Civil & Allied Technical Construction Pty Ltd T/A CATCON

[2018] FWC 3955

[2018] FWC 3955

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Civil & Allied Technical Construction Pty Ltd T/A CATCON
(AG2018/920)

DEPUTY PRESIDENT MASSON MELBOURNE, 16 JULY 2018

Application for approval of the Catcon West Australia Civil Engineering Construction Agreement 2018 - 2021.

[1] An application has been made for approval of a greenfields agreement known as the Catcon West Australia Civil Engineering Construction Agreement 2018 - 2021 (the Agreement). The application was made by Civil & Allied Technical Construction Pty Ltd T/A CATCON (the Applicant) pursuant to s 185 of the Fair Work Act 2009 (the Act) on 9 March 2018.

[2] The Applicant filed a statutory declaration in support of the Agreement. The statutory declaration noted that the relevant award for the purpose of the better off overall test was the Building and Construction General On-site Award 2010 (the Award). 1 The statutory declaration noted that the provisions in the Agreement were more beneficial than the Award or were not conferred by the Award. No less beneficial terms were identified.

[3] The Agreement was made with the Australian Workers Union (the AWU) pursuant to s 53(2)(b) of the Act. The AWU filed a statutory declaration supporting approval of the Agreement on 9 March 2018.

Pre-approval requirements

[4] In reviewing the Agreement for approval, the Commission identified a number of concerns with the Agreement and wrote to the Applicant on 14 June 2018. A number of those concerns were addressed in the Applicant’s response received on 15 June 2018. Following consideration of the Applicant’s response, three outstanding concerns were identified in correspondence sent to the Applicant on 22 June 2018, a response to which was sought by close of business on 26 June 2018. Those concerns were:

(1) The Applicant’s F20 Statutory Declaration declared that the Agreement did not cover a new enterprise that the Applicant is establishing or proposing to establish. The declaration was in conflict with the requirements of ss 172(2)(b) and 172(4) of the Act;

(2) The Agreement did not expressly incorporate the Award and it (the Agreement) was silent on the payment of weekend penalties and annual leave loading. Clarification was requested as to whether it was the intention to incorporate the Award to properly enable the better off overall test (BOOT) to be completed.

(3) The rates of pay in the Agreement were expressed to operate from 1 July 2018. No rates were provided that were applicable at test time. As the BOOT assessment can only be undertaken at test time pursuant to s 186(2)(d) and s 193 of the Act, the Commission is unable to conduct the BOOT without the applicable rates.

[5] The Applicant failed to respond on or by 26 June 2018 following which I caused further correspondence to be sent to the Applicant on 28 June 2018. In that correspondence, I indicated that I had formed a preliminary view that, on the basis of the concerns held, the Agreement cannot be approved. The Applicant was requested to provide further submissions and/or undertakings in relation to the matters raised on or by 12.00 midday on Friday, 29 June 2018. No response was received from the Applicant.

[6] I then caused to be sent from my Chambers further correspondence to the Applicant on 4 July 2018 in the following terms:

“I refer to previous correspondence forwarded to you on 22 June 2018 and 28 June 2018 requesting a response to outstanding concerns held by Deputy President Masson in relation to the above agreement. As expressed in the correspondence of 28 June 2018, the Deputy President has formed a preliminary view that the Agreement cannot be approved for the reasons detailed in the earlier correspondence. A copy of the previous correspondence is attached. To date, no further response from the parties has been received in relation to this correspondence.

Deputy President Masson advises that in the absence of a response from the parties by 4.00 pm Friday, 6 July 2018, he will proceed to determine the application on the material currently before him. Should you wish to provide further submissions and/or undertakings you are required to do so by 4.00 pm Friday, 6 July 2018 and file such material with the Deputy President’s Chambers. Alternately you may elect to withdraw the application or seek to be heard in relation to the matter, in which case you must advise the Deputy President’s Chambers by 4.00 pm Friday, 6 July 2018.”

[7] No response was received from the Applicant to the correspondence dated 4 July 2018. As a consequence I will proceed to determine the matter on the materials before me.

Relevant legislation

[8] Section 172 of the Act deals with the making of enterprise agreements; including the permitted matters that agreements may include; and the form of agreements that may be made including single enterprise agreements, multi-enterprise agreements and greenfields agreement. For the purpose of the present application, s 172 relevantly provides as follows:

“172 Making an enterprise agreement

……………..

