DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

National Electrical and Communications Association
v
Electrotechnology Industry Group Training Company Ltd
(C2021/6976)

Appeal against decision [2021] FWCA 6239 of Commissioner Johns at Sydney on 12 October 2021 in matter number AG2021/6704.

Introduction and background

[1] The National Electrical and Communications Association (NECA) has appealed against the decision of Commissioner Johns of 12 October 2021 1 to approve the ETU and Electrogroup Group Training Apprentice Enterprise Agreement 2021-20222 (Agreement). Permission for the appeal is required under s 604 of the Fair Work Act 2009 (FW Act). The grounds for the appeal set out in the NECA’s amended notice of appeal are (excluding the particulars provided) as follows:

1. The Commissioner erred in finding that the Agreement had been genuinely agreed to for the purposes of s 186(2)(a) of the FW Act where the Commissioner could not be satisfied on the evidence that the Respondent:

(a) complied with s 180(5) of the FW Act; further and in the alternative

(b) complied with s 180(2) of the FW Act

2. The Commissioner denied the Appellant procedural fairness by:

(a) failing to provide the Appellant with a copy [of] all the material provided by the Respondent to the Commission for its consideration; and

(b) determining the matter without giving the Appellant an opportunity to make submissions in response to that material or to test the Respondent’s evidence.

[2] Electrotechnology Industry Group Training Company Ltd (EIGT) is the employer which made the Agreement. EIGT is a not-for-profit group training organisation, and it employs electrical apprentices and organises employment placements for them with “host” electrical contracting businesses. The Agreement covers the employment of such apprentices in New South Wales and the Australian Capital Territory. The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) was a bargaining representative for the Agreement. The NECA contends that the CEPU also has a controlling interest in EIGT, but this was not admitted or established by evidence.

[3] The NECA is an organisation of employers registered under the Fair Work (Registered Organisations) Act 2009. It represents employers in the electrical contracting industry. The NECA is not bound by the Agreement, was not a bargaining representative for the Agreement, and has no legal capacity to represent employees covered by the Agreement. There is no suggestion that EIGT is a member of the NECA. Some members of the NECA are host employers of apprentices supplied by EIGT and, as such, may bear the cost of any increased wages payable to such apprentices under the Agreement by virtue of the commercial arrangements that they have entered into with EIGT. The NECA also operates a group training organisation and “leases” employed apprentices and trainees to host employers in much the same way that EIGT does. As such, the NECA may be characterised as a competitor to EIGT.

[4] The Agreement was made on 30 July 2021. At this time, the Electrical, Electronic and Communications Contracting Award 2020 (Award) applied to EIGT’s apprentices in New South Wales and a long-expired agreement, the Electrogroup Training Company Enterprise Agreement (ACT) 2005 3 (ACT agreement), applied to the ACT apprentices. EIGT filed an application for approval of the Agreement on 13 August 2021.

[5] The application was accompanied by a Form F17 statutory declaration made by Mr Andrew Crebbin, the Company Secretary of EIGT. In this declaration, Mr Crebbin identified (at [21]) the steps taken by EIGT to ensure that relevant employees were given a copy of the written text of the Agreement and any material incorporated by reference in the Agreement during the access period or had access to a copy of these materials throughout the access period by stating that, on 22 July 2021, “The company emailed all relevant employees with a link to online copies of the proposed Agreement and a copy of the reference Award”. He otherwise indicated that there was no other material incorporated by reference into the Agreement. Mr Crebbin also (at [22]) identified the steps taken by the employer to explain the terms of the Agreement and their effect by stating that, on 27 July 2021, “The company emailed all relevant employees with a copy of a FAQ document and explanation of terms of the agreement.” A copy of the document referred to (Explanation Document) was attached to the declaration. No other step was identified as having been taken.

[6] The CEPU filed a Form F18 declaration stating that it supported the approval of the Agreement on 13 August 2021. On 14 August 2021, the NECA sent email correspondence to the Commission requesting copies of the application for approval of the Agreement and the Form F17 and Form F18 declarations. It stated the reasons for this request in the correspondence as follows:

“3. NECA is a registered industrial organisation of employers in the electrical and communications contracting industry and as such has a legitimate interest in the Application on the basis that NECA represents the industrial interests of its members who are employers and hosts to apprentices employed by group training companies in the industry.

4. The ETU has a controlling interest in Electro Group Pty Ltd, a group training company that employs electrical apprentices.

5. NECA has a controlling interest in other group training companies that also train apprentices.

6. It is possible that NECA will seek leave to make a submission about the Application when the above requested documents are reviewed.”

[7] The requested documents (with relevant parts redacted) were provided by the Commission to the NECA on 16 August 2021. On 26 August 2021, the NECA sent an email to the Commissioner’s chambers to advise that it would be seeking leave to intervene in the matter pursuant to s 590 of the FW Act and, subject to directions to the contrary, intended to file submissions by close of business on 27 August 2021. The Commissioner’s chambers responded the same day, advising that s 590 does not give rise to an application to seek leave to intervene but rather invested the Commission with a discretion about the receipt of submissions and requesting the NECA to explain what aspects of the Agreement approval it sought to make submissions about. In reply (and in our view improperly), the NECA simply filed its submissions the following day rather than first responding to the Commissioner’s inquiry.

[8] In its submissions, the NECA explained its interest in the matter in the following way:

“7. Apprentices employed by Group Training Companies are placed with host employers, several of whom are members of NECA.

8. Host employers pay the group training company employing the apprentice(s) a fee based on the rate of pay, allowances and other entitlements contained in the Award or Enterprise Agreement covering the apprentice(s).

9. Hourly rates set out in the Electro Group Agreement are significantly above those of other enterprise agreements covering employees employed by group training companies in the industry and are significantly above the rates in the relevant award.

10. The Electro Group Agreement may act as an impediment to the engagement of Electro Group’s apprentices by host employers.”

