Fair Work Act 2009
s.185—Enterprise agreement

Ausdrill Pty Ltd T/A Ausdrill Ltd
(AG2022/1886)

Application for approval of an enterprise agreement – explanation of terms of the enterprise agreement and their effect – genuine agreement.

Introduction and background

[1] On 13 June 2022, Ausdrill Pty Ltd (Ausdrill) applied for approval of the Ausdrill Pty Ltd Black Coal Agreement 2022 (Enterprise Agreement), which covers employees of Ausdrill throughout Australia who are engaged in drilling and blasting, exploration and associated maintenance roles in surface operations in the black coal mining industry, and who are employed in one of the classifications set out in clause 8.4 of the Enterprise Agreement.

[2] The Enterprise Agreement was made on 1 June 2022. At the time of the vote, 56 employees were covered by the Enterprise Agreement, of whom 52 cast a valid vote and 28 voted to approve the Enterprise Agreement.

[3] The CFMMEU was a bargaining representative for the Enterprise Agreement. The CFMMEU opposes the application for approval of the Enterprise Agreement on a number of grounds. However, for reasons which are explained below, I only need to deal with part of one of those grounds at this stage.

[4] On 8 August 2022, I conducted a hearing, by video conference, in relation to the application for approval of the Enterprise Agreement. The parties relied on material filed in the Commission prior to the hearing, 1 together with letters tendered by Ausdrill at the hearing.2 In addition, the CFMMEU filed and served supplementary submissions on 10 August 2022 and Ausdrill filed and served submissions in reply on 12 August 2022. I have had regard to all the material filed by the parties in determining this matter.

All reasonable steps to explain agreement

Relevant principles

[5] Section 180(5) of the Act requires an employer to take all reasonable steps to ensure that the terms of the enterprise agreement, and the effect of those terms, are explained to the relevant employees. Further, the explanation must be provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees. Satisfaction as to the “all reasonable steps” requirement is an element in the inquiry as to whether “genuine” agreement had been obtained from the employees.

[6] The purpose of the requirement in s 180(5) is to “enable the relevant employees to cast an informed vote: to know what it is they are being asked to agree to and to enable them to understand how wages and working conditions might be affected by voting in favour of the agreement”. 3

[7] 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. 4 This directs attention to the content of the explanation given to employees.5

[8] The Full Bench in CFMMEU v Ditchfield Mining Services Pty Ltd explained the requirement imposed by s 180(5) of the Act in the following way: 6

“Compliance with s.180(5) will not always require an employer to identify detriments in an agreement vis-à-vis the reference instrument, or for the employer to provide an analysis between the agreement and the relevant reference instrument, particularly in circumstances where an existing enterprise agreement, not a reference instrument, applies to the employees in their employment with the employer. The question of compliance with s.180(5) is to be judged against the circumstances that pertain at the time at which compliance was required. Section 57 of the Act makes clear that a modern award does not apply to an employee in relation to particular employment at a time when an enterprise agreement applies to the employee in relation to that employment. In the present case, when the explanations were given, no enterprise agreement applied to the employees and the Award did apply. An explanation of the effect of the terms of the Agreement vis-à-vis the Award was therefore capable of being relevant to the evaluative assessment of whether all reasonable steps were taken to explain the terms of the Agreement and the effect of those terms.”

[9] More recently, the Full Court of the Federal Court made the following observations in relation to s 180(5) of the Act: 7

“[169] For the purposes of s 180(5), the Commission must be satisfied that “all reasonable steps” were taken to ensure that the terms of the agreement and their effect were explained to the relevant employees. We do not consider that this requirement necessarily involves the identification of the universe of reasonable steps, and requires that the Commission be satisfied that every one of those steps was taken. Often, a requirement to take all reasonable steps to achieve a particular outcome may be met in different ways. The fact that one reasonable path is chosen over others need not result in a conclusion that all reasonable steps were not taken. For instance, it might be reasonable to explain the terms of an agreement by a written document, or by PowerPoint slides, or by face-to-face meetings as occurred here, or by a combination of those means. The choice of one form or words, or one reasonable medium of communication over others may be relevant to the evaluation that the Commission must make. But the legislation contemplates that there be flexibility. That flexibility arises particularly from s 180(5)(b) which requires that the employer take all reasonable steps to ensure that the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the employees. If an employer in a particular case pursues a path of explanation and mode of communication that is reasonable, the standard of reasonableness may not require that the employer pursue all parallel means of explanation and communication to achieve the same end.

[170] Further, any explanation of the terms of the agreement and their effect will often be open to challenge on the ground that the explanation could have been made with a greater level of precision or particularity. It is in the nature of most explanations that they could be given in greater detail, or alternatively at a higher level of generality. The same observation can be made about the evidence of an employer’s explanation before the Commission. In the absence of a verbatim record of what was said to the employees, evidence may always be open to a claim that the evidence could have descended into a greater level of detail. These are all matters for the Commission to evaluate in determining whether it reaches the requisite level of satisfaction, and in determining whether it has any concerns that would engage its power to accept undertakings under s 190(2).

[171] The central premise of the applicants’ case before this court in relation to the Explanation Issues was to identify a series of claimed differences between the greenfields agreements and the enterprise agreement, not all of which were the subject of submissions to the Commission, and to contend that the Commission was required to consider the explanations, if any, given to the employees in relation to all those claimed differences. In our view, that was not the Commission’s function. The Commission’s function was to form an evaluative judgment about issues that were at a higher level of abstraction, directed to the statutory question whether the employer took all reasonable steps to ensure that the terms of the proposed agreement and their effect were explained to the employees in an appropriate manner. As senior counsel for the applicants must be taken to have recognised by his acceptance of the correctness of [73] of the Commission’s reasons for the interim decision (see [147] above), there was no requirement that every difference between an existing industrial instrument and a proposed enterprise agreement be explained in order that the Commission be satisfied that all reasonable steps were taken. The identification of what reasonable steps were required, and what differences, if any, had to be explained, and if so in what terms, and by what means, were all matters for the Commission to consider.

[172] The present case is far removed from the facts considered by the Full Court in One Key Workforce, where there was no evidence at all of what explanations were given to the employees, but a bare ipse dixit that asserted compliance with s 180(5). Here, there was evidence of the steps that Mr Murphy took to explain the terms of the proposed agreement and their effect to the employees. The quality of that evidence varied. On some questions, the evidence was very general. But the quality of the evidence was for the Commission to evaluate, and the inferior quality or absence of evidence about some of the claimed differences that the applicants have identified did not deprive the Commission of jurisdiction to make the overall evaluation that was required.

[173] In our view, the Commission lawfully discharged its statutory function in this case. Relevant to the grounds of challenge advanced by the applicants are the following features of the Commission’s reasons for its interim decision. The Commission referred to the greenfields agreements at [6] and [9]. The Commission reviewed decisions of the Commission that had held in other circumstances that not every single departure from the existing terms of a governing industrial instrument had to be explained to employees, and at [72]-[73] accepted this to be a correct approach. Of importance to the Commission’s path of reasoning was its acceptance of Mr Murphy’s evidence that he went through the proposed agreement with the employees clause-by-clause. In relation to differences between the proposed agreement and the greenfields agreements, the Commission held that the discussion canvassed key differences, but the Commission also accepted that some differences were not explained, and at [85] identified as an instance the omission of union rights under the dispute resolution procedure. Contrary to the submissions on behalf of the applicants, the Commission did not substitute a requirement that only “key differences” between the greenfields agreements and the proposed enterprise agreement had to be explained. It is important not to depart from the statutory language of s 180(5), which requires that all reasonable steps be taken to ensure that the terms of the proposed enterprise agreement and their effect be explained to the employees. There was no error by the Commission in acting on evidence that key differences, and not all differences, were explained, which accorded with the principles on which it acted that it had set out at [72]-[73]. The Commission also accepted, consistently with Mr Murphy’s evidence, that the Greenfields Electrical Agreement was not separately dealt with, but held at [87] that this did not render the explanation inadequate for the purposes of s 180(5). Having undertaken that consideration, the issue that caused the Commission concern was the terms of the Awards that were incorporated by reference into the greenfields agreements, and in respect of which the Commission subsequently accepted undertakings as a condition of approval. At [90], the Commission explained that it was the breadth of the terms and conditions of the incorporated Awards which made the omission to explain the differences material.

