Drummond & Kindred Clothing Co Pty Ltd T/A Drummond & Kindred

[2020] FWCA 2727

[2020] FWCA 2727

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement

Drummond & Kindred Clothing Co Pty Ltd T/A Drummond & Kindred
(AG2020/921)

DRUMMOND & KINDRED EMPLOYEES ENTERPRISE AGREEMENT 2012

Clothing industry
COMMISSIONER HUNT	BRISBANE, 10 JUNE 2020

Application for approval of termination of an enterprise agreement – majority of employees cast valid vote to approve termination – appropriate to approve termination despite views of employee organisation covered by agreement – application approved.

[1] On 31 March 2020, Drummond and Kindred Clothing Company Pty Ltd(Drummond) made an application pursuant to s.222 of the Fair Work Act 2009 (the Act) to terminate the Drummond & Kindred Employees Enterprise Agreement 2012 (the Agreement). The Agreement commenced from 20 July 2012, with a nominal expiry date of 1 July 2014.

[2] The application was supported by a Form F24A statutory declaration made by Ms Natalie Cumner, HR Coordinator for Drummond. Ms Cumner declared, amongst other things, that the 36 employees covered by the Agreement were notified of the time and place of the vote and that of the 33 votes cast, 17 employees approved the termination of the Agreement with 16 voting against termination of the Agreement.

[3] Clause 1.2(c) of the Agreement provides that the Textile, Clothing and Footwear Union of Australia (TCFUA) is covered by the Agreement.  The TCFUA is now part of the Construction, Forestry, Maritime, Mining and Energy Union’s (CFMMEU) Manufacturing Division.

Earlier application

[4] This application was made at the time when I had heard and reserved my decision in a s.222 application made by Drummond relevant to the same Agreement (the first application). On 31 March 2020, Drummond wrote to my chambers explaining the following:

“Further to comments made in the hearing to terminate the above Agreement earlier this year, the employer has taken on board the views expressed regarding what documentation ought be provided to employees in an application such as this and put the Agreement to a second vote in accordance with s219 of the Act. 

The second request was approved by the majority and the second application has been made to the FWC a short time ago, with a request it be allocated to you.

We have copied the CFMMEU on this correspondence by way of service.

We understand that this means two applications are on foot. It is our view, subject of course to the Commissioner’s views, that if the first application is approved, the second will fall away. If the first is not approved then the second application will proceed.”

[5] On 6 May 2020, I issued a decision in the earlier application (the first decision), dismissing the first application. 1 Drummond had provided several documents to employees for their consideration in the first vote of 4 December 2019. One of those documents contrasted the Agreement terms and the terms of the Textile, Clothing, Footwear and Associated Industries Award 2010 (the Award). The document provided an additional column providing commentary on the differences between the two instruments. I determined as follows:

“[87] The document at paragraph [7(b)] above was produced for Drummond for dissemination to relevant employees to explain Agreement terms versus Award terms, and an additional column was inserted providing some commentary. As is evident during my questions of Ms Cumner during the hearing, I have found the additional column to be completely unsatisfactory, and I now declare it to be, in most of the circumstances, when all of the other documents provided to employees at paragraph [7] above are taken into account, misleading, and in other circumstances potentially misleading.”

[6] In the first decision, I concluded:

“[120] The factual difference between the Agreement and the Award should have been put to eligible voting employees in complete factual terms, without error, or it should not have been put to employees at all. Quite simply, the Agreement and Award texts could have been put to employees for their own consideration, without commentary. Drummond’s decision to provide commentary which was not factually correct has the potential to mislead voting employees, and in some circumstances stated above, I have found it to be misleading. I do not consider that it was an intentional act, but nevertheless, because of the conduct of Drummond in its provision to employees of various documents, I consider the opportunity to have been infected. On that basis I am not satisfied that Drummond gave the employees a reasonable opportunity to decide whether they want to approve the proposed termination.

[121] Accordingly, I am not satisfied that s.220(2)(b) has been met.”

This application

[7] This application has been made pursuant to a vote of 36 employees covered by the Agreement. The vote was undertaken on 27 March 2020 between 7:00am and 3:00pm.

[8] Drummond was represented by Ms Theresa Moltoni of IRIQ Law Pty Ltd. Ms Vivienne Wiles, Senior National Industrial Officer and Co-ordinator represented the CFMMEU. The parties did not require a hearing and agreed to the application being determined on the papers. Having determined that there were no contested facts, I was satisfied the application could be determined on the papers without the requirement of a hearing.

