DECISION

Fair Work Act 2009
s.615A(2) - Application for the President to direct a Full Bench to perform function

Auld and ors
v
Teekay Shipping (Australia) Pty Ltd
(U2019/2270 and ors)

Referral to a Full Bench - Fair Work Act 2009 (Cth) - ss 394, 615A – question to be determined by Full Bench

[1] Mr Auld and a number of other employees were dismissed by Teekay Shipping (Australia) Pty Limited (Respondent) and applied for an unfair dismissal remedy. The Respondent contends that the Applicants were not ‘unfairly dismissed’ because the termination of their employment was a case of ‘genuine redundancy.’

[2] Section 385 of the Fair Work Act 2009 (Cth) (the Act) provides, relevantly:

‘What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code : see section 388.

[3] The expression ‘genuine redundancy’ is defined in s.389, relevantly:

‘Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy …’ (emphasis added)

[4] The Commission must decide, relevantly, whether the Applicants’ dismissal was a case of genuine redundancy before considering the merits of the applications. 1 In determining this issue, the Commission is required to consider, among other requirements, whether or not the Respondent has complied with any consultation obligation as required by s.389(1)(b) of the Act.

[5] It is common ground that the Teekay Shipping (Australia) Pty Limited Seagoing Ratings Dry Cargo Enterprise Agreement 2015 (the Agreement) applied to the Applicants’ employment. The Agreement was approved by Deputy President Kovacic on 19 October 2017 2 (the Approval Decision). Clause 9 of the Agreement deals with consultation. The text of clause 9 is set out in Appendix 1 to this decision.

[6] Section 205 provides that an enterprise agreement must include a ‘consultation term’ which has the characteristics set out in ss.205(1) and (1A). Subsection 205(2) provides:

‘(2) If an enterprise agreement does not include a consultation term, or if the consultation term is an objectionable emergency management term, the model consultation term is taken to be a term of the agreement.’

[7] Section 201 of the Act provides for an approval decision of the Commission to note certain matters. Relevantly s.201 states:

Approval decision to note certain matters

Approval decision to note model terms included in an enterprise agreement

(1) If:

(a) the FWC approves an enterprise agreement; and

(b) either or both of the following apply:

(i) the model flexibility term is taken, under subsection 202(4), to be a term of the agreement;

(ii) the model consultation term is taken, under subsection 205(2), to be a term of the agreement;

the FWC must note in its decision to approve the agreement that those terms are so included in the agreement.

[8] In other words, if at the time of approving an enterprise agreement, the Commission considers that a relevant consultation clause does not comply with the requirements of s.205 and that s.205(2) applies, the Commission must note in its decision to approve the agreement that the model consultation term is taken, under subsection 205(2), to be a term of the agreement.

[9] The Approval Decision addressed a number of matters which had earlier been raised with the parties relating to the Agreement. In respect of the consultation term, the Approval Decision stated at [5]:

‘Pursuant to s.205(2) of the Act, the model consultation term prescribed by the Fair Work Regulations 2009 is taken to be a term of the Agreement.’

[10] As is apparent from the Approval Decision the Deputy President formed the view that clause 9 was not a ‘consultation term’ within the meaning of s.205 and considered, that pursuant to s 205(2), that the model consultation term be taken to be a term of the Agreement.

[11] It is common ground that the question to be determined in these proceedings is as follows:

‘Does the model consultation term, taken to be a term of the Teekay Shipping (Australia) Pty Limited Seagoing Ratings Dry Cargo Enterprise Agreement 2015, apply in substitution of, or in conjunction with, clause 9 of that agreement?’

[12] Submissions were filed in relation to the issue in contention 3. An oral hearing took place on 24 July 2019. The parties’ submission may be shortly summarised.

[13] The Applicants submit that:

(i) Section 205 operates in accordance with its terms to require enterprise agreements to have a consultation term that meets certain requirements. Should an agreement not include a term that meets all of those requirements then the model consultation clause becomes a term of the agreement. The section does not provide that the model consultation clause displaces any other term of the agreement.

(ii) The model consultation term at clause (8) itself contemplates that there may be other operative terms in an agreement that require consultation.

(iii) The legislative context also supports the contention that the model term does not displace other terms. Where the Act displaces agreed terms it does so expressly (ss55, 253 and 326).

[14] As to point (ii) it is convenient that we observe now that this argument is misplaced. The exclusionary provision in clause 8 of the model term is engaged when an agreement “provides” for a major change to production, program, organisation, structure or technology in relation to the employer’s enterprise. In other words, if an agreement provides for the introduction of a particular change (as compared to consultation about change), for example, the automation of particular work which is currently carried out by the employees covered by the agreement, the requirements to give notice of the change and to discuss the change with relevant employees set out in the model term do not apply. This is because notice of the change is in the agreement made by employees and discussion of the change will have taken place as part of the bargaining for the agreement. The exclusionary provision in the model consultation term does not assist in resolving the issue in this case.

[15] As to point (iii) above, the Applicants submit that the legislative context provides support for the conclusion that the Act does not operate so that the model consultation terms displace other terms in an Agreement that deal with consultation :

‘For the Act to operate that way it would mean that the clause being displaced would have no effect. However, there is no provision in the Act that states that those terms have no effect. This in in contrast with other provisions of the Act which state expressly that certain terms in enterprise agreements will have no effect. In particular:

(a) Section 56 which provides that a term of an Agreement is of no effect if it excludes the NES and so contravenes s55;

(b) Section 253 which provides that the following terms have no effect;

(i) a term that is not a term about a permitted matter,

(ii) an unlawful term, and

(iii) a designated outworker term; and

(c) Section 326 which provides that terms of enterprise agreements relating to deductions, or requiring employees to spend or pay amounts, have no effect.

There is no provision in the Act that provides that non-complying consultation terms are of no effect.’

[16] The Applicants also note that the issue in contention has not been directly considered by judicial decision or decisions of the Commission, but that the Full Bench observation in Construction, Forestry, Mining and Energy Union v St John of God Health Care (St John) 4 that the model term does not displace a term which included entitlements to severance pay suggest an approach that agreed terms continue to have force and are not displaced by the model term.

[17] The Respondent submits that:

(i) The only applicable consultation term contained within the Agreement is the model consultation term prescribed by the Fair Work Regulations 2009.

(ii) Accordingly, the model consultation term is the applicable term for the purposes of determining whether or not the Respondent has complied with the obligation under s.389(1)(b) of the Act.

(iii) On the Commission determining that clause 9, Notification and Consultation about Change, of the Agreement was non-compliant with s.205 of the Act and instead approving the Agreement with the model consultation term as term of the Agreement, clause 9 has no application.

