Application by PIMS Mining (NSW) Pty Ltd T/A PIMS Group
[2020] FWCA 2189
•30 APRIL 2020
| [2020] FWCA 2189 |
| FAIR WORK COMMISSION |
0BDECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Application by PIMS Mining (NSW) Pty Ltd T/A PIMS Group
(AG2019/4275)
PIMS MINING (NSW) PTY LTD ENTERPRISE AGREEMENT 2019
Coal industry | |
COMMISSIONER RIORDAN | SYDNEY, 30 APRIL 2020 |
Application for approval of the PIMS Mining (NSW) Pty Ltd Enterprise Agreement 2019.
[1] PIMS Mining (NSW) Pty Ltd (the Applicant) made an application to the Fair Work Commission (the Commission) on 8 November 2019 in accordance with section 185 of the Fair Work Act 2009 (the Act), for approval of the PIMS Mining (NSW) Pty Ltd Enterprise Agreement 2019 (the Agreement).
[2] It is not in dispute that the Applicant is part of the PIMS Group (PIMS) of companies. These companies have common owners, board members and senior managerial staff.
[3] The Construction, Forestry, Maritime, Mining and Energy Union (the CFMMEU) sought leave to be heard in relation to this application. In accordance with section 590 of the Act, leave was granted to allow the CFMMEU to appear in the proceedings.
[4] In accordance with section 596(2) of the Act, leave was granted to allow Mr Dan Williams, a Partner of Minter Ellison, to appear on behalf of the Applicant. The CFMMEU was represented by its Senior National Legal Officer, Mr Adam Walkaden. The matter was heard on 4 February 2020. In response to a number of questions from me final submissions were provided on 22 April 2020.
[5] The facts associated with the matter are, to the best of my knowledge and experience, quite unique. On face value, the negotiation and approval process appears, to be a contrivance. The CFMMEU has suggested that it was a manipulation.
[6] Witness statements were attested to by Mr Rod Markwell, an inexperienced mineworker employed by the Applicant, Mr Nathan Roach, an experience mineworker employed by the Applicant, Mr Andrew Itzstien, Director and General Manager of the PIMS, Mr Michael Kelly, a Consultant for PIMS and Mr Robert Timbs, the Vice President of the CFMMEU’s Mining Division South Western District. Messrs Itzstien, Kelly and Timbs were required for cross examination.
Background
[7] PIMS is a successful Australian mining contractor who have substantially worked in Queensland but never before in New South Wales. PIMS have indicated a desire to expand its operation into New South Wales.
[8] In April 2019, PIMS were invited to tender for a development contract at South 32’s Appin Mine.
[9] A new subsidiary of PIMS, Illawarra Mining Service (IMS), was registered with ASIC on 8 May 2019. IMS had negotiated a proposed greenfields agreement with the CFMMEU. This proposed agreement was submitted by PIMS to South 32 with its tender proposal.
[10] In June 2019, PIMS were advised by South 32 that the commercial model proposed by the company would not be successful in its current form. PIMS were advised that South 32 would not accept a fixed bonus of $500 and that any bonus must be based on “effort and reward.”0F 1
[11] On or around 13 June 2019, PIMS decided to use a labour hire contractor to source labour for the Appin Development Contract, if it was successful in the tender process.
[12] On 24 June 2019, PIMS received an executed letter of intent from South 32.
[13] On 29 June 2019, PIMS provided Workpac with a letter of intent to supply labour for the Appin Development Contract at the Appin Colliery (Appin).
[14] On 3 July 2019, PIMS advised people who had expressed an interest in working for PIMS via Facebook and SEEK, that Workpac would be the employer of the production and engineering workforce for the Appin Development Contract.
[15] All of the management team, including eventually all of the Deputies, are employed by PIMS. Employment of the production and engineering workforce was outsourced to Workpac, who has a national enterprise agreement with the CFMMEU.
[16] PIMS was directly involved with the employment process of the Workpac employees to make sure that they fitted into the PIMS culture. PIMS basically directed Workpac as to whom they could employ.
[17] The Workpac employees started work at Appin on 5 August 2019. It is not in dispute that these employees are required to wear a PIMS uniform, report to a PIMS management team and submit their timesheets to PIMS.
[18] Workpac have approximately 85 employees, both experienced and inexperienced mineworkers, working at Appin on the PIMS Mining development contact.
[19] In September 2019, PIMS registered a new company, namely PIMS Mining (NSW) Pty Ltd, the Applicant in this proceeding.
[20] Five employees were employed by the Applicant on 15 October 2019, to perform work at Appin. One employee, Mr Mark Gallagher, could not commence his employment until 28 October 2019, because he was required to work out his notice with a different contractor, who was also engaged at Appin.
[21] It is not in dispute that the first task of the six employees was to negotiate an enterprise agreement. They were not placed on site at Appin but in a room offsite. Negotiations commenced on 23 October 2019. All six employees were provided with their NERR on 15 October 2019. The Applicant also provided the employees with a bargaining form. It is not in dispute that the employees were ‘encouraged’ to appoint themselves as bargaining agents because the Applicant wanted to negotiate directly with the six employees.
[22] Of the six employees, four had never worked in a coalmine previously (clean skins), one was an experienced tradesperson (Mr Gallagher) and one was an experienced mineworker (Mr Marsh).
[23] It is worth noting that all six employees were on probation during the negotiations.