[9] The NECA submitted, in summary, that the Commission could not be satisfied on the material before it that EIGT gave the relevant employees the information concerning the conduct of the vote required by s 180(3), took all reasonable steps to give the employees or provide them access to a copy of the agreement and other incorporated material in accordance with s 180(2), or took all reasonable steps to explain the terms of the Agreement and their effect as required by s 180(5). In respect of the last submission, the NECA contended that the Explanation Document:

•  did not refer to clause 3, Definitions of the Agreement;

•  did not advise that a provision in the terms of clause 5(b) has been found to be non-compliant with the Code for the Tendering and Performance of Building Work 2016 (Building Code);

•  did not explain, in respect of clause 7.2(b), that apprenticeships may take less or more than four years;

•  did not refer to clause 7.4, which may also be non-compliant with the Building Code;

•  did not refer to clause 7.6, which was significant, not easily understood and warranted a detailed explanation;

•  did not explain that clause 7.7, Suicide Prevention, has no equivalent in the Award;

•  did not explain that clause 8.1, which mandates a 36-hour week, would create an added expense for host employers through overtime payments and might discourage host employers from hosting EIGT apprentices;

•  did not refer to clause 9, National Employment Standards and did not explain what the National Employment Standards are;

•  did not explain in respect of clause 11, Wages and Allowances that the rates of pay provided for might discourage employers from hosting EIGT apprentices;

•  did not refer to clause 13, Rostered Days Off and did not explain that allowing a RDO each fortnight is inconsistent with the Award, which allows a RDO every four weeks, and that the RDO calendar prescribed by clause 13.1 may not align with the dates on which host employers give RDOs to their other employees, thus causing difficulty to host employers;

•  did not refer to clause 15, Overtime, and did not explain that the increased overtime rate would be an added cost to host employers;

•  did not refer to clause 27, Picnic Day, which has no equivalent in the Award and may not in operation be compliant with the Building Code;

•  did not explain that non-expense related Award allowances are replaced by the productivity allowance in clause 28;

•  did not identify internal inconsistency in clause 34, Redundancy Pay;

•  did not explain that clause 52(c), which prohibits the transfer of a union delegate without consulting the parties to the Agreement, may be in breach of the Building Code; and

•  did not explain that the Award allows for the substitution of public holidays and the cashing out of annual leave by agreement whereas the Agreement does not.

[10] The NECA submissions having been received, the Commissioner’s chambers sent an email to all parties in response advising that the Commissioner had decided to receive the submissions pursuant to s 590 of the FW Act and invited EIGT to reply to the NECA’s submissions in accordance with the existing directions.

[11] On 30 August 2021, the NECA by email requested a copy of the Commission’s internal “Agreement Checklist” in relation to the Agreement, and sought an amendment to the directions to require materials filed by EIGT to be served on the NECA and to allow the NECA an opportunity to file submissions in reply to the further submissions that were to be filed by EIGT. This request was declined by the Commissioner the same day on the basis that the NECA was not a party to the proceedings. On 31 August 2021, the NECA sent further correspondence again requesting a copy of the Agreement Checklist and pressing for the amendment of the directions as previously sought. This request was again rejected by the Commissioner on 2 September 2021. On 8 September 2021, the NECA again wrote to the Commissioner’s chambers noting that it had not been served with any further submission filed by EIGT and requested that, if such material had been filed, it be provided to the NECA. The NECA also advised that, if the matter was to go to a hearing, it wished to be heard. The Commissioner’s chambers responded on 9 September 2021, advising that EIGT was not required by the directions to serve its submissions on the NECA and that the Commissioner’s position about hearing from the NECA remained unchanged.

[12] EIGT and the CEPU filed (late) submissions in response to the NECA submissions on 9 September 2021. The Commissioner conducted a hearing in relation to the matter on 10 September 2021. Later that day, in response to a query raised by the Commissioner at the hearing, EIGT filed a submission concerning the literacy levels of the employees who voted to approve the Agreement. The Commissioner then issued his decision in the matter without hearing further from any party.

The decision

[13] In respect of the issue raised by the NECA concerning compliance with s 180(5), the Commissioner in his decision first noted that the only evidence before him about this was contained in Mr Crebbin’s Form F17 declaration, and that the Explanation Document (referred to in the decision as the “comparison table” or “CT”) constituted the primary evidence of the explanation of the terms of the Agreement provided to employees, with the Agreement itself also being evidence of the explanation. 4 The Commissioner then said:

“[23] In considering the sufficiency of the explanation it is important to remember that the reason why the explanation of effect of terms in an enterprise agreement is important is because it is intended to enable the relevant employees to cast an informed vote. That does not mean that every word or every clause needs to be explained before the employer satisfies the statutory requirement.

[24] Further, terms beneficial to employees are unlikely to need as much of an explanation as do detrimental terms. This is because beneficial terms are less likely to cause employees to vote against an Agreement. Detrimental terms, in particular, could influence how an employee casts their vote. If a term of an Agreement will remove a benefit otherwise provided for by a Modern Award, employees must be told about the effect of that term. It might cause employees to vote against approval of the Agreement. To fail to explain the effect of a detrimental term likely deprives employees of the ability to make an informed vote. It is a matter that goes to the heart of genuine agreement.”

[14] The Commissioner then set in tabular form: (1) any changes in the Agreement compared to the Award or the ACT agreement, (2) the NECA submission about the alleged failure to explain the Agreement provisions; (3) the relevant part (if any) of the Explanation Document dealing with the change; (4) the EIGT/CEPU submission in response; and (5) his finding about the matter. 5 It is sufficient to say at this point that the Commissioner rejected each submission advanced by the NECA.

[15] The Commissioner rejected the NECA’s submission concerning compliance with s 180(3) at paragraph [29] of the decision, but did not in terms deal with the NECA’s submission concerning compliance with s 180(2). The Commissioner did however conclude at paragraph [30]: “None of NECA’s submissions have any merit”.

