3D Earthmoving (2017) Pty Ltd

[2018] FWCFB 2268

[2018] FWCFB 2268

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.604—Appeal of decision

3D Earthmoving (2017) Pty Ltd

(C2018/941, C2018/942)

SENIOR DEPUTY PRESIDENT HAMBERGER
DEPUTY PRESIDENT GOSTENCNIK
DEPUTY PRESIDENT BINET PERTH, 20 APRIL 2018

Appeal against decisions [2018] FWC 622 and [2018] FWC 623 of Deputy President Beaumont at Perth on 31 January 2018 in matter numbers AG2017/2970 and AG2017/2971.

1. The appellant seeks permission to appeal and to appeal the decisions of Deputy President Beaumont not to approve the 3D Earth Moving (2017) Mechanics, Fitters and Workshop Personnel Enterprise Agreement 2017[1] (the Mechanics Agreement) and the 3D Earthmoving 2017 Mobile Plant Operators Enterprise Agreement[2] (the Plant Operators Agreement).

1. These two appeals were heard earlier today, At the conclusion of the hearing, we delivered our decision in transcript. This is an edited version of our decision.

The decisions at first instance

1. The Deputy President declined to approve both agreements because she was not satisfied that the requirements set out in ss.180(5), 182(1) and 186(2)(a) of the Fair Work Act 2009 (Cth) (the FW Act) had been met.

1. Section 180(5) of the FW Act provides:

‘The employer must take all reasonable steps to ensure that:

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

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

1. In explaining why she was not satisfied that the requirements of s.180(5) had been met, the Deputy President noted that the agreement set out that it ‘constitutes the contract of employment’, as well as providing a clause that permitted either party to terminate ‘this agreement at any time by giving the other party the required period of notice’.

1. The Deputy President pointed out that these clauses confused contracts of employment with enterprise agreements. She said that there was no evidence before the Commission that the major terms of the enterprise agreement – including, in particular, these clauses – had been explained to the employees, nor that the employees had been invited to discuss these terms and to raise any questions they might have in relation to how an enterprise agreement that is to be voted on could be the employment contract of each employee.

1. Section 182(1) of the FW Act states:

‘If the employees of the employer that will be covered by a proposed single-enterprise agreement that is not a greenfields agreement have been asked to approve the agreement, the agreement is made when a majority of those employees who cast a valid vote approve the agreement.’

1. The Deputy President, after considering the materials and evidence before the Commission, concluded at [81]:

‘Based on the materials and evidence before the Commission, I am not satisfied that there was compliance with the appointed voting procedure a requirement that is implicit in the notion of casting a valid vote. Further, I am satisfied that there are reasonable grounds for believing that the agreement had not been genuinely agreed to by the employees.’

1. The Deputy President came to this conclusion after she had considered the oral evidence of Ms Kershaw, the person who made the statutory declaration on the Commission’s Form F17, who was unable to provide any details about how the vote – if there was one – was conducted.

1. Section 186(2)(a) of the FW Act provides that the Commission must be satisfied before approving an enterprise agreement that the agreement has been genuinely agreed to by the employees covered by the agreement.

1. Section 188 of the FW Act relevantly provides that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

‘(a)        the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i)        subsections 180(2), (3) and (5) (which deal with pre-approval steps);

(ii)       subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

…

(c)       there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.’

1. The Deputy President noted that the proposed enterprise agreement that was put to a vote wrongly informed the relevant employees that it ‘constitutes the contract of employment’. She pointed out that an employment contract does not exist between an employer and a collective of employees. She said that:

‘It follows that the Mechanics’ Agreement purports to be something it is not or alternatively purports to establish something, namely an employment contract, which it does not. Plainly, it is open to find that at the time when the relevant employees were requested to approve the Mechanics’ Agreement there were reasonable grounds for believing that the Mechanics’ Agreement had not been genuinely agreed to due to the absence of authenticity and soundness of the agreement, and the consent of the employees was not informed.’[3]

1. The Deputy President put her concerns to the employer’s representative (Mr Irvine) who was not able to assuage them and she concluded:

‘Based on the evidence he provided I am not satisfied that the consent of the employees who were to be bound by the Mechanics’ Agreement was informed.’[4]

1. The Deputy President’s decisions (and her reasons contained therein) in relation to both agreements were in all relevant respects identical.

The appeal

1. The grounds of appeal were in summary that the Deputy President’s decisions:

·   Were inconsistent with previous agreement approvals;

·   Incorrectly found that a restraint of clause in the agreements was not a permitted matter;

·   Set an unduly high standard for the employer in relation to the requirement to explain the agreement;

·   Were mistaken at law in concluding that the enterprise agreement could not be a contract of employment;

·   Erred by determining that terms and conditions in the enterprise agreement could not constitute the terms and conditions of employment;

·   Were wrong to conclude that the employees had not genuinely agreed to the agreement;

·   Erred in her assessment that the appellant did not comply with voting procedure requirements; and

·   Were mistaken when determining that all eligible voting employees did not receive the required 21 days between receiving the NERR and casting a vote.

Consideration

1. It is not necessary to deal with all the appeal grounds, as a number of them are not germane to the bases upon which the Deputy President refused to approve the agreements.

1. We are satisfied that the Deputy President was entirely correct to draw attention to the difficulties created by provisions in the enterprise agreements that indicated they constituted the employee’s contract of employment. Her observations about the difference between an enterprise agreement and a contract of employment are entirely unexceptionable. Given this it was entirely reasonable for her to be concerned about the quality of the explanation provided to the employees and the genuineness of their consent to the agreements.

1. Moreover, we are satisfied that the findings of fact that the Deputy President made, for example in relation to the voting process, were open to her on the evidence before her.

1. We are not persuaded that the Deputy President made any appealable errors in reaching the decision not to approve the two enterprise agreements.

1. In the circumstances, permission to appeal is refused in in each case.

SENIOR DEPUTY PRESIDENT

Appearances:

N Irvine for 3D Earthmoving (2017) Pty Ltd.

Hearing details:

Perth.
2018.
April 20.

<PR602168>

[1]     [2018] FWC 623.

[2]     [2018] FWC 622.

[3]     [2018] FWC 623 [58].

[4] Ibid [67].

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