[2019] FWCA 7930

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Downer EDI Engineering Power Pty Ltd
(AG2019/2987)

DOWNER EDI ENGINEERING POWER PTY LTD SOUTH WEST MAINTENANCE SERVICES ENTERPRISE AGREEMENT 2019

Building, metal and civil construction industries
COMMISSIONER JOHNS	SYDNEY, 4 DECEMBER 2019

Application for approval of the Downer EDI Engineering Power Pty Ltd South West Maintenance Services Enterprise Agreement 2019.

[1] An application has been made for approval of an enterprise agreement known as the Downer EDI Engineering Power Pty Ltd South West Maintenance Services Enterprise Agreement 2019 (Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (Cth) (FW Act). The application has been made by Downer EDI Engineering Power Pty Ltd (Downer). The Agreement is a single enterprise agreement.

[2] The Agreement covers 20 employees. They all cast a valid vote. 11 (55%) voted in favour of the Agreement.

[3] In addition to one employee bargaining representative, there were two bargaining organisations involved in the agreement making process, namely:

a) the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, known as the Australian Manufacturing Workers’ Union (AMWU); and

b) Communications, Electrical, Electronic, Energy, Information, Post, Plumbing and Allied Services Union of Australia (CEPU).

[4] Both unions object to the approval of the Agreement. The unions object on the basis that, they both contended, the Commission could not be satisfied that all relevant employees genuinely agreed to the Agreement as required by s.186(2) and in accordance with s.188 of the FW Act.

[5] The lack of genuine agreement is said to arise out of two circumstances:

a) The first relates to the fact that, when Downer was explaining the terms of the Agreement to employees (before they voted), employees were provided with, amongst other explanatory documents, a document called the Comparison Document indicating that 17.5% annual leave loading (Leave Loading Statement) would be included in the Agreement. It was not.

The CEPU submitted 5 statements from employees who were said to have voted in favour of the Agreement relying upon the Leave Loading Statement. Noting that the Agreement was only voted up by one vote, if all of the 5 employees put forward by the CEPU had voted against the making of the Agreement, it would not have been made. However, for the reasons explained below in the history of the application I have not had regard to the employees’ statements.

b) The second relates to changes that were made to the Agreement (when compared with the previous 2015 Agreement) relating to the calculation of rates paid to casuals that were not explained in any of the explanatory documents provided to employees.

History of the Application

[6] The history of the application for approval of the Agreement is as follows:

a) On 14 August 2019 Downer made an application for approval of the Agreement. The application was made within 14 days of the making of the Agreement on 1 August 2019.

b) On 28 August 2019 administrative officers within the Commission prepared a checklist assessing the Agreement’s compliance with the requirements of the FW Act.

c) On 24 September 2019:

i. the matter was re-allocated to me.

ii. Downer was notified of the assessed inconsistencies between the Agreement and the National Employment Standards (NES).

iii. Downer was invited to provide an undertaking to remedy the same.

iv. the AMWU and the CEPU were each invited to file Form F18s because they had been listed as bargaining representatives on the Form F16 application.

d) On 25 September 2019 Downer sought an extension of time to ensure that any undertakings were compliant with the Building Code 2016.

e) On 26 September 2019 I issued Directions in the matter and programmed the application for hearing on 7 November 2019.

f) On 30 September 2019 the CEPU filed submissions in opposition to the approval of the Agreement. It also filed redacted statements from its members.

g) On 1 October 2019 the CEPU filed a Form F18 Statutory Declaration. It indicated its opposition to the approval of the Agreement.

h) On 3 October 2019:

i. Downer filed in the Commission an undertaking including a NES precedence clause in the Agreement.

ii. The AMWU filed a Form F18 Statutory Declaration. It indicated its opposition to the approval of the Agreement.

iii. The parties were provided with the Commission’s checklist.

iv. Amended Directions were issued re-listing the matter for hearing on 14 November 2019.

i) On 10 October 2019 Downer filed:

i. Further undertakings;

ii. An amended F17;

iii. submissions in support of the approval of the Agreement; and

iv. a witness statement of Mr Rob Twomey.

j) On 11 October 2019 Downer filed a witness statement of Mr Phillip Bajaky. Downer also asked that the hearing date be re-listed to accommodate Mr Twomey.

k) On 14 October 2019 the parties were asked to confer amongst themselves about an alternative hearing date.

l) On 16 November 2019 the CEPU filed un-redacted witness statements of its members.

m) On 17 October 2019 both the CEPU and the AMWU filed submissions in further opposition to the approval of the Agreement.

n) On 18 October 2019 the matter was relisted by consent of the parties for 20 November 2019.

o) On 24 October 2019 Downer filed further submissions in reply to the unions’ submissions.

p) On 14 November 2019 the CEPU (on behalf of it and the AMWU) advised that (on 12 November 2019) it had informed Downer that neither union intended to cross-examine Downer’s witnesses, nor call their own witnesses. It indicated a preference for the matter to be decided on the papers.

q) On 15 November 2019:

i. My chambers emailed the parties querying the utility of the hearing on 20 November 2019 in circumstances where no witness was required for cross-examination by the unions and the unions did not intend calling their own witnesses.

ii. The CEPU (on behalf of it and the AMWU) notified that it did not object to the application being determined on the papers.

iii. Downer wrote to the Commission in the following terms:

“In relation to your email below, the Applicant did not consent to the unions' request that the matter being heard on the papers, in circumstances where the CEPU continues to seek to rely on identical, redacted witness statements as part of its evidence.

The Applicant raised its objection to the admissibility of these statements in its submissions dated 10 October 2019 (at paragraphs 21 to 25). In its submissions in reply dated 17 October 2019, the CEPU reasserted that it relies on these statements (at paragraphs 11 and 12).

On 12 November 2019, in response to the CEPU's email seeking the Applicant's consent for the matter to be dealt with on the papers, the Applicant's solicitors advised the CEPU of the following:

While it is a matter for the CEPU as to whether it makes its witnesses available for cross examination at the hearing, our client puts the CEPU on notice that if its witnesses are not made available for cross examination at the hearing, our client will object to the admission of the redacted witness statements in their entirety.

Subsequent to this correspondence between the parties, the CEPU advised the Fair Work Commission that it 'did not intend to bring any witnesses to the hearing'. In its communication to the Fair Work Commission, the CEPU did not advise the Commission of the Applicant's proposed objection to these witness statements.

The Applicant notes the advice in your email below that the CEPU's decision to not make the witnesses available for cross examination necessarily affects the weight to be given to those statements. The Applicant submits that the consequence of that decision goes further, in that:

1. the statements should be disregarded in their entirety;

2. paragraph 11 of the CEPU's submissions dated 30 September 2019 and attached to the Form F18 dated 1 October 2019 should be struck out; and

3. paragraphs 11 and 12 of the CEPU's submissions dated 17 October 2019 should be struck out.

The Applicant is also seeking a hearing to raise its objection to paragraph 7 of the CEPU's submissions dated 30 September 2019 and paragraphs 14 to 17 of the CEPU's submissions dated 17 October 2019, which seek to impugn the evidence of Mr Twomey regarding how the error in the Comparison Document came about and when Mr Twomey first became aware of the error, without any basis upon which to do so. The CEPU has not filed any evidence to refute the credibility or veracity of Mr Twomey's evidence on these issues (as set out in paragraphs 28 to 35 of his witness statement dated 10 October 2019), and has chosen to not cross examine Mr Twomey on these issues, even though it had the opportunity to do so. Accordingly, the Applicant submits that these paragraphs of the CEPU's submissions should be struck out or otherwise be disregarded in their entirety.

If the Commission accepts the Applicant's submissions on these evidentiary issues as set out above, then the Applicant will not further object to the matter being heard on the papers. However, if the Commission considers that these evidentiary issues require further argument, the Applicant wishes to be heard on these issues.”

r) On 18 November 2019:

i. the parties were advised that I was minded to accept the submissions made by Downer about evidence and submissions filed in the proceedings.

ii. the CEPU (on behalf of the unions) replied as follows:

“Acknowledging the concerns raised by the Applicant in respect of:

a. the 5 employee statements; and

b. relevant submissions to be struck out;

the Unions confirm that it does not object to the proposed course of action and that the matter be determined on the papers.”

iii. Consequently, the listing on 20 November 2019 was vacated.

s) On 4 December 2019 Downer provided a signed copy of the consolidated undertakings.

[7] As a consequence of the history of the application, in coming to this decision, the Commission, as presently constituted, has had regard to the following:

a) Form F16 – Application for approval of an enterprise agreement,

b) Form F17 – Employer’s amended statutory declaration in support of an application for approval of an enterprise agreement (filed on 10 October 2019),

c) Downer EDI Engineering Power Pty Ltd South West Maintenance Services Enterprise Agreement 2019,

d) Agreement Checklist prepared 28 August 2019,

e) Form F18 – CEPU Statutory declaration of employee organisation,

f) CEPU submissions dated 30 September 2019, 1

g) Form F18 – AMWU Statutory declaration of employee organisation,

h) Downer Undertakings dated 25 September 2019 (filed 3 October 2019),

i) Downer submissions dated 10 October 2019,

j) Further Downer Undertakings dated 10 October 2019,

k) Witness Statement of Robert Twomey dated 10 October 2019,

l) Witness Statement of Phillip Bajaky dated 11 October 2019,

m) CEPU further submissions dated 17 October 2019, 2

n) AMWU submissions dated 17 October 2019,

o) Downer further submissions dated 24 October 2019, and

p) Downer consolidated undertakings signed 4 October 2019.

Legislative scheme – genuine agreement

[8] Section 186(2)(a) provides as follows:

“(2) The FWC must be satisfied that:

(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement.”

[9] Section 188 deals with the phrase “genuinely agreed” and provides as follows:

“(1) 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).

…

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and

(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.”

[10] By reason of s.188(1)(a)(i), subsections 180(2); (3) and (5) are relevant. They provide as follows:

“(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.

(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:

(a) the time and place at which the vote will occur;

(b) the voting method that will be used.

…

(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.”

