Contract Resources Pty Ltd T/A Contract Resources
[2019] FWCA 4776
•12 JULY 2019
| [2019] FWCA 4776 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Contract Resources Pty Ltd T/A Contract Resources
(AG2018/7297)
CONTRACT RESOURCES PTY LTD WESTERN AUSTRALIAN NORTH WEST ENTERPRISE AGREEMENT
Manufacturing and associated industries | |
COMMISSIONER WILSON | MELBOURNE, 12 JULY 2019 |
Application for approval of the Contract Resources Pty Ltd Western Australian North West Enterprise Agreement.
[1] An application has been made for approval of an enterprise agreement known as the Contract Resources Pty Ltd Western Australian North West Enterprise Agreement (the 2018 Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Contract Resources Pty Ltd T/A Contract Resources (Contract Resources). The Agreement is a single enterprise agreement.
[2] By way of background, a previous agreement Contract Resources Western Australia Operations Enterprise Agreement 2019 (the First Agreement) was voted down by employees, which led to the commencement of bargaining for two separate agreements (a) the Contract Resources Pty Ltd Western Australia South West Enterprise Agreement (the South West Agreement) and (b) the 2018 Agreement covering the North West Region of Western Australia. The South West Agreement was approved by Commissioner Riordan on 30 May 2019. The 2018 Agreement is the subject of the below decision.
[3] On 28 March 2019 the Commission raised three issues regarding approval of the 2018 Agreement by email as follows:
“Good afternoon,
RE: AG2018/7297 Application for approval of the Contract Resources Pty Ltd Western Australian North West Enterprise Agreement.
Please be advised that the above application has been allocated to Commissioner Wilson for determination.
Upon review of the application the Commissioner has asked that the below concerns please be addressed as soon as possible but not later than close of business Tuesday, 2 April 2019.
PRE-APPROVAL
1. Time between notification time and last NERR (Q2.3 + Q2.4): The Form F17 it is indicated that the date the last notice of representational rights was given to the employees was on 15 September 2018, and that the notification time was on 29 August 2018. As you may be aware, section 173(3) of the Fair Work Act 2009 requires that the employer must give the notice no later than 14 days after the notification time for the Agreement. The dates provided in the Form F17 indicate that more than 14 days had passed between when the employees were notified and when they were given the notice. Could clarification please be provided as to the notification date and the date the first notice of employee representational rights was given to employees. If the dates provided in the Form F17 lodged with the Agreement are incorrect, please provide a revised Form F17 with the correct dates, and ensuring all signature requirements of the statutory declaration are complied with. Alternatively, if the dates are correct the Commissioner invites further information having regard to the decision in Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others[2019] FWCFB 318.
NES
2. Abandonment of employment (Clause 4.1(k)): The abandonment of employment provision at Clause XXXXX may be inconsistent with the National Employment Standards (NES) at section 117 of the Act (see Bienias v Iplex Pipelines Australia Pty Limited[2017] FWCFB 38 at [58]). Clause 4.1(k) states that ‘termination of employment by abandonment’ occurs after 3 days continuous non-explained absence with the last date of attendance/date of approved attendance being the date of termination. As such, notice of termination appears contrary to NES. The Commissioner invites the employer to give an undertaking to the effect that clause 4,1(k) of the Enterprise Agreement will operate subject to the NES in that employees will receive notice of termination.
BOOT
The following issue(s) have been identified in relation to whether employees will be better off overall under the Agreement:
3. Apprentices are contemplated in clause 7.5(j) regarding exemption from notice of termination, however, there is no further mention of apprentices throughout the agreement including their rates of pay. As such, it is unclear whether they are better off under the Agreement.
Please provide information on how employees will be better off overall under the Agreement taking into account these issues. You may also wish to consider undertakings to address one or more of the issues identified above.
Undertakings:
If undertakings are to be provided, please ensure that they are:
● provided in a form that can be published with the Agreement (for example, as a standalone document separate to any response provided); and
● signed in accordance with the Fair Work Regulations 2009, in particular, regulation 2.07, which states: “For subsection 190(5) of the Act, an undertaking relating to an enterprise agreement must be signed by each employer who gives the undertaking.”
Note to Bargaining Representatives
Bargaining representatives for the Agreement are requested to provide any views in relation to undertakings provided by the Employer, including whether the undertakings are supported or opposed as well as any reasons why, by close of business Wednesday, 3 April 2019 to ensure those views can be considered prior to the application being finalised.
Kind regards,
…”
[4] On 1 April 2019, submissions opposing approval were raised anonymously by an employee claiming to be covered by the 2018 Agreement as follows:
1. That one of the employee bargaining representatives had throughout the bargaining process transitioned to an office supervisory/management position, ceasing to be an independent representative for employees meaning they had a conflict of interest in representing the companies interests as well as employees interests in negotiations;
2. That the process of the vote was not independent as employees were required to send their vote to the abovementioned employee bargaining representative being a process not agreed to by employees;
3. That prior to the vote, pressure was placed on employees by management to approve the 2018 Agreement in order to obtain future contracts; and
4. That the Agreement did not pass the better off overall test (BOOT) as a result of changes to the sustenance allowance and remote allowance from that of the previous Agreement. Previously the sustenance and remote allowance were paid to employees together at $90 a day however, under the proposed Agreement these allowances have been separated with the remote allowance being more narrowly applied to remote sites offshore on islands and on mainland remote refineries/mining sites resulting in a reduction of $50 a day from the previous Agreement to certain employees.