(2) An employer, or 2 or more employers that are single interest employers, may make an enterprise agreement (a single‑enterprise agreement):

(a) with the employees who are employed at the time the agreement is made and who will be covered by the agreement; or

(b) with one or more relevant employee organisations if:

(i) the agreement relates to a genuine new enterprise that the employer or employers are establishing or propose to establish; and

(ii) the employer or employers have not employed any of the persons who will be necessary for the normal conduct of that enterprise and will be covered by the agreement.

Note: The expression genuine new enterprise includes a genuine new business, activity, project or undertaking (see the definition of enterprise in section 12).

Multi‑enterprise agreements

(3) Two or more employers that are not all single interest employers may make an enterprise agreement (a multi‑enterprise agreement):

(a) with the employees who are employed at the time the agreement is made and who will be covered by the agreement; or

(b) with one or more relevant employee organisations if:

(i) the agreement relates to a genuine new enterprise that the employers are establishing or propose to establish; and

(ii) the employers have not employed any of the persons who will be necessary for the normal conduct of that enterprise and will be covered by the agreement.

Note: The expression genuine new enterprise includes a genuine new business, activity, project or undertaking (see the definition of enterprise in section 12).

Greenfields agreements

(4) A single‑enterprise agreement made as referred to in paragraph (2)(b), or a multi‑enterprise agreement made as referred to in paragraph (3)(b), is a greenfields agreement.

………………”

[9] If an application is made under s 185 of the Act, the Commission must approve the agreement if satisfied of those matters under ss 186 and 187 of the Act. Section 186 of the Act, relevantly states:

“186 When the FWC must approve an enterprise agreement—general requirements

Basic rule

(1) If an application for the approval of an enterprise agreement is made under section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.
Note: The FWC may approve an enterprise agreement under this section with undertakings (see section 190).

Requirements relating to the safety net etc.

(2) The FWC must be satisfied that:

(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; and

(b) if the agreement is a multi enterprise agreement:

(i) the agreement has been genuinely agreed to by each employer covered by the agreement; and

(ii) no person coerced, or threatened to coerce, any of the employers to make the agreement; and

(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and

(d) the agreement passes the better off overall test…

Consideration

[10] The application is for approval of the Agreement pursuant to s 185 of the Act. It is a greenfields agreement and as such it can only be made if it relates to a genuine new enterprise. As noted in s 172(2)(b), the expression “genuine new enterprise” includes a genuine new business, activity, project or undertaking.

[11] In light of the response in the Applicant’s F20 Statutory Declaration at Question 1.4 that the Agreement does not cover a “genuine new enterprise”, further information was sought from the Applicant. Absent further submissions or materials from the Applicant that would clarify or correct the information in the Applicant’s F20 Statutory Declaration, the Commission cannot be satisfied that the enterprise proposed to be covered by the Agreement is a “genuine new enterprise”. As such, the requirements necessary for approval of the Agreement pursuant to s 172(2)(b) and s 172(4) of the Act are not met.

[12] In order to conduct the better off overall test (BOOT) assessment of the Agreement pursuant to s 193 of the Act, it is necessary to conduct the BOOT assessment at “test time”, that being the date the application for approval of the Agreement was made. The application for approval of the Agreement was made on 9 March 2018, however the rates of pay in the Agreement are expressed to commence from 1 July 2018. No rates were provided that were applicable at test time. Without the applicable rates, the Commission is unable to conduct the BOOT assessment pursuant to s 186(2)(d) and s 193 of the Act. Consequently, I cannot be satisfied that prospective award covered employees that would be covered by the Agreement would be better off overall under the Agreement than if the relevant modern award applied to them.

[13] In order to approve the Agreement, the Commission must, as part of its consideration, be satisfied in respect of the s 172(2)(b), s 172(4) and s 186(2) requirements under the Act. For the reasons detailed above I am not satisfied in respect of those requirements. Consequently, the application for approval of the Catcon West Australia Civil Engineering Construction Agreement 2018 - 2021 is dismissed. An order reflecting this decision will be separately issued.

DEPUTY PRESIDENT

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