Caledonia SA Pty Ltd
[2022] FWC 2846
•24 OCTOBER 2022
| [2022] FWC 2846 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Caledonia SA Pty Ltd
(AG2022/1907)
| DEPUTY PRESIDENT BOYCE | SYDNEY, 24 OCTOBER 2022 |
Application for approval of the Caledonia Scaffolding Services Enterprise Agreement 2022 – concerns of intervener as to absence of genuine agreement and non-compliance with better off overall test – non-compliance with s.180(5) of the Fair Work Act 2009 – absence of satisfaction as to genuine agreement – application dismissed
An application has been made for approval of an enterprise agreement to be known as the Caledonia Scaffolding Services Enterprise Agreement 2022 (Agreement). The application is made pursuant to s.185 of the Fair Work Act 2009 (Act). It has been made by Caledonia SA Pty Ltd t/as Caledonia Scaffolding (Applicant/Employer). The Agreement is a single enterprise agreement.
The Construction Forestry Maritime Mining Energy Union (CFMMEU) was granted leave to intervene in the proceedings to make submissions opposing the approval of the Agreement. The Applicant did not oppose the CFMMEU’s intervention. The CFMMEU was not involved in the bargaining of the Agreement, or its approval by relevant employees. Despite this, it appears to be uncontested that the CFMMEU was a default bargaining representative for one or more relevant employees by virtue of s.176(b) of the Act (albeit another employee bargaining representative was appointed under s.176(c) of the Act).[1]
Mr Tom Earls, Partner, Fair Work Lawyers, appeared (with permission) for the Applicant, and Mr Peter Russell, Senior Legal and Industrial Officer, appeared for the CFMMEU.
The Agreement is a third reiteration rollover enterprise agreement made under the Act.[2]
Initially, the CFMMEU’s concerns as to the approval of the Agreement were limited to the better off overall test (BOOT) in terms of its application to loaded rates under the Agreement.[3] The CFMMEU subsequently expanded its concerns to also include an alleged absence of genuine agreement.[4]
On 13 July 2022, the Applicant made submissions, provided detailed 24-page calculations, and proffered preliminary undertakings to address the BOOT concerns raised by the CFMMEU. In response, the CFMMEU, in its submissions dated 18 July 2022, submitted that the proffered undertakings do not address the concerns raised by the CFMMEU, will cause financial detriment to employees covered by the Agreement, disclose an absence of genuine agreement, and/or will result in substantial changes to the Agreement.[5]
By way of revised written undertakings dated 29 July 2022 (July Undertakings), and submissions dated 2 August 2022, the Applicant directly engaged with the CFMMEU’s concerns in relation to genuine agreement, and set out the basis upon which it considers that its revised undertakings address any concerns as to the BOOT.
In its submissions supporting the July Undertakings, the Applicant relevantly stated:
“6. Notwithstanding, the Applicant has, fairly, acknowledged that when one undertakes an exercise outside of the industrial reality of the work contemplated by the parties to the Agreement, and which occurs in practice, there may be issues with the BOOT and has offered an undertaking to removal [sic] all doubt about those circumstances.
7. It is not histrionics to offer undertakings that avoid that process. Indeed, the very purpose of the undertakings offered by the employer was to remove any argument about the operation of the clause – even in the abstract. The Applicant should be commended for taking an approach that reduces the need for adversarial proceedings.
…
10. The Applicant has conceded, on a risk averse basis, this it is likely that when extended to a broader range of circumstances than contemplated by the parties, some BOOT issues may arise and has offered undertakings to remove any doubt whatsoever. It is implicit from the CFMMEU submissions that they concede that the undertakings provided remove the doubt.”[6]
After considering the July Undertakings, an issue was raised by the Commission with the Applicant as to the reference to the Manufacturing and Associated Industries and Occupations Award 2020 (Manufacturing Award) within same. In this regard, on 22 August 2022, the following email was sent by my Associate to the Applicant:
“The undertaking provided by the Applicant dated 29 July 2022 (at paragraph 5(c)) refers to the Building and Construction General Onsite Award 2020 and the Manufacturing and Associated Industries and Occupations Award 2020, whereas the Form F17 dated 10 June 2022 (at Part 2.1, Item 8) refers to the Building and Construction General On-Site Award 2020 and the Storage Services and Wholesale Award 2020.
