Delta Coal Mining Pty Limited

[2014] FWC 3697

[2014] FWC 3697 [Note: An appeal pursuant to s.604 (C2014/5041) was lodged against this decision - refer to Full Bench decision dated 4 September 2014 [[2014] FWCFB 5743] for result of appeal.]

The attached document replaces the document previously issued with the above code on 3 June 2014.

The decision with the reference ([2014] FWCA 3550) is replaced with [2014] FWC 3697.

Sophie Bonnette

Associate to Senior Deputy President Harrison

Dated 4 June 2014

[2014] FWC 3697

FAIR WORK COMMISSION

DECISION

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

Delta Coal Mining Pty Limited
(AG2014/5678)

DC ENTERPRISE AGREEMENT 2014

Coal industry
SENIOR DEPUTY PRESIDENT HARRISON	SYDNEY, 3 JUNE 2014

Application for approval of the DC Enterprise Agreement 2014.

[1] This decision concerns an application made by Delta Coal Pty Limited (the Employer) for approval of a single enterprise agreement known as the DC Enterprise Agreement 2014 (the Agreement). The application is made under s.185 of the Fair Work Act 2009 (Cth) (the Act).

[2] As part of its application, the Employer filed a Form F16 “Application for Approval of an Enterprise Agreement”; Form F17 “Employer’s statutory declaration in support of an application for approval of an enterprise agreement” with accompanying attachments; and a signed copy of the Agreement. I note that each Form was properly completed and each relevant question answered. The Form F16 indicated that there were no employee organisations involved as bargaining representatives. A number of employees who had appointed themselves, or another person as a bargaining representative, are identified. In the Employer’s statutory declaration, details were given in respect of each of the pre-approval steps that had been taken. Additional documents were also provided, including a “FAQ Sheet”, a power point presentation made to employees and a letter sent to each employee highlighting matters that had been raised during bargaining and the amendments the Employer was prepared to make as a result.

[3] On 16 April 2014, the Employer’s representative wrote to the Commission clarifying an entry in the Form F16 in relation to the number of individual bargaining representatives. On 17 April 2014, the Construction, Forestry, Mining and Energy Union (CFMEU or Union) wrote to my chambers stating it had concerns regarding the Agreement and advising it had sought information from the Employer in relation to its concerns. The Union further requested it be provided with any notices of listing and all correspondence in relation to the application. A response was provided to the CFMEU from the Employer on 23 April 2014 clarifying the scope of the Agreement and also enclosing all the documents filed with the Commission in relation to the application. It appears the CFMEU had an incorrect understanding of the coverage of the Agreement and the Employer indicated that there was no other enterprise agreement covering the Employer and relevant employees.

[4] On 29 April 2014, my chambers phoned the CFMEU seeking advice as to whether or not it opposed the application and wished to be heard. On 6 May 2014, my chambers informed the Union it had until the close of business on 13 May 2014 to advise the Employer and the Commission of its position.

[5] On 13 May 2014 at 4:47pm the CFMEU emailed my chambers seeking an extension until close of business 16 May 2014 on the grounds that the Union was making further enquiries of the Employer. The email also sought further clarification on information provided in the Form F16 regarding individual bargaining representatives. On 14 May 2014, I granted the CFMEU’s request for an extension. On that same date a notice was sent from my chambers listing the application for approval before me on 21 May 2014. Also on 14 May 2014, the Employer’s representative provided a letter to my chambers, copying in the Union, which addressed the Union’s question regarding the individual bargaining representatives.

[6] On 16 May 2014, the CFMEU emailed my chambers indicating that it opposed the approval of the Agreement, sought to have the hearing on 21 May 2014 vacated and proposed a timetable for the filing of submissions and evidence. The Union indicated the Employer’s representative had advised it that the Employer did not consent or agree with the approach proposed by the CFMEU. I note that the CFMEU gave no indication of the grounds upon which it opposed the approval.

[7] On 19 May 2014, an email from the Employer’s representative confirmed the Employer did not consent to the approach proposed by the Union on 16 May 2014, and provided reasons why it would be detrimental to the Employer to further delay the approval process. On that same day, after considering the matters raised in both emails, I decided to proceed with the hearing as listed on 21 May 2014 and informed the parties of my decision.

