[2018] FWCFB 2405
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.604 - Appeal of decisions

Thiess Pty Ltd
v
Construction, Forestry, Maritime, Mining and Energy Union
(C2017/1073)

DEPUTY PRESIDENT GOSTENCNIK
DEPUTY PRESIDENT CLANCY
COMMISSIONER LEE

MELBOURNE, 7 JUNE 2018

Appeal against decision [2017] FWC 718 of Commissioner Roe at Melbourne on 6 February 2017 in matter number AG2016/7396; whether group of employees covered by the Agreement fairly chosen; whether the Agreement was genuinely agreed to by relevant employees; appeal upheld; decision quashed; matter remitted to single member to determine outstanding issues raised by the application.

[1] Thiess Pty Ltd (Thiess) applied to the Fair Work Commission (Commission) for the approval of the MTP Enterprise Agreement 2016 (Agreement) on 29 November 2016. Commissioner Roe dismissed the application to approve the Agreement. The reasons for so doing are set out in his decision published on 6 February 2017 (Decision).1 By its notice of appeal lodged on 27 February 2017, Thiess sought permission to appeal and appealed the Decision. In our decision published on 23 May 20172 we, inter alia, granted Thiess permission to appeal and upheld its appeal. We did so on the basis that we had concluded that the Commissioner erred in his conclusion that the employees who voted to approve the Agreement were not covered by the Agreement with the consequence that the Commissioner was not satisfied that the employees genuinely agreed to the Agreement as required by s.186(2)(a). We did not think it necessary to decide the other grounds of appeal as we considered that the Commissioner had not finally decided those matters.

[2] The Construction, Forestry, Mining and Energy Union now known as the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU), applied for the relief in the nature of certiorari and mandamus under s.39B of the Judiciary Act 1903 (Cth), ss.562 and 563 of the Fair Work Act 2009 (Cth) (Act) and ss.21, 22 and 23 of the Federal Court Act 1976 (Cth) in relation to our decision. The Full Court of the Federal Court rejected that part of the CFMMEU’s application which sought to impugn our construction of the coverage provision of the Agreement. 3 However the Court concluded that we had erred in our reading of the Decision and that we should have, but did not, decide the other grounds of appeal raised by Thiess. In this respect the Full Court granted the relief sought by the CFMMEU.4

[3] The appeal has been remitted to us to determine the remaining appeal grounds. 5 The remaining grounds of appeal as disclosed in the notice of appeal are as follows:

[4] As should be evident from the above, grounds 2, 3 and 4 relate to the Commissioner’s consideration of whether the group of employees covered by the Agreement were fairly chosen (fairly chosen grounds), while grounds 5 and 6 relate to the Commissioner’s consideration of whether there were any other reasonable grounds for believing that the Agreement had not been genuinely agreed to by the employees (genuinely agreed grounds). It is convenient to deal with the appeal grounds collectively (save for ground 7) as they relate to the issues determined by the Commissioner.

The fairly chosen grounds

[5] Section 186(3) of the Act requires, as one of the matters about which the Commission must be satisfied, that the group of employees covered by the agreement was fairly chosen. Section 186(3A) provides that if the agreement does not cover all of the employees of the employer or employers covered by the agreement, the Commission must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

[6] The Commissioner correctly identified at [27] of the Decision that the Agreement did not cover all of the employees of the employer and as a consequence he must turn his consideration to whether the group is geographically, operationally or organisationally distinct in assessing whether the group was fairly chosen. At [28] of the Decision the Commissioner concluded that the group is not geographically distinct. In so doing, the Commissioner reasoned as follows:

[7] At [29] of the Decision the Commissioner sets out that he is satisfied that the work at or in connection with the Mount Pleasant Mine Project is organisationally distinct. However, the Commissioner continued as follows:

[8] At [30] of the Decision the Commissioner concluded the same reasons as that set out above, that the group was not operationally distinct. The Commissioner reasoned as follows:

[9] Next, the Commissioner considered whether there had been a manipulation in the Agreement making process in the sense discussed by Buchanan J in Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd (John Holland). 9 The Commissioner concluded that the selection of the group had been manipulated and it was not based on a clear or defensible business rationale and reasoned as follows:

[10] Section 186(3) and (3A) of the Act are concerned with the characteristic of the group of employees covered by the agreement, that is, the whole class of employees to whom the agreement might in the future apply rather than the group of employees which actually voted on whether to approve the agreement. 11

[11] In support of its fairly chosen grounds of appeal, Thiess contends that the Commissioner wrongly determined that the group of employees was not organisationally or operationally distinct, and without any apparent reasonable basis, ignored Thiess’ evidence to the contrary. Although the Commissioner recognised that work at or in connection with the Project is work that is organisationally distinct, Thiess contends that the Commissioner’s first error was in his conclusion that, effectively, the work of the employees who voted to approve the Agreement was not work that was in connection with the Project.

[12] Thiess points to material before the Commissioner 12 setting out the challenges it would face in repairing, bringing back to active service and modifying the equipment to meet Project standards (including safety and noise attenuation upgrades). Some of the equipment had not been used for up to four years, and did not meet the standards specific to the Project. It says that the employees who voted to approve the Agreement were effectively engaged to overcome these challenges and to place Thiess, in a cost-effective and competitive way, in a position to deliver the Project without, for example, needing to buy an entirely new fleet of equipment. It contends that the Commissioner was clearly in error in determining that the work carried out by the employees who voted to approve the Agreement was not operationally or organisationally distinct given its dedicated connection to the Project, which the Commissioner had accepted was operationally and organisationally distinct.

[13] Thiess contends that the Commissioner’s conclusions in relation to the issue of distinctiveness appear to have been wrongly influenced by his earlier conclusion that the employees who voted to approve the Agreement were not, or should not be, covered by the Agreement. In each case the Commissioner purported to decide that the employees were not operationally or organisationally distinct if the Agreement included a group of employees who performed maintenance work before a contract had been signed for the Project. Thiess contends that it is entirely apparent that the Commissioner has applied his erroneous reasoning about ‘preparatory or necessary work’ which is undertaken before a formal contract is signed, to the concept of whether the entire group identified in clause 3.1(b) of the Agreement was fairly chosen. As he earlier concluded, it is not the work itself that is the problem, it is the fact that it occurred prior to the signing of a contract for work, which signing would have remedied the coverage issue for employees doing the work of the three employees. It says that it follows that if a contract was signed for the Project, the inclusion of the employees in the Agreement would no longer be unfair.

[14] Thiess contends given our earlier conclusion as to the coverage of the Agreement, it must follow that the Commissioner’s finding in the first two sentences of [29] of the Decision, that he was satisfied that the work at or in connection with the Mount Pleasant Mine Project is organisationally distinct, must be taken to include the work being undertaken by the three employees. It contends that as we had earlier found error in the Commissioner’s conclusion on the coverage issue, the finding in the last sentence of [29] of the Decision is unsustainable. It says that once it is understood that the Project is constituted by Thiess so as to incorporate the preparatory work, and employees have been engaged in a mobilisation team specifically for that purpose, it is entirely fallacious and irrelevant to decide this matter on the basis that the work is "no different from other work which might be done to attract customers, seek contracts and maintain equipment. Thiess contends that as the Commissioner adopts the same reasoning at [30] of the Decision on the question of operational distinctiveness, the same error is made.

[15] Thiess maintains that the correct question the Commissioner should have addressed was, whether the work of the three employees formed part of a coherent project or work organisation set up by the employer, not whether the work was similar to, or the same as, the work which Thiess may have asked other hypothetical employees to do for a different purpose.

