CBI Constructors Pty Ltd

[2017] FWCA 6837

[2017] FWCA 6837

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

CBI Constructors Pty Ltd
(AG2017/2750)

PROJECT AGREEMENT 2017

Building, metal and civil construction industries
DEPUTY PRESIDENT COLMAN	MELBOURNE, 19 DECEMBER 2017

Application for approval of the Project Agreement 2017.

[1] This decision concerns an application by CBI Constructors Pty Ltd (CBI) for approval of an enterprise agreement known as the Project Agreement 2017 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the FW Act) and relates to a single enterprise agreement. There were no union bargaining representatives for the Agreement.

[2] On 13 July 2017, the Commission received an email communication from the Construction, Forestry, Mining and Energy Union (CFMEU) requesting copies of the F16 application, F17 employer declaration and the notice of employee representational rights (NERR). The Commission provided the union with the documentation on 19 July 2017, consistent with the decision of the Full Bench in CFMEU v Ron Southon Pty Ltd. 1

[3] Similar requests were subsequently received from the Australian Workers’ Union (AWU), the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU). The materials were provided also to those unions.

[4] The matter was allocated to my chambers on 13 September 2017. Later that day, the CFMEU sent to the Commission and the company an email message outlining its concern that the requirements in relation to the 7-day access period had not been met, and foreshadowing that it would file written submissions. Correspondence was also received from the AMWU, AWU and CEPU supporting the position of the CFMEU.

[5] On 19 September 2017, the CFMEU provided to the Commission and the company written submissions addressing its contentions concerning the 7-day access period as well as other grounds on which it submitted that the Agreement could not be approved.

[6] On 5 October 2017, the company provided to the Commission written submissions in response to the submissions of the CMFEU. It contended that the CFMEU was a stranger to the bargaining process and that it had no right, interest or legitimate expectation concerning the Agreement’s approval.

[7] The Commission has a broad power to inform itself in relation to any matter, in such manner as it considers appropriate, including by inviting oral or written submissions from a person or organisation (s.590). 2 Although the CFMEU, AMWU, CEPU and the AWU were not bargaining representatives for the Agreement, I determined that my consideration of the application would be assisted by taking into account their submissions.

[8] On 27 October 2017, I informed the company and the four unions that I proposed to determine the application on the papers not before Friday 10 November 2017, and that any further written submission should be provided to the Commission before this date. On 9 November 2017, I received written submissions from the AMWU and the CEPU, outlining their objections to the approval of the Agreement.

[9] On 24 November 2017, I wrote to the company’s representative, copied to the union objectors, raising several questions concerning the company’s explanation to employees of the terms of the Agreement. I listed the application for hearing on 8 December 2017 for the purposes of addressing these issues. The company filed and served a witness statement of Ms Sarah De Young, the company's Human Resources Manager who was involved in bargaining for the Agreement and who was also the deponent of the statutory declaration filed in support of the approval of the Agreement. Ms De Young gave evidence at the hearing. I will return to her evidence later in this decision.

[10] I set out below my assessment of the matters raised in the unions’ written and oral submissions, and the company’s responses. I do not address other issues raised by the Commission with the company that have been resolved to the Commission’s satisfaction.

The 7-day access period

[11] The statutory declaration filed by the company in support of the Agreement states that employees were notified in writing of the date, place and method of voting on 22 June 2017. Further, it states that each employee was hand delivered a copy of the final agreement on 22 June 2017 and that voting commenced on 29 June 2017. 3 The unions contend that, on a proper construction of ss.180(3) and (4) of the FW Act, the vote should not have occurred prior to 30 June 2017. They submit that the requirements of s.188 have not been met and that the Agreement cannot be approved.

[12] Section 180(1) requires that, ‘before an employer requests under s181(1) that employees approve a proposed enterprise agreement by voting for the agreement’, it must comply with the various requirements of s.180. I note that the day on which an employer makes such a ‘request’ is not the day on which it advises employees that a vote will take place. It is clear from the context of sections 180 and 181 that the employer ‘requests’ employees to approve the agreement on the day of the vote or its commencement. In the present case, that date was 29 June 2017.

[13] Accordingly, before the vote on the Agreement occurs or commences, the employer must have complied with the requirements of s180. Several of these requirements operate by reference to the concept of an ‘access period for the agreement’. This expression is defined in s.180(4) as ‘the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1)’.

[14] Section 180(2) requires that an employer take all reasonable steps to ensure that, ‘during the access period for the agreement’, employees are given a copy of the agreement and incorporated material (or that throughout the period, employees have access to those materials).

[15] Section 180(3) requires that the employer take all reasonable steps to notify employees of the time, place and method of the vote ‘by the start of the access period for the agreement’. Thus, employees can be notified of the voting arrangements well in advance of the start of the 7 day period. But they cannot be notified of the voting arrangements inside the 7-day period.

