| [2021] FWCFB 3635 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Commonwealth Bank of Australia
(AG2021/4666)
COMMONWEALTH BANK GROUP ENTERPRISE AGREEMENT 2020
Banking finance and insurance industry | |
DEPUTY PRESIDENT COLMAN |
MELBOURNE, 23 JUNE 2021 |
Application for approval of the Commonwealth Bank Group Enterprise Agreement 2020.
[1] The Commonwealth Bank of Australia (CBA) has made an application under s 185 of the Fair Work Act 2009 (FW Act) for approval by the Commission of an enterprise agreement known as the Commonwealth Bank Group Enterprise Agreement 2020 (the Agreement). The Agreement covers CBA, Commonwealth Securities Limited (CommSec), Commonwealth Insurance Limited (CommInsure) and Colonial Services Pty Limited (Colonial) (the employers), which are related bodies corporate and therefore ‘single interest’ employers who may be covered by a ‘single-interest agreement’ (s 172). The Agreement also covers employees of the employers who are employed in a grade covered by the Agreement.
[2] The Finance Sector Union of Australia (FSU) was a bargaining representative for the Agreement. Commencing in April 2020, it negotiated with the employers for a new enterprise agreement to replace the Commonwealth Bank Group Enterprise Agreement 2016 (2016 Agreement). The parties were unable to agree on a number of matters, including salaries. In March 2021, the employers decided to put the Agreement to a vote. The FSU opposed this course. The employers encouraged employees to vote ‘yes’. The FSU encouraged them to vote ‘no’. The vote occurred from 24 to 30 March 2021. The employees who voted in favour of the Agreement numbered 13,095 employees, while 7,746 employees voted against it. In a form F18 statutory declaration, the FSU’s national secretary, Ms Angrisano, advised the Commission that the FSU objected to the employers’ application for the Commission’s approval of the Agreement, on the grounds that various statutory approval requirements had not been met.
[3] Pursuant to ss 615 and 582 of the FW Act, the President referred the employers’ application to a Full Bench. On 30 April 2021, we issued directions that the employers and the FSU file and serve submissions, witness statements and any other materials on which they sought to rely. We also requested the employers to address in their submissions a number of questions from members of the Bench relating to the approval requirement in s 186(2)(d) of the FW Act, namely that the Commission be satisfied that the Agreement passes the ‘better off overall’ test (BOOT). We heard the application on 8 and 15 June 2021.
[4] In its F18 declaration the FSU raised four objections to the approval of the Agreement. The first was that employees who voted on whether to approve the Agreement included employees who were not eligible to vote, and that it was unclear whether a majority of employees had approved the Agreement. In its written submissions, the FSU abandoned this objection and accepted that a majority of employees had voted to approve the Agreement.
[5] The second and third objections raised in the FSU’s F18 declaration contended that the terms of the Agreement were not properly explained to employees as required by s 180(5) of the FW Act, and that the Commission could therefore not be satisfied that the Agreement had been genuinely agreed to by employees. It further contended that the Commission should conclude that there were ‘other reasonable grounds’ for believing that the Agreement had not been genuinely agreed to by employees, within the meaning of s 188(1)(c). In its written submissions, the FSU advanced these objections together as the union’s second contention as to why the Commission should not approve the Agreement. The fourth objection raised in the FSU’s F18 declaration was that the Commission could not be satisfied that the Agreement passed the BOOT. In the FSU’s written submissions, this was presented as the union’s first objection to the approval of the Agreement.
[6] Although the FSU did not press its first objection, we nevertheless propose to say a few words about it, as we must satisfy ourselves that the Agreement was approved by a majority of employees. A single-enterprise agreement that is not a greenfields agreement is made when a majority of employees who cast a valid vote approve the agreement, having been asked to do so by their employer or employers (s 182(1)). Without majority approval, an enterprise agreement cannot be genuinely agreed to by the employees covered by the agreement (see s 188(1)(b)), and the Commission cannot approve the agreement (s 186(2)(a)). The employees who were said to have been ineligible to vote on the Agreement were those covered by Australian Workplace Agreements (AWAs) and Individual Transitional Employment Agreements (ITEAs). Clause 1.2 of the Agreement states that employees will not be covered by the Agreement if they are engaged on an AWA or ITEA, but that they will become so covered if their AWA or ITEA is terminated.
[7] It will be recalled that AWAs are statutory individual agreements that were made under the Workplace Relations Act 1996 (WR Act), and that ITEAs are statutory agreements that were able to be made during a transitional period under the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008. When the FW Act commenced operation, AWAs and ITEAs continued to operate in accordance with the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (TPCA Act). The TPCA Act allows a party unilaterally to terminate these instruments after their nominal expiry date, with the Commission’s approval (see s 19 of Schedule 3 to the TPCA Act).
[8] The employers contended that employees covered by AWAs and ITEAs were eligible to vote on the Agreement, because the Agreement would apply to them if they elected to terminate their AWAs or ITEAs, all of which had passed their nominal expiry dates. The employers relied on a passage from the decision of the plurality of the High Court in ALDI Foods Pty Ltd v Shop, Distributive & Allied Employees Association [2017] HCA 53, (2017) 262 CLR 593 (Aldi), in which their Honours cited with approval the judgment of the Full Court of the Federal Court in CFMEU v John Holland (2015) 228 FCR 297 at 299 and the decision of the Full Bench of the Commission in TWU v ALDI Foods Pty Ltd (2016) 255 IR 248 at 260 [40]-[42]. At [83] their Honours said:
“In John Holland, the expression “the group of employees covered by the agreement” in s 186(3) was held to relate to the “whole class of employees to whom the agreement might in the future apply” (66). As was said in John Holland, the expression “covered by” in s 186(3) extends to any person who will, in the future, be engaged as an employee to whom the agreement will apply. To the extent that a different view was taken in Cimeco, it should not be followed. Consistently with the view of s 186(3) taken in John Holland, the references in sub-s (2) to “covered by” may be read as “those persons currently employed who fall within the whole class of employees to whom the agreement might in future apply”. That was the approach which found favour with the Full Bench (67). That approach is correct. …”
[9] The employers contended, in reference to the third last sentence of this passage, that employees who were covered by AWAs and ITEAs at the time of the vote on the Agreement were persons currently employed and ‘to whom the Agreement might in future apply’, because if their AWAs or ITEAs were terminated (which was a realistic prospect given the availability of unilateral termination) they would become covered by the Agreement. On a literal reading of the plurality judgment in Aldi this is a plausible argument however we consider that a contextual reading of the judgment points to a different conclusion. We do not propose to elaborate upon this, other than to note that this conclusion is in our view confirmed by footnote 67, which follows the plurality’s reference to the decision of the Full Bench, which it then endorses. That footnote refers to paragraphs [40] to [42] of the Full Bench decision. At [41] of that decision, the Full Bench states clearly, summarising authority, that the approach to the provision entails two elements: ‘The first involves determining whether the persons are employees, while the second entails determining whether the employees will be covered by the agreement after it is made’ (emphasis added). In our view, the High Court must be taken to have approved this statement. Employees who were covered by AWAs and ITEAs at the time of the vote did not satisfy the second element, because it could not have been said that they will be covered by the Agreement after it was made, only that they might later become covered if their AWAs or ITEAs were terminated.
[10] However, the employers produced evidence that at the time of the vote there were 2,306 employees covered by AWAs, and 540 employees covered by ITEAs – together, 2,846 employees. The employers also produced evidence of the result of the ballot, in which 33,427 employees had been considered eligible to vote (including those on AWAs and ITEAs), of whom 20,841 had cast a valid vote. As noted earlier, 13,095 employees voted to approve the Agreement, and 7,746 voted not to approve it. It is clear that 2,846 ineligible votes could not have affected the outcome of a ballot which returned a ‘yes’ vote that exceeded the ‘no’ vote by 5,349 ballots. Even if all of the 2,846 employees on AWAs and ITEAs had voted ‘yes’, and these votes were removed from the total, the ‘yes’ vote comfortably prevails.
[11] The Commission has consistently recognised that casting the voter-eligibility net too widely is not fatal to the approval of an agreement, if it can be demonstrated that, despite the error, the agreement was approved by a valid majority of those employees who were entitled to vote and did vote (see for example: Kmart Australia Ltd [2019] FWCFB 7599, [43]; and see the decision of the Full Federal Court in National Tertiary Education Industry Union v Swinburne University of Technology [2015] FCAFC 98 at [10]). The inclusion in the vote of employees covered by AWAs and ITEAs was immaterial to the outcome. The Agreement was made by a majority of employees who cast a valid vote.
[12] We will deal next with the question of whether we can be satisfied that the Agreement passes the BOOT. The FSU engaged with and expanded upon the BOOT questions posed to the employers by the Full Bench at the time of issuing directions to the parties. We will address the employers’ responses to our questions and the FSU’s BOOT contentions together. First however we will comment briefly on the relevant provisions of the FW Act.
[13] Before approving an enterprise agreement, the Commission must be satisfied that the agreement passes the BOOT (s 186(2)(d)). Section 193 provides that an enterprise agreement that is not a greenfields agreement passes the better off overall test ‘if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.’
[14] The FSU rightly emphasised, and the employers acknowledged, that the BOOT plainly requires the Commission to be satisfied that each award covered employee and prospective award covered employee would be better off overall under the Agreement than under the relevant award, and that it would not be enough that most employees were better off overall.
[15] The questions directed by the Full Bench to the employers were set out in a document attached to the directions issued to the parties. In the document, we noted that the rates of pay under the Agreement appeared to exceed those in the Banking, Finance and Insurance Award 2020 (Award) by between 5.2 percent and 72.9 percent, but that in respect of employees whose rate of pay was at the lower end of this range, the Bench would appreciate further explanation as to how employees would be better off overall under the Agreement in five circumstances. Those were as follows:
• Employees working the extended span of ordinary hours under the Agreement, at times that would attract overtime under the Award, specifically between 7.00pm and 10.00pm on weekdays, and 12.00 noon and 8.00pm on Saturdays (issue A).
• Part-time employees working overtime: Modelling was attached of a GC2 level employee under the Agreement (corresponding to a Level 2 under the Award), working eight ordinary hours and four hours of overtime a week (model 1). The modelling indicated that the employee would be $18.17 a week worse off under the Agreement because of the lower overtime rates provided for under the Agreement (issue B).
• Casual employees working overtime: Modelling was attached of a casual GC2 employee working 10 ordinary hours with four hours of overtime (model 2). The modelling indicated that the employee would be $00.29 a week worse off under the Agreement, the casual loading not applying to overtime (issue C).
• Employees working outside the Award span of hours on Saturday and Sunday: Modelling was attached of a GC2 employee working ten hours on a Saturday and Sunday (model 3). The modelling indicated that the employee would be $97.37 a week worse off under the Agreement than under the Award (issue D).
• Employees working shifts at times when penalties would apply under the Award but not under the Agreement: Modelling was attached of a GC2 employee working an afternoon shift finishing at 7:00pm, which under the Award, but not under the Agreement, attracts an afternoon shift penalty (model 4). The modelling indicated that the employee would be $125.76 a week worse off under the Agreement (issue E).
[16] The Full Bench also requested the employers to address the question of how employees receiving the national training wage or supported wage under the Agreement would be better off overall (issue F).
[17] We observed that clause 41 of the Agreement contains a reconciliation provision under which, at the end of each six month period, the employers calculate whether employees are eligible for a ‘top up’ payment. A payment will be made if the remuneration that the employee would have received under the Award would have been greater than the remuneration the employee actually received. We stated that, despite this, if a class of employees were to be systematically worse off, reliance on a top up payment every six months would not necessarily result in employees being better off overall under the Agreement. We also observed that it would not be sufficient that the top up payment resulted in the employees being as well off as they would have been under the Award. We will refer to these matters as issue G.
[18] The employers responded to each of these matters in their written and oral submissions. We refer to the numbered models in the employers’ submissions as the ‘CBA models’. The FSU addressed these issues and models and raised additional concerns. The FSU’s written submissions contained 14 models and we have assigned them numbers in the order in which they appear. The employers’ reply submissions contained further responsive calculations. Shortly before the hearing the FSU submitted 14 new and revised models. We refer to these as the ‘FSU new models’ and have assigned them numbers in the order in which they appear in the FSU’s modelling document. We refer to the employers’ further modelling that was submitted in reply as the ‘CBA new models’. There were a number of iterations of the CBA new models, correcting or adjusting the calculations. On the morning of the second day of the hearing, the FSU produced further calculations on its models, to which the employers filed their own further modelling later in the day and after the hearing, which among other things adjusted calculations to relevantly include a second meal allowance that might apply under the Award, and to confine superannuation payments to ordinary hours. We have considered these, without revising all calculations.
[19] We will deal first with issue G, as it is of relevance to the other BOOT issues.
[20] Clause 41 of the Agreement contains what is commonly referred to as a reconciliation provision. It states:
“41. Better off overall test
We will ensure that the remuneration you receive under this Agreement means you are better off overall than if the Banking Award applied to you in place of this Agreement, in accordance with the methodology set out in this clause.