[16] As to the question of a business rationale for the inclusion of the employees who voted for the Agreement within the Agreement’s scope, Thiess says that the Commissioner’s conclusion that their inclusion had no apparent business rationale was wrong and was little more than an extension of the incorrect conclusion already made as to scope. Thiess contends that the Commissioner should have been satisfied that there was a clear ‘business rationale’ supporting the coverage provision, and wrongly allowed his own business judgement to call into question that of Thiess, a successful and significant operator in the industry. The Commissioner did so on the basis of wholly irrelevant and erroneous considerations, including:

(a) whether the employees would have been available to do the maintenance work in the absence of the Agreement;  13

(b) there was no uncertainty about the capacity of the employees to undertake the work in the absence of the Agreement; 14

(c) whether there was any demand or need to alter the conditions under which the work of the employees was performed (without having any evidence of their existing conditions); 15

(d) whether the work, the subject of the Agreement, was exclusively on equipment owned or controlled by Thiess prior to commencement of the Agreement; and

(e) allowing the coverage of employees prior to the signing of a contract to influence his judgement. 16

[17] Thiess submits that these considerations each look back at the circumstances of Thiess and the employees only prior to the commencement of the Agreement, a test not required by the Act. It says that the Commissioner failed to give consideration to the business rationale relating to the whole class of employees to which the Agreement might in the future apply. 17 Thiess submits that this is contrary to the Act and the authorities including John Holland18 which determined that, when considering the fairly chosen requirement in s.186(3), the group to be considered is the whole class of employees to which the agreement might in the future apply rather than the group of employees who actually voted on whether to make the agreement.

[18] Further, it says that in the absence of clear and compelling evidence, the Commissioner should not have made the finding at [32] that Thiess had effectively misconducted itself in relation to the making of the Agreement by ‘manipulation’ of the group of employees to be covered by the Agreement.19 It says that in doing so, the Commissioner completely ignores Thiess’ un-contradicted evidence as to its business rationale for scoping the Agreement as it did and appeared to be diverted from a correct analysis by the existence of the three employees in that group prior to the signing of a contract for the Project, but not afterwards. 20

[19] Thiess says that the Commissioner also relied on those irrelevant considerations in finding that “the selection of the group has been manipulated and it is not based on a clear or defensible business rationale.” 21 Thiess maintains that the Commissioner disregarded the authority in The Maritime Union of Australia v MMA Offshore Logistics Pty Ltd (MMA)22and says that there was no evidence to support a finding that Thiess had manipulated the agreement-making process.23 In addition, it says that the Commissioner failed to recognise the additional business rationale of having an in-term enterprise in place for Thiess as it means that Thiess is protected from protected industrial action, which was a relevant consideration set out in MMA.24

[20] The CFMMEU contends that the Commissioner’s conclusion that the group was not fairly chosen turns on two matters. First, the inclusion of the three maintenance employees meant that the group was not geographically, operationally or organisationally distinct. Secondly, that there was no clear or defensible business rationale for choosing the group. It says that both matters were relevant considerations under s.186(3). The former was a required consideration under s.186(3A). The CFMMEU submits Thiess’ contentions that the Commissioner’s findings in respect of operational, organisational and geographical distinctiveness must be erroneous as the Commissioner’s conclusions ‘appear’ to have been wrongly influenced by his earlier incorrect coverage conclusion, is wrong. This is so, according to the CFMMEU, because:

• first, the Commissioner expressly states that only if he was wrong on the issue of coverage then the question of “fairly chosen” arose; and

• secondly, when considering whether the group chosen was geographically, operationally or organisationally distinct, the Commissioner had regard to all of the employees covered by the Agreement. That is, the whole class of employees to whom the Agreement might in the future apply. The relevant question, which the Commissioner correctly answered, was whether that group (inclusive of the pre-mobilisation team and production and engineering employees), was geographically, organisationally or operationally distinct. In answering this question the Commissioner concluded that:

o the whole group was not geographically distinct because the three employees were not engaged at the mine site but rather they were engaged at the main workshop and at various sites, whereas the other employees would work at or adjacent to the mine;
o the work of the three employees was maintaining existing equipment in advance of the achievement of the contract which is the normal maintenance work of Thiess and so it was not organisationally distinct; and
o the scope is not operationally distinct as the maintenance work on equipment prior to the securing of the contract for work at the Mt Pleasant Mine, performed by the three employees, does not share the operational distinctiveness of those engaged in work necessary for and preparatory to work at the Project.

[21] As to the Commissioner’s conclusion that he was satisfied that the selection of the group had been manipulated and it was not based on a clear or defensible business rationale, the CFMMEU contends that this conclusion was reached on the basis that:

• the three employees in the pre-mobilisation team were existing employees of Thiess who would be available to do the maintenance work required whether or not there was an enterprise agreement;
• they were paid in excess of the Agreement, whilst engaged in normal maintenance work, not at or about a mine where employees duties are not directly connected to the day to day operations of a mine; and
• they were likely to be covered by a completely different award to those who will be covered by the Agreement should Thiess secure the contract, that is the Black Coal Mining Industry Award 2010 (Coal Award).

[22] Most recently in Aerocare Flight Support Pty Ltd t/a Aerocare Flight Support v Transport Workers' Union of Australia; Australian Municipal, Administrative, Clerical and Services Union 25 a Full Bench of the Commission summarised the principles that may be discerned from decided cases concerning ss.186(3) and (3A) and appeals against decisions concerning a member’s decision concerning these provisions.26 The summary bears repeating here.

[23] First, the expression “the group of employees covered by the agreement” in s.186(3) refers to the whole class of employees to whom the agreement might in future apply, not the group of employees who actually voted on whether to make the agreement. 27 Secondly, the references in ss.186(3) and (3A) to whether “the group of employees covered by the agreement was fairly chosen” are, in the case of an enterprise agreement that is not a greenfields agreement made with a group of employees, particularly a small group, references to a choice made by the employer.28

[24] Thirdly, a decision by a Commission member as to whether that member is satisfied that the group of employees covered by an agreement was “fairly chosen” involves a degree of subjectivity and the exercise of a very broad judgment or value judgment, and in a broad sense may be characterised as a discretionary decision. 29 Fourthly, in an appeal from a decision of that nature, it will be necessary for the appellant to demonstrate error in the decision-making process of the type identified in House v The King30 in order for a Full Bench to set aside the decision.31

[25] Fifthly, once it has been determined that an agreement does not cover all of the employees of the employer, it is necessary for the Commission to make a finding as to whether the group of employees who are covered is geographically, operationally or organisationally distinct, and then take that matter into account and give it due weight, having regard to all other factors. 32 Sixthly, if the group of employees covered by the agreement is geographically, operationally or organisationally distinct then that would be a factor telling in favour of a finding that the group of employees was fairly chosen, and conversely, if the group of employees covered by the agreement was not geographically, operationally or organisationally distinct then that would likely be a factor telling against a finding that the group was not fairly chosen.33

[26] Seventhly, while the question whether the group of employees covered is geographically, operationally or organisationally distinct must be evaluated and given due weight having regard to all other relevant considerations, that is not a determinative consideration, in that it is not necessary to make a finding that the group is geographically, operationally or organisationally distinct in order to be satisfied that it was fairly chosen. 34 Eighthly, the selection of the group of employees to be covered on some objective basis (as opposed to an arbitrary or subjective basis) is likely to favour a conclusion that the group was fairly chosen.35

