Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v John Holland Pty Ltd
[2021] FWCFB 5396
•31 AUGUST 2021
| [2021] FWCFB 5396 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
Australian Manufacturing Workers’ Union; Construction, Forestry, Maritime, Mining and Energy Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
John Holland Pty Ltd
(C2021/3507)
VICE PRESIDENT HATCHER | SYDNEY, 31 AUGUST 2021 |
Appeal against decision [2021] FWCA 3038 of Commissioner O’Neill at Melbourne on 31 May 2021.
The appeal
[1] This decision concerns an appeal, for which permission is required under s 604 of the Fair Work Act 2009 (FW Act), from a decision of Commissioner O’Neill made on 31 May 2021 (Decision) 1, in which the Commissioner approved an enterprise agreement known as the West Gate Tunnel Project (Tunnelling) Agreement 2021 (Agreement).2 The appellants are the Australian Manufacturing Workers’ Union (AMWU), the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU), and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU). The Agreement covers John Holland Pty Ltd (John Holland), the Australian Workers’ Union (AWU), and employees of John Holland covered by the classifications in the Agreement who are engaged in tunnelling work on the West Gate Tunnel Project in Victoria.
[2] The appellants contend that the Commissioner erred in approving the Agreement because it was not properly ‘made’ under s 182, as a different version of the Agreement had previously been approved by a vote of employees but had not been subject to any application for the Commission’s approval contrary to s 185(1) of the FW Act. Instead, a second vote occurred in respect of a revised version of the Agreement, and an application was then made to the Commission for its approval. The appellants contend that the effect of the first vote was to conclude bargaining, with the consequence that there was no proper foundation upon which the revised Agreement could subsequently be made by a second vote of employees. In particular, the appellants contend that the notice of employee representational rights (NERR) issued to employees prior to the first vote became ‘spent’ when the first vote occurred, and that the revised Agreement approved by the second vote was incapable of approval by the Commission. The appellants further contend that the Commissioner ought to have been alive to the fact that an earlier vote had occurred and made inquiries into the matter, and that her failure to do so was an error that vitiated her decision to approve the Agreement. They also contend that in various respects the Agreement was not explained, or not properly explained, to employees and that John Holland therefore failed to comply with the requirement in s 180(5) to take all reasonable steps to ensure that the terms of the Agreement and the effect of those terms were explained to employees who would be covered by the Agreement.
[3] Although the appellants were not involved in the bargaining for the Agreement and are not covered by it, they contend that they are each ‘persons aggrieved’ by the Decision for the purposes of s 604(1) because they have the right under their respective rules to represent employees who are covered by the Agreement. Consistent with the accepted approach of the Commission to this question, we are satisfied that the appellants are persons aggrieved and have standing to appeal the Decision.
Factual background
[4] The factual background is not contentious and may briefly be summarised as follows. In March 2021, John Holland commenced negotiations with the AWU for an enterprise agreement to cover employees working on the West Gate Tunnel project in Melbourne. The notification time for the proposed agreement was 4 March 2021. John Holland issued a NERR to employees on 5 March 2021. The NERR referred to ‘John Holland Pty Ltd’ as the relevant employer that would be covered by the proposed agreement. Negotiations ensued. John Holland and the AWU reached an agreement. The text of the agreement was distributed to employees (original agreement document). John Holland requested relevant employees to approve the original agreement document. The vote occurred from 6 to 8 May 2021 (first vote). A majority of employees voted to approve the original agreement document. We note that the appellants initially sought leave of the Full Bench to admit further evidence on appeal under s 607(2) of the FW Act in relation to the circumstances surrounding the first vote but, at the hearing, this application was not pressed because the relevant facts are not disputed.