Evidence - Downer

[11] Mr Twomey gave the following evidence:

1. I make this statement in support of Downer EDI Engineering Power Pty Ltd's (Downer) application for approval of the Downer EDI Engineering Power Pty Ltd South West Maintenance Services Enterprise Agreement 2019 (Agreement).

2. I am currently employed at Downer as the IR Manager West. I have been in this role since January 2018.

3. Before this, I was an IR Manager at Kentz (now SNC-Lavalin) for two and a half years.

4. I have 11 years' experience in human resources and industrial relations.

5. I have engaged in the enterprise agreement making process under the Fair Work Act 2009 (Cth) (FW Act) five times in my role at Downer.

My role in the Agreement-making process

6. I oversaw the enterprise bargaining process for the Agreement. This included:

(a) overseeing the Downer team responsible for bargaining (Mr Paul Kazmierowski, Operations Manager for the South West Region and Ms Brie Jones, HR Advisor);

(b) leading negotiations with employee and union bargaining representatives;

(d) drafting the Agreement and its explanatory materials; and

(e) preparing the Forms F16 and F17 which were submitted to the Fair Work Commission with the Agreement approval application.

7. The parties engaged in enterprise bargaining from 13 December 2018 until 4 July 2019 and attended nine bargaining meetings. I attended all nine meetings. Representatives from the Automotive, Food, Metals, Printing and Kindred Industries Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) were present at all of these bargaining meetings as a bargaining representative.

8. Bargaining meetings occurred on 13 December 2018, 16 January 2019; 30 January 2019,14 February 2019, 11 March 2019, 11 April 2019, 2 May 2019, 14 May 2019, and 4 July 2019.

9. By the ninth bargaining meeting on 4 July 2019 Downer made a decision to put the Agreement to the vote, although this was not agreed to by the bargaining representatives from the AMWU or the CEPU.

Steps taken to explain the Agreement to employees

10. My understanding of section 180(5) of the FW Act is that Downer must make information regarding the terms and effect of the Agreement available to the employees who will be covered by it, so they know what they are voting on. In my experience, this information should be put in as simple and clear terms as possible.

11. For this reason, it has been my practice to firstly issue a copy of the current terms and conditions of employment for the relevant employees (which in this case is the Downer EDI Engineering Power Pty Ltd South West Maintenance Services Enterprise Agreement 2015 (2015 Agreement)) with the proposed changes for the new Agreement clearly marked up with tracked changes (Comparison Agreement).

12. I arranged for circulation of the Comparison Agreement to the employees as the bargaining meetings were progressing, for their information and by way of update.

13. Updates were communicated to employees on the enterprise bargaining progress on 1 February 2019, 2 April 2019 and 9 May 2019.

14. On 5 July 2019, a memorandum was issued to employees regarding the commencement of the viewing period for the Agreement and explaining the process for voting and approval of the proposed Agreement, as well as informing employees that explanatory materials would be available to explain the content of the Agreement. A true copy of this memorandum is annexed and marked RT-1.

15. The following explanatory materials were distributed with that memorandum to each employee's personal email address:

(a) the most recent Comparison Agreement;

(b) a 'Key Features of New EA' document to be read in conjunction with the Comparison Agreement, designed to set out what employees will receive if they vote 'yes' to the Agreement (Key Features Document) (a true copy is annexed and marked RT-2);

(d) information from CiVS, the independent service provider that conducted the vote (CiVS Information); and

(e) an 'Award versus Enterprise Agreement Comparisons' document, explaining the differences between the key terms of the applicable modern awards, and the proposed Agreement (Comparison Document) (a true copy is annexed and marked RT-3),

(the Explanatory Materials).

16. I prepared the Explanatory Materials (other than the CiVS Information) and explain the purpose of each below:

Comparison Agreement

(a) I consider the most important document is the Comparison Agreement, because employees are familiar with the 2015 Agreement and can easily identify the changes under the new Agreement.

(b) It also allows employees to see the proposed changes in the same format that they are familiar with.

Comparison Document

(c) The Comparison Document is prepared to demonstrate key differences between the monetary entitlements under the two reference modern awards, being the Manufacturing and Associated Industries and Occupations Award 2010 or the Electrical, Electronic & Communications Contracting Award 2010 (Awards), and the new Agreement.

(d) I have read the checklist provided by the Fair Work Commission dated 28 August 2019 concerning omissions of certain Award entitlements not being included in the Comparison Document or other Explanatory Materials.

(e) In preparing the Comparison Document and determining which parts of the Awards to reference, I assessed which elements of the Award offered some monetary benefit or allowance, as these can be compared to the rates of pay and allowances under the Agreement. I did not prepare the Comparison Document with the intention of undertaking a line by line comparison between every Award term and every term of the Agreement. In my view, if this was required, Downer would simply provide employees with a copy of the entire Award, which would not assist them to understand the terms and effect of the Agreement. The Awards are not incorporated in the 2015 Agreement or the new Agreement.

CiVS Information

(f) This information was prepared by the independent service provider, CiVS, who conducted the vote on the Agreement.

(g) This information advised employees when and how the vote would take place and included an example of what the SMS employees would receive.

17. To further satisfy the requirements of section 180(5) of the FW Act, I also directed Phil Bajaky (South West Regional Manager) to conduct a face to face meeting with employees to go through the Agreement and Explanatory Materials. I prepared a Frequently Asked Questions document, addressing common questions that arise on the enterprise agreement making process (a true copy is annexed and marked RT-4), as well as speaking notes, to assist him in preparing for this session. A true copy of his speaking notes are annexed and marked RT-5.

18. The vote was held from 7.00am on 16 July 2019 to 5.00pm 17 July 2019. The vote returned a majority 'no' result.

19. I instructed Mr Bajaky to obtain feedback from employees on the reasons for not voting in favour of the Agreement. Having received that feedback, Downer determined it would provide employees with:

(a) a 5% wage increase effective from the first full pay period; and

(b) an additional site allowance of $1.20 per hour,

effective from the first full pay period, if the Agreement was put to the vote again and the vote was successful.

20. On or about 22 July 2019, I amended the Explanatory Materials to this effect (a true copy of which are annexed and marked RT-6, RT-7, RT-8, RT-9, and RT-10 respectively). Downer commenced the second access period on 23 July 2019 in accordance with the same steps set out at paragraphs 14 to 17 of this statement.

21. The second vote was conducted from 7.00am on 31 July to 5.00pm on 1 August 2019 and returned a majority 'yes' result.

Discussion of annual leave loading during bargaining

22. Annual leave loading was included on the CEPU and AMWU's log of claims provided at the bargaining meeting on 14 February 2019. A true copy of the bargaining meeting minutes are annexed and the main points in the log of claims and marked RT-11 and RT-12 respectively.

23. Downer consistently rejected the claim for annual leave loading. This is reflected in the bargaining meeting minutes of 11 March 2019 and Downer's response to the log of claims, a true copy of which are annexed and marked RT-13 and RT-14 respectively. Downer's response to item number 4 – Leave loading 17.5% was 'Not agreed, to agree to this cost would require an offset elsewhere'.

24. On 2 April 2019, a memorandum was sent to all employees covered by the Agreement updating them on the progress of the bargaining. A true copy of that memorandum is annexed and marked RT-15. The document annexed and marked RT-14, which set out Downer's position on the claim for annual leave loading, was attached to that memorandum.

25. During the seventh bargaining meeting on 2 May 2019, the union bargaining representatives raised the claim for annual leave loading again. I responded that annual leave loading was firmly 'off the table' and that instead, Downer would be prepared to:

(a) increase the base rates of pay by 2.25% on commencement of the Agreement, with a 2.5% annual increase over the four year term of the Agreement; and

(b) increase the Electrical Licence Allowance to all-purpose at $1.20 per hour.

26. A true copy of the minutes of the bargaining meeting minutes is annexed and marked RT-16.

27. On 9 May 2019, a further memorandum was sent to all employees covered by the Agreement updating them on the progress of the bargaining and the revised offer made by Downer, as set out in paragraph 25 above. A true copy of that memorandum is annexed and marked RT-17.

Typographical error in the Comparison Document

28. To save time, I prepared the Comparison Document on the basis of a precedent document I had used for a previous enterprise agreement that did incorporate 17.5% annual leave loading.

29. The bottom half of page two of the Comparison Document deals with terms in the Agreement that are 'as per the NES'.

30. I try to maintain this format for ease of drafting and reference, as this part of the document does not usually require extensive re-drafting.

31. In the course of doing so, I failed to notice and amend reference to employees receiving 17.5% annual leave loading under the new Agreement. This error was unintended.

32. I did not notice the typographical error until it was brought to my attention by James Moloney, one of the employee bargaining representatives, in an email on 6 August 2019, about one week after the Agreement was voted on and was made by way of a majority vote.

33. In that email, Mr Moloney said words to the effect of not being able to see the 17.5% annual leave loading in the Agreement and that it may have been overlooked.

34. I responded by email that leave loading was not part of the Agreement, and that the additional wage increases had been in lieu of any leave loading. In support of this, I attached the Key Features Document. A true copy of this email exchange is annexed and marked RT-18.

35. I attached the Key Features Document annexed as RT-9 to demonstrate that annual leave loading was not a part of the terms of the Agreement. This document is designed to set out all of the key benefits employees will receive under the Agreement to encourage them to vote 'yes'. Had annual leave loading been a term of the Agreement, it would have been included in the Key Features Document, because it would have been a significant new benefit compared to the 2015 Agreement (which does not provide for annual leave loading).

Calculation of casual overtime rates

36. In or about June 2019, Downer carried out a review of all payroll data configurations in its system.

37. In this process it was discovered that casual employees' overtime rates of pay were being incorrectly calculated, resulting in casual employees receiving overpayments when they worked overtime hours.

38. The issue was identified across three Downer enterprise agreements, and the 2015 Agreement was one of them.

39. I recall Leza Howie (Manager, People and Culture) and Mr Kazmierowski were predominantly dealing with this issue.

40. Once the issue was identified, it was determined that Downer would address it with employees and their representatives, and this was done under clause 4.2 'Consultation Term' of the 2015 Agreement.

