FEDERAL COURT OF AUSTRALIA
Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd [2017] FCA 1266
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- Case
- [2017] FCA 1266
- Decision Date
CaseChat Overview and Summary
The court considered the procedural fairness of the approval process and the substantive validity of the agreement. It noted that the Fair Work Commission had engaged with the parties and provided detailed feedback on potential issues with the agreement. However, the court found that the Commission had not taken all reasonable steps to ensure that the employees understood the implications of the agreement, particularly in relation to clauses that affected their rights under the modern awards. The court concluded that the agreement was not genuinely agreed to by the employees and that it was not susceptible of approval under the Fair Work Act. The court also considered the delay in filing the Originating Application but found that the delay was adequately explained and that the discretion should not be exercised to refuse relief.
The Federal Court set aside the approval granted by the Fair Work Commission and concluded that the enterprise agreement was not an agreement that was susceptible of approval under section 186 of the Fair Work Act. The parties were ordered to bring in Short Minutes of Orders to give effect to these reasons within fourteen days. This case highlights the importance of procedural fairness in the approval of enterprise agreements and the need for the Fair Work Commission to ensure that employees fully understand the terms of any agreement before it is approved.
Orders
Orders of the court
1. The parties are to bring in Short Minutes of Orders to give effect to these reasons within fourteen days.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
A further email was sent by the Commission on 13 October 2015 which stated in part as follows (without alteration):I write in relation to the above matter and refer to your email dated 30 September 2015 and the email from my colleague dated 18 September 2015.Commissioner Roe notes your response, however, has raised the following issues that could be potentially disadvantageous on employees, noting that the agreement incorporates the Awards listed in clause 2.1(b).Operation of clause 9.2 and 12.5 conjunctively:Clause 9.1 provides that employees shall be engaged on assignment as either a full time, part time or casual employee.Further, clause 9.2 provides that full time or part time employees can be engaged on a permanent, fixed term, maximum term or fixed task basis.Clause 12.5 provides that when an employee is on assignment the client can change a nominated shift pattern or roster cycle. Each time a cycle is changed an employee’s assignment will be taken to end.The Commissioner is concerned that clause 12.5 is inconsistent with the employment categories under the agreement.Clause 11 Casual ConversionClause 11 removes an employee’s right to casual conversion, where it is an entitlement under any of the Modern awards listed in clause 2.1(b).The removal of the right to casual conversion is compensated by an additional loading of 1%.The Commissioner is not satisfied that the additional 1% is sufficient compensation for the removal of the right to casual conversion.Clause 12.3 Maximum Hours of WorkClause 12.3 of the agreement provides that an employee can work a maximum of 12 hours per day.The Commissioner notes that the incorporated awards provide numerous different mechanisms of setting the maximum working hours for employees.Thus, the Commissioner is concerned with clause 12.3 providing that all employees can be required to work a maximum of 12 hours on any day, irrespective of which award would cover the work that they are performing.Clause 9.4: Abandonment of employmentClause 9.4 provides that where an employee is absent from work for a continuous period exceeding two working days, employment is deemed to be abandoned. The Commissioner notes that the abandonment of employment is possible at common law. Further in relation to the incorporated awards under the agreement, it is available under only the Manufacturing and Associated Industries and Occupations Award 2010.The Commissioner is concerned that this clause does not provide the opportunity for employees to explain their absence. This restricts an employee’s opportunity to prevent their employment being considered abandoned by the employer.The Commissioner also notes that the Manufacturing and Associated Industries and Occupations Award 2010 requires an employee to be absent for a period exceeding three working days to activate the abandonment provisions.Clause 6: Policies and ProceduresClause 6 requires employees to comply with specific client policies and procedures applicable to their assignment of work.The Commissioner is concerned that the terms of employment can thus be changed to incorporate provisions that could not be assessed by the Fair Work Commission, whilst the agreement is being considered for approval.The Commissioner is willing to consider any undertakings in relation to any of the above matters or any of the matters previously raised in correspondence. Alternatively, you may wish to provide submissions in relation to the additional matters raised.If you do wish to provide any undertakings please do so in a written and signed format and return it via email to the address provided below. Any undertakings should be signed by the employer. Furthermore, the Commissioner asks that you seek the views of all bargaining representation, if any, regarding any proposed undertakings. Any objections to the proposed undertakings should be raised with the Commission prior to the approval of the agreement.The Commissioner has asked that you provide any undertakings or submissions by close of business on Friday, 16 October 2015. That email provoked a response by the solicitors acting for One Key Workforce on 16 October 2015. That response was a letter which addressed in such detail as was then thought appropriate the matters canvassed in the email from the Commission under the headings:·“Operation of clauses 9.2 and 12.5 conjunctively”·“Clause 11 – casual conversion”·“Clause 12.3 – maximum hours of work”·“Clause 9.4 – abandonment of employment”·“Clause 6 – policies and procedures”Also forwarded to the Commission on 16 October 2015 was an undertaking that RECS would “not apply clause 9.4 of the RECS (Qld) Pty Ltd Enterprise Agreement 2015 as a term of the Agreement” and that cl 12.3 of the Agreement would “be read subject to clauses 22.3 and 23.3 of the Road Transport and Distribution Award 2010”.