[2021] FWC 4949

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Broome Marine and Tug Pty Ltd
(AG2020/2872)

DEPUTY PRESIDENT MASSON

MELBOURNE, 12 AUGUST 2021

Application for approval of the Broome Marine Enterprise Agreement 2020.

Introduction

[1] This decision concerns an application made by Broome Marine and Tug Pty Ltd (Broome Marine) under s 185 of the Fair Work Act 2009 (the Act) for the Fair Work Commission (the Commission) to approve the Broome Marine Enterprise Agreement 2020 (the Agreement) upon rehearing of the application. The background is as follows.

[2] The application was initially approved by Commissioner Williams in a decision 1 issued on 23 November 2020 (the Approval Decision). In the Approval Decision the Commissioner concluded that, save for a deficient consultation clause, the Agreement met the various approval requirements in the Act, including that it passed the “better off overall test” (the BOOT). The Commissioner determined to insert the model consultation clause pursuant to s 205(2) of the Act and approved the Agreement. In deciding the Application, the Commissioner considered and rejected matters raised by the Australian Maritime Officers Union (AMOU) in their Form F18 and resisted an application by the Construction, Forestry, Mining, Maritime and Energy Union (CFMMEU) to be heard in the matter.

[3] An appeal of the Approval Decision was brought by the CFMMEU and AMOU (the Unions). The fifth and successful appeal ground raised by the Unions was that the Commissioner erred by determining that Broome Marine had taken all reasonable steps to explain the terms and conditions of the Agreement to the employees and that the Agreement was genuinely agreed to by employees.

[4] On 23 March 2021, a Full Bench granted permission to appeal, upheld the appeal in respect of the fifth ground of appeal and quashed the Approval Decision (the Appeal Decision 2). The Full Bench considered that the Commissioner could not have been reasonably satisfied that Broome Marine had taken all reasonable steps to explain the terms and effects of the terms of the Agreement and consequently the Agreement was not genuinely agreed. In upholding the fifth ground of appeal the Full Bench was concerned that Broome Marine had failed to provide an accurate explanation to employees of certain substantive provisions of the Agreement, those being clause 5 (Total Hourly Rate of Pay), clause 6 (Annual Salary) and clause 9.1 (Individual Flexibility Agreement). The matter was remitted by the Full Bench to me for redetermination.

[5] In the rehearing of the application for approval of the Agreement, the Unions sought to be heard pursuant to s 590 of the Act. In a decision 3 issued on 27 April 2021 I determined that the Unions had established a basis upon which they should be invited to be heard. Directions were subsequently issued requiring Broome Marine to file and serve an amended Form F17 following which the Unions were required to file any submissions, witness statements and material on which they sought to rely in opposing approval of the Agreement. Broome Marine were then afforded an opportunity to file material in reply. The matter was set down for hearing before me on 15 July 2021.

Case for Broome Marine

Revised Form F17 Declaration

[6] On rehearing of Broome Marine’s application for approval of the Agreement, a revised Form F17 declaration (F17) was filed which was signed by Mr Dean Thornton and dated 14 May 2021. Mr Thornton who is a director of the accounting firm Smith Thornton Accountants which provides accounting and payroll services to Broome Marine, was authorised to complete the Form F17 declaration in his capacity as an authorised agent of Broome Marine pursuant to s 126 of the Corporations Act (Cth) 2001 4(the Corporations Act).

[7] In the F17 Mr Thornton relevantly declares as follows;

• The Marine Towage Award 2020 5 (the Towage Award) covers employees of Broome Marine.

• The Agreement would if approved provide for terms or conditions more beneficial than the Towage Award. Specifically, clause 4.2 of the Agreement provides for base rates of pay at least 5% higher than those in the Towage Award.

• The Agreement does not confer any entitlements that are not provided for in the Towage Award. Nor does it contain any terms that are less beneficial than equivalent terms in the Towage Award or omit any entitlements in the Towage Award. The Agreement does contain terms that are different to the Towage Award 6.

• The notification date is identified as 17 July 2020 with the notice of employee representational rights (NERR) distributed that same day.

• Employees were each given a notice by email on 10 September 2020 detailing the time, place and method of voting for the Agreement. On that same day employees were also provided with copies of the Agreement, the Towage Award and an Explanation Sheet for the Agreement (the Agreement Explanation) 7.

[8] As regards the steps taken by Broome Marine to explain the terms and effects of the terms of the Agreement to employees, Mr Thornton states as follows at Q22 of the F17;

• Employee bargaining representatives both had 9 and 20 years industry experience respectively and became the primary conduit through which communication occurred with employees. The reliance on the two bargaining representatives was attributable to the geographical dispersion of employees and erratic hours of work.

• As a result of Covid-19 and travel restrictions, bargaining meetings in which Mr Thornton participated were conducted by ZOOM and were regularly attended by employee bargaining representatives.

• Given the “sporadic” hours of work of employees, no collective meetings with all employees were held. Feedback and queries were received from employees and responded to through the employee bargaining representatives.

• In explaining the terms and effects of the terms of the Agreement to employees, reliance was placed by Broome Marine on the employee bargaining representatives having regard to their industry experience and knowledge of the Towage Award.

• At the start of the access period employees were provided with copies of the Agreement, Towage Award and the Agreement Explanation document which was approximately 3 pages in length.

[9] The Agreement Explanation document dated 10 September 2020 included a table two pages in length that explained the terms of the Agreement and how those terms differed from the Awards. The introductory page of the Agreement Explanation documents relevantly states as follows;

“Dear Employee

RE: REPLACEMENT ENTERPRISE AGREEMENT – EXPLANATION SHEET

1. The following table provides a brief explanation of the terms of the proposed single-enterprise agreement called the Broome Marine Enterprise Agreement 2020 (Agreement). It does not constitute a complete explanation, and may contain minor, unintended errors.

This document must be read in conjunction with the text of the Agreement. It does not displace the explanation provided by in person information sessions.

You are strongly encouraged to attend an information session or to ask any questions you may have in relation to the Agreement.

2. You are expected to read the text of the Agreement in conjunction with this explanation. Where you have a concern with the explanation provided in this document compared to the Agreement clause, you should contact Dean Thornton.

3. If the Agreement is voted-up and approved by the Fair Work Commission (Commission), it will apply to the incorporate the Marine Towage Award 2020 (Award).

4. The Award contains a number of terms and conditions that are not provided for in the Agreement (see below for a snapshot). It is important that you carefully consider the terms of the Award against the Agreement.

5. Please consider the explanation of the terms of the Agreement provided below and if you have any questions please do not hesitate to contact Dean on………”

[10] A ballot was conducted on 18 September 2020, in which 18 of the 19 employees covered by the proposed Agreement voted. Of the 18 employees who participated in the ballot, 15 voted to approve the Agreement.