[18] The Respondent advances four points in support of its contention that the model consultation term is the relevant term for the purposes of s.389(1)(b) of the Act and that clause 9 does not have any application:

1. The statutory framework relating to the approval of enterprise agreements supports that, if a proposed consultation term does not comply with s.205 of the Act, then the model consultation term provides the relevant obligations relating to consultation, see: Hanson Construction Materials Pty Ltd and Others 5 (Hanson).

2. Hanson has been referred to and applied in subsequent decisions of the Commission. 6

3. If the approach to construction urged by the Applicants is accepted, it has a number of significant implications in relation to the operation of enterprise agreements generally, namely, the model consultation would not be the only source of the consultation obligations. There would be two separate clauses which contain the consultation obligations. The parties would instead be left to debate the precise consultation obligations which would apply in circumstances where the clauses overlap and, in part, are inconsistent or provide for different steps to be undertaken. Such a position is highly undesirable given the uncertainty which it creates and the consequent exposure of the parties to allegations of breaches and the imposition of pecuniary penalties. Further, such an approach is said to be ‘directly contrary to the scheme established by the Act for the operation of agreements and inclusion of certain mandatory terms.’

4. There is a need for certainty and clarity in the obligations which apply, particularly in relation to the mandatory consultation obligations. In the context of imposing pecuniary penalties, the courts have noted the seriousness of certain breaches of enterprise agreements see Australian Building and Construction Commissioner v Huddy (No 2) [2017] FCA 1088 and a number of authorities indicate that contraventions of industrial laws are to be regarded more seriously than may have been the case generally in the past: see Finance Sector Union v Commonwealth Bank of Australia [2005] FCA 1847, (2005) 224 ALR 467 at [72]; Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union [2008] FCAFC 170, (2008) 171 FCR 357 at [61]-[62]. More generally, in the context of interpreting the terms of an enterprise agreements, courts have acknowledged the importance of adopting an approach to interpreting instruments which avoids uncertainty and the possibility of alternate understandings given that parties are exposed to pecuniary penalties. 7

[19] In reply to the submission by the Applicants that s.205 does not say anything ‘about the model clause displacing other terms in the agreement’ the Respondent argues that the submission ignores the broader statutory context and framework within which s.205 operates, including the inability of the Commission to accept undertakings in respect of a proposed consultation clause.

[20] As to the reference to the other provisions, namely ss.56, 253 and 326 of the Act, the Respondent submits that the Applicants fail to note that those provisions facilitate the impugned provisions of an enterprise agreement operating except ‘to the extent’ that the impugned clause does not meet a relevant requirement or contravenes a provision. In other words, the only parts of the impugning clauses which are of no effect are “to the extent” that they are invalid or contravene relevant provisions. In contrast, the Act makes no provision for a deficient consultation clause to operate, including ‘to the extent’ that it is not inconsistent with the model consultation term. Put differently, the Act does not provide any mechanism in respect of the mandatory consultation obligations in the way that it does in respect of other provisions of an agreement which can continue to operate except ‘to the extent’ of any invalidity or non-compliance.

[21] The ratio of Hanson (and the decisions which apply it) is in dispute and it is convenient to deal with that matter first.

[22] In Hanson Senior Deputy President Richards found that the proposed consultation term did not comply with the requirement in s.205(1)(b) of the Act and rejected a submission that the relevant clause could be cured by way of the provision of an undertaking under s.190, stating:

‘[29] The AMWU contended that in the absence of deeming the model consultation clause, FWA should accept an undertaking from the relevant employers as to the operation of the consultation clause. But s.190 of the Act, which concerns the circumstances in which FWA may approve an enterprise agreement with undertakings, only applies where the tribunal has a concern that an enterprise agreement does not meet the requirements set out in s.186 of the Act and s.187 of the Act. The requirement to have a consultation term arises in s.205 of the Act.

[30] It follows that a deficiency in relation to the consultation term cannot be cured by way of an undertaking under s.190 of the Act.

[31] Given that s.205(1) of the Act states that an enterprise agreement must include a consultation term, should an agreement therefore not be approved where its consultation clause is defective?

[32] Section 205 (1) of the Act states that “an enterprise agreement must include a term (a consultation term) that...” performs certain work as set out in s.205(1)(a) of the Act and s.205(1)(b) of the Act.

[33] A consultation term in an enterprise agreement which does not perform the statutorily required work set out in s.205(1)(a) of the Act and s.205(1)(b) of the Act would not be a consultation term for the Act’s purposes.

[34] It appears to me, therefore, that on this approach s.205(2) of the Act rectifies or cures all errors and deficiencies in a consultation term in an agreement by way of enabling FWA to deem, in effect, the model consultation term in s.205(2) of the Act into the enterprise agreement (in substitution for the defective term). This construction, incidentally would allow s.205 to be read conformably with s.190 of the Act.

[35] On the basis of this reasoning, I will act in accordance with s.205(2) of the Act and the model consultation term as set out in Schedule 2.3 of the Fair Work Regulations 2009 will be taken to be a term of the agreement.’

[23] The Respondent relies on the observation at [34] that the model term is deemed to a term of the enterprise agreement ‘in substitution for the defective term.’

[24] It seems to us that the Respondent’s reliance on Hanson is misplaced. Two things may be said about the Senior Deputy President’s observations at [34] of the decision. First, the proposition that in circumstances where a consultation in an enterprise agreement does not meet the requirements of s.205(1) the Commission ‘deems’ the model consultation term into the enterprise agreement is incorrect. Rather, in circumstances where the consultation term in an enterprise agreement does not meet the requirements set out in s.205 then, by force of s.205(2), the model consultation term is taken to be a term of the Agreement.

[25] Second, the issue determined in Hanson was whether an undertaking could be given to address a deficiency in the consultation term in an enterprise agreement. The Senior Deputy President concluded, correctly, that a deficiency in relation to a consultation term cannot be cured by an undertaking. The Senior Deputy President’s further observations, at [34], are merely obiter and there is no indication that the parties advanced the issue which was the subject of the Senior Deputy President’s comment. Plainly, we are not bound by the Senior Deputy President’s obiter comments. We reject the Respondent’s submission to the model consultation term being in substitution for the defective term is part of the determination of the Commission, which has consequences for how the relevant agreement and clause is applied and understood by the parties and the basis on which it was approved by the Commission.

[26] As to the decisions which are said to have applied Hanson; these are of no relevance to the matter before us. The decision in question applies the Senior Deputy President’s conclusion that a deficiency in relation to a consultation term cannot be cured by an undertaking. None of the decisions relied upon directly address the interaction between the agreed consultation term and the model term.

[27] The Applicants also challenge Hanson on the basis that it is “contrary to the approach of a later Full Bench” in St John. 8 The Respondent contends that this submission cannot be accepted on a proper reading and appreciation of St John.

