Construction, Forestry, Maritime, Mining and Energy Union v Hays Specialist Recruitment (Australia) Pty Ltd
[2020] FWCFB 1891
•21 APRIL 2020
| [2020] FWCFB 1891 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Construction, Forestry, Maritime, Mining and Energy Union
v
Hays Specialist Recruitment (Australia) Pty Ltd; Mr Samuel Lovass; Mr Justin Coden
(C2020/219)
VICE PRESIDENT HATCHER | SYDNEY, 21 APRIL 2020 |
Appeal against decision [[2019] FWCA 8698] of Commissioner Spencer at Brisbane on 23 December 2019 in matter number AG2019/2416 - better off overall test – explanation of terms of the agreement to employees – whether requirements of s 188(1)(c) met – permission to appeal refused
Introduction
[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) against a decision of Commissioner Spencer made on 23 December 2019 1 (decision) to approve the Hays Specialist Recruitment (Australia) Pty Ltd Queensland Black Coal Enterprise Agreement 2018 (Agreement). The application for approval of the Agreement was made by Hays Specialist Recruitment (Australia) Pty Ltd (Hays). The CFMMEU was a bargaining representative for the Agreement and objected to its approval in the proceedings before the Commissioner.
[2] An appeal under s 604 of the FW Act is an appeal by way of rehearing and the Commission’s powers on appeal are exercisable only if there is error on the part of the primary decision maker. There is no right to appeal and an appeal may be made only with the permission of the Commission. Subsection 604(2) requires the Commission to grant permission to appeal if satisfied that it is “in the public interest to do so”. Permission may otherwise be granted on discretionary grounds.
[3] The CFMMEU’s notice of appeal advanced four grounds which contended that the Commissioner erred in approving the Agreement. The fourth ground was not pressed. The remaining grounds were elaborated upon in the CFMMEU’s written submissions and in oral argument before us. The first and second grounds contended that the Commissioner erred in concluding that the Agreement passed the better off overall test (BOOT), and in concluding that Hays had complied with s 180(5) by taking all reasonable steps to explain to employees the terms of the Agreement and the effects of those terms. Ground 3 contended that the Commissioner erred in her consideration of whether there were other reasonable grounds for believing that the Agreement had not been genuinely agreed (s 188(1)(c)).
Ground 1: The better off overall test
[4] The first ground of appeal submits that the Commissioner erred by concluding that the Agreement passed the BOOT against the relevant modern award, the Black Coal Mining Industry Award 2010 (Award). The notice of appeal frames this ground in general terms that are directed at the Commissioner’s assessment of the BOOT in respect of all current and prospective employees. However, the CFMMEU’s written submissions on this ground concerned the Commissioner’s assessment of the BOOT in respect of prospective casual production and engineering employees employed under the Agreement. We understand the first appeal ground to be confined accordingly.
[5] Of central importance in the present appeal is the fact that the Agreement allows for production and engineering employees to be engaged as casuals. Under the Award, there is no provision for production and engineering employees, who are covered by Schedule A of the Award, to be engaged on a casual basis. Only staff employees, who are covered by Schedule B of the Award, may be engaged as casuals. The Agreement therefore introduces the possibility of casual employment for production and engineering employees otherwise covered by the Award.
[6] Before the Commissioner, the CFMMEU contended that the introduction into the Agreement of a casual mode of engagement for production and engineering employees entailed three particular forms of detriment, as measured against the Award: the loss of job security; the implications of casual employment for a safety critical industry; and the inability of a 25% loading to compensate for the casual nature of employment, particularly given the generous personal leave entitlements which are available to permanent employees under the Award.
[7] These contentions proceeded on the basis that the question of whether the Agreement passed the BOOT in relation to prospective casual production employees involved comparing casual employment under the Agreement with permanent employment under the Award. This does not appear to have been a point of contention before the Commissioner. We note that in CFMEU v SESLS Industrial Pty Ltd 2(SESLS), a Full Bench considered an appeal involving relevantly similar circumstances to those of the present case. In considering the BOOT, as it applied to casual production employees otherwise covered by Schedule A of the Award, the Full Bench in SESLS stated that it assumed, but did not necessarily accept, that the test requires a comparison between casual employment under the agreement and part-time or full-time employment under the Award. We adopt the same approach in this appeal.