Can the Applicant please clarify this discrepancy.”
In response, Mr Earls sent the following response email to Chambers:
“Undertaking 5(c) relates to circumstances where employees are working away from home and specifically on resources projects. The Storage and Wholesale Services Award 2020 applies to our client’s yard and is not relevant to the circumstances that undertaking 5(c) relates to.
However, the undertaking is limited to work on resources projects and, while much of this work may be under the Building and Construction General Onsite Award 2020 (the modern award used for BOOT purposes), given that the undertaking relates specifically to work on resources projects, there is the potential that some of the work (e.g. scaffolding around existing plant during maintenance where it is not a construction project) may be covered by the Manufacturing and Associated Industries and Occupations Award 2020.
It is noted that our client has historically applied the Building Award and that is the award likely to cover employees. The reference to the Manufacturing Award was inserted out of an abundance of caution. However, and to avoid any concerns, our client would be happy to amend the undertaking to remove reference to the Manufacturing Award.”[7]
At a further hearing of the matter on 7 September 2022, the following exchange on transcript occurred:
| “THE DEPUTY PRESIDENT: | Thank you. The matter has been listed just as a result of the undertaking that was provided, and then the email correspondence indicating that there's the potential for the Manufacturing Award to possibly cover employees performing work under the agreement. I suppose it's an issue that there's been no BOOT analysis done against that award. There's also this issue about genuine agreement flowing from any explanation provided by reference to that award, and/or the provision of the award during the access period. What do you say about those things, Mr Earls? |
| MR EARLS: | Yes, thank you, Deputy President. If I might, I'll just respectfully make some brief observations in relation to this. Firstly, our client's position is that all the work performed by employees under this agreement is covered by the Building & Construction General Onsite Award. We do not believe that employees are covered, or are likely to be covered by the Manufacturing Award, but the better-off-overall test has taken a life unto its own in relation to the possibility of work in the future, and in circumstances where we cannot exclude that possibility because we simply don't know, that's why it was put there, and perhaps with the benefit of hindsight, perhaps some overthinking, and our initial position would simply be to remove that from the undertaking, and if required by the Commission, to make it clear that the agreement does not apply to work that is covered by the Manufacturing & Associate Industries Award. In relation to the explanation, the document that was provided to the Commission, the explanatory document compares the agreement to the previous agreement, and we say that's the appropriate comparison to be made. Those submissions have been made and I don't propose to re-make them. Importantly, in relation to this question of the Manufacturing Award, neither the Building Award nor the Manufacturing Award had ever applied to employees of the company, and the Commission can take on judicial notice the history of enterprise agreements covering this entity. It was previously noted as Caledonia Scaffolding Services Proprietary Limited. It is now Caledonia Scaffolding SA Proprietary Limited. It's the same entity with a name change, not a change of the ACN. So, in those circumstances we say there's no real issue in relation to explanation or genuine agreement, because employees the employees had never been covered by the Manufacturing Award, nor had the employees – nor has the company itself ever applied to have the Manufacturing Award apply to it. So, in those circumstances it is perhaps, and I say with the benefit of hindsight from overthinking in relation to the operation of the BOOT, but in our respectful submission it would be appropriate for the agreement to be approved, perhaps with that reference to the Manufacturing Award removed, and if required, a clear statement that work covered under the Manufacturing Award is not covered by the agreement.”[8] |
(my emphasis)
Having regard to the content of the July Undertakings and the further oral submissions of Mr Earls, further directions were issued for the Applicant and the CFMMEU to file and serve supplementary submissions, evidence and/or undertakings in support of, or in opposition to, the approval of the Agreement. Both the Applicant and the CFMMEU sought extensions to the timeframes set out in those directions (which were granted). Further submissions from the Applicant and the CFMMEU were received on 16 and 27 September 2022 respectively. The Applicant also provided further revised written undertakings dated 16 September 2022 (September Undertakings).
