Brockman Engineering Pty Ltd

[2016] FWC 5011

[2016] FWC 5011

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.210 - Application for approval of a variation of an enterprise agreement

Brockman Engineering Pty Ltd
(AG2016/1198)

BROCKMAN ENGINEERING PTY LTD WORKSHOP & SITE COLLECTIVE BARGAINING AGREEMENT 2014

Manufacturing and associated industries
DEPUTY PRESIDENT GOSTENCNIK	MELBOURNE, 26 JULY 2016

Application for variation of the Brockman Engineering Pty Ltd Workshop & Site Collective Bargaining Agreement 2014.

Background

[1] On 1 July 2016, I approved a variation to an enterprise agreement titled the Brockman Engineering Pty Ltd Workshop & Site Collective Bargaining Agreement 2014 (Agreement). 1 In doing so, I indicated that further reasons for my decision would be published in due course.2 These are my further reasons.

[2] Brockman Engineering Pty Ltd (Brockman) has applied pursuant to s.210 of the Fair Work Act 2009 (Act) for the approval of a variation to the Agreement. A vote to approve the variation occurred on 4 May 2016.

[3] The Agreement is expressed to cover all of the Applicant’s employees who are employed at the Applicant’s workshop and at any sites around Australia where maintenance or storage tank work is carried out as described in clause 3.2.1 of the Agreement in classifications or occupations specified in the Agreement as described in clause 3.2.2 and who are eligible for membership of one of the unions covered by the Agreement. The unions covered by the Agreement are the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), the Construction, Forestry, Mining and Energy Union (CFMEU) and the Australian Workers Union (AWU) (collectively, the Unions).

[4] The Unions opposed the approval of the variation of the Agreement and wished to be heard. A hearing, during which evidence was given and submissions made about the Unions’ objections to the approval of the variation, was conducted on 28 June 2016.

[5] The approval of the variation to the Agreement is opposed on three bases. First, it is said that Brockman did not provide evidence that all persons eligible to vote to approve the variation, were given an opportunity to vote. 3 Secondly, the Unions contend that Brockman did not take all reasonable steps to provide to relevant employees with an explanation of the variation and its effect.4 Thirdly, the Unions contend that there are reasonable grounds for believing that relevant employees may not have genuinely agreed to the variation.5 I deal with each of these bases below.

Vote of employees to approve the variation

[6] At the relevant time during which voting to approve the variation took place, there were 90 employees covered by the Agreement. 6 Seventy seven of these employees cast a valid vote and 43 of those employees who cast a valid vote, voted to approve the variation to the Agreement.7

[7] Brockman is a mechanical contractor operating predominately in the water and oil and gas industries. It operates a medium sized workshop, fabricating piping and steel structures. Site crews are engaged in the construction and maintenance of large storage tanks, and the installation of mechanical equipment including piping. 8

[8] The Agreement has operation at the following sites:

• Brockman’s workshop at 340 Forest Road, Corio, Victoria (Workshop);



• Viva Energy Refinery in Geelong, Victoria (Geelong Refinery); and



• ESSO Bulk Storage Tank site in Hastings, Victoria (ESSO Hastings). 9

[9] The gravamen of the Unions’ objection under this head is that Brockman conducts operations involving work covered by the Agreement at locations other than the three listed above and it may employ persons at those locations in classifications covered by the Agreement. The Unions point, inter alia, to the Melville Island Fuel Depot Tank Farm project in the Northern Territory. 10 Mr Graeme Deller gave evidence, which I accept, that at all times since the start of April 2016 until the date he gave evidence, Brockman had not employed any person within the scope of the Agreement at or in relation to any of the projects identified by the Unions as potentially falling within the scope of the Agreement.11

[10] Although Mr Deller, during cross examination, qualified his answer somewhat, 12 I am satisfied on the preponderance of the evidence, that at the time that relevant employees were asked to approve the variation by voting for it, Brockman did not employ persons covered by the Agreement at sites other than the three earlier mentioned. Moreover, there is no probative evidence which causes me to doubt the veracity of Mr Deller’s clear evidence, which was to the effect that other than at the Workshop, Geelong Refinery and ESSO Hastings, Brockman did not elsewhere employ persons covered by the Agreement at the time employees were asked to approve the Agreement.