[16] The CFMEU’s written submissions contend that because employees were provided with the Agreement on 22 June 2017, the vote could not properly have occurred until 30 June 2017, at the earliest. Although its objection is cast by reference to when employees were given the Agreement, I understand it to relate rather to the question of when employees were notified of the details of the vote for the purposes of s.180(3). This was the contention the CFMEU advanced at the hearing. It is also how the CEPU submissions are framed. The AMWU and AWU support and adopt those submissions.

[17] The unions contend that the ‘7-day period’ referred to in s180(4) means seven clear days. On this calculation of time, they submit that the necessary information about the vote was not provided to employees until after the commencement of the access period. 4 They contend that the seven day period in s.180(4) should be understood by reference to s.36 of the Acts Interpretation Act 1901 (AI Act) as in force as at 25 June 2009 (see s.40A of FW Act). Section 36 of the AI Act dealt with the reckoning of time. It provided that where in an Act ‘any period of time, dating from a given day, act or event, is prescribed or allowed for any purpose, the time shall, unless the contrary intention appears, be reckoned exclusive of such day or of the day of such act or event’. The unions contend that s.36 applies equally to the reckoning of time ‘backwards’ (as s.180(4) could be described as requiring), as it does to the reckoning of time forwards.

[18] The unions rely on the decision of Hydro Electric Corporation, 5in which SDP Harrison accepted the argument for which they contend. In that case, the employer had notified employees of the time, place and method of voting on 11 December 2013, and the vote commenced on 18 December 2013. The Senior Deputy President concluded that ‘the seven day period ending immediately before the start of the voting process ended on 10 December 2013’, and that the notification on 11 December was one day after that date.6 I find this conclusion problematic, as it suggests that the 7 day period ‘ends’ (counting back in time) at the beginning of the period.7 Yet s.180(4) makes plain that the 7-day period ends immediately before the vote.

[19] In reaching this conclusion, her Honour stated that she had adopted the approach in an earlier decision of SDP O’Callaghan in McKechnie Iron Foundation, 8 in which his Honour concluded that he was obliged to adopt, in relation to s.180(4) of the FW Act, the approach of the Full Bench of the Australian Industrial Relations Commission in Whites Discounts Pty Ltd9but ‘in reverse’.10In the latter decision, the Full Bench had applied s.36 of the AI Act to the counting of time in relation to the consideration period for agreements made under s.170LK of the Workplace Relations Act 1996 (WR Act).

[20] The unions contend that the facts in the present case are analogous with those in Hydro Electric Corporation and McKechnie and that I should adopt the same approach and dismiss the application. However, for the reasons that follow, I respectfully disagree with the decisions in Hydro Electric Corporation and McKechnie.

[21] First, section 36 of the AI Act is concerned with a situation where a period of time ‘dating from’ a given day, act, or event is ‘prescribed or allowed for any purpose’. It may be accepted that the words ‘dating from’ are in principle capable of looking forwards or backwards. However, the ‘purpose’ requirement in my view suggests that the section looks forwards and not backwards. In one sense, any time period in an enactment will serve some ‘purpose’, otherwise it will be redundant. However, in my view, s.36 is concerned with an active purpose, rather than a conceptual purpose, in relation to which a certain period of time is prescribed or allowed. By excluding the first day, s.36 gives to the counting of time its ordinary and commonly understood meaning: if a person is allowed 7 days for the purpose of carrying out a task ‘from’ Monday, it must be completed by the following Monday. The first Monday does not count as a day, otherwise the task would be due on the coming Sunday. In my view, it is difficult to read s.36 as applying to the reckoning of time into the past; there is no active purpose for which time can be prescribed or allowed.

[22] Secondly, even if it is accepted that s.36 of the AI Act does apply to the reckoning of time into the past, it is clear that the ‘act or event’ from which time would run, in the context of s.180(4), would be the day on which the voting process starts or occurs. This causes the difficulty noted above, namely that the FW Act states that this is the end of the seven day period, whereas s36 would have time running from this date, ‘ending’ at a point 7 days earlier. But leaving this aside, there is a further difficulty confronting the application of s.36 of the AI Act to s.180(4) of the FW Act. If s.36 applies, the excluded ‘day of such act or event’ would have to be the day of (or the start of) the vote. However, s.180(4) tells us that that day cannot be excluded, because the 7-day period ends ‘immediately before the start of the voting process in s.181(1).’ 11 The inescapable conclusion is that the day of the vote or its commencement (and all of the period running up to the point immediately before the start of the vote) is part of the 7 day period. Section 36 of the AI Act only operates ‘unless the contrary intention appears’. In my view, s.180(4) shows such a contrary intention.

