Construction, Forestry and Maritime Employees Union v JWLand Construction Pty Ltd
[2025] FWCFB 147
•18 JULY 2025
| [2025] FWCFB 147 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Construction, Forestry and Maritime Employees Union
v
JWLand Construction Pty Ltd
(C2025/449)
| VICE PRESIDENT GIBIAN | SYDNEY, 18 JULY 2025 |
Appeal against decision [2024] FWCA 4497 of Commissioner McKinnon at Sydney on 19 December 2024 in matter number AG2024/4278 – Approval of enterprise agreement – Whether agreement resulted in employees being better off overall – Genuine agreement – Whether employees who voted on agreement had sufficient interest in its terms – Misunderstanding of the nature of hearing at first instance – Refusal to consider further submissions and material filed after hearing – Whether denial of procedural fairness – Whether arguable case of appealable error – Permission to appeal refused.
Introduction
The Construction, Forestry and Maritime Employees Union (the CFMEU) seeks permission to appeal, and to appeal, from a decision of Commissioner McKinnon made on 19 December 2024 to approve an enterprise agreement known as the JWLand Construction Enterprise Agreement 2024-2028 (the Agreement).[1] The Agreement was made by five employees, four of whom are CFMEU members. The CFMEU submitted at first instance that the Agreement was not genuinely agreed to, that information in support of the approval of the agreement was deficient, that it did not pass the better off overall test, and that the Agreement did not contain mandatory terms.
The CFMEU was not involved in bargaining for the agreement but the decision at first instance set out that, given the membership of the covered employees, the CFMEU would likely have been a default bargaining representative for the Agreement. The CFMEU sought to be heard in relation to the application for approval and the application was listed for a hearing on 28 November 2024. A representative of the CFMEU, Rosalind Read, appeared at the hearing. During the hearing, Ms Read informed the Commissioner that she had misunderstood the purpose of the hearing. Ms Read indicated that she had understood that the purpose of the hearing was to deal with whether the CFMEU would be granted leave to be heard, rather than to consider the substantive application. During the hearing, Ms Read indicated the CFMEU sought to file written submissions setting out its substantive submissions.
The CFMEU filed a supplementary written submission the following day, 29 November 2024, which provided calculations regarding the effect of the Agreement and elaborated upon the various grounds upon which it said the application for approval should be dismissed. The submissions filed by the CFMEU attached two statements purportedly made by employees of JWLand which dealt with the provision of breaks and their rates of pay. The statements were anonymised to disguise the identity of the employees. JWLand responded to the CFMEU’s submissions by letter on 3 December 2024. It did not object to the receipt of the two statements but asserted that the provision for breaks in the Agreement was varied at the request of employees.
On 4 December 2024, the CFMEU filed reply submissions. JWLand objected to the reply submissions being received or considered by the Commission. On 9 December 2024, the Commissioner’s associate wrote to the parties advising that the Commissioner would only consider further submissions “to the extent they are responsive to directions for the filing of further materials made during the Hearing on 28 November 2024.” On 19 December 2024, the Commissioner published her decision approving the Agreement.
Decision to approve the Agreement
The Commissioner initially considered whether the Agreement had not been genuinely agreed in light of the CFMEU’s position.[2] The submissions of the CFMEU contained three discrete parts. First, the CFMEU submitted that the agreement was not genuinely agreed as the employees did not have a sufficient interest in the terms of the agreement as required by s 188(2)(a) of the Act. The Commissioner concluded that the five employees who made the Agreement had a sufficient interest in the terms of the Agreement in that they would otherwise be covered by the Building and Construction General On-site Award 2020 (the Award), and the Agreement provides for annual wage increases at the discretion of the employer.