41. There was a specific directive from within Downer that the issue of the overpayment of overtime was to be dealt with separately from the enterprise bargaining process. This was because rectifying the issue did not require substantive changes to the 2015 Agreement, and any changes made to the Agreement were only to clarify for employees how the casual overtime rates of pay were correctly calculated. Specifically, any changes were to ensure that the references in the Agreement aligned with the definition of 'ordinary rate' as it would be applied by Downer's payroll systems and to alleviate any ambiguity.

42. To the best of my recollection, from about 25 June 2019 to 28 June 2019, meetings were held with the employees directly affected and their managers regarding Downer's identification of the incorrect calculation of casual overtime payments.

43. On 28 June 2019 I attended a meeting with Ms Howie and Ms Jones as part of the consultation on the casual overtime payment issue with Brant Softley and Simon Rushworth from the AMWU and Adam Woodage of the CEPU.

44. As a good faith gesture, Downer agreed to draw a line in the sand and assured it would not seek to reclaim any overpayments made to employees as a result of the payroll error.” 3

[12] Mr Bajaky gave the following evidence:

2. I started at Downer in July 2017 as a Project Manager and occupied this role for about two years.

3. I moved into the South West Regional Manager role about six months ago.

4. I have about eight years' experience in project management and superintendent roles.

5. In my current role, I am responsible for looking after the South West business unit from the Bunbury workshop and any works undertaken at the Muja Power Station, both in respect of projects and shut down work.

Role in enterprise agreement making process

6. My role in the enterprise agreement making process for the Agreement was limited to explaining the new Agreement to employees on site at Muja at the start of the access period.

7. I was instructed by Rob Twomey (IR Manager West) to convey the terms and conditions of the proposed Agreement to employees and to answer any questions they might have had about the effect of those terms.

8. Mr Twomey and Brie Jones (HR Advisor) assisted me in this process by preparing a script for me to use when introducing the Agreement to employees at the outset of the access period.

9. These instructions and documents were attached to an email from Mr Twomey dated 4 July 2019. A true copy is annexed and marked PB-1.

First access period

10. The first vote was scheduled for 13 July 2019 and the access period started on 5 July 2019.

11. On 5 July 2019, after the usual pre-start meeting, I explained the access period ahead of the vote for the new Agreement was commencing that day.

12. I read from the script and FAQ document prepared by Mr Twomey (true copies are annexed and marked PB-2 and PB-3 respectively) and encouraged everyone to vote to follow through on the information they had been sent by email. Annual leave loading was not included on the script and I did not discuss this with employees. I informed employees that I was available to answer any questions.

13. To the best of my recollection, any questions asked by employees were mostly just repeating back the information I had provided from the script and confirming they understood what was on offer under the new Agreement.

14. I also left copies of the proposed Agreement and the explanatory documents in the crib room for employees to review in their own time.

15. I also put a poster in the crib room. A true copy of this poster is annexed and marked PB-4.

16. On 17 July 2019, Mr Twomey informed me that the Agreement was voted down and received a majority 'no' vote. Mr Twomey asked me to go back to the employees to convey the result of the vote and ask questions in respect of the key things the employees were looking for and whether they understood the implications of the 'no' vote.

17. To the best of my recollection, when I had the discussion with employees on or about 18 July 2019, they raised concerns using words to the effect of 'why aren't we on the same rates as other mechanical contractors?'.

18. I then conveyed the feedback to Mr Twomey in a telephone discussion.

Second access period

19. On 23 July 2019, Ms Jones sent me an email confirming that employees had been emailed a second bundle of explanatory documents about the new Agreement and that it was being put to the vote again.

20. Ms Jones also provided me with another script and FAQ document to use to explain the terms and effect of the Agreement to employees at the start of the viewing period. True copies of these documents are annexed and marked PB-5 and PB-6. Ms Jones also attended site at this time to support me with this process and answer any questions employees had.

21. I engaged in the same process I have described at paragraphs 11 to 15 of this statement.

22. When I explained the fact that the Agreement was being put to the vote again, I received some questions from employees in respect of what the main changes were to the Agreement from the last time it was put before them. Annual leave loading was not discussed.

23. I went through the fact that if there was a majority 'yes' vote, then a 5% pay increase would apply on the commencement of the next outage and the employees would also receive an additional $1.20 per hour site allowance and $2.20 shutdown allowance.

24. I recall that some members of the electrical crew stated that they wanted to know if they were getting annual leave loading and Ms Jones responded with words to the effect that they would not be getting it and that it was not a term of their existing Downer EDI Engineering Power Pty Ltd South West Maintenance Services Enterprise Agreement 2015 (2015 Agreement) either.

25. Mr James Moloney in the electrical crew asked about the annual leave loading and I understood he had been attending bargaining meetings and for this reason was interested in the issue.

26. There was a small number of employees at the Bunbury workshop so I delegated explanation of the Agreement at the workshop to a Site Supervisor, Darren Von Bibra, by email. A true copy of this email is annexed and marked PB-7.

27. On or about 24 July 2019, I telephoned Mr Darren Von Bibra to ask if everything had gone smoothly and Mr Darren Von Bibra confirmed it was straight forward and employees said that they understood the Agreement.

Calculation of casual overtime rates

28. On or about 26 June 2019, I was informed by Mr Paul Kazmierowski that in the process of a payroll review, Downer discovered that casual employees' overtime rates of pay were being incorrectly calculated resulting in an overpayment.

29. On or about 26 June 2019, Mr Kazmierowski (Regional Manager, West) sent me documents to print in relation to the casual overtime payment issue. A true copy of this email and its attached document is annexed and marked PB-8 and PB-9 respectively.

30. Mr Kazmierowski came to site the next day (27 June 2019) to address this issue with employees and I attended the meetings with employees with him to address any questions at the Bunbury workshop and the Muja site. The FAQ document annexed and marked PB-9 was handed out to employees.

31. Between 17 and 24 July 2019, employees' payslips were updated to reflect the changes to the calculation of the casual overtime rates. I recall this because I had some questions from employees on why their payslips looked different and I recall explaining to them that it was because of the way casual overtime rates were being calculated.

32. I recall these payroll changes occurred before the new rates under the Agreement were applied on or about 5 August 2019 following the majority 'yes' vote on the Agreement.” 4

Submissions

[13] On 30 September 2019, the CEPU submitted that:

“Introduction

1. This is an application under section 185 of the Fair Work Act 2009 (Cth) (‘the FW Act’) for the approval of the Downer EDI Engineering Power Pty Ltd South West Maintenance Services Enterprise Agreement 2019 (‘the Agreement’) by the Fair Work Commission (‘the Commission’).

2. The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (‘the CEPU’) is a bargaining representative for the purposes of section 176(1)(b) of the FW Act, as it represents the industrial interest of its members employed by Downer EDI Engineering Power Pty Ltd (‘Downer’) who will be covered by the Agreement.

3. The CEPU opposes the Agreement being approved by the Commission on the basis that the Commission cannot be satisfied that all relevant employees have genuinely agreed to the Agreement, as required by section 186(2) and in accordance with section 188 of the FW Act.

“Error” in Attachment F

4. Subsection 188 of the FW Act was recently amended to include the following:

(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

5. In the Full Bench decision of Huntsman Chemical Company Australia Pty Ltd T/A RMAX Ridge Cellular Plastics & Others, 5 the Commission dealt with the proper construction of section 188(2) of the FW Act, specifically distinguishing intentional conduct from conduct which could rightfully be regarded as an error. At paragraph [73] of the decision, the Commission stated:

[73] Accordingly a proper distinction is to be made between an intentional act which unintentionally results in non-compliance with the procedural and/or technical requirements for the making of an enterprise agreement and which may depending on the circumstances be capable of characterisation as an error, and intentional non-compliance with those requirements, which will not constitute an error for the purpose of s.188(2). On the basis of the limited argument before us we do not propose to express a view on the question of whether a ‘reckless’ act may constitute an ‘error’ within the meaning of s.188(2). That issue is best determined in the context of a particular case in which the factual circumstances raise the issue for determination.

6. Here, Downer emailed Attachment F 6 to employees which identified that the 17.5% annual leave loading, would be included in the Agreement. This was incorrect.

7. Downer had ample opportunity to rectify or correct such an error, by, for example, withdrawing Attachment F and providing a corrected version. The CEPU notes that when Downer put the Agreement out to vote in around mid-July 2019, 7 ~~Downer issued the same document itemising the alleged error 17.5% annual leave loading in the material comparing the modern awards and the Agreement.~~8 However, despite the fact its representative is an experienced HR/IR personnel and Downer is a large organisation with a well-resourced human resources department, at no point was the accompanying document corrected.

8. On 6 August 2019, (after the vote), a bargaining representative emailed Downer noting that the Agreement did not contain the 17.5% annual leave loading claimed in attachment F. Downer responded stating it was a “typographical error”. 9

9. On 7 August 2019, the CEPU wrote to Downer about this misrepresentation. 10 Downer at no point communicated with all the relevant employees to address this concern.

10. On 14 August 2019, a letter from Minter Ellison 11 was emailed to the CEPU which stated:

[…]

Our client accepts the comparison document contained a typographical error. However, it was clearly a minor error. Your letter does not specify any employee who has been disadvantaged as a result of this error. Our client does not consider any employee was disadvantaged. Our client therefore maintains that the Agreement was validly made and intends to seek its approval.

[…]

~~11. On 26 September 2019, the CEPU received statements from five employees,~~ 12 who voted in favour of the Agreement because Attachment F specified that 17.5% annual leave loading would be included in the Agreement. This should be taken into consideration given the marginal results of the voting results.13 ~~The CEPU will provide the unredacted statements to the Commission separately.~~

Conclusion

12. The CEPU submits that Downer’s “error” cannot be regarded as minor or technical. Also, it was, at the very least, reckless. The CEPU notes that the Full Bench expressly stated that whether a reckless act can constitute an error must be determined in the context of the particular case. The CEPU submits that in these circumstances, even if the Commission does not consider the conduct intentional, it ought to consider it reckless and incapable of properly being characterised as a “minor error”. Thus, the Commission cannot be satisfied that Attachment F is properly captured by the circumstances set out in subsection 188(2) of the FW Act. On that basis, the CEPU submits that the Commission cannot be satisfied that the Agreement was genuinely agreed to by the employees covered by the Agreement, pursuant to section 186(2) of the FW Act.”

