Decmil Australia Pty Ltd T/A Decmil

[2013] FWC 8252

[2013] FWC 8252

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Decmil Australia Pty Ltd T/A Decmil
(AG2013/1441)

DEPUTY PRESIDENT MCCARTHY PERTH, 8 NOVEMBER 2013

Application for approval of the DA Agreement 2013.

Background

[1] Decmil Australia Pty Ltd (Decmil) lodged an application for approval of the DA Enterprise Agreement 2013 (the DA 2013 Agreement). Decmil lodged an Employer’s Declaration in Support of the Application for Approval of the Enterprise Agreement (the Employer’s Declaration).

[2] In addressing the Scope of the Agreement provisions of the Fair Work Act 2009 (the FW Act) the Employer’s Declaration identified that the Agreement did not cover all employees of the Employer (Item 2.2 of Employers Declaration). In response to the question to specify the group(s) of employees covered by the Agreement Decmil identified the classifications that the Agreement covered and also explained that the Agreement did not cover:

“The Agreement does not cover those employees who are employed in:

1. Managerial;

2. Clerical; or

3. Administrative,

roles with the Employer, and those employees who are covered by either the:

1. Decmil Australia Pilbara Projects Employee Collective Agreement 2009;

or

2. Decmil Australia Pty Ltd Employee Collective Pluto Project Agreement 2009.”

[3] The Employer’s Declaration stated that when the Agreement was made there were 9 employees who will be covered by the Agreement each of whom cast a valid vote and voted to approve the Agreement. The application for approval of the Agreement (the application) identified 9 bargaining representatives, being the 9 employees who were employed when the Agreement was made and voted to approve the agreement.

[4] The Employer submitted that is primarily engaged in the operations of building and construction. The Employer’s Declaration identified the appropriate reference instrument for the better off overall test was the Building and Construction General On Site Award 2010 (the BCI Award).

[5] I conducted a conference to deal with the application. I granted the Construction, Forestry, Mining and Energy Union (the CFMEU) the right to participate. At that conference the CFMEU indicated that they did not believe that all employees who should have been involved in the making of the Agreement were given the opportunity. They asserted that the Application clause of the Agreement covers employees other than the 9 involved in the making of the Agreement.

Submissions of the CFMEU

[6] The CFMEU provided written submissions and argued that there was a failure by Decmil to notify and involve employees who would be covered by the Agreement in the making of the Agreement and as a consequence the Agreement was not genuinely agreed to and cannot be approved by the Fair Work Commission (the FWC).

[7] The CFMEU thus objected to the Agreement being approved. The CFMEU asserted that:

“10.1.Decmil employed, throughout Australia, more than nine workers as of 30 May 2013 in the classifications contained within the Agreement; and

10.2. as such those other workers were covered by the Agreement when it was made; and

10.3. those other workers were not involved in the making of the Agreement.”

Submissions of Decmil

[8] Decmil submitted that at the time the Agreement was made there were 9 employees of the Applicant covered by the Decmil Australia Pilbara Project Collective Agreement 2009 (the Pilbara Agreement) and no employees covered by the Decmil Australia Pty Ltd Employee Collective Pluto Project Agreement 2009 (the Pluto Agreement).

[9] Other than the 9 employees covered by the DA 2013 Agreement and the 9 covered by the Pilbara Agreement at the time when the DA 2013 Agreement was made there were also 36 employees employed by Decmil in Queensland. The Queensland employees were covered by the Decmil Australia Buffel Park Village Project Union Greenfields Agreement 2012 (the Buffel Park Agreement).

[10] Decmil submitted that with respect to those 36 employees that were covered by the Buffel Park Agreement that by early August no employees were employed.

[11] Decmil stated that the Buffel Park Agreement does not pass its nominal expiry date until 30 April 2016 and that it covered employees performing on-site construction work within Decmil’s scope of work during performance of the Buffel Park Village Construction Project located in the Bowen Basin Coalfield in Queensland (the Buffel Park Project).

[12] They asserted that the DA 2013 Agreement would never apply to the Buffel Park employees because when the DA 2013 Agreement was made the Employees at Buffel Park were working their notice period and the Applicant's scope of work on the Buffel Park Project was coming to an end.

[13] Decmil referred to the Full Bench in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; Construction, Forestry, Mining and Energy Union and Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (known as the Australian Manufacturing Workers' Union v MI&E Holdings Pty Ltd) 12 (MI&E Holdings). In MI&E Holdings an agreement was made (the MIE Agreement) on 13 April 2012. There the employer had excluded employees covered by two other agreements and explained the reason for that exclusion was because “employees at those projects were not included as the work was nearing completion at the time of making the agreement and the expectation was that they would soon finish their employment.”

[14] The MI&E Holdings Full Bench found that the group to be covered by the MIE Agreement was not fairly chosen because the Worsley Agreement had passed its nominal expiry date and employees covered by the Worsley Agreement would thus be covered by the MIE Agreement and it would apply to those employees. The MI&E Holdings Full Bench made no finding in respect of the Shenton Park Agreement but made the observation that “it was not free from doubt”.

[15] The Full Bench stated that:

“[35] We have earlier referred to the explanation given by MI&E as to why it had not given employees engaged on the greenfields projects an opportunity to vote on the Agreement. Whilst it is not free from doubt as to whether the employees to which the Shenton Park agreement applied, which was still within its nominal life, should have voted (the Appellants submit they should have) in our opinion those on the Worsley project clearly were entitled. The explanation given by MI&E that they did not allow them to vote because they expected their employment would be finishing up shortly after the Agreement was made does not justify them declining to give them the opportunity to do so. They were persons who under s.181 of the Act would be covered by the Agreement and were employed at the time and therefore should have been requested by MI&E to approve the Agreement by voting for it.”

