[2019] FWC 211
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.185—Enterprise agreement

Georgiou Group Pty Ltd
(AG2018/2415)

DEPUTY PRESIDENT BEAUMONT

PERTH, 22 JANUARY 2019

Application for approval of the Georgiou Group (Operations) Enterprise Agreement 2018.

Introduction and conclusion

[1] Georgiou Group Pty Ltd (Georgiou) made an application under s 185 of the Fair Work Act 2009 (Cth) (the Act) for the approval of an enterprise agreement (the Application) known as the Georgiou Group (Operations) Enterprise Agreement 2018 (the Operations Agreement). The Operations Agreement is a single-enterprise agreement.

[2] There is controversy over whether the Operations Agreement should be approved by the Fair Work Commission (the Commission). The Construction, Forestry, Maritime, Mining, and Energy Union (the CFMMEU), previously the Construction, Forestry, Mining, and Energy Union (the CFMEU), asserted that the Operations Agreement scope was uncertain, it had not been genuinely agreed, the vote was not a valid vote, certain clauses contravened the National Employment Standards (NES), it included an unlawful term, and it did not pass the better off overall test (BOOT). Georgiou of course, for the most part, disputed the assertions advanced.

[3] Having considered the evidence and submissions of both parties, I am not satisfied that Georgiou has complied with the requirements set out in s 180(2) and (5) of the Act, which deal with the pre-approval steps. Therefore, I have concluded that the CFMMEU was correct with its submission that the Operations Agreement has not been genuinely agreed. 1

[4] In short, it cannot be said that Georgiou took all reasonable steps to ensure that employees were given access to incorporated materials during the access period, or alternatively that the employees had access throughout the access period to a copy of such material. Further, while an employer must take all reasonable steps to ensure the terms of the agreement and their effect are explained in an appropriate manner taking into account the particular circumstances of the employees, this did not occur.

[5] Therefore the application to approve the Operations Agreement is dismissed. The reasons for the decision follow.

BACKGROUND

[6] Mr Waller, National Human Resources Manager (Mr Waller), gave evidence that Georgiou operates a diverse range of business ranging from fabrication of concrete products to the development of subdivisions, civil construction, and construction of multi-story buildings. 2

[7] The Georgiou workforce is said to compromise of approximately 600 employees. 3 Approximately, 163 employees work in the operations stream and 26 perform work in an area referred to as the trade and services stream.4

[8] Georgiou has two enterprise agreements currently covering this workforce. The first, the Georgiou Group (Operations) Enterprise Agreement 2014 (the Old Agreement) has a nominal expiry date of 27 May 2018, 5 and covers the operations stream. The second, the Georgiou Group (Trades & Services) Enterprise Agreement (the Old Trades & Services Agreement) covers the trades and services stream.6

[9] The Operations Agreement is purported to cover construction workers, concrete product workers, plant operators, and foreman and drainage employees. Whilst the Operations Agreement has national coverage there is an exception regarding those employees to whom the Victorian Sub-division & Minor Civil Works Agreement 2016 applies.

[10] It is apparent, given the classifications in the Classification Schedule to the Operations Agreement, that the Building and Construction General On-Site Award 2010 (Construction Award) and the Concrete Products Award 2010 (Concrete Products Award), were the relevant modern awards.

[11] Georgiou negotiated a replacement for the Old Trades & Services Agreement at the same time as the Operations Agreement. The content of the replacement agreements is similar, and the bargaining meetings held, in addition to meetings to explain the terms, notification of the vote, and access period, addressed both agreements. As there was no objection to hearing the Application with the application for the approval of the Georgiou Group (Trades & Services) Enterprise Agreement 20187 a hearing was conducted over the course of 1 – 2 November 2018 with regard to both applications.

Bargaining

[12] Mr Waller’s evidence was that in May 2017, Georgiou gave notice of its intention to make an enterprise agreement to replace the Old Agreement8 Mr Waller arranged for the Notice of Representational Rights (NERR) to be sent to the employees who were covered by the Old Agreement. The first NERR was issued on 31 May 2017, and the last was issued some 14 days later.9

[13] By September 2017, most of the employees had appointed a Georgiou workmate to serve as their bargaining representative. 10 Some employees, who were working on a project to construct a traffic bridge in Mandurah, appointed the CFMEU as their bargaining representative.11 Mr Waller explained that, notwithstanding the appointment of the CFMEU as a bargaining representative, he was nevertheless aware of the CFMEU’s interest in the making of the Operations Agreement because of the communications that had taken place with WA based officials of the CFMEU in July and August of 2017.12

[14] Mr Waller gave evidence that in January 2018, Georgiou provided the bargaining representatives with correspondence that outlined their responsibilities as bargaining representatives, set some dates for bargaining meetings, and requested an agenda for the upcoming discussions. 13

[15] In addition, Mr Waller instructed the solicitor acting on behalf of Georgiou to write to the CFMEU informing them to withdraw their interest in bargaining on the basis that the operations employee who had appointed the CFMEU had been dismissed before the first bargaining meeting. 14 Further, Mr Waller informed the CFMEU that other employees specifically engaged for the traffic bridge project had been dismissed; including the remaining six employees who had appointed the CFMEU has their bargaining representative. Mr Waller held the view that there was no scope for the CFMEU to be a bargaining representative by default.

[16] First round bargaining meetings were held with various groups of employees at various locations on 12, 14, 19, 20, 21, and 22 February 2018. 15 Second round of bargaining meetings were thereafter held on 19, 22, 23, 26, 27, and 28 March 2018.16

[17] Mr Waller gave evidence that the bargaining discussions came to a quick conclusion because Georgiou were building on an agreement that had already been working well enough for four years and there were only a few agenda items to be considered. 17 As a consequence, by the end of the second round bargaining discussions, Mr Waller believed that they had arrived at the text of the Operations Agreement.

[18] Between 23 April 2018 and 10 May 2018, Mr Ryan Islip, Senior HR Advisor, (Mr Islip) and Mr Waller ran a series of roadshows to explain the terms of the Operations Agreement to the employees. 18 The roadshows were scripted to ensure consistency in messaging.19 Mr Islip explained that the roadshows were meetings held with those employees whose employment would be covered by the Operations Agreement. Mr Islip explained to the employees what the Operations Agreement meant, and how it would work in practice. He reported that he answered any questions that the employees had about the Operations Agreement.20

[19] Mr Islip provided specific detail regarding the steps taken to explain the content of the Operations Agreement to the employees. By way of example, he referred to the roadshow held at Roy Hill on 1 May 2018. At the 1 May 2018 meeting, Mr Islip stated that once employees had arrived and signed an attendance sheet he began by reading the prepared roadshow script. 21 He asked whether any of the employees had difficulty understanding English, or if the group knew of anyone who had such difficulty.22 There was no indication that the group could not understand English.

[20] Once the literacy of the group had been established, Mr Islip explained that the employees had been provided with a business card that included a QR reader code for the Operations Agreement23 Mr Islip explained that he informed the group how the QR reader code worked and that it would enable the employees to access a copy of the Operations Agreement at a later date.24 Mr Islip confirmed that copies of the proposed Operations Agreement would be left in the lunch rooms.25

[21] The meeting room included a large projector screen. 26 Mr Islip gave evidence that on the screen he displayed a document that compared, side by side, and clause by clause, the Old Agreement with the Operations Agreement.27 He stepped the employees through each clause of the agreements and informed employees they were free to ask any questions.28 Further, Mr Islip gave evidence that he informed the group that he would return the following week to hold the same discussions with those employees who were on ‘R&R that morning’.29

[22] Mr Islip recalled that during discussions about the proposed Operations Agreement, he was asked by the employees about cashing out of annual leave and personal leave, the fitness for work section regarding drug and alcohol testing, and notice periods. 30 Further, questions were asked about the pay rates as there were no guaranteed pay increases in the proposed Operations Agreement.31 Mr Islip’s evidence was that he explained that the employees were paid more than the hourly minimum pay rates that were outlined in the proposed Operations Agreement and that such pay rates were designed to be attractive enough to entice employees to join Georgiou and stay employed for the project duration.32

[23] Mr Islip also explained that in the meeting he informed the employees that the vote would be conducted by a secret ballot, and when this would take place (21 May 2018). 33 One of the employees asked what would occur if they were away from site at the time of the vote.34 Mr Islip gave evidence that he responded by informing the employee that the company would ascertain who was away and would try and contact them via email or SMS to ensure everyone had the opportunity to vote.35

[24] In addition to the meeting held at Roy Hill on 1 May 2018, Mr Islip said he continued on with the roadshow visiting the Tianqi Lithium Processing Plant in Kwinana on 2 May 2018, and the Precast facilities in Hazelmere on 3 May 2018. 36 A follow up roadshow visit was conducted at Roy Hill on 8 May 2018,37 and Mr Islip said that he held a roadshow at Talison Lithium Hydroxide Project in Greenbushes on 9 May 2018. Essentially, the same process was undertaken as was described for the 1 May 2018 meeting.

