[2019] FWCFB 5916

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.604—Appeal of decision

Construction, Forestry, Maritime, Mining and Energy Union
v
CoreStaff NSW Pty Ltd
(C2019/4308)

Coal industry
VICE PRESIDENT HATCHER DEPUTY PRESIDENT COLMAN COMMISSIONER MCKENNA	SYDNEY, 18 SEPTEMBER 2019

Appeal against decision of Deputy President Saunders at Newcastle on 25 June 2019 – explanation of terms of the agreement to employees – alleged uncertainty about current conditions – construction of current agreement – permission to appeal refused

Decision of Vice President Hatcher and Deputy President Colman

[1] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) has brought an appeal under s 604 of the Fair Work Act 2009 (FW Act), for which permission to appeal is required, against a decision of Deputy President Saunders made on 25 June 2019 1 (Decision) to approve the CoreStaff NSW Black Coal Mining Industry Enterprise Agreement 2018 (2018 Agreement). The application for approval of the 2018 Agreement was made by CoreStaff NSW Pty Ltd (CoreStaff). The CFMMEU was not a bargaining representative for the 2018 Agreement; however the Deputy President exercised his discretion under s 590 of the FW Act to hear from the CFMMEU in relation to the application. It was not in contest that the CFMMEU has standing to bring the appeal as a person aggrieved by the Decision.

[2] The CFMMEU contended in its appeal that the Deputy President erred in finding that the approval requirements of s 180(5) and s 186(2)(a) of the FW Act were met, and submitted that there was no basis for the Deputy President to have concluded that the 2018 Agreement was genuinely agreed as defined in s 188 of the FW Act, which requires compliance with s 180(5).

[3] The central contention of the CFMMEU was that the employer did not take all reasonable steps to ensure that the 2018 Agreement, and the effect of its terms, was properly explained to the 11 employees who voted on it, all of whom were casual employees. It said that the employer’s explanation proceeded on an incorrect assumption, as well as a corresponding implicit representation to employees, concerning their current employment status and conditions, namely that they were casual employees whose employment was governed by the CoreStaff NSW Enterprise Agreement 2014 (2014 Agreement), and that they were not entitled to the benefits of permanent employment. The CFMMEU submitted that, properly construed, the 2014 Agreement did not provide for casual employment in respect of production and engineering work covered by the Black Coal Mining Industry Award 2010 (Black Coal Award), which was incorporated into the 2014 Agreement along with other awards.

[4] The CFMMEU contended that, as a consequence, the casual employees who at the time of the vote were engaged to work in production and engineering roles in the black coal mining industry could not properly be regarded as casuals. 2 Rather, they were permanent employees and entitled to the benefits of permanent employment. The CFMMEU submitted that employees therefore misunderstood what the 2018 Agreement offered them, and that CoreStaff’s explanation of the new agreement was deficient. It said that a proper explanation of the 2018 Agreement and the effect of its terms would have required a comparison of the terms of the new agreement against the correct conditions of employment that applied to the relevant employees at the time of the vote. There was evidence that some employees were “sweating on” the approval of the 2018 Agreement because they wished to utilise the new casual conversion provision it contained. The CFMMEU said that this illustrated the deficiency of the employer’s explanation of the agreement because employees should have been told that they were already entitled to the benefits of permanent employment.

[5] The CFMMEU acknowledged that the appeal turned on a point of construction and that unless its interpretation of the 2014 Agreement was accepted by the Full Bench, its appeal could not succeed. That construction, advanced before the Deputy President and before us, was that the 2014 Agreement did not make any provision for casual employment except to the extent that one of the modern awards incorporated into the agreement allowed for it. Therefore, because the Black Coal Award does not allow for casual employment of production and engineering employees, neither relevantly does the 2014 Agreement.

[6] The principles that apply to the construction of an enterprise agreement are well-established and we will not restate them, other than to note that the proper interpretation starts with a consideration of the ordinary meaning of the relevant words, and the resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose.

[7] As to the context and purpose of the 2014 Agreement, it is relevant to note that the agreement comprises 14 clauses, running to some five pages, and a schedule listing 122 modern awards. As clause 3 makes clear, the 2014 Agreement covers employees employed by CoreStaff who are made available to work for CoreStaff’s clients. Several clauses are of particular importance to the present controversy.

[8] First, clause 3 states that the 2014 Agreement binds CoreStaff and “all casual, fixed-term or permanent (full-time of part-time) employees employed by CoreStaff and who are supplied as labour on an on-hire basis to CoreStaff’s clients in New South Wales”.

[9] Clause 5.1 of the 2014 Agreement then states that the agreement “incorporates the terms of the Awards listed in Schedule A as in force at the date this Agreement commenced operation”. Clause 5.2 states that the incorporated award provisions are to be “read as altered to incorporate necessary changes resulting from them being provisions of an agreement rather than provisions of an award” and, for example, that references to “award” would be read as references to “agreement”. Clause 5.3 provides that where there is any inconsistency between a term of the 2014 Agreement and a term of an incorporated award, “the term in this Agreement shall prevail to the extent of any inconsistency.”

[10] Clause 7 of the 2014 Agreement deals with wage rates and provides that employees will receive a rate of pay that is 0.5% greater than the relevant award rates, as adjusted by the annual wage reviews undertaken by the Commission. Clause 8 states that the ordinary hours of work will be an average of 38 hours per week, but that hours may be varied to suit the needs of the operations on site or the relevant client.

[11] The CFMMEU submitted that there is no substantive provision in the 2014 Agreement dealing with casual employment. There is no clause that provides for a casual loading or casual conversion, nor is there a definition of casual employment for the purposes of the agreement. The CFMMEU contended that the reference to casual employees in clause 3 of the 2014 Agreement is of little significance, because clause 3 is concerned only with the question of who is bound by the agreement. In this respect, the clause identifies the employer and all employees employed by CoreStaff who are deployed to work for its clients. The references to casual, fixed-term, and permanent employees interact with incorporated award provisions. The union contended that the only basis upon which an employee could be engaged as a casual under the 2014 Agreement was if an incorporated award made provision for this, and the Black Coal Award does not do so.

[12] The Deputy President rejected the CFMMEU’s contentions. He concluded:

“[102] I do not agree with these submissions by the CFMMEU in relation to casual employees and the operation of the 2014 Agreement. Clause 3.2 of the 2014 Agreement states that it “binds… all casual, fixed term or permanent (full-time or part-time) employees employed by CoreStaff and who are supplied as labour on an on-hire basis to CoreStaff’s clients in New South Wales”. Clause 5.1 of the 2014 Agreement provides that 122 modern awards, including the BC Award, are incorporated into the 2014 Agreement. Clause 5.3 provides that the 2014 Agreement prevails over a term of an incorporated award to the extent of any inconsistency. Clause 7 of the 2014 Agreement provides that employees will be paid the applicable rate of pay for their classification derived from the applicable modern award.

[103] Construing the terms of the 2014 Agreement in context and having regard to their purpose, I am of the opinion that the 2014 Agreement covers all casual (as well as permanent) employees employed by CoreStaff and who are supplied as labour on an on-hire basis to CoreStaff’s clients in New South Wales, regardless of which award, if any, they are covered by. That is the ordinary meaning of clause 3.2 of the 2014 Agreement.”

[13] The CFMMEU contended that the Deputy President erred in reaching this conclusion. In its written submissions, the CFMMEU first submitted that the correct question that the Deputy President needed to answer was not whether the 2014 Agreement covered casual employees of CoreStaff engaged in the black coal mining industry, but rather what terms and conditions applied to those employees who voted on the 2018 Agreement “and particularly whether they were lawfully engaged as casuals.” 3

[14] There is no substance in this submission. Before the Deputy President, the CFMMEU contended that employees voting on the 2018 Agreement were not lawfully engaged as casuals, and in order to address this contention the Deputy President had first to determine whether the 2014 Agreement enabled the casual engagement of relevant employees in the first place.

[15] The CFMMEU then submitted that the Deputy President misconstrued the terms and the effect of the 2014 Agreement, and consequently proceeded on a misunderstanding of the law and thereby constructively failed to exercise jurisdiction. 4 In this regard, the CFMMEU contended that the Deputy President wrongly interpreted clause 3 of the 2014 Agreement as a provision authorising casual employment, rather than one that identifies who is bound by the agreement and interacts with incorporated awards.

[16] We reject this contention. Although clause 3 is concerned with the application of the 2014 Agreement, its reference to casual employment clearly conveys an intention that this mode of employment is covered by the instrument. We recognise that clause 3.2 states that casual employees are bound by the agreement, and does not state specifically that they can be employed under the agreement. However in our view one entails the other. If a casual employee can be bound by the 2014 Agreement, it must be possible for an employee to be employed as a casual under the agreement. Further, we think it improbable that it was intended that casuals could only be engaged under the 2014 Agreement if an incorporated award allowed for this to occur. The framers of the document turned their minds to the question of the interaction of the express terms of the 2014 Agreement and the incorporated award provisions in clause 5, giving primacy in the event of inconsistency to express terms, and in clause 5.2 deeming incorporated provisions to be read as “altered to incorporate necessary changes”. They did not confine the possibility of casual employment to work covered by awards that authorised it.

[17] The CFMMEU next contended that, given the Black Coal Award’s notorious exclusion of any provisions concerning casual employment for production and engineering employees, one would have expected the introduction of the possibility of casual employment by the 2014 Agreement to have been dealt with specifically and substantively. We disagree.

[18] The union’s contention would have more force if the 2014 Agreement applied exclusively or prominently to work in the black coal mining industry, in which case it might have been expected that, if the agreement introduced casual employment arrangements for production and engineering employees, it would do so in an overt and substantive way. However the present 2014 Agreement is an omnibus incorporating 122 awards with no award-specific tailoring of any incorporated award or award provisions to the terms of the agreement. In the context of an agreement with such a broad scope, and yet with so few express terms, it is in our view not surprising that no special provision is found in respect of casual employment in respect of work covered by one particular award.

[19] The CFMMEU further submitted that in having regard to the industrial purpose of the 2014 Agreement, it is relevant to consider that in correspondence with the Commission in relation to the application for approval of the 2014 Agreement, CoreStaff had advised the Commission that employees covered by the agreement “will be entitled to all applicable modern award terms.” 5 We do not see how that advances the CFMMEU’s construction. Employees plainly are entitled to all applicable modern award terms, namely those that apply under the relevant incorporated award, unless they are inconsistent with one of the express terms of the 2014 Agreement. The Black Coal Award does not prohibit casual employment in production and engineering roles, it simply does not provide for it. We do not think there is any inconsistency between the Black Coal Award and the 2014 Agreement in this regard upon which the interaction provision in clause 5.3 of the 2014 Agreement operates. However, to the extent that it might be asserted that the Black Coal Award contains some negative implication that an employer must not engage casuals in production or engineering roles, clause 5.3 of the 2014 Agreement would have the effect that clause 3.2 of the agreement would prevail.