[16] The Commissioner went on to find that he was satisfied as to the literacy of all the employees and their ability to understand the Explanation Document and, consequently, that he was satisfied that EIGT complied with s 180(5). 6 The Commissioner approved the Agreement on the basis of undertakings which he accepted,7 and noted pursuant to s 201(2) of the FW Act that the Agreement covered the CEPU.8

Standing to appeal

[17] Section 604(1) of the FW Act confers standing to appeal a decision (subject to the prior grant of permission to appeal) upon a “person who is aggrieved” by a decision. EIGT and the CEPU contest whether the NECA had standing to bring this appeal and, accordingly, this issue must be determined first.

[18] The NECA submitted that it is a person aggrieved by the decision because:

(1) The Commissioner received submissions from the NECA as to the application for approval of the Agreement (principally concerning the question of compliance with s 180(5)), and such submissions were rejected as lacking any merit.

(2) The NECA is a registered organisation the objects of which are directed to the advancement of the interests of its members. The NECA’s “evidence” is that a number of its members have entered into contracts with EIGT to host apprenticed employees covered by the Agreement pursuant to which the rates of pay under the Agreement are “passed on” to the member. The NECA’s members are therefore directly affected by the decision under appeal and, because the NECA has a role in assisting, advancing and protecting its members’ interests, the NECA’s interests are beyond that of an ordinary member of the public.

[19] EIGT submitted, as to the first identified basis of aggrievement, that there was no obvious reason why the Commissioner should at first instance have received the NECA’s submissions, which were considered in detail and rejected as being without merit and raised no issue of general application or importance. As to the second basis, EIGT submitted that this was only a remote or indirect interest not capable of meeting the statutory standard for standing, there was no evidence as to the materiality of the economic impact of the decision on the NECA’s members, the NECA’s members had freely entered into agreements whereby the costs of apprentices’ wages would be passed on to them and it was not now open to them to complain about them, and it appears that members of the NECA will be free to terminate the relevant contracts with EIGT. The CEPU made submissions to similar effect as those of EIGT.

[20] The “person aggrieved” test for standing to institute appellate or judicial review proceedings has been given a broad meaning. The interest required for standing need not be a legal, financial or proprietary interest in the subject matter of the proceedings and may take any of a variety of forms. It is sufficient that the person has a complaint or grievance which they will suffer as a consequence of the decision which is beyond the effect on an ordinary member of the public, provided that interest is not merely remote, indirect, fanciful, or that of an intermeddler or busybody. 9

[21] We consider that the NECA has a sufficient interest in the matter to give it standing to appeal as a “person aggrieved”. As earlier recounted, the NECA was permitted to make submissions at first instance opposing the approval of the Agreement. While the Commissioner’s decision does not disclose on what basis he considered that he should hear from the NECA beyond noting that he was “assisted by” the NECA’s submissions, we infer that the interest in the matter disclosed by the NECA, namely that increased wages costs that would flow from the approval of the Agreement would be borne by its members, was taken into account and given weight by the Commissioner. Considered in that context, the outright rejection by the Commissioner of the NECA’s submissions meant that the decision necessarily had an effect on the NECA that was beyond the effect that the decision would have on an ordinary member of the public. 10 We note in this respect that, although there was a dispute about its materiality or degree, that the wages costs of the Agreement would “flow on” to the NECA’s members was not disputed by EIGT or the CEPU.

Permission to appeal

[22] As earlier stated, permission is required for the appeal. The NECA’s submissions on the issue of permission to appeal were only cursory: it submitted that the errors which it contended that the Commissioner had made were jurisdictional in nature, that it was in the public interest that the jurisdiction vested in the Commission in approving agreements be exercised properly and permission should be granted to correct jurisdictional errors, and that the decision was counter-intuitive and disharmonious when compared to other decisions of the Commission.

[23] EIGT submitted that permission to appeal should not be granted because:

•  the appeal concerned the minutiae of the procedure by which the Agreement was approved and the content of the Agreement, and raised no issues of general importance;

•  both the employer and the relevant union opposed the appeal;

•  most of the matters now raised by the NECA in its appeal were not advanced in its submissions at first instance;

•  even if the NECA has a sufficient interest to have standing to appeal, this interest is indirect at best and arises from commercial contracts freely entered into by its clients; and

•  the agreement-making process should not be prejudiced by allowing challenges to approvals by competitors or clients or by persons with, at best, an indirect economic interest.

[24] The CEPU similarly submitted that permission to appeal should not be granted on the basis contended for by the NECA because the decision does not disclose jurisdictional error and the contention that the decision is counter-intuitive and disharmonious with other decisions of the Commission was not developed and merely asserted in a perfunctory way.

[25] For reasons which are stated later in this decision, we consider that some aspects of the submissions advanced in support of the NECA’s first appeal ground have merit. Notwithstanding this, we have grave reservations about granting permission to appeal with respect to this ground of appeal:

(1) The NECA has no direct interest, or direct representational interest, in the approval of the Agreement. It was not a bargaining representative for the Agreement nor is it or any of its members bound by the Agreement. It cannot in the future represent any employee covered by the Agreement, and there is no suggestion that it would represent EIGT in any conceivable circumstances. 11 In short, the NECA is a stranger to the Agreement.

(2) In the circumstances earlier described, the NECA effectively operates (through a subsidiary) as a competitor to EIGT as an employer and supplier of apprentices to host employers in the electrical contracting industry. The notion that an employer can intervene in Commission proceedings to seek to block the approval of an enterprise agreement made by a competitor is, we consider, inimical to the objects of the scheme of enterprise bargaining established by Pt 2-4 of the FW Act (see s 3(f) and s 171).

(3) The proposition that a registered organisation of employers can, on behalf of its members, intervene to oppose the approval of an enterprise agreement in order to protect its members from the commercial consequences of the agreement is also at odds with the scheme for enterprise bargaining in Pt 2-4. Enterprise bargaining under the FW Act proceeds on the premise that, within certain constraints imposed by Pt 2-4 (in particular, the better off overall test), employers and their employees are best placed to determine the wages and conditions of employment which are in their best interests. No agreement approval requirement in Div 4 of Pt 2-4 is concerned with the commercial effect of bargained outcomes on third party businesses (except, arguably, s 189, which is not relevant here). If members of the NECA have chosen to enter into commercial arrangements with EIGT whereby the costs of wage increases agreed to by EIGT are to be passed on to them, that is not a matter of concern to the Commission in the approval process.

