Dawsons Maintenance Contractors Pty Ltd

[2017] FWC 3346

[2017] FWC 3346

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Dawsons Maintenance Contractors Pty Ltd
(AG2017/1652)

COMMISSIONER ROE MELBOURNE, 26 JUNE 2017

Application for approval of the Dawsons Maintenance Contractors Site Specific (BHP Billiton - Olympic Dam) Enterprise Agreement 2017.

[1] An application has been made for approval of an enterprise agreement known as the Dawsons Maintenance Contractors Site Specific (BHP Billiton – Olympic Dam) Enterprise Agreement 2017 (the Agreement). It has been made by Dawsons Maintenance Contractors Pty Ltd (the Applicant). The Agreement is a single enterprise agreement.

[2] On 22 May 2017, the Commission sent correspondence to the Applicant advising them that upon review of the application documents, the Commissioner had a number of concerns regarding whether the agreement satisfied the requirements of the Fair Work Act 2009 (the Act). The concerns were as follows:

“1. Apprentices – Rates of Pay

The Commissioner notes that at clause 3.4.1 of the Agreement it is stated that Apprentices shall be employed in accordance with the terms and conditions as contained in the Mining Industry Award, and will receive at least equivalent to relevant conditions in clause 13 and schedules to that Award. The Commissioner is concerned he cannot be certain Apprentices will be better off overall under the Agreement as it appears they will only be receiving exactly at Award rates and conditions.

2. Clerks Award – Rates of Pay

The Commissioner notes that the rate of pay provided for clerical casual employees in Grade 3 fall below relevant Award rates. It does appear that this may be a typographical error as all other rates are above, but is concerned that if not addressed these employees may be left worse off under the Agreement.

3. Workplace Arrangement

At Clause 1.13 of the Agreement, it is provided at sub-clause 4 that the employer and employee(s) may mutually agree on the way in which remuneration will occur, including on Agreement terms, by way on an annualised aggregate salary, a loaded rate plus specified penalties or by an all-inclusive flat rate paid hourly, daily, weekly, fortnightly or monthly. Whilst all Awards allow for the provision of Annualised Salaries, the Commissioner is concerned that there is no such ability to pay rates by way of a loaded rate plus specified penalties, or by an all-inclusive flat rate. The Commissioner is further concerned that it appears unclear how these arrangements would be implemented and as such that he is unable to be certain what remuneration employees may be entitled to, to ensure the better off overall test is met.

Whilst Clause 1.13.6 states the remuneration arrangement must be no less than an employee would otherwise have received under the Agreement, and provides for an at least annual review of the rates provided, the Commissioner remains concerned in relation to the use of a loaded rate plus specified penalties and the all-inclusive flat rate. The Commissioner seeks clarification on how these would apply, and how it can be ensured employees are better off overall.

4. Overtime and Time off In Lieu (TOIL)

At Clause 4.3.4 of the Agreement, Mining Award employees are provided with the ability to take TOIL at the rate of an hour per hour of overtime worked. The Commissioner is concerned that no extra provisions are provided for when such TOIL must be taken by, or how any untaken TOIL may be cashed out, as per Clause 20.4 of the Mining Award.

At Clause 5.3.5 of the Agreement, Clerical employees are provided with the ability to take TOIL at the rate of an hour per hour of overtime work, which may be cashed out at overtime rates where requested by the employee, provided it has been at least 4 weeks from accrual. The Commissioner is concerned the clause does not provide for the TOIL to be automatically cashed out at any point as per Clause 27.5 of the Clerks Award, but rather requires an employee to request, and also prevents an employee requesting such cashing out until at least 4 weeks from accrual.

5. Shift Work

The Commissioner notes that at Clause 4.3.5 of the Agreement, shift penalties are provided for Mining employees working afternoon, night or permanent night shifts. However, no definition of these shifts is provided. The Commissioner is concerned this leaves it unclear when these penalties will be paid.

The Commissioner further notes that at clause 7.1.4(a), a shift worker in the Mining Stream for the purposes of the NES is defined as a continuous shift worker, however no definition is provided for a continuous shift worker as per Clause 3 of the Mining Award. The Commissioner is concerned this makes it unclear whether an employee is a continuous shift worker, and whether they will receive the additional benefits and entitlements that come along with this, such as an extra week of annual leave.”

