Armor Safety Pty Ltd
[2021] FWC 4437
•22 JULY 2021
[2021] FWC 4437
The attached document replaces the document previously issued with the code [2021] FWCA 3978 to correct document referencing.
Associate to Commissioner Lee.
Dated 23 July 2021.
| [2021] FWC 4437 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.222—Enterprise agreement
Armor Safety Pty Ltd
(AG2020/3056)
COMMISSIONER LEE | MELBOURNE, 22 JULY 2021 |
Application for termination of the Armor Safety PTY LTD & The Australian Workers’ Union Agreement 2019.
[1] On 19 October 2020, Armor Safety Pty Ltd made an application under s.222 of the Fair Work Act 2009 (the Act) seeking that the Fair Work Commission (the Commission) terminate the Armor Safety PTY LTD & The Australian Workers’ Union Agreement 2019 (the Agreement). 1
[2] The Agreement is a single enterprise agreement. It was approved by Commissioner Cirkovic on 17 September 2019. The nominal expiry date of the Agreement is 28 February 2022.
History of the application
[3] The application was lodged on 19 October 2020. The Australian Workers’ Union (AWU) was a bargaining representative and is covered by the Agreement. My chambers wrote to the AWU seeking their views on the application. The AWU indicated that it opposed the termination of the Agreement and sought to be heard.
[4] Directions were set for the filing of material by the AWU setting out the basis of its objection, and by the Applicant in reply. The matter was listed for hearing on 14 December 2020.
[5] A request for an adjournment was subsequently made by the Applicant on the grounds that an application had been made to the Federal Court to quash the decision approving the Agreement. The AWU supported the granting of the adjournment. The adjournment was granted. The matter was also scheduled for report back conference on 8 February 2021.
[6] During the report back conference, the matter was programmed for hearing on 9 April 2021, and the parties also agreed to further directions for the filing of further material by both the Applicant and the AWU.
[7] During the hearing on 9 April 2021, I raised with parties the Full Bench decision in Appeal by Shop, Distributive and Allied Employees Association and Others against decision [2019] FWC 6105. 2 The parties indicated that they had not had the opportunity to review the decision and consider the potential relevance of the decision to the current proceedings. Accordingly, I agreed to provide parties with an opportunity to make further submissions and provide further evidence on the issue of which casual employees were entitled to vote for the termination of the Agreement. I issued further directions for the filing of material by both the Applicant and the AWU.
[8] I also indicated that if it was necessary, the matter would be listed for a further hearing on 10 May 2021. However, neither party sought that a further hearing be convened.
The legislation
[9] The relevant provisions of the Act are as follows:
“219 Employers and employees may agree to terminate an enterprise agreement
Termination by employers and employees
(1) The following may jointly agree to terminate an enterprise agreement:
(a) if the agreement covers a single employer—the employer and the employees covered by the agreement; or
(b) if the agreement covers 2 or more employers—all of the employers and the employees covered by the agreement.
Note: For when a termination of an enterprise agreement is agreed to, see section 221.
Termination has no effect unless approved by the FWC
(2) A termination of an enterprise agreement has no effect unless it is approved by the FWC under section 223
…
220 Employers may request employees to approve a proposed termination of an enterprise agreement
(1) An employer covered by an enterprise agreement may request the employees covered by the agreement to approve a proposed termination of the agreement by voting for it.
(2) Before making the request, the employer must:
(a) take all reasonable steps to notify the employees of the following:
(i) the time and place at which the vote will occur;
(ii) the voting method that will be used; and
(b) give the employees a reasonable opportunity to decide whether they want to approve the proposed termination.
(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.
221 When termination of an enterprise agreement is agreed to
Single-enterprise agreement
(1) If the employees of an employer, or each employer, covered by a single-enterprise agreement have been asked to approve a proposed termination of the agreement under subsection 220(1), the termination is agreed to when a majority of the employees who cast a valid vote approve the termination.
Multi-enterprise agreement
(2) If the employees of each employer covered by a multi-enterprise agreement have been asked to approve a proposed termination of the agreement under subsection 220(1), the termination is agreed to when a majority of the employees of each individual employer who cast a valid vote have approved the termination.
222 Application for the FWC’s approval of a termination of an enterprise agreement
Application for approval
(1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to the FWC for approval of the termination.
Material to accompany the application
(2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.
When the application must be made
(3) The application must be made:
(a) within 14 days after the termination is agreed to; or
(b) if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows.
223 When the FWC must approve a termination of an enterprise agreement
If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:
(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and
(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and
(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and
(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.
224 When termination comes into operation
If a termination of an enterprise agreement is approved under section 223, the termination operates from the day specified in the decision to approve the termination.”
[10] It is apparent that each of ss.223 (a) to (c) must be satisfied. The Commission must also consider it appropriate to terminate the Agreement after considering the factors in s.223(d). If the Commission does not reach the requisite level of satisfaction on any of either ss.223(a), (b), or (c), or forms a view it is not appropriate to terminate the Agreement taking into account s.223(d), the application for termination cannot be approved.
The evidence
Witnesses
[11] Ms Jessica McFadden (Office Manager for Armor Safety Pty Ltd) gave evidence on behalf of the Applicant. Mr James Weissmann (AWU Organiser, Major Construction) gave evidence on behalf of the AWU.