[23] Thirdly, the provisions of s170LK of the WR Act, which were the subject of the Full Bench analysis in Whites Discounts and relied on in McKechnie and Hydro Electric Corporation, were quite different from s.180(4) of the FW Act. Section s.170LK of the WR Act required that a person to be covered by a proposed agreement have ‘at least 14 days’ notice, in writing, of the intention to the make the agreement’. The Full Bench applied s.36 of the AI Act and concluded that the 14 day period did not include the day on which notice was given. That day was 14 January 2003. The vote occurred on 28 January 2003. The 14^th of January was excluded, and on 28 January 2003, only 13 full days had passed since notice was given. In my view, s.36 was plainly applicable to s.170LK. A period of 14 days from a given act or event (the notice) was prescribed for the purpose of the consideration period. Time was reckoned exclusive of the day of such act or event, in the manner contemplated by s.36 of the AI Act. By contrast, s.180(4) looks into the past, from the point immediately preceding the start of the voting process. I do not consider that the approach in McKechnie and Hydro Electric Corporation took sufficient account of these differences.

[24] Fourthly, as noted above, I find problematic the conclusion in Hydro Electric Corporation that ‘the seven day period ending immediately before the start of the voting process ended on 10 December 2013’. The 7-day period cannot end on two different dates. The FW Act tells us when the period ends, namely immediately before the start of the voting process.

[25] Fifthly, the words of s.180(4) can be compared and contrasted with other expressions of time denominated in days that are found in Part 2-4 and elsewhere in the FW Act. Section 173 requires that the employer give employees the notice of employee representational rights not later than 14 days after the notification time for the agreement. Similarly section 181(2) prohibits an employer from putting a proposed enterprise agreement to a vote until at least 21 days after the day on which the last notice of employee representational rights is given. In these cases, time is counted forwards, excluding the day that marks the commencement of the time. Looking beyond Part 2-4, s.414 requires that notice be given of protected industrial action, and that the period of notice be ‘at least 3 working days.’ Paragraph 1668 of the Explanatory Memorandum confirms (consistent with accepted judicial interpretations of this expression in earlier legislation) that the reference to ‘at least 3 working days’ notice’ in s.414 is intended to mean ‘three clear (full) days which excludes both the day on which the notice is given and the day when the action is to occur’. It will be noted that the wording of s.414 is similar to s.170LK.

[26] In conclusion, the words of s.180(4) are to be given their ordinary meaning, read in the context of Part 2-4 and the FW Act more generally. 12 The words ‘the 7-day period ending immediately before the start of the voting process’ are not concerned with the giving of notice. They do not set anybody a task. They look back over the preceding seven days from a particular moment in time, immediately before the vote. The day of the vote is not excluded from the period. It is part of the period. If this were not so, the word ‘immediately’ would be bent out of all semantic recognition.

[27] If the day on which the voting process occurs or starts had been intended to be excluded from the 7-day period, s.180(4) could simply have referred to the 7-day period ‘ending on the day before the vote commences.’ If the first day of the access period had been intended to be excluded, s.180(4) could have said that the access periods ends ‘7 days after’ details of the voting arrangements are provided to employees. The provision does not say either of these things, nor is there a textual, contextual or purposive reason for interpreting it in either of these ways.

[28] The company contends that the 7-day access period comprises the seven consecutive 24 hour periods immediately before the start of the vote, which occurred at or around 11.00am on 29 June 2017. 13 Seven 24 hour periods before this time was at or around 11.00am on 22 June 2017. At or about 6.00am on 22 June 2017, a site supervisor had read out to employees the details of the voting arrangements, including the time, place and method of voting.14 At approximately 10.00am, which was the first crib break, an employee agreement pack had been distributed to employees that included details of the voting arrangements.15 Ms De Young gave sworn evidence about these matters at the hearing.16 The unions contend that it is hearsay evidence, as Ms De Young was not present at the worksite on 22 June 2017. However, the Commission is not bound by the rules of evidence. Further, Ms De Young gave direct evidence that she requested a supervisor, Mr Lanbred, to read out the details of the voting arrangements on 22 June 2017, and that she called him afterwards to confirm that this had occurred. I accept this evidence. There is no basis on the evidence or material before me to doubt the truth of what Mr Lanbred said to Ms De Young.

[29] In my opinion, the evidence establishes that the company complied with s.180(3) and took all reasonable steps to notify (and did notify) employees of the time, place and method of the vote ‘by the start of the access period for the agreement’. The seven day access period comprised the seven days constituted by the seven 24 hour periods ending immediately before the start of the voting process at or around 11.00am on 29 June 2017. The access period started at or around 11.00am on 22 June 2017. By that time the company had advised employees of the time and place at which the vote would occur, and the voting method that would be used.

[30] I have some reservations about whether the reference to ‘day’ in s.180(4) necessarily means a complete 24 hours. If it does carry this meaning, the satisfaction of the requirements in s.180 would come down to matters of hours and minutes. It is not clear to me that this is intended. On one view, the 7 day period refers simply to the 7 calendar days counting back from the vote, inclusive of the day of the vote. On this reading, it would not have mattered if the employees had been provided details of the voting arrangements after 11.00am on 22 June 2017 (hence receiving slightly less than seven 24 hour periods). However, it is not necessary for me to determine this question, as this is not what occurred in the present case.

