[2021] FWCA 1234


Fair Work Act 2009

s.210—Enterprise agreement

Compass Group (Australia) Pty Ltd T/A ESS


Hospitality industry



Application for variation of the Compass Group (ESS Cannington) Enterprise Agreement 2019.

[1] Compass Group (Australia) Pty Ltd (company) has made an application for approval of a variation to the Compass Group (ESS Cannington) Enterprise Agreement 2019 (Agreement) pursuant to section 210 of the Fair Work Act 2009 (the Act). The variation introduces new pay and conditions for new employees engaged after the commencement of operation of the variation. It also removes Brisbane as a point of hire for ‘fly in, fly out’ (FIFO).

[2] The AWU is bound by the Agreement. It objects to the application on three grounds which are set out in its form F23B. The company responded to the AWU’s objections in a brief written submission dated 3 March 2021. The parties did not wish to be heard. They asked the Commission to determine the application on the papers and I consider it appropriate to do so.

[3] The AWU’s first objection was that the company did not explain the terms of the Agreement in a manner that was appropriate, taking into account the particular circumstances and needs of the relevant employees, contrary to the requirement in s 180(5)(b), as that section applies to variations because of s 211(3). The focus of the union’s concern was a document entitled ‘General information + FAQs’ (FAQ document) that the company had provided to employees before the vote on the proposed variation. The document is in tabular form. It poses questions in one column and answers in another. In response to the question, ‘What happens if there is a ‘No’ vote?’, the document stated that ‘ESS will not retain the contract at Cannington and demobilisation of staff will begin.’ It further stated that employees ‘will not be entitled to redundancy pay as this is categorised as ordinary and customary turnover of labour due to the client contract ending.’ I refer to these as the first and second disputed statements respectively.

[4] The AWU submitted that these statements were not ‘appropriate’ because they were coercive in nature and gave employees no choice but to support the variation. In my view, the objection invokes the wrong provision of the Act. Section 180(5)(b) is concerned with the manner in which the explanation of the terms of the agreement or the variation occurs, rather than the content of the explanation, which is the subject of s 180(5)(a). A contention that an employer made a coercive statement to employees in respect of a proposed agreement or variation is a matter that concerns s 180(5)(a), and also the question of whether the agreement was genuinely agreed to by employees covered by the agreement (see s 186(2)(a), as affected by s 211(3)). In the latter regard, s 188(1)(c) requires the Commission to consider whether there are ‘other reasonable grounds’, aside from those referred to in ss 188(1)(a) and (b), for believing that an agreement has not been genuinely agreed to by employees. This section applies also to applications for approval of variations to enterprise agreements (see 211(3)(c))

[5] In its written submissions, the company stated that its response to the question of what would occur if there were a ‘no’ vote was simply a candid statement of the sequence of events that would take place if the company lost its contract with its client, South 32. It further stated that its explanation to employees of the application of the ‘ordinary and customary turnover’ exception to redundancy pay was a statement of fact that reflected the company’s longstanding practice when it loses a commercial contract. The company submitted that it would have been misleading for it to represent to employees that they would receive a redundancy payment if the contract were lost.

[6] I do not consider the first disputed statement - that a ‘no’ vote would result in the loss of the South 32 contract and demobilisation of staff - to have been coercive. It was informative, not threatening. Nor was it otherwise inappropriate. Further context and explanation is revealed by the answer to another question in the FAQ document, which asked ‘Why do we need to make changes to the current agreement terms?’ The answer stated that the company’s contract with South 32, under which it provides catering and hospitality services at the Cannington site, had been causing significant operating costs for the client, and that these were not sustainable if the company wished to retain the contract. The answer stated that a reduction in labour costs was needed, and that South 32 had notified the company that if the variation to the Agreement was not approved, the company’s contract would not be renewed when it expired in February 2021. The union does not contest the accuracy of this information.

[7] In my opinion, the answer to the first disputed statement contained highly relevant information that was properly conveyed to employees as part of the explanation of the terms of the variation to the Agreement and the effect of those terms. Part of the effect of the new terms of the Agreement was that they would enable the company to have its contract with South 32 renewed. The statement constituted a reasonable step that the company took in order to meet the requirements of s 180(5). It does not call into question the genuineness of employees’ agreement to the variation.

