Christies People Pty Ltd

[2021] FWC 962

[2021] FWC 962

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Christies People Pty Ltd
(AG2020/3332)

CHRISTIES PEOPLE PTY LTD ENTERPRISE AGREEMENT 2020 - 2024

Building, metal and civil construction industries
COMMISSIONER LEE	MELBOURNE, 22 FEBRUARY 2021

Application for approval of the Christies People Pty Ltd Enterprise Agreement 2020 - 2024.

[1] An application has been made for approval of an enterprise agreement known as the Christies People Pty Ltd Enterprise Agreement 2020 - 2024 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Christies People Pty Ltd (the Applicant). The Agreement is a single enterprise agreement.

[2] On 9 November 2020, the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU)emailed the Fair Work Commission (the Commission) to request the relevant documents filed with the application and indicated that it wished to be heard.

[3] On 18 November 2020, my chambers sent correspondence to the relevant parties outlining an issue regarding clause 10.9.12 containing an apparently incorrect reference. In that email, my chambers gave the CFMMEU until Monday, 23 November 2020 to indicate whether it still wished to be heard.

[4] On 23 November 2020, the CFMMEU sent the following email to my chambers:

“The CFMMEU wish to be heard in respect of this matter.

The CFMMEU has reason to believe that in accordance with to s 186(2)(a) of the Fair Work Act 2009 (The Act), the proposed agreement has not been genuinely agreed to by the employees covered by the agreement. In particular s 180(5) of the Act, that the employer has not met its requirement  in taking “reasonable steps” to ensure that “the terms of the agreement and the effect of those terms are explained to the relevant employees.”

This in relation to the lack of evidence in the Application as to whether all reasonable steps to explain the key differences between the current agreement CHRISTIES PEOPLE PTY. LTD. / CFMEU COLLECTIVE AGREEMENT 2012 – 2014 and the proposed agreement Christies People Pty Ltd Enterprise Agreement 2020 - 2024 . Particularly circumstances, where the proposed agreement is fundamentally different in comparison to the proposed agreement, and the fact that the proposed agreement departs from a number of entitlements under the current agreement.”

(original text retained)

[5] I subsequently issued directions on 24 November 2020, which included the following:

“[3] I direct that:

1. The CFMMEU file with the Fair Work Commission and serve on the Applicant submissions in support of the position set out in paragraph 2 above by no later than close of business Tuesday, 8 December 2020.

2. The Applicant file with the Fair Work Commission and serve on the CFMMEU, submissions in reply by no later than close of business Tuesday, 22 December 2020.

[4] The matter will be listed for hearing before me at 10:00 am (AEDT) Tuesday, 12 January 2021.”

[6] The Applicant in their submissions indicated that it was “not aware of any determination having been made by the Commission to the effect that the CFMMEU is a party to the application or related proceedings.” 1 The Applicant also accepted that “some employees are current Union members”2 but that the employees were “representing themselves to the exclusion of the union in the circumstances.”3 The Applicant provided the bargaining nomination form for each of the employees that nominated themselves as a bargaining agent. There are five employees covered by the Agreement, and the Applicant provided five bargaining nomination forms.

[7] Proceeding on the basis that the CFMMEU has members but was not a bargaining representative, the question is whether or not I should hear from the CFMMEU.

[8] As the relevant employees had nominated themselves as bargaining representatives (therefore meaning that the CFMMEU isn't a bargaining representative for the Agreement), the CFMMEU made the following submissions at the hearing:

“Pursuant to section 590 of the Fair Work Act the Commission retains a discretion to allow a party the right to be heard of an approval of an agreement.

This power has been exercised on a number of occasions, you know, where the union isn't a bargaining representative to the agreement.  There's a litany of case law to give example.  One in particular that I will point to was well elaborated by Commissioner Cambridge in the application by Inco Ships Pty Ltd [2016] Fair Work decision at 1637 at paragraphs 24-26.  Commissioner Cambridge set out essentially that:

…  The Commission is required to ensure that the agreement complies with the Act and the resolution of those concerns which have been identified should be conducted with transparency and appropriate rigour.  Registered organisations with a legitimate interest in the industry and occupations covered by the agreement may assist in the resolution of these issues of concern.  In this way a process involving an open diligent and comprehensive scrutiny should provide for the correct outcome, and also enhance broader confidence in the Commission's enterprise agreement approval role.

