Construction, Forestry, Maritime, Mining and Energy Union v Pims Mining (NSW) Pty Ltd
[2020] FWCFB 5115
•2 OCTOBER 2020
| [2020] FWCFB 5115 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Construction, Forestry, Maritime, Mining and Energy Union
v
PIMS Mining (NSW) Pty Ltd
(C2020/3786)
VICE PRESIDENT HATCHER | SYDNEY, 2 OCTOBER 2020 |
Appeal against decision [2020] FWCA 2189 of Commissioner Riordan at Sydney on 30 April 2020 in matter number AG2019/4275.
Introduction and background
[1] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) has lodged an appeal, for which permission to appeal is required, against a decision of Commissioner Riordan issued on 30 April 2020 1 in which he determined to approve the PIMS Mining (NSW) Pty Ltd Enterprise Agreement 2019 (Agreement). The CFMMEU contends in its notice of appeal that, in a number of identified respects, the Commissioner erred in approving the Agreement.
[2] This appeal was originally allocated to a Full Bench consisting of Vice President Hatcher, Deputy President Asbury and Deputy President Kovacic, and was the subject of a hearing on 20 July 2020. Sadly, on 31 July 2020, Deputy President Kovacic passed away. On 12 August 2020, the President of the Commission, Ross J, reconstituted the bench to consist of Vice President Hatcher, Deputy President Sams and Deputy President Asbury. The parties were informed of this the same day, and advised that Deputy President Sams would read the submissions and other materials filed by the parties and would join in the decision-making process of the reconstituted Full Bench on that basis. The parties were given an opportunity to object to this course, but no communication of any objection was received, and accordingly the matter has been determined on the basis described.
[3] The background circumstances of this matter were described uncontroversially in the decision and may be summarised as follow. The employer which made the application for the approval of the Agreement, PIMS Mining (NSW) Pty Ltd (PIMS NSW) is part of the PIMS group of companies (PIMS). PIMS operates as a mining contractor in Queensland and seeks to extend its business into New South Wales. In April 2019, PIMS was invited to tender for a development contract at South32 Limited’s Appin Mine in New South Wales. After some discussions about a joint venture with another business which did not come to fruition, PIMS obtained registration of a new subsidiary company, Illawarra Mine Services Pty Ltd (IMS), on 8 May 2019. The intention was that this company would operate as a supplier of labour to PIMS on the Appin development contract if PIMS was the successful tenderer. There were discussions with the CFMMEU concerning a greenfields agreement to apply to IMS, and a draft of such an agreement accompanied PIMS’ tender for the development contract.
[4] In June 2019, PIMS was advised by South32 that its proposed commercial model would not be successful. In particular, South32 advised that it would not accept the provision in the proposed greenfields agreement for a fixed $500 bonus, and that any bonus had to be based on “effort and reward”. Consequently, PIMS decided to use a labour hire contractor to source labour for the Appin development contract if its tender was successful. On 24 June 2019, PIMS received an executed letter of intent from South32 and, on 29 June 2019, PIMS provided WorkPac (a labour hire business) with a letter of intent for it to provide labour for the development contract.
[5] On 3 July 2019, PIMS advised persons who had expressed an interest in performing work for PIMS at the Appin Mine that WorkPac would be the employer of PIMS’ production and engineering workforce. Such employees would be covered by the WorkPac Coal Mining Agreement 2019 (WorkPac Agreement), an agreement for which the CFMMEU was a bargaining representative and which covered the CFMMEU. PIMS oversaw the recruitment by WorkPac of employees who would work for it at the Appin Mine. WorkPac employees commenced work at the Appin Mine on 5 August 2019. Such employees are approximately 85 in number, include both experienced and inexperienced mineworkers, and wear PIMS uniforms, report to a directly-employed PIMS management team, and submit their timesheets to PIMS.
[6] PIMS NSW was registered as a company in September 2019. PIMS employed six persons to work at the Appin Mine in October 2019, with five commencing employment on 15 October 2019 and the sixth on 28 October 2019. Four of the six had never worked in a coal mine previously, one was an experienced tradesperson and one was an experienced mineworker. They were not placed on the Appin Mine site immediately after commencing employment, but were rather placed in an offsite room and tasked with negotiating an enterprise agreement. PIMS NSW engaged an industrial relations consultant, Mr Mike Kelly, to facilitate the bargaining process. PIMS NSW also appears to have utilised the services of MinterEllison lawyers (specifically, Mr Dan Williams) to provide legal advice in relation to the process.