[8] The Commissioner addressed her consideration of the BOOT at paragraphs [38] to [48] of her decision. She commenced by identifying four principal contested matters pertaining to the BOOT analysis that had been set out by the parties in a table of “residual issues”. After setting out relevant passages of transcript, the Commissioner concluded as follows:
“[48] The issue of casual employment and whether the Agreement passes the BOOT is a matter for consideration. I accept Mr Brotherson’s submissions that, consistent with the Decision of the Full Bench in the SESLS Industrial Pty Ltd, the Agreement passes the BOOT with respect to prospective casual employees. In this regard, as was the case in SESLS Industrial Pty Ltd, the Agreement incorporates the Black Coal Award and that while casual employment is not permitted under the Black Coal Award, the Agreement provides a 25% loading applicable to employees as set out in the aforementioned case authority. Further, the undertakings provided by the Applicant include a NES undertake [sic] and a reconciliation process that respond to the BOOT concern. Accordingly, I am satisfied that the Agreement also passes the BOOT for prospective employees.”
[9] The CFMMEU submitted that the Commissioner wrongly proceeded on the basis that the decision in SESLS established a general rule that an enterprise agreement that provided a 25% loading for casual employees who would otherwise be covered by Schedule A of the Award (production and engineering employees) would be sufficient to compensate those employees for detriments associated with casual employment, and result in the Agreement passing the BOOT in relation to those employees. The CFMMEU contended that the correct understanding of the Full Bench decision in SESLS is that a 25% loading provided under an enterprise agreement for casual production and engineering employees engaged as casuals was a matter that could be taken into account and that there had been no appealable error in the particular decision that was before the Full Bench in that particular case.
[10] The CFMMEU is correct that the decision of the Full Bench in SESLS did not purport to establish any general rule. 3 However there is nothing in the paragraph from the Commissioner’s decision extracted above, or elsewhere in her decision, that suggests to us that the Commissioner interpreted the decision in SESLS as having established such a rule, or that she applied the decision in such a manner. At [48], the Commissioner simply noted the similarities between the case before her and the facts in SESLS: the Agreement incorporated the Award; the Award did not provide for casual engagement of production and engineering employees; but the Agreement does allow for such casual engagement and provided for a 25% loading. These are relevant observations about a factual correlation between the two cases. They do not reflect the application by the Commissioner of any general rule.
[11] The CFMMEU further contended that the Commissioner failed to identify how the provisions of the Agreement were either superior or inferior to the Award, and that she did not undertake the comparison or weighing process that is inherent in the BOOT and required by s 190. The CFMMEU submitted that the Commissioner failed to advert in her decision to the detriments in the Agreement that it had identified, and did not engage in any deliberative process about whether the other benefits in the Agreement were sufficient to enable her to be satisfied that the Agreement passed the BOOT in relation to prospective casual production and engineering employees.
[12] We reject the contention that the Commissioner failed to conduct the weighing up exercise required by the BOOT. The Commissioner identified contested dimensions of the BOOT and extracted passages of transcript in which relevant matters were addressed, including the significance of the decision in SESLS, which was understandable as several of the arguments advanced by the CFMMEU before the Commissioner had also been put before the Full Bench in SESLS. It is true that the Commissioner did not set out her own analysis of each of the relevant provisions and record precisely how she considered them to weigh in the balance of the better off overall test. However, it is clear that she considered and accepted Hays’ submissions in relation to the BOOT concerns that had been raised by the CFMMEU.
[13] The CFMMEU contended that the Commissioner’s analysis was deficient because, although she referred to the introduction of casual employment as a contested element of the BOOT analysis, she did not take into account three particular dimensions of detriment associated with casual employment that the CFMMEU had identified, and therefore failed properly to consider the significance of the Agreement’s introduction of casual employment for production and engineering employees.
[14] The fact that the Agreement allowed for casual employment of production and engineering employees, when the Award does not, was clearly a matter which the Commissioner was required to consider in her assessment of the BOOT. It is evident from paragraph [48], and her decision as a whole, that she did so. She did not refer separately to the CFMMEU’s three dimensions of detriment associated with casual employment (although the transcript extracted in her decision deals with leave and other entitlements of permanent employees under the Award as against the 25% casual loading under the Agreement). However, in our opinion, although the “three detriments” were clearly relevant to the BOOT and of potential significance, they were not necessarily entitled to the particular weight in the analysis of the BOOT that the CFMMEU sought to assign them. Nor do we consider that they required independent assessment and articulation in the Commissioner’s decision.