Evidence of Mr Dean Thornton

[11] In the hearing conducted on 15 July 2021 Mr Thornton was called to give evidence in support of the application for approval of the Agreement. Mr Thornton gave evidence that can be summarised as follows;

• As the external accountant for Broome Marine, he was familiar with its operations and had been responsible for rolling out the enterprise agreement making process with the support of an external IR consultant and legal practitioners.

• Broome Marine’s activities are broader than just marine towage and extend to crew transfer and offshore marine support services. It has several vessels of which three are dedicated to towage services.

• Broome Marine have and continue to apply the Towage Award to its employees in all circumstances regardless of whether the marine activities undertaken by employees are covered by the Towage Award or by the Ports, Harbours and Enclosed Water Vessels Award 2020 8 (the Ports Award). From a payroll perspective Broome Marine does not distinguish between work undertaken by its employees whether it is covered by the Towage or Ports Awards.

• Mr Thornton states that his understanding of the term “marine towage industry including associated marine activities” where the words appear in the scope and application clause found at clause 2 of the Agreement means that the Agreement covers all of Broome Marines activities including both towage and non-towage marine services.

• Broome Marine employees are currently paid a daily rate that is set by reference to ‘market rates’ and not by reference to the Towage or Ports Award rates and conditions. Mr Thornton conceded that he is not familiar with the different rates that the Towage Award provides for in respect of different towage services. He expressed confidence however that the daily rates paid to employees by Broome Marine would more than satisfy Towage Award obligations.

• All employees of Broome Marine would be covered by the Agreement were it to be approved, excluding Mr Renny Gardiner who is a director of Broome Marine and not an employee. Employees that would be covered include the ‘Operations Manager’ who also undertakes work as a Master on one of the vessels, and the administration clerk who also works on the vessels from time to time.

• Mr Thornton confirmed that the notice of ballot and Agreement Explanation, both dated 10 September 2020, were sent to employees, and not the equivalent documents dated 9 September 2020 that were appended to the original Form F17 that had been signed and dated by Mr Renny Gardiner on 21 September 2020 and which were filed with the original application for approval of the Agreement. Mr Thornton reconciled the conflicting dates on the two sets of documents by explaining that the documents dated 9 September 2020 were sent to him by the IR consultant following which he transferred the two documents to company letterhead before arranging signing by Mr Gardiner and distribution to employees on 10 September 2020.

• No meetings or information sessions were held with employees to explain the terms or effects of the terms of the Agreement at or about the time of or following commencement of the access period. Mr Thornton referred to discussions that he understood the IR consultant had held directly with employees during the bargaining process but was unable to give evidence as to the timing and content of those discussions. As regards discussions between the employee bargaining representatives and employees, on which Broome Marine sought to place some reliance, Mr Thornton was similarly unable to give evidence as to the timing and content of those discussions.

• Mr Thornton received some questions from employees via email from one of the employee bargaining representatives on 17 September 2020 in relation to various matters including the geographical coverage of the Agreement, STCW rules/regulations, breaks between towage jobs and bus/travel arrangements. Mr Thornton responded via telephone to Mr Bennetto regarding the queries, of which conversation he made notes. 9

Broome Marine Submissions

[12] Broome Marine reject the Unions’ complaint that the F17 prepared by Mr Thornton was not made in compliance with Fair Work Act Rules (FW Rules) and submit that Mr Thornton was acting as an authorised agent of Broome Marine in accordance with s 126 of the Corporations Act. Mr Thornton was responsible for the enterprise bargaining process with assistance from IR consultant Mr Hudston, he was familiar with the communications with employees and as such was the most appropriate person to complete the declaration. Broome Marine submit that should the Commission have any concerns it should exercise its discretion under s 586(b) of the Act and waive any irregularity in compliance with the rules.

[13] Turning to compliance with s 180(5) of the Act, Broome Marine contend that it is necessary to take into account the relevant factual circumstances of their operations and workforce when considering whether employees genuinely agreed to the Agreement. Those circumstances relevantly include that; the workforce is experienced and familiar with the Towage Award which is incorporated in the Agreement, the explanation provided to employees was appropriate and limited to differences between the Towage Award and the Agreement which only contains 10 clauses. Employees were also specifically encouraged to carefully read both the Agreement and Towage Award.

[14] Broome Marine refer to the matters raised by the Unions in relation to whether the requirements of s 180(5) of the Act had been met and highlight the findings of the Full Bench on appeal in which the majority of the genuinely agreed issues were similarly raised, considered and dismissed by the Full Bench. Broome Marine submit that the findings of the Full Bench in relation to the genuinely agreed matters dealt with on appeal may be adopted on rehearing of the application.

[15] Adoption of the Full Bench’s findings on the genuinely agreed matters would leave three matters to be dealt with on rehearing, those being the concerns identified by the Full Bench 10 regarding deficient explanations provided by Broome Marine to employees in relation to clauses 5, 6 and 9 of the Agreement.

[16] Broome Marine acknowledge the Full Bench’s conclusion regarding the inadequacy of the explanation in respect of clauses 5, 6 and 9 of the Agreement. It concedes that it would be open and proper to adopt the findings of the Full Bench in relation to employees’ genuine agreement. That includes those findings as to reasonable steps that could have but were not taken by Broome Marine in explaining the terms and effects of the terms of the Agreement. To address the specific genuinely agreed concerns identified by the Full Bench, Broome Marine propose the following undertakings;

“……………

1. The Applicant will not implement a total hourly rate of pay or annual salary arrangement otherwise than in accordance with clause 14.2 of the Marine Towage Award 2020 (Award). Where such arrangement is implemented, the Applicant will ensure, by conducting a reconciliation in accordance with clause 5.8 or 6.8 (as applicable), that the employee is better off overall under the terms of the Agreement as compared to the Award.

2. Any individual flexibility arrangement between an Employee and the Applicant will be made in accordance with clause 5 of the Award.

……..”

[17] When questioned as to whether the proposed undertakings dealing with clauses 5 and 6 were capable of acceptance, Broome Marine contended that a plain reading of the Agreement and Towage Award by employees, as they were encouraged to do, would have led to an inevitable conclusion that those Agreement clauses were to be read in conjunction with clause 14.2 of the Award. Clause 14.2 of the Award sets out the arrangements for the implementation of aggregate wages and or annual salary arrangements, which relevantly includes at clause 14.2(a) a majority workforce approval requirement for the introduction of such arrangements.

[18] Broome Marine further contend that it would have been apparent to employees through the Agreement Explanation document and by reading the Agreement and Towage Award that it was intended that the introduction of total hourly rates of pay or annual salaries under the Agreement could only occur by agreement of a majority of employees. Accepting that the explanation could have been clearer, Broome Marine contend that undertaking 1 would remedy the inadequate explanation of clauses 5 and 6 and give effect to the intended operation of clauses 5 and 6 of the Agreement, that being in conjunction with clause 14.2(a) of the Award in that majority employee support would be required to enable implementation of aggregate daily rates or annualised salaries.