[20] It was also contended that, given the 2014 Agreement makes no provision for a casual loading for employees engaged as casuals who work as production or engineering employees in the black coal mining industry, a construction of the agreement that permitted casual employment on this basis would produce an unreasonable result, and that very clear words would be required to bear out that this was the intention of the parties. However we consider that the 2014 Agreement contains clear words that employees covered by the agreement may be employed on a casual basis and there are no words to suggest that this mode of employment is confined to circumstances where the underpinning award permits it. Although there is no provision establishing a casual loading for production and engineering employees covered by the Black Coal Award, it is possible that this was simply overlooked, as almost all of the modern awards appearing in Schedule A do make provision for casual employment, and the evidence before the Deputy President was that the casual employees covered by the 2014 Agreement in fact receive a casual loading. 6 Moreover, on one view, the effect of clause 5.2 might be to adapt the incorporated Black Coal Award such as to apply its “staff” casual loading to all employees employed on a casual basis in that sector under the 2014 Agreement.

[21] We therefore agree with the conclusion reached by the Deputy President that the 2014 Agreement covered casual employees, including those who were deployed by CoreStaff to work in the black coal mining industry.

[22] Our rejection of the CFMMEU’s construction point is sufficient therefore for us to refuse permission to appeal and dismiss the appeal. It is not necessary for us to proceed to consider further the question of what precisely were the terms and conditions of employment provided for in the 2014 Agreement in respect of casual employees in the black coal mining industry, or whether CoreStaff’s explanation to employees of the 2018 Agreement and the effect of its terms pursuant to s 180(5) comprehended, or needed to comprehend, the legally correct answer to that question. The CFMMEU’s appeal did not proceed beyond the coverage point to raise that question. We would note however the question is not without complexity and we do not imply by our decision that we have reached any conclusion in relation to it.

[23] We would point out that the Deputy President dealt at some length with the evidence of CoreStaff’s explanation of the terms of the 2018 Agreement to employees who would be covered by it 7, as well as the CFMMEU’s contentions in relation to the explanation. He concluded among other things that the 2018 Agreement was “more beneficial than the 2014 Agreement in many respects for casual employees in the production and engineering classifications in the black coal mining industry”, notably by the inclusion of a casual loading and a casual conversion provision.8 It cannot be said that the Deputy President failed to apply himself to the task required by s 188, which was, relevantly, to consider and reach a state of satisfaction as to whether CoreStaff had complied with s 180(5).

[24] Finally, the failure of the 2014 Agreement to make express provision for a casual rate of pay might call into question how it was that the agreement was found to pass the better off overall test when it was submitted to the Commission for approval. However, the decision to approve the 2014 Agreement was not appealed and the agreement was in operation and applied to employees at the time of CoreStaff’s explanation of the terms of the 2018 Agreement. The Deputy President was correct in observing that questions about how the 2014 Agreement met the approval requirements did not have any particular significance for him in considering the approval requirements in relation to the 2018 Agreement.

[25] For the above reasons, permission to appeal is refused.

Decision of Commissioner McKenna

[26] I have had the opportunity to read, in draft form, the decision of Hatcher VP and Colman DP. Respectfully, and for the reasons that follow, I am not able to agree with my colleagues in certain of the conclusions reached.

[27] In this appeal, made pursuant to s 604 of the Fair Work Act 2009 (“the Act”), the Construction, Forestry, Maritime, Mining and Energy Union (“the CFMMEU”) seeks permission to appeal and to appeal a decision of Deputy President Saunders that was issued on 25 June 2019 ([2019] FWCA 4403) (“the Decision”) in which he approved the CoreStaff NSW Black Coal Mining Industry Enterprise Agreement 2018 (“the 2018 Agreement”). The application for the approval of the 2018 Agreement, being an application made pursuant to s 185 of the Fair Work Act 2009 (“the Act”), was made by CoreStaff NSW Pty Ltd trading as CoreStaff (“CoreStaff”). The CFMMEU had opposed the approval of the 2018 Agreement in proceedings before the Deputy President.

[28] CoreStaff operates a labour hire and recruitment business in New South Wales. To contextualise matters arising in the appeal, it is apposite to outline some historical background. Some years before the application for the approval of the 2018 Agreement, CoreStaff had made an earlier application on 8 October 2014 for the approval of an enterprise agreement titled the CoreStaff NSW Enterprise Agreement 2014 (“2014 Agreement”). The 2014 Agreement was made by a vote of four employees, none of whom was working in the black coal mining industry and at a time when CoreStaff did not have employees working in that industry.

[29] It may be noted that the 2014 Agreement has not, apparently, been terminated. Thereby, it appears, the 2014 Agreement continues to apply to categories of employment with the exception of those employees working in the black coal mining industry who are now employed by CoreStaff under the 2018 Agreement (the Decision, as it concerns the approval of the 2018 Agreement, has not been stayed). That is, one cohort of employees, said by CoreStaff to have been covered by the 2014 Agreement, has been singularly excised from it while it is still in operation - albeit past its nominal expiry date of 18 November 2018 (for example, it would seemingly still purport to have work to do in what is known as Schedule B (staff) employees under the Black Coal Mining Industry Award (“the Black Coal Award”, “the BCMIA” or “the BC Award”).

[30] Reduced to its essential elements, the 2014 Agreement has a number of clauses with the following headings:

“1. Arrangement

2. Title

3. Application

4. Date and period of operation

5. Relationship to modern awards and the National Employment Standards

6. Building Code Compliance

7. Wage rates

8. Hours of work

9. Abandonment of employment

10. Managing absenteeism

11. Superannuation

12. Flexible arrangements

13. Consultation

14. Dispute resolution

SCHEDULE A

SIGNATORIES”

[31] Relevantly, as to the clause headings above, the 2014 Agreement reads in part:

“3. Application

This Agreement binds:

3.1 CoreStaff NSW Pty Ltd (ABN 77 167 062 606) (“CoreStaff”);

3.2 All casual, fixed-term or permanent (full-time or part time) employees employed by CoreStaff and who are supplied as labour on an on-hire basis to CoreStaff’s clients in New South Wales (“Employee”).

…

5. Relationship to modern awards and the National Employment Standards

5.1 This Agreement incorporates the terms of the Awards listed in “Schedule A” as in force at the date this Agreement commenced operation and the National Employment Standards.

5.2 In incorporating award terms by reference into this Agreement, they are to be read as altered to incorporate necessary changes resulting from them being provisions of an agreement rather than provisions of an award. For example, the words “this award” would become “this Agreement”.

5.3 Where there is any inconsistency between a term in this Agreement and a term of the Award, the term in this Agreement shall prevail to the extent of the inconsistency.

…

7. Wage rates

7.1 Employees will be paid the applicable rate of pay for their classification derived from the applicable Modern Award listed in “Schedule A” for work performed.

7.2 The rate of pay derived from 7.1 will be increased by the amount of each national minimum wage order made in an annual wage review by the Fair Work Commission effective from 1 July each year.

7.3 For the Term of this Agreement, CoreStaff will pay the Employees a rate of pay which is 0.5% greater than the rates derived from clauses 7.1 and 7.2.

8. Hours of work

8.1 The ordinary hours of work will be an average of 38 hours per week. Ordinary hours can be averaged in accordance with the averaging provisions (where applicable) from the modern awards listed in “Schedule A”.

8.2 CoreStaff and Employees recognise the value of flexibility in relation to work arrangements and hours particularly in the context of on-hire employment. The parties therefore agree that hours may be varied to suit the needs of the operations on site and/or client needs, subject to clause 8.1.

…”

[32] The introductory words in Schedule A to the 2014 Agreement read:

“SCHEDULE A

This list of modern awards reflects those that currently apply and cover employees as defined in clause 3 of this Agreement employed by CoreStaff and those that CoreStaff may apply in the foreseeable future.”

[33] Schedule A to the 2014 Agreement then lists the following modern awards (and also itemises their “MA” numbers and year - uniformly 2010). Just so as to give some sense of the breadth of the agreement struck as between CoreStaff and four building and construction casual employees, the following is the list of the modern awards in Schedule A of the 2014 Agreement:

