| [2021] FWC 1267 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Master Builders' Association of New South Wales, The
(AG2020/3481)
COMMISSIONER JOHNS |
SYDNEY, 9 MARCH 2021 |
Application for approval of the FDC Construction (NSW) Pty Ltd / Employees Enterprise Agreement 2020-2023
[1] An application has been made for the approval of an enterprise agreement known as the FDC Construction (NSW) Pty Ltd / Employees Enterprise Agreement 2020-2023 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (FW Act) on 17 November 2020. The application was made by The Master Builders’ Association of New South Wales (MBA NSW) on behalf of the employer, FDC Construction (NSW) Pty Ltd (FDC/Employer). The Agreement is a single enterprise agreement.
[2] Until it is replaced, the employees are covered by the FDC / CFMEU Collective Agreement 2018 1 (2018 Agreement). The 2018 Agreement passed its nominal expiry date on 31 December 2018. The Employer commenced bargaining when it issued a Notice of Employee Representational Rights (NERR) on 25 February 2020.
[3] On 18 November 2020, correspondence was received from the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU/Union) requesting to be provided with copies of the application documents and requesting to be heard in the matter. In line with Fair Work Commission’s (Commission) usual practice the application documents were provided to the Union on 20 November 2020.
[4] The application was accompanied by a Form F17 - Employer’s Declaration in support of an application for approval of an enterprise agreement (Form F17) declared by Sean Gibbeson, General Manager – Construction NSW, of the Employer. In relation to s.180(5) of the FW Act, in answer to the question “What steps were taken by the employer to explain the terms of the agreement, what was explained and how was the effect of those terms explained to the relevant employees”, Mr Gibbeson declared,
“27 October 2020 A PowerPoint presentation (attached and Attached and marked "E" and "F" marked "E") was presented to all Employees which provided as follows:
• An overview of the bargaining process
• Identified and explained the documents issued to employees including:
◦ How and When for Approval Form - Enterprise Agreement
◦ 1 x Copy of the current 2018 Enterprise Bargaining Agreement
◦ 1 x Copy of the Proposed 2020 -2023 Enterprise Bargaining Agreement
◦ 1 x USB which contains relevant documents and web links
• Explained the terms of the FDC Construction (NSW) Pty Ltd / Employees Enterprise Agreement 2020-2023, and the effect of those terms, as amended from the FDC / CFMEU Collective Agreement 2018 (AG2018/1418) by way of a page turn comparing both documents, with the amendments highlighted in yellow (attached and marked "F")
• Explained the voting process moving forward
• Provided a question and answer session”
[5] At the time of lodgement, other than the simple assertion that “the effect of those terms” were explained, no other information was provided about what was explained. Self-serving statements by an employer about compliance are not sufficient to discharge the proof required in relation to s.180(5) of the FW Act.
[6] Section 180(5) provides that,
The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.
(my emphasis)
[7] Having regard to the decision of the Federal Court of Australia (Flick J) in Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd 2 compliance with s.180(5) of the FW Act in an essential pre-approval requirement. His Honour held that,
“[108] The response provided to the Commission in para 2.6 of the F17 Statutory Declaration was misleading to the extent that it asserted on behalf of One Key Workforce that the “terms of the Agreement and the effect of the terms were explained to the relevant employees” by means of either the 25 August 2015 email or during the “telephone conversations”.
[109] Such reasons as were provided by the Commissioner at para [9] of his reasons for decision expose jurisdictional error. Little, if any, consideration was given to what were the “steps” in fact taken by the employer or the adequacy of those steps. Such consideration as was given was more directed to the subject-matter of the information communicated rather than to the content of the information communicated or the effectiveness of the communication of that information or (for that matter) what was not communicated.
[110] Separate from that source of jurisdictional error is the further conclusion that there must in fact be compliance with s 180(5) before the power of the Commission to “approve” the agreement arises. Although the Commission must form a state of “satisfaction” for the purposes of s 188(a)(i) of the Fair Work Act as to whether an employer has “complied with” s 180(5), its statement of having reached that state of “satisfaction” cannot transform a manifestly inadequate explanation process into one which complies with s 180(5). That factual inquiry, on this alternative basis, remains a matter that this Court can examine.
[111] On this alternative basis, it is further concluded that the approval process entrusted to the Commission miscarried.”
[8] An appeal against the decision of Flick J was dismissed by the Full Federal Court of Australia (Bromberg, Katzman and O’Callaghan JJ) in One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union. 3 The Full Court observed that,
“[111] The only material before the Commission on compliance with s 180(5) was contained in Ms Ind’s statutory declaration. Although the statutory declaration was silent as to the content of the explanation or, indeed, as to the substance of the communications, OKW submitted that the declaration itself was some evidence upon which the Commission could form the requisite state of satisfaction. That may be so, but it was by no means enough to enable the Commission to lawfully reach that state.
