Construction, Forestry, Mining and Energy Union and Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (known as the Australian Manufacturing Workers' Union) v Mi&E Holdings Pty Ltd
[2013] FWCFB 2142
•11 APRIL 2013
The attached document replaces the document previously issued with the above code on 11 April 2013.
The document has been edited at paragraph [31] to remove the word “It” at the beginning of the fourth sentence and replace it with “The Agreement”.
Ruchi Bhatt
Associate to Senior Deputy President Harrison
18 April 2013
| [Note: refer to the Federal Court decision dated 24 February 2015 [2015] FCAFC 15 for result of appeal.] [2013] FWCFB 2142 FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
MI&E Holdings Pty Ltd
(C2012/6132)
SENIOR DEPUTY PRESIDENT HARRISON | SYDNEY, 11 APRIL 2013 |
Appeal against decision [2012] FWA 9503 of Deputy President McCarthy at Perth on 6 November 2012 in matter number AG2012/1272, application and coverage clause of enterprise agreement inconsistent with the Fair Work Act 2009, group of employees not fairly chosen.
The appeal and background
[1] This decision concerns an appeal made under s.604 the Fair Work Act 2009 (the Act) by the Communications, Electrical, Electronic, Energy, Information, Plumbing, Postal and Allied Services Union of Australia (CEPU), the Construction, Forestry, Mining and Energy Union and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (known as the Australian Manufacturing Workers’ Union) (the Appellants). The challenge that is made is to the approval of an enterprise agreement known as the MI&E Holdings Pty Ltd Western Division Enterprise Agreement 2012 (the Agreement). The appeal is opposed by MI&E Holdings Pty Ltd (MI&E), the employer covered by the Agreement. It was not in issue that the Appellants are persons aggrieved by the approval decision and have standing to make this appeal.
[2] The terms of the coverage and application clause of the Agreement and the pre-approval processes drew the Appellants’ attention to it. The Agreement is expressed to operate throughout all of Western Australia and covers employees in excess of 70 classifications which are those similar to classifications found in building, construction and electrical contracting modern awards. Despite this breadth of coverage the Agreement was only voted on by four employees who were based at a workshop in Bibra Lake, a Perth suburb.
[3] None of the Appellants had participated in bargaining for the Agreement. They sought and were granted permission to appear before the Deputy President and opposed the approval of the Agreement. 1
[4] The key clause of the Agreement is clause 2 and it is in these terms:
“2. Coverage and Application of this Agreement
(a) Subject to clause 2(b), this Agreement shall apply to;
• MI&E Holdings Pty ltd (MIE) ("the Company"); and
• Employees of the Company employed in and performing work as set out in the classifications specified in Schedule 1 - Classifications, of this Agreement in Western Australia.
(b) The Company undertakes separate project or site specific work that is regulated by its own site specific terms and conditions. This Agreement does not cover or apply to any employees working at those project sites where any of the following agreements are in operation (whether before their nominal expiry dates or not);
a) A greenfields agreement made in accordance with section 172(4) of the Act or predecessor legislation; or
b) Any other enterprise agreement made with employees in replacement or, or as a successor to, a greenfields agreement in (a).”
