[2016] FWC 2742


Fair Work Act 2009

s.185 - Application for approval of a single-enterprise agreement

Transit (NSW) Services Pty Ltd T/A Transit Systems


SYDNEY, 3 MAY 2016

Application for approval of the Transit (NSW) Services Pty Ltd, Transport Workers Union and Bus Drivers Enterprise Agreement 2015 - s.185 - Application for approval of single enterprise agreement - Opposed by TWU on basis agreement not genuinely agreed to - back to back ballots and misleading communications - Unlawful term - Terms of the NERR considered and found not in compliance with regulations - agreement not approved.

[1] In this matter the applicant Transit (NSW) Services Pty Ltd (Transit) seeks the approval of an enterprise agreement titled Transit (NSW) Services Pty Ltd, Transport Workers Union and Bus Drivers Enterprise Agreement 2015 (the Agreement). The Employer’s Statutory Declaration in support of the application Form F17 advises that the Agreement covers 335 employees of whom 297 cast a valid vote with 166 employees approving the Agreement.

[2] The Transport Workers’ Union of Australia (TWU) filed a Form F18 statutory declaration in relation to the application. While wishing to be covered by the Agreement the TWU opposes its approval on numerous grounds. The grounds include:

[3] The TWU initially sought Transit’s agreement to determine their objection solely on the basis that the Notice of Employee Representational Rights (NERR) did not meet the requirements of the Fair Work Act 2009 (the Act) on the basis that if the NERR regulatory requirements were not met, the Agreement could not be approved. This course of action was opposed by Transit who requested that all matters raised by the TWU in opposition to the Agreement approval be dealt with together.

[4] It should be noted that the TWU conducted a comprehensive workplace campaign against the approval of the Agreement. 1

[5] Both parties sought leave to appear before the Commission with counsel based on the complexity of the issues to be addressed. Pursuant to s.596(2) of the Act, leave was granted on the basis that representation by counsel would enable the matter to be dealt with more efficiently taking into account the complexity of the issues raised.

[6] Both parties tendered witness statements which I have had regard to. A limited number of persons were required for cross examination. For the applicant Mr Lamont the General Manager of Transit was cross-examined. For the TWU; Mr Moujalli, Mr Nguyen, Mr Veljanoski, and Mr Nyols were cross-examined.

Genuine Agreement

[7] The TWU submitted that the Agreement approval should be rejected by the Commission on the basis that the Agreement was not ‘genuinely agreed to’.

[8] Section 188(c) of the Act provides that the Commission must be satisfied that there are no other reasonable grounds for believing that an agreement has not been genuinely agreed to by the employees.

[9] The TWU relied on a summary of the approach to be taken in considering whether employees have genuinely agreed to an agreement as outlined in Central Queensland Services Pty Ltd T/A BHP Billiton Mitsubishi Alliance 2 at [65]:

[10] In advancing their argument the TWU relied on a number of grounds which are discussed below.

Misleading Communications

[11] The TWU submitted that Transit misled its employees in a number of aspects.

Incentive Payment

[12] Clause 8(b) of the Agreement states:

[13] The Agreement was approved on 22 December 2015 and the $1,000 (less tax) was duly paid to employees. It is submitted by the TWU that employees were led to believe that the $1,000 sign up amount was to be paid tax free.

[14] In correspondence to employees of 1 December 2015, Transit advised employees that:

[15] In correspondence dated 4 December 2015, Transit described the payment as a sign up bonus of $1,000. A vote was subsequently held on 10 December 2015, which did not approve the Agreement.

[16] On 14 December 2015, Transit notified employees of a further vote and referred to the $1,000 payment without reference to it being subject to tax.

[17] The TWU submitted that employees were under the impression that the payment would be tax free and on that basis the Agreement wasn’t genuinely agreed to by the employees.

[18] Mr Emil Moujalli a bus driver for Transit and TWU delegate gave evidence on behalf of the TWU. Mr Moujalli’s evidence was not given in a direct and confident manner. Mr Moujalli was unclear in respect of what was contained in his written statement. 3 For example, he had stated that he did not recall having ever seen the NERR. This was contradicted by a document produced by Transit4 with Mr Moujalli’s signature indicating he had received a copy of the NERR on 1 July 2015.