[174] The alternative way in which the applicants’ case before this court was put was, in substance, that having regard to the claimed differences between the greenfields agreements and the enterprise agreement that were the subject of the applicants’ submissions, acting reasonably the Commission was bound to find that not all reasonable steps had been taken by the employer to comply with s 180(5). For the preceding reasons, we are not persuaded that the applicants’ case goes anywhere near the threshold that is required to establish that the Commission’s evaluation of the evidence before it was not reasonable: the applicants’ case in relation to the Evaluation Issues goes no further than to debate the merits of the outcome.”

Steps taken by Ausdrill to explain the Enterprise Agreement

[10] It is apparent from the evidence given by Mr Tony Flynn, Ausdrill’s Human Resources Manager, that the following steps were taken to explain the terms of the Enterprise Agreement, and the effect of those terms, to the employees:

(a) substantial explanatory material was distributed to employees during the access period both physically and via email on 24 May 2022, 26 May 2022, 27 May 2022 and 30 May 2022;

(b) face to face meetings and webinars were held with employees to explain the terms of the Enterprise Agreement and their effect on 24 May 2022, 26 May 2022 and 27 May 2022; and

(c) employees were reminded of the explanatory materials, and given an opportunity to ask questions, at pre-start meetings on every day of the access period (24 May 2022 to 30 May 2022).

[11] The steps undertaken by Ausdrill to explain the terms of the Enterprise Agreement, and their effect, to the employees must be considered in context. Part of the relevant context includes the fact that the notice of employee representational rights provided by Ausdrill to its employees at the commencement of bargaining identified that the proposed agreement would cover employees “that are employed on-site in the black coal mining industry and who perform work defined in Schedule A of the Black Coal Industry Award 2010”. Further, on 12 May 2022, shortly before the access period, Mr Flynn sent an email to all employees which stated:

“As you know we have been conducting Bargaining meetings with all the relevant stakeholders who are covered by the Black Coal Award. One of those parties has been the Mining & Energy Union (MEU) and we are now at the stage with the MEU where they are undertaking a review of the final version of the EA so we can consider any last feedback from them.”

[12] These communications correctly informed employees that they were covered by the Black Coal Mining Industry Award 2010 (BC Award). However, they did not say anything about whether the BC Award applied to any of the employees with whom Ausdrill was bargaining for a new enterprise agreement.

Relevant background

[13] Although all the employees covered by the Enterprise Agreement are covered by the BC Award, may be divided into three categories in terms of the industrial instruments that had application to their employment with Ausdrill at the time of the vote. The first category is comprised of a group of employees to whom the BC Award applied at the time of the vote. The BC Award applied to this category of employees because they fell within the coverage of the BC Award and they were not covered by an enterprise agreement. 8

[14] The second category of employees had incorporated into their contracts of employment with Ausdrill the terms and conditions of an enterprise agreement known as the Brandrill East Coast Coal Agreement 2019 (Brandrill EA). There is no dispute that, at the time of the vote, the Brandrill EA did not cover those employees within the meaning of s 53 of the Act; the Brandrill EA only governed their terms and conditions of employment because its terms and conditions were incorporated into their contracts of employment. Because the Brandrill EA did not cover the employees in this category, it did not apply to them within the meaning of s 52 of the Act. Had the Brandrill EA applied to this group of employees within the meaning of s 52 of the Act, the BC Award would not have applied to them. 9 The fact that the Brandrill EA did not apply to this group of employees at the time of the vote meant that the BC Award applied to them at that time.10 In the result, at the time of the vote for the Enterprise Agreement the BC Award applied to this category of employees and they were contractually bound by the terms and conditions of the Brandrill EA. The practical and legal effect of this arrangement was that employees in this category were entitled, at the time of the vote, to the benefits conferred (and the obligations imposed) by the BC Award and the Brandrill EA.

[15] There is only one employee in the third category. That employee had incorporated into their contract of employment with Ausdrill the terms and conditions of the Brandrill EA, but, at the time of the vote, the Brandrill EA also covered and applied to that employee within the meaning of ss 52 and 53 of the Act by reason of a transfer of business. As a result, the BC Award did not apply to this employee at the time of the vote for the Enterprise Agreement. 11

Communications with employees about their existing terms and conditions and differences between those terms and conditions and the Enterprise Agreement

[16] In answer to question 21 of his Form F17 declaration in support of the application for approval of the Enterprise Agreement, Mr Flynn declared:

“Employees to be covered by the proposed enterprise agreement are currently engaged only at sites in New South Wales and Queensland.

In New South Wales, the relevant site is the Boggabri site. Employees at Boggabri are engaged under the terms of the Black Coal Mining Industry Award 2020.

In Queensland, the relevant sites are the Blair Athol, Middlemount, Millennium and Moranbah sites. The Moranbah site is often referred to as the BMA site, as Ausdrill’s client at the Moranbah site is the BHP Mitsubishi Alliance (BMA). Employees at these sites are either covered by the Black Coal Mining Industry Award 2020 or the Brandrill East Coast Coal Agreement 2009.

On 24 May 2022, the commencement of the access period, I took the following steps.

Employees covered by the Black Coal Mining Industry Award 2020

At 4.19am, I sent all employees engaged under the terms of the Black Coal Mining Industry Award 2020 (Award) an all email attaching a copy of:

•  the proposed enterprise agreement; • a comparison document between the proposed agreement and the Award;

•  a document entitled ‘Key Terms Explained’; and

•  an employee FAQs document

(together, the Black Coal Award Information Pack).

See: Annexure marked ‘E’, being a copy of my email and the attachments to that email.

Employees covered by the Brandrill East Coast Coal Agreement 2009

At 4.18am, I sent all employees engaged under the terms of the Brandrill East Coast Coal Agreement 2009 (Brandrill Agreement) an email attaching a copy of:

•  the proposed enterprise agreement;

•  a comparison document between the proposed agreement and the Brandrill Agreement;

•  a document entitled ‘Key Terms Explained; and

•  an employee FAQs document

(together, the Brandrill Agreement Information Pack)

See: Annexure marked ‘F’, being a copy of my email and the attachments to that email. At 11.58am, I then emailed all employees covered by the Brandrill Agreement a copy of the Brandrill Agreement for their reference.

See: Annexure marked ‘G’, being a copy of my email and the attachment to that email.”

[17] The email referred to as annexure E in Mr Flynn’s answer to Q21 (which was provided to employees in category one) provides:

“Dear Ausdrill employees,

Please find the attached PDF Information Pack containing:

•  A copy of the proposed Ausdrill Pty Ltd Black Coal Enterprise Agreement 2022 (Proposed Enterprise Agreement);

•  A comparison document between the Proposed Enterprise Agreement and either the Black Coal Mining Industry Award 2022 or the Brandrill East Coast Enterprise Agreement 2009 depending on what your current underpinning terms and conditions are sources from.

•  A ‘Key Terms explained’ document; and

•  An Employee FAQ document.

Your individual project entitlements letter will be sent to you in a subsequent email individually.

Please let us know if you have any issues or questions.

Kind regards”

[18] The email referred to as annexure E in Mr Flynn’s answer to Q21 attached the following documents, which were referred to by Ausdrill as the Black Coal Information Pack:

(a) a copy of the Enterprise Agreement;

(b) a document entitled “Significant changes from the Black Coal Mining Industry Award 2020”;

(c) a document entitled “Key Terms explained”. The first page of that document states:

“Key Terms explained

Ausdrill Pty Ltd Black Coal Agreement 2022

This document explains the key terms of the proposed Ausdrill Pty Ltd Black Coal Agreement 2022 (Agreement).

This document is intended to give you an overview of the terms and conditions applying to your employment under the Agreement.

Where can I find the terms that apply to me?

The Agreement will apply to the exclusion of the Black Coal Mining Industry Award 2020 (Award). This means the terms and conditions of your employment will be found in the Agreement, your contract of employment, and any Project Entitlement Letter you receive from the Company. The Agreement does however refer to the Award at several points, but it is only for these specific references that the Award terms have any operation.

All terms of the Agreement will apply to the relevant Employees unless a term is inconsistent with a term in National Employment Standards (NES) and the NES provide a greater benefit to Employees. In that case, the NES will apply instead of the less beneficial Agreement term.

Any capitalised word in this Key Terms document which is not defined, refers to the defined term in the Agreement itself.