[28] St John concerned a challenge to the first instance decision of Commissioner Cloghan who had approved an agreement and stated in the approval decision that:

[5] … For the purposes of compliance with paragraph 205(1)(a) of the FW Act, the Employer concedes that the Model Consultation Term applies to the extent of any inconsistency with Clause 44 in relation to the “Introduction of Change” provisions.

[29] The CFMEU appealed Commissioner Cloghan’s decision and asserted the Commissioner had made errors of law, including that he stated that the consultation term applied to the extent of any inconsistency with clause 44. The CFMEU argued that the approach taken was not consistent with s.205(2) which states that the model consultation clause is taken to be a term of the agreement.

[30] The Full Bench concluded that the consultation clause did not comply with s.205 and stated:

‘[23] The consequence of the two deficiencies in clause 44 was that the Agreement did not include a consultation term complying s.205(1). Section 205(2) provides that in those circumstances the model consultation term is taken to be a term of the Agreement. Section 601 required the Commissioner to publish a written decision having decided to approve the Agreement. In doing so, the Commissioner erred by failing to note in his decision, as required by s.201(1)(b), that the model consultation term is taken to be a term of the Agreement.

…

[26] … Pursuant to s.607(3)(a) we vary the Commissioner’s decision in so far as it purports to comply with s.201(1)(b) of the Act and in lieu find that as the Agreement does not include a consultation term as required by s.205, the model consultation term is taken to be a term of the Agreement.’

[31] The Respondent submits that the effect of St John above was that the consultation obligations would be those contained in the model consultation term. The approach at first instance of permitting the model consultation term to apply except to the extent of any inconsistency with the provisions of the consultation clause in the agreement was rejected. At [27], the Full Bench expressly stated that “(T)he model consultation term regulates only the respondent’s obligations in respect of consultations it must undertake and provides for the right of an employee to be represented in those consultations”. It is submitted that the corollary of this position is that there were no other provisions of the agreement which contained the relevant consultation obligations.

[32] In our view St John turns on its own facts and is of no assistance in the resolution of the issue before us.

[33] To the extent that the Full Bench made reference to the model consultation term not displacing all of the provisions of the relevant clause, this was expressed only in the context of a concern that the enhanced redundancy payments contained in the agreement clause may also be excluded. The relevant clause provided for consultation obligations and also redundancy entitlements. The Full Bench then commented at [27] that “it may be better in any future enterprise agreements for the parties to separate the consultation time from any time providing for substantive employee entitlements”.

[34] Unlike the agreement the subject of St John, Clause 9 in the Agreement specifically deals with consultation obligations and there is a separate clause containing the substantive redundancy entitlements.

[35] The observation in Hanson at [34] is also contrary to the approach of a later Full Bench in Appeal by Construction, Forestry, Mining and Energy Union [2014] FWCFB 4011. In that case the Full Bench also took the view, at [25], that a s.190 undertaking was not applicable where an agreement does not contain a consultation term as required by s.205. The Full bench went on to say:

‘[26] For the foregoing reasons we are persuaded that the Commissioner failed to comply with the requirements of ss.201 and 205 of the Act. These are not discretionary matters and in failing to properly apply those sections of the Act the Commissioner made errors of law. They are such as to warrant the grant of permission to appeal and for the appeal to be upheld. Pursuant to s.607(3)(a) we vary the Commissioner’s decision in so far as it purports to comply with s.201(1)(b) of the Act and in lieu find that as the Agreement does not include a consultation term as required by s.205, the model consultation term is taken to be a term of the Agreement.

[27] Finally, we should comment on the concern raised by the respondent as to the practical effect of the ruling we have made. In our opinion, noting in the approval decision that the model consultation term is taken to be a term of the Agreement does not extend access to the enhanced redundancy payments to employees beyond those clause 44 identified as having those entitlements. The model consultation term regulates only the respondent’s obligations in respect of consultations it must undertake and provides for the right of an employee to be represented in those consultations. We should observe that we did not understand the CFMEU to be asserting to the contrary. Certainly we did not take the union to submit that the impact of the model consultation term being taken to be a term of the Agreement was such as to displace all of the provisions of clause 44. If that was so it would exclude the enhanced redundancy payments from those employees identified in the clause. The issues raised in this decision suggest that it may be better in any future enterprise agreements for the parties to separate the consultation term from any term providing for substantive employee entitlements.’

[36] During oral argument, the parties’ attention was drawn to a further issue. Clause 5.3 of the Agreement incorporates the Seagoing Industry Award 2010 (Award) as in operation just before the Agreement was made. The Agreement was made on 14 July 2017. In the event of any inconsistency between any terms of the Award and any express provision of the Agreement, the express provision of the Agreement shall prevail to the extent of any inconsistency. Clause 8 of the Award as in operation at the relevant time made provision for consultation. 9 The text of clause 8 of the Award which operated immediately before the Agreement was made is set out in Appendix 2 to this decision. On our review of clause 8 of the Award as then in force, it appears to comply fully with the requirements in s.205 of the Act. An issue that arises is whether, properly construed, the effect of clauses 5.3 and 9 of the Agreement read together with clause 8 of the Award operating as an incorporated term of the Agreement, have the effect that the Agreement contains a consultation term that complies with s.205 so that s.205(2) was not engaged. If that be correct, a further issue arises, concerning the effect of the note in the Approval Decision to which earlier reference has been made.

[37] As both parties had proceeded in their submissions on the assumption that clause 9 of the Agreement was the only consultation term in the Agreement, we allowed the parties to file further written submissions addressing the issues identified. 10 These submissions are summarised below.

[38] The Respondent contended that on a proper construction, the consultation obligation provisions of the Agreement and Award contain different sets of obligations which are inconsistent and cannot operate together. They should not be selectively read to form a conglomerate consultation term which is an entirely different consultation term. The Respondent contends there is relevant inconsistency so that clause 8 of the Award cannot operate because:

•  Clause 9 of the Agreement commences to apply when the Respondent “is likely” to introduce relevant changes, consultation and information provision thereafter is predicated on the proposed decision;

•  Clause 8 of the Award applies when “a definite decision” has been made by the Respondent to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees. Consultation and information provision thereafter is predicated on the definite decision and its effects;

•  The terms are predicated on a very different basis and operate at different times, consequently they cannot operate together and nor be read together;

•  It is not possible, given the framework and context of the different consultation terms, to supplement or supplant the Agreement provisions with the Award provisions;

•  The terms also contain other differences which are inconsistent, including as to representation, the ability of the union to oppose any implementation by withholding agreement and/or referring the relevant change to the Commission for arbitration; and

•  It cannot be assumed that some different hybrid provision which is a conglomerate would be agreed by the parties and approved by the employees (given that it would be a different clause and impose different consultation obligations).