Second, the CFMEU submitted that the Agreement was not genuinely agreed to because the explanation of it provided to workers was unreasonable in the circumstances. The Commissioner rejected that submission on the basis that notes of meetings confirmed that employees asked questions, proposed changes and received a Notice of Employee Representational Rights and did not seek to involve the CFMEU, which “tells against a conclusion that the employees were somehow lacking in capacity or interest to bargain for themselves”.[3]
The third part of the CFMEU’s submission that there was no genuine agreement related to the adequacy of the information provided to employees in relation to rostered days off (RDOs), particularly that the explanatory material provided to employees did not explain that the Agreement does not lock in the CFMEU RDO calendar. Whilst the Commissioner appeared to agree that the absence of a provision in the Agreement which ensured the adoption of the CFMEU RDO Calendar should have been explained to employees, the Commissioner accepted an undertaking by JWLand to address the concern.[4]
The CFMEU submitted that the agreement could not be approved on the basis that information provided by JWLand to the Commission in relation to the better off overall test failed to include entitlements contained in clause 19 of the Award. The Commissioner was satisfied that JWLand had provided revised spreadsheets which demonstrated that employees would still earn substantially more under the Agreement than the Award.[5]
The CFMEU submitted further that the Agreement could not pass the better off overall test because of the provisions in relation to meal and crib breaks as well as minimum breaks between shifts. The Commissioner accepted JWLand’s explanation of these provisions, including that the provisions were requested by employees or that the provisions are not part of the working pattern of JWLand. The Commissioner observed that the Agreement did not contain a “right to disconnect” but considered that the matter should be given limited weight on the basis that the right to disconnect is also found in the Act.[6]
The Commissioner finally dealt with the material filed by the CFMEU following the hearing held on 29 November 2024. The Commissioner indicated that she declined to accept the submissions and evidence “in the interests of procedural fairness and having regard to the objects of Part 2-4 of the Act, and in particular s 171(b)(iii)”. The Commissioner considered that the arguments could have been made at the hearing and that the explanation provided for its late provision was inadequate. The Commissioner stated that anonymous evidence would not have aided in the assessment of the application in any event because anonymous evidence rarely has probative value.[7]
Grounds of appeal
The notice of appeal contains five grounds of appeal. First, that the Commissioner erred in finding that the employees would be better off overall under the Agreement than under the Award. Second, that the Commissioner erred in principle by carrying out the better off overall test on an assumption that JWLand would organise its operations in a particular way where the Agreement did not require such organisation. Third, that the Commissioner failed to take into account a mandatory consideration, being whether the voting cohort had a sufficient interest in the Agreement terms within the meaning of s 188(2)(a) of the Act and the Fair Work (Statement of Principles on Genuine Agreement) Instrument 2023. Fourth, that if the Commissioner did consider whether the voting cohort had a sufficient interest in circumstances where the voting parties were not to be paid the rates provided for in the Agreement, a finding that the employees had a sufficient interest was not open. Fifth, the CFMEU submits that the Commissioner erred by refusing to have regard to material filed by the CFMEU relevant to the question of sufficiency of interest after the hearing and thereby denied it procedural fairness.
Extension of time to appeal
The notice of appeal was filed six days after the expiry of the 21-day time limit which applies for the filing of a notice of appeal under rule 128(2)(a) of the Fair Work Commission Rules 2024 (the Rules). The Commission has a discretion to allow such further time for the filing of a notice of appeal under rule 128(2)(c). In Jobs Australia v Eland[2014] FWCFB 4822, the Full Bench set out some considerations that may be relevant to the exercise of the discretion to extend time to file a notice of appeal which was then contained in rule 56 of the Fair Work Commission Rules 2013 (footnotes omitted):
[5] Time limits of the kind in Rule 56 should not simply be extended as a matter of course. There are sound administrative and industrial reasons for setting a limit to the time for bringing an appeal and it should only be extended where there are good reasons for doing so. The authorities indicate that the following matters are relevant to the exercise of the Tribunal’s discretion under Rule 56(2)(c):
- whether there is a satisfactory reason for the delay;
- the length of the delay;
- the nature of the grounds of appeal and the likelihood that one or more of those grounds being upheld if time was extended; and
- any prejudice to the respondent if time were extended.
[6] In broad terms the issue for the Commission is whether, in all the circumstances and having regard to the matters set out above, the interests of justice favour an extension of the time within which to lodge the appeal.
Rule 128(2)(c) does not require the Commission to be satisfied that there are exceptional circumstances justifying an extension of time. Rather, “the primary question to be answered is whether the interests of justice favour an extension of time”.[8]
The CFMEU explains that the delay was the result of a delay in obtaining counsel’s advice on the prospects of appeal over the Christmas period. The CFMEU filed a witness statement of Rosalind Read, a Senior Legal Officer and Women’s Officer of the ACT Branch, dated 14 February 2025 which set out the delay caused by the CFMEU and counsel in relation to the filing of the appeal. JWLand opposes the granting of an extension of time and submits that the CFMEU has not demonstrated that an extension of time should be granted and that time “should not be simply extended as a matter of course”. JWLand provided extensive written submissions that predominantly focused on what it says is the CFMEU’s failure to provide a satisfactory reason for the delay in filing.
The CFMEU’s outline of submissions provide an explanation of the late filing of the appeal as follows:
42. The appeal was filed on 16 January 2025, 28 days after the decision under appeal. The delay was the product of representative error, principally a delay in counsel’s provision of advice on the prospects of the appeal.
43. In circumstances where there is no apparent prejudice to JWLand associated with the six day delay, and the appeal otherwise has merit, an extension of time is appropriate.
We are satisfied that it is in the interests of justice to allow further time for the CFMEU to file its notice of appeal. Counsel for the CFMEU properly and frankly accepted responsibility for the delay. In those circumstances, we accept that the CFMEU has provided an adequate explanation for the delay. The grounds of appeal do not raise mere technicalities. The notice of appeal raises issues as to whether the Agreement was genuinely agreed to by the employees, including whether the employees had a sufficient interest in the terms of the Agreement, and whether the Commissioner should have been satisfied that the Agreement passed the better off overall test. In the circumstances, further time should be allowed to permit the Full Bench to consider the grounds of appeal sought to be advanced by the CFMEU.
