[2020] FWC 1063

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Mulgoa Quarries Pty Limited
(AG2019/3985)

MULGOA QUARRIES PTY LIMITED QUARRY AND PLANT OPERATORS ENTERPRISE AGREEMENT 2019-2023

Building, metal and civil construction industries
COMMISSIONER WILSON	MELBOURNE, 26 FEBRUARY 2020

Application for approval of the Mulgoa Quarries Pty Limited Quarry and Plant Operators Enterprise Agreement 2019-2023.

[1] An application has been made for approval of an enterprise Agreement known as the Mulgoa Quarries Pty Limited Quarry and Plant Operators Enterprise Agreement 2019-2023 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made Mulgoa Quarries Pty Limited. The Agreement is a single enterprise Agreement.

[2] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) was a bargaining representative for the Agreement, as were five employee bargaining representatives.

[3] After being notified of Mulgoa Quarries’ intention to initiate bargaining for the Agreement on 20 February 2019 the matter was the subject of negotiations which ultimately led to a ballot of employees being conducted on 14 October 2019 which resulted in the Agreement being made on that day. At the time of the vote 63 employees were covered by the Agreement of whom 52 cast a valid vote, with 48 employees voting to approve the Agreement. The proposed Agreement would replace an earlier Agreement, the Mulgoa Quarries Pty Limited Quarry and Plant Operators Enterprise Agreement 2015–2018.

[4] After an application was made by Mulgoa Quarries to the Commission for approval of the Agreement, the CFMMEU notified the Commission that it opposed approval for four reasons, namely that the employees covered by the proposed Agreement did not genuinely agree to the proposed Agreement; there were misrepresentations made to the employees in regards to their right to nominate bargaining representatives; the proposed Agreement contains an unlawful term within the meaning of s.195(1) of the Act; and it does not pass the better off overall test (BOOT).

[5] A hearing on the subject was convened on 29 January 2020, with Ms E Rooke of the Civil Contractors Federation of New South Wales appearing on behalf of Mulgoa Quarries and Mr D Syron appearing on behalf of the CFMMEU. At the conclusion of the hearing I invited the Applicant to consider whether further or alternative undertakings needed to be given on several matters and then invited the parties, and especially the CFMMEU, to consider whether revised undertakings may lead to the union withdrawing its objection. That did not occur, with the CFMMEU identifying to the Commission that it continued to object to certain items of the revised undertakings provided. The form of the Applicant’s revised undertakings is as follows, noting that the CFMMEU continues to object to items 4 and 5 of the following final version of undertakings given on 4 February 2020:

“2. We undertake that the rates of pay outlined in Appendix A that apply from approval will apply at test time.

3. We undertake that the Building and Construction General On-site Award 2010 will be incorporated in the Agreement.

4. We undertake that, at clause 12, an employee will not be required to work more than 5 hours without a meal break.

5. We undertake that, at clause 22.7, an employee will be required to keep their annual leave balance under forty (40) days.

6. We undertake that, at clause 38.2.4, were an employee would be entitled to a higher amount of severance pay under the Building and Construction General On-site Award 2010 than the amount accrued in the Employees ACIRT account, the Employer will top up the amount owed by the difference.” 1

[6] I turn to consider each of the CFMMEU’s objections to approval of the Agreement.

GENUINE AGREEMENT

[7] Section 186(2) of the Act requires the Commission to be satisfied that an Agreement has been genuinely agreed by employees covered by it with s.188(1) then setting out the matters to be considered by the Commission in determining whether there has been genuine Agreement. One matter requiring consideration for the Commission is whether the pre-approval steps required by ss.180(2), (3) and (5) have been met.

[8] Section 188 is in these terms:

“188 When employees have genuinely agreed to an enterprise agreement

(1) An enterprise agreement has been genuinely agreed to by the 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.

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

(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and

(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174.”

[9] The relevant provisions of s.180 are these:

“180. Employees must be given a copy of a proposed enterprise agreement etc.

Pre-approval requirements

(1) Before an employer requests under subsection 181(1) that employees approve a proposed enterprise agreement by voting for the agreement, the employer must comply with the requirements set out in this section.

Employees must be given copy of the agreement etc.

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

(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:

(i) the written text of the agreement;

(ii) any other material incorporated by reference in the agreement; or

(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.

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

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

(b) the voting method that will be used.

(4) The access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1).

Employees must be given copy of disclosure documents etc.

…

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

(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and

(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.

(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:

(a) employees from culturally and linguistically diverse backgrounds;

(b) young employees;

[10] Three “genuine agreement” objections are argued by the CFMMEU:

• ss.180(2) and (5) have not been complied with as the Applicant failed to discharge its obligation to ensure material incorporated by reference into the Agreement was made available to employees during the access period. The particular contention put forward by the CFMMEU is that the reference Award, the Building and Construction On-Site Award 2010 was insufficiently made available to employees during the access period.

• When the Applicant circulated notification of the commencement of bargaining and invited the nomination of bargaining representatives, it did so in such a way as to make a misrepresentation to employees. The import of the misrepresentation is such as to be a reasonable ground under s.188(1)(c) “for believing that the agreement has not been genuinely agreed to by the employees”; and

• The nature and number of erroneous statements in the Applicant’s Form F17, the Employer Support Statutory Declaration are such as to diminish the capacity for a genuine agreement finding. The Form F17, stating that there were no provisions of the Agreement that are less beneficial than the reference Award should lead to a finding that the requirements of s.180(5) to explain the Agreement’s terms and their effect have not been complied with.

Incorporation of reference material

[11] The CFMMEU contend that the Commission cannot be satisfied that the obligations in either ss.180(2) and (5) have been met. Section 180(2) dealing with the subject of provision of certain material to employees prior to a ballot requires consideration and s.180(5) deals with the requirement to take all reasonable steps to explain the terms and effect of the Agreement to employees covered by the Agreement. The CFMMEU does not raise an objection about whether the Commission can be satisfied that the Applicant has met the requirements in s.180(3) which provides the steps required to notify employees of voting arrangements.

