INTERIM DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Macmahon Contractors Pty Ltd
(AG2017/4173)

Application for approval of the Macmahon Byerwen Agreement 2017 - request by union to be heard.

[1] This Interim Decision concerns an application made by Macmahon Contractors Pty Ltd (Macmahon or the Applicant) on 13 September 2017 under section 185 of the Fair Work Act 2009 (the Act) for the approval of the Macmahon Byerwen Agreement 2017 (the Agreement). The Agreement is a single-enterprise agreement.

[2] On 2 October 2017 the Commission provided the Construction, Forestry, Mining and Energy Union (the CFMEU), at their request, with copies of the relevant forms F16-Application for approval of enterprise agreement and F17-Employer’s statutory declaration in support of an application for approval of an enterprise agreement lodged by the Applicant. At the time of requesting these materials the CFMEU advised it had concerns about the content of the Agreement and wished to have those concerns heard.

[3] On 4 October 2017 the CFMEU advised the Commission that they do not have any members employed by the Applicant and they were not a bargaining representative in the making of the Agreement however they sought to be heard by the Commission pursuant to section 590 of the Act. The same day the Applicant’s representative advised the Commission that they objected to the CFMEU being heard any further on this application.

[4] On 13 October 2017 the CFMEU filed written submissions both on the basis for being heard pursuant to section 590 (1) of the Act and on the issues of concern it has regarding the content of the Agreement, the Better off Overall Test (BOOT) and inconsistency with the National Employment Standards (NES). In response the same day the Applicant’s representatives again advised the Commission of its continued objection to the CFMEU being heard any further on this matter.

[5] On 18 January 2018 this application was allocated to myself. On 22 January 2018 directions were issued for the Applicant to file submissions in response to the CFMEU’s submission regarding its request to be heard and then for the CFMEU to file any submission in reply. Both parties have filed submissions as directed.

[6] This Interim Decision concerns only the request by the CFMEU to be heard on this application.

The parties’ submissions

The CFMEU

[7] The CFMEU is not seeking to be heard by way of right or because it has a “right, interest or legitimate expectation” that requires that it be heard as a matter of procedural fairness. The CFMEU acknowledges that it does not have any members employed by the Applicant who were involved in the making of the Agreement and, as such, does not have standing to appear as of right. However the CFMEU seek the opportunity to be heard by the Commission in this matter by virtue of section 590 of the Act.

[8] Section 590 (1) of the Act provides that the Commission “may, except as provided in the Act, inform itself in relation to any matter in such manner as it considers appropriate.” The section provides the Commission with a broad discretion to hear from a union, other organisation or person. Section 590 of the Act also provides the Commission with a broad discretion as to the manner in which the Commission may determine to “inform itself in relation to any matter.”

[9] The Full Bench in CFMEU v Collinsville Coal Operations Pty Ltd [[2014] FWCFB 7940] (Collinsville) at [75] with respect to section 590 stated:

“We would make the observation however, that the Commission may choose, in a particular matter to hear from an employee organisation or any other person about the approval of an agreement even though the organisation or person may not otherwise have a right to be heard. The Commission has a broad power to inform itself in relation to any matter in such manner as it considers appropriate, including by inviting oral or written submission from a person or organisation.”

[10] The CFMEU seeks that the Commission exercise that discretion in this matter and determine to hear from the CFMEU regarding any concern the CFMEU may have with the both the agreement-making process and the contents of the Agreement.

[11] The Agreement applies to employees of the Applicant engaged in the black coal mining industry in one of the identified classifications. The Agreement is confined to employees at the Byerwen Coal Mine Project in Queensland.

[12] The interest of the CFMEU goes to the application to work and employees in the black coal mining industry.

[13] In the context of the scope of the Agreement set out above the CFMEU submits that the Commission should hear from the CFMEU for the following reasons.

[14] The CFMEU submits it can assist the Commission in its deliberations on the approval of the Agreement because it has a long history representing the industrial interests of employees in the black coal mining industry. The CFMEU has knowledge of the relevant modern award provisions and agreements in the black coal mining industry.

[15] The CFMEU is likely to have members under the Agreement (if approved) at some future point.

[16] In circumstances where there would otherwise be no contradictor, as is the case in this matter, the Commission would be assisted by hearing from the CFMEU in respect of whether the Agreement meets the requirements for approval. In a number of other decisions individual members of the Commission have recognised the assistance provided by a contradictor.

[17] The CFMEU has identified a number of concerns. Of particular concern is the coverage of the Agreement. In addition it has other concerns with both the pre-approval requirements and the statutory requirements regarding the contents of the Agreement. The CFMEU seeks an opportunity to put those matters to the Commission and to have them tested and considered by the Commission. On the basis of what the CFMEU intend to submit, the Commission must refuse to approve the Agreement.

[18] The CFMEU in its original submissions identified concerns it holds which relate to a range of matters including in summary the wage rates, which it acknowledges are more beneficial than the Black Coal Mining Industry Award [MA000001] (the Award), and how beneficial these rates apply to employees which is a function of their rosters, the absence of public holiday rates, the absence of some allowances, the absence of an afternoon shift, queries about the dispute resolution procedure and the contract of employment and the treatment of part-time employees, the inclusion of casual employment, questions with respect to termination of employment and meal breaks, overtime, payment of wages, annual leave and a number of other concerns.

