[2016] FWCFB 2222


Fair Work Act 2009

s.604—Appeal of decision

McDermott Australia Pty Ltd
The Australian Workers’ Union, & The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)



Appeal against decision [2016] FWC 1113 of Commissioner Lee on 25 February 2016 in matter number AG2016/2073 – permission to appeal, non-approval of single enterprise agreement– right of casuals to vote on agreement employed at the time, Fair Work Act 2009, ss.181(1), 182(1). Appeal upheld.


[1] This appeal relates to a decision issued by Commissioner Lee handed down on 25 February 2016. 1 The appeal by McDermott Australia Pty Ltd (McDermott/Appellant) is against the decision of the Commissioner refusing under s.185 of the Fair Work Act 2009 (the Act) to approve the McDermott Australia Pty Ltd Ichthys Project Offshore Construction Agreement 2016 (the Agreement).

[2] The Agreement proposes to cover McDermott employees engaged to work offshore on the Inpex Ichthy Project (the Project) and where relevant replaces the McDermott Australia Pty Ltd Western Australian and Northern Territory Offshore Construction Projects Agreement 2012-2015. 2

[3] The Ichthys gas and condensate field is in the Browse Basin located about 220 kilometres offshore from Western Australia. Gas and condensate from the Ichthys Field will be exported to onshore facilities for processing near Darwin via an 890 kilometre pipeline; the Project is currently in its construction phase.

[4] At the hearing of the appeal, Mr S Wood, QC, and Mr B Jellis of Counsel appeared on behalf of McDermott. Ms E Douglas appeared on behalf of the Australian Workers’ Union (AWU) and Ms P Lim on behalf of the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) (the Unions) via video link from Perth to Sydney. There was no objection to counsel appearing on behalf of McDermott and the Commission was satisfied pursuant to s.596(2)(a) of the Act that permission be granted for representation of the Appellant by counsel.


[5] In the initial Agreement approval application, the Unions’ filed Form 18’s indicating they were bargaining representatives for the Agreement and opposing its approval. The Unions opposed the approval of the Agreement on two grounds:

[6] We deal with the signature objection by the Unions later in this decision.

[7] In respect of the first point of opposition to the Agreement’s approval raised by the Unions, the Commissioner accepted that he could not be satisfied that the Agreement had been genuinely agreed to as is required under s.186(2)(a) of the Act. The Commissioner’s conclusion is reflected in the following paragraphs:

[8] The relevant award for the application of the better off overall test as prescribed by s.186(2)(d) is the Building and Construction General On –site Award 2010 (the Award). The Award at clause (10) – Types of employment, provides for the engagement of casual employees and daily hire employees, they are separate and distinct types of engagement. The Commissioner’s reference at [26] of his decision in reference to the employees being daily hire employees could not have been as per the Award definition of daily hire employees. Together with other differences in conditions, casual employees receive a 25% loading which is not payable to daily hire employees under the Award. We note that sub clause 12.2 of the Agreement makes no distinction for employment purposes as to whether a casual employee is mobilised offshore or not, when calculating the Cost of Living Allowance for employees under the Agreement.

[9] The Agreement provides that all employees will be engaged on a casual basis. 3 It is the industry practice that all offshore construction employees engaged on projects off the North West Coast of Western Australia are employed on a casual basis, whereas this is not necessarily the case elsewhere in Australia.4 For example offshore construction workers employed in the Bass Strait are engaged on a permanent basis.

[10] In arriving at the conclusion to dismiss the application, the Commissioner stated he had regard to the decision of Jessup J (with whom White J agreed) in National Tertiary Education Industry Union v Swinburne University of Technology (Swinburne), 5 a Full Court decision of the Federal Court which overturned a Full Bench decision of the Commission. Pagone J agreed with the result but for different reasons.

Appeal grounds

[11] The grounds of appeal advanced by McDermott are twofold:

Legislative provisions

[12] Division 4 of Part 2-4 of the Act provides for the approval of enterprise agreements. An agreement must be approved by the employees to whom it will apply, in the manner specified by the Act.