[9] The following evidence has been considered, together with written submissions:

(a) The statutory declaration of Ms Cumner;

(b) A ballot notice dated 19 March 2020 declaring a vote of employees to terminate the Agreement to occur on 27 March 2020;

(c) An 80-page comparison document of the Agreement clauses and Award clauses;

(d) A list of 36 employees’ names provided by Drummond to the Commission only, being those employees stated by Drummond to be covered by the Agreement;

(e) A witness statement of Mr Anthony Hack, CFMMEU Organiser dated 16 April 2020;

(f) A witness statement of Ms Leanne Ambrosetti, a Drummond employee and CFMMEU member dated 15 April 2020;

(g) A witness statement of Ms Ambrosetti dated 20 May 2020;

(h) A certified ballot report by Mr Luke Gilliland of IRIQ Pty Ltd dated 27 March 2020;

(i) A witness statement of Ms Cumner dated 20 May 2020 in response to questions of the Commission relevant to employees who had participated in the first vote on 4 December 2019, and two new employees; and

(j) A witness statement of Mr Faiyaz Devjee, Ballot Officer of IRIQ Pty Ltd dated 25 May 2020.

[10] The documents at [9](d) and [9](i) were provided by Drummond to my chambers only, on account of the documents containing names of employees. I informed the parties that this is my practice to determine, on an ex parte basis, the correct roll of eligible employees to vote to terminate the Agreement or not. It is my experience that employers typically do not provide to unions a full list of employees’ names. The following email was sent from my chambers on 20 May 2020:

“…..The Applicant has provided to chambers, in an email dated 21 April 2020, a confidential list of 36 names of employees the Applicant states were eligible to vote on 27 March 2020.  There will be correspondence shortly sent to the Applicant only, requiring further information relevant to six employees.  The Commissioner has undertaken a reconciliation of the list provided to chambers relevant to the vote taken on 4 December 2019 for the first vote, and notes that it appears to the Commissioner that four of those employees’ names are no longer on the list of employees on the report relevant to the vote taken on 27 March 2020.  Further, there are two new names on the 27 March 2020 list that were not on the 4 December 2019 list.  The Commissioner will be requiring a witness statement of a person with knowledge within the Applicant to detail each of those six employees’ circumstances as to when they ceased working for the Applicant and when the “new names” commenced working for the Applicant.  This information will be provided to chambers only for the Commissioner’s consideration.  The Commissioner will require this information by 4:00pm Thursday, 21 May 2020.”

[11] Ms Cumner’s witness statement at [9](i) was provided to my Chambers, and I am satisfied that it correctly demonstrates that four employees who were eligible to vote in the first vote were no longer employed by 27 March 2020, the date of the second vote. Two new employees had commenced by 27 March 2020 and had not participated in the first vote as they were not yet employed. Accordingly, I am satisfied that there were 36 eligible employees covered by the Agreement on 27 March 2020.

Relevant legislation

[12] The relevant sections for consideration are ss.219 to 223 of the Act, produced below:

“Section 219 Employers and employees may agree to terminate an enterprise agreement

Termination by employers and employees

219(1) The following may jointly agree to terminate an enterprise agreement:

(a) if the agreement covers a single employer – the employer and the employees covered by the agreement; or

(b) if the agreement covers 2 or more employers – all of the employers and the employees covered by the agreement.

Termination has no effect unless approved by the FWC

219(2) A termination of an enterprise agreement has no effect unless it is approved by the FWC under section 223.

…..

Section 220 Employers may request employees to approve a proposed termination of an enterprise agreement

220(1) An employer covered by an enterprise agreement may request the employees covered by the agreement to approve a proposed termination of the agreement by voting for it.

220(2) Before making the request, the employer must:

(a) take all reasonable steps to notify the employees of the following:

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

(ii) the voting method that will be used; and

(b) give the employees a reasonable opportunity to decide whether they want to approve the proposed termination.

220(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.

Section 221 When termination of an enterprise agreement is agreed to

Single-enterprise agreement

221(1) If the employees of an employer, or each employer, covered by a single-enterprise agreement have been asked to approve a proposed termination of the agreement under subsection 220(1), the termination is agreed to when a majority of the employees who cast a valid vote approve the termination.

…..

Section 222 Application for approval

Application for approval

222(1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to the FWC for approval of the termination.

Material to accompany the application

222(2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.

When the application must be made

222(3) The application must be made:

(a) within 14 days after the termination is agreed to; or

(b) if in all the circumstances the FWC considers it fair to extend that period--within such further period as the FWC allows.