Statutory provisions
Division 4 of Part 2-4 sets out the requirements for the approval of an enterprise agreement. Section 186 sets out the general requirements about which the Commission must be satisfied to approve an enterprise agreement in the following terms:
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.
Note 1: For when an enterprise agreement has been genuinely agreed to by employees, see section 188.
Note 2: The FWC may approve an enterprise agreement that does not pass the better off overall test if approval would not be contrary to the public interest (see section 189).
Note 3: The terms of an enterprise agreement may supplement the National Employment Standards (see paragraph 55(4)(b)).Requirement that the group of employees covered by the agreement is fairly chosen
(3) The FWC must be satisfied that the group of employees covered by the agreement was fairly chosen.
(3A) If the agreement does not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.
Requirement that there be no unlawful terms
(4) The FWC must be satisfied that the agreement does not include any unlawful terms (see Subdivision D of this Division).
Requirement that there be no designated outworker terms(4A) The FWC must be satisfied that the agreement does not include any designated outworker terms.
Requirement for a nominal expiry date etc.
(5) The FWC must be satisfied that:
(a) the agreement specifies a date as its nominal expiry date; and
(b) the date will not be more than 4 years after the day on which the FWC approves the agreement.
Requirement for a term about settling disputes
(6) The FWC must be satisfied that the agreement includes a term:
(a) that provides a procedure that requires or allows the FWC, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes:
(i) about any matters arising under the agreement; and
(ii) in relation to the National Employment Standards; and
(b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.
Note 1: The FWC or a person must not settle a dispute about whether an employer had reasonable business grounds under subsection 65(5) or 76(4) (see subsections 739(2) and 740(2)).
Note 2: However, this does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4).
Section 188 governs the circumstances in which the Commission can be satisfied an agreement has been genuinely agreed to and dictates that certain matters be taken into account in that assessment. The relevant provisions are set out as follows:
188 Determining whether an enterprise agreement has been genuinely agreed to by employees
Statement of principles
(1) The FWC must take into account the statement of principles made under section 188B in determining whether it is satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement.
Sufficient interest and sufficiently representative
(2) The FWC cannot be satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement unless the FWC is satisfied that the employees requested to approve the agreement by voting for it:
(a) have a sufficient interest in the terms of the agreement; and
(b) are sufficiently representative, having regard to the employees the agreement is expressed to cover.
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.
…
Where notice of employee representational rights was required
(3) Subsection (4) applies in relation to an enterprise agreement if an employer was required by subsection 173(1) (which deals with giving notice of employee representational rights) to take all reasonable steps to give notice in relation to the agreement.
(4) The FWC cannot be satisfied that the agreement has been genuinely agreed to by the employees covered by the agreement unless the FWC is satisfied that the employer complied with the following provisions in relation to the agreement:
(a) sections 173 and 174 (which deal with giving notice of employee representational rights);
(b) subsection 181(2) (which requires that employees not be requested to approve certain enterprise agreements until 21 days after the last notice of employee representational rights is given).
Explanation of terms of the agreement
(4A) The FWC cannot be satisfied that the agreement has been genuinely agreed to by the employees covered by the agreement unless the FWC is satisfied that the employer complied with subsection 180(5) in relation to the agreement.
Minor errors may be disregarded
(5) In determining whether it is satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement (including determining whether it is satisfied that an employer complied with the provisions mentioned in subsection (2A) or (4) or (4A)), the FWC may disregard minor procedural or technical errors made in relation to the following requirements if it is satisfied that the employees were not likely to have been disadvantaged by the errors:
(a) section 173 or 174 (which deal with notices of employee representational rights for certain agreements);
(aa) subsection 180(5) (which requires employers to explain the terms of agreements);
(ab) section 180A or 180B (which deal with agreement of certain bargaining representatives);
(b) subsection 181(2) (which requires that employees not be requested to approve certain enterprise agreements until 21 days after the last notice of employee representational rights is given);
(c) subsection 182(1) or (2) (which deal with the making of different kinds of enterprise agreements by employee vote).
…
Section 188(1) now requires that the Commission take into account the Fair Work (Statement of Principles on Genuine Agreement) Instrument 2023 in determining whether the agreement has been genuinely agreed to by employees. The statement of principles includes the following:
17. 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.
18. An enterprise agreement will generally not have been genuinely agreed to by the employees covered by the agreement unless the agreement was the product of an authentic exercise in agreement-making between the employer(s) and employees in one or more enterprises, and the employees who voted for the agreement had an informed and genuine understanding of what was being approved.