[13] Section 181(1) provides that:

[14] The procedure available to an employer under s.181(1) is subject to ss.180(1-4), which states:

[15] Section 182(1) of the Act provides:

[16] Section 186(2)(a) states as follows:

[17] What constitutes genuine agreement by the employees covered by an agreement, as required by s.186(2)(a), is the subject of s.188 which reads in part:

[18] In Swinburne the words “the employees employed at the time” as used in s.180(2)(a) and s.181(1) were examined in detail.

[19] The background to Swinburne was a decision of a Full Bench of the Commission in approving a new enterprise agreement to cover the academic, general and executive staff of the Swinburne University of Technology. A large number of sessional or casual employees were included in the voting ballot. This raised the question as to whether those employees were “employed at the time.” The National Tertiary Education Industry Union contended that this would necessarily have included a number of persons who were not “employed at the time.” The University’s cohort included all sessional academic staff who had been employed at any time, over a period of 12 months before the s.181 request was made. The Full Bench decision held the view that s.181(1) both permitted and required the University to address its request to all individuals who were then “usually employed” by it, this was said to be the “relevant test” by the Full Bench. The relevant paragraph is extracted below:

[20] In the Federal Full Court decision, the majority held that by including everyone who had been employed to any extent, in the previous 12 months including those who were “usually employed” as being within the expression “employees employed at the time” was a misreading of s.181(1). While s.13 of the Act contains a definition of a national system employee which includes an individual “usually employed”, it was held in Swinburne that this definition is not to be applied in establishing the “employees employed at the time for the purpose of voting on an Agreement, as the words “employed at the time” are words of limitation. 6 As such, the Commission could not have been satisfied that a majority of employees employed at the time who cast a valid vote, approved the Agreement.


[21] In this matter, the Commissioner found that the request to employees to approve the Agreement by voting for it was made to employees who were not “employed at the time”. 7 Of the 36 employees who were requested to vote on the Agreement, the Commissioner held at [26]:

[22] The evidence before the Commissioner was provided by Mr Matthew Dixon an organiser for the AWU and Mr Stephen McMahon a Human Resources Generalist for McDermott. Mr Dixon tendered a number of documents associated with the Ichthys Project. 8  The documentation described the scope of work allocated to McDermott during the Project and the vessels to be used by McDermott to carry out the allocated work.

[23] Included in the McDermott Project work is the installation of flexible risers/flow lines, umbilicals/controls, spools, jumpers, lateral buckling sleepers 9 and crossings. The offshore construction work for the Project commenced in the second quarter of 2014 and was on-going at the time of the Agreement approval application. The first offshore campaign undertaken by McDermott commenced in September 2014, with the laying of sleepers10 over a period of approximately one month, followed by a number of additional campaigns of various durations before the vote for the Agreement was undertaken. No work was being conducted at the time of the vote.

[24] Several vessels and barges are used by McDermott to complete its scope of work. McDermott directly hires its own construction workers and the number of employees’ allocated work at any one time depends on the tasks being undertaken including what vessel/barge is being used and it’s manning capacity.

[25] Mr McMahon’s evidence was that in total 39 casual employees had been engaged by McDermott for the Project. Most employees had worked on earlier campaigns for the Project and all 39 employees had been paid wages to undertake the HSCS training essential for the Project. 11 Prior to the voting process the number of casual employees available to work on the Project had been reduced to 36 active employees due to two resignations and one termination.12 It was the 36 ‘active’ employees who were asked to vote on the Agreement.

[26] At the time of the vote, none of the 36 casual employees were working offshore as there was no current campaign being undertaken by McDermott.