[11] There is no suggestion that Brockman employees employed at the Workshop, Geelong Refinery and ESSO Hastings were not given an opportunity to vote on the variation. It seems clear on the evidence that they were. 13

[12] Ultimately the Unions’ objection under this head amounts to no more than a suspicion that there may be persons employed elsewhere by Brockman who might be covered by the Agreement and who were not given an opportunity to vote to approve the variation. The Unions did not lead any evidence which might have borne out the suspicion or undermined Mr Deller’s evidence to which earlier reference has been made. I am satisfied on the evidence that all employees who were at the relevant time covered by the Agreement were given an opportunity to vote to approve the variation to the Agreement. 14

Whether Brockman took all reasonable steps to provide to relevant employees an explanation of the variation and its effect

[13] The Unions submit that Brockman did not take all reasonable steps to provide relevant employees with a proper explanation of the variation and, in particular that it did not explain:

• classification translations;



• the effect of the “jump up” provisions in clause 39.3 of the Agreement: and



• the “call in” roster allowance absorption. 15

[14] The proposed variation to the Agreement on which relevant employees were asked to vote was to Appendix 1 of the Agreement. Specifically the variation proposed to add the words “(INCLUDING GEELONG REFINERY)” to the heading “RATES, WORKSHOP & SITE” in Appendix 1, and to remove in its entirety the rates of pay and classifications specified as the “GEELONG REFINERY RATES”.

[15] Brockman sent a letter on 12 April 2016 to all relevant employees, including those on annual leave, outlining its proposal to vary the Agreement including a marked up version of the Agreement and a further letter about the variation was sent to relevant employees on 19 April 2016 which included a clean copy of the Agreement as varied by the proposal. 16 Brockman also conducted meetings with relevant employees during which it says it explained the proposed variation and its effect.17

[16] Turning firstly to the issue of whether Brockman adequately explained to the employees how classification translations would be affected by the proposed variation. The letter of 12 April 2016 contains an explanation of the effect of the proposed variation as follows:

“The proposal is that wages for the refinery rate RW4 to be the same as a C10 in the workshop or at other sites. In effect, the weekly wages for all refinery personnel would align to the EBA rates for the workshop and other sites. For turnaround events the wage rates applied would be negotiated with Viva for each event with the proposed new tank maintenance rates being the minimum rates to apply.

For this to happen we need to vary the terms of the Brockman Engineering Enterprise Agreement. There would need to be an adjustment to Appendix 1 of the EBA relating to the rate of pay at the Geelong refinery. All other conditions, allowances and 35 hour week would remain the same at the refinery. The changes would only affect wages for personnel whilst working on the refinery site - refer to attached extract from EBA which identifies proposed changes. Copies of the proposed Enterprise Agreement, as varied, will be available at the company workshop and all sites where Brockman Engineering employees are currently working.” 18

[17] Mr Deller gave the following evidence about the effect of the variation on the classifications and rates of pay applicable to work performed at the Geelong refinery:

“The alignment between these rates would be the same as has been applied for at least the last five years at Brockman when any Employee has moved between the refinery and Workshop or vice-versa and is in my experience, common knowledge amongst Employees. Such staff movement accommodates fluctuating work requirements arising from tank maintenance and shutdown work at the Geelong Refinery. Brockman has undertaken tank maintenance at the refinery for approximately 20 years and in more recent times shutdown work. It has had at times up to 50 to 70 employees on the site for tank maintenance and shutdown work. People transfer across fairly regularly. On average there would be transfers most months. For instance Brockman had 7 personnel on site two months ago and we now have more than 20. During turnaround events it would be expected that 10 to 20 personnel from the Workshop would relocate to the refinery site. The ESSO project is not an ongoing maintenance contract. Personnel do transfer also to this site but on a less regular basis. Whenever staff have moved between sites, the following translation has applied:

Workshop & Site	Refinery
C9	RW6
C10	RW4
C11	RW3
C12	RW1

…” 19

[18] Whilst I give little weight to Mr Deller’s opinion about that which is said to be common knowledge amongst employees, the remainder of his evidence is instructive. The variation proposed by Brockman did not occur in a vacuum. In my view, relevant employees will have had an appreciation of the terms and conditions that applied to them under the Agreement and in particular the terms and conditions that applied when work was undertaken at the Geelong Refinery. Mr Deller’s evidence sets out that which has been the translation of classifications when employees move from the Workshop and site rates to the Geelong Refinery rates. According to Mr Deller, the alignment of classifications between Workshop and site on the one hand and refinery on the other, has applied for at least the last five years. 20 There is no suggestion in the evidence that this was not the case. Given this, and the uncomplicated nature of the proposed variation, it seems to me that the explanation about the effect of the variation as set out in the letter of 12 April 2016 more than adequately explained the effect of the variation on classification translations and the corresponding rates of pay.