(4) The case advanced by the NECA in the appeal is significantly different to that which it advanced at first instance. In respect of the issue of compliance with s 180(2), the argument now advanced is particularised in a way which it was not at first instance, meaning that the Commissioner was not given the opportunity to consider the detailed submissions which were made on appeal. In respect of the s 180(5) issue, the defects in the Explanation Document now relied upon barely overlap with those identified in the NECA’s submissions at first instance, summarised in paragraph [9] above. Nearly all the arguments earlier summarised in paragraph [9] (most of which were completely unmeritorious and some of which verged on the risible) have been abandoned or substantially modified; there is, for instance, no reliance now placed on the lack of explanation that some provisions were allegedly contrary to the Building Code. Permission to appeal would normally not be granted to allow a new case to be advanced in an appeal. 12

(5) The case advanced by the NECA is, in substance, disingenuous. Its arguments concerning compliance with s 180(5) and s 180(2) are advanced in pretended concern for the protection of the interests of the employees covered by the Agreement. However, the NECA’s real interest in the matter, as disclosed in its submissions as to standing, is to block the approval of the Agreement so that its members do not have to pay for the enhanced rates of pay and conditions of employment which the Agreement provides for the employees covered by it. In this sense, this appeal is intended to subvert the interests of the employees.

[26] However, the NECA is correct in submitting that the matters it raises in connection with its first appeal ground are jurisdictional in nature. The ultimate duty of a Full Bench of the Commission discharging the appellate function under the FW Act is to ensure that the Commission operates within the limits of its statutory powers. Where an appellant with standing to do so raises a meritorious case that the Commission at first instance has exceeded its prescribed powers (or failed to exercise its powers when required to do so) and thereby has fallen into jurisdictional error, it is difficult to identify a situation where permission to appeal would not be granted so as to correct the error. Accordingly, we grant permission to appeal with respect to the first ground of appeal. 13

[27] We reject permission to appeal with respect to the second appeal ground because it is without merit. As a stranger to the Agreement in the manner earlier described, the NECA had no right to be heard at first instance and accordingly could not have been denied procedural fairness. 14 In any event, the NECA was heard in relation to its (then) grounds of objection to the approval of the Agreement, and its appeal submissions have not articulated why not being provided with the Agreement Checklist, or not being given an opportunity to reply to EIGT’s submissions, constituted in the circumstances a denial of procedural fairness in any practical sense. Even if there was a denial of procedural fairness then, to the limited extent to which the NECA’s case on appeal reflected that put at first instance, it has now been fully heard and considered by us and any procedural unfairness has been rectified.15

Compliance with s 180(5)

[28] Section 180(5)(a) provides that an employer must, in respect of a proposed enterprise agreement, take all reasonable steps to ensure that the terms of the agreement, and the effect of those terms, are explained to the employees employed at the time who will be covered by the agreement (relevant employees). Section 180(5)(b) requires that the explanation be provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees. The focus of the enquiry as to whether s 180(5) has been complied is firstly upon the steps taken to comply, and then to consider whether the steps taken were reasonable in the circumstances and whether they were all the reasonable steps that should have been taken in the circumstances, with attention being required to the content of the explanation given. 16

[29] Under s 188(1)(a)(i), the Commission’s satisfaction as to compliance with s 180(5) is a required element of the genuine agreement approval requirement in s 186(2)(a). This criterion of the Commission’s satisfaction means that the House v The King standard of appellate review applies on appeal. 17 This means, for relevant purposes, that the NECA needs to demonstrate before us that it was not reasonably available for the Commissioner to conclude, on the basis of the material before him, that s 180(5) had been complied with.

[30] The NECA submitted before us that EIGT did not take the reasonable step of providing an explanation in the Explanation Document that was accurate, clear and without misrepresentation, and which identified detriments to the relevant employees and other matters of significance, with respect to clauses 5(b), 7.2(j)-(l), 8(b), 16(e), 16(h) and 16(i) of the Agreement. We will deal with the explanation given, if any, for these provisions in turn.

[31] Clause 5(b) of the Agreement provides:

“b) Where a host employer is a party to a or site agreement or is obligated by a site that has superior wages and conditions then the following provisions of the host employer's agreement will apply to the Company's apprentices in lieu of the provisions in this agreement while working for that host employer:

•  Hours of Work

•  Wages

•  Allowances

•  Inclement Weather

•  Overtime

•  Living Away from Home

•  MERT or other redundancy fund

•  Superannuation.”

[32] The explanation of clause 5(b) given in the Explanation Document (noting that the provision was incorrectly identified as clause 5(a)) was:

“Clause 5(a) If the Enterprise Agreement of a Host Employer is more beneficial than the conditions overall of the Proposed Agreement, the terms of the Host Employer’s Enterprise Agreement will apply.”

[33] In respect of the comparison between the provision and the Award/ACT agreement, the Explanation Document said:

“Award No equivalent. Without the Proposed Agreement in place, the terms of the Award will apply regardless of the conditions that apply in the Host Employer’s Enterprise Agreement with its employees.

ACT Agreement Clause 15 applies all terms of the Host Employer’s Enterprise Agreement, regardless of whether the terms of that Agreement are more or less beneficial than the agreement with EGT. The Proposed Agreement ensures employees are not worse off overall under the Host Employer’s Enterprise Agreement.”

[34] The preamble to the Explanation Document also relevantly stated, in an apparent reference to clause 5(b):

“The terms of the Host Employer’s enterprise agreement may apply to some apprentices under the Proposed Agreement, where the Host Employer’s agreement is more beneficial overall.”

[35] The NECA submitted that the explanation of clause 5(b) given was inaccurate or misleading because it asserted that the entirety of the terms of the host employer’s agreement would apply, whereas clause 5(b) provides that only the stipulated terms would apply. It also submitted that the Explanation Document did not accurately explain when the identified terms would apply, in that it referred to the agreement of a host employer being “more beneficial overall”, whereas clause 5(b) refers to “superior wages and conditions”.

