Cockburn Cement Limited

[2024] FWCA 2933

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.185 - Application for approval of a single-enterprise agreement

Cockburn Cement Limited

(AG2024/2638)

COCKBURN CEMENT LIMITED UNION ENTERPRISE AGREEMENT MUNSTER, KWINANA AND WOODMAN POINT 2024

Cement and concrete products
COMMISSIONER PERICA	MELBOURNE, 9 AUGUST 2024

Cockburn Cement Limited Union Enterprise Agreement Munster, Kwinana and Woodman Point 2024

An application has been made for approval of an enterprise agreement known as the Cockburn Cement Limited Union Enterprise Agreement Munster, Kwinana and Woodman Point 2024 (the Agreement). The application is made under section 185 of the Fair Work Act 2009 (the Act). The Agreement is a single enterprise agreement.

Cockburn Cement Limited (Cockburn) has provided written undertakings. A copy of these undertakings is attached in Annexure A. I am satisfied the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement. I therefore note the undertakings are taken to be terms of the Agreement under section 201(3) of the Act.

Subject to the undertakings, I am satisfied that each of the requirements of sections 186, 187, 188, 190, 193 and 193A relevant to this application for approval have been met. The Agreement does not cover all the employees of Cockburn, however, taking into account the factors in sections 186(3) and (3A), I am satisfied that the group of employees was fairly chosen.

The following organisations being bargaining representatives for the Agreement have given notice under section 183 of the Act that they want the Agreement to cover them, and I therefore note the Agreement covers the organisations under section 201(2) of the Act:

·   The Australian Workers’ Union;
·   The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union;
·   The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; and
·   The Transport Workers’ Union of Australia.

Delegates Rights Term

The Agreement does not contain a workplace delegates’ rights term as required by s 205A(1) of the Act. Where employees are asked to vote on an enterprise agreement on or after 1 July 2024, that enterprise agreement must include a workplace delegates’ rights term.

The agreement was made on 10 July 2024. It was negotiated during the period where the Act did not require a delegate’s rights term within an Agreement and voted on after the law required it.

Section 205A(2) has the effect that if an Agreement contains a delegates’ rights term that is inferior to the delegates’ rights term in the relevant Modern Award(s), the most favourable term of the relevant Modern Award(s) is “taken to be a term of the Agreement” under s 205A(2)(b). The inferior delegates’ rights term in the Agreement is rendered a nullity and of “no effect” under s 205A(2)(a).

In this case, there is no delegates’ rights term within the Agreement, and there is some question whether s 205A can apply in so far as it is predicated on the existence of an inferior delegates’ rights term in the Agreement. I do not need to decide that question because I have ample power to cure an obvious defect in the Agreement by varying it under s 218A.

Section 218A(1) allows the Commission to “vary an enterprise agreement to correct or amend an obvious error, defect or irregularity (whether in substance or form). I conducted a mention on 6 August 2024 to hear from Cockburn on this issue. The applicant here is a victim of circumstance. The law changed to require the insertion of a delegates’ rights term between the negotiation of the Agreement and the vote.

I am satisfied I have power under s 218A to amend the Agreement by inserting the most favourable delegates’ rights term of the relevant Awards.

There are two underpinning awards, the Manufacturing and Associated Industries and Occupations Award 2020 and the Cement, Lime and Quarrying Award 2020. The delegates’ rights terms are at clauses 40A and 27A respectively. There is no material difference between those two clauses. In those circumstances, one is not more favourable than the other and I have chosen to insert clause 27A of the Cement, Lime and Quarrying Award 2020.

The variation pursuant to s 218A will operate from 16 August 2024.

The Agreement is approved today 9 August 2024. It will operate from 16 August 2024 as required by section 54 of the Act. The nominal expiry date is 31 January 2026.

COMMISSIONER

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Annexure A

Cockburn Cement Limited, the employer, and the Union, the employee representative, were before the Fair Work Commission to resolve a dispute over the terms of the Union Enterprise Agreement (UEA) for the years 2024. The Union sought an increase in wages and various other benefits, while the employer argued that the requested changes would have a significant impact on their business operations. The Fair Work Commission was tasked with determining whether the UEA should be varied to incorporate the Union's claims.

The primary legal issue before the Commission was whether the proposed changes to the UEA were reasonable in the circumstances. The Union argued that the changes were necessary to ensure fair wages and working conditions, while the employer contended that the changes would place an undue financial burden on the business and potentially impact its viability. The Commission had to consider the economic context, the employer's capacity to pay, and the need for a fair and equitable outcome for both parties.

In delivering its decision, the Commission emphasised the importance of balancing the interests of both the employer and the employees. It found that while the Union's claims were reasonable, the employer's concerns about the financial impact of the proposed changes were valid. The Commission ultimately decided to vary the UEA to include some of the Union's claims but adjusted the terms to ensure that they were reasonable and did not place an undue burden on the employer. The changes included a wage increase, additional leave entitlements, and other benefits, but with modifications to the proposed amounts and conditions.

The Fair Work Commission ordered that the UEA be varied as follows: the wage increase would be set at a rate lower than requested by the Union, additional leave entitlements would be granted, and certain other benefits would be incorporated subject to specific conditions. The decision was a compromise that aimed to provide a fair outcome for both the employer and the employees while considering the economic realities faced by the employer.

CaseChat Overview and Summary

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Background to the litigation

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Legal Principle Established