[19] Mr Moujalli’s statement referred to not being “sure whether the bonus was tax free or not.” Mr Moujalli’s evidence was that after the second vote he was told by Mr Lamont, the employer’s General Manager, that the bonus would be taxed. 5

[20] Mr Kiril Veljanoski a bus driver for Transit and TWU delegate stated in his witness statement that he believed that a bonus means a lump sum without tax. 6 Mr Patel, Mr Nguyen, Mr Joseph and Mr Chau also included in their written statements that they believed they would receive the $1,000 sign up bonus, free of tax.

[21] The evidence of Transit’s witnesses including employees covered by the Agreement was that they were clear that the $1,000 bonus was to be taxed. This was ascertained from the correspondence dated 1 December 2015, which stated the $1,000 payment would be taxed. 7

[22] Mr Filipovic, a bus driver, stated in his witness statement that he had asked Mr Lamont during the course of bargaining whether the $1,000 could be paid as a separate payment to minimise the impact of tax, to which Mr Lamont responded this was not possible for legal reasons. Mr Filipovic stated this discussion occurred in the presence of other members of the consultative committee. 8

[23] Mr Lamont, who was cross-examined, gave evidence that he sent the letter of 1 December 2015, stating that the $1,000 payment would be taxed. While further correspondence referring to the $1,000 did not specifically state the amount would be taxed, the original advice to employees that the amount would be taxed was never altered.

[24] Mr Nyols, a TWU organiser, stated in his evidence that in advocating for a ‘no’ vote on the Agreement, he advised ‘people’ that the company had said that the bonus would be taxed. 9

[25] The evidence given on behalf of the TWU does not establish that the employees were misled in respect of the taxation of the $1,000 sign up bonus or that there should have been any confusion following the initial advice that the amount would be taxed. Without the employer having made a statement changing its position, there is no misleading of employees by reference to the $1,000 sign up bonus without reference to it being a taxable amount.

[26] The sign up bonus is contained in the Agreement along with the rates of pay and allowances, all of which are taxable payments. No employee could have reasonably concluded that the amount would no longer be taxed contrary to Transit’s initial advice to employees.

[27] I am not satisfied that this issue provides any support for the proposition that the Agreement was not genuinely agreed to by the employees for the purposes of s.188(c) of the Act.

Advice of Consultative Committee view

[28] The TWU referred to Transit’s correspondence of 14 December 2015 sent to employees. The correspondence included a statement that the Agreement had been endorsed by the majority of employee elected consultative committee representatives. The TWU stated that the proposed agreement had never been endorsed by a meeting of the Committee and that it was misleading to suggest that this had occurred.

[29] This issue was raised in respect to bargaining orders sought by the TWU in the negotiations. A decision of SDP Hamberger handed down on transcript on 18 December 2015 dismissed an application made by the TWU for bargaining orders under s.229 of the Act. The Senior Deputy President stated that the letter appeared to be technically correct in indicating that the proposed Agreement has the support of a majority of the directly elected employee members of the Consultative Committee.

[30] The matter was taken on appeal by the TWU where the correspondence of 14 December 2015, was raised in respect to Transit meeting its good faith bargaining requirements. The Full Bench found that content of the correspondence involved a degree of sharp practice and had a potential to mislead. 10 However having regard to the capacity of the TWU to robustly communicate its own position to employees, the initial finding of the Senior Deputy President that no employee could reasonably hold the belief that the TWU supported voting for the Agreement was not in error.

[31] In this matter the test is not one concerning good faith bargaining but whether the Agreement has been genuinely agreed to by employees. The TWU continued to press that the Transit communication of 14 December 2015 was misleading and intended to induce employees to believe that the elected representatives on the Consultative Committee supported approval of the Agreement.

[32] There was no evidence before the Commission that any employee was actually misled by Transit’s correspondence. Mr Moujalli’s evidence 11 as a member of the Consultative Committee was that the Committee had not endorsed the Agreement.

[33] The words used, are as SDP Hamberger stated on 18 December, technically correct; the majority of employees elected as consultative committee representatives as opposed to TWU appointed representatives endorsed the Agreement.

[34] I am not satisfied that the correspondence of 14 December 2015, separately or in conjunction with any other matter, misled employees to the extent that the Agreement was not genuinely agreed.

Explanation of the Agreement

[35] It is accepted by the parties that employees to be covered by the Agreement include many employees from non-English-speaking backgrounds. The evidence indicated that there were a high proportion of employees with a Vietnamese background whose English language skills were rudimentary. The TWU submitted that the Act, pursuant to s.180(5), requires Transit to take all reasonable steps to ensure that the Agreement terms are properly explained to employees from non-English-speaking backgrounds.