[12] On 5 December 2019, a revised Form F17 was provided to the Commission which provides evidence about the means by which employees were provided with information about the Agreement and in particular its connection with the Award. The December Form F17 states that:

• On 19 September 2019, “[a]ll employees were invited to a staff meeting where the terms and conditions of the Enterprise Agreement were explained” (item 2.7);

• On 4 October 2019, employees were provided with a hard copy of the Enterprise Agreement that was to be voted on and were provided with a hard copy of the notice to vote (items 2.5 and 2.6);

• On 14 October 2019, “[a] representative of the employer (Matt Wearn, Business Development Manager) attended each site to explain the terms of the Agreement and ensure that any employees questions were answered. During these meetings he stated that there were copies of the Award available online or that if people wanted a copy printed for them they could come into the office and someone would help them” (item 2.7).

[13] The CFMMEU’s objections on these matters are associated with the access for employees to the Award. It argues the requirements of these sections in this regard have not been met for the following reasons:

• With respect to s.180(2), after noting that the declaration in respect of item 2.7 above may in fact be intended as an answer to question 2.5 which asks for details about the steps taken by the employer to ensure employees were given a copy of the written text of the Agreement and material incorporated by reference, the CFMMEU argues that:

“… the steps taken by the Applicant cannot be considered reasonable steps. It is merely pointing out the obvious in terms of the location of the Award, and suggesting there is an opportunity for it to be given to them physically. These steps taken do not go far enough in ensuring that the employees were either given or had access to the incorporated material. Even if they are found to be reasonable by the Commission, we submit that the Company have not taken all reasonable steps in accordance with s 180(2) of the Act”. 2

• In relation to s.180(5), the CFMMEU submits that the steps taken by Mulgoa Quarries were insufficient for the Commission to be satisfied that section has been complied with it arguing:

“Given that the Award was incorporated into the Agreement, it would be imperative for all reasonable steps to be taken to ensure the employees were fully informed as to whether the Award was incorporated into the Agreement. However, at question 2.7 of the amended F17 it merely suggests that the Award is available online and that it can be made available online. There appears to be no evidence from question 2.7 or anywhere in the F17 that there was any explanation as to whether the Award was incorporated into the Agreement.” 3

• In this regard, the CFMMEU relies on two limbs for its argument; employees were not told the Award was incorporated which means they were unaware of the situation, meaning that the Applicant failed to take all reasonable steps to explain that the Award has been incorporated into the Agreement.

[14] The Agreement refers to the Award in three places; in Clauses 4 and 42 (Application of CW levels), set out in entirety below, and in Appendix A (Calculation of hourly rates of pay). Clauses 4 and 42 are in these terms:

“4. THE AWARD

4.1 Reference in this Agreement to "the Award" shall mean the Building and Construction General On-site Award 2010, as varied from time to time.

4.2 Where this Agreement is silent the terms of the Award shall apply.

4.3 In the event of any inconsistency between the Award and an express provision of this Agreement, the terms of this Agreement shall take precedence to the extent of the inconsistency.”

“42. APPLICATION OF CW LEVELS

42.1. The competency classification is to be reviewed on a twelve (12) monthly basis. The classification is not proportional to length of service.

42.2. Movement into a higher classification will be determined by the following factors:

✓ the employee's ability to perform tasks competently in their classification

✓ the employer's need for the employee to undertake tasks defined in the higher classification

42.3. The Employer reserves the right to set the number of employees it wishes to utilise at higher classification levels. This will always be determined by the workload and number of employees with the Employer at any given time.

42.4. Although an employee commencing with the Employer may be of a higher classification than the level they have been employed at with the Employer, the Employer is not obliged to pay the employee at the higher classification rate.

42.5. The wage rates and allowances paid under this Agreement shall be in substitution for all wage, allowance, and special rate entitlements of "the Award."

42.6. An Employee may be demoted and have their classification and duties downgraded in association with a disciplinary process.”

[15] In addition to these references, the word “Award” is used at several places in Appendix A, dealing with the calculation of hourly rates of pay, with the Appendix specifying in each of its tables that a “New Entrant” is to be paid “Award CW3”.

[16] In support of its argument, the CFMMEU submitted that the reasoning of Deputy President Cross in Re Bachy Soletanche Australia Pty Ltd 4 (Bachy) should have application in this matter. In Bachy, the Commission refused approval of an Agreement including for the reason that the Applicant employer had not taken all reasonable steps to provide a copy of an incorporated Award, with it being said in the decision:

“[41] While the Applicant took all reasonable steps to ensure the employees were provided with a written text of the Agreement, the same cannot be said for the Award. The height of the Applicant’s case as to compliance with s.180(2) of the Act seems to be that the relevant employees had access to the Award throughout the access period for the Agreement because if any employee had requested a copy of the Award from the Applicant, the Applicant would have provided that employee with a copy.

[42] There is no evidence that the Applicant drew to the employees’ attention the relevance of the Award. The answers at Questions 2.6 and 2.7 of the Form F17 make no mention of reference to the Award, or its availability. Preparedness to provide a copy of the Award upon request is not sufficient to comply with the obligations of s.180(2) of the Act, particularly where the relevant employees are not advised of the Award’s relevance or availability by that means.” 5 (references omitted)

[17] Bachy in turn considered whether reasoning expressed by Vice President Hatcher in Greenfreight Logging (NSW) Pty Ltd Albury Depot Enterprise Agreement 2018 6 (Greenfreight) had application. In that matter, the Vice President was satisfied that non-compliance with s.180(2) was a minor procedural error, the product of which would be not to disadvantage employees and that accordingly, the Commission’s discretion in s.188(1)(a)(i) could be applied.