I note that the CFMMEU for the purpose of this agreement obviously would have coverage to these employees.  We do have a legitimate interest, you know, obviously in this agreement itself because it will be in the building construction industry, and I note the interest really does extend, particularly with pre-approval steps, that are quite important, Commissioner, when approving agreement, and that goes to section 180(5).  This is not just simply just us raising one or two minor BOOT issues or small slight deficiencies.  This is quite an important issue that needs to be ventilated and I suppose with the presence of a contradictor in this matter I think it would benefit the Commission in terms of coming to a conclusion about the matter.  I note that I have requested to cross-examine Dianne Chami, specifically for the purpose to get to the bottom of this central issue.  This is not a mere throwing in a few submissions, Commissioner, this is us being - acting as the contradictor to get a case from both sides”. 4

[9] The Applicant opposed the CFMMEU being granted the right to be heard. The Applicant submitted that:

•  The CFMMEU is not a bargaining representative and does not have the right at law.

•  It is a matter for my discretion, but that discretion is not unfettered.

•  There is no role in the Act to allow a contradictor.

•  The CFMMEU has in any event made all of their points with which the Applicant does not agree. 5

[10] The parties were aware that I initially expressed a provisional view that the Agreement could be approved subject to some minor issues, including a typographical error. Having considered the submissions of the CFMMEU, a concern arose regarding whether or not the requirements under s.180(5) of the Act have been met. The provisional view that I previously held was based on an incorrect understanding that the Agreement was a “rollover” agreement. That is, an agreement that is essentially a mirror of the previous agreement, with the exception of additional pay increases. However, submissions made by the CFMMEU highlighted that the Agreement is not a rollover, 6 which gives rise to additional considerations.

[11] After considering the submissions and having regard to the material filed, I considered it appropriate to exercise my discretion to hear from the CFMMEU having regard to s.590 of the Act and the powers of the Commission to inform itself. 7 My reasons for doing so are set out in the transcript of the hearing.8

Written submissions

Construction, Forestry, Maritime, Mining and Energy Union

[12] In its written submissions, the CFMMEU highlight that pursuant to s.186(2)(a) of the Act, the Commission must be satisfied that an agreement that is not a greenfields agreement has been genuinely agreed by the employees covered by the agreement. Relevantly, pursuant to s.188(1)(a) of the Act, an enterprise agreement has been genuinely agreed to by the employees if the Commission is satisfied that subsections 180(2), (3) and (5) (which deal with pre-approval steps) are complied with. 9 In this matter, the CFMMEU focus on the pre-approval steps under s.180(5), which provide as follows:

“Terms of the agreement must be explained to employees etc.

(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.”

[13] The CFMMEU refer to several authorities, including the Full bench in Construction, Forestry, Maritime, Mining and Energy Union v Ditchfield Mining Services Pty Limited, 10 which affirmed the importance of assessing whether all reasonable steps have been taken in accordance with s 180(5), by referring to the Full Federal Court decision in One Key Workforce (No 2).11The following quote was emphasised:

“…. The Commission was required to be satisfied that OKW had taken “all reasonable steps to ensure” that both the terms and the effect of the terms had been explained to the relevant employees as an element in the inquiry as to whether “genuine” agreement had been obtained from them. The agreed purpose of the obligation imposed on employers by s 180(5) is to enable the relevant employees to cast an informed vote: to know what it is they are being asked to agree to and to enable them to understand how wages and working conditions might be affected by voting in favour of the agreement.

In order for the employer to comply with the obligation it must take into account the particular circumstances and needs of those employees, including their cultural and linguistic backgrounds, their youth, and the absence of a bargaining representative. That is made explicit in s 180(6). How could the Commission decide whether the steps the employer had taken were “all reasonable steps” unless it knew what the employees had been told before they cast their votes? Without knowing the terms in which the explanation had been conveyed how could the Commission form an opinion on the sufficiency of the explanation, particularly having regard to the considerations mentioned in s 180(6)? Ultimately, how could the Commission decide that a genuine agreement had been reached without having evidence upon which it could answer both these questions?”  12

[14] In this matter, the relevant employees are currently covered by the Christies People Pty. Ltd. / CFMEU Collective Agreement 2012 – 2014 (the current agreement). 13

[15] Under a heading titled “Did Christies People explain the differences between the Current and Proposed Agreement?”, the CFMMEU note that the Employer's Declaration in Support of Enterprise Agreement (Form F17) refers to the current agreement at question 22, where it states that:

“Employees were advised that the wage rates contained in Appendix 2 of the Agreement were set higher than the current award rates and those in the current agreement and that they will increase annually during the life of the Agreement.”

[16] The CFMMEU states however, that this is the only mention of the current agreement in respect of the explanation of the terms and effect of the proposed Agreement, and that the explanation appears to be misleading, given the base rates in the current agreement are in fact higher than the start rates in the proposed Agreement. 14

[17] The CFMMEU highlight the ‘substantive differences between the agreements’ in their submissions as follows:

“Base rates of pay comparison

The base rates in the proposed agreement are lower than the current agreement. Base rates of pay are applicable in respect of calculating how much an employee will receive when they are entitled to take leave such as annual leave, personal leave, compassionate leave and a Rostered Day Off.