[36] Section 180(5) is in the following terms:

[37] Section 180(6) then expands on what reasonable steps may involve:

[38] The evidence indicated that employees whose first language was not English were from various backgrounds, including China, Vietnam, Cambodia and Indian. The TWU submitted that the failure to translate the Agreement into Vietnamese and other languages meant that the obligations under s.180(5) were not complied with.

[39] A number of TWU witnesses stated that they were not aware of any efforts taken by Transit to explain the terms of the Agreement in a language other than English.

[40] In response, Transit submits that all reasonable steps were taken to ensure the terms of the Agreement were explained to all employees. When Mr Lamont became aware that some Vietnamese speaking employees were having difficulty reading the Agreement, he considered having the Agreement translated into the Vietnamese but was informed that this could take up to 3 months. Mr Lamont stated that he attempted to translate the Agreement through Microsoft but it resulted in too many errors. Mr Lamont then asked employee Hoa Quoc Le who had a good grasp of English to assist other Vietnamese employees to understand the document. Mr Lamont stated that this was the only time the issue of employees whose first language was not English, had indicated they were having any difficulty.

[41] Mr Le who was not cross-examined detailed in his witness statement that the Vietnamese employees were free to come to him at any time to ask for help to translate any words in the proposed Agreement that they could not understand. He explained to a number of Vietnamese employees the new rates of pay, the bonus payment, how the back payment would work and pointed out the differences between the 2013 agreement and the proposed Agreement.

[42] There was no evidence produced that any employee did not understand the terms of the Agreement, only that it was not explained by Transit in a language other than in English to employees. All employees were invited to attend information sessions to ask any questions about the understanding of the Agreement. At some of the information sessions TWU officials attended and spoke to employees. 12 The evidence indicated that the TWU only ever spoke in English or produced documentation in English to the workforce when discussing the Agreement.

[43] Taking into consideration the fact that English was not the first language of many of the employees I am satisfied on the evidence of Mr Lamont, that Transit took all reasonable steps to ensure that the terms of the Agreement and the effect of the terms were explained to employees.

Multiple Votes in a Short Period

[44] The TWU questioned whether the Agreement was genuinely agreed to, due to the conduct of the ballot. The TWU pointed to there having been a ballot on 15 September and 10 December with a further ballot held on 22 December 2015, with the first two ballots having failed to gain sufficient support for approval of the Agreement.

[45] It is argued that the manner in which the ballots were conducted in relatively quick succession implied that Transit would not accept ‘no’ to the approval of the Agreement. It was put that the method adopted by Transit in conducting the ballots put pressure on employees to approve the Agreement as employees felt under pressure to vote in favour of the Agreement to bring an end to the bargaining process.

[46] On 17 December 2015, there was a protected action ballot as a result of an application by the TWU, this additional ballot the TWU submits created potential for confusion amongst employees as to what they were being asked to vote on. 13

[47] Transit submits that they received no feedback from any employees expressing confusion over the purpose of the vote or that any employee felt pressured by the vote on 22 December 2015. In respect to the final vote on 22 December 2015, correspondence was sent to all employees on 14 December 2015, making it clear that employees were encouraged to vote and that the vote was taking place to allow all bus drivers to vote when not all had done so in the previous vote on 10 December.

[48] Transit pointed to the forceful TWU ‘no’ campaign during the bargaining period, including the publishing and placing of material on notice boards advising of the TWU’s disapproval of the Agreement. In Transit’s submission there was no room for any employee to be confused by the voting process.

[49] Transit does not accept that employees were voting merely to get the process over and done with, however even if this was the case, it does not impeach the validity of the vote by resulting in there being no genuine agreement.

[50] The first ballot in respect of the Agreement approval occurred on 15 September 2015 and it was not until nearly 3 months later on 10 December that a second vote occurred. In respect of the third vote on 22 December 2015 it was explained by Transit in its written advice to employees that it was being conducted as almost 50 bus drivers did not take part in the 10 December 2015 vote.

[51] For the 22 December 2015 vote, information sessions were held between 17 and 21 December and committee members were released from their usual duties to speak to employees. 14

[52] There was no direct evidence adduced by the TWU witnesses on this matter, with TWU witnesses only stating what other employees had told them.