At the end of each Relevant Period, the Group will calculate whether you are eligible for a top-up payment on the following basis: TP = A - E
Where:
a. TP: is the top-up payment to be made to you. However where E is greater than A, the top-up payment will be deemed to be zero.
b. E: is the total remuneration you received for the work performed by you in the Relevant Period (including under an Old Individual Agreement or an individual arrangement under a Previous Enterprise Agreement) including:
i. the Salary paid to you whether worked or taken as paid leave (including time off in lieu of overtime or working on a public holiday);
ii. any loadings, payment for overtime and/or allowances;
iii. any PRP or variable pay (including STVR) received in the Relevant Period for work performed in any period, provided that where the payment relates to a period longer than the Relevant Period, the value of the payment will be divided in half (or pro-rated if the Relevant Period is less than 6 months) and apportioned to the current and subsequent Relevant Period;
iv. any gross lump sum payment in respect of the annual leave you have accrued that was received in the Relevant Period, provided that where the payment relates to a period longer than the Relevant Period, the value of the payment will be divided in half (or pro-rated if the Relevant Period is less than 6 months) and apportioned to the current and subsequent Relevant Period; and
v. any payments made on termination to you.
If the first Relevant Period after the commencement of this Agreement is not for a full 6 month period, clause 41(b)(iii) shall apply such that we may include any PRP or variable pay received (including STVR) in the Relevant Period for work performed in any period, provided that if the payment was received by you in the 12 months prior to the commencement of this Agreement, a proportion of the value of the payment will be considered in the first Relevant Period of this Agreement, to the extent that the value was not taken into account in the final better off overall assessment under Clause 10, Division A of the CBA EA 2016.
c. A: is the remuneration that would have been paid to you for the Relevant Period had the Banking Award applied in place of this Agreement, being:
i. ordinary hours worked or paid leave taken calculated at the minimum rates provided for by the Banking Award;
ii. any loadings (including annual leave loading), penalty rates, payment for overtime or allowances which would have been applicable; and
iii. any termination payments calculated at the minimum rates provided for by the Banking Award.
d. Relevant Period means each 6 month period calculated from 1 May 2021 (or 1 November 2021 if this Agreement does not commence before 1 November 2021), provided that:
i. an interim period which may be shorter than 6 months will cover the period from the start of this Agreement through to 30 April 2021 (or 31 October 2021 if this Agreement commences after 1 May 2021); and
ii. if you cease to be covered by this Agreement (because your employment terminates or otherwise), the Relevant Period will end on the date you cease to be covered by this Agreement.
Any top-up payment will be made within 49 calendar days of the end of the applicable Relevant Period and shall be subject to PAYG tax.
If at any time before the end of the Relevant Period your circumstances change and you consider you would have been paid more if the Banking Award applied, you should raise it with your Line Manager and your Line Manager can arrange for a review to be completed earlier. The Group will consider your changes to determine the likelihood of a top-up payment and may, at its sole discretion, take steps to remedy the effect of those circumstances. If a shortfall is identified and paid to you part way through a Relevant Period, when we undertake the assessment at the end of a Relevant Period, we will take into account the shortfall already paid to you.
A reference to the Banking Award in this clause is the Banking Award as it operated at the date the Agreement commenced.”
[21] The purpose of clause 41 is stated in its opening paragraph. It is to ensure that the remuneration received by employees under the Agreement results in employees being better off overall than if the Award had applied to them. Such provisions have become common in enterprise agreements. In principle, the presence of such a clause in an enterprise agreement can assist the Commission to reach a state of satisfaction that each award covered employee, and prospective award covered employee, will be better off overall under the enterprise agreement than under the relevant award. However, the reconciliation provided for under the clause must be initiated by the employer and confer a legal entitlement on employees to receive relevant payments that are sufficient to ensure that all employees remain better off overall than would be the case if the relevant award applied to them (see SDA v Beechworth Bakery Employee Co Pty Ltd [2017] FWCFB 1664 (Beechworth) at [42] – [46]); and Loaded Rates Agreements Case [2018] FWCFB 3610 at [139]).
[22] Clause 41 requires the employers to conduct the reconciliation process and creates an enforceable right to a reconciliation payment. These matters distinguish the clause from the provision considered in Beechworth at [42]. The review period of 6 months is longer than the review period in the provision that was considered by the Full Bench in Beechworth. We also note that if an employee ceases to be covered by the Agreement the review period will end and the employers will conduct a reconciliation and make any payment. Further, employees may request a review at any time if their circumstances change and they believe that they would have been paid more had the Award applied to them.
[23] We have a concern about the efficacy of the reconciliation provision in clause 41. The formula ‘TP = A-E’ does not ensure that employees who receive less remuneration during the review period than they would have received under the Award would be better off overall under the Agreement as a result of the reconciliation. An employee who earned for example $20,000 over the period, and who would have received the same amount under the Award, would not receive a top up payment, because ‘TP’ would equal zero. Further, as we explain below, there are a range of circumstances in which it is possible that employees could work in ways which result in payments that are less than those payable in the same circumstances under the Award. This possibility is sufficient for us to have a concern that, without an effective reconciliation provision, the Agreement would not pass the BOOT.
[24] Through their written submissions, the employers offered to provide an undertaking, by which the payment to affected employees under clause 41 would include the ‘shortfall’ plus an additional amount of 5%. The undertaking, contained in paragraph 9 of the undertakings document in attachment A to the reply submissions, states:
“In respect of clause 41 of the Agreement, if an employee is eligible to receive a top-up payment under clause 41, the employee will receive the top-up payment calculated under clause 41 plus an additional 5% of the top-up payment.”
[25] Subject to what we say further below, this undertaking addresses our concern that the reconciliation provision’s formula would not necessarily render affected employees better off overall under the Agreement.
[26] We return to our observation that, if certain employees were to be systematically worse off, reliance on a top up payment every six months would not necessarily result in those employees being better off overall. The mere possibility that a reconciliation provision will have work to do would generally be of little moment in the BOOT analysis. But where it appears that employees will regularly work in ways that will see them earn the same or less than would be the case under the award, a question arises as to whether the reconciliation provision would ensure that affected employees remain better off overall despite the payments conferred by the provision. A premium payment that not only exceeded the shortfall but did so by a significant margin might be sufficient to offset what might loosely be described as the ‘late payment detriment’. This consideration would form part of the weighing exercise inherent in the Commission’s evaluation of the BOOT. It would also be necessary to consider non-monetary benefits and detriments under the agreement and the award. Evidence about the employer’s working arrangements is relevant to the Commission’s assessment. Mindful of these matters, we proceed to consider further whether the Agreement passes the BOOT.
[27] Of relevance to issue A is the fact that the Agreement, unlike the Award, permits ordinary hours to be worked between 7.00 pm and 10.00 pm on weekdays, and between 12.00 noon and 8.00 pm on Saturdays, whereas these hours are overtime hours under the Award. (compare clause 13.1 of the Agreement with clauses 13.1 and 20.1 of the Award).
[28] The employers advanced several reasons why employees working such hours would be better off overall under the Agreement, without recourse to the reconciliation provision in clause 41. First, between 12.00 noon and 8.00 pm on Saturdays employees other than shift workers are entitled to a weekend penalty of 150% (clause 13.1). Secondly, hours worked as ordinary hours under the Agreement attract annual leave accruals and by implication annual leave loading (see s 87(2) of the FW Act), as well as superannuation payments, which would not be the case for hours worked as overtime under the Award. Thirdly, the Agreement provides for other benefits that are more generous than the relevant Award counterparts or are not found in the Award at all. The employers referred to the following:
(a) subject to meeting eligibility criteria, employees are entitled to annual salary increases of 3.25% effective from 1 July 2020 and 3% effective 1 July 2021, based on their actually salaries on these dates;
(b) subject to meeting eligibility criteria, employees may be entitled to a performance related payment, and the vast majority (some 93%) of eligible employees receive a payment;
(c) the meal allowance under the Agreement is $28.95 for all meals, which is 66% or 103% higher than the Award counterpart;
(d) a weekly interpreter allowance is provided for employees who have language skills other than English and are required to use those skills in the course of their work for a minimum of 5 hours a week;
(e) the travel allowance under the Agreement means that transport home will be covered in some circumstances where it would not be covered under the Award;
(f) employees have access to salary sacrifice arrangements;
(g) all employees are provided with a CBA transaction account, free from a number of fees;
(h) employees who work ordinary hours between 8am and 8pm on a Saturday receive a 50% loading in addition to their ordinary pay;
(i) employees may receive a second meal break under the Agreement in circumstances where no second meal break is provided under the Award;
(j) overtime is calculated on a weekly basis, rather than the less favourable daily basis provided for in the Award, and unlike in the Award, overtime is also paid for the time worked outside the daily maximum of ordinary hours;
(k) employees may perform some or all of their work from a remote location which is not their usual place of work, by agreement;
(l) there is an additional one week of leave per year for employees who work in certain remote locations;
(m) paid ‘life leave’ of 22.8 hours (3 days) is provided on the employee’s anniversary of service, subject to criteria relating to the taking of paid annual leave. This equates to around 1.25% of salary;
(n) employees are entitled to 13 weeks paid parental leave for primary carers and 4 weeks for secondary carers, as well as fostering and surrogacy leave, and leave to support employees through the loss of a child relating to pregnancy;
(o) superannuation is paid while taking unpaid parental leave;
(p) employees are entitled to 3 days of compassionate leave on each occasion under the Agreement, rather than 2 days on each occasion under the Award, and employee entitlements in relation to jury service leave and military leave are more generous than under the Award;
(q) employees are entitled to paid domestic and family violence leave, paid gender affirmation leave and paid Sorry Business leave (unpaid for casuals); and
(r) employees are entitled to a number of additional benefits under the redundancy scheme in the Agreement, including a longer period of notice of termination and a higher severance scale.
[29] These are benefits that are to be weighed in the balance in assessing the BOOT in respect of issue A, and whether the Agreement passes the BOOT more generally. We note however that many of the items above are contingent benefits. Importantly, as the FSU emphasised, the wage increases provided for in the Agreement are subject to various conditions. They do not apply to employees engaged on any of the individual arrangements listed in clause 9.1(a) of the Agreement, or to mobile bankers, or those who have a salary exceeding $153,600. Further, clause 9.1(b) excludes from pay increases employees who have given, or who have been given, notice of termination of employment as at the date of the salary increase. And clause 9.1(c) provides that in order to receive a pay increase, employees must have met minimum performance measures and compliance standards and must also have completed mandatory learning requirements.
[30] However, as we explain below, it will be necessary for the employers to provide an undertaking in order to meet our concern, in respect of s 180(5), that in the course of explaining the Agreement, representations were made to employees that pay increases were guaranteed. It appears to us that an effective undertaking would need to guarantee a pay increase. No undertaking is yet before us; we simply note the effect that an undertaking of the required kind is likely to have.
[31] The quantum of the wage increases payable under the Agreement substantially exceed CPI over the 12 months to the March 2021 quarter, which was 1.1%. The Annual Wage Review decision of 16 June 2021 adjusts award rates of pay, however the BOOT is assessed as at the ‘test time’ (this is the day on which the application under s 185 is made - see s 193(6)). This anchors the test to the relevant award as in force at that time.
[32] We also note that clause 8 of the Agreement prescribes the minimum rates of pay for all employees other than those on a trainee or supported wage. These exceed the Award minima by over 5% at the narrowest margin, which is the GC2 classification. In addition, all employees are able to salary sacrifice and receive discounted CBA bank accounts.
[33] A significant benefit contained in the Agreement is the provision of three days of ‘life leave’ on each service anniversary date after the commencement of the Agreement for employees other than casuals. This benefit equates to some 1.25% of salary. We note that under clause 25 life leave can only be taken if employees have taken a certain amount of annual leave in the past year and their accrued annual leave balance is less than 4 weeks, or 5 weeks for shift workers. Some employees will not be able to access life leave immediately, either because their anniversary date has not been reached, or because of their annual leave circumstances (although presumably they could take annual leave and reduce leave balances, including by cashing out annual leave under clause 23.4). However, the employers advised employees shortly before the vote on the Agreement that, if the Agreement were to be approved by vote, employees would be given an additional three days of life leave in the first year of the Agreement, without preconditions, thereby affording immediate access to this type of leave. The employers have also offered a pre-emptive undertaking to the Commission to make this commitment a term of the Agreement (undertaking 8 in the employers’ undertakings document). The undertaking is offered in response to any concern the Commission might have that without such an undertaking, the Agreement may not have been genuinely agreed to by employees. As we explain below, we have a concern that some employees may have understood that the additional life leave would be provided as a term of the Agreement, and we propose to accept this undertaking.
[34] As a result of the undertaking, the three days of additional life leave will also be provided under the Agreement (see s 191). In assessing the BOOT, it is relevant for the Commission to take into account all undertakings, including those that have been offered in response to the Commission’s concerns about other approval requirements, relevantly in this case, s 180(5). The additional three days of life leave that apply under the Agreement as a result of the undertaking will be a benefit that applies ‘if the agreement applied to the employee’ (see s 193(1)) and it is therefore to be taken into account for BOOT purposes. We appreciate that the employers advised employees that the additional leave would be provided if the Agreement were voted up, and that on one view, because the Agreement was voted up, the additional leave would be provided irrespective of whether the Agreement applied to employees. However, there is no basis to conclude that the employers’ decision to grant employees the additional leave outside the terms of the Agreement would be legally enforceable. The undertaking on the other hand confers on employees a legal entitlement to the additional leave. On any view, this would be a benefit accruing to employees only if the Agreement applied to employees. In summary, the Agreement will provide for up to six days of life leave in the first year of the Agreement, equating to up to 2.5% of salary, for employees other than casuals. This is a substantial benefit.
[35] We take account of the fact that there are also various respects in which the Agreement is less favourable to employees than the Award, which are addressed in attachment C to the F17 declaration. Many of these are also contingent in nature.