[31] For the purposes of s.188(a), I am satisfied that the company has complied with the pre-approval steps in sections 180(2) and (3).

Fairly chosen

[32] Clause 2 of the Agreement states that it covers employees of the company who perform 'building, construction and maintenance related work in Australia', excluding those employees who perform work at the seven sites listed. Schedule B to the Agreement sets out a list of classification descriptions, ranging from levels 1 to 7.

[33] The unions contend that the group of employees to whom the Agreement applies was not fairly chosen for the purposes of s.186(3) of the FW Act. They submit that, although the F17 statutory declaration states that the group was fairly chosen because it is organisationally and operationally distinct, it does not provide any elaboration as to why this is so, and there is no evidence to support this contention. Further, they say that although the Agreement is called a 'project agreement', its coverage is not limited to major projects, and applies generally to the work in question, but for the exclusions listed.

[34] The CEPU’s written submission contended that there was no evidence of the classifications of the employees who voted on the Agreement and that it could therefore be the case that all employees are in one classification, and have voted up an agreement that may apply to other classifications. Subsequently Ms De Young gave evidence that all employees work on the same project in New South Wales, performing work in construction classifications. However, the fact that the employees who vote on an agreement may represent only one of several or even many classifications of work that will be covered by the agreement does not of itself suggest that the group of employees was not fairly chosen. 

[35] In this regard, CFMEU v John Holland Pty Ltd 17 is authority that it is possible for a small group of employees to make an enterprise agreement of broad coverage. Buchanan J also stated that ‘there is no requirement that the employees who vote to make the agreement must have been in employment for any length of time, and there is no requirement that they remain in employment after the agreement is made.’18 His Honour went on to note the possibility of manipulation of the agreement making process, and said that determination of whether the group of employees was fairly chosen may need to bring into account the ‘business rationale for the choice’.

[36] In the present case, the company's submissions and the evidence of Ms De Young addressed the business rationale for the Agreement. Ms De Young explained that the Agreement will have a nominal expiry date 4 years from when it is approved, providing temporally extended enterprise agreement coverage, which will allow CBI to tender for longer term work, and ensure longer term compliance with the Code. 19 The coverage of the Agreement is very similar to that of the 2015 Agreement; it applies throughout Australia, with certain project sites excluded (where site-specific enterprise agreements apply). The coverage clause in the Agreement does not make express reference to the ‘classification structure’ found in Schedule B, however in my view Schedule B must be given work to do, and is intended to confine the scope of the Agreement. In this regard, Schedule B is identical to the classification structure found in Schedule B of the 2015 Agreement. In this regard, there is nothing especially new about the choice of employees who will be covered by the Agreement, save for the express statement that it applies to employees performing ‘building, construction and maintenance related work’, which aptly describes the roles in Schedule B.

[37] The unions further contend that the scope of the Agreement is very broad, applying across all of Australia (save for the excluded projects and work sites precluded by clause 2 of the Agreement), but that it was made with only 10 casual employees, seven of whom are no longer engaged, and that there is no convincing evidence of what the ongoing connection is of these employees to the Agreement or the work it covers. This argument intersects with contentions discussed further below that the agreement was not ‘genuinely agreed’.

[38] However, the fact that the group of employees who voted on the Agreement comprised 10 employees is not strictly relevant to the question of whether the group was fairly chosen. As noted by the High Court in ALDI Foods Pty Limited v SDA 20, the ‘group of employees covered by the agreement’ referred to in s186(3) is directed towards the whole class of employees to whom the agreement might in future apply, rather than the group of employees which actually voted on whether to make the agreement.21

[39] In the present case, the coverage clause in the Agreement refers to three operational areas of work, ‘building, construction and maintenance’, and contains the same classification structure as the previous agreement. There is a statutory declaration that attests that the work is organisationally and operationally distinct within the business. It has not been contradicted. In the circumstances, I am satisfied that the group of employees to whom the Agreement applies was fairly chosen.

Genuinely agreed

[40] The unions contend that the Commission cannot be satisfied on the material before it that the Agreement was genuinely agreed for the purposes of s188 of the FW Act, and in particular s.188(c) which requires the Commission to consider whether there are ‘any other reasonable grounds for believing that the agreement has not been genuinely agreed to by employees’. They rely on the decision of the Full Bench of the Commission in KCL Industries Pty Ltd, 22 and the recent decision of the Federal Court in CFMEU v One Key Workforce Pty Ltd,23 and submit that the consideration of whether an agreement has been genuinely made involves examination of the ‘authenticity and moral authority’ of an enterprise agreement.