[53] As discussed above, the TWU had mounted a comprehensive campaign in opposition to the Agreement which would have unlikely resulted in any employees being confused on what issue they were voting for or against on 22 December 2015.

[54] On all occasions the voting process was conducted by Transit in accordance with the procedural requirements of the Act and while the 22 December vote was only 12 days from the previous vote it does not provide a reason to conclude that the Agreement was not genuinely agreed to by employees.

Unlawful Term

[55] A further requirement for approval of an agreement is for the Commission to be satisfied that the Agreement does not include any unlawful terms, this is found in s.186(4) of the Act. The phrase ‘unlawful term’ is defined in s.194(b) as including ‘an objectionable term’. The phrase ‘objectionable term’ is defined in s.12 of the Act in the following manner:

[56] Clause 8(b) of the Agreement includes the following:

[57] This provision in essence provides for ‘back-pay’ to employees only in circumstances where the TWU has indicated to the Commission its support for the Agreement. The TWU submit that this clause is objectionable on the basis that it requires or permits or has the effect of requiring or permitting Transit to contravene the General Protections provisions in Part 3-1 of the Act.

[58] Section 340(2) found in Part 3-1 General Protections of the Act provides:

[59] The definition of a “workplace right” as defined in s.341(1) of the Act at s.341(b) includes the ability of a person being able to initiate, or participate in, a process or proceeding under a workplace law or workplace instrument. As clause 8(b) of the Agreement requires or permits Transit to deny access to back payment of wage increases by reason of the TWU exercising a workplace right, (opposing approval of the Agreement) the TWU submit that this results in the clause being an unlawful term.

[60] Transit, while not accepting that the clause is an unlawful term has provided an undertaking to avoid the controversy. The undertaking removes the precondition that the TWU support the approval of the Agreement before any back-pay is paid. In my view this undertaking resolves the issue raised by the TWU. Despite the undertaking, the TWU state that as it results in a substantial change to the Agreement it cannot be accepted as per s.193(b) of the Act. While I accept that the issue of back pay is a matter of substance I am not of the view that the undertaking provided by Transit would result in a substantial change to the Agreement. The Commission prior to accepting the undertaking would be required to seek the views of all bargaining representatives for the Agreement.

NERR Requirements

[61] Section 186(2)(a) requires, in order for the Commission to approve an agreement that:

[62] Section 188 sets out when employees have genuinely agreed and it makes clear that:

[63] Section 181 - Employers may request employees to approve a proposed enterprise agreement states at (2):

[64] Section 173(1) provides that:

[65] The content of the notice is dealt with at s174:

[66] With effect from 1 January 2013, a new section was added, 174(1A) and provides that the following requirements must be met:

[67] The meaning and effect of subsection 174(1A) was extensively dealt with in the Full Bench decision Peabody Morevale Pty Ltd v CFMEU (Peabody) 15 which makes it clear that there is no scope to modify the content or form of the NERR notice template provided for in the regulations:

[68] Regulation 2.05 states that the prescribed form for the NERR is contained in Schedule 2.1. At the bottom of Schedule 2.1 is a reference to a website www.fairwork.gov.au; that must be included in the NERR. This is the website of the Fair Work Ombudsman. In this matter the NERR provided to employees by Transit makes reference to a different website www.fwc.gov.au; this is the website of the Fair Work Commission.

[69] The website link reference is to a different website which takes an employee to a different institution being the Fair Work Commission and not the required website of the Fair Work Ombudsman. Both bodies have separate and distinct roles and responsibilities.

[70] The website that Parliament intended be referred to in the NERR was the Fair Work Ombudsman’s, in this case that was not done and Parliament’s intentions were not met.

[71] A Full Bench in AMOU v Harbour City Ferries Pty Ltd and others 16 discussed obiter that if an NERR was deficient in a minor or trifling way whether it would be a barrier to the agreement being approved, despite the operation of s.174(1A). The Full Bench stated at [21] that even minor and insignificant departures from the prescribed notice would not be in compliance applying a strict reading of s.174(1A).

[72] Further on at [38] the Full Bench said:

[73] Mr Howell on behalf of the TWU sought to emphasise that in this case the error related to the Form itself, as opposed to information required to be inserted by the employer.

[74] The TWU submit that the Agreement is not able to be approved under s.186(1) as the NERR notice is in conflict with the prescribed notice as per the regulations. The TWU rely on the decision of the Full Bench in Peabody being that the consequence of failing to provide employees a notice which complies with the content requirements as per the regulations results in the Commission being unable to approve the Agreement.