[36] The employers further contended that there was a relatively low incidence of employees working hours within the extended span that would be loaded under the Award. Relying on the evidence of Mr Voon, the group’s executive manager of workforce analytics, the employers submitted that in the 12 months to 30 April 2021, only 1,422 employees had worked schedules that included working time between 12 noon and 8.00pm on a Saturday, or on a Sunday, and that employees would receive higher rates for ordinary hours.
[37] The parties advanced contentions and submitted a large volume of modelling in relation to issues B to E, some of which concern the scenarios in which employees work outside of the Award span of hours. We will address these below. However, speaking generally in relation to employees working the extended span of ordinary hours under the Agreement at times that would attract overtime under the Award, we do not consider it likely that employees will regularly work to a schedule that would see employees earn the same or less under the Agreement than under the Award, leaving the reconciliation clause to one side. If that occurs, the reconciliation provision will apply and provide them with a payment that exceeds the ‘shortfall’ by a margin of 5%. In our assessment, as we will explain further below, this will see employees remain better off overall under the Agreement compared to their position under the Award.
[38] The Commission’s model 1 considered a part-time GC2 employee working eight ordinary hours and four hours of overtime. The model showed the employee to be $18.17 worse off under the Agreement compared to the Award. The difference is associated with the fact that the Agreement has an overtime payment for part-time employees of 125% for hours up to 38 hours per week, rather than 150% to 200% under the Award (see clause 15.2.1 of the Agreement and clause 20.1 of the Award). The FSU’s model 2 suggested that employees at the other GC levels would also be worse off working these hours under the Agreement than under the Award.
[39] The employers contended that despite the analysis in model 1, which it acknowledged would also affect employees at grades GC1, GC3 and GC4, the employees would be better off overall under the Agreement. It submitted that model 1 did not account for the higher meal allowances available under the Agreement where employees work more than 10 hours (excluding meal breaks) on any day. The meal allowance under the Agreement is $28.95, compared to $17.35 or $14.27 under the Award (see clauses 11.3 of the Agreement and 18.4(a) of the Award). The FSU disputed the relevance of the meal allowance under the Agreement, on the basis that, assuming the overtime extends past 6pm, which it said was a reasonable assumption for a 12-hour shift, a meal allowance is also payable under the Award (see clause 18.4). This is correct but the employers’ original models accounted for both the Agreement and the Award meal allowances. When meal allowances are included, the employers’ modelling shows that part-time employees at grades GC1, GC3 and GC4 earn more under the Agreement than they would under the Award, although an employee at GC2 would still earn $6.57 less (CBA model 1(c)). However, the employers submitted that their model 1(d) showed that GC2 employees would be better off under the Agreement, taking into account the meal allowance, if they work 2.75 hours of overtime on a day, and that this was a much more realistic assumption than the premise in the Commission’s model of 4 hours of overtime.
[40] The employers relied in this regard on the evidence of Mr Voon, which drew on the group’s employee data for the 12 month period ending on 30 April 2021, to support their contention that it was highly unusual for part-time employees to work four hours of overtime on a day, and that the average number of overtime hours worked by part-time employees on a day when overtime was worked was 2.63 hours. The employers said that the Commission’s model 1 also assumed a high proportion of overtime hours (33% of the total hours worked), which was very uncommon, occurring only among 1.9% of part-time employees who worked overtime in the sample period, and that on average, overtime hours worked by part-time employees formed only 4.1% of their total hours worked. Further, Mr Voon’s evidence was that over the preceding year, no employees classified at GC2 worked eight ordinary hours plus four hours of overtime. The employers contended that model 1 postulated working arrangements that would not arise for the vast majority of employees, and that a better model would assume 2.75 hours of overtime worked by a part time employee on a day, just above the average number of overtime hours worked. CBA’s model 1(d) showed that this would see a net positive result for part-time employees at all grades, including for employees at GC2.
[41] The FSU contended that it would be inappropriate for the Commission to rely on data concerning the average amount of overtime worked by part-time employees, or average data in relation to other matters, because of the wide diversity of circumstances likely to be worked by the large number of employees covered by the Agreement. It said that the employers should have provided more data, including the range and median number of overtime hours worked. Averages do not tell the whole story. However, we consider averages to be relevant to our assessment of whether we can be satisfied that employees will be better off overall under the Agreement than under the Award and whether, in considering the efficacy of a reconciliation provision, it is probable that employees will regularly work in ways that will not see them better off overall unless the reconciliation provision is applied.
[42] The FSU also contended that under clause 15.2.1 of the Agreement, the employer can average excess hours over a four week period, meaning it is possible that an employee might not receive overtime otherwise payable under the Award. However, clause 13.2 of the Award allows for ordinary hours to be averaged over a four week period. The FSU said that its model 4 (part-time employees at GC2 working Sunday, Monday and Tuesday from 9.00am to 5.00pm with 2.75 hours overtime on each day) showed employees would be worse off under the Agreement. The employers however pointed to the evidence of Mr Voon, which we accept, that over the 12 months to 30 April 2021, no employees in classifications GC1 to GC4 had worked in this way.
[43] We consider that the Agreement’s more generous meal allowance should be included in the BOOT analysis alongside the Award meal allowance. And we consider that it is relevant to take into account the average number of part-time hours. We accept that the working arrangements on which the Commission’s model 1 is premised, entailing four hours of overtime constituting a third of hours worked, are rare. The fact that a small number of employees worked overtime amounting to a third of their hours of work over the past 12 months is not a reason to conclude that it is probable that part-time GC2 employees will regularly work four hours of overtime in the manner contemplated by model 1, particularly when in the past 12 months no GC2 has worked in this way.
[44] In respect of part-time employees working overtime, the FSU’s new model 7 contemplated part-time employees working 7.6 hours on Monday, Tuesday and Wednesday to 5.00pm, together with 2.75 hours of overtime each day at the end of the shift. The FSU’s new model 8 considered a part-time employee working the ordinary hours in the preceding model, but with a stand-alone overtime shift of 7.6 hours on a Sunday. And FSU new model 9 considered a part-time employee working 30 ordinary hours Monday to Friday over a month with 25 hours of overtime. Each model showed employees at levels GC1 to GC4 receiving less pay under the Agreement than under the Award.
[45] The CBA new models showed that in the circumstances assumed by FSU new models 7 and 9, employees receive more pay under the Agreement for the hours worked. We consider the employers’ amended calculations to be correct. In any event, Mr Voon’s evidence, which we accept, was that over the 12 month period ending on 30 April 2021 no employees had worked in the manner contemplated by FSU new model 7, and that even if one extended the model to persons working 2.75 hours or more overtime, only one employee, at level CSL B, had worked such hours over the 12 month period. Mr Voon said that no employees had worked the hours in FSU new model 9. As to FSU new model 8, the employers’ calculations showed that employees at GC1 to GC4 would receive less pay under the Agreement by between $13.00 and $32.90 per week. But Mr Voon’s evidence was that over the 12 months to 30 April 2021 only one employee, at the GC 4 level, had worked the hours in FSU new model 8, and only in one week. Mr Voon also said that, if one adapted FSU new model 8 to consider employees working 7.6 hours or more over overtime, the data showed that only three employees had done so over the past year, each on one occasion. The FSU’s working models were therefore unlikely scenarios.
[46] The employers submitted that, should the Commission nevertheless have a concern that the Agreement did not pass the BOOT in relation part-time employees working overtime at level GC2, they would offer an undertaking to raise the base hourly rate of the GC2 classification from $24.29 per hour to $25.00 per hour (undertaking 2 in the employers’ undertakings document). However, we do not consider it probable that such employees at GC2 or other levels will regularly work in ways that will see them receive less pay under the Agreement than under the Award. Even if they do, and even if the FSU calculations are adopted, we consider that, for reasons explained further below, the 5% payment will see them better off overall under the Agreement than under the Award. We do not have a concern that the Agreement does not pass the BOOT in respect of part-time employees at level GC2 working overtime or otherwise. The undertaking is not responsive to any concern we hold in this regard.
[47] We note that the FSU new models showed workings for GC2 with and without the $25.00 hourly rate offered in the employers’ undertaking, which we have declined to accept. We have adjusted the employers’ new model workings where they have included the GC2 undertaking to account for our decision not to accept the undertaking, and instead applied the GC2 rate of pay in the Agreement.
[48] The Commission’s model 2 considered a casual GC2 employee working ten ordinary hours with four hours of overtime. This produced a remunerative shortfall, as against the Award, of $0.29. Unlike the Award, the Agreement provides that casual employees are not entitled to the casual loading when overtime is worked (see clauses 2.3.1(a) of the Agreement and clauses 11.3 and 20.1 of the Award).
[49] The employers contended that the Commission’s model 2 produced a negative outcome only in respect of casual employees at grade GC2, and that, as shown by the evidence of Mr Voon, employee data for the 12 month period ending on 30 April 2021 demonstrated that no casual employee worked 14 hours in a day. Moreover, the maximum hours of work on a day was 12, which occurred in only 7 instances. Only one of these employees was graded at GC2. The employers contended that on that basis, the working arrangements in model 2 are improbable. We agree.
[50] The employers submitted modelling showing that, where casual employees work 12 hours in a day (ten ordinary hours and two overtime hours), and also where they work 13 hours in a day (ten ordinary hours and three overtime hours), casual GC2 employees are better off under the Agreement (CBA models 2(b) and 2(c)). We accept this analysis. We also agree with the analysis in CBA model 2(d), indicating that once the Agreement’s higher meal allowance is factored into the analysis, even the fourteen hour day in model 2 sees a GC2 employee better off overall under the Agreement.
[51] The FSU submitted that there were a range of scenarios where casual employees would be worse off when working overtime under the Agreement. The examples it cited were casuals working an overtime shift from 10.30am to 6.30pm on a Saturday, which showed a deficit against the Award in the lowest six classifications, and the same hours worked on a Sunday, which showed a deficit in the lowest four categories (FSU models 5 and 6). To the extent that these models envisage casual employees having already worked 38 ordinary hours by the weekend, we accept the employers’ submission that such a situation would not arise because the group’s pay period ends on a Friday, and the higher rate of pay for the 38 ordinary hours would see employees better off under the Agreement than under the Award.
[52] However, if casuals were to work from 10.30am to 6.30pm within their maximum of 38 hours a week, employees working on the Saturday at grade GC2 would receive less pay under the Agreement than under the Award, as would employees working on the Sunday at GC1, GC2 and GC4. As to the likelihood of employees working in these ways, Mr Voon’s evidence was that 93 casual employees had been paid overtime working on a Saturday, and that their average number of hours worked on a Saturday was only 5.7, whereas the FSU’s model 5 contemplated an entire 8 hour overtime shift on a Saturday. Mr Voon’s evidence was that only two employees had worked such hours over the preceding year. As to FSU model 6, Mr Voon’s evidence was that 55 casual employees had worked overtime on a Sunday, averaging 6.5 hours on that day, and that only nine had worked the hours contemplated by the model, each of whom had worked hours on days other than Sunday.
[53] The FSU’s further modelling considered casuals working only on a Saturday from 12.00pm to 8.00pm (FSU new model 10) and the same hours only on a Sunday (FSU new model 11), indicating that at levels GC1 to GC4 employees would receive less pay under the Agreement than under the Award by between $9.17 and $22.04 in FSU new model 10, and between $40.69 and $53.56 in FSU new model 11. The employers’ calculations in reply showed that in the circumstances of FSU new model 10, employees at GC1 to GC4 would receive between $19.14 and $27.33 less per week than would be the case under the Award. In respect of the FSU new model 11, the CBA new models showed that employees would receive less pay under the Agreement than under the Award at GC1 to GC4 by between $1.28 and $10.64. However, Mr Voon’s evidence, which we accept, was that over the 12 months to 30 April 2021 only 14 employees had worked on a Saturday in the manner contemplated by FSU new model 10, across 19 days; and over the 12 months to 30 April 2021, only 21 employees worked on Sundays in the manner of FSU new model 11, across 45 days.
[54] The FSU’s models 5 and 6, and its new models 10 and 11, are evidently very rare scenarios. We do not consider it probable that casual employees will work regularly in these ways. Should employees work any of these hours on a regular basis, we consider that the reconciliation provision, with its 5% payment on top of the ‘shortfall’, will be sufficient to see the employees remain better off overall under the Agreement than under the Award. We consider that this would be the case even accepting the FSU’s calculations.
[55] The Commission’s model 3 considered a GC2 employee working ten ordinary hours on Saturday and ten ordinary hours on Sunday. The comparison showed the employee receiving $97.37 a week less under the Agreement than would be the case under the Award. We note that under the Agreement ordinary hours can be worked between 8am and 8pm, although such hours attract weekend penalties of 150% and 175% (see clause 13.2). Under the Award, hours outside 8am to 12 noon on Saturday are overtime, as are all hours on Sunday, attracting penalties of 150% and 200% respectively (clauses 13.1 and 20.1).
[56] The employers submitted that the Commission’s model 3 contained an error, in that it included under the Award entitlements an amount for annual leave and annual leave loading accrued after 12 noon on Saturday, and at any time on Sunday. They submitted that, because under the Award work performed at these times is overtime rather than ordinary hours, it does not attract accruals for annual leave under s 87(2) of the FW Act or by extension annual leave loading. The employers contended that in model 3, the figures of $35.52 and $6.22, representing annual leave and leave loading accruals under the Award, ought to be deleted. They said that by contrast under the Agreement, while weekend penalty rates apply, hours worked between 8am and 8pm are ordinary hours, and therefore attract an accrual of annual leave and annual leave loading. The amounts of annual leave and annual leave loading indicated in model 3 as arising under the Agreement should therefore be retained. We agree.
