Ausdrill Pty Ltd
[2021] FWC 6348
•16 NOVEMBER 2021
| [2021] FWC 6348 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Ausdrill Pty Ltd
(AG2021/6853)
DEPUTY PRESIDENT MASSON | MELBOURNE, 16 NOVEMBER 2021 |
Application for approval of the Ausdrill Pty Ltd Black Coal Agreement 2020.
Introduction
[1] An application has been made for approval of the Ausdrill Pty Ltd Black Coal Agreement 2020 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Ausdrill Pty Ltd (Ausdrill). The Agreement is a single enterprise agreement.
[2] A notice of employee representational rights was provided to employees on 13 October 2020 and the notice complied with the regulations. Employees were provided with notice of the time and place and method of voting on 3 August 2021 and were provided with access to the proposed Agreement and information about the effects of the terms of the Agreement in the period from 4-11 August 2021. Voting occurred in the period 12-13 August 2021 and a majority of those who voted approved the Agreement.
[3] Ausdrill filed a statutory declaration in support of the Agreement. The statutory declaration, which was declared by Ausdrill’s HR Manager Mr Tony Flynn, noted that the relevant award for the purpose of the better off overall test (BOOT) was the Black Coal Mining Industry Award 2010 1 (the Award).
[4] In reviewing the Agreement for approval, the Fair Work Commission (the Commission) identified a number of concerns in relation to the Agreement and supporting documentation. Those concerns included pre-approval requirements, National Employment Standards (NES) compliance and BOOT assessment considerations. The Commission wrote to Ausdrill on 2 September 2021 and identified the following issues requiring its response:
(1) The Form F17 identified the Construction, Forestry, Mining, Maritime and Energy Union (CFMMEU) as a bargaining representative however, a Form F18 had not been filed.
(2) Copies of emails sent to employees advising them of the ballot details and providing the Agreement and explanatory information were referred to in the F17 but were not provided. Copies of the relevant emails were sought.
(3) National Employment Standard (NES) inconsistencies were identified in respect of compassionate leave and community service leave. Ausdrill was advised that the NES precedence clause at clause 4.3 of the Agreement remedied those deficiencies and would be noted in the decision if the Agreement was approved.
(4) A number of BOOT concerns were identified on which submissions and/or undertakings were sought. The issues raised related to;
a. test time rates of pay;
b. composite rates and reconciliation provisions;
c. overtime provisions;
d. casual employee penalty rates;
e. part-time employment provisions which lacked the protections found within the Award;
f. overtime minimum engagement periods; and
g. Award allowances omitted from the Agreement.
[5] On 7 August 2021 the CFMMEU filed a form F18 in which it objected to approval of the Agreement and set out detailed reasons for its objections. The concerns raised can be summarised as follows;
(1) Clause 6.16 of the Agreement which deals with abandonment of employment contravenes s.55 of the Act.
(2) Ausdrill failed to take all reasonable steps to explain the Agreement in that it;
a. failed to provide an overarching explanation of the various documents provided to employees;
b. failed to support the large volume of explanatory materials with verbal communication; and
c. failed to provide an explanation of the Brandrill Agreement comparative material and which employees that was relevant to.
(3) The Award versus Agreement comparison document was inaccurate and/or misleading in a significant number of respects including with respect to;
a. ordinary hours of work beyond which penalty payments apply;
b. classification structure definitions;
c. personal leave entitlements of fixed or maximum term employees;
d. apprentice classifications and entitlements;
e. inclusion of ‘General Duties’ (clause 6.4 of Agreement) said to be not less beneficial relative to the Award;
f. notice of termination provisions;
g. overtime and shift penalty provisions;
h. shiftwork loadings; and
i. meal breaks.
(4) The explanation of the Agreement terms versus the Brandrill Agreement, which applied to certain employees as a transferrable instrument, was said to be inaccurate and/or misleading including with respect to the;
a. NES Precedence clause;
b. shift definitions;
c. above Agreement entitlements;
d. prohibition on obtaining other employment;
e. overtime provisions;
f. personal leave; and
g. the statement that employees moving from coverage by the Brandrill Agreement to coverage by the proposed Agreement would not be disadvantaged.
(5) The Agreement failed to satisfy the BOOT in a significant number of respects including with respect to the;
a. composite hourly rate;
b. classification structure and supporting provisions;
c. base hourly rates and loadings;
d. pro-rata personal leave entitlements of fixed and maximum term employees;
e. apprentice rates and entitlements;
f. prohibition on obtaining other employment;
g. overtime penalty rates;
h. casual rates not compounding with other penalty rates;
i. part-time employees;
j. stand-down provision; and
k. notice of resignation.
[6] Having regard to the matters raised by both the Commission and the CFMMEU, the matter was listed for Mention on 10 September 2021 following which directions were issued for the filing of material by both parties in advance of a hearing listed for 13 October 2021.
Background and evidence
[7] Ausdrill is part of the Perenti Group, an ASX200 diversified global mining services group with businesses in surface mining, underground mining and mining support services. Ausdrill provides a range of drillings services including in production drill and blast, exploration and geotechnical in both metalliferous and black coal mining.
[8] Clause 2.1(b) of the Agreement states that it will apply to the following employees engaged by Ausdrill;
“(b) employees of the Company engaged in drilling and blasting, exploration and associated maintenance roles in surface operations in the black coal mining industry in the classifications set out in clause 8.8 of this Agreement (Employees).”
[9] At the time of the ballot for approval of the Agreement Ausdrill engaged employees at the following black coal operations where it held contracts;
• BMA Coal;
• Ensham;
• Middlemount;
• Blair Athol; and
• Boggabri.
[10] On 23 October 2020 a notice of employee representational rights was issued by the then HR Manager for Ausdrill Ms Maria Cutt 2.
[11] Between 26-29 October 2020 seven on-site one hour bargaining meetings were held with employees across the BMA, Middlemount, Ensham and Blair Athol sites and were chaired remotely by Ms Cutt on Microsoft Teams (due to Covid restrictions) with the relevant Ausdrill Project Manager and employees at site. The sessions were structured so as to enable attendance of all employees to at least one meeting. Employees who were unable to attend a meeting were subsequently contacted by Ms Cutt 3. The then draft agreement was used as the basis for discussions in those meetings. A number of changes were made to the draft agreement arising out of feedback from the meetings4.
[12] On 18 November 2021 the 7-day access period prior to an agreement approval ballot commenced. Employees were provided with an information pack which included a copy of the proposed agreement (the November 2020 Agreement) and other explanatory documents. Included in the information pack was a PowerPoint presentation 5 (the November 2020 Presentation) that summarised the changes from an earlier (October 2020) draft agreement.
[13] On 27 November 2020 a ballot was conducted for approval of the November 2020 Agreement but was unsuccessful 6. Employees who were eligible to participate in the ballot were those employees who at the time, were employed at the BMA, Middlemount, Ensham and Blair Athol sites and numbered approximately 40.
[14] During December 2020 the Respondent mobilised employees for a new production drill and blast contract that it had secured at Boggabri. The number of employees required was approximately 20 7.
[15] On 15 May 2021, Mr Flynn who commenced as the Respondent’s new HR Manager on 24 March 2021, sent an email 8 to employees advising them that the Respondent wished to resume bargaining. The proposed recommencement of bargaining followed a bargaining pause during which period there were some informal discussions with various employees9. One of the reasons for the hiatus in bargaining was that of the ‘kick-off’ of the Boggabri contract in December 2020, which management wanted to see settle in after its commencement before recommencing bargaining10. The starting point for the resumed bargaining was the rejected November 2020 Agreement11.
[16] On 21 May 2021 Mr Flynn received an email from the CFMMEU advising that they wished to be involved in bargaining as they were the default bargaining representative for those employees that were members and who had not nominated any other bargaining representative. It is noted that no other bargaining representatives had been nominated by employees following the NERR distribution 12. Mr Flynn responded to the CFMMEU email on 24 May 2021 and then exchanged various emails with the CFMMEU between then and 1 June 2021 which led to a meeting being arranged for 3 June 2021 between Ausdrill and the CFMMEU.
[17] Between 24-28 May 2021 Mr Flynn and Ausdrill’s General Manager of Exploration Mr Eric Gobbert travelled to site and held five bargaining sessions with employees located at the Boggabri and BMA sites. The Boggabri meeting was held as part of the normal one hour pre-start meeting while the BMA meetings were held as separate meetings 13. A PowerPoint presentation14 (April 2021 Presentation) was used to facilitate the meetings during which employees were;
• provided with an outline of key terms of the proposed agreement;
• provided an opportunity to discuss various terms;
• taken through the proposed agreement and given an opportunity to ask questions and provide feedback; and
• were advised that any questions or concerns raised during bargaining sessions would be considered and responded to. 15
[18] Mr Flynn was asked questions during cross examination in relation to the April 2021 Presentation which was used during the May 2021 bargaining meetings with employees. In response to various questions Mr Flynn stated that;
• In respect of the explanation on the Composite Rate (Clause 8.5 & 8.6 of the Agreement) slide 16, he was unsure whether employees were told that there was a distinction between those employees on a Composite Rate who would receive a 1.5% increase on commencement of the Agreement and those who were not on Composite Rates and would not receive that increase17.
• In respect of the explanation on the Exploration Payment (Clause 11.1-11.3 of Agreement) slide 18, he confirmed that it was only employees engaged in exploration drilling that would be entitled to these payments, those being approximately 40 employees engaged at the Ensham, Middlemount, BMA and Blair Athol sites which were exploration contracts. Apprentices, tradespeople and employees at the Boggabrri site (which was a drill and blast production contract) would not receive payments under clauses 11.1-11.319.
• In respect of the explanation on the Annual Leave (clause 17.1-17.5 in the Agreement) slide 20 which states that Ausdrill has provided “One week’s additional leave”, he was unable to clarify which employees were “Eligible site employees”, where that term appears at clause 17.5, that would be entitled to the additional week of annual leave21.
• In respect of the explanation on the Annual Leave slide that employees would receive an increased leave loading at 20%, he conceded that the Award in fact provided for a 20% leave loading 22.
[19] On 25, 26 & 27 May 2021 Ausdrill’s Project Manager Mr Keith Pollard conducted bargaining sessions with employees at the remaining sites, Ensham, Middlemount and Blair Athol. Mr Flynn spoke with Mr Pollard prior to these meetings to discuss how the bargaining sessions were to be held. Mr Pollard was also provided with a copy of the April 2021 Presentation and guidance materials which briefly set out the terms of the proposed agreement 23. While lists of attending employees were kept of these meetings and provided to Mr Flynn, no minutes of the meeting were provided24.
