Brady Marine and Civil Pty Ltd T/A Brady Marine and Civil
[2024] FWCA 805
•4 MARCH 2024
| [2024] FWCA 805 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Brady Marine and Civil Pty Ltd T/A Brady Marine and Civil
(AG2023/3993)
BRADY MARINE & CIVIL PTY LTD ENTERPRISE AGREEMENT 2023
| Building, metal and civil construction industries | |
| COMMISSIONER CIRKOVIC | MELBOURNE, 4 MARCH 2024 |
Application for approval of the Brady Marine & Civil Pty Ltd Enterprise Agreement 2023.
An application has been made for approval of an enterprise agreement known as the Brady Marine & Civil Pty Ltd Enterprise Agreement 2023 (the Agreement). The application was made pursuant to s 185 of the Fair Work Act 2009 (the Act) by Brady Marine and Civil Pty Ltd T/A Brady Marine and Civil (the Applicant/the Employer). The Agreement is a single enterprise agreement.
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) made changes to enterprise agreement approval processes in Part 2-4 of the Fair Work Act, that commenced operation on 6 June 2023. The notification time for the Agreement was 26 April 2023 and the Agreement was made on 17 October 2023. Accordingly, under transitional arrangements, the genuine agreement and the better off overall test provisions in Part 2-4 of the Fair Work Act, as it was just before 6 June 2023, apply to this application.
The Agreement was made on 17 October 2023 when 18 of the 28 employees covered by the Agreement voted in favour of approving the Agreement.
The Construction, Forestry and Maritime Employees Union (CFMEU) were a bargaining representative of employees to be covered by the proposed enterprise agreement and were involved in the negotiations.
On 16 November 2023, the CFMEU filed an F18 with the Fair Work Commission (the Commission) indicating that it opposed the approval of the Agreement on a number of grounds. Directions were issued for the filing of material from the CFMEU and the Employer on the CFMEU’s objections to the application and the preliminary concerns identified by the Commission.
On 30 November 2023, I held a mention to clarify the issues in dispute and issued further directions. At the mention, Mr Ben Cooper of Mapien Workplace Strategists applied for permission to appear on behalf of the Employer pursuant to s 596(2)(a) of the Act. Having weighed the considerations in s.596 of the Act and the circumstances before me, I granted permission to Mr Cooper to be represented.
In light of the material received from the parties, I conducted a second mention on 8 February 2024. Following the mention, the Employer provided an undertaking in the terms set out below:
“1. The Employer will, from 17 October 2023, apply the wage increases contained at clause 4.1.2 of the Agreement to all employees and for all purposes.”
On 12 February 2024, in response to the undertaking, the CFMEU sent the following correspondence to my Chambers:
“Dear Associate
The parties have discussed tomorrow’s hearing and agree that, if the Commission will exercise its power under s 586 to remove the CFMEU’s name from the agreement, the matter can be dealt with on the basis of the revised undertaking and other materials filed to date, without holding a hearing.
The applicant’s representatives are copied in to this email, which is sent with their consent. I am advised that they will be able to provide the Commission with a revised copy of the agreement which gives effect to the above”.
On 12 February 2024, my Chambers sent the following correspondence to the parties:
“Dear parties,
I refer to the above matter and the below correspondence.
Further to the below, the CFMEU are requested to confirm that they no longer press their objection to the approval of the Agreement.
In the event that objection to the approval of the Agreement is maintained, the CFMEU is requested to outline the basis of their remaining objections.
The hearing date cannot be vacated until this clarity is obtained. It is requested that the CFMEU provide a response by 4.00pm, today 12 February 2024….”
On 12 February 2024, the CFMEU sent the following correspondence to my Chambers:
“Dear Associate
The CFMEU presses the following objections, which the revised undertaking does not address, on the following bases.
The applicant’s misrepresentations are not capable of being addressed by an undertaking.
The basis of this objection is that, applying the reasoning of the Full Bench in NTEU v Southern Cross University [2023] FWCFB 200 at [51]:
(a)No undertaking can retrospectively alter established facts, specifically in this case, that there is a reasonable doubt about whether a majority of voters in the ballot genuinely agreed.
(b)This case involved a closely contested ballot that was distorted by a material misrepresentation concerning a contingent financial payment to encourage employees to vote.
(c)That cannot be cured by a latent undertaking to make the payment to employees, and it does not matter that the misrepresentation may have been unintended, or that the applicant may have already made the payment.
The relevant paragraphs of the parties’ written submissions are [20]–[23] of our amended outline, [25]–[28] and [32]–[35] of the applicant’s outline, and [14]–[25] of our reply outline.