The significance of this is that employees taking leave under the proposed agreement will be financially worse of in comparison to them being covered by the current agreement.

The following table shows a comparison between the two agreements on a per hour basis. The rates for the current agreement are shown from the last increase, whereas proposed agreement shows the ‘start rates’.

Company Consultative Committee

Clause 9 of the current Agreement allows the company the opportunity to establish a company consultative committee. The Committee is made up of an equal number of management representatives and from the site workforce. Consultative Committee provides for the following:

“9.3. The principle purpose of this Committee will be to:

9 .4. Monitor the implementation of the terms of this Agreement

9.5. Facilitate the process of workplace refo1m through consultation

9.6. Ensure Employees are properly consulted in respect of issues impacting On their wages, working conditions and job security

9.7. Monitor, discuss, develop and I or recommend measures or actions in respect of but not limited to:

•  Productivity

•  Skills audit and training

•  Management of quality assurance

•  Work health and safety

•  Existing and future work

•  Removal of restrictive work practices

•  Productive use of inclement weather downtime

•  Rehabilitation of injured Employees

•  Environmental protection

•  Redundancies”

The proposed agreement provides for no such provision. The significance of this is that there may be a consultative committee in place, but being that the proposed agreement does not provide for it, would that then mean the committee is disbanded. Alternatively, if there isn’t one, then this prevents the employees from establishing a consultative committee.

Redundancy Trust Fund Scheme

Clause 12.3 of the current agreement provides for contributions to be made in respect of employees covered by the agreement into the Australian Industry Redundancy Trust (ACIRT) in Accordance with Appendix C.

Appendix C of the current Agreement provides all full time employees covered by the agreement, except the Tower Crane Crew, will receive $77.00 per week into ACIRT. Whilst, all CW7 employees that are either a Tower Crane Driver, Dogman/ Rigger (Tower Crane Crew) received $125 per week into their ACIRT.

The proposed agreement does not entitle any of its workers to any AICRT payments. It instead provides for Building and Construction on Site Award 2010(Award) entitlement to redundancy. As a result, employees under the proposed agreement will be at a financial loss in comparison to the current agreement.

Under the current agreement if an employee, that is not apart of the has a period of one year service they should have an accumulated total of $4,004. Whereas, under the proposed agreement a level 6 employee will be entitled to $2,787.07. This is a difference of approximately $1,216.93.

In addition, the maximum amount of redundancy a level 6 employee under the proposed agreement can receive is 8 weeks’ worth of redundancy, which is after 4 years’ worth of service would amount to $9,758.4. Whereas, an employee, that is not a part of the Tower Crane Crew under the current agreement, after 4 years worth of service would receive $16,016 worth of redundancy. This is a difference of approximately $6,257.6.

It is worth noting that ACIRT contributions under the current agreement do not stop at a certain time in an employees service, they continue so love as they are covered by the agreement. So the financial loss by comparison between the two agreements will continue to grow.

"Workcover Top-Up" and "Income Protection"

Clause 12.5 of the current agreement entitles employees to be covered by a non-cancellable "Workcover Top-Up" and "Income Protection" insurance policy for Employees covered by the Agreement. It further provides that “terms, conditions and benefits provided by the agreed insurance policy must be equal or better than that provided by "U-Plus"”

A “Workcover Top-Up” is top up payment made when an employee is receiving workers compensation payments. This is a particularly important in the industry that this agreement applies, which is the ‘construction industry’. The construction industry has one of the highest amount of workers compensation claims per year, so this entitlement would no doubt have the potential to be utilised.

The “Income protection” is essentially an insurance policy that provides for weekly wages in the event an employee suffers an injury or illness that is non-work related. Being that it would be equivalent to “Uplus”, workers would be entitled to up to $2,500 per week for up to two years.

The proposed agreement does not contain any entitlement to either “Workcover Top-up” or “Income Protection”. In the employees no longer being entitled to either of these entitlements under the current agreement, it could pose potential significant financial detriment to workers that could be entitled to either “Workcover Top-Up” if they are receiving workers compensation, or if they are entitled to income protection in the event of an injury or illness outside for work.

The Rostered Days Off

The two agreements vary in the amount of RDOs that accrue per year. The Current agreements provides for a significantly higher amount of accumulated RDO’s in a calendar year in comparison to the Proposed Agreement.

Clause 28.2 of the current agreement provides that employees will accumulate 0.8 of an hour per day per day accruing for a rostered days off (RDO). Therefore, employees will be entitled to up to 26 RDO’s a calendar year.

