arising in Re Phabcast Enterprise Agreement 2017 34;35

•  the Agreement was genuinely agreed to by employees and there were no other reasonable grounds of which the Commissioner was aware for believing that the Agreement was not genuinely agreed to by the relevant employees; 36

•  the group of employees to be covered by the Agreement was operationally distinct and fairly chosen; 37

•  the Agreement did not contain any designated outworker terms and there was no evidence of any scope order in operation; 38

•  the nominal expiry date of the Agreement was four years from the date of approval by the Commission; 39 and

•  the Agreement’s dispute settlement term (clause 25), flexibility term (clause 26) and consultation term (clause 24) each met the requirements of the Act. 40

[9] The Commissioner invited LS Precast to provide any undertaking it wished to give addressing the concern in relation to redundancy and the Unions and any bargaining representatives were invited to provide their views in relation to any undertakings provided. 41 The Commissioner concluded she was “otherwise satisfied that each of the requirements of ss.186, 187 and 188 of the Act, as are relevant to this application for approval, have been met.”42

Approval Decision

[10] In the Approval Decision, the Commissioner records that she accepts an undertaking proffered by LS Precast and with the undertaking the Commissioner was now satisfied that each of the requirements of ss.186, 187, 188 and 190 43 had been met. The Commissioner approved the Agreement.44

Grounds of Appeal

[11] By way of a joint Notice of Appeal lodged on 13 December 2018 and amended on 10 January 2019, the Unions seek to appeal the Decisions pursuant to s.604 of the Act for which permission must be obtained. The operative grounds of appeal need not be repeated here. It is sufficient to note that the appeal grounds contend error in the Commissioner’s refusal to further hear from the Unions except in respect of the BOOT (Ground 2) and in her conclusions that:

•  the group of employees covered was fairly chosen (Ground 3);

•  LS Precast had taken all reasonable steps to explain the terms and effect of the terms of the Agreement to employees (Ground 4); and

•  there were no other reasonable grounds for believing the Agreement was not genuinely agreed to by relevant employees (Grounds 5 and 6).

Application to reopen and to admit further evidence

[12] On 21 January 2019, at the conclusion of the hearing of this appeal, we reserved our decision. Subsequently, on 5 March 2019, the Unions applied to reopen their case on appeal and thereafter for the Full Bench to admit further evidence pursuant to s.607(2) of the Act. The further evidence the subject of the application would be adduced from Mr Frank Krishnan, a former employee of LS Precast and one of the seven employees who had voted to approve the Agreement. Mr Krishnan is said to be able to give evidence about a number of matters that bear directly on whether there was compliance by LS Precast with s.180(5), whether the Agreement was genuinely agreed to pursuant to s.186(2)(a), and whether the Commission can be satisfied that there are no other reasonable grounds for believing that the Agreement was not genuinely agreed to by employees for the purposes of s.188(1)(c).

[13] Mr Krishnan is said to only be willing to provide this evidence if an order under s.590(2)(a) is made requiring his attendance. An application for such an order has also been made.

[14] The nature of the evidence that Mr Krishnan would give is set out in a statement of Ms Jessica Dawson–Field, 45 a solicitor in the employ of Maurice Blackburn lawyers, the solicitors for the AWU. In summary, the evidence that would be adduced is as follows:

•  on 30 May 2018, he started work at Phabcast as a labourer;

•  on 25 July 2018, he received a letter stating his employment would be ‘moved’ to LS Precast;

•  there were seven employees employed at LS Precast in August 2018, when he voted on the Agreement;

•  he does not believe any of the employees had experience in precast concrete;

•  he does not recall receiving a NERR from LS Precast;

•  he was not aware that he could be represented by a union in bargaining for a new agreement;

•  at meetings on 9, 10 and 15 August 2018, he recalls that Mr Zev Costi, a Director of Strategic Employee Relations Pty Ltd who had provided assistance to LS Precast in relation to the pre-approval process associated with the making of the Agreement, 46 stated words to the effect that:

•  the employees would be better off signing the Agreement and the sooner it was done, the sooner the employees would be on a higher rate; and

•  if the employees voted on the Agreement they would have a choice of shift (day, night, evening), overtime, full-time, casual or part-time;

•  he does not recall any detailed discussion occurring about the difference between the Award and the Agreement at any of the meetings;

•  he voted in favour of the Agreement; and

•  if he had understood the difference between the Agreement and the Award, he would not have voted in favour of the Agreement.

[15] It is also clear from Ms Dawson-Field’s file note of instructions that Mr Krishnan told her that he “can’t remember the specifics of the meetings”, that discussions were “all very general and vague” and that employees “didn’t really ask questions at the meetings and there was a not a great deal of discussion.” 47

[16] The exercise of power to reopen a case on appeal and to admit further evidence under s.607(2) of the Act involves the exercise of discretion. It is convenient to deal with both issues concurrently as the matters are clearly interrelated and the considerations relevant to whether to admit further evidence are often also relevant to the exercise of the power to allow a party to reopen its case. 48 Here that is clearly the case.

[17] Section 607(2) of the Act provides that the Commission may:

(a) admit further evidence; and

(b) take into account any other information or evidence.

[18] Material that is relevant to an issue before the Commission which comes to light subsequent to the time of an initial hearing may be admitted if it bears on an issue to be determined in the appeal. 49  It is uncontroversial that the exercise of the discretion to admit further evidence is guided by the principles set out in Akins v National Australia Bank50 (Akins). In Akins, the Court said:

“Although it is not possible to formulate a test which should be applied in every case to determine whether or not special grounds exist there are well understood general principles upon which a determination is made. These principles require that, in general, three conditions need be met before fresh evidence can be admitted. These are: (1) It must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; (2) The evidence must be such that there must be a high degree of probability that there would be a different verdict; (3) The evidence must be credible.” 51 

[19] In considering whether to exercise the discretion in s.607(2), it may be appropriate in a given case to admit further evidence even if one or more of the considerations set out in Akins are not strictly satisfied. 52 As the Court in Akins observed, “it is not possible to formulate a test which should be applied in every case to determine whether or not special grounds exist” to admit fresh evidence.

[20] We turn then to the considerations in Akins. Accepting that Mr Krishnan’s evidence was not available to the Unions prior to the appeal hearing or before the Commissioner at least in part because the Unions’ participation in the oral proceedings before the Commissioner was confined to the BOOT, we are not persuaded the evidence that Mr Krishnan would give is particularly probative or persuasive. We do not consider the evidence proposed to be given is such that there is a high degree of probability that there would be a different result in the appeal or in the decision at first instance. Our reasons for this conclusion may be shortly stated.

[21] As will later become clear, the Commissioner had before her evidence of Mr Costi. 53 That evidence addresses the preparation of a written Explanatory Statement containing an explanation of the terms of the Agreement and the effect of those terms.54 That evidence also addresses the distribution of the Explanatory Statement to employees including to Mr Krishnan. Ms Dawson-Field’s file note of instructions does not suggest that Mr Krishnan will say that he did not receive a copy of the Explanatory Statement.

[22] Mr Costi’s evidence included notes he had prepared 55 of the meetings he held on 9, 10 and 15 August 2018 with employees, including Mr Krishnan. His evidence also included pre-prepared speaking points56 that he used during the meeting on 15 August 2018. Ms Dawson-Field’s file note of instructions does not suggest that Mr Krishnan was given a copy of these materials, that he reviewed them, and that he would give evidence that he disputes the content or accuracy of the materials. Mr Krishnan’s evidence would be rather that he does not remember the specifics of the meetings, he does not recall any detailed discussions of the differences between the Award and the Agreement, but that he has a recollection that the discussions were very general and vague.

[23] Mr Krishnan would also give evidence that his recollection is that employees did not really ask questions at the meetings. His recollection appears contrary to Mr Costi’s notes of the meetings in which a number of employees, including Mr Krishnan, are recorded as asking questions about the operation of particular terms of the Agreement and about the bargaining and agreement making process. 57 As we have already noted, there is nothing in Ms Dawson-Field’s file note of instructions to suggest that Mr Krishnan was given a copy of this material and the evidence that would be adduced does not state that Mr Krishnan disputes that the various employees identified in the notes asked the questions that are recorded therein.