Despite the oral submissions of Mr Earls (on 7 September 2022) that any further revised undertakings from the Applicant would contain “a clear statement that work covered under the Manufacturing Award [would not be] covered by the Agreement”, the September Undertakings maintained the position that employees covered by the Agreement would be covered to the exclusion of the Manufacturing Award.[9] In support of the September Undertakings, the Applicant made the following submissions:
“5. In circumstances where the agreement largely reflects the employee’s existing terms and conditions of employment, there is a long history of agreement coverage (commencing in 2007 with AC313203), the changes are modest and those changes have been discussed in writing and in meetings, the Commission should be satisfied that an award explanation is not required in this matter.
6. The written explanation provides, among other things:
To a large extent, the terms of the Proposed Agreement are the same as the terms that you currently have. Accordingly, this explanation focusses on the changes between your current conditions of employment and the conditions that would apply if the Proposed Agreement comes into effect. If you require a more detailed explanation of your current terms of employment, please contact the Contact Person (details below).
The Current Agreement and the Proposed Agreement both displace the relevant awards in their entirety. This means that if the new agreement is made, it will replace the existing agreement and the relevant awards will continue to not apply.
Scaffolders, Labourers and Boilermakers would otherwise be covered by the Building and Construction General On-Site Award 2020...
7. The Applicant itself operates firmly in the building and construction industry, as may be inferred from the CFMMEU’s involvement and steadfast opposition in this matter. While it may have been preferable to refer to the Manufacturing Award as an award that “could” cover employees, the explanation shortly thereafter makes the accurate and clear statement as to the effect of making the agreement:
The effect of making this Agreement will be that the Proposed Agreement operates to the exclusion of any modern award (our emphasis)
8. The explanatory document also provides a ‘blow by blow’ explanation of the terms and the effect of each of the changes between the existing terms and the proposed agreement.
…
12. In the matter presently before the Commission, the explanation extracted above (and when read in full) provides a clear statement as to its terms and effect. Clauses are either unchanged or where changed they are explained in depth. The effect insofar as awards is concerned is clear – they will continue to not apply.
13. Accordingly, it is the Applicant’s respectful primary submission that no issue in relation to s180(5) arises. Although it may have been preferable to include the Manufacturing Award in the explanation, that award is neither a term nor were employees choosing between any term of the Manufacturing Agreement applying, or not applying, to their employment, as part of the agreement making process.
14. To the extent that the Commission determines that it may have been preferable to expressly refer to the Manufacturing Award, this is a minor issue and the amended undertaking proposed below should in our respectful submission, remove this as an issue.”[10]
On 5 October 2022, the Commission’s Agreements Team provided me with an analysis of the differences between the the Building and Construction General Onsite Award 2020 (Building Award), the Manufacturing Award, and the Agreement.
On 6 October 2022, at yet a further relisting of the matter, I advised the Applicant that, notwithstanding the September Undertakings, I continued to have concerns in relation to the BOOT and genuine agreement, and provided the Applicant with one final opportunity to resolve such concerns via undertakings. On 11 October 2022, the Applicant filed further submissions, final undertakings (Final Undertaking), and a statement from Mr Martin Riegert, Operations Manager of the Applicant. The CFMMEU filed responsive submissions on 17 October 2022.
In its submissions dated 11 October 2022, the Applicant states:
“2. In that conference, the Commission indicated that there were remaining concerns in relation to the proposed undertakings provided, particularly arising from the coverage of the Manufacturing Award including potential issues with the explanation given and other matters including, but not limited to, the definition of shift work for the purpose of the NES.
3. As submitted on transcript, the Applicant’s view was that’s [sic] lineage predates modern awards, applies to a known work group was drafted by a work group that is as a matter of coverage consistent with the current agreement. In circumstances where the Manufacturing Award did not apply to employees at any time from the Notification Time onwards, the references to the Manufacturing Award arose from an abundance of caution having regard to the more recent application of the better off overall test to even theoretical possibilities on the terms of the agreement.
