Construction, Forestry, Mining and Energy Union v Civil, Energy & Mining Services Pty Ltd T/A CEM Services Pty Ltd

[2014] FWC 3951

[2014] FWC 3951

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.604—Appeal of decision

Construction, Forestry, Mining and Energy Union
v
Civil, Energy & Mining Services Pty Ltd T/A CEM Services Pty Ltd
(C2014/935)

VICE PRESIDENT CATANZARITI SYDNEY, 13 JUNE 2014

Appeal against decision [2014] FWCA 3145 of Senior Deputy President Hamberger at Sydney on 14 May 2014 in matter number AG2014/1055 - Stay granted.

[1] On 14 May 2014, Senior Deputy President Hamberger issued a decision 1 (Decision) pursuant to s.185 of the Fair Work Act 2009 (the Act) approving an enterprise agreement known as the CEM Services Pty Ltd - Enterprise Agreement 2014 (the Agreement).

[2] On 2 June 2014, the Construction, Forestry, Mining and Energy Union (the CFMEU) lodged an appeal against the Decision, and noted in its Notice of Appeal that it sought a stay of the Deputy President’s Decision. I heard the parties on 10 June 2014 in relation to the stay application, and made a decision to grant the stay. At the conclusion of the hearing I informed the parties of my decision and that the reasons for my decision would be published in due course. These are the reasons for my decision.

Applicable Principles and General Approach

[3] There was no dispute between the parties as to the principles applicable to the determination of the stay application. They are as stated in Kellow-Falkiner Motors Pty Ltd v Edghill, 2in which the Full Bench approved the following statement of principle:

“[5] In determining whether to grant a stay application the Commission must be satisfied that there is an arguable case, with some reasonable prospect of success, in respect of both the question of leave to appeal and the substantive merits of the appeal. In addition, the balance of convenience must weigh in favour of the order subject to appeal being stayed. Each of the two elements referred to must be established before a stay order will be granted.

[6] The Commission approaches applications for stay orders on the basis that, unless otherwise established, the order subject to appeal was regularly made.”

Submissions

[4] The CFMEU’s grounds of appeal can be summarised as follows:

1) The Senior Deputy President’s approval of the Agreement was distorted by fraud or analogous circumstances in a way that induced or affected his Decision on the basis of false or misleading statements in the Form F17 “Employer’s statutory declaration in support of an application for approval of an enterprise agreement” that was filed by Civil, Energy & Mining Services Pty Ltd T/A CEM Services Pty Ltd (the Respondent). The Respondent declared in the Form F17 that all employees that were to be covered by the Agreement were notified that an application had been made to the Fair Work Commission (the Commission) for approval of the Agreement and that all reasonable steps had been taken to give notice to every employee of their right to be represented by a bargaining representative. The CFMEU submitted that employees of the Respondent who were working at the Wilpinjong mine were not made aware of the application for approval of the Agreement or provided notice of their representational rights, and that the Respondent supplied 16 contractors to that mine. The CFMEU further submitted that despite the Respondent’s declaration to the contrary, not all employees were given access to the written text of the Agreement prior to its approval, informed of the voting process, or given the opportunity to have the terms of the Agreement explained to them.

2) The conduct referred to in (1) above rendered the Senior Deputy President’s approval of the Agreement beyond jurisdiction, was plainly unjust and the Agreement was not genuinely agreed to by the employees covered by the Agreement.

3) The Senior Deputy President’s approval of the Agreement was distorted by fraud as the Respondent wrote to the chambers of the Senior Deputy President purportedly seeking to correct an alleged error in the Form F17 and represented to the Commission that “We have a total of 7 employees in our business and all seven participated in the voting process as well as voted to approve the agreement.” However, the Respondent’s employees who worked at the Wilpinjong mine did not participate in the voting process at all.

4) The Respondent did not provide a notice of employee representational rights that complied with the form and content requirements of s.174(1A) of the Act as the notice was two pages, with the first page containing content that is not part of the content and form requirements under s.174(1A) nor what is prescribed by regulations.

5) The CFMEU was denied procedural fairness or a reasonable opportunity to be heard despite being a default bargaining representative for the purposes of s.176(1)(b) of the Act.