[24] The Applicant engaged Mr Mike Kelly, from MK Consulting, to assist with these negotiations. Mr Kelly is a former official of the Construction, Forestry, Mining and Energy Union, Mining Division, (as it then was) and has run a successful Industrial Relations consultancy for many years.
[25] After 4 bargaining committee meetings, the proposed Agreement was voted up 6 – 0, some 23 days after the NERR was issued.
[26] Despite the views of Mr Itzstien and Mr Markwell, Mr Kelly agreed that the negotiations were not robust or typical of negotiations in the coal industry.
Jurisdiction
[27] Both parties referred me to One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 (One Key), the recent pre-eminent decision of the Full Court of the Federal Court of Australia. In One Key the learned judges held:
“[115] The Commission was required to be satisfied that OKW had taken “all reasonable steps to ensure” that both the terms and the effect of the terms had been explained to the relevant employees as an element in the inquiry as to whether “genuine” agreement had been obtained from them. The agreed purpose of the obligation imposed on employers by s180(5) is to enable the relevant employees to cast an informed vote: to know what it is they are being asked to agree to and to enable them to understand how wages and working conditions might be affected by voting in favour of the agreement.
[116] In order for the employer to comply with the obligation it must take into account the particular circumstances and needs of those employees, including their cultural and linguistic backgrounds, their youth, and the absence of a bargaining representative. That is made explicit in s180(6). How could the Commission decide whether the steps the employer had taken were “all reasonable steps” unless it knew what the employees had been told before they cast their votes? Without knowing the terms in which the explanation had been conveyed how could the Commission form an opinion on the sufficiency of the explanation, particularly having regard to the considerations mentioned in s180(6)? Ultimately, how could the Commission decide that a genuine agreement had been reached without having evidence upon which it could answer both these questions?
…
[145] Enterprise agreements are an important feature of the Fair Work Act. Together with the NES and modern awards, enterprise agreements constitute the sources of the main terms and conditions of employment provided by the Fair Work Act: see s 5(2).
[146] Enterprise agreements provide employees with a means of improving their terms and conditions of employment beyond the floor of minimum terms and conditions of employment provided for by the NES and modern awards. For employers, the making of enterprise agreements can provide greater flexibility and enhanced productivity. Subject to compliance with the BOOT, many of the terms and conditions of employment required by modern awards may be supplanted by terms and conditions more suited to the employer’s enterprise. Section 3 of the Fair Work Act states that the object of the Act is “to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians” by a number of means. One, specified in para (f) is:
achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action;
…
[151] An enterprise agreement made early in the life of an enterprise with two or three employees and before the employment of the much larger workforce necessary to operate the business of the enterprise is, in terms of the process by which it was made, far more likely to reflect characteristics akin to individual bargaining than collective bargaining. As the facts of this case demonstrate, there will be no bargaining with the collective of employees because, in substance, the collective is yet to be formed. In the absence of any real opportunity for employees to form an effective collective, the power imbalance will reflect that of individual bargaining. As the Full Court said in a similar context in Construction, Forestry, Mining and Energy Union v PilbaraIronCompany (2011) 194 FCR 269 at [38]:
If it were possible for an employer to choose any employees it wishes, and to designate them as the employees in part of its single business with whom it wishes to make a collective agreement, the underlying purpose of promoting collective negotiation might be subverted.
[152] Still, it is abundantly clear that an enterprise agreement may be made with two or three employees and, in relation to a new enterprise, may be made as a non-greenfields agreement where some employees of the enterprise are already employed (see ALDI at [76]). That that should be so is not really surprising. Enterprises come in all shapes and sizes. Nor, as the High Court observed at [84] in ALDI, is it implausible for the legislature to have intended that a small group of employees should be able to fix the terms and conditions of employment of a larger group of employees who are later employed and covered by the enterprise agreement.
[153] But it does not follow from the fact that agreement-making of that kind has not been prohibited by the Fair Work Act that the Act is unconcerned with agreement-making that may undermine or subvert its preference for collective bargaining. That concern, as the High Court observed in ALDI at [84] and [87], is addressed not by prohibition but by the Fair Work Act’s “protective provisions”.
[154] Section 186(3) (the “fairly chosen” requirement) is one example of such a “protective provision”. A primary purpose of this provision is to avoid the workforce of an enterprise being broken up into artificial employee groupings with the consequence that the workforce of the enterprise is unable to bargain as a single collective: see Aerocare Flight Support Pty Ltd v Transport Workers’ Union of Australia [2018] FCAFC 74 at [19] (Jagot, Bromberg and Rangiah JJ). Another example of a protective provision referred to by the High Court in ALDI is the BOOT. Each of those provisions is an element of the approval process specified by Sub-division B of Part 2–4. Like those provisions, other provisions of that sub-division, including ss186(2) and 188, have a protective purpose. That s188 harbours a concern directed at agreements made by a small number of employees in circumstances where the agreement covers a wider range of employee classifications is confirmed by [824] of the Explanatory Memorandum which provides:
Note that where an agreement covers a large number of classifications of employees in which no employees are actually engaged there may be a question as to whether the agreement has been genuinely agreed – see clause 188.
[155] Where employees working in few occupational classifications consent to an agreement which covers numerous other occupations or other occupations in many industries beyond their own, an explanation of the terms of the agreement and their effect may fall short of providing an adequate basis for the formation of genuine consent. The employees who voted may be indifferent to the impact of an agreement on other employees or prospective employees in occupational classifications outside their own training or experience. As Buchanan J observed in John Holland (Besanko and Barker JJ agreeing), in those circumstances the employees will presumably act out of self-interest (at [33]) with the possible result that “it may not be fair for an enterprise agreement made with three existing employees to cover a wide range of other classifications and jobs in which they may have no conceivable interest” (at [83]).