The history leading up to the termination application
[12] Mr Weissmann gave evidence that the Agreement was approved by the Commission on 17 September 2019. On 24 September 2020, the AWU received an email from the Commission advising that the Applicant had made an application under s.222 to terminate the Agreement. Mr Weissmann was unaware that the Applicant intended to terminate the Agreement. The AWU advised the Commission that it opposed the termination on the basis that the application was filed some 8 months after the date the Agreement termination was agreed to and therefore the Application did not conform with s.222(3)(a). The Applicant subsequently discontinued that application to terminate the Agreement in late September 2020.
[13] On 25 September 2020, Mr Weissmann contacted Mr Michael Muse (Director of Armor Armor Safety Pty Ltd). Mr Weissmann’s evidence was as follows:
“When I asked the question are you going to pay the EA rates as applicable to the project he responded “Not saying I do and that I don’t, I cant afford it.” I asked again are you going to pay the agreement rates he responded “No.” I also asked are you going to pull the application to terminate the agreement and have further discussions with the AWU to which he replied “I think so, I will get back to you.” He did not get back to me.” 3
[14] On or around 25 September 2020, the AWU notified a dispute to the Commission regarding alleged non-compliance with the terms and conditions of the Agreement. On 30 September 2020, Commissioner Bissett’s chambers advised the parties to have urgent discussions about the alleged non-compliance.
[15] On 1 October 2020, there was a Zoom meeting held between representatives of the AWU and Ms Erin Ellul (Operations Manager for Armor Safety Pty Ltd). The AWU emailed Ms Ellul that day setting out:
• A proposed process to deal with components of the Agreement that the Applicant deemed to be “problematic”.
• A request that the Applicant postpone the vote to terminate the Agreement scheduled for 8 October 2020.
• Seeking that prior to any future vote, detailed information be provided which would compare the Agreement with the relevant award and “identify any loss of benefits, entitlements, and overall loss of earnings”, and that this information, and information about the voting cohort be provided to the AWU.
• Seeking information about the details of the alleged underpayments to individual employees in order to assist in the discussions that Commissioner Bissett had requested the parties have.
[16] Ms Ellul responded the next day, 2 October 2020, advising that the Applicant was proceeding to conduct a vote to seek approval to terminate the Agreement on 8 October 2020. Included in her email was the text of an email Ms McFadden had sent to employees on 30 September 2020. The content of the 2 October email is set out in full below:
“Dear James
I refer to your email to me after our meeting on 1 October 2020. I have copied below the email that we sent to our employees. The email notifies them of the details for the vote, sets out why we are asking them to vote on the question of terminating the agreement and gives them access to the two documents. It also makes clear that we are available to answer any questions. The email does not shy away from the fact that pay rates after the agreement is terminated will be less than those that the agreement requires, but also doesn’t shy away from the reality that it is highly likely that the agreement will not cover any employees in the future as we will lose all of the work that the agreement covers. I think we have made it clear to employees the issues on which they will be voting so that they understand what it is they are being asked to decide.
Email sent to employees:
“Hi Guys,
We have been going through some operational issues in house that have recently just come to our attention. The issues are in regards to an EBA that was in place which we was meant to be voided previously under past management but had not been done correctly. In order to rectify this issue we are having a re-vote to discontinue said EBA on Thursday 8th of October at 6:30pm. At our depot, 28 Jesica Rd, Campbellfield, this vote will be done via secret ballot.
Please see attached both EBA and Award for your viewing.
We are having this re-vote to discontinue the current EBA as with it in place, we are no longer capable of being a competitive company. With the EBA in place, we will almost certainly lose both current and upcoming projects and work because of the pricing we would need to charge in order to maintain staying open.
Moving forward, you would be covered under the attached award you will remain on your current rates, with travel and meal allowances paid. Choosing the Award, gives us a chance to compete with the big players and other traffic management companies resulting in you guys maintaining and getting more work with the aim of keeping you employed and working regularly at Armor Safety Traffic Management.
We will have a hard copy of both the EBA and Award at the Yard for viewing between now and next week’s vote, the yard will be open between 4pm and 6pm Thursday and Friday this week and 10am - 4pm Monday to Wednesday next week. Please just let us know if you would like to come in outside of these hours so we can accommodate a mutually beneficial time. We will also be more than happy to discuss any questions you may have regarding this as we want to ensure you have a full understanding of what is taking place.
If you have any questions or comments we encourage you to contact Erin … or Jess … at any time.
Thanks,
Jess McFadden
Office Manager” 4
[17] I note that in the first part of the email, Ms Ellul claims that the email sent to employees “does not shy away from the fact that pay rates after the agreement is terminated will be less than those that the agreement requires…”. However, the email says that while employees would be covered by an award, they would remain on “current rates”. It is apparent that the email was sent to employees on 30 September 2020. 5 Therefore it appears that the Applicant had already decided to proceed with the vote to seek approval to terminate the Agreement prior to the meeting on 1 October 2020 with the AWU.
[18] Mr Weissmann sent responses to this email on 6 and 7 October 2020 again seeking the information requested in the 1 October 2020 email. The Applicant did not respond to either of those emails.