[41] In KCL, the employees who had voted on the agreement in question were found to have had no ‘stake’ in it. The rates of pay provided by the agreement would not apply to them as they were assured of higher rates. Further, the range of classifications covered by the agreement encompassed industries in which KCL did not operate. Neither of these factors is present in this matter, and the facts in general differ significantly from those in this KCL. In particular, in KCL, three employees voted on an agreement underpinned by 11 awards, and many more employees were subsequently hired to perform work under it. In the present matter, ten employees voted on an agreement underpinned by one award, albeit with many different classifications referred to in Appendix B, but ones identical to those in the current agreement.

[42] The unions contend that the Agreement’s lack of ‘authenticity’ is reflected in the fact that seven of the ten employees who voted on the Agreement no longer work for the company; and that the Agreement could not in any event apply to the employment of any of the employees until after the nominal expiry date of the current agreement on 23 March 2019 (see further below). 24

[43] As to the circumstance that seven of the ten employees who voted on the agreement are no longer working for the company, Ms De Young gave evidence that the project that they were working on has significantly demobilised. 25 She said that the employees who voted on the Agreement have worked for the company on and off on many occasions and could be expected to work for the company again in the future.26 Ms De Young gave evidence that they understood that the purpose of the new agreement was to enable the company to tender for new work, and have longevity of business in Australia.27 She said that CBI is tendering for a range of work, that it has not been awarded any recent projects, but is pursuing work ‘heavily’.

[44] Ms De Young was asked in cross examination what prevented the company from tendering for work on the basis of the present 2015 agreement. She explained that the company was tendering for some work with that agreement, but that other work for which the company tenders will have a commercial term that extends beyond the nominal expiry date of the current agreement. 28

[45] In my view, the employees who voted on the Agreement did (and do) have a ‘stake’ in it. The agreement they approved may assist CBI to bid for and win contracts on which they may be deployed to work, on terms and conditions that exceed award conditions by some 60-90%, and also exceed the rates of the current agreement by some 20-30%. The agreement will not apply to employees until the nominal expiry date of the current agreement has passed in March 2019; but employees will have an interest in the fact that the Agreement is in operation, as it may assist the company to win work which they can perform. It might be said that employees have no guarantee of being deployed on any new work that might be awarded to the company. However, the employees are in any event casual employees, and, as the authorities confirm, there is no statutory impediment to an enterprise agreement being made with such employees. As to CBI’s intention to engage them on future projects, Ms De Young’s evidence was that the company considers them to be good employees who are familiar with CBI and go where the work is, and that they are ‘first preference re-hires’. 29 There would appear to be every prospect of the employees being engaged on future work under the Agreement for which the company successfully bids.

[46] I do not consider that these circumstances are indicative of a lack of genuineness or moral authority in the Agreement, such as to constitute other ‘reasonable grounds’ for believing the agreement has not been genuinely agreed to by employees.

[47] I would note that the FW Act allows for new enterprise agreements to be made before their application will commence. As discussed below, the instrument interaction rules in the FW Act plainly permit the making of an enterprise agreement before the expiry date of a current agreement, and allow the newly made agreement to apply once the earlier agreement’s nominal expiry date has passed. 30

[48] Further, the fact that the Agreement will not actually apply to the employees who voted on it until some point in the future does not mean that the agreement was not genuinely agreed. This is clear from the decision of the High Court in Aldi, in which the plurality said:

‘In addition, while s186 operates on the assumption that there are employees covered by the agreement at the time the application for approval is made, it does not follow that the agreement must apply to them in the sense of operating to fix their rights and obligations in the work actually being performed by them at the time.’ 31

[49] At the time when the 17 Aldi employees voted on the Aldi Regency Park Agreement 2015, the Regency Park Distribution Centre to which the agreement would apply was still under construction and trading had not commenced. The agreement was in operation, but did not apply to employees’ employment. In the present case, the Agreement will be in operation but will not apply to employees’ employment until March 2019. However, that fact does not impugn the Agreement or the genuineness of employees’ agreement to it.

[50] The unions further submitted that the Agreement covers many classifications which might not have application to the employees who voted on the agreement. But there is nothing unusual about this. This would be the position under any agreement which contains a variety of classifications. Further, the fact that more employees may subsequently be employed under an enterprise agreement was considered by the High Court in ALDI:

‘In light of the ordinary and natural meaning of the terms of Pt2-4 of the Act, a non-greenfields enterprise agreement can be made with two or more employees, so long as they are the only employees employed at the time of the vote who are to be covered by the agreement. It does not matter that the agreement may, in due course, come to apply to many more employees. That understanding is consistent with the approach of the Full Court in John Holland.’ 32

[51] The FW Act says that an agreement cannot be made with one employee (s.172(6)). Therefore it may be made with 2 employees, or 3, as in John Holland, or 10 as in this case. There is no prohibition on agreements being made with casual employees. And as was noted by Buchanan J in John Holland, there is no requirement that employees remain in employment after the agreement is made. There is no requirement that the cohort of employees must be representative of all the work and classifications that the agreement covers. Such is the framework of the FW Act.