[25] Whilst Mr Islip met with the employees at some of the Georgiou sites, Mr Waller similarly met with those employees working at other sites. On 23 April 2018, Mr Waller said that he conducted the roadshow for employees at Pimlico, a site in the Eastern States. 38 This was followed by the roadshow at the Telegraph Road Project in Queensland on 24 April 2018.39 Mr Waller gave evidence that he conducted further roadshows with the Georgiou Building Team (30 April 2018), Infrastructure Department (1 and, 4 May 2018), Plant and Infrastructure Department (2 May 2018), and employees working on the Northern Road Project in New South Wales (10 May 2018).

[26] As far as the content of the abovementioned meetings is concerned, Mr Waller’s evidence was for the most part on par with that provided by Mr Islip regarding the explanation of the terms of the proposed Agreement, and whether the employees were literate in English. 40

[27] The meeting held with employees at Pimlico on 23 April 2018 is significant in the context of this matter, and warrants the provision of further detail. Its significance will become apparent when consideration is given to whether Georgiou took all reasonable steps to ensure the terms of the Operations Agreement, and the effect of those terms, were explained to the employees.

[28] Before that meeting, Georgiou had distributed to the employees a document that was referred to as Update Number 4. 41 Mr Waller acknowledged that the meeting on 23 April 2018 was, in respect of the employees working a Pimlico, the only real opportunity for a one-on-one worker-management discussion.42 Mr Waller’s evidence was that he gave the employees information about the relationship between the Old Agreement and the proposed Operations Agreement.

[29] In cross examination Mr Waller was asked whether he recalled one of the employees asking how the rates of pay operated and how they related to the employees’ existing rates. Mr Waller responded:

Not entirely for that project. I do remember that that was one of the areas that was discussed when we were going across a few of those discussions around those rates of pay because we had moved away from the increase to the review period. 43

so in response to a question from an employee at the Pimlico meeting about wanting to know how the rates in the EBA related to the employee’s existing rates, do you recall yourself or someone else from management side saying words to the effect of, “We can’t tell you what your rates of pay will be because it’s an Australian wide EBA and it all depends upon where you’re working. In some places you’ll get less, in some places you’ll get more”?

In that discussion I didn’t have anyone – there was myself in that meeting, so I wouldn’t have said it that way. I believe – I cannot actually recall but I would’ve talked about this being a baseline agreement, and then we also then would be looking at the rates depending on the areas you’re located at, the market conditions, et cetera. But, like I said, I wouldn’t have said the words to what you’re saying, I believe. I can’t exactly recall, sorry. 44

[30] Attention was then turned, in Mr Waller’s cross examination, to the operation of cl 11 regarding the auditing of shift payments which requires a four-weekly audit of payments against the relevant award. When asked about the explanation provided between cl 11 and the Construction Award, Mr Waller stated:

Were copies of the award distributed?---No.

The Construction Award?---No.

Were employees provided with any guidance or mechanism as to how they could access the award?---No.

But the agreement actually incorporates the award by reference – I'll withdraw that.  I'll try to be a bit less technical.  The agreement is in some respects dependent upon the award, isn't it?  So the auditing shift payment section actually requires employees to understand both the award and the agreement, doesn't it not?---With that one there I went through the application of that clause, the meaning of the clause.

People basically just had to take your word for it that the auditing against – about what the award might've provided; yes?---I mean, I was there to answer any questions.  On that particular one there I didn't actually receive any questions about that.  I went – I was there for the majority of these roadshow – of all the roadshows besides my colleague, Mr Ryan Islip, and I didn't get questions on that part. 45

[31] Mr Waller gave evidence that in mid-May 2018 he was contacted by a CFMEU official, who identified he was from the New South Wales branch. 46 Mr Waller’s evidence was that while the CFMEU official sought a meeting to further negotiate the terms of the Operational Agreement, Mr Waller declined on the basis that he considered bargaining had finished. Further, he considered that the CFMEU NSW branch had not been nominated to represent anybody and the official had indicated that he wanted to negotiate a New South Wales specific enterprise agreement so that his members would not be bound by the proposed Operational Agreement.47

[32] Mr Dean Rielly, a union organiser employed by the New South Wales Branch of the Construction and General Division of CFMMEU (Mr Rielly), gave evidence that he had responsibility for the north coast of NSW. 48 As part of that region he was responsible for organising building and construction workers on the Pacific Complete Project (PCP).49

[33] In or around February 2018, Mr Rielly became aware that Georgiou was working on a portion of the PCP. Around late March 2018, Mr Rielly said that he had met with a member employed by Georgiou who discussed with him concerns about the ‘agreement’. 50 Mr Rielly understood from his discussion that the ‘agreement’ in question was the Operations Agreement.51 After the discussion with the member, Mr Rielly said that he was concerned employees had not been properly informed of their rights concerning the Operations Agreement.52 Further, as the default bargaining representative, he had not been made aware that bargaining had taken place.53

[34] Mr Rielly stated that on 16 May 2018 he had a telephone discussion with Mr Waller about obtaining a log of claims and was informed by Mr Waller that Georgiou appreciated the information he provided but were looking to go to the vote on the Operations Agreement54

[35] By letter dated 21 May 2018 (the Letter), Mr Ben Kruse, Legal Industrial Officer CFMEU NSW, and Counsel at the hearing (Mr Kruse), wrote to Mr Waller expressing concern that Georgiou had failed to comply with the mandatory pre-approval steps for the making of an agreement in accordance with s 180 of the Act.

[36] In particular, Mr Kruse referred in the Letter to the obligation to take all reasonable steps to explain the terms of the agreement and the effects of those terms to the employees. The Letter detailed that workers had asked management how the rates of pay in the proposed Operations Agreement related to the workers’ existing pay rates and what the percentage pay increases were. The Letter purported that management responded ‘we can’t tell you what your rates of pay will be because it is an Australia wide EBA and it all depends upon where you are working, some places you will get less, in some places you will get more’. 55 Nothing further appears to have amounted from the Letter.

[37] In Mr Waller’s witness statement, he refers to Georgiou having conducted a secret ballot from 21 May 2018 to 23 May 2018. 56 The result of the ballot was that 153 employees voted to approve the Operational Agreement and 28 voted not to approve it.57 Mr Rielly’s evidence was that on 21 May 2018, he received a telephone call from a member employed by Georgiou who informed him to the effect that the ballot was not secret. That same person informed Mr Rielly that employees were required to put their names on voting forms, which were subsequently scanned and sent to the WA office.58 In cross examination, Mr Waller conceded that the vote conduct at Pimlico was not conducted how Georgiou expected it to be conducted and site management were instructed to go and redo the vote.59

CFMMEU’S OBJECTION TO THE APPROVAL OF THE AGREEMENT

[38] By way of background, on 19 June 2018 the CFMMEU Construction & General Division, New South Wales Branch, wrote to the Commission requesting copies of the Form 16, Form 17, and any other documentation submitted by Georgiou in support of its Application.