[36] The NECA’s submission must be accepted. A reasonable step required by s 180(5) in the circumstances was that the Explanation Document provide an accurate explanation as to the terms and effect of clause 5(b). It did not do this for the reasons submitted by the NECA. We therefore do not consider that it was reasonably available for the Commissioner to conclude that s 180(5)(a) was complied with in respect of clause 5(b).

[37] Clauses 7.2(j)-(l) provide:

“j) Apprentices undertake to honour the duration, conditions and commitment to trade training.

k) Apprentices shall not engage in any paid electrical work outside the Company’s employment or specific Host Company lease agreements and all work conducted for the Host Company shall appear on the work time sheet.

l) Apprentices will not be permitted to negotiate any variation of the Training Agreement, in particular its duration, conditions and commitment to trade training without consultation with the Company.”

[38] The expression “Training Agreement” used in clause 7.2(l) is defined in clause 3(xxvi) as follows:

“(xxvi) Training Agreement means the Apprenticeship Training Contract and Training Plan between the Company, Employee and where applicable, the Registered Training Organisation (RTO).”

[39] No explanation of these terms was provided in the Explanation Document. The NECA submitted that it would have been a reasonable step to explain these provisions, given that they operate as restraints of trade, provide no discernible benefit to the employees, and have no equivalent in the Award or the ACT Agreement.

[40] We do not necessarily agree with the NECA’s submission that the above provisions constitute restraints of trade. Nevertheless, we consider that it would clearly have been a reasonable step for EIGT to at least explain that the provisions give force as terms of the Agreement to the requirements of each apprentice’s Training Agreement in a way that the Award and the ACT agreement do not. We therefore do not consider that it was reasonably available for the Commissioner to conclude that s 180(5)(a) was complied with in respect of these provisions.

[41] Clause 8(b) provides:

“b) Upon commencement of employment, Employees will undertake the electrical apprentice readiness assessment (RA) run by Energy Space or similar at the company’s expense. The RA results will not have any effect on an employee(s) probation period referred to in clause 8(a) but will indicate where remedial targeted support can be provided to increase the likelihood of an apprentice completing their apprenticeship. Field Officers can advise apprentices on suitable service providers who can offer targeted support.”

[42] There was no explanation of clause 8(b) in the Explanation Document. The NECA submitted that the effect of the provision is that an employee can be required to undertake some additional assessment and there was no explanation of the use the employer can make of the assessment, in circumstances where there is no equivalent provision in the Award or the ACT agreement.

[43] It is unclear what the NECA submits is the reasonable step which could have been taken but was not. The provision is self-explanatory and states in unambiguous terms the use which can be made of the required apprentice readiness assessment. We are not persuaded that there was a reasonable step which EIGT could have taken with respect to this clause but did not, and this submission is therefore rejected.

[44] Clauses 16(e), (h) and (i) are all concerned with annual leave. They provide:

“e) Annual leave shall be taken at a time which is approved by the Company as being convenient having regard to overall operational and manning requirements of the Company. An Employee is required to provide at least one month’s notice of a request to take annual leave.

. . .

h) Where an Employee has more than 8 weeks (10 weeks for a shift worker) annual leave entitlement accrued to them, the Company may direct the Employee to take annual leave by providing a minimum 4 weeks’ notice to the Employee. The Company may only direct an Employee to take a maximum one quarter of the leave credits owing to the Employee.

i) Provided an Employee receives 4 weeks-notice, the Company may direct an Employee to take any accrued annual leave during the Company’s annual close down, e.g. the Christmas/ New Year period.”

[45] Only clause 16(h) is explained in the Explanation Document:

“Clause 16

EGT may direct employees to take ¼ of their annual leave balance as leave once the employee has accrued 8 weeks or more annual leave.

Award and ACT Agreement

For shiftworkers, the employer may only direct employees to take annual leave once their leave balance has exceeded 10 weeks rather than 8.”

[46] The NECA submitted that the effect of clause 16(e) is to restrict an employee’s entitlement to take annual leave to a time of the employer’s choosing, and the provision also requires a minimum period of notice for any such request, in circumstances where there are no equivalent provisions in the Award or the ACT agreement and the provision provides no discernible benefit to the employee. In relation to clause 16(h), it was submitted that its effect is to permit the employer to direct unilaterally that employees take excess annual leave, in circumstances where there was no equivalent provision in the ACT agreement and where, under the Award provisions (clauses 21.6 and 21.7), the employer’s right to direct the taking of leave only arises where the employer and employee have first genuinely tried to reach an agreement about the issue but have been unsuccessful. As to clause 16(i), the NECA submitted that the provision’s effect is that the employer is only required to give an employee 4 weeks’ notice of a requirement to take accrued annual leave during the employer’s close down, which may be of a duration of the employer’s choosing. There is no equivalent provision in the ACT agreement, and clause 21.5 of the Award requires a written notice of 2 months and limits the period of the closedown to 2-4 weeks. The NECA submitted that it would have been a reasonable step to explain all these matters and, by failing to do so, EIGT did not comply with s 180(5).

[47] Clause 16(e) does not have the effect contended for by the NECA because of the operation of clause 9 of the Agreement. Clause 9 provides:

“9. NES MINIMUM STANDARDS

a) The National Employment Standards (NES) apply at all times to an Employee(s) covered by this Agreement.

b) Where the NES provides, or is varied to provide, a benefit or condition or entitlement more favourable in a particular respect than that contained in this Agreement, the benefit or condition or entitlement contained in this Agreement shall be overridden to the extent of any less favourable inconsistency with the NES.”

[48] Section 88 of the FW Act provides, in respect of the taking of the NES annual leave entitlement, that annual leave may be taken for a period agreed between the employee and the employer, and the employer must not unreasonably refuse to agree to a request by the employee to take annual leave. The entitlement under s 88 as to the taking of annual leave is “more favourable” than clause 16(e) because the employer must not unreasonably refuse a request to take leave and there is no notice period applicable to the request. By virtue of clause 9(b), clause 16(e) is “overridden” by s 88 and has no effect to the extent of the identified inconsistencies. It would therefore not have been a reasonable step to explain clause 16(e) in the way suggested by the NECA, since such an explanation would have been wrong. The NECA submission is therefore rejected.