The Deputy President’s decision
[5] The Deputy President commented on the fact that only four employees were involved in the making of the Agreement and, at that time, over 200 employees were covered by greenfields agreements with MI&E on what was described as the Shenton Park project and the Worsley project. Work at those projects had been completed but since then “200 other employees had been engaged for work at two other major construction sites, the Wheatstone project and the Macedon project.” 2
[6] His Honour noted the Appellants’ submission that the group of employees who will be covered by the Agreement was not fairly chosen and the argument of MI&E that the group covered was geographically, operationally and organisationally distinct. He referred to the employer’s assertion that the Agreement did no more than support the express capacity within the Act for parties to make greenfields agreements for new projects despite overlap with an agreement covering employees of an existing business. 3
[7] The Deputy President referred to the evidence given by two witnesses called by MI&E. Key aspects of that evidence included that MI&E was divided operationally between a Western Division (incorporating Western Australia, Northern Territory and South Australia) and an Eastern Division (incorporating Queensland and New South Wales). The company had wanted to operate in Western Australia in a way it had previously operated in Queensland. That is, it would have a permanent workforce based at Bibra Lake “but with a capacity to have project conditions for onsite work for employees on major projects”. The aim of MI&E was described as “to employ this permanent workforce on projects and bring them back into the Bibra Lake workshop for short periods of time in between projects”. Thus the company could have a permanent workforce at Bibra Lake that could be deployed to different sites “and if there wasn't any work at other sites to be able to bring them back to Bibra Lake.” 4
[8] MI&E acknowledged it had two greenfields agreements in operation at the time the Agreement was made (Shenton Park and Worsley) but said that employees at those projects were not included “as the work was nearing completion at the time of making the agreement and the expectation was that they would soon finish their employment” with MI&E. 5
[9] The Deputy President found that the group covered by the Agreement was geographically, operationally and organisationally distinct. 6 He found it was appropriate that employees on the Shenton Park and Worsley projects were excluded from involvement in the making of the Agreement.7 He found that there were good grounds why the Agreement excluded employees that would be covered by a greenfields agreement or a replacement for a greenfields agreement.8 He found the group was fairly chosen.
[10] The Deputy President acknowledged and accepted the business strategy of MI&E which underpinned the Agreement and the manner in which it understood it would operate. He identified the common practice in the industry for greenfields agreements to be established in respect to major construction projects. He approved the Agreement subject to the provision of an undertaking which is not relevant to the matters raised by this appeal.
A summary of the challenges to the decision
[11] The Appellants challenge the finding made by the Deputy President that the group of employees covered by the Agreement was fairly chosen. They argued that it was in the public interest to grant permission to appeal due to the nature of the issues raised which concern the circumstances in which the group of employees covered by the Agreement was chosen and whether they had genuinely agreed to the making of the Agreement. The grounds and submissions on appeal raised a number of arguments which, in summary, concerned the inconsistency between the coverage clause of the Agreement and provisions of the Act, the effect of the Agreement undermining the objects and purposes of the Act and the right to participate in collective bargaining, whether the pre-approval steps were complied with and whether employees had genuinely agreed to the Agreement.
Other relevant terms of the Agreement
[12] We have earlier reproduced clause 2 of the Agreement. It provides that it operates throughout the State of Western Australia in respect of employees in classifications specified in it. The classifications are contained within eight pay groups that are contained in a schedule to the Agreement and within those pay groups there are in excess of 70 classifications. The classifications are broad and encompass those which would be expected to be associated with a “Construction, Maintenance and Industrial Services Industry” 9 employer. The classifications include ones which are contained within two other agreements which covered MI&E being the Worsley Efficiency and Growth Project MI&E Holdings Pty Ltd Electrical Trades Agreement 2008 (the Worsley agreement) and the MI&E Holdings Pty Ltd Shenton Park Solid Waste Treatment Plant CEPU Agreement 2011 (the Shenton Park agreement). We refer to these two agreements later in this decision. Additionally, and as examples of the broad range of the classifications in the Agreement we note the following classifications: labourer, cleaner, store person, scaffolder, boilermaker, rigger, sheet metal worker, excavator, bitumen sprayer, concrete finisher, mobile crane operator, tradesperson and welder.
The application for approval and the statutory declaration in support of approval of the Agreement
[13] We should refer briefly to the application for approval and the employer statutory declaration in support. The application for approval indicates that no employee organisations were bargaining representatives for the Agreement but that four signed instruments of appointment by employees of bargaining representatives were given to MI&E. The employer statutory declaration identifies that the Agreement does not cover all employees but that those covered had been “fairly chosen on a geographical and operational basis”. It indicates that the Agreement covers employees on industrial services and electrical work in Western Australia except those covered by a greenfields agreement or a successor agreement to a greenfields agreement. It indicates that the reason for the distinction is that “those projects are already covered by their own agreed site-specific arrangements tailored for use at those particular projects”. 10
[14] The statutory declaration indicates that the representational rights notice was given to employees on 23 February 2012. A copy of the proposed agreement was given to employees on 7 March and the “Final Agreement” was given to them on 5 April 2012. The Agreement was made on 13 April 2012. The answers given to paragraph 2.9 in the statutory declaration reveal that four employees will be covered by the Agreement, four cast a valid vote and four voted to approve it. The relevant modern awards referred to as being applicable to the application of the better off overall test are the Electrical, Electronic and Communications Contracting Award 2010 and the Building and Construction General On-site Award 2010.