[14] On 3 October 2019 the AMWU submitted that:

1. AMWU was a bargaining representative for the 2019 Agreement.

2. The AMWU wishes to be heard about whether the relevant employees genuinely agreed to the 2019 Agreement.

3. The AMWU has two matters which it seeks to agitate before the Commission relating to the application of section 180(5) of the Fair Work Act 2009 (“FW Act”). Those issues are whether the employer explained to the relevant employees that:

a. There was no 17.5% annual leave loading contained in the proposed 2019 Agreement; and

b. The effect of the changes to the wording in clauses 5(e), 7.1 and 12 was to stop casuals being paid overtime on their loaded rate of pay (i.e. the loaded rate of pay being the permanent rate plus the 25% casual loading).

4. These issues go to whether there was genuine agreement, as required by section 186(2)(a) of the FW Act. As such, they are a matter of importance.

5. With regards to the issue of the 17.5% loading the AMWU notes and supports the objections outlined by the CEPU in their submissions dated 1 October 2019.

6. With regards to the issue of the changes affecting casual employees, the AMWU refers to clause 7.1, specifically the classifications table. Attached as A is a document comparing this table in the 2019 Agreement to the existing enterprise agreement, the South West Maintenance Services Enterprise Agreement 2015 (“2015 Agreement”).

7. Under the 2015 Agreement the table was headed with “Permanent Hourly Rates of Pay”. Under the 2019 Agreement the table is headed “Ordinary Rate”.

8. The AMWU says that under the 2015 Agreement the rates of pay under clause 7.1 were for the permanent full-time employees. Casual employees were paid a casual rate pursuant to clause 6(b)(iii) of the 2015 Agreement.

9. In contrast, the rates under clause 7.1 of the 2019 Agreement apply to all employees covered under the agreement, including casuals. This is confirmed by the Applicant in clause 3.3 of their Form F17.

10. This has implications for the rate of pay casuals receive for working outside of ordinary hours. Under the 2015 Agreement when casuals worked overtime hours they were paid their loaded rate of pay multiplied by the relevant overtime loading. This was the practice for the entirety of the 2015 Agreement up until the vote on the 2019 Agreement in July 2019. This was also the practice for the predecessor to the 2015 Agreement.

11. After the vote on the 2019 Agreement concluded the Applicant changed the method of payment for casuals working overtime to the following method: (ordinary hourly rate x 25% casual loading) + (ordinary hourly rate x overtime rate). This has resulted in a reduction in pay for affected casual employees.

12. This change was not discussed during the negotiation meetings nor was it explained to the voting workforce at any time.

13. As such, the AMWU submits that there was no genuine agreement, as required by section 186(2)(a) of the Fair Work Act. This is because the Applicant did not take all reasonable steps to ensure the terms of the agreement, and the effect of those terms, were explained to the relevant employees pursuant to subsection 180(5) of the Fair Work Act.”

[15] On 10 October 2019 Downer submitted that:

1. The Applicant makes these submissions in support of the approval of the Agreement, pursuant to the directions made by the Commission on 3 October 2019.

2. In preparing these submissions, the Applicant has had regard to:

(a) the Single Enterprise Agreement Legislative Checklist prepared by the Commission in relation to the terms of the agreement prepared on 28 August 2019;

(b) the Form 18 and accompanying submissions filed by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) filed on 30 September and 1 October 2019; and

(c) the Form 18 and attachment filed by the Automotive, Food, Metals, Printing and Kindred Industries Union (AMWU) filed on 3 October 2019.

Whether the Agreement was genuinely agreed to by the relevant employees

3. Neither the CEPU nor the AMWU wish to be covered by the Agreement. However, both unions object to the approval of the Agreement, claiming that the Agreement was not genuinely agreed to by the employees covered by the Agreement. If this is the case, then the Commission cannot be satisfied that the requirement under section 186(2)(a) of the Fair Work Act 2009 (Cth) (FW Act) has been met.

4. Section 188 of the FW Act defines when employees have genuinely agreed to an enterprise agreement. The Applicant submits that all of the requirements under section 188 have been met, for the reasons set out below.

5. Section 188(1)(a) requires the Commission to be satisfied that the Applicant complied with sections 180(2), (3) and (5) of the FW Act.

6. Section 180(2) requires the Applicant to take all reasonable steps to ensure that during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the enterprise agreement are given a copy of the written text of the agreement and any other material incorporated by reference in the agreement, or the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.

7. In compliance with section 180(2), on 23 July 2019 (being the commencement of the access period) the relevant employees were provided with a hard copy of the Agreement, and were also provided with an electronic version of the Agreement sent to their personal email accounts 14.

8. Section 180(3) requires the Applicant to take all reasonable steps to notify the relevant employees by the start of the access period the time and place at which the vote will occur, and the voting method that will be used.

9. In compliance with section 180(3), on 23 July 2019 (being the commencement of the access period) the relevant employees were advised by a memorandum sent to their personal email accounts of the time and place at which the vote would occur, and the voting method that would be used 15. On the same day, employees were also advised by an information sheet from CiVS sent to their personal email accounts of the time and place at which the vote would occur, and the voting method that would be used16.

10. Section 180(5) requires the Applicant to take all reasonable steps to ensure that the terms of the agreement, and the effect of those terms, are explained to the relevant employees.

11. In compliance with section 180(5), on 23 July 2019:

(a) meetings were held between relevant employees and managers during which time the relevant employees were advised of the main changes contained in the Agreement, compared to the current 2015 enterprise agreement 17;

(b) the relevant employees were provided with a copy of the agreement that tracked and marked all of the changes made when compared to the current 2015 enterprise agreement (the Comparison Agreement) 18;

(c) the relevant employees were provided with a memorandum with a summary of the key features of the Agreement (Key Features Document) to be read in conjunction with the Comparison Agreement, and details of who to speak to if an employee had any difficulty in understanding the information 19; and

(d) the relevant employees were also provided with a more detailed document comparing the key terms of the relevant modern awards against those in the Agreement 20 (the Comparison Document).

Minor procedural error remediable by section 188(2)

12. The CEPU and the AMWU rely on an error in the Comparison Document concerning the inclusion of a 17.5% annual leave loading in the Agreement as the basis for their objection to the approval of this application.

13. The Applicant acknowledges that there was a typographical error in the Comparison Document, which incorrectly stated that the Agreement provided a 17.5% annual leave loading. However, the Applicant submits that this is the type of error which falls within the scope of section 188(2) of the FW Act.

14. The Applicant submits the Commission can be satisfied that, for the purposes of section 188(2) of the FW Act:

(a) the typographical error was a procedural error;

(b) the procedural error was minor in nature;

(c) the agreement would have been genuinely agreed to within the meaning of section 188(1) but for this minor procedural error made in relation to the requirement under section 180(5)(a); and

(d) the employees covered by the Agreement were not likely to have been disadvantaged by the error.

15. In relation to paragraph 14(a) the Applicant submits that:

(a) the Comparison Document was prepared by the Applicant in relation to the requirements of section 180(5) of the FW Act 21; and

(b) section 180(5) of the FW Act contains a procedural requirement which is able to be remedied by operation of section 188(2) of the FW Act 22.

16. In relation to paragraph 14(b) the Applicant refers to paragraph [55] of Huntsman in which the Full Bench stated:

'..what constitutes a ‘minor’ error calls for an evaluative judgment having regard to the underlying purpose of the relevant procedural or technical requirement which has not been complied with and the relevant circumstances.'

17. The underlying purpose of section 180(5) of the FW Act was described by the Full Bench as 23:

'Ensure that employees understand the effect of the agreement that is to be voted on, enabling them to make an informed decision.'

18. Despite the typographical error in the Comparison Document, the employees were nevertheless able to make an informed decision regarding the effect of the Agreement, having regard to the following:

(a) the Comparison Document was not the only resource made available to employees for the purpose of explaining to them the terms of the Agreement, and the effect of those terms:

(i) the relevant employees were also provided with a Comparison Agreement on two separate occasions, neither of which tracked or marked up any changes provided for annual leave loading 24; and

(ii) the relevant employees were also provided with a Key Features Document on two separate occasions, to be read in conjunction with the various Comparison Agreements 25. The addition of a new 17.5% annual leave loading would have been a 'key feature' to the new Agreement, compared to the 2015 enterprise agreement (which did not provide for annual leave loading). However, neither version of the Key Features Document made any reference to the inclusion of annual leave loading in the Agreement;

(b) as there were two votes in relation to the Agreement, the employees also had two separate opportunities to ask questions during the access periods prior to each vote, if they had any questions about the Comparison Document (and in particular, the reference to the annual leave loading, which was inconsistent with what was provided for in the Comparison Agreement, and the Key Features Documents) 26. No questions regarding the inclusion of annual leave loading in the Agreement were received from any employee or bargaining representative prior to either vote; and

(c) during the bargaining process, the relevant employees were informed of the priority items in the log of claims received from the CEPU and AMWU, and the Applicant's position in relation to those claims 27. One of those claims was for the payment of 17.5% leave loading. The Applicant's written response to that claim, which was communicated to the relevant employees, was 'Not agreed, to agree to this cost would require an offset elsewhere'.

19. In relation to paragraph 14(c) the Applicant submits that, had the error not been made, then all of the requirements under section 188(1) would have been complied with. Specifically:

(a) as set out above, the Applicant complied with sections 180(2) and 180(3) 28;

(b) the Applicant complied with section 181(2), in that the relevant employees were not requested to approve the Agreement until 21 days after the last notice of employee representational rights was given 29;

(c) the Agreement was made in accordance with section 182(1) 30, in that a majority of the relevant employees who casted a valid vote approved the Agreement31;

(d) there are no other reasonable grounds for believing that the Agreement has not been genuinely agreed to by the employees 32, as the Applicant took other reasonable steps to ensure that the procedural requirements under section 180(5) of the FW Act had been complied with; and

(e) the error arose as a result of a genuine mistake 33; it did not arise as a result of an intentional non-compliance with the procedural requirements under section 180(5)34. The error was also not known to the Applicant until after the Agreement was made on 1 August 201935.

