Construction, Forestry, Mining and Energy Union v CSR Limited T/A Viridian New World Glass
[2015] FWCFB 3889
•25 JUNE 2015
| [2015] FWCFB 3889 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
CSR Limited T/A Viridian New World Glass
(C2015/1621)
(C2015/1623)
SENIOR DEPUTY PRESIDENT DRAKE | SYDNEY, 25 JUNE 2015 |
[1] Senior Deputy President Richards allowed an application 1 for approval of the CSR Limited trading as Viridian "New World Glass" Townsville Sales Centre Agreement 2014 (the Townsville Agreement) on 19 January 2015.
[2] His Honour also allowed an application 2 for approval of the CSR Limited trading as Viridian "New World Glass Cairns Agreement" 2014 (the Cairns Agreement) on 19 January 2015.
[3] The Construction, Forestry, Mining and Energy Union(theCFMEU) sought permission to appear and make submissions before his Honour concerning its objections to the approval of both agreements. There was an exchange of submissions. Permission was refused on 14 January 2015. That decision has not been appealed.
[4] The CFMEU lodged an appeal against the approval of both agreements. Those appeals were listed for hearing and heard together before this Full Bench on 4 March 2015. The Grounds of Appeal from both approvals are essentially the same. There were some additional matters in contest in relation to the Cairns Agreement.
[5] Permission was granted to both parties to be legally represented before the Full Bench. Mr White of counsel, instructed by Hall Payne Lawyers, appeared for the CFMEU. Mr Christopher Murdoch of counsel, instructed by Herbert Smith Freehills, appeared for the respondent CSR Limited (CSR).
[6] CSR submitted that permission to appeal should not be granted but, if permission to appeal was granted, the appeal should be dismissed because:
● The CFMEU is not a person aggrieved by the decisions and does not have standing.
● The appeal is not in the public interest, and
● In any event his Honour's decisions were not affected by appealable error.
Is the CFMEU a person aggrieved?
[7] Pursuant to section 604 of the Fair Work Act 2009 (the Act) a person who is aggrieved by a decision of the Fair Work Commission (FWC) may appeal that decision, with the permission of the FWC.
[8] CSR submitted that the CFMEU was not a person aggrieved and therefore was not entitled to appeal the decision of his Honour. It relied on the Full Bench decision of this Commission in Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Ltd (Collinsville) 3. Determining the CFMEU’s right to be heard that Full Bench said:
“Doubtless, the CFMEU has an interest in all of these matters or even some expectations as to these matters but that will not be enough to attract the right to be heard. As McHugh and Gummow JJ in Re Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Lam:
‘Used in some strict sense, or as an antonym to “illegitimate”, the term “legitimate” is apt to suggest entitlement in law to some final outcome.
However, the term has been used in the authorities not in that sense, but with a lesser meaning of ‘reasonable’. Here too care is needed. Not every expectation or hope which might be entertained by a ‘reasonable man’ will necessarily attract the doctrine. This qualification was noted by Lord Diplock in Council of Civil Service Unions v Minister for the Civil Service...’”
[9] The CFMEU submitted that Collinsville should be distinguished as a decision primarily concerned with a party's right to be heard at first instance. The CFMEU referred the Bench to the discussion of what constitutes a "person aggrieved" contained in the Australian Institute of Marine and Power Engineers v Secretary, Department of Transport (AIMPE) 4 and Tweed Valley Fruit Processors Pty Ltd v Ross and Others(Tweed Valley)5. In summary it submitted that a party does not have to have its legal rights affected by a decision under appeal to be entitled to appeal that decision as a person aggrieved if it has an interest in the decision beyond that of an ordinary member of the public.
[10] There is a significant issue to be considered in this appeal concerning the operation of the Better Off Overall Test (BOOT) in agreements which incorporate a reference to the draft Building and Construction Industry (Fair and Lawful Building Sites) Code 2014 (the draft Building Code).
[11] We are satisfied that the CFMEU, given its interest in obtaining or maintaining reasonable conditions of employment for its members, many of whom are affected by the incorporation of clauses requiring compliance with the draft Building Code, is a person aggrieved with an "...intensity and degree well above that of an ordinary member of the public." 6
Permission to appeal
[12] This is an appeal pursuant to s.604 of the Act. This Full Bench must determine whether or not to grant permission to appeal. Permission to appeal must not be granted unless it is in the public interest to do so.