[3] The Applicant provided a response on 23 May 2017, requesting an extension of time until close of business, 29 May 2017 to provide an adequate response. This extension of time was granted.

[4] The Applicant provided a response on 29 May 2017, offering an undertaking and making submissions in relation to the several issues raised by the Commission. The Applicant made submissions as to why the Agreement provisions in respect to Workplace Arrangements should be found acceptable. The Applicant offered an undertaking in respect to the other concerns.

[5] On 31 May 2017, the Commission sent correspondence advising the Applicant that there were still a number of unaddressed issues outstanding from the original correspondence and requested a response from the Applicant. The outstanding issues were as follows:

“1. The Commissioner remains concerned in relation to the use of workplace arrangements as per clause 1.13 of the Agreement, particularly the use of an all-inclusive flat rate and loaded rates plus specified penalties. While the Commissioner acknowledges that clauses 3.1.1, 3.1.2 and 3.1.5 outline the components that will be included in such clauses, he is not satisfied that all such components, such as the number of overtime hours required, can be determined before such work is undertaken. Furthermore, he remains concerned that employees were not aware of their entitlements when working under such workplace arrangements when voting on the Agreement. As such, the Commissioner is not satisfied employees will be better off overall when working under these workplace arrangements.”

[6] The Applicant provided a response on 5 June 2017, offering a further undertaking and making further submissions in relation to Workplace Arrangements.

[7] On 6 June 2017, a further email was received from the Applicant with re-worded undertakings (Annexure A) that added references to employees being better off overall.

[8] On 15 June 2017, the Commission sent correspondence to the Applicant seeking further undertakings and submissions. The responses sought were as follows:

“1. Notice of Employee Representational Rights

The Commissioner does not consider that the inclusion of the date renders the NERR invalid. He also does not consider that there is any evidence that the notice of appointment of the bargaining representative was in fact attached to the notice or formed part of the notice. The Commissioner notes that only six employees completed forms and this does not suggest that there was any conflict between the form and the notice.

2. Provision of Relevant Material (s 180(2))

The Commissioner requests further information be provided in respect to the access employees had to the Dawsons Mine Management Pty Ltd Drug and Alcohol Policies as referred to at clause 8.2.2 of the Agreement.

3. Explanation of the Agreement (s 180(5))

The Commissioner notes that, despite the incorrect reference at Q2.6 of the Access Letter, reference is made to the correct Agreement in the letter itself. He is satisfied that the incorrect reference in the F17 appears to be an obvious error. He is also satisfied that the error in the description of the BOOT in the access letter (ie. stating that the BOOT must ensure employees are not disadvantaged) is a shorthand which in the circumstances of this agreement does not appear to be material. Finally, he notes that, given that the current operations appear to be in Queensland, the reference to Queensland in the F17 (although inaccurate) does not suggest any substantial problem with the explanation.

However, the Commissioner does seek further information as to how the Agreement was explained to employees, The nature of the explanation of the terms of the agreement and its effect required to satisfy the legislation will vary depending upon the circumstances, including whether or not the terms and conditions in the Agreement are close to the Award or not. In the present case the rates and conditions are very close to the Award and this suggests that more comprehensive steps to explain the agreement and its effect would be required. According to the F17, employees were called to answer any questions or explain any terms that were raised. This does not suggest that any particular explanation was provided to employees unless the employee had a question. The Commissioner requests further submissions and or evidence in respect to this point.

4. Better Off Overall Test (s 186(2)(d))

The Commissioner considers that additional undertakings should be provided to deal with the issue of a rail allowance and the abandonment of employment provision:

1.1 Rail Allowance

The Commissioner is willing to accept the submission of the company that there are no locomotive drivers employed or proposed to be employed. He further believes that this concern can be overcome through the use of an undertaking, without the necessity to alter the scope of the agreement. He seeks an additional undertaking be provided in the following terms:

“The Rail Allowance is described as not applicable in Clause 3.6.1 (b)(iv) because there are currently no locomotive drivers engaged by the company and no intention to engage such drivers. In the event that locomotive drivers were engaged in the future then a 30% rail allowance will be paid.”