[49] In relation to clause 16(h), we consider that the explanation given in the Explanation Document is accurate except that, as submitted by the NECA, it does not identify that clause 21.7(a) of the Award requires the employer to genuinely try to reach agreement with the employee about reducing or eliminating an excessive leave accrual before a direction to take leave may be given, whereas clause 16(h) does not. Because clause 16(h) has the effect of displacing the Award provision, we consider that it would have been a reasonable step for EIGT to point out this difference in the Explanation Document (including for employees under the ACT agreement). 18 We therefore do not consider that it was reasonably available for the Commissioner to conclude that s 180(5)(a) was complied with in respect of clause 16(h).

[50] As to clause 16(i), we accept that it would have clearly been a reasonable step to explain that the provision is less beneficial than and would displace the equivalent provision in the Award, which requires two months’ notice of a Christmas-New Year close-down (clause 21.5(a)) and limits the length of a close-down to 4 consecutive weeks (clause 21.5(e)). This applies equally to employees under the ACT agreement. 19 It was not reasonably open for the Commissioner to conclude that s 180(5)(a) was complied with in respect of clause 16(i).

[51] Apart from the submissions it made concerning the specific provisions of the Agreement dealt with above, the NECA also made a general submission that a reasonable step which EIGT could have taken pursuant to s 180(5) was to arrange a meeting to explain the terms of the Agreement and/or receive/allow any comments, having regard to the fact that a significant number of the employees were aged under 21 years and the Agreement was not a “rollover” agreement. This submission was not made at first instance, and accordingly EIGT did not have the chance to deal with it. Having regard to the fact that the apprentice workforce of EIGT is dispersed at the workplaces of various host employers, it may not have been reasonably practicable for EIGT to call such a meeting. Having deprived EIGT of the opportunity of meeting this point with evidence at first instance, the point cannot be raised now to suggest error in the Commissioner’s decision.

[52] Finally, the NECA submitted that the Commissioner erred in finding that the Agreement itself was or could be evidence of the explanation of the terms and effect of the terms of the Agreement. Read in context, we understand the Commissioner’s finding to convey only that, in respect of a provision of an agreement that is straightforward, readily comprehensible and deprives employees of no existing benefit, giving employees a copy of the Agreement may itself be a step relevant to s 180(5). The submission is therefore rejected.

Compliance with s 180(2)

[53] Section 180(2) provides that, during the “access period” for an agreement, the employer must take all reasonable steps to ensure that the relevant employees are given a copy of the written text of the agreement and other material incorporated by reference in the agreement, or that the employees have access to a copy of these materials. The “access period” is the 7-day period ending immediately before the start of the voting process for the agreement: s 180(4). By virtue of s 188(1)(a)(i), satisfaction as to compliance with s 180(2) is (subject to s 188(2)) a prescribed element of the genuine agreement approval requirement in s 186(2)(a). The purpose of s 180(2) was described by the Full Bench in CFMEU v Sparta Mining Services Pty Ltd 20 in the following way:

“The statutory purpose of s.180(2) is clear: where a proposed enterprise agreement contains, as material incorporated by reference in the agreement, entitlements or obligations derived from an external document, that document is to be provided to employees to be covered by the agreement before they vote upon it so that they know what the content of those entitlements or obligations are when they consider whether to approve the agreement. That is why compliance with s.180(2) is an element of the requirement for an enterprise agreement to have been “genuinely agreed” by the employees who voted upon it.” 21

[54] The NECA contends that five provisions of the Agreement incorporate external material by reference which was not provided to employees in accordance with s 180(2): clauses 5(b), 10(a)(iii), 41(a)(iv), 41(a)(vi) and 44(h). We will deal with each of these provisions in turn.

[55] We have earlier set out the terms of clause 5(b). It is debatable whether clause 5(b) is to be construed as incorporating by reference the identified provisions of any “site agreement … that has superior wages and conditions”. On one view, the effect of the provision is simply to render inoperative the identified provisions of the Agreement where such a site agreement exists in respect of any host employer. In any event, even if clause 5(b) is read as incorporating the identified provisions of any such site agreement on the basis that the provision imposes an enforceable obligation upon EIGT to apply these provisions to its employees, we do not consider that the NECA has established that it was not open to the Commissioner to be satisfied that s 180(2) had been complied with in respect of such site agreements. Notwithstanding that, as earlier set out, Mr Crebbin’s Form F17 declaration indicates that the only material considered to be incorporated by reference into the Agreement and provided to the employees as required by s 180(2) was the Award, the preamble to the Explanation Document states:

“The terms of the Host Employer’s enterprise agreement may apply to some apprentices under the Proposed Agreement, where the Host Employer’s agreement is more beneficial overall. Each apprentice will have received a copy of their Host Employer’s enterprise agreement upon commencement of their placement with the Host Employer. If you require a new copy of your Host Employer’s enterprise agreement please contact [name and email address redacted] for a copy.”

[56] The effect of the above statement is that apprentices had already been supplied with a copy of their host employer’s enterprise agreement upon the commencement of their placement, in which case they had access to it during the access period. If they had misplaced it, they could obtain another copy on request. To the extent that s 180(2) was applicable at all in respect of clause 5(b), we consider that it was reasonably open for the Commissioner to have been satisfied that the steps taken by EIGT constituted compliance with s 180(2). The NECA’s submission about this provision is therefore rejected.

[57] Clause 10(a)(iii) provides:

“a) It is a term and condition of employment and of the obligations and rights occurring under this Agreement, that all Employees:

. . .

(iii) Maintain commitment to, and comply with the Company’s directions (consistent with the objectives of the Agreement) with respect to, safety, quality, site cleanliness and waste management;…”

[58] The above provision plainly does not incorporate any external material by reference. The “Company’s directions” referred to are directions which may be made by EIGT from time to time about the identified subject matters. Section 180(2) had no application with respect to this provision, and the NECA’s submission to the contrary is rejected.

