CMG Contracting Pty Ltd
[2025] FWCA 317
•28 JANUARY 2025
| [2025] FWCA 317 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.216DA - Application by an employer for approval of a variation of a single interest employer agreement to add employer and employees
CMG Contracting Pty Ltd
(B2024/1692)
Total Air Pty Ltd
(B2025/6)
AMWU ON-SITE CONSTRUCTION HVAC WORKERS NSW ENTERPRISE AGREEMENT 2023 - 2027
| Manufacturing and associated industries | |
| DEPUTY PRESIDENT WRIGHT | SYDNEY, 28 JANUARY 2025 |
Application for variation of the AMWU On-Site Construction HVAC Workers NSW Enterprise Agreement 2023 – 2027 (AE525044)
Introduction and outcome
The AMWU On-Site Construction HVAC Workers NSW Enterprise Agreement 2023 – 2027 (HVAC Agreement) was approved by the Commission on 14 June 2024.[1] It is a multi- employer agreement which was made with eight employers pursuant to a single interest employer authorisation issued by the Fair Work Commission (Commission) on 13 February 2024.[2] The employers concerned all operate in the heating, ventilation and air conditioning (HVAC) industry. The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) is also covered by the HVAC Agreement.
CMC Contracting Pty Ltd (CMC Contracting) and Total Air Pty Ltd (Total Air) have each made an application pursuant to s.216DA of the Fair Work Act 2009 (Act) to vary the HVAC Agreement to add each of them, and their relevant employees, to its coverage. The applications are supported by the AMWU. Three other employers recently made such applications which were approved in Application by DNM Engineering Pty Ltd.[3]
For convenience I have dealt with the applications by CMC Contracting and Total Air together, however it is necessary for me to be satisfied that the requirements of the Act are met with respect to each application.
On 17 January 2025, I listed the applications for a case management conference. Each of the parties advised that they relied upon the material filed and that they consented to the applications being determined on the papers.
For the reasons set out below, I have decided to grant the applications and approve the variations.
Legislative Framework
Section 216DC sets out the circumstances in which the Commission is required to approve a variation of a single interest employer agreement to add an employer and employees. It provides:
216DC When the FWC must approve a variation of a single interest employer agreement to add employer and employees
Approval of variation by the FWC
(1) The FWC must approve a variation of a single interest employer agreement if:
(a) an application for approval of the variation has been made under section 216DA or 216DB; and
(b) the FWC is satisfied that:
(i) the employers and any employee organisations covered by the agreement have had an opportunity to express to the FWC their views (if any) on the application; and
(ii) if the application was made by an employer under section 216DA—the variation has been genuinely agreed to by the affected employees in accordance with section 216DD; and
(iii) if the application was made by an employee organisation under section 216DB—the requirements of subsection (1A) are met; and(iv) the requirements of either subsection (2) or (3) (which deal with franchisees and common interest employers) are met; and
(v) if the requirements of subsection (3) are met—the operations and business activities of the employer are reasonably comparable with those of the other employers who are covered by the agreement.
(1AA) If:
(a) the application for approval of the variation was made by an employee organisation under section 216DB; and
(b) the employer that will be covered by the agreement employed 50 employees or more at the time that the application was made;
it is presumed for the purposes of subparagraph (1)(b)(v) that the operations and business activities of the employer are reasonably comparable with those of the other employers that are covered by the agreement, unless the contrary is proved.
Additional requirements for application by employee organisation
(1A) The requirements of this subsection are met if:
(a) the employer that will be covered by the agreement employed at least 20 employees at the time that the application for approval of the variation was made; and
(b) a majority of the affected employees want to be covered by the agreement; and(c) subsection (1C) does not apply to the employer.
(1B) For the purposes of paragraph (1A)(b), the FWC may work out whether a majority of the affected employees want to be covered by the agreement using any method the FWC considers appropriate.
(1C) This subsection applies to an employer if:
(a) the employer and the affected employees are covered by another enterprise agreement that has not passed its nominal expiry date at the time that the FWC will approve the variation; or
(b) the employer and an employee organisation that is entitled to represent the industrial interests of one or more of the affected employees have agreed in writing to bargain for a proposed single‑enterprise agreement that would cover the employer and the affected employees or substantially the same group of the affected employees.
Franchisees
(2) The requirements of this subsection are met if the employers covered by the agreement and the employer that will be covered by the agreement carry on similar business activities under the same franchise and are:
(a) franchisees of the same franchisor; or
(b) related bodies corporate of the same franchisor; or
(c) any combination of the above.