[27] Ninthly, the considerations that are relevant in assessing whether the group of employees covered by the agreement was fairly chosen will vary from case to case, but the word “fairly” in s.186(3) suggests that the selection of the group covered was not arbitrary or discriminatory, so that for example selection based upon employee characteristics such as date of employment, age or gender would be likely to be unfair. 36 Tenthly, it is appropriate to have regard to the interests of the employer, such as enhancing productivity, and the interests of both the employees included in the agreement’s coverage and the employees excluded.37

[28] Lastly, guidance may be obtained as to how to interpret and apply the expression “organisationally distinct” in s.186(3A) from decisions concerning the use of the same expression in ss.237(3A) and 238(4A). Relevantly:

[29] It will be apparent from the above that for the Commission to reach a state of satisfaction in relation to an application for the approval of an enterprise agreement which does not cover all of the employer’s employees, as to whether the group of employees covered by the agreement was fairly chosen, it must take into account, whether the group is geographically, operationally or organisationally distinct. Distinctiveness is not absolute and can be a matter of degree. Distinctiveness on one or more of the bases identified is a factor usually telling in favour of a finding that the group is fairly chosen. Conversely, if the group of employees is not geographically, operationally or organisationally distinct, then that is a factor usually telling against a finding that the group was fairly chosen. Whether a group chosen is organisationally, operationally or geographically distinct is not decisive. Rather it is a matter to be given due weight having regard to all of the other circumstances. 42
[30] We deal firstly with the Commissioner’s conclusion in considering whether the group was fairly chosen, that the group of employees covered by the Agreement is not geographically, operationally or organisationally distinct. There is no real challenge to the Commissioner’s conclusion that the group was not geographically distinct. Ground 2 of the notice of appeal attacks the Commissioner’s conclusions as to organisational and operational distinctiveness of the group. It is accepted that the whole group was not geographically distinct because the three employees were not engaged at the Mt Pleasant Mine site but rather they were engaged at the main workshop and at various sites, where other employees not covered by the Agreement also worked, whereas the other employees would work at or adjacent to the Mine and we need not take that matter further. That leaves the challenge by Thiess to the Commissioner’s conclusions that the “group” chosen is not operationally nor organisationally distinct.

[31] To begin, we reject Thiess’ contention that the Commissioner’s conclusions in relation to the issue of organisational or operational distinctiveness appear to have been wrongly influenced by his earlier conclusion that the employees who voted to approve the Agreement were not, or should not be, covered by the Agreement. It appears to us clear on the face of the Decision that the Commissioner considered the questions of both organisational and operational distinctiveness upon the basis that the three employees who voted to approve the Agreement were covered by it. On this basis, the Commissioner concluded that inclusion in the scope of “work necessary for and preparatory to the Mount Pleasant Mine Project” 43 had the result that the scope was neither organisationally nor operationally distinct. This was because such work was not different from “other work which might be done to attract customers, seeking contracts and maintaining equipment,”44 that the Commissioner was not satisfied that “the work of the three employees in maintaining existing equipment in advance of the achievement of the contract is organisationally distinct from the normal maintenance work of Thiess”45 and that the work “is not organisationally the same as the work at or in connection with the Mount Pleasant mine Project”.46

[32] In QGC Pty Ltd v Australian Workers’ Union 47 a Full Bench of the Commission discussed the meaning of organisational and operational distinctiveness and observed:

[33] We consider that the converse must also apply. That is, merely because the work undertaken by some members of the group is not different from “other work which might be done to attract customers, seeking contracts and maintaining equipment” is not a sufficient basis to conclude that the “group” is not organisationally or operationally distinct. The point may be illustrated through a simple example. An employer may be conducting its business in the commercial building and civil construction sectors. It may for instance employ a number of engineers. Organisationally the employer conducts and organises the commercial building aspect of its business separately from the civil construction aspect of its business. It assigns some of its engineers to perform their work exclusively for civil construction projects while others are assigned to perform their work exclusively for commercial building projects undertaken by the employer. The work performed by engineers in both settings is not materially different yet there will be little doubt that one group of engineers is organisationally distinct from the other.

[34] In the instant case Thiess organised various parts of its enterprise by reference to a particular project, the Mt Pleasant Mine Project. This included the premobilisation team, of which the three employees were members. According to the material before the Commissioner it is clear that the organisation of aspects of its business in this way is not unusual. Mr Michael Moy for Thiess made the following submission:

[35] The submission above that it is not unusual for Thiess to organise work for a particular mine project and preparatory to a particular mine project does not appear to us from a review of the transcript of the hearing before the Commissioner to have been contradicted or challenged. Indeed in the submissions of the CFMMEU filed for the hearing, the CFMMEU does not make any submission that the group of employees covered was not geographically, operationally or organisationally distinct.  50At the hearing the CFMMEU made the following submission:

[36] This submission is comparing distinctiveness as between one part of the group covered by the Agreement with another part of that group. Section 186(3A) is concerned with whether the group covered by the Agreement is distinct in one of the identified senses from other employees or groups of employees who are not covered by the Agreement. This submission does not address the point advanced by Thiess as to the manner in which it organises work for project purposes.

[37] In this regard, the Commissioner’s conclusion that the work carried out by the three employees “is not organisationally the same as the work at or in connection with the Mount Pleasant Mine Project” appears to us to be contrary to that which was advanced by Thiess above and which, as we have already observed, was not contradicted. In any event, for the reasons stated in our earlier decision it is plainly the case that the work undertaken by the three employees was work “in connection with the Project, because that description and the way in which Thiess organised its projects is apt to include readying work or preparatory work to enable the commencement of the work at the Mount Pleasant Mine in the event of a successful tender.

[38] The Commissioner concluded that the work of the three employees in maintaining existing equipment in advance of the achievement of the contract is the normal maintenance work of Thiess and so it was not organisationally distinct. Whether the work was normal maintenance work in the context of the way in which Thiess organised its business is, we consider, beside the point. By focusing on the work performed by part of the group chosen and comparing that work to work performed by others elsewhere in Thiess’ organisation, the Commissioner misdirected himself and failed to look at the group as a whole and determine whether that group (of which the three employees were members) was organisationally or operationally distinct from other employees not covered by the Agreement. That required a consideration of the relevant distinctiveness of the group performing work at or in connection with the Mount Pleasant Mine Project, having regard to the un-contradicted submission advanced by Thiess as to its organisational treatment of projects, with other Thiess employees not covered by the Agreement. Further, it is not obvious to us on the face of the Decision that the Commissioner took that into account or that he considered but rejected that submission. It was a relevant consideration and one which the Decision does not disclose was taken into account. This is an error of the kind identified in House v The King. 52

[39] Once it is accepted that Thiess organises various parts of its mining business on a project basis, which includes preparatory work for or in anticipation of commencing work, and that it did so in relation to the Mount Pleasant Mine Project, it seems clear that by including the three employees in the group to be covered by the Agreement, the group was (and remained) organisationally distinct. The performance of so called normal maintenance work in relation to the Mount Pleasant Mine Project is nonetheless part of an integrated operation being the Mount Pleasant Mine project. In the context of the way in which Thiess organises parts of its mining business this necessarily includes the work associated with winning work, work undertaken in anticipation of winning work and work in readying or preparing for the commencement of work at Mount Pleasant Mine in the event that work for which a tender was submitted, is awarded. That is the Mount Pleasant Mine Project as an integrated organisational unit of Thiess involves work that is necessary to be undertaken in preparing Thiess to carry out works at the Mount Pleasant Mine as well as the carrying out of such works if it became the preferred contractor. One is aimed at achieving the other. The scope of the Agreement appears to us to be designed or described in a way that is consistent with the way in which Thiess organised parts of its mining business, relevantly the Mount Pleasant Mine Project. The Mount Pleasant Mine Project including preparatory work is organisationally distinct from other projects (and employees engaged in those projects) undertaken by Thiess. The coverage of the Agreement including the three employees corresponds with the way in which Thiess organises this part of its business. We consider that a group of employees falling within that coverage is organisationally distinct.