[5] On 11 May 2021, John Holland’s industrial relations advisor sent an email to employees stating:
“As you will be aware, due to a couple of small but important administrative / typographical errors, and to ensure these errors are correctly rectified, we are required to ‘revote’ on the proposed West Gate Tunnel Project (Tunnelling) Agreement 2021…. You will see from the attached proposed agreement and explanatory document that the intended substance of the Agreement is largely the same as what you had previously voted on …”
[6] The email message went on to say that votes would be cast ‘in the same fashion as they were previously by SMS, with a fall-back phone option’. The second vote occurred on 19 and 20 May 2021 and the Agreement was approved by a majority of employees. John Holland then made an application under s 185 of the FW Act for the Commission’s approval of the Agreement. The Commissioner approved the Agreement on the papers.
[7] The original agreement document stated, at clause 1.3.1(a), that the employer ‘party’ to was ‘John Holland Group Pty Ltd’ (Group Entity). This was an error. The employer of the relevant employees was not the Group Entity, but John Holland Pty Ltd. John Holland considered this to be a fatal error and for this reason did not submit the original agreement document for approval by the Commission.
[8] The other differences between the original agreement document and the Agreement were as follows: clause 1.6.10 of the original agreement document referred to an ABN, whereas the Agreement refers to an ACN (the number is the same); clause 1.6.14 of the original agreement document defined the ‘project’ as ‘the West Gate Tunnel Project’ whereas the Agreement has added the words ‘as constructed by the joint venture between John Holland and CPB Contractors Pty Limited’; clauses 1.7 and 2.1 of the Agreement have minor editorial changes of no substantive consequence to the corresponding provisions of the original agreement document; and Part 8 of the Agreement has removed the reference found in the original agreement document to CPB Contractors Pty Limited as a signatory – this company is not referred to elsewhere in the Agreement save in the amended definition of ‘project’. All of these changes were marked-up in a copy of the Agreement that was distributed to the employees before the second vote.
Consideration
[9] An appeal under s 604 of the FW Act is an appeal by way of rehearing, however the Commission’s powers on appeal are exercisable only if there is error on the part of the primary decision-maker. Permission to appeal is required. Subsection 604(2) requires the Commission to grant permission to appeal if it is satisfied that it is in the public interest to do so. Permission may otherwise be granted on discretionary grounds. We do not consider that there are public interest or general discretionary grounds on which to grant permission to appeal. Further, we have examined the substance of the appeal grounds and determined that they disclose no error in the Commissioner’s decision, and that permission to appeal is therefore refused.
[10] The first of the appellants’ three grounds of appeal contended that the Agreement was not ‘made’ within the meaning of s 182. The argument ran as follows. Section 172 describes the types of enterprise agreements which may be made under the FW Act. Section 173 imposes an obligation on an employer that will be covered by ‘a proposed enterprise agreement’ to give employees a NERR no later than 14 days after the ‘notification time’. Section 181(1) permits an employer who will be covered by a ‘proposed enterprise agreement’ to request employees who will be covered by the agreement to approve the agreement by voting for it. Section 180(1) prescribes various pre-approval steps. Section 182 provides that, if employees of an employer that will be covered by a proposed agreement have been asked to approve the agreement under s 181(1), the agreement will be ‘made’ when a majority of those employees vote to approve the agreement. Section 185(1) states that when an enterprise agreement is made, a bargaining representative for the agreement ‘must’ apply to the Commission for its approval.
[11] The appellants submitted that the bargaining scheme in Part 2-4 prescribes a beginning and an end point in the agreement-making process, and that the latter occurs when an agreement is ‘voted up’ by a majority vote of employees. They contended that it is inconsistent with, and subversive of, the scheme of agreement-making in Part 2-4, as well as directly inconsistent with the obligation in s 185(1), for an employer whose employees have made a single-enterprise agreement under s 182(1) to fail to apply to the Commission for approval of that agreement, and to proceed to hold a vote on another agreement. They contended that, properly construed, and as applied to the facts of the present case, ss 173, 181-182 and 185 determined that once the original agreement document had been approved by employees, the agreement-making process initiated by the notification time for that agreement ended, and John Holland was required to apply for the approval of that agreement. The appellants contended that it was not open to John Holland to put a different agreement to a second vote without a new notification time and NERR in relation to that different agreement.
