Construction, Forestry, Maritime, Mining and Energy Union

[2019] FWC 6080

[2019] FWCA 6002

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Construction, Forestry, Maritime, Mining and Energy Union
(AG2019/2478)

DEPUTY PRESIDENT MASSON MELBOURNE, 30 AUGUST 2019

Application for approval of the REDBEK PTY LTD and the CFMEU (Victorian Construction and General Division) Enterprise Agreement 2016 - 2018.

[1] An application has been made for approval of the REDBEK PTY LTD and the CFMEU (Victorian Construction and General Division) Enterprise Agreement 2016 - 2018 (the Agreement). The application was made pursuant to section 185 of the Fair Work Act 2009 (the Act) by the Construction, Forestry, Maritime, Mining and Energy Union (the Applicant). The Agreement is a single enterprise agreement.

[2] Redbek Pty Ltd (the Employer) filed a statutory declaration Form F17 in support of the Agreement. The Employer states that employees were notified in person of the time, place and method of voting on 19 June 2018 and that voting occurred on 28 June 2019. A majority of those who voted approved the Agreement. 1 A notice of employee representational rights was provided to employees on 28 May 2019 and the notice complied with the regulations2.

[3] The statutory declaration provided by the Employer noted that the relevant award for the purpose of the better off overall test (the BOOT) was the Building and Construction General On-site Award 2010 (the Building Award). 3

[4] The statutory declaration noted that some provisions in the Agreement were more beneficial than the Award or were not conferred by the Award. No less beneficial terms were identified.

[5] The Employer states that employees were encouraged to seek advice on any terms they were unsure of or didn’t understand, in answer to question 2.6 of the Statutory Declaration which asks what steps were taken by the Employer to explain the terms of the agreement, and the effect of those terms. 4

[6] On the 23 July 2019, correspondence from the Commission was sent to the Applicant requesting further information on how s 180(5) of the Act had been complied with, and specifically, how the Agreement terms and the effect of those terms were explained to the employees. A response was sought from the Applicant by the close of business on 26 July 2019. An extension of time to provide a response on or by 31 July 2019 was subsequently sought by the Applicant and granted by the Commission.

[7] On the 1 August 2019, the Applicant requested a further extension of time until 9 August 2019. Having regard to the limited scope of the information sought by the Commission and that an extension of time had already been granted, the further extension of time was refused, and a response was requested by close of business on 2 August 2019. No response was subsequently received by the Commission.

[8] On the 29 August 2019, the Applicant was contacted and advised by Commission staff that if a response was not provided by 3:00pm 29 August 2019, the Application may be dismissed. The Applicant advised that due to not receiving a response from the Employer, they would not be able to provide a response by 3:00pm 29 August 2019.

[9] In the absence of a response to the matters raised by the Commission I turn to consider the application on the material before me.

Statutory Provisions

[10] Section 180 requires, amongst other things, that in order for an enterprise agreement, that is not a greenfields agreement to be approved, the Commission must be satisfied that the Employer took all reasonable steps to explain the Agreement terms. Section 180(5) relevantly provides as follows:

“ 180 Employees must be given a copy of a proposed enterprise agreement etc.

Pre-approval requirements

(5) The employer must take all reasonable steps to ensure that:

(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and

(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.”

[11] Section 186 of the Act sets out the general requirements for approval of an enterprise agreement;

“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 subsection 182(4) or 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; an

(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.

[12] Having regard to the above it is necessary for the Commission to satisfy itself, amongst other statutory considerations when considering approval of the Agreement, that the Agreement has been genuinely agreed to by employees pursuant to section 186(2)(a). Employees will be found to have genuinely agreed to the Agreement if the requirements of section 188 are met. This relevantly includes consideration of, for the purposes of the present matter, section 180(5) requirements. Specifically, whether the Employer has taken all reasonable steps to explain the terms of the Agreement and the effect of those terms to the relevant employees, and whether that explanation was provided in a manner that had regard to the particular circumstances of the relevant employees.

Consideration

[13] In response to question 2.6 of the Form F17 which deals with the steps taken by the employer to explain the terms of the agreement and the effect of those terms to the relevant employees, the Employer stated as follows;

‘Employees were encouraged to seek advice on any terms they were unsure of or didn’t understand, either by informing the employer or seeking assistance from their employee representative (the CFMEU).’

[14] Further, at question 2.7 of the Form F17, the Employer provided the following response in relation to whether the explanation provided to employees had regard to the particular circumstances and needs of the relevant employees;

‘Employees were informed that if they required extra assistance due to language or learning difficulties, their bargaining representative (the CFMEU) would accommodate by arranging the appropriate resources.’

[15] In light of the above responses the Commission sought further information as it was not clear how the employer took reasonable steps to explain the terms of the agreement, and the effect of those terms to the relevant employees, and also specifically how the particular circumstances and needs of those employees were taken into account as required by s180(5) of the Act.

[16] It is plainly apparent in the absence of the further information sought from the Applicant and Employer, that the explanation of the terms of the Agreement, such as it was, was confined to the provision of a copy of the Agreement with an offer to employees to seek assistance if they were unsure or didn’t understand the terms of the Agreement. That approach falls well short of the requirements of s180(5). The mere circulation of the Agreement is not an explanation of the Agreement at all let alone meeting the higher standard of taking ‘all reasonable steps’.

[17] I am not satisfied that the Applicant took all reasonable steps to explain the terms and the effects of the terms of the Agreement to employees as required under s 180(5) of the Act. Consequently, I cannot be satisfied that employees genuinely agreed to the Agreement as required under s 186(2)(b)(i) of the Act. It follows that the Agreement cannot be approved.

Conclusion

[18] In order to approve the Agreement, the Commission must, as part of its consideration, be satisfied in respect of the s 186(2) requirements under the Act. For the reasons detailed above I am not satisfied in respect of those requirements. Consequently, the application for approval of the Agreement is dismissed. An order reflecting this decision will be separately issued.

DEPUTY PRESIDENT

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 1 Section 180 Fair Work Act 2009 (Cth)

 2   Section 173

 3   MA000020

 4 Section 180(5)