[19] In the event that I am not satisfied as to the proposed undertakings remedying or fully remedying the genuinely agreed concerns, Broome Marine submit that any residual concerns may be addressed by the use of s 188(2) of the Act. It submits that the shortcomings of the explanation of the terms and effects of the terms of the Agreement in respect to clauses 5, 6 and 9, that being an unclear explanation of those provisions, represent minor procedural errors which were not likely to disadvantage employees. Broome Marine submit that but for those minor procedural errors, the Agreement would have otherwise been genuinely agreed and is therefore capable of approval.

[20] Turning to the better off overall issues (BOOT) raised by the Unions, Broome Marine submit that the maters raised on rehearing in relation to Agreement provisions compared against the Towage Award were similarly raised and dismissed on appeal. A similar approach in Broome Marine’s submission should be adopted on rehearing of the application.

[21] As regards the Unions’ contention that a BOOT assessment must also be undertaken against the Ports Award in respect of the non-marine towage services undertaken, Broome Marine submit that the scope of the Agreement is confined to work that would fall within the coverage of the Towage Award only and that the relevant award for BOOT purposes is exclusively the Towage Award. This is clear from a plain reading of clause 2.1 which relevantly states as follows;

“2.1 This Agreement shall apply to an be binding on upon the following parties;

(a) Broome Marine Tug Pty Ltd (ACN 120 795 351) (Employer); and

(b) All Employees of the Employer engaged to perform duties in the marine towage industry including associated marine activities in the classifications contained in the Marine Towage Award 2020 (Award) that fall within the scope of this Agreement in Western Australia (Employees).”

[22] Broome Marine further submit that the fact that it undertakes work in addition to its primary and substantial character of providing towage services is not denied, but that does not alter the Agreement’s coverage clause, nor the relevant reference instrument for the purposes of the BOOT.

Case for the Unions

[23] The Unions submit that the second F17 declared by Mr Thornton and dated 14 May 2021 does not comply with Rule 24(5B) of the FW Rules in that he is not a ‘Director’ or an ‘employee’ of Broome Marine. As such, the Unions contend that the application is not properly made.

[24] The Unions further contend that Broome Marine failed to comply with the requirements of s 180(5) of the Act and as such the Commission cannot be satisfied that employees had genuinely agreed to the Agreement as required by ss 188 and 186(2) of the Act. In making this submission the Unions rely on the following.

[25] The Unions submit that the revised F17 signed by Mr Thornton and filed for the rehearing of the application, if it is accepted, establishes that Broome Marine did not conduct any information sessions with employees to explain the terms and effects of the terms of the Agreement. Nor did Mr Thornton have any direct discussions with employees other than bargaining representatives to explain the terms and effects of the terms of the Agreement. This is contrary to statements made by Mr Gardiner in the original F17 filed with the original application for approval of the Agreement 11.

[26] The Unions submit that a reasonable step in explaining the terms of the Agreement would have been to conduct information sessions with employees to supplement the incomplete or inaccurate explanation contained within the Agreement Explanation document. This is particularly so in circumstances where information sessions were explicitly foreshadowed at paragraph 1 in the introductory comments on page 1 of the Agreement Explanation document, which is reproduced above at [9].

[27] As regards the content of the Agreement Explanation document, the Unions point to several shortcomings including;

• The explanation in respect of clauses 5 and 6 of the Agreement makes clear that the implementation of aggregate hourly rates and annual salaries are permitted at Broome Marine’s discretion. The explanation of the differences with clause 14.2 of the Towage Award vis a vis implementation of such arrangements requiring agreement by a majority of employees is not explained.

• Clause 7 of the Agreement sets out ‘employee responsibilities’ which are not found in the Towage Award. The consequences of breaches of these responsibilities are not explained in the Agreement Explanation document.

• Clause 9 of the Agreement which provides for the making of Individual Flexibility Agreements (IFAs) does not explain that the range of terms that may be subject to an IFA are not limited to five terms as is the case in the Towage Award. No explanation of the difference was provided.

• Clause 10 of the Agreement allows for an employee’s regular roster or ordinary hours of work to be changed following consultation whereas clause 12.2.(b) of the Towage Award requires agreement with a majority of affected employees. This difference was not explained.

[28] The Unions also additionally contend in relation to the genuinely agreed point that;

• A reasonable step that ought to have been taken but was not taken was that of explaining to employees that the Agreement did not apply to non-towage marine work if Broome Marine is correct in its assertion that the scope of the Agreement is confined to marine towage work;

• Assertions by Broome Marine that employees were familiar with the Towage Award is not supported by evidence;

• Mr Thornton’s response to queries raised with him on 17 September 2020 regarding aspects of the Agreement reveal Mr Thornton’s and employees’ lack of understanding of entitlements under the Towage Award; and

• Broome Marine placed reliance on bargaining representatives to discharge the employer’s obligation to explain the terms and effects of the terms of the Agreement in circumstances where one of those bargaining representatives Mr Wadge, was also the Operations Manager and was arguably not free from control of the employer as required by Regulation 2.06 of the Fair Work Regulations (the FW Regulations).

[29] The Unions further contend that considering the deficiencies of the explanation highlighted above, Broome Marine’s responses at questions 12 and 13 of the F17 cannot be correct. Broome Marine answered in response to questions 12 and 13 that there were no terms less beneficial than the Towage Award and that there are no terms of the Towage Award omitted from the Agreement. In these circumstances the Unions submit it would not have been possible for Broome Marine to have taken all reasonable steps to explain the terms and effects of the terms of the Agreement to employees.

[30] Turning to the BOOT assessment, the Unions submit that the scope of work undertaken by Broome Marine employees extends beyond the scope of the Towage Award and includes work that would fall within the coverage of the Ports Award. The Unions rely on the evidence of Mr George Gakis, who is an official with the CFMMEU, who states that Broome Marine operates vessels that undertake a range of work including marine towage, pilot/crew transfer, cargo transfers, offshore marine services, and salvage work 12. The Unions submit that Broome Marine has failed to advance any material that would satisfy the Commission that the BOOT is met in respect of the Ports Award.

[31] As regards the Towage Award, the Unions also submit that the less beneficial entitlements identified by it and set out above at [27], are not offset by the higher minimum rates of pay provided for at clause 4.2 of the Agreement such that the BOOT is met.

Consideration

[32] The Unions object to approval of the Agreement on two main grounds, those being that the Commission cannot be satisfied that the Agreement was genuinely agreed as required by s 188(1) of the Act or that the Agreement satisfies the BOOT. The Unions also raise a point that the application was not properly made as the F17 declaration signed by Mr Thornton was not made in a form consistent with the FW Rules. I will deal with the latter objection first.

Was the F17 made in accordance with the FW Rules?

