Construction, Forestry, Mining and Energy Union v Jeld-Wen Australia Pty Ltd T/A Jeld-Wen Australia Qld
[2016] FWCFB 4461
•20 JULY 2016
| [2016] FWCFB 4461 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
v
Jeld-Wen Australia Pty Ltd T/A JELD-WEN Australia QLD
(C2016/1322)
VICE PRESIDENT CATANZARITI | MELBOURNE, 20 JULY 2016 |
Appeal against decision [2016] FWCA 3088 of Commissioner Lee at Melbourne on 17 May 2016 in matter number AG2016/958.
[1] On 17 May 2016 Commissioner Lee issued a decision 1 (Decision) which approved the JELD-WEN Australia QLD Enterprise Agreement (Agreement). On 7 June 2016 the Construction, Forestry, Mining and Energy Union (CFMEU), who was not a bargaining representative, lodged a Notice of Appeal on the basis that it was not sufficiently clear that s.180 and s.186 of the Fair Work Act 2009 (FW Act) had been satisfied.
[2] We heard the appeal on 5 July 2016 and decided to uphold the appeal and quash the original Decision and rehear the application. The first part of this decision provides our reasons for upholding the appeal. The second part of this decision provides our findings with regards to the application for the approval of the Agreement.
[3] At the hearing on 24 June 2016, Ms Doust sought permission to appear for the CFMEU and Mr Farr sought permission to appear for Jeld-Wen Australia Pty Ltd (Respondent). Given the complexity of the matter, and having regard to s.596 of the FW Act, permission was granted to both parties to be represented.
Background
[4] The relevant background to this appeal is provided by the Form F17 2 lodged on 14 April 2016 and can be summarised as follows:
- On 23 March 2016 a copy of the Agreement was provided to all employees;
- In accordance with s.180(5) of the FW Act, meetings were held with all employees to discuss and afford opportunity for employees to raise any questions they had and to discuss the relevant pay increases to be awarded to each employee;
- A vote was conducted on 14 April 2016. Ten of the sixteen employees who were to be covered by the Agreement casted a valid vote, all voting to approve the Agreement; and
[5] At first instance, the Commissioner decided that:
“[2] I am satisfied that each of the requirements of ss.186, 187 and 188 as are relevant to this application for approval have been met.
[3] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 24 May 2016. The nominal expiry date of the Agreement is 31 March 2019.” 3
The Appeal
[6] The Appeal concerned a typographical error in Appendix A of the Agreement that was not identified by the parties or the Commissioner at first instance. Specifically, under the heading “Wages Rates from date of lodgement” in Appendix A of the Agreement, the dates of the three increases were left as “[insert date]”. 4 This appears as:
[7] On behalf of the Respondent, Mr Mark Grundy, the Director of Human Resources at Jeld-Wen Australia Pty Ltd, provided a statement that we have marked as exhibit A 5 in which he conceded that Appendix A of the Agreement contains a typographical error. Mr Grundy states that the dates in the table which should have been inserted were as follows:
- Column 2 (2.2% increase effective): Date of lodgement
- Column 3 (2.2% increase effective): 1 April 2017
- Column 4 (2.2% increase effective): 1 April 2018
[8] In exhibit A, Mr Grundy gave an undertaking (Undertaking) that these wage increases are those agreed to by the employees and will apply to all employees covered by the Agreement. 6
[9] At the heart of the appeal was whether the Undertaking could remedy the typographical error in Appendix A of the Agreement, addressing the concerns raised in the CFMEU’s grounds of appeal. 7
CFMEU’s Submissions
[10] The CFMEU contended that permission to appeal should be granted on the basis that the appeal raises issues with regards to the mandatory pre-approval requirements of the FW Act in circumstances where an agreement contains terms that are unclear and objectively unidentifiable. The CFMEU posited that an error of the type in Appendix A of the Agreement is a matter of general and public interest pursuant to s.604(1) of the FW Act.
[11] The CFMEU submitted that the error in Appendix A left in some doubt the issue of the rate of wage increases at the commencement of the Agreement. The CFMEU further submitted that consistent with a decision of a Full Bench of the Commission in Construction, Forestry, Mining and Energy Union v CSR Limited, 8 an agreement must be sufficiently clear on its face so as to permit an objective determination of its meaning and effect.
[12] The CFMEU further submitted that the rates set out in Appendix A are uncertain and may be construed as placing no obligation on the employer to pay the rates because of the error. On that basis the CFMEU posited that the Commission could not be satisfied that the Agreement has genuinely been agreed to and that therefore, s.180(5) of the FW Act has not been satisfied.
[13] In oral submissions at the hearing, the CFMEU submitted that nothing could satisfy the Commission that the Agreement, with the dates provided in the Undertaking inserted, was genuinely agreed to 9 as there is a limit as to what can be made of the Undertaking.10 The CFMEU submitted that the only document that the Commission could find was genuinely agreed to is the original Agreement with the relevant dates omitted.11 The CFMEU did not seek to cross-examine Mr Grundy12 and did not seek a formal adjournment to cross-examine Mr Grundy at a later date.13
Respondent’s Submissions
[14] The Respondent contended that it would not be in the public interest to grant permission to appeal on the basis that there has been no error on the part of the Commission at first instance. The Respondent posited that by considering the relevant material at first instance, it was clearly open to the Commission to approve the Agreement and that as a result, permission to appeal should not be granted pursuant to s.604(1) of the FW Act.