[12] The appellants contended that for these reasons, the Agreement was not ‘made’ for the purposes of s 182(1), John Holland’s application for its approval under s 185(1) was invalid, and the Commissioner had no jurisdiction to approve the Agreement.
[13] We reject the first ground of appeal. It proceeds upon a premise which we reject, namely that an agreement was ‘made’ when the first vote occurred. Section 172(2) provides that an employer may make an enterprise agreement with the employees who are employed at the time the agreement is made and who will be covered by the agreement. The original agreement document was not such an agreement, because it covered an entity that was not the employer of the relevant employees. The original agreement document was therefore incapable of approval under s 185. Whether it might have been possible for an application to have been made to allow a ‘correction or amendment’ to the original agreement document under s 586 (a debatable proposition) is beside the point. There is clearly no obligation on a person to make such an application. Further, the requirement of s 185(1) is that a bargaining representative apply to the Commission for approval of an enterprise agreement if one is ‘made’. The vote on the original agreement document did not result in the making of an enterprise agreement, or any other statutory artefact known to Part 2-4 of the FW Act, because it was not made with the relevant employer.
[14] The appellants contended that, properly construed, the original agreement document did in fact cover John Holland because the erroneous reference to the Group Entity in clause 1.3 was an obvious error and because the substantive provisions of the original agreement document operated by reference to ‘John Holland’, which was correctly defined in clause 1.6.10 as ‘John Holland Pty Ltd’, with the correct Australian Company Number (albeit incorrectly referred to as an Australian Business Number). We reject this constructional argument. Clause 1.3 identifies the ‘parties to the agreement’. Although the appellants are correct to say that under Part 2-4 of the FW Act, unlike the framework of the Workplace Relations Act 1996, there are no ‘parties’ to non-greenfields agreements, clause 1.3 cannot be disregarded because, without it, there is no provision identifying the employer that is covered by the instrument. The appellants point to clause 1.5, which states that the agreement covers ‘employees of the Company’, with ‘Company’ being defined in clause 1.6 as John Holland. But clause 1.5 is concerned with the employees who are covered, not the employer. Properly construed, having regard to common industrial parlance, clause 1.3 purports to designate the Group Entity as the relevant employer that is covered by the agreement. The fact that, like very many other agreements, the clause uses the language of ‘parties’ instead of ‘coverage’ does not affect this conclusion. In this regard, we note that the effect of s 256A(3), in its interaction with s 172, is relevantly to require that the employer covered by an enterprise agreement be ‘specified’ by name. Clause 1.3 is the only provision that can be regarded as meeting this requirement.
[15] The FW Act conspicuously specifies no consequence of a failure to comply with s 185(1). It is not necessary for us to consider whether, as the appellants contended, the making of an agreement under s 182(1) marks the end of the agreement-making process under Part 2-4 with the consequence that the relevant NERR becomes ‘spent’ and no further agreement can be made without a recommencement of the bargaining process from the very beginning. In any event however, we consider that s 185(1) could not sensibly be read as requiring John Holland or the AWU to lodge an application which it believed to be incapable of approval by the Commission.
[16] We would add that the facts of this matter do not entail anything that could be described as ‘inconsistent’ with or ‘subversive’ of the bargaining scheme in Part 2-4 (nor is it clear how this contention pertains to any of the approval requirements in ss 186 and 187, particularly given the fact that there can be no serious doubt that the Agreement was ‘genuinely agreed’ to by employees within the meaning of s 188). This is not a case where an employee contends that the employer has failed to make an application under s 185 for the Commission’s approval of an agreement that was properly made under the FW Act. Were that the case, a bargaining representative for the employee could of course simply file an application under s 185. What occurred here was that the employer and the union regarded the original agreement document as fatally flawed. They fixed the flaw and resubmitted the document to employees for a vote. They then applied to the Commission for approval of the Agreement, as required by s 185(1).