[24] It is also said that Mr Krishnan would give evidence that he does not recall receiving a NERR from LS Precast. There was evidence before the Commissioner that a NERR was sent by email to Mr Krishnan at the email address nominated by him in the employment record held by LS Precast and that a copy was also distributed by hand to employees including Mr Krishnan. 58 Nowhere in Ms Dawson-Field’s file note of instructions is it suggested that Mr Krishnan was taken to any of this material and that he would give evidence that he disputes this account.

[25] In short, the evidence that Mr Krishnan would give, as disclosed from the note of instructions, does not join issue in any direct sense, with the evidence given by Mr Costi but merely discloses that Mr Krishnan does not remember receiving a NERR and does not have a specific recollection about the content of the various meetings held on 9, 10 and 15 August 2018. Mr Costi’s evidence is specific and detailed. That evidence was that the terms of the Agreement and their effect were explained, including, as will later become clear, variously through comparisons between the Agreement and the Award.

[26] The evidence of Mr Krishnan, as set out in the file note of instructions, is unpersuasive and falls well short of being of a nature such that there would be a high degree of probability that there would be a different result in the appeal or in the decision at first instance. In the circumstances, it is not necessary for us to express a view as to whether the evidence is credible.

[27] We accept that the application by the Unions to reopen their case on appeal was made prior to any decision in the appeal being delivered and was made promptly after the evidence Mr Krishnan would be able to give came to light, taking into account the need to seek advice and take instructions from the Unions. We also accept that no substantive prejudice to LS Precast would ensue if the application were granted as the Agreement remains in force. There is also no doubt that the admission of further evidence on appeal which is probative of an issue the subject of an appeal and is persuasive in the sense that it meets the characteristic described in Akins would assist the Commission in discharging its agreement approval functions and in reviewing on appeal whether there was error in the approval of an agreement. But as we have already observed, the proposed evidence to be given by Mr Krishnan falls well short and so the discretionary considerations just noted do not outweigh the weak nature of the evidence that would be adduced.

[28] If an application to admit Mr Krishnan’s evidence had been made during the course of the hearing of the appeal, on the basis of the material available to us and for the reasons stated, we would not admit the further evidence. As the application by the Unions to reopen their case on appeal rests solely on the desire to lead evidence from Mr Krishnan, we are not persuaded to allow the case to be opened. The application by the Unions to reopen their case on appeal is dismissed.

Extension of time and Permission to Appeal

[29] To the extent that it is necessary, we allow a further period within which an appeal against the Section 590 Decision may be lodged. That period is extended until 13 December 2018. We are persuaded having regard to the Decisions that the amended Notice of Appeal raises an arguable case of appealable error justifying the grant of permission to appeal. We therefore grant permission.

Consideration

Appeal ground 3

[30] We begin our consideration of the appeal with ground 3 of the amended Notice of Appeal. By this ground, the Unions contend that the Commissioner erred in determining that the group of employees covered was fairly chosen by failing to assess whether there was a possibility of exploitation and/or manipulation of the agreement making process by LS Precast.

[31] The Unions contend that the possibility of unfair exploitation and/or manipulation was, in the circumstances of the application, a live and relevant matter for the Commissioner to consider in assessing s.186(3). They contend the Commissioner failed to take this matter into account and therefore erred in law. They contend that the Commissioner ought to have drawn an inference of unfair exploitation and/or manipulation from the circumstantial evidence before her. In this connection, the Unions point to the following circumstances:

•  the Agreement was made before precast concreting work could start as the construction of the precast facility had not been completed;

•  the voting group comprised 7 part-time employees who were employed at or about the time bargaining commenced for the apparent purpose of making an enterprise agreement;

•  the employees voted to approve the Agreement about 3 weeks after being employed;

•  the employees had had no prior experience in the precast concrete manufacturing industry or with the relevant reference award, the Concrete Products Award 2010 (Award);

•  there were no employee bargaining representatives;

•  no collective bargaining actually took place; and

•  Phabcast had previously been asserted to have been engaged to perform work at the facility but, after its application for approval of an agreement was discontinued, LS Precast became the vehicle by which an agreement was to be made before the precast facility commenced operation.

[32] Section 186(3) requires the Commission to be satisfied that the “group of employees covered by the agreement was fairly chosen.” The focus is on the group covered by the agreement. Section 186(3) is a protective provision. 59 Understood in context, s.186(3) protects the process of collective bargaining with which Part 2-4 of the Act deals.60 In Aerocare Flight Support Pty Ltd t/a Aerocare Flight Support v Transport Workers' Union of Australia; Australian Municipal, Administrative, Clerical and Services Union (Aerocare),61 a Full Bench of the Commission summarised a number of principles that may be discerned from decided cases concerning the operation and application of ss.186(3) and (3A).62 These are as follows.

[33] First, the expression “the group of employees covered by the agreement” in s.186(3) refers to the whole class of employees to whom the agreement might in future apply, not the group of employees who actually voted on whether to make the agreement. 63 

[34] Secondly, the references in ss.186(3) and (3A) to whether “the group of employees covered by the agreement was fairly chosen” are, in the case of an enterprise agreement that is not a greenfields agreement, made with a group of employees, particularly a small group, references to a choice made by the employer. 64

[35] Thirdly, a decision by a Commission Member as to whether that Member is satisfied that the group of employees covered by an agreement was “fairly chosen” involves a degree of subjectivity and the exercise of a very broad judgment or value judgment, and in a broad sense may be characterised as a discretionary decision. 65 

[36] Fourthly, once it has been determined that an agreement does not cover all of the employees of the employer, it is necessary for the Commission to make a finding as to whether the group of employees who are covered is geographically, operationally or organisationally distinct, and then take that matter into account and give it due weight, having regard to all other factors. 66 

[37] Fifthly, if the group of employees covered by the agreement is geographically, operationally or organisationally distinct then that would be a factor telling in favour of a finding that the group of employees was fairly chosen, and conversely, if the group of employees covered by the agreement was not geographically, operationally or organisationally distinct then that would likely be a factor telling against a finding that the group was fairly chosen. 67

[38] Sixthly, while the question whether the group of employees covered is geographically, operationally or organisationally distinct must be evaluated and given due weight having regard to all other relevant considerations, that is not a determinative consideration, in that it is not necessary to make a finding that the group is geographically, operationally or organisationally distinct in order to be satisfied that it was fairly chosen. 68

[39] Seventhly, the selection of the group of employees to be covered on some objective basis (as opposed to an arbitrary or subjective basis) is likely to favour a conclusion that the group was fairly chosen. 69

[40] Eighthly, the considerations that are relevant in assessing whether the group of employees covered by the agreement was fairly chosen will vary from case to case, but the word “fairly” in s.186(3) suggests that the selection of the group covered was not arbitrary or discriminatory, so that for example selection based upon employee characteristics such as date of employment, age or gender would be likely to be unfair. 70

[41] Ninthly, it is appropriate to have regard to the interests of the employer, such as enhancing productivity, and the interests of both the employees included in the agreement’s coverage and the employees excluded. 71

[42] The Full Bench in Aerocare also noted that guidance may be obtained as to how to interpret and apply the expression “organisationally distinct” in s.186(3A) from decisions concerning the use of the same expression in ss.237(3A) and 238(4A). 72 Relevantly:

•  the term “organisation” refers to the manner in which the employer has organised its enterprise in order to conduct its operations; 73 

•  the performance by a group of employees of duties which are qualitatively different from duties performed by other employees may justify a conclusion that the group is organisationally distinct; 74

•  however, the mere performance by a group of employees of different tasks or roles to others may not be sufficient to render it organisationally distinct where the employees work in an integrated way with the other employees to perform a particular business function; 75  and

•  most businesses have organisation structures which will allow organisationally distinct groups to be identified. 76 

[43] As should be apparent from the summary above, for the Commission to reach a state of satisfaction in relation to an application for the approval of an enterprise agreement which does not cover all of the employer’s employees, that the group of employees covered by the agreement was fairly chosen, the Commission must take into account a range of considerations including whether the group is geographically, operationally or organisationally distinct. Distinctiveness is not absolute and can be a matter of degree. Distinctiveness on one or more of the bases identified is a factor usually telling in favour of a finding that the group was fairly chosen. Conversely, if the group of employees is not geographically, operationally or organisationally distinct, then that is a factor usually telling against a finding that the group was fairly chosen. Whether a group chosen is organisationally, operationally or geographically distinct is not decisive. Rather, it is a matter to be given due weight having regard to all of the other circumstances. 77 

[44] In an appeal from a decision of that nature, it will be necessary for the appellant to demonstrate error in the decision-making process of the type identified in House v The King 78 in order for a Full Bench to set aside the decision.79

[45] The Commissioner correctly concluded that the Agreement did not cover all employees of LS Precast. 80 The Commissioner also concluded that the group of employees covered by the Agreement is operationally distinct because the Agreement covers employees who would otherwise fall within classifications in the Award and who perform operational production tasks.81 It is not suggested in this appeal that the Commissioner was wrong in that conclusion and so it is to be taken as a factor usually telling in favour of a finding that the group was fairly chosen.