The other enterprise agreements and other employees of MI&E
[15] We have earlier referred to the Deputy President’s decision where he identified the fact that at the time the Agreement was made there were over 200 employees covered by greenfields agreements and that since the Agreement was made some 200 employees had been engaged to work on the Wheatstone and Macedon projects. We should refer in a little more detail to these matters.
[16] At the time the Agreement was made there were two other relevant enterprise agreements which covered MI&E and operated within Western Australia. They were each made as greenfields agreements and the CEPU is covered by each of them. They are the Worsley agreement and the Shenton Park agreement. We refer to the Worsley agreement first. It is a workplace agreement 11 lodged with the then Workplace Authority. Its operative date is 8 September 2008 and its nominal expiry date is expressed in terms of remaining in force for a period of 3½ years after it was lodged with the Workplace Authority “or until the practical completion of the Worsley Efficiency and Growth Project, whichever occurs sooner.” As we understand the evidence the practical completion of the project was in late 2011 but that up until May 2012 employees were still employed. The Worsley agreement had well passed its nominal expiry date by February 2012 when MI&E distributed the representational rights notice and commenced negotiations for the Agreement.
[17] The evidence and submissions before the Deputy President established that during the time when the notice was given, negotiations held and the Agreement voted upon a much larger number of employees than the four at Bibra Lake were in employment. 12 As is clear from the preceding paragraph the Worsley agreement reached its nominal expiry date upon practical completion. We refer later to the consequences of this group of employees being excluded from the scope of the Agreement and also to the consequence of them being denied the opportunity to participate in negotiations and the vote.
[18] Clause 3 of the Worsley agreement provides that it was binding on the CEPU and MI&E and its employees engaged in classifications contained in the agreement undertaking on-site construction and commissioning work part of the Worsley Efficiency and Growth Project. The classifications include Trades Assistant, Communication Technician, Electronics Tradesperson, Electrician Special Class, Electrical Fitter/Installer, Licensed Plumber, Boilermaker (Electrical) and Sprinkler Plumber which are also classifications in the Agreement.
[19] We turn to the Shenton Park agreement. That is an enterprise agreement made under the Act. It was approved in October 2011 and has a nominal expiry date of 4 October 2014. It covers the CEPU, MI&E and employees of MI&E engaged on the Shenton Park Solid Waste Treatment Plant Project and in classifications contained in the agreement. Similar classifications are contained in the Agreement.
[20] At the time of the hearing before the Deputy President there were in excess of 200 employees working on what was described as the Wheatstone and Macedon projects as well as at Bibra Lake. Surprisingly, MI&E could not advise the Deputy President when it had bid for work on those projects. A fair inference could be drawn however that it was seeking work on those projects at the same time it was negotiating the Agreement. MI&E had been applying the Agreement terms to those employees even though it had not been approved. An additional amount was also being paid to the employees on the Wheatstone project to bring them up to a rate equivalent to the rate that was in an agreement which applied to a principal or head contractor on that site.
The Act and the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
[21] A number of provisions of the Act are relevant to our consideration of the matters raised in this appeal. Those provisions relate to the concept of enterprise agreements covering or applying to employees and the interaction rules between certain instruments in relation to their operative effect. Before referring to those sections we should indicate that in addressing the manner in which MI&E proposed that clause 2 would operate, the variation and termination of enterprise agreements provisions contained within Division 7 of Part 2-4 of Chapter 2 of the Act were not addressed. We need not refer to them.