[52] The unions contended that the Agreement excluded employees at particular sites, working on particular projects, but not the Viva Clyde project in New South Wales, where all of the employees who voted on the Agreement worked. The unions submitted that CBI employees on other projects might soon be demobilised but were effectively excluded from the scope of the Agreement. 33 However, there is no evidence that employees have been unfairly excluded, and I have concluded above that the group of employees to whom the Agreement applies was fairly chosen.

[53] It was put to Ms De Young in cross examination that a significant part of the company’s motivation for making the agreement in the way it did was to avoid a vote with a larger cohort of employees and the potential for union representation. However, Ms De Young denied this and said that the purpose of making the Agreement was to have a business strategy to allow the company to tender for work and have continuity of work. 34 I accept her evidence. In my view, the present case is not one involving ‘manipulation’ of the agreement making process, as hypothesised by Buchanan J in John Holland. It seeks to establish a platform of conditions that will enable the company to bid for work with a longer time horizon.

[54] It is a matter of common industrial and commercial knowledge that it is difficult for a business to successfully tender for work if it does not have in place a current enterprise agreement. Without one, the business poses a commercial and industrial risk to a principal or head contractor; labour costs are not settled and remain subject to negotiation, and the possibility of protected industrial action cannot be precluded. Tendering and selection processes, particularly for larger projects, can be protracted, with lengthy lead times before work actually commences. In this case, the current agreement does not reach its nominal expiry date until 2019; CBI therefore has a collective employment framework with ‘nominal life’ remaining until March 2019. But a new agreement with a four year nominal life allows the company to bid for work that extends well beyond March 2019.

[55] The unions’ concern to protect the interests of members who might one day be employed under the Agreement is understandable. However, they should not assume anything sinister or ‘un-genuine’ in the desire of the company to establish a collective agreement that can provide an employment framework that allows it, in the medium to longer term, to bid for work, grow its business, and potentially employ more workers. 

[56] In my view, the matters raised in the unions’ submissions do not point to the existence of ‘other reasonable grounds’ for believing that the Agreement was not genuinely agreed to by employees.

Explanation of the terms of the Agreement

[57] Section 180(5) provides that an employer must take all reasonable steps to ensure that the terms of the agreement, and the effect of those terms, are explained to relevant employees, in an appropriate manner taking into account their particular circumstances and needs.

[58] The employment of employees who voted on the Agreement is currently covered by the Project Agreement 2015 (2015 Agreement), which reaches its nominal expiry date on 22 March 2019. According to the instrument interaction rules in s58, if an enterprise agreement applies to an employee in relation to particular employment, and another enterprise agreement covering the employee in relation to the same employment comes into operation, the later agreement cannot apply to the employee until the earlier agreement passes its nominal expiry date. Therefore, the Agreement cannot apply to any person covered by the 2015 Agreement until 23 March 2019. 35

[59] I was concerned to ascertain whether this point had been the subject of the company’s explanation to employees of the terms of the agreement, and the ‘effect of those terms’, as required by s.180(5). In my view the ‘effect’ of the terms of an enterprise agreement can include the question of when those terms will actually apply to employees. This prompted me to seek further information from the company and to list the matter for hearing.

[60] In her witness statement, and in oral evidence before the Commission, Ms De Young stated that she explained to employees who would be covered by the Agreement that, if it was approved, the Agreement would not apply to them until the nominal expiry date of the 2015 Agreement had passed. 36 She said that she explained to employees that the company’s purpose of seeking a new agreement was to give CBI an opportunity to tender for work which was predicted to have a commercial work cycle greater than 22 March 2019.37 She said employees understood that the purpose of the new agreement was to enable the company to pursue future work and that the current agreement would continue to apply to them until it expired.38

[61] It was suggested by the unions that the operation of the instrument interaction rules should have been spelt out in the Agreement. However, this is a contention about what terms might have been included in the Agreement; it is not properly a contention as to how the Agreement was explained to employees. In any event it was not necessary. What was necessary was to take all reasonable steps to ensure employees understood the terms of the agreement, and their effect, including in relation to the question of when the Agreement would actually apply to them. In my view, the company did take all reasonable steps in this regard.

[62] The unions contended more generally that the company did not take all reasonable steps to explain the terms of the Agreement and the effect of those terms on employees. 39They submitted that it is not apparent that the company explained the differences between the Agreement and the 2015 Agreement. There is no express obligation to frame the explanation of an enterprise agreement by reference to a current instrument, whether that be an agreement or an award. In a particular case, depending on the circumstances, the explanation of an enterprise agreement might properly focus on certain clauses that introduce significant change to the current working arrangements, as reflected in particular current instruments. However, I would note that employees are likely to have reasonable familiarity with the terms and conditions that they currently enjoy, and an explanation of the terms of an enterprise agreement will ordinarily focus on the terms of the new instrument, as the FW Act directs.