Common interest employers
(3) The requirements of this subsection are met if it is appropriate to approve the variation, having regard to:
(a) whether the employers covered by the agreement and the employer that will be covered by the agreement have clearly identifiable common interests; and
(b) whether it would be contrary to the public interest to approve the variation.
(3A) For the purposes of paragraph (3)(a), matters that may be relevant to determining whether the employers have a common interest include the following:
(a) geographical location;
(b) regulatory regime;(c) the nature of the enterprises to which the agreement relates, and the terms and conditions of employment in those enterprises.
(3AB) If:
(a) the application for approval of the variation was made by an employee organisation under section 216DB; and
(b) the employer that will be covered by the agreement employed 50 employees or more at the time that the application was made;
it is presumed that the requirements of subsection (3) are met, unless the contrary is proved.
Calculating number of employees
(3AC) For the purposes of calculating the number of employees referred to in paragraph (1AA)(b), (1A)(a) or (3AB)(b):
(a) employee has its ordinary meaning; and
(b) subject to paragraph (c), all employees employed by the employer at the time that the application was made are to be counted; and
(c) a casual employee is not to be counted unless, at that time, the employee is a regular casual employee of the employer; and(d) associated entities of the employer are taken to be one entity.
Employers and employees that are already bargaining
(3B) Despite subsection (1), the FWC may refuse to approve the variation if the FWC is satisfied that:
(a) the employer is bargaining in good faith for a proposed enterprise agreement that will cover the employer and the affected employees, or substantially the same group of the affected employees; and
(b) the employer and the affected employees have a history of effectively bargaining in relation to one or more enterprise agreements that have covered the employer and the affected employees, or substantially the same group of the affected employees; and
(c) on the day that the FWC will approve the variation, less than 9 months have passed since the most recent nominal expiry date of an agreement referred to in paragraph (b).
General building and construction work
(4) Despite subsection (1), the FWC must not approve the variation if:
(a) the agreement is a greenfields agreement that covers employees in relation to general building and construction work; or
(b) as a result of the variation, the agreement would cover employees in relation to general building and construction work.
Supported bargaining authorisation
(5) Despite subsection (1), the FWC must not approve the variation if the employer that will be covered by the agreement is specified in a supported bargaining authorisation in relation to any of the affected employees.
Section 216DA deals with joint variation applications by an employer not covered by the agreement and their employees. Section 216DB deals with applications by employee organisations. Both applications before me are joint variations by an employer and their employees. Therefore ss.216DC(1AA), (1A), (1B), (1C) and (3AB) are not relevant to my consideration as they apply only with respect to applications by employee organisations. The employers covered by the HVAC Agreement do not carry out business activities under a franchise arrangement so s.216DC(2) does not apply.
Therefore, the provisions of s.216DC which are relevant to the matters before me require me to approve the applications if I am satisfied of the following:
an application for approval of the variation has been made under s.216DA;
the employers and any employee organisations covered by the HVAC Agreement have had an opportunity to express to the Commission their views (if any) on the application;
the variation has been genuinely agreed to by the affected employees in accordance with s.216DD;
it is appropriate to approve the variation, having regard to:
owhether the employers covered by the HVAC Agreement and the employer that will be covered by the HVAC Agreement have clearly identifiable common interests; and
owhether it would be contrary to the public interest to approve the variation; and
the operations and business activities of the employer are reasonably comparable with those of the other employers who are covered by the HVAC Agreement.
Requirements in relation to application for approval of a joint variation
Section 216D provides that an employer may request the affected employees to approve the proposed variation by voting for it (s.216D(3)), and that a variation is madewhen a majority of the affected employees who cast a valid vote approve the variation (s.216D(5)).
Section 216DAA(1) requires an employer, before requesting that affected employees approve a proposed variation, take all reasonable steps to ensure that:
(a) the terms of the agreement as proposed to be varied, and the effect of those terms, are explained to the affected employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of those employees.
Section 216DAA(2) provides the following examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with s.216DD(1)(b):
(a) employees from culturally and linguistically diverse backgrounds;
(b) young employees;
(c) employees who did not have a representative for the variation.
Section 216DA requires the employer to be covered by the agreement to apply to the Commission for approval of the variation made under section 216D within 14 days after the variation is made, or within such further period as the Commission allows.