[20] On 3 June 2021 Mr Flynn and the Boggabri Project Manager Mr Greg Kitchen met via Microsoft Teams with CFMMEU representatives Mr Jeff Drayton and Mr Keenan Endacott along with two employees of Ausdrill who were CFMMEU members. During the meeting a number of concerns were raised by Messrs Drayton and Endacott regarding the terms of the draft agreement. At the conclusion of the meeting Mr Flynn requested that the CFMMEU set out their concerns in writing 25.
[21] On 9 June 2021 Mr Drayton sent an email to Mr Flynn setting out some fifteen concerns held by the CFMMEU regarding the draft agreement. After considering the matters raised by the CFMMEU Mr Flynn responded on 22 June 2021 26.
[22] Between 23 June and 22 July 2021 Ausdrill management considered feedback received from employees during and following the May 2021 bargaining sessions. In doing so, management continued to engage with employees regarding the agreement terms and agreed to make a number of further changes to clauses in the draft agreement 27.
[23] On 23 July 2021 Mr Flynn sent a revised draft agreement to employees at their personal email addresses which included changes made as a result of negotiations. In doing so, Mr Flynn requested that employees provide any further feedback to their respective Project Managers by no later than 30 July 2021. Feedback was subsequently received from employees including that there was no reference to “metre bore drilling” in the metre bonus structure. This feedback led to the draft agreement being amended to include such reference 28.
[24] On or around 2 August 2021 Mr Flynn contacted Ausdrill’s Project Managers Mr Pollard, Mr Kitchen and Mr Keenan and asked them to familiarise themselves with the material in the Access Period Kit that was to be sent to employees prior to the commencement of the access period. Mr Flynn instructed and encouraged the Project Managers to hold meetings and discussions with employees throughout the access period, to draw attention of employees to the explanatory material and show employees a PowerPoint presentation with a voice over (August 2021 Presentation) that was provided as part of the Access Period Kit which summarised the key changes from the November 2020 Agreement to the proposed Agreement 29.
[25] On 3 August 2021 Mr Flynn sent an email to employees advising them that the 7-day access period prior to the ballot for approval of the Agreement would commence on 4 August 2021 (the Access Period Email) 30. Employees were also sent an email on 3 August 2021 advising them of the ballot details31. The introductory paragraphs of the Access Period Email relevantly stated as follows;
“Dear All
We confirm that tomorrow, 4th August 2021, is the commencement of the access period for the proposed Ausdrill Pty Ltd Back Coal Agreement 2020 (Agreement). The access period will operate from tomorrow, 4th August 2021, until immediately before the commencement of the voting process on 12 August 2021.
Set out below is a secure link to access relevant documentation and a video which will assist in the explanation of the proposed Agreement and how it differs from the previous version of the Agreement which was provided to employees in November last year. The link can be accessed now and is a source of information for you to consider the proposed Agreement in order to make an informed decision prior to the ballot on 12 August 2021.
……..”
[26] The Access Period Email then provided a secure link to a number of documents including the;
• Agreement;
• November 2020 Agreement that had been voted down by employees;
• Brandrill East Coast Coal Agreement 2009 (the Brandrill Agreement);
• Award;
• Award pay guide;
• Comparison of the Agreement versus the Award (Award Comparison Document);
• Comparison of the Agreement versus the Brandrill Agreement (Brandrill Agreement Comparison Document) 32;
• NES;
• Coal Mining Industry (Long Service Leave) Administration Act 1992 (Coal LSL Act);
• August 2021 Presentation; and
• Fair Work Information Statement.
[27] Inclusion of the Brandrill Agreement along with the Brandrill Agreement Comparison Document was said to be because of a transmission of business that had occurred some years previously. That transmission of business was said to have occurred in 2016 resulting in the transfer of the Brandrill Agreement to Ausdrill and which had continued to apply to employees at the BMA, Ensham, Middlemount and Blair Athol sites. When pressed during cross-examination on the detail of that transfer of business Mr Flynn was unable to confirm the circumstances that led to the asserted transfer of business and when that transfer of business had occurred. Mr Flynn was also unable to confirm which Ausdrill employees were covered by the Brandrill Agreement at the Ensham, Middlemount, Blair Athol and BMA sites although he was clear in his evidence that it did not apply to any employees at the Boggabri site 33.
[28] The Brandrill Agreement Comparison Document 34, which was included as part of the Access Period Kit, is 75 pages in length. It is laid out in a table form with each clause of the Brandrill Agreement set out in the first column with the comparable clause of the Agreement in the adjacent column with comments provided in the third column explaining the Agreement clauses relative to the comparable Brandrill Agreement clause. The Award Comparison Document35 is in a similar table format and runs to some 90 pages in length with each clause of the Award set out in the first column with the comparable Agreement clause adjacent in the second column and in the third column some commentary on relevant differences between the two are provided.
[29] The August 2021 Presentation 36, which was sent out in the Access Period Kit, set out differences between the Agreement and the November 2020 Agreement.
[30] Between 4-11 August 2021, pre-start toolbox meetings and discussions were held by Project Managers with employees at each of the sites.
[31] On 6 August 2021 Mr Flynn received an email from one employee stating among other things that employees were not able to access a lot of the information that had been sent out in the Access Period Email. Mr Flynn responded to the employee on 9 August 2021 37.
[32] The ballot for approval of the Agreement was conducted on 12-13 August 2021. At the time of the ballot there were 63 employees eligible to participate in the ballot. Of that number, 60 voted and 43 voted in support of approval of the Agreement 38.
Case for CFMMEU
[33] After reviewing submissions and undertakings filed by Ausdrill in advance of the hearing on 13 October 2021the CFMMEU pressed three broad grounds of objection to approval of the Agreement, those being that the Commission could not be satisfied that;
(i) the Agreement has been genuinely agreed to, taking into account that all reasonable steps were taken to explain the terms and effect of the terms of the Agreement as required by s.180(5) and s.188(1)(a)(i) of the Act;
(ii) the Agreement has been genuinely agreed to, taking into account that there are other reasonable grounds for believing the Agreement has not been genuinely agreed to by employees: s.188(1)(c); and
(iii) the Agreement passes the BOOT: s.186(2)(d).
[34] The CFMMEU did not press its objection at the hearing in respect of clause 6.16 of the Agreement which deals with abandonment of employment and which they contended in their F18 contravenes s.55 of the Act.
Whether genuinely agreed (s.180(5) & s.188(1)(a)(i))
[35] The CFMMEU contend that Ausdrill failed to take all reasonable steps to explain the terms and effects of the terms of the Agreement as required by s.180(5) of the Act. That submission is based on the following;
• The large volume of material sent to employees via the Access Period Email appears to have been the primary step taken by Ausdrill to explain the terms of the Agreement, yet the email did not have an overarching document explaining which parts of the kit might be relevant to employees.
• While Ausdrill refer to toolbox meetings having been conducted during the access period there is no evidence of the content of those meetings, therefore it appears likely that the substantive explanation provided was in the written material provided in the Access Period Email.
• Given the large volume of written material sent to employees, the apparent lack of verbal communication as part of the explanation and the lack of a clear document being provided to assist employees navigate the large volume of material that was linked in the Access Period Email is a relevant consideration that weighs against the Commission being satisfied as to compliance with s.180(5).
• Outside of the brief summation of differences provided in the third columns of the Award Comparison Document and the Brandrill Agreement Comparison Document, there appears to have been little explanation of the differences between the Agreement and the Award and Brandrill Agreement.
• The Access Period Email fails to provide any explanation as to why two comparison documents (the Award Comparison Document and Brandrill Agreement Comparison Document) were included in the explanatory material and to which employees those respective documents were relevant.
• The material contained in the Award Comparison Document and the Brandrill Agreement Comparison Document was, as an explanation of the terms and effects of the terms of the Agreement, inadequate and misleading with respect to significant terms of the Agreement.
[36] The CFMMEU submit that the explanation of the terms and effect of the terms of the Agreement in the Award Comparison Document was misleading in the following respects;
• The ordinary hours of work provisions (clause 15 Hours of Work) are said to be ‘consistent’ with the Award but in fact do not provide for payment of penalty rates for ordinary hours of work undertaken on a weekend.
• The classification structure in the Agreement (clause 8.8) is said to be ‘consistent’ with the Award but makes significant changes to the Award including removal of definitions and conferring much greater control over the allocation of work and the work appropriately expected of an employee.
• No explanation is provided of the difference between the Award and the Agreement in respect of personal leave entitlements for fixed-term and maximum term employees which are pro-rated under the Agreement (clauses 7.1(c) & 18), this being less beneficial than the Award.
• The terms of the Award with respect to Apprentices are said to be ‘incorporated’ however contrary to this representation, the Agreement provision for Apprentices (clause 9.1) does not incorporate the Award nor provide the same entitlements.
• Employees are said not to be disadvantaged relative to the Award in respect of the general duties and prohibition on other employment (clause 6) however the Award contains no such provision.
• Employees were not provided with an accurate explanation as to the effect of the Agreement provisions regarding notice of termination, which are said to be ‘consistent’ with the NES. The Agreement requires employees to provide the same notice of termination on resignation as that required on the employer side when giving notice to an employee (clause 25). That is to be contrasted with the Award requirement, that of one week’s notice on the employee’s side and where the NES does not impose a notice obligation on employees.
• Employees are said to be entitled to the same overtime penalties as provided by the Award however this is inaccurate in respect of certain shiftworkers (clause 15) who appear only entitled to lower penalty rates.
• The shiftwork provisions in the Agreement are said to be the same as the Award however under the Agreement shift loadings are applied to the ‘base hourly rate’ (clause 15.8) whereas under the Award the penalty rates are applied in a compounding manner with respect to weekend work. The Award also provides a more expansive definition of permanent night shift.
• Employees were misled in respect of meal break entitlements (clauses 15.21 & 15.22). The Agreement provisions were said to be ‘consistent’ with the Award whereas the Agreement omits the Award entitlement to payment at overtime rates where an employee works by agreement beyond 5 hours without a meal break.