[39] If this construction is correct, clause 9 of the Agreement does not comply with s.205 and the second issue does not arise as the note in the Approval Decision correctly observes that the model consultation term is taken to be a term of the Agreement. Nevertheless, as to the second issue, the Respondent contends that the Approval Decision must be taken to have been validly made and that is not for the parties to presumptively disregard a decision of this Commission on the basis that a view is formed that the Approval Decision was wrong.

[40] The Respondent contends that if a decision approving an agreement notes that a model term is taken to be a term of the agreement, the decision governs the legal effect of the agreement. It relies on Minister for Employment and Workplace Relations 11 to make good its contention. Consequently, the question about whether or not the Approval Decision can be taken to have any effect if a person considers it to be incorrectly decided does not arise, and if a binding determination rending the Approval Decision ineffective is subsequently made, this would only operate from the time at which such a determination is made and could not operate retrospectively to change the terms of the Agreement.

[41] The Appellants contend that inconsistency as between clause 9 of the Agreement and clause 8 of the Award may be determined in the manner discussed DL Employment Pty Ltd v AMWU. 12 In that case, a Full Bench took the approach that in determining inconsistency it was required to consider the various obligations and determine whether inconsistency arose on their terms and then determine which obligations prevailed. Additionally, the test of whether one instrument was intended to “cover the field” to the exclusion of all others may be relevant but that will depend on the particular circumstances.

[42] The Appellants contend that:

•  Clause 5.3(b) provides that an express provision of the Agreement will prevail to the extent of any inconsistency between any term of the Award and an express provision of the Agreement. This inconsistency test is not a cover the field exercise, it is a matter of considering specific provisions;

•  If the deficient aspect of the Agreement clause, for the purposes of s.205(1), is identified it may be that that deficiency is cured by the Award clause because the Award clause fills the void and is therefore not inconsistent in that respect with the Agreement clause. In that event, the Respondent is able to meet obligations in both clauses;

•  For example, if clause 9 of the Agreement is deficient because it provides for representation for employees by the union, the clause when it is read together with clause 8 of the Award, which provides for representation by other representatives, would meet the requirement in s.205(1)(b); and

•  Consequently, s.205(2) would not operate and the question before the Commission would be resolved because clause 9 (read with clause 8 of the Award) was not displaced by the model term because the model term is not to be taken as a term of the Agreement.

[43] As to the effect of the note in the Approval Decision, the Applicants contend that when approving an agreement, an assessment is required of the provisions of an agreement to determine whether there is relevantly a consultation term that meets the requirements in s.205(1). If the result of that assessment is that the agreement does not contain such provision or provisions, the model term is to be taken to be a term of the agreement. The Applicants contend that the Commission’s role under s.201 is to make a note in its decision approving an agreement that the model term is included under s.205(2). That role arises following the decision to approve the agreement is made and it is merely a statement that under subsection 205(2) the model term is taken to be a term of the agreement.

[44] The Applicants contend that s.201 requires the Commission to form a view about the operation of subsection 205(1) to determine whether to include the note. They contend the Commission is not required to form any satisfaction in the exercise of a power that will result in a decision that will affect the parties’ rights in the way it is when considering the factors in s.186. They contend that the question whether the model term is taken to be a term of the Agreement is not determined by reference to whether the Commission has decided under s.201 to include a note in the Approval Decision. Rather, it is answered by a consideration of whether s.205(2) operated so that the model term is taken to be a term of the Agreement.

[45] We consider these issues in turn below.

Statutory Construction Point

[46] The interpretation of a statutory provision(s) requires reading the relevant statutory provision(s) consistently with the intended purpose or objects of the statute as disclosed by the text of the statute by reference to the language of the instrument viewed as a whole and begins with an examination of the text of the statute having regard to its context and purpose. 13 As Dixon CJ in Commissioner for Railways (NSW) v Agalianos14 observed:

“….the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”. 15

[47] Section 15AA of the Acts Interpretation Act 1901 16 (AI Act) also makes it clear that in interpreting a statute, regard must be had to the purpose or object underlying the statute (whether that purpose or object is expressly stated in the statute or not) and that a construction that would promote its underlying purpose or object is to be preferred to a construction that would not promote that purpose or object.”

[48] So far as is presently relevant, the object of the Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by, inter-alia, achieving productivity and fairness through an emphasis on enterprise level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action. 17 The legislative mechanism by which an enterprise agreement may be made and then approved is contained in Part 2-4 of Chapter 2 of the Act. The objects of Part 2-4 are set out in s.171 as follows:

“171 Objects of this Part

The objects of this Part are:

(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and

(b) to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:

(i) making bargaining orders; and

(ii) dealing with disputes where the bargaining representatives request assistance; and

(iii) ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay.”

[49] Subdivision A of Division 4 of Part 2-4 contains provisions for the preapproval steps that an employer is required to undertake in relation to a proposed enterprise agreement and those required of bargaining representatives for an agreement in respect of applications to the Commission for approval of an agreement once it has been made. One preapproval requirement is that an employer must take all reasonable steps to explain to employees that will be covered by the proposed agreement the terms of the agreement and the effect of those terms. 18 Compliance by an employer with this requirement becomes relevant to the Commission’s satisfaction whether relevant employees genuinely agreed to the agreement.19

[50] Section 181(1) of the Act provides that an employer that will be covered by a proposed enterprise agreement may request employees employed at the time who will be covered by the agreement to approve the agreement by voting for it. Section 181(2) establishes a minimum period before which such a request may be made and s.182 provides that an agreement is made, relevantly, when a majority of the employees asked to approve the agreement under s.181(1) who cast a valid vote, approve the agreement. Section 185 sets out the process by which and the time within which an application to the Commission for the approval of an enterprise agreement is to be made.

[51] Subdivision B of Division 4 of Part 2-4 of the Act contains provisions for the approval of enterprise agreements by the Commission. Section 186(1) requires the Commission to approve an enterprise agreement if an application has been made and requirements in ss.186 and 187 are met. Relevantly, the requirements in s.186 about which the Commission must be satisfied are that:

•  employees covered genuinely agreed to the agreement (ss.186(2)(a) and 188);

•  the terms do not contravene s.55, which deals, inter alia, with the interaction between the National Employment Standards (NES) and enterprise agreements (s.186(2)(c));

•  the agreement passes the better off overall test (ss.186(2)(d) and 193);

•  the group of employees covered by the agreement is fairly chosen (ss.186(3) and (3A));

•  no unlawful terms are included (ss.186(4), 194-195A and 12);

•  it specifies a nominal expiry date that is not more than 4 years after the date the agreement is approved (s.186(5)); and

•  it contains a dispute resolution procedure which meets particular requirements (s.186(6)).