[7] The Notice of Employee Representational Rights (NERR) was provided by PIMS NSW to the employees on 15 October 2019, and negotiations commenced on 23 October 2019. With the encouragement of PIMS NSW, the six employees appointed themselves as bargaining representatives. At the first meeting, the employees were presented with a draft agreement. Some amendments were made to the draft at the request of the employees. After four bargaining meetings, the last of which occurred on 31 October 2019, the proposed agreement was put to a vote and, on 8 November 2019, all six employees voted in favour of approval and the Agreement was made. The application for approval of the Agreement was made on the same day.
[8] On 14 November 2019, the CFMMEU sent an email to the Commission stating that it had concerns about the Agreement and wished to be given access to the relevant documentation and be heard in relation to the application for approval of the Agreement. On 18 November 2019, PIMS NSW stated in an email to the Commission that it did not oppose the CFMMEU being granted access to the documents, but that it opposed the CFMMEU being heard except in relation to whether the Agreement passed the better off overall test (BOOT). On 21 November 2019, the CFMMEU lodged a submission, accompanied by a witness statement, in support of its request to be heard on all matters in relation to the application. PIMS NSW filed submissions opposing this application, and the question of the CFMMEU’s role in the proceedings was the subject of a hearing before the Commissioner on 28 November 2019. On 3 December 2019, the Commissioner issued an interlocutory decision 2 in which he effectively allowed the CFMMEU to participate in an unrestricted way in the proceedings, and made directions for the filing of evidence and submissions.
[9] The CFMMEU’s submissions filed on 12 December 2019 contended that:
• PIMS NSW’s process for the making of the Agreement was a “contrived tick the box agreement making process to avoid bargaining with its soon to be engaged workforce”;
• PIMS NSW subcontracted the production and engineering workforce to WorkPac to avoid clause 24 of the Appin Colliery & West Cliff CPP Enterprise Agreement 2018 (Appin Agreement), but intended to move the workforce to employment with PIMS NSW if the Agreement was approved;
• there appears to have been very little bargaining for the Agreement;
• there was a mismatch between the six employees who voted to approve the Agreement, the majority of whom were inexperienced mineworkers, and the Agreement’s coverage which encompassed all production and engineering work performed in New South Wales;
• the evidence did not establish that at least two persons were covered by the Agreement at the time it was made, since it did not demonstrate that they were performing duties directly connected with the day-to-day operation of a black coal mine or had the necessary training or competencies;
• there was a failure to explain the terms of the Agreement and their effect as required by s 180(5), and in particular there was a failure to explain clause 24 of the Appin Agreement which, if the Agreement was voted down, would require the employees who were experienced mineworkers to be paid the Operator/Trade rate (currently $42.68 per hour), all other conditions of the Black Coal Mining Industry Award 2010 (Award) and the bonus payment provided for by the Appin Agreement of at least $500 per week; and
• the Agreement lacked authenticity and thus fell foul of s 188(1)(c).
[10] The matter was the subject of hearings on 12 February and 6 April 2020. On 29 April 2020, PIMS NSW provided an undertaking which clarified the requirement to pay a weekend loading for ordinary hours worked on the weekend. Having given the bargaining representatives an opportunity to respond to the undertaking, the Commissioner issued his decision accepting the undertaking and approving the Agreement the following day.