[59] Clauses 41(a)(iv) and (vi) provide:

“a) The parties acknowledge and agree that a safe and secure workplace is important, and that Employees will:

. . .

(iv) Comply with the Company’s Work health and safety practices and procedures or face disciplinary action, including termination of their employment.

. . .

(vi) Comply with all Client or Site Specific WHS requirements.”

[60] In respect of clause 41(a)(iv), we consider it likely that EIGT had in place documented “health and safety practices and procedures” at the time of the access period. It is clear that these were incorporated by reference into the Agreement, since clause 41(a)(iv) requires compliance with them, at pain of disciplinary action up to and including dismissal. 22 It would be surprising if EIGT had not provided or made accessible to employees any such health and safety documents, but there was no evidence before the Commission at first instance that such documents had in fact been provided or made accessible to the employees during the access period or at all. We therefore accept the NECA’s submission that the Commissioner could not have been satisfied, on the material before him, that s 180(2) was complied with in relation to clause 41(a)(iv).

[61] The position is somewhat different in respect to clause 41(a)(vi). Although we accept that client and site-specific WHS requirements are likely to be documented, and that the effect of clause 41(a)(vi) is to incorporate into the Agreement any such documents by reference since compliance with them is required as a term of the Agreement, it is less clear what “reasonable steps” it was open for EIGT to take to provide or make accessible these documents during the access period. There is no evidence that EIGT itself possessed or had access to these third-party documents at the relevant time. A requirement upon a person to “take all reasonable steps” does not encompass steps which are not within the legal or practical capacity of the person to take. 23 On a fine balance, we consider that it may have been reasonably open for the Commissioner to conclude that s 180(2) was complied with on the basis that there were no steps which could have been taken.

[62] Finally, clause 44(h) provides:

“h) Employees shall comply with the requirements prescribed in policies of the Company in relation to drugs and alcohol.”

[63] Again, we consider it likely that any drugs and alcohol policy would be documented. Compliance with any policy is required by clause 44(h) and, on that basis, it may be concluded that any such policy is incorporated by reference into the Agreement. There was nothing before the Commissioner to indicate that any step was taken by EIGT to provide a copy of or access to such a policy during the access period. Accordingly, we conclude that the Commissioner could not have been satisfied on the basis of the material before him that s 180(2) was complied with in relation to clause 44(h).

Conclusion on the appeal

[64] To the extent stated above, we uphold grounds 1(a) and 1(b) of the appeal. We conclude that it was not reasonably available for the Commissioner to conclude on the basis of the material before him that ss 180(2) and 180(5) had been complied with, and accordingly it was not reasonably available for him to be satisfied that the Agreement was genuinely agreed as required by s 186(2)(a). It is therefore necessary to quash the decision to approve the Agreement.

Re-determination of the application for approval of the Agreement

[65] It does not follow from our conclusion with respect to the appeal that we should simply proceed to dismiss the application for approval of the Agreement, as the NECA submitted we should do. Because the NECA ran a substantially different case in this appeal than it did at first instance, EIGT was deprived of the opportunity to meet the case now advanced by the NECA by calling additional evidence. It may be, for example, that there was some further explanation to employees of the provisions of the Agreement dealt with above, notwithstanding what was said about the steps taken to comply with s 180(5) in Mr Crebbin’s declaration, which could be the subject of further evidence. Additionally, the course of events in the proceedings has meant that EIGT has not yet had the opportunity to propose undertakings which might resolve the difficulties raised by the NECA and accepted by us or to make submissions as to the potential applicability of s 188(2). As a matter of fairness, therefore, we consider that the appropriate course is for us to re-determine EIGT’s application for the approval of the Agreement.

[66] We are satisfied that the Agreement meets the requirements for approval in ss 186 and 187 as are relevant to the application on the basis of our acceptance of the same undertakings which were made by EIGT at first instance except, in relation to s 186(2)(a), we have the following concerns:

(1) The material before us does not permit us to be satisfied that EIGT complied with s 180(5) in respect of clauses 5(b), 7.2(j)-(l), 16(h) and 16(i).

(2) The material before us does not permit us to be satisfied that EIGT complied with s 180(2) in respect of the material incorporated by reference in clauses 41(a)(iv) and 44(h).

[67] We propose to give EIGT the opportunity to file further evidence to address these concerns and/or to make submissions (supported by evidence if necessary) that, notwithstanding these concerns, we may be satisfied that the Agreement was genuinely agreed by virtue of the application of s 188(2).

[68] We also propose to give EIGT the opportunity, in the alternative, to propose undertakings to address our concerns. We indicate that our provisional view is that the following undertakings would address our concerns:

Section 180(5) concerns

(1) Clause 5(b): the following undertaking will align the operation of clause 5(b) with the explanation of the clause given in the Explanation Document: 24

“The following will apply in lieu of clause 5(b): If the enterprise agreement of a Host Company is more beneficial than the conditions overall of this Agreement, the terms of the Host Company’s enterprise agreement will apply”.

(2) Clauses 7.2(j)-(l): the following undertaking will have the effect of removing clauses 7.2(j)-(l) from the Agreement. EIGT will still have the capacity to separately require compliance with the provisions of the Training Agreements which its employed apprentices have entered into:

“Clauses 7.2(j)-(l) will not be applied as terms of this Agreement.”

(3) Clause 16(h): the following undertaking will render moot any failure to explain that the precondition for making a direction to take annual leave under clause 21.7(a) of the Award had been displaced in the Agreement:

“Before making any direction under clause 16(h), the Company shall confer with the employee and genuinely try to reach agreement on how to reduce or eliminate the employee’s excessive leave accrual.”

(4) Clause 16(i): the following undertaking will render moot any failure to explain that the more beneficial provisions of the Award concerning the taking of annual leave during close-downs:

“In lieu of clause 16(i), clause 21.5 of the Electrical, Electronic and Communications Contracting Award 2020 will be applied as if it were a term of this Agreement.”