[57] The employers acknowledged however that, even once this correction is made, the modelled working arrangements still see employees at GC2 earning $55.63 less under the Agreement than they would under the Award (CBA model 3(a)), and that employees would also earn less at levels GC1 (by $15.00), GC3 (by $11.72) and GC4 (by $18.20). The employers also acknowledged in their model 3(b) that employees working for 10 hours on Saturday would earn less under the Agreement than under Award for that day at levels GC1 (by $20.72), GC2 (by $40.86), GC3 (by $20.50) and GC4 (by $24.36). Further, their model 3(c) showed GC2 employees working 10 hours on Sunday would earn $14.77 less on that day than they would under the Award. (We note that the FSU’s model 1 also suggested that employees working an eight hour shift on a Sunday would be worse off under the Agreement than the Award by $12.22 at the GC1 level and $0.43 at the GC2 level. However, once annual leave and 9.5% superannuation (for ordinary hours) is included on the Agreement side of the ledger, employees are better off under the Agreement. In any event however, Mr Voon’s evidence was that in the 12 month period ending on 30 April 2021, only nine employees at GC1 or GC2 had worked on a Sunday, and only one had worked only on a Sunday. The part-time scenario in the FSU’s model 1 is rare.)
[58] The employers further submitted that, despite the ‘negative differences’ shown in their own models, relevant employees would be better off overall under the Agreement than under the Award, even leaving aside the application of the reconciliation provision. First, they contended that the work pattern used in model 3, and in their own models of work performed on Saturday and Sunday only, do not take into account hours worked by those employees from Monday to Friday which would be treated as ordinary hours under both the Agreement and the Award. Here, minimum rates of pay in the Agreement exceed the pay rates in the Award by more than 5% at the narrowest margin and would be expected to offset and exceed the negative differences. The employers relied also on the other benefits afforded to employees under the Agreement. We refer in this regard to our earlier analysis.
[59] The employers further contended that the exclusive Saturday and Sunday work pattern used in the Commission’s model 3 was rare, as was the performance of work exclusively on either a Saturday or a Sunday. It referred to the evidence of Mr Voon concerning working arrangements of employees over the 12 month period ending on 30 April 2021. This showed that only 40 employees had worked 10 ordinary hours on each of Saturday and Sunday, of whom 37 had also worked ordinary hours on weekdays. Additionally, Mr Voon said that the number of employees who had worked only on a weekend numbered 22. We note that Mr Voon said in cross-examination that he did not know whether this data recorded persons who had only ever worked in these ways during the relevant period, or who had worked in these ways at any time during the period. Mr Voon said that on average, when employees work on weekends, only 20% of their ordinary hours fall on the weekend. Mr Voon also gave evidence that only 48 employees had worked 10 ordinary hours on a Saturday, and that 20 of these employees also worked ordinary hours on weekdays. Further, 54 employees had worked 10 ordinary hours on a Sunday, 13 of whom had also worked ordinary hours on weekdays.
[60] The FSU relied on a witness statement of Mr Cousner, who said that on 19 May 2021 two FSU delegates had advised him that at a contact centre in Launceston staff are offered the opportunity to work overtime on three out of four Saturdays, typically from 8.00am to 1.00pm, and that staff would routinely work between 4 and 6 hours per week. This evidence is of course hearsay. In any event it is not entirely clear what is meant by ‘routinely’, nor does this evidence address the number of ordinary hours worked by the persons concerned, which are paid at rates that exceed the Award. The employers objected to Mr Cousner’s hearsay evidence. We have had regard to it but accord it little weight in considering the likely working patterns of employees under the Agreement.
[61] We consider that the working arrangements in the Commission’s model 3 are rare. Based on Mr Voon’s evidence, which we accept, of the 40 employees who worked ten hours on each of a Saturday and Sunday only three did not also work ordinary hours on weekdays, which under the Agreement are generally paid at rates higher than the Award. These employees, if classified at grade GC1 to GC4, would have received less pay under the Agreement than the Award for the weeks when they worked these hours. But there is nothing to suggest to us that this is likely to occur on a regular basis. We take into account the evidence that 22 employees had worked ordinary hours ‘exclusively’ on the weekend, however even assuming these employees worked in this way throughout the year, the question of whether they would have earned more under the Award than the Agreement would depend on how many of these hours were outside of the Award span of hours; any time worked before noon on Saturday would not attract the Award loading.
[62] As to the employees working only on either a Saturday or a Sunday, over the 12 months to 30 April 2021, only 28 employees had worked 10 ordinary hours on a Saturday without any ordinary hours during the week, and 41 had done so on a Sunday. If employees at the GC1 to GC4 levels were to work the ‘model 3(b)’ or ‘3(c)’ hours, they would suffer the ‘shortfalls’ identified above. But again, based on the material before us, we do not consider that it is probable that employees will regularly work such hours. If they do, the affected employees will be entitled to the payments provided for under clause 41. Even if they were to work such hours on a regular basis, and applying the FSU’s calculations, we consider that this payment will ensure that they are better off overall under the Agreement.
[63] The Commission’s model 4 examined a GC2 employee working 38 hours a week comprised of shifts finishing at 7pm, which attract a shift loading under the Award but not under the Agreement. Under the Agreement, an afternoon shift is one that finishes at or after 8pm but before midnight, whereas under the Award an afternoon shift finishes between 6pm and midnight (clause 19.1 of the Agreement and clause 13.7(a)(ii) of the Award). The Agreement provides for a 17.5% loading, whereas the Award loading is 20%, and in the case of permanent afternoon shift workers, 25%. The model showed that such an employee would under the Agreement receive $125.76 a week less than would be the case under the Award.
[64] The employers contended that employees working the hours in model 4 would nevertheless be better off overall under the Agreement than the Award. They conceded that model 4 gave rise to a ‘negative difference’ for employees at grades GC1 to GC4. However, they submitted that employees who work an afternoon shift are generally not employed in the ‘GC’ grades. The employers referred to Mr Voon’s evidence that over the 12 month period ending on 30 April 2021, of the employees who worked a shift finishing between 7pm and 8pm, none were employed at GC1, GC2 or GC3; 50 were employed at GC4, but only working one shift a week finishing at this time; and 83 were employed at higher grades, where the rate of pay under the Agreement exceeds that in the Award by greater margins. We accept Mr Voon’s evidence. Based on the material before us, we do not consider that it is probable that employees will regularly work the hours in the Commission’s model 4 which result in employees receiving less pay than would be the case were the Award to apply to them.
[65] The FSU contended that the Agreement nevertheless systematically disadvantaged shift workers and submitted eight further examples of situations where it said employees working shift work under the Agreement would be worse off overall than under the Award. These were as follows:
• An employee working a 38 hour week of shifts of equal length, with no overtime, Monday to Friday, on an afternoon shift finishing at 6.30pm (as a non-permanent shift worker under the Award) (FSU model 7). This showed employees at GC1 to GC4, AMA and AMB earning less under the Agreement in amounts ranging from $46.65 at the AMB level to $222.82 at GC2.
• The same employee as in the previous example working 2 hours of overtime on each shift (FSU model 8). This showed employees at GC1 to GC4 earning less under the Agreement in amounts ranging from $24.74 at GC3 to $411.68 at GC1.
• An employee working temporary afternoon shift, with 2 hours of overtime on each shift (FSU model 9). This showed an employee at GC2 earning $48.65 less under the Agreement than would be the case under the Award.
• An employee working permanent afternoon shift Monday to Friday (FSU model 10). This showed employees at GC1 to GC4 earning less under the Agreement in amounts ranging from $9.37 at GC1 to $61.29 at GC2.
• An employee working permanent afternoon shift with 2 hours overtime on each shift, Monday to Friday (FSU model 11). This showed employees at GC1 to GC4 earning less under the Agreement in amounts ranging from $35.38 at GC3 to $116.22 at GC2.
• An employee working permanent night shift in shifts of equal length, Monday to Friday (FSU model 12). (Under the Award, a night shift finishes between midnight and 8am. Under the Agreement, night shift is defined as commencing on or after 10am on day 1 but before 4.30am on day 2 and finishing at or after midnight on day 2 but before 6.30pm on day 2. A loading of 25% is paid in both cases. A permanent night shift worker under the Award receives an additional 5%.). This showed employees at GC2 to GC4 earning less under the Agreement in amounts ranging from $37.90 at GC3 to $88.25 at GC1.
• An employee working permanent night shift in 7.6 hour shifts, from 12pm to 8am, Sunday to Thursday (FSU model 13). This showed employees at GC1 worse off under the Agreement by $68.66.
• An employee working permanent night shift as in the previous model, but also working 5 hours of overtime on Saturday. This showed employees at GC1 to GC4 earning less under the Agreement than under the Award in amounts ranging from to $116.43 at GC1 to $200.74 at GC2.
[66] The FSU submitted that the Commission should also take into account the fact that shift workers are entitled under the Award to have their 20 minute meal breaks paid as time worked, whereas the Agreement provides only for a 45 minute unpaid break. A shift worker rostered under the Award to work 8 ordinary hours will be on site, and paid, for 8 hours and 20 minutes, whereas the Agreement requires attendance for 8 hours and 45 minutes and pays only for 8 hours. We take account of this. However, in our view it could not be safely concluded that all employees would necessarily regard the Award-based break arrangements as preferable. Employees may prefer an unpaid break of more than twice the length of that prescribed in the Award, instead of a 20 minute paid break.
[67] The FSU also submitted that under the Award, but not the Agreement, shift workers are paid shift loading on overtime hours. The FSU’s modelling proceeded on this basis. However, clauses 13.7(d) and 20.1 of the Award contain a note referring to Schedule B, clause 2.2 of which provides for shift worker overtime rates which are set at 150%, 200% and 250% of the base hourly rates in B.1.1. The Award does not provide for a loading upon a loading in this regard. This has inflated the Award figures in the union’s shift models.
[68] In relation to the FSU’s additional shift work modelling referred to above, the employers noted that under the Award, ordinary hours for non-shift workers can be worked up to 7.00pm Monday to Friday and up to 9.00pm on one day of the week. The fact that an employee finishes work after 6.00pm does not make that person a shift worker.
[69] The employers acknowledged that under the FSU’s models 7, 8 and 10 (but not the others), employees would, assuming they were indeed shift workers, receive less pay under the Agreement than under the Award for those particular shifts, although by much lesser margins. Using the ‘CBA reworked’ tabs in the calculations, for the weekly working arrangements in FSU new model 7, a GC1 would receive $78.96 less under the Agreement than the Award, a GC2 would receive $129.88 less, a GC3 $81.24 less and a GC4 $92.26 less. For the hours in FSU model 8, the employers’ calculations showed a GC1 would receive $52.30 less under the Agreement than the Award, a GC2 would receive $113.61 less, a GC3 $41.29 less, and a GC4 $48.32 less. For the hours in FSU model 10, the employers’ calculations showed only the GC2 level receiving less pay for the hours worked under the Agreement than the Award in the amount of $12.23. We accept these calculations.
[70] The employers contended however that the other benefits provided to such employees under the Agreement would outweigh these detriments, should they materialise, without recourse to the reconciliation provision. They also said that Mr Voon’s evidence showed that these working scenarios would arise very rarely. Of the group’s 13,650 full time employees in grades GC1 to AMB, only 21 of them worked ordinary hours which finished on or after 6.00pm and before 8.00pm Monday to Friday. As to the FSU models that assumed overtime on shift, the employers noted Mr Voon’s evidence that the average amount of overtime worked by these employees was only 0.8 hours per day. We accept Mr Voon’s evidence. We do not consider it likely that employees would work the arrangements in the models above.
[71] The employers submitted that, should the Commission hold a concern that the Agreement might not pass the BOOT in respect of employees working the afternoon shifts, they would offer an undertaking (paragraph 4 of the employers’ undertakings document) that clause 19.1 of the Agreement will be applied as if it provided for a ‘pre-afternoon shift’ loading of 12.5% for shifts finishing at or after 6.00pm but before 8.00pm.
[72] The employers contended that the FSU’s other shift modelling did not result in employees receiving less pay under the Agreements for the shifts worked, and in particular that the definition of night shift under the Agreement was much broader than its Award counterpart resulting in many more employees qualifying for the night shift loading under the Agreement, and that employees working such shifts would receive more pay under the Agreement than under the Award (see the modelling in Attachment F to the employers’ reply submissions). We agree with the employers’ modelling. Mr Voon’s evidence also shows that such shifts have been worked only rarely.
[73] The FSU submitted that its various examples were not exhaustive, but merely illustrative of working arrangements that would see shift workers earning less under the Agreement than they would earn under the Award. Among the FSU new models were six that concerned employees working permanent afternoon shift (FSU new models 1 and 2), temporary afternoon shift (FSU new models 3 and 4) and evening shifts (FSU new models 5 and 6), showing such employees would receive less pay in the particular circumstances of those models at levels GC1 to GC4 (and, in new model 6, at levels AMA, AMB and AMC). The further revised FSU models 1 to 5 tell essentially the same story, although the calculations are different, and several other classifications are shown to be worse off under the Agreement. We note that the FSU’s revised new model 6 does not appear to correlate with the original FSU new model 6. FSU new models 12 to 14 concerned employees on annual salaries working in ways that would see them classified as permanent shift workers under the Award. The models assumed employees working from Sunday to Thursday, with and without overtime, and on Monday to Friday finishing at 4.00am, and showed employees worse off at various gradings under the Agreement.