[37] The CFMMEU also submit that the explanation of the terms and effect of the terms of the Agreement in the Brandrill Agreement Comparison Document were also misleading in the following respects;
• The explanation of the coverage of the Agreement is inadequate in that it is not explained which employees are presently covered by the Brandrill Agreement.
• The explanation suggests that the Agreement goes further than the Brandrill Agreement in that it includes an NES precedence clause (clause 4.3) which infers that the absence of such a clause would leave an employee in some way unprotected, whereas s.56 of the Act protects employees without the need for an NES precedence clause.
• It is suggested that the Agreement has the same shift definitions as the Award which as set out above in [36] is contended by the CFMMEU to be inaccurate.
• The explanation of the Agreement states that it (the Agreement) “provides Employees with the potential to receive greater benefits” which infers (incorrectly) that the Brandrill Agreement prevented employees from receiving entitlements in excess of those provided by that agreement.
• It is said in the explanation that the Agreement has no equivalent provision to that of clause 9 in the Brandrill Agreement which prohibits an employee from working for another company without Ausdrill’s approval. The statement is misleading as clause 6.4(c) of the Agreement contains a similar prohibition.
• It is said that the Agreement contains the same overtime provisions as that of the Award which is inaccurate for the reasons set out above at [37].
• The explanation of the personal leave entitlements are, according to the CFMMEU, confusing and unclear to the point where the intention of the Agreement entitlement is unclear.
• Employees were advised that they would not be financially disadvantaged by the Agreement. While this statement appears correct for some classes of employees it appears that employees may be potentially disadvantaged in for example the scenario of an employee working 35 ordinary hours Monday to Friday, that being due to the higher flat rates paid under the Brandrill Agreement.
[38] The CFMMEU further submit that inaccurate explanations extended to information provided by Ausdrill in the April 2021 Presentation as follows;
• The explanation failed to distinguish the pay rise entitlement of employees on a Composite Rate (of 1.5% on commencement of the Agreement) from that of employees on a Base Rate who would not be entitled to the 1.5% increase on commencement of operation of the Agreement.
• The slide on annual leave stated that employees would receive an additional week’s annual leave in circumstances where the Agreement did not specify which employees were eligible for that additional week. The explanation also inferred that employees would get a higher leave loading of 20% when the Award actually provided a 20% leave loading.
Whether genuinely agreed (s.188(1)(c))
[39] The CFMMEU submit that the flaws in the explanation of the Agreement are such that the Commission would have reasonable grounds to believe that employees did not genuinely agree to the Agreement because the employees were provided with misleading information.
Whether BOOT met
[40] The CFMMEU contend that the Commission cannot be satisfied that the Agreement passes the BOOT in respect of a significant number of provisions within the Agreement which are set out below.
[41] A key feature of the Agreement is that of Composite Hourly Rates (clause 8) which permits Ausdrill at its discretion to implement composite hourly rates instead of base hourly rates, where such composite rates are intended to compensate and roll-up various foregone penalties, loadings and allowances that would be otherwise payable. The CFMMEU contend that the Agreement itself provides no actual composite rate and that in the absence of specified rates the Commission is not in a position to assess whether employees are better off overall.
[42] The CFMMEU further submit that the commitment at clause 8.13 that Ausdrill will ensure employees are better off overall than if they were employed under the Award is a poor substitute for enforceable entitlements in respect of composite rates. The CFMMEU also contend that the Commission should not accept a reconciliation provision in the circumstances as it would delegate the BOOT task to Ausdrill or where such a reconciliation provision provides for no enforceable entitlements or firm dates when any reconciliation should occur or the period over which the payments might be averaged for the purpose of comparison and reconciliation.
[43] The CFMMEU also submit that there are multiple other provisions in the Agreement that are less beneficial than the Award including;
• Classifications (clause 8) in the Agreement, while stated to be ‘referable’ to the Award, do not contain the same definitions or protections found within the Award.
• While base rates in the Agreement (clause 8) may appear higher than the comparable Award base rates, there are a range of penalties in the Award discussed above at [36] not provided by the Agreement. This includes the absence of penalty rates for ordinary hours of work undertaken on a weekend and shift loadings for night shift are applied more narrowly under the Agreement than the Award.
• Clause 7.1(c) of the Agreement provides for pro-rata personal leave entitlements for fixed-term or maximum term employees whereas the Award does not provide for a pro-rata entitlement, but rather confers an entitlement of 105 hours personal leave per annum on commencement of full-time employment and on each anniversary thereafter.
• The Agreement omits a range of apprentice entitlements found within the Award and only states at clause 9.1 of the Agreement that apprentices will be “paid no less” than the minimum rates in the Award.
• The prohibition at clause 6.4(c) of the Agreement on Ausdrill employees working for other employers without Ausdrill’s consent imposes a restriction not found in the Award.
• Overtime rates at clause 15.10 of the Agreement are lower than the Award for particular shiftworkers.
• The Agreement provides for casual employees and payment of a casual loading of 25% at clauses 7.1(d)-(g) however does not provide for the compounding effect of application of other penalty rates (weekend, shift and overtime) to the ordinary hourly rate (inclusive of the 25% loading) as applies to persons covered by Schedule B of the Award. The CFMMEU acknowledge that Schedule B of the Award may be taken as the proxy for the BOOT in circumstances where the Award does not provide for casual employment in respect of persons covered by Schedule A.
• Part-time employment provisions are less favourable than the Award.
• Clause 6.9 of the Agreement which deals with stand-down is wider in scope than s.524 of the Act. That is because the Agreement which provides for the stand-down of employees due to stoppages of work for any cause also covers “any other limitation of work” for any cause.
• Notice of resignation required to be given by employees pursuant to clause 25.1 of the Agreement (up to 4 weeks depending on length of service) exceeds the 1 weeks’ notice required under the Award.
• Clause 15.21 of the Agreement which deals with meal breaks does not provide a right to overtime payments when an employee works beyond 5 hours by agreement without a meal break.
Case for Ausdrill
Whether genuinely agreed (s.180(5) & s.188(1)(a)(i))
[44] Ausdrill submit that it took all reasonable steps to explain the terms and effects of the terms of the Agreement to employees, thus complying with the requirements of s.180(5) & s.188(1)(a)(i) of the Act. In support of that submission, it points to the following;
• Negotiations for the Agreement occurred with each of the employees to be covered involved in bargaining. This resulted in employees having greater involvement, oversight and understanding of the Agreement well before the access period.
• The explanation of the Agreement was provided in written terms as well as by way of a verbal pre-recorded presentation (the August 2021 Presentation) and all Project Managers were equipped to discuss the terms of the Agreement during toolbox meetings and at other times.
• In the Access Period Email employees were expressly invited to ask any questions they had about the terms of the Agreement or the explanatory information.
• The circumstances of the Covid pandemic in terms of staff movement and border closures limited the opportunity of conducting mass meetings during the access period. In those circumstances a pre-recorded presentation was a reasonable step in the alternative.
• As part of the written explanation employees were also provided with a copy of the November 2020 Agreement which had been rejected in the November 2020 ballot. This allowed employees to compare the terms of the Agreement with those of the previously rejected draft agreement.
[45] Ausdrill submit that the explanations provided to employees in respect of the relevant industrial instrument were not misleading for the following reasons;
• Both the Brandrill Agreement Comparison and Award Comparison Documents were relevant regardless of which instrument applied to which employee and formed part of the reasonable steps taken by Ausdrill.
• For employees not covered by the Brandrill Agreement it was not misleading or inaccurate to provide employees with a comparison of the terms of employment applying to their colleagues.
• As to the CFMMEU’s complaint that the explanatory material did not make clear which comparison document was relevant to which employees, Ausdrill submit that employees are well informed about the instrument applying to their employment.
[46] Responding to the concern that Ausdrill failed to explain to employees that it was only employees on a Composite Rate of Pay who would receive a 1.5% increase on commencement of the Agreement, Ausdrill have proposed an undertaking that would result in all employees receiving a 1.5% increase on commencement of the Agreement (Undertaking 5).
[47] In respect of the alleged misleading or inaccurate explanation provided in the Award Comparison Document, Ausdrill submit the following;
• The document sets out the exact wording of the Award and compares it to the equivalent provision in the Agreement, such direct comparison allowing employees to determine the differences on a clause by clause basis. The third column provides Ausdrill’s commentary and explanation.
• It is not misleading or inaccurate not to explain that certain Award terms do not appear in the Agreement, especially so in circumstances where the terms of the Award are clearly set out alongside the equivalent terms in the Agreement.
• The ordinary hours of work under the Agreement and the Award are both 35 hours per week and there is no misrepresentation to employees on its face. An undertaking was however proposed to address the concern that the explanation provided did not highlight the absence of weekend penalties for ordinary hours of work (Undertaking 16).
• The classification structure is consistent with the Award. Simply because the descriptions of each classification in the Agreement are not as detailed as they are in the Award does not mean the classifications are not consistent.
• Ausdrill disagree with the CFMMEU’s interpretation of the personal leave clause under the Award as it applies to fixed or maximum term employees. An absence of the union’s explanation of the relative entitlement does not render the explanation misleading. Ausdrill did however offer an undertaking that aligned the personal leave entitlement in the Agreement with the Award (Undertaking 20).
• The intention of the parties was to ensure that apprentice rates in the Award apply to employees of Ausdrill. Undertakings confirming that intention have been proposed (Undertakings 6, 7 & 8).
• The CFMMEU’s complaint regarding an inadequate explanation of the general duties of employees under the Agreement should be given no weight. That is because the Act provides that an employee who has engaged in conduct that causes serious and imminent risk to the reputation of their employer has engaged in serious misconduct. Ausdrill have however proposed an undertaking removing the prohibition on obtaining other employment (Undertaking 3).
• The explanation provided in respect of employees’ notice of termination obligations was not misleading. It specifically confirms that an employee was not required to give one week’s notice. Nevertheless, Ausdrill have proposed an undertaking to align the notice obligation of employees with that of the Award (Undertaking 21).
• The intention of the parties was to ensure the Agreement provided conditions equivalent to the Award in respect of shift penalties. To remedy any explanation shortcomings Ausdrill have proposed undertakings to align the Agreement terms with that of the Award. (Undertakings 14 & 15).
• The timing of meal breaks and the ability to agree on an alternate time are consistent between the Agreement and Award. As regards the penalty of working beyond 5 hours without a meal break, an undertaking has been provided to align the Agreement entitlement with the Award (Undertaking 19).