4. Attached to these submissions is a Statement of Martin Riegert which confirms the coverage of the group balloted for the Agreement. While in the most recent conference the Applicant acknowledged the more recent approach to the BOOT has been to assess agreements as broadly as the terms permit rather than the industrial context, it is noted that this is not an issue with the group that voted on the Agreement but rather a theoretical issue as to potential future applicability to certain employees.
5. The CFMMEU in its submissions of 27 September 2022 was critical of the Applicant’s draft undertakings and particularly critical of the employer not excising coverage of the Manufacturing Award, which it presented as a pathway to cure the defect (see for example, paragraph 5 and following of those submissions).
6. The Applicant’s proposed undertaking is to limit coverage of the Agreement to employees whose employment is covered by the Building and Construction General Onsite Award 2020.
7. Insofar as concerns are raised, the proposed undertaking addresses this by:
7.1 Dealing with any potential issue regarding the explanation provided, namely that “Scaffolders, Labourers and Boilermakers would otherwise be covered by the Building and Construction General On-Site Award 2020” by limiting coverage to that award, and
7.2 Simultaneously ensure that the BOOT considerations are address by ensuring that coverage for not only any current award covered employee, but any prospective award covered employee, is limited to the Building Award, and which has been extensively addressed throughout these proceedings.
8. In circumstances where the concern being addressed is a theoretical future concern rather than a concern that arises with the employee group covered by the Agreement, it is submitted that this change is minor, does not disadvantage any employee and is, in practice, merely a set of fence posts to ensure there is no risk of the seepage of agreement coverage beyond that which it was intended to, and as a matter of practice does, apply.
9. Accordingly, the Applicant submits that the Agreement, with the amended undertakings attached, is capable of and should be approved.”[11]
In response, the CFMMEU submits:
“2. The Applicant has been afforded an extraordinary number of opportunities to produce undertakings that unambiguously meet the concerns. It continues to refuse to do so, instead engaging in conduct of the kind that Commissioner Wilson was appropriately critical of in Cladding & Roofing.
3. The Applicant now offers a half-measure undertaking, carefully curated, which we submit is revealing of their continued intention to employ workers under (sic) who would be covered by the Manufacturing Award.
4. That this is the employer’s obvious intention can be easily inferred by:
a. the proposed undertaking being limited to ‘On-site roles’:
To avoid doubt, in the case [sic] On-site roles, this Agreement only applies to employees whose employment would otherwise be covered by the Building and Construction General Onsite Award 2020.
b. the Applicant continuing to refuse to provide the undertaking which they had sought leave to file, being an undertaking that the Agreement will not cover anyone who would be covered by that Award at all;
c. The crafting of the Applicant’s statement, which speaks of current employees but does not suggest that the employer has no intention to engage persons who may be covered by the Manufacturing Award under the proposed Agreement;
d. The submissions of the Applicant, which does not say that no workers could be employed under this agreement who would be covered by the Manufacturing Award, but instead implies that this may occur by describing the concern as a theoretical future concern.
…
6. There is nothing in the genuine agreement concern detailed extensively in our submission of 27 September 2022 that would enable an understanding that the concern regarding genuine agreement is limited to ‘on-site’ positions under the Agreement. If the Applicant continues to intend that its Agreement could cover workers who would otherwise be covered by the Manufacturing Award then the explanation was misleading.
…
12. The statement of Riegart is entirely without forensic value.
13. The statement is comprised of inadmissible opinion evidence from a person who does not profess any particular expertise, and who provides an entirely self-serving view on a question of law, being that he has reviewed the Award and that he purports to hold a view as to Award coverage.