Clause 7.2 of the proposed agreement provides that the employees will be entitled to

accumulated 0.4 of an hour per day towards accruing for an RDO. Therefore, employees would be entitled up to 13 RDOS a calendar a year.” 15

(original text retained)

[18] Ms Dianne Chami (the General Manager for the Applicant) agreed with the CFMMEU’s analysis of the differences between the two agreements. 16

[19] The CFMMEU states that the Form F17 and all the material filed with the application shows no evidence of the Applicant identifying any of the differences that have been highlighted in the CFMMEU’s submissions. 17

[20] The CFMMEU state that the importance of explaining the difference between a current agreement and a proposed Agreement was considered in the Full bench decision in Construction, Forestry, Maritime, Mining and Energy Union v McNab Constructions Pty Ltd (McNab). 18 Drawing on McNab, the CFMMEU submits that the “material differences between a current agreement that applies to the employees and the proposed agreement they are voting on, warrant the employer explaining the changes between the two documents. Particularly in circumstances such as these where the agreements are not simple rollovers with increases to the wages of the agreements,”19 and at the heart of their submissions is the critical issue of whether the Applicant has explained the changes between the current agreement and the proposed Agreement. 20

[21] Based on the evidence presently before the Commission, the CFMMEU submits that the Applicant has failed in their obligation under s.180(5) of the Act to take all reasonable steps to ensure that the terms of the Agreement, and the effect of those terms, are explained to the relevant employees. As such, the proposed Agreement cannot be approved, as it has not been genuinely agreed to by the employees. 21

Christies People Pty Ltd

[22] The Applicant made written submissions that Ms Chami convened a meeting on 13 October 2020 (the Discussion Meeting), where the Agreement was explained. Part of that explanation was said to involve a comparison of the current agreement with the proposed Agreement. 22

[23] The Applicant submits that the terms of the proposed Agreement were explicitly discussed with all of the relevant employees at various stages throughout the bargaining process, and that the discussions on the proposed Agreement when compared vis-a-vis the current agreement revealed a consensus amongst the employees that the Union agreement offered was not commercially viable for the Applicant. The Applicant contends that the relevant employees were already well aware of the differences between the two agreements before the vote was taken. 23

[24] On the question of whether the agreement was genuine, the Commission’s attention was drawn to the following:

“•  All employees nominated themselves as bargaining representatives.

•  No employees nominated the Union as their bargaining representative, despite express notification being given that they had a right to do so [see NERR].

•  All employees participated in the bargaining.

•  All employees participated in the Discussion Meeting.

•  All employees voted in favour of proposed agreement.

•  One of the self-nominated bargaining representatives signed the Agreement.” 24

[25] This conduct, the Applicant submits, is entirely consistent with that of employees who have genuinely agreed to the Agreement put to them for approval, and the CFMMEU’s core argument that the employees who voted for the agreement did so while being unaware of the current agreement’s provisions is based on speculation. 25

[26] The Applicant refers to the decision of Boyce DP in Downer EDI Mining – Blasting services Pty Ltd. 26 The Applicant contends that the Deputy President observed that unsubstantiated assertions based on access to filing documents:  

“…end[s] up enabling those who have had no involvement in the negotiation or making of an enterprise agreement (such as a union that has not been a bargaining representative (default or otherwise) for an enterprise agreement, or had or has no current members at the workplace), to identify a ‘desktop’ foundation upon which they might seek to be heard to oppose the approval of an enterprise agreement (i.e. solely on the basis of what is able to be extrapolated or said to be inferred (in an adverse way) from the face of an F17 form …). 27

[27] The Applicant submits that in the Deputy President’s words, on this occasion the CFMMEU’s ‘desktop inferences’ about lack of genuine agreement are incorrect. 28 Further, that the “balance of the Union’s submission … deal with rates of pay, consultative committees, redundancy and top-up / income protection and RDOs and are irrelevant to the BOOT test which uses the relevant award as the comparator.”29

[28] As such, the Applicant contends that are no reasonable grounds for the Commission to conclude that the proposed Agreement was not genuinely agreed. The Applicant submits that “for the purposes of s.186(2) the Commission should be satisfied that the proposed Agreement was ‘genuinely agreed’, as that term is described in s.188. Therefore, the application should be approved immediately.” 30

The hearing

[29] During the hearing, the Applicant indicated that “the approval of this agreement just hinges on whether it was explained properly to the employees in the circumstances.” 31 The CFMMEU also indicated that the “central issue that we are here today to obviously get to the bottom of in regards to section 180(5)” of the Act.32 As such, the hearing focused on the relevant section, being s.180(5) of the Act.