[13] The effect of the draft Building Code on applications for approval of agreements in the construction industry is a significant issue. CSR submits that it is a requirement for obtaining Commonwealth government contracts that agreements comply with the draft Building Code as varied or replaced from time to time. That submission is in accordance with the understanding of this Full Bench. In the construction industry, agreements have been approved by the FWC which have included equivalent clauses to the clause in the agreements which are the subject of these appeals. We consider the resolution of this issue attracts the public interest. We have therefore decided to grant permission to appeal.
The BOOT
[14] Clause 7 of the two agreements is identical. It provides for a conditional variation of the agreements. The clause is set out below:
“7. RELATIONSHIP TO AWARD AND THE BUILDING CODE
This Agreement incorporates the terms of the Joinery and Building Trades Award 2010 (‘the Award’) as varied from time to time, provided that where there is any inconsistency between the express terms of this agreement and the incorporated terms of the award, the terms of this agreement prevail to the extent of any inconsistency.
Building Code means the Building and Construction Industry (Fair and Lawful Building Sites) Code 2014 (Cth); as varied or replaced from time to time.
Queensland Code means Queensland Code of Practice for the Building and Construction Industry, as varied or replaced from time to time.
Guidelines means the Implementation Guidelines to the Queensland Code of Practice for the Building and Construction Industry, as varied or replaced from time to time.
The Agreement is intended to satisfy the Building Code.
This means that any Award provision that does not satisfy the Building Code is not incorporated into this Agreement. For the avoidance of doubt and without limitation, the following clauses of the Award are not incorporated into this Agreement:
a) Clause 8 - consultation;
b) Clause 9 - dispute resolution;
c) Clause 12.7 - casual conversion;
d) Clause 13.9 - apprentices;
e) Clause 26 - payment of wages;
f) Clause 28.2(c) - rostered days off; and
g) Clause 31 - alternative work arrangements.”
[15] Clause 11A of the draft Building Code is set out below:
“11A Attempts to avoid section 11 requirements
(1) A code covered entity must not be covered by an agreement in respect of building work which includes clauses that:
(a) purport to remedy, or render ineffective, clauses in an enterprise agreement that are inconsistent with section 11, including clauses which:
(i) provide for clauses in the enterprise agreement to be read in a manner that is consistent with subsections 11(1) and (3); or
(ii) provide for clauses in the enterprise agreements to have no effect if they are inconsistent with subsection 11(1) or subsection 11(3); or
(b) require or provide for the application of terms and conditions contained in an enterprise agreement that does not cover and apply to the relevant employer and employees.”
[16] The CFMEU submitted that the effect of clause 11A of the draft Building Code and clause 7 of both agreements is that if there is an inconsistency between the agreements and the draft Building Code the entire agreement is set aside. We disagree. We are satisfied that the effect of Clause 7 is that any offending clause of the agreements will be deemed to have no effect in the event of an inconsistency with the draft Building Code as varied or replaced from time to time. The rest and residue of the agreements will survive the inconsistency.
[17] The draft Building Code does not have any present statutory effect. Its terms and its future are uncertain. We are satisfied that this renders the operative terms of the agreements uncertain during the life of the agreements. It also seems to bring into question the genuine agreement of the relevant employees making the agreements.
[18] In their present form terms of the agreements as they operate in the future could be substantially altered by a decision of a third party. By this process the terms of the agreements would be altered by means other than a flexibility term within the agreements, or by a variation in compliance with the provisions of the Act. This could result in the substantial variations of the agreements, possibly to the detriment of employees, without the oversight or approval of the FWC exercising its obligations.
[19] Compliance with the draft Building Code is an imperative for businesses seeking contracts. The process of approval should endeavour not to be a hindrance to business with government.
[20] However, the Act requires that enterprise agreements contain terms and conditions of employment that are certain. We are not satisfied that the agreements, in their present form, whereby the future terms and conditions of the employees are capable of being altered by the act of a third party, are sufficiently certain to pass the BOOT.
[21] For these reasons we are satisfied that the agreements as approved do not pass the BOOT. We have therefore decided to allow the appeals and quash the decisions of his Honour Senior Deputy President Richards.
[22] There were other Grounds of Appeal in relation to compliance with the preapproval procedures for each of the agreements. Although we have decided to allow the appeals for the reasons we have already stated, the issues in relation to preapproval can be dealt with by further submissions from CSR. This Full Bench will then reconsider the applications in light of the material provided.