[112] It is common ground that the Commission was never told what was said to the relevant employees. It was simply told that they had been given an explanation of the terms of the Agreement and the effect of those terms. In effect, this amounted to little more than a self-serving statement that the employer had complied with its obligation under the Act. OKW contended that the fact that it made such a statement in a statutory declaration was significant.
It is not. As the CFMEU argued, whether all reasonable steps were taken to ensure that the effect of the terms of the Agreement was explained in an appropriate manner is a question of substance, not form. The recital of a conclusion on the very question the Commission was required (through an evaluative process) to determine is not, without more, a sufficient basis for the satisfaction of the statutory test. In other words, a bare statement by an employer that an explanation has been given is an inadequate foundation upon which to reach a state of satisfaction. OKW submitted that if the Commission had erred in this respect, it was an error in fact finding or an error in process, which would be an error within its jurisdiction. We reject this submission. In order to reach the requisite state of satisfaction that s 180(5) had been complied with, the Commission was required to consider the content of the explanation and the terms in which it was conveyed, having regard to all the circumstances and needs of the employees and the nature of the changes made by the Agreement. It is true that the Act does not expressly say that. But the question of whether an administrative decision-maker is required to consider a matter is not determined only by the express words of the Act; it may also be determined by implication from the subject-matter, scope and purpose of the Act: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39–44 (Mason J).
[113] A consideration of the subject-matter, scope and purpose of the relevant provisions of the Fair Work Act indicates that the content of the explanation and the terms in which it was conveyed were relevant considerations to which the Commission was bound to have regard. The absence of that information meant that the Commission was not in a position to form the requisite state of satisfaction. Put differently, without knowing the content of the explanation, it was not open to the Commission to be satisfied that all reasonable steps had been taken to ensure that the terms and their effect had been explained to the employees who voted on the Agreement or that they had genuinely agreed to the Agreement.
[114] The following considerations point inexorably to that conclusion.
[115] The Commission was required to be satisfied that OKW had taken “all reasonable steps to ensure” that both the terms and the effect of the terms had been explained to the relevant employees as an element in the inquiry as to whether “genuine” agreement had been obtained from them. The agreed purpose of the obligation imposed on employers by s 180(5) is to enable the relevant employees to cast an informed vote: to know what it is they are being asked to agree to and to enable them to understand how wages and working conditions might be affected by voting in favour of the agreement.
[116] In order for the employer to comply with the obligation it must take into account the particular circumstances and needs of those employees, including their cultural and linguistic backgrounds, their youth, and the absence of a bargaining representative. That is made explicit in s 180(6). How could the Commission decide whether the steps the employer had taken were “all reasonable steps” unless it knew what the employees had been told before they cast their votes? Without knowing the terms in which the explanation had been conveyed how could the Commission form an opinion on the sufficiency of the explanation, particularly having regard to the considerations mentioned in s 180(6)? Ultimately, how could the Commission decide that a genuine agreement had been reached without having evidence upon which it could answer both these questions?
[117] As there was no evidence of these matters before the Commission, it necessarily follows that the Commission purported to be satisfied that OKW’s obligations under s 180(5) had been discharged without taking those matters into account. That was a jurisdictional error because the Commission did not have authority to make the decision unless its satisfaction had been informed by them. As is often the case, there are several ways of describing the error. It could be characterised as a misconception as to what the exercise of the statutory power entails or an error “as to an important attribute of the decision to be made”: Graham at [68]. Equally it could be seen as a misunderstanding on the part of the Commission of the nature of the opinion it was required to form: Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 at [31] (Gleeson CJ, Gaudron and Hayne JJ). Had the Commissioner applied his mind to the question of what the putative explanation entailed, he would inevitably have inquired into its content and terms.
[9] One Key mandates the Commission to focus its enquiry on the steps actually taken to comply s.180(5) and to consider whether:
a) the steps taken were reasonable in the circumstances; and
b) these were all the reasonable steps that should have been taken in the circumstances. 4
[10] The task before the Commission “requires attention to the content of the explanation given.” 5
[11] If the explanation is in writing, the task of assessing the reasonableness of the explanation is relatively easy. If it was not in writing (as in the present case) then it is vitally necessary to understand what words were spoken.
[12] The matter was heard on 5 February 2021. The Applicant was granted permission to be represented pursuant to s.596 of the FW Act by Mr R Goot of Senior Counsel and with him Mr B Rauf of Counsel, instructed by Mr B Austin of Oakes Austin Lawyers. 6 I also determined that I would be assisted by the participation of the CFMMEU. I granted the Union a limited opportunity to participate in the proceedings pursuant to s.590 of the FW Act.7 The Union was represented by Mr S Crawshaw of Senior Counsel.
[13] In coming to my decision, I have had regard to all of the material filed in this matter, including the following documents:
[14] When the application for approval of the agreement was lodged, the Employer filed a Form F17 Employer’s declaration in support of the application. The Employer was asked to explain what steps were taken to explain the terms of the Agreement and the effect of those terms. As stated above, the explanation was inadequate.