1. Aboriginal Community Controlled Health Services Award

2. Aged Care Award

3. Air Pilots Award

4. Aircraft Cabin Crew Award

5. Airline Operations—Ground Staff Award

6. Airport Employees Award

7. Alpine Resorts Award

8. Aluminium Industry Award

9. Ambulance and Patient Transport Industry Award

10. Amusement, Events and Recreation Award

11. Animal Care and Veterinary Services Award

12. Aquaculture Industry Award

13. Architects Award

14. Asphalt Industry Award

15. Banking, Finance and Insurance Award

16. Black Coal Mining Industry Award

17. Book Industry Award

18. Broadcasting and Recorded Entertainment Award

19. Building and Construction General On-site Award

20. Business Equipment Award

21. Car Parking Award

22. Cement and Lime Award

23. Cemetery Industry Award

24. Children's Services Award

25. Cleaning Services Award

26. Clerks—Private Sector Award

27. Coal Export Terminals Award

28. Commercial Sales Award

29. Concrete Products Award

30. Contract Call Centres Award

31. Corrections and Detention (Private Sector) Award

32. Cotton Ginning Award

33. Dredging Industry Award

34. Dry Cleaning and Laundry Industry Award

35. Educational Services (Post-Secondary Education) Award

36. Educational Services (Schools) General Staff Award

37. Educational Services (Teachers) Award

38. Electrical, Electronic and Communications Contracting Award

39. Electrical Power Industry Award

40. Fast Food Industry Award

41. Fire Fighting Industry Award

42. Fitness Industry Award

43. Food, Beverage and Tobacco Manufacturing Award

44. Funeral Industry Award

45. Gardening and Landscaping Services Award

46. Gas Industry Award

47. General Retail Industry Award

48. Graphic Arts, Printing and Publishing Award

49. Hair and Beauty Industry Award

50. Health Professionals and Support Services Award

51. Higher Education Industry—Academic Staff—Award

52. Higher Education Industry—General Staff—Award

53. Horse and Greyhound Training Award

54. Horticulture Award

55. Hospitality Industry (General) Award

56. Hydrocarbons Field Geologists Award

57. Hydrocarbons Industry (Upstream) Award

58. Joinery and Building Trades Award

59. Journalists Published Media Award

60. Labour Market Assistance Industry Award

61. Legal Services Award

62. Live Performance Award

63. Local Government Industry Award

64. Mannequins and Models Award

65. Manufacturing and Associated Industries and Occupations Award

66. Marine Tourism and Charter Vessels Award

67. Marine Towage Award

68. Maritime Offshore Oil and Gas Award

69. Market and Social Research Award

70. Meat Industry Award

71. Medical Practitioners Award

72. Mining Industry Award

73. Miscellaneous Award

74. Mobile Crane Hiring Award

75. Nursery Award

76. Nurses Award

77. Oil Refining and Manufacturing Award

78. Passenger Vehicle Transportation Award

79. Pastoral Award

80. Pest Control Industry Award

81. Pharmaceutical Industry Award

82. Pharmacy Industry Award

83. Plumbing and Fire Sprinklers Award

84. Port Authorities Award

85. Ports, Harbours and Enclosed Water Vessels Award

86. Poultry Processing Award

87. Premixed Concrete Award

88. Professional Diving Industry (Industrial) Award

89. Professional Diving Industry (Recreational) Award

90. Professional Employees Award

91. Quarrying Award

92. Racing Clubs Events Award

93. Racing Industry Ground Maintenance Award

94. Rail Industry Award

95. Real Estate Industry Award

96. Registered and Licensed Clubs Award

97. Restaurant Industry Award

98. Road Transport and Distribution Award

99. Road Transport (Long Distance Operations) Award

100. Salt Industry Award

101. Seafood Processing Award

102. Seagoing Industry Award

103. Security Services Industry Award

104. Silviculture Award

105. Social, Community, Home Care and Disability Services Industry Award

106. Sporting Organisations Award

107. State Government Agencies Administration Award

108. Stevedoring Industry Award

109. Storage Services and Wholesale Award

110. Sugar Industry Award

111. Supported Employment Services Award

112. Surveying Award

113. Telecommunications Services Award

114. Textile, Clothing, Footwear and Associated Industries Award

115. Timber Industry Award

116. Transport (Cash in Transit) Award

117. Travelling Shows Award

118. Vehicle Manufacturing, Repair, Services and Retail Award

119. Waste Management Award

120. Water Industry Award

121. Wine Industry Award

122. Wool Storage, Sampling and Testing Award

[34] Thus, as seen from the extracts, some of the other features of the 2014 Agreement include:

• by operation of clause 3, it is expressed to bind casual, fixed-term or permanent (full-time or part-time) employees employed by CoreStaff who are supplied as labour on an on-hire basis to CoreStaff’s clients in New South Wales;

• the 2014 Agreement incorporates the National Employment Standards;

• the incorporated award terms are to be read as altered to incorporate necessary changes resulting from them being provisions of the 2014 Agreement rather than provisions of an award; and

• where there is any inconsistency between a term in the 2014 Agreement and a term of a relevant award, the term in the 2014 Agreement shall prevail to the extent of the inconsistency.

[35] The 2014 Agreement provides the following as to wages and hours:

• as to pay increases, for the applicable rate of pay for the employee’s classification derived from the applicable Schedule A modern award for work performed is increased by the amount of each national minimum wage order made in an annual wage review by the Fair Work Commission effective from 1 July each year, with a rate of pay which is 0.5 per cent greater than the rates derived from the applicable modern award as adjusted for annual wage review increases for the term of the 2014 Agreement; and

• the ordinary hours of work are an average of 38 hours per week, which can be averaged in accordance with the averaging provisions (where applicable) from the Schedule A modern awards – with, subject to a proviso noted in the 2014 Agreement, capacity to vary hours to suit the needs of the operations on site and/or client needs (but note, separately, the effect of undertakings provided in connection with the approval of the 2014 Agreement).

[36] The Form F17 - Employer’s statutory declaration in support of an application for approval of an enterprise agreement (as that form stood in its approved iteration as of 28 March 2014) in support of the application for the approval of the 2014 Agreement contained questions which were asked (in bold text) and answered (mostly in plain text) for CoreStaff as follows:

“Reference instruments

3.1 List the modern award(s), if any, that currently cover the employer and any of the employees covered by this agreement.

See Schedule A of the agreement.

3.2 List the pre-reform award(s) of NAPSA(s) that covered the employer and any of the employees covered by this agreement as at 31 December 2009.

Given the nature of Schedule A, the relevant NAPSA or pre-reform award will apply depending on the state or territory the employee is working. Further information can be provided if required.

Translating classifications

3.3 Are any of the classifications in the agreement different from the classifications in any of the reference instruments(s)?

[ ] Yes

[X] No

Improvements and reductions

3.4 Does the agreement contain any terms and conditions of employment that are more beneficial than equivalent terms and conditions in the reference instrument(s) listed in questions 3.1 and 3.2 and/or does the agreement confer any entitlements that are not conferred by those reference instruments?

[X] Yes

[ ] No

If you have answered yes to question 3.4 - Identify the terms and conditions of the agreement that are more beneficial than, or are not conferred by the reference instruments. Your answer should indicate whether all or only some of the employees are affected and, if only some employees are affected, identify the groups of employees affected.

Clause 7.3 of the agreement provides that employees will be paid a rate of pay which is 0.5% greater than the modern award rates.

3.5 Does the agreement contain any terms that are less beneficial than equivalent terms and conditions in the reference instrument(s) listed in questions 3.1 and 3.2 and/or does the agreement confer any entitlements that are not conferred by those reference instruments?

[ ] Yes

[X] No

If you have answered yes to question 3.5 – Identify the terms and conditions of the agreement that are less beneficial and are not conferred by the reference instruments. Your answer should indicate whether all or only some of the employees are affected and, if only some are affected, identify the groups of employees affected.

Not applicable.

Exceptional circumstances (where the agreement fails the better off overall test)

3.6 Do you think that the agreement passes the better off overall test?

[X] I think the agreement does pass the better off overall test

[ ] I don’t think the agreement passes the better off overall test

…”

[37] The application for the approval of the 2014 Agreement was allocated to Senior Deputy President Watson. Despite the responses in the employer’s declaration that there were, for example, no less beneficial terms than in any of the reference instruments (and, it may be noted, no different classifications either) the Senior Deputy President had a number of preliminary concerns about the 2014 Agreement. In correspondence dated 23 October 2014, the Senior Deputy President wrote to CoreStaff’s General Manager and CoreStaff’s then-representative, The Australian Industry Group (“the AIG”). The detailed correspondence of the Senior Deputy President set out, over eight pages, some preliminary observations as well as directions for the provision of further information by CoreStaff. The Senior Deputy President did not raise any issues about casual employment-related matters or classifications.

[38] Among other matters, the Senior Deputy President wrote under the paragraph heading of “Better Off Overall Test”:

“… In this respect, I note that clause 8 - Hours of work of the Agreement, prescribes ordinary hours of work of an average 38 hours per week (clause 8.1) and provides for variation of hours to suit the need of the operations on site and/or clients (clause 8.2). These provisions would prevail over the relevant terms of otherwise applicable modern awards, by virtue of clause 5.3 of the Agreement.

In respect of clause 8.1 of the Agreement, clause 21.1 of the Black Coal Mining Industry Award 2010 [MA000001] (Black Coal Award) provides for ordinary hours of work of an average of 35 hours per week over the roster cycle. On its face, the Black Coal Award is more beneficial than the Agreement provision in respect of employees within the coverage of the Black Coal Award and the Agreement provision would result in a disadvantage to such employees through a diminution of payments in respect of the 36th, 37th and 38th hours for which clause 17.2 of the Black Coal Mining Industry Award requires for overtime payment, which would need to be assessed, in respect of employees otherwise subject to the Black Coal Award, against other more or less beneficial Agreement terms.

Other awards, for example clause 33.1 of the Building and Construction General On-site Award 2010 [MA000020] (Building Award), limit the average 38 ordinary working hours to work undertaken on Monday to Friday (other than in respect of shiftworkers), within a defined spread of hours. Clause 8.1 of the Agreement contains no such limitations. On its face, this is less beneficial than the Building Award provision and would result in a disadvantage to such employees through a diminution of payments in respect of overtime payments for work outside the Building Award spread of hours and on weekends. Similar issues would arise in respect of other modern awards.

Further, clause 8.2 of the Agreement appears to provide for the variation of hours, constrained only by the needs of operations on site and/or clients, unconstrained by modern award restrictions on the variation of hours such as appear, for example, in clause 36.5 of the Manufacturing and Associated Industries and Occupations Award 2010 [MA000010] (Manufacturing Award) in respect of arranging ordinary working hours.

The failure to identify in question 3.5 of the Form F17, the less beneficial ordinary hours provision in clause 8.1 of the Agreement against clause 21.1 of the Black Coal Award suggests that CoreStaff has not fully or accurately assessed the Agreement provisions which can or may prevail over comparable provisions of each of the 122 Modern Awards in order to better inform CoreStaff at question 3.6 of the Form F17 if the Agreement does pass the better off overall test.

In order to assist the undertaking of the BOOT, CoreStaff is directed to provide full and accurate answers to questions 3.4 and 3.5 of the Form F17, identifying each more or less beneficial Agreement provision against the modern awards in Schedule A of the Agreement. I accept that clause 7.3 does provide for wage rates 0.5% in excess of those provided for in each relevant modern award.”

(my underlining)

[39] The Senior Deputy President also raised a range of other issues under paragraph headings titled “Genuine agreement – provision of or access to relevant materials”, “Clause 6 - Building Code Compliance”, “Clause 12 - Flexibility arrangements”, “Clause 14 - Dispute resolution”, “Clause 11 - Superannuation” and “Conclusion”.

[40] On 31 October 2014, the AIG sent correspondence/submissions on behalf of CoreStaff seeking to respond to the matters which had been raised earlier by the Senior Deputy President. The correspondence addressed matters mostly under the same paragraph heading topics that were set out initially by the Senior Deputy President. Under a paragraph headed “Better off overall test”, the AIG wrote:

“The agreement is better off overall [sic] when compared to the 122 modern awards which are incorporated into the agreement by virtue of Schedule A of the Agreement. CoreStaff did thoroughly consider the terms of the Agreement as compared to these reference instruments and is of the view that every employee and prospective employee is better off overall under the Agreement when compared to any of the modern awards, due to the 0.5% per hour above the award wage entitlement. No other term of the modern awards are intended to be circumvented by the Agreement. As such, an employee covered by the Agreement will be entitled to all applicable modern award terms, plus the 0.5% above award payment per hour that is payable under the Agreement.

Clause 8.1 of the Agreement is not intended to circumvent any other hours of work clause in a modern award. As such, the attached undertaking clarifies this point.

In relation to clause 8.2 of the Agreement, the clause is a general statement about the nature of on-hire employment and recognises that any such variation needs to be conducted in accordance with clause 8.1 and Schedule A of the Agreement.”

(my underlining)

[41] Moreover, in a supplementary statutory declaration dated 17 November 2014 that was additional to the Form F17 statutory declaration, Ian Jones, General Manager of CoreStaff, also identified certain matters in support of the application for the approval of the 2014 Agreement.

[42] In a decision dated 19 November 2014 ([2014] FWCA 8233), the Senior Deputy President approved the 2014 Agreement. The approval decision read, in part:

“[2] I am satisfied that each of the requirements of ss.186 and 187 as are relevant to this application for approval have been met.