[52] Section 187 contains additional requirements about which the Commission must be satisfied and are concerned with good faith bargaining (s.187(2)); specific requirements for shift workers, pieceworkers, school based apprentices and training and outworkers (ss.187(4) and 196-200)); multi-enterprise agreements (s.187(3)); and greenfields agreements (ss.187(5) and (6)).

[53] As should be evident from the analysis above, there is nothing in ss.186 and 187 which requires the Commission to be satisfied that an enterprise agreement contains a consultation term, either generally or in a particular form, as a condition of approving the agreement.

[54] Section 190 of the Act allows the Commission to accept undertakings from an employer covered by the agreement if it has concerns that one or more of the approval requirements in ss.186 and 187 have not been met. Section 191 provides that if the Commission approves an agreement after accepting an undertaking, the undertaking is taken to be a term of the agreement, as the agreement applies to the employer. If an agreement is approved after an undertaking is accepted, s.201(3) requires the Commission to note in its decision to approve the agreement that the undertaking is taken to be a term of the agreement.

[55] As ss.186 and 187 are not concerned relevantly, with the existence, form or content of a consultation term in an enterprise agreement, any concern that a Member of the Commission might have about a consultation term may not be resolved through the provision of an undertaking by the employer.

[56] Section 193 sets out the better off overall test.

[57] Sections 194 – 195A describe the kinds of terms of an enterprise agreement that are unlawful terms. Relevantly, s.253(1)(b) provides that a term of an enterprise agreement has no effect to the extent that it is an unlawful term. The same consequence applies to any terms of an enterprise agreement that are not about permitted matters or which is a designated outworker term.

[58] To similar effect:

•  section 56 provides that a term of an enterprise agreement has no effect to the extent that it contravenes s.55 (which deals with the interaction between the NES and an agreement);

•  section 306 provides that a term of an enterprise agreement has no effect in relation to an employee to the extent that it is less beneficial to the employee than the term of an equal remuneration order that applies to the employee; and

•  section 326(1) provides that a term of an enterprise agreement has no effect to the extent that it permits, or has the effect of permitting, an employer to deduct an amount from an amount that is payable to the employee in relation to the performance of work in particular circumstances.

[59] Section 201 deals with several matters the Commission must, if applicable, note in its decision approving an enterprise agreement. We earlier set out the provision requiring a note about the model consultation and flexibility terms. The effect of an undertaking and that an organisation is covered by an agreement in particular circumstances must, if applicable, also be noted.

[60] Division 5 for Part 2-4 of the Act deals with the mandatory terms that an enterprise agreement must include. Sections 202-204 are concerned with the requirement for, and the content and effect of, a flexibility term that enables an employee and his or her employer to make an individual flexibility arrangement. Section 205 requires an enterprise agreement to include a consultation term and provides:

“205 Enterprise agreements to include a consultation term etc.

Consultation term must be included in an enterprise agreement

(1) An enterprise agreement must include a term (a consultation term) that:

(a) requires the employer or employers to which the agreement applies to consult the employees to whom the agreement applies about:

(i) a major workplace change that is likely to have a significant effect on the employees; or

(ii) a change to their regular roster or ordinary hours of work; and

(b) allows for the representation of those employees for the purposes of that consultation.

(1A) For a change to the employees’ regular roster or ordinary hours of work, the term must require the employer:

(a) to provide information to the employees about the change; and

(b) to invite the employees to give their views about the impact of the change (including any impact in relation to their family or caring responsibilities); and

(c) to consider any views given by the employees about the impact of the change.

Model consultation term

(2) If an enterprise agreement does not include a consultation term, or if the consultation term is an objectionable emergency management term, the model consultation term is taken to be a term of the agreement.

(3) The regulations must prescribe the model consultation term for enterprise agreements.”

[61] The effect of s.205 is that an enterprise agreement must include a consultation term that requires an employer to consult employees about two broad matters. First, to consult about major workplace change that is likely to have a significant effect on the employees. Secondly, to consult about a change to employees’ regular roster or ordinary hours of work. The second broad subject matter need not be connected to the first. A compliant provision must also allow for the representation of the employees for the purposes of that consultation. Additional requirements as to the nature of the consultation involved in consulting about a change to the employees’ regular roster or ordinary hours of work must also be contained in the consultation term.

[62] Section 205(2), which provides, inter alia, that if an enterprise agreement does not include a consultation term, the model consultation term is taken to be a term of the agreement, is not confined to an enterprise agreement which does not contain a consultation term at all. The model consultation term prescribed by Schedule 2.3 of the Fair Work Regulations 2009 is set out in Appendix 3 to this decision. If an enterprise agreement contains a term dealing with obligations to consult employees but does not contain terms meeting each requirement in s.205(1) and (1A), the model consultation term will in that case also be taken to be a term of the agreement. That is evident from the text and structure of s.205. A consultation term within the meaning of s.205 is one that meets the description in s.205(1) and (1A). That this is the proper reading of s.205 seems to us to be confirmed by the Explanatory Memorandum to the Fair Work Bill 2008 which relevantly provides:

“876. A consultation term must require the employer(s) to which the agreement applies to consult the employees to whom the agreement applies about major workplace changes that are likely to have a significant effect on those employees. The term must also allow for the representation of those employees during consultation (subclause 205(1)). A person representing the employees could be an elected employee or a representative from an employee organisation.

877. Where an enterprise agreement does not include such a consultation term, the model consultation term will be taken to be a term of the agreement. If FWA approves an enterprise agreement and the model consultation term is taken to be a term of the agreement, FWA must note in its decision to approve the agreement that the model consultation term is included in the agreement (subclause 201(1)).” [Emphasis added]

[63] The reference to “such a consultation term” at [877] of the Explanatory Memorandum is clearly a reference to the features of the consultation term described at [876] and which are found in s.205(1).

[64] From the foregoing it may be seen that the scheme of the Act, so far as is presently relevant, is that there are various requirements about which the Commission must be satisfied before it must approve an agreement. A number of these matters concern the terms of the agreement – terms contravening s.55 (s.186(2)(c)), unlawful terms (s.186(4)), a dispute settlement term and its content (s.186(6)) and the terms relating to particular kinds of employees, for example shift workers (s.187(4) and ss.196–200). If the Commission has concerns about whether one or more of these requirements have been met, the concerns may be addressed by an undertaking.