The better off overall test is dealt with in s 193. Relevant parts of s 193 include:
193 Passing the better off overall test
When a non‑greenfields agreement passes the better off overall test
(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that:
(a) each award covered employee, and each reasonably foreseeable employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee; and
(b) if the agreement is a single‑enterprise agreement that covers one or more employees (each of whom is an old agreement employee) to whom a supported bargaining agreement or a single interest employer agreement applies—each old agreement employee would be better off overall if the single‑enterprise agreement applied to the employee than if the supported bargaining agreement or single interest employer agreement (as the case requires) applied to the employee.
Note 1: Reasonably foreseeable employee is defined in subsection (5).
Note 2: Section 193A sets out rules for applying the better off overall test, including requiring the FWC to only have regard to patterns or kinds of work, or types of employment, that are reasonably foreseeable at the test time (see subsection 193A(6)).…
In addition, s 193A now imposes certain requirements on the Commission in relation to the approach to be adopted when determining whether an enterprise agreement passes the better off overall test.
Permission to appeal, approach on appeal and procedural fairness complaint
An appeal from a decision of the Commission requires permission under s 604(1) of the Act. There is no right to an appeal. The Full Bench must grant permission if satisfied it is in the public interest to do so pursuant to s 604(2) of the Act. The public interest may arise “where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counterintuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters…”.[9]
The CFMEU submits that permission should be granted as the appeal raises issues of general importance in respect of the approval of enterprise agreements and the decision contains jurisdictional errors. JWLand submits that the appeal is not in the public interest and only involves one employer and a small number of employees. JWLand further submits that the bargaining process provides opportunity for unions to be involved and an appeal would provide the CFMEU with another opportunity to have a role in bargaining “that far extends what was intended under the Act”.
We are not convinced that the appeal raises issues of wider importance or general application. JWLand is correct to observe that the Agreement covers only a single employer and a small number of employees. The approach to be adopted to the application of the better off overall test and consideration of whether an enterprise agreement has been genuinely agreed to are, in general terms, well established. In our view, whether permission to appeal should be granted in this matter turns on whether the CFMEU is able to establish sufficiently arguably grounds of appeal in relation to the decision of the Commissioner to warrant the decision being revisited by the Full Bench. That requires the Full Bench to consider the grounds of appeal at least to the extent of assessing, at a preliminary level, the merits of the grounds.
The decision of the Commissioner involved consideration of whether the Act required the Commission to approve the Agreement. Section 186(1) requires that the Commission approve an enterprise agreement if the requirements of that section and s 187 are met. The requirements in ss 186 and 187 turn on the Commission being “satisfied” of various matters. Relevantly, s 186(2)(a) requires that the Commission be satisfied that the agreement has been genuinely agreed to by the employees covered by the agreement and s 186(2)(d) requires that the Commission be satisfied that the agreement passes the better off overall test.
The fact that the obligation of the Commission to approve an enterprise agreement turns on it being “satisfied” of certain matters might not necessarily mean that the decision is properly described as discretionary in nature.[10] However, in the context of s 186 of the Act, the Commission is required to be satisfied of matters involving broad value judgments and a considerable degree of subjectivity. The consequence is that the decision-making process required to approve an enterprise agreement involves the exercise of a discretion. In Diamond Offshore General Company v Baldwin[2018] FWCFB 6907; (2018) 284 IR 1, the Full Bench explained:[11]
To the extent that part of the decision-making process required to approve an agreement involves the exercise of discretion or satisfaction in relation to statutory criteria, the principles relevant to appealable error in relation to such decisions are well established. An appealable error in a decision involving the exercise of discretion is an error of the kind identified in House v The King. An error in relation to satisfaction is a question as to whether the decision maker has reached a “state of mind which must be formed reasonably and on a correct understanding of the law”.
If permission to appeal is granted, the Full Bench does not simply determine whether it would have approved the Agreement. It is necessary to identify error of a relevant type in the decision of the Commissioner.
As we have observed, a peculiar feature of the present appeal is that the hearing at first instance proceeded in circumstances of a misapprehension by the representative for the CFMEU as to the nature of the hearing. The consequence is that the CFMEU was not adequately prepared for the hearing conducted by the Commissioner. It sought to file further submissions after the hearing. It is not entirely clear from the transcript of the hearing whether the request was refused. As we have recorded, the CFMEU did file supplementary submissions the following day and JWLand replied to the submissions. The Commissioner, however, indicated in her decision that she declined to accept the further materials.