The NERR did not comply with s 174, as it did not identify the proposed coverage of the Agreement.
The basis of this objection is that the NERR described the proposed coverage of the Agreement by reference to the Agreement’s classification structure. However, the NERR did not contain, nor was it accompanied by, a description of the Agreement’s classification structure.
Accordingly, the NERR failed to identify the proposed coverage of the Agreement such that it did not comply with the requirements of s 174. This was not a minor procedural or technical error.
The relevant paragraphs of the parties’ written submissions are [27]–[37] of our amended outline and [36]–[39] of the applicant’s outline.
Objection re inclusion of CFMEU’s name
For completeness, I note the further objection foreshadowed in our F18, that the inclusion of the CFMEU’s name in the Agreement was misleading such that the Commission cannot be satisfied the Agreement was genuinely agreed.
That objection is also not addressed by the revised undertaking, but is not pressed on the basis that the parties agree it would be appropriate for the Commission to exercise its power under s 586 to remove the CFMEU’s name from the agreement, as indicated below.”
Noting the above issues in dispute, the matter proceeded to a hearing on 13 February 2024. The Employer was represented by Mr Cooper and the CFMEU were represented by its legal officer, Mr Liley.
Facts not in dispute.
The following relevant facts are largely not in dispute:
On 26 April 2023, the Notice of Employee Representational Rights (NERR) was emailed to employees.
Meetings between the Employer and bargaining representatives were held between 7 June 2023 and 1 August 2023 to discuss the Agreement.
On 24 August 2023, the Employer provided a memorandum to employees regarding the Agreement, requesting feedback by 31 August 2023. This document had attached a copy of the Agreement and a copy of the previous Agreement for reference, and was distributed to all employees by email. Relevantly, the memorandum stated “Your wage increase will be applied from the date of a successful ballot”.
Between 6 and 13 September 2023, during the first access period for the First Ballot, meetings were held with employees to explain the terms of the Agreement and the effect of those terms.
On 12 September 2023, a document explaining and summarising the terms and changes to the Agreement was emailed to employees.
On 13 September 2023, Mr Paul Brady of the Employer sent an email to employees which stated “And don’t forget, a YES vote triggers an immediate 7.5% to your hourly rate (10% for crane operators)”. The email additionally referred to a ‘secret sign on bonus’ as follows:
“we are offering a sweetener of $5,000 to each voting employee, should the new agreement be voted in with a majority YES vote tomorrow.
If we get a majority YES vote tomorrow, $2,500 will be paid to each voting employee in next week’s pay run, and a further $2,500 will be paid once the new agreement is officially accepted by the federal Commissioner”.
On 14 September 2023, the Employer held the first ballot (First Ballot). The First Ballot was unsuccessful.
On 9 October 2023, the Employer emailed correspondence to employees which stated the access period would start on 10 October 2023, and a second ballot would be held on 17 October 2023 (Second Ballot). This correspondence relevantly stated “Your wage increase will be applied from the date of a successful ballot”.
On 12 October 2023, the Employer provided a document regarding the Agreement. Relevantly, this document stated “increases to hourly wage rates will be honoured from the date of a successful vote by employees, rather than having to wait until approval of the Agreement by the Fair Work Commission”.
On 17 October 2023, the Second Ballot was held. 26 of 28 employees participated in the Second Ballot. 18 in favour of approval of the Agreement and 8 voted against. Accordingly, the Agreement was approved by 69.2% of employees who participated in the Second Ballot.
On 31 October 2023, the Employer made an application for the Agreement to be approved by the Commission.
Issues to be determined.
As set out at paragraph [10] above, the following issues remain to be determined:
The applicant’s misrepresentations are not capable of being addressed by an undertaking.
CFMEU submissions.
The CFMEU submits that the Employer’s representations to employees on 9 October 2023, and 12 October 2023 as outlined at paragraph [12] above were misleading and misrepresented to employees that increases to hourly wage rates would be honoured from the date of a successful vote by employees, rather than having to wait for the Agreement to be approved by the Commission.
Further, the CFMEU submit that the proffered undertaking reproduced at paragraph [7] above does not rectify the Employer’s misrepresentations as to the increased rates as it is not in the category of genuine agreement issue that is capable of being addressed by undertakings.