[74] The CBA new models in response to FSU new models 3 to 6 indicated that all employees would in fact be better off. However, the modelling included the pre-afternoon shift loading that is the subject of the proposed undertaking referred to above; without this loading, employees at GC1 through to GC4 in each of these models would receive less pay under the Agreement than under the Award. The employers acknowledged that FSU new models 1 and 2 would see employees at levels GC1 to GC4 earn less for the hours worked under the Agreement than under the Award by between $0.55 and $29.19 per week (FSU new model 1) and between $19.33 and $51.62 (FSU new model 2) despite the pre-afternoon shift undertaking. The employers contended that any such detriment would be easily outweighed by the Agreement’s other benefits, without recourse to the reconciliation provision.
[75] The employers contended that further, and in any event, Mr Voon’s evidence showed that over the 12 month period ending on 30 April 2021, only one employee had worked the hours contemplated by FSU new models 1 and 3, on only one occasion, and that none had worked the hours in FSU new models 2 or 4. In respect of FSU new model 5, Mr Voon said that only 13 employees had worked in this way, on a total of 430 occasions, but none was classified at GC1 to GC4. Mr Voon said that over the 12 months to 30 April 2021 no employees had worked the hours in FSU models 6, 12, 13 or 14. The employers’ modelling showed that employees working the hours in FSU new models 12 to 14 would all be better off overall under the Agreement, because of the high minimum salaries for employees on annualised salaries prescribed by clause 8 of the Agreement. The application, where relevant to the model, of the pre-afternoon shift loading would not affect this outcome. We consider the explanations and breakdowns of payments in the employers’ models to be correct.
[76] We also accept Mr Voon’s evidence. It shows that the working arrangements in the FSU’s new models are rare. We do not consider it likely that these patterns of work will be undertaken on a regular basis. In the event that an employee were to be engaged in any of the patterns of work above that result in shortfalls in respect of a relevant period, the reconciliation clause would apply to the employee and they would receive the difference between what they earned and what they would have received under the Award, plus five percent of the difference. We believe that this payment would be sufficient to ensure that employees remain better off overall under the Agreement than under the Award.
[77] As to the pre-afternoon shift undertaking offered by the employers, we decline to accept it, because we do not have a concern that the Agreement does not pass the BOOT in relation to employees who might work those shifts. We have accounted for the fact that many of the models have included this loading and made adjustments accordingly. However, we do not consider that it is probable that employees will regularly work the various modelled working arrangements. And the fact remains that anyone who does so will by virtue of clause 41 receive more pay than would have been the case under the Award. As we discuss further below, employees will be better off overall under the Agreement than under the Award.
[78] We asked the employers to address the question of how employees receiving the national training wage or supported wages will be better off overall under the Agreement. Clause 8.3 of the Agreement provides that the supported wage system in Schedule D of the Award is incorporated into the Agreement, and that the minimum rates provided for in the Agreement will not apply. Clause 8.4 states that, if the national training wage in the Award would have applied to an employee undertaking a traineeship, the minimum wage rate in the Award will apply instead of the rates in the Agreement. The rate of pay for employees receiving the national training wage or supported wages is therefore the same as the Award.
[79] The employers submitted that employees receiving the supported wage or the national training wage would nevertheless clearly be better off overall under the Agreement than under the Award, given the various additional Agreement benefits referred to above. We agree. There are certain universal benefits provided under the Agreement that render such employees better off overall, including the ability to salary sacrifice and the provision of CBA accounts free from certain charges. The various respects in which the Agreement is less favourable than the Award are outweighed by the totality of the provisions that are more favourable.
[80] In our view, where an enterprise agreement contains a reconciliation process under which the employer undertakes to ensure that employees will be paid more than they would have earned under the award over a period, the Commission’s consideration of whether the agreement passes the BOOT would take into account whether it is probable that employees will regularly work in ways that would attract the operation of the reconciliation provision and if so the margin by which the payment exceeds the award-based ‘shortfall’ and whether this is sufficient to outweigh the ‘late payment detriment’. If an enterprise agreement does not have a reconciliation provision of course, there is no internal safety net. The existence of a realistic possibility of employees working in ways that would result in them receiving the same pay as, or less pay than, that prescribed by the award would lead the Commission to doubt whether it could be satisfied that the agreement passed the BOOT (depending on the other terms and conditions in the agreement and the award), and to seek appropriate undertakings. But the presence of an effective reconciliation provision means that an employee will always have more pay. The concern is rather to weigh in the balance what we have broadly described as the ‘late payment detriment’.
[81] The FSU contended that ‘make-good clauses’ inherently create risk for employees, beyond the delay in receiving their full entitlements. It submitted that reconciliation processes are not perfect, and that in the present case the task of conducting reconciliations under the Agreement will not be simple. But this is a burden the employers assume under the clause. It will be their responsibility to get it right. This is the same responsibility owed by every employer in respect of employees covered by awards and enterprise agreements.
[82] The FSU contended that a consideration that should give the Commission pause before placing reliance on the reconciliation provision in its BOOT analysis was the fact that the presence of similar provisions in the employers’ predecessor agreements had not been sufficient to avoid the employers underpaying employees by substantial margins. However, no link has been established between any previous underpayments and the application of the reconciliation provisions in previous agreements, and even had it been established, one would expect the employers to guard zealously against the possibility of any recurrence.
[83] The FSU further contended that there is no internal right of review, or any obligation on the employers to provide employees with a breakdown or analysis of the reconciliations they undertake. However, any dispute about such matters could be resolved under the dispute resolution procedure, which authorises the Commission to make a binding recommendation (see clause 38 of the Agreement).
[84] The FSU submitted that the Commission should exercise caution in reaching a state of satisfaction that an agreement passes the BOOT in reliance on the role played by a reconciliation clause, and that the more ‘endemic the likely shortfall’, the less likely it is that reliance on a make-good clause is appropriate. We agree with the FSU that a cautious approach is warranted. We have adopted such an approach in this matter. However, we do not consider that it is likely that there will be regular shortfalls. While the modelling shows that it is possible for employees to work in ways which would see them receive less pay under the Agreement than under the Award for particular weekly working arrangements, we do not consider that there is a proper basis for us to conclude that it is probable that employees will in fact work in these ways on regular basis. A collection of various possibilities would not equate to a probability. The BOOT is concerned with the circumstances of each individual employee. The fact that one might conclude that it is likely that there will be some kind of working arrangements that will result in ‘shortfalls’ and engage clause 41 would not be a reason to conclude that it is probable that any particular employee would regularly work in ways that engaged the reconciliation provision.
[85] The BOOT does not require employees to be better off under an agreement than under the relevant award in each pay period, or over any particular units of time. It requires that they be better of overall. In our view, the overall nature of the assessment may bring into consideration temporal elements, such as fluctuations in pay. Although the test is conducted as at the ‘test time’, the Commission is required to consider the employee’s possible working arrangements under the Agreement over its life. (Plainly, the test is not confined to working arrangements on the day of lodgement of the application; as most applications are filed on a weekday, the Commission would then be precluded from considering weekend work.) The BOOT analysis, although anchored to the award as at the test time, looks to the working arrangements under the agreement generally, beyond the date of lodgement of the application, and beyond the pay cycle. There is no reason why an employee who earns less under an agreement than the award in one period, but more in another, may not be better off overall under the Agreement than the Award, subject to appropriate safeguards (for example, that a reconciliation is conducted if an employee ceases to be covered by the agreement, as is the case in the present instance).
[86] We have referred in broad terms to the possible detriment associated with the ‘late payment’ of a part of an employee’s remuneration in cases where the reconciliation provision is engaged. This is a convenient way to describe an important dimension of potential detriment. But strictly speaking the payment is not late, because there is no right to payment of the reconciliation amount until the end of the relevant period; the Award does not apply and any shortfall is hypothetical. The significance of this is that employees are unlikely to be leading their working life by reference to the Award, because it does not apply to them. Indeed, in the present case, the Award has had no recent application, because employees’ employment has been regulated by a succession of enterprise agreements. This means that employees will expect to earn what the Agreement provides for. They will not experience a ‘shortfall’ in their weekly wage or receive a late payment of remuneration to which they were actually entitled and which they expected to receive at an earlier time. Rather, for the purpose of a statutory test that requires the Commission before approving an agreement to ensure that each employee is better off overall under the Agreement than under the Award, the Commission would, in assessing the significance of a reconciliation provision, consider the likely nature and extent of variations in pay above and below the safety net.
[87] In the present case, we consider that if the shortfalls identified in various models were to materialise, even on a regular basis, the detriment would comfortably be outweighed by the operation of the employer-initiated reconciliation provision which confers an additional 5% payment on top of any shortfall. It is an incontrovertible fact that any affected employees will under clause 41 be entitled to receive more pay than under the Award. The margin will compensate not only for the ‘shortfall’ against the notional Award-based amount but also for any ‘later payment detriment’. In this regard, it is a prominent feature of the current economic climate that interest rates are very low. Five percent is a significant amount. Employees will be better off overall under the Agreement than would have been the case under the Award. This is our evaluative judgement, taking into account our assessment of the various ways in which employees might undertake work under the terms of the Agreement.
[88] The FSU contended that it is possible that some employees could experience large shortfalls in particular pay periods working various models, and that because the reconciliation period is six months, this could translate into significant sums that are paid ‘late’. In our view, this is not likely to occur. The FSU submitted that, insofar as the employers’ evidence concerned the past working of overtime, the records upon which it was based did not capture all hours that would be overtime hours under the Award, because for employees on contractual arrangements, certain amounts of overtime had been built into the annual salary. We take this into account. We would also note however that because those overtime hours have been bought out, there is a payment associated with them. Further, there is no reason why this matter should have undermined the employers’ ability to model payments that would apply to employees under the Agreement and the Award.
[89] The FSU contended that only certain working arrangements had been modelled and that the myriad of scenarios that could realistically be worked under the Agreement had not been examined. However, a significant number of working arrangements have been examined, focusing on areas of potential concern which have been raised by the Commission and the FSU. It is possible to construct various working arrangements that might see an employee earn less under the Agreement than under the Award in a particular period. However, the existence of this possibility is the reason why the Agreement contains a reconciliation provision. Provided they contain appropriate safeguards, there is nothing wrong with such provisions. They are in fact helpful and facilitate enterprise bargaining for agreements that will cover employees whose wages may in some cases only exceed award rates by a relatively small margin. As we have said, in the present case, the primary, but by no means exclusive, focus of our deliberations on the BOOT has been employees whose rate of pay exceeds the Award rate by the smaller margins. We are satisfied, subject to the undertaking affecting clause 41, that these and all other award covered and prospective award covered employees would be better off overall if the Agreement applied to them than if the Award were to apply.
[90] Our conclusion that the Agreement passes the BOOT is reinforced by other considerations. In particular, employees other than casual employees will have up to six days of additional leave in the first year of the Agreement, three of which are not subject to conditions relating to annual leave and the anniversary date. The right to take additional paid leave has a value that transcends its financial dimension. It is conducive to greater work-life balance and to an employee’s well-being. The life leave provided to employees under the Agreement is a substantial benefit. As to the position of casual employees, we are otherwise satisfied, taking into account all of the terms and conditions of the Agreement and those in the Award, that they would be better off overall if the Agreement applied to them than if the Award applied. Further, as we have mentioned, we note that an undertaking responsive to our concern about the employers’ representation to employees that pay increases were guaranteed (to which we will return below) would need to guarantee a pay increase. Again, no undertaking is yet before us in this regard, we simply note the effect that an undertaking of the required kind is likely to have. We also take into account the balance of the benefits conferred on employees under the Agreement, which we consider outweigh the detriments, measured against the Award.
[91] It might be thought that accepting the employers’ undertakings to increase the GC2 rate by $00.71 and to pay a pre-afternoon shift loading would reduce the likelihood of employees experiencing any ‘shortfall’ against the Award, which could only reinforce the Commission’s conclusion that the Agreement passes the BOOT. But we are satisfied that the Agreement passes the BOOT. It would be inconsistent with our conclusion about the significance of clause 41 for us to accept either of these undertakings. Why then did we embark on the painstaking analysis above of the various working arrangements and their associated payment calculations? Because in order to reach an informed conclusion about whether a premium payment provision in a reconciliation clause would outweigh the potential detriment associated with ‘late’ payments for ‘shortfalls’, one must have an appreciation of the nature and extent of that detriment. This is part of the weighing exercise that the Commission is required to undertake in deciding whether it is satisfied that employees will be better off overall under the Agreement than under the Award.
[92] The FSU contended that the employers ought to have submitted comprehensive roster data for the purposes of the Commission’s consideration of the BOOT. As we have noted above, evidence of past and current working arrangements is of course relevant. However, the employers have in fact put before the Commission extensive evidence concerning their working arrangements. This evidence has principally been in response to modelling presented to the employers by the Commission and the FSU, but there is nothing wrong with this, particularly in a context where the Agreement contains a reconciliation provision with a substantial loading.
[93] There must be some practical limits to the scope of the Commission’s inquiry. In our view it was reasonable for the employers to focus their modelling on the areas of potential BOOT concern that were raised with them. To have had the employers produce, and then for the Commission to have examined, comprehensive roster data in respect of more than 30,000 employees would not have been reasonable. In this regard, we note Mr Voon’s evidence that producing details of all employees’ working arrangements would create 12 million rows of data. This would not be in keeping with the objects of Part 2-4 of the FW Act set out in s 171, which include to provide a simple, flexible and fair framework that enables collective bargaining, and to enable the Commission to facilitate the making of enterprise agreements, including through ‘ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay’ (see s 171(b)(iii)). Further, the Commission is required by s 577 to perform its functions, and exercise its powers, in a manner that is fair and just, as well as quick.