[5] On 2 April 2019, the Applicant responded to the Commission’s concerns as raised on 28 March 2019 providing undertakings that the notice of termination provisions of the NES will be applied to employees who abandon their employment and that apprentices are not covered by the Agreement nor were any apprentices employed at the time the Agreement was made. Submissions were also provided in response to the pre-approval concern raised as follows:
“…
Issuing the Notice of Employee Representational Rights (NERR)
We start by noting that the timing and steps associated with issuing the NERR set out in paragraph 2.4 of the Form F17 are correct. In summary:
● the Company initially determined to commence bargaining for the Agreement on 29 August 2018 (Notification Time);
● by 10 September 2018, and well within 14 days of 29 August 2018, the Company believed it had provided a copy of the NERR to all employees covered by the Agreement. The vast majority were provided by hand, with only a small number emailed to employees working remotely on Barrow Island;
● on 13 September 2018, the Company discovered that it had failed to issue the NERR to 10 employees located at one site (Montara Site). The Company promptly rectified its error by issuing copies of the NERR to the 10 employees at the Montara Site by hand on 13 September 2018.
The initial failure to issue the NERR to the Montara Site employees was a genuine oversight.
The Agreement covers remote onshore and offshore sites in the North West of Western Australia. With the exception of the Montara Site, all sites covered by the Agreement are mobilised out of Western Australia. By contrast, the Montara Site is mobilised out of Darwin even though the site itself is within Western Australia. The mobilisation of the site out of Darwin is done purely for convenience given the location of the Montara Site. When arranging for the distribution of the NERR, the fact that the Montara Site is mobilised out of Darwin caused that group of employees to be overlooked in issuing the NERR. Once discovered the Company acted promptly to address its error.
The Company submits that the distribution of the NERR to the Montara Site employees more than 14 days after the Notification Time is not a barrier to the approval of the Agreement.
Elaborating on this, notwithstanding that s.173(3) (read together with s.174) of the FW Act required the Company to take all reasonable steps to provide the NERR to relevant employees within 14 days of the Notification Time, Commissioner Wilson can still be satisfied the Agreement was ‘genuinely agreed’ having regard to s.188(2) of the FW Act. This section provides:
(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and
(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.
Here, Commissioner Wilson can be satisfied that the late issuance of the NERR was both a ‘minor procedural’ error in respect of the requirements in s.173 andthat the employees covered by the Agreement were not likely to have been ‘disadvantaged’ by it.
In terms of the error constituting a ‘minor procedural’ error, we note:
● in Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others [2019] FWCFB 318 (Huntsman), a Full Bench of the Fair Work Commission found the obligation to provide employees with a NERR in s.173(3) is a ‘procedural’ requirement and, accordingly, a failure to comply with such a requirement was a ‘procedural error’: see paragraph 117. The Full Bench went on to say that what constitutes a ‘minor’ error calls for an evaluative judgement and, generally speaking, the lower the level of non-compliance the more likely it is to be characterised as a ‘minor error’: see paragraph 117;
● in Veolia Environmental Services (Australia) Pty Ltd T/A Veolia Environmental Services [2019] FWCA 1645 (Veolia), Deputy President Beaumont found that a NERR that was issued 21 days after the Notification Time, and therefore 7 days outside the timeframe required by s.173(3), was a ‘minor procedural’ error; and
● in Sibelco Australia Limited [2019] FWCA 1523 (Sibelco), Deputy President Colman found that a NERR that was issued to two employees on 21 November 2018 in circumstances where all other employees received the NERR by hand on 25 and 26 October 2018, which by inference means it was issued to those employees 13 days outside the timeframe required by s.173(3), was a ‘minor procedural’ error.
In this case the NERR was issued to all but 10 employees covered by the Agreement within the timeframe required by s.173(3). For the cohort that was initially overlooked, the error was genuine and explicable. It was not a case of deliberate non-compliance. Importantly, the error was identified and remedied on the 15th day after the Notification Time – that is, one day after the timeframe required by s.173(3) elapsed. Having regard to those facts and the decisions in Huntsman, Veolia and Sibelco, the Company submits that Commissioner Wilson can be satisfied the late issuance of the NERR was a ‘minor procedural’ error.
In terms of the employees not being disadvantaged by the ‘minor procedural’ error, we note:
● in Huntsman the Full Bench said at paragraph 117 that the ‘word “disadvantaged” suggests a deprivation which manifests in the employees covered by the agreement being prevented from substantively exercising their rights within the bargaining regime in Part 2-4 of the Act’;
● in the terms of the timeframe for issuing the NERR in s.173(3), the purpose of the right is to ensure that the employees understand their representational rights within a reasonable period before substantive bargaining commences thus allowing them to exercise those rights in a timely manner. Where employees receive the NERR later than the 14 day period, it may be the case that this prevents them from attending initial bargaining meetings, and therefore may keep them from effectively influencing the bargaining process even after they participate thus manifesting in ‘disadvantage’: see Huntsman at [74] and Veolia at [6].
Here, there is no ‘disadvantage’ in the relevant sense. The first bargaining meeting did not occur until 28 September 2018, well after the NERR had been issued to all employees, including the employees at the Montara Site who received it one day late. In addition, not only did the employees at the Montara Site know about their representation rights, they actually exercised them. In this regard, employees at the Montara Site appointed four different bargaining representatives to represent them in the bargaining. Those representatives participated (in varying degrees) for the entire duration of the bargaining.