[15] First, the CFMMEU’s contentions about the loss of job security associated with casual employment were similar to those advanced in SESLS. They were the subject of argument before the Commissioner. The Full Bench in SESLS took note of these contentions and observed that permanent and part-time employment will not necessarily be more secure than casual employment, although this will often be the case. 4 We concur with these observations.
[16] Secondly, as to the safety-related dimensions of casual employment, we note that in its 4 yearly review of modern awards, the Full Bench stated that, before introducing casual employment for production and engineering employees covered by the Award, it would be necessary to consider the “safety-critical nature of the industry”, and that there was a lack of relevant evidence before the Bench on that question. 5 The Full Bench also noted that the introduction of casual employment for such employees had merit as a matter of “broad principle”. Importantly, these observations concerned the safety net, and whether the Full Bench could be satisfied that introducing casual employment for production employees would be consistent with the modern awards objective. They were not concerned with, and are not necessarily relevant to, the question of whether the casual engagement of production and engineering employees at a particular enterprise should be regarded as a safety-related detriment for the purposes of the BOOT. Further, there was no evidence before the Commissioner to suggest that, at the relevant workplaces covered by the Agreement, casual engagement of production and engineering workers would in fact be associated with particular safety problems, such as to pose a detriment for the purposes of the BOOT in this particular case.
[17] Thirdly, the CFMMEU contended before the Commissioner that the 25% casual loading could not offset the loss of relevant leave conditions, particularly given that under the Award, permanent employees are credited with 105 hours of personal leave at the commencement of employment and can cash out untaken accrued leave on termination in certain circumstances. In SESLS, the Full Bench rejected essentially the same argument, concluding that it was open to the Commissioner to be satisfied that the agreement passed the BOOT for casual production and engineering employees given the 25% loading in the agreement. The Full Bench observed that the presence in the Award of a 25% loading for casual staff employees was a matter which could be taken into account in considering the adequacy of the 25% loading for casual production and engineering employees in the Agreement. We agree. The personal leave provisions in the Award apply equally to permanent production and staff employees and in the absence of any evidence to the contrary, there would appear to be little to distinguish the circumstances of the two in respect of the adequacy of the 25% loading to offset leave conditions attaching to permanent employment.
[18] The Commissioner was not required to reach any particular conclusion about the implications of casual employment for the BOOT generally, or in relation to the three dimensions of detriment associated with casual employment that were put forward by the CFMMEU.
[19] Whether the Commission is satisfied that an employee is better off overall under an agreement than under the relevant award requires an evaluative assessment after consideration of the provisions of the award and the agreement, including the respects in which each may be more beneficial or less beneficial to the employee. As the High Court noted in Aldi Foods Pty Ltd v SDAEA, 6 this kind of assessment has been described in other contexts as “a question, not of principle or of positive findings of fact or law, but of proportion, of balance and relative emphasis, and of weighing different considerations”, involving “individual choice or discretion as to which there may well be differences of opinion by different minds”.
[20] We cannot identify any error in the Commissioner’s assessment of the BOOT in relation to casual employees. Section 186(2)(d) required the Commissioner to decide whether she was satisfied that the agreement passed the BOOT in relation to prospective casual employees.The CFMMEU does not present a mathematical model that demonstrates that casual employees under the Agreement could not be better off than under the Award, and that therefore it was not open to the Commissioner to reach a contrary conclusion. At the hearing, the CFMMEU contended that the value to be placed on the loss of permanent or more secure employment defied monetisation, and that it was not possible to put a value on it. This suggested that it was not possible for any detriment associated with casual employment to be offset, which seems improbable to us, even if one accepts the various forms of detriment associated with casual employment for which the CFMMEU contends. In essence, the CFMMEU’s argument in relation to the BOOT advanced a preference that a greater weight be given to the significance of casual employment under the Agreement. But even if we shared the CFMMEU’s preference, this would not speak to any error on the part of the Commissioner.
[21] The CFMMEU contended that it was not incumbent upon it to demonstrate why the Agreement did not pass the BOOT, but rather for Hays to persuade the Commission that the Agreement passed the test. This may be a correct statement in so far as it relates to the proceedings before the Commissioner. However, an appeal is concerned with the correction of error. In relation to ground 1, no error has been identified.
[22] For these reasons, ground 1 of the notice of appeal is rejected.
Ground 2: explanation of the Agreement
[23] By its second ground of appeal the CFMMEU contends that the Commissioner erred in reaching a state of satisfaction that, for the purposes of ss 180(5) and 188(1), Hays had taken all reasonable steps to ensure that the terms of the agreement, and the effect of those terms, were explained to the employees.