[33] As set out above, a revised F17 was filed by Broome Marine in advance of the re-hearing of the application for approval of the Agreement. It was completed by Mr Thornton who is not an employee or officer of Broome Marine and nor was he a nominated bargaining representative during bargaining for the Agreement.

[34] Section 185A requires that an application under s 182(4) of the Act must be accompanied by;

(a) a copy of the agreement; and

(b) any declarations that are required by the procedural rules to accompany the application.”

[35] Relevantly, Rule 24(5B) states that;

“The application must be accompanied by a declaration, in support of the application for approval, by each employer, or by an officer or authorised employee of each employer, that is a bargaining representative for the agreement.”

[36] I discern the essence of the Unions’ objection to the F17 completed by Mr Thornton to be that he is not an officer or employee of Broome Marine or that he was a bargaining representative in negotiations for the Agreement. Mr Thornton was intimately involved however in the bargaining process and was responsible for co-ordinating the bargaining with the support of a bargaining representative and IR consultant Mr Hudston. I accept that Mr Thornton was, in the circumstances of his role in the enterprise bargaining, well positioned to complete the declaration although he was not an employee or officer of Broome Marine.

[37] Rule 24(5B) does not in my view compel that the declarant of the F17 must be an employee or an officer of the company. That is clear in my view by the requirement that the form be completed by the ‘employer’ or ‘officer’ or ‘authorised employee’. Nor does Rule 24(5B) in my view compel that the declaration can only be completed by a bargaining representative. Were that the case, many F17s submitted by employers would be held to be non-compliant with the FW Rules even though they had been completed by a senior officer of the employer. My view is supported by the agreement approval application Form F16 which specifically envisages at question 3.1 that an employer may not have an appointed bargaining representative.

[38] In the present case the ‘employer’ has provided an F17 completed by Mr Thornton who has been duly authorised by Broome Marine pursuant to s 126 of the Corporations Act to act as an authorised agent in the preparation of a F17 and all other documents or forms required to be completed by Broome Marine in connection with the lodgement of the application for approval of the Agreement. I am consequently satisfied that the F17 has been completed consistent with the FW Rules. If, however I am wrong in that conclusion I would rely on Rule 6 of the FW Rules and waive compliance with the rules and accept the F17 signed by Mr Thornton. It follows therefore that the application for approval of the Agreement has been validly made.

Was the Agreement genuinely agreed?

[39] 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’.

[40] The state of satisfaction required to be reached by the Commission as to compliance with s 180(5) of the Act, and flowing from that, whether an agreement has been ‘genuinely agreed’, is well established. The principles were set out by the Full Bench at [34]-[35] of the Appeal Decision and do not require restating here.

[41] On rehearing of the application for approval of the Agreement the Unions raise a number of concerns in respect of Broome Marine’s compliance with s 180(5), largely in similar terms to the matters raised by them on appeal. The Unions point to the absence of any information sessions held with employees to explain the terms of the Agreement, such a step in their submission being a reasonable step that ought to have been but was not taken. They also raise the claimed deficient explanations provided to employees in relation to Clause 5 Total Hourly Rate of Pay, Clause 6 Annual Salary, Clause 7 Responsibilities, Clause 9 Individual Flexibility Agreements and Clause 10 Consultation. The Unions also contend that Broome Marine made incorrect statements in answer to questions 12 and 13 in the revised F17 which would mean they could not have taken all reasonable steps to explain the Agreement terms.

[42] From the revised F17 filed by Broome Marine and on the evidence of Mr Thornton it is apparent that there were no information sessions conducted to supplement the Agreement Explanation document provided to employees. This is despite the conduct of information sessions having been being specifically foreshadowed in the Agreement Explanation document. Some reliance was placed by Broome Marine on the role of the bargaining representatives in communicating with employees. However, the role of the bargaining representatives cannot in my view be relied on to diminish the obligation of Broome Marine to take all “reasonable steps” to explain the terms and effects of the terms of the Agreement to employees. That is so in the present circumstances because, aside from Mr Thornton’s handwritten notes of his telephone discussion with Mr Benetto on 17 September 2020 in response to queries from employees, there is no other evidence as to what information was communicated to employees by Mr Thornton or by bargaining representatives to employees to supplement the Agreement Explanation document.

[43] It follows from the above and I am satisfied that the explanation of the terms and effects of the terms of the Agreement was confined to the provision of the Agreement Explanation document to employees. The Full Bench found for the reasons set out below, and with which I agree, that there were significant shortcomings in the explanation of the Agreement terms in the Agreement Explanation document. Those shortcomings were in respect of Clause 5 Total Hourly Rate of Pay, Clause 6 Annual Salary and Clause 9 Individual Flexibility Agreements of the Agreement.

[44] Turning to the provisions in question, Clause 5 of the Agreement relevantly states as follows;

“5.1 Compensation for the applicable base Hourly Rate of Pay for all ordinary and additional hours worked (and any applicable allowances, overtime payments, penalty payments and loadings payable under the Award) may be given by payment of a higher composite Total Hourly Rate of Pay over a given period (Total Hourly Rate of Pay.

……………” (emphasis added)

[45] Clause 6 (Annual Salary) of the Agreement also relevantly states as follows:

“6.1 The Employer may pay an employee an annual salary in satisfaction of any or all of the amounts payable pursuant to the Award.

……………..” (emphasis added)

[46] The comparable Award provision to clauses 5 and 6 of the Agreement is found at clause 14.2 of the Towage Award which relevantly states as follows;

“14.2 Option for aggregate wage or annual salary – full time and part -time employees

(a) As an alternative to being paid the minimum wage rate plus overtime and penalty payments (in accordance with clauses 19 and 25.2), an employer may agree to pay an aggregate wage or annual salary provided the employer obtains the agreement of a majority of its employees who are covered by this award.

………………” (emphasis added)

[47] In dealing with clause 6 (Annual Salary), the Agreement Explanation stated that an Annual Salary “is where Employer may pay an employee an annual salary in satisfaction of any or all of the amounts payable pursuant to the Award.” The Agreement Explanation described the differences between clause 6 of the Agreement and clause 14.2 of the Award in the following terms: “Clause 14.2 of the Award is an option for an annual salary”. The explanation of the differences between clause 5 (Total Hourly Rate of Pay) and the equivalent ‘aggregate wage’ clause in the Award was also limited, with the differences between the provisions described as follows; “Clause 14.2 of the Award is an option for an aggregated wage.”

[48] As regards Clause 9 Individual Flexibility Agreement, the Agreement relevantly states at clause 9.1 as follows;

“9.1 Subject to the FW Act the Employer and Employee covered by this Agreement may agree to make an Individual Flexibility Arrangement (IFA) to modify the application of terms of this Agreement that relates to terms and conditions of employment if:

………………”

[49] Clause 5.1 of the Towage Award by contrast relevantly states as follows;

“5.1 Despite anything else in this award, an employer and an individual employee may agree to vary the application of the terms of this award relating to any of the following in order to meet the genuine needs of both the employee and the employer:

(a) arrangements for when work is performed; or

(b) overtime rates; or

(d) allowances; or

(e) annual leave loading.”