[48] In respect of the alleged misleading or inaccurate explanation provided in the Brandrill Agreement Comparison Document, Ausdrill submit the following;
• The document sets out the exact wording of the Brandrill Agreement and compares it to the equivalent provision in the Agreement, such direct comparison allowing employees to determine the differences on a clause by clause basis. The third column provides Ausdrill’s commentary and explanation.
• It is not misleading or inaccurate not to explain that certain Brandrill Agreement terms do not appear in the Agreement, especially so in circumstances where the terms of the Brandrill Agreement are clearly set out alongside the equivalent terms in the Agreement.
• The explanation of the NES clause is legitimate and not misleading.
• The intention of the parties in respect of shift penalties has been reflected in undertakings 14 & 15.
• It is not misleading or inaccurate to explain that the Brandrill Agreement did not include an equivalent clause to Clause 5 Project Employment Arrangements in the Agreement or that employees had the potential to receive greater benefits pursuant to that clause.
• The intention of the parties with respect to overtime is reflected in undertakings and the explanation was not misleading (undertaking 12).
• The union’s criticism that the personal leave explanation was confusing is not borne out by the fact that no employees raised any questions or concerns.
• The union’s assertion that some employees may be potentially disadvantaged in the move from flat rates under the Brandrill Agreement to the Agreement does not establish any misleading explanation as to the financial impact of the Agreement.
Whether genuinely agreed (s.188(1)(c))
[49] Ausdrill submit that the CFMMEU’s argument in relation to whether there are other reasonable grounds to believe the Agreement was not genuinely agreed is merely a transposition of its s.180(5) objections through the lens of s.188(1)(c). Ausdrill further contend that the CFMMEU misunderstand what the Federal Court had to say about s.188(1)(c) at [142] in One Key, that is it was intended to pick up anything not otherwise caught by sub-paragraphs (a) & (b) of s.188(1). It was not intended that objections in relation to s.180(5) and 188(1)(a) compliance are able to be re-run under s.188(1)(c).
Whether BOOT met
[50] In relation to the Composite Hourly Rate provided for at clause 8 of the Agreement Ausdrill submits that;
• Despite the union’s submission, the Commission is able to consider whether the Agreement passes the BOOT because clause 8.4(c) of the Agreement guarantees that the Composite Hourly Rate of Pay is ‘greater than would otherwise be payable to employees’.
• If the Commission is satisfied that the Agreement passes the BOOT having regard to the Base Hourly Rate of Pay and other monetary entitlements, it follows that the Composite Hourly Rate of Pay must also pass the BOOT.
[51] To address the CFMMEU’s concern about the prohibition on obtaining employment with other employers without the employer’s consent, Ausdrill have proposed an undertaking to remove the prohibition (Undertaking 3).
[52] In response to the CFMMEU’s concern over the stand down provision, an undertaking has been provided that more closely aligns the provision in the Agreement to that found at s.524(1) of the Act (Undertaking 4).
[53] Dealing with the apprentice and trainee rate issues raised by the CFMMEU, Ausdrill have proposed undertakings that would have the effect of incorporating the relevant Award provisions (Undertaking 6, 7 & 8).
[54] Dealing with the casual employee issue raised by the CFMMEU, Ausdrill acknowledges that Schedule A of the Award, which is relevant for the purposes of the BOOT, does not provide conditions of employment for casual employees. Notwithstanding that, Ausdrill have proposed undertakings (undertakings 9, 10 & 11) that would provide benefits in line with Schedule B classifications in the Award.
[55] To address concerns that overtime provisions in the Agreement were detrimental relative to the Award, Ausdrill have provided a number of undertakings that seek to align overtime entitlements in the Agreement with the Award (Undertakings 12 & 17).
[56] Addressing the concern that the Agreement did not include provisions dealing with part-time employment hours of work, Ausdrill have proposed an undertaking to align the Agreement terms with that of the Award (Undertaking 13).
[57] With respect to the CFMMEU’s submission that the calculation of certain penalties and loading in the Agreement should be calculated on a compounding basis, Ausdrill have proposed an undertaking to address that issue (Undertaking 14).
[58] To address the concern that the Agreement did not provide for penalty payments for ordinary hours of work performed on a weekend an undertaking was proposed to align the penalty payment with that of the Award (Undertaking 16).
[59] Responding to the concern that the Agreement failed to provide for certain Award allowances, Ausdrill have proposed an undertaking to include certain relevant allowances in the Agreement (Undertaking 18).
[60] Dealing with the CFMMEU meal break concern that employees are not entitled to payment of overtime rates where they work beyond 5 hours without a meal break, Ausdrill have proposed an undertaking to align the Agreement term with that of the Award (Undertaking 19).
[61] As regards the pro-rata personal leave applied to fixed and maximum term employees, Ausdrill have proposed an undertaking to align the entitlement of such employees with that provided in the Award (Undertaking 20).
[62] Ausdrill responded to the notice of termination provision concern by providing an undertaking that aligned the notice required to be provided by an employee with that of the Award (Undertaking 21).
Consideration
[63] I now turn to consider the various matters raised by both the Commission and the CFMMEU regarding approval of the Agreement, those being pre-approval, NES issues, genuine agreement and BOOT issues.
Pre-approval concerns
[64] In its initial correspondence sent to Ausdrill. the Commission requested copies of emails referred to in the F17 that were not provided. The requested emails were those sent by Ausdrill to employees prior to the commencement of the access period notifying them of the ballot details and providing copies of the Agreement, incorporated documents and explanatory materials. Copies of the requested emails were furnished by Ausdrill, addressing the Commission’s concern regarding compliance with s.180(2) and s.180(3) of the Act.
NES issues
[65] The CFMMEU raised a concern in their F18 and in their outline of submissions regarding clause 6.16 which deals with abandonment of employment and whether the term contravenes s.55 of the Act which relevantly states that “A modern award or enterprise agreement must not exclude the National Employment Standard or any provision of the National Employment Standards.” While the objection was not pressed at the hearing I will deal with it, nonetheless.
[66] I am satisfied that clause 6.16 of the Agreement purports to enable Ausdrill to treat abandonment of employment (as defined in the Agreement) as at an employee’s initiative which would negate the need for notice of termination by the employer. A similar term in an award was dealt with by the Full Bench in Iplex 39and was foundto be contrary to NES notice of termination provisions and where such a termination was held to be at the initiative of the employer. Clause 6.16 similarly purports to permit abandonment of employment to be treated as a termination of employment at an employee’s initiative, that being contrary to s.117 of the Act (notice of termination of employment provisions) and consequently contrary to s.55 on its face.
[67] Other minor NES inconsistencies were also identified by the Commission in respect of the standard of proof that may be required to be furnished in support of compassionate leave (clause 19.5) and personal leave (clause 18.9) applications.
[68] Notwithstanding the above referred NES inconsistencies, I am satisfied that the Agreement contains an effective NES precedence clause at clause 4.3 of the Agreement that remedies the identified deficiencies and ensures that the Agreement operates in a manner that is not contrary to s.55 of the Act.
Whether genuinely agreed (s.180(5) & s.188(1)(a)(i))
[69] Before approving an enterprise agreement, s.186(2)(a) of the Act requires the Commission to be satisfied that it has been ‘genuinely agreed to’ by the employees, as defined in s.188. Section 188(1)(a) states that an agreement will have been ‘genuinely agreed to’ if, among other things, the employer has complied with the various pre-approval requirements, including s.180(5). Section 180(5)(a) provides that the employer ‘must take all reasonable steps to ensure that the terms of the agreement, and the effect of those terms, are explained to the relevant employees’. Section 180(5)(b) requires that the explanation be provided ‘in an appropriate manner, taking into account the particular circumstances and needs of the relevant employees’. I turn now to the steps taken by the employer to explain the terms and effects of the terms of the Agreement.
[70] From the evidence before me it appears that the steps taken by Ausdrill to explain the terms and effects of the terms of the Agreement included the following;
• Provision of the Access Period Kit on 3 August 2021 to employees.
• The Access Period Kit included links to a significant number of documents as set out above at [26] including copies of the Agreement, the Award and two key comparison documents, that of the Award Comparison Document and the Brandrill Agreement Comparison Document.
• The August 2021 Presentation was included in the Access Period Kit and was a voiceover PowerPoint presentation prepared by Mr Flynn which explained the differences/changes from the rejected November 2020 Agreement to the Agreement.
• Project Managers were contacted and requested by Mr Flynn on 2 August 2021 to familiarise themselves with the Access Period Kit material and were encouraged to hold meetings with employees and as part of those meetings show employees the August 2021 Presentation.
• Pre-start toolbox meetings were held in the period 4-11 August 2021 during which meetings it was said that the Agreement was discussed.
[71] Ausdrill says that the history of bargaining needs to also be taken into account in circumstances where employees were directly engaged in bargaining at each of Ausdrill’s sites. It is noted that there were no employee bargaining representatives nominated and the bargaining appears to have taken place through direct discussions with the workforce at each site. Taken at its highest, the bargaining that Ausdrill refers to appears to comprise;
• Seven one hour meetings conducted at the BMA, Middlemount, Ensham and Blair Athol sites prior to the first access period and unsuccessful November 2020 ballot. The meetings were structured to ensure all employees were able to attend one meeting.
• Several meetings conducted between 24-27 May 2021 at each of the sites mentioned above plus the Boggabri site, some of which meetings were conducted as part of normal pre-start toolbox meetings. The meetings were again structured to ensure all employees were able to attend one meeting.
• A meeting held between Ausdrill and the CFMMEU on 3 June 2021 following which Ausdrill and the CFMMEU exchanged correspondence in respect of CFMMEU concerns over the draft agreement.
• The circulation by Ausdrill of a draft agreement to employees on 23 July 2021 inviting further feedback from employees.
[72] I discern the essence of Ausdrill’s submission to be that because employees were directly involved in bargaining, they were well informed as to the details of their current employment conditions and the proposed agreement. That with respect is not supported by the evidence. The extent of the bargaining appears limited to each employee at the BMA, Middlemount, Ensham and Blair Athol sites attending two meetings over the 9 month period within which bargaining was held. In the case of the Boggabri site which was mobilised in December 2020 there was only one meeting.