[65] Separately, the scheme of the Act requires that an enterprise agreement include mandatory terms dealing with flexibility and consultation that meet the statutory requirements. However, the absence of one or more mandatory terms or if an agreement includes terms dealing with individual flexibility arrangements or consultation but which do not meet the statutory requirements are not matters that stand in the way of the approval of an enterprise agreement. Nor is a concern about the absence or the content of a mandatory term capable of rectification through an undertaking. In such a case, the relevant model term is taken to be a term of the agreement. In this respect, the provisions in s.202(4) and s.205(2) of the Act are self-executing. It seems clear that the Commission must form a view about whether an enterprise agreement contains the requisite complying mandatory terms in order that it may consider whether it must carry out the task of noting in the approval decision that either or both the model flexibility term or the model consultation term is taken to be a term of the agreement by operation of s.202(4) or s.205(2).

[66] Although the Commission must be satisfied that an agreement does not contain terms that contravene s.55 and that it does not contain unlawful terms, the scheme of the Act makes provision that such terms are of no effect to that extent. There are other provisions earlier noted which also render terms of an enterprise agreement of no effect in particular circumstances.

[67] The scheme of the Act discloses a purpose of preserving as much of the agreement as made while also protecting against encroaching upon existing rights (the NES) or protections (unlawful terms). This is achieved through the capacity to accept undertakings and by rendering those parts of an agreement that offend of no effect to the extent that they do so.

[68] When s.202(4) or s.205(2) of the Act operate on an agreement so that the relevant model term is taken to be a term of the agreement, there is no provision in the Act which renders any existing term of the agreement dealing with an individual flexibility arrangement or consultation of no effect. It seems to us that had the Parliament intended that that would be a consequence it would have said so expressly, as it has done in respect of a number of other terms of an enterprise agreement.

[69] We do not accept the Respondent’s contention that because provisions of the Act such as s.56 operate upon an impugned provision only to the extent that the impugned provision, in the case of s.56, contravenes s.55, the absence of a provision in the Act rendering a term of an agreement dealing with consultation of no effect to the extent that it does not meet the statutory requirements indicates legislative intention that the impugned term would be inoperative once the model term is taken to be a term of the agreement.

[70] The purpose of the statutory formulation resulting in a term of agreement having no effect “to the extent” that it is contrary to a statutory prohibition is to leave non-offending parts of the term unaffected so that as much of the agreement of those who made it is preserved. The fact that this mechanism is not adopted in respect of mandatory terms suggests to us that the whole of the subject matter of, in this case, consultation as set out in the agreement is preserved reflecting the agreement of those who made it. However, as that term does not meet the statutory requirements, the deficiency is rectified by imposing obligations under the relevant model term as a term of the agreement.

[71] Moreover, terms that contravene s.55 and unlawful terms operate upon an existing statutory entitlement such as the NES or a statutory protection, for example against discrimination. Terms falling in this category have a deleterious effect on employees covered by the agreement. It is unsurprising that the legislature would render such a term as having no effect to the extent that it contravenes s.55 or is an unlawful term, for example, because it is a discriminatory term.

[72] A consultation term or a flexibility term of an agreement is in a different category altogether. The mandatory content of a consultation term or flexibility term is not itself a statutory entitlement. Rather the content requirement regulates that which particular terms of an agreement must contain. In this sense, these provisions regulate the content and form in which a right or obligation in an agreement is to create. Where an agreement does not contain a compliant term, the gap in content is filled by the deeming provisions in s.202(4) or s.205(2) of the Act. It cannot have been intended, for example, that a term in an agreement which deals with consultation in very broad circumstances, which includes a decision to introduce a major change having a significant effect on employees, would be rendered of no effect because it failed to deal with consultation about changing regular rosters. It seems to us that express language to that effect would be required. There is no indication in the provisions of the Act which would support such an outcome.

[73] Consistent with the policy and evident purpose of the agreement making provisions of the Act, a non-compliant consultation term of an enterprise agreement need not be rendered as having no effect, because it does not offend against some other statutory entitlement or protection. Such a term can continue to operate, but the relevant model term that is taken to a term of the agreement and also operates.

[74] We therefore consider that the both textual and contextual considerations lead to a conclusion that s.205(2) of the Act does not have the effect of rendering inoperative an existing term in an agreement dealing with consultation. On the assumption that s.205(2) of the Act operated in this case, it follows that clause 9 of the Agreement together with the model consultation term operate as terms of the Agreement. Any conflict between the two provisions may be resolved through the usual means of interpreting agreements.

Whether the model consultation term is a term of the Agreement

[75] In considering this issue it is first necessary to endeavour to identify the deficiency in clause 9 of the Agreement which caused the Deputy President to note in the Approval Decision that the model consultation term is taken to be a term of the Agreement.

[76] There are 2 obvious deficiencies with clause 9. The first is that it appears to allow for representation during consultation only by the union whereas a compliant consultation term must allow for representation of the employees, without qualification.

[77] The second is that it does not make provision to consult with employees about change to the employees’ regular roster or ordinary hours of work as required by s.205(1A) of the Act.

[78] The model consultation term operating as a term of the Agreement would cure these deficiencies.

[79] However, as we earlier noted, clause 5.3 of the Agreement incorporates the Award as in operation just before the Agreement and provides that an express provision of the Agreement will prevail to the extent of any inconsistency between any term of the Award and an express provision of the Agreement. Clause 8 of the Award provides for consultation.

[80] Read together, clause 9 of the Agreement and clause 8 of the Award would comply with the content requirements in s.205. Clause 8 of the Award makes provision for both representation during consultation and consultation of employees about changes to rosters and ordinary hours of work.

[81] The Respondent contends, for the reasons earlier summarised, that the provisions are inconsistent with the consequence that the Agreement term prevails and clause 8 of the Award does not operate.

[82] We disagree. First, there is no direct inconsistency between clause 9 of the Agreement and clause 8 of the Award. The Respondent can comply with both provisions.

[83] Secondly, we do not discern any right conferred on the Respondent by clause 9 of the Agreement which clause 8 of the Award would take away. If this were the case then although compliance with both provisions is possible, there might nevertheless be inconsistency because the subservient provision (clause 8) took away a right the dominant provision (clause 9) conferred on the Respondent. We also do not consider that clause 8 of the Award has the effect of altering, impairing or detracting from clause 9 of the Agreement in a way that would create a burden that amounts to inconsistency. It is to be remembered that clause 8 of the Award contains the very matters that s.205 requires a compliant consultation term to contain.

[84] Thirdly, as to indirect inconsistency, we do not agree with the Applicants’ submission that having regard to the terms of clause 5.3 of the Agreement the question of inconsistency cannot not determined by a “cover the field” test of inconsistency. The Applicants’ say this is because the terms of clause 5.3 and it reference to the Agreement prevailing “to the extent of any inconsistency”.