[15] On 17 December 2020 the Employer’s General Manager (Director), Construction New South Wales, Sean Gibbeson, filed a Statutory Declaration. That Statutory Declaration corrected some errors in the Form F17. Mr Gibbeson did not further explain what steps the Employer took to explain the terms of the Agreement and the effect of those terms.
[16] On 24 December 2020 Mr Gibbeson filed a statement in support of the approval of the Agreement. He sought to address concerns raised by the CFMMEU. Mr Gibbeson:
1. set out the background to bargaining.
2. explained his own background and experience and that of Mr Marcus Cooper (NSW Construction Manager).
3. noted that the employees are currently covered by the 2018 Agreement.
4. expressed the view that employees “have a good knowledge of the terms and the effect of the terms of the [2018] Agreement.”
5. explained that the 2018 Agreement is available to employees at any time at their request.
6. expressed the view that “the terms, and the effect of the terms of the [2018] Agreement are substantially similar to the terms of previous FDC enterprise agreements.”
7. set out the steps and interactions with employees prior to the 27 October 2020 meeting, including a two-hour tool-box meeting on 1 October 2020 specific to the Agreement that was attended by 17 of the 19 employees.
8. set out what was discussed at the meeting on 27 October 2020. He said that the effect of the terms was explained “by going through the terms and noting their provisions and explaining their operation and changes as compared to the [2018] Agreement.”
9. a PowerPoint presentation was given (Attachment “E” to the F17). A copy of the Agreement was projected onto a screen. It “included the changes to the Proposed Agreement from the Existing Agreement highlighted in yellow.” Highlighted sections were identified and discussed. I deal with the explanations given in the table below.
[17] On 29 January 2021 Mr Gibbeson filed a further witness statement further detailing what was explained to employees on 27 October 2020. I deal with the explanations given in the table below.
[18] Accepting as evidence of what was explained to employees, the contents of the:
a) Form F17;
b) Statement of Mr Gibbeson dated 24 December 2020; and
c) Statement of Mr Gibbeson dated 29 January 2021,
[19] I make the following findings:
Clause |
What changed from 2018 Agreement? |
What was explained to the employees? |
What is the effect of the clause and was it explained? | |||
1. Title |
New Title of the Agreement |
No evidence. |
Inconsequential change. Obvious effect (it changes the name of the Agreement). Not a material change. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). | |||
2. Definitions |
The definition of Agreement |
No evidence. |
Inconsequential change. Obvious effect. Not a material change. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). | |||
Inclusion of “NES”, National Employment Standards |
No evidence. |
Inconsequential change. Obvious effect. Not a material change. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). | ||||
3. Parties |
At the request of the CFMMEU, the Union no longer listed as a party. |
PowerPoint presentation states that “The CFMEU instructed FDC to remove all references to the CFMEU from the FDC proposal.” |
Not an inconsequential change. The effect of the CFMMEU not having the agreement apply to it is that it could not commence a civil penalty proceeding in respect of a breach of the Agreement (see s.539, Item 4, FW Act). It could have in respect of the 2018 Agreement. This was not explained to the employees. | |||
5. Duration of Agreement |
New nominal expiry date (NED) of 31 December 2023. |
FDC have proposed that we have a 3-year agreement rather than a 12 month agreement as per the current document. If we are negotiating an agreement we should all be happy with the duration, we suggest 3 years as we are unsure of the COVID impacts and what the industry will do during this period. If we can have an agreement which we are all familiar with and have been successful collectively, we would like for this agreement to run until this date. Does anyone have any concerns with the proposed duration? In relation to the new clause 5(e), this this clause has been modified by adding "the union" into the sentence and creating a new sub clause as the sentence was previously included in the clause above. |
Not an inconsequential change. The effect of a NED is that it makes “unprotected” any industrial action engaged in during the life of the Agreement (see ss. 408, 409). Industrial action that is not protected industrial action can be the subject of a stop order by the Commission (see s.418). This was not explained to the employees. | |||
Discussions for replacement agreement to occur 3 months before expiration. |
No evidence. |
Inconsequential change. Obvious. No substantive effect. Not a material change. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). | ||||
6(c) |
New clause. “To assist new employee’s in familiarising themselves with this agreement, new employees will be given the contact details of the Union Delegate/Employee representative upon engagement. The Union Delegate/Employee representative will be advised of the engagement of new employees where consented to by the new employee.” |
This clause was requested to be inserted by the CFMMEU. We have no issues about inserting this clause or providing the information if any new employee wishes to do so. There is no action required by anyone here, this is for any new employee. Any questions or concerns about this? It's fairly straight forward. |
Obvious effect. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). | |||
8. No extra claims |
New clause. a) “The Employees covered by this Agreement undertake that they will not pursue any further claims against the Company during its period of operation. b) Notwithstanding the provisions of this clause, any party to this Agreement may apply to the FWC to vary the Agreement in accordance with the relevant provisions of the FW Act. However, such variations shall be compliant with the Building Code 2016. c) If, subject to approval of this Agreement by the FWC, any clause of this Agreement is deemed inconsistent with the Building Code 2016, the parties agree to vary the Agreement pursuant to the FW Act to address any inconsistency.” |