The Townsville Agreement
[23] The CFMEU contends that his Honour could not be satisfied that:
● The terms of the Townsville Agreement passed the BOOT.
● CSR had taken all reasonable steps to ensure that the terms and effect of the Townsville Agreement had been explained to its employees.
● CSR’s employees had access to the material incorporated into the proposed agreement.
[24] The CFMEU therefore contends that CSR's employees could not have genuinely agreed to the Townsville Agreement.
[25] Ms Priscilla Ball provided a statutory declaration (F17) dated 25 November 2014 in which she declared that:
● Copies of the proposed EBA were provided to each employee on 5 November 2014.
● A copy of the award was available on site on 5 November 2014.
● A toolbox talk took place on 5 November 2014 at which the date, place, method and time of the proposed vote was outlined.
● A vote by show of hands was conducted on 13 November 2014.
[26] Mr Scott Garrow provided an Employee Representative statutory declaration (F18A) dated 26 November 2014 in which he declared that:
● He was an employee bargaining representative.
● He agreed with an unspecified statutory declaration.
Were the preapproval steps complied with in relation to the Townsville Agreement?
[27] Setting aside the issue of the availability of the draft Building Code, with which we will deal with separately, we are satisfied that, in relation to compliance with ss.182(2)(a) and (b) and s.182(3) of the Act his Honour appropriately considered the statutory declarations provided and concluded that all reasonable steps had been taken to ensure compliance. He was entitled to rely on the statutory declarations. The underlying Award is a publicly available document and it was available at the workplace. There was no contradictory material. We would not disturb his conclusion. It was available to him.
[28] Pursuant to s.180(2)(b) should the CSR employees have had access to the draft Building Code as material incorporated by reference into the proposed Townsville Agreement?
[29] CSR employees had to understand the terms and conditions of the Townsville Agreement as they applied at the time it was presented to them for voting. At the date of voting the Townsville Agreement was not inconsistent with the draft Building Code. CSR employees could understand and vote on the agreement without consideration of the present effect of the draft Building Code on their future terms and conditions of employment. We are satisfied that CSR employees had access to all the necessary material for a proper consideration of the terms and conditions of their employment as they existed at the date of voting.
[30] Did CSR take all reasonable steps to ensure that the terms and effect of the Townsville Agreement at the time of voting and into the future had been explained to its employees?
[31] The CFMEU submitted that there was no evidence before his Honour, other than bald assertions, that all reasonable steps had been taken to ensure that the terms and effect of the Townsville Agreement had been explained to its employees. We do not need to consider any of the bald assertions the CFMEU refers to. There was no evidence in the statutory declarations provided, or otherwise, of any explanation provided to the CSR employees to whom the Townsville Agreement would apply, as to the terms and effect of the Townsville Agreement at the time of voting or in its future operation. One of the issues that we consider should have been explained to employees was the effect any amendment to the draft Building Code might have on the future application of the terms and conditions of the Townsville Agreement. There is no evidence of any such explanation.
[32] The legal context of this agreement is complicated. The interrelationship of the agreement and the documents incorporated by reference cannot be easily understood. We require evidence to be provided establishing that CSR took all reasonable steps to ensure that the terms and effect of the Townsville Agreement was explained to its employees at the time of voting and as to its future operation.
The Cairns Agreement
[33] As in the case of the Townsville Agreement the CFMEU contends that his Honour could not be satisfied that:
● The terms of the Cairns Agreement passed the BOOT.
● CSR had taken all reasonable steps to ensure that the terms and effect of the Cairns Agreement had been explained to its employees.
● CSR’s employees had access to the material incorporated into the proposed agreement.
[34] The CFMEU therefore contends that CSR's employees could not have genuinely agreed to the Cairns Agreement.
[35] In addition to the issues raised in common in relation to both the Townsville and Cairns Agreements his Honour could not have been satisfied that, pursuant to s.180(3) of the Act, employees had been notified of the steps to be taken for voting in relation to the Cairns Agreement.
[36] Mr Brad Gething provided a statutory declaration (F17) on 19 November 2014 in which he declared that:
● Employees were informed by Mr Stuart Oastler, Branch Manager, on 7 November 2014, that a vote would be taking place on 10 November 2014.
● The vote took place on 10 November 2014.