[22] The sections of the Act of particular relevance to the considerations in this appeal are ss.52, 53, 54 and 58. Each of them has been reproduced in an appendix to this decision. We refer to s.58 in particular. It provides that only one enterprise agreement can apply to an employee at a particular time. If there is an earlier agreement applying to the employee in relation to particular employment and another enterprise agreement that covers that employee in relation to the same employment comes into operation then, until the earlier agreement has passed its nominal expiry date, the later agreement cannot apply. When the earlier agreement does pass its nominal expiry date the latter can apply to the employee. At that stage the earlier agreement cannot apply again. The submissions proceeded on the basis that regardless of the type of agreement which was in contemplation they all concerned employment with MI&E in the range of classifications in the Agreement at any location throughout Western Australia.
[23] A number of provisions of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (TP&C Act) are also relevant. The TP&C Act contains a number of provisions relevant to collective agreements like the Worsley agreement. 13 In summary, the effect of them is as follows. The Worsley agreement became a collective agreement-based transitional instrument by virtue of the TP&C Act. The concepts of agreements covering and applying to employees were referred to in that act and were subject to a number of other provisions which dealt with the interaction between these transitional instruments and enterprise agreements under the Act. In particular, item 30(2) of Schedule 3 provides that if an enterprise agreement under the Act started to apply to an employee or an employer covered by a collective agreement-based transitional instrument then that instrument ceases to cover (and could never again cover) the employee or the employer.
Was the group fairly chosen?
[24] Because of the way the clause was drafted the group with whom negotiations were held and who could vote on the Agreement excluded any employees of MI&E other than the four employees at Bibra Lake. But for the exclusion of existing greenfields agreements in clause 2 the Worsley agreement employees would be covered by the Agreement. The Worsley agreement had reached its nominal expiry date but employees remained employed until probably May 2012 (in any event at least throughout the time the Agreement was being negotiated and voted upon). Upon approval of the Agreement it immediately applied to all of those employees. By virtue of the TP&C Act the Worsley agreement ceased to cover and could never again cover them. The clause attempts to continue the time expired greenfields agreement in operation and allow those employees to be excluded from coverage of the Agreement. This is not consistent with the provisions of the TP&C Act. No good reason has been established for excluding this group of employees. The drafting of the clause is such as to attempt to minimise the number of employees who, under s.181 of the Act, were entitled to vote for it. That section required MI&E to request employees who were employed at the time, and who would be covered by the Agreement, to approve it by voting for it.
[25] The matters addressed in the preceding paragraph are considerations which, in our opinion, are appropriate to be taken into account in the application of ss.186(3) and 186(3A) of the Act. The manner in which those sections of the Act should be applied was considered by a Full Bench in Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union and others 14. The Full Bench said:
“[20] It is important to appreciate that whether or not the group of employees covered by the agreement is geographically, operationally or organisationally distinct is not decisive, rather it is a matter to be given due weight, having regard to all other relevant considerations.
[21] It is not appropriate to seek to exhaustively identify what might be the other relevant considerations. They will vary from case to case and will need to be demonstrated to the satisfaction of the tribunal. The word ‘fairly’ suggests that the selection of the group was not arbitrary or discriminatory. For example, selection based upon employee characteristics such as date of employment, age or gender would be unlikely to be fair. Similarly, selection based on criteria which would have the effect of undermining collective bargaining or other legislative objectives would also be unlikely to be fair. It is also appropriate to have regard to the interests of the employer, such as enhancing productivity, and the interests of employees in determining whether the group of employees was fairly chosen. In this regard, it is not only the interests of the employees covered by the agreement that are relevant; the interests of those employees who are excluded from the coverage of the agreement are also relevant. We note that there is a suggestion to the contrary in the oral submissions put on behalf of Cimeco when counsel submitted that:
“It was an erroneous approach to introduce the identification of the persons who were relevantly employed at the time of the making of the agreement for the purposes of testing the group chosen.”
[22] To the extent that it is suggested that the interests of the excluded employees are irrelevant we reject that submission. In evaluating whether the group to be covered by the agreement has been fairly chosen it is entirely appropriate to have regard to the consequences of that choice, that is, which employees have been excluded from the agreement.”
[26] In our opinion the exclusion of the Worsley agreement employees was unfair. In finding to the contrary the Deputy President was in error.