[30] Ms Chami was asked a number of questions by me regarding the Form F17 filed on behalf of the Applicant, and steps taken pursuant to s.180(5) of the Act. The evidence of Ms Chami was not contradicted, 33 and the CFMMEU agreed that I was entitled to rely on that evidence.34 Ms Chami was asked if she took any other steps other than the Discussion Meeting on 13 October to explain the Agreement. Her answer was that:

“before the agreement, before we even put the agreement together I had been in discussions with my guys and they were asking why I wasn't able to (indistinct) consistent work and what the industry was - what was happening, and I explained to them that I was in - I was in an industry - I'm currently in an industry where it is quite hard and competitive.  The current agreement that's sitting there, the CFMMEU one, was a little bit more extensive than the one we are proposing, and it has been a bit difficult.  So I've been having these discussions with my guys for quite some time before we even went through the proposal together.  So this isn't - the agreement itself isn't something that my men have just came out of the blue.  I've obviously - I've got a very close knit team here so I ran it, and I'm very honest and transparent with them.  So when I told them that, look, this is what we're going to do, this is our view we're taking, they were - they have been in the loop the entire time.  We invited them in and I had a very in-depth discussion with them, and I ran through the entire process, why - why it is less than the current agreement in there, what our position is as a business, as an employer and an employee, and they were - they were very receptive.  They understood, and they understand, Commissioner, because they are the ones that are currently being impacted, just as much as I am.  I haven't been able to give them consistent work.” 35

[31] Ms Chami confirmed that five employees were covered by the Agreement at the time of the vote, and all five of them were at the formal Discussion Meeting held on 13 October 2020, 36 where she “explained it to them, the differences, there is substantial difference … and our reasoning for doing what we're doing, and also that the proposed Agreement is a base,” and that she made sure no one left until all questions were answered.37

[32] When asked what steps she took to explain the differences between the current agreement and the proposed Agreement, Ms Chami answered as follows:

“I explained to them the base - the pay rates, the allowances.  I explained to them the differences are significant because I am aware and they are aware that there is a significant difference in the rates, but I also explained to them from a business point of view and an employee point of view the reasoning for us doing this.  We are unable to - we haven't been able to keep them gainfully employed under - under the current agreement, and I explained to them that we are actually a little bit - our rates are higher than of the charge rate and whatever it may be it's actually harder for us to get work, hence why we needed a different avenue, and I explained why we eliminated some of the allowances.  There was no backlash, that the boys - the men all understood it and they - they - yes, but (indistinct).  They just - I don't know what else I could say to you, Commissioner, but everything was very transparent, they had the agreement, we read through everything with them and they understood and accepted.  Their exact words to me were, "We would rather work than no work", and under the current agreement that I had I was struggling to get them any work.” 38

[33] Ms Chami said that she explained the differences in the allowances between the current agreement and the proposed Agreement. As to explaining the other differences, Ms Chami said:

“There was - there's the redundancy that's not in, the travel allowance which we replaced with a productivity allowance, and the base rate.  They were - they were the main - they were the main points that the men discussed and wanted to touch base on.

Right.  You didn't discuss any other issues that were between the two agreements?---From my recollection that was - they were the main - we went through most of it.  We went through the living away from home, but Christies People we don't do much regional work so that wasn't a big thing.  There was living away from home, the casual employment, the productivity allowance on all hours, the casual loading that went on to travel or to the overtime, and I also explained to them and I did explain to them the rate that we put forward, the rates that we have put forward, what we have found to be the most competitive that we can to get them work.  So with the rates that are in the current agreement at the moment it's been very difficult with the additional allowances to win any work to keep them employed, so hence why we're doing what we're doing.” 39

[34] Ms Chami was asked whether she used anything to assist her in the discussion meeting “like a PowerPoint presentation or handouts or anything to that effect.” Ms Chami stated that she only used a whiteboard to assist her in this discussion, but that she had not taken a picture of it after the meeting. 40 Ms Chami did not give employees any material during the meeting.41 Despite the substantial differences between the two agreements, Ms Chami indicated that she did not think it was necessary to have any kind of summary between the two agreements to hand out.42 Ms Chami relied on her view that the relevant employees “all knew what we were doing. All the guys were aware.”43

[35] Ms Chami indicated that “all our guys were given a copy of the proposed agreement and a copy of the current agreement for their own - so they can review on their own accord.” 44 However, when asked further about the evidence that employees were given a copy of the current agreement, Ms Chami’s evidence was that:

“Just then your evidence was that you gave them copies of the current CFMEU agreement?---Yes.

I don't think you have said that anywhere in your F17 where - - -?---No, I didn't - I gave it after.

After?---I've given it after, yes.