[63] In the present case, Ms de Young gave evidence that she went through the Agreement clause by clause. 40 She did not simply read out the Agreement to employees. She had face to face meetings with them on 25 May and 8 June 2017, and dealt with each employee one individually.41 She pointed out terms of the Agreement that were ‘greater or lesser’ than the award.42 In this regard, I do not accept the unions’ submission that comparing the Agreement with the award was misleading. Although the award did not apply to employees, it is their safety net, and the differences between the Agreement and the award might assist employees to understand the terms of the Agreement and their effect. I do not suggest that it was necessary for Ms De Young to have referred to provisions in the award in order to adequately explain the terms of the Agreement and their effect. But there is no basis for criticism of her having done so.

[64] The unions contended that Ms De Young did not explain to employees the differences between clause 6.5 of the Agreement and clause 25.5 of the 2015 Agreement, which deal with wage increases during the life of the agreements. Clause 6.5 of the Agreement refers to s.206 of the Act and establishes a mechanism to increase agreement wages rates, should they ever fall below the award rate, to 4% above award rates. By contrast, clause 25.5 of the 2015 Agreement provides for wage increases commensurate with increases in the Federal Minimum Wage. The unions submitted that Ms De Young conceded in cross examination that she did not direct employees’ attention to this difference. 43 However, Ms De Young’s response was in the context of questioning as to whether she had gone through the 2015 agreement with employees, which she did not.44 I understood her evidence to be that she did not compare and explain the wording of the two agreements, including these two clauses. In response to a question from me, Ms De Young said that she had addressed clause 6.5 of the Agreement, and even read this clause out to employees.45

[65] In any event, the Full Bench of the Commission noted in NTEIU v University of New South Wales that it is not necessary to explain every single term of the agreement to employees, and a practical approach is required. 46 As noted by Flick J in One Key, the steps that may be necessary to explain the agreement and the effect of its terms to employees will depend on the facts and circumstances of the particular case.47 In the present case, the Agreement provides for rates of pay well above the rates in the award and the current agreement. In this context, a failure to address clause 6.5 in the explanation of the Agreement to employees would not in my view have resulted in the company failing to take all reasonable steps as contemplated by s.180(5). In any event, Ms De Young’s evidence was that she did address this clause and read it out.

[66] The CEPU and AMWU final submissions contend that Ms De Young’s evidence contained inconsistencies, and that these undermine her credibility as a witness. 48 I do not accept this contention. Ms De Young’s references variously to ‘bargaining meetings’ and ‘information sessions’ do not amount to inconsistencies of any substance. Her different, but compatible descriptions of certain events speak to me rather of unrehearsed and honest testimony in the context of cross examination from three different advocates. I found her evidence to be candid, direct and convincing.

[67] The CEPU and AMWU final submissions also contend that I should draw an adverse inference from the fact that the company did not lead evidence from witnesses who were present on site on 22 June 2017 when the access period commenced. I reject this submission. Ms De Young had intimate knowledge of the access period, and gave sworn evidence about it, which I have addressed earlier.

[68] This raises a broader question of what level of forensic inquiry is expected in relation to an application for approval of an enterprise agreement. The Commission must act within jurisdiction and satisfy itself that the relevant statutory requirements have been met. It will do so assiduously, but mindful that an object of Part 2-4 is to provide a ‘simple, flexible and fair framework’ for collective bargaining. In the present matter, the concerns of objectors have been carefully considered. The Commission has raised its own concerns. A hearing has been conducted. A company witness has been examined and cross-examined. It is simply not necessary for more evidence to be led.

[69] Based on the evidence of Ms De Young, in conjunction with the information provided in the statutory declaration in support of the application for approval and the company’s submissions, I am satisfied that the company took all reasonable steps to explain the agreement and its terms to employees who would be covered by the agreement.

Other issues

[70] In its written submissions, the CFMEU acknowledges that the Agreement passes the ‘better off overall test’ (BOOT). However, it claims that there are ‘unlawful’ provisions that ‘sanction the working of excessive and unsafe hours.’ 49 The union submits that clause 23.2 of the Agreement allows for delay, for operational requirements, in taking the lunch breaks that are required to occur after 5 hours of work. The company rejects the contention that the clause poses a safety issue. I note that any delay to lunch breaks requires employee agreement. In any event, I do not consider the provision to be an unlawful provision for the purposes of s194, or otherwise to constitute a barrier to approval of the Agreement.