[19] I turn next to the explanation given by Brockman about the effect of the proposed variation on the “call-in roster allowance”. Mr Deller gave the following evidence:

“On Tuesday 12 April 2016, Chris Bishop and I met with Geelong Refinery Employees at the Geelong Refinery site, explained to them the Contract Extension opportunity and discussed the details of the Proposed Variation. We invited the employees to ask questions and provided responses to those questions. Some of these employees queried if the changes would impact any other allowances, asked us to confirm that the revised rates would apply to all Brockman work at the refinery and also asked if we had any knowledge as to what was happening with other contractors on the refinery. What was questioned was if there were changes to any of the other conditions apart from the hourly rate, and it was made clear to them that no other conditions, including allowances, would be changed.

Later that day at approximately 1:30pm, Chris Bishop and I met with Workshop
Employees at the Workshop site, explained to them the Contract Extension opportunity and discussed the details of the Proposed Variation. Again, we invited the employees to ask questions and provided responses to those questions. The employees’ queries were very similar to those that had been raised by the Refinery Employees. We explained a number of times, and I believe that the Employees clearly understood, that the change to the hourly rates applied only at the refinery and not to any other sites, and that no other changes to conditions, including allowances, would be made.

At both of these meetings, the employees’ feedback suggested that they understood that the change proposed applied only to the hourly rate at the refinery site. None of the questions or comments suggested to me that there was any uncertainty about this.” 21

[20] Disregarding Mr Deller’s evidence about his belief as to that which employees understood, the remainder of his evidence makes clear that apart from the removal of the Geelong Refinery rates of pay from the Agreement, no other conditions, including allowances, would be changed. The Geelong Refinery rates were inclusive of that which is described as the “Call-In Roster Allowance”. It seems clear therefore, that the absorption of the call-in roster allowance was proposed to be removed from the Agreement by the removal of the Geelong refinery rates of pay. It follows that, where applicable, the call-in roster allowance provided for elsewhere in the Agreement would be paid. It seems to me therefore, that the explanation given to employees that, inter alia, allowances provided in the Agreement would not be changed by the amendment, clearly enough explained this consequence.

[21] As to the explanation given about the effect of clause 39.3 of the Agreement, it seems clear that none was given, however I do not accept the Union’s contention that any explanation was necessary. Clause 39 of the Agreement provides the following:

“39.0 CLIENT - MAINTENANCE PROVIDER - PRACTICES FOR SUPPLEMENTARY

LABOUR ONLY

39.1 Where employees work at a plant location where the Client Company or Maintenance Provider applies to his employees, members of the same unions as are party to this Agreement, by award or agreement, average ordinary hours of work per week that are less than the provisions of this agreement such provisions shall also apply on a pro-rata basis to employees engaged under the terms of this Agreement.

39.2 Where the Agreement defines the adoption of hours of work of the Client Company or Maintenance Provider, when they are more generous than this agreement this also applies to the method of working overtime and the taking of crib breaks.

39.3 SITE AGREEMENTS

Where an employee is employed or engaged at a site/client premises, where there is a general provision that applies to employees engaged on that site/client premises that provides a benefit that is superior to the provisions of this agreement, then the superior conditions shall apply. This provision shall go to such issues as wages, site allowances, classification levels and the like. For the avoidance of doubt, the dispute resolution procedure contained in this agreement applies to disputes over the application of this clause.”

[22] Clause 39.3 of the Agreement operates according to its terms and in the context of clause 39 as a whole. It has operation when the Geelong Refinery rates in Appendix 1 are or were in operation and it continues to have operation according to its terms once the Geelong Refinery rates are removed from the Agreement by the amendment. The explanation given by Brockman to relevant employees to the effect that apart from the removal of the Geelong Refinery rates of pay, there would be no other changes to conditions resulting from the variation, more than adequately explains this consequence.

