CSR Limited T/A Viridian New World Glass

[2015] FWC 344

[2015] FWC 344

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

CSR Limited T/A Viridian New World Glass
(AG2014/8253)

CSR Limited T/A Viridian New World Glass
(AG2014/8328)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 14 JANUARY 2015

Summary: CFMEU objections to approval of agreement - whether CFMEU has a right to be heard - s.509 - Building and Construction Industry (Fair and Lawful Building Sites) Code 2014 etc - statutory tolerance of inclusion of unlawful, discriminatory and non-permitted terms which have no or limited legal effect.

[1] This decision concerns an objection to the applications for approval of both the CSR Limited Viridian ‘New World Glass’ Cairns Agreement 2014 and the CSR Limited Viridian ‘New World Glass’ Townsville Sales Centre Agreement 2014 (together “the Agreements”). Both applications were made under s.185 of the Fair Work Act 2009 (“the Act”) as applications for approval of single enterprise agreements.

[2] The applications were subject to an objection by the Construction, Forestry, Mining and Energy Union (“the CFMEU”).

[3] The principal issue to which this decision relates is whether or not the CFMEU has a right to be heard (and to cross examine the employer) in relation to the approval applications.

[4] Before turning to that issue I will set out the CFMEU concerns in broad summary.

Provisions to which the CFMEU object

[5] The concerns on the part of the CFMEU relate to clause 7 of the purported Agreements, which provides as follows (noting that there is a minor drafting variation between the two Agreements that has been set aside deliberately):

Relationship to award and building codes

This agreement incorporates the terms of the Joinery and Building Trades Award 2010 ("the award") as varied from time to time, provided that where there is any inconsistency between the express terms of this agreement and incorporated terms of the award, the terms of this agreement prevailed to the extent of any inconsistency.

Building Code means the Building and Construction Industry (Fair and Lawful Building Sites) Code 2014 (Cth); as varied or replaced from time to time.

Queensland Code means Queensland Code of Practice of the Building and Construction Industry, as varied or replaced from time to time.

Guidelines mean the Implementation Guidelines to the Queensland Code of Practice for the Building and Construction Industry, as varied or replaced from time to time.

The agreement is intended to satisfy the Building Code, Queensland Code and Guidelines (the Compliance Instruments).

This means that any award provision that does not satisfy the Compliance Instruments is not incorporated into this agreement. For the avoidance of doubt and without limitation, the following clauses of the award are not incorporated into this agreement:

• Clause 8 – consultation;



• Clause 9 – dispute resolution;



• Clause 12.7 – casual conversion;



• Clause 13.9 – apprentices;



• Clause 26 – payment of wages;



• Clause 28.2 (c) – rostered days off; and



• Clause 31 – alternative work arrangement.

[6] I note initially that the Agreements include their own consultation term (clause 25 in both Agreements), dispute resolution procedure (clause 23/22), a clause explaining how the agreement has dealt with rostered days off (clause 8), apprentice provisions (clause 26/16), and an individual flexibility arrangement, which allows for alternative arrangements of work in relation to when work is performed. That is, these are terms for which there is no reliance upon the award.

The CFMEU objection

[7] The CFMEU sought a right to be heard in relation to the approval of the Agreements, arguing broadly that because the Building Code does not as yet have legal force, the terms of the applicable modern award cannot satisfy (however defined) that particular document.

[8] The CFMEU also considers that “confusion arises” when regard is had to the terms of the Building Code, albeit in its draft form. For example, the CFMEU contends that the Building Code confers responsibilities on the Australian Building Construction Commission (“the ABCC”) but that body does not presently exist.  

[9] Further difficulties may arise, according to the CFMEU, should the draft Building Code in some manner be different from the promulgated Building Code (such that the latter is an entirely new document). The CFMEU also contended that as the Building Code, as it may be, had been incorporated on an ambulatory basis and this was “fraught with difficulty”. This was so for reason that such documents are made “by a third party who is a stranger to the agreement” and the parties to the Agreements “have no rights in respect of what might be included in any variation of such a document”.

[10] Because of this, the CFMEU argues that the “Commission cannot be satisfied that the agreement passes the better off overall test or that the employees genuinely agreed to the agreement”.

[11] The CFMEU made written submissions to this end, outlining concerns it had (which are discussed below) with the Agreement, and sought to cross-examine the employer in relation to its declarations.