20. In relation to paragraph 14(d) the Applicant submits that the employees were not likely to have been disadvantaged by the error, because of the reasons set out in paragraph 18 above.

21. The CEPU has provided the Commission with five redacted statements purporting to be provided by employees who voted in favour of the Agreement. The Applicant submits that the CEPU cannot attest to whether these employees voted in favour of the Agreement, and it is not sufficient for the CEPU to provide the Commission unredacted versions of the statements in order for the Commission to be satisfied that those statements have any evidentiary value in addressing the question currently before the Commission.

22. The voting process was undertaken by CiVS, an independent service provider. The Applicant refers to and relies upon the letter from CiVS to the relevant employees dated 19 July 2019 36 which confirms that all votes submitted were confidential and anonymous. The personal details of the employees who voted in favour of the Agreement are only known to CiVS, and not known to the Applicant.

23. The Applicant believes that it is more likely that the employees who provided the statements are employees who are members of the CEPU and who did not vote in favour of the Agreement, which was put to the employees for vote over the objection of the CEPU. However, the Applicant is not in a position to be able to provide the Commission with a list of employees who voted in favour of the Agreement, for the Commission to be able to then validate the veracity of the CEPU's assertion.

24. The Applicant further submits that the redacted statements do not demonstrate any disadvantage to the employees by the error in the Comparison Document. None of the redacted statements provided attest that the employee would have voted differently, had he or she known that the agreement did not contain the leave loading allowance. The redacted statements also do not explain how each employee reconciled the apparent inconsistency between the documents described in paragraph 18 above (on two separate occasions) with the error contained in the Comparison Document.

25. To avoid prejudice to the Applicant and the majority of employees who voted in favour of the agreement, the Applicant submits that either:

(a) the Applicant be provided with unredacted versions of the purported employee statements and be given an opportunity to cross examine those employees at the hearing of this Application as to the matters raised in paragraph 24 above; or

(b) the Commission give no weight to paragraph 11 of the CEPU's submissions and to the documents at attachment 'E'.

26. In relation to paragraphs 7 to 10 of the CEPU's submissions:

(a) the Applicant repeats paragraph 19(e) above;

(b) in the letter from the CEPU dated 7 August 2019, the CEPU sought to continue to negotiate the terms of the Agreement with the Applicant, even though this was not legally open to the Applicant, as the Agreement had already been made pursuant to section 182 (1) of the Act.

Rates of pay for casual employees

27. The AMWU submits that the Agreement was not genuinely agreed to by the relevant employees because of the changes that were made to the Agreement concerning the rates of pay for casual employees, compared to the 2015 enterprise agreement.

28. The Applicant submits that:

(a) no substantial changes were made to the Agreement when compared to the 2015 enterprise agreement in respect of the payment of overtime to casual employees;

(b) the issue that had been identified by the Applicant regarding the previous overpayment of overtime for casual employees was an administrative matter, and not a matter that was relevant to the enterprise bargaining 37;

(d) both unions were consulted about this administrative error outside of the bargaining process 39.

29. The Applicant notes that the AMWU is aware of the matters described in paragraph 28 above, and that the AMWU (in its capacity as a bargaining representative) never sought to raise the issue of overtime payments to casuals as a part of the bargaining process. Had the AMWU genuinely considered that the Agreement resulted in substantial changes to the conditions being offered to casual employees, it was open to the AMWU to raise this as an issue during the bargaining process, but it did not do so.

Other matters raised by the Commission

30. The Applicant wishes to address a number of other matters raised by the Commission in the Single Enterprise Agreement Legislative Checklist.

31. In relation to section 2, the Commission has raised the question of whether the Applicant took all reasonable steps to explain the terms of the Agreement and the effect of those terms, as required by section 180(5) of the FW Act, where the Comparison Document 'omits comparison of entitlements surrounding shifts, including notice of shifts, penalties, and definition of afternoon shift, all of which are less beneficial under the Agreement'. In response to this question, the Applicant:

(a) submits that it met its legal obligation to take 'all reasonable steps' to explain the terms of the Agreement and the effect of those terms;

(b) refers to paragraphs 14 to 16 of Mr Twomey's witness statement; and

(c) submits that the provisions to which the Commission has referred are relevant for the purposes of the Better Off Overall Test, but were not matters of such importance as to require them to have been included in the Comparison Document 40.

32. Also in relation to section 2:

(a) the Commission has noted that in the Form F17 the Applicant has stated that there are no less beneficial or omitted terms. Having regard to the Commission's comments regarding the less beneficial terms that have been identified, and that the Applicant omitted to include income protection insurance (clause 24 of the agreement) in its response to question 3.4 of the Form F17, the Applicant seeks leave pursuant to section 586 of the FW Act to make an amendment to the Form F17 in the proposed highlighted terms enclosed with these submissions;

(b) the Applicant's revised Form F17 also seeks to address some of the questions raised by the Commission by identifying how other provisions of the Agreement are more beneficial than the corresponding provisions of the relevant modern awards in its response to question 3.3; and

(c) the Applicant is prepared to provide an undertaking in relation to the definition of 'shiftworker' in the proposed terms enclosed with these submissions.

33. In relation to section 4, the Applicant has already provided an undertaking that addresses any inconsistency between a term of the Agreement and the National Employment Standards.

34. In relation to section 5:

(a) the Applicant is prepared to provide the undertakings in relation to overtime for part time workers and the minimum engagement periods in the proposed terms enclosed with these submissions; and

(b) the Applicant submits that the differences between the modern awards and the Agreement in respect of shift penalties have been taken into account by the ordinary rates of pay under the agreement, which are substantially higher than the relevant award rates.”

[16] On 17 October 2019 the CEPU submitted further that:

2. The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (‘the CEPU’) provides these further brief submissions as per the amended Directions dated 3 October 2019 by the Commission. The CEPU continues to rely on the its F18, dated 1 October 2019, and submissions, dated 30 September 2019.

3. The CEPU makes these further submissions in respect of the following:

(2) The F18 and attachment filed by the Automotive, Food, Metals, Printing and Kindred Industries Union (‘the AMWU’), dated 3 October 2019;

(3) AMWU’s submissions, dated 17 October 2019; and

(4) The Applicant’s submissions, dated 10 October 2019 and witness statements from:

(a) Mr Robert Twomey, dated 10 October 2019; and

(b) Mr Phillip Bajaky, dated 11 October 2019

AMWU’s F18 and concerns regarding overtime for casuals

4. The CEPU supports the objections outlined by the AMWU at part 5 of their F18 and submissions, dated 17 October 2019, in respect of the Agreement not being genuinely agreed to by the relevant employees, particularly in respect of the calculation of overtime payments for casual employees.

Annual Leave Loading

5. At paragraph [11(d)] of the Applicant’s submissions, the Applicant confirms that it provided the South West EA 2019, Award versus Enterprise Agreement Comparisons - 22 July 2019 (‘Attachment F’ of the Application) to the relevant employees on 23 July 2019. Attachment F was a document that relevant employees relied on to make an informed decision on how to vote on the Agreement.

6. At paragraph [14] of the Applicant’s submissions, “the Applicant submits that the Commission can be satisfied for the purposes of section 188(2) of the FW Act:

(2) The typographical error was a procedural error;

(3) The procedural error was minor in nature;

(4) The agreement would have been genuinely agreed to within the meaning of section 188(1) but for this minor procedural error made in relation to the requirement under section 180(5)(a); and

(5) The employees covered by the Agreement were not likely to have been disadvantaged by the error.”

The CEPU disputes this.

7. Section 188(2) of the FW Act establishes a mechanism for the Commission to reach its state of satisfaction concerning genuine agreement. It relevantly operates where the Commission is satisfied of two things: first, that the Agreement would have been genuinely agreed to but for minor procedural or technical errors (which relevantly include those made in relation to section 180(5) requirements); and second, that the relevant employees were not likely to have been disadvantaged by those errors.

8. The Commission’s assessment of whether an error is of a “minor procedural or technical” nature calls for an evaluative judgement having regard to the underlying purpose of the relevant requirement. 41 As noted above, the underlying purpose of the requirement in s180(5) is to enable the relevant employees to cast an informed vote.42

9. Two requirements of s 188(2) are uncontroversial. The first is that the requirements of s 180(5) are “procedural” in nature. The second is that the Agreement was not genuinely agreed to because of the error.

10. On 23 July 2019 the Applicant allegedly went through a script and FAQ document “to explain the terms and effect of the Agreement to the employees”. 43 Furthermore, Attachment F was provided to the relevant employees. Yet, if the Applicant took all reasonable steps to ensure the terms of agreement and the effect of those terms were explained to the relevant employees, the Applicant would have realised that the annual leave loading was itemised on Attachment F.

11. The CEPU relies on the statements received by the 5 employees, all dated 26 September 2019, who voted in favour of the Agreement because Attachment F specified that the annual leave loading would be included in the Agreement. Attachment F, which included the annual leave loading, impacted the vote cast by at least 5 relevant employees. The 5 employees do not wish to have their identity disclosed to the Applicant as they are still employed by the Applicant. On 16 October 2019, the CEPU filed unredacted statements to the Commission separately on a confidential basis to protect the identity of the employees.

12. After the Agreement was made, it was identified that the Agreement did not contain the annual leave loading entitlement. Given the voting outcome was marginal and 5 employees voted ‘Yes’ to the Agreement because they relied on Attachment F, identifying that annual leave loading was included in the Agreement, the CEPU submits that the Commission cannot be satisfied that this error did not affect the vote.

13. If the Commission is satisfied that that annual leave loading provided in Attachment F was a procedural error and/or does not give weight to the 5 employee statements provided, the question is then twofold: whether the error was “minor”, and whether employees were likely to be disadvantaged by it. That assessment must also be made in context: that is, in light of other relevant circumstances which operate to mitigate the severity of what might otherwise have been the error’s impact upon the employees’ genuine agreement.