In order for the terms of the Agreement to apply to you however, the Agreement needs to first be approved by a majority of employees. It then needs to be approved by the Fair Work Commission – which is the independent third party tribunal that is responsible for reviewing enterprise agreements like this one and deciding if they will come into operation. None of the terms of the Agreement can start applying unless the Fair Work Commission approves the Agreement."

(d) a document entitled “Frequently Asked Questions”.

[19] The email referred to as annexure F in Mr Flynn’s answer to Q21 (which was provided to employees in category two) provides:

“Dear Ausdrill employees,

Please find the attached PDF Information Pack containing:

•  A copy of the proposed Ausdrill Pty Ltd Black Coal Enterprise Agreement 2022 (Proposed Enterprise Agreement);

•  A comparison document between the Proposed Enterprise Agreement and either the Black Coal Mining Industry Award 2022 or the Brandrill East Coast Enterprise Agreement 2009 depending on what your current underpinning terms and conditions are sources from.

•  A ‘Key Terms explained’ document; and

•  An Employee FAQ document.

Your individual project entitlements letter will be sent to you in a subsequent email individually.

Please let us know if you have any issues or questions.

Kind regards”

[20] The email referred to as annexure F in Mr Flynn’s answer to Q21 attached the following documents, which were referred to by Ausdrill as the Brandrill Information Pack:

(a) a copy of the Enterprise Agreement;

(b) a document entitled “Significant changes from the Brandrill East Coast Coal Agreement 2009 (Brandrill Agreement)”;

(c) a document entitled “Key Terms explained”. The first page of that document is different to the first page of the “Key Terms explained” document provided to employees in category one. It states:

“Key Terms explained

Ausdrill Pty Ltd Black Coal Agreement 2022

This document explains the key terms of the proposed Ausdrill Pty Ltd Black Coal Agreement 2022 (Agreement).

This document is intended to give you an overview of the terms and conditions applying to your employment under the Agreement.

Where can I find the terms that apply to me?

The Agreement will apply to the exclusion of the Black Coal Mining Industry Award 2020 (Award) and the Brandrill East Coast Coal Agreement 2009 (Brandrill Agreement). This means the terms and conditions of your employment will be found in the Agreement, your contract of employment, and any Project Entitlement Letter you receive from the Company. The Company has provided a copy of the Project Entitlement Letter to Employees and it forms part of this explanatory package of material.

The Agreement does however refer to the Award at several points, but it is only for these specific references that the Award terms have any operation.

All terms of the Agreement will apply to the relevant Employees unless a term is inconsistent with a term in National Employment Standards (NES) and the NES provide a greater benefit to Employees. In that case, the NES will apply instead of the less beneficial Agreement term.

Any capitalised word in this Key Terms document which is not defined, refers to the defined term in the Agreement itself.

In order for the terms of the Agreement to apply to you however, the Agreement needs to first be approved by a majority of employees. It then needs to be approved by the Fair Work Commission – which is the independent third party tribunal that is responsible for reviewing enterprise agreements like this one and deciding if they will come into operation. None of the terms of the Agreement can start applying unless the Fair Work Commission approves the Agreement."

(d) a document entitled “Frequently Asked Questions”.

[21] The Black Coal Information Pack (sent to employees in category one) did not include the document entitled “Significant changes from the Brandrill East Coast Coal Agreement 2009 (Brandrill Agreement)”. The Brandrill Information Pack (sent to employees in category two) did not include the document entitled “Significant changes from the Black Coal Mining Industry Award 2020”.

[22] At 9:50am on 24 May 2022, employees in category two were emailed a copy of the Brandrill EA. 12 There is no suggestion in the material before the Commission that employees in category one were sent such an email.

[23] On 24 May 2022, hard copies of the Black Coal Information Pack, the Brandrill Information Pack and the Brandrill EA were left in employee common areas at mines located in Queensland known as the Blair Athol, Middlemount, Millenium and Moranbah sites. Mr Flynn gave evidence that Ausdrill’s employees at these sites are “either covered by the Black Coal Mining Industry Award 2020 or the Brandrill East Coast Coal Agreement 2009” [emphasis original]. 13

[24] The emails referred to as annexures E and F in Mr Flynn’s answer to Q21 make reference to each employee’s “individual project entitlements letter”. Those letters were sent to individual employees on about 24 or 25 May 2022. Those letters are in materially the same terms, save for details particular to individual employees such as their name, rate of pay, classification, project, and additional entitlements. The individual project entitlement letters relevantly provide:

“PRIVATE AND CONFIDENTIAL

24 May 2022

[contact details of employee]

Dear [employee name],
Confirmation of Project Entitlements

I am writing in relation to your employment with Ausdrill Pty Ltd (Ausdrill) in the role of Production Driller 2 Mid (Role), pursuant to your current contract of employment with Ausdrill (Contract).

Your Project Entitlements

This letter (Project Entitlements Letter) is intended to confirm the remuneration that you receive based on your Role and the roster that you are engaged to work by Ausdrill on the Middlemount (Project) (collectively, your Project Entitlements).

All other terms and conditions in your Contract will remain unchanged except as set out in this Project Entitlements Letter.

Subject to the Ausdrill Black Coal Agreement 2022 (Agreement) being approved by the Fair Work Commission (Commission), your Composite Hourly Rate of Pay set out below takes effect from the first full pay period after the Agreement Made Date. All other Project Entitlements will take effect from the first full pay period following the Commencement Date of the Agreement (which is 7 days after the Commission’s approval of the Agreement).

The table below confirms the details of the Project Entitlements that apply to your employment with Ausdrill. For ease of reference, the table also confirms the reference classification in the Black Coal Mining Industry Award 2020 (Award) that is applicable to your employment.

Note: the conditions in the above table are current to the date of this letter being issued. In the event you change role or move to another any changes to the above conditions will be confirmed in a separate letter provided to you by Ausdrill.

Leave

Your entitlement to paid leave will be in accordance with your Contract, except where you have a more generous entitlement according to an Enterprise Agreement that applies to you or the National Employment Standards provides a greater entitlement.

Composite Hourly Rate of Pay and Industrial Laws

Your Composite Hourly Rate of Pay and any other benefits you receive from Ausdrill, as set out in this Project Entitlements Letter, and your Contract are intended to comply with the requirements of any employment legislation or employment instrument that applies to you including:

•  the Fair Work Act 2009 (Cth) (FW Act) and/or any other applicable State or Federal legislation or subordinate law;

•  the Award;

•  any applicable enterprise agreement; or

•  any other industrial instrument which may apply,

(collectively, Industrial Laws).

Your Composite Hourly Rate of Pay is not a Base Rate of Pay but a flat payment per hour for all hours worked. As such, the Composite Hourly Rate of Pay incorporates an average of all applicable penalty payments, allowances and loadings pursuant to applicable Industrial Laws across your rostered working hours in your work cycle. To the extent permitted by law, Ausdrill can set off any claim that you have to any payment or total payment under Industrial Laws that is higher than the Composite Hourly Rate of Pay in any hour of your work cycle against a payment you receive that is greater than any entitlement under the Industrial Laws for other hours in that work cycle. This is provided that the total payment you receive in the work cycle is greater than the total of what you are entitled to receive under the Industrial Laws for the same work cycle.

If you have any questions regarding this Project Entitlements Letter please contact your Manager in the first instance or HR Manager Tony Flynn on 0861594531 or myself.

Your sincerely”

[25] The script used for the face to face meetings and webinars where Mr Flynn gave a PowerPoint presentation to employees in May 2022 included the following relevant statements:

“Slide 3 – Proposed enterprise agreement

Those employees who are going to be covered by the proposed Ausdrill Agreement currently comprise two groups in the context of the terms and conditions that they are currently covered by.

For some employees their terms and conditions are currently sources from the terms of the Black Coal Mining Industry Award 2020 as this is the Award that covers and applies to their employment.

For another group of employees their terms and conditions are currently sources from an older Enterprise Agreement called the Brandrill East Coast Enterprise Agreement 2009, for these employees the reason they are covered presently by the Brandrill Agreement is because of a combination of history and in some cases because of the way in which their contracts of employment were drafted which specifically incorporated the Brandrill Agreement.

For employees covered currently by the Brandrill Agreement we have provide you with a pack of material which explains the Agreement in general terms but also with reference to how it compares from the terms of the Brandrill Agreement.