14. The statement provides no objective evidence for the Commission to consider in exercising its jurisdiction. It does not for example provide any information about the work performed by said people that would enable the Commission to conduct an evaluation and determine Award coverage. The statement does not even go so far as to say that the Applicant does not intend to employ people that it perceives are covered by the scope of the Manufacturing Award, having been carefully curated to speak only to current or past employees. The employer’s subjective opinion as to Award coverage takes the matter no further than had the statement not been filed.”[12]
The CFMMEU also relies upon its previous submissions as to why the Agreement was not genuinely agreed to by relevant employees. In this regard, the CFMMEU submits (in summary):
a) there is no evidence about work performed by employees, or the nature of work or work patterns that may be performed;[13]
b) the explanation provided to relevant employees was inaccurate, in that not only were employees not told that the Manufacturing Award had coverage (or potential coverage), but they were positively told that only the Building Award and the Storage Award had coverage (or were to be displaced by the Agreement).[14] Given the explanation was inaccurate, it was also misleading;[15]
c) this matter has a comparable factual matrix to that considered by Commissioner Simpson in HiCrete Precast Systems Pty Ltd[16] (HiCrete);[17] and
d) the defect in genuine agreement in this case cannot be cured or remedied by an undertaking (including for the same reasons it could not be cured in HiCrete).[18]
Consideration
I concur with the CFMMEU submissions in relation to the probative value of the statement of Mr Riegert. I therefore do not rely upon it in resolving these proceedings.
The Applicant submits that the reference to the Manufacturing Award in the July Undertakings arose so as to remove any argument about the operation of clause 4.9.2 of the Agreement in respect of loaded rates of pay. However, it is also the case that the reference to the Manufacturing Award has broader implications in that it is, at the very least, tacit acknowledgement that the Manufacturing Award has, or will have, coverage of current and/or prospective employees (at least by reference to the terms (words) of the Agreement).
In relation to prospective employees to whom the Agreement will cover and apply, given the somewhat ‘shifting sands’ of the Applicant’s position as to the coverage of the Manufacturing Award in respect of work performed (or to be performed) under the Agreement, it is necessary for me to focus upon the terms of the Agreement in order to ascertain the nature and characteristics of the employment which the Agreement itself provides or permits.
Clauses 1.5.1 and 1.5.3 of the Agreement read:
“1.5.1 This Agreement will be binding on Caledonia SA Pty Ltd (ABN 66 089 689
029) (“the Company”) on the one hand, and employees of the Company who are employed in the classifications contained in this Agreement.…
1.5.3 This Agreement describes all of the terms and conditions of employment and replaces any existing agreements (whether registered or not) and any award covering or relating to the employees.”
It is plain from the foregoing clauses that the Agreement will apply as a stand-alone document to relevant employees (employed in the classifications set out in the Agreement) to whom any modern award might otherwise cover and apply. It is also plain that the classifications covered by the Agreement include classifications that, coverage aside, fall under the classification structures and definitions contained in the Building Award and the Manufacturing Award.
Paragraph 6 of the Final Undertaking provides that for “on-site roles” only, the Agreement only applies to employees whose employment would otherwise be covered by the Building Award. The Final Undertaking does not exclude the application of the Agreement to employees (including prospective employees) who are or would otherwise be covered by the Manufacturing Award. Having regard to the terms of clauses 1.5.1 and 1.5.3 of the Agreement, I find that the Agreement, if approved, will cover and apply to employees covered by the Manufacturing Award. Having regard to the history of the proceedings before me, I also consider it reasonable to presume that the Applicant may well employ or otherwise utilise employees under the Agreement who would otherwise be covered by the Manufacturing Award. Indeed, there is no evidence (or an undertaking) to the effect that this will not occur.
In order for the Commission to be satisfied that the Agreement has been genuinely agreed to by the employees covered by the Agreement, the Commission must be satisfied, for the purposes of s.186(2)(a) of the Act, that the Applicant (employer) complied with s.180(5).
Section 186(2) of the Act reads:
“(2) The FWC must be satisfied that:
(a) if the agreement is not a greenfields agreement - the agreement has been genuinely agreed to by the employees covered by the agreement.”
Section 180(5) of the Act reads:
“(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.”
Section 188 of the Act is also relevant. It reads:
“188 When employees have genuinely agreed to an enterprise agreement
(1) An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.
(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.”