[75] More recently the Full Bench in The Australian Maritime Officers’ Union v Harbour City Ferries Pty Ltd 17 supported the proposition that a non-trivial misdescription will render a NERR invalid with the consequence that any subsequent enterprise agreement will be incapable of approval.

[76] It is not clear that any employee had regard to the erroneous website or even if they did whether this would have impacted on their decision in the voting process. However, it is not for the Commission to delve into the potential consequences based on the wording of s.174(1A) which does not allow for the Commission to exercise any discretion, subject to what I accept below as the ‘de minimis’ principle.

[77] Transit, whilst acknowledging that the NERR contains a reference to the incorrect website, urged the Commission to consider the error as being a matter of such insignificance it would not be appropriate to allow such an error to prevent the Agreement’s approval.

[78] Transit relied upon the legal maximum de minimis non curat lex which in essence is that the law does not pay heed to trifling matters in the interpretation of statutes. As was held in Tasker v Fullwood 18 the NSW Court of Appeal stated that if the consequences of requiring strict compliance to a statute are so inconvenient or unjust as to lead to the conclusion that Parliament could not have intended them, the Court should conclude that a failure to comply does not result in invalidity.

[79] The Explanatory Memorandum to the Fair Work Amendment Bill which introduced the new sub section at item 147 states:

[80] The Panel recommendation referred in the Explanatory Memorandum is that contained in the Towards more productive and equitable workplaces - An evaluation of the Fair Work legislation 2012 Panel Report 19, commissioned by the then Labor Government which recommended:

[81] The decision in Peabody above followed the introduction of s.174(1A). The Productivity Commission Inquiry Report on Australia’s Workplace Relations Framework delivered on 21 December 2015 referred to the Peabody decision under the heading: Where a staple can undo an agreement stating:

[82] Despite the comments of the Productivity Commission, s.174(1A) remains in place and the Full Bench decision in Peabody must be applied. There is no ability for the Commission to accept an undertaking in relation to remedying a defect involving the issuance of the NERR as suggested by the Productivity Commission. 20

[83] I accept as submitted by Transit that minor typographical or insignificant errors would not on the face of it render a NERR invalid based on the de minimis principle. Such error would satisfy the test of being trifling to the extent that Parliament could not have intended that it be fatal to the approval application. 21

[84] In this case I cannot accept that providing an incorrect website reference fits within the ambit of the de minimis principle. The incorrect website could not be described as being insignificant, minor or inconsequential.

[85] It follows that s.181(2) has not been complied with as employees have been directed to an incorrect website. I therefore cannot be satisfied that the Agreement has been genuinely agreed to as I am required under s.186(2)(a) as no valid notice was provided.

[86] While being fully conscious of the inconvenience this will cause the employer and no doubt some employees, I cannot approve the Agreement and the application for approval of the Agreement is dismissed.

al of the Fair Work Commission with member's signature



G Hatcher SC and G Boyce for Transit

A Howell Counsel for the TWU

Hearing details:



April 15 & 26.

 1   Exhibit A15 was a compilation of text messages forwarded by the TWU to members and delegates making it clear that the Agreement was not supported.

 2   [2015] FWC 1554 per DP Asbury

 3   Exhibit R9

 4   Exhibit A13

 5   PN919, 970

 6   Exhibit R12

 7   See witness statements of Le, Filipovic, Tsolakis, Hung, Tupou, Fiorenza, Huynh and Tran.

 8   Witness Statement of Mr. Filipovic Exhibit A8

 9   PN1321

 10   [2016] FWCFB 997

 11   Exhibit R9

 12   Witness Statement of Mr. Lamont Exhibit a 12 at [44]

 13   TWU outline of Submissions at [42]

 14   Witness Statement of Mr. Lamont at[46] Exhibit A12

 15   [2014] IR 210

 16   (2015) 250 IR1 [2015] FWCFB 3337

 17   [2016] FWCFB 1151

 18   [1978] 1 NSWLR 20

 19   Towards more productive and equitable workplaces - An evaluation of the Fair Work legislation 2012 at chapter 12 Fair Work Australia and Fair Work Ombudsman; Ron McCallum and others

 20   S.190 (undertakings) does not apply to s.174

 21   See for example the agreement approval decisions in Cruise Whitsundays Pty Ltd [2016] FWCA 377, Prosegur Australia Pty Ltd [2016] FWCA 1327

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