Having regard to the facts and the decisions in Huntsman, Veolia and Sibelco, the Company submits that Commissioner Wilson can be satisfied that the late issuance of the NERR did not disadvantage employees.”
[6] On 23 April 2019, the Commission provided the Applicant with a summary of the anonymous objections raised on 1 April 2019 inviting a response to the matters raised. In the meantime, the Commissioner received a further five emails, four from the same anonymous employee on 24 and 29 April 2019 and 1 May 2019 and one from another employee bargaining representative on 2 May 2019 raising further concerns relevantly as follows:
1. That voting restrictions had been placed on employees to the effect that in order to vote employees were required to be residents in WA, permanent employees of Contract Resources, or a casual employee who worked on the date of the vote being 10 January 2019;
2. That certain employees were not notified of the vote;
3. That the Agreement contains further reductions in the way Contract Reources administer the travel allowance;
4. That the voting process was not confidential;
5. That the removal of the remote location allowance of $50 a day results in the Agreement not passing the BOOT; and
6. That employees were told words to the effect that if they voted for the Agreement the company would continue to pay the $50 remote allowance in good faith, which was seen as a threat to some employees.
[7] On 1 May 2019, the Applicant responded to the Commission’s summary of the initial anonymous submissions received on 1 April 2019 as follows:
“Dear Associate,
Thank you for your email.
Please find attached a copy of the signed undertakings previously provided in draft format.
Thank you for also outlining some concerns raised by an employee covered by the Contract Resources Pty Ltd Western Australian North West Enterprise Agreement (Agreement). We appreciate this opportunity to respond to the summary of the concerns. Our detailed responses are set out below, however, we note at the outset that we firmly believe the bargaining process and the Agreement itself meet the requirements of the Fair Work Act 2009 (Cth) (FW Act).
1. The employee bargaining representative was not independent of management and voting for the Agreement was required to be channelled through him;
The Company denies that the employee bargaining representatives for the Agreement were not independent of management.
In this regard we note that:
● six different bargaining representatives were appointed by employees; and
● the bargaining representatives held a variety of roles within the business (all of which are set out in the Form F16) but none were involved in management nor did they represent the Company in any way during the bargaining process – they only represented the employees who had appointed them.
Further, the Company did not advise any employee that they were required to appoint a bargaining representative, nor did it instruct any employee to appoint a particular individual as their bargaining representative. Employees were provided with a Notice of Representational Rights which clearly explained their right to appoint a bargaining representative. Employees were free to choose their own bargaining representatives, free from any influence. We submit this is supported by the fact that multiple different bargaining representatives were appointed by employees. It is also supported by the fact that only about half of the employees covered by the Agreement decided to appoint an employee bargaining representative – the remaining employees voluntarily determined not to appoint an employee bargaining representative, as was their right.
In terms of their involvement in the bargaining, each of the six employee bargaining representatives was appointed by relevant employees prior to the commencement of any bargaining meetings taking place, and each had the opportunity to either attend bargaining meetings in person or attend via teleconference.
Against this backdrop, we submit that the process of appointing employee bargaining representatives and the identity of those representatives was completely appropriate and nothing arising from those matters supports a finding that the Agreement was not ‘genuinely agreed’.
In terms of the ballot, it is correct that the voting method involved employees submitting their vote to one of the six employee bargaining representatives, Andrew Cane. This involved employees submitting their vote via email to Mr Cane who then subsequently notified the Company of the outcome of the ballot. The Company submits this was an appropriate method of voting, particularly given:
● there is no particular method of voting mandated by FW Act;
● the method utilised was convenient as some of the sites covered by the Agreement are in remote locations that can at times be difficult to access. An on-site ballot would have been difficult to undertake;
● the method utilised was not imposed by the Company, but rather was agreed by the Company and the six employee bargaining representatives during the final bargaining meeting on 23 November 2019. In this meeting Mr Cane was elected by the employee bargaining representatives (and not the Company) to receive the employees votes;
● the Company took steps to protect the confidentiality of voters (even though this is not a requirement of the FW Act). Elaborating on this:
a. it was agreed that Mr Cane would not advise management of the names of any employees who submitted a vote or how they voted. Rather, it was agreed he would only advise the Company of the total number of votes submitted and the total number of ‘yes’ votes submitted; and
b. the Company clearly explained the voting method (and the steps to ensure confidentiality) to employees in correspondence sent prior to the commencement of the ‘access period’ on 11 December 2018 and again on 17 December 2018;
● participation rates in the ballot were high, with 44 out of 54 eligible employees (which is above 80%) submitting a vote. Further, the vote was resoundingly in favour of the Agreement with 38 out of 44 employees (which is above 86% of eligible voters) voting to approve the Agreement. We submit this is supportive of the fact that employees covered by the Agreement voluntarily determined whether to participate in the ballot and to vote; and
● consistent with the Agreement reached by the parties, Mr Cane has not provided any personal details of who submitted votes, or the outcome of their vote, to the Company. The Company has not requested this information.
Finally, it is also worth noting that Mr Cane has prior experience as an bargaining representative, including acting as an employee bargaining representative in 2018 in an unsuccessful round of bargaining where employees voted to reject an enterprise agreement. We note the earlier unsuccessful round of enterprise bargaining covered the same employees who are covered by the Agreement and the same voting method was used. This supports the view that Mr Cane fulfilled his role as an employee bargaining representative with integrity and that the voting method has not influenced the outcome of the ballot.