[37] On 2 December 2014 correspondence from his Honour’s Chambers was forwarded to Mr Gething. It is extracted below.
“The application to approve the CSR Limited Viridian ‘New World Glass’ Cairns Agreement 2014 has been allocated to Senior Deputy President Richards.
His Honour advises as follows:
At the outset I note a threshold issue in relation to this application.
Notification of voting process
Section 181(1) of the Act states that an employer may request the employees employed at the time, who will be covered by a proposed enterprise agreement, to approve the agreement by voting for it. Section 180 of the Act sets out various pre-approval requirements that an employer is obliged to meet before an employer requests employees to approve the proposed agreement. Sections 180(2), 180(3) and 180(4) of the Act otherwise regulate the pre-approval steps and state:
“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).
......”
Section 180(3) of the Act provides that the employer must take all reasonable steps to notify the relevant employees of the time and place at which the vote will occur and the voting method that will be used “by the start of the access period”.
Section 180(4) of the Act provides that the “access period” is a seven day period ending immediately before the voting commences. It follows that the access period is not any seven day period that commences before the ballot. Rather, it is the seven day period that immediately precedes the voting process.
Section 180(4) of the Act therefore serves to identify the means by which the start of the access period is calculated, and that is by counting back seven days before the voting process starts. That is, the access period is not calculated as a period of time going forward from an event, but as the seven days that precede an event (i.e. the commencement of the voting process).
In the case before me now, the voting process is expressed to have commenced on 10 November 2014, and therefore the access period is calculated by counting backwards (from the day “before”) to discern the date on which the access period starts. The seven days before the “before” the voting process are: 9 November 2014, 8 November 2014, 7 November 2014, 6 November 2014, 5 November 2014, 4 November 2014 and 3 November 2014.
The difficulty that this presents for the application is that the requirements of s.180(3) of the Act must be carried out “by the start of” the access period. On the Form F17 as completed by the Applicant, that information was provided to employees on 7 November 2014, which is during the access period.
In stating as such, I am assuming that the phrase “by the start of” the access period means a time before the access period starts. This appears to me to be the plain and ordinary meaning of the phrase.
The Applicant may wish to review its procedures as they were in this respect and confirm the facts in its prior declaration, or else provide an explanation of the reasonable steps it took prior to 3 November 2014 (the start of the access period) to notify the relevant employees (but which were unsuccessful so that the notification took place later, on the 7th). If the F17 includes an error, an explanation and amended F17 declaration should be provided.
Please provide any response to the above no later than COB on 5 December 2014.”
[38] Mr Gething responded on 5 December 2014. His response is set out below.
“Dear Senior Deputy President Richards,
I refer to the email below in which you have questioned the Notification of voting process in respect to the lodgement of the CSR Limited Viridian New World Glass Cairns Agreement 2014. I wish to advise that upon checking the Form F17 I can only envisage that I inadvertently put in the wrong date. I have gone back to the Branch Manager at the Cairns site and have been advised by him that the matter was discussed in fact on the 30th October 2014, not the 7th November as stated in the Form F17. In support of that fact I attach an email from the Branch Manager outlining the process that took place. I also attach a revised Form F17 as requested.
Please accept my apologies for any inconvenience caused by this error.”
[39] He provided a memorandum from the Branch Manager which is set out below and then provided an amended F 17 which corrected the date in paragraph 2.5.
“Brad,
I have asked the employees for clarification on their voting process.
Robbie Peterson has informed me that it was decided on Thursday 30th October a meeting, after smoko, on the Monday 10th November will be held to vote on the EBA.
This was performed and they handed the signed copy to me on the 10th November around 10am.”
[40] At the request of his Honour a further statutory declaration was provided by Mr Gething on 5 January. It set out the circumstances by which he came to correct the mistake contained in his first statutory declaration. Despite his Honour’s request it did not deal with access to or the provision of materials to employees. In this declaration he declared that:
● He had been informed by the Cairns Branch Manager that on 30 October 2014 employees were told that a vote for the Cairns Agreement was to be held on 10 November 2014.
● A vote was conducted on 10 November 2014.
[41] Mr Robbie Peterson, who was an employee, but not a bargaining representative appointed by one or more employees in accordance with the Act, provided a statutory declaration in which he declared that the employees he represented supported the approval of the Cairns Agreement. He declared that he agreed with the statutory declaration of Brad Gething dated 5 December 2014.