Ground 5 in the notice of appeal contends that the Commissioner erred in refusing to have regard to the material supplied by the CFMEU following the hearing, including that the CFMEU was denied procedural fairness as a result. We refuse permission to appeal with respect to ground 5. If Ms Read was not prepared because she had genuinely misunderstood the purpose of the hearing on 28 November 2024 (a matter we have no reason to doubt) and was able to provide supplementary submissions quickly after the hearing, the interests of justice arguably favoured receiving and considering the further submissions and materials. The proper consideration of a matter before the Commission should not, where it is avoidable, be undertaken without a party having had the opportunity to put its full argument as a result of a genuine misunderstanding of the nature of a hearing.
However, it is not necessary for the Full Bench to determine the CFMEU’s complaint that it was denied procedural fairness as a result of the approach adopted by the Commissioner. In our opinion, the appropriate course is to consider the further materials provided by the CFMEU in determining the appeal for the purpose of considering whether error is established in the decision at first instance. If the supplementary submissions and materials do not demonstrate error in the decision of the Commissioner, or do not demonstrate that the Agreement should not have been approved, there is no utility in granting permission to appeal with respect to the procedural fairness complaint. Even if that procedural complaint has merit, unless the further material demonstrates error in the decision of the Commissioner, no different outcome would have resulted.
JWLand also sought to rely on further evidence on appeal in the form of a witness statement of Michael Prendergast, National Head of Development and CEO Construction, dated 5 March 2025. In summary, Mr Prendergast’s witness statement provides further information in relation to the rates of pay and designated classifications of the employees who participated in bargaining and voted on the Agreement as well as evidence in relation to communications with the CFMEU during bargaining. The CFMEU did not oppose the Full Bench receiving the witness statement as further evidence on appeal for the purposes of s 607(2) of the Act. The Full Bench received the witness statement of Mr Prendergast on the appeal.
Consideration of remaining grounds of appeal
Grounds 1 and 2 – Better off overall test
Grounds 1 and 2 allege that the Commissioner erred in being satisfied that the Agreement passed the better off overall test. The CFMEU submits that the Agreement results in employees not being better off overall than if the Award applied to their employment in three respects concerning meal breaks, rest breaks and breaks between shifts.
In relation to meal breaks, clause 18.1(a) and (b) of the Award require that there must be a cessation of work and of working time of not less than 30 minutes between midday and 1pm or as otherwise agreed between an employer and a majority of employees and that an employee must not be required to work more than 5 hours without a break for a meal. Clause 29.6(a) provides that an employee must be paid at double time if the employer requires an employee to work during the time prescribed for the meal break until time is allowed in substitution for the meal break. Clause 16.1 of the Agreement provides for meal breaks in the following terms:
16.1 An Employee (other than a shift worker) who has worked for:
(a) more than 5 hours and up to 10 hours in one shift must be provided with an unpaid meal break of up to 30 minutes; or
(b) more than 10 hours in one shift must be provided with two unpaid meal breaks of up to 30 minutes each.
The CFMEU submits that this provision is disadvantageous in two respects. Clause 16.1(a) only provides for a meal break of “up to 30 minutes” rather than “not less than 30 minutes” and the Agreement makes no provision for an additional payment to be made if the employer requires the employee to work during a time prescribed for a meal break.
In relation to rest breaks, clause 18.3(a) and (b) provides that a paid rest period of 10 minutes must be allowed between 9am and 11am and further paid crib time of 20 minutes’ duration if an employee is required to work overtime for 2 hours or more after their usual finishing time or shift, and 30 minutes after each further 4 hours of continuous work. Clause 18.3(c) provides that if the 20 minute crib break is not taken, an employee will be treated as having worked an additional 20 minutes. Clause 16.2 of the Agreement provides for crib breaks in the following terms:
16.2 Employees (other than shift workers) must be provided with a paid crib break of up to 15 minutes between:
(a) 9.00 am and 11.00 am; and
(b) 5 pm and 6 pm.
Again, the CFMEU submits that this provision is less advantageous compared to the Award because it does not provide for a minimum shift length and for any additional payment if the break is not taken.
In relation to breaks between shifts, clause 29.8(d) of the Award provides that an employee who, on the instruction of the employer, resumes or continues work without having 10 consecutive hours off duty, must be paid at double time until released from duty for that period. The CFMEU submits that the Agreement does not contain any equivalent provision and is less advantageous to employees because it fails to confer an entitlement to be paid at double time until released from duty if the employee does not receive a 10 hour break between periods of work.
The Commissioner commenced her consideration of the better off overall test by observing that the rates of pay in the Agreement are more than 60 percent higher than the rates in the Award. The Commissioner considered the deficiencies in the Agreement identified by the CFMEU in relation to meal break, crib breaks and minimum breaks between shifts and accepted the submissions of JWLand that the operation of the provisions were requested by employees or were not part of the working pattern of JWLand. The Commissioner was satisfied that, on balance, the employees will be better off overall under the Agreement than under the Award.