Section 180(2) concerns

(5) Clause 41(a)(iv): The following undertaking will have the effect of removing clause 41(a)(iv) from the Agreement, thus rendering moot any failure to provide copies of or access to the incorporated material. This will not prevent EIGT from making lawful and reasonable directions that its employees comply with its work health and safety practices and procedures:

“Clause 41(a)(iv) will not be applied as a term of this Agreement.”

(6) Clause 44(h): The following undertaking will have the effect of removing clause 44(h) from the Agreement, thus rendering moot any failure to provide copies of or access to the incorporated material. This will not prevent EIGT from making lawful and reasonable directions that its employees comply with its drugs and alcohol policies:

“Clause 44(h) will not be applied as a term of this Agreement.”

[69] EIGT may file further evidence, submissions or proposed undertakings in response to the concerns identified in paragraph [66] above within 21 days from the date of this decision. The CEPU may file any submissions in response, including its views as to any proposed undertakings, within 7 days after EIGT files its further material. The NECA may also file any submission in response within the same time frame.

Orders and directions

[70] We order and direct as follows:

(1) Permission to appeal is granted with respect to ground 1 of the appeal. Permission to appeal is otherwise refused.

(2) Ground 1 of the appeal is upheld to the extent stated in our reasons for decision above.

(3) The decision to approve the ETU and Electrogroup Group Training Apprentice Enterprise Agreement 2021-2022 ([2021] FWCA 6239) is quashed.

(4) In respect of the re-determination of the application in matter AG2021/6704:

(a) EIGT shall file any further evidence, submissions or proposed undertakings to address the concerns identified in paragraph [66] of this decision within 21 days from the date of this decision.

(b) The CEPU shall file any submissions in response to any further material filed by EIGT pursuant to (a) above, including submissions stating its views concerning any proposed undertakings, within 7 days of such material being filed.

(c) The NECA shall file any submissions in response to any further material filed by EIGT pursuant to (a) above within 7 days of such material being filed.

VICE PRESIDENT

Appearances:

A Moses SC with J Darams of counsel for the appellant.
G Fredericks of counsel for the respondent.
R Reitano of counsel with C Massy of counsel for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

Hearing details:

2021.

Sydney and Melbourne (via video-link):
19 November.

Printed by authority of the Commonwealth Government Printer

<PR736908>

 1   [2021] FWCA 6239

 2   AE513478

 3   AG842473; PR962550

 4   [2021] FWCA 6239 at [19]-[22]

 5   Ibid at [26]

 6   Ibid at [36]-[37]

 7   Ibid at [38]-[39]

 8   Ibid at [40]

 9   Right to Life Association (NSW) Inc v Secretary, Department of Human Services [1995] FCA 33, 56 FCR 50 at 65; Tweed Valley Fruit Processors Pty Ltd v Ross and others [1996] IRCA 407, 137 ALR 70, 65 IR 393 at 90-91; Argos Pty Ltd v Corbell, Minister for Environment and Sustainable Development [2014] HCA 50, 254 CLR 394 at [48]; Australian Industry Group [2010] FWAFB 4337, 196 IR 125 at [9]- [12]; Transport Workers’ Union of Australia v Coles Supermarkets Australia Pty Ltd [2013] FWCFB 276 at [29]; Australian Mines and Metals Association Inc; Master Builders Australia Limited v Construction, Forestry, Maritime, Mining and Energy Union [2018] FWCFB 3710 at [30]; CFMMEU v JFM Civil Contracting Pty Ltd [2020] FWCFB 4866, 300 IR 122 at [21]-[22]

 10   See AIMPE v Secretary of the Department of Transport [1986] FCA 443, 13 FCR 124, 18 IR 431 at 133; AWU v Baiada Farms Pty Ltd & AMIEU [2021] FWCFB 6029 at [23]

 11   Whether EIGT could become a member of the NECA under its rules was not addressed in the parties’ submissions.

 12   Nilsen (SA) Pty Ltd v CEPU [2016] FWCFB 3119 at [13]

 13   In its oral submissions at the hearing of the appeal, the NECA briefly adverted to some additional contentions of error which were not pleaded in its amended notice of appeal nor raised in its written outline of submissions. It did not seek to amend its notice of appeal or seek permission to appeal with respect to these matters. We will accordingly disregard them.

 14   CFMEU v Collinsville Coal Operations Pty Ltd [2014] FWCFB 7940, 246 IR 21 at [65]-[75] 

 15   Ibid at [76]

 16   CFMEU v One Key Workforce Pty Ltd [2017] FCA 1266, 270 IR 410 at [94]-[109], affirmed on appeal: [2018] FCAFC 77, 277 IR 23; CFMMEU v Ditchfield Mining Services Pty Limited [2019] FWCFB 4022 at [66]-[67]

 17   [1936] HCA 40, 55 CLR 499 at 504-505; Coal and Allied Operations Pty Ltd v AIRC [2000] HCA 47, 203 CLR 194 at [19]-[21] per Gleeson CJ, Gaudron and Hayne JJ; Minister for Immigration and Border Protection v SZVFW [2018] HCA 30, 264 CLR 541 at [35]-[50] per Gageler J; Donnybrook Holdings Pty Ltd v CEPU [2021] FWCFB 1825 at [20]

 18   The ACT agreement prevails over the Award only to the extent of any inconsistency: clause 28(2) of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009. No inconsistency arises because the ACT agreement contains no equivalent to clause 21.7 of the Award.

 19   See above.

 20   [2016] FWCFB 7057, 261 IR 107

 21   Ibid at [15(3)]

 22   See ibid at [18]

 23   See BGC Contracting Pty Ltd [2018] FWC 1466 at [43]; AWU v Rigforce Pty Ltd [2019] FWCFB 6960 at [36]

 24   See CFMMEU v Karijini Rail Pty Ltd [2020] FWCFB 958, 293 IR 254 at [107]; CFMMEU v Mechanical Maintenance Solutions Pty Ltd [2020] FWCFB 1918 at [36]