[8] The matter proceeded on 21 May 2014 for hearing. Mr Pearson, a solicitor, appeared on behalf of the Employer and Mr O’Sullivan, a barrister, appeared on behalf of the CFMEU. Both sought, and were granted, permission to appear pursuant to s.596 of the Act. I indicated that legal representation would allow the application for certification to be dealt with more efficiently, taking into account the complexity of the matter.

[9] Mr O’Sullivan, on behalf of the CFMEU, provided both written and verbal submissions. He indicated that the Union opposed the approval of the Agreement on the ground that the Agreement had not been genuinely agreed to as that term is described in s.188 of the Act. That section is in these terms:

“188 When employees have genuinely agreed to an enterprise agreement

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.”

[10] The first challenge made by the CFMEU relates to s.180(2) of the Act. It was submitted that there was a lack of access by employees to the Black Coal Mining Industry Award 2010 (the Award) 1during the access period. The second is that I could not be satisfied that the requirements of s.180(5) of the Act had been met. That section deals with how the terms of an agreement are to be explained to employees. The third ground is referable to s.188(c) of the Act and allows the consideration of any other reasonable grounds there may be for the Commission “believing that the agreement has not been genuinely agreed to by the employees.” For these reasons it was submitted that I could not be satisfied, as required by s.186(2)(a) of the Act, that the Agreement had been genuinely agreed to by the employees covered by it.

[11] The first issue which arises is whether the CFMEU should be heard in this matter. In its written submissions the CFMEU indicated that it had members who are or will be covered by the Agreement. In the hearing before me, Mr O’Sullivan said that the CFMEU had members who will be covered by the Agreement and who had voted upon the Agreement. 2 He submitted that if the Agreement was approved it would provide a reduction in the current redundancy provisions of employees in comparison to those provided in the relevant Award.

[12] The Employer did not concede that the CFMEU had any relevant members however it did not require the CFMEU to call evidence so as to establish that which it asserted. The Employer submitted that the CFMEU had taken no active role in bargaining for the Agreement. Mr O’Sullivan did not assert the CFMEU was a bargaining representative, although, in light of s.176 of the Act I do not readily understand this submission. He was unable to confirm if the relevant member or members of the CFMEU had also completed a notice appointing themselves or another employee as a bargaining representative. In fairness to Mr O’Sullivan, it appears he was briefed on short notice. The officer of the union with carriage of this matter was unavailable (for reasons I accept) to attend the hearing. It would have been preferable these considerations were addressed. However, the Employer did not require them to be. Further, the Employer was not inclined to delay the hearing. In those circumstances, I decided to grant the CFMEU an opportunity to make submissions. I ruled, pursuant to s.590 of the Act, to allow the CFMEU to be heard only as to the matters it had outlined in its written submissions pertaining to the access ground and genuinely agreed ground.

[13] I turn first to the submission by the CFMEU that the Employer had not complied with s.180(2) of the Act, that section is in the following terms:

“180 Employees must be given a copy of a proposed enterprise agreement etc.

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

(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:

(i) the written text of the agreement;

(ii) any other material incorporated by reference in the agreement; or

(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.”

[14] The CFMEU argues that the effect of clause 11.1 of the Agreement (which I reproduce below) is to incorporate by reference clause 14 of the Award. Accordingly, the Employer was required to take all reasonable steps to ensure that during the access period employees were given a copy of the Award or have access to it. The Union refers to the Employer’s statutory declaration filed in support of approval of the Agreement and says it appears that employees were told only that a copy of the Award would be made available to them on request and it did not appear that any other steps had been taken to give them a copy or provide access to it.

[15] In response, the Employer led evidence that it did take all reasonable steps to ensure that the employees to be covered by the Agreement had access to the Award. Mr James Richardson, the General Manager of Delta SBD, New South Wales North and West Districts, gave evidence about this matter. He was cross-examined by Mr O’Sullivan.