Evidence relating to the voting process and information provided
[19] The evidence as to the conduct of the voting process includes the following:
• The Form F24 and Form F24A were signed by Mr Michael Muse. Ms McFadden claims that she completed these forms for Mr Muse. The Form F24A states that 43 employees are covered by the Agreement, whereas Ms McFadden claims this was incorrect, and the correct number is 29 employees. 6
• 29 employees identified as “eligible to vote” were sent a message by Ms McFadden at 1:59 pm on 30 September 2020:
“Hi Guys,
We have been going through some operational issues in house that have recently just come to our attention. The issues are in regards to an EBA that was in place which we was (sic) meant to be voided previously under past management but had not been done correctly. In order to rectify this issue we are having a revote to discontinue said EBA on Thursday 8th of October at 6:30pm. At our depot 28 Jesica Rd, Campbellfield, this vote will be done via secret ballot. You will receive an email with more information shortly with all relevant information so please check and let us know if you do not receive the email. If there are any questions regarding this at all please do not hesitate to contact Erin or Jess at any time. Thanks heaps Guys.” 7
• A few hours later, at 3:45 pm, the 30 September email set out in full earlier was sent to the 29 employees. Ms McFadden stated that she received a few text messages from employees stating that they had not received the email. 8 A follow up message was sent on 1 October at 4:52 pm, checking that employees had received the 30 September email.9
• Ms McFadden stated that no employees requested to “make a time to look at the Award and the Enterprise Agreement.” 10 There were links to the Award and the Agreement in the 30 September email.
• The vote took place on 8 October 2020. The vote was scheduled for 6:30 pm. However, some employees requested that the vote be conduct earlier. Consequently, the first vote took place “just before 3:00 pm”. 11 It is not clear exactly how many employees voted “early”. However, it appears there were a number of employees as Ms McFadden gave evidence that:
“I received only a few telephone calls with requests to come in early the majority of the calls requesting to come in early went to Ms Ellul. Employees requested that the time of the vote be amended as many employees are casual and lived far away.” 12
• Representatives of the AWU arrived at “around 5 or 5:30pm”. 13 The AWU representatives handed out flyers to staff members as they arrived to vote.
• Ms McFadden’s evidence is that 3 of the 29 employees assessed as eligible to vote were “unable to attend”. 14 There was no evidence that there was any attempt to make alternative arrangements which would allow the 3 employees an opportunity to vote.
• 15 employees voted in support of termination, and 11 employees voted against the termination.
The information provided to employees
[20] As set out earlier, the 30 September email provided links to the Agreement and the relevant award. The email also set out, among various other claims, that if the Agreement is terminated, employees “would be covered under the attached award [and] will remain on [their] current rates, with travel and meal allowances paid.” 15 Both that email and the messages to employees characterised the vote to terminate the Agreement as being a necessary “rectification” of a previous incorrect attempt to void the Agreement.
[21] In the room where the vote was conducted, a whiteboard was installed with information written on it. 16 Ms McFadden indicated during the hearing that she “didn’t write the sign”.17 A photo of the whiteboard was in evidence and, written on it was:
“Vote:
Voting must be done at your own freewill
You are not to influence anyones (sic) vote
Backpay will be organised regardless of vote
• Our competitor does not have EBA for same projects (Momentum Traffic)
If you vote yes:
• Backpay will be arranged
• Current major projects will continue
• Upcoming planned major projects will commence
• Company able to stay competitive in market and recommence bidding on upcoming major works
• Shifts will return to normal capacity once finalised
If you vote no:
• Current major projects will discontinue
• Company may go into liquidation
• Company unable to stay competitive in market and bidding projects may closed
• Backpay will be organised
• Backpay without major projects going ahead may result in liquidation”
[22] The evidence of Ms McFadden is that the voting had already commenced approximately 1 hour before the whiteboard was put up. 18 It is not apparent how many employees voted prior to the whiteboard information being put on display, but it is clear from the evidence of Ms McFadden that a number of them did vote before the whiteboard was erected.
[23] The only other information provided to employees was two flyers that were handed to employees by the AWU. Copies of the flyers were included in the evidence of Ms McFadden. 19 The flyers cover two A4 pages. The text of the first flyer is as follows:
“IMPORTANT UPDATE FROM THE AUSTRALIAN WORKERS UNION
ARMOR SAFETY HAS BEEN UNDERPAYING ITS EMPLOYEES!
ARE THEY RIPPING YOU OFF?
Not only is Armor Safety trying to rip up your current Enterprise Agreement, they have also been underpaying their workforce.
Is this you?
If you have worked on a major project that is over $10mill you must be paid the following…
• Major Projects Site allowance which is paid per the hour ranging from $2.65 to $5.75 depending on the value of the project.
• Double time for all overtime worked
• Time on time payment for working in inclement weather.
• A 36 hour week, not a 38 hour week
• All overtime paid at double time with a $31.78 meal allowance payable when working more than 9.5 hours.
• Payment of double time for all afternoon and night shift work.
• TC traffic controller (casual rates) TC1 $30.19, TC2 $31.63
• TC3 $32.27 & TC4 $35.07.
There are too many other conditions to list!
Underpaid? Time to join the AWU and end the wage theft!
Join the fight and when it come to the employer asking you to vote to tear up your agreement conditions
VOTE NO!
• Its time for Amor to get real – pay what you owe to your hard working employees, and by joining the AWU we will take up the fight together!
Note: All enterprise agreements are available for you to read at original)
[24] The text of the second flyer is as follows:
“ALERT
IMPORTANT UPDATE FROM THE AUSTRALIAN WORKERS UNION
ARMOR SAFETY’S ATTEMPT TO TERMINATE YOUR CURRENT AGREEMENT.