The CFMEU refer the Commission in particular to the decision of the Full Bench in NTEU v Southern Cross University[1] where the Full Bench states that “Whilst undertakings can restore or remediate rights or commit to future conduct, they cannot retrospectively alter established facts; in this case that doubt reasonably exists about whether a majority of voters in the ballot genuinely agreed. Whilst not all errors or misrepresentations in a bargaining or balloting process are incapable of being cured by undertakings, a closely contested ballot distorted by a material misrepresentation concerning a contingent financial payment to encourage a cohort of casuals to vote cannot be cured by a latent undertaking to make the payment to that voting cohort. It matters not that the misrepresentation was unintended or that the University may have already done so.”[2]
Employer submissions.
The Employer does not contest that on 9 October 2023 and 12 October 2023 it represented to eligible employees that hourly rates of pay would be increased from the date of a successful ballot, and that the Agreement did not provide for rates of pay to increase until the approval of the agreement by the Commission.
The Employer in its written submissions stated that eligible employees were paid “the equivalent of initial increase provided for under the Agreement, albeit in a different way than represented to employees, and no employee has suffered a disadvantage due to their possible reliance on the misrepresentations”. Essentially, the Employer submitted that the increases to hourly rates of pay were applied as an allowance for normal time hours, and overtime hours equivalent to the rates set out in clause 4.1.2 b) of the Agreement.
Prior to the hearing of the matter, the Employer offered the following undertaking as a means of addressing this issue:
“1. The Employer will, from 17 October 2023, apply the wage increases contained at clause 4.1.2 of the Agreement to all employees and for all purposes.”
The Employer contests the CFMEU’s submission that the current circumstances are ‘on all fours’ with the Full Bench decision of NTEU v Southern Cross University[3] for the following reasons:
The Decision states at [35] that “... the fact that a misrepresentation is made in the course of an access or voting period does not, of itself, mean that the Agreement was not genuinely agreed. The issue which determines that question is whether, in the words of the Full Bench in Appeal by Australian, Municipal, Administrative, Clerical and Services Union …it could reasonably be expected to have the effect of deceiving those employees into voting for something which, if they had known the true position, they would not have voted for”.[4]
The Full Bench identified at [39] the considerations arising from the misrepresentations in that case and determined that “... collectively these considerations constituted a proper basis for supposing that the misleading statements may have materially affected the outcome of the ballot”.
The misrepresentations in Southern Cross were made to employees including casual employees and one misrepresentation was made specifically to casual employees, whereas the Employer made its representation to all employees covered by the proposed agreement.
The Southern Cross ballot cohort was comprised of at least 50% casual employees, whereas the F17A filed in the current application identifies that only 6 employees of the Employer’s 28 employee cohort were casual employees; and
The Southern Cross ballot was approved by 53% of employees, whereas the F17A identifies that the Agreement was positively approved by 69.2% of participants.
The Employer submits that “the considerations arising from its misrepresentation do not lead to the conclusion they may have materially affected the outcome of the ballot”.
Following the hearing, the Employer provided, on a confidential basis, a list of its employees employed as of 9 October 2023 (the date of the misrepresentation pertaining to the successful Second Ballot) and a list of employees employed with the Employer as at the date of the hearing on 13 February 2024. An analysis of this material performed by the Commission found that only 2 employees that were employed as of 9 October 2023 have since ceased employment with the Employer.
Secret sign on bonus.
Although the secret sign on bonus objection is not raised by the CFMEU in its correspondence of 12 February 2024 confirming the bases upon which it objects to the approval of the Agreement, in the event that it presses the objection I make the following observations here and at paragraphs [42]-[43] below.
On 13 September 2023, during the access period for the First Ballot, the Employer sent an email to employees which relevantly stated “And don’t forget, a YES vote triggers an immediate 7.5% to your hourly rate (10% for crane operators)”. The email additionally contained a ‘secret sign on bonus’ which stated:
“we are offering a sweetener of $5,000 to each voting employee, should the new agreement be voted in with a majority YES vote tomorrow.
If we get a majority YES vote tomorrow, $2,500 will be paid to each voting employee in next week’s pay run, and a further $2,500 will be paid once the new agreement is officially accepted by the federal Commissioner”.
The CFMEU submit that the $5000 ‘sign on bonus’ in the 13 September 2023 email to employees was “self-evidently offered to induce employees to vote to approve the Agreement, and is wholly outside the terms of the Agreement”, and “tends to suggest that employees did not give their informed consent to make the Agreement by voting for it”. It therefore provides “other reasonable grounds for believing” that the Agreement was not “genuinely agreed for the purposes of s 188(1)(c)”.