Section 186(2)(d) requires the Commission to make an evaluative assessment of whether each employee concerned would be better off overall under the terms of the agreement versus the relevant modern award.[12] We do not believe the CFMEU has demonstrated that it was not open to the Commissioner to be satisfied that the Agreement passes the better off overall test. The extent to which the rate of pay in the Agreement exceeds the rates of pay in the Award is such that it was open to the Commissioner to be satisfied that the Agreement passed the better off overall test notwithstanding the three areas of disadvantage identified in the submissions made by the CFMEU.
The submission in relation to the meal break and rest break provisions assumed that clause 16.1 and 16.2 of the Agreement permit JWLand to require employees to work through meal or rest breaks without penalty. Although the provisions are admittedly ambiguous, we do not believe that is correct. The requirement that an employee be provided with a break of “up to 30 minutes”, properly understood, confers an entitlement to a 30 minute break unless the employee agrees to a shorter break. In that manner, the employee is entitled to a break of “up to 30 minutes”. The clause, sensibly construed, does not permit the employer to require an employee to have a shorter break.
In that respect, the anonymous statements relied upon by the CFMEU suggested that employees at JWLand are permitted to take breaks at their discretion, rather than having the timing of breaks dictated. The evidence before the Commissioner, including the anonymous statements relied upon by the CFMEU, do not suggest that working patterns requiring a break between periods of duty of less than 10 hours is likely to occur. That is relevant in assessing whether it was open to the Commissioner to be satisfied that the higher rates of pay resulted in employees being better off overall.
To the extent that the CFMEU submits that the Commissioner erred in considering the better off overall test having regard to the working pattern at JWLand rather than the manner in which the Agreement permits it to organise its operations, the ground has no merit. In applying the better off overall test, the Commission is required to have regard to working patterns that are reasonably foreseeable.[13] Although the evidence before the Commissioner could have been more substantial, we consider it was open to the Commissioner to accept the assertions made by JWLand’s representative in relation to the pattern of work it utilises.
For these reasons, we do not accept that the CFMEU has established a sufficiently arguable case of error with respect to grounds 1 and 2 to justify a grant of permission to appeal. Permission to appeal should be refused with respect to those grounds.
Grounds 3 and 4 – Genuine agreement and sufficient interest
Grounds 3 and 4 contend that the Commissioner erred in failing to take account of the mandatory consideration in s 188(2)(a) of the Act, being whether or not the voting cohort had a sufficient interest in the terms of the agreement, and, in the alternative, that the finding that the voting cohort had a sufficient interest in the Agreement was not open. In support of this submission, the CFMEU raised a number of matters. First, that the voting cohort of five employees were all engaged as “full-time permanent employees at CW2 or CW3”. Second, that four of the five voting employees were not paid rates fixed by the Agreement but were instead paid an additional $1 or $2 per hour above the applicable rate in the Agreement and were unclear as to which classification in the Agreement would apply to them and what rates would apply to their employment. Third, that the classifications in the Agreement are at the discretion of the employer and existing employees do not have a sufficient interest in the rates of pay for future employees once their own classification is set.
In relation to the issue of classification under the Agreement, the CFMEU at first instance understood that of the four members who voted on the agreement, three were classified as CW3 and one as CW2. The witness statement of Mr Prendergast admitted on the appeal suggests that two employees are classified at CW2, two employees at CW4 and one employee at CW5. At first instance, the employer did not have “specific instructions” as to the classification of the voting employees although the CFMEU submitted on appeal that it was unclear that any of the voting employees themselves understood their classification under the Agreement. The CFMEU submits that the question of classification under the Agreement, in circumstances where neither the employer nor the voting employees appeared to have a clear understanding of their classification, is relevant to whether the Commissioner could be satisfied that the employees had a sufficient interest in the agreement.
The Commissioner was required to be satisfied that the Agreement had been genuinely agreed to for the purposes of s 186(2)(a). Section 188(1) required the Commissioner to take into account the Statement of Principles on Genuine Agreement in determining whether the agreement has been genuinely agreed and s 188(2) required that the Commissioner be satisfied that the employees voting on the agreement have a sufficient interest in its terms and are sufficiently representative. The CFMEU submits that the statement of principles set out that the Commission might, in determining whether there has been genuine agreement, have regard to whether the employees were paid the rates set out in the agreement and whether they were employed across the range of possible classifications.
The Full Court of the Federal Court in One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77; (2018) 277 IR 23 provided guidance on the issue of genuine agreement as follows:[14]
Where employees working in few occupational classifications consent to an agreement which covers numerous other occupations or other occupations in many industries beyond their own, an explanation of the terms of the agreement and their effect may fall short of providing an adequate basis for the formation of genuine consent. The employees who voted may be indifferent to the impact of an agreement on other employees or prospective employees in occupational classifications outside their own training or experience. As Buchanan J observed in John Holland (Besanko and Barker JJ agreeing), in those circumstances the employees will presumably act out of self-interest (at [33]) with the possible result that “it may not be fair for an enterprise agreement made with three existing employees to cover a wide range of other classifications and jobs in which they may have no conceivable interest” (at [83]).