[28] In ALDI Foods Pty Ltd v Shop, Distributive & Allied Employees Association [2017] HCA 53 (Aldi), the High Court of Australia held:
“[76] The SDA’s argument, and the reasoning of the majority of the Full Court, cannot stand with the plain and ordinary meaning of s 172(2) and (4) of the Act. Those provisions, as mentioned, contemplate the making of non-greenfields agreements with persons already employed. In addition, while s 186 operates on the assumption that there are employees covered by the agreement at the time the application for approval is made, it does not follow that the agreement must apply to them in the sense of operating to fix their rights and obligations in the work actually being performed by them at that time.
[77] The question of coverage that arises when the Commission asks whether the agreement has been genuinely agreed to for the purposes of s 186(2)(a) is not whether the employees voting for the agreement are actually employed under its terms, but rather whether the agreement covers all employees who may in future have the terms and conditions of their jobs regulated by it. At the stage of considering whether an enterprise agreement is available to be made under s 172 of the Act, ie when no agreement has as yet been made, it is a natural and ordinary use of language to speak of the employees whose jobs are within the scope of the proposed agreement as employees who “will be covered” by the agreement. At the stage of considering whether an enterprise agreement, which has been made (by virtue of s 182(1)), should be approved pursuant to s 186(2)(a), it is a natural and ordinary use of language to speak of the employees, whose jobs are described by the terms of the agreement which has been made, as employees who “are covered” by the agreement.
…
[84] The conclusion indicated by the ordinary and natural meaning of these provisions of the Act is not brought into question by the concern, identified by White J, that there is something implausible in the legislature accepting that a small group of employees may be able to fix the terms and conditions of employment for all the employees who may be employed in the enterprise in the future. That concern was adverted to and rejected in John Holland (68). It is a concern that does not warrant the adoption of an understanding of the Act that is contrary to the ordinary and natural meaning of its text. Indeed, the concern is addressed, and largely allayed, by the protective provisions of the Act relating to the right to representation, the “fairly chosen” provisions of sub-ss (3) and (3A) of s 186, and, most importantly, the need to pass the BOOT.
…
[87] Yet, in relation to new enterprises, the approach of the majority of the Full Court treats that possibility as unacceptable. Rather than countenance the possibility, expressly contemplated by s 172(2)(a), that a few original employees may make an agreement in relation to a proposed new enterprise that will later bind a larger group, the majority of the Full Court ignored the language of s 172 and adopted a strained construction of s 186(2)(a). That strained construction had the effect of denying those employees the capacity to make an agreement capable of receiving approval. Presumably it was because of the involvement of employee organisations in the making of greenfields agreements that the majority of the Full Court saw its concern as remedied by that construction. However, given that employees involved in making a non-greenfields agreement might, if they wished, appoint an employee organisation as a bargaining representative, and given the additional protections of sub-ss (3) and (3A) of s 186, and the need to pass the BOOT, no good reason, in terms of the purpose of the Act, justifies that strained construction.”
Brief Outline of the CFMMEU’s Submissions
[29] The CFMMEU contended that the process followed by PIMS in negotiating the Agreement was nothing more than a ‘contrived tick the box process.’
[30] The CFMMEU stated that there is a mismatch in the skill, experience and geographic location of the six employees and the scope of the Agreement. They claimed that all of the employees that negotiated the Agreement were engaged in the Illawarra and most of them were inexperienced, but they were negotiating an agreement for the whole of New South Wales and for both experienced and inexperienced mineworkers.
[31] The CFMMEU’s written submissions outlined that the Applicant failed to comply with the requirements of the Act. The CFMMEU contended that:
● the Agreement incorporates the Black Coal Mining Industry Award 2010 (the Award) and that it is not clear on the facts that the six employees engaged by the company were covered by the Award.
● the six employees that negotiated the Agreement were not fairly chosen.
● the Applicant failed to properly explain matters associated with the terms of the Agreement.
● the Agreement was not genuinely agreed to.