[94] Section 186(2)(d) requires the Commission, before approving an agreement, to be satisfied that it passes the BOOT. This requires ‘an evaluative assessment after consideration of the provisions of the award and the Agreement that may have been more beneficial to employees and those that may have been less beneficial’ (Aldi, at [99]). We have undertaken such an evaluative assessment in this case. Subject to the undertaking in paragraph 9 of the employers’ undertakings document, we are satisfied that each award covered employee, and each prospective award covered employee for the Agreement would be better off overall if the Agreement applied to them than if the Award applied.
[95] As required by s 190(4), we have sought and considered the views of the FSU, as a bargaining representative for the agreement (and the only one known to the Commission) about the proposed undertakings. The undertaking meets the concerns that we have identified above and we accept it. In this regard, we are satisfied that the undertaking does not cause financial detriment to any employee covered by the Agreement or result in substantial changes to the Agreement.
[96] Before approving an enterprise agreement, s 186(2)(a) of the Act requires the Commission to be satisfied that it has been ‘genuinely agreed to’ by the employees, as defined in s 188. The FSU contends that two elements of this definition have not been met.
[97] First, s 188(1)(a) states that an agreement will have been ‘genuinely agreed to’ if, among other things, the employer has complied with the various pre-approval requirements, including s 180(5). Section 180(5)(a) provides that the employer ‘must take all reasonable steps to ensure that the terms of the agreement, and the effect of those terms, are explained to the relevant employees’. Section 180(5)(b) requires that the explanation be provided ‘in an appropriate manner, taking into account the particular circumstances and needs of the relevant employees’. The FSU submits that the employers did not meet these obligations.
[98] Secondly, s 188(1)(c) provides that, in order for an agreement to have been genuinely agreed to, the Commission must be satisfied that there are ‘no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees’. The FSU submits that, for a number of reasons, the Commission should not be so satisfied.
[99] The FSU’s argument in support of both of these contentions placed emphasis on the nature of what it described as the employers’ ‘campaign’ to encourage employees to vote to approve the Agreement, which the FSU said was overwhelming and ‘drowned out’ what it acknowledged to have been the generally more measured explanation of the terms of the Agreement found in the explanatory documents provided to the employees.
[100] We will first make some general observations about the employers’ explanation of the terms of the Agreement. On any view, the employers went to great lengths to explain the terms of the Agreement and the effect of its terms to the employees who would be covered by it. They employed various different media to do so. The terms of the Agreement were explained to employees in team briefings in their business units from 15 to 30 March 2021. From 15 March 2021 employees were sent an email with an explanatory document of 62 pages titled ‘Our Proposed New Commonwealth Bank Group Enterprise Agreement 2020 Terms and Effect’ (the Terms and Effect Explanation Document), which explained each term and the effect of each term and drew attention to various changes as against the 2016 Agreement. Employees were also provided with access to 18 subject matter specific fact sheets. Further modes of explanation and opportunities for employees to ask questions were provided in live meetings, by telephone and by email, and in various online or electronic fora, such as ‘Yammer’, which is the group’s internal social networking site. Videos were made and shown to employees of senior group executives explaining the terms of the Agreement, including in ‘Q&A’ sessions. The FSU’s submissions suggested that the employers’ explanation of the terms of the Agreement might have been too detailed. It may be that, in order for all reasonable steps to be taken to ensure that the Agreement was explained, less could have sufficed. But that would not be a basis to criticise the approach that was taken.
[101] The employers said that they decided to adopt a tiered approach to the explanation of the Agreement and the effect of its terms, whereby some communications were general or ‘broad brush’, and some were much more detailed. Employees were offered various channels through which they could ask questions and seek additional information. The employers contended that simply to overload employees with copious detail all at once would deter employees from engaging with the agreement-making process and that they considered the tiered approach an appropriate way to connect with the workforce. This makes sense. The reasonableness of an explanation would not be measured simply in the volume of its detail. Explanations constituted by, or that include, simple and concise information about the effect of an agreement may be preferable to explanations that might overload employees with detail.
[102] The FSU contended that the employers’ explanation of the terms of the Agreement, and the effect of those terms, was deficient in various particular respects. Much of the contest between the parties in this arena concerned the ‘broad brush’ communications from the employers which explained the Agreement to the employees. The FSU contended that a number of these were misleading. The employers submitted that they had to be read and understood in context, and in the light of other explanatory material.
[103] First, the FSU contended that, in a number of ways, the employers misrepresented to employees that all employees would receive pay increases. The union referred to an explanatory document entitled ‘CBA Enterprise Agreement 2020’, which was made available to employees on the employers’ ‘EA Hub’ from 15 March 2021 and is attached to the F17 declaration as document ‘AA’. In a row beside a heading ‘More pay’, and a sub-heading ‘A market-leading pay increase – the largest pay increase for the majority of our people’, the document stated: ‘Employees on an EA contract would receive 3.25% for FY2021’. (Employees on an ‘EA contract’ are those who are covered by the Agreement but are not employed pursuant to one of the individual arrangements referred to in clause 9.1(a) of the Agreement.) The document then stated:
“All other eligible employees (including Bankwest employees not covered by the Bankwest EA, Individual Arrangements, Annualised Salary Contracts, AWAs and ITEAs) would receive the following base pay increases for FY2021:
• 3.25% for those whose base pay is up to $75,000.99 p.a.
• 2.25% for those whose base pay is between $75,001 and $110,000.99 p.a.
• 2.00% for those whose base pay is between $110,001 and $153,600.99 p.a.
• 1.25% for those whose base pay is between $153,601 and $200,000.99 p.a.”
[104] The document went on to say that these amounts ‘are for FY2021 and are inclusive of the partial pay increase paid to eligible employees on 17 December 2020’, and that ‘if the new EA is approved, the base pay increase will be back-dated to 1 July 2020’. These figures, which we will refer to as the ‘tiered increases’, also appeared elsewhere in the employers’ communications to employees about the Agreement.
[105] The factual position with respect to pay increases is that employees on ‘EA contracts’ receive the pay increases prescribed in clause 9.2 of the Agreement, subject to the conditions in clause 9.1 set out earlier (see [29]), which include meeting minimum performance requirements. Employees on individual arrangements (IA), including annualised salary contracts, are not eligible for a pay increase under clause 9.2 of the Agreement, because they are among the classes of employees excluded by clause 9.1. Pay increases for these employees are set outside of the terms of the Agreement. The employers have determined that these pay increases will be in the amounts set out in document AA. These are also subject to certain conditions, including the requirement that employees meet minimum performance measures and compliance standards. These arrangements were summarised in a letter dated 22 March 2021 from Mr Clift, the group’s general manager of industrial relations, to Ms Angrisano.
[106] We have considered whether document AA may have been misleading by suggesting to employees that the wage increases it referred to were unconditional. We do not believe this is the case. The document states that employees on EA contracts would receive 3.5%; whilst the contingency suggested by the conditional mood of the verb (‘would’) could conceivably be understood to be the approval of the Agreement by employees, we think it conveys simply that there are conditions that attach to the pay increases. The second sentence of the document refers to ‘other eligible employees’, and ‘eligible employees’ are referred to also in the second last sentence of the segment. This points to the existence of eligibility requirements. Further, the comments on the left hand side of the segment contain the following statement: ‘A market-leading pay increase – the largest pay increase for the majority of our people’. The reference to a ‘majority’ of employees also suggests that not all employees will receive a pay rise.
[107] Next, the FSU referred to a video ‘question and answer’ session that the employers made available to employees, a transcript of which was submitted as an attachment to the F17 declaration. During the video, Mr Clift stated that ‘anybody in the Group whose salary is less than $200,000 per annum will receive a pay rise’. He went on to say that ‘employees who are on a strict EA, so the unpackaged arrangement, will be entitled to a flat 3.25% and that will be backdated to 1st of July, and 3% from 1st July 2021.’ As we have said, the correct position is that pay increases for all employees are subject to certain conditions, including in relation to performance. The FSU contended that Mr Clift’s statement that ‘anyone’ earning less than $200,000 will receive a pay rise, and that employees on an unpackaged salary will ‘be entitled’ to increases, were misleading, because they made no reference to the conditions that in fact apply.
[108] The employers contended that Mr Clift’s statements must be read in the context of the ‘Q&A’ session as a whole. The statements were made in response to a question about whether employees on annualised salary contracts were eligible for the pay rises that had previously been outlined in the interview. Later in the Q&A session, Mr Clift said that ‘in terms of the offerings that we have just talked about and those percentages, they are tied to this agreement and the terms and conditions within it.’
[109] An employee who only heard the part of Mr Clift’s interview referred to by the FSU would have thought that all employees earning less than $200,000 would receive a pay rise. However, we consider that a reasonable person would understand that it would be necessary to listen to the entire interview in order properly to understand its content. We consider that Mr Clift’s later statement that these ‘offerings and percentages’ were ‘tied’ to the Agreement, and his reference to ‘the terms and conditions within it’, was a sufficient caveat to alert those watching the video to the existence of the eligibility requirements in the Agreement.
[110] Next the FSU pointed to an explanatory document, contained at page 24 of a bundle of documents labelled ‘GG’ and attached to the F17. The document is entitled ‘Are you on an IA, AWA or ITEA?’ It carries a subheading ‘Your Enterprise Agreement benefits explained.’ Employees on IAs make up the vast majority of employees covered by the Agreement (as explained earlier, employees on AWAs and ITEAs are not covered by the Agreement). This explanatory document commences by stating the following:
“If you are on an IA, AWA or ITEA, and you’re wondering what the impact of the proposed new Enterprise Agreement is for you – there are two changes: a guaranteed pay increase and guaranteed improvements to leave.”
[111] Then, under a heading ‘Guaranteed pay increase’, there appear the tiered increases set out earlier. There follows a statement that ‘[t]he increases are for FY21 and will be backdated to 1 July 2020.’ The FSU contended that this document was misleading because it told employees that they would receive guaranteed pay increases when in fact this is not the case.
[112] Further, during the hearing the FSU played a video question and answer session that was made available to employees, in which the group executive of human resources, Ms Lewis, said in answer to a question as to why employees on IAs should vote ‘yes’ for the Agreement, that they will receive a ‘guaranteed pay increase’. In another video, in answer to a question about pay under the Agreement, Ms Lewis said that ‘if you are under an EA contract you will receive a 3.25% increase … up to 75,000 anyone will receive 3.25%. Between 75 and 110 you’re going to get 2.25%, 110 to 153,600, 2%, 153,601 to 200,000 you’re going to get 1.25%’. In a third video, referred to as video ‘4a’, Ms Lewis said that employees on IAs would receive ‘a guaranteed pay rise’ and that the Bank believed it was offering ‘market leading pay rises for everybody.’
[113] The employers contended that the statements of Ms Lewis in the videos were taken out of the context of the questioning and discussion in those videos. They said that in each instance, elsewhere in the video, Ms Lewis had emphasised that employees should ensure that they understood the Agreement and inform themselves about what the Agreement will mean for them. The employers contended that the totality of the explanatory information made available to employees was accurate, and that Ms Lewis’ reference to guaranteed increases could reasonably be understood as related to the guaranteed amount of the available increases.
[114] We do not accept these submissions. A ‘guaranteed increase’ is one that is not subject to conditions. Similarly, a statement that employees ‘will receive’ an increase of a certain amount means exactly that. We do not consider that Ms Lewis’ advice to employees later in the videos to ensure that they understood the Agreement was sufficient to constitute a caveat that would advert employees’ attention to the existence of eligibility requirements attaching to pay increases. There was no reference to the increases being subject to conditions.
[115] The employers contended that the other explanatory material had made clear to employees that pay increases were indeed subject to certain conditions. They referred in particular to document ‘BB’ attached to the F17 declaration, which at page 4 stated that ‘eligible’ employees (those on EA contracts and others) would receive pay increases, and that a full list of eligibility criteria was available in the ‘FAQs’ and the ‘Annual Rem Review Hub’. The employers further contended that part of the relevant context is that employees on IAs know that their actual pay is determined outside of the Agreement and that it is subject to performance requirements; this is the case now under the 2016 Agreement and would remain the case under the new Agreement. The employers also noted that their decision to afford the tiered increases to eligible employees not covered by the wage increases in clause 9 of the Agreement, and to do so subject to performance and other conditions, was explained in the letter from Mr Clift to Ms Angrisano dated 22 March 2021, and that this letter was placed on the ‘Hub’ site that contains information for employees about the Agreement. Further, document BB was widely available, including on the ‘Hub’ website, the separate ‘Annual Rem Review Hub’, as well as on another platform available to employees called ‘Sidekick’. The employers emphasised that the Terms and Effect Explanation Document clearly stated that salary increases for ‘EA contract’ employees are subject to performance-related conditions, that the pay increases for other employees are dealt with outside the Agreement, and that ‘these employees may receive a salary increase through the Group’s pay review process (which is outside the proposed EA)’.