[85] If the Agreement or a term of the Agreement was indirectly inconsistent with terms of the incorporated award because the former covered the field in relation to a particular subject matter, the Agreement would prevail to every extent. The use of the qualifying phrase “to the extent” in assessing inconsistency is not an indicator of an intention that inconsistency must be resolved only where there is direct inconsistency. It is to be remembered that the test for indirect inconsistency is often used to resolve constitutional issues that arise between overlapping state and federal law. Section 109 of the Commonwealth of Australia Constitution Act 1904 provides that when “a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.”

[86] Nevertheless, the fact the whole of the Award is incorporated is an indicator that indirect inconsistency has little work to do in resolving inconsistency between the Agreement and the Award. It is an indication that all terms (express and incorporated) are to be given full effect except where there is direct inconsistency. Otherwise, the terms are to be read as a whole to determine rights and obligations. In any event, it seems plain enough that clause 9 of the Agreement is limited in its operation to consultation about major change having a significant effect. It has nothing to say about consultation of employees concerning changes to regular rosters or ordinary working hours, subject matters that must be part of a consultation term in an agreement. Clause 9 of the Agreement does not deal comprehensively with the subject of consultation and does not evince an intention to cover the field on that subject.

[87] Moreover, even if it could be said that there is direct inconsistency between the terms of clause 9 of the Agreement and clause 8 of the Award dealing with consultation about major change having a significant effect, there can be no direct inconsistency between the provisions dealing with consultation about changes to regular rosters and ordinary working hours, a subject on which clause 9 of the Agreement is silent.

[88] At the very least, clause 9 of the Agreement does not prevail over those provisions in clause 8 which deal with representation and with consultation with employees about changes to rosters or ordinary working hours. Therefore, when clause 9 of the Agreement is read with clause 8 of the Award operating as incorporated term, the Agreement contains a consultation term which meets the description in s.205 of the Act. At the time that the Agreement was approved, s.205(2) of the Act did not operate upon the Agreement such that the model consultation term is taken to be a term of the Agreement.

[89] It is necessary next to consider the effect of the note in the Approval Decision that pursuant to s.205(2) of the Act the model consultation term is taken to be a term of the Agreement.

[90] As earlier noted, the Respondent contends that as the Approval Decision notes that the model consultation term is taken to be a term of the Agreement, the decision governs the legal effect of the Agreement.

[91] In Minister for Employment and Workplace Relations, a Full Bench of Fair Work Australia considered the effect of a note in an approval decision concerning the model flexibility term and said:

“[8] At the outset a question of statutory construction arises. We read s.202(4) as providing that if the proposed agreement does not include a flexibility term, or includes a term which does not meet the requirements of s.203, the model term is to be a term of the agreement. At first glance that section would appear to operate independently of any decision by Fair Work Australia. On closer analysis, however, a legislative intention can be discerned that Fair Work Australia can make a legally binding decision in relation to the matter under s.201(1). It is clear that the tribunal is not able to exercise judicial power. Accordingly a decision under s.201(1) could not operate as a declaration of the legal position under s.202(4). On the other hand, it is highly unlikely that a decision under s.201(1) is intended to have no legal effect but to operate in a purely advisory way. Under that interpretation the parties would be no better informed as to the true legal position as a result of the decision and would still be exposed to the possibility of a contrary decision being reached by a court, possibly with very serious consequences. It is likely that the legislature intended that where Fair Work Australia is of the opinion that the agreement does not contain a flexibility term, or includes a term which purports to be a flexibility term but which does not meet the requirements of s.203, it can clarify the position in its decision. Where the decision approving an agreement notes that the model flexibility term is taken to be a term of the agreement, the decision governs the legal effect of the agreement. We shall approach the review on that footing.”

[92] Although the decision in Minister for Employment and Workplace Relations concerned the model flexibility term, the relevant operative provisions of the Act are the same and so the decision is on point. Although it is not strictly binding, there are sound reasons why earlier Full Bench decisions of the Commission and its predecessor which are relevant and on point should be followed. However, in this case we respectfully declined to do so.

[93] In our view, a note in an approval decision does not have the effect of the relevant model term operating as a term of the agreement if s.202(4) or s.205(2) of the Act is not first engaged. As seems clear from the text of s.201(1), two conditions must be satisfied before a note is included in a decision. First, the Commission “approves an enterprise agreement”. Secondly, the model consultation term “is taken under s.205(2) to be a term of the agreement”. The model consultation term is taken to be a term of the agreement only in the circumstances set out in s.205(2). Its legal efficacy does not depend on a note in an approval decision. The underlined words above make this clear. It also seems to us clear enough that the absence of a note in the approval decision would not negate the operative effect of s.205(2) of the Act on an enterprise agreement. This is because s.205(2) has effect according to its terms independently of any failure or omission on the part of the Commission to include the requisite note in its approval decision.

[94] There do not appear to us to be any underlying policy reasons why on one hand an erroneous failure to include a note in an approval decision nevertheless results in the inclusion of the model consultation term by operation of s.205(2) and, on the other, an erroneous inclusion of a note when s.205(2) is not engaged, would have the same result. In the first scenario, the parties are left in the same uncertain position, as the Full Bench in Minister for Employment and Workplace Relations identified as rationale for reading the note in an approved decision as having the legal effect of including the flexibility term as a term of an agreement.

[95] In our view, the model consultation term is taken to be a term of the agreement by operation of law. The note the Commission is required to include in its approval decision is an indication that the Commission considers the relevant operative section to have been engaged and no more. Were it otherwise, the effect of the note would be a declaration of legal rights. This would clearly be the case in relation to the Approval Decision. As earlier set out, the Approval Decision notes “[P]ursuant to s.205(2) of the Act the model consultation term….is taken to be a term of the Agreement”. The efficacy of the note relies upon whether as a matter of law, s.205(2) is engaged. On the Respondent’s case, this statement has the legal effect that the model consultation term is taken to be a term of the Agreement, even though s.205 (2) is not engaged. There does not appear to us to be any underlying policy reason why, when the statute does not require it, an erroneously made statement by a member of the Commission in an approval decision has the effect for which the Respondent contends. The terms of s.201, which requires the Commission to note certain matters in an approval decision, do not suggest this would be the case. As we have already noted, the requirement in s 201(1) to include a note proceeds upon the condition that the model consultation term is taken, under s.205(2) to be a term of the agreement.

[96] In our view, if the statutory intention was to empower the Commission to include a compliant consultation or flexibility term then a much clearer formulation would have been adopted. For example, provision could have been made to the effect that if the Commission considers that an agreement does not include a consultation term, the model consultation term is taken to be a term of the agreement and the Commission must note in its decision to approve an agreement that the model consultation term is taken to be a term of the agreement. There would thus be no need for s.205(2) of the Act.

[97] The inclusion of a note when s.205(2) of the Act is not engaged is an error in the same way the failure to include a note when s.205(2) is engaged is an error. Both are capable of correction on appeal but that error does not change the operation and effect of s.205(2).