In Australian Workers’ Union v Rigforce Pty Ltd (t/as Rigforce)[19] (Rigforce), the Full Bench stated:
“[35] In considering the “genuinely agreed” ground of appeal, it is necessary for reasons which will become apparent to consider in detail only the question of compliance with the pre-approval step in s 180(5). The nature of the requirement in s 180(5) was analysed in detail by the Federal Court (Flick J) in CFMEU v One Key Workforce Pty Ltd. We adopt the summary of that analysis set out in CFMMEU v Ditchfield Mining Services Pty Limited, which reduced it to the following four propositions:
(1) whether an employer has complied with the obligation in s 180(5) depends on the circumstances of the case;
(2) the focus of the enquiry whether an employer has complied with s 180(5) is first on the steps taken to comply, and then to consider whether:
• the steps taken were reasonable in the circumstances; and
• these were all the reasonable steps that should have been taken in the circumstances;
(3) the object of the reasonable steps that are to be taken is to ensure that the terms of the agreement, and their effect, are explained to relevant employees in a manner that considers their particular circumstances and needs. This requires attention to the content of the explanation given; and
(4) an employer does not fall short of complying with the obligation in s 180(5) of the FW Act merely because an employee does not understand the explanation provided.
[36] Additionally, we also adopt the analysis of Gostencnik DP in BGC Contracting Pty Ltd concerning the nature of a statutory obligation to take “all reasonable steps” as follows (footnote omitted):
“[43] A requirement or obligation to take “all reasonable steps” seems to me to require the identification of the steps a reasonable person would regard as reasonable in the circumstances that apply. Whether particular steps are reasonable will depend on the particular circumstances existing at the time the obligation arises. A requirement to take all reasonable steps does not extend to all steps that are reasonably open in some literal or theoretical sense…”“[20]
(footnotes omitted)
In Construction, Forestry, Maritime, Mining and Energy Union v Ditchfield Mining Services Pty Limited[21] (Ditchfield Mining), the Full Bench said:
“Section 180(5) of the Act is concerned with the taking of all reasonable steps to explain the terms of an agreement and the effect of those terms. How many steps and the content of those steps will necessarily depend on the circumstances. Some employers may, by reasons of the prevailing circumstances, need to take more or fewer steps than other employers with different agreements, facing different circumstances. The steps which may, in a given case, comprise “all reasonable steps” are to be assessed by reference to the circumstances of the particular case.
Compliance with s.180(5) will not always require an employer to identify detriments in an agreement vis-à-vis the reference instrument, or for the employer to provide an analysis between the agreement and the relevant reference instrument, particularly in circumstances where an existing enterprise agreement, not a reference instrument, applies to the employees in their employment with the employer. The question of compliance with s.180(5) is to be judged against the circumstances that pertain at the time at which compliance was required. Section 57 of the Act makes clear that a modern award does not apply to an employee in relation to particular employment at a time when an enterprise agreement applies to the employee in relation to that employment. In the present case, when the explanations were given, no enterprise agreement applied to the employees and the Award did apply. An explanation of the effect of the terms of the Agreement vis-à-visthe Award was therefore capable of being relevant to the evaluative assessment of whether all reasonable steps were taken to explain the terms of the Agreement and the effect of those terms.
The obligation under s.180(5) to take all reasonable steps to explain to relevant employees the terms of an enterprise agreement and the effect of those terms is an important function of the agreement-making scheme established by Part 2-4 of the Act. Its evident purpose, taking into account its role in assessing whether the employees who were asked to vote to approve an agreement genuinely agreed to the agreement, is to ensure that employees are as fully informed as practicable about the terms and effect of the terms of a proposed enterprise agreement before voting on whether to approve it. An employer’s discharge of its obligation under s.180(5) is intended to enable employees to know what they are being asked to agree to, and to understand how their wages and working conditions might be affected by voting in favour of an agreement.”[22]
The foregoing passages from Rigforce and Ditchfield Mining make clear that the extent of an explanation required (in the context of reasonable steps to have been taken) depends upon the prevailing facts and circumstances, including whether an existing enterprise agreement applies.