Based on the above we put forward that the method of voting was appropriate and nothing arising from it supports a finding that the Agreement was not ‘genuinely agreed’
2. A client manager for contract resources, Zain Kader spoke with employees “stressing the need for the agreement to be voted up for future contracts of employment, then saying at the same time he was not trying to tell me how to vote”;
Zain Kader strongly denies saying at any time (whether prior to the commencement of, or during, the bargaining period, or during the ‘access period’) words to the effect: ‘the Agreement needs to voted up for the future of contracts of employment’. Mr Kader also strongly denies saying anything to employees covered by the Agreement that amounted to an implied threat of dismissal if the employees failed to support the Agreement.
Throughout the bargaining Mr Kader did explain to employees covered by the Agreement:
● that having an ‘in-term’ enterprise agreement (ie, one which has been approved and is within its nominal term) could assist the Company to retain its existing clients and to win new work as. For obvious reasons, settled industrial arrangements are a relevant consideration for the Company’s clients on projects in the North West of Western Australia; and
● the business reasons underpinning the Company’s position in the bargaining (either in response to employee claims or in support of the Company’s claims).
We submit that explaining the above matters is completely normal in enterprise bargaining and note that Mr Kane was careful to ensure that all statements he made were factual and lawful. It is worth noting that Company representatives are entitled to liaise directly with employees during the bargaining process and to encourage support for a proposed enterprise agreement: See, for example CFMEU v Tahmoor Coal [2010] FWAFB 3510
3. The new agreement (one presently before the Commission) does not leave employees better off in comparison to the previous agreement. While of course I note that this is not the requisite “better off overall” test under the Act, it is nonetheless passed on for comment from the Applicant. The precise concern is that changes to the sustenance and remote allowance will leave employees worse off under the new agreement than the existing agreement.
The Company’s position on this matter is twofold:
● first, we note and agree with your observation that changes as between the current enterprise agreement applying to the employees and the Agreement is not relevant to the ‘better off overall test’; and
● second, to the extent such changes could be relevant to whether the Company properly explained the terms and effect of the Agreement to employees, the Company went to considerable lengths (as explained in the Form F17) to do so.
For this reason, we submit that any changes as between the current enterprise agreement and the Agreement are not a barrier to approval of the Agreement.
Finally, we note that the employee has raised a specific issue about allowances. In response to this we note that while there have been some changes to when the ‘remote facility’ allowance is paid, in practical terms no employee is worse off under the Agreement. In this regard, under the current enterprise agreement, employees receive:
○ a ‘sustenance allowance’ of $40 per day; and
○ subject to the following conditions being met, an additional $50 per day ‘remote facility’ allowance:
○ the employee must be working on a relevant site (such as a remote facility or an off-shore site); and
○ critically, the cost of paying the additional allowance must be met by the client.
In the Agreement, the ‘sustenance allowance’ of $40 per day has been increased to $44 per day (an increase of 10%), and there has been no change to eligibility. The ‘remote facility’ allowance (which remains $50 per day) has been amended so that:
○ it is no longer conditional on clients covering the cost of the allowance; and
○ the facilities at which it applies have been slightly narrowed.
While the narrowing of the eligibility to the ‘remote facility’ allowance has been slightly narrowed, there are no practical implications arising from the amendment. This is because all sites that meet the eligibility in the current enterprise agreement will also meet the new criteria for the ‘remote facility’ allowance in the Agreement. In this regard, the clarification of the ‘remote facility’ allowance enshrines the benefit for employees at sites that are currently eligible to receive it (by removing any requirement for clients to bear the cost) and thus is an improvement.
For the reasons set out above, the Company submits it is not necessary to provide further undertakings to address these matters.
Once again, we thank Commissioner Wilson for the opportunity to address these matters. If the Commissioner has further concerns or requires clarification, we would be happy to provide this.
Yours faithfully,
…”
[8] Given the influx in anonymous submissions being made all parties including those who had contacted chambers anonymously were advised by email on 3 May 2019 that any further submissions made to the Commission would need to be made on an open basis and would need to be provided to all other parties otherwise they would not be relied upon by the Commission. Additionally, the Applicant was specifically requested to provide the following information in response to the issues raised:
a. “A further and final statutory declaration from the Applicant setting out with greater particularity and as a declaration made on pain of penalty in the event of it being inaccurate or misleading;
i. the matters set out in Mr Charles’ email to the Commission, dated 1 May 2019 and dealing with the ballot method in which the bargaining representative Andrew Cane was nominated to receive ballots, with that method being "agreed by the company and six employee bargaining representatives during the final bargaining meeting on 23 November 2019" with Mr Cane being elected by the employee bargaining representatives for that purpose;
ii. that all employees employed at the date of notification of the ballot and whose employment would be covered by the Agreement were notified of the vote and given an opportunity to do so. This request connects with a concern the Commission has on the basis of some of the communications to it to the effect that those who were able to vote were limited to those who were resident in Western Australia and were either permanent employees or casual employees on the date of the vote (which may conflict with NTEIU v Swinburne University of Technology (2015) 251 IR 209, at [25]);
iii. Confirmation that no person acting on behalf of Contract Resources either sought or received any communication from Andrew Cane or anyone else about those who voted or how those people who did vote may have voted.
b. A statutory declaration from Andrew Cane dealing with the same matters set out above.