[40] We also consider the Commissioner erred in concluding that the scope is not operationally distinct as the maintenance work on equipment prior to the securing of the contract for work at the Mount Pleasant Mine, performed by the three employees, did not share the operational distinctiveness of those engaged in work necessary for and preparatory to work at the Mount Pleasant Mine Project. We consider that the Mount Pleasant Mine Project including work associated with winning the work, work undertaken in anticipation of winning the work and work in readying or preparing for the commencement of work at the Mount Pleasant Mine is productive activity which is operationally distinct from productive activities associated with other projects in which Thiess is involved. Once it is accepted that the work performed by the three employees was necessary preparatory work to ready Thiess to commence work at the Mount Pleasant Mine in the event that it was the successful tenderer, the work of the three employees was part of that productive activity. That was operationally distinct from work associated with other projects and was operationally the same as that of the mine.

[41] We turn next to the Commissioner’s conclusions that the selection of the group had been manipulated and was not based on a clear or defensible business rationale. As is evident from the earlier extracted passages of the Decision, these conclusions were reached on the basis that:

• the three employees in the pre-mobilisation team were existing employees of Thiess who would be available to do the maintenance work required whether or not there was an enterprise agreement;
• the three employees were paid in excess of the Agreement, whilst engaged in normal maintenance work, not at or about a mine where employees duties are not directly connected to the day to day operations of a mine; and
• the three employees were likely to be covered by a completely different award to those who will be covered by the Agreement should Thiess secure the contract, that is the Coal Award.

[42] We agree with Thiess’ contention that clear and compelling evidence should be identified to support a finding (or an inference) that an employer manipulated, or effectively misconducted itself in relation to the making of the Agreement by ‘manipulation’ of the group to be covered by the Agreement. Such a conclusion is a serious one. As is evident from the above, the Commissioner appears to have relied on the above matters to conclude that there was an absence of a clear or defensible business rationale for the group’s selection and thus, there has been a manipulation of the group.

[43] It is to be observed that merely because, at the time an agreement is negotiated and made, the employer only has a small number of employees with whom to negotiate, and the coverage of the resultant agreement encompasses a much wider range of employees, it does not follow that the process has been manipulated and the “fairly chosen” requirement has not been met. 53 The position might be different if it were additionally demonstrated that the bargaining and agreement process had been manipulated in the sense that there was no legitimate business rationale for the coverage of the relevant agreement and/or that the employees who made the agreement were not engaged to meet genuine work requirements but rather for the artificial and short-term purpose of negotiating and making an agreement which was disadvantageous to genuine future employees.54

[44] Before the Commissioner, the fact that Thiess organised various parts of its enterprise by reference to a particular project was not controverted nor contested. In the instant case, this included work necessary for and preparatory to work at the Mount Pleasant Mine Project. That Thiess was working towards preferred contractor status for the Mount Pleasant Mine Project was also not disputed. In order to be in the best position to secure and to deliver on the Project, Thiess undertook certain steps. It identified equipment at various of Thiess’ locations that would be necessary for the Project. Some of the equipment had been disused for long periods of up to four years. Some of the equipment was not equipped to mandatory specifications and other regulatory requirements to enable the equipment to be operated at the Mount Pleasant Mine.

[45] Some of the equipment had an unknown maintenance history and was in an unknown state of repair. Additional work requirements were also identified, including the timely formulation of site procedures such as safe operating procedures. For these reasons, Thiess determined that a pre-mobilisation team was required and one was formed. The three employees were assigned to the pre-mobilisation team. The pre-mobilisation team was engaged in preparatory activities for the Mount Pleasant Mine in anticipation of Thiess being awarded the contract. As part of the pre-mobilisation work the three employees received an induction which included learning about the Mount Pleasant Mine Project, the need for pre-mobilisation activities and their role in those activities. The employees also inspected and repaired equipment to ready the equipment, when required, for use at the Mount Pleasant Mine Project. They received on-the-job training on mobilising the heavy mining equipment which would be needed for the Mount Pleasant Mine. Some of these matters are noted by the Commissioner at [22] of the Decision, although there the Commissioner was considering whether the three employees fell within the Agreement’s coverage.

[46] It seems to us that the factors above provide the clear or defensible business rationale, the Commissioner concluded was absent.

[47] In addition, the Agreement itself provided for wage rates above those contained in the modern award which would otherwise cover future employees working at Mount Pleasant Mine and so it could not be said that the making the Agreement was disadvantageous to genuine future employees. This does not appear to be a matter that the Commissioner took into account in his assessment. He was in error not to do so. As Buchanan J noted in John Holland “[I]t was not irrelevant in that assessment to bear in mind . . . that the agreement provided benefits, not detriments, for those to whom it would apply”. 55

[48] As to the three matters the Commissioner raises at [34] of the Decision as illustrating the lack of business rationale for the scope of the Agreement, we do not consider having regard to the material discussed above that they are so illustrative. In the context of Thiess working towards winning the contract for the work at the Mount Pleasant Mine, there appears to us to be a great deal of business sense, including preparatory work in the Mount Pleasant Mine Project and in utilising existing qualified employees for the pre-mobilisation team to ready equipment which would be necessary for use at the Mine in the event that the contract was awarded to Thiess. That the work performed by the three employees during the pre-mobilisation phase might have been covered by a different modern award to that which would cover employees working at the Mine does not point to an absence of business rationale for the scope of the Agreement. There is nothing unusual in the scope of an enterprise agreement covering employees who fall within the coverage of a number of reference instruments.

[49] Thiess also contends that the Commissioner failed to recognise the additional business rationale of having an in-term enterprise agreement in place for Thiess as it means that Thiess is protected from protected industrial action. It says that this is attractive to Thiess and its clients alike.

[50] In MMA, 56 a Full Bench of the Commission observed:

“In relation to appeal grounds 2(b) and (c), we have earlier set out paragraphs [43]-[50] of the MMAOL Decision, in which the Commissioner made findings concerning the business rationale for the choice of the coverage of the MMAOL Agreement. No appealable error in those findings has been demonstrated, and we consider that they provided a proper basis for the Commissioner’s satisfaction that the coverage of the MMAOL Agreement was fairly chosen. That the business rationale included, among other things, the fact that MMAVO had been unable to reach an agreement with its employees does not compel the conclusion that the coverage of the MMAOL Agreement was not fairly chosen. In circumstances where clients would have a legitimate interest in engaging maritime logistics providers who were not at risk of being subject to protected industrial action, and where MMAVO’s inability to obtain a new enterprise agreement made it difficult for it to win and maintain contracts, we consider a choice by MMAOL to have an agreement which covered maritime logistics work was reasonable and fair. We would not infer from this that the purpose of MMAOL (or indeed of the MMA Group) was simply to avoid bargaining with the MUA, but rather to conclude an enterprise agreement on commercially appropriate terms.” 57

[51] The consideration postulated by Thiess is clearly relevant. The difficulty for Thiess on appeal is that there is no material below suggesting that there was a need or desire by Thiess to shield itself from protected industrial action or that there was such a requirement from the client in relation to the Mount Pleasant mine Project. Much less was there any material before the Commissioner that these considerations were part of its business rationale for selecting the group nor was a submission to that effect made by Thiess. We therefore do not consider the Commissioner erred in failing to take the consideration into account.