Requirements in relation to genuine agreement
Section 216DD of the Act provides, in effect, that the Commission must apply the terms
of s.188 with modifications allowing for the fact that the application concerned involves a variation to an agreement rather than the making of a new enterprise agreement. In Application by DNM Engineering Pty Ltd,[4] Deputy President Hampton conveniently sets out the relevant legislation and principles in relation to genuine agreement as they apply to applications made pursuant to ss.216DA and 216DB and I rely upon what is said in that decision.[5]
Submissions and evidence
CMG Contracting
CMG Contracting provided a declaration from Mr John Meyer, Director, in support of the application. Mr Meyer set out the steps that CMG Contracting took to provide the HVAC Agreement to affected employees and explain the terms of the HVAC Agreement and the effect of those terms. These steps included providing employees with a wage comparison document, a table comparing the current entitlements and conditions with the National Employment Standards, relevant Award and HVAC Agreement and access to information sessions held by the AMWU. In relation to the requirements of s.216DAA(2), Mr Meyer said that prior to engaging in this process, the AMWU requested information about the demographics of employees to ensure that if there were potential barriers for employees, these could be addressed. Mr Meyer provided the Commission with copies of correspondence sent to all employees advising when and how the vote would be conducted, and explained the voting process and how it ensured that each employee’s vote was not disclosed to or ascertainable by CMG Contracting.
Mr Meyer provided information to the Commission which established that the vote was conducted by an independent ballot agent and that a majority of the affected employees who cast a valid vote approved the variation.
Mr Meyer said that all of the employees to be covered by the HVAC Agreement have a sufficient interest in the HVAC Agreement and are sufficiently representative, as the HVAC Agreement covers employees who work in connection with the installation, major modernisation, servicing, repair and/or maintenance of air conditioning and ventilation and all of the employees who were requested to vote on the variation perform this work for CMG Contracting.
In relation to s.216DC(3), Mr Meyer explained that the employers covered by the HVAC Agreement and CMG Contracting have clearly identifiable common interests in circumstances whereby they:
(a)perform work in the same industry;
(b)are members of the same industry association;
(c)tender for the same or similar work and provide tenders in a similar manner;
(d)often perform work on the same worksites;
(e)employ employees with similar or equivalent qualifications and specialisations;
(f)are subject to the same regulatory standards in relation to their performance of work;
(g)perform work contract to contract, meaning there is a high turnover of employees, with the employment of their employees being relatively itinerant in nature;
(h)often hire employees from the same pool of workers;
CMG Contracting is mostly administratively applying the HVAC Agreement to their workforce; and
(j)Employers currently covered by the HVAC Agreement have expressed a view that they are pleased that more employers are varying the agreement to be party to it.
Mr Meyer also submitted that it would not be contrary to the public interest to approve the variation and that the operations and business activities of CMG Contracting are reasonably comparable with those of the other employers that are covered by the HVAC Agreement.
Total Air
Total Air provided a declaration from Mr Victor Hugo Garcia Fierro, Director, in support of the application. Mr Fierro set out the steps that Total Air took to provide the HVAC Agreement to affected employees and explain the terms of the HVAC Agreement and the effect of those terms. These steps included providing employees with a wage comparison document, a table comparing the current entitlements and conditions with the National Employment Standards, relevant Award and HVAC Agreement and access to information sessions held by the AMWU. In relation to the requirements of s.216DAA(2), Mr Fierro said that the AMWU was aware that a large portion of the workforce were from a Spanish speaking background and had a Research Officer who understood the materials and who could read, speak and understand Spanish. The Research Officer was available to answer employees’ questions at the information sessions convened by the AMWU.
Mr Fierro provided the Commission with copies of correspondence sent to all employees advising when and how the vote would be conducted, and explained the voting process and how it ensured that each employee’s vote was not disclosed to or ascertainable by Total Air.
Mr Fierro provided information to the Commission which established that the vote was conducted by an independent ballot agent and that a majority of the affected employees who cast a valid vote approved the variation.
Mr Fierro said that all of the employees to be covered by the HVAC Agreement have a sufficient interest in the HVAC Agreement and are sufficiently representative, as the HVAC Agreement covers employees who work in connection with the installation, major modernisation, servicing, repair and/or maintenance of air conditioning and ventilation and all of the employees who were requested to vote on the variation perform this work for Total Air.