[39] Subsequently, the CFMMEU wrote to the Commission advising that it had a right to be heard as it was a bargaining representative for the Operations Agreement. In the alternative the CFMMEU submitted that it had an interest in the matter and the Commission should exercise discretion under s 590 to hear from it.

[40] The CFMMEU objections can be summarised as follows: (a) the scope clause of the Operations Agreement is uncertain as to the scope of coverage; (b) the Operations Agreement has not been genuinely agreed to by the employees covered by it; (c) there are terms that contravene s 55 of the NES; (d) there is an unlawful term; (e) the Operations Agreement was not made by employees casting valid votes; and (f) the agreement does not pass the BOOT.

[41] For ease of reading, the issues will be partitioned in accordance with the CFMMEU’s objections. However, before proceeding with such consideration, attention is initially directed to the CFMMEU’s contention that it should be heard regarding the Application.

CFMMEU’s INTEREST IN THE MATTER

[42] The CFMMEU advanced it had an interest in the matter for two reasons. First, it had members who were employed by Georgiou at the relevant time, and second, it had an interest that justified the Commission exercising discretion under s 590 to hear from it.

Bargaining representative

[43] The CFMMEU asserted that it had members employed by Georgiou, but initially provided no evidence to support its contention. Having heard from both the parties it was agreed that both would provide lists of employees / members that were current at the relevant time. Having considered the material provided by both parties, and having no evidence before me to indicate that the employee revoked the status of the CFMMEU or appointed another as a bargaining representative, I am satisfied that by virtue of s 176(1)(b), the name of at least one employee was present on both the list of the CFMMEU and that provided by Georgiou.

[44] Therefore, I have found that the CFMMEU was a bargaining representative for the Operations Agreement. On that basis, I consider that it has a right to be heard in that capacity.

Interest – s 590

[45] However, if it were the case that I am wrong on this point, then I observe the Commission may choose, in a particular case, to hear from an employee organisation or any other person about the approval of an enterprise agreement even though the organisation or person may not otherwise have a right to be heard. 60 It is not the case that the Commission does this because it seeks to be advised in a legal capacity, as Mr Heathcote, Counsel for Georgiou (Mr Heathcote), advanced in his submissions. It is because the Commission’s deliberations may, at times, be assisted by a considered contribution from a contradictor. I have considered the submissions advanced by the CFMMEU that it has an interest in this matter regarding the Operations Agreement and have had regard to its request that the Commission should use its authority under s 590(1) to hear from it. I have also considered the submissions of Georgiou.

[46] The issues that the CFMMEU have raised relate not only to the content of the Operations Agreement but to whether Georgiou took all reasonable steps to ensure the terms of the Operations Agreement were explained consistent with the requirements in s 180(5). On that point I observe the correspondence between the CFMMEU and Georgiou’s representative, sent prior to the vote, regarding the effect of the proposed Operations Agreement on rates of pay. Further, there were issues raised concerning the validity of the voting process and a submission made that there were two votes undertaken at Pimlico after the CFMMEU was said to have made complaints to management.

[47] Having considered these matters, I consider that the proper course is for the Commission to properly inform itself by exercising discretion to hear from the CFMMEU regarding the Operations Agreement.

APPROVAL OF ENTERPRISE AGREEMENT

Uncertain scope

[48] The CFMMEU took issue with the second paragraph in cl 1 of the Operations Agreement, which stated:

This Agreement applies to Employees engaged in work described in the classifications in the Classification Schedule of this agreement, except that it does not apply to any Employee to whom the Victorian Sub-division & Minor Civil Works Agreement 2016 applies.

Georgiou may enter into site-specific agreements as required, and if a site specific agreement is made this agreement does not apply to any employees working on that site.

[49] According to the CFMMEU, cl 1 was contrary to s 58 of the Act. Specifically s 58(2), which prescribed when an enterprise agreement applied or did not apply to an employee. The CFMMEU considered s 58(2) set a general rule which provided that when more than one agreement could apply to an employee in relation to particular employment, the earlier in time agreement would apply to the employee in relation to the employment, unless and until that earlier agreement has passed its nominal expiry date. ‘Particular employment’ was said to refer to the employee’s job. 61

[50] It was the case then, said the CFMMEU, that given cl 1 was contrary to s 58, because it provides that the Operations Agreement will cease to apply to an employee if an existing or future site agreement is made and applies to the employee, the coverage of the Operations Agreement was inherently uncertain. The uncertainty in turn meant that the Operations Agreement was incapable of being approved, which in turn meant the Application should be dismissed.

[51] The CFMMEU was correct when it referred to s 58(2) establishing a ‘general rule’. However, that general rule is one that determines which of an earlier and later agreement, both of which are expressed to cover a particular employee, apply at each particular time. 62

[52] In the High Court decision in Aldi Foods Pty Limited v Shop, Distributive & Allied Employees Association (Aldi), 63 it was observed that the Act contemplated that while more than one agreement could cover employees at one particular time, only one could apply. Clearly then, a difference in meaning must exist between the two terms. The High Court clarified that the terms ‘coverage’ and ‘application’ were not synonymous, and drew upon the distinction that had been deliberately drawn by the inclusion of ss 52 and 53 in the Act.

[53] Section 52 prescribes when an enterprise agreement applies. It provides:

When an enterprise agreement applies to an employee, employer or organisation

(1) An enterprise agreement applies to an employee, employer or organisation if:

(a) the agreement is in operation; and

(b) the agreement covers the employee, employer or organisation; and

(c) no other provision of this Act provides, or has the effect, that the agreement does not apply to the employee, employer or organisation.

Enterprise agreements apply to employees in relation to particular employment

(2) A reference in this Act to an enterprise agreement applying to an employee is a reference to the agreement applying to the employee in relation to particular employment.

[54] Section 52(1)(b) makes it clear that a condition of an agreement applying to an employee or employer is that it must cover them.

[55] Section 53(1) addresses coverage by providing that an enterprise agreement covers an employee or employer, if the agreement is expressed to cover (however described) the employee or employer.

[56] As observed, s 58(1) specifies that only one enterprise agreement can apply to an employee at a particular time. The significance of an enterprise agreement applying to a person is set out in s 51, which states:

(1) [Enterprise agreement enforceable only if applicable]

An enterprise agreement does not impose obligations on a person, and a person does not contravene a term of an enterprise agreement, unless the agreement applies to the person.

(2) [Entitlements available only if applicable]

An enterprise agreement does not give a person an entitlement unless the agreement applies to the person.

[57] However, as has been acknowledged, there will be occasions where coverage is provided by two enterprise agreements. To determine the priority of the enterprise agreements, we arrive back at s 58(2), which conveniently sets out the general rule as follows:

If:

(a) an enterprise agreement (the earlier agreement) applies to an employee in relation to particular employment; and

(b) another enterprise agreement (the later agreement) that covers the employee in relation to the same employment comes into operation; and

(c) subsection (3) (which deals with a single-enterprise agreement replacing a multi-enterprise agreement) does not apply;

then:

(d) if the earlier agreement had not passed its nominal expiry date:

(i) the later agreement cannot apply to the employee in relation to that employment until the earlier agreement passes its nominal expiry date; and

(ii) the earlier agreement ceases to apply to the employee in relation to that employment when the earlier agreement passes its nominal expiry date, and can never so apply again; or

(e) if the earlier agreement has passed its nominal expiry date – the earlier agreement ceases to apply to the employee when the later agreement comes into operation, and can never so apply again.