[24] The CFMMEU submits that the possibility of casual employment for production and engineering employees was a significant and important change introduced by the Agreement and that it was a matter that required clear and careful explanation to employees. It says that the explanation provided to employees was inadequate because it did not highlight the fact that production and engineering employees could be engaged as casuals under the Agreement but could not be so engaged under the Award.
[25] The explanatory material provided by Hays to the employees comprised two principal documents, one relating to the Award and the other to the Agreement. The Award explanation document stated that the Award provides for casual employment “for some employees (those in the classification in Schedule B)’ and that ‘the effect of the EA is to make clear that any employee covered by the EA can be employed on a casual basis”. The Agreement explanation document was in similar terms, stating that casuals could be employed under Schedule B of the Award, and under the Agreement casual engagement was also possible for persons covered by Schedule A of the Award.
[26] The CFMMEU submits that the references in these documents to Schedule B of the Award should have been explained, such as by including the additional words “staff employees”. It says that the wording used by Hays in the documents was likely to mislead employees because it did not specifically explain that production and casual employees would be losing an entitlement to be employed on a permanent basis.
[27] We do not consider the wording in the two explanatory documents to be misleading. The Award explanation document clearly states that “any employee” covered by the Agreement can be employed on a casual basis, and that this is a change vis-à-vis the Award. The Agreement explanation document also states that the Agreement “provides for casual employment for all employees covered by the EA, including those covered by Schedule A”. Employees were provided with a copy of the Award. There was nothing misleading about the Hays’ explanation as to which employees could be employed on a casual basis. The explanatory documents could have gone further and emphasised that Part A of the Award relates to production and engineering employees and that Part B relates to staff employees. But the proposition that the explanatory documents could have been drafted differently, or better, or more clearly does not speak to any error on the part of the Commissioner.
[28] The CFMMEU further contended that the explanation of the terms of the Agreement to employees was deficient because the Award explanation document stated that the redundancy benefits in clause 14 of the Award do not apply to casuals, when nothing in the text of clause 14 excludes casuals from its application. The CFMMEU says that the explanatory material was therefore misleading because it suggested that the Agreement did not effectuate any change by excluding casuals from redundancy entitlements.
[29] We disagree with the CFMMEU’s analysis of the Award provision. Although clause 14.2(b) expressly excludes from redundancy employees engaged for a fixed term or a specified task, the absence of an exclusion in relation to casuals does not suggest that casual employees are included in the scope of the provision. Clause 14.2(a) of the Award defines redundancy. It states that an employee is made redundant for the purpose of the clause if his or her employment is terminated, at the employer’s initiative, because the employer no longer requires the person’s job to be done by anyone or because of insolvency. Ordinarily, each casual engagement stands contractually alone, and a casual employee who is no longer required would simply not be reengaged. We note that the treatment of casual employment in the Award appears to be conceptually consistent with this, in that clause 10.4(b) provides for a minimum of four hours’ payment “on each engagement”. The CFMMEU contended that in some cases casual arrangements might provide for a framework employment agreement, which would need to be terminated in the event of a redundancy situation. We accept that there are such cases. However, there is no suggestion that such arrangements are in use at Hays. Further, it is unclear how the retrenchment payment provisions in clause 14 would apply to a casual, as the quantum of redundancy benefits is expressed by reference to multiples of a week’s pay, which for a true casual will typically vary from week to week. The absence of any provision addressing how one would calculate the payments for casuals suggests that no such payments were intended to apply. It may also be observed that the exemption from the requirement to pay redundancy pay in clause 14.5 where the employer obtains alternative work for the employee has, as one of its conditions, that the alternative work “can reasonably be regarded as permanent”. It is difficult to reconcile this with the proposition that the clause has application to casual employment. We note that the Full Bench in SESLS also appears to have concluded that the Award does not extend redundancy benefits to casuals. 7
[30] In One Key Workforce Pty Ltd v CFMEU, 8the Full Court observed that satisfaction as to whether s 180(5) has been complied with involves an evaluative judgment as to whether reasonable steps were taken, and that on such matters reasonable minds might sometimes and perhaps often differ.9 The Commissioner considered the steps taken by Hays to explain to employees the terms of the Agreement and the effect of those terms. She considered the actual “explanations and the process undertaken” and concluded that a “proper explanation of the terms and their effect was given”.10 This is not a case where an important change to the working arrangements was overlooked or downplayed or ignored by the employer, such that a conclusion that the employer complied with s 180(5) was not open to the member at first instance. The Commissioner’s decision reveals no error in relation to her consideration of s 180(5), or s 188(1) as it intersects with that provision.