For employees covered currently by the Brandrill Agreement we have provide you with a pack of material which explains the Agreement in general terms but also with reference to how it compares from the terms of the Black Coal Mining Award.

If you have any questions about the material you have been provided please raise it with your line Managers, Myself or Ja Sangsewee. Ja’s details are contained in a number of the documents in the explanation packs.

The Important point however, is that whatever is your current industrial instrument (the Brandrill Agreement or the Award) which are the source of your terms and conditions – if the proposed Ausdrill Agreement is approved by a majority of employees and then approved by the Fair Work Commission, it will become the source document for your terms and conditions of engagement.

Ausdrill provided you with a copy of the proposed new enterprise agreement on 24 May 2022 and the vote opens on 31 May at 6AM and will close at 6PM on 1 June 2022.

I will refer to the Black Coal Mining Award 2020 hereafter as the Award for the rest of this briefing session. The Award is important because the proposed Agreement must be better off overall than the Award in order for the Fair Work Commission to be able to approve the Agreement.”

[26] At 12:27pm on 30 May 2022, Mr Flynn sent an email to all employees covered by the Enterprise Agreement. In that email Mr Flynn stated:

“Please find attached:

•  An information sheet explaining why employees’ current conditions are either sourced from the Black Coal Award or the Brandrill Agreement;”

[27] The information sheet attached to Mr Flynn’s email states:

“Ausdrill Pty Ltd Black Coal Agreement 2022

Why are my conditions currently sourced from the Brandrill Agreement?

Or

Why are my conditions currently sources from the Black Coal Mining Industry Award 2020?

Ausdrill has sent out some information to employees as part of the Access Period that was specific to either employees whose current conditions were sourced from the Brandrill East Coast Coal Agreement 2009 (Brandrill Agreement) or employees whose current conditions were sources from the Black Coal Mining Industry Award 2020 (Black Coal Award).

To help employees better understand why they received the specific information that referenced either the Brandrill Agreement or the Black Coal Award, Ausdrill has prepared this document.

Why is the Brandrill Agreement the source of my current terms and conditions?

For a number of employees, their contracts of employment made specific reference to the Brandrill Agreement and indicated that the Brandrill Agreement formed part of the employees “Contract with the Company”.

The language in the employee contracts that reflected this was:

“the Letter of Offer, General Terms and Conditions, Brandrill East Coast Agreement 2009 an Schedule form your Contract of Employment (Contract) with the Company”.

If your contract of employment had this term in it, then you received the Brandrill Agreement specific information.

Why is the Black Coal Award the source of my current terms and conditions?

For all other employees covered by the proposed Ausdrill Pty Ltd Black Coal Agreement 2022, they received specific information which related to the Black Coal Award.

The reason for this is that the work that the employees perform and the industry that Ausdrill operates in, is covered by the terms of the Black Coal Award.

The Black Coal Mining Industry, is defined in the Black Coal Award as:

4.2 For the purposes of this award, black coal mining industry has the meaning applied by the courts and industrial tribunals, including the Coal Industry Tribunal. Subject to the foregoing, the black coal mining industry includes:

(a) the extraction or mining of black coal on a coal mining lease by means of underground or surface mining methods;

(b) the process of black coal at a coal handling or coal processing plant on or adjacent to a coal mining lease;

(c) the transportation of black coal on a coal mining lease; and

(d) other work on a coal mining lease directly connected with the extraction, mining and processing of black coal.

4.3 The black coal mining industry does not include:

(a) the mining of brown coal in conjunction with the operation of a power station;

(b) the work of employees employed in head offices or corporate administration offices (but excluding work in town offices associated with the day-to-day operation of a local mine or mines) or employers engaged in the black coal mining industry;

(c) the operation of a coal export terminal;

(d) construction work on or adjacent to a coal mine site;

(e) catering and other domestic services;

(f) haulage of coal off a coal mining lease (unless such haulage is to a wash plant or char plant in the vicinity of the mine); or

(g) the supply of shotfiring or other explosive services by an employer not otherwise engaged in the black coal mining industry.

NOTE: The coverage clause is intended to reflect the status quo which existed under key pre-modern awards in relation to the kinds of employers and employees to whom those awards applied and the extent to which the awards applied to such employers and employees.

An example of the types of issues and some of the case law to be considered when addressing coverage matters can be found in Australian Collieries Staff Association and Queensland Coal Owners Association – No. 20 of 1980, 22 February 1982 [Print CR2297] and in the Court decisions cited in this decision.

The Black Coal Award, contains classifications (i.e. roles that employees perform). Including: Mineworker – Induction level 1, Mineworker – Induction Level 2, Minework – training, Mineworker, Mineworker – Advanced, and Mineworker – Specialised.

We hope that the above information helps to clarify this issue for employees. If you have any questions or think you have been given the wrong information pack, please contact Ja Sangsewee, HR advisor by email (ja.sangsewee@ausdrill.com.au)”

[28] Mr Flynn gave the following explanation in his Form F17 declaration for sending this email to employees on 30 May 2022: 14

“The first document was a simple explanation document of why an employee would have received the Brandrill Information Pack as compared to the Black Coal Information Pack. I had not been advised of any questions in relation to this issue through any of the pre-start meetings and this had not been raised by employees in any of the information sessions I conducted, however I thought it was reasonable to provide some information on this to employees so they understood how the Company had segmented employees (Why Brandrill – Why Black Coal Document);” [underlining emphasis added]

Summary of CFMMEU’s submissions

[29] The CFMMEU submits that the employees in the second category were not in a position from the communications made to them by Ausdrill to be able to understand their existing terms and conditions to an extent which would enable them to understand the effect of the terms of the Enterprise Agreement on their existing terms and conditions.

[30] It is submitted that Ausdrill’s communications to its employees presented the issue of coverage in a binary way: either an employee is covered by the Brandrill EA or the BC Award. The framing of the issue in this way was incorrect.

[31] The CFMMEU contends that it was necessary for Ausdrill to have explained to the second category of employees that the terms and conditions of their employment were set out in both the Brandrill EA and the BC Award. No such explanation was provided.

[32] The CFMMEU submits that the effect of the documents on which Ausdrill relies was not to inform the second category of employees that the BC Award applied to them. It is contended that the information provided by Ausdrill to its employees was to the effect that, if approved, the Enterprise Agreement:

(a) would apply to the exclusion of both the BC Award and the Brandrill EA; and

(b) rates would be referable to the classifications under the BC Award – a situation which is unchanged in substance from the circumstances under the Brandrill EA.

[33] The CFMMEU also submits that even if it was clearly identified that both the Brandrill EA and the BC Award applied to the second category of employees, in order for those employees to fully understand their existing terms and conditions, they needed to be in a position to understand the way in which the Brandrill EA and the BC Award interacted. It is submitted that key terms of the Brandrill EA were in conflict with the BC Award, and there is no evidence as to how that conflict was to be resolved, or that the second category of employees were even aware of the conflict.

[34] The CFMMEU contends that this is demonstrated by the circumstances of Mr Rudak, who was not identified by Ausdrill as one of the second category of employees but was, nonetheless, purportedly engaged as a casual employee under the terms of the Brandrill EA. It is submitted that there was no explanation provided to any of the employees that the BC Award contained a limitation precluding casual employment for production workers in the industry. Despite this, Mr Rudak was already deployed as a casual employee in circumstances where there was no relevant modern award or enterprise agreement that provided for that type of employment. What these circumstances amounted to, so the CFMMEU contends, was a lack of clarity about the basis of the existing terms and conditions of employment. Absent that clarity, the CFMMEU submits that there is no basis upon which the Commission could be satisfied that Mr Rudak could have understood the effect of the terms of the Enterprise Agreement on his existing terms and conditions of employment. The CFMMEU submits that absent Ausdrill having taken any steps to provide clarity as to Mr Rudak’s terms and conditions of employment, it cannot be said that they took all reasonable steps for the purposes of s 180(5) of the Act.

