CPB Contractors Pty Limited & John Holland Pty Ltd & Ghella Pty Ltd T/A JCG JV

[2023] FWCA 2794

[2023] FWCA 2794

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.218A - application to vary an agreement to correct or amend errors, defects or irregularities

CPB Contractors Pty Limited & John Holland Pty Ltd & Ghella Pty Ltd T/A JCG JV

(AG2023/2723)

JOHN HOLLAND CPB GHELLA JOINT VENTURE - SYDNEY METRO WEST – EASTERN TUNNELLING PACKAGE, AND AWU GREENFIELD AGREEMENT 2023 – 2027

Building, metal and civil construction industries
DEPUTY PRESIDENT WRIGHT	SYDNEY, 31 AUGUST 2023

Application for variation of the John Holland CPB Ghella Joint Venture - Sydney Metro West – Eastern Tunnelling Package, and AWU Greenfield Agreement 2023 – 2027

Introduction

1. On 12 July 2023, CPB Contractors Pty Limited & John Holland Pty Ltd & Ghella Pty Ltd T/A JCG JV (JCG JV) made an application to the Fair Work Commission for approval of a greenfields agreement known as the John Holland CPB Ghella Joint Venture - Sydney Metro West – Eastern Tunnelling Package, and AWU Greenfield Agreement 2023 – 2027 (the Agreement) pursuant to s.185 of the Fair Work Act 2009 (FW Act).

1. On 25 July 2023 I approved the Agreement. The Agreement commenced operating on 1 August 2023. The Australian Workers’ Union (AWU) is covered by the Agreement.

1. On 10 August 2023, JCG JV made an application in accordance with s.218A of the FW Act to correct or amend an error in the Agreement.

1. I listed the matter for directions on 17 August 2023. JCG JV and the AWU both appeared at the directions conference. I raised some issues with the parties in relation to the application which required clarification, and subsequently JCG JV filed an amended application on 21 August 2023.

1. My Chambers then sent an email to the parties on 25 August 2023 raising further issues in relation to the amended application, and subsequently JCG JV and the AWU filed further material on 29 August 2023.

1. Since the application is proceeding by consent of both JCG JV and the AWU, I have decided to determine the matter on the papers.

Proposed amendments

1. JCG JV seeks a variation to the Agreement in relation to two clauses.

1. The first is amending Clause 5.5(c) as follows (additions are indicated in underlined text and deletions are indicated in strike through text):

5.5 Productivity Payment

a) An Employee will receive a productivity payment as set out in Appendix C for each
productive hour worked, to provide incentive and in recognition of improved productivity performance during the operation of this Agreement.

b) For the avoidance of doubt, unless otherwise specified in this Agreement, this
allowance will be in lieu of any special rates or allowances (however described)
included in the BCGOA or any other Modern Award or any other industrial instrument.

c) This productivity payment is a flat payment and will not be subject to any premium
or penalty and will remain fixed and in place for the duration of this Agreement.

d) This productivity payment is not payable when Employee(s) leave site due to
inclement weather, or are on any type of leave, whether paid or not paid (e.g. annual
leave, personal leave, jury duty, leave without pay, community service leave,
parental leave or compassionate leave), or have been suspended with pay, or are
absent for any other reason, including RDOs, public holidays, absence due to a work related injury, or are engaged in any form of industrial action.

1. The second is amending Clause 8.1(d)(iii) and (vii) as follows (additions are indicated in underlined text and deletions are indicated in strike through text):

8.1 Workers Comp. Top-Up Insurance and 24-Hour Sickness and Accident Cover

a)   The Company will provide top-up workers compensation insurance, a 24-hour sickness and accident insurance for Employees, including casuals, covered by this Agreement. Chifley Services Pty Ltd is the agreed provider.

b)   The Company agrees to the agreed provider’s EBA income protection policy terms and conditions.

c)   Employee(s) will be registered with the agreed provider.

d)   The agreed provider will supply this insurance and the level of monthly contribution per employee will not exceed 3% + GST of gross wages and at a minimum the insurance will cover the following:

(i) Payments to commence within 14 days of a claim being correctly submitted;
(ii) Payments per week to the Employee by the insurer of 90% income (100% for workers compensation top up) to a maximum of $4,500.00;

(iii) Sickness and injury benefit for a maximum of 104 weeks. In this subclause “sickness and injury” does not include mental health conditions as defined in subclause 8.1(d)(vii)

(iv) Accident benefit;

(v) Workers’ compensation tops up insurance;

(vi) Superannuation contribution benefit meeting the applicable superannuation guarantee contributions rate based on the employee’s pre-disability income up to a maximum of $500.00 per week;