[32] During the Hearing, the CFMMEU pressed the following three objections to the Agreement being approved:
● It cannot be established that the Agreement was made with at least two employees who were employed at the time the agreement is made, and who will be covered by the Agreement.1F 2
● The Applicant filed to properly explain matters associated with clause 24.6 of the Appin Colliery and West Cliff CPT Enterprise Agreement 2018 (the Appin Agreement)2F 3
● The Agreement lacked ‘moral authority’3F 4
Brief Outline of the Applicant’s Submissions
[33] The Applicant submitted that it has complied with the pre-approval steps in the Act. The Applicant stated that:
“(a) All employees who will be covered by the PIMS EA who were employed at the notification time were provided with the Notice of Employee Representational Rights on 15 October 2019 and the NERR was in the prescribed form under s.174 of the FW Act;
(b) All of those employees are employed by PIMS NSW in the classifications covered by the PIMS EA;
(c) All employees appointed themselves as bargaining representatives;
(d) Numerous bargaining meetings took place between PIMS NSW and the employees in relation to the PIMS EA. Concessions and amendments to the PIMS EA were made during the course of those meetings;
(e) During the access period, all employees were provided with a copy of the PIMS EA and had access to the PIMS EA throughout the access period for the purpose of s.180(2) of the FW Act;
(f) At the start of the access period, employees were provided with written notice of the time and place at which the vote to approve the PIMS EA would occur as well as the method of voting in accordance with s.180(3) of the FW Act;
(g) The employer took all reasonable steps to ensure that the terms of the agreement, and the effect of those terms, were explained to the relevant employees for the purpose of s.180(5) and s.180(6) of the FW Act. In that regard:
(i) all employees participated during the enterprise bargaining process;
(ii) a two hour meeting was held on 31 October 2019 to explain to the employees the terms of the PIMS EA, the effects of those terms and the FW Act requirements for the approval of the enterprise agreement;
(iii) a 'Terms & Effects' document was distributed to all employees by email on November 2019 which gave an explanation of the terms of the PIMS EA, as well as a comparison with the terms of the Black Coal Mining Industry Award 2010
(iv) a further meeting was held with employees on 7 November 2019 to discuss any questions the employees had about the PIMS EA and that meeting also involved discussion of the 'Terms & Effects' document; and
(v) employees were invited to raise questions about the PIMS EA throughout the process;
(h) the request for employees to approve the agreement by voting for it (on 8 November 2019) was made at least 21 days after the last NERR was issued (on 15 October 2019) in compliance with s.181 of the FW Act;
(i) all six employees of PIMS NSW voted to approve the PIMS EA in the vote on 8 November 2019; and
(j) there are no other reasonable grounds for the Fair Work Commission (Commission) to believe that the agreement has not been genuinely agreed to by the employees.”4F 5
[34] The Applicant rejected each of the CFMMEU’s submissions as described above. The Applicant submitted that:
● the employees were employed by the company to perform work in the coal mining industry and within the coverage clause of the Agreement.
● they adequately explained the terms and conditions of the Agreement.
● the employees were fairly chosen.
● the Agreement has moral authority thus the Agreement was genuinely agreed to.
[35] During the Hearing the Applicant addressed each of the objections pressed by the CFMMEU. In summary they contended:
● The employees that negotiated the Agreement were engaged to work and go underground at Appin and on the day of the Hearing they were part of the workforce at Appin.
● The Applicant submitted that section 180(5) of the Act requires explanation of the Agreement but not the effect of any term of another agreement to which they are not a party.
● The Applicant submitted that the Agreement does not lack ‘moral authority’ and that the facts in the case at hand do not resemble, in anyway, the circumstance addressed by the Full Court of the Federal Court in One Key.
Statutory Provisions
[36] The statutory provisions of the Act, in relation to the making and approval of an enterprise agreement, are provided here in detail for convenience and are as follows:
171 Objects of this Part
The objects of this Part are:
(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and
(b) to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:
(i) making bargaining orders; and
(ii) dealing with disputes where the bargaining representatives request assistance; and
(iii) ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay.
172 Making an enterprise agreement
Enterprise agreements may be made about permitted matters
(1) An agreement (an enterprise agreement) that is about one or more of the following matters (the permitted matters) may be made in accordance with this Part:
(a) matters pertaining to the relationship between an employer that will be covered by the agreement and that employer’s employees who will be covered by the agreement;
(b) matters pertaining to the relationship between the employer or employers, and the employee organisation or employee organisations, that will be covered by the agreement;
(c) deductions from wages for any purpose authorised by an employee who will be covered by the agreement;
(d) how the agreement will operate.
Note 1For when an enterprise agreement covers an employer, employee or employee organisation, see section 53.
Note 2An employee organisation that was a bargaining representative for a proposed enterprise agreement that is not a greenfields agreement will be covered by the agreement if the organisation notifies the FWC under section 183 that it wants to be covered.
Single-enterprise agreements
(2) An employer, or 2 or more employers that are single interest employers, may make an enterprise agreement (a single-enterprise agreement):
(a) with the employees who are employed at the time the agreement is made and who will be covered by the agreement; or
(b) with one or more relevant employee organisations if:
(i) the agreement relates to a genuine new enterprise that the employer or employers are establishing or propose to establish; and
(ii) the employer or employers have not employed any of the persons who will be necessary for the normal conduct of that enterprise and will be covered by the agreement.
Note: The expression genuine new enterpriseincludes a genuine new business, activity, project or undertaking (see the definition of enterprise in section 12).
Multi-enterprise agreements
(3) Two or more employers that are not all single interest employers may make an enterprise agreement (a multi-enterprise agreement):
(a) with the employees who are employed at the time the agreement is made and who will be covered by the agreement; or
(b) with one or more relevant employee organisations if:
(i) the agreement relates to a genuine new enterprise that the employers are establishing or propose to establish; and
(ii) the employers have not employed any of the persons who will be necessary for the normal conduct of that enterprise and will be covered by the agreement.
Note: The expression genuine new enterprise includes a genuine new business, activity, project or undertaking (see the definition of enterprise in section 12).
Greenfields agreements
(4) A single-enterprise agreement made as referred to in paragraph (2)(b), or a multi-enterprise agreement made as referred to in paragraph (3)(b), is a greenfields agreement.
Single interest employers
(5) Two or more employers are single interest employers if:
(a) the employers are engaged in a joint venture or common enterprise; or
(b) the employers are related bodies corporate; or
(c) the employers are specified in a single interest employer authorisation that is in operation in relation to the proposed enterprise agreement concerned.
Requirement that there be at least 2 employees
(6) An enterprise agreement cannot be made with a single employee.
173 Notice of employee representational rights
Employer to notify each employee of representational rights
(1) An employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who:
(a) will be covered by the agreement; and
(b) is employed at the notification time for the agreement.