6) The Senior Deputy President erred in approving the Agreement as one of the purported employee bargaining representatives was not free from control by the employee’s employer in contravention of regulation 2.06 of the Fair Work Regulations 2009.

7) The Senior Deputy President erred in finding that he was satisfied that the requirements of s.186 of the Act were met because, contrary to ss.186(2)(d) and 193 of the Act, the Agreement did not pass the Better Off Overall Test (the BOOT).

8) The group of seven employees alleged by the Respondent to be covered by the Agreement was not fairly chosen in contravention of ss.186(3) and 186(3A) of the Act.

[5] On the issue of whether a stay should be granted, the CFMEU submitted that:

1) There is an arguable case with some reasonable prospect of success in respect of the question of leave to appeal. It is in the public interest for leave to appeal to be granted as the appeal raises issues of importance and general application going to the integrity of the Commission’s processes.

2) There is an arguable case with real prospects of success on the substantial merits of the case.

3) The balance of convenience favours the grant of a stay as the Agreement will have a detrimental impact on the employees of the Respondent who were not aware of the bargaining or voting process.

[6] The CFMEU submitted an affidavit of Robert Michael Calov in support of its stay application. Mr Calov’s affidavit contained four exhibits, each of which I ordered to remain confidential. Each of the four exhibits related to an employee of the Respondent, referred to as Workers A–D. In his affidavit, Mr Calov swore that each of the Workers A–D had told him that, prior to contact that was initiated by Mr Calov, they had not been made aware that the Agreement had been approved by the Commission, nor were they made aware at any stage of any bargaining or voting processes in relation to the Agreement.

[7] In opposing the stay application, the Respondent conceded that there was nothing on the face of the Agreement that suggested that it would only cover a select group of employees, and that not all employees were involved in the bargaining or voting process. However, the Respondent submitted that:

1) Despite what appears on the face of the Agreement, it was not intended to cover all employees of the Respondent. The Agreement was intended to apply only to a select number of employees, and any employees that might be hired if the Respondent is successful in its bid on a contract to supply labour for a new coal mining operation. Thus, there was no fraud or deliberate misrepresentation made to the Commission.

2) The balance of convenience weighed against the granting of a stay, as the Agreement was implemented in order to enable the Respondent to bid on a contract to supply labour for a new coal mining operation. The granting of a stay would seriously affect the Respondent’s chances of being successful in its bid.

Consideration

[8] I accept the CFMEU’s submission that this matter raises issues of importance and general application going to the integrity of the Commission’s processes, and that therefore the CFMEU has an arguable case with some reasonable prospect of success in respect of the question of leave to appeal.

[9] Further, I accept the CFMEU’s submission that there is an arguable case with reasonable prospects of success in relation to the merits of the matter. The grounds of appeal outlined by the CFMEU reveal a number of issues that, if successfully made out, could provide a basis for allowing an appeal against the Senior Deputy President’s Decision.

[10] In light of the above, I find that the CFMEU has an arguable case with some reasonable prospect of success in respect of the question of leave to appeal and on the substantial merits of the appeal.

[11] Further, I accept the CFMEU’s submissions that the balance of convenience favours the granting of a stay on the basis that the employees of the Respondent will suffer a detrimental impact if they are subject to an enterprise agreement that was not validly approved, particularly given the concession of the Respondent and the evidence that is now before the Commission, which was not before the Senior Deputy President, that not all employees of the Respondent who stand to be covered by the Agreement were made aware of the bargaining or voting process.

[12] Having considered the authority on the exercise of the Fair Work Commission’s discretion to grant a stay, I find that in all the circumstances a stay order is appropriate.

Conclusion

[13] The Decision is stayed pending the hearing and determination of the CFMEU’s appeal or until a further order of the Fair Work Commission. Given the nature of the Decision, it is appropriate for the stay order to operate from 14 May 2014.

VICE PRESIDENT

Appearances:

B Docking of Counsel for the Construction, Forestry, Mining and Energy Union.

J Thorley for Civil, Energy & Mining Services Pty Ltd T/A CEM Services Pty Ltd.

Hearing details:

2014.

Melbourne and Sydney (video hearing):

June 10.

 1   [2014] FWCA 3145.

 2   P Edghill v Kellow-Falkiner Motors Pty Ltd[2000] AIRC 1207.

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