[50] In explaining clause 9.1 of the Agreement, the Agreement Explanation document states that “This provision allows you and the Employer to negotiate flexibility arrangements around certain terms contained in this Agreement”. In describing the difference between the Agreement term and clause 5.1 of the Award, the Agreement Explanation states is respect of clause 5 of the Award that the “Clause sets out Award consultation clauses in detail.”

[51] In considering the differences between the Agreement provisions and the comparable Award provisions (set out above) and the explanation of the terms and the effects of the terms of the Agreement to employees, the Full Bench in the Appeal Decision relevantly said;

“………….

[48] While there appear to be some other differences of substance between clauses 5 and 6 of the Agreement and clause 14.2 of the Award, the Appellants’ particular criticism is that the relevant explanations of clauses 5 and 6 of the Agreement contained in the Explanation Sheet did not explain that clause 14.2 of the Award only enables aggregate wage or annual salary arrangements to be implemented where a majority of employees in the workplace agree, whereas the Agreement permits the implementation of such arrangements at Broome Marine’s discretion.

………………

[51] The language in clauses 5 and 6 of the Agreement is clear and on a plain reading permits Broome Marine to implement Total Hourly Rate of Pay and Annual Salary arrangements at its initiative rather than only by agreement of a majority of employees. This should have been explained to employees.

[52] Given the significance of these terms in establishing the remuneration arrangements for employees and the absence of a clear explanation of the effects of clauses 5 and 6 of the Agreement and the equivalent Award provisions, we are not persuaded that Broome Marine took all reasonable steps to explain the terms of the Agreement and the effects of those terms. The Commissioner erred in concluding otherwise.

………………….

[62] In dealing with the IFA clause the Explanation Sheet states that “This provision allows you and the Employer to negotiate flexibility arrangements around certain terms contained in this Agreement.” It goes on to describe the Award IFA clause in the following manner; “Clause 5 sets out Award individual flexibility arrangements clause in detail.”

[63] We agree with the Appellants that the explanation provided by Broome Marine in relation to the Agreement IFA clause was inaccurate in that failed to highlight the differences between the potential scope of an IFA made under the Agreement versus an IFA made under the Award. Further, use of the words “certain terms” in the Explanation sheet convey that there are limits on the matters that can be dealt with by an IFA under the Agreement when clause 9.1 imposes no such limitations. It simply refers to terms that “relates to terms and conditions of employment…” that may be varied by an IFA under the Agreement. In contrast the Award confines the matters that may be dealt with in an IFA to 5 particular matters.

[64] It follows from the above that the explanation provided by Broome Marine in respect of the IFA clause in the Agreement was deficient. A reasonable step would have been to accurately explain the changes in the Agreement provisions against the Award. Broome Marine failed to do this in relation to the IFA clause and it follows that the Commissioner erred by failing to so conclude.

…………….

[66] In conclusion, an accurate explanation of the remuneration arrangements under clause 5 and 6 and IFAs at clause 9 of the Agreement were reasonable steps that ought to have been taken by Broome Marine, but were not. There was a failure to comply with s 180(5). In such circumstances it was not open to the Commissioner to conclude that the “genuinely agreed” approval requirement in s 186(2)(a) were satisfied absent; the application of s 188(2), which was clearly not considered by the Commissioner.

……………..”¹³

[52] I am not persuaded on rehearing of the application to depart from the conclusion reached by of the Full Bench in respect of Broome Marine’s deficient explanation of clauses 5, 6 and 9 of the Agreement. Nor am I persuaded by the Unions on rehearing of the application that the explanations of Clause 7 Responsibilities and Clause 10 Consultation were deficient, again for the reasons set out by the Full Bench in the Appeal Decision, which I adopt. The Full Bench relevantly said as follows;

“[53] The Appellants further contend that clause 7 (Responsibilities) of the Agreement sets out responsibilities of employees which are not contained in the Award and that no explanation is provided of the consequences of breaches of those responsibilities. Those responsibilities relevantly include:

• complying with lawful and reasonable directions;

• using best endeavours and at all times act faithfully, honestly and diligently;

• devoting the whole of their time and attention to performing solely work-related activities in work time;

• ensuring the highest levels of safe working practices are maintained;

• exhibiting a professional and courteous attitude in all interactions; and

• carrying out services for third parties faithfully, diligently and with all due care, competence and skill.

[54] The explanation provided in the Explanation Sheet states there is no “corresponding clause in Award” and that “This clause explains an employee’s duties and responsibilities to your employer and service to third parties”.

[55] We accept that the description of clause 7 of the Agreement in the Explanation Sheet does not include an explanation of the implications of an employee failing to comply with the obligations set out. We would observe however that the breach exposure the Appellants refer to is more theoretical than real in our view. In our experience is it not the usual practice for explanations to be provided by employers to their employees of the consequences of breaching terms of an enterprise agreement more generally. We accept that such an explanation may be a theoretical step that was not taken by Broome Marine, but we are not persuaded that such a step was a reasonable step in the circumstances. Consequently, we are not persuaded that the Commissioner erred in the manner contended by the Appellants.

…………

[65] The final matter raised by the Appellants relates to the explanation of clause 10 (Consultation). The appellants contend that clause 10 allows Broome Marine to change an employee’s regular roster or ordinary hours of work after consultation whereas clause 12.2(b) of the Award requires agreement with a majority of affected employees. We would simply observe that clause 12.2(b) of the Award is not concerned with changes to an employee’s regular roster or ordinary hours of work but rather is concerned with changes to the span of hours which may occur by agreement of a majority of affected employees. Furthermore, the effect of clause 12.2(b) of the Award is not in our view displaced by the effect of the Agreement consultation clause and continues to apply by reason of the Award’s incorporation into the Agreement. The Commissioner did not err in the manner contemplated by the Appellants.”

[53] It follows from the above that a reasonable step that ought to have been but was not taken by Broome Marine in explaining the terms and effects of the terms of the Agreement to employees, was to provide employees with an accurate explanation of clauses 5, 6 and 9 of the Agreement. Furthermore, in circumstances where the Agreement Explanation document was inaccurate and where that document foreshadowed information sessions would be conducted with employees, it would have also been a reasonable step to conduct the foreshadowed information sessions.

[54] I am consequently not satisfied in the circumstances that Broome Marine has taken all reasonable steps to explain the terms and effects of the terms of the Agreement. It has consequently failed to comply with s 180(5) of the Act and as such I cannot be satisfied that the Agreement was genuinely agreed to by employees as required by s 188(1) and s186(2)(b)(i) of the Act.

Are the proposed undertakings capable of acceptance?