[46] The Commissioner also concluded that “there is a legitimate business rationale for making the Agreement, related to the development of the Benalla facility.” 82 Although imprecisely expressed, we consider that it is clear enough that the Commissioner concluded that there was a legitimate business rationale for the choice of the scope or coverage of the Agreement, namely one related to the development of the Benalla facility. This conclusion seems to us to be self-evidently correct. The scope or coverage of the Agreement is directed to employees engaged or to be engaged in the production and associated operations of the precast facility being the manufacture of precast concrete products. Neither the small numbers of employees who voted to approve the Agreement nor the fact that the precast facility was not operational, nor any of the other matters to which the Unions point, succeed in diminishing the existence of a legitimate business rationale for selecting the scope or coverage of the Agreement.

[47] Although the Commissioner did not expressly deal with the “possibility” of unfair exploitation or manipulation which the Unions contended was inferentially available on the circumstantial evidence to which they point, it seems to us clear enough that the Commissioner was simply not persuaded that there was manipulation of the group chosen because the group was operationally distinct and there was a legitimate business rationale for choosing the group of employees covered by the Agreement.

[48] Moreover, nowhere in the written submissions below nor on appeal do the Unions point to any evidence of actual manipulation or actual unfair exploitation in the selection of the group of employees covered by the Agreement. The inferential case sought to be made out by the Unions is in our view a weak one and the criticism of the Commissioner’s 22 November Decision is put no more highly than that she failed to take into account “the possibility of unfair exploitation and/or manipulation.”

[49] Even if, contrary to our view, the Unions are correct in their contention that the Commissioner did not take that into account, we do not consider the error to be fatal in this case. None of the circumstances to which the Unions point are prohibited by the scheme of the Act. Agreements may be made with a small group of employees. Agreements may be made with employees before the facility in which they will ultimately perform work has been established. The Act does not require employees to appoint bargaining representatives nor does it require collective bargaining in a particular form to take place. Good faith bargaining requirements 83 guide the conduct of bargaining but the scheme of the Act does not prohibit an employer proposing an enterprise agreement to employees and after complying with the statutory pre-approval requirements, requesting employees to vote for the agreement. It is also not a prerequisite to the making of an agreement that employees have particular experience in the work covered by the agreement. Balanced against this circumstantial material is the unchallenged finding that the group of employees covered by the Agreement is operationally distinct and the fact that it is evident that the business rationale for selecting the group of employees is directed to the production and associated operations at the Benalla facility. This is plainly a legitimate business rationale. Thus, in the absence of any evidence of actual manipulation of the group of employees chosen, the circumstances to which the Unions point as raising the possibility of manipulation simply do not outweigh the organisational distinctiveness of the group chosen and the existence of a legitimate business rationale for the group’s selection.

[50] It follows that this ground of appeal fails.

Appeal ground 4

[51] By ground 4 of the amended Notice of Appeal, the Unions contend that the Commissioner erred in assessing whether LS Precast had taken all reasonable steps to explain the terms of the Agreement and effect of those terms to employees, and by failing to consider information provided to employees by LS Precast that was erroneous so far as the differences between the Award and Agreement were concerned.

[52] It is uncontroversial that the pre-approval step set out in s.180(5) is an important part of the agreement making scheme contained in Part 2-4 of the Act. Its evident purpose is to ensure that employees are as fully informed as is practicable about the terms and effect of the terms of a proposed enterprise agreement before voting on it. By taking all reasonable steps to ensure that the terms and effect of the terms of an enterprise agreement are explained in an appropriate manner, employees who are being asked to approve the agreement are able to know what they are being asked to agree to and to understand how their wages and working conditions might be affected by voting in favour of an agreement.  84

[53] The question whether an employer has complied with the obligation in s.180(5) depends on the circumstances of the particular case. The focus of the enquiry is on the steps actually taken to comply and to consider whether the steps taken were reasonable in the circumstances and whether these were all the reasonable steps that should have been taken in the circumstances. The object of the reasonable steps that are to be taken is to ensure that the terms of the agreement and their effect are explained to relevant employees in a manner that takes into account the particular circumstances and needs of the relevant employees. This directs attention to the content of the explanation given. An employer does not fall short of complying with the obligation in s.180(5) merely because an employee does not understand the explanation provided. 85 

[54] The Commissioner dealt with this issue at [23] of the 22 November Decision as follows:

“[23] I am satisfied that the Agreement and its effect were explained to employees in the agreement making process. Detailed information about what employees were told about the Agreement before it was made has been provided. It is clear that employees were given comprehensive information dealing with a range of matters, including the business of LS Precast, its reasons for seeking to make the Agreement, key terms of the Agreement and differences to the Award. Individual discussions were held with employees about their understanding of the proposal being put and whether they wanted additional information. Contemporaneous notes were kept of those discussions. LS Precast made relevant inquires of the employees about their particular circumstances. It gave them an opportunity to make further inquiries. Many of the employees took the opportunity to ask how the Agreement would, or was likely to, affect them and these questions were answered by LS Precast.”

[55] The criticism of the Commissioner’s decision underpinning ground 4 is concerned with the quality or accuracy of the explanation given by LS Precast to relevant employees. Specifically, the Unions contended that the explanation of the terms of the Agreement relative to comparable terms of the Award was inaccurate. The Unions contend that the circumstances of the relevant employees required LS Precast to identify and explain how the terms of the Agreement related to or differed from the Award. The circumstances of the relevant employees which the Unions contend so justified such a comparison were that the employees asked to vote to approve the Agreement were only employed a few weeks before the Agreement was made, and they had no prior experience in precast concrete manufacturing industry or with working under the Award. Additionally, there were no employee bargaining representatives.

[56] The Unions contended that LS Precast did not correctly explain to relevant employees how the Agreement terms differed from the Award in a number of respects and that these were wrongly analysed, went unnoticed or were not analysed by the Commissioner. The Unions identify eight areas of incorrect explanation. We deal with each of these in turn below.

[57] The first concerns the casual conversion provisions of the Agreement. Clause 4.7 of the Agreement deals with a casual conversion and provides the following:

“4.7 Casual conversion to full-time or part-time employment

(a) A casual Employee (other than an irregular casual Employee) who has been engaged for six months (either continuously or for a sequence of periods totalling 6 months) may elect to convert to full-time or part-time employment provided the employment is to continue beyond any conversion date.

(b) Such casual Employee will be provided written notice of their right to convert within 4 weeks of achieving the 6 month period.

(c) A casual Employee who does not elect to convert to full-time or part-time employment within four weeks of the notice is deemed to have elected not to convert.

(d) Once a casual Employee has elected to become a full-time or part-time Employee, he/she may only revert to casual employment by agreement with the Company.

(e) If a casual Employee has elected to convert to full-time or part-time employment, the Company and Employee must discuss and agree:

(i) whether the Employee will convert to full-time or part-time; and

(ii) if it is agreed that the Employee will become a part-time employee, the number and the pattern of hours that will be worked by the Employee

(f) An Employee who has worked on a full-time basis throughout the period of casual employment has the right to elect to convert to full-time employment and an Employee who has worked on a part-time basis during the period of casual employment has the right to elect to convert to part-time employment, on the basis of the same number of hours and times of work as previously worked, unless other arrangements are agreed.”

[58] The corresponding term of the Award is clause 11.6 which provides:

“11.6 Casual conversion to full-time or part-time employment

(a) A casual employee, other than an irregular casual employee, who has been engaged by a particular employer for a sequence of periods of employment under this award during a period of six months, thereafter has the right to elect to have their contract of employment converted to full-time or part-time employment if the employment is to continue beyond the conversion process.

(b) Every employer of such an employee must give the employee notice in writing of the provisions of clause 11.6 within four weeks of the employee having attained such period of six months. The employee retains their right of election under clause 11.6 if the employer fails to comply with clause 11.6(c).

(c) Any such casual employee who does not within four weeks of receiving written notice elect to convert their contract of employment to full-time or part-time employment is deemed to have elected against any such conversion.