Having regard to the material before me, I make the following findings:
a) the Agreement does not incorporate any modern awards;[23]
b) the Agreement, including clause 4.9, reflects terms and conditions of employment that have applied at the Applicant’s workplace since May 2013.[24] In other words, such terms and conditions under the Agreement have applied to relevant employees, notwithstanding any relevant award coverage, since 2013;
c) the work undertaken by the Applicant, and its relevant employees, occurs in the building and construction industry, and is covered by the Building Award. To the extent that coverage under the Manufacturing Award might arise into the future,[25] the substance and nature of the work being performed by employees will not change. In this regard, I note the following submissions of the Applicant:
“… while much of this work may be under the Building and Construction General Onsite Award 2020 (the modern award used for BOOT purposes), given that the undertaking relates specifically to work on resources projects, there is the potential that some of the work (e.g. scaffolding around existing plant during maintenance where it is not a construction project) may be covered by the Manufacturing and Associated Industries and Occupations Award 2020.”[26];
d) putting aside the scope of the Agreement with respect to classifications under the Storage Award, the scope and coverage of the Agreement, whilst not confined to work covered by the Building Award, is confined to a limited range of classifications,[27] and to work that is understood to be commonly performed on construction and resource development projects. Significantly, the Agreement does not cover unrelated work as was the case in One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union[28]where the Full Court noted that where employees working in a few occupations or classifications consent to an agreement covering numerous other occupations in many industries beyond their own, an explanation of the terms of the agreement and their effect, may fall short of providing an adequate basis for the formation of genuine consent;
e) the Building Award, being the award (along with the Storage Award), that was stated to relevant employees to be displaced, contains many terms and conditions that are superior to those contained in the Manufacturing Award. However, the Manufacturing Award contains superior terms and conditions to the Agreement and the Building Award in the following respects:
i) higher minimum engagement for overtime performed on Saturdays of four hours (albeit the rates of pay in the Agreement are high enough to compensate for this);
ii) four hour minimum engagements for part-time employees (or three by request).[29] The Agreement and the Building Award are silent on minimum engagements for part-time employees; and
iii) a less onerous definition of a shiftworker (for the purposes of qualifying for the additional week of annual leave under the NES).[30]
f) the Applicant’s F17 statutory declaration (dated 30 June 2022) describes the various steps that were taken to explain the Agreement to relevant employees. Also before me is the Explanatory Document (including comparative table) that were provided to relevant employees. In my view, the Explanatory Document gives an adequate and accurate explanation of the relevant terms of the Agreement, other than as to award coverage and award displacement. In other words, the explanation provided to relevant employees did not draw their attention to coverage (or potential coverage) under the Manufacturing Award; and
g) I consider that it was reasonable in all the circumstances for the Applicant to have taken the step of drawing relevant employees’ attention to the coverage (or potential coverage) of the Manufacturing Award in the Explanatory Document that it provided to relevant employees.[31] Whether the failure to take such a step might be characterised as an omission, error, misrepresentation, inaccuracy or deficiency is not to the point. Rather, the point is that the failure to take this (reasonable) step gives rise to non-compliance with the requirements of s.180(5) of the Act.
In addition to the findings set out in the foregoing paragraph, I also find that:
a) the failure to draw relevant employees’ attention to the coverage (or potential coverage) of the Manufacturing Award is not a minor procedural or technical error in respect of compliance with s.180(5) of the Act;[32] and
b) the Final Undertakings, given their confined scope, do not remedy:
i)the non-compliance with s.180(5) of the Act; and/or
ii)any concern as to genuine agreement (or the absence of my satisfaction in relation same) for the purposes of ss. 188(1)(a)(i) and s.188(1)(c) of the Act.[33]
Conclusion
For the reasons set out above, I am not satisfied that the Agreement was genuinely agreed to by relevant employees as required by s.186(2)(a) of the Act. I therefore decline to approve the Agreement, and dismiss the Application.
DEPUTY PRESIDENT
Mr Tom Earls, Partner, Fair Work Lawyers, appeared (with permission) for Caledonia SA Pty Ltd t/as Caledonia Scaffolds.
Mr Peter Russell, Senior Legal and Industrial Officer, appeared for the Construction Forestry Maritime Mining Energy Union.
[1] See F18A, 14 June 2022, declared by employee bargaining representative, Mr Peter Gary Collis, and F16, 14 June 2022, at Item 5.2.