[55] As set out at [16] above, Broome Marine have provided pre-emptive undertakings to address the Commission’s concerns identified in respect of the inaccurate explanations of clauses 5, 6 and 9 of the Agreement. Before turning to consider the specific undertakings proposed it is useful to say something about the capacity to accept an undertaking to address a concern regarding compliance with s 180(5).

[56] The Full Bench decision in CFMMEU v Specialist People 14 (Specialist People) stands as authority for the proposition that an undertaking may be accepted to address a concern held by the Commission that an agreement has not been genuinely agreed15 by reason of a failure of an employer to comply with s 180(5). That is not to say that an undertaking may be accepted to address all concerns that arise in relation to compliance with s 180(5) of the Act. The Specialist People authority was endorsed in CFMMEU v Karijini Rail Pty Ltd16(Karijini) where the Full Bench relevantly stated as follows;

“[105] The CFMMEU also contends that the “concern” where s.180(5) has not been complied with is not about the terms of the agreement, but rather about the fact that an essential pre-approval step has not been taken. It says as a matter of logic, this concern cannot be remedied by an undertaking about a different matter, that being the terms of the agreement. We also reject this submission.

[106] First, section 190(1) does not provide that the section applies if the Commission has a concern that “the terms of the agreement” do not meet the requirements set out in ss.186 and 187 - it provides that the section applies if the Commission has a concern that “the agreement” does not meet the requirements. In the instant case the Deputy President’s concern was that the Agreement did not meet the requirement in s.186(2)(a) because she was not satisfied that Karijini had complied with s.180(5) as set out in s.188(1)(a)(i).

[107] Secondly, a concern about whether an employer has complied with s.180(5) and therefore whether the agreement has been genuinely agreed to by the relevant employees, may as a matter of logic be remedied depending on the nature of the concern. It is accepted that in a number of cases concerns about genuine agreement will not be able to be met by an undertaking. But it is not the case, as a matter of logic, that any such concern could never be met. Why for example, could not a concern that an employer explained the effect of a term of the agreement as to shift work was that an afternoon shiftworker would receive a 15% loading under the agreement, when the agreement only provides for a 10% loading, be met by an undertaking that the employer would pay an afternoon shiftworker a loading of 15%? We consider that such an undertaking would remedy the concern since the agreement operating with the undertaking is consistent with the explanation given.

[108] Our conclusion is consistent with the approach adopted in the most recent Full Bench authority dealing with the subject, namely Construction, Forestry, Maritime, Mining and Energy Union and others v Specialist People Pty Ltd.” 17

[57] It follows from the above that an undertaking may be accepted to address a concern regarding compliance with s 180(5) however the capacity to accept an undertaking will depend on the particular circumstances of the matter and the nature of the concern held.

[58] Turning to the circumstances of the present matter, the nature of the deficient explanation set out above in respect of clauses 5 and 6 of the Agreement is that the differences between the relevant provisions in the Towage Award and the Agreement were not explained. Specifically, the difference that was not properly explained was that under clause 14.2 of the Towage Award aggregate hourly rates of pay and annualised salary arrangement may only be implemented with agreement of a majority of employees covered by the Towage Award whereas the Agreement permits the introduction of such arrangements at the initiative of Broome Marine.

[59] Broome Marine submit that it would have been clear to employees reading the Agreement and Award together that it was the clear intent that the majority approval requirement found at clause 14.2 of the Award be read harmoniously and in conjunction with clause 5 and 6 of the Agreement. Given that clear intent, Broome Marine submit that undertaking 1 gives effect to that intent and is therefore capable of acceptance.

[60] With respect, for the reasons that follow I do not accept Broome Marine’s submission that on a plain reading of the terms of the Agreement and Award it would have been clear to employees that the majority approval requirement found at clause 14.2(a) of the Towage Award was incorporated into the Agreement.

[61] Clause 4.4 of the Agreement states as follows;

“4.4 Should there be any inconsistency between the terms of this Agreement and the terms and conditions of the Awards, the terms of this Agreement will prevail”

[62] Clause 5 and 6 of the Agreement deal in a comprehensive manner with total hourly rates of pay and annual salary. Importantly, the provisions of the Agreement depart from clause 14.2 of the Towage Award in a number of respects including that of the majority approval requirement found in clause 14.2(a) of the Award which states as follows;

“14.2 Option for aggregate wage or annual salary—full-time and part-time employees

(a) As an alternative to being paid the minimum wage rate plus overtime and penalty payments (in accordance with clauses 19 and 25.2), an employer may agree to pay an aggregate wage or annual salary provided the employer obtains the agreement of a majority of its employees who are covered by this award.

…………………” (emphasis added)

[63] By contrast to clause 14.2(a) of the Award, clause 5.1 of the Agreement relevantly states as follows;

“5.1 Compensation for the applicable Base Hourly Rate of Pay for all ordinary and additional hours worked (and any applicable allowances, overtime payments, penalty payments and loadings payable under the Award) may be given by payment of a higher composite Total Hourly Rate of Pay over a given period (Total Hourly Rate of Pay).” (emphasis added)

[64] Clause 6.1 of the Agreement also relevantly states as follows;

“6.1 The Employer may pay an employee an annual salary in satisfaction of any or all of the amounts payable pursuant to the Award.” (emphasis added)

[65] In my view the language in clause 5 and 6 of the Agreement is inconsistent with the comparable language used in clause 14.2(a) of the Award. Whereas the Award makes the introduction of an aggregate wage or annual salary contingent on majority employee agreement, no such language is used in clause 5 and 6 of the Agreement. It follows from clause 4.4 of the Agreement set out above that as there is an inconsistency between the Award and Agreement provisions the Agreement provisions prevail to the extent of that inconsistency.

[66] The Agreement on a plain reading permits Broome Marine to introduce total hourly rate of pay or annual salary arrangements at its initiative without the requirement for majority agreement of employees. The submission that employees would have understood that the majority approval requirement of clause 14.2(a) of the Award was to be incorporated into the Award strains for a construction of the Agreement terms that is misconceived in my view. My view is not altered by the contended familiarity of employees with the terms of the Towage Award.

[67] It follows from the above that I am not satisfied that employees would have understood that clause 14.2(a) applied in conjunction with clauses 5 and 6 of the Agreement. Consequently, the effect of Undertaking 1, if it were accepted, would be to impose a condition on the introduction of total hourly rates of pay or annual salary arrangements that was not explained to employees. This can be contrasted with the Full Bench reasoning in Karijini set out above at [56], where a hypothetical example was used of an incorrect statement having been made in respect of a shift penalty which was higher than the shift penalty actually provided for in an agreement. In the hypothetical example, the Full Bench rhetorically posed why such an inaccurate explanation could not be remedied by an undertaking that gave effect to the incorrect statement as to the higher shift penalty.