Were the preapproval steps complied with in relation to the Cairns Agreement
[42] Setting aside the issue of the availability of the underlying award and the draft Building Code, with which we will deal separately, we are satisfied that, in relation to compliance with s.180(2)(a)(i) of the Act there was material before his Honour on the basis of which he could be satisfied that the relevant employees had access to the Cairns Agreement.
[43] We are satisfied that there was material before his Honour on which he could be satisfied that ss.180(3)(a) and (b) of the Act had been satisfied. We are satisfied that his Honour considered the statutory declarations provided. There was no contrary evidence. He was entitled to rely on those declarations.
[44] Pursuant to s.180(2)(b) of the Act should the CSR employees have had access to the draft Building Code and award as material incorporated by reference into the proposed Cairns agreement?
[45] CSR employees had to understand the terms and conditions of the Cairns Agreement as they applied at the time it was presented to them for voting. At the date of voting the Cairns Agreement was not inconsistent with the draft Building Code. CSR employees could understand and vote on the agreement without consideration of the present effect of the draft Building Code on their future terms and conditions of employment. The underlying award is a publicly available document. There is no evidence that the underlying award was available at the workplace as was declared to be the case in Townsville.
[46] Did CSR take all reasonable steps to ensure that the terms and effect of the Cairns Agreement at the time of voting and in the future had been explained to its employees?
[47] As with the Townsville Agreement the CFMEU submitted that there was no evidence before the Commission other than bald assertions that all reasonable steps had been taken to ensure that the terms and effect of the Cairns Agreement had been explained to CSR employees. We do not understand, and have not considered, what bald assertions the CFMEU refers to. There was no evidence in the statutory declarations provided, or otherwise, as to any explanation provided to the CSR employees to whom the Cairns Agreement would apply, as to the terms and effect of the Cairns Agreement at the time of voting or in its future operation. One of the issues that might have been explained to employees was the effect any amendment of the draft Building Code might have on the future application of the terms and conditions of the Townsville Agreement. There is no evidence of any such explanation.
[48] The material supplied was inconsistent and inadequate. There were no employee representatives as determined by the Act. When Mr Gething declared that the company had ensured that employee representatives understood the terms and conditions of the Cairns Agreement it is not clear who was the subject of his declaration. The material provided was inadequate and internally inconsistent. We require evidence to be provided establishing that CSR took all reasonable steps to ensure that the terms and effect of the Cairns Agreement was explained to its employees at the time of voting and as to its future operation.
[49] We have decided to reconsider the applications for approval of the two agreements.
[50] In relation to the BOOT we are satisfied that our concerns can be met by an undertaking provided by the respondents to this appeal in the following terms:
“If, subsequent to approval, any clause of this agreement is deemed inconsistent with the Building and Construction Industry (Fair and Lawful Building Sites) Code 2014 the parties will address any inconsistency through an application to vary the agreement pursuant to the Fair Work Act 2009.”
[51] We are satisfied that this undertaking will ensure that any modification or nullification of a substantive term or terms of the agreements arising from a deemed inconsistency with a future variation or replacement of the draft Building Code will involve the informed consent of the employees and will be subject to the approval requirements for a variation of an agreement in accordance with the Act.
[52] In relation to both agreements CSR should give consideration to the undertaking drafted by this Bench and advise within 7 days whether it will consent to the undertaking. If an amendment to this undertaking is proposed by either party, consultation between the parties should occur and a Member of this Bench will relist the matter for conference.
[53] We have indicated that we have misgivings as to whether we could be satisfied on the material before his Honour that all reasonable steps had been taken to ensure that the relevant employees had had explained to them the terms and effect of the agreements.
[54] CSR can address these issues by further evidence which should be provided within 14 days. This Full Bench will satisfy itself as to compliance with the preapproval requirements in relation to the Cairns Agreement. The CFMEU may respond to that evidence 7 days thereafter if it considers it appropriate to do so.
SENIOR DEPUTY PRESIDENT
Appearances:
Mr White of Counsel, instructed by Hall Payne Lawyers for Construction, Forestry, Mining and Energy Union
Mr C Murdoch of Counsel, instructed by Herbert Smith Freehills for CSR Limited.
Hearing details:
Brisbane
2015
March 4
1 AG2014/8328
2 AG2014/8253
3 [2014]FWCFB 7940
4 13 FCR 124 at 134
5 65 IR at 393
6 13 FCR 124 at 134
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