After what?---After our meeting.  Once - once I had the meeting with them I then - they all had a copy of the proposed agreement prior.  Then after our agreement - after our meeting I said to them, "Look, here's a copy if you guys want to review", and a couple of them took it, the others didn't.  They weren't interested to be honest.” 45

[36] When asked further as to exactly when she gave employees the current agreement, Ms Chami answered, “I honestly couldn't give you an exact date.” 46

[37] Question 22 on the Form F17 contained the following statement:

“Employees were advised that the wage rates contained in Appendix 2 of the Agreement were set higher than the current award rates and those in the current agreement and that they will increase annually during the life of the Agreement.”

[38] When asked whether this was a mistake on the Form F17, Ms Chami claimed that this was her mistake, and was a typo, and that she “spoke to them that the rates in the proposed Agreement will be less than the rates in the current agreement, but higher than the award.” 47 However, Mr Gissane in closing submissions claimed it was his error in helping the Applicant prepare the Form F17.48

[39] In relation to steps the Applicant took to explain the differences between the current agreement and the proposed Agreement, Ms Chami indicated that she “explained to them the base - the pay rates, the allowances. I explained to them the differences are significant.” 49

[40] When asked whether there were any other differences between the current agreement and the proposed Agreement, Ms Chami stated that “there's the redundancy that's not in, the travel allowance which we replaced with a productivity allowance, and the base rate.” 50 Ms Chami indicated that from her recollection, they were the main issues discussed between the two agreements, providing further that the “living away from home, the casual employment, the productivity allowance on all hours, the casual loading that went on to travel or to the overtime” were also discussed.51 She also indicated that it was explained to employees that they would no longer be receiving any kind of workers top-up or income protection policy.52 Further, that she “put it on the board”.53 When asked if she explained what it meant for employees no longer being covered by an income protection policy, she replied:

“Yes, that's what I'm saying, they know what it means.  They've been in the industry, they've had ESA payments in the past and they are totally aware, and with the top-up they are totally aware of what it means.” 54

[41] When directed to the change in the redundancy provisions and whether she explained the effect it would have on employees, Ms Chami indicated that “I'm pretty sure they were aware of it, but nobody had any further questions. I did explain to them what ESA was, but these guys have been in the industry for quite a few years, they all know what ESA is, and they all knew that there wasn't going to be ESA in the proposed agreement, and nobody objected.” 55

[42] In relation to RDO’s, Ms Chami could not recall that she explained the RDO’s as she “didn’t think there was a significant difference.” 56

[43] As mentioned earlier, Ms Chami was directed to the submissions of the CFMMEU, and she indicated that she does not disagree with the substantive difference between the agreements as outlined by the CFMMEU. 57

[44] Ms Chami was asked why none of the explanations about the differences in the agreements were referred to in the Form F17. Ms Chami said that it was probably her mistake that she didn’t indicate it as she did not know that it was necessary. 58

[45] The CFMMEU submitted that the fact that there are significant material differences between the agreements, and employees would experience significant financial detriments pursuant to the Agreement, further steps are required in the particular circumstances of the matter. 59

[46] The CFMMEU again drew on the Full Bench decision in McNab, making specific reference to paragraph [26]. The CFMMEU submits that all that is before the Commission is “what Dianne Chami says happened. That's what we have got. We don't have anything to explain what the content of those discussions [were that] took place. In these circumstances where there are material differences between a current agreement and the [proposed] Agreement they're looking to vote up these are essential, Commissioner, to ensure that all reasonable steps are taken.” 60

Consideration

[47] Having considered all of the evidence in this matter, I am not satisfied that all reasonable steps were taken by the employer to ensure that terms of the Agreement, and the effect of those terms, were explained to the relevant employees.

[48] The first point to make is that the Applicant agreed with the substantive differences between the current agreement and the proposed Agreement as outlined by the CFMMEU. 61 Consistent with the decision in McNab, it was important considering all the circumstances in this matter that those differences were explained, including the effect that the changes would have on employees.62

[49] Firstly, the Applicant did not explain that, unlike the current agreement, the proposed Agreement does not contain provisions relating to establishment of a company consultative committee. As per the CFMMEU’s submissions, which the Applicant did not contest:

“The significance of this is that there may be a consultative committee in place, but being that the proposed agreement does not provide for it, would that then mean the committee is disbanded. Alternatively, if there isn’t one, then this prevents the employees from establishing a consultative committee.” 63

[50] Secondly, the Applicant could not recall if the reductions in RDOs when compared to the current agreement were explained and indicated that they did not believe there to be a significant difference. 64 This does not appear to be the case, as the uncontested submission of the CFMMEU indicate that:

“The two agreements vary in the amount of RDOs that accrue per year. The Current agreements provides for a significantly higher amount of accumulated RDO’s in a calendar year in comparison to the proposed Agreement.”