[17] By their second ground of appeal the appellants contended that the Commissioner failed to seek further information about the first vote in circumstances where the fact of the earlier vote was apparent from the materials on the Commission’s file. They contended that this failure was legally unreasonable or constituted a constructive failure to exercise jurisdiction. However, the appellants recognised that their second ground of appeal had no life independent of the first, because if the first ground failed, any inquiries allegedly not made by the Commissioner could not have changed the outcome. Our rejection of the first ground of appeal makes it unnecessary to consider the second. We would note however that the Commissioner’s approach to the application was in our view entirely orthodox. The Commission is not required to undertake an investigation in respect of an application under s 185; a broad discretion is conferred by s 590 as to how the Commission may inform itself in relation to any matter before it. An application must meet certain approval requirements and the Commission will either be satisfied or not satisfied that these various requirements have been met.
[18] The third ground of appeal contended that the Commissioner erred in concluding that John Holland had taken all reasonable steps to explain the terms of the Agreement as required by s 180(5), in circumstances where it had not identified a number of respects in which the Agreement was less beneficial than the terms of the Ground Hog Civil (Vic) & Australian Workers’ Union Agreement 2018 (Ground Hog Agreement), which applied to employees who would be covered by the Agreement. The appellants contended that the only evidence before the Commissioner of John Holland’s efforts to comply with s 180(5) was an explanatory document issued to employees, and that this document failed to identify, properly or at all, ten detriments that employees would suffer in the event the Agreement was approved. The detriments were said to be constituted by the following:
• Disciplinary matters: The Ground Hog Agreement provided for an agreed investigator to look into misconduct allegations and a five-step sanction process. The Agreement does not. These omissions were not addressed in the explanatory document.
• Stand down: The Ground Hog Agreement required one week’s notice of stand downs, whereas the Agreement requires only 48 hours’ notice. The explanatory document stated that the stand down clause had been ‘carried over’.
• Fares: The Ground Hog Agreement required payment of daily fares and travel allowances on RDOs, but the Agreement does not. The explanatory document stated that the travel allowance was ‘the same’ as in the Ground Hog Agreement.
• Superannuation: The Ground Hog Agreement afforded casuals working less than 3 days pro rata superannuation contributions of 20% of the weekly rate for each day worked, and certain minimum superannuation payments were prescribed for tunnel and civil workers. The Agreement does not provide for these entitlements. The explanatory document stated that superannuation was ‘the same’ as the earlier agreement.
• Hours of work: The Agreement treats work performed before 5.00am as ordinary hours, whereas the Ground Hog Agreement provided that ordinary hours commenced at 5.00am. This was not addressed in the explanatory document.
• Overtime: The Ground Hog Agreement prohibited compulsory overtime that would prevent attendance at training and provided for double time where work resumed without 10 hours off duty. The Agreement does not contain these benefits. The Ground Hog Agreement also provided that standard weekly hours could only be altered by agreement, but the Agreement does not. The explanatory document stated generally that overtime had been simplified.
• Annual leave: Under the Agreement, payment while on leave is variously less generous than under the Ground Hog Agreement. The Agreement also allows the employer to cancel annual leave in emergency situations and to require employees to take leave accrued in excess of 20 days or during a shut down. These changes were not identified in the explanatory document.
• Public holidays: The Agreement pays work on public holidays at double time and a half for at least 4 hours of work, whereas the Ground Hog Agreement paid work on public holidays at triple time and for at least 8 hours of work. The Agreement also removes the requirement of notice of a direction to take accrued annual leave during Christmas shutdowns. These matters were not addressed in the explanatory document.
• RDOs: The Agreement allows RDOs to be rescheduled by agreement, but employees’ agreement must not be unreasonably withheld. Under the Ground Hog Agreement, rescheduling of RDOs required four weeks’ notice or payment of double time. The explanatory document stated that RDOs would be ‘as per’ the Ground Hog Agreement.