[58] In the decision of CPB Contractors the clause under consideration provided that ‘a later enterprise agreement approved by the Commission will cover CPB and its employees at a particular project or site “to the exclusion of this Agreement”’. 64 With regard to the offending clause, the Full Bench observed that the provision was one premised on the proposition that such a project or site would be one that fell within the coverage of the ‘Agreement’ in question and hence the rationale for the inclusion of the provision was to resolve a situation of dual coverage.65 The Full Bench continued:

The final paragraph purports to exclude the coverage of the Agreement (being the earlier agreement) in favour of the later agreement for specific project or site. As earlier explained, an agreement cannot apply to employee unless it covers them. The intended effect of the final paragraph of clause 3.3 is therefore that the later agreement will apply and the Agreement will not at the specific project or site in question. While the Agreement remains within its nominal term, this is a result which is directly contrary to that mandated by s 58(2). 66

[59] It was found by the Full Bench that the offending clause was a mechanism for the making and approving of a new project or site/specific enterprise agreement as a means by which CPB and a subset of employees covered by the enterprise agreement in question may cease to be covered before its nominal expiry date. The Full Bench in CPB Contractors found that the offending clause was rendered unlawful by the operation of s 194(ba). That section states:

194 Meaning of unlawful term

A term of an enterprise agreement is an unlawful term if it is:

(ba) a term that provides a method by which an employee or employer may elect (unilaterally or otherwise) not to be covered by the agreement.

[60] As a consequence, the Full Bench concluded that there could not be the requisite satisfaction under s 186(4) because the enterprise agreement contained an unlawful term.

[61] Unlike the case of CPB Contractors where the offending clause provided that ‘a later enterprise agreement approved by the Commission will cover CPB and its employees at a particular project or site “to the exclusion of this Agreement”’, 67 the Operations Agreement speaks to it not applying if a site specific agreement is made.

[62] The first part of the second paragraph of cl 1 in the Operations Agreement is unproblematic; it simply states that Georgiou may enter site-specific agreements. However, the second part of the second paragraph uses language that indicates that an enterprise agreement not yet in contemplation, if made, would apply to the employees working on the site rather than the Operations Agreement. That is, an enterprise agreement made in the future would apply to the employees and employer notwithstanding that the clause makes no reference to the Operations Agreement first passing its nominal expiry date. The clause therefore operates in a manner that is contrary to the general rule set outlined in s 58(2)(d)(i).

[63] While in CPB Contractors the Full Bench was able to arrive at a position that the term was unlawful due to its inconsistency with s 194(ba), it is the case that such a conclusion cannot be so easily reached in this matter. Section 194(ba) speaks directly to a term providing a method by which an employee or employer may elect, unilaterally or otherwise, not to be covered by the agreement. The Operations Agreement does not remove its coverage, but for a set of employees working on the relevant site, it removes its application. In short, it includes a means by which an employee or employer may elect not to have the Operations Agreement apply.

[64] Aldi informed us that the terms ‘cover’ and ‘apply’ were not synonymous. And yet, the mischief that the insertion of s 194(ba) sought to address in 2012, appears to have been frustrated by the use of the phrase ‘does not apply’ rather than ‘not be covered’.

[65] By way of reference, s 194(ba) was inserted into the Act to provide that a term of an enterprise agreement that would enable an employee or an employer to ‘opt out’ of coverage of the agreement is an unlawful term. 68 The amendment responded to the recommendation made by the three member panel who had reviewed the Act to assess its operation in light of its objects.69 Recommendation 23 provided that the Act be amended to prohibit enterprise agreement clauses which permitted employees to opt out of the agreement. Various reasons were cited why ‘opting out’ clauses were a cause for concern, including the potential for new and existing employees to feel pressured to opt out of such agreements, thereby relinquishing legitimate rights and entitlements.

[66] Of course, it is the case that if coverage is excluded then it necessarily follows that the enterprise agreement cannot apply to the employee or employer by operation of s 52. The consequence being that it is the application of that enterprise agreement to the employee that entitles that employee to the benefits provided by it. 70 It has been previously said that where one interpretation will result in injustice and another avoid it, the latter is to be preferred.71 Interpretation by reference to the consequences of adopting a particular construction is an incident of the purposive approach to interpretation.72 

[67] I am satisfied that the intended effect of the second paragraph of cl 1 is that if a later agreement is made, namely a ‘site specific agreement’ then notwithstanding that the Operations Agreement applies to those employees, if they work on ‘that site’ the Operations Agreement will no longer apply. While the Operations Agreement remains within its nominal term, such a result is directly contrary to that mandated by s 58(2).

[68] The second paragraph of cl 1 is effectively a method by which the employees and employer can elect not to be covered by the Operations Agreement. While the clause specifically refers to ‘does not apply’, the effect on the employees would be the same were the clause to read ‘does not cover’. Therefore, I have found that the term is one that is unlawful as understood by reference to s 194(ba). As a consequence, as was the case in CPB Contractors, I am not satisfied that the Operations Agreement does not include any unlawful terms.

[69] However, if I am wrong in reaching the conclusion that the second paragraph of cl 1 is contrary to s 194(ba), it remains the case that I consider that the second paragraph in cl 1 offends s 58(2)(d)(ii). Accordingly, to the extent that a term in an enterprise agreement purports to determine the priority of enterprise agreements inconsistently with that general rule under the Act, then I consider that the term is of no legal effect.

[70] The fact that the requirement set out in s 186(4) cannot be satisfied because of the inclusion in the Operations Agreement of cl 1 the second paragraph, or because such paragraph is of no legal effect, does not necessitate the dismissal of the Application, so much is clear from CBP Contractors. If an undertaking were to be proffered, that undertaking to remove or treat of no effect the offending cl 1 second paragraph, would merely remove a method by which Georgiou and a subset of employees could at some future time opt out of the Operation Agreement’s application.

Genuinely agreed

[71] While I have found that cl 1 does not necessitate the dismissal of the Application, I am of the view nonetheless that the Application must be dismissed because the Operations Agreement has not been genuinely agreed. An enterprise agreement is genuinely agreed if the Commission is satisfied that, among other subsections, s 180(2) and 180(5) are complied with. I am not satisfied this is the case for the following reasons.

[72] Section 186 sets out the circumstances in which the Commission must approve an enterprise agreement. It is a long section but for the purpose of this part suffice to say the enterprise agreement must be genuinely agreed to by employees covered by the enterprise agreement, must not contravene s 55 of the Act regarding the National Employment Standards, and must pass the BOOT.

[73] ‘Genuinely agreed’ takes its meaning from s 188 of the Act. This section sets out the following:

188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by employees covered by the agreement if the FWC is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);

(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

[74] The term is expressed in a way that requires the Commission to satisfy itself of the employer’s compliance with particular bargaining provisions within the Act (ss 188(a) and (b)), and satisfaction of a more general criterion in s 188(c) of the Act. 73 It is not simply a general consideration whether in all of the circumstances of a particular enterprise agreement the Commission is satisfied that the enterprise agreement has been genuinely agreed to.74

[75] In the decision of Ostwald Bros Pty Ltd v Construction, Forestry, Mining and Energy Union (Ostwald), the Full Bench stated the specific requirements in s 188(a) of the Act were:

  Section 180(2) of the Act: The employer must take all reasonable steps to ensure that during the access period for the agreement, ‘the employees employed at the time who will be covered by the agreement are given a copy’ of the agreement and ‘any other material incorporated by reference in the agreement’ or ‘have access, throughout the access period for the agreement, to a copy of those materials’.

  Section 180(3) of the Act: ‘The employer must take all reasonable steps to notify the relevant employees’ of the ‘time and place at which the vote will occur’ and the voting method by the start of the access period for the agreement.

  Section 180(5) of the Act: The employer must take all reasonable steps to ensure that the terms of the agreement and their effect are explained to the relevant employees, ‘in an appropriate manner taking into account the particular circumstances and needs of the relevant employees’.

  Section 181(2) of the Act: the request by the employer of the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it ‘must not be made until at least 21 days after the day on which the last notice under subsection 173(1) (which deals with giving notice of employee representational rights) in relation to the agreement is given’. 75

[76] Section 188(b) refers to the requirement that the Commission must be satisfied that the enterprise agreement must be made in accordance with, in the circumstances of this case, s 182(1). This subsection provides that if the employees of the employer who will be covered by a proposed enterprise agreement have been asked to approve the enterprise agreement under s 181(1), the enterprise agreement is made when a majority of those employees who cast a valid vote approve the enterprise agreement.