[18] The obligation within s.180(2) that an employer must take all reasonable steps to ensure employees are given a copy or have access to material incorporated by reference in the Agreement has been the subject of extensive consideration by the Commission. In BGC Contracting it was concluded that in addition to the provision of a hyperlink the step of downloading a document would probably be required before an employee might be said to have been given a copy of material. 7 Access to a document need not involve physical possession of the documents and would encompass an employer leaving copies of such documents where employees are able to gather and review the documents.8 In CFMMEU v Dawsons Maintenance Contractors Pty Ltd it was decided that provision of such documents in one form or another is a foundational matter with it being an element of the requirement for an enterprise Agreement to have been genuinely agreed.9

[19] Since those matters were decided, s.188(2) has been inserted into the Act enabling the Commission to accept that there has been genuine agreement notwithstanding minor procedural or technical errors. The text of s.188(2) is set out above.

[20] Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others, 10 decided after the commencement of s.188(2), determined that a failure to comply with a procedural requirement will constitute a “procedural error” with a procedural requirement being one which requires an employer to follow a particular process or course of action.11 A procedural error is to be distinguished from a technical error which includes an obligation to comply strictly with the form and content of an instrument. While a single error may have both procedural and technical components, what constitutes a “minor” error calls for an evaluative judgement having regard to the underlying purpose of the relevant procedural or technical requirement which has not been complied with and the relevant circumstances. The Full Bench then concluded this about the characterisation and determination of minor errors:

“7. Generally speaking, the lower the level of non-compliance the more likely it is to be characterised as a ‘minor error’. For example, informing the employees of the matters in ss.180(3)(a) and (b) just after the start of the 7 day access period (say 6 days before the start of the voting process) is likely to be a ‘minor error’ in most cases. But it will depend on the circumstances. If it is the first Agreement at the enterprise; the bargaining representatives are inexperienced and the employees are predominantly from a non-English speaking background, then it may not be a ‘minor error’. Conversely, only informing the employees of the time and place at which the vote will occur some 4 days before the voting process starts may be a ‘minor error’ where there is a history of bargaining at the enterprise; the Agreement is, in effect, a ‘roll over’ Agreement; the employer takes further active steps to remind employees of the time and date of the vote; and a high proportion of employees actually vote.” 12

[21] In the case of Greenfreight, two Awards were incorporated by reference within the Agreement, however initial correspondence to employees about the proposed Agreement made no reference to the incorporated Award material and the company did not inform its employees that the incorporated material would be made available on request. 13 The Vice President considered initially that there had not been compliance with s.180(2) but that after submissions from the Applicant about the operation and applicability of s.188(2), together with reference to the history of negotiations and the fact that the Agreement was a “roll over” Agreement,14 it was possible to characterise the Applicant’s failure to inform employees that copies of the incorporated material were available on request as a minor procedural technical error and that employees were not likely to be disadvantaged by the error. He then accepted that the Agreement was genuinely agreed within the meaning of s188(2).15

[22] Bachy also concerned a case in which there was also a previously operable Enterprise Agreement, however the Applicant did not provide employees with a copy of an incorporated Award, although it submitted that had anyone requested a copy of the Award they would have been provided with a copy. 16 There was evidence that the Applicant believed employees would be able to access the Award through the internet if they chose to do so.17 It was also the case that the Agreement under consideration made explicit reference to the operation of provisions otherwise contained within the reference Award in six places, with it being put to the Deputy President that such failure to provide a copy of the Award meant employees were only receiving part of their terms and conditions.18 In finality the Deputy President was not satisfied employees’ attention had been drawn to the relevance of the Award.19

[23] I am satisfied that Mulgoa Quarries informed employees about the content of the Agreement with that occurring in meetings on 19 September and 14 October 2019, and that in the latter meeting employees were told, pertinent to the incorporation by reference of the Award that “there were copies of the Award available online or that if people wanted a copy printed for them they could come into the office and someone would help them”. 20

[24] The circumstances now before the Commission are distinguishable to either Bachy or Greenfreight, since in this case, employees were informed of the operation of the Award and where copies could be accessed. Such is obviously different to both Bachy or Greenfreight. Nonetheless, the failure to do more than merely refer to the Award or say that it may be accessed online or upon request from the employer may be characterised as an error on the part of the Applicant which, without further consideration, would cause the Commission to find that the Agreement had not been genuinely agreed.

[25] The context of this Agreement is that it is a successor to earlier Agreements, in largely similar terms, and in relation to the incorporation of the Award, identically so. Employees were provided with access to the primary document, being the Agreement. There is no basis to conclude that Mulgoa Quarries deliberately sought not to comply with s.180(2), or that employees were confused about what incorporation of the Award may mean for them, especially since the predecessor Agreement included an identical incorporation. This is a situation in which the incorporation of the Award continues that which applied in previous enterprise agreements (including the agreement which was in effect at the time of the vote), and the substantive changes to the existing position (concerning adjustments to the rates payable) are contained in the Agreement itself. Employees were informed where and how they may be able to access the content of the Award. They were not likely to have been disadvantaged by the failure to provide full copies of the Award.

[26] Therefore, to the extent that the failure to provide employees with a copy of the Award was a procedural or technical error, the error was “minor” and is capable of being addressed with an exercise of discretion on my part pursuant to s.188(2). I am satisfied that but for the minor and technical error concerning compliance with s.180(2) as mentioned in s.188(1)(a)(i), the Agreement would have been genuinely agreed to within the meaning of s.188(1).

Misrepresentation about nomination of bargaining representatives

[27] The CFMMEU argument that there has been misrepresentation to employees about the nomination of a bargaining representative turns upon the content of the communication to Mulgoa Quarries employees from the company’s General Manager – Operations, Mr Scott Jamieson. That communication was sent to employees on 20 February 2019 and was covering correspondence both for the commencement of the companies notification of an intention to bargain as well as the provision of the notice of employee representational rights and an invitation to employees to nominate a bargaining representative for the purposes of bargaining. The communication by Mr Jamieson was in these terms:

“All,

As you are aware our current Enterprise Agreement is due for renewal at the end of March 2019.

Enclosed are the prescribed notification letters in regard to commencement of discussions and representational rights for agreement of the new Enterprise Agreement.

The letters attached are “prescribed documents” under the Act and therefore cannot be

amended.