[19] The Applicant in its submissions opposing the CFMEU being heard contends that there are no “unusual characteristics on this particular matter than would justify a departure from those principles.” The notion that the CFMEU has to identify “unusual characteristics” to satisfy the requirements of section 590 is erroneous. It is submitted nowhere in Collinsville, or elsewhere, is such a task given to any third party requesting to be heard pursuant to section 590 of the Act.

[20] As to the submission by the Applicant that if the Commission agrees to hear the CFMEU then this should be allowed only on a restricted basis the CFMEU submits that it should be heard on any matter relevant to the making of the Agreement and should not be subject to any artificial barriers such as restrictions on the cross-examination of witness or confining their involvement to parts only of the approval process. The CFMEU reject any notion that that they would “otherwise embark on a wide-ranging exercise of objection-taking to stymie the prompt resolution of the Application.” Not only would it be fruitless and pointless but ultimately counterproductive. The issues of concern raised in their earlier submission concern BOOT and NES matters.

[21] A further matter of concern that has become apparent is whether the Applicant has complied with section 180 (5) of the Act regarding explaining the Agreement and the effect of its terms and the provisions of section 186 (2)(a) being the genuine agreement provisions as they concern the inclusion of casual employment in the Agreement. The CFMEU would seek to be heard on this issue if the Commission accepts its section 590 application in this matter. Other issues may also become apparent and the CFMEU submit they should not be prevented from ventilating them if they arise.

[22] The CFMEU seeks that the Commission determine to hear from the CFMEU in this matter pursuant to section 590 of the Act with respect to the issues raised by the CFMEU in its submission on the making of, and the contents of, the Agreement and any other relevant issues that may arise during any proceedings.

The Applicant

[23] On 11 September 2017, the Applicant made the Agreement with six of its employees. It did so in an orthodox manner; the relevant employees, each of whom nominated as an individual bargaining representative, met with Macmahon on four occasions to discuss the terms and effect of the proposed Agreement.

[24] The Agreement provides generous all-purpose hourly rates which are substantially higher – in the order of 59% higher for production employees working a ‘7 days on, 7 off, 7 nights on, 7 off’ roster – than the minimum rates under the Award. The Agreement was ultimately voted up by 80% of valid votes cast.

[25] The CFMEU, a stranger to the bargaining process leading to the making of the Agreement, now seeks permission to argue before the Commission that the Agreement should not be approved.

[26] The Applicant submits the CFMEU has not established any right, interest or legitimate expectation concerning the Agreement’s approval, nor has it established a basis for the Commission to exercise its discretion under section 590 of the Act to grant leave for it to be heard. Leave should not be granted. Given the already significant period that has elapsed since the application was lodged, the Commission ought to deal with the application to conclusion without delay.

[27] The Agreement submitted for the Commission’s approval was one made between an employer and its employees. The CFMEU did not participate in the bargaining process. It concedes that it does not have any members employed by Macmahon who were involved in the making of the Agreement.

[28] The CFMEU appeals to its coverage of black coal mining work under its eligibility rules, its “long history representing the industrial interests of employees in the black coal mining industry” and the asserted likelihood that it will have members covered by the Agreement at some future point, its “detailed knowledge” of relevant Award provisions and enterprise agreements in the black coal mining industry and its role in the award modernisation and review processes for the Award. The Applicant submits these submissions were precisely the sorts of matters considered by in Collinsville to be an insufficient foundation for standing.

[29] The CFMEU next calls in aid the Commission’s residual discretion under section 590 to inform itself as it considers appropriate. Whilst Macmahon recognises the breadth of that discretion, it is not “untrammelled” rather, it should be exercised in a manner consistent with, firstly, the principles enunciated in Collinsville (that is, in a manner consistent with comity principles applicable in this Commission), and, secondly, with the Objects of Part 2-4 of the Act.

[30] As to the first, there are no unusual characteristics of this particular matter that would justify a departure from those principles. None of the cases to which the CFMEU refers establish the matters outlined above as determinative (or even relevant) in every case. That is unsurprising; such an approach would fetter the Commission’s broad discretion, and would amount to a wholesale subversion of the principles articulated in Annetts v McCann ((1990) 170 CLR 596) and Collinsville (allowing arguments concerning appearance soundly rejected in those cases to carry the day through a discretionary ‘back door’).

[31] The CFMEU points to the absence of a contradictor as a purportedly relevant distinguishing characteristic. Macmahon readily accepts that the absence of a contradictor may in certain cases warrant leave being granted. This, however, is not such a case. The CFMEU’s objections concern whether the Agreement satisfies the BOOT and complies with the NES. Those are matters which the Commission – assisted, as it is in matters such as these, by the Member Support Research Team – is plainly able to adequately address without granting leave to a third party intervenor. They are not matters which would be illuminated by cross-examination. In this respect, the present matter may be distinguished from the decisions to which the CFMEU refers (and other recent decisions of this Commission) in which compliance with sections 180(2), 180(5) and 188(c) – being matters concerning which cross-examination of the form F17 deponent would likely assist the Commission – were squarely in issue. No such matters are raised here, nor is there a proper basis to do so.