Armor Safety have made an application to the Fair Work Commission to terminate your enterprise agreement that was negotiated with the AWU in September 2019. It still has another two years to go!
WHAT WILL THIS MEAN TO YOU AND YOUR WORKMATES?
• You will not get a 5% pay increase for 2021 OR 2022 – GONE!
• Traffic Controller Level Two ($31.63) will drop back to the award rate $27.56. decent pay rates – GONE!
• You won’t get paid you (sic) site allowance on major projects, which range from $2.65 per hour to $5.75 per hour.
• Major Projects Allowance – GONE!
• Income protection – GONE!
• Time on time payment for working in inclement weather – GONE!
• Double time payment for all overtime – Gone! 36 Hour Week – GONE!
THIS IS JUST A FEW OF YOUR CONDITIONS!
So if Armor Traffic asks you to agree and vote to terminate the current Enterprise.
VOTE NO and tell them you want to be represented by the AWU!
STOP THE RORT
STOP THE WAGE THEFT – VOTE NO TO THE TERMINATION OF THE AGREEMENT!
The AWU will fight this however we need your support. Now is the time to join the AWU. If you have worked on projects of $10 million and you think you have not been paid correctly contact and join the AWU. You may be eligible for backpay.
Note: All enterprise agreements are available for you to read at original)
[25] Noting that the voting started 3.5 hours earlier than scheduled and an unknown number of employees voted from around 3:00 pm, it is apparent that only some of the employees would have been offered these flyers, as a number had voted before the AWU arrived.
The employees covered by the Agreement
[26] The coverage term in the Agreement provides as follows:
“3. PARTIES BOUND
3.1. This Agreement covers each of the following:
• Armor Safety PTY LTD (the company).
• The Australian Workers Union (AWU) (the “Union”); and
• All persons employed by the Company who are engaged in classifications prescribed in this Agreement on the Project, and within the scope set out in clause 5 of the Agreement (the “Employees”).”
[27] Clause 5 provides as follows:
“5. APPLICATION/SCOPE
5.1. This Agreement shall apply to work performed by Employees of the Company who are engaged in the classifications set out in Appendix A of this Agreement in the State of Victoria on Projects with a Value over $10 Million.
5.2. The works on a Project that fall within the scope of this Agreement include the construction of roadworks, earthworks, bridges, structures, service relocations, associated buildings, urban design and structures, and traffic management.
5.3. The Building and Construction General On-site Award 2010 is wholly incorporated into this Agreement. Unless otherwise provided, an Award provision shall not apply where the subject matter of the provision is dealt with in this Agreement. This Agreement shall prevail over the Award to the extent that there is any inconsistency.”
[28] The Form F24 declaration lodged with the application states that there are 43 employees covered by the Agreement, and that all of those 43 employees are casual employees. A similar number of casual employees (41 employees) were said to be covered by the Agreement when the Agreement was made. 20 However, as set out earlier, Ms McFadden’s evidence was that only 29 employees were considered eligible to participate in the vote. Her evidence was:
“We concluded that employees who had worked two weeks prior to the vote on a $10 million dollar project would be eligible.
Using Traff.io, the Company’s booking system, we were able to work out who had worked at the DecMil project which was the only $10 million dollar project we had at the time.
I counted a total of 43 employees who were in the Traff.io booking system however, some of those employees had not yet been rostered on for a shift and were not considered eligible to participate in the vote.
Based on that assessment, we concluded that 29 employees were eligible to participate in the vote in this process.” 21
[29] However, Ms McFadden’s evidence on the point changed somewhat in her supplementary statement to the following:
“Ms Erin Ellul (Operations Manager) and I conducted an assessment as to which employees would be eligible to participate in a secret ballot on whether they supported termination of the enterprise agreement, We used the Traff.io booking system to make this assessment. We reviewed the Traff.io booking system and identified which employees had worked on the ten million dollar projects for two weeks leading up to the vote and I made an assessment as to who would most likely be working on the worksite 1 week after the vote.” 22
[30] From this, it can be seen that the evidence as to the criteria applied to determine which employees were eligible to vote changed to include the additional assessment as to who was “most likely” to be working on the worksite 1 week after the vote. There was no information as to how that forecast was made. However, during the hearing, Ms McFadden stated that she estimated that the same 29 employees would likely be working the next week. 23
[31] When asked why a two-week period was chosen to determine eligibility to vote, Ms McFadden’s evidence was:
“Because that’s what I was told.
Who told you that? -So, my Operations Manager at the time, Erin Ellul. We had just done some research; we contacted our lawyer and we were advised that anyone within two weeks had the right to vote. Honestly, they were the only ones that were working at the time.” 24
[32] Ms McFadden also gave the following evidence:
“Would it be correct to say that many of the employees who did not vote, based on your earlier evidence, may have been covered by the agreement at some stage? -That’s not for me to say, unfortunately.
It’s not for you to say, or you don’t know? -Like I don’t - I’m office manager; I don’t know the value of every project, so I couldn’t tell you. If it was based on six months, then yes, they probably could have had a vote.