Whether CFMEU has “a right to be heard” and to conduct cross examination

[12] Upon the CFMEU so notifying me of its purported interest (by way of its objections), I brought to its attention the decision of the Full Bench in [2014] FWCFB 7940 (“Re: Collinsville”). In particular, I brought to the CFMEU’s attention the decision of the Full Bench upholding the decision of the member at first instance to refuse the CFMEU a right to be heard in relation to various matters in relation to the approval of the relevant agreement.

[13] In that decision, the Full Bench concluded that:

“Whether an employee organisation which is not a bargaining representative has a right to be heard in relation to an application for the approval of an agreement will depend on the circumstances in each case. In this case, when the rights, interests or expectations asserted by the CFMEU are understood in the legislative context, it is clear that the CFMEU has not established any right, interests or legitimate expectation that would be adversely affected by the decision to approve the agreement which would give it a right to be heard.

We are therefore not persuaded that the Senior Deputy President erred in not giving the CFMEU the opportunity to be heard or to lead evidence in relation to its opposition to the approval of the agreement.” 1

[14] In response to my query, the CFMEU contended that the decision in Re: Collinsville was factually distinguishable (as to the issues in contest) and did not preclude the Commission from exercising its discretion - in this instance - in the CFMEU’s favour.

[15] The CFMEU also contended that it should be permitted an opportunity to be heard “because the questions raised by the CFMEU are of significant importance and there is presently no contradictor in the proceedings.” The CFMEU was concerned, broadly put, that the Agreements could not have been genuinely agreed under s.188 of the Act by the employees as there can have been no adequate explanation of various of the Agreements’ terms for the purposes of s.180(5) of the Act.

[16] The CFMEU continued that:

“The absence of a contradictor means that it is unlikely that the Commission will have the benefit of hearing from a party about those matters. Further, should the Commission decide to approve the agreement in error, the CFMEU would have standing to appeal such a decision.”

[17] The CFMEU also seeks a right to cross-examine the employer.

Consideration of CFMEU application to be heard

[18] Section 590 of the Act provides as follows:

590 Powers of the FWC to inform itself

(1) The FWC may, except as provided by this Act, inform itself in relation to any matter before it in such manner as it considers appropriate.

(2) Without limiting subsection (1), the FWC may inform itself in the following ways:

(a) by requiring a person to attend before the FWC;

(b) by inviting, subject to any terms and conditions determined by the FWC, oral or written submissions;

(c) by requiring a person to provide copies of documents or records, or to provide any other information to the FWC;

(d) by taking evidence under oath or affirmation in accordance with the regulations (if any);

(e) by requiring an FWC Member, a Full Bench or an Expert Panel to prepare a report;

(f) by conducting inquiries;

(g) by undertaking or commissioning research;

(h) by conducting a conference (see section 592);

(i) by holding a hearing (see section 593).

[19] Section 590 of the Act extends to the Commission a power to be informed in a manner it considers appropriate to the circumstances before it.

[20] Some of the relevant circumstances of this case are as follows.

[21] The CFMEU was not a bargaining representative in relation to the Agreements. The employer so contends, and the CFMEU does not claim otherwise in its submissions.

[22] The CFMEU brings no evidence on the part of any member/employee covered by the Agreements to cause me to look behind the matters duly and properly declared by the employer, let alone the Agreements as made between the employer and the employees.

[23] That is, as declared, the Agreements were genuinely agreed for the purposes of s.188 of the Act and there is no evidence (or claim by anyone to whom the Agreements apply or cover) to the contrary. More specifically, the employer declares that it met the requirements of s.180(5) of the Act (see below), and took “all reasonable steps to ensure that the terms of the agreement and the effect of those terms to the relevant employees, and did so in terms appropriate to the circumstances of the employees.”

[24] This is not a case in which the CFMEU seeks to lead its own evidence; there are no witness statements from relevant employees who are CFMEU members (or otherwise) as part of its objections, nor do its materials (even) allude to any such witness evidence.

[25] The circumstances of this case, in my view, dictate that the CFMEU has not established a sufficiently sound basis on which to be given a right to be heard.

[26] It follows that I will not extend to the CFMEU a right to be heard in relation to the Agreements, or permit the CFMEU to cross-examine for whatever purposes the employer or its representatives or any of the deponents

Consideration of the Agreements (for current purposes)

[27] I have been provided a statutory declaration by the employer, which attests to the fact that each of the statutory requirements for the approval of the Agreements have been met and discharged according to the Act, including those in relation to s.180, and the range of steps relevant to s.188 of the Act.

[28] More specifically, s.180(5) of the Act provides as follows:

Terms of the agreement must be explained to employees etc.

(5) The employer must take all reasonable steps to ensure that:

(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and

(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.