The decision
[11] After setting out the facts of the matter, the submissions of the parties and the statutory framework, the Commissioner observed that he had an initial suspicion that the Agreement was bordering on a sham “due to the deliberate and calculated steps taken by the Applicant in ‘choosing’ its six employees” 3, and set out a number of matters which he had taken into account. These included:
• this was not a case where the employer was trying to employ a new workforce in an attempt to lower existing conditions of employment but, on the contrary, the Agreement provides superior rates of pay to employees than those currently payable by WorkPac;
• evidence from a PIMS NSW witness, Mr Andrew Itzstein (General Manager of PIMS), that the six persons selected for employment we people who were considered to be “a good fit for the PIMS business, good attitude, good work ethic” and “friendly”;
• only six employees were engaged by PIMS NSW to make the process “manageable”;
• the 85 WorkPac employees were subject to the day-to-day control of PIMS NSW;
• PIMS NSW intended to engage a directly-employed production and engineering workforce when the Agreement was approved and, while PIMS NSW did not intend to direct the WorkPac employees to join PIMS NSW, it had the contractual capacity to cancel WorkPac’s contract;
• the Agreement had superior wages and conditions to the WorkPac Agreement, and was basically the same as the greenfields agreement negotiated between IMS and the CFMMEU except for the fixed bonus provision;
• PIMS NSW did not advise the six employees of clause 24.6 of the Appin Agreement;
• the negotiation process for the Agreement was atypical of the coal industry in terms of its short length, and it would have been highly unlikely that the six employees would have taken protected industrial action whilst on probation and in the first month of their employment;
• the six employees would not have been allowed to start on-site at the Appin Mine if the Agreement negotiations had not successfully concluded;
• the Agreement’s rates of pay appear to be competitive with other coal industry contractors in the Illawarra region in New South Wales; and
• it is not unusual for a small number of employees to negotiate an agreement with a new company in an industry which may experience exponential growth in the coming months.
[12] The Commissioner then stated the following conclusions:
“[56] It is true that the Applicant could have selected any of the 85 employees that it had engaged through WorkPac to negotiate an agreement. For whatever reason, the Applicant settled on the six employees that it chose. Such action does not contravene the Act. There is no evidence to suggest that an alternative outcome would have been achieved had a different six, ten or twenty employees been selected. The Agreement is superior to the terms of WorkPac’s agreement. Such a scenario would, nearly always result in the higher and more beneficial agreement being supported by employees.
[57] I am satisfied that there were at least two employees employed by the Applicant at the time the Agreement was made who were covered by the Award. I accept the evidence that all six employees are currently employed at Appin.
[58] I am satisfied that the provisions of the Appin Agreement did not need to be explained to the employees because the employees would never be faced with the scenario contained in the Appin Agreement. The Applicant made it clear to the employees that they would not be starting work at the mine until they negotiated an enterprise agreement. As a result, clause 24.6 of the Appin Agreement never had the capacity to become a relevant consideration.
[59] I am satisfied that the Applicant and its employees had the moral authority to make the Agreement. The Applicant had attempted to negotiate a greenfields agreement with the CFMMEU. However, the Applicant’s client, South32, intervened to stop that agreement as a result of the fixed bonus provision. The CFMMEU refused to move off its position in relation to this issue. Therefore, the Applicant was placed in a difficult position of finding an alternative labour source to deliver its contact. Put simply, the Applicant “contracted out” its production and engineering workforce to a company with an agreement with the CFMMEU. However, the Applicant wanted its own agreement to cover its current and future work in NSW. The only way to achieve this goal was to negotiate its own agreement.
[60] I can understand the CFMMEU’s position that the Applicant manipulated the negotiations. The Applicant utilised the inexperience of its clean skin employees, combined with the friendly attitudes of its two experienced mineworkers, to negotiate an agreement in near record time. However, based on the quality of the outcome, I am satisfied that the speed of the negotiations and the minimal evidence of any contested negotiation is due to the experience and advice of Mr Williams and Mr Kelly.
[61] I am satisfied that the Agreement complies with the industrial precedent established by One Key and Aldi.”
[13] The Commissioner then gave his reasons for the acceptance of the undertaking proposed by PIMS NSW and stated that “I am satisfied that each of the requirements of sections 186, 187, 188 and 190 as are relevant to this application for approval have been met”. 4
Appeal submissions
[14] The CFMMEU essentially advanced three propositions in its appeal. The first was that the Agreement was incapable of approval by the Commissioner because it was not made with at least 2 employees who were employed at the time that the Agreement was made and would be covered by the Agreement, as required by s 172(2)(a). The latter element of this jurisdictional fact requirement was not satisfied, it was contended, because:
• the coverage clause of the Agreement (cl 3) requires, among other things, that an employee be covered by the Award to be also covered by the Agreement;
• the coverage clause of the Award (cl 4.1) requires, among other things, that an employee be “employed in a classification or class of work on Schedule A”; and
• there was no evidence to ground a finding that at least two of the six employees met this requirement and were thereby covered by the Award and the Agreement, and the Commissioner failed to give reasons for his conclusion otherwise.