[35] While that specific issue is ostensibly confined to Mr Rudak, the CFMMEU submits that it demonstrates the lack of clarity which plagues the terms and conditions of employment for each of the employees in the second category. Noting that they were all what Ausdrill referred to as “Composite Hourly Rate of Pay” employees, the CFMMEU submits it is unclear, for example, whether these employees knew that, despite what was set out in the Brandrill EA, they were entitled to five weeks of annual leave, triple pay for ordinary time worked on public holidays, or redundancy pay amounting to the payment of both retrenchment and severance pay under the BC Award, compared with the Brandrill EA entitlement that confined redundancy entitlements solely to the payment of retrenchment pay under the Coal Mining Industry (Production and Engineering) Consolidated Award. It follows, so the CFMMEU contends, that there is no basis upon which the Commission could be satisfied that the second category of employees were properly informed as to what the terms and conditions of their existing employment was to the extent required for them to understand what would change in the event that the Enterprise Agreement applied to their employment instead.

[36] The CFMMEU submits that even if the second category of employees had appreciated that the terms and conditions of their employment were sourced from both instruments, and understood how those instruments interacted, it was necessary for those employees to have received an explanation as to what changes the Enterprise Agreement would bring about to the entitlements available to them under the BC Award. The CFMMEU submits that it is clear from the emails appearing in the Brandrill Explanation Pack and the Black Coal Explanation Pack, together with Mr Flynn’s F17 declaration, that each employee cohort was treated separately, and that the second category of employees received the Brandrill Explanation Pack and not the Black Coal Explanation Pack. It is submitted that the failure to provide any substantial explanation to the second category of employees as to the differences between the Enterprise Agreement and the BC Award meant that they could not possibly have understood how the terms and effects of the Agreement would alter their employment conditions as provided by the BC Award.

[37] The CFMMEU further submits that the explanation provided to the second category of employees in the Key Terms Explained document was misleading because it stated that the Enterprise Agreement would apply to the exclusion of the Brandrill EA in circumstances where the Brandrill EA would continue to apply to the employees because its terms and conditions were incorporated into their contracts of employment.

[38] The CFMMEU submits that the contents of the Brandrill Explanation Pack were also similarly misleading. The Significant Changes document which appeared in that pack identified significant changes between the Brandrill EA and the Enterprise Agreement, framing these changes as the effects of the approval of the Enterprise Agreement when the reality of the situation was that both instruments would continue to apply and the second category of employees would get the benefit of the higher entitlement that existed between either document, rather than the Enterprise Agreement entitlement alone. Again, on this basis alone, the CFMMEU submits that it cannot be said that Ausdrill took all reasonable steps to explain the Enterprise Agreement.

[39] The CFMMEU contends that Mr Minhinnick was among the employees who Ausdrill submitted at the hearing had his conditions sourced from the Brandrill EA, and Mr Minhinnick’s project entitlements letter was produced and tendered into evidence on that basis. Despite this, the CFMMEU submits that Mr Minhinnick did not receive the Brandrill Explanation Pack provided to the second category of employees on 24 May 2022, and was instead sent the Black Coal Explanation Pack. In the event that Mr Minhinnick was correctly identified at the hearing as an employee whose terms and conditions of employment were governed by the Brandrill EA, in order for Mr Minhinnick to have been in a position to understand the terms and conditions of his employment it was arguably necessary, so the CFMMEU contends, for him to have been sent the relevant explanation pack (notwithstanding the errors in the information contained in that pack). In the absence of having received that information, if the distribution of the Brandrill Explanation Pack is said to be one component of all the reasonable steps the applicant was required to take to explain the Enterprise Agreement, the CFMMEU submits that it cannot be said that Ausdrill took all those steps in its failure to send this information to Mr Minhinnick.

[40] It is submitted that Mr Lyne has a unique set of circumstances relating to the explanation he received. Mr Lyne was in receipt of the Brandrill Explanation Pack, but any project entitlements letter relating to his employment was not put into evidence by Ausdrill. The CFMMEU submits that this may have been an error, in which case Mr Lyne’s project entitlements letter should be provided to the Commission for consideration. In the event the omission was intentional, it may be because Mr Lyne was not one of second category of employees. If that is correct, the CFMMEU submits that Mr Lyne should have received the Black Coal Explanation Pack and Ausdrill’s failure to provide him with a copy of that pack leads to the inevitable conclusion that Ausdrill has failed to take all reasonable steps to explain the Enterprise Agreement to the relevant employees. In the alternative, it may be that Mr Lyne is one of the employees to whom the Brandrill EA applies, but that Mr Lyne was not provided with a project entitlements letter. Should that be the case, the CFMMEU submits that Ausdrill’s submissions at the hearing must be considered without the benefit of the purported explanation provided by the Projects Entitlement Letter. Similarly, in those circumstances, the CFMMEU submits that it cannot be said that Ausdrill has taken all reasonable steps to explain the Enterprise Agreement to Mr Lyne.

[41] Further to Mr Rudak, the CFMMEU submits that he was ostensibly engaged under a contract which incorporated the terms and conditions of the Brandrill EA. Despite this, Mr Brandrill received the Black Coal Explanation Pack, and not the Brandrill Explanation Pack. To the extent that it is determined that the provision of the Brandrill Explanation Pack was a reasonable step for the purposes of s 180(5), the CFMMEU contends that it cannot be said that all reasonable steps were taken by Ausdrill with respect to Mr Rudak.

[42] In the alternative, the CFMMEU submits that should the Commission be satisfied that Ausdrill has taken all reasonable steps to ensure that the terms and effects of the Enterprise Agreement were explained to the relevant employees in an appropriate manner, the explanations provided to the relevant employees create other reasonable grounds for believing that the Enterprise Agreement has not been genuinely agreed to. In support of that argument, the CFMMEU relies on the observations of the Full Court of the Federal Court in One Key (at [142]). In particular, the Full Court identified in this passage that the likelihood of the relevant employees understanding the extent to which wages and working conditions would change, for better or worse, was a circumstance that could logically bear on the question of whether the agreement had been genuinely agreed to.

[43] Even if the Commission reaches the requisite state of satisfaction to determine that all reasonable steps have been taken for the purposes of s 180(5), the CFMMEU submits that there remains the distinct likelihood that the relevant employees did not understand the extent to which the wages and working conditions for employees, particularly those in the second category, would (or would not) change under the terms of the Enterprise Agreement. In circumstances where employees had no clarity as to the existing terms and conditions of employment that applied to some of the cohort, it can hardly be said, so the CFMMEU contends, that the Enterprise Agreement embodies the legitimate expectations of the employees in the way in which the legislature intended.

Summary of Ausdrill’s submissions

[44] Ausdrill submits that the statement in the Key Terms Explained document provided to the second category of employees that “The Agreement will apply to the exclusion of the Black Coal Mining Industry Award 2020 and the Brandrill East Coast Coal Agreement 2009” only makes sense if the BC Award applied to the employees’ employment. It is submitted that employees reading this statement would be capable of understanding that the BC Award continued to apply to them. Otherwise, it is submitted, it would not have been necessary to state that the Enterprise Agreement they were being asked to vote on excluded the BC Award terms.

[45] Ausdrill relies on various parts of the project entitlement letters provided to employees in category two to support its contention that those employees were capable of understanding that the terms of the BC Award applied to their employment. In particular, reliance is placed on (a) the statement that the “table also confirms the reference classification in the Black Coal Mining Industry Award 2020 (Award) that is applicable to your employment”, (b) the fifth row of the table contains a “Reference Classification” which is directly referable to the employee’s classification under the BC Award, and (c) the statement that the “Composite Hourly Rate of Pay and any other benefits you receive from Ausdrill … are intended to comply with the requirements of any employment legislation or employment instrument that applies to you including … the Award”.

[46] Ausdrill submits that all employees, including those in category two, were invited to attend webinars that were held on 28 May and 30 May 2022. At each of these webinars, a PowerPoint presentation was given that only compared the Enterprise Agreement with reference to the BC Award. It did not compare the terms of the Enterprise Agreement with the terms of the Brandrill EA. Mr Flynn attended each webinar and read from a script, which stated that the BC Award was “important because the proposed Agreement must be better off overall than the Award…” Ausdrill further submits that the script to the webinar identified that:

(a) “The Composite Hourly Rate of Pay is a flat rate of pay which compensates an employee for all applicable penalties, allowances and loadings which they may be entitled to under the award for a 3 month period.”

(b) “The Award sets out the percentage of the pay rate each level of apprentice gets paid. This percentage will apply to the Agreement rates.”