[29] The employer’s statutory declaration (regarding the Cairns Agreement) - by way of Form F17 of the Commission’s forms - provides as follows:

During the bargaining period the Company met with the employee representatives whereby discussions took place concerning the terms and conditions of the agreement. Information was circulated back to the employees via the employee representatives.

The Company ensured that the employee representatives understood the terms and conditions of the agreement. Feedback from the employees was provided by the employee representatives and all questions from employees were answered.

[30] The employer’s statutory declaration regarding the Townsville Agreement provides as follows:

On the 5/11/2014 a detailed verbal explanation of the EBAs terms and how they affect the employees was given. Employees were given the opportunity to ask questions if they were uncertain with the explanation.

No particular hurdles [regarding particular circumstances of employees] identified. Two employee bargaining representatives were present in the negotiations. All the employees above the age of 21 and speak English fluently.

[31] There is no evidence before me that the requirements of s.180(5) of the Act in relation to the employer having taken all reasonable steps to explain the terms and effect of the Agreements have not been discharged. This, after all, is the relevant test, not whether the steps taken result necessarily in a perfect understanding of each term of the Agreements and the effects of each such terms.

[32] Generally, I have no sound reason to look behind the statutory declarations provided in support of the applications. There would be little point to placing a burden upon an employer to provide a statutory declaration - with all that implies at law - in support of an application for approval of an agreement if the declarations were to be lightly put aside.

Wider observations

[33] The CFMEU objection was based on the inclusion of terms in the Agreements that it asserted were incompatible with the statutory requirement that any agreement be “genuinely agreed”. As mentioned above, no attack was made upon the employer’s declaration in this regard.

[34] It is true, notwithstanding, that some declarations express factual errors (such as dates and claims that are internally irreconcilable, and which invite scrutiny). Many agreements, equally, manifest doubtful terms and uncertain interactions.

[35] But it does not follow that the declarations as relevantly made are erroneous or misleading, and cannot be relied upon.

[36] Further, enterprise agreements for which approval is sought often incorrectly cite Commonwealth legislation, mis-identify statutory bodies (FWC, FWA, FWO, AIRC, IRC), and misname individuals or their functions. But these are not errors commonly fatal to the bargain.

[37] The Act provides for various mechanisms by which employees (and their representatives) and employers may rectify uncertainties, ambiguities and conflicting interpretations of their agreements.

[38] Many dispute applications under s.739 of the Act and applications under s.217 (seeking variations to an agreement for reasons of ambiguity or uncertainty a term) arise from provisions in enterprise agreements about which there are contested interpretations or queries about their operative effects.

[39] Indeed, the Act itself provides very considerable tolerance for an agreement to include terms which are unlawful, non-permitted and discriminatory (see s.253(1) of the Act). That is, an agreement may include terms which are inconsistent with the NES (s.56), objectionable provisions (s.356), outworker terms, bargaining service and impermissible deduction-related terms (s.326), along with any matters not permitted by s.172 of the Act - such as constraints on contractor utilisation or demands that future agreements be made with a nominated union, as well as other unlawful and discriminatory terms (s.194 and s.195).

[40] But while such terms are rendered unenforceable at law, the Act does not direct that such terms must be removed before approval of the agreement.

[41] Presumably this is because such terms may have no legal force, or have legal force to an extent only under the Act, and the inclusion of the terms in the enterprise agreement does not affect the residual operative elements of the bargain as reached between the employer and the employees concerned (see Full Court of the Federal Court (in its judgment in Australian Industry Group v Fair Work Australia [2012] FCAFC 108 (14 August 2012) at [44])).

[42] Generally, the Act ensures that the inclusion of terms such as those cited above do not in their own right go to the question of whether an agreement was “genuinely agreed” for the Act’s other purposes. How parties might come to apprehend that elements of their bargain have no legal force when their agreement is approved without demur is not a matter dealt with by the Act.

[43] That all said, the fact that an agreement might also make reference to instruments or documents that are not under the control of both of the parties to the agreement (and are made by a “stranger to the agreement”) does not give cause to set the agreement aside. Agreements routinely reference and incorporate documents that are not directly within the influence of both of the parties – such as anti-discrimination and workplace health and safety legislation, amongst others.

Conclusion

[44] These wider observations aside, for the reasons I have given earlier, I intend to proceed to determine the applications for approval in the ordinary manner, including my assessment of the Better Off Overall Test, and will issue separate decisions in this regard.

SENIOR DEPUTY PRESIDENT

 1   Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Limited[2014] FWCFB 7940 at PN72-73.

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