[3] My satisfaction as to s.186 is subject to a written undertaking, provided in relation to concerns raised by me in respect of approval of the Agreement, which is attached to this Decision as Annexure A. In accordance with s.191(1)(b) of the Act the undertaking is taken to be a term of the Agreement. A copy of the undertaking is attached to the Agreement.

[4] The agreement does not contain a flexibility provision in the terms of s.202 of the Act. Pursuant to s.202(4) of the Act, the model flexibility term prescribed by the Fair Work Regulations 2009 is taken to be a term of the Agreement.

[5] The Agreement is approved and, in accordance with s.54, will operate from 26 November 2014. The nominal expiry date of the Agreement is 18 November 2018.”

[43] The undertakings provided by CoreStaff in connection with the approval of the 2014 Agreement, to which reference was made in the approval decision, relevantly read:

“In accordance with section 190 of the Fair Work Act 2009 (Cth), we provide the following undertaking in respect of the CoreStaff NSW Enterprise Agreement 2014 (Agreement).

That clause 8 of the Agreement be amended to read:

8.1 The ordinary hours of work will be an average of 38 hours per week unless otherwise stipulated by the applicable modern award listed in “Schedule A”. Ordinary hours can be averaged in accordance with the averaging provisions (where applicable) for the modern awards listed in “Schedule A”.

8.2 CoreStaff and Employees recognise the value of flexibility in relation to work arrangements and hours particularly in the context of on-hire employment. The parties therefore agree that hours may be varied in accordance with provisions contained in the applicable modern awards listed in “Schedule A”.

That clause 6.3 be deleted.”

[44] Relevantly, although the Form F17 employer’s statutory declaration indicated there were no less beneficial terms in the 2014 Agreement than in the 122 modern awards it incorporated, the Senior Deputy President raised certain matters either not identified or not known to CoreStaff in its Form F17, including the fact the Black Coal Award had a 35-hour week for full-time employees.

[45] Given the careful and conscientious attention that Senior Deputy President Watson brought to his consideration of the 2014 Agreement in identifying in his correspondence matters that CoreStaff had failed to identify in the Form F17 as to matters including detriments, it strains credulity to suppose that the Senior Deputy President would have approved an enterprise agreement which, as CoreStaff would later have it, would give it the imprimatur to introduce casual employment classifications for persons employed by it as production and engineering employees in the black coal mining industry to whom the Black Coal Award otherwise would apply with, for example, no form of casual loading, minimum engagement/payment provisions or the like (or, by extension, in relation to the other modern awards which did not allow for casual employment, namely, the Fire Fighting Industry Award, the Maritime Offshore Oil and Gas Award and the Seagoing Industry Award). Further, in such respects, the AIG had submitted in response to the better off overall concerns that had been raised by the Senior Deputy President: “CoreStaff did thoroughly consider the terms of the Agreement as compared to these reference instruments and is of the view that every employee and prospective employee is better off overall under the Agreement when compared to any of the modern awards, due to the 0.5% per hour above the award wage entitlement. No other term of the modern awards are intended to be circumvented by the Agreement.”

[46] A “circumvention” of the Black Coal Award necessarily would arise, however, from the introduction of casual employment if the 2014 Agreement was presupposed in actuality to involve (by what have been described in the Decision and by majority as the “drafters” or the “framers” of the agreement) the creation “at will”, as it were, and on such unconditioned terms as CoreStaff determined otherwise to apply, of casual employee classifications for production and engineering employees where the Black Coal Award did not allow for casual employment of production and engineering employees (and nor did a number of other awards in Schedule A of the Agreement). In this regard, it also may be noted, CoreStaff contended in the appeal that the relevant minimum rate of pay under the 2014 Agreement for persons employed as casual production and engineering employees was the relevant base rate (i.e. for permanent employees) under the Black Coal Award for the work involved, plus 0.5 per cent - and in circumstances where, more typically as to casual employees, there would now be a casual loading usually of an additional 25 per cent. So much was also noted in the Decision at [106] where the Deputy President said “… the effect of clause 7 of the 2014 Agreement is that employees (including casual employees) are entitled to the rate of pay for their classification derived from the applicable modern award plus 0.5%”.

[47] Despite suggestions to the contrary, I would not for a moment suppose or be inclined to conclude that the Senior Deputy President approved the 2014 Agreement with arrangements which may have been “overlooked” by him in connection with the approval as it concerned casual employees, whereby CoreStaff could then determine to pay persons it decided to engage and categorise as casual employees those who could not be otherwise so engaged and categorised under any one or more of the incorporated awards (here, an amount that would be paid to casual employees, so CoreStaff contended, relevantly was the rate for permanent employees under the Black Coal Award, plus 0.5 per cent). That, in my view, is not the proper construction of the 2014 Agreement or flavour of the related materials which were before us in the appeal. If the effect of the 2018 Agreement, properly construed, was to create a new category of employment that was not comprehended by the Black Coal Award, that is not articulated or evinced on a plain reading of the wording of the 2014 Agreement itself (and nor would a reading of any of the other materials tend to support a conclusion as to the creation of a new category or categories of employment). The decision to approve the 2014 Agreement was not the subject of appeal. However, it may be separately observed, in passing, that certain other characteristics associated with the 2014 Agreement (i.e. not turning on the issue of casuals being engaged when the incorporated award did not comprehend such employment) would not, in light of case law developments since 2014, suggest the agreement would be approved in 2019: KCL Industries Pty Ltd [2016] FWCFB 3048 at [23]-[42]; Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd [2017] FCA 1266; One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 (cf Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd [2015] FCA 16).

Developments following the approval of the 2014 Agreement

[48] At the time the 2014 Agreement was put to a vote involving, as it did, four casual employees and comprehending 122 incorporated modern awards, CoreStaff then was providing labour on-hire employees in New South Wales solely or principally in the building and construction industry. Some years after the approval of the 2014 Agreement, that is around May 2017, CoreStaff began also to supply labour on an on-hire basis to clients in the black coal mining industry. In a witness statement dated 7 May 2019 made by Adrian Button, CoreStaff’s Business Manager - Hunter & Newcastle, matters were described in the following way:

“3. CoreStaff is a provider of specialist labour hire and recruitment services to large mining and energy, manufacturing, transport and construction organisations across New South Wales. Our employees that will be covered by the CoreStaff NSW Black Coal Mining Industry Enterprise Agreement 2018 (the Agreement) are placed at CoreStaff client site across the Hunter region, including at Liddell Coal (Liddell) and the Ravenswood Open Cut mine (Ravenswood).”

[49] That is, CoreStaff now provides labour to coal mine operators at what was described as “two pits” in New South Wales - both being Glencore mines. The basis upon which CoreStaff determined to set the rate of pay of its employees who were, commencing from May 2017, undertaking production and/or engineering work (as casual employees) for the host employers was unclear on the evidence and submissions, both below and in the appeal. There was no indication, for example, of any specific, 2014 Agreement-derived method for calculating the amount of wages paid to the relevant employees. It appears that the only evidence as to payments arose in the oral evidence of Mr Button in the proceedings below - and that was in the context of a question about casual conversion:

“PN116 … In terms of my experience taking a permanent job to the market with our casuals, it’s a hit and miss situation because they do lose the casual loading in lieu of their personal leave and annual leave. There are casuals we have that are happy to get the $50 upfront and work that way. Particularly a couple of Anglo operators I had that took 15 year redundancies that are happy to have the flexibility of a casual role and work the last two, three years at Liddell, which is a pit with a lot less pressure on you, it’s in wind down mode. The pressures aren’t on them and they’re quite happy to roll along with me as a casual and be happy at Liddell.”

[50] Thus, the only evidence before the Commission as to what the employees were being paid from the time CoreStaff started providing labour in the black coal mining industry appears to suggest that employees were being paid $50.00 an hour for work performed by them. There was no indication as to what component, if any, constituted a casual loading upon a base rate or something akin to that. For example, there was nothing put in evidence as to payslips with the disaggregated or different pay components.

The 2018 Agreement

[51] Mr Button explained that around the time of commencement of bargaining for the 2018 Agreement, CoreStaff was by then employing approximately a dozen production and/or engineering employees who would be covered by the then-proposed 2018 Agreement. The 2018 Agreement was different in form and substance from the 2014 Agreement. It was specific to production and engineering employees in the black coal mining industry and it contained, for example, flat rates of pay and a range of other features which made it different from the, shortly described, incorporated modern award provisions plus half-of-one-per-cent approach of the 2014 Agreement.

[52] Mr Button said that in meetings and other separate discussions held in August 2018 he used a summary letter to explain the purpose of the 2018 Agreement, the employees’ current coverage under the 2014 Agreement and the need to demonstrate and prove to the Commission that all of CoreStaff’s employees would be better off under the 2018 Agreement than under the Black Coal Award. He explained to employees that “by voting ‘yes’ for the Agreement they would be agreeing that they thought the Agreement was a better deal for them than the Award”. He then went through the letter comparing entitlements. Mr Button also explained to employees, among other matters, that if the 2018 Agreement was not “voted up” they would “continue to be covered by their current 2014 enterprise agreement even if it went past its expiry date until we managed to negotiate a new one that would supercede it.”

[53] The summary letter to which Mr Button referred read:

“Dear CoreStaff Employees

As you consider our proposed Black Coal Mining Industry Agreement we would like to provide you every opportunity to discuss any questions directly with us. I will be available for face-to-face meetings during the next 7 days, as well as available any time via telephone.

The purpose of this agreement is far broader than wages. It is to provide certainty to our employees that we will provide minimum conditions of employment including a safe working environment and pathways to permanent employment. As you’re currently paid above agreement rates that will be protected, there are a number of other potential benefits to this agreement for you.

Some of the key areas of the agreement include:

• 11.4 provides a casual conversion to pathway for CoreStaff casual employees to get into permanent roles

• 12.1 and 12.3 provides the minimum rates and annual increases. As you are aware market rates are often higher than these rates and vary from job to job. This agreement does not mean that you will be paid the rates in the agreement, they are just a minimum

• 12.5 ensures that your current rate of pay will not go down when this agreement is ratified. You will continue at your current rate, however we are negotiating with our client to get the rates at Liddell increased

• 14 is a site bonus for employees once the agreement is ratified

• 19 outlines our [personal protective equipment] requirements ensuring you will be provided with the right clothing

• 26 and 35 provides for unrostered overtime and unrostered public holidays. If you work unrostered time you will get higher rates.

If you have any questions at all, or would like to organise a face-to-face meeting, please don’t hesitate to contact me on [telephone number] or Nathan Hunter on [telephone number].”