This is a new clause inserted to ensure that should there be any claims put forward those claims are limited to this agreement. You can, if you see fit apply to Fair Work Commission and apply for a modification so long as it remains compliant. And if we find something non-compliant we all agree to modify the agreement to make it compliant |
Putting aside the fact that the purported effect of the clause is problematic (it appears to seek to bind employees into varying the Agreement if it becomes inconsistent with the Building Code 2016), there is no evidence that the explanation given to employees explained the Building Code 2016; what it is, why it is important, why it might be desirable to amend an agreement in the future. No explanation was given about how agreements are varied. It is not simply a process of applying to the Fair Work Commission Employees cannot be compelled to vary an agreement to comply with the Building Code 2016 as sub-para (c) suggests. The explanation given does not properly clarify the operation of the clause. There is little semblance between what the clause says and what was explained. The explanation was inadequate. | |||
11.1(j) Safety issues |
New sub-clause: “In the interests of safety best practice site safety inductions will be conducted on-site and communicated face to face in paid ordinary hours. The company will not accept online site safety induction processes.” |
This is another request by the CFMMEU to include a clause requiring inductions to be undertaken on site, face to face and within normal working hours. We agree with this and have subsequently included this in the proposal |
The clause gives rise to an entitlement in favour of employees. It is a beneficial term. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). Explanation is reasonable. | |||
11.2 Protective Clothing |
Replacement shoe limit of $250 annually with a receipt. |
We have increased the boot allowance to $250 per annum. We believe you can purchase a decent pair of boots of your choice for this amount." |
The clause gives rise to an entitlement in favour of employees. It is a beneficial term. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). Explanation is reasonable. | |||
11.3 Inclement weather |
Inclusion “air pollution.” |
As a consequence of the bush fires and the air quality issues experienced, particularly on Mac Uni (the FDC Macquarie University site), we agreed with the CFEMU to add in air pollution. The remainder of the clause remains unchanged. Make sense? Fairly straight forward again but any questions on this?" |
Inconsequential change. Obvious effect. Not a material change. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). Explanation is reasonable. | |||
11.5 Mental Health and Wellbeing |
New clause, a) “The Company and Employees recognise mental health issues have a significant impact on health and safety. Suicide rates in the construction industry are higher than average and is best practice for companies and employees to work to tackle the issue of mental health in the workplace. b) The Company and employees also recognise that following a serious incident personnel may suffer trauma. c) In order to improve mental health outcomes, the Company and the Employees agreed to support the Fondo Blue program tailored to the building construction and allied industries and to utilise the related services available in managing health and safety issues. |
As you know this is very close to FDC and we have all been exposed to someone suffering the challenges of mental health. This is a clause suggested and agreed with the CFMMEU to insert. The only change we have made to the CFMMEU suggested drafting was that the CFMMEU wrote in that the company and the employees will engage the Foundo Blue program, however we recognise that each individual may need different types of assistance, therefor we believe it is best to not be stuck with one option but to have an option or many to suit the individuals needs. I will not read all of this out but suicide in construction is high and we want to look after each other and tackle the issue. Please take a read of this, any questions on our approach? |
It is unclear what it means to oblige Employees “to support the Fondo Blue program.” It is doubtful the clause has any substantive operative effect. It is not clear what actual work the clause has to do in the enterprise agreement. In any case it is an inconsequential change and not material. Likely gives rise to no obligation on behalf of employees. Not a material change. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). | |||
11.6 Employee Tools |
Replacing tools up to $2,500. |
We have increased the employee tool replacement allowance to $2,500. All aspects of the proof of purchase etc remain unchanged. This is a bit of a mute point for us as we provide all of the tools anyway. Any questions or comments? Again, fairly straight forward |
The clause gives rise to an entitlement in favour of employees. It is a beneficial term. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). Explanation is reasonable. | |||
11.7(a) Mess/Change sheds |
Sheds to comply with Construction Work Code of Practice July 2014. |
Mess and change sheds, as we know are required to meet code, there is minor change request which I believe was suggested by the CFMEU and we agreed to, was changing the drafting which is quite detailed to be covered by the code rather than descriptive in this document. |
The clause gives rise to an entitlement in favour of employees. It is a beneficial term. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). Explanation is reasonable. | |||
11.9 Access to floors |
New clause |