1.2 Abandonment of Employment

The Commissioner agrees that abandonment of employment clauses (Clause 2.7 of the Agreement) need to be considered from the perspective of the BOOT, as well as considering whether or not they affect unfair dismissal and NES rights. In this particular case Clause 2.7 does not state that the employee will be dismissed and does not say that the employee will not get notice. The clause also includes some protections which would limit any BOOT issues. The Commissioner therefore seeks an undertaking be provided in the following terms:

“To avoid doubt, the provisions in Clause 2.7 do not alter any rights an employee may have in respect to unfair dismissal.”

Given that the undertakings already provided and those requested reflect existing practice at the time the employees voted, and clarify what it is likely employees understood, the Commissioner does not consider that the undertakings result in a substantial change to the Agreement as voted on by the employees. He further notes that they do not lead to any financial detriment.

For clarification, the Commissioner requests the following:

1. Further explanation of how employees had access to the Dawsons Mine Management Pty Ltd Drug and Alcohol Policies

2. Further explanation as to how the terms of the Agreement were explained to employees and/or submissions as to how the explanations provided were adequate

3. An undertaking as to the Rail Allowance for Locomotive Drivers in the requested terms

4. An undertaking as the Abandonment of Employment clause in the requested terms

The Commissioner seeks the above submissions and/or undertakings be provided by no later than close of business on Monday 19 June 2017.”

[9] The Applicant provided a response on 19 June 2017, offering a further undertaking (Annexure B) and making further submissions in relation to how employees had access to the Drug and Alcohol Policies of Dawsons Mine during the access period and how the Agreement was explained to employees who were to be covered by it.

[10] On 19 June 2017, the Commission sent correspondence to the Applicant providing a response to the undertakings and submissions provided, and seeking further submissions from the Applicant. The response was as follows:

“The Commissioner has now considered the submissions provided by the company. He notes the following:

1. The Commissioner has not changed his preliminary view that the inclusion of the date does not make the NERR invalid.

2. The Commissioner is satisfied that the additional undertakings when considered with the previously provided undertakings satisfy the BOOT and NES requirements of the Act, and do not result in a substantial change or mean that any employee is financially worse off.

3. The Commissioner is satisfied that the employees had access to the drugs policy throughout the access period.

4. In respect to the explanation of the effect of the terms of the Agreement, the Commissioner notes that the access letter advised employees that they could access the Awards through the website or obtain a copy from their supervisor and explained how the terms related to the existing agreements. On balance the Commissioner is satisfied that the explanation was adequate.

The Commissioner seeks further submissions concerning the issue of the notice of appointment of bargaining representatives should be provided. Upon further review of this application and of the earlier application (which was withdrawn) it appears that the appointment notice and the Notice of Employee Representational Rights were distributed together. The Commissioner requests that the Company provide the following information.

1. Was the notice of appointment of bargaining representatives distributed to employees at the same time as the notice of employee representational rights?

2. Was the notice of appointment of bargaining representatives attached to the notice of employee representational rights?

3. If the answer to both questions (a) and (b) is no then please provide details of how and when the notice of appointment of bargaining representatives was distributed to employees.”

[11] The Applicant provided a response on 20 June 2017, making further submissions as to how the Notice was provided to employees.

[12] The Applicant was asked to provide a copy of the email sent to employees attaching the Notice, and on 21 June 2017 provided a copy of the email sent to employees on 24 March 2017 attaching the Notice, as well as an email sent to employees on 18 April 2017 attaching the Draft Enterprise Agreement and an Access period Notice. Copies of all attached documents were also provided.

[13] On 22 June 2017, an email was received from the Applicant outlining their final submissions which contended that the electronic form is a 2 page document, and that as the two pages do not cross reference each other, they cannot be deemed to be one document.

[14] From the undertakings received, I am satisfied that the Agreement passes the Better Off Overall Test. I am satisfied the undertakings provided on 6 June 2017 (Annexure A) and 19 June 2017 (Annexure B) 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.

[15] Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 that are relevant to this application for approval have been met. The Agreement does not cover all of the employees of the employer, however, taking into account the factors in Section 186(3) and (3A) I am satisfied that the group of employees was fairly chosen. The group of employees covered are operationally or organisationally distinct.

[16] From the submissions provided on 19 June 2017, I am satisfied that the requirements of s.180 have been met in relation to the provision of relevant material and explanation of the proposed Agreement to employees that are covered by the proposed Agreement.