Ground 3: “genuinely agreed” (s 188(1))
[31] By its final ground of appeal the CFMMEU contended that the Commissioner erred in her consideration of s 188(1)(c) of the FW Act by confining it to the question of whether the requirement of s 180(5) had been complied with. The CFMMEU submitted that the Commissioner therefore did not properly consider whether there were any other reasonable grounds for believing that the agreement had not been genuinely agreed to by employees.
[32] The CFMMEU submitted that s 188(1)(c) is concerned with the authenticity or moral authority of the agreement and that in this connection, even if the explanation of the terms of the agreement was sufficient for the employer to have complied with s 180(5), the content of the explanation, and the extent to which employees possessed an informed and genuine understanding of the agreement they were asked to approve, remain highly relevant to the Commission’s consideration of s 188(1)(c).
[33] It seems to us unlikely that an explanation of the terms of an agreement might be sufficient for the purpose of s 180(5) but at the same time defective in some other respect such as to cast doubt on the genuineness of employees’ approval for the purpose of s 188(1)(c). At the same time, it is clearly the case that the question of whether an employer has complied with s 180(5) is only one of the matters that must be considered for the purpose of s 188(1). The CFMMEU’s rather general submissions about s 188(1) below contended that the circumstances warranted a “heightened” explanation of the Agreement, but it was not persuasively explained why this was so, or why the approval of the employees should not be considered genuine.
[34] The CFMMEU also contended that the Commission’s reasons at [34] treat the matters in ss 180(5) and 188(1)(c) as coterminous, when they are clearly separate considerations, and that there is no indication from this passage that the Commissioner considered matters other than s 180(5).
[35] At [34] of the decision, the Commissioner said the following:
“[34] In relation to the matters of genuine agreement, s. 188 (sic) 11 in particular, in accordance with ss. 180(5) and 188(1)(a),(b), and (c), on consideration of the explanations and the process undertaken, taking into account the context, that a proper explanation of the terms and their effect was given, and that the phone calls to employees were an additional step. For discussion of inquiry, the documents set out explanation of the appropriate terms and their effect. On the material, there were no other reasonable grounds for considering that the Agreement had not been genuinely agreed.”
[36] Preceding this paragraph of the decision the Commissioner extracts substantial passages from Hays’ oral submissions in relation to ss 180(5) and 188(1)(c), which deal with Hays’ explanatory documents and the follow up telephone calls made to employees, as well as Hays’ responses to the CFMMEU’s submissions on 188(1)(c). In particular, Hays submitted to the Commissioner that there simply were no “other reasonable grounds” for concluding that the Agreement had not been genuinely agreed. The Commissioner evidently accepted these contentions and we consider that it was open to her to do so.
[37] It is not clear to us exactly what are said to be the “other reasonable grounds” for believing that the Agreement was not genuinely agreed. The “moral authority” of the agreement has not been called into question. In our opinion, the Commissioner undertook the task that s 188(1)(c) required of her. She considered whether there were any other reasonable grounds for believing that the Agreement had not been genuinely agreed and concluded that there were no such grounds. Her decision was not affected by error.
Conclusion
[38] We consider that permission to appeal should be granted because the appeal grounds have raised a number of matters of substance concerning the application of the BOOT and s 180(5) in circumstances where the Award applies to the employees in question. However, for the reasons given, none of the appeal grounds has been upheld, and accordingly the appeal must be dismissed.
VICE PRESIDENT
Appearances:
L Doust of counsel for the appellant.
S Meehan of counsel for the respondent.
Hearing details:
2020
Sydney, by telephone
24 March
Printed by authority of the Commonwealth Government Printer
<PR718187>
1 [2019] FWCA 8698
2 [2017] FWCFB 3659
3 Ibid at [46]
4 Ibid at [41]
5 [2017] FWCFB 3541, 269 IR 125 at [879]
6 [2017] HCA 53, 262 CLR 593 at [99]
7 [2017] FWCFB 3541 at [43] to [45]
8 [2018] FCAFC 77, 277 IR 23
9 Ibid at [105]
10 [2019] FWCA 8698 at [34]
11 There appears to be a word missing after ‘s. 188’
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