Other issues about whether the group covered by the Agreement was fairly chosen
[27] Additional considerations arise out of the way in which the group of employees covered by the Agreement was expressed. Again we return to the terms of clause 2. Despite the submissions of MI&E we are not persuaded that the clause is clear. We are also not satisfied the description about how it was intended to operate is consistent with the terms of the Act.
[28] In some parts of the Deputy President's reasons for decision it seems he thought the exclusion clause would only relate to greenfields agreements that were made subsequent to the approval of the Agreement. Clause 2 is not so limited however and it was not satisfactorily explained to us on appeal why, if it was to be so limited, MI&E did not make that expressly clear. It was not the way in which the witnesses had described it was intended to operate and no undertaking reflecting it was given to the Deputy President. If what was really intended was a narrow interpretation of the clause no satisfactory explanation was given why clear words to that effect were not used. The exclusion of the Worsley agreement employees suggests it was not intended to operate that way.
[29] In our opinion the clause is such that it creates significant doubt as to who will be covered by the Agreement. Firstly clause 2(b) refers to project or site work MI&E undertakes that is regulated by “its own site-specific terms and conditions”. Although not clear from those words the parties seem to have proceeded on the basis it should be read as applying to agreements to which MI&E is a party or is covered. The clause goes on to provide that such agreements, whether they are before or after their nominal expiry date are excluded from coverage. As is apparent from the sections of the Act and the TP&C Act we have referred to if there is an agreement which has reached its nominal expiry date then the Agreement will apply to MI&E and the employees. The earlier time expired agreement cannot be saved consistent with the Act in the way the clause seems to envisage. It will cease to apply and can never apply again.
[30] Next the clause provides that the Agreement is not to apply to employees at project sites where there is any other enterprise agreement made with employees as a replacement of, or as a successor to, a greenfields agreement. This clause envisages that it would not necessarily need to be an agreement made under the Act. We do not understand how this clause could have the practical effect of operating in a way so that the Agreement would somehow cease to apply to MI&E or its employees prior to its nominal expiry date.
[31] Assuming it is intended that the clause excludes greenfields agreements made subsequent to the approval of the Agreement there is still some real doubt as to how this would be allowable under the Act. The coverage and application of clause 2 has been referred to numerous times by us. It applies in respect of any employment with MI&E throughout Western Australia of persons in the large number of classifications referred to in the Agreement. The Agreement envisages that work will be undertaken on project sites and contains a site allowance for such work. It envisages that employees may be required to work at the workshop (presumably Bibra Lake) or transfer between locations covered by the Agreement, and when at those other locations they may be paid a higher rate of pay or receive additional allowances. 15 It is not at all apparent how MI&E could enter into any greenfields agreement that would come within the Act’s definition of such.
[32] In summary, MI&E wished to move its employees between Bibra Lake and any other site in Western Australia where it may have work and then back again to Bibra Lake (or presumably some other site in Western Australia where it had work for the employees to do). Clause 2 was designed to apply to employees when at Bibra Lake and then to allow another agreement (either a greenfields, an enterprise agreement or some other agreement not regulated by the Act, either in or outside of any nominal expiry date) to apply whilst the work was being done and then the Agreement would again apply. It is clear that the Act and s.58 in particular does not allow for this to occur. The suggestion that whilst on specific site work the Agreement application to an employee was somehow suspended or displaced finds no support in the Act.
[33] The coverage of the Agreement was not consistent with the Act and the Agreement could not operate in the way MI&E had wished. In our opinion this consideration is also relevant to whether the group of employees covered by it was fairly chosen and weighs against our being satisfied such a finding should have been made.
[34] Another consideration also arises and that is whether the employees who did vote for the Agreement genuinely agreed to it.If the Agreement could not operate in the manner MI&E wished a real issue arises as to the explanation about it which was given to the four employees who voted for it. A combination of ss.186(2) and 188 necessitate the Agreement having been genuinely agreed to by the employees and that includes the necessity for its terms to have been explained to the relevant employees. An explanation about how an agreement would operate that is contrary to the Act raises real doubts as to whether it was genuinely agreed to. We raised this concern with MI&E on appeal. We acknowledge that it was not expressly argued in this manner below and that MI&E objects to its having to now address it on appeal. We have some sympathy for this position but do note that it is not a discretionary issue; it goes to the mandatory pre-approval steps. We have decided in the circumstances that as we have found error in other respects we will not deal with this matter any further.
