BMD Constructions Pty Ltd T/A BMD Constructions Pty Ltd
[2023] FWCA 1158
•24 APRIL 2023
| [2023] FWCA 1158 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
BMD Constructions Pty Ltd T/A BMD Constructions Pty Ltd
(AG2023/843)
BMD CONSTRUCTIONS PTY LTD NEW SOUTH WALES ENTERPRISE AGREEMENT 2023
| Building, metal and civil construction industries | |
| DEPUTY PRESIDENT MILLHOUSE | MELBOURNE, 24 APRIL 2023 |
Application for approval of the BMD Constructions Pty Ltd New South Wales Enterprise Agreement 2023
An application has been made for approval of an enterprise agreement known as the BMD Constructions Pty Ltd New South Wales Enterprise Agreement 2023 (Agreement). The application was made pursuant to s 185 of the Fair Work Act 2009 (Cth) (Act). It has been made by BMD Constructions Pty Ltd T/A BMD Constructions Pty Ltd (Employer). The Agreement is a single enterprise agreement.
Procedural history
In correspondence to the Commission dated 30 March 2023, the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) advised that it sought to be heard in respect of this application notwithstanding that it was not a bargaining representative involved in the making of the Agreement. The CFMMEU raised a concern that the Agreement has not been genuinely agreed to in accordance with s 186(2)(a) of the Act. Consistent with the Commission’s standard practices, the application material was redacted and provided to the CFMMEU. The views of the parties were sought with respect to the CFMMEU’s request to intervene.
Upon review of the parties’ respective submissions, I exercised powers pursuant to s 590(1) of the Act to allow the CFMMEU to be heard on the application on the basis that it retained a right to appeal any decision approving the Agreement pursuant to s 604 of the Act.[1] Directions were issued for the provision of submissions and evidence from the CFMMEU and the Employer on the CFMMEU’s objection to the application.
In accordance with the directions, the CFMMEU filed submissions on 17 April 2023 and the Employer filed submissions and a witness statement of Ms Lucy Pemble, Human Resources Advisor for the Employer on 20 April 2023.
On 21 April 2023, the Employer and the CFMMEU emailed the Commission requesting the matter be determined on the papers. Accordingly, this decision has been made without convening a hearing. The matters raised by Ms Pemble in her witness statement are therefore unchallenged.
CFMMEU objection
The CFMMEU objected to the approval of the Agreement on the basis that the Employer:[2]
“…failed to explain material from differences between the Current Agreement and Proposed Agreement.
Therefore, we say the proposed agreement has not been genuinely agreed to in accordance with s 186(2) of the FW Act, as the company did not take all reasonable steps to explain the terms of the proposed agreement pursuant to s 180(5) of the FW Act.”[3]
Section 180(5) of the Act deals with the requirement to explain, inter alia, the terms of the Agreement to employees. It provides as follows:
(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.
The Full Bench decision in Construction, Forestry, Maritime, Mining and Energy Union v Ditchfield Mining Services Pty Limited[4] in summarising Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd[5]set out the following propositions with respect to the inquiry pursuant to s 180(5):
[65] First, whether an employer has complied with the obligation in s.180(5) depends on the circumstances of the case.
[66] Secondly, the focus of the enquiry whether an employer has complied with s.180(5) is first on the steps taken to comply, and then to consider whether:
· the steps taken were reasonable in the circumstances; and
· these were all the reasonable steps that should have been taken in the circumstances.
[67] Thirdly, the object of the reasonable steps that are to be taken is to ensure that the terms of the agreement, and their effect, are explained to relevant employees in a manner that considers their particular circumstances and needs. This requires attention to the content of the explanation given.
[68] Fourthly, an employer does not fall short of complying with the obligation in s.180(5) of the Act merely because an employee does not understand the explanation provided.
The CFMMEU identifies three material differences between the Agreement and the BMD Constructions New South Wales Enterprise Agreement 2020 (2020 Agreement). The CFMMEU submits that the application materials do not disclose that the Employer explained the key changes between the Agreement and the 2020 Agreement. Accordingly, the CFMMEU contends that the Commission cannot be satisfied that all reasonable steps had been taken to ensure that the terms of the Agreement, and their effect, had been explained to the employees who voted on the Agreement.[6] It is useful to consider the material differences identified by the CFMMEU in turn.
Definition of “major project works”
The term “major project works” is defined in clause 2 of the Agreement as a project in excess of $50 million value. The definition of “major project works” under the 2020 Agreement is a project is in excess of $45 million dollars. The CFMMEU submits that the definition is integral to both agreements, referring to the following clauses in respect of the Agreement:
(a) Clause 5.3.1 which provides: “For employees engaged on minor works, the Employer will contribute $75.00 per week (or $35.00 per week for trainees) to ACIRT. For employees engaged on major project works, the Employer will contribute $150.00 per week to ACIRT.”