[15] The second proposition was that the Commissioner erred in finding that PIMS NSW was not required to explain, pursuant to s 180(5), clause 24.6 of the Appin Agreement. The relevant effect of the Agreement, the CFMMEU submitted, was that relevant employees would be paid in accordance with that Agreement rather than receive the benefits of clause 24.6. Accordingly, it was necessary for clause 24.6 to be explained to employees so that they could take into account that they would be better off by being “agreement free” rather than being covered by the Agreement.
[16] The CFMMEU’s third proposition was that the Commissioner erred in finding that PIMS NSW and the employees had the “moral authority” to make the Agreement, in that:
(1) the Commissioner failed to take into account a relevant consideration, namely that an effect of PIMS NSW’s conduct in the process by which the Agreement was made was that the WorkPac employees at the Appin Mine - many of whom are likely to become covered by the Agreement – were and will be denied the opportunity to collectively bargain; and
(2) the conclusion in paragraph [60] of the decision that the success of the negotiations was “due to the experience and advice of Mr Williams and Mr Kelly” was an error of fact, since there was no evidence of the advice which either of these persons had provided to PIMS NSW, and as a consequence the Commissioner’s finding that PIMS NSW had not manipulated the negotiations and that the Agreement had the necessary moral authority was not reasonably open to him.
[17] The CFMMEU submitted that the identified errors justified the grant of permission to appeal either in the public interest or on discretionary grounds, and that the appeal should be upheld and the decision quashed.
[18] In relation to the first proposition above, PIMS NSW submitted that this involved a straightforward question of fact which was decided on the basis of the evidence. The evidence showed that the six employees were employed in classifications covered by the Agreement, and two of them gave direct and unchallenged evidence to that effect. The five classifications under the Agreement, it was submitted, were certainly covered by Schedule A of the Award. The six employees had not yet commenced mining work for PIMS NSW, but they were all firmly contracted and allocated to do that work and undertook induction training whilst negotiations for the Agreement were underway. Further, PIMS NSW submitted, the six employees as a matter of fact commenced work at the Appin Mine after the Agreement was made. There was no absence of reasons in the decision since paragraph [57] of the decision contained the Commissioner’s finding and the basis for that finding.
[19] As to the second proposition, PIMS NSW submitted that the terms of the Appin Agreement had no bearing on what was required to be explained for the purpose of s 180(5). The provision did not, it was submitted, require an employer to explain the effect of the terms of a different enterprise agreement which did not apply to the employer and could not in any circumstances affect the terms and conditions which were proposed in the Agreement. In any event, the evidence made clear that the six employees were not going to be deployed at the Appin Mine until an enterprise agreement had been negotiated and approved, and in those circumstances clause 24.6 could have no effect on what the six employees might be required to be paid if they worked at the Appin Mine.
[20] In relation to the third proposition:
• the challenge to the “moral authority” of the Agreement could not succeed given the failure of the CFMMEU to challenge the quality of the Agreement;
• the various matters raised by the CFMMEU concerning the small cohort of employees who made the Agreement, the “friendly” and “atypical” nature of the negotiations, and the fact that the employees had a strong incentive to make the Agreement because it provided for enhanced terms and conditions of employment, did not engage the limited concept of the absence of “moral authority” to make an enterprise agreement;
• the WorkPac employees were not employees of PIMS NSW, and therefore had no right to be involved in bargaining with PIMS NSW;
• there was evidence touching on the fact that PIMS NSW engaged the services of Mr Kelly and MinterEllison because of its lack of internal experience in enterprise bargaining and to assist with and facilitate the bargaining; and
• the Commissioner’s comment about this was an observation which assisted in his satisfaction that the efficiency of the negotiation should not cause concern in relation to its validity.
Consideration
[21] We grant permission to appeal because we consider that the circumstances attending the making of the Agreement are such as to justify appellate scrutiny of the Agreement’s approval. However, for the reasons which follow, we do not consider that the CFMMEU has succeeded in demonstrating any appealable error in the decision.
[22] In relation to the CFMMEU’s first contention of error, it may be accepted that in order for there to be an enterprise agreement capable of approval, it is necessary under s 172(2)(a) and (6) of the FW Act that the agreement be made with at least two employees who are employed at the time the agreement is made and who will be covered by the agreement. Relevant to the second aspect of this requirement, clause 3(a) of the Agreement provides, in respect of its coverage:
(a) This Agreement covers the following parties:
(i) PIMS Mining (NSW) Pty Ltd (the Company)
(ii) All Employees of the Company employed in NSW working in the classifications set out in this Agreement who, but for this Agreement, Schedule A of the Award would apply (Employee(s)). For the avoidance of doubt, a permanently appointed statutory official such as a Deputy is not covered by this Agreement.