Access to floors has been updated such that a hoist needs to be provided to meet the limitation of floors. This is the same as previous agreements. FDC have agreed to ensure all hoists are operated by an appropriated ticketed operator. We don't believe builders lifts require a full time ticketed driver, so this has been removed however will be assessed from project to project. We have a/so removed the comments for crane drivers as we do not employ crane drivers so why is it in our agreement. Does anyone have any questions or concerns about this update? Make sense? |
The clause gives rise to an entitlement in favour of employees. It is a beneficial term. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). Explanation is reasonable. | |||
16 (f) Training and related matters |
Silica added to asbestos |
Most of you would be aware due to the news/media/industry that silica is fast becoming something similar to asbestos. We are aware of the concerns around silica and have agreed to insert silica into this clause. Furthermore, we agree to send you guys, if you have not done it already or would like to complete it again, on a silica awareness course. Joe Abraham will arrange this in the next few weeks. If you have not completed this training please make Joe aware and he will book you in. Any questions? The clause does not change, except that silica is added |
The clause gives rise to an entitlement in favour of employees. It is a beneficial term. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). Explanation is reasonable. | |||
19 Personal/carer’s leave |
New subclause (b)(i) “Upon commencement of employment Employees will automatically be credited with five days Personal and/or Carer’s leave. After six months of employment, the leave will begin to accrue progressively until it reaches 10 days at the conclusion of 12 months employment.” |
''This is another clause which was requested be inserted by the CFMMEU , again one which we thought was important and we are happy to include. This protects a new employee who may fall ill within the early parts of their employment. As everyone here knows, we support our employees so we don't have a problem with this new clause. Essentially it protects the employee to ensure they have sick leave immediately upon commencement then accrues up to 10 for the 12 months, then normal sick day accrual moving forward. No change other than crediting 5 days upon employment |
The clause gives rise to an entitlement in favour of employees. It is a beneficial term. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). Explanation is reasonable. | |||
Addition to 19.1(e): “An employee will not be required to provide such evidence of single days of absence but only where two or more consecutive days absence are taken where the Company accepts it is appropriate.” |
This clause is simply providing clarity that should you take a single day sick leave, then no certificate is required, however 2 or more requires a certificate. This is unchanged from your normal working conditions already. Make sense? |
The clause gives rise to an entitlement in favour of employees. It is a beneficial term. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). Explanation is reasonable. | ||||
21. Parental leave |
New sub-clause (d): “Where an Employee is entitled to Dad and Partner Pay under the PPL Act, the Company will provide two weeks paid leave in accordance with this subclause. The payment will be equivalent to the difference between the Employee’s entitlement to the Dad and Partner Pay, for a two week period under the PPL Act (based on the minimum wage) and the Employee’s 38 hour wage rate presecribed in Appendix B1 applicable to their classification plus productivity allowance in Appendix C2.” |
This PPL is government legislation which allows employees to apply for this leave and the standard payment under the PPL act will be increased to meet your 38 hour a week wage, excluding overtime etc. The rates used to calculate this payment are the ones included in the agreement once it is approved by Fair Work. We will touch on the rates shortly. |
The clause gives rise to an entitlement in favour of employees. It is a beneficial term. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). Explanation is reasonable. | |||
29.1 Hours of work |
New clause: (a) Consistent with the objectives of this Agreement, the parties have agreed to organise the Hours of work to suit the requirements of the industry whilst also giving the Company and Employees greater flexibility in organising their rostered days off (RDO’s). The ordinary working hours shall be Monday to Friday 7.4 hours per day. (b) Work will be performed between 6.00 am and 6.00 pm. However, the usual working day will be 7.00am to 3.30pm. It is noted there may be circumstances when a working day may be altered when some classifications of workers are required to commence work prior to a usual working day to open the Project for the day and close the Project for the day and to prepare the amenities etc. (c) All time worked in excess of 8 hours per day will be at overtime rates. |
This clause had been heavily modified in the proposed CFMMEU proposal however some of the items they raised allowed for a clearer understanding of the proposed hours and how they work. I will allow you to read through this, which is fairly easy to understand, however if not understood let me know and we can address." There was then a pause for review by the CWs. Then it was said "Essentially normal work hours are 7 to 3.30pm, and work over 8 hours will become overtime at the appropriate rate. Any questions? Everyone ok with this?" |
Obvious effect. Span has not changed from 2018 Agreement. Greater clarity around normal working hours. | |||
29.4 Overtime on Saturdays and Sundays |
New clauses: Employees required to work on a Saturday or Sunday must be afforded a minimum Four (4) hours’ work or be paid as if for Four (4) hours at the aforementioned overtime rates. Overtime worked on a Sunday must be paid for at the rate of double ordinary time rates. Employees required to work on a Sunday must be afforded a minimum four (4) hours’ work or be paid as if for 4 hours at the aforementioned overtime rates. |