(c) “Allowances which may be paid in addition to the Base Hourly Rates of Pay include:… Additional shift allowance of 0.43% of the Award Standard Rate per Afternoon Shift and 0.85% of the Award Standard Rate per Night Shift… Water money of 0.49% of the Award Standard Rate per shift… Dirty money of 0.23% of the Award Standard Rate per shift.”

[47] It is submitted by Ausdrill that, importantly, on 26 May 2022, Mr Flynn also delivered the same presentation physically at the Moranbah site, where many of the employees in category two are based. Ausdrill submits that the PowerPoint presentation delivered at the Moranbah site explained the terms of the Enterprise Agreement, and the effect of those terms, with direct reference to the BC Award.

[48] Ausdrill places emphasis on the fact that the employees in category two were also supplied:

(a) a document called “Frequently Asked Questions”, which provided a hyperlink to the BC Award. Ausdrill submits that employees reading this would understand that the BC Award applied to their employment. Otherwise, so Ausdrill contends, it would not have been necessary to supply this link to them;

(b) a sheet entitled “Minimum Composite Hourly Rate of Pay”, which makes clear, in the example provided, that the Composite Hourly Rate takes into account the “Award rate”; and

(c) a sheet entitled “Employee Responses Covering Sheet” which addressed various questions raised by employees through the course of bargaining for the Enterprise Agreement, and which makes reference to various conditions reflected in the Enterprise Agreement by reference to the corresponding entitlement in the BC Award as follows:

(i) clause 6.10(a) and 6.10(b), Inclement Weather, which is explained in terms of the general application of the “Award and the FW Act” and that the payment provided under the Agreement when compared to those two sources “is therefore a benefit employees receive under the Agreement”;

(ii) clause 8, Remuneration, which explains the classifications and remuneration under the composite rates with reference to the BC Award stating, “You can find the classification including the “Mineworker” classification in clause 8.4 and Schedule A of the Agreement. These classifications are also reflected in Schedule A of the Award. The black coal award Fair Work Commission pay guide (which is available at http://services.fairwork...”;

(iii) clause 18.7, Close Down (annual leave), which explains the operation of those terms by comparison to the operation of similar provisions under the BC Award; and

(iv) clause 22, Public Holidays, which explains in response to a claim for “local public holidays” as provided for in the “Black Coal Award” that “the Award confirms that public holidays are provided for in the NES”.

[49] Ausdrill submits that no question was raised by any employee which identifies a lack of understanding of the relevance of the BC Award to the employment of those to be covered by the Enterprise Agreement. Further, Ausdrill submits that its response to the only question concerning coverage of the Enterprise Agreement was clear and unequivocal: “The Company’s view is that exploration drillers are covered by the Award and therefore are entitled to be covered by the proposed Agreement.”

[50] As to the document entitled “Why are my conditions currently sourced from the Brandrill Agreement? Or Why are my conditions currently sourced from the Black Coal Mining Industry Award 2020?”, Ausdrill submits that the document does not invoke terms such as “cover” or “apply” which could be confused for a statement about the statutory safety net. Instead, Ausdrill submits that the document uses language which in common parlance reflects the understanding that employees had about the current benefits and entitlements that were being applied to them. For the second category of employees, Ausdrill submits that their current terms and conditions were being “sourced” from the Brandrill EA in the sense that it was being applied to them as a consequence of the terms of their contracts of employment.

[51] Ausdrill submits that it applied the terms of the Brandrill EA to the second category of employees as if that were the sole source of their entitlement, and not as if it also needed to be compared to the BC Award to determine whether there was a benefit greater than the Brandrill EA. It is contended that whether or not that position was legally correct is not the correct inquiry under s 180(5) of the Act. Ausdrill submits that because it applied the terms of the Brandrill EA to the second category of employees, explaining differences between the Enterprise Agreement and the Brandrill EA was more important than explaining the differences between the Enterprise Agreement and the BC Award. In support of this argument, Ausdrill relies on my decision in CoreStaff NSW Pty Ltd. 15

[52] Ausdrill further submits that:

(a) the effect of the terms of the Enterprise Agreement are straight forward, and similar explanations were delivered to the second category of employees in the webinars and presentations with reference to the BC Award. All employees were expressly informed that the Enterprise Agreement would apply to the exclusion of the terms of the BC Award;

(b) the CFMMEU has been a bargaining representative for the employees covered by the Enterprise Agreement. The CFMMEU has at all times been in a position to provide information to those employees and Ausdrill. The CFMMEU has not informed Ausdrill or the employees that they have been provided with confusing or misleading information by Ausdrill, nor has the CFMMEU made an application for bargaining orders;

(c) the CFMMEU has not led any evidence from an employee to demonstrate a lack of understanding or confusion about their terms and conditions of employment with Ausdrill;

(d) the CFMMEU did not challenge the evidence given by Mr Flynn as to the steps taken by Ausdrill to explain the terms of the Enterprise Agreement, and their effect, to the employees;

(e) the employees covered by the Enterprise Agreement were actively engaged in the bargaining process;

(f) contrary to the submissions advanced by the CFMMEU to the effect that Ausdrill’s Key Terms Explained document was misleading because it informed the second category of employees that “The Agreement will apply to the exclusion of the Black Coal Mining Industry Award 2020 … and the Brandrill Agreement” when in fact the Brandrill EA would continue to apply because its terms were incorporated into their contracts of employment, Ausdrill submits that its explanation in that document was correct. In that regard, Ausdrill places emphasis on the following sentence in the Key Terms Explained document: “This means that the terms and conditions of your employment will be found in the Agreement, your contract of employment, and any Project Entitlement Letter you receive from the Company.” This means, so Ausdrill contends, that where a contract of employment incorporates the terms of the Brandrill EA, it will continue to apply.

[53] As to the CFMMEU’s submissions in relation to individual employees, Ausdrill contends as follows:

(a) the CFMMEU has misapprehended the position as it relates to Mr Minhinnick. He was not an employee who was part of the second category, his project entitlement letter was provided to the Commission during the hearing by way of comparison given he was an employee who received the Black Coal Pack. The CFMMEU’s submissions are accordingly factually misplaced and should not be regarded as a basis for criticising the process or information supplied by Ausdrill in explaining the Enterprise Agreement;

(b) as to Mr Rodney Lyne, Ausdrill provided the Commission with a copy of the project entitlement letter for Mr Lyne together with its final submissions. Ausdrill submits that it was omitted inadvertently, and it reveals in its terms the same matters reflected in the other project entitlement letters for the second category of employees; and

(c) as to Mr Michael Rudak’s employment contract, Ausdrill submits that it does not reflect terms which incorporate by reference the Brandrill EA, and it does not contain the language that was contained within Annexure N to the F17 of Mr Flynn to explain the provision of the information provided to the second category of employees. It is submitted that clause 2.1 of the Rudak contract, headed “Your Contract of Employment”, does not incorporate the Brandrill EA by reference and the effect of the final sentence of clause 15.7(a) of the Rudak contract excludes the operation and incorporation of the Brandrill EA. Ausdrill contends that the mere fact that the Brandrill EA is referenced in Schedule A of the Rudak contract as the “Industrial Instrument” does not mean that the Brandrill EA actually applies as a matter of law. Ausdrill submits that the BC Award, and not the Brandrill EA, applied to Mr Rudak’s employment. Ausdrill submits that Mr Rudak was therefore correctly provided documents only relating to the BC Award. Moreover, Ausdrill contends that the CFMMEU’s submissions regarding Mr Rudak are emblematic of its overall challenge; that is whether the employees were able to give “informed consent”. The effect of those submissions, so Ausdrill submits, is that the CFMMEU says Mr Rudak did not genuinely agree to the terms of the Enterprise Agreement because he was not told that the BC Award did not permit casual employment (at least for production workers). Whilst there is no evidence as to how Mr Rudak did vote, it is logical to infer that even if he was given the information the CFMMEU says he needed to be given to provide his informed consent he would (still) have voted in favour of the Enterprise Agreement. Ausdrill submits that this is because it was Mr Rudak that wanted to be employed on a casual basis. In fact, Ausdrill submits that there would be little to no room to doubt that in those circumstances if told that the BC Award did not permit his form of employment but the Enterprise Agreement did, Mr Rudak would have voted in favour of the Enterprise Agreement.