(b) Clause 6.4 which provides: “An employee required to commence work on site shall receive a travel/mobility allowance of $28.00 per day for each day that the employee is required to commence on site. This will not be paid where the employee is provided with a vehicle or transport to and from the site. On major project works, the applicable travel allowance shall be $40.00 per day.”
(c) Clause 6.5 which provides: “On major project works, or where deemed necessary by the OHS Committee, one employee will be nominated as a First Aid Attendant for each 50 workers or part thereof under the Employer’s control.”
(d) Clause 7.8 which provides: “On Major works, the overtime penalties will apply where less than five (5) consecutive nights or less than the average weekly hours are worked.”
(e) The wage rates set out in Schedule 1 Wage Rates apply to minor works which appears to be a project that is not a “major project works” as defined in the Agreement. Schedule 2 applies to employees engaged on “major project works.” The wage rates in Schedule 2 are much higher in comparison to those in Schedule 1.
The CFMMEU submits that the additional $5 million in the definition of “major project works” between the 2020 Agreement and the Agreement can potentially result in employees’ wages and condition being affected.
The unchallenged evidence of Ms Pemple is that she held the following five meetings with employees:[7]
(a) At or about 9:00am on 28 February 2023, at Western Sydney Airport (Aprons), a faceto-face conversation with the employees;
(b) At or about 1:00pm on 28 February 2023, at Western Sydney Airport (Landside), a face-to-face conversation with the employees;
(c) At or about 9:30am on 1 March 2023, via Microsoft Teams, with the employees engaged on the West Camden Project;
(d) At or about 1:30pm on 1 March 2023, via Microsoft Teams, with the employees engaged on the Moorebank Project;
(e) At or about 10:00am on 2 March 2023, via Microsoft Teams, with the employees engaged on the Newell Highway Alliance Project.
At each of the meetings Ms Pemble provided the employees with a copy of the 2020 Agreement and a copy of the Agreement and explained the proposed changes from the 2020 Agreement.[8] At the conclusion of each of the meetings Ms Pemble sent all employees an email which attached a copy of the Summary Document for the Agreement and requested employees contact her by return email with any concerns or questions regarding the Agreement. No responses were received.[9]
Neither party made submissions on whether the attendees at these meetings constituted all the employees covered by the Agreement. Nevertheless, Ms Pemble’s statement at [6] is consistent with the Form F17 which, in response to the question, “What steps were taken by the employer to explain the terms of the agreement, what was explained and how was the effect of those terms explained to the relevant employees?” identifies the five meetings conducted by Ms Pemble and states “The company explained the terms of the agreement and the key changes in the proposed agreement from the existing agreement. A preliminary summary document was used to explain these key changes.”[10] In the absence of evidence or submissions to the contrary, I am satisfied that the “relevant employees,” being those covered by the Agreement, participated in the meetings.
Ms Pemble’s evidence is that at the meetings held to discuss the changes with employees, the matter of major project works and minor project works was discussed. The evidence is that the following matters were explained to employees:[11]
The value of Major project works under the Current Agreement is 'more than $45 million', whereas the Proposed Agreement has Major project works valued as 'more than $50 million'.
Further, Ms Pemble’s explanation to the relevant employees of the matters raised by the CFMMEU at [10(a)-(e)] above is, in summary as follows:
(a) In relation to clause 5.3.1 concerning redundancy, the amount of the Employer’s redundancy contributions is determined based on the value of the project that employees are engaged on, and all employees are engaged on projects over $50 million;[12]
(b) In relation to clause 6.4 concerning travel allowance, the increases in the travel allowances from for both major and minor project works were explained to employees;[13]
(c) In relation to clause 6.5 concerning first aid, the provision was not changed from the 2020 Agreement;[14]
(d) In relation to clause 7.8 concerning first aid, the provision was not changed from the 2020 Agreement;[15] and
(e) In relation to the wage rates, a side-by-side comparison of the wage rates in the Agreement and the 2020 Agreement was conducted, both in respect of the minor project works schedules and the major project works schedules.[16]
There is nothing before me which undermines or calls into question this evidence, and I accept it. Accordingly, I am satisfied that the Employer took reasonable steps to explain the change in the definition of “major project works” and its effect to the employees covered by the Agreement.
Income protection
Clause 6.9 of the Agreement applies to employees who work “on projects with a project value in excess of $50M.” Under clause 6.8 of the 2020 Agreement all employees, irrespective of whether they work on a particular project, are entitled to the benefit of income protection. The CFMMEU submits that, under the Agreement, employees that are potentially not working on a project value of more than “$50M” will lose their entitlement to income protection.
Ms Pemble gave unchallenged evidence that, at the meetings identified at [12] above, she explained to the relevant employees that the income protection provisions had changed. Specifically, Ms Pemble explained that the Employer would “provide income protection for employees engaged on projects with a project value of more than $50 million” and “[f]or employees on projects with a project value of less than $50 million, income protection won't be provided.”[17]
There is nothing before me which undermines or calls into question this evidence, and I accept it. Accordingly, I am satisfied that the Employer took reasonable steps to explain the change in the income protection provision and its effect to the employees covered by the Agreement.