1. Both statutory declarations are to be provided to the Commission and filed upon each bargaining representative by no later than 4:00 PM Friday, 10 May 2019.”
[9] Submissions opposing approval were received a further 10 times by Chambers, none of which were provided on an open basis.
[10] Statutory declarations were received from both Mr Cane, employee bargaining representative for the 2018 Agreement and Mr Charles, General Manager Contract Resources. Mr Canes statutory declaration relevantly provided that:
● There was another Agreement voted on previously (the first Agreement) called Contract Resources Western Australia Operations Enterprise Agreement 2018, which was voted down by employees.
● As a result, the Agreement was split in two (a) Contract Recourses Pty Ltd Western Australia South West Enterprise Agreement and (b) Contract Resources Pty Ltd Western Australian North West Enterprise Agreement (proposed Agreement).
● Mr Cane was elected bargaining representative for the first Agreement on 19 January 2018 and then subsequently for the proposed Agreement on an unknown date.
● The method of the vote was discussed between the employer and bargaining representatives in meetings on 23 November 2018 and 10 December 2018.
● Employees were notified of the voting method on 11 December 2018 by email by Dianne Gillis (Human Resource Manager). An attachment email written by Mike Charles (Company General Manager Western Region) was attached which provided information about the date, place and method of the vote.
● A further email was sent by Dianna Gillis on 18 December 2018 to employees covered by the 2018 Agreement discussing confidentiality of the proposed vote.
● Mr Cane continues to hold the voting emails (44 in total) and while he passed on the voting numbers to the employer, he did not provide the names of the employees who voted or the emails he received.
[11] Mr Charles’ statutory declaration relevantly provided that:
● There were two meetings held discussing the method of the vote on 23 November 2018 and 10 December 2018. The method was agreed to in the second meeting in December 2018.
● Peter Hitchcock one of the bargaining representatives was not present at either meeting though he was aware of the proposal.
● The method of the vote was not forced on employees by management even though management proposed it.
● All eligible employees were notified of the time, place and method of the vote by email on 11 December 2018.
● Mr Charles opposes submissions that eligibility was limited to those employees who were residents in WA and those rostered to work the date of the vote. Mr Charles submits that there were a significant number of employees who voted who were not working that day and who did not live in WA.
● No one acting on behalf of the company sought or received information from Mr Cane regarding the identity of voters and/or how they voted.
[12] On 17 June 2019, Directions for filing were issued to determine the pre-approval issue original raised on 28 March 2019 as to whether the Commission has the power to approve the 2018 Agreement given thetime between notification time and last NERR was more than 14 days.While a hearing was originally listed to determine this issue on 7 July 2019, the listing was subsequently vacated given no submissions were received on the record from parties opposing approval. Two further anonymous submissions were received however, they were not relevant to the matter at hand and again were not made on an open basis and have since been provided to the Applicant.
[13] Submissions and a further affidavit from Michael Charles were received by the Applicant in response to these Directions.
Genuine agreement
[14] Section 186(1) of the Fair Work Act 2009 (the Act) requires the Commission to approve an enterprise agreement if the requirements in ss.186 and 187 are met. Relevantly for present purposes, the approval requirements include s.186(2)(a):
“(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 …”
[15] Section 188(1) provides that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement, for the purpose of s.186(2)(a) if the Commission is satisfied of the matters set out in s.188(1)(a)–(c) as follows:
“188 When employees have genuinely agreed to an enterprise agreement
(1) 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.”
[16] Section 188(2) of the Act provides a means for finding that an agreement has been genuinely agreed to despite minor procedural or technical errors as follows:’
“(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and
(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174.’
[17] Subsection 188(2) applies in relation to an application under s.185 for approval of an enterprise agreement, where the application is made:
(i) on or after 12 December 2018; or
(ii) before 12 December 2018 if any of the following circumstances apply:
• the Commission had not decided the application on or before 12 December 2018; or
• the Commission had decided the application before 12 December 2018 and an application to appeal had been made but the Commission had not made a final decision on the appeal before 12 December 2018; or
• the Commission had decided the application within 21 days before 12 December 2018 and immediately before 12 December 2018 no application to appeal had been made, but an application to appeal was made within 21 days of the decision. 1
[18] Relevantly, s.173 of the Act sets out the requirements for giving the NERR to employees as follows:
“173 Notice of employee representational rights
Employer to notify each employee of representational rights
(1) An employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who:
(a) will be covered by the agreement; and
(b) is employed at the notification time for the agreement.
Note: For the content of the notice, see section 174.
Notification time
(2) The notification time for a proposed enterprise agreement is the time when:
(a) the employer agrees to bargain, or initiates bargaining, for the agreement; or
(b) a majority support determination in relation to the agreement comes into
operation; or
(c) a scope order in relation to the agreement comes into operation; or
(d) a low-paid authorisation in relation to the agreement that specifies the employer comes into operation.
Note: The employer cannot request employees to approve the agreement under section 181 until 21 days after the last notice is given (see subsection 181(2)).
When notice must be given
(3) The employer must give the notice as soon as practicable, and not later than 14 days, after the notification time for the agreement.
Notice need not be given in certain circumstances
(4) An employer is not required to give a notice to an employee under subsection (1) in relation to a proposed enterprise agreement if the employer has already given the employee a notice under that subsection within a reasonable period before the notification time for the agreement.
How notices are given
(5) The regulations may prescribe how notices under subsection (1) may be given.”