[17] The remaining issues to be considered in this matter are:

(a) whether the inclusion of the date at the top of the Notice of Employee Representational Rights (NERR) does render the Notice invalid under s. 174(1A);

(b) whether the Notice was provided with the Notification of Appointment of Bargaining Representative; and

(c) if so, whether providing the Notice along with the Notification of Appointment of Bargaining Representative renders the Notice invalid under s. 174(1A).

[18] The relevant authority about whether changes to the NERR renders the notice invalid is Peabody [Peabody Moorvale Pty Ltd v CFMEU[2014] FWCFB 2042 at paragraph [46]]:

“In our view s.174(1A) is clear and unambiguous. There is simply no capacity to depart from the form and content of the notice template provided in the Regulations. A failure to comply with these provisions goes to invalidity.”

[19] In my view, the addition of the date does not change the form and content of the notice template provided in the Regulations. The template notice is provided in full and without alteration (subject to consideration of whether the nomination form is part of the notice). The inclusion of a date assists both employees and the Commission to identify that it is in fact a valid notice given that the legislation requires the notice to be issued within a certain time frame in respect to the notification time for the bargaining for the Agreement. In my view, the inclusion of the date is no different to the inclusion of a cover letter. It is additional material provided with the Notice. A cover letter may be a relevant consideration in respect to genuine agreement if it has the effect of changing the message of the notice but Peabody found that it does not invalidate the notice.

[20] In the Peabody case, the Full Bench decided that the nomination form distributed with the notice was a part of the notice and therefore was an addition to the notice that rendered the notice invalid. The reasoning was as follows:

“[72] It is common ground that the three documents (JP1, JP2 and JP3) were stapled together and given to each of the employees. The issue is whether these three documents stapled together constituted the purported Notice or whether only JP1 was the purported Notice. The evidence relevant to this issue is Mr Paterson’s Form 17 statutory declaration of 20 December 2013 and the covering email of the same date; Mr Paterson’s statutory declaration of 23 January 2014 and Mr Paterson’s oral evidence in the proceedings. The documentary evidence is referred to earlier in our decision (see paragraphs [49]-[54]).

[73] The Form 17 statutory declaration and covering email support an inference that the purported Notice consisted of documents JP1, JP2 and JP3.

[74] In his Form 17 declaration Mr Paterson’s response to question 2.3 states that a Notice was given to each employee and that a ‘copy of the notice given to employees’ was attached to the declaration. The document attached to the Form 17 declaration consisted of all three pages of the material provided to the employees (ie JP1, JP2 and JP3). The covering email to the Form 17 declaration also referred to the attached Notice of Employee Representational Rights. The only document attached was the three pages provided to the employees.”

[21] The Full Bench then went on to analyse other evidence given in the proceedings about what constituted the notice. The Full Bench then made the following finding:

“[83] In our view the proper inference to be drawn is that the purported Notice in this case consisted of the three pages given to the employees (ie JP1, JP2 and JP3).

[84] We wish to make it clear that the finding we have made in this case as to what constitutes the notice turns on the particular facts in this matter. We repeat our earlier observation (at paragraphs [68] to [70] that s.174(1A) is not to be construed so as to preclude an employer from providing additional material to its employees at the same time as the Notice is given to them. Where additional material accompanies a document which complies with the form and content of the prescribed Notice the issue to be determined is what purports to be the Notice. This issue will turn on the evidence and particular circumstances of each case.

[85] As the Notice includes ‘other content’ it does not comply with s.174(1A) and hence is invalid. The Notice did not appear to comply with the prescribed Notice in a number of other respects, however given our conclusion above it is unnecessary for us to deal with those matters.”

[22] In the circumstances of this case the F17 Form states as follows at 2.3:

“The Schedule 2.1 Notice of Representational Rights (as attached) was sent by email to each relevant Employee on Friday 24 March 2017. Ms Tracy Harrison, HR Officer, followed up with a telephone call to each Employee, “did you receive your Notice.”

[23] The Notice which is attached to the F17 consists of two pages; One page is headed Schedule 2.1 Notice of Employee representational rights and the second page is headed Notice of Appointment of Bargaining Representative.