Did all relevant employees have an opportunity to vote?
[35] We have earlier referred to the explanation given by MI&E as to why it had not given employees engaged on the greenfields projects an opportunity to vote on the Agreement. Whilst it is not free from doubt as to whether the employees to which the Shenton Park agreement applied, which was still within its nominal life, should have voted (the Appellants submit they should have) in our opinion those on the Worsley project clearly were entitled. The explanation given by MI&E that they did not allow them to vote because they expected their employment would be finishing up shortly after the Agreement was made does not justify them declining to give them the opportunity to do so. They were persons who under s.181 of the Act would be covered by the Agreement and were employed at the time and therefore should have been requested by MI&E to approve the Agreement by voting for it.
[36] Had clause 2 been drafted in a manner consistent with the Act the Worley project employees in employment at the time negotiations commenced (which was in February 2012) would have been entitled to have participated in the negotiations for the Agreement and in the vote for it. This consideration goes to the compliance with the pre-approval steps and whether the Agreement was validly made. The acceptance by the Deputy President (albeit in the context of his consideration of whether the employees were fairly chosen) 16 that it was appropriate to exclude these employees is erroneous.
Is this a matter that can be cured by an undertaking?
[37] We should refer to the issue of an undertaking however given the errors we have identified we intend to refuse to quash the approval of the Agreement. Section 190 of the Act provides that if the Commission has a concern that an agreement does not meet the requirements of ss.186 and 187 it may approve the agreement if it is satisfied that an acceptable undertaking meets the concern. An undertaking will not be accepted if the effect of it is likely to result in substantial changes to an agreement.
[38] No undertaking could be given which would meet the concerns we have identified (that is the appealable errors). Even if MI&E were to give an undertaking that clause 2 would be read in a way much narrower than its terms indicate, for example that it only relates to new greenfields agreements that may be entered into, or that it would not operate at all, this would not meet the concerns we have expressed about the group of employees not being fairly chosen. That is, any undertaking will not rectify the exclusion of Worsley agreement employees from participating in the negotiations and voting for the Agreement. Additionally, such an undertaking would be such as to result in a substantial change to the Agreement.
Conclusion
[39] We have decided that it is in the public interest to grant permission to appeal. The issues raised by the appeal concern important issues about the terms of application and coverage clauses in enterprise agreements and the interaction provisions of the Act. As is apparent from our reasons we are also of the opinion that the decision of the Deputy President is attended with sufficient doubt as to warrant the grant of permission to appeal.
[40] We find that the Deputy President was in error in finding that the group was fairly chosen. We have considered that matter ourselves and for the reasons given have decided the group was not fairly chosen. We allow the appeal and quash the decision to approve the Agreement.
[41] In conclusion, we should indicate that this decision does not rule in an exhaustive way on the practice of employers and unions entering into greenfields agreements in respect of a genuine new enterprise at a time when a relevant enterprise agreement is still within its nominal life. We are aware it is not uncommon (particularly in Western Australia) for this practice to be recognised in some way in the wording of an enterprise agreement. It may be wise for there to be some further consideration of the wording being adopted by these parties in their enterprise agreements. When doing so consideration should be given to this decision and to the recent decision of Commissioner Gooley in Abigroup Contractors Pty Ltd. 17 This decision was not referred to in the submissions before us.
SENIOR DEPUTY PRESIDENT
Appearances:
R. Reitano, counsel and K. Sneddon and A. Kentish for the Appellants
C. Gianetti, solicitor and D. Brajevic for the respondent
Hearing details:
2013
Sydney
16 January and 11 March
Appendix
52 When an enterprise agreement applies to an employer, employee or employee organisation
When an enterprise agreement applies to an employee, employer or organisation
(1) An enterprise agreement applies to an employee, employer or employee organisation if:
(a) the agreement is in operation; and
(b) the agreement covers the employee, employer or organisation; and
(c) no other provision of this Act provides, or has the effect, that the agreement does not apply to the employee, employer or organisation.