[52] As we have already indicated, once it has been determined that an agreement does not cover all of the employees of the employer, it is necessary for the Commission to make a finding as to whether the group of employees who are covered is geographically, operationally or organisationally distinct, and then take that matter into account and give it due weight, having regard to all other factors.   Given our conclusion that the Commissioner erred in his assessment in this regard, we consider that the Commissioner attributed weight to this consideration which told against a conclusion that the group had been fairly chosen, whereas in our view, the consideration ought properly have weighed the other way. Thus, even if the Commissioner’s conclusion as to manipulation and an absence of business rationale were open to him (which for the reasons already stated we do not think is the case) the erroneous conclusion as to organisational and operational distinction by itself leads to a conclusion that it is unsafe to consider that the Commissioner’s conclusion that the group of employees was not fairly chosen was correct.

[53] On a rehearing, for the reasons stated, we consider that the group of employees covered by the Agreement is organisationally distinct and there are no material factors which would otherwise weigh against a conclusion that the group was fairly chosen. We consider, for the reasons stated, these factors point the opposite way. We reject the proposition that there was an absence of a business rationale for selecting the scope of the Agreement or that there has been a manipulation of the bargaining or agreement making process by Thiess.

The genuinely agreed grounds

[54] Section 186(2) relevantly provides:

[55] Section 188 of the Act sets out the circumstances in which employees have genuinely agreed to an agreement and provides:

[56] The Commissioner was satisfied as to the matters in ss.188(a) and (b). 58 As to s.188(c) the Commissioner concluded as follows:

[57] Thiess contends that there is no suggestion that the employees did not genuinely agree to the Agreement, and the Commissioner had no grounds on which to reach his conclusion that the Agreement was not genuinely agreed to by the employees. It contends that the Decision at [37] to [39] is wrong, insofar as the Commissioner determined that the Agreement was not genuinely agreed to by the only employees who by law were entitled to agree to it in circumstances where:

[58] Further, it says that the Commissioner gave no weight to the fact that the employees would in fact enjoy these benefits over and above their basic Award entitlements. Thiess contends that the Commissioner denied it procedural fairness by failing to afford it an opportunity to make submissions on, and tender evidence in respect of, the long term contractual work arrangements for the employees in the event of the contract being secured, if that consideration was to influence his Decision. 60

[59] Thiess contends that the Commissioner’s conclusions at [38] of the Decision are in direct opposition to the authority of John Holland and the conclusion at [39] of the Decision was therefore erroneous. 61

[60] Further, Thiess contends that the Commissioner’s conclusion at [40] of the Decision that the scope of the Agreement was ‘manipulated’ and that there was a lack of genuine agreement is made only on the basis of inferences and supposition and a misapplication of John Holland. It contends that the conclusion is not supported by the evidence and is contrary to evidence led by Thiess. Further, it maintains that where misconduct of this kind is alleged, cogent evidence is ordinarily required to justify the contention. 62

[61] Thiess contends that by parity of reasoning with ALDI Foods Pty Ltd v Shop, Distributive and Allied Employees Association 63 (ALDI), it is an error of principle and a misconstruction of the intended operation of the legislation to apply the "genuinely agreed" provisions in section ss.186(2)(a) and 188(c) more widely than is intended by Parliament, and to thereby effectively limit the intended operation of the Act in a manner analogous to the error identified by the High Court as being committed by the Full Court.64

[62] Thiess says that ALDI confirms the approach of the Full Court in John Holland that the making of an agreement between an employer and a small number of employees, which will later cover a much larger group of future employees, is "uncontroversial" and is clearly contemplated and permitted by the Act. 65 It says that an agreement made in this way will inevitably involve only a small group of employees comprising the seed workforce then employed, who are not representative of the wider workforce to be engaged in the future. As such an agreement is expressly permitted to be made in this way, and can only be made with the employees actually engaged at the time, it is an error of principle based upon a misunderstanding of the scheme of the Act to apply the "genuinely agreed" provisions in such a way that this ordinary fact provides a basis for a finding of manipulation or lack of genuine agreement.66

[63] Thiess says that ALDI now makes it clear that, in a case where (as here):

• there presently exists only a small start-up workforce for a larger planned but contingent project; and

• there is no valid suggestion of artifice or concoction in the creation of that group; and

• the start-up workforce are materially connected to the work of that project and are a part, or an intended part, of the project,

the Commission cannot "deny those employees the capacity to make an agreement capable of receiving approval by the mere unexplained and unjustified assertion that the composition of the start-up workforce has been manipulated and that their agreement is not genuine for that reason. 67

[64] Further, Thiess says that the conclusion that the Commissioner was in error in relation to coverage had the consequential effect that it has now been determined that the Project as described in the Agreement is an enterprise as defined, in which the three employees were engaged. 68 Thiess says that this finding reinforces the submissions already made that the conclusion that there was no business rationale for their inclusion in the single enterprise cannot be sustained. This conclusion is not supported by any evidence and is contrary to the accepted evidence. The reasoning of the Commissioner in this respect is opaque and the Decision is counter-intuitive.69

[65] The CFMMEU contends that the Commissioner did not find that the three employees had no capacity to make the Agreement by an “unexplained and unjustified” assertion that the Agreement was not genuinely agreed to, as submitted. The CFMMEU says that the Commissioner correctly concluded that the three employees had not genuinely agreed to the Agreement as 70:

• the employees were existing maintenance employees;

• the employees were paid more than the rates in the Agreement;

• the Agreement does not provide for entitlements over and above the Award, save for the rates of pay;

• the employees gained no benefit from voting on the Agreement;

• there was no certainty that Thiess would be successful in obtaining preferred contractor status and if successful, that the employees would work at the Mine;

• the employees had no “stake” or direct interest in the terms and conditions of the Agreement; and

• the potential future employees would operate machinery at the Mine which was estimated to be several hundred workers.

[66] Further, the CFMMEU says that the Commissioner’s conclusion that the employees did not genuinely agree to the Agreement were detailed and based upon evidence. The factors taken into account by the Commissioner were consistent with authority. 71

[67] The Full Bench in KCL Industries Pty Ltd 72(KCL Industries) considered similar matters including all relevant circumstances revealed by the material before the Commission and the agreement making process betokens a concern with the authenticity and moral authority of an agreement. That reasoning was followed by a Full Bench in CFMEU v Sparta73.74 The CFMMEU says that nothing in the reasoning in ALDI disturbs the approach taken by the Full Bench of the Commission in KCL Industries.75

[68] The CFMMEU says that in ALDI, the High Court expressly acknowledged that the question of coverage arises when the Commission asks whether the agreement has been genuinely agreed. The plurality relevantly stated at [111]:

“What s 186(2)(a) therefore requires, in the case of an agreement that is not a greenfields agreement, is satisfaction that the agreement has been genuinely agreed to by those employees who were employed at the time the agreement was made and who became covered by the agreement as a result of the agreement being made...” 76

[69] The CFMMEU relies on the decision in Broadspectrum Limited v United Voice. 77 In that case a Full Bench was required to determine an appeal from a finding that an agreement had not been genuinely agreed to. Similar to the facts of this matter, the Broadspectrum agreement was voted on by four employees who were engaged to undertake preparatory work relating to various tenders for correctional services work which the employer was pursuing. The work performed by the four employees was not the work performed by the classifications listed in the Agreement. In considering whether to approve the Agreement, Deputy President Kovacic concluded that he was not satisfied that the Agreement was genuinely agreed. On appeal, a Full Bench of the Commission accepted the findings of Deputy President Kovacic and refused permission to appeal.78

[70] The CFMMEU also relies on Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd 79(One Key Workforce (No 1)) which considered ss.186(5) and 188(c) in circumstances where a small selection of employees make an agreement.

