FWCFB 4011
FAIR WORK COMMISSION
Construction, Forestry, Mining and Energy Union
Fair Work Act 2009
s.604 - Appeal of decisions
SENIOR DEPUTY PRESIDENT HARRISON
SYDNEY, 17 JUNE 2014
Appeal against decision  FWCA 7552 by Commissioner Cloghan in matter number AG2013/2817, model consultation clause, compliance with s.201 and s.205 of the Fair Work Act 2009 (Cth).
 This decision concerns an appeal under s.604 the Fair Work Act 2009 (the Act) by the Construction, Forestry, Mining and Energy Union (CFMEU). The appeal is against a decision 1 of Commissioner Cloghan in which he approved an enterprise agreement known as the St John of God Health Care Maintenance Caregivers Agreement 2013 (the Agreement).2 The grounds of appeal are confined to the Commissioner’s findings regarding the consultation term of the Agreement.
Relevant legislative provisions
 The application for approval of the Agreement was made under s.185 of the Act. Sections 186 and 187 set out a number of requirements about which the Commission must be satisfied before approving an agreement. Pursuant to s.190, the Commission may approve an enterprise agreement with undertakings where it has a concern that the agreement does not meet the requirements of ss.186 and 187. Division 5 of Part 2-4 of the Act contains additional provisions, described as mandatory terms, which must be in an enterprise agreement. A consultation term is one such provision. Section 205, at the time that the Agreement was approved, read as follows: 3
Consultation term must be included in an enterprise agreement
(1) An enterprise agreement must include a term (a consultation term) that:
(a) requires the employer or employers to which the agreement applies to consult the employees to whom the agreement applies about major workplace changes that are likely to have a significant effect on the employees; and
(b) allows for the representation of those employees for the purposes of that consultation.
Model consultation term
(2) If an enterprise agreement does not include a consultation term, the model consultation term is taken to be a term of the agreement.
(3) The regulations must prescribe the model consultation term for enterprise agreements.
 As is clear from s.205(2), where an enterprise agreement does not include a consultation term which meets the requirements of s.205(1), the model consultation term is taken to be a term of the agreement. In that case, s.201 is relevant. We reproduce part only of that section below:
“201 Approval decision to note certain matters
Approval decision to note model terms included in an enterprise agreement
(a) the FWC approves an enterprise agreement; and
(b) either or both of the following apply:
(ii) the model consultation term is taken, under subsection 205(2), to be a term of the agreement;
the FWC must note in its decision to approve the agreement that those terms are so included in the agreement.
 Regulation 2.09 of the Fair Work Regulations 2009 (the Regulations) provides that for the purposes of s.205(3) the model consultation term is that which is set out in Schedule 2.3 of the Regulations. We have reproduced in Annexure A to this decision the relevant model consultation term. 4
The Commissioner’s decision
 An application was made by St John of God Health Care Inc. (the respondent) under s.185 of the Act for approval of the Agreement. The Agreement covers “caregivers” engaged in the respondent’s hospitals in Western Australia. A “caregiver” is defined by clause 6.1(a) of the Agreement as being an employee of the respondent. Broadly speaking, these employees are classified as either metal or building trades employees. They may be engaged on a full-time, part-time, or casual basis.
 The CFMEU, being a bargaining representative for the Agreement, filed a F18 ‘Declaration of Employee Organisation in relation to an Application for Approval of Enterprise Agreement’, giving notice that it wanted to be covered by the Agreement. The union indicated in its declaration that it supported approval of the Agreement and did not raise any objections in relation to the application. Similarly, the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) filed F18 forms, indicating their support for approval of the Agreement. Consequently, the Commissioner’s decision notes that the CFMEU, AMWU and CEPU are covered by the Agreement.
 Clause 44 of the Agreement is titled “Introduction of Change and Redundancy”. It deals with the respondent’s obligation to consult where it has decided to take action that is likely to have a significant effect on a caregiver or it has decided to make a caregiver’s position redundant. It also contains redundancy entitlements, which are superior to those that are found in the Act under the National Employment Standards. 5 Relevantly, a caregiver is defined for the purposes of clause 44 as excluding employees engaged on a casual or temporary basis, and those on a fixed term contract. We reproduce clause 44 in its entirety:
“44. INTRODUCTION OF CHANGE AND REDUNDANCY
(1) In this clause:
“Caregiver” does not include a Caregiver engaged on a casual or temporary basis or on a fixed term contract;
“Redundant” means the position is no longer required by the Employer to be undertaken because the Employer has decided that the job will not be done by any Caregiver.