Overtime,so this clause is drafted to ensure that employees shall have a minimum of 4 hours on either a Saturday or Sunday and confirming that it is at double time. You have all worked under these for some time so does that make sense? Yep, ok we will move on |
The clause gives rise to an entitlement in favour of employees. It is a beneficial term. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). Explanation is reasonable. | |||
29.5 Public Holidays and Holiday Work |
New paragraph under sub-paragraph (a), “No payment shall be made for any public holiday declared on a weekend unless the Employee is required to work on those days.” |
No evidence |
No explanation of effect. | |||
Clause 33 Consultation |
Obligation to consult changed from when “seriously considering and prior to the taking of any definite decision” (2018 Agreement) to “if the Company has made a decision.” Loss of right to be consulted before definite decision made. |
No evidence |
No explanation of effect. | |||
Appendix A |
New sentence, “The Company will provide appropriate training of all Company personnel.” |
Previously it was suggested that the incident should be reported to the site manager and WHS officer. It was suggested by the GFMEU that perhaps these individuals may not be qualified or the appropriate people to deal with and manage something of this nature. It was requested it be changed to senior management of the company. Also, we have added in that FDC shall ensure there is appropriate training of all company personnel. |
The clause gives rise to an entitlement in favour of employees. It is a beneficial term. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). Explanation is reasonable. | |||
Appendix B1 rates of pay and other appendices |
New rates |
Rate changes are self explanatory, site allowance, redundancy and ACIRT contributions, fares, crib time payments etc are updated to reflect the proposed rates, all other aspects remain unchanged and are self explanatory. The apprentice rates have been increased to match the percentage increases in line with the other rate changes. |
Obvious effect. The clause gives rise to an entitlement in favour of employees. It is a beneficial term. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)). Explanation is reasonable. | |||
Appendix H – Drug and alcohol testing |
New appendix |
The major change to this document is the drug and alcohol policy. The CFMMEU had inserted into our existing agreement a very similar policy to which FDC had, however with minor differences. What we had proposed to the GFMEU was to remove the proposed GFMEU document and install the FDC policy. The CFMMEU requested a copy of our policy, which we provided, however I don't recall any feedback as yet. The documents remain very similar in function however brings the weekly pay employees in line with salary pay employees with regards to our drug and alcohol policy. The specifics are that we have our support providers who are different to the proposed providers of the CFMMEU. It is our preference to have one policy for which all employees work under. |
Obvious effect. Explanation is reasonable. |
[20] The obligation imposed on employers by s.180(5) of the FW Act is of critical importance. It goes to the integrity of the understanding of employees, their vote and the making of the agreement.
[21] In BGC Contracting Pty Ltd 8 Deputy President Gostencnik was concerned (amongst other things) with a replacement enterprise agreement that, unlike the predecessor agreement, incorporated the Black Coal Award. He held,
[86] I accept BGC’s contentions that it should not be required to overcome a “higher than usual bar” in respect of the s.180(5) obligation. But s.180(5) is concerned with the taking of all reasonable steps to explain. How many steps and the content of those steps will necessarily depend on the circumstances. Some employers may, by reasons of the prevailing circumstances, need to take more or fewer steps than other employers with different agreements facing different circumstances. The steps which may in a given case be required by “all reasonable steps” is be assessed by reference to the circumstances of the particular case.
[87] I also accept that compliance with s.180(5) will not always require an employer to identify detriments in an agreement vis-à-vis the reference instrument or for the employer to provide an analysis between an agreement and the relevant reference instrument in circumstances where an existing enterprise agreement, not a reference instrument, applies to the employees in their employment with the employer. But as I have already stated, the question of compliance with s.180(5) is to be judged against the circumstances that pertain at the time at which compliance was required. Section 57 of the Act makes clear that a modern award does not apply to an employee in relation to particular employment at a time when an enterprise agreement applies to the employee in relation to that employment. That was the case at the relevant time that explanations were given vis-à-vis the 2012 Enterprise Agreements and the Mining Award, it would continue to be so in relation to the Agreement, if the Agreement is approved by the Commission. That is the effect of an operative enterprise agreement, save in circumstances where an agreement itself incorporates a modern award, but those terms operate in relation to relevant employees as terms of the agreement. Here there was an additional circumstance, the incorporation of the identified provisions of the Coal Award. These were new provisions to be introduced into the Agreement, which were not part of the 2012 Enterprise Agreements and the Coal Award did not cover the relevant employees.
[88] The relevant employees to be covered by the Agreement were at the relevant time, subject to the application of existing enterprise agreements. Insofar as the terms of the Agreement would have had any relevant effect on existing terms and conditions, it was to displace the application of the terms of the existing agreements. That effect was explained to those employees in considerable detail, in particular as set out in the comparative table.
….