The Employer does not contest that it made a representation to employees on 13 September 2023 regarding a sign on bonus. The Employer states that this representation was made in relation to the First Ballot of 14 September 2023 that was unsuccessful, and which lapsed upon this event. It further contends that no further representation of that type was made to employees prior to the successful Second Ballot, and it cannot be said that it was a representation relied upon by employees in relation to their consideration of the Agreement in that ballot.
The NERR did not comply with s 174, as it did not identify the proposed coverage of the Agreement.
The NERR issued on 26 April 2023 gave notice that the Employer is bargaining in relation to an enterprise agreement which is proposed to cover “employees that fall under the classifications contained within this Agreement”.
CFMEU submissions.
The CFMEU contends that the NERR was deficient as the Employer’s failure to specify the classification structure in or in association with the NERR renders it defective, because it is “not knowable” from the NERR who will be covered by the Agreement. It contends that the NERR therefore does not describe the Agreement’s proposed coverage as required by FW Regs Schedule 2.1 and, as a result, is non-compliant with the content requirement in s.174(1A). The CFMEU further states that the NERR and the email attaching it were not accompanied by a draft copy of the Agreement, the classification structure contained in it, or any description of the classification structure.
The CFMEU submit that the provision of a NERR that does not identify the proposed coverage of an agreement is not a “minor procedural or technical error” that can be excused under s 188(2).[5]
Employer submissions
The Employer submits that employees were not likely to have been disadvantaged by the NERR construction for the following reasons:
The Employer and its employees have a long history of enterprise bargaining including the Brady Marine & Civil Pty Ltd Enterprise Agreement 2011-2015, Brady Marine & Civil Pty Ltd Enterprise Agreement 2015-2019; Brady Marine & Civil Pty Ltd Enterprise Agreement 2019 and the Brady Marine & Civil Pty Ltd Enterprise Agreement 2019 VARIATION.
The coverage of the above agreements has not changed from agreement to agreement.
The classification structure of the Agreements is substantially based upon the classification structure of the Building and Construction General On-Site Award 2020 and its predecessor modern award.
The employees who were issued with the NERR understood who was intended to be covered by the Agreement.
The employees were represented over an extensive bargaining period by the CFMEU and another employee bargaining representative; and
The employees exercised their industrial right to not approve a prior ballot of the Agreement which was put to them.
The Employer relies on the Full Bench decision of Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others[6] in support of its submission that the failure to specify the coverage in the NERR was a minor, technical, or procedural error.
Consideration.
The applicant’s misrepresentations are not capable of being addressed by an undertaking.
The CFMEU submits that the terms of the material provided to employees on 9 and 12 October 2023 contained the misleading representation that “Your wage increase will be applied from the date of a successful ballot” and that “increases to hourly wage rates will be honoured from the date of a successful vote by employees, rather than having to wait until approval of the Agreement by the Fair Work Commission”.
The CFMEU submits the above communications were misleading because the terms of the Agreement such as clause 4.1.2(a) in fact provide for the increases to hourly wage rates to take effect “Upon Approval by the Fair Work Commission”.
Essentially, the CFMEU submits that the Commission cannot be satisfied the Agreement was genuinely agreed as the representations were self-evidently made to induce employees to vote to approve the Agreement.
Further, the CFMEU submit that the misrepresentations are not capable of being addressed by an undertaking. As stated earlier, the CFMEU points to the Full Bench decision of Southern Cross to support its contention.
There is no dispute that the Employer made misrepresentations to its employees as to when the wage increases would take effect and the manner in which those increases would be provided. The undertaking proffered and reproduced at paragraph [19] above purports to cure the defects.
It is uncontroversial to observe that not every misrepresentation made during the course of an access or voting period of itself means the agreement was not genuinely agreed. As stated by the Full Bench in Appeal by Australian, Municipal, Administrative, Clerical and Services Union[7], the question is determined if “it could reasonably be expected to have the effect of deceiving those employees into voting for something which, if they had known the true position, they would not have voted for.”
Having regard to the submissions before me, I am not satisfied that the misrepresentations were such that they could have reasonably been expected to have had this effect.
There is no evidence before me that any employee was misled or changed their vote as a result of the communications.
In my view, the decision of the Full Bench in Southern Cross is distinguishable from the matter before me. First, the misrepresentations in Southern Cross were made to a cohort of employees including a large proportion of casual employees as opposed to the largely permanent workforce in the present matter. Second, the Full Bench in Southern Cross was concerned with a fairly narrow majority of 53% of voters voting in favour of approving the Agreement, whereas in the matter before me 69.2% of employees voted in favour of approving the Agreement. Third, the evidence before me is that of the workforce employed by the Employer at the time of the commencement of the access period for the successful second ballot, only two employees have since departed. Fourth, I accept the Employer’s submission that the undertaking proffered on 8 February 2024 cures the defects referred to at paragraph [10] above.