For the purposes of this clause, an action of the Employer has a “significant effect” on a Caregiver if:
(a) there is to be a major change in the composition, operation or size of, or skills required in, the Employer’s workforce that will affect the Caregiver; or
(b) there is to be elimination or reduction of a job opportunity, promotion opportunity or job tenure for the Caregiver; or
(c) the guaranteed hours of the Caregiver’s work are to significantly increase or decrease; or
(d) the Caregiver is required to be retrained; or
(e) the Caregiver is to be required to transfer to another job or work location; or
(f) the Caregiver’s job is to be restructured.
Caregiver to be Informed
(2) (a) Where the Employer has decided to:
(i) take action that is likely to have a significant effect on a Caregiver; or
(ii) make a Caregiver’s position redundant,
the Caregiver is entitled to be informed by the Employer, as soon as reasonably practicable after the decision has been made, of the action or the redundancy, as the case may be.
Discussions to occur
(b) The Employer shall thereafter hold discussions with the Caregiver affected as to:
(i) the likely effects of the action or the redundancy in respect of the Caregiver; and
(ii) measures that may be taken by the Caregiver or Employer to avoid or minimise a significant effect.
Provided that the Employer shall not be required to disclose confidential information the disclosure of which may seriously harm the Employer’s interests.
Other Parties to be informed
(3) Where the Employer has made a definite decision to introduce major changes that are likely to have significant effects on Caregivers, the Employer shall notify and hold discussions with other interested parties, including the Union(s), in regard to the general nature of the changes.
(4) (a) In addition to the period of notice prescribed in Clause 10 Separation of this Agreement, for ordinary termination, a Caregiver whose employment is terminated on the grounds of redundancy shall be entitled to the following amount of severance pay in respect of a continuous period of service.
Period of Continuous Service
LESS THAN 1 YEAR
1 year but less than 2 years
2 years but less than 3 years
3 years but less than 4 years
4 years but less than 5 years
5 years but less than 6 years
6 years but less than 7 years
7 years but less than 8 years
8 years but less than 9 years
9 years but less than 10 years
10 years but less than 11 years
11 years but less than 12 years
12 years but less than 13 years
13 years but less than 14 years
14 years but less than 15 years
15 years and over
“Weeks Pay” means the ordinary weekly rate of wage for the Caregiver concerned.
(b) For the purpose of this clause continuity of service shall not be broken on account of:
(i) any absence from work on account of personal sickness or accident for which a Caregiver is entitled to claim sick pay as prescribed by this agreement or on account of leave lawfully granted by the Employer; or
(ii) any absence with reasonable cause, proof whereof shall be upon the Caregiver; or
(iii) any absence on approved leave without pay.
Provided that in the calculation of continuous service under this subclause any time in respect of which a Caregiver is absent from work except time for which a Caregiver is entitled to claim annual leave, sick pay, long service leave and public holidays as prescribed by this agreement shall not count as time worked.
(c) Service by the Caregiver with a business which has been transmitted from one hospital to another and the Caregiver’s service has been deemed continuous in accordance with the relevant State long service leave legislation, as amended from time to time, shall also constitute continuous service for the purpose of this clause.
(d) Redundancy shall not be payable in the event of a transmission of business where comparable alternative employment is offered and accepted.
Caregiver Leaving During Notice
(5) A Caregiver whose employment is to be terminated on the grounds of redundancy may terminate employment during the period of notice and, if so, shall be entitled to the same benefits and payments under this clause had the Caregiver remained with the Employer until the expiry of such notice. Provided that in such circumstances the Caregiver shall not be entitled to payment in lieu of notice.
(6) The Employer, in a particular redundancy case, may make application to Fair Work Commission to have the general severance pay prescription varied if the Employer obtains acceptable alternative employment for a Caregiver.
Leave for Job Interviews
(7) (a) A Caregiver who has been given notice that he or she has been, or will be, made redundant shall during the period of notice of termination be entitled to be absent from work up to a maximum of 8 ordinary hours during each week of notice without deduction of pay for the purpose of being interviewed for further employment.