[71] In scrutinising the category of employees who had expressed their agreement, Justice Flick took into account the positions occupied by each of the employees and concluded they were in stark contrast to those employees covered by at least some of the Awards listed in the coverage clause of the agreement. Flick J concluded that such an agreement would lack “authenticity” and “moral authority”. 80

[72] The CFMMEU says that the Commissioner in considering whether the three employees genuinely agreed to the Agreement, relevantly took into account the fact that they did not perform work covered by the Agreement and lacked any “stake” in the Agreement. The approach adopted by the Commissioner, of scrutinising the category of employees who had expressed their agreement, was correct and consistent with One Key Workforce (No 1).

[73] We consider that the Commissioner erred in his analysis in two respects. Before we deal with these, we briefly observe that although the CFMMEU contends that the Commissioner took into account that the three employees did not perform work covered by the Agreement, we find no reference to such a consideration in the Decision related to the Commissioner’s analysis of s.188(c). Indeed, the Commissioner’s observation at [37] that the three employees “were already paid more than the rates specified for tradespersons (level 3) in the Agreement”, suggests that the Commissioner formed the view (for the purposes of the analysis related to s.188(c)) that the work performed by the three employees was covered by a classification in the Agreement. We return then to that which we consider to be errors in the analysis.

[74] The Commissioner concluded that there was “no evidence that the employees gained any benefit from voting for the Agreement.” The conclusion was erroneous for three reasons. First, the very existence of an agreement, which was in term, would doubtless have placed Thiess in a strong position to obtain preferred contractor status for work at the Mount Pleasant Mine. Employees plainly have an interest in the success of its employer’s business. This is a benefit flowing to employees who voted for the Agreement although not immediately quantifiable.

[75] Secondly, the Agreement incorporated as a term of the Agreement the more generous redundancy provisions of the Coal Award compared to the redundancy provisions which were applicable under the Manufacturing and Associated Industries and Occupations Award 2010 (that is the NES entitlement) which would, as the Commissioner earlier noted, have applied to the three employees in their employment but for the Agreement. During the course of the hearing the following exchange between the Commissioner and the solicitor for Thiess is recorded in the transcript:

“THE COMMISSIONER:  What will happen to them?  What will happen to them if Thiess doesn't end up having the work at the mine site?  What would happen to the three of them if that happened?

MR MOY:  My client would be required by the terms of the Act to look at reasonable redeployment opportunities for those employees.  They are engaged to work at the Mount Pleasant mine project.  If, in fact, for instance, that contract goes to a different contractor and Thiess is no longer required to do any work for that project, then they will be - my client ought to engage or offer them engagement elsewhere in its operations as required by the Act.”  81

[76] It seems to us clearly to follow from the above that in the event that redeployment was not available, redundancy would likely follow. The Agreement would require Thiess to pay a quantifiably higher level of redundancy pay to the three employees than would be the case if the Agreement did not apply to their employment. It follows that there was a clear benefit (albeit a contingent one) to the employees concerned.

[77] Thirdly, it is plain as the Commissioner observed, that subject to winning the contract, when the three employees commenced work on site, the arrangement for working hours in the roster available at the site might result in some benefit to the three employees.

[78] As to the second matter, the Commissioner’s conclusion that there was “no certainty that if the contract was obtained that the three employees would work at the site” is contrary to the uncontested submission by the solicitor for Thiess which is recorded in the transcript as follows:

[79] It is plain from the above that the conclusion of the Commissioner was not only not open to him but was contrary to the expressed and unchallenged statement made on behalf of Thiess.

[80] Given the above, the Commissioner’s conclusion that “the three maintenance employees had no stake or direct interest in the terms and conditions of the majority of potential employees who would be covered by the Agreement should Thiess get the contract” respectfully cannot be sustained on the material before him. To the extent that under this head the Commissioner noted that “if it were necessary to determine the matter I would find that the selection of the three employees to participate in the ballot for the agreement was a manipulation and that the outcome was not a genuine agreement”, we would observe that we have already dealt with the manipulation point earlier but if there are other bases on which such a finding might have been made there is no indication on the face of the Decision as to those bases. The Commissioner’s conclusion therefore cannot be maintained as supporting a finding in respect of s.188(c) of the Act.

[81] We later note that there is an outstanding issue (related to s.188(c)) requiring determination but for the present purposes we conclude that none of the matters identified above support a conclusion that there are reasonable grounds for believing that the Agreement has not been genuinely agreed to by the employees.

Ground 7

[82] By ground 7, Thiess contends that the Commissioner misdirected himself as to the role of the Commission in relation to applications for approval of enterprise agreements because the Commission’s role is to facilitate, not control or regulate, bargaining under the Act. We do not accept that the Commissioner misdirected himself in the manner alleged. The Commissioner sought to apply the statutory considerations that he was required to apply in considering whether to approve the Agreement. That he may have erred in the consideration of some of the matters does not mean that the Commissioner misdirected himself as set out in ground seven. In any event, although it certainly is an object of the agreement making and approval provisions of the Act to provide a simple, flexible and fair framework that enables collective bargaining in good faith and to enable the Commission to facilitate good faith bargaining and the making of enterprise agreements, it nonetheless remains the Commission’s function to approve agreements which meet the statutory criteria and to not approve agreements which do not, subject to the role of undertakings. This ground of appeal fails.

Disposition

[83] Thiess has urged that if we uphold its appeal we should re-determine the matter for ourselves. This course not only encompasses a redetermination of those matters that were in contest but we need also to be satisfied as to each of the matters that must be taken into account set out in ss.186 and 187 of the Act. For the reasons which follow, we consider that it is more appropriate to remit the matter to a single member to determine. Four matters remain outstanding. Each matter concerns the satisfaction as to s.186(2)(a) and arise by reason of s.188(a)(i) and (c) of the Act. The first of these matters concerned is the notification of the time, place and method of voting.

[84] Section 180(3) provides as follows:

“(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:

                     (a)  the time and place at which the vote will occur;

                     (b)  the voting method that will be used.”

[85] The amended statutory declaration filed in support of the application for the approval of the Agreement provided in response to question 2.5 the following:

“At the meeting on 21 November 2016, Employees were notified the planned voting date would be Tuesday 29th November 2016 by secret ballot.

At the meeting on 21st November 2016 Employees were given a letter from the Project HR Representative outlining the voting process, date and the location at which the vote would take place.” 83

[86] It is plain on the face of the response that one is not able to discern that employees were advised of the time and place of voting. That is, neither the time at which the vote is to occur, nor the place at which it will occur is identified in the declaration. This is a matter that we raised at the conclusion of the appeal hearing. Since that time Thiess provided the following document:

“21 November 2016

Notice Regarding Ballot to Approve the MTP Enterprise Agreement 2016

Dave Singery

Dear Dave

You have today been issued with a copy of the MTP Enterprise Agreement 2016 which

you are required to be in receipt of for 7 days prior to employees taking a vote to approve the agreement.