So, you don’t know the value of every project? -No, that was my Operations Manager at the time. So, Erin Ellul knew everything.” 25
[33] As to the value of the projects that the company was engaged on, Ms McFadden’s evidence at the hearing was that there was one only project, the DecMil project, that had a project value in excess of $10 million. 26
[34] However, in the further supplementary witness statement of Ms McFadden, she revealed that there were in fact two projects that were in excess of $10 milllion, being both the DecMil and the Balmain & Co: 250 Gore projects. 27 The number of employees who “received the email on 30 September 2020” in the further statement was now 28 and not 29 employees.28 I note that Ms McFadden previously made clear that an employee had indicated that they did not receive the email, however it was subsequently discovered in their junk mail folder. Ms McFadden also stated that she “received a few more texts from employees advising that they had not received a copy of the email”, so she sent a follow up message to employees “to confirm that employees should have received the email”.29 There was no further indication that any of the 29 employees considered eligible to participate in the vote did not receive the 30 September 2020 email. Therefore, it appears that the reference to “28” is an error and should read “29”.
[35] There was further evidence given by Ms McFadden as to the manner in which casual employees are engaged:
“Would it be correct to say that your company provides traffic control to a variety of projects? They could be major over $10 million, they could be minor or council projects, would that be fair to say? -Yes, it would.
And of those 40, they could alternate between various projects? They could be doing a council job this afternoon and on a $10 million tomorrow. Is that correct? -Correct.
So, there is complete movement between projects? You don’t just have people who work on major and then minor; you have complete movement. Is that correct? -Somewhat, yes.” 30
[36] In this matter, the Agreement provides at clause 16 as set out earlier that employees be engaged on written contracts of employment. I asked Ms McFadden about the manner of engagement of casual employees during the hearing. Her evidence was as follows:
“So, all of the employees that are relevant for these proceedings are described by you as casual employees? -Correct, yes.
Can you tell me about the nature of the way they’re engaged? Are they told either in writing or some other way when they’re engaged, that they are - well, you tell me the basis upon which they are engaged. What are they told as to the nature of the working relationship with your company? -So, we, whenever we hire someone, we let them know that they’ll be on a casual rate. Depending on their experience level, it would rate from TC1, so traffic controller one, through to three. They all know that they’re casual. It’s written in the contract that they will be casual; that’s their casual rate. They know, you know, that one day they might have a shift, the next day they won’t. So, yes.
They’re told that they have no guarantee or ongoing employment? -Correct.
In that sense, is each engagement from the company’s perspective, on each day, a separate and discrete engagement? -Yes, depending on how they treat a client, anything can kind of change with this industry, unfortunately. There’s nothing kind of set in stone.
Yes. All right. And you set out those terms to the employees in writing, do you? -Yes.” 31
Consideration
[37] The relevant legislation was set out earlier. Before requesting the employees covered by the Agreement to approve the proposed termination of the Agreement, the employer must take all reasonable steps to notify the employees of the following:
(i) the time and place at which the vote will occur;
(ii) the voting method that will be used.
[38] It is apparent on the evidence that employees were notified by email on 30 September 2020 as to the time and place of the vote, and that the method would be by secret ballot. However, the time of the vote changed, and was brought forward by some 3 hours. However, it is not apparent that had a significant effect in itself on the ability of the employees invited to vote. In fact, it allowed those employees who could not attend later in the day to have the opportunity to vote. Having considered the evidence, I am satisfied that the Applicant took all reasonable steps to advise employees it had determined were covered by the Agreement of the time and place at which the vote will occur and the voting method that will be used.
[39] However, there is a question as to which employees were in fact covered by the Agreement and whether some employees voted who were not in fact covered, or in the alternative, some employees who were covered were not afforded the opportunity to vote.
[40] The reference to “the employees” in s.220(2)(a) of the Act could only mean as a matter of statutory construction, the employees covered by the Agreement. It follows that in circumstances where employees were entitled to vote for the Agreement and were not notified, it would be unlikely that the Commission could reach a state of satisfaction that all reasonable steps had been taken to advise of the time and place the vote will occur and the voting method used. Whether the subset of the employees selected were the employees covered by the Agreement is dealt with in more detail below.
[41] Notably, 3 of the 29 employees invited to vote indicated they were unable to attend the vote. The Applicant’s submissions assert that those 3 employees “chose” not to attend the vote. 32 That is not the evidence. The evidence of Ms McFadden is that they advised they were “unable” to attend.33
[42] This failure to consider the position of the 3 employees who advised they could not attend at the nominated time can be contrasted with the efforts made to bring forward the vote to accommodate the availability of some other employees. It is not apparent why the effort was made for some and not for others. This is a factor I will consider as part of the consideration as to whether employees were given a reasonable opportunity to decide whether they want to approve the proposed termination.
The number of employees covered by the Agreement
[43] Section 220(1) of the Act sets out that the employees that can be requested to approve a proposed termination are those employees “covered by an enterprise agreement”.
[44] The language used in this section can be contrasted with the language used in s.181(1), which sets out that the employees that can be requested to approve an agreement are “the employees employed at the time who will be covered by the agreement” (emphasis added).
[45] As s.220(1) does not include the words “at the time”, decisions of the Commission and the Federal Court which have considered the meaning of s.186(1) are of assistance in interpreting the provision, but the absence of the words “at the time” provides some limitation to the assistance those decisions provide. 34
[46] For an employee to be covered, they must of course actually be an employee of the Applicant. Section 170 sets out the meaning of employee for the purposes of Part 2 – 4 of the Act, which contains s.219:
“170 Meanings of employee and employer
In this Part, employee means a national system employee, and employer means a national system employer.