To ensure your nomination for a Bargaining Representative is valid where asked to provide PRINT NAME of BARGINING REPRESENTATIVE please nominate a person’s name or a “Recognised Organisation” (note “MQ Consultative Committee” is not a recognised organisation)

Please complete and sign the nomination form included in the attached documents and

arrange for its’ return to 44 Tyrone Place, Erskine Park.

If you require any additional information please contact Chris Miler, myself or a Consultative Committee Representative.” 21

[28] Characterising the matter as pertaining to whether the Agreement is genuinely agreed the CFMMEU gave these submissions:

“35. The two above statements appear to make two misrepresentations. Firstly, in reading the letter it could appear that it alludes to nomination form to appoint a bargaining representative is a prescribed document. Pursuant to regulation 2.05 of the Fair Work Regulations a prescribed document or prescribed notice is the notice of representation rights (NERR). A form to appoint a bargaining representative is not a prescribed document and is not required to be completed by the employee. An employee as per s 178(c) simply has the option of appointing a bargaining representative in writing.

36. Secondly, a nomination for a bargaining representative can still be valid irrespective of whether an employee nominates a person in writing. As per s 176(b) of the Act, if an employee is a member of an organisation, that organisation by default will be their bargaining representative.

37. Prior to approving an agreement s 188(1)(c) of the Act requires that the Commission be satisfied there are no reasonable grounds for believing that the agreement was not genuinely agreed. One of the critical issues that fall under s 188(1), is determining whether the agreement of the voting cohort of employees is capable of being described as having authenticity or moral authority based upon a real and true understanding of the consequences of the proposed agreement.” 22 (citation omitted)

[29] The argument that this is a misrepresentation to employees or provision of false and/or misleading information has no substance. It would be an overly technical construction both of the legislation as well as the communication itself to form the view that what was said in Mr Jamieson’s February communication somehow falsely or misleadingly characterises employees’ rights. Such an approach would also be disharmonious with the Objects of Part 2 – 4 of the Act encouraging “a simple, flexible and fair framework that enables collective bargaining in good faith”. Far from being a mischaracterisation or misrepresentation of what is attached, it is apparent that what Mr Jamieson has communicated to employees is an endeavour, somewhat formally and perhaps not with the best choice of language, to invite the nomination of bargaining representatives.

[30] The CFMMEU argument in respect of potential misrepresentation to employees about the nomination of bargaining representatives is not made out and does not persuade me that for this reason the Agreement has not been genuinely agreed.

[31] To the extent that this is a procedural or technical error, it is a minor one and it is capable of being addressed with an exercise of discretion on my part pursuant to s.188(2). I am satisfied that but for what was communicated in the letter, the Agreement would have been genuinely agreed to within the meaning of s 188(1).

An erroneous Form F17

[32] Finally, the CFMMEU pressed that the Employer Support Statutory Declaration, the Form F17 stated there were no provisions of the Agreement that are less beneficial than the reference Award. The union claims this is false as there are a number of terms and conditions that are less beneficial in comparison to the Award, which in turn raises concerns as to the compliance with s.180(5) of the Act. 23 The CFMMEU argued that the decision of the Full Bench in CFMEU v Shamrock Civil24 should have application in this matter as well. In that matter the Form F17 had declared, incorrectly, that none of the provisions of the Agreement were less beneficial than the reference Award when in fact there were a significant number of less beneficial terms.

[33] This matter was analogous the CFMMEU contended, noting that in Shamrock:

“66. The Full Bench also noted that the erroneous provision of information in an F17 declaration was relevant to the following further matters. First, the declaration sets out the employer’s understanding of the Agreement. If that understanding is erroneous, this will presumably have resulted in the provision of a misleading explanation to employees and will impact on whether or not the Agreement has been genuinely agreed. Second, the Full Bench quoted and endorsed the remarks of Flick J at first instance in CFMEU v One Key Workforce to the effect that the obligation s 180(5) imposes is important to ensure that employees are as fully informed as practicable. Third, that the steps necessary to fulfil the requirements of s 180(5) will depend on the circumstances of the particular case. These matters are also relevant, to the satisfaction of the requirement under s 188(1)(c).

67. Given the number of BOOT related issues there are serious concerns that the proposed Agreement has not been genuinely agreed. We submit that the company has not taken all reasonable steps to ensure that the terms of the Agreement, and the effect of those terms were not explained to the relevant employees.”

[34] The Applicant contends there is no need for Shamrock to be applied, since: 25

• those matters outlined by the CFMMEU “are in fact not less beneficial and that is why they were not included in that section of the F17”;

• not only were employees represented during bargaining, but the terms and conditions of the Agreement were accurately explained to employees prior to the vote; and

• all reasonable steps were taken by Mulgoa Quarries to ensure the terms of the Agreement and their effect were explained to employees.

[35] The CFMMEU submissions refer to and rely upon the Full Bench’s reasoning in Shamrock, drawing a comparison between the Agreement which was the subject of consideration in the appeal, and this Agreement. However, it is apparent from a careful consideration of the full text of the Full Bench’s decision that it was concerned about a significant failure on the part of the employer bound to the Agreement to inform and explain a situation in which the Agreement then before the Commission would lead to a significant number of significant reductions from the Award standard:

“[31] The Respondent’s answer to question 2.6 of the Form F17 as to the steps taken to explain the terms of the Agreement, and the effect of those terms, to relevant employees is extracted above at paragraph. Depending on the circumstances, this could well be enough to satisfy the statutory requirement. As his honour Justice Flick said, whatever steps may be necessary will depend upon the facts and circumstances of each particular case.