Enterprise agreements apply to employees in relation to particular employment
(2) A reference in this Act to an enterprise agreement applying to an employee is a reference to the agreement applying to the employee in relation to particular employment.
53 When an enterprise agreement covers an employer, employee or employee organisation
Employees and employers
(1) An enterprise agreement covers an employee or employer if the agreement is expressed to cover (however described) the employee or the employer.
Employee organisations
(2) An enterprise agreement covers an employee organisation:
(a) for an enterprise agreement that is not a greenfields agreement—if the FWC has noted in its decision to approve the agreement that the agreement covers the organisation (see subsection 201(2)); or
(b) for a greenfields agreement—if the agreement is made by the organisation.
Effect of provisions of this Act, FWC orders and court orders on coverage
(3) An enterprise agreement also covers an employee, employer or employee organisation if any of the following provides, or has the effect, that the agreement covers the employee, employer or organisation:
(a) a provision of this Act or of the Registered Organisations Act;
(b) an FWC order made under a provision of this Act;
(c) an order of a court.
(4) Despite subsections (1), (2) and (3), an enterprise agreement does not cover an employee, employer or employee organisation if any of the following provides, or has the effect, that the agreement does not cover the employee, employer or organisation:
(a) another provision of this Act;
(b) an FWC order made under another provision of this Act;
(c) an order of a court.
Enterprise agreements that have ceased to operate
(5) Despite subsections (1), (2) and (3), an enterprise agreement that has ceased to operate does not cover an employee, employer or employee organisation.
Enterprise agreements cover employees in relation to particular employment
(6) A reference in this Act to an enterprise agreement covering an employee is a reference to the agreement covering the employee in relation to particular employment.
54 When an enterprise agreement is in operation
(1) An enterprise agreement approved by the FWC operatesfrom:
(a) 7 days after the agreement is approved; or
(b) if a later day is specified in the agreement—that later day.
(2) An enterprise agreement ceases to operate on the earlier of the following days:
(a) the day on which a termination of the agreement comes into operation under section 224 or 227;
(b) the day on which section 58 first has the effect that there is no employee to whom the agreement applies.
Note: Section 58 deals with when an enterprise agreement ceases to apply to an employee.
(3) An enterprise agreement that has ceased to operate can never operate again.
Subdivision C—Interaction between one or more enterprise agreements
58 Only one enterprise agreement can apply to an employee
Only one enterprise agreement can apply to an employee
(1) Only one enterprise agreement can apply to an employee at a particular time.
General rule—later agreement does not apply until earlier agreement passes its nominal expiry date
(2) If:
(a) an enterprise agreement (the earlier agreement) applies to an employee in relation to particular employment; and
(b) another enterprise agreement (the later agreement) that covers the employee in relation to the same employment comes into operation; and
(c) subsection (3) (which deals with a single-enterprise agreement replacing a multi-enterprise agreement) does not apply;
then:
(d) if the earlier agreement has not passed its nominal expiry date:
(i) the later agreement cannot apply to the employee in relation to that employment until the earlier agreement passes its nominal expiry date; and
(ii) the earlier agreement ceases to apply to the employee in relation to that employment when the earlier agreement passes its nominal expiry date, and can never so apply again; or
(e) if the earlier agreement has passed its nominal expiry date—the earlier agreement ceases to apply to the employee when the later agreement comes into operation, and can never so apply again.
Special rule—single-enterprise agreement replaces multi-enterprise agreement
(3) Despite subsection (2), if:
(a) a multi-enterprise agreement applies to an employee in relation to particular employment; and
(b) a single-enterprise agreement that covers the employee in relation to the same employment comes into operation;
the multi-enterprise agreement ceases to apply to the employee in relation to that employment when the single-enterprise agreement comes into operation, and can never so apply again.
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.
Employees must be given copy of the agreement etc.
(2) The employer must take all reasonable steps to ensure that:
(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:
(i) the written text of the agreement;
(ii) any other material incorporated by reference in the agreement; or
(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.