Note: See also Division 2 of Part 6-4A (TCF contract outworkers taken to be employees in certain circumstances).”
[47] Section 13 of the Act sets out the meaning of national system employee:
“113 Meaning of national system employee
A national system employee is an individual so far as he or she is employed, or usually employed, as described in the definition of national system employer in section 14, by a national system employer, except on a vocational placement.
Note: Sections 30C and 30M extend the meaning of national system employee in relation to a referring State.”
[48] In this case, all of the employees are casuals and are employed according to clause 16 of the Agreement on “an occasional basis”:
“16.1. A casual Employee is an Employee employed on an occasional basis and whose work pattern is not regular and systematic. When a person is engaged for casual employment they will be informed in writing that they are to be employed as a casual, the job to be performed, the classification level and their pay rate.”
[49] The representative for the Applicant referred me to the leading judgement of Jessup J in National Tertiary Education Union v Swinburne University of Technology as providing the best guide to what is mean by “usually employed”. However, the passage that I was referred to by the Applicant was not part of the decision of Jessup J but in fact can be found in the decision of Pagone J. Nevertheless, I agree that the observations of Pagone J on the point are relevant:
“A workplace may depend upon a more or less regular pool of persons who are regularly drawn from for sessional or casual employment. A person may fall within the statutory description of being usually employed if that person is part of a pool of persons regularly drawn from for employment by an employer. Whether or not a person comes within the statutory criterion depends upon the facts and the basis upon which the statutory criterion is applied to the facts.” 35
[50] Much of the decision of Pagone J, as with the leading judgement of Jessup J is concerned with the interpretation of the words in the provision under consideration in that matter, being s.181(1) which includes the words “at the time”. His Honour Jessup J found in the leading judgement that the employees: “…to whom a request under s 181(1) should be addressed are confined, in my view, to those who are employed at that time. No other conclusion makes sense of the statutory scheme.” 36
[51] This confinement of the group of employees to those employed at the time is not included in the text of s.220(1). It follows that a person will fall, following the observation of Pagone J, within the description of being usually employed if the person is part of a pool of persons regularly drawn from for employment by an employer.
Applying the statutory criteria to the facts in this matter
[52] The factual background pertaining to the engagement of casual employees was set out earlier. In summary, it is that casual employees are engaged as needed and each engagement is a separate and distinct engagement. It is also the case that casual employees move between projects, sometimes working on a project worth more than $10 million and other times not. Ms McFadden agreed “somewhat” with the proposition that employees had complete movement between projects. 37
[53] Having regard to that factual background, whether a person is “usually employed” on a project exceeding the value of $10 million and therefore covered by the Agreement is admittedly a vexed question, but a question that must be answered. The Applicant has answered the question by determining that if a person is employed even on one occasion in the two weeks prior to the vote, it is sufficient to establish that they are “usually employed”. However, evidence that a person has been employed on only one or even two occasions in a single two-week period is not sufficient in my view to establish that they have been regularly drawn from the pool of employees.
[54] There was no particular explanation forthcoming from the Applicant as to why the criterion of being employed at all, even on one occasion, in the two weeks prior to the vote was an appropriate basis to determine that an employee was regularly employed. My concern about the limitation of selecting only those employees employed in the two-week period prior to the vote is that it potentially excludes employees who, when a longer period of time is examined, say 3 months, may well have been regularly drawn from the pool of casual employees, just not employed during that particular two-week period. For example, it would in my view be appropriate to include an employee who had been engaged 2 or 3 times a week over the 3-month period leading up to the time of the vote but was not engaged at all in the two weeks prior to the vote as they had indicated, for example, that they were unwell and not available to work at that time. It could reasonably be anticipated that such a person would be employed again upon recovering. Such a person would objectively be considered to be usually employed and therefore would be covered by the Agreement and entitled to vote. However, given the arbitrary nature of the criteria adopted by the Applicant, they would not have been in the subset of employees offered the opportunity to vote.
[55] It may well be that a more extensive interrogation of any available data as to the regularity of employment of the employees over a longer period of time would assist in establishing a more objective basis of determining which employees are covered by the Agreement. However, there is not enough information in order for me to be satisfied that the cohort of employees that were selected by the Applicant as covered by the Agreement is, objectively, the subset of employees that are covered by the Agreement.
[56] Of course, that situation could be remedied by seeking further data as to the actual levels of employment of employees over a longer period than two weeks. However, that is not necessary in the circumstances as the application for termination of the Agreement is not able to be approved for the reasons set out below.
Were employees given a reasonable opportunity to decide?
[57] The terms of s.220(2)(b) were set out earlier. What will constitute a reasonable opportunity for employees to decide if they want to approve the termination of the Agreement should be considered objectively against the particular facts and circumstances of the application.
[58] The Explanatory Memorandum to theFair Work Bill at item 932 provides some guidance on the meaning of a reasonable opportunity to decide:
“This may, for example, involve the employer allowing employees sufficient time between making the request and the time of the vote to consider the effect of the termination on their terms and conditions.”
[59] It may be that the approach taken by an employer which could be objectively considered a reasonable opportunity in the circumstances of one matter, would not be considered a reasonable opportunity in another. For example, the provision of only a cursory explanation of the effect of the termination and a short period of time between making the request and the time of the vote may well constitute a reasonable opportunity in circumstances where there is very little difference between the conditions in the agreement that is sought to be terminated and the relevant award. Other factors such as evidence as to the level of understanding of the employees considering the change may be relevant.