[51] It does not appear that the above two less beneficial differences were explained to employees in accordance with s.180(5) of the Act. This was a reasonable step that should have been taken.

[52] The Applicant has provided evidence at a broad level that they explained the following differences:

•  Rates of pay and allowances

•  Casual entitlements

•  Redundancy Trust Fund Scheme

•  Workcover Top-up

•  Income Protection

[53] On income protection, when asked whether she explained what it meant for employees no longer being covered by an income protection policy, Ms Chami’s answer was that “they know what it means. They've been in the industry, they've had ESA payments in the past and they are totally aware, and with the top-up they are totally aware of what it means.” 65 This evidence does not demonstrate that there was an explanation of the effect of the terms. Instead, there was a reliance on an assumption that employees already know what it means. A reasonable step would have been to explain to employees the effect of the changes impacting on income protection.

[54] As to the changes in the quantum of entitlements, these are significant changes. The evidence of Ms Chami demonstrates that she explained that there was a change to the terms of the agreement on redundancy, but she did not explain the effect of the terms, instead relying on her view that she was “pretty sure they were aware of it”. 66 Having regarding to the significant difference in the entitlements to redundancy, a reasonable step would have been to explain the effect of the change in that term.

[55] Further, employees were not given a copy of the current agreement until an unknown time after the Discussion Meeting held on 13 October 2020. As such, employees did not have the current agreement in front of them in order to compare the current agreement and the proposed Agreement during the meeting with Ms Chami. Providing employees with a copy of the current agreement at the Discussion Meeting would have been a reasonable step to take in all the circumstances.

[56] The Applicant did not provide any supporting documentation regarding the content of the explanation given. Instead, it relied on Ms Chami’s recollection regarding what took place during the Discussion Meeting with the relevant employees on 13 October 2020. That recollection, provided at the hearing, was not referred to at all on the Form F17.

[57] On the Form F17, the explanation that was said to have been given focused on the differences between the Building and Construction General On-Site Award 2010 and the Agreement. However, employees were at the time covered by the current agreement. The only indication on the Form F17 that there was a reference to the current agreement was the statement that the wage rates were set higher than the proposed Agreement. This was incorrect. Ms Chami claimed the error was a typo and took responsibility. However, Mr Gissane said it was his “cut and paste error.” 67

[58] In any case, Ms Chami’s recollection of the explanation she gave as to the differences between the current agreement and the proposed Agreement was rather vague, and the content of the explanation given to employees remained unclear at the conclusion of the hearing.

[59] The Agreement is not a rollover, with a discrete and obvious change. The changes are significant. The Applicant appears to have neglected to explain two detrimental differences between the current agreement and the proposed Agreement. The Applicant appears to have largely relied on an assumption that employees understood the differences due to discussions had before the proposed Agreement was put to them. 68

[60] The Applicant was vague in its evidence regarding what was explained at the meeting, and reliance was placed on previous discussions with the employees, 69 and the claim that “they all knew what we were doing.”70 This is especially apparent in the explanations (or lack thereof, rather) regarding the company consultative committee and RDOs, both of which constituted significant differences between the current agreement and the proposed Agreement.

[61] There was a reference to a white board used to “assist the employees to visualise the differences”, 71 but the Applicant offered rather vague evidence as to what was written on it. Furthermore, there was no further explanatory material provided to employees to explain the changes. Importantly, during the Discussion Meeting, the employees did not have a copy of the current agreement. While the Applicant submits that some employees obtained it after the meeting, the evidence as to when they obtained a copy of the current agreement was vague and unhelpful.

[62] At a minimum, the Applicant should have provided employees with a copy of the current agreement at the Discussion Meeting so that employees could compare the provisions of the current agreement with the proposed Agreement. That would have been a reasonable step. A further reasonable step would have been to provide a summary of the key changes between the two agreements. This might have been done on the white board, but the vagueness of Ms Chami’s evidence does not satisfy me as to what was on the whiteboard. As stated above, alternatively, a printed explanatory document could have been provided to assist in the Applicant’s explanations.

[63] Further, the Applicant has failed to take the reasonable step of providing an explanation of the effect of the terms relating to consultative committee, income protection and redundancy as discussed above.

[64] Ms Chami’s emphasis was on the need to approve the Agreement in order to keep the Applicant “competitive in the market”, 72 and that the employees indicated that “we don't care, we just want to work.”73 Ms Chami is entitled to make these points but this is no substitute for the reasonable steps that need to be taken to explain the effect of the terms of the Agreement pursuant to s.180(5) of the Act.