(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:
(a) the time and place at which the vote will occur;
(b) the voting method that will be used.
(4) The access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1).
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;
(c) employees who did not have a bargaining representative for the agreement.
181 Employers may request employees to approve a proposed enterprise agreement
(1) An employer that will be covered by a proposed enterprise agreement may request the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it.
(2) The request must not be made until at least 21 days after the day on which the last notice under subsection 173(1) (which deals with giving notice of employee representational rights) in relation to the agreement is given.
(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.
182 When an enterprise agreement is made
Single-enterprise agreement that is not a greenfields agreement
(1) If the employees of the employer, or each employer, that will be covered by a proposed single-enterprise agreement that is not a greenfields agreement have been asked to approve the agreement under subsection 181(1), the agreement is made when a majority of those employees who cast a valid vote approve the agreement.
...
Greenfields agreement
(3) A greenfields agreement is made when it has been signed by each employer and each relevant employee organisation that the agreement is expressed to cover (which need not be all of the relevant employee organisations for the agreement).
Subdivision B—Approval of enterprise agreements by the FWC
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 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
(b) if the agreement is a multi-enterprise agreement:
(i) the agreement has been genuinely agreed to by each employer covered by the agreement; and
(ii) no person coerced, or threatened to coerce, any of the employers to make the agreement; and
(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and
(d) the agreement passes the better off overall test.
Note 1: For when an enterprise agreement has been genuinely agreed to by employees, see section 188.
Note 2: The FWC may approve an enterprise agreement that does not pass the better off overall test if approval would not be contrary to the public interest (see section 189).
Note 3: The terms of an enterprise agreement may supplement the National Employment Standards (see paragraph 55(4)(b)).
Requirement that the group of employees covered by the agreement is fairly chosen
(3) The FWC must be satisfied that the group of employees covered by the agreement was fairly chosen.
(3A) If the agreement does not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.
Requirement that there be no unlawful terms
(4) The FWC must be satisfied that the agreement does not include any unlawful terms (see Subdivision D of this Division).
Requirement that there be no designated outworker terms
(4A) The FWC must be satisfied that the agreement does not include any designated outworker terms.
Requirement for a nominal expiry date etc.
(5) The FWC must be satisfied that:
(a) the agreement specifies a date as its nominal expiry date; and
(b) the date will not be more than 4 years after the day on which the FWC approves the agreement.
Requirement for a term about settling disputes
(6) The FWC must be satisfied that the agreement includes a term:
(a) that provides a procedure that requires or allows the FWC, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes:
(i) about any matters arising under the agreement; and
(ii) in relation to the National Employment Standards; and
(b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.
Note 1: The FWC or a person must not settle a dispute about whether an employer had reasonable business grounds under subsection 65(5) or 76(4) (see subsections 739(2) and 740(2)).
Note 2: However, this does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4).
188 When employees have genuinely agreed to an enterprise agreement
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.
1 There were previous proceedings concerning the Agreement which we do not need to refer to - see CEPU and others and MI&E Holdings Pty Ltd [2012] FWAFB 6817
2 Paragraph [7]
3 Paragraphs [8] and [9]
4 Paragraphs [20],[21],[22]
5 Paragraph [23]
6 Paragraphs [31] to [36]
7 Paragrpah [37]
8 Paragraph [47]
9 The description is by MI&Ein the application for approval of the Agreement and in the employer’s statutory declaration
10 Paragraph 2.2 and 2.3
11 Workplace Relations Act 1996 Part 8, Division 2
12 Appellants written “Outline of Objections” undated para [7], Appellant’s written submissions filed at the hearing para [5], Appellant’s written submissions filed after the hearing, para [8] and transcript eg 122,218,445,543, appeal PN117
13 In the Workplace Relations Act 1996 ss.347,348, 351 (provisions comparable to the Act also applied to whether an employer or employee could take protected action in support of a new agreement - ie not until after the nominal expiry date see ss.440,494). T&C ActSchedule 3 items 2,3 and 30(2)
14 [2012] FWAFB 2206
15 Clauses 11 and 12
16 Paragraph [37]
17 [2012] FWA 9755
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