[2] See Caledonia Scaffolding Services Pty Ltd Enterprise Agreement 2017 [2017] FWCA 5698, AG2017/3021, 1 November 2017, Kovacic DP, AE425953, PR597344; Caledonia Scaffolding Services Pty Ltd Enterprise Agreement 2013 [2013] FWCA 2620, AG2013/5629, 1 May 2013, O’Callaghan SDP, AE401003, PR536111.
[3] See CFMMEU (one page) Submissions (undated) and attached “Wage Scenario” calculations in Excel format.
[4] See CFMMEU Submissions, 18 July 2022.
[5] Ibid.
[6] Applicant’s Submissions, 2 August 2022, at [6]-[7], and [10].
[7] Email from Mr Tom Earls to Chambers, 22 August 2022, 10.43am.
[8] Transcript, PN5-PN13.
[9] See in particular, Undertaking 2 of the September Undertakings.
[10] Applicant’s Submissions, 16 September 2022, at [5]-[8], and [12]-[14].
[11] Applicant’s Submissions, 11 October 2022, at [2]-[8].
[12] CFMMEU’s Submissions, 17 October 2022, at [2]-[4], [6], and [12]-[14].
[13] CFMMEU Submissions, 27 September 2022, at [6].
[14] Ibid, at [7]-[11].
[15] Ibid, at [21] and [23].
[16] [2021] FWC 5985.
[17] CFMMEU Submissions, 27 September 2022, at [12]-[14].
[18] Ibid, at [15]-[18], [24]-[30]
[19] [2019] FWCFB 6960.
[20] Ibid, at [35]-[36].
[21] [2019] FWCFB 4022.
[22] Ibid, at [70]-[72].
[23] Clause 1.5.3 of the Agreement.
[24] See Caledonia Scaffolding Services Pty Ltd Enterprise Agreement 2017 [2017] FWCA 5698, AG2017/3021, 1 November 2017, Kovacic DP, AE425953, PR597344; Caledonia Scaffolding Services Pty Ltd Enterprise Agreement 2013 [2013] FWCA 2620, AG2013/5629, 1 May 2013, O’Callaghan SDP, AE401003, PR536111.
[25] CFMMEU v Specialist People Pty Ltd[2019] FWCFB 6307, at [25]-[26], i.e. the coverage of the Building Award is to be read as attaching to employers covered by the Manufacturing Award not generally, but with respect to relevant employees. See Clause 4 of the Building Award, and Clause 4 of the Manufacturing Award.
[26] Email from Mr Tom Earls to Chambers, 22 August 2022 (10.43am).
[27] See clauses 4.1.1 and 4.9.2.2 of the Agreement; Part 2.1, Item 9 of the Form F17; and the Applicant’s Final Submissions, 16 September 2022, supported by extensive calculations comparing the terms of the Agreement to the Building Award, the Storage Award, and the Manufacturing Award.
[28] [2018] FCAFC 77.
[29] Clause 10.3 of the Manufacturing Award.
[30] Clause 34.2 of the Manufacturing Award provides: “For the purpose of the additional week of annual leave provided for in section 87(1)(b) of the Act, a shiftworker is a 7-day shiftworker who is regularly rostered to work on Sundays and public holidays.” Whereas Clause 5.8.11 of the Agreement provides: “In the case of on-site employees: an employee engaged to work in a system of consecutive shifts throughout the 24 hours of each of at least 6 consecutive days without interruption (except during breakdown or meal breaks or due to unavoidable causes beyond the control of the employer) and who is regularly rostered to work those shifts.” This is the same definition contained in the Building Award. Given my findings as to an absence of genuine agreement, it has been unnecessary for me to consider and resolve any BOOT concerns.
[31] Note finding in CFMMEU v Specialist People Pty Ltd[2019] FWCFB 7919, at [22].
[32] Section 188(2) of the Act; Huntsman Chemical Company Australia Pty Ltd [2019] FWCFB 318.
[33] Construction, Forestry, Maritime, Mining and Energy Union and others v Karijini Rail Pty Ltd[2020] FWCFB 958, at [105]-[108].
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