In relation to Section 216DC(3), Mr Fierro explained that the employers covered by the HVAC Agreement and Total Air have a clearly identifiable common interest in circumstances whereby they:
(a)perform work in the same industry;
(b)are members of the same industry association;
(c)tender for the same or similar work and provide tenders in a similar manner;
(d)often perform work on the same worksites;
(e)employ employees with similar or equivalent qualifications and specialisations;
(f)are subject to the same regulatory standards in relation to their performance of work;
(g)perform work contract to contract, meaning there is a high turnover of employees, with the employment of their employees being relatively itinerant in nature;
(h)often hire employees from the same pool of workers; and
Total Air is mostly administratively applying the HVAC Agreement to their workforce.
Mr Fierro also submitted that it would not be contrary to the public interest to approve the variation and that the operations and business activities of CMG Contracting are reasonably comparable with those of the other employers that are covered by the HVAC Agreement.
Consideration
Section 216DC(1)(a) - Has an application been made?
Each application has been made within 14 days of the employees of each of Total Air and CMG Contracting voting to approve the variation pursuant to s.216D(5). The material accompanying the applications complied with the requirements of s.216DA(2) of the Act and the Fair Work Commission Rules 2024. The variations have been signed as required by the Act and the Fair Work Regulations 2009.
The evidence establishes that in respect of each application, the employer, before requesting that affected employees approved the proposed variation, took all reasonable steps to ensure that the terms of the HVAC Agreement, and the effect of those terms, were explained to the affected employees and that the explanation was provided in an appropriate manner taking into account the particular circumstances and needs of those employees.
I therefore find that the requirements of s.216DC(1)(a) with respect to each application have been met.
Section 216DC(1)(b)(i) – Have the employers and any employee organisations covered by the HVAC Agreement had an opportunity to express to the Commission their views (if any) on the application?
The AMWU has expressed its views in relation to each of the applications by filing separate Form F23GA Declarations of an employee organisation which indicate its support of each application and that it does not disagree with any of the statements in the relevant Employer’s declaration in support of the variation. The Commission has corresponded directly with each of the employers covered by the HVAC Agreement and requested that they provide any views about the applications. The employers who have responded to this correspondence have advised that they support the applications. Taking these matters into account, I am satisfied the employers and any employee organisations covered by the HVAC Agreement have had an opportunity to express to the Commission their views on the applications.
Section 216DC(1)(b)(ii) – Was the variation genuinely agreed to by the affected employees in accordance with s.216DD?
I find that the variation with respect to each application was genuinely agreed to by the affected employees in accordance with s.216DD taking into account the following evidence:
In each matter the employer provided employees with a reasonable opportunity to consider the HVAC Agreement and the effect of its terms before voting on the variation, so that the employees could vote in an informed manner,
In each matter the employees were given a reasonable opportunity to vote on the variation in a free and informed manner and were informed of the time, place and method for the vote at least 7 full calendar days before the day on which voting started,
In each matter the employees have a sufficient interest in the terms of the HVAC Agreement and are sufficiently representative, having regard to the employees the HVAC Agreement is expressed to cover.
Section 216DC(1)(b)(iv) – Are the requirements with respect to and clearly identifiable common interests public interest met?
In Application by UWU, AEU and IEU[6] the Full Bench said that the expression ‘common interests’ used in the context of supported bargaining authorisations is ‘one of wide import, and on its ordinary meaning extends to any joint, shared, related or like characteristics, qualities, undertakings or concerns as between the relevant employers…The common interests must be ‘clearly identifiable’, that is, plainly discernible or recognisable, but need not be self-evident.[7]
In the decision of the Commission approving the relevant Authorisation,[8] the employers were found to have clearly identifiable common interests based upon numerous recognisable related or like characteristics including:
geographical location in that they principally operate in the State of New South Wales;
regulatory regime in that they are are required to comply with various Australian Standards when performing HVAC work;
the nature of the enterprises to which the agreement will relate in that they all operate in the HVAC industry, are all members of the HVAC Manufacturing Installation Association,[9] employ workers from the same labour pool and are often subject to the same process in tendering for and the performance of HVAC work;
the terms and conditions of employment in those enterprises in that employees are covered by the Building and Construction General On-site Award 2020 and fall within the same or very similar classification structures.[10]
Based upon the evidence before me, I find that CMG Contracting and Total Air share the characteristics described above with the employers covered by the HVAC Agreement and that these specific characteristics are indicative of them having clearly identifiable common interests with those employers. Further, there is no evidence to establish that it is contrary to the public interest to approve the variation.