[15] With regards to the CFMEU’s contention concerning genuine agreement, the Respondent submitted that it took all reasonable steps to ensure the terms of the Agreement, and the effect of those terms, were explained to the relevant employees. The Respondent posited that all that has happened is that there has been a typographical error which does not lead to the conclusion that the Agreement has not been genuinely agreed to.
[16] In relation to the better off overall test, the Respondent submitted that the terms and conditions in the Agreement surpassed the terms and conditions of the Joinery and Building Trades Award 2010 (Award) for each employee covered by the Agreement.
[17] In summary, the Respondent submitted that by incorporating the dates provided in the Undertaking into the Agreement, the Commission can be satisfied that the terms of the Agreement have been adequately explained, genuinely agreed to and pass the better off overall test. 14
Consideration
[18] The Commission will grant permission to appeal only if it is in the public interest to do so. 15 The test of assessing whether the public interest is enlivened is discretionary, involving a broad value judgement.16 In GlaxoSmithKline Australia Pty Ltd v Colin Makin,17 the Full Bench summarised the test for determining the public interest as follows:
“[26] Appeals have lain on the ground that it is in the public interest that leave should be granted in the predecessors to the Act for decades. It has not been considered useful or appropriate to define the concept in other than the most general terms and we do not intend to do so. The expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only by the objects of the legislation in question. [Comalco v O’Connor (1995) 131 AR 657 at p.681 per Wilcox CJ & Keely J, citing O’Sullivan v Farrer (1989) 168 CLR 210]
[27] Although the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters, it seems to us that none of those elements is present in this case.”
[19] Otherwise, the grounds for granting permission to appeal include that the decision is attended with sufficient doubt to warrant its reconsideration or that substantial injustice may result if leave is refused. 18
[20] In determining this appeal we have read and considered all material filed by the parties including all submissions, correspondence and relevant authorities.
[21] We find that permission to appeal should be granted in this matter. We are of the view that the appeal raises important questions concerning the mandatory pre-approval requirements of the FW Act in circumstances where an agreement contains terms that are unclear and objectively unidentifiable. We consider this to be an important matter with regards to the approval of enterprise agreements and that therefore, the dispute arising in this case is a matter of public interest. It is on this basis that permission to appeal is granted.
[22] The Commission can only approve an enterprise agreement if it is satisfied that the mandatory requirements of the FW Act have been complied with. With the relevant dates omitted from Appendix A of the Agreement, we accept the Appellant’s submissions that the Agreement does not pass the mandatory requirements of the FW Act. At the hearing, we expressed this preliminary view to the parties. 19 The Parties did not oppose this view and did not oppose our preliminary suggestion that the Commissioner’s decision should be quashed. We are therefore satisfied that the appeal should be upheld and that we should quash the original Decision. As such, the Commissioner’s Decision is quashed.
[23] On this basis we have proceeded to rehear the application for the approval of the Agreement and our findings are provided below.
The Agreement
[24] The application for the approval of the Agreement was made pursuant to s.185 of the FW Act. The issue before us is whether the Undertaking provided by Mr Grundy remedies the typographic error in Appendix A of the Agreement, thereby addressing the concerns raised in the CFMEU’s grounds of appeal. In summary, the CFMEU’s grounds of appeal were that given the typographic error in Appendix A of the Agreement:
- the Commission could not be satisfied that the Agreement has been adequately explained pursuant to s.180(5) of the FW Act;
- the Commission could not be satisfied that the employees have genuinely agreed to the Agreement pursuant to s.186(2)(a) of the FW Act; and
- the Commission could not be satisfied that the Agreement passes the better off overall test pursuant to s.186(2)(d) of the FW Act.
[25] It follows that if the Undertaking can address these concerns, it is sufficient to remedy the typographic error in Appendix A of the Agreement, and should be accepted by the Commission on the condition that s.190 of the FW Act is satisfied. As such, we will address the concerns raised by the CFMEU below and then proceed to considering s.190 of the FW Act.
s.180(5) – adequate explanation
[26] Section 180(5) of the FW Act prescribes that an employer must take all reasonable steps to ensure that the terms of the agreement, and the effect of those terms, are explained to the relevant employees in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.
[27] We agree with the submissions of the CFMEU that there was not an adequate explanation provided to the employees that Appendix A of the Agreement would have a typographical error. This occurred on the basis that Respondent, in explaining the terms of the Agreement, did not notice the typographical error in Appendix A of the Agreement.