[23] On the evidence and material before me, and also noting that the Unions did not lead any evidence from any relevant employee to the effect that the explanation about the terms of the variation and its effect given by Brockman was inadequate or caused confusion, I am satisfied that Brockman took all reasonable steps to explain to the relevant employees the variation and its effect.

Are there reasonable grounds for believing that the relevant employees may not have genuinely agreed to the variation?

[24] The Unions contend that there are reasonable grounds for believing that the relevant employees may not have genuinely agreed to the variation because:

• The terms of the variation and its effect were not adequately explained to relevant employees; and



• Brockman took steps to hinder the Unions in proffering an alternative view in that:

○ it failed to call a mass meeting of the relevant employees when requested to do so;

○ there was a management presence during the vote to approve the variation at the Workshop; and

○ there was a denial of entry to the Esso Hastings sought Mr Stephen Dodd, an AMWU organiser, on the day of the vote to approve the variation. 22

[25] I have already dealt with the question whether the terms of the variation and its effect was adequately explained to relevant employees and for the reasons given above I am satisfied that the Union’s contention in that regard does not provide any reasonable ground for believing that the relevant employees did not genuinely agree to the variation.

[26] In KCL Industries Pty Ltd 23 a Full Bench of the Commission, of which I was a member, considered at length the issue of whether and in what circumstances there might be “other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees”.24 I adopt that analysis without repeating it. It is plainly the case that, in some circumstances, the hampering of efforts by an organisation entitled to represent the industrial interests of employees covered by an agreement to disseminate information to its members about a proposed agreement or a proposed variation to an agreement, may provide a proper foundation to conclude that there are reasonable grounds for believing that employees may not have genuinely agreed to the agreement or to the variation.

[27] It seems to me uncontroversial that Mr Dodd was denied entry to the Esso Hastings site on 4 May 2016, that a request for a meeting with employees who were union members employed at the Workshop made by Mr Gavin Penn an organiser with the AWU and Mr Craig Kelly of the AMWU was refused and that Mr Deller was in or about the crib room in which the voting by employees at the Workshop to approve the variation took place on 4 May 2016. I accept that these events might have had the effect of limiting the Unions’ capacity to disseminate information to its members covered by the Agreement about the variation. As with all things however, context is also relevant.

[28] On or about 4 or 6 April 2016 (nothing material turns on the precise date) there was a meeting between representatives of Brockman and representatives of the AWU and the AMWU at which the proposed variation was discussed. 25 Mr Penn and Mr Tony Hynds gave evidence suggesting that at this meeting, they were merely told that Brockman wished to vary the Agreement and were not provided with any details of the variation.26 I reject that evidence and prefer the evidence about the meeting and its content given by Mr Deller,27 for the following reasons. First, it strikes me as odd and somewhat unlikely that confronted with a mere statement from Brockman representatives that Brockman wish to vary its Agreement, the representatives of the AMWU and the AWU did not ask for any detail about the proposed variation. Neither Mr Penn nor Mr Hynds suggested in their evidence that such an enquiry was made. In my view, such an enquiry was unnecessary since, consistent with Mr Deller’s evidence, an explanation of the variation was given during the meeting. Secondly, as the cross examination of Mr Deller revealed, the representatives of the Unions in attendance at the meeting on 4 or 6 April 2016 proposed alternatives to the proposed variation. 28 It seems to me most unlikely that union representatives would propose alternatives to a variation about which they had been given no information. That union representatives proposed alternatives to the variation is consistent with the evidence given by Mr Deller that the substance of the variation was explained to the union representatives at the meeting on 4 or 6 April 2016.