[77] Section 188(c), although itself a broad discretionary consideration, is an additional matter about which the Commission needs to be satisfied, and relates to grounds other than those arising in relation to the ss 188(a) and (b) matters as indicated by the expression ‘other reasonable grounds’. 76

[78] In KCL Industries Pty Ltd (KCL) the Full Bench examined the requirement of ‘genuinely agreed’ in the context of s 188(c) of the Act. 77 It traced its origin, referred to the Explanatory Memorandum of the Fair Work Bill 2008, and traversed the analysis of s 188 in the decision of the Full Bench in Ostwald and by the Deputy President in Central Queensland Services Pty Ltd (Central Queensland).78 In short, the Full Bench in KCL agreed with, and adopted, the majority analysis in Ostwald, and the analysis of the Deputy President in Central Queensland. I intend to do the same.

[79] Of particular relevance to this matter are the decisions of the Federal Court in Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (Gordonstone), 79 and Grocon Pty Ltd Enterprise Agreement (Victoria) (Grocon);80 both of which are referred to in KCL.

[80] In Gordonstone, the Full Court considered the operation of s 170LT(6) of the Workplace Relations Act 1996 (Cth) (WR Act). This section provided that ‘a valid majority of persons employed at the time whose employment would be subject to the agreement must have genuinely made the agreement’. The Full Court considered the subsection against the backdrop of the principal object of the WR Act. That object was to provide a framework for cooperative workplace relations by, amongst other things, supporting fair and effective agreement making.

[81] The Full Court found that the subsection was plainly a sign or indication of the concern with the authenticity and, as it were, the moral authority of the certified agreement. While Gordonstone considered the term ‘must have genuinely made’, subsequent decisions of the Commission have continued to adopt its analysis when considering s 188(c) of the Act. The objects of Part 2-4 still speak of a fair framework albeit ‘simple’ and ‘flexible’ have been added to the mix, as has the end product of an enterprise agreement being that it delivers productivity benefits.

[82] Ross VP, as he then was, considered Gordonstone in Grocon and went on to quote the observations he had made in Re Toys “R” Us (Aust) Pty Ltd Enterprise Flexibility Agreement 199481 regarding an application to approve an enterprise flexibility agreement under a different statutory regime.82 Those observations were:

In my view the requirement that a majority of employees “genuinely agreed” to be bound by the agreement implies that the consent of the employees was informed and there was an absence of coercion.

[83] In Grocon, Ross VP drew upon the decision in Coles Supermarkets Australia Pty Ltd v Shop, Distributive and Allied Employees Association, where the Full Bench of the Australian Industrial Relations Commission said:

…The need to explain the terms of the agreement is both an explicit requirement of ss. 170LJ(3) and is implied in the concept of “genuine approval”. “Genuine” approval implies that the consent of the employees was informed, that they were advised of the consequences of giving their approval to the agreement. 83

[84] When determining whether or not there are other reasonable grounds for believing that the enterprise agreement has not been genuinely agreed to, consideration of the authenticity of the enterprise agreement, its soundness, 84 and whether the employees who will be covered by the enterprise agreement are informed of its terms so it can be said that their ‘consent’ is informed, are relevant considerations.

[85] The use of the word ‘genuinely’ in the phrase ‘genuinely agreed’ in ss 186(2)(a) and 188(c) of the Act, indicates that mere agreement will not suffice, and that consent of a higher quality is required. 85

[86] Paragraph 188(c) is cast in very broad terms. 86 It is intended to pick up anything not caught by paras (a) and (b).87 Thus, any circumstance which could logically bear on the question of whether the agreement of the employees was genuine would be relevant.88

Explanation of the effect of the terms of the enterprise agreement

[87] Section 188 of the Act provides that an enterprise agreement has been genuinely agreed to by the employees covered by the enterprise agreement if the Commission is satisfied that the employer has complied with requirements set out in that section, including those in s 180(5) of the Act.

[88] Further, s 180(1) of the Act requires that before an employer requests employees to approve an enterprise agreement by voting for it, the employer must comply with requirements including the requirement at s 180(5) that:

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.

[89] The issue at the heart of the requirement in s 180(5) of the Act is to ensure genuine and informed consent to the terms of the proposed enterprise agreement. 89

[90] Whether s 180(5) has been complied with involves an evaluative judgment. 90 This is because the Commission must assess whether ‘reasonable steps were taken by the employer’.91 Whatever steps may be necessary will depend upon the facts and circumstances of each particular case; but it has been found that those steps are not satisfied by a person reading – without explanation – the terms of an enterprise agreement to an employee.92

[91] In One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union (One Key), 93 Flick J found that ‘reasonable steps’ could include the identification of the particular award which covered the employees, with particular reference to those provisions in the award that varied from, or did not vary from, the terms of the proposed enterprise agreement. It is relevant to observe that Flick J was proffering suggestion on what steps could have been taken to constitute ‘all reasonable steps’ in the circumstances of that particular case, not attempting to create a prescriptive set of criteria.

[92] On appeal, the Full Court in One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union Court Decision (One Key Full Court Decision) found that a bare statement by an employer that an explanation had been given was an inadequate foundation upon which to reach a state of satisfaction for the purpose of s 180(5) of the Act. 94 The Full Court said that the relevant considerations, to which the Commission was bound to have regard, were the content of the explanation provided, and the terms in which it was conveyed.95 The Full Court went on to say:

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. 96

To construe that requirement as mandating an informed and genuine understanding of what is being approved is consistent with the text of the provision (as defined) and accords with its underlying purpose. 97

[93] The emphasis in the One Key Full Court Decision was on the employee’s understanding of the terms and conditions provided in the enterprise agreement and their effect. Regard therefore must be had to the content and terms of the explanation the employer provided to the employees before they cast their votes. In addition, in determining whether the employees had genuinely agreed to the enterprise agreement, the Commission must consider whether they were likely to have understood its terms and effect. 98

[94] The term ‘reasonable’ is usually considered within the context of ‘reasonable in all of the circumstances of the case’. The real question is to determine what circumstances are relevant. 99

Consideration

[95] It was evident through Mr Waller’s evidence that the Operations Agreement provided minimum hourly rates of pay, or, as was termed by Mr Waller, a ‘baseline agreement’. 100 This observation by Mr Waller accords with the cl 10 of the Operations Agreement which provides ‘Georgiou will pay each Employee a minimum of the Hourly Rates set out in the Pay Schedule’.

[96] As a ‘baseline agreement’, it can be concluded that the terms and conditions within the Operations Agreement set the minimum terms and conditions that would otherwise have been provided by the relevant modern award, or perhaps the NES. I have observed that given the classifications in the Classification Schedule to the Operations Agreement, the Construction Award and the Concrete Products Award, were the relevant modern awards.

[97] While the Operations Agreement in effect set the new ‘baseline’, it is not apparent that the employees were provided with any information on the differential between the rates of pay in the relevant modern awards and the Operations Agreement. Further, the employees were not provided with access to the relevant modern awards, whether via the provision of an email hyperlink, attachment or hard copy version.

[98] Clause 10 of the Operations Agreement placed an obligation upon Georgiou to review ‘the rates of pay whenever the Award rates are varied to ensure that Georgiou continues to pay employees at above the Award rates’. While the word ‘Award’ is capitalised it is not defined and therefore the particular modern award cannot be ascertained from the Operations Agreement.

[99] Similarly, at cl 11 reference is made to the ‘modern award’ in the context of Georgiou conducting ‘4-weekly audits of all payments to any Employee who undertakes shift work to confirm that it has paid the Employee at least 104% of the amount that he or she would have earned had the modern award that covers that work, applied’. It is not clear from the content of the Operations Agreement what the relevant modern award is, or what the rates of pay under that modern award are for shift work.

[100] Under the Operations Agreement, Trainee Employees are paid at ‘the rate set out in any award that, but for this Agreement, would have applied to that Employee’s employment’. Apart from the obvious issue of how such benefit renders the Trainee Employee better off overall, again the question looms how the employees knew what the rate of pay was set out in the modern award, and which modern award was relevant.