[27] The employment status of a casual employee was succinctly put in the Full Bench decision of Wayne Shortland v The Smiths Snackfood Co Ltd (Smiths Snackfood) decision 13 14at paragraph [10]:

[28] The Commissioner had before him a redacted version SJM1 (payroll records) attached to Mr McMahon’s Statutory Declaration. 15 This Full Bench was provided with a copy of an un-redacted version of SJM1 which clearly indicates that all 36 employees who voted for the Agreement were on the Appellant’s payroll for the Project (listed as Ichthys URF Project16) prior to the vote having taken place. SJM1 lists the original hire dates for all the employees, the latest employee hire date being 27 July 2015.

[29] The application for approval of the Agreement states that it covers 36 employees based on agreement by a process of voting via an independent internet site 17 through which 33 employees cast a valid vote, 19 of which were in favour of the Agreement.

[30] The decision to not approve the Agreement involves the application of a number of statutory tests and it is this process which the Appellant complains was conducted erroneously in respect of ss. 181(1) and/or 182(1).

[31] Insofar as any aspect of the decision which is not properly considered a discretionary decision, we are required to determine whether the decision is correct. 18

[32] There is no issue that enterprise agreements were intended by the legislature to be capable of covering casual employees, the difficulty is ascertaining when a casual employee ought be regarded as an employee “employed at the time” within the meaning of s.181(1). In relation to permanent employees it is relatively straight forward exercise. 19

[33] Generally a casual employee is employed for the duration of each engagement; that is, their employment commences and finishes with the commencement and finish of each engagement. Employees engaged by McDermott for the Ichthys Project received an offer of on-going casual employment on the Project. 20 The employees who accepted the offer were placed on the employer’s payroll records and permitted to vote for the Agreement.

[34] The Commission was correct to test the application against the ratio in Swinburne, however in our view the Commissioner misdirected himself by narrowly focussing on the upcoming campaign involving one of the Project vessels- the Lay Vessel 108 (LV108) which was one of the vessels used by McDermott on its scope of work for the Project, rather than the Project itself. In doing so he concluded that at the time of voting the employees who voted were not employed as the campaign work for the LV108 had not commenced. 21 

[35] The Commissioner was of the view that there was something wrong with the vote occurring while employees were not actually performing or being paid for performing work at the time of the vote. This in our view was incorrect; the status of the 36 casual employees at the time of the vote is a natural and expected phenomenon of being employed on a casual contract as per the Full Bench decision in Smiths Snackfood. In our view it would be inappropriate and counter intuitive to disenfranchise casual employees of a right to vote on an agreement that determines their wages and conditions on the basis that they were not rostered on to work on the day/s of the vote, or during the 7 day access period. 22 There are obvious implications for voting manipulation adopting this approach. Swinburne is not authority for the proposition that a casual employee is only “employed at the time” they are rostered to work and are being paid. Swinburne eschewed the proposition that employed at the time included “usually employed”.

In this matter as per clause 8 – Work Cycles of the Agreement, casual employees work a cycle of 21 days on duty and 21 days off duty (unless otherwise agreed); employees are not paid during their 21 day period off duty.

[36] It appears that the Commissioner accepted the Unions’ proposition that the Appellant’s work on the Ichthys Project, the subject of the Agreement did not begin until 10 January 2016. 23  While the Agreement was not to operate retrospectively, the Appellant’s work on the Project, the subject of the coverage of the Agreement had already commenced in the third quarter of 2014, with a workforce of casual employees having already been employed and trained to work on the Project.24

[37] The casual employees accepted on-going employment with McDermott as evidenced by the employer’s payroll records and the evidence of Mr McMahon; as such they were employed by McDermott at the time the Agreement was made. Their employment comprehended work within McDermott’s scope of work for the Project. It matters not that the next campaign had not commenced or that the casual employees who would be engaged on the next campaign would be dependent on the specific campaign and the vessel/barge used and its manning capacity (POB).