[8] As to the second disputed statement - that if the contract were lost, employees would not be entitled to redundancy pay because of the ‘ordinary and customary turnover’ exception - I would note that only a court could finally determine whether the exception applied in a particular case. However, in my opinion the statement conveys to employees the company’s view that the exception would apply; that the company ‘categorises’ the situation as ordinary and customary turnover of labour. It also tells employees that it is the company’s intention therefore not to make redundancy payments in the event that the contract is lost. In my view it was reasonable for the company to adopt a position on this matter and to advise employees of this position. Importantly, there is no information before me to suggest that the company’s position was not well-founded. There is nothing to indicate, for example, that the circumstances that would obtain if the contract were lost would be similar to those that were before the Full Court in Berkeley Challenge Pty Ltd v United Voice [2020] FCAFC 113, where the Court concluded that the exception did not apply. Moreover, the AWU does not contend that the exception would not apply. It says only that the statement was coercive, not that it was inaccurate.

[9] In my opinion, the second disputed statement contained important information that employees were entitled to receive. It assisted them to make an informed and genuine decision about whether to vote to approve the variation to the Agreement. I reject the AWU’s first objection.

[10] The AWU’s second objection was that the company had not complied with s 180(5)(a) of the Act, as applicable to variations through s 211(3). It contended that the company did not take all reasonable steps to ensure that the terms of the Agreement as varied, and the effect of those terms, were explained to the relevant employees, because the explanation of the variation was not ‘appropriate’. The argument was as follows.

[11] One of the questions in the FAQ document asked, ‘What happens if there is a Yes vote?’ Part of the response to this question was that if employees voted ‘yes’ to the proposed variation, and the company was successful in being awarded a new contract with the client, existing employees ‘will not see any difference to [their] terms and conditions except for those who have a Point of Hire FIFO of Brisbane’. The AWU submitted that the answer to this question was deficient because it did not address how the variation would affect new employees, and that the new, different conditions for new employees would create a ‘two-tiered’ system of employment within the workplace.

[12] However, a different question in the FAQ document asked, ‘What changes are being proposed by ESS?’ The answer to that question stated that, in addition to Brisbane being removed as a point of hire for FIFO, new employees would be offered conditions which were different from those of the existing workforce. The answer then summarised the new conditions for new employees, noting in particular the reduction in wage rates, penalties, and overtime entitlements.

[13] The ‘FAQ document’ addresses the very point that is the substance of the union’s second objection. It told employees that new employees would be on different, lower conditions. It was not necessary that the document characterise these arrangements as a different tier or stream of employment. This was not a ‘reasonable step’ required by s 180(5). Nor would it have been reasonable for the company to repeat the information that had already been provided in response to another question in the same document. I reject the AWU’s second objection.

[14] The AWU’s third objection was that the union had not been notified of the variation until it was submitted for the vote. It contended that it would be unreasonable for the Commission to approve the variation in such circumstances, by which I understand the union to contend that this circumstance constitutes a reasonable ground to conclude that the variation to the Agreement was not genuinely agreed to by the employees (s 188(1)(c)).

[15] It is not a requirement of the Act that a union bound by an enterprise agreement be notified of a proposed variation to the agreement, although depending on the circumstances, the question of whether a union has been notified could be relevant to the consideration of s 188(1)(c), as affected by s 211(3).

[16] The company disputed the AWU’s claim that it had not been notified of the variation. It said that the company’s representative, Ms Sarah Bagshawe, had discussed the proposed variation with an AWU official, Mr Gavin Lawrence, on 2 October 2020. It also said that in early October 2020, Mr Andrew Chamberlain, the company’s national workplace relations manager, contacted the branch secretary of the AWU, Mr Steven Baker, to discuss the variation of the Agreement. The company further contended that on or about 22 October 2020, the AWU had released materials to the workforce discouraging employees from voting in favour of an earlier version of the proposed variation, and that the AWU then lodged a dispute in relation to the variation in the Commission.

[17] The AWU did not seek to contradict any of these detailed factual contentions. I am satisfied that the AWU knew that the company proposed to vary the agreement. Based on the information before me, there is nothing that causes me to conclude that there are reasonable grounds for believing that the variation to the Agreement was not genuinely agreed to by employees. I note that of the 72 employees eligible to vote, 60 did so, and 52 voted to approve the variation to the Agreement. I reject the AWU’s third objection.

[18] The company has provided a written undertaking, a copy of which is attached to this decision. I am satisfied that the undertaking will not cause financial detriment to any employee covered by the Agreement and that it will not result in substantial change to the Agreement. The undertaking is taken to be a term of the Agreement.

[19] Subject to the undertaking, and on the basis of the material contained in the application and the declarations, and the submissions that have been lodged, I am satisfied that each of the requirements of ss 211 and 212 as are relevant to this application for approval have been met.

[20] In the original application for approval of the Agreement, the company provided written undertakings to meet concerns that particular requirements of ss 186 and 187 had not been met. The undertakings were accepted, and the Agreement was approved on 26 November 2019. Those undertakings form part of the Agreement as varied.

[21] The variation is approved and the consolidated version of the Agreement, as varied, is attached to this decision. The variation will operate from 9 March 2021.


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