~~14. Firstly, the Applicant has failed to identify how this “error” is minor. Mr Twomey states that “Downer consistently rejected the claim for annual leave loading”.~~ 44 ~~If this was true, then this alleged error would have not occurred given it was “consistently rejected” and was a major log of claim item that was “consistently” raised.~~

15. Mr Bajaky states that he recalls “members of the electrical crew” asking about the annual leave loading at a meeting on site on 23 July 2019, during the commencement of the second access period. 45 ~~Yet, Mr Twomey states that he did not notice the typographical error until 6 August 2019.~~46

~~16. At no point between 23 July 2019 and 6 August 2019 did the Applicant address this alleged ‘minor error’, regardless of:~~

~~(2) the Applicant being an employer who has a well-resourced human resources department;~~

~~(3) Mr Twomey having over a decade of industrial relations and human resources experience;~~ 47

(4) the Applicant alleging that the annual leave loading was “consistently rejected” yet, for an important bargaining issue that was “consistently” discussed the Applicant claims it’s a “typographical error”; and

(5) The Applicant had ample and reasonable opportunity to address the alleged “minor error” during the access period, as the Applicant alleges it was raised in a meeting during the second access period. It did not do so.

17. The Applicant took no steps to address this alleged ‘typographical error’ to the workforce after allegedly only knowing about it on 6 August 2019. Despite this, the Applicant filed this Application in the Commission on 14 August 2019, 8 days later, and did not consult with the workforce about the issue.

18. The Applicant has now filed two statutory declarations, F17s, dated 14 August 2019 and 10 October 2019. At section 3.6 of both F17s, the Applicant does not itemise that the annual leave loading, which is an entitlement conferred by both underpinning instruments, as an omission from the Agreement.

19. Secondly, the CEPU submits that the employees were likely to have been disadvantaged. In the case of Huntsman the Full Bench stated:

In our view the word ‘likely’ in s.188(2)(b) means ‘probable’, in the sense that there is an odds-on chance of it happening. As Bray CJ observed in Krieg, such a meaning is consistent with the ordinary and natural meaning of the word. 48

20. For the employees to be ‘disadvantaged’ is easily identifiable. In Huntsman the Full Bench stated:

[91] The Revised Explanatory Memorandum also states that:

‘45. … It is intended that any disadvantage likely to have been suffered by employees, for the purpose of paragraph 188(2)(b), must relate to the employees’ ability to genuinely agree to the terms of the proposed agreement.

46. The effect of new subsection 188(2) is that an enterprise agreement will have been genuinely agreed to despite any minor procedural or technical error if the employees (as a whole) were not likely to have been disadvantaged by those errors.

…

48. When considering whether the employees were not likely to have been disadvantaged by an error, in relation to the relevant procedural requirements, the [Commission] could take into account, for example, the effect of the error and circumstances of the error.’

21. The relevant employees will not receive the annual leave loading because the Agreement omits such entitlement even though the relevant employees were provided Attachment F, which states that they would be receiving this entitlement.

22. For example an EW5 electrical worker under the Electrical, Electronic and Communications Contracting Award 2010 would be entitled to annual leave loading. 49 Under the Agreement and the assertions made by the Applicant that annual leave loading is not included in the Agreement, a C6 employee will not receive such entitlement and will be disadvantaged.

23. The relevant employees relied on Attachment F to make an informed decision when voting which has:

(2) disadvantaged relevant employees by removing the entitlement; and

(3) impacted the relevant employees’ ability to genuinely agree to the terms of the Agreement.

24. Furthermore, the Commission should take the following into account:

(2) the Applicant put the Agreement out to vote, which was not agreed to by the CEPU;

(3) the Applicant put the Agreement hastily out to a vote for a second time, 3 days after it was first voted down; and

(4) the Applicant had reasonable opportunity to address the alleged error and the Applicant acknowledges that the annual leave loading was one of the main bargaining issues.

25. Therefore, if the Commission is satisfied that the annual leave loading itemised in Attachment F was a minor error, the Commission ought also be satisfied that the relevant employees were likely to be disadvantaged by this minor error and it is not capable of rectification.

Conclusion

26. Based on the above and the CEPU’s F18 and accompanying submissions, the Commission cannot be satisfied that Attachment F is properly captured by the s188(2) of the FW Act. The CEPU submits that the Commission cannot be satisfied that the Agreement was genuinely agreed by the employees covered by the Agreement.

[17] On 17 October 2019 the AMWU submitted that:

1. Downer has made an application to the Commission for the approval of the Downer EDI Engineering Power Pty Ltd South West Maintenance Services Enterprise Agreement 2019 (“2019 Agreement”). If approved, the Agreement will replace the South West Maintenance Services Enterprise Agreement 2015 (“2015 Agreement”).

2. The AMWU was a bargaining representative for the 2019 Agreement and makes these submissions pursuant to paragraph [3] the Amended Directions issued on 3 October 2019. In making these submissions, the AMWU relies on the following:

a. The AMWU’s Form F18 and attachment filed on 3 October 2019;

b. The material filed by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (‘the CEPU’), comprising of a Form F18 dated 1 October, submissions dated 30 September 2019 and further submissions dated 17 October 2019; and

c. The materials filed by the Applicant over 10-11 October 2019.

3. The Commission’s task is to determine whether it should approve the 2019 Agreement. That task requires the Commission to consider the factors contained in section 186 and 187 of the Fair Work Act 2009 (“FW Act”).

4. The AMWU supports the CEPU’s objections to the approval of the 2019 Agreement as outlined in their Form F18 and submissions.

The AMWU’s case is that Downer did not explain to its employees that there were changes in the 2019 Agreement that would change the way casuals are paid when working overtime compared to the 2015 Agreement. The failure of Downer to explain this significant change to the workforce tainted the genuineness of the employees’ consent.

5. If the Commission accepts the AMWU’s argument, then it cannot approve the 2019 Agreement. This is because the genuine agreement requirement in section 186(2) of the FW Act will not have been satisfied.

Genuine Agreement

6. Before the Commission can approve an enterprise agreement, it needs to be satisfied that the employees who made the agreement genuinely agreed to it. The need for genuine agreement comes from section 186(2)(a) of the FW Act.

7. The word “genuine” in the term “genuine agreement” means that something more than mere agreement is required. 50 There needs to be a higher quality of consent for agreement to be genuine.51 For example, if an employed provides misleading information to its employees or does not provide its employees with full disclosure about what they are voting for, then it is unlikely that those employees could genuinely agree to the proposed enterprise agreement.52

8. Section 188 provides that an enterprise agreement will be genuinely agreed to if – amongst other things – the employer complied with section 180(5) and there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

9. Section 180(5) requires an employer to take all reasonable steps to ensure that:

a. the terms of the enterprise agreement and the effect of those terms are explained to the relevant employees; and

b. the explanation is provided in an appropriate manner that takes into account the particular circumstances and needs of the relevant employees.

10. The purpose of section 180(5) is to “enable the relevant employees to cast an informed vote: to know what it is they are being asked to agree to and to enable them to understand how wages and working conditions might be affected by voting in favour of the agreement”. 53 Whether an employer has taken all reasonable steps ensure that the effect of the terms of the proposed agreement was explained in an appropriate manner is “a question of substance, not form”.54

11. The obligation in section 180(5) requires the employer to explain to the employees the effect of the whole proposed agreement, not just the effect of the terms in the proposed agreement that are relevant to those employees. 55 An explanation of the effect of the whole of the proposed agreement is necessary to ensure that the employees give informed consent when voting for the agreement.56

Payment of casuals when working overtime

2015 Agreement

12. Under the 2015 Agreement, casuals are covered pursuant to clause 6. Per clause 6.1(b)(iii), casual employees are paid “a 25% loading in lieu of the entitlements such as paid public holidays, paid annual leave, paid personal leave and other paid absences”.

13. Pay classifications are detailed in a table contained in clause 7.1. This table is titled “Permanent Hourly Rates of Pay”. Under the 2015 Agreement permanent employees received the rates of pay in clause 7.1 when working ordinary hours. Casual employees were paid the permanent hourly rates of pay with the 25% loading on top when working ordinary hours.

14. In the 2015 Agreement, clause 12 details the payment of overtime:

12.1 Subject to the provisions of this clause, all work performed outside of the ordinary hours of any day, Monday to Friday, inclusive, shall be paid for at the rate of time and one half for the first two hours and double time thereafter.

15. The 2015 Agreement does not explicitly state which rate the overtime loading applies to. The AMWU says that there are two possible interpretations of the 2015 Agreement.

16. The first is that the overtime clause operates when work is performed outside of the ordinary hours of work. The overtime loading therefore applies to the rate of pay an employee receives for working ordinary hours. When working ordinary hours casuals receive the relevant rate of pay a permanent receives under clause 7.1 plus a 25% loading.

17. The second interpretation is that the casual loading in clause 6.1(b)(iii) is expressly not limited to when casual employees work ordinary hours. As such, it applies to all hours worked and the relevant rate of pay for the hours worked. In the case of work performed outside ordinary hours, all employees receive an hourly rate comprised of the permanently hourly rate under clause 7.1 with the overtime loading. Casuals then receive the casual loading on top of the overtime rate.

18. Both interpretations lead to casuals receiving a ‘casual overtime rate’ whereby both the casual and overtime loadings are applied to the permanent hourly rate at the same time.

19. The Applicant acknowledges that under the 2015 Agreement casuals did receive this casual overtime rate when working overtime. 57

2019 Agreement

20. In the 2019 Agreement the table in clause 7.1 has been changed from “Permanent Hourly Rates of Pay” to “Ordinary Rate”. As a result, the rates apply to all employees, not just the permanent employees. This is confirmed by the Applicant in clause 3.3 of their Form F17.

21. Clause 12 has also been amended to read:

12.1 Subject to the provisions of this clause, all work performed outside of the ordinary hours of any day, Monday to Friday, inclusive, shall be paid for at the rate of time and one half of the Ordinary Rate for the first two hours and double time the Ordinary Rate thereafter. (emphasis added)

22. This makes it clear that the overtime loading only applies to the ordinary time rates in clause 7.1 which was amended to apply to all employees. This substantially reduces the payment casuals receive when working overtime hours. An example of the monetary difference is contained in Attachment 9 of Phillip Bajaky’s witness statement.