[73] Some of the above-referred site bargaining meetings were held as part of the normal pre-start toolbox meetings and there was no indication whether the ‘bargaining’ conducted during the pre-start toolbox meetings went for 10 minutes or 50 minutes. There were no minutes taken or evidence going to the content of the discussions beyond Mr Flynn’s evidence that he used the April 2021 presentation to assist the discussion at the five sessions he attended at the Boggabri and BMA sites in the 24-28 May 2021 period. I accept that some amendments were made to the draft agreement following the unsuccessful November 2020 ballot and in the period from May-August 2021, which indicates Ausdrill responded to employee feedback on the terms of the draft agreement. However, there is no probative evidence that would enable me to conclude that employees were necessarily well informed of their current terms and conditions of employment and how they would be affected were the Agreement approved. It follows from the forgoing that I place limited weight on the history of and role of employees in bargaining in considering Ausdrill’s compliance with s.180(5) of the Act.
[74] Also relevant to the explanation of the terms and effect of the terms of the Agreement is that of previous explanatory material provided to employees, particularly the April 2021 Presentation which was used in bargaining meetings with employees in May 2021. I will return later to this point when I consider the accuracy of the explanation of the terms and effect of the terms of the Agreement.
[75] Returning to the steps taken, Mr Flynn states that pre-start meetings were held at all sites in the 4-11 August 2021 period and that Project Managers were encouraged by him to familiarise themselves with the Access Period Kit and show employees the August 2021 presentation during these site meetings. There is however no evidence before me as to the content of Agreement explanations provided at those meetings. It follows that I am satisfied that the extent of the explanation of the terms and effects of the terms of the Agreement that may be relied on by Ausdrill in compliance with s.180(5) of the Act is that contained in the written material provided to employees in the Access Period Kit on 3 August 2021.
[76] I regard the provision of the written explanatory material to employees as a reasonable step that was taken by Ausdrill, particularly in circumstances when state border restrictions in place due to the Covid pandemic restricted the ability of Mr Flynn and other senior managers of Ausdrill from travelling to Queensland and NSW sites from WA where Ausdrill’s head office is located. In circumstances where the specific information in relation to the explanation of the Agreement was limited to the Access Period Kit it is necessary for me to consider the accuracy and extent of the explanation provided to employees in that material to properly assess whether the requirements of s 180(5) were met. I turn now to the nature and accuracy of the explanation.
[77] Before turning to the specific content of Agreement explanation it is necessary to provide some context that goes to the particular circumstances of the workforce. For the purpose of the Agreement explanation, there are two cohorts of employees, those whose employment is currently underpinned by the Award and those whose terms and conditions of employment are apparently provided by the Brandrill Agreement. The second cohort I have referred to arises from an apparent transfer of business that occurred in 2016 according to Ausdrill. That transfer of business resulted in the Brandrill Agreement transferring to Ausdrill in respect of the BMA, Ensham, Middlemount and Blair Athol sites.
[78] Beyond a submission on the transfer of business, there was no evidence led as to when it occurred, the circumstances in which it occurred, which employees transferred in their employment from Brandrill to Ausdrill, which employees were covered in their employment by the Brandrill Agreement as transferring employees and finally whether any orders were issued by the Commission pursuant to s.318 or s.319 regarding the operation of the transferable instrument in respect of transferring and/or non-transferring employees. Mr Flynn in his evidence was unable to shed any light on the transfer of business and which employees were covered by the Brandrill Agreement. It is consequently unclear which employees at the BMA, Ensham, Middlemount and Blair Athol sites were in fact covered by the Brandrill Agreement. That Ausdrill may have applied the Brandrill Agreement to all employees at those sites does not mean that the agreement actually applied as a matter of law.
[79] What may be said with greater confidence however is that the Boggabri site, as a new operation for Ausdrill, was not covered by the Brandrill Agreement and the currently applying industrial instrument is the Award. It follows that the explanation of the terms and the effects of the terms of the Agreement for the employees at the Boggabri site needed to be by reference to the terms and conditions provided by the Award.
[80] It follows from the above that a reasonable step in explaining the terms and effects of the Agreement was to provide an explanation by reference to the applicable instrument and how the terms and conditions of employment conferred by that applicable instrument would change as a result of approval of the Agreement. This necessitated an approach such that employees who were covered by the Award would receive an Agreement explanation referable to the Award whereas employees covered by the Brandrill Agreement would receive an explanation referable to the Brandrill Agreement.
[81] As stated above at [70] Ausdrill included two comparison documents in the Access Period Kit, the Award Comparison Document and the Brandrill Agreement Comparison Document. Putting aside for the moment the accuracy of the two documents which I will return to shortly, the provision of the two documents in the Access Period Kit is said by Ausdrill to be a reasonable step. I would agree with that submission if there was clarity as to whom the comparison documents were relevant to. There was no overarching explanation in the email sent to employees on 3 August 2021 going to the relevance of the various documents. While many of the linked documents were self-explanatory, the two explanation documents warranted some additional clarification or explanation as to which employees they were relevant to.
[82] In simple terms, for employees to properly consider whether the Agreement represented a ‘good deal’ worthy of their support, they needed to understand how it compared to the terms and conditions they were entitled to under the instrument that currently applied to them. Absent that clarity it is unclear to me how it could be said that employees were able to make an informed decision based on a clear understanding of the differences between what they were currently entitled to and what the Agreement would provide by comparison. Ausdrill says that employees were familiar with the instrument that applied to them but provided no evidence to support that submission. Moreover, in circumstances where the HR Manager responsible for co-ordinating the bargaining process was unable to identify which employees were covered by which instrument, the submission that employees were familiar with the applicable instrument would be a fragile basis on which to draw such a conclusion. I decline to do so.
[83] It follows from the above that a reasonable step that Ausdrill ought to have taken was to clearly identify which instrument applied to which employees at the various sites so that each employee invited to participate in the ballot was able to consider the relevant comparison document provided. That reasonable step was not taken and as a consequence Ausdrill has failed to comply with the requirements of s.180(5) of the Act. It follows that I cannot be satisfied that the Agreement was genuinely agreed as required by s.188(1)(a) of the Act.
[84] I have found the Agreement could not have been genuinely agreed for the reasons set out immediately above. If I am wrong in my conclusion, I must also necessarily turn to consider the accuracy of the explanations provided in the two relevant comparison documents.
Award Comparison Document
[85] Before turning to the actual explanations provided in the document it is useful to recount the structure of the document. It is some 92 pages in length and is set out with three columns, with the left hand column including the full text of each Award provision running in chronological order. Adjacent to the Award clause is the equivalent Agreement clause (if applicable) set out in full. Where there is no equivalent Agreement clause the Agreement column is left empty. Similarly, where the Agreement includes a term not found in the Award, the Award column is left empty. The third column of the table which is headed ‘Better off overall?’ allows for commentary to be provided by Ausdrill in respect of the differences between the Award and Agreement provisions. The structure of the document allows the reader to read the Award clause and equivalent Agreement clause side by side (where applicable) to which is added some commentary to further aid an understanding of the terms and effects of the terms of the Agreement.
[86] The first matter raised by the CFMMEU is the explanation provided in respect of ordinary hours of work 40. The terms of the Award and Agreement are said to be ‘consistent’ in circumstances where clause 21.2 of the Award provides for penalty payments for ordinary hours of work undertaken on a weekend whereas the Agreement makes no such provision. While both the Agreement and Award provide for a maximum of 35 ordinary hours per week, the explanation that the Agreement is ‘consistent’ with the Award in respect of ordinary hours of work is inaccurate given the weekend penalty rate omission in the Agreement.
[87] Ausdrill has proposed an undertaking to remedy the inaccurate explanation and submits that the undertaking, if accepted ,would give effect to the expressed intention that the Agreement provisions operate consistently with that of the Award in respect of ordinary hours of work. Undertaking 16 provides as follows;
Saturday and Sunday ordinary hours
16. With respect to clause 15.10 of the Agreement, the Company undertakes to apply additional sub clause 15.10.4 that reads as follows:
15.10.4 All Ordinary Hours worked by an Employee on the following days will be paid for at the following rates:
Days of the week | Rate of Base Hourly Rate of Pay |
Saturday | First 4 hours at 150% |
After 4 hours at 200% | |
Sunday | 200% |
[88] I am satisfied that undertaking 16 would, if accepted, ensure that the Agreement operated in a manner consistent with the explanation provided.
[89] Turning now to the Agreement classification structure, the CFMMEU contends that the description of the Agreement classification structure which states that it is ‘consistent with those in Schedule A of the Award’ 41 is inaccurate. It submits that the Agreement does not include the Award definitions found in Schedule A of the Award, the absence of which the CFMMEU says gives Ausdrill considerably more control over the allocation of work appropriately expected to be performed by an employee in a particular classification. Ausdrill accepts that the classifications in the Agreement are not as detailed as the Award but submit this does not render the classification structure inconsistent.
[90] The actual classification titles in the Agreement are identical to that of the Award commencing with Mine Worker - Induction Level 1 and progressing up to Mine Worker – Specialised. While it is true the Agreement does not include the definitions contained within the Award I note that those definitions are expressed at A.1.3 of the Award to be necessarily general and that the classification of an employee is to be subject to assessment against mine site standards. By comparison the Agreement is quite explicit in detailing the various Mine Worker classification levels and the indicative roles that fall into each level. In these circumstances I am not persuaded that the explanation was misleading or would lead to the employer having a greater degree of control over direction of the performance of work as contended by the CFMMEU.
[91] In respect of the personal leave entitlements, the Agreement is said to be ‘consistent’ 42 with the Award. The CFMMEU contend this is inaccurate in respect of fixed term and maximum term employees engaged under the Agreement. Whereas clause 26.2 of the Award provides for 105 hours of personal leave on commencement and on each anniversary of employment of a full time employee, the Agreement provides for an entitlement of 120 hours personal leave on commencement and each anniversary thereafter. That entitlement is however calculated on a pro-rata basis for employees on a fixed term or maximum term contract in accordance with clause 7.1(c) of the Agreement. The CFMMEU submit that the Award makes no provision for pro-rata entitlements and that the stated consistency between the Agreement and Award provisions is misleading. I agree with the CFMMEU that the Award does not provide for pro-rata personal leave entitlements for full time employees engaged on fixed or maximum term contracts. In these circumstances the explanation that the personal leave terms of the Agreement and the Award were ‘consistent’ was inaccurate.