(b) A Caregiver who claims to be entitled to paid leave under paragraph (a) shall, at the request of the Employer, be required to produce reasonable proof of attendance at an interview or the Caregiver shall not receive payment for the time absent.
Notice to Centrelink
(8) Where a decision has been made to terminate Caregivers in circumstances of redundancy, the Employer shall notify Centrelink thereof as soon as possible giving relevant information including the number and categories of the Caregivers likely to be affected and the period over which the terminations are intended to be carried out.”
 The Commissioner formed the view that the above clause did not comply with s.205(1), to the extent that it does not allow for the representation of employees covered by the Agreement for the purposes of consultation. The Commissioner, through email correspondence sent by his chambers, sought an undertaking from the respondent in this regard. The respondent advised that the right to representation was purportedly recognised by clause 44(3). That subclause is reproduced above.
 The CFMEU wrote to the Commissioner’s chambers regarding his request for an undertaking from the respondent. It expressed the view that neither clause 44(3), nor any other provision in that clause, satisfied the requirements of s.205(1)(b) and that this could not be addressed by an undertaking given under s.190 of the Act. That section only envisaged undertakings in circumstances where the Commission had concerns that an agreement did not meet the requirements of ss.186 and187. Additionally, the CFMEU submitted clause 44 did not extend the entitlement to be consulted to all of the employees under the Agreement. It excluded casual, temporary and fixed term employees. In this regard it was submitted that the clause did not meet the requirements of s.205(1)(a). This too could not properly be rectified by an undertaking given pursuant to s.190 of the Act. The union submitted that the Commissioner should approve the Agreement and note in his approval decision, as required by s.201(1)(b)(ii), that the model consultation term is taken to be a term of the Agreement. The AMWU and CEPU supported the CFMEU’s submissions.
 The respondent indicated that it would be content for the model consultation term to apply to the extent of any inconsistency with clause 44 and that this could be achieved by either an undertaking or, in accordance with the CFMEU’s submission, the decision noting that the model consultation term is taken to be a term of the Agreement. It expressed its concern regarding the implications of the model term applying, so far as the term might expand the group of employees who would have an entitlement to the enhanced redundancy provisions in clause 44.
 No further correspondence was exchanged between the Commissioner and the parties. The Commissioner approved the Agreement and in his decision doing so said:
“ For the purposes of s.205 of the FW Act, the Agreement contains Clause 44: Introduction of Change and Redundancy (Clause 44). Clause 44(2)(a) entitles employees to be informed by the Employer of any action it intends to take which is likely to have a significant effect on Caregivers. Further, the Employer is required to hold discussions with affected Caregivers on measures to avoid or minimise the significant effect. Finally, the Agreement provides that the Employer is required, if it has made a definite decision to introduce major change which will have significant effect, to notify and hold discussions with what is described as “interested parties, including Union(s)”.
 In the absence of a particular term which allows for representation of employees for the purposes of consultation, I raised the matter with the Employer. For the purposes of compliance with paragraph 205(1)(a) of the FW Act, the Employer concedes that the Model Consultation Term applies to the extent of any inconsistency with Clause 44 in relation to the “Introduction of Change” provisions.”
The grounds of appeal
 The CFMEU bases its appeal on three grounds, characterising each as an error of law. It submits that we should grant permission to appeal, quash the Commissioner’s decision and approve the Agreement, noting that the model consultation term is taken to be a term of the Agreement. The AMWU and CEPU support the submissions of the CFMEU.
 Firstly, the CFMEU submits that the Commissioner erred by failing to find that the Agreement does not include a consultation term that complies with s.205(1) of the Act. Citing the extract of the Commissioner’s decision that we have reproduced earlier, the CFMEU submits that the Commissioner failed to explicitly find that clause 44 does not meet the requirements of s.205(1). It argues that clause 44 is deficient in two respects: it excludes casual, temporary and fixed term employees from the requirement that the respondent must consult with its employees, and it does not entitle employees covered by the Agreement to representation for the purposes of consultation. Although the Commissioner identified that the clause did not meet the requirements of s.205(1)(a), he does not make explicit in his decision that the clause does not satisfy s.205(1). The respondent does not dispute the CFMEU’s submissions in this regard.
