Construction, Forestry and Maritime Employees Union
[2024] FWCA 4491
•13 DECEMBER 2024
| [2024] FWCA 4491 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Construction, Forestry and Maritime Employees Union
(AG2024/3990)
SKILL LABOUR SERVICE PTY LTD AND THE CFMEU (VICTORIAN CONSTRUCTION AND GENERAL DIVISION) SUBCONTRACTORS CONCRETE PLACEMENT ENTERPRISE AGREEMENT 2024 - 2027
| Building, metal and civil construction industries | |
| COMMISSIONER MATHESON | SYDNEY, 13 DECEMBER 2024 |
Application for approval of the SKILL LABOUR SERVICE PTY LTD and the CFMEU (Victorian Construction and General Division) Subcontractors Concrete Placement Enterprise Agreement 2024-2027
An application has been made for approval of an enterprise agreement known as the SKILL LABOUR SERVICE PTY LTD and the CFMEU (Victorian Construction and General
Division) Subcontractors Concrete Placement Enterprise Agreement 2024-2027 (Agreement). The application was made by the Construction, Forestry and Maritime Employees Union (Applicant) pursuant to s.185 of the Fair Work Act 2009 (Cth) (Act). The Agreement is a single enterprise agreement.
The notice of employee representational rights that was provided to employees was not in the correct form. I consider this to be a minor procedural or technical error of the nature contemplated by s.188(5) and am satisfied that the employees are not likely to have been disadvantaged by the error.
The Agreement covers a small cohort of employees who are concreters and patchers and was voted up by two employees who cast an eligible vote.
The Commission sought confirmation that the casual employee who voted was ‘employed at the time’ within the meaning of s.181(1) of the Act. The Full Bench considered the meaning of the phrase ‘employed at the time’ in s.181(1) of the Act in Kmart Australia Limited t/a Kmart and others[1] and noted that in Swinburne,[2] Jessup J expressed the following view:
“[25] It is not necessary to consider whether employees to whom a copy of the proposed agreement was given under s 180 should, or may, be included within the requested group under s 181. The present case does not depend on such fine distinctions. However, and although the question was not argued, I would be disposed to the view that the “time” referred to in s 180(2)(a) is the whole of the “access period”. Since that period is, at its later boundary, contiguous with the time of the request under s 181, the better view may be that such employees should be so included”.
The Full Bench went on to say that it would likewise prefer an approach whereby the “time” of the request referred to in s.181(a) encompasses the whole of the access period and is to be equated to the “time” referred to in s.180(2)(a).[3]
The Applicant produced pay slips to the Commission showing that the casual employee was employed during the access period. In following the approach of the Full Bench in Kmart Australia Limited t/a Kmart and others[4] I find that the casual employee who voted was employed at the time referred to in s.181(a) and was eligible to vote.
Section 188(1) of the Act provides that the Commission must take into account the statement of principles made under s.188B (SoPs) in determining whether it is satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by it. Section 188(2) provides that the Commission cannot be satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by it unless the Commission is satisfied that the employees requested to approve the agreement by voting for it:
(a) have a sufficient interest in its terms; and
(b) are sufficiently representative, having regard to the employees the agreement is expressed to cover.
A note appearing under s.188 in the Act states:
‘Note: In One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 (2018) 262 FCR 527, a Full Court of the Federal Court observed that whether an agreement has been genuinely agreed involves consideration of the authenticity of the agreement of the employees, including whether the employees who voted for the agreement had an informed and genuine understanding of what was being approved’.
Principle 17 of the SoPs relevantly provides:
‘In considering whether employees have a sufficient interest in the terms of an enterprise agreement as required by section 188(2)(a) of the Fair Work Act, and whether the employees are sufficiently representative as required by section 188(2)(b), the FWC may take into account:
(a) whether the employees entitled to vote on the enterprise agreement are to be paid the rates of pay provided for in the agreement, and
(b) the extent to which the employees entitled to vote on the enterprise agreement are employed across the full range of:
(i) classifications in the agreement
(ii) types of employment in the agreement (for example, full-time, part-time
and casual)
(iii) geographic locations the agreement covers, and
(iv) industries and occupations the agreement covers’.