[60] As set out earlier, it appears clear on the evidence that the Applicant has not been abiding by the terms of the Agreement. The evidence of Mr Weissmann on this point was not challenged. Further, Ms McFadden conceded that the company had not applied the terms and conditions of the Agreement, at least to the DecMil job. 38 This is a relevant consideration when considering the information provided to employees as to the effect on their terms and conditions of employment if the termination was agreed to.
[61] In this case, employees were told in the 30 September email that “Moving forward, you would be covered under the attached award you will remain on your current rates, with travel and meal allowances paid”. This could be read to mean that the rates of pay would not be reduced from the rates they were currently actually being paid, because the evidence is that those rates of pay are not the rates of pay to which they are entitled under the Agreement. If this is correct, it is ambiguous and confusing information because it simply ignores that the rate which they are entitled to be paid will be reduced to the award rate. Alternatively, it is misleading, as it is apparent that the rates of pay to which employees are entitled will be reduced if the Agreement is terminated.
[62] There is a further concern I have about the 30 September email, which was also reflected in the 30 September message. Both sets of correspondence characterised the vote to terminate the Agreement as simply a rectification of an incorrect earlier attempt to terminate the Agreement by the previous management. My concern is that this suggests to the employees that the vote to terminate the Agreement is little more than an administrative necessity. Combined with the subsequent text which infers there is no effective change to the rates of pay, it downplays and does not accurately reflect the actual effect that terminating the Agreement would have on employees.
[63] In short, the 30 September email is at best ambiguous and confusing. To the extent that it provides a false assurance that employees’ rates of pay to which they were entitled would be maintained, it is misleading. A reasonable opportunity for the employees to decide should include providing accurate, rather than ambiguous, confusing or misleading information.
[64] Further, there was no information provided to employees by the employer that explained with any clarity the effect that the termination of the Agreement would have on them. It is apparent they were provided with links to the Agreement and the relevant award and could access hard copies of the same if they wished.
[65] In circumstances where the effect of a termination of an Agreement was relatively minor, and the workforce had a high level of understanding of the terms and conditions of their employment, this may be sufficient to meet the test of reasonableness. However, the changes to the terms and conditions if the Agreement is terminated are significant, and the employees covered are traffic controllers who are unlikely to have a high level of understanding of the impact of the changes. Having regard to that context, part of providing a reasonable opportunity would have been to provide a clear explanation of the quantum and nature of the reductions in entitlements that will occur if the Agreement is terminated. There was no such explanation provided by the employer.
[66] The only additional explanation provided by the employer as to the effect of the termination of the Agreement was the whiteboard that was on display, at least for a part of the time the voting process was underway. As noted earlier, as the whiteboard was erected after the vote commenced, a number of employees voted without seeing the whiteboard. In any case, there are two key concerns as to the information on the whiteboard. Firstly, I note that the Applicant submitted that the whiteboard showed what a termination “…would mean for workers’ pay rates.” 39 That submission is at odds with the facts. The whiteboard only mentions pay rates in respect to its plans for payment of “backpay” presumably associated with the Applicant’s previous failure to comply with the terms of the Agreement. Nor does the whiteboard provide any information about the nature of the other reductions in entitlements.
[67] Secondly, most of the text is directed at communicating that a “yes” vote will ensure that current major projects will continue, “upcoming” major projects will commence, the company will stay competitive, and shifts will “return to normal”. The text under “If you vote no” advises that current major projects will discontinue, the company may go into liquidation, the company will not be competitive, and the company would cease bidding for projects. In respect to backpay, the whiteboard text is clear that backpay will be organised regardless of the vote. However, under the “If you vote no” column, it is made clear that backpay (because of the forecast loss of major projects) may result in liquidation of the company.
[68] Ms McFadden was questioned about this claim during the hearing. It emerged during the cross examination of Ms McFadden that she was the Office Manager, that she didn’t know the value of every project, that she was unaware the Agreement was actually in place, that she “[doesn’t] understand how it all works” as she comes from retail, and that one would need to speak to the Operations Manager to understand all that. Ms McFadden also gave evidence that “we generally do council work”. 40
[69] When questioned on the veracity of the claim made on the whiteboard that the company may go into liquidation if there was a “no” vote, her evidence was as follows:
“If I can refer to the no column, what do you mean if you vote no the company may go into liquidation? -You mean that the current projects that we’re on would stop and we would not have jobs to continue going.
Is that all jobs? Why would all jobs stop? -Not all jobs, no. We’re talking about the major projects, because at the time that was what we were working on; what we were doing.
You said earlier that you had one project of $10 million or more, and that was the DecMil job? -Which was DecMil, yes.
So, all projects wouldn’t stop, because the agreement doesn’t apply to the small jobs or the Council jobs, does it? -No, projects. Notice we said projects would stop.
Yes, but the company may go into liquidation? -Yes, because you can’t sustain a company on small jobs. The big job was what was giving the staff hours. It’s a casual industry; they needed hours to survive.” 41
[70] The claim that the company may go into liquidation if there is a “no” vote is not consistent with the evidence that generally the company does council work. Of course, it is entirely possible for any company to go into liquidation for a range of reasons so it is not misleading to suggest that the company may go into liquidation. Many things “may” happen. But the whiteboard suggests that the requirement to pay backpay combined with the loss of major projects may result in liquidation. The evidence for this claim is tenuous at best, given the admittedly vague evidence of Ms McFadden that the company generally does “council work”.