[93] With the exception of the terms of the Coal Award incorporated in the Agreement by Schedule A thereof, I would otherwise be satisfied that BGC took all reasonable steps to explain the terms of the Agreement and their effect to the relevant employees. In my opinion, BGC did this through a combination of communications with relevant employees. The evidence is that it did so during return to site meetings, pre-shift meetings and consultative committee meetings. It did so on an ad hoc basis through discussions with individual employees. It did so through a series of FAQ documents. It also did so by providing to employees the Final Information Pack. This included detailed tables comparing the terms of the Agreement and the 2012 Enterprise Agreements, the Reference Document, and information about the Preserved Conditions Contracts.
[94] Turning then to the issue of the explanation of the incorporated terms of the Coal Award. BGC readily conceded that it did not initiate or publish any explanation about the Agreement as it would apply to employees performing work in black coal mining. 96 It is uncontroversial that no relevant employee was working in black coal mining at the time of the explanations and at the time that employees voted to approve the Agreement. There is also no evidence that the relevant employees had any particular or relevant experience in black coal mining. The distinction BGC sought to make between One Key Workforce (No 1) and the circumstances applicable here, by pointing to the differing “effect” vis-à-vis the reference or existing industrial instruments of the impugned agreement in One Key Workforce (No 1) does not assist it. It was required to take all reasonable steps to explain the effect of the incorporated provisions of the Coal Award, but it took no steps to do so.
[95] BGC contends that as there were no employees employed by it at the relevant time engaged in the black coal mining industry it was reasonable in the circumstances to make available an opportunity for employees to ask questions of management about all matters concerning the Agreement including the terms and effect of those terms as they would apply to employees who might work in the coal mining sector in the future. BGC did explain to employees that it was seeking an Agreement in order that it may remain competitive in the market and to win new work including in coal mining.
[96] Whether the steps taken by an employer to explain the terms of an agreement and the effect of those terms to relevant employees were reasonable steps or were all reasonable steps is, as I have already indicated, to be assessed in the circumstances faced by the employer. Whilst the fact that there were no relevant employees employed by BGC at the relevant time working in black coal mining is a relevant circumstance, the absence of such an employee does not relieve the employer of the obligation to explain to the relevant employees the terms of the agreement and their effect. This is so even if those terms will have no immediate effect upon the relevant employees. Were it otherwise, an employer would only have an obligation to explain the terms of the agreement and their effect to employees insofar as those terms have any application to the relevant employees who are asked to vote to approve the agreement.
[97] Section 180(5) places an obligation on an employer to take all reasonable steps to explain the terms of an agreement and the effect of those terms to relevant employees. It does not delineate between those terms that may have effect on relevant employees and those terms which will have no effect on relevant employees. As I have already noted, the distinction between the effect of the impugned agreement in One Key Workforce (No 1) and this Agreement sought to be made by BGC does not assist it. The explanation given by an employer is one of the vehicles through which an employee becomes informed about the terms of the agreement and is able to then give informed consent, or to use the statutory phrase, to genuinely agree to the agreement. An employee voting to approve the agreement is not asked to vote to approve only those terms and conditions of an agreement which will have application to that employee. The employee and indeed all employees who will be covered by the agreement are asked to vote for or against the totality of the agreement not just aspects of it. It is for this reason that an employer is obliged by s.180(5) to take all reasonable steps to explain the terms of the whole agreement and the effect of those terms to relevant employees.
[98] The view I have expressed above is reinforced by the Full Court’s judgment in One Key Workforce (No 2).
[99] In this case, it is clear that apart from making available the opportunity at various fora to relevant employees to ask questions, BGC took no other material step to explain to relevant employees the terms of the Coal Award which are incorporated in the Agreement by Schedule A or the effect of those terms. The incorporated terms were not trifling, insignificant, or inconsequential so that no or minimal explanation need have been given. These were substantive terms. That the employees were not working in, nor had experience in, black coal mining, meant that a more not less comprehensive, explanation was warranted in the circumstances in order that informed consent might be given. The employer was required to take all reasonable steps to explain these terms and their effect and it did not do so. It took no step. In these circumstances I am not satisfied that the employer has complied with its obligation under s.180(5) of the Act to explain the terms of the Coal Award that are incorporated in the Agreement by Schedule A or the effect of those terms to relevant employees.
[22] That is to say, the non-explanation of the incorporation of the Coal Award (even when voting employees were not covered by it), resulted in the non-approval of the agreement. The matters I have identified have actual relevance to the employees who voted for the Agreement.
[23] In this matter it is relevant context that the Agreement is largely a roll-over agreement with increased benefits. It is also relevant context that the employees are largely long-term employees, likely familiar with previous Agreements.
[24] I accept that the meeting in early October, the page turn exercise, and PowerPoint presentation on 27 October 2020 were all reasonable steps. However, that is not the end of the matter. There were deficiencies in the explanation of the terms of the Agreement.