[32] At its heart, the CFMEU’s submission amounts to an assertion that the absence of a contradictor of itself warrants a grant of leave. This cannot be so. Were that the case, Parliament would have enacted provisions granting a right of intervention to unions with constitutional coverage of employees to be covered by the Agreement, or at the very least an obligation for employers to notify such unions of approval applications. The fact that Parliament did neither is instructive.

[33] What Parliament in fact enacted neatly illustrates the second matter which ought to guide the Commission’s exercise of discretion. Parliament enacted a regime dealing with the making and approval of enterprise agreements intended (amongst other objects) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, and to facilitate the making of enterprise agreements through ensuring that applications to the Commission for approval of enterprise agreements are dealt with without delay.

[34] To this end it is submitted, it is difficult to envisage how granting leave to a third party to appear and make submissions on matters which the Commission is compelled by the Act to consider for itself, and which the Commission is plainly able to adequately address on its own motion, could be said to be either “simple, flexible and fair”. Nor could such an approach be said to facilitate the making of the Agreement by ensuring that the approval application is dealt with without delay; any grant of leave will necessarily (and, for the reasons set out above, needlessly) prolong the approval process.

[35] The Applicant submits the CFMEU obliquely seeks to fortify its application with reference to its approval objections. This approach, of course, amounts to the CFMEU pulling its case up by its bootstraps, whilst the Commission may consider those objections after a grant of leave; they cannot be used in order to justify the grant of leave itself. Such an approach would entirely defeat the purpose of a leave requirement.

[36] The CFMEU has failed to articulate a proper basis for a discretionary grant of leave under section 590 of the Act. It should not be granted leave to be heard.

[37] Should the Commission be minded to grant leave to the CFMEU under section 590 then for all of the reasons set out above, the Commission ought grant leave only to the extent necessary to admit the CFMEU’s Outline of Issues filed 13 October 2017. It ought not grant leave to allow the CFMEU to cross-examine Macmahon witnesses, or to otherwise embark upon a wide-ranging exercise of objection-taking in order to stymie the prompt resolution of the Application. This reflects the course adopted by Harrison SDP at first instance in Re Collinsville Coal Operations Pty Ltd [[2014] FWCA 5705], which the Full Bench in Collinsville did not disturb.

Consideration

Section 590

[38] The relevant provision of the Act in this instance is section 590 which is set out below.

“590 Powers of the FWC to inform itself

(1) The FWC may, except as provided by this Act, inform itself in relation to any matter before it in such manner as it considers appropriate.

(2) Without limiting subsection (1), the FWC may inform itself in the following ways:

(a) by requiring a person to attend before the FWC;

(b) by inviting, subject to any terms and conditions determined by the FWC, oral or written submissions;

(c) by requiring a person to provide copies of documents or records, or to provide any other information to the FWC;

(d) by taking evidence under oath or affirmation in accordance with the regulations (if any);

(e) by requiring an FWC Member, a Full Bench or an Expert Panel to prepare a report;

(f) by conducting inquiries;

(g) by undertaking or commissioning research;

(h) by conducting a conference (see section 592);

(i) by holding a hearing (see section 593).”

[39] In making this Interim Decision I have had regard for the submissions of the parties including the Outline of Issues filed by the CFMEU which detail the concerns it has with the Agreement.

[40] It is common ground that the CFMEU was not a bargaining representative involved in the making of this Agreement and does not have any members who are employed by Macmahon who were involved in making the Agreement.

[41] In this instance the CFMEU recognises that it does not have a right to be heard in this application.

[42] What the CFMEU is seeking is that the Commission exercise the discretion it has under section 590 of the Act to allow it to be heard.

[43] In this case the vast majority of concerns raised by the CFMEU are whether the Agreement passes the BOOT (sections 186 (2)(d) and 193) and satisfies section 186 (2)(c) regarding the NES and have arisen from a desktop comparison the CFMEU has undertaken between the Agreement and the relevant modern award and the NES. Other concerns relate to the requirements of section 180 (5) and section 186 (2)(a). There is no suggestion the CFMEU wish to call their own witnesses whom have knowledge of particular facts relevant to the application.

[44] The benefit of a union acting as a contradictor will depend on the particular circumstances of the case and will involve in each case a judgement by the Commission. The absence of a contradictor would be the most common situation the Commission deals with in agreement approval applications and is no way abnormal or in any way inconsistent with the scheme of the Act. This absence of a contradictor of itself is not sufficient reason for the Commission to exercise its discretion and allow a union, that was a stranger to the bargaining process, to be heard over the objections of one or more of the parties to the Agreement.

[45] Considering the particular circumstances of this case there is no compelling reason why the Commission should exercise its discretion under section 590 of the Act in favour of allowing the CFMEU to be heard in this matter. Consequently the CFMEU will not be heard further in regard to this application to approve the Agreement.

COMMISSIONER

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