Given the small cohort covered by the Agreement the Commission sought submissions from the Applicant concerning whether the employees who voted on the Agreement had a sufficient interest in the terms of the enterprise agreement as required by s.188(2)(a) of the Act and were sufficiently representative as required by s.188(2)(b) of the Act. The Applicant filed comprehensive submissions in response.
Sufficient interest test
The Applicant submitted that each of the two employees who voted in favour of the Agreement had a sufficient interest in the Agreement within the meaning of s.188(2)(a) (guided by Principle 17(a) of the SoPs) because they are to be paid the rates of pay provided by the Agreement. Pay slips were provided for each of the two employees who are currently employed under the Skill Labour Service Pty Ltd and the CFMEU (Victorian Construction and General Division) Subcontractors Placement Enterprise Agreement 2020-2023 (Current Agreement) that the Agreement would replace. Pay slips provided by the Applicant in respect of each of the employees appear to indicate that these employees were paid rates at or very close to those in the Current Agreement as well as other entitlements in the Current Agreement. Based on the information before the Commission it appears likely that these employees will be paid the rates of pay and provided with the entitlements prescribed by the Agreement if approved and in this regard I find that the employees have a sufficient interest in the Agreement within the meaning of s.188(2) of the Act.
Sufficiently representative
The employees covered by the Agreement fall within the coverage of the Building and Construction General On-site Award 2020 (Award) and the classifications in the Award are contained in the Agreement. The Agreement’s coverage provisions are set out in clause 4 and relevantly, subject to the exceptions in sub-clauses 4.1(d) and (e), cover employees ‘who are construction workers, including apprentice construction workers, engaged in the on-site building, engineering and civil construction industry as defined in the Award, performing concrete placement, concrete finishing and all associated works by hand and machine.’ The Applicant submits that the relevant classifications that pertain to the Agreement’s coverage provisions are classifications CW1, CW4 and PCW4. The two employees who voted to approve the Agreement are covered by the PCW4 classification. The Applicant submitted that this does not preclude a finding that the employees who voted on the Agreement are sufficiently representative on the following bases:
the legislative scheme allows for the making of an Agreement with two or more employees[5] and in this regard:
a.it would seldom be the case that an Agreement covering two employees would have those employees engaged in every possible classification under that Agreement;
b.a finding that two employees in the same classification voting on an agreement with five classifications were not sufficiently representative would lock out many small employers and their employees from the benefits of the enterprise bargaining regime under the Act and that cannot have been the intention of the Parliament when it passed amended s.188(2);
rates of pay and conditions are relevant to the consideration of whether the employees who voted on the Agreement are sufficiently representative because:
a.the clear legislative intention of s.188(2), as evidence from the legislative note and explanatory memorandum, is to prevent a situation like that in One Key[6] or KCL[7] where the enterprise bargaining scheme is subverted by agreements that ‘lack authenticity’ and ‘moral authority’;
b.in the Agreement, rates for each of the classifications under the Agreement are in excess of $25 an hour above what those classifications would be entitled to under the Award, allowances are not under the Award and there are only a small number of entitlements that are less beneficial than the awards;
c.the current matter can therefore be contrasted to One Key[8] and KCL[9] where the agreements in question provided only marginal increases to pay, while removing a number of conditions that employees would have been entitled to under the relevant modern award;
d.the circumstances of the current matter are distinctly different to the decisions mentioned in the Explanatory Memorandum in relation to the sufficiently representative test;
while it is the case that the only employees who voted for the Agreement are engaged in one classification, one-fifth coverage of the classifications is a far greater fraction than was the case in the agreements considered in One Key[10] and KCL[11] noting that:
a.in One Key[12] the employer made an agreement with three employees and the coverage included any employee covered by 11 awards;
b.in KCL[13] the agreement in question was voted on by two (out of three) employees and covered a wide range of classifications most of which had no relevance to the work performed by the employer’s three existing employees and encompassed industries in which the employer did not currently operate, amongst other deficiencies;
c.in the current matter, the position is the opposite in that the Agreement applies only to a narrow band of classifications that are contemplated by one Award, and only to the extent that employees engaged in those classifications are engaged in work already performed by the employer.