[101] When Mr Waller provided his evidence, he appeared to be quite candid when asked about the accessibility the employees had to the Construction Award 2010. Mr Waller conceded that copies of the award were not distributed and the employees. He further acknowledged that the employees were not provided with any guidance or mechanism as to how they could access the Construction Award.

[102] I observed that in One Key, ‘reasonable steps’ could include the identification of the particular modern award which covered the employees with particular reference to those provisions in the modern award that varied from, or did not vary from, the terms of the proposed enterprise agreement.

[103] An approach where comparisons are drawn with the relevant modern award will not always be necessary to conclude ‘all reasonable steps’ were taken to ensure the effect of the terms were explained to the therefore employees. What constitutes ‘reasonable steps’ may depend on the circumstances of the employees and whether they were likely to have understood the terms of the enterprise agreement and their effect, particularly with regard to their personal interests.

[104] There was no evidence before me to show that the employees had knowledge about the modern awards in question, nor that they were sufficiently positioned to ask questions about the terms of the proposed Operations Agreement and how they differed to those of modern awards. There was no mention made that comparisons had been drawn concerning the rates of pay in the Operations Agreement when compared to the relevant modern awards, and that this information had been imparted to the employees. Further, evidence concerning the explanations provided regarding audit and reimbursement in cl 11 were, in my view, deficient. In summary, there was no evidence to show that the employees were informed of the rates of pay they would otherwise receive under a modern award, or when working shift work, what 104% of the amount earned under the modern award actually amounted to in monetary terms. Therefore, in my view, it cannot be said that their consent was informed.

[105] There was evidence that the Letter provided to Georgiou had alerted it to concerns regarding the adequacy of the explanation provided to the employees about rates of pay. Mr Waller’s evidence was, that while he could not actually recall what was said, he ‘would’ve talked about this being a baseline agreement, and then we also then would be looking at the rates depending on the areas you’re located at, the market conditions, et cetera’. 101

[106] In circumstances where a ‘baseline agreement’ is proposed, it is entirely conceivable that all reasonable steps would include that the effect of the terms on the employees’ personal interests would be explained by reference and comparison to the instrument that otherwise would set the baseline. In this case that would be the two aforementioned modern awards. This is clearly more the case when the proposed Operations Agreement expressly references a ‘modern award’ or ‘Award’ and yet there is no evidence to show that the employees were provided with accessibility to the same or provided with an explanation about the terms and their effect in relation to what would otherwise be provided by the modern awards.

[107] I am not satisfied that in the circumstances of this case that the impact on the employees’ interests was clearly addressed by Georgiou’s explanations in its discussions with the employees. Mr Islip and Mr Waller went through the Operations Agreement adopting a line by line approach, which is acknowledged. I am of no doubt that they endeavoured to provide at least one opportunity of a face to face meeting with a group of employees who were geographically widespread. However, what constituted all reasonable steps in the circumstances of this matter where a ‘baseline agreement’ was proposed, and an award or awards were referenced within the same, was at the very least information on what the relevant modern awards were, and an explanation as to how the rates of pay compared to those baseline rates in the Operations Agreement, and explanation on the operation of cl 11 reconciliation and the rates of pay for Trainee Employees.

Access to materials

[108] Section 180(2)(a) requires an employer to take all reasonable steps during the access period to ensure that employees are given a copy of material incorporated by reference in the proposed agreement. In the alternative, the employer is required to ensure that the employees have access throughout the access period to a copy of those materials. 102

[109] Accessibility of legislation incorporated by reference into an agreement was considered in McDonald’s Australia Pty Ltd; Shop, Distributive and Allied Employees’ Association (McDonalds). 103 McDonalds was later considered in Construction, Forestry, Mining and Energy Union v Sparta Mining Services Pty Ltd (Sparta).104 In McDonalds, the Full Bench concluded that whilst long service leave legislation had been incorporated into the agreement by reference, the employer was not required to take any further steps to ensure employees had access to such legislation, as the laws of the land were available to Australian citizens. In Sparta, the Full Bench stated:

[22] We consider the above passage is to be read on the basis that the Full Bench took judicial notice of the fact that legislation, including South Australian legislation, is readily available to citizens in a number of ways (most notably on the internet), and therefore presumed for the purpose of s.180(2)(b) that it was accessible to employees during the access period. However it must be noted that the subsequent Full Bench decision in National Tertiary Education Industry Union v University of New South Wales left open the possibility that paragraph [43] of McDonalds above may not be universally applicable, but rather that “that there may be cases where the characteristics of the workplace and the composition of the workforce may require more than what that Full Bench indicated was adequate”. We further note that McDonalds did not explain how the mere availability of material in the public domain meant that there was no reasonable step at all which the employer could have taken to ensure access to a copy of the material. 105

[110] In short, it was not the case that Sparta overruled McDonalds, but the Full Bench found what constituted all reasonable steps under section 180(2) ‘will depend on the circumstances’. 106 In National Tertiary Education Industry Union v University of New South Wales the Full Bench stated:

We are not persuaded a sufficient argument has been made out to revisit the approach taken in McDonalds. We do acknowledge however that there may be cases where the characteristics of the workplace and the composition of the workforce may require more than what that Full Bench indicated was adequate. This is not such a case. 107

[111] In the decision of BGC Contracting Pty Ltd108 the Deputy President distinguished between the two limbs in s 180(2) on the following basis:

The difference between the two methods of complying with the preapproval step in s.180(2) is that the first is concerned with each employee having possession of a copy of an enterprise agreement and any incorporated material. The giving may occur at any time during the access period, although the reasonable steps directed to ensuring that relevant employees are “given” the materials may be taken both before and during the access period. The second is concerned with enabling each employee to have access to an enterprise agreement and any incorporated material. Access to an enterprise agreement and any incorporated material need not involve physical possession of the documents and so would encompass for example, an employer leaving copies of such documents in a staff room or other area where employees are able to gather and can review the documents. In these circumstances, the access must be arranged by the start of the access period and employees must have access to the documents throughout the period. It seems to follow that the reasonable steps directed to achieving the end in s.180(2)(b) must be taken before the access period begins. 109

[112] It is more likely than not that Georgiou discharged its obligation under s 180(2) vis--vis the Operations Agreement. Georgiou purported to give each relevant employee a copy of the Operations Agreement via use of a QR code (utilising scanning software on a phone to access the Operations Agreement) or website, and a copy was to be provided in crib rooms.

[113] However, while Counsel for the CFMMEU was hesitant to utilise the phrase that the Operations Agreement ‘incorporates the award by reference’, I consider that in light of clause 10.2, it does. Clause 10.2 states:

Trainee Employees

Georgiou will pay each Trainee Employee at the rate set out in any award that, but for this Agreement, would have applied to that Employee’s employment.

[114] While it is not the case that the Operations Agreement adopts express language stipulating that an award or awards are incorporated by reference into the Operations Agreement, the language in cl 10.2 imposes an obligation on Georgiou to pay each Trainee at the rate set out in any award that otherwise would have ‘applied to the Employee’s employment’. This provision is not advisory. That is, the clause does not simply advise the Trainee Employees the amount of their pay. Rather, the use of the word ‘will’ within the framework of the sentence sets out an obligation to an entitlement, and that entitlement is a particular rate of pay.

[115] Georgiou did not, during the access period, give employees a physical copy of ‘any award’ or for the matter the Construction Award or Concrete Products Award. Nor has Georgiou identified any step to provide access to such awards as set out in s 180(2)(b). As acknowledged by Mr Waller, the employees were not provided with any guidance or mechanism as to how they could access the awards.