[23] The effect of clause 3(a) is that, to be covered by the Agreement, an employee must (1) be working in a classification provided for in the Agreement and (2) be subject to Schedule A of the Award but for the operation of the Agreement. The CFMMEU’s contention was that there was no evidence upon which the Commissioner could be satisfied that the second of these two conditions was satisfied.
[24] Schedule A of the Award sets out the classification structure for production and engineering employees under the Award. Clause A.2 of Schedule A defines the classifications provided for as follows:
A.2 Definitions
A.2.1 Mineworker - Induction Level I
Mineworker - Induction Level 1 is the entry level for a non-trade person who is undertaking the statutory/generic and/or minesite induction and who remains at this level until assessed by the employer to have successfully completed the induction requirements when they then advance to a Mineworker - Training.
A.2.2 Mineworker - Induction Level 2 / Mineworker - Training
Mineworker - Induction Level 2 is the entry level for a certificated tradesperson who is undertaking the statutory/generic and/or minesite induction. The tradesperson after successful completion of the induction phase then becomes a Mineworker - Training at this level.
A Mineworker - Training is an employee who trains in and performs the required tasks under direct supervision. This classification applies to employees until assessed by the employer as meeting the requirements to be classified as a mineworker.
A.2.3 Mineworker
A Mineworker is an employee who is assessed by the employer as competent to perform the required tasks in a variety of operating circumstances and under limited supervision. An employee continues in this classification until assessed for advancement to Mineworker - Advanced.
A.2.4 Mineworker - Advanced
A Mineworker - Advanced is an employee who is assessed by the employer against the employer’s available criteria as competent to perform the required tasks in all relevant operating circumstances at a level above that of a Mineworker.
A Mineworker - Advanced may be required to supervise the work of other employees.
A.2.5 Mineworker - Specialised
A Mineworker - Specialised is an employee assessed by the employer as competent to perform specialised functions beyond the level of a Mineworker - Advanced. An employee appointed to this classification will undertake a specialised role, which requires them to exercise independent discretion in undertaking functions within the bounds set by the employer.
The performance of this role may require the employee to supervise the work of other employees.
[25] The material before the Commissioner demonstrated that, of the six employees who made the agreement with PIMS NSW, four were engaged as “inexperienced mineworkers”, one was engaged as an “experienced mineworker” and one as an “experienced tradesperson”. Mr Itzstein gave the following evidence with respect to these employees:
• when the four inexperienced mineworkers were first employed, they were deployed to the mine site training program to do competencies that would assist them though their cleanskin program; 5
• all the employees were employed to negotiate an enterprise agreement so that they could be deployed to the Appin Mine; 6
• within a week or two of the vote, the inexperienced coalminers started to do their induction process, and the experienced ones were already inducted and went straight into working on crews at the Mine; 7
• all six were (at the time of his evidence) working on crews at the Appin Mine alongside WorkPac employees; 8
• the six employees were given an indication of the shifts and hours they would be working at the Appin Mine prior to the making of the Agreement; 9 and
• in the period from the issue of the NERR to the date of the vote, the employees were undertaking training. 10
[26] The experienced mineworker, Mr Nathan Roach, gave unchallenged evidence via his witness statement that he was employed by PIMS NSW “as an underground coal mine worker”. One of the inexperienced mineworkers, Mr Rod Markwell, gave the same evidence, and said he participated in training after his employment commenced.
[27] This evidence demonstrates clearly, we consider, that the four inexperienced mineworkers fell within the Mineworker - Induction Level I classification in Schedule A of the Award at the time that the Agreement was made: they were engaged for the purpose of performing underground mining work at the Appin Mine, they were informed of the shift pattern and hours they would be working at the mine prior to the vote on the Agreement, they were undertaking training during the period of the bargaining process, and their engagement in enterprise bargaining was for the purpose of facilitating their deployment at the Appin Mine. For similar reasons, we consider that the experienced mineworker, Mr Roach, fell within the classification of A.2.3 Mineworker or above at the time the Agreement was made. The nature and incidents of their employment at the time the Agreement was made is confirmed by what followed thereafter: the four inexperienced mineworkers proceeded to induction training at the Appin Mine, and subsequently formed part of underground mining crews, while Mr Roach went straight into an underground mining crew.