[32] In this matter, the Applicant answered “no” in respect to questions 3.5 and 3.6 of the Form F17 stating that there were no more beneficial terms or less beneficial terms in the Agreement compared to the Award. It is patently clear that both answers do not accord with the factual situation. The reality is that there are some more beneficial terms in the Agreement, for example higher base rates of pay. It is also apparent that there are a significant number of less beneficial terms. In the Decision at first instance the Commissioner considered a number terms of the Agreement which the CFMEU considered to be less beneficial and other issues identified by the Commission in its initial assessment of the Agreement. The Commissioner did not consider a number of the terms identified by the CFMEU to be a detriment to employees. However, the Commissioner found that no requirement in the consultation term to provide written information, entitlements for shiftworkers, redundancy, meal breaks and rest periods, the absence of a minimum engagement on Saturdays and public holidays, reduced notice of annual shut down and averaging of hours over a 12 month period were either detrimental to employees or may result in scenarios where employees may be worse off under the Agreement. A number of undertakings were sought to satisfy the Commissioners concerns in relation to the BOOT.

[33] It is important to note that the Form F17 is a statutory declaration as to what the Applicant declares that they have done to satisfy the various requirements of the legislation. While in some circumstances an Applicant will incorrectly answer question 3.4 and/or question 3.5 because they have omitted one or some items from the list, and because the omitted items are not particularly significant this may not necessarily be a cause for concern. However, in this case a declaration that there are no less beneficial terms does give rise to concern as it is apparent that in fact there were a significant number of less beneficial terms. Aside from the obvious concern that the declarant has made a declaration which is untrue, it gives rise to a further concern as to the nature of the explanation given to employees as to terms of the Agreement and the effect of those terms. That is, it at least raises a real question as to the explanation to employees about the terms of the Agreement and in particular the effect of those terms, in circumstances where the employer is attesting that the agreement has no less beneficial terms.

[34] We are of the view that where the answer to the question less beneficial terms’ was so clearly at odds with the factual situation, this should have led to the Commissioner to make further enquiries. While we understand the focus of the CFMEU during the proceedings was not on that aspect, this does not alter the fact that the Commissions statutory obligation is to properly assess all of the approval requirements, to the standard set by Justice Flick. We have sympathy for the fact that the decision in One Key was not handed down until after the approval of this Agreement.

[35] As we have mentioned, the Respondent has made further submissions regarding the explanation provided to the relevant employees in this case. Those submissions are set out above. We note that the Respondent submits and we accept that the employees were aware that they were covered by the Building and Construction General On-Site Award 2010. We also accept that some Award clauses and Agreement clauses were compared. We also accept that the knowledge and experience of employees is relevant when determining whether the employer has taken ‘reasonable steps’. However, importantly, the Respondent concedes that “The CSM [Corporate Services Manager] did mention that the Award and NES formed the baseline and that nothing in the Agreement would be less than what they were entitled to under the Award or NES. And at the time the CSM believed this to be the case”.

[36] However, it is apparent that there are in fact a number of significant reductions in the Award entitlements. In light of the concession, it is apparent that the explanation to employees was quite simply, wrong. We accept that an explanation of the terms of the Agreement and the effect of those terms to employees may not be perfect and may, depending on the circumstances, still satisfy the requirement of s.180(5) of the Act. However, an explanation which is clearly misleading (as in this case) cannot possibly meet the requirement. We note that the Commissioner did not have the benefit of the additional submissions and the concession.

[37] Where the Commission is provided with a statutory declaration which is at odds with the real position in important respects, a number of practical difficulties can be raised in determining an application for approval. The applicant stated in its application that there were no reductions on the award when in fact there were, which gradually became apparent during the proceedings at first instance. Such an employer understanding would presumably lead it to provide the same misleading explanation to employees, and it is now conceded by the employer that this was the case. As in this present matter this may well have implications in many proceedings for the question of whether or not there was genuine agreement within s.186(2)(a), and therefore whether the agreement can be approved, which the Commission must endeavour to examine in greater detail as the real facts become apparent.” 26 (endnotes omitted; emphasis added)

[36] In this case, certainly the employer omitted mention within the Form F17 that the Agreement contained several less beneficial terms within the Agreement. Those terms though, were not either a significant number of terms, or significant reductions. In the context of the union’s submissions about passage of the “better off overall” test, the CFMMEU identify six matters in which the Agreement is less beneficial than the Award and which should have been identified as less beneficial terms in the Form F17:

• the hours of work in the proposed Agreement are less beneficial than those in the Award; this arises because of the span of hours in the Agreement being well beyond those in the Award;

• there is a restriction on the number of employees who may be permitted to have an rostered day off (RDO) at the same time;

• the provisions for the taking of meal breaks are detrimental;

• arrangements for payment of the living away from home allowance are less generous;

• the restriction on the maximum amount of annual leave which may be accrued is detrimental when compared with the Award; and

• redundancy provisions are less beneficial.

[37] The matter of whether each passes the BOOT is dealt with later in this decision. In relation to the subject of them being identified as detrimental in the Form F17, it is to be noted that while each of the matters, of course, has individual importance the omissions would neither be able to be characterised as numerically significant when compared with the entirety of the obligations cast on an employer by the Award or the Agreement, or would be drivers of any individual employee’s take home pay. The context of this Agreement is that it is a successor to earlier Agreements, in largely similar terms, including on these matters. There is no basis to conclude that Mulgoa Quarries deliberately sought to avoid stating less beneficial terms in the Form F17.

Conclusion on genuine agreement

[38] The CFMMEU have advanced three heads of argument that the Agreement is not genuinely agreed; that the terms and effect of the incorporated Award were not explained to employees; that the Applicant misrepresented the need for appointment of a bargaining representative in its notification correspondence, and that incorrect information in the Form F17 should lead to a finding that the terms and effect of the Agreement were insufficiently identified to or explained to employees. Having considered each of these arguments and for the reasons expressed above, I am satisfied that the Agreement was genuinely agreed within the meaning of s 188(2).

INCLUSION OF AN UNLAWFUL TERM

[39] Clause 32 of the Agreement requires employees to periodically attend for medical examinations paid for by Mulgoa Quarries. Clause 32.2 provides for a differential requirement depending on age of the employee:

“32. MEDICAL EXAMINATIONS

32.1. Employees covered by this Agreement are required to attend medical examinations, paid for by the Employer, and conducted during working hours.