Note: For the content of the notice, see section 174.
Notification time
(2) The notification time for a proposed enterprise agreement is the time when:
(a) the employer agrees to bargain, or initiates bargaining, for the agreement; or
(b) a majority support determination in relation to the agreement comes into operation; or
(c) a scope order in relation to the agreement comes into operation; or
(d) a low-paid authorisation in relation to the agreement that specifies the employer comes into operation.
Note: The employer cannot request employees to approve the agreement under section 181 until 21 days after the last notice is given (see subsection 181(2)).
When notice must be given
(3) The employer must give the notice as soon as practicable, and not later than 14 days, after the notification time for the agreement.
Notice need not be given in certain circumstances
(4) An employer is not required to give a notice to an employee under subsection (1) in relation to a proposed enterprise agreement if the employer has already given the employee a notice under that subsection within a reasonable period before the notification time for the agreement.
How notices are given
(5) The regulations may prescribe how notices under subsection (1) may be given.
176 Bargaining representatives for proposed enterprise agreements that are not greenfields agreements
Bargaining representatives
(1) The following paragraphs set out the persons who are bargaining representatives for a proposed enterprise agreement that is not a greenfields agreement:
(a) an employer that will be covered by the agreement is a bargaining representative for the agreement;
(b) an employee organisation is a bargaining representative of an employee who will be covered by the agreement if:
(i) the employee is a member of the organisation; and
(ii) in the case where the agreement is a multi-enterprise agreement in relation to which a low-paid authorisation is in operation—the organisation applied for the authorisation;
unless the employee has appointed another person under paragraph (c) as his or her bargaining representative for the agreement, or has revoked the status of the organisation as his or her bargaining representative for the agreement under subsection 178A(2); or
(c) a person is a bargaining representative of an employee who will be covered by the agreement if the employee appoints, in writing, the person as his or her bargaining representative for the agreement;
(d) a person is a bargaining representative of an employer that will be covered by the agreement if the employer appoints, in writing, the person as his or her bargaining representative for the agreement.
Bargaining representatives for a proposed multi-enterprise agreement if a low-paid authorisation is in operation
(2) If:
(a) the proposed enterprise agreement is a multi-enterprise agreement in relation to which a low-paid authorisation is in operation; and
(b) an employee organisation applied for the authorisation; and
(c) but for this subsection, the organisation would not be a bargaining representative of an employee who will be covered by the agreement;
the organisation is taken to be a bargaining representative of such an employee unless:
(d) the employee is a member of another employee organisation that also applied for the authorisation; or
(e) the employee has appointed another person under paragraph (1)(c) as his or her bargaining representative for the agreement; or
(f) the employee has revoked the status of the organisation as his or her bargaining representative for the agreement under subsection 178A(2).
(3) Despite subsections (1) and (2):
(a) an employee organisation; or
(b) an official of an employee organisation (whether acting in that capacity or otherwise);
cannot be a bargaining representative of an employee unless the organisation is entitled to represent the industrial interests of the employee in relation to work that will be performed under the agreement.
Employee may appoint himself or herself
(4) To avoid doubt and despite subsection (3), an employee who will be covered by the agreement may appoint, under paragraph (1)(c), himself or herself as his or her bargaining representative for the agreement.
Note: Section 228 sets out the good faith bargaining requirements. Applications may be made for bargaining orders that require bargaining representatives to meet the good faith bargaining requirements (see section 229).
180 Employees must be given a copy of a proposed enterprise agreement etc.
Pre-approval requirements
(1) Before an employer requests under subsection 181(1) that employees approve a proposed enterprise agreement by voting for the agreement, the employer must comply with the requirements set out in this section.
Employees must be given copy of the agreement etc.
(2) The employer must take all reasonable steps to ensure that:
(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:
(i) the written text of the agreement;
(ii) any other material incorporated by reference in the agreement; or
(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.
(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:
(a) the time and place at which the vote will occur;
(b) the voting method that will be used.
(4) The access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1).
Employees must be given copy of disclosure documents etc.
(4A) If an organisation gives the employer a document under section 179 by the end of the fourth day of the access period for the agreement, the employer must take all reasonable steps to ensure that the relevant employees:
(a) are given a copy of the document as soon as practicable after it was given to the employer; or
(b) are given access to a copy of the document as soon as practicable after it was given to the employer and have access to that copy throughout the remainder of the access period for the
agreement.
Note: This subsection is a civil remedy provision (see Part 4-1).
(4B) If the employer is required to prepare a document under section 179A, the employer must take all reasonable steps to ensure that the relevant employees:
(a) are given a copy of the document by the end of the fourth day of the access period for the agreement; or
(b) are given access to a copy of the document by the end of that fourth day and have access to that copy throughout the remainder of the access period for the agreement.
Note: This subsection is a civil remedy provision (see Part 4-1).
(4C) The employer must not knowingly or recklessly make a false or misleading representation in the document that the relevant employees are given a copy of or access to under subsection (4B).
Note: This subsection is a civil remedy provision (see Part 4-1).
Terms of the agreement must be explained to employees etc.
(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.
(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:
(a) employees from culturally and linguistically diverse backgrounds;
(b) young employees;
(c) employees who did not have a bargaining representative for the agreement.
181 Employers may request employees to approve a proposed enterprise agreement
(1) 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.
(2) The request must not be made until at least 21 days after the day on which the last notice under subsection 173(1) (which deals with giving notice of employee representational rights) in relation to the agreement is given.
(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.