[19] Submissions have been provided by the Applicant that due to a previously unsuccessful vote for an agreement covering all employees in Western Australia, the First Agreement on 29 August 2018 Contract Resources commenced bargaining for two separate agreements, one to cover employees located in the South West of Western Australis and one to cover employees located in the North-West of Western Australia (the 2018 Agreement). 2
[20] The 2018 Agreement covers many facilities both offshore and onshore including:
The following facilities are the onshore facilities covered by the NW Agreement:
(a) Woodside Karratha Gas Plant
(b) Pluto Gas Plant
(c) King Bay Supply Base
(d) Yara Fertiliser Plant
(e) Devil Creek Gas Plant
(f) Macedon Gas Plant
(g) Wheatstone Gas Plant
(h) Thevenard Island
(i) Barrow Island including Gorgon Gas Plant
(j) Varanus Island
The following facilities are the offshore facilities covered by the NW Agreement:
(a) Wheatstone Offshore Platform
(b) Reindeer Platform
(c) Pyrenees FPSO
(d) Okha FPSO
(e) Northern Endeavour FPSO
(f) Nganhurra FPSO
(g) Prelude FLNG
(h) lnpex FPSO
(i) lnpex CPF
(j) Montara FPSO
(k) Ngajimi Yin FPSO
(I) North Rankin A
(m) North Rankin B
(n) Goodwyn A
(o) Wandoo B
(p) Wandoo A
(q) Angel Platform
(r) Noble Prosser
(s) Atwood Eagle
(t) Pluto Platform
(u) Stag Platform 3
[21] On 10 September 2018, 12 days after notification time Mr Charles directed the NERR be distributed to all employees believed to be covered by the 2018 Agreement. This was done by hand as well as by email. 4
[22] Unbeknownst to Mr Charles at the time, there was an error with distribution of the NERR in that employees working at the Montara Site who are covered by the Agreement were not provided with the NERR. Mr Charles submits that the reason for the error was that “despite the fact the Montara Site is an offshore facility located in North West Western Australia, it is mobilised from Darwin. Being the only North West, Western Australia facility mobilised from a different State, the site was simply overlooked.” 5
[23] The error was identified on 13 September 2018, 15 days after notification time and one day after the prescribed time frame under s.173(3) of the Act. Contract Resources onsite supervisor at the Montara Site, Brayden Crain held a toolbox meeting on 13 September 2018, providing a physical copy of the NERR to all 10 employees covered by the Agreement at the Montara Site. 6
[24] Toolbox meetings were also held on 14 and 15 September 2018 at all sites covered by the Agreement to explain the error which had occurred at the Montara Site. The NERR was again issued to employees in attendance at these meetings. 7
[25] Four employees were appointed bargaining representatives from the Montara Site. 8
[26] As discussed earlier, in order for the Commission to approve an enterprise agreement it must be genuinely agreed to in accordance with s.186(2)(a), with a requirement under s.173(3) of the Act that the employer must give the notice (referring to the NERR) as soon practicable, and not after 14 days, after the notification time for the agreement. It is apparent from the evidence before the Commission that that the last copy of the NERR provided to all employees by Contract Resources did not occur until 13 September 2019, 15 days after notification time (being the date the employer agreed to bargaining, or initiated bargaining for the agreement as prescribed by s.173(2)(a) of the Act).
[27] As a result of the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018 (the Amending Act) which came into effect on 11 December 2018 the Commission has a mechanism to conclude that an enterprise agreement has been ‘genuinely agreed’ to, within the meaning of s.186(2)(a), despite ‘minor procedural or technical errors’. The Full Bench in Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others 9provided clarity to the proper construction of s.188(2) setting out the relevant procedural or technical requirements to which s.1882(2) applies including under s.173(3) whether the NERR has been issued as soon as practicable, no later than 14 days after the notification time.10
[28] Whether the procedural or technical requirement is a “minor error” was discussed by the Full Bench as follows:
“[74] As mentioned earlier, the determination of whether an error constitutes a ‘minor error’ within the meaning of s.188(2) calls for an evaluative judgment having regard to the underlying purpose of the relevant procedural or technical requirement which was not complied with and the relevant circumstances. Table 2 below (extracted from ACCI’s written submission at [61]) examines each of the procedural or technical requirements, considers the underlying purpose of these requirements and outlines some ways in which employees might be disadvantaged by a minor technical or procedural error.
Table 2:
Procedural or technical requirements covered by s. 188(2) and potential ways in which employees may be disadvantaged in relation to minor errors
…
Section | Procedural or Technical Requirement | Underlying Purpose of requirement | How might employees be disadvantaged? |
173(3) | Issue the NERR as soon as practicable, no later than 14 days after the notification time | To ensure that the employees understand their representational rights within a reasonable period before bargaining commences thus allowing them to exercise those rights in a timely manner | In the circumstances the employees may have received the NERR later than the 14 days thus period preventing them from attending initial bargaining meetings and thus effectively influencing the bargaining process even after they do participate |
…
[79] Whether a failure to comply with s.180(3) constitutes a ‘minor error’ depends on the extent of the non-compliance and the circumstances. Generally speaking, the lower the level of non-compliance the more likely it is to be characterised as a ‘minor error’. So, informing the employees of the matters in s.180(3)(a) and (b) ‘just after the start of the access period’, say 6 days before the start of the voting process, is likely to be a ‘minor error’ in most cases; but in some circumstances it may not be. For example, if it is the first agreement at the enterprise, the bargaining representatives are inexperienced and the employees are predominantly from a non-English speaking background, then it may not be a ‘minor error’.