[28] The evidence in exhibit A indicates that the Respondent explained to the relevant employees that Appendix A of the Agreement would have included in it the dates which are the dates listed by Mr Grundy in exhibit A. It follows that the Agreement, combined with the evidence provided in exhibit A, gives effect to the explanation that the Respondent provided to the relevant employees. Therefore, the Respondent’s failure to adequately explain that there would be a typographic error in Appendix A of the Agreement is remedied by the evidence in exhibit A and specifically, the Undertaking regarding the relevant dates that should have been included. The weight of evidence indicates that the Agreement, when read in conjunction with the Undertaking in exhibit A, reflects the explanation that the Respondent offered to the relevant employees. It follows that the Agreement, when read together with exhibit A, adequately reflects the explanation that the Respondent provided the relevant employees, satisfying s.180(5) of the FW Act.
s.186(2)(a) – genuine agreement
[29] Pursuant to s.186(2)(a) of the FW Act, the employees must have genuinely agreed to the enterprise agreement. We agree with the CFMEU’s submissions that the Agreement, with the relevant dates omitted from Appendix A, is not what the employees agreed to.
[30] However, as the weight of the evidence indicates that the employees agreed to the dates that are prescribed in the Undertaking, we do not agree with the CFMEU’s contention that the Agreement, combined with the Undertaking, can never meet the genuine agreement requirement. 20 To the contrary, the Agreement, in conjunction with the Undertaking, gives effect to the terms and dates that the employees genuinely agreed to. It therefore follows that the Agreement, read in combination with the Undertaking, passes the requirement in s.186(2)(a) of the FW Act.
s.186(2)(d) – better off overall test
[31] At the hearing the CFMEU accepted 21 that the Agreement, with the relevant dates included in Appendix A, passes the better off overall test pursuant to s.193 of the FW Act.
s.190 – undertakings
Pursuant to s.190(2) of the FW Act, the Commission may approve an Agreement if the Commission is satisfied that an undertaking accepted by the Commission meets a concern raised by the parties. In light of the above analysis, we are satisfied that the Underataking meets the concerns raised by the CFMEU and remedies the typographical error in Appendix A of the Agreement.
[32] Section 190(3) – (5) of the FW Act prescribes additional requirements to be satisfied before an undertaking is accepted. Section 190(3) of the FW Act provides that:
“190 FWC may approve an enterprise agreement
(3) The FWC may only accept a written undertaking from one or more employers covered by the agreement if the FWC is satisfied that the effect of accepting the undertaking is not likely to:
(a) Cause financial detriment to any employee covered by the agreement; or
(b) Result in substantial changes to the agreement.”
[33] The parties did not consider s.190(3) of the FW Act to be a relevant concern, 22 and we are satisfied that the Undertaking is not likely to cause financial detriment to any employee covered by the agreement or result in substantial changes to the Agreement.
[34] On the basis that the CFMEU was not appointed as a bargaining representative, s.190(4) of the FW Act, which requires consultation with bargaining representatives before an undertaking is approved, is not relevant.
[35] Furthermore, we are satisfied that the Undertaking meets the requirements prescribed by the regulations, pursuant to s.190(5) of the FW Act.
Summary
[36] In light of the above, we are satisfied the Undertaking addresses the concerns raised by the CFMEU and sufficiently remedies the typographic error in Appendix A of the Agreement. We are satisfied that sections 190(3), 190(4) and 190(5) of the FW Act do not apply to prevent us from accepting the Undertaking. As such, we are satisfied that it is appropriate for us to accept the Undertaking and approve the Agreement. The Agreement is therefore to be read in conjunction with the Undertaking pursuant to s.190(2) of the FW Act.
Conclusion
[37] Taking the Agreement into account in conjunction with the Undertaking, we are satisfied that the employees will be better off overall under the Agreement.
[38] Subject to the Undertaking, we are satisfied that each of the requirements of ss.186, 187 and 188 as are relevant for the approval of the Agreement have been met.
[39] The Agreement is approved and, in accordance with s.54 of the FW Act, will operate from 27 July 2016. The nominal expiry date of the Agreement is 31 March 2019.
VICE PRESIDENT
Appearances:
Ms L. Doust of Counsel for the Appellant
Mr A. Farr for the Respondent
Hearing details:
9:30am
5 July 2016
Brisbane
1 [2016] FWC 3088.
2 Appeal book, tab 10.
3 [2016] FWC 3088.
4 Appendix A of the Agreement.
5 Transcript, PN73.
6 Ibid.
7 Transcript, PN29.
8 (2015) 250 IR 16.
9 Transcript, PN21.
10 Transcript PN22.
11 Transcript PN39.
12 Transcript PN73.
13 Transcript PN82.
14 Transcript PN47.
15 Fair Work Act 2009 (Cth) s 604(2).
16 Esso Australia Pty Ltd v AMWU; CEPU; AWU[2015] FWCFB 210 at [6].
17 [2010] FWAFB 5343 at [27].
18 Esso Australia Pty Ltd v AMWU; CEPU; AWU[2015] FWCFB 210 at [7].
19 Transcript, PN11.
20 Transcript, PN64.
21 Ibid.
22 Transcript, PN46 and PN54.
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