[28] The Commissioner was therefore correct in finding in paragraph [57] of the decision that at least two of the six employees were covered by the Award (and hence the Agreement) at the time the Agreement was made. In light of our conclusion in this respect, the appeal cannot succeed on the basis that the Commissioner may not have given adequate reasons for his finding. If, as the CFMMEU contends, this was a finding of jurisdictional fact, then for the purpose of this appeal it is sufficient for us to conclude that the finding was correct. Accordingly the CFMMEU’s first contention of error is rejected.
[29] We also reject the CFMMEU’s second proposition that PIMS NSW did not comply with s 180(5) because of its failure to explain clause 24.6 of the Appin Agreement. Clause 2.2 of the Appin Agreement provides that it applies to Illawarra Coal Holdings Pty Ltd (a subsidiary of South32) and its employees at the Appin Mine (and the West Cliff Coal Preparation Plant) within the classifications set out in the Agreement. Clause 2.3 provides that it also covers the CFMMEU and two other unions. Clause 24.6 provides:
24.6 Contractors engaged in black coal mining work at the Colliery to whom the Award applies, and who are not covered by an enterprise agreement or any transitional instrument, will not be engaged by the Company on terms that would undercut:
24.6.1 the Operator/Trade Classification Rate if the Employee is experienced (as adjusted from time to time in accordance with the provisions of this Agreement);
24.6.2 all other conditions as prescribed by the Award; and
24.6.3 the bonus payment in line with the principles of the Bonus Scheme of this Agreement.
[30] The bonus scheme referred to in clause 24.6.3 is dealt with in clause 8 of the Appin Agreement, which relevantly states that “The Bonus will be determined by adding $500 to a performance recognition payment set out in Appendix 2 – Recognition Payment.” It was this element of an unconditional weekly payment of $500 as an element of the bonus scheme which South32 rejected in the draft IMS greenfields agreement negotiated with the CFMMEU.
[31] The effect of clause 24.6 is to impose upon Illawarra Coal Holdings an obligation pertaining to the terms on which it engages contractors to work at the Appin Mine. It imposes no obligation on PIMS NSW, nor does it confer any entitlement on any PIMS NSW employees who work at the Appin Mine.
[32] Section 180(5)(a) requires an employer to take all reasonable steps to ensure that the terms of a proposed enterprise agreement, and the effect of those terms, are explained to the relevant employees. Plainly, clause 24.6 of the Appin Agreement was not a term of the Agreement, and we do not consider that an explanation of the effect of the terms of the Agreement required any reference to clause 24.6 because it did not confer any entitlement upon the six employees which would be displaced by the Agreement.
[33] Even if s 180(5) is to be read as encompassing a requirement to explain indirect practical effects of the terms of a proposed agreement, as suggested by the CFMMEU, it would still not be the case that PIMS NSW was required to explain clause 24.6 of the Appin Agreement to the six employees. It is plain from the non-contested facts that PIMS NSW was operating within the commercial constraints imposed upon it by South32. Relevantly, this meant that PIMS NSW could not enter into an enterprise agreement which required it to pay an unconditional bonus of the type provided for in the Appin Agreement (the cost of which would, presumably, have ultimately been borne by South32). Nor could it take the course of placing employees on the Appin Mine site who were not covered by an enterprise agreement because this would trigger the obligation upon Illawarra Coal Holdings under clause 24.6 of the Appin Agreement. As the evidence made clear, and as the Commissioner found, the management of PIMS NSW consequently had no intention of placing any of the six employees on the Appin Mine site without them being covered by an enterprise agreement. Accordingly it was never the case that non-approval of the Agreement would result in the six employees receiving a bonus of the type provided for in the Appin Agreement as an indirect effect of the operation of clause 24.6.