[54] Given the significant steps taken by Ausdrill to explain the terms of the Enterprise Agreement, and the effect of those terms, Ausdrill submits that the Commission is able to reach the state of satisfaction that the Enterprise Agreement has been genuinely agreed within the meaning of ss 186(2)(a) and 188(1)(a) and (c) of the Act.

Consideration of particular issue raised concerning all reasonable steps and genuine agreement

[55] It is apparent from the evidence to which I have referred above that the consistent message given by Ausdrill to employees covered by the Enterprise Agreement was that their current terms and conditions were sourced from either the BC Award or the Brandrill EA. That was incorrect. Employees in category two had their current terms and conditions of employment sourced from both the BC Award and the Brandrill EA.

[56] The employees in category two were told that the Enterprise Agreement would apply to the exclusion of the Brandrill EA and the BC Award, 16 but they were not told that the BC Award applied to them at the time of the vote and would continue to apply to them if the Enterprise Agreement was not approved by a majority of employees who voted on it. I do not accept Ausdrill’s submission that all employees covered by the Enterprise Agreement, including those in category two, were informed, or would be capable of understanding from the information provided by Ausdrill, that the BC Award applied to them at the time of the vote.

[57] In answer to the question “Where can I find the terms that apply to me?”, the Key Terms Explained document states, “The Agreement will apply to the exclusion of the Black Coal Mining Industry Award”. That was a correct answer to the question posed. But contrary to Ausdrill’s submission, this statement did not only make sense if the BC Award applied to the employees’ employment. Ausdrill’s employees were aware from earlier communications that they were covered by the BC Award. 17 They were also aware from Ausdrill’s communications that the BC Award was “important because the proposed Agreement must be better off overall than the [BC] Award in order for the Fair Work Commission to be able to approve the Agreement”.18 Having regard to that context, it was important for Ausdrill’s employees to understand that the BC Award would not apply to them in the future if the Enterprise Agreement was made and approved by the Commission. That information was important to understand whether or not the BC Award applied to particular employees at the time of the vote.

[58] The project entitlement letters did not state that the BC Award applied to the employee to whom the letter was sent. The letters state that “the table also confirms the reference classification in the Black Coal Mining Industry Award 2020 (Award) that is applicable to your employment”. The “reference classification”, such as “Mineworker”, was “applicable” to the employee in the sense that it accurately described the classification of the employee. That classification did not change between the BC Award, Enterprise Agreement and the Brandrill EA, since each of those instruments uses the same classification structure. 19 It was also relevant for an employee to understand their classification under the BC Award so that they could compare benefits under the BC Award with benefits under the Enterprise Agreement for the purpose of assessing whether the Enterprise Agreement passed the better off overall test. Further, the Composite Hourly Rate of Pay for the employee’s “reference classification”, as set out in the table in the project entitlements letter, was “subject to” the Enterprise Agreement being approved by the Commission.

[59] The project entitlements letters also explained to each employee that their Composite Hourly Rate of Pay and other benefits were intended to comply with, and be able to be set off against, “the requirements of any employment legislation or instrument that applies to you including … the Award; any applicable enterprise agreement; or any other industrial instrument which may apply” [emphasis added]. It is clear from the use of the disjunctive “or” between the final two items in the list of employment legislation and instruments that the letter was not stating or representing that the BC Award did in fact apply to the particular employee who received the project entitlements letter.

[60] The message given to Ausdrill’s employees that their conditions were sourced from the Brandrill EA or the BC Award is consistent with what appears to have been Mr Flynn’s understanding of the position. So much is apparent from Mr Flynn’s F17 declaration, where he declares that Ausdrill’s employees at sites in Queensland “are either covered by the Black Coal Mining Industry Award 2020 or the Brandrill East Coast Coal Agreement 2009” [emphasis original]. 20

[61] In my view, it would have been a reasonable step, in the period leading up to the vote on the Enterprise Agreement, for Ausdrill to accurately explain to employees the source of their current terms and conditions of employment. Absent a correct understanding about the source and therefore the content of their current entitlements (and obligations), employees were not in a position to understand how their terms and conditions of employment might be affected by voting in favour of the Enterprise Agreement.

[62] The present case is distinguishable from the facts of my earlier decision in CoreStaff NSW Pty Ltd. 21 In CoreStaff, the BC Award did not apply to the employees at the time of the vote because an earlier enterprise agreement applied to the employees. In those circumstances, I determined that it was more important for employees to understand the differences between the proposed new enterprise agreement and the earlier enterprise agreement than the differences between the new enterprise agreement and the BC Award. That was because the previous enterprise agreement was the source of the employees’ terms and conditions of employment at the time they voted on the new enterprise agreement. In the present case, unless and until the second category of employees understood that they were entitled to the benefits of the Brandrill EA and the BC Award, they were not in a position to make an informed choice about the Enterprise Agreement. Contrary to Ausdrill’s submissions, it does not matter that Ausdrill applied the terms and conditions of the Brandrill EA to the second category of employees as that were the sole source of their entitlements. They were entitled to the benefits of the Brandrill EA and the BC Award. The additional benefits to which the second category of employees were entitled under the BC Award, over and above the Brandrill EA, were significant. By way of example:

(a) under clause 16.1 of the Brandrill EA, employees are entitled to “four weeks’ (the equivalent of 152 hours) annual leave” and, in the case of shift workers, “an additional weeks’ leave (in total 240 hours)”. Under clause 24.2(a) of the BC Award, “An employee is entitled to annual leave, in addition to the amount provided for in the NES, such that the employee’s total entitlement to annual leave pursuant to the NES and this award for each year of employment is a cumulative total of 175 ordinary hours (5 weeks)”. Further, shift workers who meet certain requirements are entitled to “an additional 35 ordinary hours (one week) of annual leave” pursuant to clause 24.2(b) of the BC Award; and

(b) clause 25 of the Brandrill EA confines redundancy entitlements to the payment of retrenchment pay (two weeks’ pay per year of service) under the Coal Mining Industry (Production and Engineering) Consolidated Award. Pursuant to clause 34 of the BC Award, an employee who has been made redundant is entitled to one week’s severance pay per year of service and two weeks’ retrenchment pay per year of service up to a maximum of 30 weeks’ retrenchment pay.

[63] Further, the fact that employees in the second category attended, or were invited to attend, face to face meetings or webinars where Mr Flynn gave a PowerPoint presentation in which he explained differences between the Enterprise Agreement and the BC Award, but not differences between the Enterprise Agreement and the Brandrill EA, is of limited significance in circumstances where the script from which Mr Flynn read explained that some employees had “their terms and conditions sourced currently sourced from the terms of the Black Coal Mining Industry Award 2020” and “for another group of employees their terms and conditions are currently sourced from an older Enterprise Agreement called the Brandrill East Coast Enterprise Agreement 2009”. 22 This explanation maintained the “segmented” approach taken by Ausdrill to the different categories of employees covered by the Enterprise Agreement.23 In addition, Mr Flynn explained to the employees who attended those meetings that the BC Award was “important because the proposed Agreement must be better off overall than the [BC] Award in order for the Fair Work Commission to be able to approve the Agreement”.24 Mr Flynn’s explanation of the differences between the Enterprise Agreement and the BC Award must be understood in this context.

[64] The fact that employees were provided with a copy of the BC Award or a link to it did not, without more, inform the employees that they were entitled to the benefits of the BC Award. In circumstances where the Enterprise Agreement had to be compared against the BC Award for the purposes of the better off overall test, provision of the BC Award to employees is explicable on that basis. Similarly and for the same reason, references in Ausdrill’s communications to its employees to the BC Award and various entitlements under it in the context of communications about benefits under the Enterprise Agreement did not, without more, inform the employees that the BC Award applied to them.

[65] That no employee asked a question that identified a lack of understanding as to the relevance of the BC Award to their terms and conditions of employment is not surprising in circumstances where Ausdrill did not explain to the second category of employees that they were entitled to the benefits (and subject to the obligations) in both the BC Award and the Brandrill EA. The absence of such a question does not satisfy me in all the circumstances that employees in the second category were provided with information such that they could make an informed choice when they voted on the Enterprise Agreement or that they were aware of their existing terms and conditions at the time they voted on the Enterprise Agreement.

[66] The fact that a number of employees were actively involved in the bargaining process and had the CFMMEU as their bargaining representative is not of material significance to my assessment of the adequacy of the steps taken by Ausdrill to explain the terms of the Enterprise Agreement to the employees covered by it. There is no suggestion in the material before the Commission that the ongoing application of the BC Award to the second category of employees was discussed in bargaining or explained to those employees by the CFMMEU or any other person.