182 When an enterprise agreement is made
Single-enterprise agreement that is not a greenfields agreement
(1) If the employees of the employer, or each employer, that will be covered by a proposed single-enterprise agreement that is not a greenfields agreement have been asked to approve the agreement under subsection 181(1), the agreement is made when a majority of those employees who cast a valid vote approve the agreement.
Multi-enterprise agreement that is not a greenfields agreement
(2) If:
(a) a proposed enterprise agreement is a multi-enterprise agreement; and
(b) the employees of each of the employers that will be covered by the agreement
have been asked to approve the agreement under subsection 181(1); and
(c) those employees have voted on whether or not to approve the agreement; and
(d) a majority of the employees of at least one of those employers who cast a valid vote have approved the agreement;
the agreement is made immediately after the end of the voting process referred to in subsection 181(1).
Greenfields agreement
(3) A greenfields agreement is made when it has been signed by each employer and each relevant employee organisation that the agreement is expressed to cover (which need not be all of the relevant employee organisations for the agreement).
(4) If:
(a) a proposed single-enterprise agreement is a greenfields agreement that has not been made under subsection (3); and
(b) there has been a notified negotiation period for the agreement; and
(c) the notified negotiation period has ended; and
(d) the employer or employers that were bargaining representatives for the agreement (the relevant employer or employers) gave each of the employee organisations that were bargaining representatives for the agreement a reasonable opportunity to sign the agreement; and
(e) the relevant employer or employers apply to the FWC for approval of the agreement;
the agreement is taken to have been made:
(f) by the relevant employer or employers with each of the employee organisations that were bargaining representatives for the agreement; and
(g) when the application is made to the FWC for approval of the agreement.
Note: See also section 185A (material that must accompany an application).
185 Bargaining representative must apply for the FWC’s approval of an enterprise agreement
Application for approval
(1) If an enterprise agreement is made, a bargaining representative for the agreement must apply to the FWC for approval of the agreement.
(1A) Despite subsection (1), if the agreement is a multi-enterprise agreement that is a greenfields agreement, the application must be made by:
(a) an employer covered by the agreement; or
(b) a relevant employee organisation that is covered by the agreement.
Material to accompany the application
(2) The application must be accompanied by:
(a) a signed copy of the agreement; and
(b) any declarations that are required by the procedural rules to accompany the application.
When the application must be made
(3) If the agreement is not a greenfields agreement, the application must be made:
(a) within 14 days after the agreement is made; or
(b) if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows.
(4) If the agreement is a greenfields agreement, the application must be made within 14 days after the agreement is made.
Signature requirements
(5) The regulations may prescribe requirements relating to the signing of enterprise agreements.
Single-enterprise agreements that are greenfields agreements
(6) This section does not apply to an agreement made under subsection 182(4).
186 When the FWC must approve an enterprise agreement—general requirements
Basic rule
(1) If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.
Note: The FWC may approve an enterprise agreement under this section with undertakings (see section 190).
Requirements relating to the safety net etc.
(2) The FWC must be satisfied that:
(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; and
(b) if the agreement is a multi-enterprise agreement:
(i) the agreement has been genuinely agreed to by each employer covered by the agreement; and
(ii) no person coerced, or threatened to coerce, any of the employers to make the agreement; and
(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and
(d) the agreement passes the better off overall test.
Note 1: For when an enterprise agreement has been genuinely agreed to by employees, see section 188.
Note 2: The FWC may approve an enterprise agreement that does not pass the better off overall test if approval would not be contrary to the public interest (see section 189).
Note 3: The terms of an enterprise agreement may supplement the National Employment Standards (see paragraph 55(4)(b)).
Requirement that the group of employees covered by the agreement is fairly chosen
(3) The FWC must be satisfied that the group of employees covered by the agreement was fairly chosen.
(3A) If the agreement does not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.
Requirement that there be no unlawful terms
(4) The FWC must be satisfied that the agreement does not include any unlawful terms (see Subdivision D of this Division).
Requirement that there be no designated outworker terms
(4A) The FWC must be satisfied that the agreement does not include any designated outworker terms.
Requirement for a nominal expiry date etc.
(5) The FWC must be satisfied that:
(a) the agreement specifies a date as its nominal expiry date; and
(b) the date will not be more than 4 years after the day on which the FWC approves the agreement.
Requirement for a term about settling disputes
(6) The FWC must be satisfied that the agreement includes a term:
(a) that provides a procedure that requires or allows the FWC, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes:
(i) about any matters arising under the agreement; and
(ii) in relation to the National Employment Standards; and
(b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.
Note 1: The FWC or a person must not settle a dispute about whether an employer had reasonable business grounds under subsection 65(5) or 76(4) (see subsections 739(2) and 740(2)).
Note 2: However, this does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4).
187 When the FWC must approve an enterprise agreement—additional requirements
Additional requirements
(1) This section sets out additional requirements that must be met before the FWC approves an enterprise agreement under section 186.
Requirement that approval not be inconsistent with good faith bargaining etc.
(2) The FWC must be satisfied that approving the agreement would not be inconsistent with or undermine good faith bargaining by one or more bargaining representatives for a proposed enterprise agreement, or an enterprise agreement, in relation to which a scope order is in operation.
Requirement relating to notice of variation of agreement
(3) If a bargaining representative is required to vary the agreement as referred to in subsection 184(2), the FWC must be satisfied that the bargaining representative has complied with that subsection and subsection 184(3) (which deals with giving notice of the variation).