(d) Any casual employee who has a right to elect under clause 11.6(a), on receiving notice under clause 11.6(b) or after the expiry of the time for giving such notice, may give four weeks’ notice in writing to the employer that they seek to elect to convert their contract of employment to full-time or part-time employment, and within four weeks of receiving such notice the employer must consent to or refuse the election but must not unreasonably so refuse.

(e) Once a casual employee has elected to become and has been converted to a full-time or part-time employee, the employee may only revert to casual employment by written agreement with the employer.

(f) If a casual employee has elected to have their contract of employment converted to full-time or part-time employment in accordance with clause 11.6(a), the employer and employee must, subject to clause 11.6(d), discuss and agree on:

(i) which form of employment the employee will convert to, being full-time or part-time; and

(ii) if it is agreed that the employee will become a part-time employee, the number of hours and the pattern of hours that will be worked, as set out in clauses 11.4(a) and (b)

(g) An employee who has worked on a full-time basis throughout the period of casual employment has the right to elect to convert their contract of employment to full-time employment and an employee who has worked on a part-time basis during the period of casual employment has the right to elect to convert their contract of employment to part-time employment, on the basis of the same number of hours and times of work as previously worked, unless other arrangements are agreed on between the employer and employee.

(h) Following such agreement being reached, the employee converts to full-time or part-time employment.

(i) Where, in accordance with clause 11.6(d), an employer refuses an election to convert, the reasons for doing so must be fully stated and discussed with the employee concerned and a genuine attempt made to reach agreement.

(j) By agreement between the employer and the majority of the employees in the relevant workplace or a section or sections of it, or with the casual employee concerned, the employer may apply clause 11.6(a) as if the reference to six months is a reference to 12 months, but only in respect of a currently engaged individual employee or group of employees. Any such agreement reached must be kept by the employer as a time and wages record. Any such agreement reached with an individual employee may only be reached within the two months prior to the period of six months referred to in clause 11.6(a).

(k) For the purposes of clause 11.6, an irregular casual employee is one who has been engaged to perform work on an occasional or non-systematic or irregular basis.”

[59] Both before the Commissioner and on appeal, the Unions contended that under clause 11.6 of the Award, an employer can only refuse to consent to a casual employee converting to full or part-time employment if there are reasonable grounds for refusal. This imposes a high bar that will generally require an employer to have, as a matter of objective fact, a legitimate business reason for refusing a request. They contend that pursuant to clause 4.7 of the Agreement, the right is procedural in nature. If a casual employee seeks to convert, LS Precast is required to discuss and potentially agree to conversion. If agreement is not reached, it appears that the employee will not convert.

[60] This contention was rejected by the Commissioner. 86 It is also rejected by us. There is no right reposed in the employer under the Agreement to refuse a request of conversion on reasonable business grounds or otherwise. The reference in clause 4.7(e) of the Agreement to the matters on which the employer and an employee “must discuss and agree” are in essence the same matters that must be discussed and agreed under clause 11.6(f) of the Award. Beyond this, the Agreement makes no provision, unlike the Award, allowing an employer to refuse a request for conversion. We agree with the Commissioner’s assessment that the casual conversion provision in the Agreement, although truncated, is comparable to the provision of the Award with the default position being that qualifying casual employees under the Agreement have a right to convert relevantly to full-time or part-time employment.

[61] LS Precast prepared a written Explanatory Statement for the Agreement 87 which was given to relevant employees. Relevantly, the explanation provided that the effect of the casual conversion provision of the Agreement was as follows:

“...Casual Employees may, if engaged continuously or for a sequence of engagements totalling 6 months, elect to become full-time or part-time Employees on completion of the 6-month period. Whether the Employee becomes a full-time or part-time Employee upon their election, will be decided by agreement between LS Precast and the Employee. If a casual Employee does not elect to convert to full-time or part-time employment, they will continue to be a casual Employee.” 88

[62] We consider the explanation given succinctly explains the term and its effect. It follows that LS Precast was not required to explain the difference for which the Unions contend.

[63] The second Union objection concerns ordinary hours of work. Clause 22.2 of the Award makes provision for ordinary hours of work to be between 6:00am and 6:00pm, Monday to Friday. These hours may only be altered by mutual agreement between an employer and majority of employees in the plant or section(s) concerned.

[64] Clause 9 of the Agreement relevantly provides that ordinary hours will be worked Monday to Friday between 5:00am and 6:00pm and that the spread of hours may be altered by up to 1 hour either way by mutual agreement between the employer and the majority of employees in a section or sections concerned or otherwise on the provision by the employer of 7 days’ notice.

[65] The Unions contended that the explanation given by LS Precast about the effect of the hours of work provision of the Agreement compared to the Award was incorrect because contrary to the explanation given, the “pattern of rostering hours of work for day workers” was not consistent with the rostering pattern under the Award because no provision in the Award permits the employer to unilaterally change ordinary hours of work by the giving of notice. The Unions contend LS Precast did not identify this disadvantage and though the Commissioner did identify this as a disadvantage, she did not bring this disadvantage to bear in assessing whether there had been compliance with s.180(5) of the Act.

[66] The Explanatory Statement given to employees by LS Precast dealt with hours of work for Day Workers as follows:

“Hours of Work for Day Workers (clause 9) - Employees other than shift workers ("day workers") work an average of 38 hours per week in shifts of 8 hours each, Monday to Friday. Those shifts will be rostered between the hours of 5am and 6pm but if a majority of relevant Employees agree, or if LS Precast provides 7 days' notice, the hours during which shifts can be rostered without attracting overtime rates can be altered up to one hour either way. That is, so that ordinary hours can be rostered between 4am and 5pm, or between 6am and 7pm, and Employees will not be entitled to overtime rates for hours worked during those spans.

This pattern of rostering hours of work for day workers is consistent with the rostering pattern under the Award, however, the Award provides that shifts can be rostered between 6:00 am and 6:00 pm. The alteration of these hours of work under the Agreement to 5:00 am to 6:00 pm means that any hours of work rostered between 5:00 am and 6:00 am under the Agreement will not attract overtime rates as they would under the Award. However, this is compensated for by the higher hourly rates of pay in the Agreement.” 89

[67] The Explanatory Statement accurately explains the effect of the hours of work provision of the Agreement. It identifies a change in the spread of hours and it also identifies the capacity to further alter that spread upon the giving of 7 days’ notice. The written explanation does not in terms provide that there is no capacity to alter the spread of hours under the Award by the giving of notice. Nevertheless, on the evidence, such a comparative explanation was given.

[68] Mr Costi prepared a statement which was filed in support of the application for the approval of the Agreement. 90 As previously noted, Mr Costi said that he had provided assistance to LS Precast in relation to the pre-approval process associated with the making of the Agreement.91 He said that he attended a meeting with seven employees who voted to approve the Agreement on 15 August 2018, at which he provided the employees with a copy of the proposed Agreement, the National Employment Standards and the Explanatory Statement and advised employees that he had copies of the Award if they wished to refer to it throughout the discussions.92 Mr Costi said that he prepared detailed speaking notes in advance of the meeting and that he also took detailed written notes of the meeting.93 Mr Costi annexed a copy of the speaking notes and his written notes of the meeting on 15 August 2018 to his statement.94 The written notes record the following:

“I then explained the difference between the hours of work for day workers by speaking through paragraphs 5 & 6 of page 4 the explanatory Statement. I took employees to clause 9 of the EA and I also noted that change with 7 days notice will be subject to consultation under clause 24 in EA. I also noted that if hours changed to start the hours between 4 am & 5 am would not be overtime whereas would under Award.” 95 [Our emphasis]

[69] We consider the emphasised sentence above to be a clear indication that the spread of ordinary hours could not be unilaterally altered under the Award and that hours worked outside the spread under the Award are overtime hours. This is not the case under the Agreement in relation to the capacity to alter the starting time by one hour upon the giving of 7 days’ notice.

[70] In addition, the prepared speaking points to which Mr Costi referred in his statement, were also attached to the statement and included the following:

“10. Hours of work for Day Workers

- Speak through explanatory statement (take to clause 9 in EA).

- Re-point out Award differences.” 96

[71] It seems to us, having regard to the totality of the evidence, that LS Precast explained the terms and effect of the hours of work clause of the Agreement to the relevant employees including by reference to the differences between the Agreement and the Award. The Unions’ contention to the contrary is rejected.