[38] The Commissioner at paragraph [26] of his decision accepted that the persons asked to approve the Agreement by voting for it were casual employees of McDermott. As stated in evidence by Mr McMahon 25 all employees that were hired to work on the Project, had completed paid training for the Project and none had resigned or had been terminated by McDermott or indicated they were not available for future work. The Project had commenced, the employees had been engaged specifically for the Project. Unlike the facts in Swinburne, the casual employees were employed at the time, they were not in a cohort of “likely to be engaged” or “usually employed.” It was legitimate and necessary for them to be included in the group of employees asked to approve the Agreement.

[39] The resultant Agreement was made under s.182(1). It was a single enterprise agreement available to be made under s.172(2)(a). The Agreement has been genuinely agreed to by the employees covered by the Agreement.

[40] On the basis of our above reasoning the appeal grounds as advanced by the appellant must succeed as we are satisfied that the Commissioner erred in his conclusion that the Agreement was not genuinely agreed to pursuant to s.186(2)(a) of the Act.

Signature requirements

[41] As raised above, in the initial approval application, the Unions filed statutory declarations (Form 18) indicating they were bargaining representatives for the Agreement and opposing its approval on two grounds. The second ground opposed the approval on the basis that the application did not contain a signed copy of the proposed agreement pursuant to section 185(2)(a) of the Act. It was the Unions’ position that the signatory claiming to be an employee representative was not an authorised representative.

[42] The Commissioner stated that in the circumstances, it was not necessary to consider this objection on the basis that the application was dismissed on the first ground raised by the Unions. 26 The transcript of the hearing reveals that the Commissioner was not disposed to the merit of this part of the Unions’ objection.27 We note the Commissioner had earlier dismissed a similar argument in the agreement approval application for the MSS Security Victorian Enterprise Agreement 2011.28

[43] While not an appeal ground in this appeal, as the Unions have not filed an appeal, having been successful in the first instance with their argument that the Agreement was not genuinely agreed to. The Unions still submit that the Agreement cannot be approved on the basis that the signatory claiming to be an employee representative was not an authorised representative.

[44] Section 185 requires a number of procedural steps to be undertaken before the Commission can approve an agreement. At ss.185(5) under the heading Signature requirements it provides that the regulations may prescribe requirements relating to the signing of enterprise agreements.

[45] Regulation 2.06A under the Fair Work Regulations 2009 (the Regulations) is the relevant prescribed regulation. It effectively defines what constitutes a signed copy of the Agreement. The regulation is in the following terms:

[46] What can be relevantly extracted from the above regulation is the requirement for at least one representative of the employees covered by the Agreement to sign the Agreement and provide an explanation of their authority to do so.

[47] It is noted that in the Full Bench decision Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and another v Sustaining Works Pty Limited at [30], 29 it was determined that a failure to comply with the requirements concerning the signing of enterprise agreements in regulation 2.06A unless remedied by an amendment, meant that the agreement could not be approved by virtue of ss.185(2)(a) and 186(1) of the Act.

[48] The requirement for a signed copy of the Agreement to be attached to an approval application is explained in the Explanatory Memorandum to the Fair Work Bill 2008 at item 762. The requirement is to ensure that the agreement presented to the Commission for approval is the one actually made by the parties.

[49] At page 19 of the Agreement under the heading “Signed on Behalf of the Employees by their authorised representative(s)” is the signature of Mr Benjamin Lloyd Coleman. In relation to Mr Coleman’s authority to sign the Agreement he states “Storeperson – Employed by McDermott Australia Pty Ltd”. The signature page also contains the signature of the McDermott representative and his authority to sign.

[50] Mr McMahon gave evidence confirming that Mr Coleman was employed in the classification of Stores Person, a listed classification in clause 12 of the Agreement.

[51] The Unions’ argument proceeds on the basis that an enterprise agreement cannot be signed by any employee who is covered by the Agreement, rather the employee must be an ‘appointed’ representative of the relevant employees with authority to sign the Agreement on their behalf. As there was no evidence that Mr Coleman was ‘appointed’ as a representative of the employees, the Unions’ argued that the Agreement cannot be approved.