Requirements relating to particular kinds of employees
(4) The FWC must be satisfied as referred to in any provisions of Subdivision E of this Division that apply in relation to the agreement.
Note: Subdivision E of this Division deals with approval requirements relating to particular kinds of employees.
Requirements relating to greenfields agreements
(5) If the agreement is a greenfields agreement, the FWC must be satisfied that:
(a) the relevant employee organisations that will be covered by the agreement are (taken as a group) entitled to represent the industrial interests of a majority of the employees who will be covered by the agreement, in relation to work to be performed under the agreement; and
(b) it is in the public interest to approve the agreement.
(6) If an agreement is made under subsection 182(4) (which deals with a single-enterprise agreement that is a greenfields agreement), the FWC must be satisfied that the agreement, considered on an overall basis, provides for pay and conditions that are consistent with the prevailing pay and conditions within the relevant industry for equivalent work.
Note: In considering the prevailing pay and conditions within the relevant industry for equivalent work, the FWC may have regard to the prevailing pay and conditions in the relevant geographical area.
188 When employees have genuinely agreed to an enterprise agreement
(1) An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.
(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and
(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.
190 FWC may approve an enterprise agreement with undertakings
Application of this section
(1) This section applies if:
(a) an application for the approval of an enterprise agreement has been made under subsection 182(4) or section 185; and
(b) the FWC has a concern that the agreement does not meet the requirements set out in sections 186 and 187.
Approval of agreement with undertakings
(2) The FWC may approve the agreement under section 186 if the FWC is satisfied that an undertaking accepted by the FWC under subsection (3) of this section meets the concern.
Undertakings
(3) The FWC may only accept a written undertaking from one or more employers covered by the agreement if the FWC is satisfied that the effect of accepting the undertaking is not likely to:
(a) cause financial detriment to any employee covered by the agreement; or
(b) result in substantial changes to the agreement.
FWC must seek views of bargaining representatives
(4) The FWC must not accept an undertaking under subsection (3) unless the FWC has sought the views of each person who the FWC knows is a bargaining representative for the agreement.
Signature requirements
(5) The undertaking must meet any requirements relating to the signing of undertakings that are prescribed by the regulations.
Consideration
[37] I have taken into account all of the evidence and the submissions that have been provided by the parties. The fact that an issue has not appeared in this decision does not mean that it has not been taken into account.
[38] I note that the decision in Construction, Forestry, Mining & Energy Union v Pilbara Iron Company (Services) Pty Ltd (No 3) [2012] FCA 697can be distinguished on the facts. This is not a case where the employer is trying to employ a new workforce in an attempt to lower existing conditions of employment. On the contrary, the Agreement provides superior rates of pay to employees to those rates which are currently being paid by its labour hire provider. I have taken this into account.
[39] I have taken into account the ‘duck principle’ i.e. if something looks like a duck, walks like a duck, sounds like a duck, then it’s a duck. My initial suspicion was that the Agreement is bordering on being a ‘sham’ due to the deliberate and calculated steps taken by the Applicant in ‘choosing’ its six employees.
[40] In response to a question from me, Mr Itzstein said;
“So why did you choose the six?---Having conversations with Mark and Nathan following the information session, we wanted to employ people who we thought would be a good fit for the PIMS business, good attitude, good work ethic. We did reference checks on these guys. They were – Nathan was known from his time at Queensland, as well. So, yes.
So, would you regard them as being friendly?---Yes, they were friendly. Mark Gallagher asked a lot of questions. You know, he was very forthcoming so – he had a lot of knowledge of Appin when we had our initial discussions on 10 July, so he asked a lot of questions directly about our contract and how it worked, compared to, say, how Nexus' contract worked, et cetera.”5F 6
I have taken this into account.
[41] I have taken into account that only six employees were engaged by the Applicant in order to make the process ‘manageable.’ I also note that the Applicant had earlier been involved in the employment of 85 employees, the majority of whom are experienced mineworkers, to work for Workpac.
[42] I have taken into account that the 85 Workpac employees were subject to the day-to-day control of the Applicant. This is not surprising on the basis that these employees are labour hire employees, however, in general terms, labour hire is traditionally used to supplement a permanent workforce. When these Workpac employees started at Appin, the Applicant had no other production and engineering employees.
[43] I have taken into account that the Applicant intends to engage a directly employed production and engineering workforce “when the Agreement is approved.”6F 7
[44] I have taken into account that the Applicant does not intend to direct the Workpac employees to join the Applicant but note that the Applicant has the contractual capacity to cancel Workpac’s contact.
[45] I have taken into account that the proposed Agreement has superior wages and conditions to the Workpac Agreement and that the Agreeement is basically the same as the greenfields agreement negotiated between IMS and the CFMMEU, except for the fixed bonus provision.
[46] I have taken into account that the Applicant did not advise the six employees of the provisions of the Appin Agreement and the beneficial ramifications for them if they started work at the mine without an enterprise agreement. Clause 24.6 of the Appin Agreement states;
“24.6 Contractors engaged in black coal mining work at the Colliery to whom the Award applies, and who are not covered by an enterprise agreement or any transitional instrument, will not be engaged by the Company on terms that would undercut:
24.6.1 the Operator/Trade Classification Rate if the Employee is experienced (as adjusted from time to time in accordance with the provisions of this Agreement);
24.6.2 all other conditions as prescribed by the Award;
24.6.3 the bonus payment in line with the principles of the Bonus Scheme of this Agreement.”