[68] See also the comments of the Full Bench in Construction, Forestry, Maritime, Mining and Energy Union v Square Ceilings Pty Ltd 18 (Square Ceilings) where it said the following in respect of an analogous situation to the hypothetical example posed in Karijini;

“[20] The comments of the Full Bench in Karijini, particularly at [107] of that decision, are directly analogous to the present circumstances in respect of the inaccurate statements made by Square Ceilings to its employees in relation to daily ordinary hours of work and the relevant trigger for the payment of overtime. Square Ceilings explained to employees during information sessions held prior to the conduct of the Agreement ballot that the daily trigger for the payment of overtime would be 7.6 hours. That explanation occurred in circumstances where the Agreement did not specify the maximum daily ordinary hours of work beyond which overtime would be payable. As we found in the Appeal Decision, that explanation went to a substantive provision of the Agreement and was inaccurate. That meant that Square Ceilings had not met the requirements of s 180(5) of the Act, the undertaking provided to the Commissioner at first instance failed to remedy the concern and the Agreement was not capable of approval.

[21] The undertaking now provided by Square Ceilings that maximum daily ordinary hours of work shall be 7.6 hours, satisfies our concern as to the inaccurate explanation of the daily ordinary hours of work. The undertaking will ensure that the Agreement will operate in a manner consistent with the explanation provided to employees.” 19

[69] Unlike the particular circumstances in Square Ceilings, in the present matter there was no clear statement as to the entitlements set out at clauses 5 and 6 of the Agreement. Rather it is the absence of a clear statement as to the particular terms (clauses 5 and 6) and effects of those terms that has led to my conclusion that Broome Marine failed to comply with s 180(5) of the Act. Had Broome Marine explained (albeit incorrectly) to employees that clause 5 and 6 of the Agreement permitted the introduction of total hourly rates of pay or annual salary arrangements only by majority agreement of employees, a concern about that inaccurate explanation may have been amenable to an undertaking giving effect to the explanation. That however is not what occurred. No proper explanation was provided that set out the effects of clause 5 and 6 of the Agreement.

[70] Having regard to the above, undertaking 1 if accepted would impose on employees a condition that was neither provided for in the Agreement or explained to them. In these circumstances I am unable to accept the undertaking as it does not address the concern that I hold in relation to the inadequate explanation provided to employees. Moreover, the nature of the concern I have identified is not in the circumstances of this matter amenable to acceptance of an undertaking in my view.

[71] For the same reasons set out above in relation to undertaking 1, I am similarly unable to accept the undertaking proposed by Broome Marine to address my concern in respect of the explanation provided in relation to clause 9. Undertaking 2 would have the effect of narrowing the range of matters that clause 9.1 permits to be the subject of an individual flexibility agreement IFA). It would narrow the matters able to be dealt with an IFA in circumstances where no such explanation was provided to employees.

Use of section 188(2)

[72] The Applicant further submits in the alternative that the deficiencies in the explanation of clause 5, 6 and 9 of the Agreement are amenable to the use of s 188(2) of the Act which relevantly provides as follows;

“(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and

(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174.”

[73] The effects of s 188(2) were considered by a Full Bench in Huntsman Chemical Company Australia Pty Limited t/a RMAX Rigid Cellular Plastics & Others 20(Huntsman). The analysis of the Full Bench was distilled into a number of propositions helpfully summarised as follows by a different Full Bench in Construction, Forestry, Maritime, Mining and Energy Union v Karijini Rail Pty Limited21 (Karijini);

“ ……………….

• the application of the test in s 188(2)(b) involves a retrospective and counterfactual inquiry into the circumstances pertaining to the particular case;

• the test in s 188(2)(b) is whether the employees covered by the agreement were “not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174”;

• the impact of the errors is to be assessed by reference to the objects of those requirements and not by reference to any more general sense of “genuine agreement”;

• in assessing whether employees were not likely to have been disadvantaged by an error, it may be necessary to consider the particular circumstances of the employees concerned at the time the error occurred and the impact of the error on the subsequent course of bargaining. This may include a consideration of what occurred following the error, such as considering any steps taken by the employer to address the adverse impact of the non-compliance;

• assessing whether the employees were not likely to have been disadvantaged by the error may also involve considering the subsequent conduct of the relevant employees;

• the word “likely” in s 188(2)(b) means “probable”’ in the sense that there is an odds-on chance of it happening, rather than there merely being some possibility of it happening; and

• the word “disadvantaged” suggests a deprivation which manifests in the employees covered by the agreement being prevented from substantively exercising their rights within the bargaining regime in Part 2-4 of the FW Act.^” 22(citations omitted).

[74] In the present matter, the contended minor procedural or technical errors in relation to the question of whether relevant employees were not likely to have been disadvantaged is that of the inadequate explanation of clauses 5, 6 and 9 of the Agreement. As observed by the Full Bench in Karijini “the word “disadvantage” takes its colour from the particular context in which it is deployed and the likely impact of the errors is to be assessed by reference to the objects of the requirement in relation to which the errors are made” 23. The relevant requirement that was not met by Broome Marine was that of compliance with s 180(5), that being to ensure that employees were properly informed of the terms of the Agreement so as to allow them to understand how their terms and conditions of employment would be impacted by voting in support of the Agreement.

[75] In considering whether the inadequate explanations were minor procedural and/or technical errors it is useful to consider the context in which the explanations were provided. The Agreement is the first agreement Broome Marine has sought to put in place with the Towage Award currently applying. That award is incorporated and the Agreement itself only contains 10 clauses, several of which may be described as ‘machinery’ provisions, those dealing with title, parties bound, period of operation and relationship to NES. There are only a small number of clauses that deal substantively with conditions of employment including: total hourly rates of pay, annual salary, dispute settlement. individual flexibility agreements and consultation.

[76] Turning to the deficient explanation of clauses 5 and 6 of the Agreement, it needs to be understood in the context of there being only a small number of substantive provisions in the Agreement. Clauses 5 and 6 deal with the form of remuneration arrangements for employees covered by the Agreement and permit the employer to implement total hourly rates of pay or annual salary arrangements at its initiative whereas as set out above, the Award allows such arrangements only by agreement of a majority of employees. Such arrangements if implemented are in lieu of a range of conditions that would otherwise prevail under the Award including base rates of pay, penalty rates, loadings, shift and other allowances prescribed by the Towage Award.

[77] The structure of remuneration arrangements in an agreement is invariably a significant matter for employees, perhaps even more so relatively in the context of the present matter where clauses 5 and 6 are two of only a small number of provisions in the Agreement that are substantive in character. The departure of the Agreement from the Towage Award in terms of the capacity of Broome Marine to unilaterally implement total hourly rates of pay or annual salary arrangements was no small matter in my view. It warranted a proper explanation to ensure employees understood what were arguably two of the most significant provisions in the Agreement. The absence of an effective explanation in these circumstances cannot in my view be described as minor procedural or technical errors. A fulsome and accurate explanation of those Agreement terms would have assisted employees’ understanding of how their terms and conditions of employment would be impacted by voting to approve the Agreement.