[16] The Applicant submitted that that the DA 2013 Agreement can and should be distinguished from MI&E Holdings, because:

“(a) the employment of the Buffel Park Employees will cease after the Agreement was made, but before the Agreement is likely to be approved or have any operation;

(b) the Buffel Park Agreement will not pass its nominal expiry date until 30 April 2016, and by virtue of s 58 of the Act and the fact that the employment of the BP Employees will have ceased, the Buffel Park Employees will never have the Agreement apply to them”.

[17] Decmil also argue that if the Agreement is approved on or after 31 July 2013, the Agreement at the time that it comes into operation will never cover the Buffel Park Employees.

Consideration

[18] The Agreement does not have a clause titled “Coverage” or “Scope”, rather it has a clause titled “Application”. It does not seem to be in contention that this clause more accurately provides for the employees that will be covered by the DA 2013 Agreement.

[19] It is not in dispute that at the time of the making of the Agreement there were employees that were employed by Decmil that were covered by the Buffel Park Agreement. I also accept and find, relying on the information provided by Decmil, that there were no other employees that would be covered by the DA 2013 Agreement. Thus, the question here is whether the DA 2013 Agreement was genuinely agreed by excluding the Buffel Park employees that were employed by Decmil at the time the DA 2013 Agreement was made.

[20] The FW Act provides that an enterprise agreement covers an employee or employer if the agreement is expressed to cover (however described) (s.53) and only one enterprise agreement can apply to an employee at any particular time (s.58). Thus, a number of agreements may cover an employee at the same time but only one agreement can apply at the same time. The FW Act provides that an agreement must be in operation and it must cover the employee and the employer for it to apply. Whether the agreement is in operation and whether it covers the work being performed, the employer for whom work is being performed and the employee performing that work depends on what the agreement itself says.

[21] It seems here that Decmil never intended the DA 2013 Agreement to cover Buffel Park employees as the Agreement would never apply to those employees. The confusion appears to arise from misunderstanding the terminology of “coverage” and “application” of an agreement. That much is evident from Clause 1.2 of the DA 2013 Agreement referred to above. I find that the DA 2013 Agreement will cover the employees that were also covered by the Buffel Park Agreement even though I accept that the DA 2013 Agreement did not, and never will, apply to those employees.

[22] The FW Act mandates that the employer take all reasonable steps to provide information and opportunity for employees in respect of an agreement that will cover those employees. The obligation cannot be avoided regardless of the reason.

[23] Therefore, I cannot be satisfied that the DA 2013 Agreement was genuinely agreed to as employees at Buffel Park will be covered by the Agreement, but the Applicant did not take the reasonable steps it was required to take.

[24] The FWC may approve the agreement if it is satisfied that an acceptable undertaking meets a concern that the agreement does not meet the requirements of the FW Act. 3

[25] The Buffel Park Agreement provides at Clause 3(a)(1) as follows:

“The Agreement includes the five Appendices. The Agreement covers the Unions, the Employer and employees of the Employer who will:

(1) perform on-site construction work within the Employer’s scope of work during the performance of the Buffel Park Village Construction Project located in the Bowen Basin Coalfield in Queensland (the Project), in any of the work classifications identified in subclause 12.3 of the Agreement.”

[26] Decmil was awarded the contract for construction, installation and commissioning of the Buffel Park Village, including all site development works and service infrastructure, to house the Caval Ridge Coal Project construction workforce. The project involves a 1500 bed accommodation village which includes ensuite accommodation rooms, dining facilities, laundry, training room, wet mess, and recreation facilities, as well as bus parking, bus stop and car parking areas.

[27] The potential for this Agreement to either cover or apply to the Buffel Park Project does not exist. The Buffel Park Project has been totally completed and Decmil’s contract for work there has concluded. There are no employees of Decmil employed at the Project and neither can there be.

[28] Decmil has indicated it is prepared to give an undertaking. Here I am inclined to accept the undertaking for a number of reasons including that the flaw in the agreement making process appears to have no practical effect or consequence whatsoever. The undertaking Decmil proposes is as follows:

“The Applicant is prepared to offer an undertaking in the following terms:

(a) Clause 1.2 of the Agreement shall be read as follows:

“1.2.1 This Agreement shall apply to:

(a) Decmil Australia Pty Ltd (Company); and

(b) the Employees of the Company:

(i) employed in Classifications contained in this Agreement;

(ii) who are not covered by the:

(A) Decmil Australia Pilbara Projects Employee Collective Agreement 2009;

(B) Decmil Australia Pty Ltd Employee Collective Pluto Project Agreement 2009; or

(C) Decmil Australia Buffel Park Village Project Union Greenfields Agreement 2012.”

[29] I do not consider in the circumstances here that the undertaking will result in any substantial change to the Agreement.

[30] I am conscious that the CFMEU made its objection on the basis of what it considered to be a “Threshold issue”. The inference from the CFMEU description is that they may have other submissions to make on other issues. Before considering the other aspects of the application I will provide the CFMEU the opportunity to make further submissions. The CFMEU should do so by 5:00pm Tuesday, 12 November 2013.

[31] Any views of bargaining representatives regarding the undertaking should be communicated to my office by 5:00pm Tuesday, 12 November 2013. Should the CFMEU wish to be covered by the Agreement they should lodge the appropriate form by the same time.

DEPUTY PRESIDENT

 1   [2013] FWCFB 2142.

 2   [2012] FWA 9503.

 3   See MI&E Holdings.

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