32.2. These examinations will be conducted at least every three (3) years for Employees aged forty-nine (49) or under and yearly for Employees aged fifty (50) or over, and may be required more frequently as circumstances require.

32.3. These examinations will be carried out by a medical practitioner(s) appointed by the Employer.

32.4. The medical practitioner(s) will be provided with a copy of the position descriptions including the physical requirements of the position.

32.5. If a medical report renders an employee unfit to carry out their duties, every endeavour will be made by the Employer to retrain and redeploy the employee to undertake alternative duties.

32.6. As an alternative where the employee is unfit to carry out their duties, the Employee may elect to resign and, in this circumstance, as a gesture of good will, the resignation will be treated and paid as a voluntary redundancy.

32. 7. The results of all medical examinations available to the Employer will be treated with strict confidence and will be available to the Employee.”

[40] The CFMMEU’s objection is that the differential requirement for those aged 49 or under to those aged 50 or above amounts to age discrimination and as such the provision is an unlawful term since employees over the age of 50 are to undertake medical tests more frequently than employees who are younger than 50 years of age. As a result, employees over the age of 50 are forced to undertake more medical tests, because of their age. In the hearing conducted before me the Applicants clarified that it was prepared to modify the provision, through an undertaking such that the reference to those aged 50 or over being required to undertake annual medical checks would be removed. 27

[41] I accept the CFMMEU’s arguments that Clause 32.2 would, if included in an approved Agreement be an unlawful term. Section 194 provides that an unlawful term includes a discriminatory term and s.195(1) defines a discriminatory term including one which discriminates against an employee covered by the Agreement because of their age amongst other matters.

[42] I note from the final undertakings provided to me on 4 February 2020 after the hearing that the matter of frequency of medical examinations for employees 50 years of age or older is not dealt with in the undertakings. Noting that s.190(1) deals with the circumstances of the Commission having a concern that the Agreement does not meet the requirements set out in either is sections 186 or 187 and that satisfaction by the Commission that an Agreement does not include an unlawful term is dealt with in s.186(4) I consider that the discriminatory effect of Clause 32.2 may be removed through the provision of an undertaking by the Applicant, which I now invite.

WHETHER BOOT PASSED

[43] The CFMMEU have argued that there are 6 matters relevant to application of the better off overall test (BOOT) which would cause the Commission to form the view that the test has not been met:

• the hours of work in the proposed Agreement are less beneficial than those in the Award; this arises because of the span of hours in the Agreement being well beyond those in the Award;

• there is a restriction on the number of employees who may be permitted to have an RDO at the same time, but none in the Award;

• the Agreement provisions for the taking of meal breaks are less than those within the Award;

• the living away from home allowance is less beneficial than the Award;

• the Agreement’s restriction on the maximum amount of annual leave which may be accrued is detrimental when compared with the Award; and

• the Agreement’s redundancy provisions are less beneficial than the Award.

[44] I now consider each of these objections in greater detail.

Hours of work

[45] The CFMMEU’s objections in respect of hours of work connect with the fact that Clause 13.1 of the Agreement provides for a span of hours as follows:

“13.1. The ordinary hours of work for full time employees will be eight (8) hours per day, with an average of thirty-eight (38) hours per week, worked from Monday to Friday between the hours of 5.30am and 5:30pm. The ordinary hours when working on a residential site will be 6.30am-6.30pm.

13.2. The hourly rates expressed in Appendix A will be paid for the first eight (8) hours of work performed Monday to Friday.

13.3. Start and finish times, frequency of break times and breaks between periods of work will be agreed between the parties on a situational basis requirement.

13.4. Where no agreement can be reached, the Employer shall determine all reasonable break times that are consistent with business requirements and with reasonable regard to Employees' personal welfare and responsibilities.” (13.5 – 13.7 omitted)

[46] In contrast Clause 33.1 of the Award provides a more restricted span of hours; namely ordinary working hours which is not shift work may be worked between 7.00 AM and 6.00 PM, Monday to Friday in accordance with procedures set out in the Award. Relevant to this matter are the provisions of Clause 33.1(a)(viii) provides for early starts through local agreement, as follows:

“(viii) Early starts

The working day may start at 6.00 am or at any other time between that hour and 8.00 am and the working time will then begin to run from the time so fixed, with a consequential adjustment to the meal cessation period. The change to the start time requires agreement between the employer and the employees and their representative(s), if requested.”

[47] The union also notes that Clause 34(a) of the Award defines a morning shift as a shift commencing at or after 4:30 AM and before 6:00 AM, with a morning shift attracting a penalty rate of 25% if the employee is employed continuously for five shifts between Monday to Friday. 28 The CFMMEU’s concern is expressed as being both in relation to the span of hours of day workers, as well as for shift workers. Mulgoa Quarries response to this objection is that it would appear “that the Union have applied the shift work definitions that are applied to the General Building and Construction and Metal Engineering Construction sectors rather than the provisions in the Award dealing with shift work for the civil construction sector.”

[48] It is noted in relation to shift work under the Award, that a day shift means any shift starting on or after 6.00 AM and before 10.00 AM, and that provisions are not made for extensions to the span of hours through local agreement. It is also noted that provisions are made in the Award’s Clause 7, Individual Flexibility Arrangements for agreement to be reached between an employer and employee over a variation to the application of provisions of the Award for “arrangements for when work is performed”.

[49] The scheme of the Agreement is that while shift work is provided for, it is essentially limited to night shift work, being defined as a shift which finishes after 11.00 PM and before 7.00 AM (Clause 13.6). In contrast, the Award’s definition of night shift is “any shift starting at or after 8.00 pm and before 6.00 am”. There is no evidence before me about how night shifts would be utilised, if at all, by Mulgoa Quarries. The Agreement does not provide for afternoon or evening shift work, and does not define a day shift in the way the Award does.