[54] The longer, three-page letter that Mr Button went through comparing the proposed 2018 Agreement to the Award included text advising that before “voting on this agreement there are a number of key issues that we need you to consider and the effect it will have on you in your employment with CoreStaff”. Those key issues were identified as follows:

“1. Currently the CoreStaff NSW Enterprise Agreement 2014 applies to your employment. That Agreement will continue to apply to you until it expires and, after expiry, until we have a new one in place.

However, the existing agreement is not a black coal specific industry one and we believe that an industry specific agreement better serves our requirements as well as provide better certainty and protection for you, our employees, by providing conditions of employment that are directly referable to your industry.

For this reason, we will apply the terms of the Black Coal Mining Industry Agreement to you from 7 days after its approval by the Fair Work Commission. [Being a date which, it seems, was anticipated to be before the nominal expiry date of the 2014 Agreement on 18 November 2018]

2. The Black Coal Mining Industry Award (BCMIA) covers your employment with CoreStaff and would apply to you if there was no enterprise agreement. Unlike every other Modern Award, the BCMIA does not have any provision for production and engineering employees to be engaged on a casual basis, though it does allow for staff employees to be engaged as casuals. Hence the requirement for employers who want to engage production and engineering employees engaged on a casual basis to have an Enterprise Agreement, whose purpose is to alter the terms of the Award to better suit the needs of employers and employees in a particular enterprise.

There are a number of differences between our proposed Agreement and the BCMIA. The major difference is the inclusion of casual employment.

For the Agreement to be approved, CoreStaff needs to demonstrate that our employees would be better off under it than they would be if they were engaged as casuals under the BCMIA. Given the BCMIA doesn’t provide for casuals, we need to demonstrate our casuals will be better off than if they were engaged as permanent part time employees under the BCMIA. The steps we have taken to ensure this are outlined below.

3. When you vote on the Agreement you will need to consider that the Agreement does not just cover you as an existing employee, but will also cover all other current and any future employee of CoreStaff who are deployed to work in Production or Engineering roles on a CoreStaff client site in NSW that would otherwise be covered by the BCMIA.

By voting yes you are approving the Agreement and effectively agreeing that it is a better deal for you than you would have if employed under the BCMIA, but you should carefully consider whether you feel that other people would also be better off in the future, based on your knowledge of the industry.

You should also feel free to seek any advice you might need to assist you in making your decision. Also, as above, if you have any questions at all, please don’t hesitate to raise them with me.

In order to assist you, the following table illustrates how our proposed Agreement is different from the BCMIA, and how that will benefit or otherwise effect [sic] you.”

[55] The letter to which Mr Button referred then set out a table which set out various clause numbers of the Agreement, the “Difference from BCMIA” and the “Benefit to You” as follows:

Clause No	Difference from BCMIA	Benefit to You
11.1(c)	The BCMIA makes no provision for casual employment	Casual employment allows CoreStaff to provide employment opportunities in the black coal industry
11.4(c)	Conversion from casual to permanent employment	The BCMIA makes no provision for casual (staff only) employees to be offered permanent jobs. The Agreement provides a commitment to you after 6 months.
12	Our rates range from 1% above BCMIA for new-to industry hires up to 5% above the BCMIA for experienced tradespeople	As these are minimum rates they ensure that you will always be paid above Award wages
12.1(b)	Provides for the ability to pay flat rates as is an industry standard	The detail in this clause ensures that prior to accepting a job with a flat rate, you will be provided a build-up demonstrating how that rate was arrived at, and will be no worse off than if you were engaged on a base rate.
12.3	Ensures that you will get at least a 3% increase or whatever the FWC decides if that is greater	While the last 2 FWC increases have been greater than 3%, the previous 2 years were less than 3%. This ensures that even if FWC provided a 2% increase you would receive a minimum of 3% each year
13.3	We have separate production and engineering classifications whereas the BCMIA groups all employees under the same classifications	This provides a more detailed description of each classification for employees to more easily understand what classification they are. By separating engineering roles we are also ensuring that the minimum rates for tradespeople reflects the effort required to obtain a trade qualification which the BCMIA does not.
14	The BMCIA makes no provision for bonuses	All existing employees will receive a bonus in the first pay period after approval of the agreement by the FWC.
19	The BMCIA does not contain any minimum provision of clothing	The Agreement guarantees a minimum clothing provision
27.5	When day employees are required to work more than 3 consecutive afternoon or night shifts the BCMIA requires overtime rates to be paid for the first shift	The Agreement provides that any day shift employee changing to afternoon or night shift will be paid for the first 3 shifts at overtime rates instead of only their first shift
42	The BMCIA makes no provision for casual employees to be paid in wet weather events	The Agreement ensures casual employees will be paid a minimum of 4 hours

[56] The letter concluded:

“Attached to this communication you will also find a rate build up as outlined in clause 12.1 of the Agreement, demonstrating how the flat rate of pay you are currently being paid is calculated for the roster you currently work, and how you are no worse off compared to being a base rate employee. You can also find an example calculation in Schedule 1 of the Agreement. This is designed to help you understand how we would calculate flat rates for you, and for future employees, if work is performed on a different roster to your current one.

Unfortunately, without an Enterprise Agreement, employers are unable to offer casual opportunities in the black coal industry. We are fortunate that you will be able to continue employment under our existing Agreement, however we believe that the proposed industry specific Agreement will provide a greater benefit to you and better suit our needs and yours. …”

[57] Mr Button’s letter had an attachment showing those sample payments.

[58] The 2018 Agreement was put to a vote and approved.

The Decision

[59] The application for the approval of the 2018 Agreement was opposed by the CFMMEU on various, indeed multiple, bases at first instance. In a detailed exposition, the Deputy President described and analysed matters which had arisen for consideration. Relevantly as to the appeal, the section of the Decision concerning “Explanation re casual employees” (from [94]) addressed matters including, but not limited to, the following concerning the CFMMEU’s “key issue” in the case.

[60] The Decision noted that CoreStaff advised the employees they were casual employees, that the 2014 Agreement currently applied to them and it allowed them to be employed on a casual basis - whereas the CFMMEU submitted this was a fundamental mischaracterisation of the employment status of the employees and/or their employment entitlements. The Decision said the CFMMEU did not seek to adduce sufficient evidence of the kind (hours of work, rosters, work patterns, contractual arrangements and the like) as would be needed for the Deputy President to make a finding about whether the 11 employees, or any of them, were “casual employees at law” around the time the terms of the 2018 Agreement were explained to them and the vote conducted. The following contentions and/or submissions of the CFMMEU were also noted in the Decision:

• Even assuming the employees were engaged under a contract that has been described by the parties as “casual” employees, they were entitled under the 2014 Agreement to all the benefits afforded to permanent ongoing employees under the Black Coal Award.

• It was imperative to the employees’ understanding of their position and providing genuine agreement that they understood this aspect of their entitlements - but as CoreStaff did not tell them of such entitlement, that was not the case.

• On the proper construction of the 2014 Agreement, as developed by reference to relevant clauses, all relevant Black Coal Award terms are incorporated into the 2014 Agreement.

• The body of the 2014 Agreement does not contain a “Types of Employment” clause, and it has no clauses for casual-specific employment conditions such as casual loading or minimum hours of engagement. The reference to casual employees in the coverage clause can be construed only as intended to be a reference to casual employees where the incorporated award makes provision for casual employees.

• Given the Black Coal Award does not permit the employment of casual employees in production or engineering classifications, there is no provision in the 2014 Agreement for casual employment of employees in a production or engineering classification in the black coal mining industry.

• The application of the terms of the incorporated awards in relation to the 2014 Agreement was made express in the AIG’s correspondence of 31 October 2014.

• The employees described by CoreStaff as “casual” and who voted on the 2018 Agreement have at all relevant times been entitled to all the benefits that apply to permanent production and engineering employees under the Black Coal Award with no exclusion of entitlements such as leave.

• Employees voting on the 2018 Agreement, which would introduce casual employment and collaterally remove permanent employment-related entitlements, must have had that explained to them by CoreStaff for a finding to be made that: (a) all reasonable steps were taken to explain the agreement and; (b) the enterprise agreement was genuinely agreed to by the employees who voted on it.

[61] The Deputy President rejected the submissions for the CFMMEU in such respects. He wrote:

[104] Clause 5 has the effect of incorporating many awards, including the BC Award, into the 2014 Agreement. The incorporation of the BC Award into the 2014 Agreement has important implications for any part-time or full-time employees employed by CoreStaff in a production or engineering classification in the black coal mining industry, because the BC Award contains many benefits for such employees. However, because there is no capacity to engage a casual employee in a production or engineering classification under the BC Award, the incorporation of the terms of the BC Award into the 2014 Agreement did not result in any entitlements particular to casual employees in the BC Award being conferred on any person employed by CoreStaff as a casual in a production or engineering classification in the black coal mining industry.”

(my underlining)

[62] The Deputy President considered his views were reinforced by passages from CFMEU v SESLS Industrial Pty Ltd[2017] FWCFB 3659 (“SESLS”), a case where the Full Bench had considered an agreement, and argument concerning the approval thereto, not dissimilar in some ways to what was advanced by the CFMMEU concerning the application for the approval of the 2018 Agreement. The Decision continued:

“[106] Importantly, the fact that there is no capacity under the BC Award to engage a casual employee in a production or engineering classification does not mean, as the CFMMEU contends, that casual employees engaged by CoreStaff in a production or engineering classification are entitled to all of the benefits that apply to part-time or full-time production and engineering employees under the BC Award. The rights and obligations conferred and imposed by the 2014 Agreement on a casual employee in a production or engineering classification arise from the terms of the 2014 Agreement. For example, the effect of clause 7 of the 2014 Agreement is that employees (including casual employees) are entitled to the rate of pay for their classification derived from the applicable modern award plus 0.5%. The classifications in Schedule A of the BC Award include, amongst others, various levels of “mineworker”, which would cover the types of employees employed by CoreStaff to work in the black coal mining industry. Accordingly, an employee (including a casual employee) of CoreStaff would be able to determine their correct classification under Schedule A of the BC Award and then work out the applicable pay rate for that classification under the BC Award. They could then add 0.5% to that pay rate to calculate their pay rate under the 2014 Agreement.

[107] Although a casual employee in a production or engineering classification in the black coal mining industry does not appear to have an entitlement to a casual loading under the terms of the 2014 Agreement, that is a matter which may have been relevant to the BOOT at the time the 2014 Agreement was being considered for approval, but it does not have any particular significance in the context of the current application for approval of the Enterprise Agreement. The fact that the 2014 Agreement does not appear to confer particular entitlements on a casual employee in a production or engineering classification in the black coal mining industry such as casual loading or minimum periods of engagement does not, in my view, mean that such casual employees are entitled to all of the benefits that apply to part-time or full-time production and engineering employees under the BC Award.