[47] I have taken into account that the negotiation process was atypical of the coal industry, e.g. it would appear that the campaign to improve the annual wage increase lasted minutes rather than days, weeks or months.
[48] I have taken into account that it would be highly unlikely for the six employees, i.e. the entire workforce of the Applicant, to take protected industrial action whilst on probation and only in the first month of their employment.
[49] I have taken into account that the six employees would not have been allowed to start on-site at Appin if the Agreement negotiations had not successfully concluded.
[50] I have taken into account that the negotiating committee was made up of four inexperienced mineworkers, one experienced mineworker and one experienced tradesperson, whilst the majority of the on-site workers employed by Workpac are experienced mineworkers and tradespersons.
[51] Mr Mark Gallagher, the experienced tradesperson, was not employed by the Applicant when he was issued with his NERR, on 15 October 2019. Mr Gallagher did not commence employment until 28 October 2019. Mr Gallagher was not issued with a new NERR when he commenced employment. Mr Gallagher attended bargaining meetings, representing himself, when he was not even an employee. This fact raises questions as to whether the bargaining committee meetings that were conducted prior to 28 October 2019, when Mr Gallagher was present, were conducted in accordance with the Act. I have taken this into account
[52] I have taken into account that the ballot to approve the Agreement was a unanimous decision, i.e. 6-0.
[53] I have taken into account, from my recent experience, that the Agreement’s rates of pay and conditions of employment appear to be competitive with other coal industry contractors in the Illawarra region of NSW.
[54] I have taken into account that is not unusual for a small number of employees to negotiate an agreement with a new company in an industry, which may experience exponential growth in the coming months.
[55] I have taken into account that, during the Hearing, the CFMMEU raised an issue in relation to the BOOT. The issue raised relates to the interpretation and application of clause 11.2 (a) of the Agreement. 11.2 (a) of the Agreement concerns the payment of penalty rates for ordinary hours of work undertaken on weekends. The Applicant offered to provide and undertaking in relation to this issue.
Conclusion
[56] It is true that the Applicant could have selected any of the 85 employees that it had engaged through Workpac to negotiate an agreement. For whatever reason, the Applicant settled on the six employees that it chose. Such action does not contravene the Act. There is no evidence to suggest that an alternative outcome would have been achieved had a different six, ten or twenty employees been selected. The Agreement is superior to the terms of Workpac’s agreement. Such a scenario would, nearly always result in the higher and more beneficial agreement being supported by employees.
[57] I am satisfied that there were at least two employees employed by the Applicant at the time the Agreement was made who were covered by the Award. I accept the evidence that all six employees are currently employed at Appin.
[58] I am satisfied that the provisions of the Appin Agreement did not need to be explained to the employees because the employees would never be faced with the scenario contained in the Appin Agreement. The Applicant made it clear to the employees that they would not be starting work at the mine until they negotiated an enterprise agreement. As a result, clause 24.6 of the Appin Agreement never had the capacity to become a relevant consideration.
[59] I am satisfied that the Applicant and its employees had the moral authority to make the Agreement. The Applicant had attempted to negotiate a greenfields agreement with the CFMMEU. However, the Applicant’s client, South 32, intervened to stop that agreement as a result of the fixed bonus provision. The CFMMEU refused to move off its position in relation to this issue. Therefore, the Applicant was placed in a difficult position of finding an alternative labour source to deliver its contact. Put simply, the Applicant “contracted out” its production and engineering workforce to a company with an agreement with the CFMMEU. However, the Applicant wanted its own agreement to cover its current and future work in NSW. The only way to achieve this goal was to negotiate its own agreement.
[60] I can understand the CFMMEU’s position that the Applicant manipulated the negotiations. The Applicant utilised the inexperience of its clean skin employees, combined with the friendly attitudes of its two experienced mineworkers, to negotiate an agreement in near record time. However, based on the quality of the outcome, I am satisfied that the speed of the negotiations and the minimal evidence of any contested negotiation is due to the experience and advice of Mr Williams and Mr Kelly.
[61] I am satisfied that the Agreement complies with the industrial precedent established by One Key and Aldi.
[62] The undertaking that has been provided by the Applicant is attached to the Agreement. I am satisfied pursuant to section 190(3) of the Act that the undertaking will not cause financial detriment to any employee covered by the Agreement and that the undertaking will not result in substantial change to the Agreement. Pursuant to section 201(3) of the Act, I note that the undertaking is taken to be a term of the Agreement. The views of the bargaining representatives for the Agreement were sought regarding the undertaking provided pursuant to section 190(4) of the Act. There was no opposition from any bargaining representative to the Applicant’s undertaking.
[63] Subject to the undertaking referred to above, I am satisfied that each of the requirements of sections 186, 187, 188 and 190 as are relevant to this application for approval have been met.
[64] The Agreement is approved and, in accordance with section 54 of the Act, will operate from 7 days from the date of approval. The nominal expiry date of the Agreement is 30 April 2024.
[65] I so Order.
COMMISSIONER
1 Transcript of Proceedings, Tuesday 4 February 2020 [232]
2 Transcript of Proceedings, Tuesday 4 February 2020 [1025]
3 Transcript of Proceedings, Tuesday 4 February 2020 [1191] – [1192]
4 Transcript of Proceedings, Tuesday 4 February 2020 [1116]
5 Submissions on Behalf of the Applicant signed on 19 December 2019 [2].
6 Transcript of Proceedings, Tuesday 4 February 2020 [723] – [724]
7 Transcript of Proceedings, Tuesday 4 February 2020 332
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