[92] Ausdrill has proposed an undertaking to remedy the inaccurate explanation in respect of personal leave and submits that the undertaking if accepted would give effect to the expressed intention that the Agreement provisions operate consistently with that of the Award in respect of personal leave. Undertaking 20 provides as follows;
“Personal/carer’s leave
20. With respect to clause 18.5 of the Agreement, the Company undertakes that the reference to full-time employees includes permanent full-time employees, as well as maximum term and/or fixed term full-time employees.”
[93] I am satisfied that undertaking 20 would, if accepted, ensure that the Agreement operated in a manner consistent with the explanation provided.
[94] The Agreement Explanation Document also states that while Ausdrill does not currently engage apprentices or trainees Ausdrill has retained an apprentice and trainee clause at clause 9 and has ‘incorporated the provisions of the Award to ensure that in the event it does engage such employees, they will receive the same entitlements that they would otherwise have received under the Award’ 43. The CFMMEU contend this statement in incorrect when regard is had to the range of provisions at A.6 of Schedule A of the Award. I agree. The Award includes detailed provisions going to both rates and as well as entitlements that are not found in the Agreement including provisions dealing with block release training and reimbursement of travel and course costs. The explanation was consequently inaccurate.
[95] Ausdrill has proposed undertakings to remedy the inaccurate explanation in respect of apprentice and trainee entitlements and submits that the undertakings, if accepted, would give effect to the expressed intention that the Agreement incorporates the relevant Award provisions in respect of apprentices and trainees. Undertaking 6, 7 & 8 provide as follows;
“Apprentice and trainee rates of pay
6. The Company undertakes to apply additional sub clause 9.2.1 and 9.2.2 that reads as follows:
9.2.1 Subject to clause 9.2.2 and 9.2.3, the following terms of the Award as they apply at the date of approval of this Agreement are incorporated into the Agreement:
a) Schedule A.6.2 to A.6.6; and
b) Schedule A.6.8 to A.6.16
9.2.2 The references to the ‘Award’ in clauses A.6.6 and A.6.8(c) are to be read as references to the Agreement.
9.2.3 The terms of the Agreement apply to the extent of any inconsistency with the incorporated provisions at 9.2.1.
7. With respect to clause 9.5 of the Agreement, the clause will be taken to read as follows:
9.5 The minimum hourly wages for full-time apprentices and trainees as set out in the Award apply to school-based apprentices for total hours worked including time deemed to be spent in off-the-job training.
8. With respect to clause 9.13 of the Agreement, the clause will be taken to read as follows:
9.13 For the avoidance of doubt, any reference to the Award in this clause of the Agreement is for reference purposes for progression and does not incorporate monetary entitlements in the Award into this Agreement, unless otherwise stated in this Agreement.”
[96] I am satisfied that undertakings 6,7 & 8 would, if accepted, ensure that the Agreement operated in a manner consistent with the explanation provided in respect of apprentices and trainees through incorporation of relevant Award provisions.
[97] A further criticism raised by the CFMMEU is that of the explanation offered by Ausdrill in comparing clause 12 - Employer and employee duties in the Award with clause 6.4 of the Agreement which sets out employee duties. The explanation states that while the clauses are different, they do not disadvantage employees 44. The CFMMEU submit this statement is inaccurate when regard is had to the prohibition at clause 6.4(c) of the Agreement on employees working for another company while engaged by Ausdrill, when no such prohibition is found in the Award. I accept the CFMMEU submission that the Award contains no such prohibition. As a consequence, employees are arguably disadvantaged relative to the Award. The distinction ought to have been drawn to employees’ attention and was not. The explanation offered was therefore inaccurate.
[98] Ausdrill has proposed an undertaking to remedy the inaccurate explanation in respect of the prohibition on outside employment. It contends that if the undertaking were accepted it would give effect to the explanation provided that employees would not be disadvantaged relative to the Award. Undertaking 3 provides as follows;
“Contract of Service
3. With respect to clause 6.4(c) of the Agreement, the words “and not work for any other company without the Company’s written approval” will be removed from the clause.”
[99] I am satisfied that undertaking 3 would, if accepted, ensure that the Agreement operated in a manner consistent with the explanation provided such that employees would not be disadvantaged relative to the Award in respect of a prohibition on outside employment.
[100] Turning to notice of termination provisions, clause 25 of the Agreement sets out the notice obligations of employees and employers. The clause imposes an obligation on employees to provide notice of up to four weeks depending on their length of service. By contrast, clause 13.1(b) of the Award provides that an employee must only give at least one weeks’ notice. The explanation provided in relation to the notice of termination obligation of employees states that the notice requirement is the same as the NES and is said not to disadvantage employees 45. This statement is made in circumstances where the NES does not impose a notice period obligation on employees and the Award places a one weeks’ minimum notice obligation on employees. I agree with the CFMMEU submission that the explanation is misleading in that it conveys that employees’ notice obligations are consistent with the NES when the NES imposes no such obligation. Self-evidently, the notice obligations under the Agreement are more onerous than the Award and this should have been highlighted to employees. The explanation provided was misleading.
[101] Ausdrill has proposed an undertaking to remedy the inaccurate explanation in respect of employee notice of termination obligations. It contends that if the undertaking were accepted it would give effect to the explanation provided that employees would not be disadvantaged relative to the Award. Undertaking 21 provides as follows;
“Termination of Employment
21. With respect to sub-clauses 25.1 and 25.2 of the Agreement, the clause shall be read as follows:
Except in the case of Casual Employees, an Employee’s employment with the Company may be terminated at any time by:
(a) the Employer providing written notice to the Employee in accordance with the National Employment Standards; or
(b) The Employee providing one week of written notice to the Employer.”
[102] I am satisfied that undertakings 21 would, if accepted, ensure that the Agreement operates in a manner consistent with the explanation provided that employees would not be disadvantaged relative to the Award in respect of employee notice of termination obligations.
[103] The CFMMEU also contend that the explanation provided in relation to overtime and shift penalties was also inaccurate. Specifically, the explanation in relation to overtime and shift penalties states that ‘Where employees receive a Base Hourly Rate of Pay under the enterprise agreement they are entitled to the same overtime and shift penalty provisions as are contained in the Award’ 46. This statement is said by the CFMMEU to be inaccurate with respect to those shiftworkers defined at clauses 17.1(b)(ii) & (iii) of the Award in circumstances where the Agreement confines the payment of the relevant overtime penalty rate of double time to only those employees defined as six day or seven day roster employees. I agree that the explanation was inaccurate as the Agreement excludes payment of the double time penalty rate to certain shiftworkers who would otherwise receive that penalty rate under the Award.
[104] The CFMMEU also contend that unlike the equivalent Award provisions found at clause 22.8 of the Award, the Agreement does not provide for the compounding effect of overtime and shift penalties when hours are worked on a weekend or public holiday. That is because the Agreement expresses the base rate for the purpose of calculating penalty payments as the Base Hourly Rate of Pay whereas the Award applies relevant penalty payments to the ‘ordinary time rate’ which allows for compounding. I agree with the CFMMEU submission that the Agreement does not provide for compounding of penalty rates, unlike the Award, and as such the statement made that that the Agreement provides for the same ‘overtime and shift penalty rates’ was inaccurate.
[105] Further to the above the CFMMEU also identify that the Agreement does not include a definition for permanent night shift, unlike the Award where such definition is found at clause 22.1(c) of the Award. It consequently contends that the explanation that shift penalties in the Agreement are the same as the Award cannot be sustained in respect of an employee working permanent night shift under the Agreement. I agree. The explanation was consequently inaccurate.
[106] To address the contended inaccuracy of the explanations in relation to overtime and shiftwork penalty provisions Ausdrill has proposed undertakings which it contends would give effect to the intended operation of the Agreement and would align the Agreement with the Award as explained to employees. Undertakings 14 and 15 provide as follows;
“Shifts
14. With respect to clause 15.8 of the Agreement, the Company undertakes that where an Employee works ordinary hours on an Afternoon Shift or Night Shift on a Saturday, Sunday or Public Holiday the Afternoon Shift or Night Shift loadings will be calculated on the applicable weekend rate or public holiday rate as applicable, on a compounding basis.
15. With respect to clause 15.8 of the Agreement, the Company undertakes to apply additional sub clauses 15.8.1, 15.8.2 and 15.8.3 that reads as follows:
15.8.1 If an Employee who normally works on day shift only is required to work Afternoon or Night Shift on at least three consecutive working days then the Employee will be paid at overtime rates for the first Afternoon or Night shift so worked and after that the Employee will be paid in accordance with the provisions of clause 15.8 (a)-(d) for any other shifts.
15.8.2 If the Employee is required to work Afternoon or Night Shift work for a period fewer than three consecutive working days, overtime rates will be paid for any Afternoon or Night Shift work instead of the provisions of clause 15.8 (a)-(d). An exception to this is where the requirement is caused by the failure of any other Employee to come on duty at the proper time.
15.8.3 For the purposes of clause 15.8, a permanent Night Shift Employee is an Employee who:
(a) works night shift only; or
(b) stays on night shift for a longer period than four consecutive weeks; or
(c) works on a roster that does not give at least one-third of the employee’s working time off night shift in each roster cycle.”
[107] I am satisfied that undertakings 14 and 15 would, if accepted, ensure that the Agreement operates in a manner consistent with the explanation provided to employees that overtime and shift penalty provisions operate consistently with the Award.
[108] Turning to the meal break provisions, the explanation states that the Agreement is ‘consistent’ with the Award 47. According to the CFMMEU, this statement is inaccurate in respect of an employee that works beyond five hours without a meal break by agreement of the employer. In these circumstances the employee would be entitled to overtime payments until a meal break is taken in accordance with clause 24.3 of the Award. Clause 15.21 of the Agreement, while allowing for an employee to work beyond five hours with agreement of the employer, does not provide for the payment of overtime rates while doing so until a meal break is taken. The explanation that the Agreement meal break provision is consistent with the Award is consequently inaccurate.
[109] To address the contended inaccuracy of the explanation of the meal break provisions, Ausdrill has proposed an undertaking which it contends would give effect to the intended operation of the Agreement and would align the Agreement with the Award as explained to employees. Undertakings 19 provides as follows;
“Breaks
19. With respect to clause 15.21 of the Agreement, the Company undertakes to apply additional sub clause 15.21.1 that reads as follows:
15.21.1 Where the Company and Employee agree that the Employee will work for more than five hours without a break, then the Employee will, unless otherwise agreed, be paid for any work beyond five hours at the applicable overtime rates until a meal break is taken.”