[108] Further, if the CFMMEU were correct in its argument that the reference to casual employees in the coverage clause of the 2014 Agreement can only be construed as intended to be a reference to casual employees where the incorporated award made provision for casual employees, it would follow that CoreStaff’s casual employees working in a production or engineering classification in the black coal mining industry would not be covered by the 2014 Agreement. Such a construction would, in my view, be contrary to the objective intention of the makers of the 2014 Agreement, as is evident from the provisions of the 2014 Agreement discussed above.”

(my underlining)

[63] Specifically, the Deputy President thereby rejected the CFMMEU’s contentions: (a) about the alleged fundamental mischaracterisation of the employment status of CoreStaff’s casual employees and/or their employment entitlements; (b) that employees were misled about their status or their entitlements when the terms of the 2018 Agreement and their effect were explained; (c) that CoreStaff failed to take a reasonable step by not informing employees that they were entitled to all the benefits that apply to part-time or full-time production and engineering employees under the Black Coal Award; and (d) that the 2018 Agreement was not genuinely agreed to by employees as a result of the provision of misleading or incorrect information about employment status and/or their employment entitlements.

[64] The Decision set-out a detailed description of matters including the evidence in relation to the explanation provided to employees and the submissions of the CFMMEU and CoreStaff concerning the explanation given to employees, as well as certain conclusions concerning the matters related to the explanation provided and the question of whether the 2018 Agreement had been genuinely agreed. Among other matters, the Deputy President concluded at paragraph [129 (i)]:

“… the 2014 Agreement applied to the employees at the time they voted on the Enterprise Agreement and would have continued to apply to them had the Enterprise Agreement not been voted up and approved. Accordingly, in order for those employees to understand the impact of voting in favour of the Enterprise Agreement, the differences between the Enterprise Agreement and the 2014 Agreement were more important than the differences between the Enterprise Agreement and the BC Award. The Enterprise Agreement is more beneficial than the 2014 Agreement in many respects for casual employees in a production or engineering classification in the black coal mining industry. For example, the Enterprise Agreement requires the payment of a 25% loading to casual employees in a production or engineering classification in the black coal mining industry whereas the 2014 Agreement does not and the Enterprise Agreement includes a casual conversion clause for casual employees in a production or engineering classification in the black coal mining industry whereas the 2014 Agreement does not for such employees.

…

[132] In light of my conclusion that CoreStaff took all reasonable steps to ensure that the terms of the Enterprise Agreement, and the effect of those terms, were explained to employees, I do not need to address CoreStaff’s alternative argument that any deficiency in its explanation was a minor procedural error within the meaning of s 188(2) of the Act.”

(my underlining)

The appeal

[65] The application for the approval of the 2018 Agreement was, as noted earlier, opposed by the CFMMEU on many bases. The 2018 Agreement was approved by the Deputy President, in the end, with a number of undertakings.

[66] The CFMMEU pressed only one ground of appeal, namely:

“2. The Deputy President erred in purporting to reach a state of satisfaction in relation to the matters identified in s 180(5) and/or s 188(1) of the [Fair Work Act 2009] as a result of his conclusion that [CoreStaff] did not mischaracterize the employment status of employees at the time of making the Agreement. The finding by the Deputy President that the relevant employees were, as a matter of law, casual employees was not open on a proper construction of the CoreStaff NSW Enterprise Agreement 2014.”

[67] In its written appeal submissions, the CFMMEU submitted that under the construction favoured by the Deputy President in the Decision, the effect of the 2014 Agreement was: (a) to create a new category of casual employment for production and engineering employees in the black coal mining industry which was not permitted under the Black Coal Award; (b) to create a situation where production employees purportedly engaged as casuals would have no casual loading, possibly no leave entitlements (although this was said by the CFMMEU to be “unclear”), and have no minimum period of engagement - whereas any staff employees in the black coal mining industry employed as casuals under the 2014 Agreement would receive, for working ordinary hours, 1/35^th of the appropriate weekly rate plus a 25 per cent loading instead of leave entitlements, with a minimum of four hours’ payment on each engagement; and (c) to create a similar situation with respect to at least three other modern awards found in Schedule A to the 2014 Agreement which do not contain provision for casual employment. The CFMMEU submitted that the correct question that the Deputy President needed to answer was not whether the 2014 Agreement covered casual employees of CoreStaff engaged in the black coal mining industry, but, rather, what terms and conditions applied to those employees who voted on the 2018 Agreement “and particularly whether they were lawfully engaged as casuals.” For reasons I will turn to, the matter as posed by the CFMMEU appears potentially problematic.

[68] In the appeal, CoreStaff made submissions rejecting the matters raised by the CFMMEU and generally supporting the correctness of the conclusions of the Deputy President.

Consideration

[69] An application pursuant to s 185 of the Act requires that the Commission consider certain, specified matters. The architecture of what is required to be considered has been discussed in many decisions of this Commission, as well as in judgments of the Federal Court and the High Court which need not be exampled in this decision.

[70] It is often part of the role of the Commission - either on its own initiative or as a result of contest of such matters - to, for instance, determine the correct comparator award/reference instrument for the purposes of determining whether an enterprise agreement passes the better off overall test.

[71] Here the CFMMEU urged, however, that the Deputy President should positively make findings in favour of those for which it contended concerning its construction of an existing enterprise agreement, namely the 2014 Agreement, relevantly as such submissions dovetailed with provisions specifying that “the terms of the agreement, and the effect of those terms, are explained to the relevant employees” and the criterion for an agreement to have been “genuinely agreed”. As to those matters, the Act stipulates as follows:

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

Pre-approval requirements

(1) Before an employer requests under subsection 181(1) that employees approve a proposed enterprise agreement by voting for the agreement, the employer must comply with the requirements set out in this section.

…

Terms of the agreement must be explained to employees etc.

(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.

(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:

(a) employees from culturally and linguistically diverse backgrounds;

(b) young employees;

…

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; and

…

188 When employees have genuinely agreed to an enterprise agreement

(1) An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);

(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and

(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.”

[72] The case below for the CFMMEU in opposing the approval of the 2018 Agreement turned, in part, on the proposition that CoreStaff had, contrary to the specification in s 180(5) of the Act, not taken all reasonable steps to ensure that: (a) the terms of the agreement, and the effect of those terms, were explained to the relevant employees; and (b) the explanation was provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees (being, I separately note, employees who did not have a bargaining representative, such as the CFMMEU, or any other bargaining representative for the agreement).

[73] In consequence of the alleged failure to take all reasonable steps to ensure that the terms of the 2018 Agreement, and the effect of those terms, were explained to the relevant employees, the Deputy President could not, the CFMMEU contended, have been requisitely satisfied that the 2018 Agreement had been genuinely agreed to by the employees within the meaning of s 188 of the Act for want of compliance with s 180(5) of the Act as it concerns explanation of the terms of the Agreement and the effect of those terms.

[74] The consideration of the Deputy President dealt with the submissions as advanced below by the parties both in opposition to the approval of the Agreement by the CFMMEU, and in favour of its approval for CoreStaff. It is not, however, the role or function of the Commission in connection with proceedings concerned with an application made pursuant to s 185 of the Act for the approval of an enterprise agreement to pass upon - in a quasi-declaratory style - matters such as the status of the employment of employees under a predecessor or then-existing agreement, much less than, as the Deputy President did, to also purport to pass upon what entitlement to benefits, such as leave entitlements (or, appositely lack thereto) to which the employees may have had, individually or collectively. It must be acknowledged that the findings made by the Deputy President in such respects were in large part in response to his consideration, and ultimate rejection, of the submissions which had been advanced by the CFMMEU in relation to its opposition to the approval of the 2018 Agreement. As to that, I consider the Deputy President was led into error in such respects in purporting to determine those matters he did as to 2014 Agreement-related employment status and employment entitlements of employees employed as production and engineering workers the black coal mining industry whom CoreStaff treated as being casual employees. Here, as the CFMMEU contended, the Deputy President made findings - findings at law, in effect - as to the matters the subject of contention about the employment by CoreStaff of employees in the black coal mining industry in the relevant classifications as casual employees.

Note that superannuation is not dealt with substantively in the Award, but a separate information sheet concerning superannuation in the coal industry is also attached for your information.”

[85] The enterprise agreement summary letter identifies as the first of some of “the key areas of the agreement” being that clause 11.4 of the 2018 Agreement “provides a casual pathway for CoreStaff casual employees to get into permanent roles”. The further, three-page letter advises that: “There are a number of differences between our proposed Agreement and the BCMIA” and “[t]he major difference is the inclusion of casual employment”. The letter continued: “Given the BCMIA doesn’t provide for casuals, we need to demonstrate our casuals will be better off than if they were engaged as permanent part time employees under the BCMIA.” CoreStaff advised that the “steps we have taken to ensure this are outlined below”. As noted above, the three-page letter contained a table which set out various clause numbers of the 2018 Agreement, the difference from the Black Coal Award and the benefit to the employee. I again extract the table, but relevantly only as it specifically addressed casual employment:

Clause No

Difference from BCMIA

Benefit to You

11.1(c)

The BCMIA makes no

provision for casual

employment

Casual employment allows CoreStaff to provide employment opportunities in

the black coal industry

11.4(c)

Conversion from casual to permanent employment

The BCMIA makes no provision for casual (staff only) employees to be offered permanent jobs. The

Agreement provides a commitment to you after 6 months.

and

The BMCIA makes no provision for casual employees to be paid in wet weather events

The Agreement ensures casual employees will be paid a minimum of 4 hours

[86] Whether casual employment is a benefit to employees, as against the benefits to employees of permanent full-time or permanent part-time employment, is a matter about which reasonable minds might differ. (Apart from cases which have considered that matter, see also the November 2018 report of the House of Representatives Standing Committee on Industry, Innovation, Science and Resources titled “Keep it in the regions: Mining and resources industry support for business in regional communities”.)

[87] It is also a matter about which employees who would have been voting upon the 2018 Agreement may have had in the forefront of their minds. That is, there was evidence that some employees of CoreStaff who “are happy to get the $50 upfront”, whereas others were “sweating on” the approval of the 2018 Agreement given it included a casual conversion clause. (It may be noted that the casual conversion provision of the 2018 Agreement concerns casual conversion in employment with CoreStaff itself. The evidence indicated that employees were particularly keen on permanent employment with the host employers, but such arrangements were something that was not part of the 2018 Agreement but which were alluded to by CoreStaff; and, separately, were or may be the subject of some other, unspecified arrangements as between CoreStaff and host employer(s)).

[88] The casual conversion clause in 11.4(c) of the 2018 Agreement reads:

“Casual employees who achieve 6 months continuous service with CoreStaff that is at least equal to the ordinary hours of work over that period shall have the right to request to be converted from a casual employee to a permanent employee.

For avoidance of doubt the ordinary hours over that period are 910 (26 weeks multiplied by 35 ordinary hours).