In the circumstances, I believe that it is appropriate to approve the variation, having regard to my findings that CMG Contracting and Total Air have clearly identifiable common interests with the employers covered by the HVAC Agreement and that there is no evidence to establish that it is contrary to the public interest to approve the variation.
Section 216DC(1)(b)(v) – are the operations and business activities of the employer reasonably comparable with those of the other employers who are covered by the HVAC Agreement?
CMG Contracting and Total Air both perform work in the HVAC industry, are members of the same industry association, tender for the same or similar work and employ employees with similar or equivalent qualifications and specialisations as those employers who are covered by the HVAC Agreement. On this basis, I find that the operations and business activities of CMG Contracting and Total Air are reasonably comparable with those of the other employers who are covered by the HVAC Agreement and that the requirements of s.216DC(1)(b)(v) are met.
Other relevant considerations – ss.216DC(3B), 216DC(4) 216DC(5) and 216DE
Sections 216DC(3B), 216DC(4), 216DC(5) and 216DE all set out circumstances where the Commission may or must not approve the variation although the requirements of 216DC(1) have been met.
Existing bargaining
Section 216DC(3B) provides that the Commission may refuse to approve the variation if satisfied that:
· bargaining is currently occurring or
· less than 9 months have passed since the most recent nominal expiry date of an enterprise agreement covering the employees and there is a history of effective bargaining.
Neither of these circumstances apply with respect to either application.
General building and construction work
Section 216DC(4) provides that the Commission must not approve the variation if it would result in the agreement covering employees in relation to general building and construction work or if the agreement is a greenfields agreement that covers employees in relation to general building and construction work. CMG Contracting and Total Air do not perform general building and construction work as ‘work in connection with the installation, major modernisation, servicing, repair or maintenance of lifts and escalators, or air‑conditioning or ventilation’ is specifically exempted from the definition of general building and construction work in s.23B of the Act by s.23B(1)(b)(xii). Therefore, s.216DC(4) does not apply with respect to either application.
Supported bargaining
Section 216DC(5) provides that the Commission must not approve the variation if the employer that will be covered by the agreement is specified in a supported bargaining authorisation in relation to any of the affected employees. CMG Contracting and Total Air are not specified in a supported bargaining authorisation in relation to any of the affected employees. Section 216DC(5) does not apply with respect to either application.
Offence against law of the Commonwealth
Section 216DE provides that the Commission may refuse to approve the variation if it considers that compliance with the terms of the agreement as proposed to be varied may result in a person committing an offence against a law of the Commonwealth or a person being liable to pay a pecuniary penalty in relation to a contravention of a law of the Commonwealth. There is no evidence to support such a finding with respect to either CMG Contracting and Total Air so s.216DE does not apply in relation to either application.
Conclusion
As I am satisfied that each of the requirements of s.216DC(1) have been met in relation to each application, having regard to the evidence and submissions before me, and that ss.216DC(3B), 216DC(4), 216DC(5) and 216DE do not apply with respect to either application, I am required to approve the variations.
The variations are approved and attached to this decision as Annexure A.
As noted in Application by DNM Engineering Pty Ltd.[11] the HVAC Agreement provides in clause 4 that it applies to “The Company” which is defined in clause 2 as meaning “All Employers listed in Schedule A and/or bound by this agreement.” There is no Schedule A in the HVAC Agreement. However, it is apparent that “The Company” includes those employers who have agreed to be bound and have signed the instrument on the relevant signature pages that are attached in Appendix 9. The variations (additional signature pages to confirm that the applicant employers are now covered) in each case are to be added to the terms of the existing HVAC Agreement in Appendix 9. The consolidated version of the HVAC Agreement, as varied, is also attached to this decision.
The Commission is required by s.216DF of the Act to determine the date of effect of the variations. The variations in these matters will operate from 28 January 2025.
DEPUTY PRESIDENT
ANNEXURE A
[1] [2024] FWCA 2209
[2] [2024] FWC 395 and PR771438
[3] [2024] FWCA 4601
[4] [2024] FWCA 4601
[5] [2024] FWCA 4601, [25]-[31]
[6] [2023] FWCFB 176
[7] Ibid, [34].
[8] “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing
Workers’ Union (AMWU) [2024] FWC 395.
[9] Ibid, [13(b)].
[10] Ibid, [34]
[11] [2024] FWCA 4601, [57]
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