[29] In any event, by 12 April 2016 both Mr Penn and Mr Hynds were provided with a copy of the 12 April 2016 letter to employees, to which earlier reference is made, and a marked up attachment identifying the variations proposed by Brockman. 29

[30] On 15 April 2016, Mr Penn and Mr Hynds conducted a meeting with some of the relevant employees. The meeting was conducted at the Workshop and employees engaged at the Geelong Refinery were also in attendance. 30 Both Mr Penn and Mr Hynds gave evidence that they did not have “a full set of materials about the changes”, when they conducted the meeting at the workshop.31 Presumably, by this evidence, they each intended to convey that they could not fully discuss the proposed variation with the relevant employees in attendance at the meeting. I do not accept the evidence nor the consequence sought to be conveyed. It is clear from their own evidence that they were each provided with a copy of the email sent to employees on 12 April 2015 and the attachment thereto. That email and attachment contained the sum of the proposal. No more was required to enable each of Mr Penn and Mr Hynds to have a meaningful conversation with their respective members about Brockman’s proposal to vary the Agreement.

[31] Moreover, each of the employees who attended the meeting on 15 April 2016 would have been in possession of the same material and would likely have read the material before attending the meeting. That this is likely to be the case is borne out by the evidence that “there were a lot of questions at the meeting and debate amongst members about the options and the reasons for the specific Geelong refinery rates” 32 and that “a number of concerns were raised by members including about the voting process”.33 This is consistent with at least some of the employees in attendance having read the email, letter and attachments sent to them on 12 April 2016, as that material contained a proposal to remove Geelong Refinery rates and contained details about the voting process.34

[32] Critically, at the 15 April 2016 meeting, the union representatives told union members in attendance “that the Unions were definitely not supporting the variation”. 35

[33] A copy of the letter of 19 April 2016, to which earlier reference was made, was sent to Mr Hynds and Mr Penn on 22 April 2016. 36

[34] It appears from the evidence that neither Mr Dodd (AMWU) nor Mr Jeff Sharp (AWU) took any steps to discuss the proposed variation with members employed at Esso Hastings who are covered by the Agreement until 3 and 4 May 2016. There is no suggestion in the evidence that either or both of Mr Dodd and Mr Sharp were unaware of the proposed variation until that time. Mr Sharp sought and was denied entry to the Esso Hastings site on 4 May 2016 by notice given on 3 May 2016. 37 Mr Sharp accepts that the notice given by him did not support an entry for the purposes of discussions with employees.38

[35] Mr Dodd gave an apparent valid notice but was also refused entry. It seems to me that although entry to the site was refused, the decision to refuse entry was made by Wood Group PSN on the basis that it believed that the notice given did not comply with the requirements of the Act. 39 I need not determine whether the decision to refuse Mr Dodd entry was properly based. I do not consider that there is anything in the evidence which would suggest, or from which it might be properly inferred, that Brockman influenced the decision to refuse entry to Mr Dodd or Mr Sharp, much less that it was motivated to influence the decision, or that Wood Group PSN was influenced in its decision, by the prospect of either Mr Dodd or Mr Sharp discussing the proposed Agreement variation with members at the Esso Hastings site on the day of the vote. Moreover, if Brockman were so motivated, it is surprising that it allowed Mr Penn and Mr Craig Kelly to attend and enter the Workshop and Geelong Refinery sites on the day of the vote.40

[36] On 4 May 2016, Mr Penn requested that a meeting be convened of employees at the Workshop. The proposed meeting was to be held approximately 30 minutes before voting for the proposed variation was due to commence and the request was first made approximately one hour before the proposed scheduling of the meeting. 41 I accept Mr Deller’s evidence that the request was made on very short notice and it is unsurprising to me in those circumstances that the request was refused. There is nothing inherently unreasonable about the refusal in those circumstances. Moreover, as is apparent from Mr Penn’s own evidence, that he was permitted on site on that day at all was because of an indulgence by Brockman, as he did not purport to exercise any right of entry nor had he given a notice of entry.42

[37] Moreover, Mr Penn and Mr Kelly were provided with a facility in the form of a table near the crib room at which voting was to occur, enabling each of them to speak to employees prior to the entry into their crib room to cast a vote. 43

[38] That Mr Deller was in or about the crib room in which the voting by employees at the Workshop to approve the variation took place on 4 May 2016, or that he was in or about the vicinity of the table provided to Mr Penn and Mr Kelly, in and of itself does not give me cause for any concern. The Unions did not produce one employee who voted at the Workshop who could give evidence that Mr Deller’s presence either influenced his or her vote or influenced any decision he or she made to speak with either Mr Penn or Mr Kelly.