(vii) 52 weeks cover including for Mental health conditions for a maximum of 52 weeks. In this subclause “mental health conditions” means stress, depression, anxiety or any psychosomatic, psychological, psychotic, mental or nervous disorder, as diagnosed by a qualified psychiatrist or psychologist and under the care of a qualified psychiatrist or psychologist.

e)   For the purposes of this clause, “Workcover Top-Up Insurance” refers to additional lump sum payments for death and permanent injury as awarded under the NSW Workers Compensation Act.

f)   In the event the Employer has failed by way of omission or delay of premium payment to affect insurance coverage for any Employee covered by this Agreement, any Employee not covered by insurance, will not be required to work where insurance is not in place in accordance with this Clause.

g) In the event that the agreed provider for the purposes of this clause refuses to cover a particular claim, the Company will not be liable for such a claim.

1. The reason for the first amendment is because the inclusion of the words “and will remain fixed and in place for the duration of this Agreement.” was a drafting error.

1. Appendix C of the Agreement provides for Allowances and Contributions under the Agreement. Appendix C makes it clear that the intention of JCG JV and the AWU was to increase the Productivity Payment on an annual basis from 2023 to 2026. If the Agreement is not amended to reflect the intention of JCG JV and the AWU, employees covered by the Agreement will receive the Productivity Payment at a fixed rate throughout the nominal term of the Agreement and be deprived of the increases provided in Appendix C.

1. The reason for the second amendment is that it was the intention of JCG JV and the AWU that the Agreement should provide employees with income protection insurance cover for illness and injury for 104 weeks and mental health for 52 weeks. Sickness and injury cover for 104 weeks was left out of the Agreement in error. If the Agreement is not amended, employees covered by the Agreement will receive income protection insurance for illness and injury for only 52 weeks rather than the 104-week period intended by JCG JV and the AWU.

Consideration

1. The amended application was made in accordance with s.218A of the FW Act which provides:

218A  Variation of enterprise agreements to correct or amend errors, defects or irregularities

(1)  The FWC may vary an enterprise agreement to correct or amend an obvious error, defect or irregularity (whether in substance or form).

(2)  The FWC may vary an enterprise agreement under subsection (1):

(a)  on its own initiative; or

(b)  on application by any of the following:

(i)  one or more of the employers covered by the agreement;

(ii)  an employee covered by the agreement;

(iii)  an employee organisation covered by the agreement.

(3)  If the FWC varies an enterprise agreement under subsection (1), the variation operates from the day specified in the decision to vary the agreement.

1. Section 218A came into effect on 7 December 2022 as part of the reforms provided by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022.

1. The rationale behind s.218A is provided in the following extracts of the Explanatory Memorandum:

   775.      New subsection 218A(1) would empower the FWC, at its discretion, to vary an enterprise agreement to correct or amend an obvious error, defect or irregularity (ie without the need for a Full Bench appeal). For example, the FWC could correct typographical errors or obvious omissions. The FWC would be able to decide how corrections are made.

   776.      This addresses a regulatory gap, as the existing ‘slip rule’ in section 602 enables the FWC’s decisions, but not enterprise agreements, to be corrected: see Advantaged Care Pty Ltd v Health Services Union[2021] FWCFB 453.

   777.      By new subsection 218A(2), the FWC would be able to vary an enterprise agreement on its own initiative, or on application by a specified party.

   778.      By new subsection 218A(3), the variation would operate from the day specified in the FWC’s decision.

   779.      The new section would complement the FWC’s existing power to vary enterprise agreements to remove ambiguity or uncertainty (existing sections 217-217A).

2. I note the submissions of JCG JV and the AWU that the amendments sought are to correct drafting errors to reflect their joint intentions with respect to the entitlements of employees covered by the Agreement. I also note that if the Agreement is not varied to reflect the amendments sought by JCG JV and the AWU, employees covered by the Agreement will potentially be worse off.

1. The amended application has been properly made by JCG JV, as the employer covered by the Agreement under s.218A(2)(b)(i) of the FW Act. I am satisfied, based upon the submissions of JCG JV and the AWU that clauses 5.5(c) and 8.1(d)(iii) and (vii) contain obvious errors. I am also satisfied that it is appropriate for the Commission to correct these errors to ensure that employees covered by the Agreement receive all of the benefits which JCG JV and the AWU intended would apply under the Agreement.

1. In all of the circumstances, I have decided to vary clauses 5.5(c) and 8.1(d)(iii) and (vii) of the Agreement in the terms sought by JCG JV and the AWU. The variation takes effect from 25 July 2023, which is the date that the Commission approved the Agreement.

1. An order to give effect to this decision has been published separately (PR765708).

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

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