[71] The CFMEU also submitted that clauses 24.8 to 24.11 provide for less than 10 hours break between shifts, and that clause 24.11 allows for agreement to be reached for an 8 hour break between shifts. It contends that this is unsafe. The company submits that a flexibility arrangement of this type can be made under the award. It also submitted that it remains subject to the requirements of the individual flexibility clause in the Agreement. I do not consider these provisions of the Agreement to present any concern in relation to the statutory requirements for approval of the Agreement.

[72] Finally, the CFMEU contended that clause 24.2, which states that overtime will be assigned on the basis of work requirements, is inconsistent with the NES, namely sections 62 and 63 of the FW Act. These provide that employees may refuse to work additional hours if they are unreasonable by reference to various considerations. However, clause 24.1 of the Agreement states that employees may be required to work ‘reasonable overtime’. Clause 24.2 does not derogate from clause 24.1. In my view, it is compatible with the NES and does not purpose to exclude it. I do not consider it to be an impediment to the approval of the Agreement. 50

Conclusion

[73] I have considered the application, the evidence of Ms Young, and the submissions of the company, the CFMEU, CEPU, AMWU and AWU.

[74] On the basis of the material and evidence before me, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.

[75] I note that pursuant to s.205(2) of the Act, the model consultation term prescribed by the Fair Work Regulations 2009 is taken to be a term of the Agreement.

[76] The Agreement is approved today, 19 December 2017, and in accordance with s.54 of the FW Act it will operate from 26 December 2017. The nominal expiry date of the Agreement is 19 December 2021.

DEPUTY PRESIDENT

 1   CFMEU v Ron Southon Pty Ltd[2016] FWCFB 8413.

 2   [2014] FWCFB 7940 at [75].

 3   Questions 2.4, 2.5 and 2.8 of the Statutory Declaration F17.

 4 CEPU submissions dated 9 November 2017, at [27].

 5   [2014] FWC 4169 at [21].

 6 At [22].

 7 This reasoning is restated at [25].

 8   [2010] FWA 3171.

 9   PR937496.

 10 At [14].

 11   It is clear from s181(1) that the ‘voting process’ is the actual vote.

 12   I agree with the unions that, contrary to the Company’s contention, the Single Enterprise Agreement Date Calculator on the Commission’s website cannot be an aid to statutory construction. It is a tool of convenience.

 13 Witness statement of Ms De Young, paragraph [9].

 14   Applicant’s response, paragraph 13; evidence of Ms De Young before the Commission, PN494-501; see also Annexure C to the F17 statutory declaration of Ms De Young.

 15   Ibid, paragraph 14; evidence of Ms De Young before the Commission, PN290-297.

 16   PN498-502.

 17 [2015] FCAFC 16.

 18 At [33].

 19   Code for the Tendering and Performance of Building Work 2016.

 20 [2017] HCA 53, 6 December 2017.

 21 [2017] HCA 53 per Kiefel CJ, Bell, Keane, Nettle, Gordon and Edelman JJ at [83].

 22   [2016] FWCFB 3048.

 23 [2017] FCA 1266.

 24   Final submissions of the CFMEU, paragraphs [9]-[10].

 25   PN120.

 26   PN187.

 27   PN187.

 28   PN238.

 29   PN284, 285.

 30 Contrast the wording of s58 of the FW Act with s170LY of the Workplace Relations Act 1996.

 31   per Kiefel CJ, Bell, Keane, Nettle, Gordon and Edelman JJ at [76].

 32 At [82].

 33   CEPU/AMWU closing submissions, paragraphs [66]-[68].

 34   PN221.

 35   The AMWU drew the Commission’s attention to the fact that CBI is bound by another enterprise agreement, the CBI Constructors Pty Ltd Queensland Agreement 2014 (Queensland Agreement), which reaches its nominal expiry date on 15 May 2018. The AMWU submitted that the 2017 Agreement appears to have overlapping coverage with the Queensland Agreement. However, in her witness statement, and in oral evidence, Ms De Young stated that none of the employees who voted on the 2017 Agreement were covered by the Queensland Agreement, and that none of the employees are employed in Queensland. She stated that the only employees employed by the company in Queensland work at the Pinkenba site, which is excluded from the coverage of the 2017 Agreement.

 36   PN214, 227; witness statement of Ms De Young paragraphs [6], [7] and [9].

 37   Witness statement of Ms De Young, paragraph [7(a)].

 38   PN214.

 39   CEPU and AMWU final submissions, paragraphs [46] to [55].

 40   PN114.

 41   PN123, Statement of Ms De Young paragraph [7(a)].

 42   PN190.

 43   PN116.

 44   PN115.

 45   PN304-306.

 46 (2011) 210 IR 244 at [32], [33].

 47 At [103].

 48   Paragraphs [19] to [33].

 49   CFMEU submissions received on 19 September though dated 13 September 2017 at paragraph 25

 50 I note that the unions expressed concern about whether the signature requirements in s.185(5) had been complied with. The Commission has satisfied itself that these requirements have been met.

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