[116] At least some of the employees in question were working at a remote location. Mr Waller’s evidence regarding the employees at Pimlico was:

Just taking the Pimlico workers, they are blue collar workers working on road gangs in fairly distant regional locations, aren't they? ---I think it's – from memory, it's a – yes, I think three-and-a-half hours out of Brisbane I do believe, when I went there. 110

[117] I consider that nothing much turns on whether an employee is a ‘blue collar’ or ‘white collar’ employee in the context of such consideration. I am unable to draw a distinction between a ‘blue collar’ and ‘white collar’ employee in respect of technological literacy in circumstances where there are no facts before me to suggest such distinction is warranted. Further, there was no evidence that justified a finding that Wi-Fi access was limited or internet services were otherwise inaccessible. When asked about access to the internet and access to the Operations Agreement, Mr Waller responded:

These are not office workers who would commonly have access to a computer and Wi-Fi and be able to sort of google their way through to finding the award, are they?---No.  I mean, I – we went through and used QR Readers and URLs and all that, and offered to give hard copies and everyone – we got very few people who actually asked for any information.  They were very – they were fine with using computers or iPhones or phones to actually get any – to get that information, so - - - 111

[118] However, while Mr Waller gave evidence that all were fine with using computers or iPhones or phones, he readily conceded that the employees were not invited or provided with guidance as to how to access the Construction Award or for that matter the Concrete Products Award112

[119] I appreciate that the terms of the Operations Agreement were landed relatively quickly, because, according to Mr Waller, Georgiou were building upon the Old Agreement that had been working well enough. 113 It was Mr Waller’s evidence that he referenced the Old Agreement because ‘a lot of our employees are long-term employees’.114 However, there was no evidence before me to shed light on whether all employees had longevity with the business.

[120] While I appreciate that modern awards are available in the public domain, it is the case that before accessing them a person must appreciate which particular modern award covers them. Unlike legislation that generally applies to all, a modern award is limited in its coverage. Both an employer and employee must appreciate whether they fall within remit of its coverage. Otherwise there is simply no utility in considering an award which has no coverage in such circumstances. There was no evidence before me that showed the employees were aware of the award that covered them or were provided with information on where to obtain such guidance, and where to access the award. In the circumstances of this matter this is particularly important in light of cl 10.2.

[121] I am not satisfied that Georgiou took all reasonable steps in accordance with s 180(2). It follows that I am not satisfied that the Operations Agreement has been genuinely agreed to by the employees covered by it. 115

Valid vote

[122] The CFMMEU submitted there were irregularities in the voting process at Pimlico such that there was reason for this Commission to enquire into the process to ascertain the extent to which the irregularities occurred elsewhere. In his evidence Mr Waller spoke to the irregularity that occurred expressing that the vote conducted at Pimlico was not how Georgiou expected it to be conducted and site management were instructed to go and redo the vote. 116 There was no evidence to suggest that the irregularity that had occurred eventuated elsewhere. In the circumstances, I do not consider that the vote undertaken for the Operations Agreement was invalid.

Contraventions of section 55

[123] Section 55 contains the interaction rules between the NES and a modern award or enterprise agreement, and relevantly provides that an enterprise agreement must not exclude the NES or any provision of the NES.

[124] Section 186(2)(c) relevantly provides one of the requirements which must be satisfied in order that an enterprise agreement may be approved; that the Commission be satisfied that the terms of the agreement do not contravene s 55. For the purpose of s 186(2)(c), a term or terms of an enterprise agreement will contravene s 55(1) if that term or those terms exclude the NES or a provision of the NES. If one or more terms of an enterprise agreement are ancillary or incidental to the operation of an entitlement under the NES or supplement the NES, such term or terms will contravene s 55(4) if the effect of that term or those terms is detrimental to an employee in any respect when compared to the NES. 117

[125] The CFMMEU contended that nine provisions of the Operations Agreement contravened s 55. I do not intend to traverse those provisions in detail given I have found that the Operations Agreement was not genuinely agreed. Nevertheless, I make the following observations.

Long service leave

[126] Clause 19 deals with long service leave. Whilst providing that employees are entitled to long service leave in accordance with the applicable legislation in the jurisdiction where the employee is employed, it excludes employees employed on a casual basis. I am satisfied that a draft undertaking would remedy this issue.

[127] The CFMMEU argued that under s 26(2)(g) long service leave was a non-excluded matter meaning that State laws dealing with long service leave would apply including to the extent that such laws dealt with the entitlement for casual employees. It followed, according to the CFMMEU that cl 19 sought to exclude the operation of State workplace laws and therefore was an objectionable term and unlawful. However, again I am satisfied that if an undertaking were proffered to remove or treat of no effect the offending part of cl 19, the issue would be addressed.

Annual leave

[128] Clause 16 addresses the provision of annual leave, and included within the clause is the ability for employees to cash out annual leave. However, unlike the NES there are no safeguards concerning the amount of leave that may be cashed out in a 12 month period, and there are issues regarding the absence of reference to a separate agreement as provided in the relevant award.

Personal leave

[129] Clause 17 stated that ‘personal leave entitlements will not apply to employees receiving weekly payments for a workers compensation claim’. The CFMMEU submitted that while the Act restricts the accrual and taking of personal leave benefits while receiving workers’ compensation, s 130(2) provides that an employee is not prevented from taking or accruing leave during a compensation period if the taking or accruing is permitted by compensation law.

[130] It is difficult to make sense of the submissions of the CFMMEU. On the one hand they speak of personal leave entitlements, and on the other, they quote a legislative provision, s 49 of the Workers Compensation Act 1987 (NSW) (WC Act), which is said to provide that compensation is payable even though a worker has received or is entitled to receive annual holiday pay.

[131] However, I am satisfied that cl 17 is contrary to s 50 of the WC Act and am appreciative that employees are entitled to both compensation and leave benefits provided that permission is given by the compensation law for dual receipt. 118 Were an appropriately worded undertaking proffered to address the issue, then the issue could be resolved.

Compassionate leave

[132] Clause 18.1 provides that Georgiou may require the employee to provide proof for compassionate leave to Georgiou’s satisfaction. The CFMMEU advanced this departed from the NES, which relevantly adopts a reasonable person test. I am satisfied that if an undertaking were proffered to the effect that Georgiou may require proof for the taking of compassionate leave, which would satisfy a reasonable person, then the issue would be rectified.

Parental leave and community service leave

[133] Contrary to the Act, cl 20 purports to exclude casual employees from accessing parental leave, and cl 21 similarly does the same with regard to community service leave. As has been identified with other clauses contravening the NES, the issues could be remedied with appropriately worded undertakings.

Public holiday, notification of absences, and abandonment

[134] There are again issues regarding cl 22 public holidays, cl 25 which details the process for the notification of absences, and cl 27 which addresses abandonment. The issues all concern contraventions of the NES, but again all could be remedied with an appropriately worded undertaking.

BOOT

[135] It is understood that for an enterprise agreement to be approved it must, in most circumstances, pass the BOOT. 119 This is one of those circumstances. The Commission is required to be satisfied, at the time at which the test is undertaken, that each award covered employee and each prospective award covered employee will be better off if the agreement applies to the employee rather than if the relevant modern award applies.120

[136] There were multiple issues identified by the Commission and in the submissions of the CFMMEU which suggested that the Operations Agreement had not passed the BOOT. However, given that I have found that the Operations Agreement has not been genuinely agreed, I do not intend to traverse these issues in detail. However, some of the pressing issues are briefly covered.

[137] Concerning the rates of pay, a Pay Schedule at Table 1 provided that the rates listed were ‘the minimum rate payable to an Employee…’. However, a note at the end of Table 1 stated that ‘the hourly rate stipulated above will be payment for all applicable allowances, penalties, overtime and disabilities associated with your work. The only exceptions are those allowances detailed in this Agreement’. The Operations Agreement provided shift and overtime penalties. It was therefore unclear which employees received such penalties given the rates in the Operations Agreement were all purpose. Further, if the rates were all purpose, as purported, then it was apparent that they were not, in all circumstances, high enough to compensate the employee.

[138] The issue concerning the pay rate of Trainee Employees has already been addressed. An undertaking was provided by Georgiou that Trainee Employees would not be employed to perform any work to which the Operations Agreement applied.

[139] The span of hours provision at cl 9.2 did not specify the days on which ordinary hours were to be worked, and cl 9.6 provided for a roster across Monday to Saturday. Clause 9.6 provided that site roster or distance work may include normal hours on a Sunday. With regard to rates of pay, the concern identified was that in the absence of the appropriate penalty for the work on the Saturday or Sunday, the employees may not be better off overall.