[50] Under the Agreement, a night shift employee will be paid at their ordinary time rate plus a 50% loading. In contrast, a civil construction shift employee working Monday – Friday night shifts under the Award and not subject to an Individual Flexibility Arrangement would be paid a 15% loading and higher penalties apply for weekend and public holiday shifts or non-successive shifts.

[51] Because of the markedly different scheme between the shift arrangements of the two instruments, including the very significantly higher general shift penalty under the Agreement, as well as its more generous definition of shift work, I am satisfied shift workers under the Agreement would be better off overall.

[52] In relation to the hours of day workers, the contentions advanced by the CFMMEU that the hours of work arrangements are less beneficial under the Agreement than the Award flow from the fact that, in the absence of agreement between the employer and affected employees, the earliest start time under the Agreement is 5.30 AM generally, or 6.30 AM when working on a residential site. In contrast, the Award provides for day work generally between 7.00 AM and 6.00 PM, Monday to Friday. While so, it must be noted that Clause 34, dealing with shift work, provides for a morning shift, being “a shift commencing at or after 4.30 am and before 6.00 am”, with such shift to be paid at a penalty of 25%.

[53] The scheme of the Agreement provides that, in some cases, work in ordinary hours may commence from 5.30 AM. In contrast, under the civil construction section of the Award, which is said to apply to these employees, work starting at 5.30 AM would be treated as overtime until 6.00 AM, and as a day shift after that time (if not subject to an Individual Flexibility Arrangement). An employee starting at 5.30 AM under the Agreement would therefore have some detriment when compared with if they worked under the Award for the half hour between 5.30 AM and 6.00 AM. Even so, such reduction in benefit needs to be balanced against the financial benefit to accrue from working under the Agreement. Other than for a “New Entrant”, who is paid at the same rate of pay as if they worked under the Award, the hourly rates of pay for employees under the Agreement are between 17% and 26% higher than under the Award.

[54] I am satisfied that all employee classifications except for employees classified as New Entrant are better off overall under the Agreement due to the higher rates of pay provided under the Agreement. To remedy my concern that New Entrant classified employee would not be better off overall, I invite the employer to provide an undertaking that New Entrant employees start time’s will be as determined from the Award.

Rostered days off

[55] The CFMMEU object to the restriction contained within Clause 16.11 of the Agreement that would not permit more than two employees to have the same rostered day off unless otherwise approved and agreed by Mulgoa Quarries. It argues that this restriction is not a feature of the Award.

[56] The Applicant submits that Clause 33.1(viii) of the Award allows for agreement to be reached in an alternative method for working other than the rostered day off cycle and that the Agreement clause does not prevent the number of employees permitted to take an RDO on any one day being limited. Further, it is submitted that:

“It is essential for operational reasons that employees seek approval from Mulgoa Quarries when taking an RDO. Mulgoa Quarries typically performs work on sites that do not close down. It is not operationally viable for Mulgoa Quarries to have all of their quarry and plant operators to take the same day off as an RDO.” 29

[57] I have considered the submissions of the employer and the CFMMEU and am satisfied that due to the benefits of the Agreement, employees will not suffer a considerable detriment with the restriction on the rostering of RDO’s. While there is no provision in the Award for a restriction on the number of people to be on an RDO at the one time, neither is there a restriction. A restriction of the type indicated in the Agreement is not unreasonable in the context of a relatively small employer, such as the Applicant. I am accordingly not persuaded by the submissions of the CFMMEU on the subject and find that employees are better off overall from the Agreement provision.

Meal breaks

[58] The CFMMEU argue that the meal break provisions of the Agreement are less beneficial than those in the Award in two respects, one with a non-monetary impact and the other with a monetary impact. This is because there is no restriction on the amount of hours that an employee may be called upon to work before a meal break, as well as that there is no penalty provided for in the Agreement to be paid to an employee in the event they do not receive a meal break. In particular, the Award provides both that an employee may not work for more than 5 hours without a meal break (Clause 35.1) and that in the event they do, then until they are released for a meal break, they are to be paid at the rate of double time “between the prescribed time of finishing and the beginning of the time allowed in substitution for the meal break” (Clause 36.5).

[59] One of the CFMMEU’s objections has been dealt with through a proposed undertaking from Mulgoa Quarries, which would provide that “an employee will not be required to work more than 5 hours without a meal break”. The second of the CFMMEU’s objections, going to the matter of the payment to be made to an employee in the event a meal break is not given within 5 hours is not dealt with through the employer’s undertaking.

[60] The Applicant submits on this issue that:

“25. The Award allows for the employer and employees to agree on alternative arrangements for the taking of the meal break at 35.1(a).

26. The Agreement merely allows for employees to agree to a meal break time that suits the operational needs, the fatigue management and employees needs. This clause is not detrimental and does not remove the meal break from the employee.

27. The employees covered by this agreement are often required to commence work at 6.30am and therefore taking a meal break between 12pm and 1pm is not suitable.

28. The employee representatives advised that this arrangement suits the majority of employees.” 30

[61] I am persuaded by the submissions of the CFMMEU on the issue of meal breaks, at least in relation to the absence of a payment to be made to employees if they are not provided with a meal break, noting that the proposed undertaking does not completely deal with the objection raised by the union. To remedy my concern, I invite the employer to provide an undertaking to the effect of mirroring the Award entitlements to payment at double time in the event employees are not provided with a meal break.

Living away from home allowance

[62] Both the Agreement and the Award provide for “living away from home” arrangements providing schemes of obligations and allowances when an employee is called upon to perform work that means they are unable to return home each night. Amongst other things the Award provides either for the employee to be paid an allowance of $503.40 per week or $72.02, or to be provided with “reasonable board and lodging in a well kept establishment with three adequate meals each day” or, if required to live in camp to “provide all board and accommodation free of charge” (Clause 24.3(a)(i) – (iii)). For its part, the Agreement provides a different monetary allowance, of up to $625 per week or $105 per day. The Agreement also provides for a food allowance of $42 per day, when the employer provided board and lodging (Clause 20.8). The CFMMEU argue that this insufficient:

“As set out in clause 24.3 of the Award, if an employer decides to pay for the employee’s accommodation, then they are also required to provide three adequate meals a day. It is undoubtedly questionable whether $42 dollars per day would allow the employees to afford three meals per day. Accordingly, as per the Award if the employer does not provide the three meals, then they would be required to pay per day $72.02 a day. As a result, In only paying $42 a day when providing accommodation, there would be a $30 dollar short fall per day in comparison to the Award.”