[116] We agree that these documents are accurate. But we do not consider that this material can be regarded as context that explains away the categorical statements in document GG, or in the videos referred to at [112]. Some employees who read document GG or watched the videos, and who also read the Terms and Effect Explanation Document, may have understood the correct position, but others may reasonably have thought that the statements in document GG or in the videos had superseded the information in the Explanation Document. Further, some employees may have read document GG or watched the videos and not read the Explanation Document. The tiered approach adopted by the employers recognised that some employees were likely to be better engaged on a general level, rather than through detailed documents. This was a reasonable approach. However, the general level, and every other level, must be accurate. One might put to one side misstatements about minor matters. But the statements in the videos referred to at [112], and the content of document GG, concerned very significant matters. They were inaccurate. They represented to employees, both those on EA contracts and IAs, that the Agreement would bring pay rises in the amounts indicated, without conditions. Employees may simply have believed what they read in document GG or heard in the videos.
[117] We have a concern that the employers did not take all reasonable steps to explain the Agreement and the effect of its terms, insofar as the statements in the videos to which we have referred at [112], and document GG, were inaccurate, because they conveyed to employees that pay increases were guaranteed by the Agreement when in fact they are not. We consider however that our concern can be met by the provision of an appropriate undertaking. Section 193 allows the Commission to accept an undertaking ‘if it has a concern that the agreement does not meet the requirements set out in section 186 and 187.’ This includes s 186(2)(a) (whether an agreement has been genuinely agreed by employees). Several Full Bench decisions have now recognised that in appropriate cases undertakings may be given to remedy inaccuracies in an employer’s explanation of an agreement. We do not propose to reprise the reasoning in these decisions. We adopt the passages from the decision of the Full Bench in CFMMEU v Karijini Rail Pty Ltd [2020] FWCFB 958 at [103] to [109].
[118] In their written submissions, the employers requested that they be afforded an opportunity to provide any further undertakings in the event that the Commission had concerns that any of the approval requirements in ss 186 and 187 had not otherwise been addressed by undertakings already offered. We invite the employers to provide an undertaking that meets our concern. To meet our concern, it will be necessary for the undertaking to make good the representations in the videos referred to at [112] and in document GG referred to above.
[119] The FSU contended that there were other respects in which the employers’ explanation of the terms of the Agreement was deficient. It referred to the witness statement of its national industrial officer, Ms Holm, who said that since the end of the ballot a number of FSU members had contacted the union expressing dissatisfaction with the employers’ explanation of the Agreement. Ms Holm said that the three most common concerns were about members’ understanding of whether they would be entitled to pay increases; the employers’ explanation of the new entitlement to ‘life leave’, including the employer’s promise to grant employees three additional days of life leave if the Agreement were approved; and concerns that members would be paid less under the Agreement than they were paid under the 2016 Agreement. Ms Holm appended to her witness statement various correspondence to the FSU from employees about these matters.
[120] We have already dealt with the question of the explanation of the pay increases, but for completeness will comment briefly on messages from employees that were attached to Ms Holm’s statement. Exhibit EH26 attached an email from an unidentified person said to be an employee, stating that he or she had been told by other employees that they had voted for the Agreement in order to get a pay rise, only later to learn that they were ineligible. This evidence is unattributed hearsay and unreliable. EH27 contains an anonymised email from an employee stating that he or she was wrongly told by human resources in November 2020 that accepting a promotion would not result in ineligibility for a pay rise. EH28 contains another anonymised email from an employee to the FSU stating that he or she did not receive a pay rise in 2019-20 based on performance results, which the employee contested. These matters, in addition to being hearsay, are irrelevant. They do not concern the explanation of the terms of the Agreement or the genuineness of employees’ consent to the Agreement, because the relevant events occurred before the Agreement was distributed and explained to employees.
[121] As to the employers’ explanation of the new ‘life leave’ provisions in the Agreement, we understand the FSU to contend that some of its members believed that this would be leave at the general disposition of employees, to be taken at their discretion. The FSU contended that the employers are already provisionally scheduling requests for life leave in a manner akin to annual leave, whereby the taking of leave is agreed between management and the employee. The FSU submitted that the Terms and Effect Explanation Document does not state that life leave needs to be approved by the employer and noted that the employers were presently purporting to draft a policy that would apply to the taking of leave, whereas clause 25 of the Agreement does not refer to a policy. The FSU also referred to statements by Mr Clift during a video question and answer session in which he described life leave as being similar to ‘doona leave’. The union said that this was suggestive of the leave being at the discretion of the employee, to be taken at will.
[122] We do not accept that the employers’ explanation of the life leave benefit in clause 25 of the Agreement was deficient. The explanation of life leave in the Terms and Effect Explanation Document was fair and accurate. The fact that there may be different points of view about the objective meaning of a term of the Agreement is not a basis to conclude that the explanation of that term or its effect was inadequate. If it transpires that an employee has a different interpretation of the meaning of clause 25 from that of the employers, a dispute about such a matter can be addressed under the dispute resolution procedure in clause 38, which may culminate in a binding recommendation being given by the Commission. There is no requirement in the FW Act that enterprise agreements contain only provisions that are free from any ambiguity, and this is just as well, as it would set an impossible standard. Further, we do not consider that the expression ‘doona leave’ has any clear objective meaning. No doubt it has certain vernacular currency. We can accept that it might be understood by some to connote leave that can be taken for any reason an employee sees fits. But it could not reasonably be understood to be in the nature of ‘not turning up to work’ leave. We find it difficult to accept that any reasonable person could believe that this leave (or any leave) could be taken without at least some conditions in relation to notification or scheduling. If it transpires that there are disputes about the meaning of the life leave provision in the Agreement, such as in relation to the effect of any policy that the employers apply in respect of this leave, they may be dealt with under the dispute resolution procedure in clause 38.
[123] The FSU also contended that the employers oversold the Agreement when they told employees that they would receive three additional days of life leave if the Agreement were voted up, because the Agreement did not in fact provide for three additional days of leave. The employers announced to employees on 22 March 2021 that they would be afforded three additional days of life leave if the Agreement were approved, together with certain other additional benefits. This announcement did not state that these benefits would be terms of the Agreement. In fact, the announcement stated that it was a complex process to amend the Agreement, which had already been distributed to employees, and that instead the employers would be ‘writing to the Fair Work Commission to inform them of the commitments below, should the new EA be voted in’. At least on one view, this communication made clear that the additional benefits would be provided outside the Agreement. However, we accept that some employees may reasonably have understood that the employers’ correspondence with the Commission would effectuate, and legally formalise, the commitments given by the employers in the announcement. We have at least some concern as to whether the employers complied with s 180(5) in this regard. We note that to have a concern for the purpose of s 190 does not necessarily connote that the Commission has reached any final conclusion that an approval requirement has not been met. The employers offered a pre-emptive undertaking by which they will confer the additional three days’ leave as a term of the Agreement (paragraph 8 in the employers’ undertaking document). The undertaking meets our concern.
[124] We note that the undertaking omits the conditions found in clause 25 of the Agreement that relate to annual leave, but repeats other conditions contained in that clause (that life leave does not apply to casuals, cannot be cashed out, must be taken within a year etc). The employers’ announcement to employees on 22 March 2021 stated, somewhat loosely, that the additional leave is available to use ‘straight away without any conditions attached’. However, when this is read in context, clearly what is meant is that the conditions relating to annual leave and the anniversary date will not apply. This is evident from the rationale that is given in the announcement for providing more life leave, namely ‘to enable more of our employees to access this leave in the first year of the EA’. This purpose is also evident in the communication of 24 March 2021, which states that there will be available ‘a further 3 days up front without any conditions’. The conditions in the proposed undertaking are consistent with what was conveyed to employees. The additional life leave will be available immediately, regardless of an employee’s annual leave balance or anniversary date.
[125] In her witness statement, Ms Holm referred to a complaint from an employee to the effect that she was told by her manager that she would receive an amount of leave that was less than what had been suggested to her through the employers’ explanatory material. There is not enough information for us to draw any conclusions from the complaint. And again, disputes about the application of clause 25 to particular employees can be resolved through the dispute resolution procedure.
[126] The FSU submitted that the explanation of the Agreement did not make clear that the provision in the 2016 Agreement of one day’s leave for an employee to move house was not being replicated in the Agreement. However, the information sheets given to employees about the Agreement’s leave provisions make clear that various changes to leave arrangements were being made. In our view it was apparent that a new leave entitlement of three days for general ‘life’ purposes would subsume any ‘moving house’ leave.
[127] The FSU further contended that the employers’ promise to employees to provide three additional days of life leave in the first year of the Agreement in the event the Agreement were approved constituted an inducement to employees to vote in favour of the Agreement. We see no merit in this contention. The provision of an additional benefit to all employees if an agreement is approved would not of itself call into question compliance with any of the statutory approval requirements for an agreement.
[128] The FSU raised at the hearing various further contentions that particular terms of the Agreement were inadequately explained to employees. It said that the Terms and Effect Explanation Document was inaccurate as to the difference between the overtime arrangements for part-time employees under the Agreement compared to those in the 2016 Agreement, in respect of employees of CommSec, CommInsure and Colonial. The document explained that after the first four hours of overtime, the applicable loading under the Agreement would be ‘slightly lower’ than under the 2016. In fact, it is substantially lower, 25% rather than 100%. Mr Clift acknowledged in cross-examination that the document was inaccurate in that respect. However, this text appears underneath a table that clearly sets out what the applicable overtime rates under the Agreement actually are. The explanation of the terms of the Agreement was correct. The error was confined to commentary on the comparison of penalties in one particular respect. Explanatory sheets devoted specifically to the circumstances of CommSec employees and to those of part-time employees under the Agreement stated simply and correctly that the relevant loading that currently applies under the 2016 Agreement has been ‘reduced’. In all the circumstances, we do not consider the error constituted by the misplaced use of the adverb ‘slightly’ to be of such significance that we would conclude that the employers failed to take all reasonable steps to explain the terms of the Agreement and the effect of its terms.
[129] Next the FSU contended that the employers’ explanation of the performance related pay (PRP) provision in the Agreement was deficient. Clause 10 of the Agreement provides that the employers will operate a PRP scheme, but that the scheme will not form part of the Agreement, whereas the provision in the 2016 Agreement contains no such statement. Clause 5.4 of Division B of the 2016 Agreement provides that employees will be ‘eligible to participate in a performance related pay scheme (PRP) as determined by CBA’, and then sets out certain parameters. The FSU submitted that the Terms and Effect Explanation Document did not explain to employees that the PRP would no longer form part of the Agreement. This is the case. However, we are not persuaded that this was a change that required explication as part of the employers’ obligation to take all reasonable steps to explain the terms of the Agreement and the effect of those terms. Under the 2016 Agreement, employees are simply eligible to participate in a performance related pay scheme ‘as determined by CBA’ (clause 5.4 of Division B). Performance ratings and targets are at the discretion of the employers; they need only have regard to certain principles (clause 5.5 of Division B). Further, clause 5.4(d) of the 2016 Agreement states that the ‘determination of an employee’s performance rating and the setting of targets is within the complete discretion of CBA’. This provision reposes a substantial discretion in the employers as to what if any payments will be made to employees under any PRP scheme. Although the 2016 Agreement does not state that the PRP scheme will not form part of the Agreement, the financial outcomes under the 2016 Agreement are largely at the discretion of the employers. This will remain the case under the Agreement.
[130] In our view, the Terms and Effect Explanation Document explained the essential features of the PRP scheme that the employers proposed to operate and conveyed the discretionary character of the framework that would be applied (‘depending on performance, eligible employees may receive’ etc). The FSU noted that the Terms and Effect Explanation Document did not provide details about the new component of ‘risk ratings’ referred to in the document. But like many other matters in the PRP, this is evidently a matter for employer discretion. We consider that the explanation of the PRP provision in the Agreement was adequate. The matters raised by the FSU do not lead us to concluded that the employers failed to take all reasonable steps to explain to employees the terms of the Agreement and the effect of those terms.
[131] The FSU contended that the employers’ explanation of the terms of the Agreement relating to shift workers was inadequate because it failed to draw attention to and fully explain the changes introduced by the Agreement that represented detriments as against the 2016 Agreement. However, the Terms and Effect Explanation Document addresses the shift work provisions in the Agreement in some detail. For example, items 17 to 19 of the document’s first section explain that shift definitions have changed, explains the various loadings, and notes that the shift worker income maintenance allowance has not been included in the Agreement. The explanatory documents were accurate in their treatment of shift work. They covered the matters of significance. At the hearing, the FSU further contended that, in the course of explaining to employees the ‘greater flexibility’ in working arrangements in document AA, and in the information-sheets concerning ‘arrangements providing flexibility’ and ‘hours of work’, the employers omitted to explain to employees that they could be directed to work in a range of circumstances and that the tenor of the explanation concerning the flexibility available to employees under the Agreement was exaggerated. We do not consider that the explanatory material on these matters was inaccurate or misleading. There is ample information in the Terms and Effect Explanation Document and other materials that explains to employees how work is to be performed under the Agreement. The submissions of the FSU on these matters do not lead us to conclude that the employers failed to take all reasonable steps to explain the terms of the Agreement or the effect of those terms.
[132] The FSU also submitted that the Commission should take into account, in considering whether the Agreement was explained in the manner prescribed by s 180(5) and whether it was genuinely agreed to by employees, the nature of the employee group that voted on the Agreement. The FSU said that the group could not be assumed to be ‘industrially sophisticated’, and that employees in the group did not have a high level of ‘industrial engagement’. Ms Holm said in her statement that the union considered employees to have a ‘low level of industrial literacy’, and that this was partly the result of the employers’ widespread use of individual arrangements. In this regard, the FSU submitted that prior to the negotiations for the Agreement, there had been no bargaining in the workplace since 2016, and that many employees remained on individual agreements.