[98] But even if the note in the approval decision has the legal effect of making the model consultation term a term of the Agreement, for the reasons given earlier, the inclusion of the model consultation term does not have the effect of displacing and rendering inoperative the existing consultation provisions of the Agreement including those in clause 8 of the Award operating as an incorporated term.

PRESIDENT

Appearances:

Mr A Slevin of Counsel, for the Applicants
Mr B Rauf of Counsel, for the Respondent

Hearing details:

2019.
24 July:
Melbourne.

Supplementary written submissions:

Applicants, 29 July 2019 and 31 July 2019
Respondent, 29 July 2019 and 31 July 2019

Printed by authority of the Commonwealth Government Printer

<PR711850>

APPENDIX 1

APPENDIX 2

APPENDIX 3

Schedule 2.3—Model consultation term

(regulation 2.09)

Model consultation term

(1) This term applies if the employer:

(a) has made a definite decision to introduce a major change to production, program, organisation, structure or technology in relation to its enterprise that is likely to have a significant effect on the employees; or

(b) proposes to introduce a change to the regular roster or ordinary hours of work of employees.

Major change

(2) For a major change referred to in paragraph (1)(a):

(a) the employer must notify the relevant employees of the decision to introduce the major change; and

(b) subclauses (3) to (9) apply.

(3) The relevant employees may appoint a representative for the purposes of the procedures in this term.

(4) If:

(a) a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and

(b) the employee or employees advise the employer of the identity of the representative;

the employer must recognise the representative.

(5) As soon as practicable after making its decision, the employer must:

(a) discuss with the relevant employees:

(i) the introduction of the change; and

(ii) the effect the change is likely to have on the employees; and

(iii) measures the employer is taking to avert or mitigate the adverse effect of the change on the employees; and

(b) for the purposes of the discussion—provide, in writing, to the relevant employees:

(i) all relevant information about the change including the nature of the change proposed; and

(ii) information about the expected effects of the change on the employees; and

(iii) any other matters likely to affect the employees.

(6) However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.

(7) The employer must give prompt and genuine consideration to matters raised about the major change by the relevant employees.

(8) If a term in this agreement provides for a major change to production, program, organisation, structure or technology in relation to the enterprise of the employer, the requirements set out in paragraph (2)(a) and subclauses (3) and (5) are taken not to apply.

(9) In this term, a major change is likely to have a significant effect on employees if it results in:

(a) the termination of the employment of employees; or

(b) major change to the composition, operation or size of the employer’s workforce or to the skills required of employees; or

(c) the elimination or diminution of job opportunities (including opportunities for promotion or tenure); or

(d) the alteration of hours of work; or

(e) the need to retrain employees; or

(f) the need to relocate employees to another workplace; or

(g) the restructuring of jobs.

Change to regular roster or ordinary hours of work

(10) For a change referred to in paragraph (1)(b):

(a) the employer must notify the relevant employees of the proposed change; and

(b) subclauses (11) to (15) apply.

(11) The relevant employees may appoint a representative for the purposes of the procedures in this term.

(12) If:

(a) a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and

(b) the employee or employees advise the employer of the identity of the representative;

the employer must recognise the representative.

(13) As soon as practicable after proposing to introduce the change, the employer must:

(a) discuss with the relevant employees the introduction of the change; and

(b) for the purposes of the discussion—provide to the relevant employees:

(i) all relevant information about the change, including the nature of the change; and

(ii) information about what the employer reasonably believes will be the effects of the change on the employees; and

(iii) information about any other matters that the employer reasonably believes are likely to affect the employees; and

(c) invite the relevant employees to give their views about the impact of the change (including any impact in relation to their family or caring responsibilities).

(14) However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.

(15) The employer must give prompt and genuine consideration to matters raised about the change by the relevant employees.

(16) In this term:

relevant employees means the employees who may be affected by a change referred to in subclause (1).

 1   Section 396(d) of the Fair Work Act 2009 (Cth)

 2   [2017] FWCA 5411

 3   CFMMEU MUA Division – Applicant’s submissions dated 25 May 2019; Teekay Shipping – Respondent’s submissions dated 3 June 2019; and CFMMEU MUA Division – Applicant’s reply submissions dated 7 June 2019

 4   [2014] FWCFB 4011

 5   [2012] FWA 3037

 6   See, for instance, Fenner Dunlop Australia Pty Ltd [2013] FWCA 7630; Gladstone Ports Corporation Limited [2013] FWC 305; Perigon Qld Pty Ltd Caval Ridge Project Union Greenfields Agreement [2012] FWAA 10464; Abigroup Contractors Caval Ridge Project Union Greenfields Agreement [2012] FWA 3745

 7   Shop Distributive and Allied Employees Association v Woolworths SA Pty Ltd [2011] FCAFC 67, [11]-[14]; Construction, Forestry, Mining and Energy Union Western Australian Branch v Civil Construction Pty Ltd [2010] FWA 3649 at [74]; Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241, 273 per Kirby J, and 283 per Callinan J; Norwest Beef Industries v Australian Meat Industry Employees Union (1984) 12 IR 314, 331 per Olney J; and City of Wanneroo v Holmes [1989] 30 IR 362.

 8   Applicants’ Submission at [19]

 9   The Respondent reproduced the text of clause 8 and 8A of the Award as Schedule B to its supplementary submissions. This is not the operative term that is incorporated by clause 5.3 of the Agreement. Clause 8 of the Award as in force when the Agreement was made is set out in Appendix 2 to this decision. In substance, provision for consultation about changes to rosters or hours of work for which is now made in clause 8A of the Award was at the time the Agreement was made set out in clause 8.2 of the Award. The substantive obligations have not altered

 10   Applicants’ Note on Question Raised at hearing, 29 July 2019; Respondent’s Supplementary Submissions, 29 July 2019; Applicants’ Reply to Respondent’s Supplementary Submissions, 31 July 2019; Respondent’s Supplementary Submissions in Reply, 31 July 2019.

 11   [2010] FWAFB 3552 at [8]

 12   [2014] FWCFB 7946 at [53]–[68]

 13   See Project Blue Sky Inc & Ors v Australian Broadcasting Authority (1998) 194 CLR 355 at [69], Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 at [47]; SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) ALR 405 at [14]

 14   (1955) 92 CLR 390

 15   Ibid at 397

 16   As in force on 25 January 2009: See s.40A of the Fair Work Act 2009

 17   Fair Work Act 2009 (Cth), s.3(f)

 18   Fair Work Act 2009 (Cth), s.180(5)

 19   Fair Work Act 2009 (Cth), ss.186(2)(a)&(b) and 188(1)(a)(i)