[34] As to the CFMMEU’s third proposition, we agree with the Commissioner’s observation that, at a superficial level, the process by which the Agreement was made might appear to be a manipulated or contrived outcome on the basis that PIMS NSW selected a workforce of six employees specifically for the purpose of making an enterprise agreement with them. However, on closer analysis, this does not pursuant to s 188(1)(c) give rise to reasonable grounds for believing that the Agreement was not genuinely agreed to by the six employees in the sense that it lacked authenticity. 11 Consistent with Commissioner’s reasoning, we consider that the following matters are of decisive weight in this regard:
(1) Although their amenability to the making of an enterprise agreement appears to have been an element of the selection of the six employees for employment, the employees were genuinely engaged for the purpose of full-time employment at the Appin Mine. They did not constitute a bogus workforce engaged purely for the purpose of making an enterprise agreement and then departing. 12
(2) This was not a case where the process of making the Agreement was a merely a device or a manipulation used for the purpose of reducing the existing pay and conditions of the WorkPac workforce utilised by PIMS NSW. The evidence demonstrates that PIMS NSW genuinely wanted to develop its own directly-employed workforce. There was no challenge to the finding made by the Commissioner that the wages and conditions provided for by the Agreement were superior to those in the WorkPac Agreement and were competitive with those provided by other coal industry contractors in the Illawarra region in New South Wales. Further, the WorkPac Agreement did not provide for any unconditional bonus payment of the type contained in the Appin Agreement, so it cannot be said that the purpose of making the Agreement was to avoid the payment of any such bonus which was currently being paid.
(3) Two of the six employees gave unchallenged evidence about their participation in the process. This evidence demonstrated that the employees were not subject to any coercion or duress, that genuine bargaining occurred in that modifications were made to the proposed agreement in response to claims made by the employees, and that the employees were genuinely in favour of approval of the Agreement. The evidence also made clear that the six employees were to be paid in accordance with the Agreement, so there is no doubt that they had a direct stake in the outcome of the negotiations.
[35] We reject the CFMMEU’s contention that the effect of the process by which the Agreement was made was to deprive the WorkPac employees at the Appin Mine site of the opportunity to collectively bargain, and that this a relevant consideration which the Commissioner failed to take into account. The WorkPac employees were already covered by an enterprise agreement which the CFMMEU participated in negotiating for and the approval of which the CFMMEU supported. If they remain in WorkPac’s employ, they will be able to participate in bargaining for a new agreement when the WorkPac Agreement reaches its nominal expiry date. If such employees at a future date are offered and accept an opportunity to be employed directly by PIMS NSW at the Appin Mine, the Agreement will apply to them in accordance with the applicable provisions of the FW Act until it is terminated or replaced. The conduct of PIMS NSW has not therefore deprived the WorkPac employees of any opportunity to collectively bargain which they would otherwise have had. The CFMMEU’s contention appears to be founded on the premise that, in order for PIMS NSW to engage in a genuine enterprise bargaining process, it was necessary for it to employ the entire existing WorkPac workforce at the Appin Mine site and to bargain for an enterprise agreement with that workforce. There is no identifiable foundation for this proposition in the FW Act.
[36] The statement made by the Commissioner that Mr Kelly and Mr Williams caused or contributed to the success of the negotiations may have been more speculative than evidence-based. The evidence would suggest rather that the negotiations concluded quickly because PIMS NSW was amenable to affording competitive and acceptable rates of pay and conditions to its employees. Any error made by the Commissioner in this respect therefore does not vitiate his overall conclusion that the Agreement was genuinely agreed and does not provide a basis for upholding the appeal.
[37] Having rejected all of the CFMMEU’s contentions of error, the appeal must be dismissed.
Orders
[38] We order as follows:
(1) Permission to appeal is granted.
(2) The appeal is dismissed.
VICE PRESIDENT
Appearances:
Mr A Walkaden on behalf of the appellant.
Mr D Williams on behalf of the respondent.
Hearing details:
2020.
Sydney (video-link):
20 July.
Printed by authority of the Commonwealth Government Printer
<PR723020>
1 [2020] FWCA 2189
2 [2019] FWC 8163
3 [2020] FWCA 2189 at [39]
4 Ibid at [63]
5 Transcript, 4 February 2020, PN406
6 Ibid, PN409
7 Ibid, PN445
8 Ibid PNs 449-450
9 Ibid PNs 451-475
10 Ibid, PN 489
11 See One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77, 262 FCR 527, 277 IR 23 at [142]-[143]
12 Cf. Construction, Forestry, Mining and Energy Union v Sparta Mining Services Pty Ltd[2016] FWCFB 7057, 261 IR 107 at [28]-[30]
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