[52] In advancing this argument the Unions rely on the Explanatory Statement which was issued when regulation 2.06A was inserted into the Regulations which in part states:

[53] It is the reference to “employees could appoint any person to sign on their behalf” which the Unions submit results in the requirement for an employee (not being a bargaining representative) who signs the Agreement to be appointed before they can sign the agreement. The Attachment to the Explanatory Statement which individually goes through each amendment to the Regulations and further explains the nature of the amendment refers only to the employee being a representative and makes no reference to the appointment of an employee:

[54] In our view the submissions of the Unions’ on this point are misconceived.

[55] The interpretation of a regulation like that of a statute begins with a consideration of the ordinary meaning of its words. Regard must also be paid to the context and purpose of the provision or expression being construed. The regulation refers to a “representative of the employees covered by the agreement”. At regulation 2.06A(3) when referring to a representative it refers to an employee in a class of employees who will be bound by the agreement:

[56] In this case, Mr Coleman is an employee in a class of employees who will be bound by the Agreement; as such he is therefore a representative of the employees covered by the Agreement. The authority in the context of the regulation is the employee’s capacity to sign; which in Mr Coleman’s case is that he is an employee covered by the Agreement.

[57] Regulation 2.06A does not require a representative who signs the Agreement to be appointed. The Explanatory Statement cannot elevate the signature requirements to be in excess of the Regulations. While there is no reason why employees could not appoint a representative to sign on their behalf as suggested in the Explanatory Statement, it is not a mandated requirement, nor is there any prescribed process for ‘appointing’ a representative.


[58] We are satisfied that the appeal raises matters of public interest relating to the proper construction of ss.181(1) and 182(1) of the Act and the right of casual employees to vote on agreements. We grant permission to appeal under s.604(2) and uphold the appeal for the reasons set out above.

[59] As the above issues are the only matters on which the Agreement’s approval was challenged, we approve the Agreement. We are satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met.

[60] In a separate decision [2016] FWCA 2321, which is issued in conjunction with this decision, we approve the Agreement under s.186 of the Act

al of the Fair Work Commission with Vice President Catanzariti's signature



S. Wood QC and B Jellis Counsel for the Appellant;

Ms Douglas on behalf of the AWU and Ms Lim on behalf of the AMWU

Hearing details:


March 9

Sydney with video link to Perth

 1   [2016] FWC 1113

 2   AG2012/9886

 3   See sub clause 6.1 of the Agreement

 4   PN171 of appeal hearing

 5   (2015) 232 FCR 246

 6   (2015) FCR 246 at 254 para [26]

 7   At [25]

 8   Exhibits MD1 and MD2

 9   The pipeline is designed to buckle laterally on sleepers to accommodate thermal expansion and to overcome soil uncertainties

 10   Required for the pipeline to lay on the sea bed

 11   PN149, 162

 12   PN142 and PN149

 13   [2010] FWAFB 5709

 14   See also comments of Moore J in Andison v Woolworths Limited, IRCA, N1522 of 1994, 8 August 1995

 15   A non-redacted version was made available to the Commissioner subject to confidentiality provisos, see paragraph (4) of Statutory Declaration of Mr. James McMahon dated 2 February 2016 but appears not to have been accessed

 16   URF – Umbilicals, risers and flowlines

 17   Cirrena IVS

 18   Pawel v AIRC (1999) 94 FCR 231

 19   The decision of Lawler VP in University of New South Wales and University of New South Wales (Professional Staff) Enterprise Agreement 2010 raises similar issues

 20   PN148

 21   PN25

 22   Jessup J stated that although not argued, he was disposed to the view that “at the time” included the whole of the ‘access period’

 23   See Unions’ Outline of Submissions 8 March 2016 at [6]

 24   SeeMD2

 25   PN148, 150

 26   At paragraph [29]

 27   PN311

 28   [2013] FWCA 1474

 29   [2015] FWCFB 4422

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