[71] The Applicant submits that there was additional information supplied via the presence of the AWU on the day of the vote:
“Additionally, the AWU arrived onsite on the day of the vote and was handing out fliers (sic) to employees as they entered the voting room. The fliers (sic) specified that pay rates would decrease if employees voted in support of terminating the agreement.” 42
[72] It is apparent from this submission that the Applicant relies on the AWU flyers as a part of the communications to employees. I agree that communication from the AWU is relevant to a finding as to whether there was a reasonable opportunity.
[73] The AWU flyers spell out in clear, though somewhat vitriolic terms, the effect of a “yes” vote. However, the AWU did not arrive at the place the vote was being conducted until well after the vote had started. Those employees who voted before 5:00 – 5:30 pm would not have seen the AWU material before casting their vote. Further, it is not known how many employees chose to take the AWU flyer. While the AWU information does set out the information that the Applicant failed to provide employees as to the effect the termination would have, the rather random and uncertain access to the information from the AWU means that it is not at all clear how many employees who voted had access to it before they cast a vote.
[74] Finally, there is the position of the 3 employees who indicated that they were unable to attend the vote at the time stipulated. The evidence is that they could not attend and yet there was no attempt made to accommodate their attendance. In the circumstances, in respect of those 3 employees, it could not be said that they were given a reasonable opportunity to decide whether they wanted to terminate the Agreement.
[75] Having considered the evidence, it is apparent that employees were provided ambiguous, confusing and likely misleading information as to the effect of the termination of the Agreement on their pay rates. The only other information they were provided with by the Applicant, the whiteboard information, did not provide any indication as to the effect the termination of the Agreement would have on the terms and conditions of their employment. The only information on the effect of the termination was provided by the AWU to some, but not all employees. The characterisation of the vote in the first instance as only being necessary to rectify a previous error downplayed its effects on employees. Finally, it is apparent that 3 employees had no opportunity to vote at all. Having regard to all of the circumstances, I am not satisfied that the employer gave employees a reasonable opportunity to decide whether to terminate the Agreement as contemplated in s.220(2)(b).
[76] As I am not satisfied that the employer covered by the Agreement complied with s.220(2), I am not satisfied the requirement of s.223(a) has been met. Therefore, I cannot approve the application to terminate the Agreement. In the circumstances it is not necessary to determine the matters relevant to ss.223(b), (c) and (d).
[77] The application is dismissed.
COMMISSIONER
Appearances:
S Eichenbaum for Armor Safety Pty Ltd.
C Winter for The Australian Workers’ Union.
Hearing details:
2021.
Melbourne (by video via Microsoft Teams):
April 9.
Printed by authority of the Commonwealth Government Printer
<PR732068>
1 [2019] FWCA 6468.
2 [2019] FWCFB 7599; [2019] FWCFB 7891.
3 Witness Statement of James Weissmann dated 29 October 2020 at [8].
4 Witness Statement of Jessica McFadden dated 18 November 2020 at Exhibit JM-1.
5 Ibid.
6 Ibid at [19].
7 Ibid at Exhibit JM-2.
8 Ibid at [10].
9 Ibid at Exhibit JM-3.
10 Ibid at [12].
11 Ibid at [13].
12 Ibid at [14].
13 Ibid at [16].
14 Ibid at [17].
15 Ibid at Exhibit JM-2.
16 Ibid at [15].
17 Transcript at PN100.
18 Transcript at PN97.
19 Witness Statement of Jessica McFadden dated 18 November 2020 at Exhibit JM-4.
20 Form F17 – Employer’s statutory declaration in support of an application for approval of an enterprise agreement (other than a greenfields agreement), Question 4.3.
21 Witness Statement of Jessica McFadden dated 18 November 2020 at [3] – [6].
22 Supplementary Witness Statement of Jessica McFadden dated 2 March 2021 at [1].
23 Transcript at PN64.
24 Transcript at PN71 – PN72.
25 Transcript at PN73 – PN75.
26 Transcript at PN125.
27 Further Supplementary Witness Statement of Jessica McFadden dated 23 April 2021 at [2].
28 Ibid at [1].
29 Witness Statement of Jessica McFadden dated 18 November 2020 at [10] – [11].
30 Transcript at PN68 – PN70.
31 Transcript at PN135 – PN139.
32 Applicant’s Amended Outline of Submissions dated 2 March 2021 at [15].
33 Witness Statement of Jessica McFadden dated 18 November 2020 at [17].
34 National Tertiary Education Union v Swinburne University of Technology [2015] FCAFC 98; Construction, Forestry, Maritime, Mining and Energy Union v Noorton Pty Ltd T/A Manly Fast Ferry [2018] FWCFB 7224.
35 National Tertiary Education Union v Swinburne University of Technology [2015] FCAFC 98 at [34].
36 Ibid at [24].
37 Transcript at PN70.
38 Transcript at PN79 – PN78.
39 Applicant’s Amended Outline of Submissions dated 2 March 2021 at [21].
40 Transcript at PN74 – PN80.
41 Transcript at PN123 – PN127.
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