[140] Shift penalties for afternoon shifts and night shifts were set out in Table 2 of the Operations Agreement, but the hours when a night shift or afternoon shift commences or concludes were not provided. Further, the shift penalty of 120% appeared less than that provided in the relevant awards.

[141] I have not traversed all of the issues with the rates of pay. Notwithstanding, I observe that Georgiou provided eight draft undertakings to address the concerns raised. If it were the case that the Operations Agreement were to be approved, these draft undertaking would require additional finessing before being provided to bargaining representatives and then the Commission for further consideration.

[142] The benefits provided on redundancy are set out in cl 39 of the Operations Agreement. I note the submission of the CFMMEU concerning the difference between the redundancy entitlement which is provided for by the NES, and that which is provided by the Construction Award. The Operations Agreement provides the NES benefit.

[143] The Full Bench of the Commission in Construction, Forestry, Mining and Energy Union v Levent Painting Pty Ltd t/a Levent Altintas (Levent Painting) considered the redundancy scheme in the Construction Award when compared to the NES entitlement. 121 The agreement in question in Levent Painting preserved most of the entitlements arising under the industry specific scheme with the less beneficial component (NES) restricted in its application to those employees engaged for a specified period or for a specified task.122 The Full Bench accepted that there was a postulated detriment and when considered with other less beneficial terms, found that there were no compensating benefits to make good the shortfalls.123

[144] While Georgiou provided an undertaking concerning the redundancy clause, it addressed another issue regarding redeployment. It did not direct attention to the abovementioned shortfall.

Conclusion

[145] My concluding remarks were included in the introductory paragraphs.

Seal of Deputy President Beaumont of the Fair Work Commission

DEPUTY PRESIDENT

Appearances:

Mr S Heathcote for the Applicant

Mr B Kruse for the CFMMEU

Hearing details:

1 – 2 November 2018

Printed by authority of the Commonwealth Government Printer

<PR703836>

 1   Fair Work Act 2009 (Cth) ss 186(2)(a), 188(a)(i)

 2   Witness Statement of Damien Waller (Exhibit A1) (Waller Statement) [4].

 3   Ibid [5].

 4   Ibid.

 5   AG 2014/1008; [2014] FWCA 3494.

 6   AE408332

 7   AG2018/2416.

 8   Waller Statement [7].

 9   Submissions of the Applicant [3.1].

 10   Waller Statement [9], [17].

 11   Ibid [10].

 12   Ibid [11].

 13   Ibid [18].

 14   Ibid [19].

 15   Ibid [21].

 16   Ibid [22].

 17   Ibid [23].

 18   Ibid; Witness Statement of Ryan Islip (Exhibit A2) (Islip Statement) [8].

 19   Islip Statement [8].

 20   Ibid.

 21   Ibid [15].

 22   Ibid.

 23   Ibid [16].

 24   Ibid.

 25   Ibid.

 26   Ibid [17].

 27   Ibid.

 28   Ibid.

 29   Ibid [20].

 30   Ibid [27].

 31   Ibid [28].

 32   Ibid.

 33   Ibid [21].

 34   Ibid [24].

 35   Ibid.

 36   Ibid [36], [43].

 37   Ibid [58].

 38   Ibid [25].

 39   Ibid.

 40   Ibid [26] – [29].

 41   Transcript PN180.

 42   Ibid PN192.

 43   Ibid PN186.

 44   Ibid PN189.

 45   Ibid PN201 – 205.

 46   Waller Statement [30].

 47   Ibid.

 48   Witness Statement of Dean Rielly (Exhibit R1) (Rielly Statement).

 49   Ibid [2].

 50   Ibid [4].

 51   Ibid [5].

 52   Ibid.

 53   Ibid.

 54   Ibid [7].

 55   Exhibit R2.

 56   Waller Statement [31].

 57   Ibid [32].

 58   Ibid [8].

 59   Transcript PN346 – 347.

 60   Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Limited [2014] FWCFB 7940 [48], [75].

 61   Aldi Foods Pty Limited v Shot Distributive & Allied Employees Association [2017] HCA 53 [75].

 62   Construction, Forestry, Maritime, Mining and Energy Union v CPB Contractors Pty Limited [2018] FWCFB 5773 [15] (CPB Contractors).

 63   [2017] HCA 53.

 64   Construction, Forestry, Maritime, Mining and Energy Union v CPB Contractors Pty Limited [2018] FWCFB 5773 [16] (emphasis added).

 65   Ibid.

 66   Ibid (emphasis in original).

 67   Ibid (emphasis added).

 68   Explanatory Memorandum, Fair Work Amendment Bill 2012 (Cth) [140].

 69   Ron McCallum, Michael Moore, and John Edwards, ‘Towards more productive and equitable workplaces: an evaluation of the Fair Work legislation’ (Report, Fair Work Review, 15 June 2012), 161.

 70   Fair Work Act 2009 (Cth) s 51.

 71   Ms Delwyn Hewitt v Topero Nominees Pty Ltd T/A Michaels Camera Video Digital [2013] FWCFB 6321 [43].

 72   Turner v George Weston Foods Ltd Trading as Tip Top Bakeries [2007] NSWCA 67 [56] cited in Ms Delwyn Hewitt v Topero Nominees Pty Ltd T/A Michaels Camera Video Digital [2013] FWCFB 6321 [44].

 73   Ostwald Bros Pty Ltd v Construction, Forestry, Mining and Energy Union [2012] FWAFB 9512 [52].

 74   Ibid [78].

 75   Ibid [54].

 76   Fair Work Act 2009 (Cth) s 188(c).

 77   [2016] FWCFB 3048.

 78   [2015] FWC 1554.

 79   [1999] FCA 847.

 80   (2003) 127 IR 13.

 81   Print L9066.

 82   (2003) 127 IR 13.

 83   Print T2319; Ibid [20].

 84   See Central Queensland Services Pty Ltd T/A BHP Billiton Mitsubishi Alliance [2015] FWC 1554 [65]; Ostwald Bros Pty Ltd v CFMMEU [2012] FWAFB 9512 [154]; KCL Industries Pty Ltd [2016] FWCFB 3048 [29].

 85   One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 [141].

 86   Ibid [142].

 87   Ibid.

 88   Ibid.

 89   Coles Supermarkets Australia Pty Ltd v Shop, Distributive and Allied Employees Association Print T2319 [20].

 90   One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 [105].

 91   Ibid.

 92   Ibid [103].

 93   [2017] FCA 1266 [105].

 94   One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 [112].

 95   Ibid.

 96   Ibid [115].

 97   Ibid [156].

 98   Ibid [172].

 99   Opera House Investment Proprietary Limited v Devon Buildings Pty Ltd (1936) 55 CLR 111, 116.

 100   Transcript PN189.

 101   Ibid.

 102   Fair Work Act 2009 (Cth) s 180(2)(b).

 103   [2010] FWAFB 4602.

 104   [2016] FWCFB 7057.

 105   Sparta [2016] FWCFB 7057 [22]

 106   CFMEU v Landlease Engineering Pty Ltd [2017] FWCFB 4001.

 107   [2011] FWAFB 5163 [24].

 108   [2018] FWC 1466

 109   Ibid [40].

 110   Transcript PN206.

 111   Ibid PN208.

 112   Ibid PN212.

 113   Waller Statement [23].

 114   Transcript PN194.

 115   Fair Work Act 2009 (Cth) s 188(a)(i).

 116   Transcript PN346 – 347.

 117   CFMEU v CSRP Pty Ltd [2017] FWCFB 2101 [33].

 118   Anglicare v NSW Nurses and Midwives’ Association [2015] FCAFC 81 [64].

 119   Fair Work Act 2009 (Cth) ss 186(2)(d), 189.

 120   Ibid s 193.

 121   [2017] FWCFB 3911 [7].

 122   Ibid.

 123   Ibid.