[110] I am satisfied that undertaking 19 would, if accepted, ensure that the Agreement operates in a manner consistent with the explanation provided to employees that the meal break provisions operated consistently with the Award.
Brandrill Agreement Explanation Document
[111] The format of the Brandrill Agreement Explanation Document, which runs to approximately 74 pages in length, is the same as the Award Comparison Document described above at [86] save that it is the terms of the Brandrill Agreement that are compared with the Agreement. It is to the detail of the explanations and their alleged inaccuracy I now turn.
[112] The explanation of the differences between the Agreement and the Brandrill Agreement in respect of the NES is stated as follows;
“The Ausdrill EA goes further to ensure that employees are protected, by including a NES precedence clause …….” 48
[113] The CFMMEU rightly point out that the entitlement of employees to terms and conditions of employment no less than the NES standards are protected by legislative force through s.56 of the Act. In those circumstances the CFMMEU contends that the statement that the Agreement, which includes an NES Precedence clause, is more protective of employee entitlements than the Brandrill Agreement which did not include an NES precedence clause, misrepresents the legal position. While I accept the CFMMEU submission as to the legal position and the effect of s.56 of the Act I do not regard the above explanatory statement as a significant error or misrepresentation as I am satisfied that it sought to convey to employees that an NES precedence clause was included in the Agreement which distinguished it from the Brandrill Agreement.
[114] The CFMMEU also point to the explanatory statement regarding defined terms in the Agreement where it says “Where these terms are also used in the Award or Brandrill EA, the definitions, even where they differ in wording, have the same effect on Employees” 49. According to the CFMMEU this statement is inaccurate in respect of the definition of permanent night shift. As already stated above at [105], the Agreement does not define permanent night shift, unlike the Award. To the extent that the explanation suggests that defined terms within the Agreement, specifically permanent night shift, are the same as the Award, the explanation is inaccurate. Undertaking 15 would if accepted address this concern and is set out above at [106].
[115] Turning to clause 5 of the Agreement which provides for Project Employment Arrangements, there is specific provision at clause 5.3 of the Agreement for Ausdrill to pay project specific rates and conditions that are in excess of the Agreement. No such provision exists in the Brandrill Agreement. The explanatory document relevantly states that the “Brandrill EA does not deal with Project Employment” and goes on to say that the Agreement “provides employees with the potential to receive greater entitlements than are set out in the Ausdrill EA.” 50 The CFMMEU submits that this explanation is misleading as it implies that the Brandrill Agreement does not allow for such higher payments. I do not agree with the submission that the statement was misleading as the only reference to the Brandrill Agreement is that it does not contain a Project Employment clause. This statement is correct, and the balance of the explanation is directed to what the Agreement allows for, not what the Brandrill Agreement does or does not allow. I am not persuaded that the explanation is misleading or inaccurate.
[116] The CFMMEU contend in respect of restrictions on working for another employer which is dealt with at clause 9.1 of the Brandrill Agreement, that the statement that the Agreement has ‘No equivalent clause’ is incorrect. I agree as clause 6.4(c) of the Agreement requires that employees ‘not work for any other company without written approval’. Clause 6.4(c) is in similar if not identical terms to clause 9.1 of the Brandrill Agreement. The explanation was therefore inaccurate. Undertaking 3 set out above at [98] would, if accepted, remedy this inaccurate explanation.
“Stand down
4. With respect to clause 6.9(b) of the Agreement, the clause shall be read as follows:
(b) a stoppage of work for any cause for which the employer cannot reasonably be held responsible.”
[172] I am satisfied that the undertaking if accepted would remove any detriment of the stand down provisions of the Agreement when compared with entitlements an employee would otherwise receive if covered by the Award. The provision would in those circumstance be a neutral consideration in the BOOT assessment.
Notice of resignation
[173] As previously stated, clause 25.1 of the Agreement imposes an obligation on employees to provide up to four weeks’ notice of termination depending on their length of service. That is to be contrasted with clause 13.1(b) of the Award which requires an employee to provide a minimum of one week’s notice of termination. I accept that the notice obligation under the Agreement is more onerous and may be regarded as a detriment by some employees in circumstances where they may be anxious to commence employment with a new employer for example. It does not necessarily follow that it will be a detriment in all circumstances. Take for example the situation of an employee who may have provided four weeks’ notice (as required by reason of their length of service). Ausdrill may, in this situation, choose to pay out the notice and finish the employee up sooner. That could hardly be said to be a detriment.
[174] In truth, the detriment can really only be seen in the context of an employee desiring or feeling compelled to finish up their employment sooner than the notice period requires. It is not however the case that an employee is unpaid during the period of notice. While it may represent a detriment for certain employees, I attribute little weight to it because of the difficulty of ascribing a value to the detriment. Ausdrill has however proposed an undertaking that would if accepted align the notice period with that of the Award, that undertaking having been proposed in the context of an inaccurate explanation provided to employees as to the effect of the notice of termination provision. The undertaking, which is set out above at [101], would if accepted remedy any detriment arising from clause 25.1 and result in the provision being a neutral consideration for the purpose of the BOOT assessment.
Meal breaks
[175] Clause 15.21 of the Agreement states that an employee is entitled to a meal break of 30 minutes for each five hours worked during rostered hours and that an employee cannot be required to work beyond five hours unless agreed with the employer. Unlike clause 24.3 of the Award, the employee is not entitled under the Agreement to receive overtime payments for hours worked by agreement beyond five hours prior to a meal break being taken. This represents a detriment and when combined with a significant number of other detriments identified above, gives rise to a concern as to whether the BOOT is met. Ausdrill have proposed an undertaking which is set out above at [109] which, if accepted, would remedy the concern and align the Agreement provision with the Award. It would consequently be a neutral consideration in the BOOT assessment.
Allowances
[176] Clause 10 of the Agreement sets out certain allowances including Location (clause 10.3), Tool and Meal allowances (clause 10.5). A number of other allowances provided at A.8.2 of the Award are not included in the Agreement. The absence of various allowances gives rise to a concern as to whether the BOOT is met having regard to the 5% margin of Agreement wage rates above the Award and other identified detriments. Responding to that concern Ausdrill have proposed an undertaking in the following terms;
“Allowances
18. The Company undertakes to insert the following allowances into the table of allowances at page 13 of the Agreement as follows:
Allowance | Percentage of Award Standard Rate / Reimbursement | Application |
Additional shift allowance | Other allowance | |
0.43% of the Award Standard Rate per Afternoon Shift and 0.85% of the Award Standard Rate per Night Shift (additional to the shift work rates) | Where an employee is engaged on afternoon shift and/or night shift at open cut workings and who is in receipt of the 15% shift allowance. | |
Water money | 0.49% of the Award Standard Rate per shift | Where, through no fault of the Employee, and in the course of duties, an Employee’s clothing becomes wet. The Employee is to notify the supervisor of the intention to claim water money and the reasons for making it as soon as is possible. An Employee regularly receiving water money must not have the payment discontinued without notice |
Dirt Money | 0.23% of the Award Standard Rate per shift | Where an Employee has to handle machinery, equipment, appliances or gear of any description which is covered with oil or grease. |
[177] I am satisfied that if undertaking 18 were accepted it would remedy the identified detriment in that the Agreement would include additional relevant allowances that are consistent with the Award. The issue of allowances in the Agreement would consequently weigh as a neutral consideration in the BOOT assessment.
Summary on BOOT
[178] Before approving an enterprise agreement, the Commission must be satisfied that the agreement passes the BOOT (s 186(2)(d)). Section 193 provides that an enterprise agreement that is not a greenfields agreement passes the better off overall test ‘if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.’
[179] I have set out above the various detriments within the Agreement relative to the Award. The provisions that I have identified as concerns in respect of the BOOT assessment are as follows;
• Clause 8.5 Composite Hourly Rate of Pay;
• Clause 15 Hours of Work in respect to various overtime, shift and penalty rate entitlements;
• Clause 18 Personal Leave and Clause 7.1(c), the interaction of which clauses provide for pro-rata personal leave entitlements for fixed and maximum term employees;
• Clause 9 Apprentices and Trainees;
• Clause 6.4(c) prohibition on alternate employment;
• Clause 15.8 as it impacts on the calculation of penalties payable to casual employees;
• Clause 6.1 part time employment provisions;
• Clause 6.9(b) stand down provisions;
• Clause 25.1 notice of termination provisions
• Clause 15.21 meal break provisions; and
• Clause 10 allowances.
[180] Against the above detriments must be weighed the more beneficial provisions within the Agreement to assess whether employees and prospective employees would on balance be better off overall. The more beneficial provisions identified by Ausdrill include;
• Clause 8.10 which provides that Base Hourly Rates of Pay in the Agreement will at all times be at least 5% greater than the equivalent Award rates;
• Clause 11 which provides for an Exploration Metre Bonus;
• Clause 17 which provides for up to 240 hours annual leave for eligible employees;
• Clause 18 which provides for 120 hours personal leave; and
• Clause 21 which provides that all employees are entitled to 300% for all time worked in excess of ordinary hours worked on a public holiday.
[181] While I accept the 5% wage rate margin is a more beneficial term, I do not accept that the other identified terms are more beneficial and/or non-contingent. The Exploration Metre Bonus is contingent on employees being engaged in exploration drilling which would exclude employees at the Boggabri site which is a production drill and blast contract. The additional annual leave entitlement at clause 17 is contingent on meeting an unspecified eligibility criteria, so it is unclear which employees would receive the additional leave entitlement. Clause 27.4(b) of the Award provides that all work performed in excess of ordinary hours on a public holiday are to be paid at treble time, that being the same benefit as the contended more beneficial entitlement under the Agreement. Finally, as previously set out above, the Personal leave entitlement is less beneficial in respect of fixed and maximum term employees.
[182] It follows from the above that the non-contingent benefit of the minimum 5% wage rate margin between the Agreement and Award base rates of pay must be weighed against the various detriments I have summarised above at [179]. Having regard to the number and scope of the detriments and the incidence of shift and weekend work within Ausdrill’s operations, I cannot be satisfied that the minimum 5% wage rate margin is sufficient to offset those detriments. I am satisfied that absent the acceptance of undertakings to address my concerns the Agreement does not pass the BOOT as required by s.186(2)(d) and is incapable of approval. I now turn to consider whether the undertakings proposed address my concerns and are capable of acceptance.