[78] The absence of an accurate explanation of clause 5 and 6 relative to the equivalent Towage Award provisions deprived employees of an opportunity to exercise an informed choice as to approval or rejection of the Agreement. In those circumstances I am satisfied that employees were likely to have been disadvantaged by Broome Marine’s procedural and/or technical errors.

[79] It follows from above that I am not satisfied that the deficient explanation of clauses 5 and 6 of the Agreement were minor procedural or technical errors that were not likely to disadvantage employees. As such, the explanation shortcomings in respect of those clauses are not able to be addressed by my exercising discretion pursuant to s 188(2) of the Act.

[80] Having reached the above conclusion in relation to the deficient explanation of clauses 5 and 6 of the Agreement, it is unnecessary for me to deal with clause 9 and whether the deficient explanation of that clause was amenable to the use of s 188(2) of the Act. That is so because the application of s 188(2) to overcome shortcoming in the explanation of clause 9, were I minded to do so, would not resolve or rescue the Agreement from the failures described above in relation to clause 5 and 6 explanations.

BOOT concerns

[81] The Unions submit that the Agreement does not satisfy the BOOT when compared to the Towage Award as a consequence of the less beneficial provisions set out above at [27]. Those submissions were made in similar terms before the Full Bench and were rejected in the Appeal Decision for the following reasons;

“[75] The Appellants submit at [41] of their submissions that a number of terms of the Agreement are less beneficial than the Award and that the only above award entitlement is the 5% extra rate of pay per hour. The Appellants submit that the 5% extra rate is not sufficient to meet the BOOT assessment. The Appellants failed to advance any analysis in support of their submissions and in our view the submission lacks merit for the reasons which follow.

[76] Clauses 5 and 6 of the Agreement, which provide for Total Hourly Rate of Pay and Annual Salary arrangements, both require a reconciliation of earnings under such arrangements with the Award to ensure that they continue to receive at least 5% above the earnings they would otherwise receive under the Award. We discern no detriment.

[77] Clause 7 of the Agreement details employee responsibilities under the Agreement. The Appellants contend that this term exposes employees to prosecution in the event of breach. As stated previously, the risk of such a prosecution is theoretical rather than real and to the extent that it may arguably be a detriment we would accord it little if any weight in the BOOT analysis.

[78] The Appellants’ claim that the dispute settlement procedure is detrimental when compared against the Award. We reject this submission for the reasons set out above at [57].

[79] In relation to the claimed detriment of the IFA provision, we accept that the IFA provision under the Agreement allows for a broader range of matters to be subject to an IFA than under the Award. However it is unclear how this could be regarded as a detriment in circumstances where entering into an IFA under the Agreement is subject to an employee being better off overall than if they had not entered into an IFA. 25 Consequently we discern no detriment.

[80] Finally, we have already rejected the Appellants’ claim that the consultation clause has the effect of enabling changes to the ordinary hours of work of employees without the need for agreement of affected employees, thus overriding clause 12.2(b) of the Award (see [65] above). The Agreement does not have the effect claimed by the Appellants and as such we discern no detriment.” 24

[82] I adopt the Full Bench’s reasoning set out above and similarly reject the Unions’ submission that the Agreement fails to meet the BOOT in respect of the Towage Award.

[83] The Unions also contend that Broome Marine has failed to put on any material that would satisfy the Commission that the Agreement passes the BOOT when compared against the Ports Award which the Unions submit applies in respect of non-towage marine service work undertaken by Broome Marine.

[84] Broome Marine freely concede that the marine services they provide are not confined to work falling within the scope of the Towage Award. They submit however that clause 2 of the Agreement clearly confines the coverage of the Agreement to the “marine towage industry including associated marine activities”. This submission was however at odds with Mr Thornton’s evidence where he expressed his understanding that “associated marine activities” where those words appear in clause 2 of the Agreement, was a reference to Broome Marine’s non-towage marine services. 25 Broome Marine’s submission was also at odds with their payroll practice which is to pay employees a “a commercial rate” which is set without reference to the Ports or Towage Awards. Mr Thornton also stated that he believed the Agreement would cover all work undertaken by Broome Marine, not just work otherwise covered by the Towage Award26.

[85] I have some difficulty with Broome Marine’s submissions as to the scope of the Agreement as the meaning of the terms “associated marine activities” was entirely unclear. When that lack of clarity is considered in conjunction with Mr Thornton’s evidence there is some force to the argument that the Agreement was intended to cover all of Broome Marine’s service, not merely towage work. While there would be some utility in clearer drafting of the scope of the Agreement it is unnecessary for me to resolve the proper construction of the words in the present matter. That is because for reasons already set out above in relation to the genuinely agreed point the Agreement is incapable of approval. Any determination of the BOOT argument in relation to the Ports Award would be moot.

Conclusion

[86] I am not satisfied that the Applicant took all reasonable steps to explain the terms and the effects of the terms of the Agreement to employees as required under s 180(5) of the Act. The deficient explanations which I have detailed above are not capable of being addressed by the provision of proposed undertakings. Nor are the shortcomings in the explanation of clause 5 and 6 of the Agreement minor procedural or technical errors that were not likely to have disadvantaged employees.

[87] 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 detailed above I am not satisfied in respect of those requirements. Consequently, the application for approval of the Agreement is dismissed. An order reflecting this decision will be separately issued.

DEPUTY PRESIDENT

Appearances:

S Rogers of Mills Oakley for the applicant.
L Edmonds for the Construction, Forestry, Maritime, Mining and Energy Union.
G Anderson for the Australian Maritime Officers’ Union.

Hearing details:

2021.
Melbourne – Perth (by video):
July 15.

Printed by authority of the Commonwealth Government Printer

1 2020 FWCA 6189

2 [2021] FWCFB 171

3 [2021] FWC 2318

4 Exhibit A1, Witness Statement of Mr Dean Thornton dated 14 June 2021, Annexure DT1

5 MA000050

6 Clauses 5, 6, 8 & 9 are identified as different to Towage Award entitlements

7 Form F17, Annexure A

8 MA000052

9 Form F17, Annexure C

10 Appeal Decision at [66]

11 Exhibit R1, Witness Statement of George Gakis, dated 28 May 2021 at Annexure GG1 Question 22

12 Exhibit R1 at [10]

13 Ibid

14 [2019] FWCFB 7919 at [23]

15 See ss190(1)(b) and 186(2)(a)

16 [2020] FWCFB 958

17 Ibid at [105-[108]

18 [2021] FWCFB 1498

19 Ibid at [20]-[21]

20 [2019] FWCFB 318

21 [2021] FWCFB 4522

22 Ibid at [43]

23 Ibid at [45]

24 Appeal Decision at [75]-[80]

25 Transcript of hearing dated 15 July 2021 at PN281

26 Ibid at PN102