submitted that while the note appearing under s.188(2) referring to One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union[14] (One Key) is not part of the Act, it assists in understanding the legislative intent of s.188(2);
observed the Full Court in One Key was asked to consider the genuineness of an agreement for an enterprise agreement that, at the time it was approved, was to cover three employees, two of whom were casual.
The Applicant submitted that in these circumstances the employees who voted on the Agreement are sufficiently representative having regard to:
the classifications in the Agreement as the employees are casual and full time;
the geographic locations the Agreement covers as the Agreement applies only to work performed in Victoria and each of the employees who voted on the Agreement are engaged in Victoria;
the industries and occupations the agreement covers as the Agreement covers only a narrow part of the building and construction industry (concrete placement, finishing and associated works) and only those occupations that perform work related to concrete placement and finishing and each of the employees are engaged in that aspect of the industry in that occupation.
While s.172(6) of the Act provides that an enterprise agreement cannot be made with a single employee, there is no prohibition on the making of an agreement with a small cohort consisting of two or more employees. The question that arises in this matter is whether the Commission is satisfied, in accordance with s.188(2), that the employees who voted are sufficiently representative having regard to the employees the agreement is expressed to cover. The note appearing below s.188(2) of the Act provides an indication as to the purpose toward which s.188(2) was directed with reference to One Key[15]and the observation of the Full Court of the Federal Court that whether an agreement has been genuinely agreed involves consideration of the authenticity of the agreement of the employees.
The facts of this matter are clearly distinguishable from those in One Key[16] where in that matter:
the proposed agreement covered only three employees, with one working in the construction industry and two working in the coal mining industry;
the coverage provisions of the agreement were very broad with the proposed agreement intended to cover employees employed to work anywhere in Australia whose employment would fall within the coverage of 11 modern awards;
two of the three employees who voted were casuals.
In One Key[17] the Full Court of the Federal Court found:
‘It is not readily apparent why the Commissioner was no longer troubled by his initial concern (raised in his email of 18 September 2015) about whether the agreement had been “genuinely agreed” to. It is clear, however, that the Commissioner did not believe he needed to consider whether, in the light of the small number of employees and the large number of awards, he could be satisfied that the three employees had understood the Agreement and its effect before casting their votes. On the face of the material before the Commission there was a vast disparity of occupational classifications as between those held by the three individuals who voted and the classifications covered by the Agreement. How it was that the three employees might be regarded as having had a sufficient appreciation of the appropriateness of the terms and conditions proposed for the disparate occupational classifications covered, including in industries foreign to their own, was not identified by the Commissioner as a factor relevant to the genuineness of the approval and was not the subject of his consideration. Whether the three employees had appreciated the terms and conditions provided for by the Agreement, beyond those of direct interest and relevance to them, and thereby “genuinely agreed” to its terms (not just those that directly affected them) should have been considered. As the primary judge held, the Commissioner’s failure to do that evinced jurisdictional error’.
The Explanatory Memorandum to the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 provides a further indication as to the mischief toward which s.188(2) is directed stating:
‘702. New subsection 188(2) is intended as a safeguard against agreements which are not the result of collective bargaining in good faith, including ‘unrepresentative’ and ‘low voter cohort’ agreements. For example, a small cohort of employees offered rates of pay above those provided in the enterprise agreement should not be capable of being found to have genuinely agreed (see, for example, Re KCL Industries Pty Ltd[2016] FWCFB 3048; (2016) 257 IR 266)).