[72] The third alleged incorrect or insufficient explanation concerns clause 10.4 of the Agreement which allows LS Precast to alter an employee’s shift roster by giving 24 hours’ notice in an emergency. The Unions point to the fact that there is no equivalent provision under the Award. The Unions also point out that under clause 10.4 of the Agreement an employee can agree to LS Precast altering shifts by providing a lesser period of notice than 7 days and that no equivalent provision is contained in the Award. These particular less advantageous provisions of the Agreement were not identified to employees by LS Precast. The Unions contend that this omission was not a matter considered by the Commissioner in assessing compliance with s.180(5).

[73] Clause 25.5 of the Award allows for the alteration of shifts to occur by agreement between an employer and the majority of employees concerned, and in the absence of an agreement, by the employer giving 7 days’ notice of the alteration. The capacity to alter a rostered shift by the giving of 24 hours’ notice in an emergency is different to the Award provision but has such a limited operation (confined as it is to an emergency) that it is to be doubted whether a comparison needed to be given. In any event, given the breadth of the explanation actually given as disclosed in the evidence, such an omission is in our view trivial and does not constitute a failure to take all reasonable steps to ensure that the terms of the Agreement, and the effect of those terms, are explained to the relevant employees.

[74] The focus of the Explanatory Statement appears to be on the financial compensation payable for shiftwork under the Agreement compared to the Award. Furthermore, we do not agree that including in the Agreement a capacity for an employee to agree to alter his or her shifts without the employer giving 7 days’ written notice is a detriment under the Agreement compared to the Award. Indeed, it appears that under the Award if a majority of employees concerned agree to an alteration of shifts this would occur without 7 days’ notice from the employer. The 7 days’ notice requirement is only engaged if the employer and a majority of employees concerned are unable to agree. Moreover, under the Award an employee who is in the minority of employees concerned will be bound by the decision of the majority. That employee has no say in the matter. Under the Agreement, whether that employee agrees to alter a shift arrangement without 7 days’ notice is a matter within his or her control because it requires his or her agreement.

[75] We do not consider the failure to highlight the minutiae of the differences in notice arrangements as between the Agreement and the Award concerning shift arrangements given the overall explanation about these terms and the terms of the Agreement as a whole, constitutes a failure to comply with the obligation under s.180(5).

[76] The fourth matter raised by the Unions concerns clause 11.3 of the Agreement which allows up to 6 RDOs to be banked, over a 12-month period at the direction of LS Precast. The Unions contend that “no equivalent power is conferred on an employer” under the Award. Though strictly correct, there is nevertheless a comparable provision. Clause 22.7(a) provides:

“(a) Where the hours of work of an establishment, plant or section are organised in accordance with clause 22.6 an employer may require the employee/s to accrue up to a maximum of five rostered days off.”

[77] LS Precast explained the effect of the provision in its Explanatory Statement as follows:

“If the Employee is required to work on the scheduled RDO, the RDO can be banked to be taken at another time. Up to 6 RDOs can be banked in any 12-month period of employment. This means that once the maximum number of RDOs are banked, the Employee must take the next scheduled RDO.” 97

[78] There is no suggestion that this explanation does not accurately reflect the effect of the Agreement provision. The criticism is that the differences as between the Award and the Agreement were not explained to employees and that the Commissioner was wrong to conclude, at [11]-[13] in the 22 November Decision, that these matters were not detriments. The Unions contended that the ability of an employee to take an RDO at an employee’s election when due is a matter of importance and benefit.

[79] We accept that this may be so in a given circumstance, however, the relevant difference between the two instruments is the capacity to accrue one additional RDO over a 12 month period. Whether or not the accrual of an additional RDO is a benefit or a detriment to an employee will depend upon the individual circumstances and preferences of employees. Whilst it is doubtless the case that the capacity to take an RDO when scheduled is a benefit, it does not follow that the accrual of an RDO to be taken at a later time is a detriment. In the end under both instruments the same number of RDOs will accrue and become available to an employee. In essence, the difference arises only if an additional RDO (to the five already permitted under the Award) is accrued instead of taken as scheduled. That RDO is still available and may be taken at a later date. The difference is not so obviously a detriment as to render the Commissioner’s conclusion incorrect. We are not persuaded that in complying with s.180(5) LS Precast was required to point out that under the Award up to 5 RDOs might be accrued whereas under the Agreement up to 6 RDOs might be accrued. The effect of the provision was in our view clearly explained to employees. 98

[80] The fifth matter concerns the explanation of the effect of clause 12.1 of the Agreement contained in the Explanatory Statement which is as follows:

“Meal Breaks and Rest Breaks - Day workers will get an unpaid meal break of 30 minutes, and shift workers will get a paid meal break of 30 minutes, which must be taken between the fourth and sixth hour of work on any shift, or, if work commences at 5.00 am, the meal break may be taken by agreement with LS Precast within the fourth to seventh hour of work on the shift. If a meal break is not taken when required, and no alternative arrangement has been made with LS Precast, Employees will be paid at time-and-a-half until a meal break is taken.

All Employees working more than five ordinary hours will also receive a 15 minute paid rest break.

An Employee who works more than 2 hours past the end of their shift will receive a paid break of 20 minutes at ordinary rates, and a further paid crib break of 20 minutes for every further 4 hours worked.

The time for meal or rest breaks may be changed to ensure continuity of production.

Overtime will be arranged, where practicable, so that an Employee has 10 hours off between shifts. A full-time or part-time Employee who does not have 10 hours off between shifts after working overtime will be paid at double-time until they can have 10 hours off.

These meal breaks and rest breaks are consistent with the meal breaks and rest breaks under the Award.” 99

[81] Clause 12.1 of the Agreement provides:

“Day workers shall be entitled to an unpaid meal break of 30 minutes which must commence between the fourth and sixth hour of work. Where work commences at 5.00 am, the meal break may be taken by agreement between the Company and the Employees concerned within the fourth to seventh hour.”

[82] Clause 23.1 of the Award provides:

“23.1 Employees will be entitled to a meal break of not less than 30 minutes and not more than one hour which must be commenced within the fourth to sixth hours from the commencement of ordinary working hours.”

[83] The Unions contend that as clause 12.1 of the Agreement allows a meal break to be taken, for an employee who starts work at 5:00am, between the fourth to seventh hour an employee may therefore work up to 7 hours without taking a meal break under the Agreement. They contend that this disadvantageous provision was not pointed out to employees. The Unions say that the Commissioner accepted that this position was disadvantageous at [15] of the 22 November Decision but did not bring it to bear when considering LS Precast’s compliance with s.180(5).

[84] Contrary to the Unions contention, the Commissioner did not accept that the position was disadvantageous. The Commissioner observed only that the “result is a potential detriment to employees, which is contained by the requirement for agreement.” 100 The circumstances in which an employee may be required to take a meal break later than the sixth hour under the Agreement is dependent entirely upon the agreement of that employee. In our view, the same outcome is contemplated under the Award. Clause 23.5 of the Award provides that:

“23.5 The employee and employer may agree to any variation of these provisions to suit the circumstances of the work in hand…” [Our emphasis]

[85] The explanation given in the Explanatory Statement accurately explains the effect of the meal breaks provision of the Agreement. Moreover, the statement that “[T]hese meal breaks and rest breaks are consistent with the meal breaks and rest breaks under the Award” 101 is plainly correct.

[86] The sixth matter concerns redundancy entitlements under the Agreement compared to those for which provision is made under the Award. Under clause 13.3 of the Award, an employee given notice of termination by reason of redundancy may elect to terminate the employment during the notice period without losing the entitlement to redundancy. No equivalent entitlement is provided under the Agreement. Further, clause 13.4 of the Award affords to an employee who is given notice of termination in circumstances of redundancy up to one day’s time off without loss of pay during each week of notice for the purpose of seeking other employment. No equivalent entitlement is conferred on employees under the Agreement. A single day off is permitted under clause 22.3 of the Agreement during the notice period. The Unions contended that the Commissioner recognised the disadvantageous nature of these provisions at [16]-[17] of the 22 November Decision and required the Respondent to provide an undertaking but she did not consider it in determining whether there had been compliance with s.180(5).

[87] As the Unions have pointed out, the detriment identified was the subject of undertakings which were accepted by the Commissioner in approving the Agreement.