Please note that prior to the ballot taking place, should you have any queries and or require

points of clarification regarding the document or the voting process, please see Steve Arthur

and he will arrange for a telephone conference with me to answer any of those queries and

or, you are welcome to call me on my mobile.

Voting to approve the MTP Enterprise Agreement 2016 will take place by secret ballot at the

Thiess Mt Thorley Workshop on Tuesday morning 29th November 2016.

Leanne Johnson our Thiess Regional HR Manager will conduct the ballot.

She will arrive at the Mt Thorley Workshop at approximately 8.00am and will make contact

with you to organise the vote.

Once the vote is completed she will count the votes and declare the result.

It is highly likely she will ask one of you to witness the counting.

Regards

Adrian McCowan”

[87] On the basis of the above we are satisfied as to Thiess’ compliance with s.180(3).

[88] The second matter concerns an argument raised at first instance but not determined by the Commissioner. At [36] of the decision the Commissioner said:

[89] This matter was not agitated on appeal as it was not decided by the Commissioner. Assuming the CFMMEU presses the argument, the issue needs to be resolved and it is appropriate that a single member deal with it.

[90] The third matter concerns the question whether all reasonable steps were taken by Thiess to explain the terms of the Agreement and the effect of those terms to relevant employees. Section 180(5) provides:

   “(5)  The employer must take all reasonable steps to ensure that:

(a) the terms of the agreement, and the effect of those terms, are

explained to the relevant employees; and

(b) the explanation is provided in an appropriate manner taking into

account the particular circumstances and needs of the relevant employees.”

[91] In the amended statutory declaration filed in support of the application for the approval of the Agreement the following information is provided:

“2.6 What steps were taken by the employer to explain the terms of the agreement, and the effect of those terms, to the relevant employees?

See section 180(5) of the Fair Work Act 2009.

At the meeting on 21st November 2016, the Project HR Representative discussed the terms and effect of clauses in the proposed agreement. The interaction of the Agreement and Award was discussed as were the main clauses of the Award, including annual leave, overtime, penalties, shift work, rostering, ordinary hours being 35 (not 38) per week, personal leave, the enhanced redundancy entitlements under the Award and that penalties were calculated on the Base Hourly Rates noted in the Agreement. The BOOT was also explained to the employees.

Employees were given every opportunity to ask questions and seek clarification.

Employees were also advised that should they have any further queries relating to the agreement or the application of the Black Coal Mining Industry Award to the Agreement, they should contact the HR representative prior to the vote taking place.

2.7 When you explained the terms of the agreement to the employees, what did you do to take into account the particular circumstances and needs of the relevant employees?

Examples of employees who have 'particular circumstances and needs' include employees from non-English speaking backgrounds, young employees, employees who don't have a bargaining representative, etc.

Given that the employees had no previous knowledge of the Black Coal Mining Industry Award, time was spent explaining how the Award specifically applied to the terms and conditions of their employment.”

[92] In One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union (One Key Workforce (No 2)) 85 a Full Court of the Federal Court made the following observations about the Commission’s function in considering under s.188(a)(i) whether it is satisfied that the employer has complied with s. 180(5):

“113 A consideration of the subject-matter, scope and purpose of the relevant provisions of the Fair Work Act indicates that the content of the explanation and the terms in which it was conveyed were relevant considerations to which the Commission was bound to have regard. The absence of that information meant that the Commission was not in a position to form the requisite state of satisfaction. Put differently, without knowing the content of the explanation, it was not open to the Commission to be satisfied that all reasonable steps had been taken to ensure that the terms and their effect had been explained to the employees who voted on the Agreement or that they had genuinely agreed to the Agreement.

114 The following considerations point inexorably to that conclusion.

115 The Commission was required to be satisfied that OKW had taken “all reasonable steps to ensure” that both the terms and the effect of the terms had been explained to the relevant employees as an element in the inquiry as to whether “genuine” agreement had been obtained from them. The agreed purpose of the obligation imposed on employers by s 180(5) is to enable the relevant employees to cast an informed vote: to know what it is they are being asked to agree to and to enable them to understand how wages and working conditions might be affected by voting in favour of the agreement.

116 In order for the employer to comply with the obligation it must take into account the particular circumstances and needs of those employees, including their cultural and linguistic backgrounds, their youth, and the absence of a bargaining representative. That is made explicit in s 180(6). How could the Commission decide whether the steps the employer had taken were “all reasonable steps” unless it knew what the employees had been told before they cast their votes? Without knowing the terms in which the explanation had been conveyed how could the Commission form an opinion on the sufficiency of the explanation, particularly having regard to the considerations mentioned in s 180(6)? Ultimately, how could the Commission decide that a genuine agreement had been reached without having evidence upon which it could answer both these questions?

117 As there was no evidence of these matters before the Commission, it necessarily follows that the Commission purported to be satisfied that OKW’s obligations under s 180(5) had been discharged without taking those matters into account. That was a jurisdictional error because the Commission did not have authority to make the decision unless its satisfaction had been informed by them. As is often the case, there are several ways of describing the error. It could be characterised as a misconception as to what the exercise of the statutory power entails or an error “as to an important attribute of the decision to be made”: Graham at [68]. Equally it could be seen as a misunderstanding on the part of the Commission of the nature of the opinion it was required to form: Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194 at [31] (Gleeson CJ, Gaudron and Hayne JJ). Had the Commissioner applied his mind to the question of what the putative explanation entailed, he would inevitably have inquired into its content and terms.” 86

[93] Whilst the information provided in the amended statutory declaration is more elaborate than the information that was found in the statutory declaration filed in support of the agreement the subject of proceedings in One Key Workforce No 2, it seems to us that the information does not disclose the content of the explanation (other than in a very general way) given to relevant employees. Thiess will have an opportunity, if it is able to do so, to supplement the information provided in the statutory declaration in proceedings before a single member.

[94] The fourth matter concerns the Full Court’s judgment in One Key Workforce No 2 insofar as it concerns s.188(c).

[95] As is clear from our reasons above, in considering whether there were any other reasonable grounds for concluding that the Agreement was not genuinely agreed to by the relevant employees for the purposes of s.188(c), the Commissioner erroneously concluded that there was no evidence that the employees gained any benefit in voting to approve the Agreement, and that there was no certainty, if Thiess obtained the contract, the three employees would commence work at the mine site. It is for these reasons that we have taken the view that his ultimate conclusion as to s.188(c) based on these erroneous findings cannot be maintained. The Full Court in One Key Workforce No 2 made a number of relevant observations about s.188(c) which may be summarised as follows:

[96] As to the Commissioner’s decision concerning the enterprise agreement in that case, the Full Court observed that it evinced jurisdictional error because:

[97] The CFMMEU filed a short note in respect of One Key Workforce No 2 but other than pointing to particular aspects of the judgment, made no particular submission about how these might impact on the facts the subject of this application to approve the Agreement. We would also observe that the CFMMEU did not make any significant submissions on s.188(c) in its outline of submissions 88 in the proceedings before the Commissioner or during the hearing before him.89

[98] Thiess also filed brief submissions on the import of One Key Workforce No 2. Given our conclusions as to the Commissioner’s erroneous findings, we consider that the more appropriate course is for the issue to be considered by a single member informed by our findings and any further submissions having regard to these findings.