In this case, I am satisfied that the misrepresentations are capable of being remedied by the undertakings provided by the Employer.
Secret sign on bonus.
I have reproduced at paragraph [10] above the email of 13 September 2023. It is worth noting that the email clearly states “we are offering a sweetener of $5,000 to each voting employee, should the new agreement be voted in with a majority YES vote tomorrow. If we get a majority YES vote tomorrow (bolded for emphasis)...”. It is apparent from the email that the offer of a sign on bonus was contingent upon a ‘yes’ vote in the unsuccessful First Ballot on 14 September 2023. There is no evidence before me that the Employer made a further representation that a sign on bonus would be paid to employees in relation to the Second Ballot.
Accordingly, I am not satisfied that the sign on bonus amounts to a further basis for concluding that the Agreement was not genuinely agreed.
The NERR did not comply with s 174, as it did not identify the proposed coverage of the Agreement.
As stated at paragraph [27] above, the NERR was issued to employees on 26 April 2023 by email to cover “employees that fall under the classifications contained within this Agreement”, however no draft copy of the Agreement, classification structure, or description of the classification structure was included. The proposed enterprise agreement was not provided to employees until 24 August 2023. Accordingly, it is unclear whether employees were aware that they were to be covered at the time of receiving the NERR.
It is uncontroversial that the purpose of the NERR is to alert relevant employees that bargaining has commenced and inform them of their right to appoint a bargaining representative. [8]
In this case, I agree with the Employer that the employees involved were not likely to have been disadvantaged by the omission of the coverage in the NERR. These reasons include that the Employer and its employees have a long history of enterprise bargaining, the coverage of the above agreements has not changed from agreement to agreement, the employees were represented over an extensive bargaining period by the CFMEU and another employee bargaining representative, and the employees exercised their industrial right to not approve a prior ballot of the Agreement which was put to them. Further, I have had regard to the uncontested evidence of Mr Nathann Perkins, Operations Manager for the Employer that following 26 April 2023, he attended the Employer’s sites to meet with all workgroups reinforcing to everyone that they were covered by the proposed Agreement.
In my view, it was not in doubt that coverage of the new Agreement was the same as the current agreement, and that the NERR related to negotiations for such an enterprise agreement with the current employer.
I consider that the omission of the coverage of the Agreement in the NERR was inconsequential in the circumstances, given the employees were able to understand and exercise their representational rights and effectively participate in the bargaining process.
I consider that it was a minor technical error, and that the employees were not likely to have been disadvantaged by the omission of the coverage. As I am not persuaded that the employees would have, because of the omission of the coverage, not appreciated that they were included in the scope of the proposed agreement and not exercised their right to be represented, I do not consider that they were disadvantaged by the error.
Conclusion.
The Employer has provided written undertakings. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement. The undertakings are taken to be a term of the Agreement.
Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.
Pursuant to s 202(4) of the Act, the model flexibility term prescribed by the Fair Work Regulations 2009 is taken to be a term of the Agreement.
The Agreement lodged included the name of the CFMEU in the definition of Union at cl 1.5. This defined term was incorporated at clauses 2.2.3, 2.2.4, 2.2.11, 2.2.12, 2.4.2 and 2.5.1(f). On 24 November 2023, the Employer advised Chambers that the parties consent to the Commission exercising its discretion to remove the CFMEU’s name from the Agreement and on 28 February 2024, the Employer filed an amended version of the Agreement correcting this error. I am satisfied that the correction should be made and that it is appropriate to do so pursuant to s.586 of the Act.
The Agreement is approved and, in accordance with s.54 of the Act, will operate from 11 March 2024. The nominal expiry date of the Agreement is 4 March 2028.
COMMISSIONER
Appearances:
Mr B Cooper of Mapien Workplace Strategists with permission on behalf of the Applicant.
Mr J Liley, for the Construction, Forestry, and Maritime Employees Union (CFMEU).
Hearing details:
2024
February 13.
Annexure A
[1] [2023] FWCFB 200
[2] Ibid at [51].
[3] [2023] FWCFB 200
[4] Ibid at [35].
[5] Huntsman Chemical Company Australia Pty Ltd t/a RMAX Rigid Cellular Plastics [2019] FWCFB 318, [161]; Harbour City Ferries.
[6] [2019] FWCFB 318.
[7] [2013] FWCFB 7453 at [28].
[8] Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union (CFMEU)[2014] FWCFB 2042.
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