Ordinary hours
Clause 7.1 of the Agreement introduces a new work cycle not contained in the 2020 Agreement. Under this new cycle, employees perform work pursuant to a roster pattern involving 21 days on, 7 days off. The CFMMEU submits that employees will potentially be required to undertake a work cycle they previously have not worked, which is much more arduous than the other work cycles in the Agreement, and requires employees to work for longer periods in succession. It is therefore submitted that the introduction of this work cycle is a material difference between the two agreements.
I accept that clause 7.1 of the 2020 Agreement does not contain an express reference to the 21 days on, 7 days off work cycle. However, in both agreements the clause is framed on the wording that “[work] cycles may include weekends to suit project requirements and/or implement compacted work cycles such as [work cycles].” The words “such as” in this context, do not tend to a construction that the matters that follow are any more than examples, and not an exhaustive list of the particular matter. I am therefore not persuaded that the work cycle was not available under the 2020 Agreement if it, for example, suited project requirements.
In any event, Ms Pemble gave the unchallenged evidence that, at the meetings identified at [12] above, she explained to the relevant employees that “[o]rdinary hours of work are an average of 36 hours per week to be worked over a nominated work cycle.” Ms Pemble provided examples of the work cycles that could be worked under the Agreement, including 21 days on 7 days off. Ms Pemble further advised that the work cycles could be altered by the Employer to suit project requirements by providing employees with reasonable notice.
There is nothing before me which undermines or calls into question this evidence, and I accept it. Accordingly, I am satisfied that the Employer took reasonable steps to explain the inclusion of the 21 days on, 7 days off work cycle and its effect to the employees covered by the Agreement.
Conclusion on the CFMMEU’s objection
Having regard to the above matters and the conclusions reached, I am satisfied that the Employer took all reasonable steps to ensure that the terms of the Agreement, and the effect of those terms, were explained to the employees who voted on the Agreement for the purposes of s 180(5) of the Act. Accordingly, the CFMMEU’s objection to the application is dismissed.
Consideration
As to the balance of the matters relevant for the application for approval of the Agreement, I am satisfied that each of the requirements of ss 186, 187 and 188 as are relevant to this application for approval have been met.
Clause 13(h) of the Agreement provides that if an employee fails to provide proof of their attendance at dispute resolution training the Employer has the right to withhold or deduct monies due to the employees. Clause 13(h) does not appear to limit the sources of monies from which a deduction may occur. The effect of this clauses appears to permit the Employer to withhold or deduct monies owed to the employee under the National Employment Standards (NES), such as accrued but unused annual leave or long service leave on termination. This raises the issue that clause 13(h) may be inconsistent with the NES. However, noting clause 4 of the Agreement, I am satisfied the more beneficial entitlements of the NES will prevail where there is an inconsistency between the Agreement and the NES.
The Agreement is approved and, in accordance with s 54 of the Act, will operate from 1 May 2023. The nominal expiry date of the Agreement is 31 March 2027.
DEPUTY PRESIDENT
[1] Collinsville Coal Operations Pty Limited [2014] FWC 5628 (affirmed on appeal in [2014] FWCFB 7940, 246 IR 21); Inco Ships Pty Ltd [2016] FWC 1637 (permission to appeal refused in [2016] FWCFB 3370); One Key Coal QLD Pty Ltd [2018] FWC 256
[2] Outline of submissions of the CFMMEU dated 17 April 2023 at [3]-[4]
[3] See also, Fair Work Act 2009 (Cth) s 188(1)
[4] [2019] FWCFB 4022
[5] [2017] FCA 1266
[6] Construction, Forestry, Maritime, Mining and Energy Union v McNab Constructions Pty Ltd [2020] FWCFB 5080 at [26]
[7] Witness statement of Lucy Pemble (20 April 2023) at [6]
[8] Ibid at [7]
[9] Witness statement of Lucy Pemble (20 April 2023) at [9]-[10]
[10] Form F17 at 22
[11] Witness statement of Lucy Pemble (20 April 2023) at [8(a)-(b)]
[12] Witness statement of Lucy Pemble (20 April 2023) at [8(c)-(d)]
[13] Witness statement of Lucy Pemble (20 April 2023) at [8(e)-(g)]
[14] Witness statement of Lucy Pemble (20 April 2023) at [8(h)-(i)]; BMD Constructions Pty Ltd New South Wales Enterprise Agreement 2020 at cl 6.5 and the Agreement at cl 6.5
[15] Witness statement of Lucy Pemble (20 April 2023) at [8(j)-(k)]; BMD Constructions Pty Ltd New South Wales Enterprise Agreement 2020 at 7.3 and the Agreement at cl 7.8
[16] Witness statement of Lucy Pemble (20 April 2023) at [8(l)-(m)]
[17] Witness statement of Lucy Pemble (20 April 2023) at [8(n)-(p)]
Printed by authority of the Commonwealth Government Printer
<AE519812 PR761323>
0
7
0