…
704. New paragraph 188(2)(b) is intended to ensure that employees requested to vote on an agreement are sufficiently representative, having regard to the coverage terms or intended coverage of the agreement. For example, employees engaged in one industry, occupation or classification should not be capable of being found to have genuinely agreed to an enterprise agreement intended to cover employees across a substantially wider range of industries, occupations or classifications.
705. A small cohort of employees would also not be sufficiently representative where the agreement is intended to ultimately cover a much wider workforce following transfers of employment, possibly within a corporate group’.
The coverage of the Agreement is relatively narrow. It applies only to work performed in Victoria and only covers concrete placement, finishing and associated works which appears to relate to three of the classifications under the Agreement. The employees who voted to approve the Agreement are not employed in the full remit of classifications and employment types under the Agreement. However a significant number of agreements come before the Commission and in many of them, employees who voted will not be employed in roles across every possible classification under the Agreement. In my view, this does not in and of itself mean that employees who voted on an agreement are not ‘sufficiently representative’. Principle 17(b) of the SoPs does however require consideration of the extent to which the employees entitled to vote on the enterprise agreement are employed across the full range of:
classifications in the agreement
(ii)types of employment in the agreement (for example, full-time, part-time and casual)
geographic locations the agreement covers, and
(iv)industries and occupations the agreement covers.
In the circumstances of this matter, the employees who voted on the Agreement are:
employed in one of the three possible classifications that apply to concrete placement, finishing and associated works;
employed on a full-time and casual basis in the context of an enterprise agreement that provides for these employment types as well as part-time employment;
employed to do work in Victoria, the only geographic location the Agreement covers;
working in the only industry and occupation the Agreement covers, being concrete placement, finishing and associated works.
The employees were not asked to vote on an enterprise agreement intended to cover employees across a substantially wider range of industries, occupations or classifications, including industries foreign to their own, and there is no evidence to suggest that the Agreement is intended to ultimately cover a much wider workforce. In the circumstances of this matter, there is no evidence to suggest that the employees who voted would not have a true understanding of the consequences of the proposed agreement across the classifications relevant to the concrete placement, finishing and associated works covered by the Agreement.
Having regard to all the circumstances in this matter, I am satisfied that the employees requested to approve the Agreement by voting on it are, in accordance with s.188(2)(b) sufficiently representative having regard to the employees the Agreement is expressed to cover.
Conclusion
On the basis of the materials before the Commission, I am satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to the application for approval of the Agreement have been met.
The Construction, Forestry and Maritime Employees Union, being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants the Agreement to cover it. In accordance with s.201(2) of the Act, I note that the Agreement covers the organisation.
The Agreement is approved and, in accordance with s.54 of the Act, will operate from 20 December 2024. The nominal expiry date of the Agreement is 2 July 2027.
COMMISSIONER
[1] [2019] FWCFB 7599.
[2] [2015] FCAFC 98.
[3] [2019] FWCFB 7599 at [33].
[4] [2019] FWCFB 7599 at [33].
[5] Fair Work Act 2009 (Cth), s.172(6).
[6] [2019] FWCFB 7599.
[7] Appeal by KCL Industries Pty Ltd [2016] FWCFB 3048.
[8] [2019] FWCFB 7599.
[9] Appeal by KCL Industries Pty Ltd [2016] FWCFB 3048.
[10] [2019] FWCFB 7599.
[11] Appeal by KCL Industries Pty Ltd [2016] FWCFB 3048.
[12] [2019] FWCFB 7599.
[13]
[14] [2018] FCAFC 77.
[15] [2018] FCAFC 77.
[16] [2018] FCAFC 77.
[17] [2018] FCAFC 77.
Printed by authority of the Commonwealth Government Printer
<AE527246 PR782460>