Construction, Forestry, Mining and Energy Union

[2013] FWC 1901

[2013] FWC 1901

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Construction, Forestry, Mining and Energy Union
(AG2013/4665)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 3 APRIL 2013

Summary: whether agreement should be dismissed when undertakings not accepted - whether undertakings permissible - amending the content of an agreement - procedures under WRA.

[1] An application pursuant to s.185 of the Fair Work Act 2009 (“the Act”) was made on 24 January 2013 by the Construction, Forestry, Mining and Energy Union, Construction and General Division, Queensland Builders Labourers Divisional Branch (“the BLF”) for the approval of a single-enterprise agreement known as the D & J Harris Corporation Pty Ltd and CFMEU Union Collective Agreement 2011-2015 (“the Agreement”).

[2] I have published a decision in identical terms as this in relation to AG2013/4690 (Re Freshmore) because it incorporates the same terms and was the subject of the same undertakings by the BLF. For the purposes of clarity, I have distinguished the 2 decisions.

[3] On 14 March 2013 I issued a decision in [2013] FWC 1462 in relation to the agreements. At the conclusion of that decision I stated as follows:

[79] I have found in relation to Issue 2(a) above that an agreement that purports to apply and to cover employers (other than the employer which has identified itself in the Form F17) in the future (where defined circumstances arise) would not be an agreement for the purposes of s.172(2) of the Act. Consequently, I could not exercise the Commission’s jurisdiction to approve an agreement of such a kind as such a jurisdiction does not exist. Clause 3 of the agreements here under consideration is such a clause.

[80] I have also found in relation to Issue 2(b) above that where an agreement purports to cover and apply prospectively to employees employed by employing entities of any kind that may be established in the future (subject to various circumstances), it may be concluded that such employees are not fairly chosen (under s.186(3) of the Act, for the purposes of being covered by the agreement.

[81] The agreements before me do not meet the requirements of s.186(3) of the Act because I cannot be satisfied at the point of approval that the group of employees to be covered by the agreement (as it may be in the future) is fairly chosen. The group is also uncertain as to its identity.

[82] At Issue 2(c) above, I have found that the Agreements (for various reasons) do not meet the requirements of s.172 of the Act, because the requisite relationship(s) under s.172(5) of the Act cannot be made out at the time of the approval.

[83] Whilst I have expressed my view (at Issue 1 above) as to why Clause 2 of the Agreements is not a permitted matter for the purposes of s.172(1) of the Act, I have not concluded that such a deficiency is fatal to the application for approval.

[84] In the above considerations I have dealt with the arguments as presented by the BLF. On the day of the hearing the representative (Queensland Master Builders Association) for the Freshmore Agreement provided particularly limited argument in reply or submission. Following the hearing and in response to an extended directions timetable, the QMBA provided written submissions which largely reflect the positions I have articulated above in relation to Issue 2(a) and 2(c) above. There were no further submissions received in respect of the D & J Harris Agreement.

[85] Because of my finding in these regards, I would ordinarily move to decline to approve the applications. However, before doing so, I will provide an opportunity for those involved in the making of the Agreements to consider any avenues through which the bargain (or at least the agreements they reached) can be preserved (notwithstanding the limited application of s.190 of the Act). The QMBA appears to be of the view that undertakings of some order (perhaps not undertakings of the kind contemplated by s.190 of the Act) may save the bargaining.

[86] In any event, it appears to me to be appropriate to provide an opportunity to those who participated in the process resulting in the making of the agreement or who represent those persons or parties to consider the above findings, and as to what agreement they actually reached and “made”.

[87] This is particularly so as there appears to be some fundamental disagreement between the parties as to the jurisdictional foundation to the applications for approval (of the Freshmore Agreement in particular). It is of course open to the parties to withdraw the applications for approval and remake the agreements in different terms. Alternatively, there may be scope, subject to argument (and as the MBAQ suggest) that the relevant bargaining representatives may provide an agreed clarification of the operation of the agreement(s) in the various salient respects. The D&J Harris Agreement will need to be considered in the same context as the Freshmore Agreement.