[88] As earlier noted, the statement of Mr Costi discloses that he attended a meeting of relevant employees on 15 August 2018 and had prepared detailed speaking notes in advance of the meeting. Mr Costi’s statement also discloses that he drew a tick next to each paragraph of the speaking notes as he addressed them. 102 The speaking notes attached to Mr Costi’s statement relevantly provide:

“•  Redundancy – Under clause 13.3 of the award employees who are given notice of termination because of redundancy are entitled to one day off per week during the notice period without loss of pay for the purposes of seeking alternative employment. Under the Agreement, employees would only be entitled to a total of one day off without loss of pay under clause 22.3 of the Agreement. Further, under clause 13.3 of the Award, employees who are given notice of termination of the employment because of redundancy and who leave during the notice period remain entitled to redundancy. There is no equivalent entitlement under the Agreement.” 103

[89] The speaking notes contain a tick as indicated in Mr Costi’s statement. The written notes prepared by Mr Costi to which reference has also earlier been made contain the following:

“I then outlined that a difference in redundancy under the Award as compared to EA. I said that under clause 13.3 of Award employees who are given notice of termination because of redundancy are entitled to one day off per week during the notice period without loss of pay to seek alternative employment. Under the EA only entitled to a total of one day off without loss of pay under clause 22.3 of agreement. Also under 13.3 of Award employees who are given notice of termination because of redundancy and who leave during notice period entitled to redundancy where there is no entitlement in EA.” 104

[90] The Unions suggestion that the differences between the Award and the Agreement were not explained to employees in respect of differences in the respective redundancy entitlement is simply unsustainable in light of the evidence.

[91] The seventh and eighth matters concern the differences in the quantum of the overtime meal allowance under clause 13.7 of the Agreement and the first aid allowance under clause 7.6 of the Agreement both being less than the corresponding allowances set out in clauses 16.7 and 16.8 of the Award. The Unions contend that these differences were not identified in the Explanatory Statement and that the Commissioner did not give consideration to this in assessing compliance with s.180(5).

[92] Mr Costi’s written notes of his discussion with employees on 15 August 2018 records the following:

“I explained that some of the allowances in the EA are below the Award by a small amount. The reason for this was because the amounts written in were those that would have applied under the Phabcast EA from 1 Dec 2018 & they were determined before the Award increase in 2018. The Award raised the allowances a little but want to make sure you are aware what they are.

➣ Overtime meal $15.27 per meal under award but $15.23 in EA. I took the employees to clause 12.6 in the EA.

➣ First aid allowance $2.88 per day in award but $2.84 in EA. I took to clause 7.6 in EA.” 105

[93] The same notation is to be found in the speaking notes. 106 The contention of the Unions that the differences in the quantum of allowances as between the Agreement and the Award were not explained to employees is simply not made out in light of the evidence.

[94] The Unions contend the Commissioner did not give any consideration to the content of that explanation, the particular circumstances of the employees and the deficiencies in identification of less beneficial terms under the Agreement as compared to the Award. The Unions contend that the fact these matters did not even rate a mention in the 22 November Decision in assessing compliance with s.180(5) of the Act, illustrates the Commissioner failed to consider them, or give them genuine consideration. Consequently, the Unions contended that the Commissioner failed to take into account relevant considerations and misunderstood the nature of the task invested in her by s.180(5) and these matters operate to vitiate her satisfaction under s.180(5).

[95] It is doubtless the case that it would have been desirable for the Commissioner to have dealt with these matters in her written reasons in much the same way as we have above. Nonetheless, as disclosed from [23] of the 22 November Decision, the Commissioner noted that detailed information about what employees were told about the Agreement before it was made had been provided. This is plainly a reference to the Explanatory Statement, Mr Costi’s statement, the speaking notes and the written notes prepared by Mr Costi. Informed by these matters the Commissioner concludes that:

“...It is clear that employees were given comprehensive information dealing with a range of matters, including the business of LS Precast, its reasons for seeking to make the Agreement, key terms of the Agreement and differences to the Award. Individual discussions were held with employees about their understanding of the proposal being put and whether they wanted additional information. Contemporaneous notes were kept of those discussions. LS Precast made relevant inquiries of the employees about their particular circumstances. It gave them an opportunity to make further inquiries. Many of the employees took the opportunity to ask how the Agreement would, or was likely to, affect them and these questions were answered by LS Precast.” 107

[96] This conclusion is also reached after the Commissioner analysed the differences between particular provisions of the Agreement and the Award for the purposes of the better off overall test. 108

[97] Whilst it is correct that not every single departure from the Award compared to the Agreement was explained to employees, it is evident that the effect of the terms of the Agreement was explained and that various differences as between the Agreement and the Award were explained. Moreover, employees were told that if the Agreement is approved by the Commission it will apply instead of the Award that currently applies to their employment, 109 that there are key differences between the Agreement and the Award but that LS Precast considers that employees would be better off overall under the Agreement than the Award,110 that LS Precast “want to make sure that you know the key differences” and that employees can undertake their own checks as to the differences between the Agreement and the Award if they wish111 and highlighted some of the key differences as between the Agreement and the Award.112 Employees were also told that copies of the Award were available if they wish to go through it during the discussions on 15 August 2018.113

[98] We are satisfied that on the totality of the material including our analysis above, the employer took all reasonable steps to explain the terms of the Agreement and the effect of those terms to relevant employees. All of this material was before the Commissioner and plainly supported her conclusion as set out at [23] even though she did not expressly deal with the communication of the differences between the Agreement and the Award in the manner that we have chosen to do.

[99] In our view, LS Precast complied with s.180(5) of the Act and to the extent that compliance with that section affects the assessment as to whether the employees genuinely agreed to the agreement, satisfaction as to that state of affairs is plainly made out. It follows that the Commissioner did not err in concluding as she did that she was satisfied that the terms of the Agreement and the effect of those terms was explained to employees in the agreement making process.

[100] It follows that this appeal ground fails.

Appeal grounds 5 and 6

[101] By these grounds of appeal the Unions contend the Commissioner erred in assessing whether there were no other reasonable grounds for believing the Agreement was not genuinely agreed to by the relevant employees. Specifically, the Unions contend the Commissioner did so by failing to take into account or to pay any proper regard to:

•  the lack of experience of the work and place of performance of the work covered by the Agreement by employees who voted for the Agreement;

•  whether the Agreement of the employees who voted for the Agreement had moral authority and authenticity;

•  the fact the Agreement was made by seven part-time employees well before the collective of employees that were to be employed to perform work under the Agreement were employed; and

•  whether the employees who voted for the Agreement had the capacity to provide genuine consent to the Agreement.

[102] As a consequence, so the Unions contend, the Commissioner misunderstood the nature of the opinion she was required to form, misunderstood the function she was required to perform under s.188(c) of the Act, took into account irrelevant considerations and failed to take into account relevant considerations in relation to the exercise of jurisdiction under s.186(2)(a).

[103] It is well settled that reasons for a decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error. 114  The Decision must be read as a whole and considered fairly, so that that which might be characterised as infelicitous expressions do not too readily give rise to the inference of error.115

[104] Reasons for a decision are thus not meant to be scrutinised upon over-zealous review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed. 116 These propositions relate to judicial review of administrative decisions and there is no reason why a different approach should be taken in an appeal under the Act.117

[105] We agree with the submissions of LS Precast that the Unions criticisms of the Commissioner’s Decision encapsulated by these grounds of appeal and their written contentions are overstated. They do not involve a fair reading of the 22 November Decision and they assume that the Commissioner had no understanding of, and therefore took no account of, facts before her which were self-evident, obvious and part and parcel of the arguments expressly developed before her.

[106] The Commissioner dealt with the genuine agreement approval requirement as follows:

“[22] LS Precast has filed comprehensive material in support of its application for approval of the Agreement. On the materials, I am satisfied that each of the pre-approval steps and timeframes relating to the making of the Agreement were met. The statutory declarations of Mr Day and Mr Costi attest to those matters and to the fact that a valid majority of employees voted to approve the Agreement, as does the supporting material filed in relation to the application. Mr Day and Mr Costi were directly involved in making the Agreement on behalf of LS Precast. I am satisfied that each had relevant knowledge of the facts to which they attest.