[67] The fact no employee covered by the Enterprise Agreement has given evidence as to a lack of understanding or confusion in relation to the terms of the Enterprise Agreement is of little significance. As the Full Bench explained in CFMMEU v Ditchfield Mining Services, “an employer does not fall short of complying with the obligation in s.180(5) of the Act merely because an employee does not understand the explanation provided.” 25 That is because the test under s 180(5) is focused on the steps taken by the employer to ensure that the terms of the Enterprise Agreement, and the effect of those terms, were explained to the relevant employees and the explanation was provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees. The absence of evidence from any employee covered by the Enterprise Agreement is not determinative, or even significant, to my assessment of that question, particularly in the circumstances of this case where Ausdrill has tendered a substantial volume of written communications and records of communications with its employees.

[68] Although Ausdrill informed the second category of employees in the Key Terms Explained document that the Enterprise Agreement would apply to the exclusion of the BC Award and the Brandrill EA, that document also informed the employees that their terms and conditions of employment would be “found in the Agreement, your contract of employment, and any Project Entitlement Letter you receive from the Company”. If an employee in the second category of employees looked at their contract of employment, they would have understood that the terms and conditions of the Brandrill EA formed part of their contractual conditions of employment.

[69] I accept that the statement to employees that the Enterprise Agreement would apply to the exclusion of the BC Award and the Brandrill EA was misleading, but the matter was clarified in the following sentence and the terms of the contracts of the employees in the second category. On balance, my assessment is that Ausdrill did not fail to take a reasonable step in relation to this issue.

[70] As to the CFMMEU’s argument that the contents of the Brandrill Explanation Pack were misleading because the Significant Changes document which appeared in that pack identified significant changes between the Brandrill EA and the Enterprise Agreement, framing these changes as the effects of the approval of the Enterprise Agreement when the reality of the situation was that both instruments would continue to apply and the second category of employees would get the benefit of the higher entitlement that existed between either document, rather than the Enterprise Agreement entitlement alone, I do not accept that Ausdrill failed to take a reasonable step in relation to this issue. It was relevant for employees in the second category to understand the differences between the Enterprise Agreement and the Brandrill EA, even though the Brandrill EA would remain in force pursuant to its incorporation into the contracts of employment of employees in the second category. In my view, the primary purpose of the Significant Changes document was to explain these differences. The Key Terms Explained document gave information to the second category of employees that their ongoing “terms and conditions of employment” would be found in their contract of employment, amongst other places, which allowed the employees to understand the ongoing impact of the Brandrill EA.

[71] In relation to the individual employees addressed in the parties’ submissions:

(a) as to Mr Lyne, Ausdrill provided the Commission with a copy of the project entitlement letter for Mr Lyne together with its final submissions. I accept Ausdrill’s submission that it was omitted inadvertently, and is in the same terms as the other project entitlement letters for employees in the second category;

(b) as to Mr Minhinnick, I accept Ausdrill’s explanation that he is not within the second category of employees. His project entitlement letter was provided to the Commission during the hearing by way of comparison given he was an employee who received the Black Coal Pack; and

(c) as to Mr Rudak, Schedule A to his letter of offer of employment dated 28 January 2022 refers to the Brandrill EA as his “Industrial Instrument”. Notwithstanding this reference, I accept Ausdrill’s submission that the Brandrill EA did not apply to Mr Rudak. That is so because Mr Rudak was not employed by Brandrill Limited and there is no evidence to suggest that he gave “notice in writing” to Brandrill Limited of his “election to be covered by” the Brandrill EA. 26 I also accept Ausdrill’s submission that the Brandrill EA was not incorporated into Mr Rudak’s employment contract. Clause 15.7(a) of Mr Rudak’s employment contract makes clear that no “Industrial Laws” [defined to include any applicable industrial instrument] have been incorporated into this Contract of Employment as a contractual term”. I further accept that Mr Rudak fell within the coverage provisions of the BC Award in respect of his employment with Ausdrill as a trainee driller at black coal mines in Queensland, albeit that his employment as a casual employee was in breach of the BC Award because it does not provide for casual employment in production and engineering classifications.27 It follows that Ausdrill correctly provided Mr Rudak with the Black Coal Information Pack and not the Brandrill Information Pack.

Finding as to s 180(5)

[72] By informing employees covered by the Enterprise Agreement that their current terms and conditions were sourced from either the BC Award or the Brandrill EA and not informing employees in category two that their current terms and conditions of employment were sourced from both the BC Award and the Brandrill EA, Ausdrill failed, in my assessment and having regard to all the circumstances, to take all reasonable steps to ensure that the terms and conditions of the Enterprise Agreement, and the effect of those terms, were explained to the relevant employees in accordance with s 180(5) of the Act.

[73] In light of my conclusion that Ausdrill failed to take all reasonable steps in accordance with s 180(5) of the Act, I do not need to address the CFMMEU’s alternative argument that there are reasonable grounds for believing that the employees did not genuinely agree to the Enterprise Agreement by reason of there being a distinct likelihood that employees in the second category did not understand the extent to which their wages and working conditions would (or would not) change under the terms of the Enterprise Agreement.

Conclusion

[74] For the reasons given, I am not satisfied that Ausdrill complied with the requirements of s 180(5) in relation to the Enterprise Agreement. It follows that I am not satisfied that the Enterprise Agreement has been genuinely agreed to by Ausdrill’s employees within the meaning of s 188(1)(a)(i) of the Act.

[75] Ausdrill has requested an opportunity to consider whether it may be able to provide an undertaking to resolve my concern in relation to ss 180(5) and 188 of the Act. I direct that, by 4pm on 26 August 2022, Ausdrill must file and serve any undertaking it wishes to rely on in support of its application for approval of the Enterprise Agreement.

[76] If no undertaking is offered, the application for approval of the Enterprise Agreement will be dismissed. If an undertaking is offered, the employee bargaining representatives will be given a chance to comment on it.

[77] I note that I have not yet determined the issue raised by the CFMMEU in relation to the adequacy of the explanation, if any, given by Ausdrill concerning the engagement of casual production employees under the BC Award. I will address that issue, together with the other matters raised by the CFMMEU, in the event that Ausdrill is able to provide an undertaking to resolve the concern I have identified above in relation to ss 180(5) and 188 of the Act.

DEPUTY PRESIDENT

Appearances: 

Mr J Darams, Counsel, for the Applicant
Ms E Sarlos, for the CFMMEU

Hearing details: 
2022.
Newcastle (by videoconference) 
8 August. 

Printed by authority of the Commonwealth Government Printer 

<PR744959>

 1   Exhibit 1 comprises the whole of the Court Book prepared by Ausdrill

 2   Exhibit 2

 3   CFMMEU v Ditchfield Mining Services Pty Ltd [2019] FWCFB 4022 at [69], applying One Key Workforce Pty Ltd v CFMEU [2018] FCAFC 77 at [115]

 4   CFMMEU v LS Precast Pty Ltd [2019] FWCFB 1431 at [53]

 5   Ibid; One Key Workforce Pty Ltd v CFMEU [2018] FCAFC 77 at [112]

 6   [2019] FWCFB 4022 at [71]

 7   CFMMEU v Mechanical Maintenance Solutions Pty Ltd [2022] FCAFC 15

 8   Section 47 of the Act

 9   Section 57(1) of the Act

 10   Sections 47 & 57 of the Act

 11   Section 57 of the Act

 12   Court Book at p 305

 13   Court Book at p 136

 14   Court Book at p 155

 15   [2019] FWCA 4403

 16   See “Key Terms explained” document given to employees in category 2: Court Book at p 292

 17   See paragraph [11] above

 18   Court Book at pp 353-354

 19   Court Book at p 128 – answer to Q9 in the F17; Court Book at p 323

 20   Court Book at p 136

 21   [2019] FWCA 4403

 22   Court Book at p 353

 23   Court Book at p 155

 24   Court Book at pp 353-354

 25   CFMMEU v Ditchfield Mining Services Pty Ltd [2019] FWCFB 4022 at [69]

 26   Court Book at p 308 – clause 2 of the Brandrill EA

 27   CFMEU v SESL Industrial Pty Ltd [2017] FWCFB 3659 at [34]