[88] Because the Agreements are described as template agreements, some thought may need to be given as the future management of such applications (subject, of course, to parties exercising their rights in relation to this decision of the Commission as they may).

[89] The BLF as the bargaining representative and the employer bargaining representatives have until midday 20 March 2013 to present any agreed proposals etc in all these regards.

[4] The BLF has provided an undertaking in relation to the matters of concern. Those undertakings read as follows:

Regarding clause 3:

This clause should be read according to the general response provided by the CFMEU in regards to the Tasklake Agreement, namely that the clause merely seeks to restate the position pursuant to the Act, and should not be read in any way that is inconsistent with the Act.

Regarding clause 4:

“Associated and Related Entities” shall be read as meaning:

Any company where the office bearers, and shareholders are the same persons, the companies are engaged in the same trade or trades, and employees that are employed under the proposed Agreement have their employment transferred to the “Associated and Related Entity”.

“Associated and Related Entities” shall not be read with reference to s.9 nor s.50 of the Corporations Act 2001 (Cth).

The clause shall be read as providing that the office bearers of the company agree in their capacity as office bearers of the related company that where employees employed under the proposed agreement have their employment transferred to the related company, the related company shall apply the same terms and conditions contained in the proposed agreement to the employment by the related company, notwithstanding that the related company is not a party to the proposed agreement.

The clause is not to be read in such a way that would result in the proposed agreement not being a single enterprise agreement for the purposes of s.172(2)(a).

The clause, applied in the manner provided herein, is permitted matter pursuant to s.172(1).

[5] I am not satisfied that these undertakings, assuming they can be made in relation to the issues as cited, cure the adverse findings I made in my decision. The terms of the undertaking do not accord with the requirements of s.172 of the Act as the Agreement purports to be made between a current employer and any undefined entity (with no referable status for the purposes of the Corporations Act 2001) that may be established at some point in the future. Further, I add as an aside that it may be difficult for a director of one entity to discharge his or her corporate responsibilities in relation to another corporate entity for which he or she is a director should they be subject to an undertaking of the kind proposed. Possibly to some measure at least, the policy objective the undertaking strives to realise is a matter relevant to Part 2-8 of the Act, “Transfer of Business”.

[6] I note further that I have received no undertakings whatsoever from the employer despite my decision above, and notwithstanding the requirement that any such undertaking be provided by 20 March 2013. Of course, s.190(3) of the Act requires that an undertaking may only be accepted when it is an appropriate form (in writing) and when it is accepted from the employer(s) who will be covered by the agreement (and not an organisation that will be covered). Section 190(4) of the Act applies to non-employer bargaining representatives.

[7] Nor have I received any submission from either the employer or employee bargaining representatives in relation to whether or not undertakings of any kind are capable of curing the defects identified in my initial decision. I very much doubt that such undertakings are available to me as a matter of jurisdiction. In his decision in PR952656, (then) Vice President Ross indicated (albeit under the provision of the Workplace Relations Act 1996 (“the WRA”)) that an application that was deficient in relation to its jurisdictional foundation, and was not therefore a valid application, could not be subject to undertakings under then s.170LV of the WRA:

[253] Absent an agreement of the type referred to in s.170LI no valid application for certification can be made. In the absence of a valid application it is difficult to see how the Commission can properly exercise a discretion to accept an undertaking in respect of the agreement.

[254] A Full Court of the Federal Court in Re AIRC; Ex parte CFMEU and a Full Bench of the Commission have accepted that when the Commission is exercising its functions in deciding whether to certify an agreement it engages in a two stage process. The first stage mandates that the requirements of Division 2 or Division 3 be met. Those requirements go to the existence of an agreement that can validly be the subject of an application for certification and include compliance with s.170LI. The second stage of the certification process, in which section 170LV plays a part, is dependent upon the Commission being satisfied that the proposed agreement and the application made for certification of it conforms with the requirements of Division 2, or Division 3, including s.170LI.