Requests under this clause are subject to the employee having a satisfactory record of service. CoreStaff cannot unreasonably refuse a request, however if a request is refused CoreStaff must detail the reasons fully in writing to the employee.

Casual employees are not required to convert to permanent employees and retain the right to choose to remain casual employees.

Any disagreement regarding the operation of this clause will be dealt with in accordance with Clause 10 of this Agreement.”

Thus, subject to the provisions of clause 11.4(c) of the 2018 Agreement, an employee may attain the permanency he or she would otherwise have if employed under the Black Coal Award.

[89] As to the advice that “The Agreement ensures casual employees will be paid a minimum of 4 hours” (in the context of information that “The BMCIA makes no provision for casual employees to be paid in wet weather events”), the clause in the 2018 Agreement is not a casual minimum engagement provision as ordinarily understood in modern awards whereby an employee is typically entitled to payment for a minimum number of hours of work per engagement - putting to one side the fact that a permanent employee under the Black Coal Award would be entitled to payment of his or her rostered full-time or part-time hours. There is no minimum engagement/payment provision for casual employees other than as addressed in clause 42 of the 2018 Agreement - which is conditioned in the following way:

“42. Wet Weather

Where a client has directed that employees not attend work due to wet weather, and employees are notified before attending work

(a) Permanent employees will be entitled to payment for ordinary hours that would normally have been worked

(b) Casual employees will not be entitled to payment for hours not worked, however a casual employee who is not notified of stand down prior to attending site will be entitled to a minimum of 4 hours pay.”

(my underlining)

An alternative construction

[90] I have expressed the view earlier that it is not, in relation to an application under s.185 of the Act for the approval of an enterprise agreement, the role of the Commission, either at first instance or on appeal, to purport to pass determinatively upon the employment status, or rights and entitlements, of those employees of CoreStaff who worked in production and engineering roles in the black coal industry - whether derived from a determination of competing constructions of the 2014 Agreement or otherwise. While I have expressed that view, I would add that my own opinion as to such matters would, in any event, differ generally from the conclusions of the Deputy President and the majority concerning the construction of the 2014 Agreement. In short, I prefer - and would accept were it within my proper jurisdictional remit to determine - as being the better construction that which was advanced by the CFMMEU concerning the 2014 Agreement. I would not put what follows any higher than an alternative, available construction given I would not want to fall into what I perceive may be the potential error of purporting to pass determinatively on the matter of the relevant employees’ status and entitlements as a time when CoreStaff treated them as being employed as casuals pursuant to the 2014 Agreement.

[91] One alternative view, for instance, is that given the Federal Court has held in One Key that production and engineering employees covered by the Black Coal Award “could not be employed as casuals” then, as a corollary, neither could production and engineering employees be so employed under the 2014 Agreement - relevantly and specifically, in this particular case, because the Black Coal Award is, within terms, incorporated as part of Schedule A of the 2014 Agreement. This would remain so notwithstanding that clause 3.1 and 3.2 of the 2014 Agreement refer to binding CoreStaff and all casual, fixed-term or permanent (full-time or part-time) employees employed by CoreStaff and who are supplied as labour on an on-hire basis to CoreStaff’s clients in New South Wales. In so concluding, I have noted, but respectfully disagree with, the conclusions of the Deputy President that read:

“[106] Construing the terms of the 2014 Agreement in context and having regard to their purpose, I am of the opinion that the 2014 Agreement covers all casual (as well as permanent) employees employed by CoreStaff and who are supplied as labour on an on-hire basis to CoreStaff’s clients in New South Wales, regardless of which award, if any, they are covered by. That is the ordinary meaning of clause 3.2 of the 2014 Agreement.”

(my underlining and bold)

[92] An enterprise agreement “covers” an employer or employee if the agreement is expressed to cover the employer or employee, except in certain circumstances, which are not presently relevant. An enterprise agreement “applies” to an employer or employee if the agreement is in operation, the agreement covers that employer or employee, and there is nothing in the Act which excludes it or has that effect. At any time that an enterprise agreement applies to an employee in relation to particular employment, the modern award that would otherwise apply to the employee does not apply: see s 57 of the Act. The reference in clause 3.2 of the 2014 Agreement to “all casual … employees” is, it may be noted, the solitary reference in the 2014 Agreement to casuals. Clause 3.2 of the 2014 Agreement, in and of itself and cast as it is, would not, I think, operate so as to create or allow the creation of a hitherto-unknown, new category of casual production and engineering employees in the black coal mining industry - any more than it could or would create casual employment classifications or types concerning those whose employment would, but for the 2014 Agreement, have had their employment covered by the Fire Fighting Industry Award, the Maritime Offshore Oil and Gas Award and the Seagoing Industry Award - being awards which similarly do not have casual employment provisions and are among those included in Schedule A of the 2014 Agreement with its 122 incorporated modern awards. Clause 3.2 of the 2014 Agreement is not, in my alternative view as to the construction that would be preferred in the appeal, a substantive provision that creates new categories of casual employees under incorporated awards such as those under which relevant employees could not otherwise be employed by CoreStaff as casuals. The CFMMEU contended as much, and I consider the union may well be correct in such respects.

[93] To amplify matters, the 2014 Agreement does not otherwise address what minimum pay and conditions would apply to production and engineering employees that CoreStaff purported to employ on only a casual basis. Casual employment in production and engineering roles in the black coal mining industry is a form of employment or employment classification that is simply not comprehended by the Black Coal Award as incorporated in the 2014 Agreement. That is, clause 10 of the Black Coal Award is concerned with “Types of employment”. It reads:

“10.Types of employment

10.1 An employer may employ an employee in any classification included in this award in any of the following types of employment:

(a) full-time;

(b) part-time; or

(c) in the case of classifications in Schedule B – Staff Employees, casual.

10.2 Full-time employment

A full-time employee is an employee whose average ordinary hours of work will be 35 hours per week.

10.3 Part-time employment

(a) A part-time employee is an employee who:

(i) works less than 35 hours per week;

(ii) has reasonably predictable hours of work; and

(iii) receives, on a pro rata basis, equivalent pay and conditions to those of full-time employees who do the same kind of work.

(b) At the time of engagement the employer and the part-time employee will agree in writing on a regular pattern of work, specifying at least the hours worked each day, which days of the week the employee will work and the actual starting and finishing times each day.

(c) Any agreed variation to the regular pattern of work will be recorded in writing.

(d) All time worked in excess of the hours as mutually arranged will be overtime and paid for at the rates prescribed in clause 17 – Overtime.

(e) A part-time employee will be paid per hour 1/35th of the weekly rate prescribed for the classification, group or level on which the employee is engaged.

10.4 Casual employment [concerning only Schedule B – Staff Employees]

(a) A casual employee is one engaged and paid as such.

(b) A casual employee, for working ordinary hours, will be paid 1/35th of the appropriate weekly rate, plus 25% instead of the leave entitlements under this award, with a minimum four hours payment on each engagement.”

[94] Thus, the Black Coal Award delineates as between the Schedule A production and engineering employees and, on the other hand, the Schedule B staff employees. Separately, the Black Coal Award also refers to apprenticeship-related employment matters.

[95] It at least seems arguable, as the CFMMEU submitted, that CoreStaff’s “casual” production and engineering employees in the black coal mining industry may properly have been entitled otherwise to being treated as permanent full-time or permanent part-time employees with, as the Full Court described matters in One Key, “the additional benefits of permanent employment”.This is putting to one side, again in a view alternative to that of the Deputy President, any issues which may quite separately arise from considerations flowing from WorkPac Pty Ltd v Skene [2018] FCAFC 131. In reading the industrial media reports, hardly a week seems to go by in recent times without news about developments in the wake of Skene, including commencement of proceedings involving, for example, claims, cautions about potential liability and cautions about potential accessorial liability.

Coverage of labour hire/on hire employers in the Black Coal Award

[96] There is a further matter which I might also note, in passing, being a matter which was not referred to at first instance or in the appeal.

[97] As noted earlier, the Form F17 for the 2014 Agreement contained a question which was asked (in bold) and answered (in plain text) as follows:

“Reference instruments

3.1 List the modern award(s) if any that currently cover the employer and any of the employees covered by this agreement.

See Schedule A of the Agreement.”

The Form F17 for the 2018 Agreement application similarly asked and was answered as follows:

“Reference instruments

3.1 List the modern award(s) if any that currently cover the employer and any of the employees covered by this agreement.

Black Coal Mining Industry Award 2010.”

[98] Notwithstanding the responses provided by CoreStaff in the Form F17 for the 2014 Agreement and the Form F17 for the 2018 Agreement as to current award coverage applicable to CoreStaff, the Black Coal Award did not, it appears, cover CoreStaff. That is, CoreStaff was not, and is not, an employer “engaged in the black coal mining industry” within the meaning of clause 4 of the Black Coal Award. It was CoreStaff which was the employer in the triangular employment relationship of labour on-hire, not the host employers engaged in that industry. The Deputy President seemingly received no assistance from CoreStaff in that the information in the Form F17 employer’s statutory declaration in support of its application for the approval of the 2018 Agreement asserted that CoreStaff was, itself, an employer covered by the Black Coal Award. Moreover, the case for the CFMMEU below similarly proceeded in the context of, among other matters, comparisons with the Black Coal Award and the level of explanation provided to employees, including particularly about casual employment.

[99] In this regard, of the 122 modern awards all bar nine of them contain coverage provisions concerning labour hire/on hire employers - stemming initially from the model provisions discussed in Award Modernisation [2009] AIRCFB 945 (“2009 Award Modernisation Case”) at [105]-[126]. (The 2009 Award Modernisation Case dealt also with coverage provisions concerning group training organisations within those same paragraphs of that decision.) See also, for example, the Statement of the AIRC in Award Modernisation [2009] AIRCFB 925 as to not making a separate modern award for the on-hire industry.

[100] So far as I can ascertain, the nine modern awards that do not contain labour hire/on hire employer coverage clauses are: the Aluminium Industry Award; the Black Coal Mining Industry Award; the Contract Call Centres Award; the Electrical Power Industry Award; the Fire Fighting Industry Award; the Hydrocarbons Industry (Upstream) Award; the Mining Industry Award; the Salt Industry Award; and the Telecommunications Services Award. While there are some wording differences in the way the matter is approached in the 113 out of the 122 modern awards which contain coverage provisions concerning labour hire employers, the Manufacturing and Associated Industries and Occupations Award (“Manufacturing Award”) may be used as an example. The coverage provision of the Manufacturing Award reads in part:

“4. Coverage

4.1 This award covers employers throughout Australia of employees in the Manufacturing and Associated Industries and Occupations who are covered by the classifications in this award and those employees.

4.2 The award does not cover:

(a) an employer who is outside the scope of clause 4.9(a) or (b) unless such employer employs an employee covered by clause 4.9(c) and the employer is not covered by another modern award containing a classification which is more appropriate to the work performed by the employee; or

(b) an employee excluded from award coverage by the Act; or

(c) exempt employers and employees, as set out in clause 4.11.