 Secondly, the CFMEU submits that the Commissioner erred by failing to note in his decision, as required by s.201(1)(b)(ii), that the model consultation term is taken to be a term of the Agreement, as the Agreement does not contain a term that complies with s.205(1). The respondent does not dispute this argument.
 Finally, the CFMEU submits that the Commissioner erred in finding that the consultation term applies to the extent of any inconsistency with clause 44 of the Agreement. The union argues that such a finding was not consistent with s.205(2) which states that where an Agreement does not contain a consultation term the model consultation clause is taken to be a term of the Agreement. The respondent does not contest this argument but maintained, as it did below, its concern that the provisions relating to the quantum of redundancy payments should not be extended to all employees covered by the Agreement. They should remain available only to the specific group of employees referred to in clause 44(1).
Extension of time
 Before we deal with the grounds of appeal we should first attend to the application by the CFMEU to extend the time for filing its appeal. Appeals are to be instituted within 21 days after the date of the decision being appealed, however, the Commission has a discretion to allow an extension of time for filing. 6 The CFMEU appeal was lodged 24 days out of time. It seeks an extension of time on the basis it did not receive fair and adequate notification of the Commissioner’s decision.
 We note that the Commissioner’s decision was sent via email to a CFMEU organiser, who, we accept, was not the person who had been involved in the approval process of the Agreement and was not in a position to appreciate the significance of the decision. He was not the person named in the CFMEU’s F18 as the appropriate contact person. All previous correspondence regarding the approval of the Agreement between the Commissioner’s chambers and the CFMEU was sent to or from Mr Michael Buchan, the WA Branch Secretary or Mr Jack Nicholas, a Senior Lawyer of the CFMEU however the decision was not sent to them. It was as a result of some enquiries Mr Nicholas had made that the fact the decision had been published came to his attention. The appeal was lodged on the next business day.
 The CFMEU submits that the above facts provide a satisfactory explanation for the delay. It submits that the length of the delay should not, of itself, preclude an extension from being granted and that there would be no significant prejudice to the respondent. It submits that the grounds of appeal relate to the statutory task which the Commissioner was obliged to undertake in approving the Agreement and that it is likely, in its view, that the appeal will be upheld.
 The respondent did not make any submissions with respect to whether the CFMEU should be granted the extension of time sought.
 We have decided to extend the time for filing the appeal. The explanation for the delay in filing the appeal is acceptable and the delay is not significant. The respondent does not oppose the extension of time being granted and identifies no prejudice it will suffer if time was to be so extended. For reasons we will shortly give, the grounds of appeal raise matters which are sufficient to warrant the grant of permission to appeal.
 We turn first to s.205 of the Act. It is, as we have earlier noted, in that part of the Act which deals with mandatory terms which must be in an agreement. Parties are able to agree on the terms of a consultation clause they wish to have in their agreement however it must contain the two key elements in s.205(1). 7 The first is the employer’s obligation to consult. That obligation is in respect of any employee who is relevantly affected by a change. Clause 44 excludes certain employees from the respondent’s obligation to consult in the event there was to be major workplace change which was likely to have a significant effect on them. Such a limitation is not consistent with s.205(1)(a).
 The second element in s.205 is the requirement for the consultation clause to allow for all employees covered by an agreement to be represented for the purposes of the consultation envisaged by s.205(1)(a). Again, all employees are to have that entitlement and a consultation term must not limit it. In our opinion, clause 44 did not extend the right to representation to all employees covered by the Agreement.
 The consequence of the two deficiencies in clause 44 was that the Agreement did not include a consultation term complying s.205(1). Section 205(2) provides that in those circumstances the model consultation term is taken to be a term of the Agreement. Section 601 required the Commissioner to publish a written decision having decided to approve the Agreement. In doing so, the Commissioner erred by failing to note in his decision, as required by s.201(1)(b), that the model consultation term is taken to be a term of the Agreement.
 The comments made by the Commissioner in paragraph  were not sufficient to comply with s.201(1)(b) of the Act. Whether the respondent conceded the model consultation term applied or not is not to the point. It was for the Commissioner, having decided for himself the Agreement did not include a consultation term as required by s.205, to note in his decision that the model consultation term was to be taken to be a term of the Agreement. His comment that the model consultation term would apply to the extent of any inconsistency with clause 44 did not satisfy that requirement. Again, in this respect, it matters not that the respondent may have made a concession to that effect.