[39] It seems to me that the Unions had both ample time and opportunity to discuss with relevant employees the proposed variation and in some cases did so and made clear the Unions opposed the proposed variation. That they did not make best or full use of their opportunity cannot be visited upon Brockman. Attendance by union officials at the various sites on the date of the voting was not the exclusive means by which the Unions could communicate with their members or to explain to those members the Unions’ views. There was no bar to the Unions communicating with their respective members by telephone, email, text message or post or by placing their views in a newsletter distributed to members or on the respective websites of each union.

[40] On the whole, none of the matters to which the Unions point give rise to any reasonable ground for believing that the variation has not been genuinely agreed to by the affected employees.

[41] The issue concerning the signature requirements identified by me during a short hearing on 30 June 2016 was dealt with in my decision of 1 July 2016 and I see no need to give further reasons on that issue.

Conclusion

[42] For the reasons given above and in my earlier decision, on the basis of the evidence and material before me, I was satisfied that each of the requirements of ss.210 and 211 of the Act as are relevant to this application for approval of a variation to the Agreement have been met. Consequently, I approved the variation on 1 July 2016 and pursuant to s.216 of the Act, I fixed a date of operation assigned from 1 July 2016.

DEPUTY PRESIDENT

Appearances:

Mr M Follett, Counsel for the Applicant.

Mr E White, Counsel for the AMWU and the AWU.

Hearing details:

2016.

Melbourne.

June 28, 30.

 1   [2016] FWCA 4478.

 2 Ibid at [8].

 3   Transcript PN584.

 4   Transcript PN585.

 5   Transcript PN586.

 6   Employer’s statutory declaration in support of variation to an enterprise agreement, declared by Chris Bishop, General Manager of Brockman, 12 May 2016 at p 4.

 7   Ibid.

 8 Exhibit 7 at [7].

 9   Exhibit 7 at [8] – [11].

 10   Exhibit 3.

 11   Exhibit 7 at [13] – [14].

 12   Transcript PN352 – PN374.

 13   Employer’s statutory declaration in support of variation to an enterprise agreement, declared by Chris Bishop, General Manager of Brockman, 12 May 2016 at pp 3-4; Exhibit 7 at [53]-[68].

 14   Employer’s statutory declaration in support of variation to an enterprise agreement, declared by Chris Bishop, General Manager of Brockman, 12 May 2016 at p 4; Exhibit 7 at [8], [11]-[14] and [64]-[68].

 15   Transcript PN611 – PN651.

 16   Employer’s statutory declaration in support of variation to an enterprise agreement, declared by Chris Bishop, General Manager of Brockman, 12 May 2016 at p3; Exhibit 2, GP–1 and GP–2.

 17   Exhibit 7 at [23] – [25].

 18   Exhibit 2, GP–1.

 19 Exhibit 7 at [19].

 20   Ibid.

 21   Exhibit 7 at [23] – [25].

 22   Transcript PN652 – PN753; Submission of the AWU and AMWU (Adopted by the CFMEU) at [21] – [23].

 23   [2016] FWCFB 3048.

 24   Ibid at [23] – [30].

 25 Exhibit 7 at [20] – [21]; Exhibit 2 at [7], Exhibit 6 at [8].

 26   Exhibit 2 at [7] – [8], Exhibit 6 at [7] – [8].

 27   Exhibit 7 at [20] – [21].

 28   Transcript PN383 – PN401.

 29   Exhibit 2 at [10], Annexure GP – 1; Exhibit 6 at [11], Annexure TH – 1.

 30 Exhibit 2 at [11], Exhibit 6 at [13].

 31 Exhibit 2 at [11], Exhibit 6 at [14].

 32 Exhibit 6 at [15].

 33   Ibid.

 34   Exhibit 2, Annexure GP – 1.

 35 Exhibit 6 at [16].

 36   Exhibit 2 at [12], Annexure GP – 2; Exhibit 6 at [18], Annexure TH – 3.

 37   Exhibit 1 at [5] – [7].

 38 Exhibit 1 at [8].

 39   Exhibit 7 at [43] – [52], GD-4 and GD-5.

 40   Exhibit 2 at [14] – [15].

 41   Exhibit 7 at [57] – [58].

 42 Exhibit 2 at [20].

 43 Exhibit 7 at [60].

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