[25] In the table above I have identified clauses in the Agreement that are not trifling, insignificant, or inconsequential so that no or minimal explanation needed to be given. This is not about requiring a system of perfection. These are substantive terms that required a proper explanation. It would have been reasonable to do so. An omission to explain is of “particular significance in circumstances where there were material differences between” the old and new agreement: see Construction, Forestry, Maritime, Mining and Energy Union v McNab Constructions Pty Ltd. 9 The failure to explain the effect of them means that FDC did not “take all reasonable steps” as required by s.180(5) of the FW Act.
[26] For the reasons set out above:
a) I am not satisfied that FDC took all reasonable steps to explain the terms of the Agreement or the effect of those terms to relevant employees.
b) Consequently, I am not satisfied that the relevant employees genuinely agreed to the Agreement as described in s.188 of the FW Act.
c) Accordingly, I am not satisfied the relevant employees genuinely agreed as required by s.186(2)(a) of the FW Act.
[27] In BCG (No 2) 10 the Deputy President held,
[43] The evident purpose of ss.180(2) and (5), as is clear from their inclusion in s.188 and thus s.186(2)(a), is to ensure so far as is practicable that employees who are asked to vote to approve an agreement make an informed choice as to whether or not they will vote to approve the agreement. That is, the choice that an employee makes in deciding whether to cast a vote to approve the agreement is to be informed by, relevantly, having access to the agreement and any material incorporated by reference during the relevant period, and importantly by having the terms of that agreement (including incorporated terms) and their effect explained. The failure to take all reasonable steps vis-a-vis the material incorporated and the explanation of the terms and their effect means that employees who voted to approve the agreement were deprived of the benefit of very important pre-approval steps designed to ensure that relevant employees genuinely agree to the agreement.
[45] An employer cannot know which employees will and which will not vote in the agreement approval process, how employees will vote or the reason employees vote in a particular way. Voting is not compulsory. Thus the preapproval steps play an important role in providing information to employees so that the employees can each choose whether or not to participate in the voting process, and if so whether to vote to approve the agreement. The mischief sought to be overcome is to ensure that employees understand the terms of the agreement as a whole upon which they are asked to vote. This mischief and the concern that employees did not genuinely agree to the Agreement is not overcome or met by accepting the genuine agreement undertaking proffered by BGC, which in essence is about the ongoing application of the Agreement (through a self-imposed restraint on employment) in respect of certain classes of employees and not about the fundamental issue of whether the Agreement was genuinely agreed to by employees covered by it. That a future cohort of voting employees may make an informed choice about varying the Agreement (alone or coupled with a restraint on employment until any future variation takes effect) does not meet the concern that those employees asked to approve the Agreement in June 2016 did not have information designed to enable them to make an informed choice about whether to approve the Agreement.
[28] In the BCG matter the Deputy President allowed the employer an opportunity to offer up undertakings to deal with the genuinely agreed issue. Undertakings were offered, but the Deputy President was ultimately not “persuaded that the genuine agreement undertaking, [met] the concern identified in [his] earlier decision.” 11 The application for approval of the decision was dismissed.
[29] In this matter I have decided not to allow FDC an opportunity to proffer undertakings aimed at curing the genuinely agreed issues. This is because s.180(5) is a pre-approval requirement concerned with ensuring employees have adequate information about the terms of a proposed enterprise agreement to facilitate their genuine agreement in bargaining. I am not satisfied that FDC is capable of retrospectively curing its non-compliance with s.180(5) by proffering an undertaking at the agreement approval stage.
[30] This is not like the situation discussed in the Full Bench decision in Construction, Forestry, Maritime, Mining and Energy Union v Karijini Rail Pty Ltd. 12
[31] I cannot readily envisage an undertaking being proffered to meet the concerns I have raised. I should not engage in the theatre of providing FDC with the opportunity to do so.
[32] In the circumstances, given the conclusions I have reached about the failure of FDC in respect of s.180(5) of the FW Act, the Agreement cannot be approved and the application for its approval is dismissed.
[33] However, it seems to me that the deficiencies I have identified could be remedied quickly if FDC were minded to re-commence the agreement making process. If it decides to do so, and, in the course of doing so, explains the effect of all of the terms of the Agreement, then, when it lodges its application for approval, I would be minded to expedite consideration (and if all issues are addressed pre-emptively, approval) of the same.
COMMISSIONER
Appearances:
Mr R Goot AO SC with Mr Bilal Rauf, with permission, for the Applicant
Mr S Crawshaw SC, with permission, for the CFMMEU
Hearing details:
2021,
Sydney (by video link),
5 February.
Printed by authority of the Commonwealth Government Printer
<PR727616>
1 <AE428338>
2 [2017] FCA 1266.
3 [2018] FCAFC 77.
4 BGC Contracting Pty Ltd [2018] FWC 1466, [76].
5 BGC Contracting Pty Ltd [2018] FWC 1466, [77].
6 Transcript of Proceedings, PN 5-6.
7 Ibid, PN 5.
9 [2020] FWCFB 5080, [26].
11 [2018] FWC 6936, 46.
12 [2020] FWCFB 958 at [107].