[99] We would however make that which we consider to be the fairly obvious observation that there are a number of factual differences between the circumstances pertaining to the making of the Agreement and those which pertained to the agreement the subject of consideration in One Key Workforce No 2. Though each agreement was approved by three employees, that is where the factual similarities appear to end. There are only four classifications covered by the Agreement unlike the multiplicity of classifications in the agreement the subject of consideration in One Key Workforce No 2. It does not purport to cover work and classifications that would otherwise be covered by numerous awards covering a multiplicity of industries. The employees who voted to approve the Agreement had relevant experience in the maintenance of heavy mining equipment, which work was covered by the classifications in the Agreement.

[100] For the reasons given above order that:

DEPUTY PRESIDENT

Appearances:

Mr A Herbert, Counsel for Thiess Pty Ltd.

Mr A Slevin, Counsel for the Construction, Forestry, Maritime, Mining and Energy Union.

Hearing details:

2018.

7 March.

2017.

5 December, 2 May.

Brisbane video link to Melbourne.

Printed by authority of the Commonwealth Government Printer

<PR606676>

1 [2017] FWC 718

2 [2017] FWCFB 2459

 3   Construction, Forestry, Mining, and Energy Union v Thiess Pty Ltd [2017] FCAFC 179 at [19] - [29]

 4   Ibid at [30] – [37]

 5   By instrument signed by Acting President Hatcher dated 30 November 2017 pursuant to s.582 of the Act

 6   [2017] FWC 718 at [28]

 7   Ibid at [29]

 8   Ibid at [30]

 9   [2015] FCAFC 16 at [20] and [33]

10 [2017] FWC 718

 11   Construction, Forestry, Mining, and Energy Union v Thiess Pty Ltd [2017] FCAFC 179 at [34]-[41]

 12   AB113-AB114 at [14]

 13   [2017] FWC 718 at [32]

 14   Ibid

 15   Ibid

 16   Ibid at [35]

 17   Thiess Submissions dated 31 March 2017 at [57]

 18   [2015] FCAFC 16 at [34] to [36]

19 Thiess Submissions dated 31 March 2017 at [58]

 20   Ibid

 21   [2017] FWC 718 at [32]

 22   [2017] FWCFB 660 at [72]

 23   Thiess Submissions dated 31 March 2017 at [60] – [61]

 24   Ibid at [62]

 25   [2017] FWCFB 5826

 26   Ibid [26]-[27]

 27   Construction, Forestry, Mining, and Energy Union v John Holland Pty Ltd [2015] FCAFC 16, (2015) 228 FCR 297 at [34]-[41]

 28   Ibid at [28]-[32]

 29   Ibid at [60]-62]; Cimeco Pty Ltd v Construction, Forestry, Mining, and Energy Union [2012] FWAFB 2206, (2012) 219 IR 139 at [8]

 30   (1936) 55 CLR 499

 31   Cimeco Pty Ltd v Construction, Forestry, Mining, and Energy Union [2012] FWAFB 2206, (2012) 219 IR 139 at [8]

 32   Ibid at [10]

 33   Ibid at [19]

 34   Ibid at [15] and [20]; Australian Maritime Officers’ Union v Harbour City Ferries Pty Ltd [2016] FWCFB 1151 at [31]

 35   Cimeco Pty Ltd v Construction, Forestry, Mining, and Energy Union [2012] FWAFB 2206, (2012) 219 IR 139 at [16]

 36   Ibid at [21]

 37   Ibid at [21] - [22]; Construction, Forestry, Mining, and Energy Union v Resco Training and Labour Pty Ltd [2012] FWAFB 8461, (2012) 228 IR 5 at [34]

 38   QGC Pty Ltd v Australian Workers’ Union [2017] FWCFB 1165 at [44]

 39   United Firefighters’ Union v Metropolitan Fire & Emergency Services Board [2010] FWAFB 3009, (2010) 193 IR 293 at [60]

 40   QGC Pty Ltd v Australian Workers’ Union [2017] FWCFB 1165 at [44]-[45]

 41  Australian Workers’ Union v BP Refinery (Kwinana) Pty Ltd [2014] FWCFB 1476, 242 IR 238 at [15]; see also National Union of Workers v Cotton On Group Services Pty Ltd [2014] FWC 6601 at [15]-[16] (permission to appeal refused in [2014] FWCFB 8899) and ASU v Shine Lawyers Pty Ltd [2017] FWC 4158 at [68]-[71] as examples of where the employer’s organisational structure was used to determine organisational distinctiveness.

 42   See also QGC Pty Ltd v Australian Workers’ Union [2017] FWCFB 1165 at [42]; See also Aerocare Flight Support Pty Ltd t/a Aerocare Flight Support v Transport Workers’ Union of Australia [2018] FCAFC 74 at [12] in which the Full Court describes the guidance summarised in [28] above as persuasive.

 43   [2017] FWC 718 at [29] and at [30]

 44   Ibid at [29]

 45   Ibid, noting that for the same reasons the Commissioner concluded that the scope is not operationally distinct at [30]

 46   Ibid

 47   [2017] FWCFB 1165

 48   Ibid at [44]

 49   AB36, Transcript PN195

 50   AB85 – AB109; in particular see matters about which the CFMMEU wished to be heard set out at AB86 at [8] and a summary of the CFMMEU's contention as to the various provisions of ss.186 and 187 which on their submission are not satisfied at AB109 at [105]

 51   AB23-AB24; PN72-PN75

 52   (1936) 55 CLR 499

 53   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia Australian Manufacturing Workers' Union v Main People Pty Ltd [2015] FWCFB 4467 at [32]

 54   Maritime Union of Australia v MMA Offshore Logistics Pty Ltd [2017] FWCFB 660 at [72]

 55   [2015] FCAFC 16, (2015) 228 FCR 297 at [33]

 56   [2017] FWCFB 660

 57   Ibid at [82]

 58   [2017] FWC 718 at [14]

 59   Ibid at [37]-[40]

 60   Thiess’ Outline of Submissions dated 31 March 2017 at [66]

 61   Ibid at [67]

 62   Thiess relies on CEPU and AMWU v Main People Pty Ltd [2015] FWCFB 4467 at [33], CFMEU v Sparta Mining Services Pty Ltd [2016] FWCFB 7057 at 28 to 31 and CFMEU v John Holland [2015] FCAFC 16 at [33]

 63   [201] HCA 53

 64   Thiess Supplementary Submissions dated 24 January 2018 at [22]

 65   Ibid at [23]

 66   Ibid at [24]

 67   Ibid at [25]

 68   Ibid at [26]

 69   Ibid at [27]

 70   CFMMEU’s Submissions dated 21 February 2018 at [21]

 71   Ibid at [22]

 72   [2016] FWCFB 3048

 73   [2017] FWCFB 781

 74   CFMMEU’s Submissions dated 21 February 2018 at [23]

 75   Ibid at [24]

 76   [2017] HCA 53

 77   [2017] FWCFB 3202

 78   CFMMEU’s Submissions dated 21 February 2018 at [26]

 79   [2017] FCA 1266

 80   Ibid at [29]

 81   AB35, Transcript PN185 – PN186

 82   AB36, Transcript PN188

 83   AB143 (Amended F17 – Employer’s Statutory Declaration in support of an application for approval of an enterprise agreement)

 84   [2017] FWC 718 at [36]

 85   [2018] FCAFC 77

 86   Ibid at [113] – [117]

 87   Ibid at at [122] – [178]

 88   AB85 – AB109; the “genuinely agreed to” point appears to be confined to compliance with s.180(2), (3) and (5) and therefore s.188(a)(i) [See AB102 – AB103]; s.188(c) is mentioned only briefly, but directed to the coverage point [See AB90 – AB93]

 89   AB15 – AB53