[23] I am satisfied that the Agreement and its effect were explained to employees in the agreement making process. Detailed information about what employees were told about the Agreement before it was made has been provided. It is clear that employees were given comprehensive information dealing with a range of matters, including the business of LS Precast, its reasons for seeking to make the Agreement, key terms of the Agreement and differences to the Award. Individual discussions were held with employees about their understanding of the proposal being put and whether they wanted additional information. Contemporaneous notes were kept of those discussions. LS Precast made relevant inquires of the employees about their particular circumstances. It gave them an opportunity to make further inquiries. Many of the employees took the opportunity to ask how the Agreement would, or was likely to, affect them and these questions were answered by LS Precast.

[24] The materials also disclose information about each of the employees who was employed throughout the agreement-making process and the type of work they perform for LS Precast. At the time the Agreement was made, each of the employees was engaged as a Labourer. Their mix of experience and skill was varied, reflective of LS Precast’s decision to source local employees and provide them with training specific to its needs.  I am satisfied that each of the employees involved over the period in which the Agreement was made were employees who will be covered by the Agreement.

[25] The material does not give rise to concerns of the nature arising in the matter of Re Phabcast Enterprise Agreement 2017.  I am also mindful that those concerns arose in a separate proceeding and from a related, but distinct, agreement-making process. To the extent that the concerns raised questions about whether the conditions for enterprise agreement approval were met, it is not relevant to the matter now before me. The task remains to assess whether the Agreement meets those conditions such that it must be approved.

[26] I am not aware of any other reasonable grounds for believing that the Agreement was not genuinely agreed to by employees. To the contrary, the material discloses a direct and transparent engagement between LS Precast and each of the employees in relation to both the Agreement and the agreement-making process. It is not a barrier to the making of an enterprise agreement that in the future, a larger group of employees will become covered by its terms. Nor is it necessary in each case for an enterprise agreement to be made with at least one employee in each classification. With training and experience, the classification of employees will change but it will always be in production work in the concrete industry within the purview of the Award. In my view each of the employees has an interest in ensuring appropriate terms and conditions of employment for each classification group in the Agreement. Other than in relation to rates of pay, the Agreement’s terms and conditions are largely the same for each classification of employee.

[27] I find that the Agreement was genuinely agreed to by employees.” [Endnotes omitted; our emphasis]

[107] It is also clear from the written notes attached to Mr Costi’s statement that the employees were interested in the terms and conditions of employment set out in the Agreement and asked a series of questions about them.

[108] We consider that on a fair reading of the Commissioner’s written reasons reproduced above, particularly when regard is had to the passages we have underlined, the Commissioner was well aware of, took into account and evaluated the substance of each of the matters about which the Unions complain in the grounds of appeal. Having assessed those matters, the Commissioner reached the ultimate conclusion as set out in [27] of the 22 November Decision. The errors alleged are not made out. These grounds of appeal therefore fail.

Appeal ground 2

[109] As earlier noted, the Commissioner permitted the Unions to make further submissions on the BOOT but not otherwise. By their second appeal ground the Unions contended that the Commissioner erred in her consideration of whether the Unions should be heard, by failing to take into account that she would be better informed in carrying out her duties under the Act if the Unions were to be heard.

[110] The Commission’s power under s.590 of the Act to hear from a person such as an employee organisation is discretionary and matters that are relevant to the exercise of a discretionary power are determined by reference to the subject-matter, scope and purpose of the empowering enactment, as well as the nature of the application before the Commission. 118
It is of course a relevant matter to consider, in exercising the discretion under s.590 of the Act in an application for approval of an agreement, whether an employee organisation would be able to assist the Commission in relation to matters relevant to the approval application.

[111] The Unions did not contend that they had a right to be heard. They were not bargaining representatives for the Agreement. The Unions framed their application under s.590 on the premise that the Commissioner would be assisted in discharging her statutory functions under Part 2-4 of the Act if she permitted them to participate in the hearing on, inter alia, genuine agreement and fairly chosen issues. 119

[112] The Unions’ complaint on appeal is that the Commissioner’s reasons for refusing their application and for determining that she would hear from them only in relation to the BOOT were premised exclusively on the Unions not being bargaining representatives and therefore not having a right to be heard. In so doing, the Unions contend the Commissioner did not consider or have any regard to whether or not she would be assisted in discharging her statutory functions by allowing the Unions to participate in the hearing more generally. They say that this was a failure to take into account a relevant consideration, so as to vitiate the exercise of the discretion. The Unions contend it was also a constructive failure to exercise jurisdiction, in the sense that the Commissioner determined not to exercise the power under s.590 on the basis that the Unions did not have a right to be heard.

[113] The reason given by the Commissioner for confining the Unions’ further participation in the proceedings to the issue whether the Agreement passed the BOOT appears on the face of the transcript to be confined to the fact that they were not bargaining representatives for the Agreement and as such did not have a right to be heard. The Commissioner does not in terms say anything about whether she had regard to the Unions’ industry knowledge and whether they could have assisted her in determining matters relevant to the question whether the Agreement should be approved. But it does not follow that the Commissioner did not have regard to the other matters raised by the Unions. As the transcript makes clear, the Commissioner “decided not to hear from the unions any further in this matter with one exception.” 120 Prior to this time the CFMMEU filed a lengthy written submission121 dealing not only with its interest in the proceeding122 but also with concerns about whether there had been compliance with s.180(5)123 and setting out its submissions as to the nature of the explanations given to employees about the differences between the terms of the Agreement and the corresponding Award provisions.124 Those submissions also addressed whether there were reasonable grounds for believing that the Agreement had not genuinely been agreed to by the employees,125 and whether the group of employees covered by the Agreement was fairly chosen.126 Moreover, LS Precast made submissions below to the effect that as the CFMMEU had already filed extensive submissions as to the approval criteria, the Commission can have regard to that material in determining the application.127

[114] We consider that on a proper examination of the transcript and the submissions filed in the proceedings, the Commissioner simply determined that she would not hear further from the Unions save as to the better off overall test. That is, the Unions, or at least the CFMMEU, had set out their position in respect of the contested approval in writing and the Commissioner did not see the need to hear further from them on those matters. Given the nature of the decision that the Commissioner made, more extensive reasons than those given were not in our view required. But in any event, even if we are wrong about that, such prejudice, if any, as the Unions might have suffered as a consequence of the Section 590 Decision has been cured on appeal. The matters have been fully ventilated as is evident from our discussion above. In the circumstances, we are not persuaded there is utility in this ground of appeal and it fails.

Appeal ground 1 - Standing

[115] Ground 1 of the amended Notice of Appeal is really directed to the standing of the Unions to bring this appeal. The Unions were not bargaining representatives for the proposed agreement and neither suggests that it had a right to be heard in the matter before the Commissioner. The Unions maintain they are each a person aggrieved by the Decisions the subject of this appeal. The question of standing was not seriously contested. We consider that the Unions have an interest in the Decisions the subject of appeal beyond that of an ordinary member of the public and are consequently each a person aggrieved. They therefore have standing to appeal against the Decisions pursuant to s.604 of the Act. The rules of the respective Unions permit them to enrol as members relevant employees who will be covered by the Agreement and thus to represent their industrial interests. Furthermore, their broader interest as registered organisations and frequent bargaining representatives for agreements made in this and related industries in the proper administration of the agreement making provisions of the Act are also relevant. These circumstances are sufficient to confer standing to appeal on the Unions. 128 

Conclusion

[116] For the reasons stated, the appeal is dismissed.

Order

[117] We order as follows:

1. The application by the Unions to reopen their case on appeal is dismissed;

2. The time within which an appeal against the Section 590 Decision recorded in Transcript on 18 October 2018 may be lodged is extended to 13 December 2018;

3. The amendment to Ground 4 of the Notice of Appeal as set out in the amended Notice of Appeal lodged on 10 January 2019 is allowed;

4. Permission to appeal is granted; and

5. The appeal against each Decision is dismissed.

DEPUTY PRESIDENT

Appearances:

S Crawshaw SC (25 January) and P Boncardo (6 March) for the Appellants.

M Follett of Counsel for the Respondent.

Hearing details:

2019.

Sydney:

January 21.

Melbourne, Sydney and Newcastle (video hearing):

March 6.