[16] I accept the evidence of Mr Richardson, who had attended all six presentations in relation to the Agreement that had been held in March 2014. On each occasion, there were multiple copies of the Award in the room where the presentations were undertaken. He observed that some employees looked at the Award and some made photocopies of it or parts of it. There was a photocopier close to the room where the presentations were undertaken. He also observed that a copy of the Award was passed around the table as the presentations were being held.

[17] I am satisfied, based on the information provided in the Employer’s statutory declaration, the annexed information provided to employees and on the evidence of Mr Richardson that the requirements of s.180(2) of the Act were met.

[18] I now turn to the ground relying on s.180(5)(a). To put the argument about the asserted non compliance with this section into context, I should first reproduce parts of clause 14, the redundancy clause contained within the Award and parts of clause 11 which is the redundancy clause in the Agreement. I should observe that the Award is the relevant modern award that covers the Employer and the employees who will be covered by the Agreement.

[19] Clause 14.1 and 14.2 of the Award are relevant to this matter. They are in the following terms:

“14. Redundancy

14.1 The redundancy arrangements in this award are an industry-specific redundancy scheme and, as such, Subdivision B of Division 11 the NES does not apply.

14.2 Definition of redundancy

(a) An employee is made redundant where an employee’s employment is terminated at the employer’s initiative:

(i) because the employer no longer requires the job done by the employee to be done by anyone except where this is due to the ordinary and customary turnover of labour; or

(ii) because of insolvency or bankruptcy of the employer.

(b) This clause does not apply to employees engaged for a fixed term or a specified task.

. . .”

[20] I now turn to clause 11 of the Agreement. That clause has four sub-clauses however, for the purposes of dealing with the CFMEU’s submissions, only sub-clauses 11.1 and 11.2 are relevant. They are as follows:

“11.1 Industry Specific Redundancy Scheme

Clause 14 of the Black Coal Award (as it applies from time to time) is incorporated into the Agreement. For completeness, clause 14 of the Black Coal Award is summarised below.

11.2 Definition of Redundancy

A redundancy situation arises where DC decides that it no longer requires an Employee’s job to be done by anyone (except where this is due to the ordinary and customary turnover of labour).

Ordinary and customary turnover of labour includes the termination of employment because of:

(a) the completion or termination of a service contract with a Client in any way; or

(b) a decrease in labour requirements associated with the normal resourcing of contract works with a Client; or

(c) where a Client instructs or requests a reduction in labour.

Neither casual Employees, nor Employees engaged for a fixed term or a fixed task are entitled to any redundancy benefits under this provision.”

[21] The Union argued that clause 11.1 clearly incorporates clause 14 of the Award. It submits that although clause 11.2 purports to summarise clause 14, it does not accurately do so. It provides examples of what may constitute “ordinary and customary turnover of labour” which are not contained in the Award. It also submits that clause 11.2 excludes casual employees from the operation of the redundancy clause, but there is no reference to casual employees in clause 14 of the Award.

[22] The CFMEU referred to s.180(5)(a) of the Act which requires an employer to take all reasonable steps to ensure that the terms of the agreement and the effect of the terms are explained to the relevant employees. It submits that as the Agreement gave examples of circumstances that would amount to the ordinary and customary turnover of labour (examples of which were not in the Award) the Employer was obliged to explain to employees that they would suffer a reduction in their existing redundancy entitlement. The failure of the Employer to explain that reduction in redundancy benefits should lead to the conclusion that it has failed to comply with s.180(5)(a) of the Act.

[23] Having conferred with the parties and considered all the documentary evidence and the submissions I am not persuaded the Employer intended, by providing the examples, to in any way compromise or limit the entitlements under clause 14 of the Award. It attempted to give some practical examples of circumstances in which it may be said that there was an ordinary and customary turnover of labour. In retrospect, it would have been better it did not do so. However, the question I need to consider is if, in doing so, it has failed to explain the terms of the Agreement and the effect of those terms. I am not persuaded it has.