To the extent that, in ground 3, the CFMEU submits that the Commissioner failed to consider whether the employees who voted on the Agreement had a sufficient interest in its terms, we do not agree. The Commissioner expressly acknowledged the submission of the CFMEU that four of the employees were paid $1 or $2 more than the minimum rates in the Agreement and that, on the information then available, the employees fell within only two classifications. The Commissioner was nonetheless satisfied the employees had a sufficient interest in the terms of the Agreement. She referred to the fact that employees covered by the Agreement were primarily engaged in on-site general building and construction work and that there is facility for wage increases during the term of the Agreement, albeit at the discretion of the employer.[15]
The CFMEU submits that there is a distinction between referring to a matter and taking it into account and that to be taken into account a matter “must be more than adverted to or given mere lip service” and be the subject of “active intellectual engagement”.[16] We accept that s 188(1) and (2) and the Statement of Principles on Genuine Agreement requires active intellectual engagement with the question of whether the employees had a sufficient interest in the terms of the Agreement and are sufficiently representative, including by reason of the rates of pay they receive and whether they represent the range of classifications and types of employment for which provision is made. However, a finding that a decision-maker has not engaged in an active intellectual process with respect to a relevant consideration will not lightly be made and must be supported by clear evidence.[17] For the reasons we have given, the proper inference to be drawn is that the Commissioner appropriately considered the sufficiency of interest of the employees, including by reference to their rates of pay and spread of classifications.
In relation to ground 4, we also do not agree that the CFMEU has established it was not open to the Commissioner to be satisfied that the employees had a sufficient interest in the terms of the Agreement and were sufficiently representative. As we have observed, the contentions of the CFMEU as to why the Agreement had not been genuinely agreed to have a number of elements.
The first matter raised was that the employees were employed only in a limited number of classifications under the Agreement and in fact received rates of pay $1 or $2 above the Agreement rates. We consider that the Commissioner properly considered this matter, and it was open to the Commissioner to conclude that the employees nonetheless had a sufficient interest in the Agreement. It was relevant for the Commissioner to observe that all employees covered by the Agreement would have some similar interests in that the classifications are all concerned with on-site construction work and that the employees were likely to be affected by the rates in the Agreement as a result of increases in wage rates even if increases were at the discretion of the employer. This consideration did not compel a conclusion that the employees did not have a sufficient interest in the terms of the Agreement.
The second matter raised, in part by way of reliance on the anonymous statements provided after the hearing, is that the employees appeared to be confused as to their correct classifications, demonstrated a general disinterest in the terms of the Agreement and, for that reason, did not have a sufficient interest in its terms. We have some difficulty in accepting the manner in which the submission was put on behalf of the CFMEU. In a general sense, the reference to employees having a “sufficient interest” in the terms of an enterprise agreement refers to an examination of whether the interests of the employees are affected by whether the Agreement is approved rather than an assessment of the degree of curiosity or engagement of employees in the bargaining process. Whether the interests of the employee are affected is ordinarily likely to depend on their objective circumstances rather than on whether individual employees have taken an active intellectual interest in the subject.
Paragraph 18 of the Statement of Principles on Genuine Agreement does provide that the consideration may include whether an agreement is the result of an “informed and genuine understanding of what was being approved”. That consideration may involve an assessment of whether the employees have demonstrated a sufficient degree of understanding of the terms of the proposed agreement. However, we consider that the Commissioner considered that very question. The Commissioner observed that notes of meetings held to discuss the Agreement indicated that employees asked questions about their entitlements and suggested changes to the proposed agreement and that the employees did not seek to involve the CFMEU in the bargaining.[18] We do not accept that it was not open to the Commissioner to be satisfied that the employees had a sufficient interest in the Agreement or that the further evidence relied upon by the CFMEU establishes that the finding was not open.
The third matter raised is that the classification descriptors in the Agreement are, on one view at least, discretionary. In that respect, clause 9.1 of the Agreement requires that the employer and employee agree a classification level at the commencement of the employment. The classification descriptions are set out in Appendix A to the Agreement. In short, Appendix A provides for classification levels between Construction worker Level 1 to Construction worker Level 8 in a manner that broadly aligns with the Award. The classification descriptors are framed in a different manner to the Award. Construction worker Level 1(a) and Level 1(b) refer, respectively, to a new entrant with up to 12 months’ experience and a worker with at least 12 months’ experience. From Level 2 onwards the duties are described in the same way in the following terms:
Employee engaged for the predominant purpose of, and who generally undertakes, general labouring and incidental duties as directed.
The classification criteria from Level 2 are in the following form:
At least 12 months’ experience in the building and construction industry, and on demonstration of productivity and competency, at the discretion of the employer having regard to criteria, skills and duties relevant to the CW2 classification under the Award.