Lack of genuine agreement

23. Downer reviewed and changed the payment of the casual overtime rate in late June 2019. 58 This change was implemented between 17 and 24 July 2019.59

24. The access period for the 2019 Agreement commenced on 23 July 2019. 60 Voting for the 2019 Agreement opened on 31 July and closed on 1 August.61 Of the 20 employees covered by the 2019 Agreement, all 20 voted, with 11 voting no.

25. The documentation distributed to the workforce did not explain the effect of the changes to clauses 7.1 and 12.1 for casuals working overtime. Nor was it explained to the voting workforce verbally.

26. As such, the AMWU submits that there was no genuine agreement, as required by section 186(2)(a) of the Fair Work Act. This is because the Applicant did not take all reasonable steps to ensure the terms of the agreement, and the effect of those terms, were explained to the relevant employees pursuant to subsection 180(5) of the Fair Work Act.”

[18] On 24 October 2019 Downer submitted that:

“CEPU submissions

1. “The CEPU has no provided evidence to support the factual assertions set out in paragraph 23 of its submissions, and should be given no weight.

2. The matters set out in paragraphs 24(a) and (b) of its submissions are not relevant to the requirements for approval of the agreement pursuant to section 186 of the Fair Work Act 2009 and should be disregarded.

3. The matters set out in paragraph 24(c) of its submissions has already been addressed by the Applicant in its submissions and in the witness statement of Mr Robert Twomey filed on 10 October 2019.

4. The other matters are a restatement of the CEPU's previous submissions, which the Applicant has already addressed in its submissions of 10 October 2019. The Applicant does not consider that it is necessary to restate matters that have already been submitted to the Commission for consideration, and so will not take up the Commission's time readdressing these matters here.

AMWU submissions

1. In relation to paragraph 14 of its submissions, under the proposed agreement casual employees were still be paid at the same rate of pay as permanent employees when working ordinary hours, with a 25% casual loading. This has not changed.

2. In relation to paragraphs 22 and 23 of its submissions, the Applicant submits that this is a contrived interpretation of the intention and effect of the 2015 Agreement, and that the same rates of pay that applied to permanent employees under the 2015 Agreement were paid to casual employees (with the 25% casual loading).

3. In relation to paragraphs 25 to 28 of its submissions, the Applicant notes that the AMWU has not sought to challenge the evidence of Mr Twomey or Mr Bajaky in relation to the consultation process undertaken with employees and the unions regarding the change to the calculation of casual overtime pay outside of the bargaining process. The Applicant repeats paragraphs 28 and 29 of its submissions of 10 October 2019.”

Consideration – Genuine agreement

[19] Genuine agreement is a precondition to approval of an agreement. It must be considered before other issues; for example, in relation to the better off overall test (BOOT).

[20] The Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018 (Cth) (the Amending Act) amended s.188 of the FW Act to provide a mechanism for the Commission to conclude that an enterprise agreement has been ‘genuinely agreed’, within the meaning of s.186(2)(a), despite or “but for” ‘minor procedural or technical errors’.

[21] Examples of what may be considered ‘minor procedural or technical errors’ is provided in the Revised Explanatory Memorandum to the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017 (Cth):

“Examples of minor procedural or technical errors could include (without limitation):

• employees being informed of the time and place for voting on the proposed enterprise agreement or the voting method that will be used for the agreement just after the start of the access period rather than by the start of the access period (subsection 180(3));

• employees being requested to approve a proposed enterprise agreement on the 21st day after the last Notice was given, rather than at least 21 days after the day on which the last Notice was given (subsection 181(2));

• the inclusion of the employer’s company logo or letterhead on a Notice; 62

• the inclusion of additional materials that are stapled with a Notice; or

• minor changes to the text of the Notice that had no relevant effect on the information that was being communicated in it (for example, the Notice may say to contact a particular person in the human resources department rather than ‘contact your employer’).” 63

[22] I observe that the Leave Loading Statement does not neatly fall within the class of examples envisaged by the legislature.

[23] A Full Bench of the Commission considered how the introduction of s.188(2) could be applied in Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others 64(‘Huntsman’).

[24] The following propositions 65 emerged from the Full Bench’s consideration of the proper construction of s.188(2):

“1. Subsections 188(1) and (2) are to be approached sequentially. The first question is whether the Commission is satisfied as to the matters at s.188(1)(a)-(c). If it is so satisfied then the agreement has been genuinely agreed to and there is no need to consider s.188(2).

2. The reference to the ‘employees covered by the agreement’ in ss.188(1) and (2), is a reference to those employees employed and covered by the agreement at the time of the request to vote under s.181.

3. Subsections 188(1) and (2) both provide that an enterprise agreement has been genuinely agreed if the Commission is satisfied as to certain matters (ie those in s.188(1)(a) to (c) and ss.188(2)(a) and (b) respectively). The latitude as to the choice of the decision to be made by ss.188(1) or (2) is quite narrow in that the decision maker is required to conclude that the agreement was genuinely made if he or she forms a particular opinion or value judgment. Assessing the genuineness of agreement under ss.188(1) and (2) involves an evaluative assessment.

4. Section 188(2) is confined to circumstances where the Commission is not satisfied that an agreement has been genuinely agreed to within the meaning of s.188(1), as a result of ‘errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights’.

5. Section 188(2) does not extend to circumstances where the Commission is not satisfied that an agreement was genuinely agreed to in a more general sense, as might arise from a consideration of s.188(1)(c).

6. Section 188(2) does not apply to all procedural or technical requirements with which an employer must comply when bargaining for an enterprise agreement. The ‘minor procedural or technical errors’ referred to in s.188(2)(a) must be errors ‘made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights’ (emphasis added).

7. Table 1 at [52] [of the decision in Huntsman] sets out the procedural or technical requirements to which s.188(2) applies.

Section 188(2)(a): ‘minor procedural or technical errors’

1. The adjective ‘minor’ qualifies both ‘procedural’ errors and ‘technical’ errors, such that the expression reads ‘minor procedural errors or minor technical errors’. The word ‘minor’ is a limitation upon the type of errors contemplated by s.188(2)(a).

2. A failure to comply with a procedural requirement will constitute a ‘procedural error’ within the meaning of s.188(2)(a). A procedural requirement is one which requires an employer to follow a particular process or course of action eg. providing employees with a NERR as soon as practicable, and not later than 14 days after the notification time (s.173(3)), or ensuring there are at least 7 clear days between notifying employees of the voting process and the commencement of that process (s.180(3)).

3. A failure to comply with a technical requirement will constitute a ‘technical error’ within the meaning of s.188(2)(b). A technical requirement includes an obligation to comply strictly with the form and content of an instrument, such as the NERR.

4. A single error may have both procedural and technical components.

5. The impact of the errors is to be assessed by reference to the objects of the requirements in ss.188(2)(a), 188(1)(b), 173 or 174.

6. What constitutes a ‘minor’ error calls for an evaluative judgment having regard to the underlying purpose of the relevant procedural or technical requirement which has not been complied with and the relevant circumstances. Table 2 at [74] above examines each of the procedural or technical requirements, considers the underlying purpose of these requirements and outlines some ways in which employees might be disadvantaged by a minor technical or procedural error.

7. Generally speaking, the lower the level of non-compliance the more likely it is to be characterised as a ‘minor error’. For example, informing the employees of the matters in ss.180(3)(a) and (b) just after the start of the 7 day access period (say 6 days before the start of the voting process) is likely to be a ‘minor error’ in most cases. But it will depend on the circumstances. If it is the first agreement at the enterprise; the bargaining representatives are inexperienced and the employees are predominantly from a non-English speaking background, then it may not be a ‘minor error’. Conversely, only informing the employees of the time and place at which the vote will occur some 4 days before the voting process starts may be a ‘minor error’ where there is a history of bargaining at the enterprise; the agreement is, in effect, a ‘roll over’ agreement; the employer takes further active steps to remind employees of the time and date of the vote; and a high proportion of employees actually vote.

8. Whether an incidence of non-compliance is characterised as a ‘minor error’ also depends on the nature of the requirement which has not been complied with. For example, the need to inform employees of the time and date of the vote (s.180(3)(a)) is more significant than informing them of the ‘voting method’ (s.180(3)(b)) – the first requirement may impact on the employees’ capacity to participate in the voting process, the second may not.

9. Some species of error are unlikely to be classified as ‘minor’, for example the deletion of the prescribed text of the NERR which deals with an employee’s right to appoint a bargaining representative and the role of the unions as the default bargaining representatives. But, again, it may depend on the circumstances (see paragraphs [77] - [78] above).

10. The test in s.188(2)(b) is whether the employees covered by the agreement were ‘not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174’(emphasis added). The impact of the errors is to be assessed by reference to the objects of those requirements and not by reference to any more general sense of ‘genuine agreement’.

11. Cost or inconvenience to the employer and employee covered by an agreement associated with a delay in the approval of the agreement is not relevant to the question of whether the employees covered by the agreement ‘were not likely to be disadvantaged by the errors’.

12. The test posited by s.188(2)(b) is whether ‘the employees covered by the agreement were not likely to have been disadvantaged by the errors’.

13. The word ‘likely’ in s.188(2(b) means ‘probable’ in the sense that there is an odds-on chance of it happening, rather than merely being some possibility of it happening. The word ‘disadvantaged’ suggests a deprivation which manifests in the employees covered by the agreement being prevented from substantively exercising their rights within the bargaining regime in Part 2-4 of the Act.