[24] Firstly, the obligation imposed on the Employer by s.180(5)(a) is to take all reasonable steps to ensure the terms of the Agreement and effect of those terms were explained. There is nothing to suggest they were not. Of course it is not every term of an agreement that must be explained. In the case of the redundancy clause the Employer submits the clear intention is, and was at all times during bargaining, to incorporate without any reduction in entitlement, the whole of the industry specific redundancy scheme referred to in clause 14 of the Award. The first sentence in clause 11.1 is consistent with this and confirms that the redundancy provisions of the Award are to apply. This sentence, in my opinion, is to be read as setting the entitlement. Nothing elsewhere contained in the clause overrides that entitlement. It is open for me to find, and I do, that there was no need for the Employer to establish it had explicitly addressed the terms of clause 11.2.

[25] I also note clause 1(g) of the Agreement, which provides that, subject to the provisions of clause 11 of the Agreement which incorporates the industry specific redundancy scheme from the Award, the terms of this Agreement are to apply in a certain way. That too is consistent with the fact that the intention is to incorporate in the exact same terms, and without modification, the redundancy specific scheme from the Award.

[26] In the course of a conference with the parties before the hearing I raised with them an issue (not raised by the CFMEU) in relation to a staff employee, engaged on a casual basis, in a classification under Schedule B of the Award. In this respect I should first note that the Award only provides for full-time and part-time employees in classifications in Schedule A. This provides the reason the redundancy clause does not exclude casuals as most such clauses do. Neither party was able to assist however, with why the clause does not explicitly exclude a Schedule B staff employee engaged on a casual basis. Despite this, I was nonetheless satisfied in the circumstances of this matter the requirements of s.180(5)(a) were met. It was not suggested the circumstances and needs of the workforce required any particular special explanation.

[27] The CFMEU next submitted that, in terms of s.188(c) of the Act, there were other reasonable grounds for believing the Agreement had not been genuinely agreed to by the employees.

[28] It submits that the issue of genuine agreement is to be assessed by reference to the relevant circumstances existing as at the date the employees voted for the Agreement. In support of this submission, the CFMEU relies on the same ground that it developed in reference to its objection under s.180(5)(a) of the Act. That is, it submits the terms of clause 11.2 of the Agreement providing as it does examples of what will constitute ordinary and customary turnover of labour which examples are not contained in the Award, provides reasonable grounds for me to believe the Agreement was not genuinely agreed. It submits that I should find that the proposed clause is misleading and, additionally, there was no explanation given to the employees about this in the consultation presentations.

[29] I need to say little about this ground. For the same reasons I have addressed by reference to s.180(5), I am not satisfied there are any other reasonable grounds for my believing the Agreement was not genuinely agreed to by the employees.

[30] Although I accept it was not intended to be misleading, but rather an attempt to provide some practical examples of the ordinary and customary turnover of labour might be, nonetheless the provisions of clause 11.2 of the Agreement purport to give examples of circumstances which may not, on a proper construction of clause 14 of the Award, be excluded.

[31] I have decided that retaining the examples in clause 11.2 of the Agreement is not desirable. I consider one way of addressing this is in the context of the better off overall test. It is a requirement of s.186(2)(d) of the Act that I be satisfied that the Agreement passes the better off overall test. I have decided to require an undertaking of the Employer, pursuant to s.190 of the Act. The undertaking the Employer is to provide is that clause 11 of the Agreement will operate and be applied, consistent with clause 14 of the Award.

[32] The Employer should provide the above undertaking to my chambers as soon as possible and, at the same time, provide a copy to each of the employee bargaining representatives. Those representatives are entitled to provide their views about the undertaking to me. I indicate that if any employee bargaining representatives have any concerns with the undertaking they should advise my chambers by no later than close of business Wednesday 4 June. Assuming there is no opposition to the undertaking, I propose to approve the Agreement. There are no other grounds that have been raised, nor that I consider to exist, that would persuade me that the Agreement should not be approved.

SENIOR DEPUTY PRESIDENT

Appearances:

D Pearson on behalf of the applicant

D O’Sullivan on behalf of the CFMEU

Hearing details:

2014.

Sydney.

21 May.

 1   MA000001

 2   PN40 and PN41.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR551423>