Consideration of whether undertakings may be accepted
[183] Section 190(2) confers discretion on the Commission to approve an agreement under s.186 if satisfied that acceptance of an undertaking or undertakings, subject to the conditions in s.190(3), meets the concern. It is clear, therefore, that the undertaking proffered must meet the concern that the agreement does not meet one or more of the identified requirements set out in ss.186 and 187 of the Act. The relevant requirements here, about which there are concerns, are that of the requirement that the Agreement was genuinely agreed to by the employees covered by it (s.186(2)(a)) and that Agreement passes the BOOT (s.186(2)(d)).
Genuinely agreed concerns
[184] As set out above, I hold concerns regarding a significant number of inaccurate or misleading explanations including those provided by Ausdrill in the Award Comparison Document and the Brandrill Agreement Comparison Document. They are extensively detailed from [69]-[136] above and I do not propose to repeat them. An inaccurate explanation regarding annual leave entitlements was also provided in the April 2021 Presentation. The nature of the inaccurate and/or misleading explanations involved Ausdrill overstating the Agreement entitlements in that the entitlements were said to be either ‘consistent’ with the Award or that employees would not be ‘disadvantaged’ relative to the Award in respect of particular provisions. These statements were plainly wrong in relation to a significant number of provisions.
[185] As also set out above Ausdrill have proposed a series of undertakings to remedy the inaccurate explanations. I have found that the proposed undertakings provided would remedy the following concerns in that the terms of the Agreement would, if the undertakings were accepted, operate in a manner consistent with the explanation provided. The relevant terms and undertakings are as follows;
• Undertaking 3 would remedy my concern regarding the inaccurate explanation provided in relation to the prohibition on obtaining other employment;
• Undertakings 6,7 & 8 would remedy my concern regarding the inaccurate explanation of apprentice/trainee entitlements;
• Undertakings 14 & 15 would remedy my concern regarding the inaccurate explanation of various shift work and overtime penalty entitlements;
• Undertaking 16 would remedy my concern regarding the inaccurate explanation provided in respect to penalty rates payable for ordinary hours worked on a weekend
• Undertaking 19 would remedy my concern regarding the inaccurate explanation provided in relation to meal break entitlements;
• Undertaking 20 would remedy my concern regarding the inaccurate explanation provided in respect of the personal leave entitlements for fixed and maximum term employees; and
• Undertaking 21 would remedy my concern regarding the inaccurate explanation employees’ notice of termination obligations.
[186] While a number of concerns I hold in relation to whether employees genuinely agreed are addressed by the proposed undertakings, not all of my concerns have been addressed. Specifically, my concern about the misleading explanation of the annual leave entitlement remains as does my concern at the failure of the Respondent to explain the relevance of the two comparison documents provided to employees in the Access Period Kit. While the annual leave explanation may be theoretically capable of being remedied by an undertaking, the latter concern over the explanation of the relevance of the comparison documents is not in my view capable of being addressed by an undertaking. It follows that even if I were to accept the undertakings proposed to address my concerns about the inaccurate explanations in the two Agreement comparison documents, it would not resolve all of my genuinely agreed concerns.
BOOT concerns
[187] I have also set out above from [143]-[182] my consideration of whether the Agreement passes the BOOT. I have found that absent the acceptance of proposed undertakings the Agreement does not meet the BOOT. Ausdrill have proposed a series of undertakings that would largely address the BOOT concerns as follows;
• Undertaking 3 would remedy my concern regarding the prohibition on other employment;
• Undertaking 4 would remedy my concern regarding stand down provisions;
• Undertaking 9, 10 & 11 would remedy my concern regarding casual employee entitlements;
• Undertakings 12, 14, 15 & 17 would remedy my concern regarding various overtime, shift and weekend penalty rate entitlements;
• Undertaking 13 would remedy my concern regarding part-time employment provisions;
• Undertaking 18 would remedy my concern regarding allowances entitlements;
• Undertaking 19 would remedy my concern regarding meal break entitlements;
• Undertaking 20 would address my concern in relation to personal carers leave entitlements of fixed and maximum term employees; and
• Undertaking 21 would remedy the notice of termination obligation concern;
[188] While undertaking 6,7 & 8 provided in relation to apprentices and trainees address my concern in relation to the inaccurate explanation of apprentice/trainee entitlements under the Agreement they (the undertakings) do not address my BOOT concern. That is because the undertakings if accepted would merely ensure that apprentices/trainees received rates and conditions consistent with the Award. I am unable to identify any other non-contingent benefits under the Agreement that would ensure that Apprentices would be better off overall under the Agreement than if employed under the Award. I note that this concern may be capable of being remedied by a revised undertaking.
[189] The remaining outstanding BOOT concern I hold is in relation to the Composite Rates of Pay for the reasons set out at [144]-[149]. As earlier stated, that concern may also be amenable to a revised undertaking.
Are the undertakings likely to result in financial detriment to employees or cause substantial change to Agreement?
[190] Even were Ausdrill able to provide further revised undertakings that remedied my remaining identified genuinely agreed and BOOT concerns I would not accept the undertakings for the reasons that follows.
[191] As set out at s.190(3) of the Act, the Commission may only accept a written undertaking if the Commission 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.
[192] There is also a residual discretion that resides with the Commission as to whether it accepts a proposed undertaking that meets the requirements of ss.190(3)(a) & (b). That is evident by the use of the term ‘may’ where it appears is s.190(3) of the Act
[193] Assuming for the moment that all the undertakings proposed set out above and any further undertakings that might be proposed are not likely to cause financial detriment, the total number of undertakings that would be required to remedy the range of genuinely agreed and BOOT concerns would be in excess of 20. The undertakings already proposed number 21 and as stated above do not remedy all of my concerns. The scope of the undertakings already provided is significant. It goes to ordinary hours of work rates of pay, reconciliation of unspecified composite rates, overtime penalties, shift and weekend penalties, casual employee entitlements, part-time employee entitlements, apprentice/trainee rates and entitlements, contract of employment conditions, stand down arrangements, personal/carers leave entitlements, notice of termination obligations, allowances and meal break entitlements. The scope of the undertakings required to cure both Agreement explanation deficiencies and BOOT concerns is very broad.
[194] The proposed undertakings could not be simply described as addressing drafting oversights or omissions or minor Agreement explanation inaccuracies. They go to a broad range of substantive entitlements that were simply not included in the Agreement or if they were included would be subject to substantial amendment through the effect of the undertakings if accepted. I agree with the Full Bench in CFMEU v Kaefer Integrated Services Pty Ltd 61 (Kaefer) that simply increasing the quantum of benefits would not ordinarily result in substantial change62 but the effects of the proposed undertakings in the matter before me go beyond merely increasing entitlements. Take for example the insertion of apprentice/trainee entitlement provisions, introduction of a range of overtime and penalty rates, allowances, part-time employee hours of work provisions. These are provisions that were simply not included in the Agreement as voted on by employees.
[195] Even were I satisfied that the undertakings proposed are not likely to cause financial detriment to any employee covered by the Agreement, I would regard the scope and effects of the undertakings as constituting substantial change to the Agreement. I would consequently decline to accept them.
Conclusion
[196] In order to approve the Agreement, the Commission must, as part of its consideration, be satisfied in respect of the s.186(2) requirements under the Act. For the reasons set out above I am not satisfied that the requirements have been met in relation to whether the Agreement was genuinely agreed (s.186(2)(a)) and whether it passes the BOOT (s.186(2)(d)). I have also found that if all of the genuinely agreed and BOOT concerns I hold were addressed by the range of undertakings proposed, I would decline to accept the undertakings because those undertakings if accepted would constitute substantial change.
[197] It follows from the above that the application for approval of the Agreement must be dismissed. An order reflecting this decision will be separately issued.
DEPUTY PRESIDENT
Appearances:
A Pollock of Counsel for the Applicant.
A Kentish for the Construction, Forestry, Maritime, Mining and Energy Union.
Hearing details:
2021.
Melbourne (by Microsoft Teams):
October 13.
Final written submissions:
Applicant, 20 October 2021.
Respondent, 25 October 2021.
Printed by authority of the Commonwealth Government Printer
<PR735802>
1 MA000001.
2 Ibid, Annexure TF1.
3 Transcript at PN92-PN99.
4 Exhibit A1 at [8].
5 Ibid, Annexure TF2.
6 Exhibit A1 at [9]-[10].
7 Transcript at PN82, PN88.
8 Exhibit A1, Annexure TF3.
9 Transcript at PN105.
10 Ibid at PN111.
11 Ibid at PN104.
12 Form F16, Court Book at p.42.
13 Transcript at PN119.
14 Exhibit A1, Annexure TF5.
15 Exhibit A1 at [13].
16 Court Book at p.845.
17 Transcript at PN166-PN169.
18 Court Book at p.848.
19 Ibid at PN203-PN214.
20 Court Book at p.851.
21 Transcript at PN255-PN259.
22 Ibid at PN264-PN267.
23 Ibid at [14].
24 Transcript at PN126-PN128.
25 Exhibit A1 at [18]-[19].
26 Ibid, Annexure TF7.
27 Exhibit A1 at [15].
28 Ibid at [16]
29 Ibid at [23]
30 Ausdrill Submissions, dated 17 September 2021, Annexure B
31 Ibid, Annexure A
32 Court Book at p.359.
33 Transcript at PN270-PN277.
34 Court Book at p.359.
35 Ibid at p.69.
36 Ibid at p.861.
37 Exhibit A1, Annexure TF9.
38 Form F17, Court Book at p.68.
39 [2017] FWCFB 38
40 Court Book at p.127.
41 Ibid at p.101.
42 Ibid at p.152.
43 Ibid at pp.90-91
44 Ibid at p.93
45 Ibid at p.95
46 Ibid at p.106
47 Ibid at p.135.
48 Ibid at p.360.
49 Ibid at pp.362-363.
50 Ibid at p.363.
51 Ibid at p.373.
52 Ibid at p.402.
53 [2020] HCA 29.
54 Court Book at p.403.
55 Ibid at p.431.
56 Ibid at p.845.
57 Ibid at p.851.
58 [2019] FWCFB 6960
59 Ibid at [35]-[36].
60 Rigforce at [37]-[38].
61 [2017] FWCFB 5630.
62 Ibid at [40].
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