[63] Mulgoa Quarries submission on this matter includes that while the Agreement clause is different, it is nonetheless better for employees that the Award provision:

“32. Clause 20.8 of the Agreement provides:

Where board and lodgings are supplied by the Employer, employees shall be paid the Food Allowance per day.

33. This allowance of $42 per day is in addition to the living away from home allowance which is $625 per week.

34. Where an employee is required to live away from home and provide their own food, they would receive $835 per week under the Agreement.”

[64] I have considered the submissions of both parties on the living away from home allowance and am satisfied that there is no identified detriment to employees from the differences in the living away from home allowance provided by the Agreement compared to the Award. As such, I am satisfied that employees are better off overall.

Annual leave

[65] The annual leave objection put forward by the CFMMEU relates to the provision in the Agreement that endeavours to limit the amount of leave that may be accrued. The provision is within Clause 22.7; with the preceding and following clauses also being relevant to the matter:

“22.6. The Employer recognises the need for Employees to take rest and recreation during the year and encourages all fulltime and part-time Employees to take their annual leave in the year accrued.

22.7. Employees must keep their annual leave accrual below thirty (30) days. Employees in excess of thirty (30) days annual leave accrual, must have an approved plan agreed with the Employer to take their excess annual leave.

22.8. Where there is no approved plan in place, the Employer may direct the Employee to take excess annual leave.”

[66] The maximum accrual of annual leave was addressed by Mulgoa Quarries in its Final Undertakings, which would adjust the maximum accrual to 40 days.

[67] The CFMMEU objection is that this is a detriment for employees since there is no maximum accrual under the Award, although noting that Clause 38.7 of the Award permits an employer to direct an employee to take annual leave. 31

[68] I am satisfied that upon a reading of Agreement Clause 22 in its entirety that employees will not face a detriment on the annual leave provisions provided under the Agreement. There is an objective limit for the accrual of leave, adjusted to 40 days, after which there must be an agreed approved plan for the taking of excess leave. If a plan cannot be agreed, then the employer, if it chooses, may direct leave to be taken. Such is neither in conflict with the Award or detrimental to employees when the two provisions are compared. Excessive leave must be managed somehow, and this clause achieves that purpose without being in conflict either with the Award or the NES. In relation to the NES, it is to be noted that s.93(3) provides that an enterprise agreement may include terms requiring an employee, to take paid annual leave in particular circumstances, but only if the requirement is reasonable.

[69] I am prepared to find that the BOOT is met in relation to this matter if the employer provides a modified undertaking to the effect that a requirement given under Clause 22.8 has effect only to the extent the requirement is reasonable.

Redundancy

[70] The CFMMEU initially objected to the Agreement’s redundancy provisions indicating differences in the definition of redundancy as between the Agreement and the Award:

“60. Clause 38.2.2.2 provides for a less beneficial term in comparison to the Award, as it excludes circumstances that the Award would otherwise provide for employees. Clause 38.2.2.2 defines redundancy as the following:

“”Redundancy”, means a circumstance where, an employee’s employment is terminated on the Employer’s initiative, because the Employer no longer requires the job done by the Employee to be done by anyone.”

61. Clause 17.2 of the Award defines redundancy as the following:

“For the purposes of this clause, redundancy means a situation where an employee ceases to be employed by an employer to whom this award applies, other than for reasons of misconduct or refusal of duty. Redundant has a corresponding meaning.”

62. The difference between the two means there will be circumstances where employees covered by the proposed agreement will not be entitled to a redundancy payment. This would then result in employees being less better off overall in comparison to the Award.”

[71] In response Mulgoa Quarries gave the following submissions and then provided an undertaking in relation to its redundancy fund contributions:

“41. Employees receive an additional benefit under the Agreement in lieu of receiving the redundancy/severance pay under clause 17.3 of the Award.

42. Mulgoa Quarries make a payment on behalf of employees into the ACIRT scheme. This scheme allows employees to be paid out when they leave their employer, it is not limited to being made redundant.

43. Unlike the redundancy/ severance pay scheme under the Award that is capped at 8 weeks pay, the Agreement requires Mulgoa Quarries to continue to make a payment into the scheme on behalf of employees. This is a significant benefit for employees who are long term employees.”

[72] The undertaking is in these terms:

“6. We undertake that, at clause 38.2.4, were an employee would be entitled to a higher amount of severance pay under the Building and Construction General On-site Award 2010 than the amount accrued in the Employees ACIRT account, the Employer will top up the amount owed by the difference.”

[73] In its final response to the Commission, the CFMMEU advised that it was “not satisfied in respect of the undertakings 4 and 5 made by the Applicant” but indicated no position in relation to the other undertakings, including that dealing with superannuation.

[74] I am accordingly satisfied that employees will be better off overall in relation to the redundancy clause.

[75] As set out above, I have found that the Agreement is genuinely agreed, but presently includes an unlawful term which may be overcome with an undertaking from Mulgoa Quarries. I have also found the Agreement is capable of passing the BOOT with the undertakings given to date but with some additional undertakings. I now invite the Applicant to provide additional undertakings dealing with:

• the matter of a discriminatory provision in Clause 32;

• the starting times of “New Entrant” employees (pertaining to Clause 13);

• the matter of payment to be made if an employee does not have a meal break (Clause 35); and

• the reasonableness of a direction that annual leave be taken (Clause 22.8).

[76] Should the Applicant provide suitable undertakings within 7 days of this decision, the CFMMEU and other bargaining representatives will be afforded an opportunity to provide their views as required by s.190(3) and (4), after which the Commission will finally determine the application for approval of the Agreement.