 Although the Commissioner did not refer expressly to the possibility of an undertaking from the respondent being given pursuant to s.190 of the Act, to the extent his comments in paragraph  about the respondent’s concession may somehow rely on that section it is sufficient for us to note that s.190 only arises when a member has concerns an agreement does not comply with ss.186 and 187. It is not applicable where an agreement does not contain a consultation term as required by s.205.
 For the foregoing reasons we are persuaded that the Commissioner failed to comply with the requirements of ss.201 and 205 of the Act. These are not discretionary matters and in failing to properly apply those sections of the Act the Commissioner made errors of law. They are such as to warrant the grant of permission to appeal and for the appeal to be upheld. Pursuant to s.607(3)(a) we vary the Commissioner’s decision in so far as it purports to comply with s.201(1)(b) of the Act and in lieu find that as the Agreement does not include a consultation term as required by s.205, the model consultation term is taken to be a term of the Agreement.
 Finally, we should comment on the concern raised by the respondent as to the practical effect of the ruling we have made. In our opinion, noting in the approval decision that the model consultation term is taken to be a term of the Agreement does not extend access to the enhanced redundancy payments to employees beyond those clause 44 identified as having those entitlements. The model consultation term regulates only the respondent’s obligations in respect of consultations it must undertake and provides for the right of an employee to be represented in those consultations. We should observe that we did not understand the CFMEU to be asserting to the contrary. Certainly we did not take the union to submit that the impact of the model consultation term being taken to be a term of the Agreement was such as to displace all of the provisions of clause 44. If that was so it would exclude the enhanced redundancy payments from those employees identified in the clause. The issues raised in this decision suggest that it may be better in any future enterprise agreements for the parties to separate the consultation term from any term providing for substantive employee entitlements.
SENIOR DEPUTY PRESIDENT
Schedule 2.3 Model consultation term
Model consultation term
(1) This term applies if:
(a) the employer has made a definite decision to introduce a major change to production, program, organisation, structure, or technology in relation to its enterprise; and
(b) the change is likely to have a significant effect on employees of the enterprise.
(2) The employer must notify the relevant employees of the decision to introduce the major change.
(3) The relevant employees may appoint a representative for the purposes of the procedures in this term.
(a) a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and
(b) the employee or employees advise the employer of the identity of the representative;
the employer must recognise the representative.
(5) As soon as practicable after making its decision, the employer must:
(a) discuss with the relevant employees:
(i) the introduction of the change; and
(ii) the effect the change is likely to have on the employees; and
(iii) measures the employer is taking to avert or mitigate the adverse effect of the change on the employees; and
(b) for the purposes of the discussion — provide, in writing, to the relevant employees:
(i) all relevant information about the change including the nature of the change proposed; and
(ii) information about the expected effects of the change on the employees; and
(iii) any other matters likely to affect the employees.
(6) However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.
(7) The employer must give prompt and genuine consideration to matters raised about the major change by the relevant employees.
(8) If a term in the enterprise agreement provides for a major change to production, program, organisation, structure or technology in relation to the enterprise of the employer, the requirements set out in subclauses (2), (3) and (5) are taken not to apply.
(9) In this term, a major change is likely to have a significant effect on employees if it results in:
(a) the termination of the employment of employees; or
(b) major change to the composition, operation or size of the employer’s workforce or to the skills required of employees; or
(c) the elimination or diminution of job opportunities (including opportunities for promotion or tenure); or
(d) the alteration of hours of work; or
(e) the need to retrain employees; or
(f) the need to relocate employees to another workplace; or
(g) the restructuring of jobs.
(10) In this term, relevant employees means the employees who may be affected by the major change.
1  FWCA 7552.
3 Section 205 of the Act was amended by the Fair Work Amendment Act 2013. It now states that the consultation term must require an employer to consult with employees to whom the agreement applies about a change to their regular roster or ordinary hours of work. That amendment to the Act applies to enterprise agreements made after 1 January 2014.
4 The model consultation term has since been amended to reflect the amendments to s.205 by the Fair Work Amendment Act 2013.
5 See ss.119 – 123 of the Fair Work Act 2009 (Cth).
6 Rule 12 prior to 1 January 2014 and rule 56 after that date.
7 Consultation clause in modern awards  FWCFB 10165 at paragraph .
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