…
[95] The test in s.188(2)(b) is whether the employees covered by the agreement were ‘not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174’(emphasis added). Those requirements were outlined at [23] above. The impact of the errors is to be assessed by reference to the objects of those requirements and not by reference to any more general sense of ‘genuine agreement’. This reading is consistent with the reading of s.188(1) by the majority of the Full Bench in Ostwald (see [24] above). It is also consistent with the amendments to the provision (related at [32]–[33] above) and the Revised Explanatory Memorandum at [45] (extracted at [91] above).”
(references omitted)
[29] The failure in the current application is the additional one day taken by Contract Resources to provide the NERR to the Montara Site employees. The NERR was provided to all employees by not later than 15 September 2019 with the first bargaining meeting not occurring until 28 September 2018, some 13 days later. 11 The Montara Site employees subsequently appointed four bargaining representatives to represent them in the bargaining process.12 On the materials provided there appears to have been no disadvantage to employees nominating a bargaining representative nor participating in bargaining, being the object of s.173(3) of the Act. As such, I am satisfied that the error constitutes a minor procedural error for the purposes of s188(2)(a). Further, I am satisfied that the employees covered by the 2018 Agreement were not likely to have been disadvantaged by the error.
[30] While there were no submissions made on an open basis objecting to genuine agreement, there were several objections raised anonymously as detailed earlier in this decision. These submissions centre around the vote including that restrictions were placed on employees who voted; that the voting process was not independent as employees were required to send their vote to their employee representative Andrew Cane; that certain employees were not notified of the vote and that undue pressure was placed on employees to vote for the Agreement. These submissions for the most part did not provide any evidence of the claims made. Evidence was however provided in the anonymous submissions dated 24 April 2019 whereby an email chain between Andrew Cane and employees covered by the Agreement on 30 January 2018 which read as follows was provided:
“…
To be eligible to vote there are a few criteria to meet:
Be resident in WA, and
Be a permanent employee, or
Be a casual employee who worked on the ‘specified date’ - the specified date was 10 January.
We pick a random day for the specified date. The 10th was picked because: I was coming to Perth with Ray Sparkes (our independent guy) on 17 January so we could get things started, we could give as much notice as we can of the meeting as we could, and we were able to capture all the time sheets for 10 January by 12 January which meant I had an accurate list of who was eligible and therefore who to invite to the meeting.
So, any casual employee who is a WA resident but not rostered on to work on 10 January isn’t eligible to vote. I KNOW THIS SOUNDS STUPID but as I said in my earlier email, we’ve been hit hard by the FWC if we don’t rigidly comply with the rules.
Cheers
Andy”
[31] It is noted that this correspondence occurred on 30 January 2018, some seven months before the notification time of the 2018 Agreement. It would appear as such that this email chain was in reference to the unsuccessful vote for the First Agreement discussed previously and was not relevant to the application currently before the Commission.
[32] Submissions were also provided from Contract Resource that the voting method was discussed with the employee representatives prior to it being agreed to; 13 that notification of the vote was communicated to all employees on 11 December 2018 by email;14 that many of the employers who voted were not Western Australian residents;15 and that no details of employees who voted or how they voted were communicated to the company or a representative of the company.16
[33] Based on the evidence before the Commission I am satisfied that the employer took all reasonable steps to notify all eligible employees of the time, place and method of the vote by the start of the access period (s.180(3)) and that the Agreement has been genuinely agreed within the meaning of s.186(2)(a) of the Act.
NES
[34] Section 186(2)(c) of the Act provides that the Fair Work Commission may approve an enterprise agreement where it is satisfied that the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements). Section 55(1) of the Act relevantly provides that a modern award or enterprise agreement must not exclude the National Employment standard (NES) or any provision of the NES.
[35] Clause 4.1(k) of the 2018 Agreement provides that ‘termination of employment by abandonment’ occurs after 3 days continuous non-explained absence with the last date of attendance/date of approved attendance being the date of termination. The Applicant was advised that this clause may negate an employees entitlement to notice of termination contrary to the decision in Bienias v Iplex Pipelines Australia Pty Limited. 17 A signed undertaking was received by Contract Resource in response to this concern to the effect that the second paragraph of clause 4.1(k) of the 2018 Agreement will not be applied which purports to deem an employees’ employment to be terminated on the date of the employee’s last date of attendance at work or the last day’s absence in respect of which notification was given to the Company. I am satisfied that this undertaking removes the part of the clause which is contrary to the NES and therefore I am satisfied that s.186(2)(c) has been complied with.
BOOT
[36] Section 186(2)(d) of the Act provides that the Fair Work Commission may approve an enterprise agreement where it is satisfied that the agreement passes the better off overall test (BOOT). Section 193 relevantly provides the BOOT as follows:
“Passing the better off overall test
When a non-greenfields agreement passes the better off overall test
(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee .
FWC must disregard individual flexibility arrangement
(2) If, under the flexibility term in the relevant modern award, an individual flexibility arrangement has been agreed to by an award covered employee and his or her employer, the FWC must disregard the individual flexibility arrangement for the purposes of determining whether the agreement passes the better off overall test.
…
Test time
(6) The test time is the time the application for approval of the agreement by the FWC was made under subsection 182(4) or section 185.