• Apprentices: Apprentice wages are variously lower under the Agreement than those in the Ground Hog Agreement. The explanatory document stated that the apprentice rates were ‘less generous’ than the previous rates.
• Amenities: The Ground Hog Agreement imposed obligations ensuring specific amenities of a particular quality were provided, including extensive requirements for mess and change sheds and sanitary facilities. The Agreement does not contain these obligations and were not addressed in the explanatory document.
[19] The appellants contended that these changes were material considerations which were not taken into account by the Commissioner in assessing whether she could be satisfied of compliance by the first respondent of its obligation under s 180(5). They further contended that the Commissioner could not reasonably have achieved the state of satisfaction required by s 180(5) in the circumstances, and that her conclusion that s 180(5) had been complied with was affected by House v The King error, which vitiated the decision-making process.
[20] Contrary to the appellants’ submission, the existence of the explanatory document was not the only material before the Commissioner concerning John Holland’s explanation to employees of the terms of the Agreement. The employer F17 declaration provided information about the steps taken to explain the Agreement. It stated that a series of explanatory sessions were held for each crew, and that the employer ‘walked through’ the Agreement with employees, clause by clause, to compare it with the Ground Hog Agreement and the relevant award, including with examples. In addition, the F17 declaration stated that the AWU spoke to all employees about the Agreement and talked through the log of claims, noting what had been achieved and what had not been achieved, and identified the conditions in the proposed agreement that the union considered to be ‘less’ than those in the Ground Hog Agreement. It is the employer that carries the obligation under s 180(5) to ensure that all reasonable steps are taken to ensure that the terms of the agreement and the effect of those terms are explained to the relevant employees, however others may be involved in the explanation process, including bargaining representatives for the agreement. Facilitating or even simply allowing explanations of the kind that the AWU undertook in the present matter constitutes a ‘step’ that is relevant to the question of whether an employer has met the requirements in s 180(5).
[21] It should be noted that the explanatory document itself stated that it was only a ‘part of the mix of measures’ that would be used to explain the terms of the Agreement, and that it did not include an explanation of every term. It also clearly adverted to there being detriments in the Agreement vis-à-vis the Ground Hog Agreement. Further, when the explanatory document is a read as a whole, we do not consider it to be misleading.
[22] It is not the role of a Full Bench in an appeal to satisfy itself that the employer complied with s 180(5). An appeal under s 604 is concerned with the correction of error. It was clearly open for the Commissioner to be satisfied on the material before her that the employer had taken all reasonable steps to ensure that the terms of the Agreement were explained to employees in the manner contemplated by s 180(5). The F17 declaration spoke directly to the content of the explanation. It was accompanied by a detailed explanatory document. A union bargaining representative was closely involved in the explanation process. That union raises no concern about compliance with s 180(5).
[23] The steps that are required of an employer to meet the requirements of s 180(5) will vary depending on the particular circumstances of the case. There is no rule that every difference between a proposed agreement and a current instrument must be explained. The focus is rather on ‘material or significant’ departures which are detrimental to employees (see Diamond Offshore General Company v Baldwin 3 at [29] to [34]). In our view, the matters referred to by the appellants were not of a significance that precluded the Commissioner from concluding that the employer complied with s 180(5).
Conclusion
[24] None of the grounds of appeal disclose error on the part of the Commissioner. An appeal cannot succeed in the absence of error. Permission to appeal is refused.
VICE PRESIDENT
Appearances:
P. Boncardo of counsel for the AMWU, CFMMEU and CEPU
M. Follett of counsel for John Holland Pty Ltd
J Hartley of counsel for the AWU.
Hearing details:
2021.
Sydney (via video-link):
18 August.
Printed by authority of the Commonwealth Government Printer
<PR733358>
1 [2021] FWCA 3038
2 AE511627
3 [2018] FWCFB 6907, 284 IR 1
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