[255] The authorities support the view that s.170LV is not available to cure the invalidity of an agreement that is not a Division 2 agreement because it does not satisfy the nature of the agreement test in s.170LI. 1

[8] The then Vice President also noted further that s.170LV of the WRA related to purposes of a discrete kind (much as does s.190 of the Act now):

[256] For completeness I also draw attention to the introductory words to s.170LV. It is apparent that the section only applies where the Commission has grounds to refuse to certify an agreement under s.170LT or s.170LU. This is not such a case. The problem here is a failure to meet the requirements of s.170LI.

[9] Section 190 only applies in relation to concerns arising under s.186 and s.187 of the Act, and not more widely.

[10] But that said, an agreement may be varied in a way to ensure that it is a single enterprise agreement for the Act’s purposes. The approach I adopt in this regard is no different to that which was adopted by the then Australian Industrial Relations Commission (“AIRC”) to vary 2 agreements that were deficient in a jurisdictional sense (and hence were not valid applications) under the WRA. The matter was succinctly put by the AIRC Full Bench in Re: Atlas Steels as follows:

[42] There is one other matter to be dealt with. It concerns the course to be followed when an agreement is found to contain a clause which is an impediment to certification. In this case the Deputy President requested the parties to file agreements which had been amended to deal with various issues raised in his decision. The Deputy President's requirement that the parties amend clause 44 of the Mitre 10 Agreement is an example of this approach. With respect the approach is undesirable. Where a substantive amendment is required to remove an impediment to certification, that amendment must be brought about in the manner prescribed in the Act for the making of agreements. It is not permissible for agreements to be certified without approval by a valid majority of the persons employed at the time whose employment will be subject to the agreement. We note that in the union notification decision the Deputy President required the parties to amend a number of clauses in the Cadbury Schweppes Agreement and the Mitre 10 Agreement on grounds related to Part XA Freedom of Association of the Act. Although that part of the decision is not under appeal, our comments apply equally to it.

[43] In due course both agreements were certified. 2

[11] This approach was also endorsed by then Vice President Ross in PR952656. 3

[12] I see nothing in this approach that would disqualify it from application under the Act. The approach was not founded on any particular statutory prescription, and the Act does not include a statutory prescription that would preclude such an approach.

[13] In my view, the Agreement before me can be varied so as to amend the relevant clauses so that they are compliant with the requirements of s.172 of the Act. This would require that the steps for the approval of a proposed single-enterprise agreement be followed, at least from s.180 of the Act (inclusive). I would not consider that it was necessary to reissue the notice of employee representational rights, but all other steps would need to be undertaken to ensure the appropriate affirmation of the statutory requirements.

[14] I will allow the parties 72 hours in which to confer and indicate if this is the course they agree to follow in order to ensure a valid application is before the Commission. If there is no agreement to amend the application in an agreed and appropriate way, I will move to not approve the Agreement.

[15] The parties will be aware that this decision also affects a number of applications currently before me that have been made by the BLF (amongst others). These applications are:

• AG2013/4786 - Application to approve the Dynamic Concrete Pumping (QLD) Pty Ltd and CFMEU Union Collective Agreement 2011-2015; and



• AG2013/5559 - Application to approve the Uplift Crane Hire (QLD) Pty Ltd and CFMEU Union Collective Agreement 2011-2015.

[16] I request that the BLF advise my chambers by 5pm on 9 April 2013 as to their intentions regarding these applications.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr K. Crank, for the BLF

Mr D. Harris, for D and J Harris Corporation Pty Ltd

Hearing details:

2013

7 March

Brisbane

Final written submissions:

Received 20 March 2013

 1   PR952656.

 2   PR917092.

 3   At PNS 257-263.

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