[133] We will first say something about the nature of this contention. An employer’s compliance with the pre-approval steps, including those in s 180(5), is a necessary condition for an agreement being ‘genuinely agreed’ to by employees, as defined in s 188. If an employer has complied with s 180(5) by taking all reasonable steps to ensure that the terms of the agreement, and the effect of those terms, were explained to employees (s 180(5)(a)), and that the explanation was provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees, then it would not be permissible for the Commission to re-examine these very same matters through the prism of whether there were ‘any other reasonable grounds’ for believing that the agreement had not been genuinely agreed to (s 188(1)(c)). This must be so, because s 188(1)(c) is concerned with grounds other than those set out in the preceding sub-provisions. Similarly, if a deficiency in the explanation were remedied by an undertaking, there would be no cause to re-examine the same deficiency afresh from the perspective of s 188(1)(c)). We note that ‘any other ground’ might pertain to a concern that employees had not reasonably understood the terms of an agreement (see One Key Workforce Pty Ltd v Construction Forestry, Mining and Energy Union [2018] FCAFC 77 at [170]) although where s 180(5) has been complied with it is difficult to see how such a concern would practically arise, and where an undertaking addresses a concern about a deficient explanation, it would often simultaneously allay any concern in respect of s 188(1)(c) related to employees’ understanding of that explanation.
[134] We understand that the FSU’s contention about the alleged lack of industrial sophistication of the workforce concerns the question of whether the Commission could be satisfied that the employers had complied with the requirement in s 180(5)(b) and, to the extent that it is amenable to separate consideration as another ‘reasonable ground’ for believing that employees had not genuinely agreed to the Agreement, s 188(1)(c). However, we do not consider that it has been established that the employees covered by the Agreement have the characteristics attributed to them by the FSU. We note in particular the employers’ evidence that 62.4% of the employees covered by the Agreement participated in the ballot for the Agreement, compared to only 19.3% in the ballot for the 2016 Agreement. That would suggest to us a relatively high level of industrial engagement. Moreover, Mr Culleton’s evidence for the employers was to the effect that the workforce covered by the Agreement is well educated and professional. But even if it were accepted that the workforce bore the characteristics ascribed to it by the FSU, and assuming them to be ‘special circumstances’, we are not persuaded that there would necessarily be any special ‘needs’ that such a group would require by way of explanation for the purpose of s 180(5), or that there is any reason in the present case to doubt the genuineness of the employees’ agreement to the Agreement.
[135] Ms Holm said that she was surprised to see in the F17 a statement that the Bank had no accurate records in respect of certain demographic details sought by question 6 (numbers of persons from non-English speaking backgrounds, from Aboriginal or Torres Strait Islander backgrounds, or disabled persons). Ms Holm also said that there were high numbers of employees on sponsored visas and from non-English speaking backgrounds. But this does not call into question whether the various ways in which the employers explained the Agreement were appropriate, within the meaning of s 180(5)(b). In particular, the fact that a person comes from a non-English speaking background, or is on a sponsored visa, is not a reason to doubt the person’s proficiency in English. The employers’ explanation of the Agreement was wide-ranging and detailed, effectuated through diverse media. It catered for a wide range of circumstances for a diverse workforce. In our view, the employers complied with s 180(5)(b). None of these matters cause us to apprehend other reasonable grounds for concluding that the Agreement was not genuinely agreed.
[136] As to Ms Holm’s evidence of the concerns of certain FSU members that they would receive less pay under the Agreement than under the 2016 Agreement, we do not consider that the employers represented to the employees that they would always be better off under the Agreement than under the 2016 Agreement in every respect. Moreover, the content of the statements of the members referred to by Ms Holm are hearsay. These matters do not cause us to believe that there are other reasonable grounds for believing that the Agreement was not genuinely agreed to by employees.
[137] The FSU further submitted that the employers ‘flooded’ employees with promotional material in favour of a ‘yes’ vote, through letters, videos, and social media, and that the central message was conveyed in the ubiquitous slogan of ‘more pay, more leave, better benefits: our new enterprise agreement.’ It contended that employees may well have voted in favour of this slogan, but that the slogan did not align with what employees would actually receive under the terms of the Agreement, and that the slogan was therefore misleading. The FSU’s complaint about the accuracy of the employers’ slogan appears to interpret it as a definitive statement that the Agreement contains only ‘more pay, more leave and better benefits’. The slogan does not say this. In our view it simply conveys that the Agreement provides for more pay, leave and benefits. This is correct. We do not find anything inaccurate or misleading in the slogan ‘more pay, more leave, better benefits’.
[138] The FSU acknowledged that employers are free to encourage their employees to vote to approve an enterprise agreement but contended that they retain an obligation to provide an unbiased explanation. It submitted that the employers’ explanation of the Agreement was partial, distorted by what the union termed ‘a relentless propaganda campaign and associated sloganeering’, which involved an overwhelming focus on the positive, rather than neutral or detrimental aspects. We accept that the employers intensively promoted the Agreement and encouraged employees to vote to approve it. We agree with the union that the efforts of the employers to promote a ‘yes’ vote focused on the elements of the Agreement that were most beneficial to employees. But they were not confined to such elements. Save in respect of the matters we have identified earlier, we do not consider that the employers’ explanations were misleading or inaccurate, or that the employers’ encouragement of employees to approve the Agreement calls into question the genuineness of their approval of the Agreement.
[139] The FSU further contended that the employers’ campaign to promote the Agreement occurred in the absence of a ‘substantially present’ objector in many areas. It said that the union has only some 5,100 members, amounting only to some 17% of the employees covered by the Agreement. However, we do not consider that these contentions cast doubt on the employers’ compliance with s 180(5), or the genuineness of employees’ agreement. There is no requirement in Part 2-4 of the Act for there to be an objector, or for the employer to facilitate one. In any event, there was in fact an objector. We consider that the FSU’s submissions are unduly modest and understate the role that it has played in bargaining. It appears to us that the FSU was an effective bargaining representative for employees and, once the employers proceeded to put the Agreement to the vote over the objection of the FSU, it was an effective contradictor. It had been involved in bargaining for nearly a year as a bargaining representative. Its own evidence bears out the various ways in which it was able to represent its members in the course of negotiations, including by taking proceedings in the Commission on at least one occasion on its members’ behalf. The FSU was well placed to prosecute the case against the approval of the Agreement, and did so. We accept that the union had fewer resources than the employers to further its own industrial message to the workforce. But that does not mean that it was not effective, or that its members or other employees suffered any disadvantage.
[140] The FSU contended that the employers oversold the benefits of the Agreement. Save in respect of the inaccurate statements concerning pay increases that we have identified earlier, we disagree. It is consistent with the scheme of the FW Act that an employer would seek to promote to its employees an enterprise agreement that it has submitted to a vote. Indeed, s 181(1) provides that an employer that will be covered by a proposed enterprise agreement ‘may request the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it.’ The first step in the approval process is the employer’s request of employees to endorse the agreement; there is no statutory expectation that the employer will remain neutral. There are other safeguards that make such a requirement unnecessary, including the obligation on the employer to explain to employees the terms of the Agreement and the effect of those terms.
[141] In her evidence, Ms Holm said that she suspected that the employers had adopted a strategy of increasing the workforce participation in the ballot, so as to dilute the votes of the FSU members, who presumably were more likely to share the union’s opposition to the approval of the Agreement. We understand that this evidence is led in support of a submission that the Agreement was not genuinely agreed to by employees. We see no merit in such a contention. Encouraging high employee participation in the vote is consistent with the approval requirements in Part 2-4, with the objects of the Part and the object of the FW Act, and with the common theme of industrial democracy that runs through these provisions and is a central tenet of the FW Act. Encouraging employee participation in the vote warrants no censure.
[142] The FSU said that in considering the genuineness of employees’ agreement it was relevant to note that its efforts to encourage employees to vote against the Agreement were limited by the employers’ efforts to restrict the FSU’s access to and influence on the workforce in various ways, including by insisting on strict compliance by FSU organisers with right of entry requirements; limiting its ability to visit lunch areas, contrary to the usual practice; assigning managers to monitor FSU organisers on site, creating a ‘chilling effect’ for staff who might wish to speak to the union; by removing FSU leaflets from public areas; and by having FSU organisers who were handing out leaflets at the entry to work sites moved along by security. The employers denied these allegations. Mr Newmarch, Mr Giriyal and Mr Breen stated that the employers did not ask security to request FSU officials or members to move along, or remove fliers, and that the employers did take steps to facilitate union access to the workplace in the usual manner. In any event, the FSU does not contend that the employers acted unlawfully. And if the FSU had concerns about such matters it could have applied to the Commission under s 505 of the FW Act to resolve a dispute.
[143] We also understand the FSU to contend that the Commission should apprehend reasonable grounds to believe that the Agreement was not genuinely agreed to by employees because managers were given an incentive to sell the Agreement to employees by being promised access to ‘life leave’ to which they were not otherwise entitled, as they were not covered by the Agreement. We do not consider that the contention speaks to any of the approval requirements for the Agreement. If the submission of the union is that this incentive led managers to oversell the Agreement, then it must point to how that is said to have occurred, not to the level of enthusiasm with which the managers may have taken to the task of promoting a ‘yes’ vote to employees.
[144] The employers offered a number of pre-emptive undertakings. One has been mentioned already. On 22 March 2021 the employers announced to employees that they would provide additional life leave. Undertaking 8 in the employers’ undertakings document would confer the additional three days of life leave. For the reasons given earlier, we are satisfied that the undertaking meets our relevant concern.
[145] In the announcement of 22 March 2021, the employers also committed to employees that they would not apply the provisions of the Agreement concerning directions to take long service leave. Mr Clift acknowledged in evidence that these provisions had been misunderstood by employees. The employers offered an undertaking by which they would not apply paragraphs two and four of the long service leave provision in clause 28.1 of the Agreement. In light of Mr Clift’s acknowledgement, we have a concern as to whether the employers took all reasonable steps to explain the Agreement. The undertakings 5 and 6 in the employers’ undertakings document meet out concern.
[146] The announcement of 22 March 2021 also advised employees that with effect from 1 April 2021 they would be able to access the increased paid parental leave in clause 29.2 of the Agreement. We understand the FSU to contend that, for reasons similar to those advanced in respect of the life leave commitment, employees may reasonably have understood that this additional benefit would be provided under the Agreement. For reasons analogous to those we have given in respect of the life leave commitment, we have a concern in respect of the employers’ compliance with s 180(5) in this regard. Proposed undertaking 7 in the employers’ undertakings document meets our concern in this regard.
[147] The employers also offered an undertaking pursuant to which they would not apply clause 11.7.1(b), which concerns the grandfathering of certain arrangements relating to the district allowance. We understand that the provision was included in the Agreement in error. But this is not a basis upon which we can accept an undertaking. No relevant basis has been established. We decline to accept undertaking 3 in the employers’ undertakings document.
[148] We are satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement or result in substantial changes to the Agreement. At the hearing, we advised the FSU that we sought its views on all of the undertakings that had been offered by the employers. The FSU addressed us further in this regard. We have considered these views. For the reasons above, we have decided to accept the undertakings in paragraphs 5, 6, 7, 8 and 9 of the employers’ undertakings document.
[149] Subject to the undertakings referred to above, and save for the outstanding concern we have raised in relation to the explanation of the pay increases, we are satisfied that the employers complied with s 180(5) and that the Agreement was genuinely agreed to by employees, and specifically that there are no other reasonable grounds for believing that the Agreement was not genuinely agreed, within the meaning of s 188(1)(c).
[150] Finally, in its F17 declaration, the employers brought to the Commission’s attention that 55 employees did not receive the notice of employee representational rights (NERR) that had been distributed to employees from 30 April 2020, and that they had discussed this matter with the FSU and determined that they would reinitiate bargaining and issue a second NERR to employees. On 28 January 2021 CBA wrote to the FSU and recommenced bargaining. On 1 February 2021 it emailed the second NERR to employees. On 25 March 2021, the employers discovered that 44 employees who were on secondments had not received the second NERR. On 25 and 26 March 2021 the employers sent an email to the 44 employees providing a link to the second NERR, as well as the Agreement and the explanatory materials. These employees did not receive the second NERR within 14 days of the notification time. Further, they did not receive the written text of the Agreement during the access period for the Agreement (see s 180(2)) because the vote had commenced on 24 March 2021 (see s 180(4)), nor were they provided with details of the vote by the start of the access period (s 180(3)).
[151] Sections 180(2) and (3) require an employer to ‘take all reasonable steps’ to ensure that employees are provided with the agreement during the access period (or access to it throughout that period) and to provide voting details to employees by the start of the access period. In our opinion, based on the information in the F17 declaration, the employers did take all reasonable steps to do these things, but were not entirely successful. Had we reached a different view we would nevertheless have been satisfied that these matters constituted minor procedural or technical errors for the purposes of s 188(2)(a), and that the employees covered by the Agreement were not likely to have been disadvantaged by them. We would have been satisfied that the Agreement had been genuinely agreed within the meaning of s 188(2). But it is not necessary for us to exercise our discretion under this provision.
[152] Save for the outstanding concern we have identified at [117], we are satisfied that the Agreement meets the approval requirements in the FW Act. We will afford the employers seven days to submit any further undertaking to meet the concern.
DEPUTY PRESIDENT
Appearances:
C. O’Grady QC and B. Avallone of counsel for Commonwealth Bank of Australia
L. Saunders of counsel for the Finance Sector Union
Hearing details:
2021
Melbourne
8 June and 15 June
Printed by authority of the Commonwealth Government Printer
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