4.3 The award does not cover employees who are covered by a modern enterprise award, or an enterprise instrument (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees.

4.4 The award does not cover employees who are covered by a State reference public sector modern award, or a State reference public sector transitional award (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees.

4.5 This award covers any employer which supplies labour on an on-hire basis in the industry (or industries) set out in clauses 4.9(a) or (b) in respect of on-hire employees in classifications covered by this award, and those on-hire employees, while engaged in the performance of work for a business in that industry (those industries).

4.6 This award covers any employer which supplies on-hire employees in occupations set out in clause 4.9(c) covered by classifications in this award and those on-hire employees, if the employer is not covered by another modern award containing a classification which is more appropriate to the work performed by the employee.

4.7 Clauses 4.5 and 4.6 operate subject to the exclusions from coverage in this award.

4.8 This award covers employers which provide group training services for apprentices and/or trainees engaged in the industries and/or parts of industry and/or occupations set out at clause 4.9 and those apprentices and/or trainees engaged by a group training service hosted by a company to perform work at a location where the activities described herein are being performed. Clause 4.8 operates subject to the exclusions from coverage in this award. …”

(my underlining)

[101] In a way that is complementary to what is set out in the coverage clause of the Manufacturing Award, clause 3 (Definitions and interpretation) of that modern award also provides definitions including a definition of “on-hire”:

“Definitions and interpretation

3.1 In this award, unless the contrary intention appears:

…

employee means national system employee within the meaning of the Act.

employer means national system employer within the meaning of the Act.

…

NES means the National Employment Standards as contained in sections 59 to 131 of the Fair Work Act 2009 (Cth).

on-hire means the on-hire of an employee by their employer to a client, where such employee works under the general guidance and instruction of the client or a representative of the client.

…

3.2 Where this award refers to a condition of employment provided for in the NES, the NES definition applies.”

(my underlining)

[102] There are no provisions equivalent to clauses 4.5 and 4.6 (or the clause 3.1 definition of “on-hire”) of the Manufacturing Award in the Black Coal Award; absent like provisions in the Black Coal Award, CoreStaff is not, it appears, an employer covered by the Black Coal Award - albeit workers employed to undertake relevant work comprehended by that award would be so covered. In that regard, see generally the provisions of Ch 2, Pt 2-1, Div 2, Sub-Div A of the Act dealing with “Terms and conditions of employment provided by a modern award”, including, for example, s 45 (Contravening a modern award) and s 48 (When a modern award covers and employer, employee, organisation or outworker entity).

[103] To bring this into sharper focus, I take notice of the fact that in an application lodged on 29 March 2019 (AM2019/8), the AIG presently has an application before the Commission seeking certain variations to the Black Coal Award (information about the application is available on that part of the Commission public website concerning applications to vary modern awards). Among other proposed variations, the application seeks to amend the coverage provisions in clause 4 of the Black Coal Award. One aspect of the proposed variations is such that clause 4 of the Black Coal Award would be varied to include - for the first time - reference to labour hire employers and employees within its coverage (with the clause numbers below referring to the re-numbered clause in the proposed variation, rather than the clause numbering in the Black Coal Award as it presently stands):

“(b) An employer which supplies labour on an on-hire basis in the parts of the industry set out in clause 4.2(a) in respect of on-hire employees in classifications covered by this award, and those on-hire employees, while engaged in the performance of work in the parts of the industry set out in clause 4.2(a). This subclause operates subject to the exclusions from coverage in this award.”

[104] Among the various other consequences, considerations with respect to the accuracy in the Form F17 statutory declarations for the applications in relation to the 2014 Agreement and the 2018 Agreement may arise. As noted earlier, question 3.1 in each of the Forms F17 sought that the employer’s representative “List the modern award(s) if any that currently cover the employer and any of the employees covered by this agreement.” In relation to the Form F17 for the 2014 Agreement, the information provided in response to question 3.1 was: “See Schedule A of the Agreement”, with Schedule A being the list of 122 modern awards including the Black Coal Award. That information in the Form F17 was seemingly incorrect not only as to the Black Coal Award, but also, it at least appears, as to the other modern awards which similarly do not have coverage clauses concerning labour hire employers of the type arising after the 2009 AIRC Award Modernisation decision (namely, the Aluminium Industry Award; the Contract Call Centres Award; the Electrical Power Industry Award; the Fire Fighting Industry Award; the Hydrocarbons Industry (Upstream) Award; the Mining Industry Award; the Salt Industry Award; and the Telecommunications Services Award).

[105] In relation to the Form F17 for the 2018 Agreement, the information provided in response to question 3.1 was: “Black Coal Mining Industry Award 2010”. But as the Black Coal Award seemingly does not cover an employer which had as its primary activity “Labour hire and recruitment services”, the response to question 3.1 was also seemingly incorrect.

[106] Separately, and more jurisdiction-specifically in relation to an application for the approval of an enterprise agreement, the Commission must, by s 186(2)(d) of the Act, be satisfied that the subject agreement passes the better off overall test. Section 193 provides as follows:

“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 each award covered employee, and each prospective award covered 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.

…

Award covered employee

(4) An award covered employee for an enterprise agreement is an employee who:

(a) is covered by the agreement; and

(b) at the test time, is covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and

(iii) covers his or her employer.

Prospective award covered employee

(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:

(a) would be covered by the agreement; and

(b) would be covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) would cover the person in relation to the work that he or she would perform under the agreement; and

(iii) covers the employer.

Test time

(6) The test time is the time the application for approval of the agreement by the FWC was made under subsection 182(4) or section 185.

FWC may assume employee better off overall in certain circumstances

(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.”

(my underlining)

[107] Hence, the consideration by the Commission of the better off over test concerning a proposed agreement apropos the relevant award necessarily engages ss 193(4) and (5) of the Act, i.e., the coverage of the employer as well as coverage of the work to be performed by an employee under the agreement. That is, in each case of an award-covered employee or a prospective award-covered employee, when considering salient matters concerning the better off overall test, the award must be in operation, and cover the employer as well as the employee in relation to the work that the employee/prospective employee will perform under the agreement.

[108] Approached another way, before the better off overall test can be properly applied and the statutory duty of the Commission discharged, it is necessary to correctly identify the modern award that covers the relevant employees and their employer in relation to the work to be performed under the enterprise agreement: see, for example, Construction, Forestry, Mining and Energy Union v BJ Jarrad[2013] FWCFB 8740; Maritime Union of Australia v Sea Swift Pty Ltd[2016] FWCFB 651; United Voice v Gold Coast Kennels Discretionary Trust t/a AAA Pet Resort[2018] FWCFB 128. The Commission must conduct the better off overall assessment using the correct modern award being, relevantly for present purposes, an award that covers the work the employee or prospective employee is to perform under the agreement and that covers the employer of the employee or prospective employee.

[109] It is possible, thereby, that the approval of the 2018 Agreement might be called in question for reasons different from those raised by the CFMMEU in the appeal. In the absence of any appeal grounds and/or submissions on this other matter, I will take the matter no further. The proper exercise of jurisdiction in relation to the approval of enterprise agreements is, however, a matter the Commission, whether at first instance or on appeal, must determine for itself. Were it not for the conclusion of the majority that permission to appeal should not be granted, I would have proposed a relisting of the matter to allow the parties to make further submissions, should they wish to do so, on what seems to be the fairly obvious matter of the absence of a coverage clause in the Black Coal Award that captures labour/on-hire arrangements given the prevalence of such arrangements that feature in the coverage clauses within nearly all other modern awards.

Conclusion

[110] The issues raised in this appeal relate to significant questions regarding the engagement by a labour hire and recruitment business of production and engineering workers as casual employees in the black coal mining industry. The questions include the interaction with the Black Coal Award. Other matters include, but are not limited to, the explanation of the terms and effect of a proposed enterprise agreement said by CoreStaff to its employees to make them better off overall as casuals for the reasons in the nature of the explanations that were provided. This is particularly so in this case of the explanation provided, where the entire Black Coal Award specifically was incorporated by reference in the 2014 Agreement.

[111] The question is what should the employees have been told, and what were they told about the 2018 Agreement? Regardless of the CFMMEU’s construction point concerning the 2014 Agreement, the explanation provided to the employees about the terms and the effect of the Agreement was disingenuous in, for example, presenting the opportunity for casual conversion as one of the principal benefits of the 2018 Agreement when, under the Black Coal Award, employees could be employed only as permanent full-time or permanent part-time employees; and similar observations may be made about the wet weather-related minimum engagement clause. In consequence, the supposed benefit of casual conversion in the 2018 Agreement, which some employees at least were “sweating on” in connection with the approval of the 2018 Agreement, was an illusory one or was even, as the CFMMEU contended, “positively misleading”. The casual conversion provision was presented as a benefit as against the award - but that squarely left to one side in the explanation that under the Black Coal Award production and engineering employees cannot be employed other than on a permanent basis with the obvious result the employees would have no need in those circumstances for, let alone benefit from, casual conversion provisions under the 2018 Agreement considered in the alternative context of employment under the Black Coal Award. If the employees were sweating on having the opportunity of permanent employment, that was something already provided as a feature of the Black Coal Award as it is the only type of employment with the matters such as the “suite of entitlements” of incidents of employment associated with that type of employment.

[112] I would grant permission to appeal and uphold the appeal. I would find that the Deputy President erred in purporting to reach a state of satisfaction in relation to the matters identified in s 180(5) and/or s 188(1) of the Act, at least in as much as such conclusions proceeded on the basis of findings which purported to determine, on the construction point, no outcome other than that the employees were, as a matter of law, casual employees and not entitled to any or all of the benefits of permanent employment. I would quash the Decision. Given that the majority has concluded that permission to appeal should not be granted, it is unnecessary to finally determine what should follow in consequence of the appeal outcomes I would favour.

VICE PRESIDENT

Appearances:

C Howell of counsel for the appellant

C Brown, solicitor, for the respondent

Hearing details:

2019.

Sydney:

21 August.

Printed by authority of the Commonwealth Government Printer

1 [2019] FWCA 4403

2 It does not appear to be contested that some or all of the 11 casual employees who voted on the 2019 Agreement were engaged in production or engineering roles in the black coal mining industry at the time of the vote.

3 CFMMEU outline of submissions, paragraphs 12 and 13

4 Ibid

5 CFMMEU outline of submissions, paragraph 16(f)

6 Transcript of proceedings, 24 May 2019, PN116

7 Decision at [110]-[111]

8 Decision at [129]

Construction, Forestry, Maritime, Mining and Energy Union v CoreStaff NSW Pty Ltd

[2019] FWCFB 5916

18 SEPTEMBER 2019

DECISION