[24] In response to our request, Dawsons provided a copy of what was in fact sent to each of the employees by email. That document is a cover email which refers to one attached document. The attached document when opened is the two page document which was attached to the F17 Form. The cover email is dated 24 March 2017 and states as follows:

“We are entering into a bargaining period, please find enclosed your Notice of Employee Representational Rights which explains in full detail the process of undertaking an enterprise agreement bargaining process.

You will have an opportunity to nominate either yourself or another employee as a bargaining representative on your behalf if you wish to do so.

Nominations need to be received at our office either on email or in person by close of business on 31 March 2017.

If you have any questions please direct them to Sharon Dawson, Tracy Harrison, Serena Engel or 07 4058 5200 or refer to fair work commission infoline on 1300 799 675 or The attachment at the bottom of the email is entitled “DMM sched_2_1_20170324.pdf”. That attachment when opened is the two page notice described earlier.

[26] There is no other evidence before me which would alter or detract from the plain meaning of these words. There is only one document enclosed. That document is referred to in the cover email as “our Notice of Employee Representational Rights”. The second and third sentences talk about nominations as a bargaining representative. It is not suggested that this is a separate process or a separate document. It is simply stated that “you will have the opportunity to nominate”. Considered in context, the message is that the nomination process is a part of “your Notice of Employee Representational Rights which explains in full detail the process of undertaking an enterprise agreement bargaining process.”

[27] I am satisfied that the circumstances of this case lead to a clear finding that the nomination of bargaining representative form was a part of the notice which was given to employees. This, based on the authority of Peabody, means that the Notice includes ‘other content’ and it does not comply with s.174(1A) and hence is invalid.

[28] For completeness, I also note that the requirement in the cover letter that “nominations need to be received at our office either on email or in person by close of business on 31 March 2017” is contrary to the content of the notice and the legislation. The legislation does not require nominations for bargaining representatives to be made by a certain time in the process. Of course, there is nothing wrong with pointing out when it is proposed that the bargaining meetings would commence and that employees may wish to bear that in mind if considering nominating a representative. However, imposing a hard deadline is to mislead employees as to their rights. If this formed part of the notice, then it would render the notice invalid. However, the hard deadline is in the cover email and not in the notice itself. Therefore, the hard deadline does not render the notice invalid but it would be a relevant consideration in determining whether or not there had been genuine agreement. If employees have been in some substantial way misinformed of their rights then this may well constitute a reason to find that there are “other reasonable grounds for believing that the agreement had not been genuinely agreed to by the employees.” (Section 188(c)).

[29] There have been a number of decisions where the Commission has found that where the appointment form and or cover letter send a different message to that of the NERR, this is a relevant consideration in respect to Section 188(c) genuine agreement. In this case, there is no suggestion that employees are required or urged to fill in the form. There is also nothing on the form which suggests that union members are required to or should nominate a bargaining representative. However, in this case the cover email does suggest that there is hard deadline for nominations. The logic for this approach is clearly set out in the Full Bench decision in Peabody at paragraph [70]:

“Thirdly, where additional material is provided with the Notice and that material has the character of being, for example, misleading or intimidatory, then this will be relevant to the Commission’s assessment of whether the enterprise agreement had been ‘genuinely agreed’ by the employees. However, it is not a basis for finding that a Notice has not been given in accordance with the Act. Section 188 deals with when employees have ‘genuinely agreed’ to an enterprise agreement. It is set out at paragraph [41] above. To rely on additional material which is misleading or intimidatory as a basis for finding that the Notice has not been given in accordance with the Act would be to conflate the issues that arise for consideration in paragraphs 188(a) and (c). These are two separate requirements and need to be considered as such. Paragraph 188(a) deals with whether a Notice was given in accordance with the Act (ie whether the timing, content and form requirements were met). Any concerns as to whether the employees may have misunderstood their right to be represented, despite being provided with a valid Notice, fall to be considered under paragraph 188(c).”

[30] As a valid Notice of Employee Representational Rights was not issued the Agreement cannot be approved. The Application is dismissed.

COMMISSIONER

Appearances:

S Dawson and L Eberift for the applicant.

A Thomas for the Construction, Forestry, Mining and Energy Union.

Hearing details:

2017.

Melbourne and Sydney (by video):

June 23.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR593977>

Annexure A

Annexure B