FWC may assume employee better off overall in certain circumstances
(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.”
[37] Clause 7.5(j) of the 2018 Agreement expressly excludes apprentices from notice of termination under the enterprise agreement however, there is no further mention of apprentices throughout the 2018 Agreement including their rates of pay making it unclear whether apprentices are better off under the Agreement.
[38] On 1 May 2019 Contract Resources provided a signed undertaking to the effect that apprentices are not covered by the 2018 Agreement; that they were not intended to be covered by the Agreement; that no apprentices were employed at the time of the vote and that the reference to apprentices at clause 7.5(j) was to be deleted. I am satisfied that the reference to apprentices at clause 7.5(j) of the Agreement was an error and that the undertaking alleviates this concern.
[39] Again, while there were no submissions made on an open basis objecting to approval of the Agreement on the basis that it did not meet the BOOT, there were several objections raised anonymously as detailed earlier in this decision. These submissions centred mainly around the changes to the sustenance and remote allowances between the Contract Resources Pty Ltd Western Australia Operations Enterprise Agreement 2014 (the previous Agreement) and the 2018 Agreement.
[40] Under the previous Agreement both a $40 per night sustenance allowance is payable where an employee is required to stay away from home overnight, within Australia as well as a $50 per day onshore or remote location sustenance allowance is payable for all days, or part thereof, worked on an offshore facility or in a remote location within Australia granted the company is able to receive the costs from their client. 18 Under the 2018 Agreement while a sustenance allowance of $44 per night is payable where employees are required to stay away from home overnight, within Australia similar to under the previous Agreement, the offshore sustenance allowance of $50 is only payable for days, or part thereof for work on floating or fixed offshore facilities, being a narrower category of work than under the previous Agreement. The submissions put forth are that this change to the applicability of the offshore sustenance allowance will mean employees who may have otherwise been entitled to the $50 per day allowance under the previous Agreement will no longer be entitled to this allowance, equating to a reduction in pay of $46 per day and therefore the Agreement does not pass the BOOT.
[41] While it is foreseeable that employees under the Agreement may receive the reduction in allowance as put forth, the BOOT is not comparable to entitlements previously held by employees under a previous enterprise agreement. The test under s.193(1) of the Act is that an enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time being the date the application for approval of the agreement by the FWC is made (s.193(6)) that each award covered employee and each prospective award covered employee, for the agreement would be better off if the agreement applied to the employee than if the relevant modern award applied to the employee.
[42] The relevant modern award for the purposes of the 2018 Agreement is the Manufacturing and Associated Industries and Occupations Award 2010 19(the Manufacturing Award) being the modern award otherwise applicable to employees were the 2018 Agreement not in force.
[43] The Manufacturing Award does not appear to provide a comparable allowance to the offshore or sustenance allowance provided for under the 2018 Agreement. The closest allowance to the offshore or sustenance allowances appear to the various travel allowances, namely the distant work allowance. 20 This allowance provides that an employee required to remain temporarily away from the employees usual residence because the employee is temporarily in a locality away from the employee’s usual workplace must be paid travelling time for necessary travel between the locality and the employee’s usual workplace and expenses. This allowance does not appear to deal with a situation similar to the sustenance allowance where an employees’ usual work is offshore or some distance from the employees’ permanent residents and therefore does not appear applicable to the BOOT analysis. It is also noted however, that the 2018 Agreement provides a mobilisation and demobilisation allowance very similar to the distance travel allowance under the Manufacturing Award which provides employees with paid travel time where an employee is relocated for a project and are paid for the additional travel time taken to attend that project. As such, the sustenance allowance as provided for under the 2018 Agreement does not appear to be a reduction in entitlement from the Manufacturing Award, alternatively it appears to be an additional entitlement to the allowances provided for under the Manufacturing Award specific to the offshore work undertaken by Contract Resources and therefore I am satisfied that s.186(2)(c) has been complied with.
[44] The Employer has provided written undertakings. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.
[45] Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.
[46] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 19 July 2019. The nominal expiry date of the Agreement is 12 July 2023.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
<AE504361 PR710162>
Annexure A
1 Amending Act Schedule 4 cl.28.
2 Statutory Declaration of Andrew Cane, 28 May 2019, [2] – [4].
3 Statutory Declaration of Michael Charles, 25 June 2019, [11] – [13].
4 Statutory Declaration of Michael Charles, 25 June 2019, [15].
5 Statutory Declaration of Michael Charles, 25 June 2019, [19].
6 Statutory Declaration of Michael Charles, 25 June 2019, [21].
7 Statutory Declaration of Michael Charles, 25 June 2019, [24].
8 Statutory Declaration of Michael Charles, 25 June 2019, [23].
9 [2019] FWCFB 318.
10 Ibid, [52].
11 Contract Resource Submissions, 25 June 2019, [33].
12 Statutory Declaration of Michael Charles, 25 June 2019, [23].
13 Statutory Declaration of Michael Charles, 10 May 2019, [4] – [5].
14 Ibid, [6].
15 Ibid, [11]
16 Ibid, [12]; Statutory Declaration of Andrew Cane, 28 May 2019, [12].
17 [2017] FWCFB 38, [58].
18 Contract Resources Pty Ltd Western Australia Operations Enterprise Agreement 2014, AE408210, clause 6.4(b)(ii).
19 MA000010
20 Manufacturing and Associated Industries and Occupations Award 2010, MA000010, clause 32.4(c).
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