For Level 3 to Level 8, the classification criteria are in the same terms but referring, in each case, to the corresponding CW classification in the Award. The CFMEU submits that the form of the classification descriptors means it is entirely at the discretion of the employer to nominate a classification. The consequence, it is said, is that existing employees will know their classification because it will have been agreed at commencement of their employment, or from time to time. However, no future employee will have any certainty as to how they will be classified because it is a matter which is at the discretion of the employer.
The submission assumes that the classification levels are entirely a matter of a discretionary determination by the employer. We do not consider that to be the correct. Although the classification criteria refer to “discretion of the employer”, it is a discretion to be exercised having regard to the criteria, skills and duties in the classifications in the Award. We do not consider that the Agreement permits JWLand to classify employees in a manner that disregards the classification criteria in the Award. In any event, even if there is uncertainty as to the classification that will be attributed to future employees, we do not consider that means it was not open to the Commissioner to be satisfied the employees had a sufficient interest in the Agreement. Although there was some uncertainty as to the classification of particular employees, the employees who voted on the Agreement were attributed classifications drawn from the Agreement. The Agreement provides for rates of pay and conditions that would apply to those employees. The employees had an interest in the terms of the Agreement even if the application of the classification structure to future employees was uncertain.
Finally, although it did not form part of the grounds in the notice of appeal, the CFMEU made submissions as to the adequacy of the explanation of the Agreement provided to employees. In particular, it is said that the information did not properly explain the difference in the meal and rest break provisions and there were admitted errors in the calculations of the difference between the rates of pay in the Agreement and the Award. The Commissioner considered those matters and was satisfied that the net effect of the explanation provided to employees was adequate.[19] We believe the finding was open to the Commissioner. The errors in the calculation of the difference between the Agreement and Award rates was just over 2 percent and, as the Commissioner observed, the rates were still very substantially above the Award. The explanation of the meal or rest break provisions does not appear to refer to the absence of a penalty rate if a break is not taken. However, considering the material as a whole, we do not believe that deficiency alone means it was not open to the Commissioner to be satisfied that the Agreement was adequately explained and genuinely agreed to.
For these reasons, we also do not consider that grounds 3 and 4 have established error in the decision of the Commissioner so as to justify permission to appeal being granted.
Conclusion and disposition
The Full Bench orders that permission to appeal is refused.
VICE PRESIDENT
Appearances:
O Fagir, of counsel instructed by R Read for the appellant.
A Sydney, solicitor, of MV Law for the respondent.
Hearing details:
13 March 2025.
Sydney.
[1] JWLand Construction Enterprise Agreement 2024-2028 [2024] FWCA 4497.
[2] [2024] FWCA 4497 at [3]-[8].
[3] [2024] FWCA 4497 at [5].
[4] [2024] FWCA 4497 at [15].
[5] [2024] FWCA 4497 at [9].
[6] [2024] FWCA 4497 at [13].
[7] [2024] FWCA 4497 at [14].
[8] See, for example, Appeal by the Australian Workers’ Union [2023] FWCFB 157 at [72] and Torcello v Deakin University [2024] FWCFB 457 at [15].
[9] GlaxoSmithKline Australia Pty Ltd v Makin[2010] FWAFB 5343; (2010) 197 IR 266 at [27].
[10] DP World Sydney Pty Ltd v Witherden[2025] FWCFB 133 at [28] referring to Sun v Chapman [2022] NSWCA 132 at [27] and [114]-[115] (Leeming JA) and R v Bauer [2018] HCA 40; (2018) 266 CLR 56 at [9] and [61].
[11] Diamond Offshore General Company v Baldwin[2018] FWCFB 6907; (2018) 284 IR 1 at [25]. See also Shop, Distributive and Allied Employees Association v Allen Family Pty Ltd [2024] FWCFB 48 at [15]
[12] Shop, Distributive and Allied Employees Association v Allen Family Pty Ltd [2024] FWCFB 48 at [27].
[13] Fair Work Act 2009 (Cth), s 193A(6).
[14] One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77; (2018) 277 IR 23 at [155].
[15] [2024] FWCA 4497 at [4].
[16] By reference to Tickner v Chapman (1995) 57 FCR 451 at 464, Anderson v Director General of the Department of Environment [2008] NSWCA 337; (2008) 251 ALR 633 at [58] and Mentink v Minister for Home Affairs [2013] FCAFC 113 at [44].
[17] See, for example, Carrascalao v Minister for Immigration and Border Protection [2017] FCAFC 107; (2017) 252 FCR 352 at [48] and GBV18 v Minister for Home Affairs [2020] FCAFC 17; (2020) 274 FCR 202 at [32](g).
[18] [2024] FWCA 4497 at [5].
[19] [2024] FWCA 4497 at [9] and [12].
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