Printed by authority of the Commonwealth Government Printer

<PR705529>

 1   AE500975

 2   Appeal Book at p.736

 3   [2018] FWCA 7392

 4   [2018] FWC 7163

 5   Appeal Book at p.160; Transcript of proceedings dated 18 October 2018 at PN75

 6   Appeal Book at p.202 at [6]; p.538 at [6]

 7   Ibid at p.204 at [18]

 8   Ibid at pp.206 – 208

 9   Ibid at p.540 at [18]; p.541 at [21]; p.550 at [54]; p.551 at [57]

 10   Ibid at p.751

 11   Transcript of proceedings dated 21 January 2019 at PN322 – PN325; Appeal Book at p.552 at [62] and [63]

 12   Appeal Book at p.541 at [23]-[24]

 13   Ibid at p.540 at [18]

 14   22 December 2017

 15   Re Phabcast Enterprise Agreement 2017 [2018] FWC 2886

 16   Appeal Book at p.542 at [25] and p.543 at [29]

 17   Ibid at pp.511-512

 18   Ibid at p.733

 19   Ibid at pp.164-177

 20   Ibid at pp.160 –161; Transcript of proceedings dated 18 October 2018 at PN75

 21   [2018] FWC 7163 at [5]

 22   Ibid at [6]-[7]

 23   Ibid at [8]-[10]

 24   Ibid

 25   Ibid at [11]-[13]

 26   Ibid at [14]-[15]

 27   Ibid at [16]-[17]

 28   Ibid at [18]-[19]

 29   Ibid at [20]

 30   Ibid at [21]

 31   Ibid at [22]

 32   Ibid at [23]

 33   Ibid at [24]

 34   [2018] FWC 2886

 35   [2018] FWC 7163 at [25]

 36   Ibid at [27]

 37   Ibid at [28]

 38   Ibid at [29]

 39   Ibid at [30]

 40   Ibid at [31]

 41   Ibid at [32]

 42   Ibid at [33]

 43   [2018] FWCA 7392 at [5]

 44   Ibid at [6]

 45   Exhibit A

 46   Appeal Book at p.537 at [1]

 47   Exhibit A, Annexure JDF – 1 at [9]

 48   Smith v New South Wales Bar Association (1992) 176 CLR 256 at 266-67

 49   The Australian Workers' Union v Killarnee Civil & Concrete Contractors Pty Ltd, ITF The Thompson Family Trust; Construction, Forestry, Mining and Energy Union [2011] FWAFB 4349 at [22]

 50   (1994) 34 NSWLR 155

 51   Ibid at [160]

 52   J.J. Richards & Sons Pty Ltd v Transport Workers' Union of Australia [2010] FWAFB 9963 at [95]

 53   Appeal Book at pp.475-507

 54   Ibid at pp.580-481; pp.497-505

 55   Ibid at pp.611-663

 56   Ibid at pp.633-642

 57   Ibid at pp.611-615 and 623-631

 58   Ibid at pp.477, 495, 543, 564; Also see Exhibit B

 59   ALDI Foods Pty Ltd v Shop, Distributive & Allied Employees Association [2017] HCA 53; (2017) 270 IR 459 at [84] and [87]

 60   Aerocare Flight Support Pty Ltd v Transport Workers’ Union of Australia [2018] FCAFC 74 at [19]

 61   [2017] FWCFB 5826

 62   Ibid [26]-[27]

 63   Construction, Forestry, Mining, and Energy Union v John Holland Pty Ltd [2015] FCAFC 16; (2015) 228 FCR 297 at [34]-[41]

 64   Ibid at [28]-[32]

 65   Ibid at [60]-[62]; Cimeco Pty Ltd v Construction, Forestry, Mining, and Energy Union [2012] FWAFB 2206; (2012) 219 IR 139 at [8]

 66   Ibid at [10]

 67   Ibid at [19]

 68   Ibid at [15] and [20]; The Australian Maritime Officers’ Union v Harbour City Ferries Pty Ltd [2016] FWCFB 1151 at [31]

 69   Cimeco Pty Ltd v Construction, Forestry, Mining, and Energy Union [2012] FWAFB 2206; (2012) 219 IR 139 at [16]

 70   Ibid at [21]

 71   Ibid at [21] - [22]; Construction, Forestry, Mining, and Energy Union v Resco Training and Labour Pty Ltd [2012] FWAFB 8461; (2012) 228 IR 5 at [34]

 72   Aerocare Flight Support Pty Ltd t/a Aerocare Flight Support v Transport Workers’ Union of Australia; Australian Municipal, Administrative, Clerical and Services Union [2017] FWCFB 5826 at [27]

 73   QGC Pty Ltd v Australian Workers’ Union [2017] FWCFB 1165 at [44]

 74   United Firefighters’ Union v Metropolitan Fire & Emergency Services Board [2010] FWAFB 3009; (2010) 193 IR 293 at [60]

 75   QGC Pty Ltd v Australian Workers’ Union [2017] FWCFB 1165 at [44]-[45]

 76   Australian Workers’ Union v BP Refinery (Kwinana) Pty Ltd [2014] FWCFB 1476; 242 IR 238 at [15]; see also National Union of Workers v Cotton On Group Services Pty Ltd [2014] FWC 6601 at [15]-[16] (permission to appeal refused in [2014] FWCFB 8899) and ASU v Shine Lawyers Pty Ltd [2017] FWC 4158 at [68]-[71] as examples of where the employer’s organisational structure was used to determine organisational distinctiveness

 77   See also QGC Pty Ltd v Australian Workers’ Union [2017] FWCFB 1165 at [42]; See also Aerocare Flight Support Pty Ltd t/a Aerocare Flight Support v Transport Workers’ Union of Australia [2018] FCAFC 74 at [12] in which the Full Court describes the guidance summarised in [42] above as persuasive

 78   (1936) 55 CLR 499

 79   Cimeco Pty Ltd v Construction, Forestry, Mining, and Energy Union [2012] FWAFB 2206; (2012) 219 IR 139 at [8]; Aerocare Flight Support Pty Ltd t/a Aerocare Flight Support v Transport Workers’ Union of Australia; Australian Municipal, Administrative, Clerical and Services Union [2017] FWCFB 5826 at [26]

 80   [2018] FWC 7163 at [28]

 81   Ibid

 82   Ibid

 83   See s.228 of the Act

 84   One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 at [115]

 85   See Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd [2017] FCA 1266 at [94]–[109]

 86   [2018] FWC 7163 at [7]

 87   Appeal Book at pp.497–505

 88   Ibid at p.497

 89   Ibid at p.500

 90   Ibid at pp.537-552

 91   Ibid at p.537 at [1]; Also see [14] and [21]-[26]

 92   Ibid at p.545

 93   Ibid

 94   Ibid at pp.643–663

 95   Ibid at p.649

 96   Ibid at p.639

 97   Ibid at p.501

 98   Ibid

 99   Ibid at pp.501–502

 100   [2018] FWC 7163 at [15]

 101   Appeal Book at p.502

 102   Ibid at p.545 at [39]

 103   Ibid at pp.636 – 637

 104   Ibid at p.650

 105   Ibid at p.646

 106   Ibid at p.635

 107   [2018] FWC 7163 at [23]

 108   Ibid at [6]–[19]

 109   Appeal Book at p.634

 110   Ibid

 111   Ibid

 112   Ibid at pp.634–637

 113   Ibid at p.545 at [37]

 114   See for example, Minister for Immigration and Ethnic Affairs v Wu and Ors (1996) 185 CLR 259 at 271-272

 115   Ibid at 219

 116   Ibid at 272

 117   See for example, Baxter Healthcare Pty Ltd v Portelli [2017] FWCFB 3891 at [65]

 118   See Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-40

 119   Appeal Book at pp.151-152; Transcript of proceedings dated 18 October 2018 at PN20

 120   Appeal Book at p.160; Transcript of proceedings dated 18 October 2018 at PN75

 121   Ibid at pp.164 –177

 122   Ibid at pp.164 –165

 123   Ibid at pp.168 –169

 124   Ibid at pp.170 –173

 125   Ibid at pp.173 –175

 126   Ibid at pp.175 –176

 127   Ibid at p.60 at [4]

 128   See CEPU v Main People Pty Ltd [2014] FWCFB 8429 at [5]-[7]; MUA v Toll Energy Logistics Pty Ltd [2015] FWCFB 7272; (2015) 254 IR 353 at [95]-[98]; CFMEU v MGI Piling (NSW) Pty Ltd [2016] FWCFB 2654; (2016) 260 IR 244 at [4]; TWU v ALDI Foods Pty Limited [2016] FWCFB 91; (2016) 255 IR 248 at [22]-[23]; CFMEU v CSRP Pty Ltd [2017] FWCFB 2101 at [8]-[13]; and CFMEU v Concrete Constructions (WA) Pty Ltd [2017] FWCFB 3912 at [4]