14. In assessing whether employees were not likely to have been disadvantaged by an error, it may be necessary to consider the particular circumstances of the employees concerned at the time the error occurred and the impact of the error on the subsequent course of bargaining. This may include considering any steps taken by the employer to address the adverse impact of the non-compliance.” 66

[25] Below I have amended the table that appears at para [52] in Huntsman to include a column addressing whether Downer complied with the relevant requirements:

Section	Procedural or technical requirement	Compliance by Downer
188(1)(a)	Comply with subsection 180(2) – take all reasonable steps to ensure that relevant employees are given the written text of the agreement and any materials incorporated by reference during the access period or that the relevant employees are given access to these materials throughout the access period	
	Comply with subsection 180(3) – take all reasonable steps to notify the relevant employees of the time, place and method of vote, prior to the start of the access period	
	Comply with subsection 180(5)(a) – take all reasonable steps to ensure the terms of the agreement and their effects are explained to the relevant employees	See discussion below
	Comply with subsection 180(5)(b) – take all reasonable steps to ensure the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees	
	Comply with subsection 181(2) – the employer must not request that the employees approve a proposed agreement until at least 21 days after the day on which the last notice of employee representational rights (NERR) is given	
188(1)(b)	The agreement must be made in accordance with subsection 182(1) or (2)	
173(1)	Take all reasonable steps to give a NERR to each employee who will be covered by the agreement and is employed at the notification time for the agreement	
173(3)	Issue the NERR as soon as practicable, no later than 14 days after the notification time	
174(1A)(a)	The NERR must contain the content prescribed by the regulations	
174(1A)(b)	The NERR must not contain any other content	
174(1A)(c)	The NERR must be in the form prescribed by the regulations	

[26] The only potential defects in the process undertaken by Downer relate to:

a) the Leave Loading Statement made in the Comparison Document; and

b) the non-explanation of the changes to the Agreement relating to the calculation of some payments to casuals.

[27] Starting with the casuals issue I have considered all the material filed in the matter and I am not satisfied that the changes made result in a failure to take all reasonable steps to explain the effects of the Agreement. The issue was one that was dealt with separately and openly with the unions and the affected employees. Outside the bargaining process Downer addressed the issue. It did not seek repayment of overpayments. The issue was then made less ambiguous in the Agreement when compared with the 2015 Agreement. This is not an example of a failure to comply with a procedural or technical requirement. Section 188(2) does not arise for consideration in relation to this issue.

[28] Coming then to the Leave Loading Statement Downer concedes that it was made in error. It is then caught by s. 188(1)(a) if it can be characterised as a failure to take all reasonable steps to ensure the terms of the agreement and their effects are explained to the relevant employees as required by s. 180(5)(a). In my opinion it is such a failure.

[29] If Downer had taken all reasonable steps it would have discovered the Leave Loading Statement error in the Comparison Document. It should have done so before the first vote that resulted in a “no” vote. It should also have done so between the first vote and the second vote that resulted in a “yes” outcome. A failure to properly proof read a document given to employees in advance of a vote equates to a failure to take “all reasonable steps”. Taking “all reasonable steps” to explain the Agreement is a procedural requirement. Consequently, despite the Leave Loading Statement being the only inconsistent message given about the issue (when compared with the Comparative Agreement and the Key Features Document), it is a procedural error. It then falls into the category of issues that s.188(2) may remedy in the appropriate circumstances.

[30] Those circumstances require that the Leave Loading Statement be:

a) minor; and

b) not likely to have caused disadvantage to employees covered by the agreement.

[31] Considering all the evidence as a whole relating to the efforts that Downer went to in explaining the terms and the effect of the Agreement I am satisfied that the Leave Loading Statement was minor. It appeared in one document out of 3 substantive documents. It did not appear in any other material produced by Downer. It was inconsistent with every other message Downer was giving about the issue. It was not a part of the verbal explanation given by Mr Bajaky in his discussions with employees.

[32] In fact it was so minor that no one raised the issue with Downer prior to the second vote. It was only raised after the successful “yes” vote. No one appears to have noticed the inconsistency of the Leave Loading Statement before the vote. That is sufficient evidence of how minor it was in the scheme of things.

[33] I am also not satisfied that the Leave Loading Statement resulted in disadvantage. Employees did not have leave loading under the 2015 Agreement. They do not have it under the 2019 Agreement.

[34] Further, no employee gave evidence to the effect that:

a) they are an employee covered by the Agreement,

b) they were entitled to vote on the Agreement,

c) they voted on the Agreement,

d) they read the Leave Loading Statement,

e) they relied upon the Leave Loading Statement,

f) consequently, they voted in favour of the Agreement, and

g) but for the Leave Loading Statement, they would have voted against the Agreement.

[35] Such evidence would have been compelling; especially when the Agreement was only voted up 11 votes to 9. However, no such evidence is before me. Absent proper evidence I am not prepared to find that disadvantage was likely, or probable, or an odds-on chance. The unions could have run that case before me. They did not.

[36] In the circumstances, I am satisfied that, having regard to the decision of the Full Bench in Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others, 67 the Leave Loading Statement constituted a minor procedural error for the purposes of s.188(2)(a).

[37] Further, having regard to the evidence I am satisfied that the employees covered by the agreement were not likely to have been disadvantaged by the error. As a result, I am satisfied that the Agreement has been genuinely agreed within the meaning of s 188(2) of the Act.

Conclusion

[38] For the reasons set out above the Agreement is approved.

[39] Downer provided written undertakings on 25 September 2019 and 10 October 2019. On 4 October 2019 Downer provided consolidated undertakings. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings 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. The undertakings are taken to be a term of the Agreement.

[40] Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.

[41] In each of their respective Form F18 the AMWU and CEPU indicated “No” in answer to the question “Does the Union give notice pursuant to s.183 of the Fair Work Act 2009 that they want the Agreement to cover it.” Consequently, I make no note in accordance with s.201(2) of the FW Act.

[42] The Agreement is approved and, in accordance with s.54 of the FW Act, will operate from 11 December 2019. The nominal expiry date of the Agreement is 3 December 2023.

COMMISSIONER

Annexure A

1 But not the redacted or un-redacted statements of employees and not paragraphs 7 and 11.

2 But not paragraphs 11, 12 and 14–17.

3 Witness Statement of Robert Twomey dated 10 October 2019.

4 Witness statement of Phillip Bajaky dated 11 October 2019.

5 [2019] FWCFB 318.

6 Document highlighting the difference between the relevant modern awards and the Agreement.

7 See attached and marked “A” for copy of notice of ballot vote, dated 5 July 2019.

8 See attached and marked “B” copy of Award vs Enterprise Agreement comparison, dated 5 July 2019.

9 Email from Mr Rob Twomey dated 6 August 2019.

10 See attached and marked “C” copy of letter dated 7 August 2019.

11 See attached and marked “D” copy of letter dated 14 August 2019.

12 See attached and marked “E” redacted statements from employees, dated 26 September 2019.

13 2.10 of the F17 provides 11 out of 20 employees voted to approve the Agreement.

14 Response to question 2.5 of the Form F17, paragraph 20 of Robert Twomey's witness statement dated 10 October 2019.

15 Response to question 2.6 of the Form F17 and Attachment D; paragraph 20 of Robert Twomey's witness statement.

16 Response to question 2.6 of the Form F17 and Attachment F.

17 Response to question 2.7 of the Form F17 and Phil Bajaky's witness statement dated 10 October 2019.

18 Response to question 2.7 of the Form F17 and Attachment C; paragraph 20 of Robert Twomey's witness statement.

19 Attachments D and E to the Form F17; paragraph 20 of Robert Twomey's witness statement.

20 Attachment F to the Form F17; paragraph 20 of Robert Twomey's witness statement.

21 Paragraphs 15 and 20 of Robert Twomey's witness statement.

22 Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others[2019] FWCFB 318 (Huntsman) at paragraph [52] and Table 1.

23 Huntsman at [74] and Table 2.

24 Paragraph 16 of Robert Twomey's witness statement.

25 Paragraphs 15 and 20 of Robert Twomey's witness statement.

26 Phil Bajaky's witness statement.

27 Paragraph 24 of Robert Twomey's witness statement.

28 Section 188(1)(a)(i) of the FW Act.

29 Section 188(1)(a)(ii) of the FW Act; response to question 2.9 of the Form F17.

30 Section 188(1)(b) of the FW Act.

31 Response to question 2.10 of the Form F17.

32 Section 188(1)(c) of the FW Act.

33 Paragraphs 28 to 31 of Robert Twomey's witness statement].

34 Huntsman at [71] - [73].

35 Paragraphs 32 to 35 of Robert Twomey's witness statement.

36 Attachment G to the Form F17.

37 Paragraph 41 of Robert Twomey's statement.

38 Phil Bajaky's witness statement.

39 Paragraph 43 of Robert Twomey's witness statement.

40 BGC Contracting at [89].

41 Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others [2019] FWCFB 318 (Huntsman) at para [117].

42 One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 at para [115].

43 Para [20] of Mr Bajaky’s statement.

44 Para [23] of Mr Twomey’s statement.

45 Para [24] of Mr Bajaky statement.

46 Para [32] of Mr Twomey’s statement.

47 Para [4] of Mr Twomey’s statement.

48 Para [110] Hunstman.

49 Clause 28.4 of the Electrical, Electronic and Communications Contracting Award 2010.

50 One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 at [141].

51 Ibid.

52 Ibid at [142].

53 Ibid at [115].

54 Ibid at [112].

55 BGC Contracting Pty Ltd [2018] FWC 1466 at [96]-[97].

56 Ibid at [97].

57 Witness statement of Rob Twomey, paragraph 37.

58 Ibid, paragraphs 42-43; Witness statement of Phillip Bajaky, paragraphs 28-29.

59 Witness statement of Phillip Bajaky, paragraph 31.

60 Applicant’s Form F17, clause 2.5.

61 Applicant’s Form F17, clause 2.9.

62 See for example Woolworths Supermarkets Agreement 2018 [2019] FWCA 7 (Gostencnik DP, 7 January) at para. 69.

[2019] FWCFB 318.

63 Revised Explanatory Memorandum to Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017 (Cth) para 47.

64 [2019] FWCFB 318 (Ross J, Hatcher VP, Saunders DP, 18 January 2019).

65 Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others [2019] FWCFB 318 (Ross J, Hatcher VP, Saunders DP, 18 January 2019) at para. 117.

66 Huntsman [117].

67 [2019] FWCFB 318.

Printed by authority of the Commonwealth Government Printer

Downer EDI Engineering Power Pty Ltd

[2019] FWCA 7930

4 DECEMBER 2019

DECISION

History of the Application

Evidence - Downer

Consideration – Genuine agreement

Conclusion