Conclusion

[65] The Applicant did not provide satisfactory evidence regarding the content of the explanation given to employees as to the differences between the two agreements and the effect that would have on them; failed to take the reasonable step of explaining two of the detrimental differences in the proposed Agreement; failed to take the reasonable steps to explain the effect of a number of the terms and failed to take the reasonable step of providing a copy of the current agreement to employees at the 13 October 2020 Discussion Meeting. Given the significance of the changes, I also consider that in all the circumstances a reasonable step in this case would have been to provide the employees with a summary of the key changes and the effect those changes will have. In conclusion, taking into account all of the circumstances, I am not satisfied that the Applicant took all reasonable steps to ensure that the terms of the Agreement, and the effect of those terms, were explained to the relevant employees.

[66] I am therefore not satisfied the Agreement was genuinely agreed, taking into account the requirements of s.188(1)(a)(i). Consequently, I have a concern that the Agreement does not meet the requirement in s.186(2)(a).

[67] Section 190 of the Act provides that if the Commission has a concern that an agreement does not meet the requirements in ss.186 and 187, the Commission may approve the agreement under s.186 if the Commission is satisfied that an undertaking accepted by the Commission meets the concern.

[68] It may be that given the nature of my concern, it would be extremely difficult to meet my concern with an undertaking. This proposition is best explained by reference to the Full Bench decision in Construction, Forestry, Maritime, Mining and Energy Union v Karijini Rail Pty Ltd, where it was said that:

“…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.” 74

[69] The example above unfortunately does not align with the circumstances in this case. The genuine agreement concern is much broader. Nevertheless, the Applicant will be afforded the opportunity to provide undertakings to meet the genuine agreement concern articulated.

[70] Any undertakings that the Applicant wishes to provide to meet the concerns are to be provided no later than 7 days from the date of this decision.

COMMISSIONER

Appearances:

M Gissane for the Applicant.

D Syron for the Construction, Forestry, Maritime, Mining and Energy Union.

Hearing details:

2021;
Melbourne (by telephone via Microsoft Teams)

January 12.

Printed by authority of the Commonwealth Government Printer

<PR727204 >

 1 Applicant’s Outline of Submissions dated 15 December 2020 at [3].

 2 Ibid at [9].

 3   PN8.

 4   PN22 – PN25.

 5   PN31 – PN32.

 6 CFMMEU’s Outline of Submissions dated 8 December 2020 at [17].

 7   PN33.

 8   PN34 – PN36.

 9 CFMMEU’s Outline of Submissions dated 8 December 2020 at [8].

 10   [2019] FWCFB 4022 at [65] - [68].

 11   One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77.

 12   [2019] FWCFB 4022 at [69].

 13   [2013] FWCA 1428.

 14 CFMMEU’s Outline of Submissions dated 8 December 2020 at [14].

 15   Ibid at [19] – [36].

 16   PN101.

 17 CFMMEU’s Outline of Submissions dated 8 December 2020 at [15].

 18   [2020] FWCFB 5080.

 19 CFMMEU’s Outline of Submissions dated 8 December 2020 at [17].

 20 Ibid at [37].

 21 Ibid at [38].

 22 Applicant’s Outline of Submissions dated 15 December 2020 at [4].

 23 Ibid at [8].

 24 Ibid at [11].

 25   Ibid at [12] – [13].

 26   [2019] FWC 5615.

 27 Ibid at [18].

 28 Applicant’s Outline of Submissions dated 15 December 2020 at [15].

 29 Ibid at [18].

 30 Ibid at [19].

 31   PN37.

 32   PN56.

 33   PN175 – PN176

 34   PN175 – PN178.

 35   PN79.

 36   PN75 – PN78.

 37   PN83.

 38   PN92.

 39   PN96 – PN97.

 40   PN112 – PN114.

 41   PN116.

 42   PN130.

 43   PN131.

 44   PN102.

 45   PN103 – PN106.

 46   PN118.

 47   PN90 – PN91.

 48   PN143.

 49   PN92.

 50   PN96.

 51   PN97.

 52   PN123.

 53   PN125.

 54   PN126.

 55   PN119 – PN121.

 56   PN127.

 57   PN98 – PN101.

 58   PN135,

 59   PN157 – PN158.

 60   PN161.

 61   PN98 – PN101.

 62   [2020] FWCFB 5080 at [25].

 63 CFMMEU’s Outline of Submissions dated 8 December 2020 at [23].

 64   PN127.

 65   PN126.

 66   PN121.

 67   PN143.

 68   See PN79, PN83, PN92, PN183.

 69   PN79.

 70   PN131.

 71   PN144.

 72   PN83.

 73   PN102.

 74   Construction, Forestry, Maritime, Mining and Energy Union v Karijini Rail Pty Ltd[2020] FWCFB 958 at [107].