Section 223 When the FWC must approve a termination of an enterprise agreement

223 If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and

(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.”

The CFMMEU’s objections to the application

[13] The CFMMEU’s objections to the application are summarised below:

(a) Difficulties in some employees registering a valid vote by mobile phone in context where the period of voting was limited to 7am to 3pm, Friday 27 March 2020;

(b) Given these difficulties, the outcome of the employee vote (17 Yes, 16 No) is open to doubt as constituting a valid majority under the Act;

(c) The failure by Drummond to genuinely consult with affected employees and the CFMMEU as required under the terms of the Agreement; and

(d) The significant diminution of employees’ current terms and conditions of employment which would result from the termination of the Agreement.

[14] The CFMMEU requested the Commission require the Applicant provide to the Commission a document detailing the names and roles of employees the Applicant considers are covered by the Agreement. This has occurred.

Ms Ambrosetti’s evidence

[15] Relevant to the outcome of the vote being 17 yes and 16 no, the CFMMEU submitted that Ms Ambrosetti’s evidence demonstrated that she attempted to vote no during the voting period, but her vote was not accepted. Ms Ambrosetti’s evidence may be summarised as follows:

(a) She is aged 53 years and left high school at age 15;

(b) She commenced working at Drummond when she was aged 17;

(c) She has worked at Drummond for 36 years and has been a union member for almost all that time;

(d) She is a clothing machinist, primarily making jackets and trousers;

(e) She works 37 hours per week and has an RDO every two weeks;

(f) Her workday has her commencing at 8:30am, a 10 minute morning tea break at 10:am, an unpaid 30 minute lunch break at 12:00pm, and a 10 minute afternoon tea break at 3:00pm;

(g) Employees are not permitted to have their mobile phones on them when working on the floor of the factory;

(h) She checks her mobile phone during the lunch break;

(i) She typically washes her hands, has her lunch, goes to the bathroom and washes her hands again, and then return to her station on the factory floor;

(j) She usually checks her phone quickly while eating lunch, including checking for any calls from her three children aged 8, 13 and 19;

(k) The 30 minutes goes very quickly and before she realises it, she needs to be out on the floor starting work for the afternoon;

(l) Prior to the 27 March 2020 vote she received several documents about the vote. One of the documents was very large and she did try and read parts of it but understood only bits and pieces;

(m) At lunchtime on 27 March 2020 she looked at her mobile phone and noticed she had received a message at 12:05pm to do the vote;

(n) Her intention was to vote ‘no’, and she tried twice to vote using the word “No”, but each time she received a message which said, “Your answer is invalid. Please reply Y for Yes or N for No.”;

(o) At the time she could not work out why her vote wasn’t being accepted. She needed to return to work. She informed Ms Sue Silva, Factory Production Manager that she had tried twice to vote in the ballot on her mobile but had been unsuccessful. Her evidence is Ms Silva ‘didn’t really respond’ so she continued with her work;

(p) On 30 March 2020 at 12:29pm, she tried again to vote, this time using “N”. She did not receive a message in return;

(q) She heard from some of the other workers that they too had made the same mistake as her by replying “No” instead of “N”, but they had discovered their error and voted “N” by the time the voting concluded at 3:00pm on 27 March 2020 and their vote was included; and

(r) She considered that she discovered this too late for her vote to be counted and she considers it unfair that her vote “No” did not count as her intention was clear that she did not agree with terminating the Agreement.

[16] The CFMMEU submitted that if Ms Ambrosetti’s no vote had been included, it would have resulted in 17 yes votes, 17 no votes, and accordingly, the application could not be made as there would not be a majority of employees who voted to terminate the Agreement.

[17] On 20 May 2020, I sent the following correspondence to the parties from chambers:

“….Relevant to Ms Leanne Ambrosetti’s evidence before the Commission, the Commissioner requires Ms Ambrosetti to make a further witness statement relevant to whether she voted in the first vote on 4 December 2019.  In addition, Ms Ambrosetti is directed to review her text messages of 4 December 2019 and provide evidence of her participation in the vote if she did, in fact, participate in the vote.  Ms Ambrosetti’s evidence is required in the form of a witness statement, with attachments (such as a screen shot of her text message) by 4:00pm Friday, 22 May 2020.

The Commissioner notes that in the first application, when the Commissioner was requiring further information from the Applicant, in an email from the Applicant on 29 April 2020, it was stated:

“We have made enquiries from the Balloting officer and have been advised that none of these three employees cast a vote in the Ballot relevant to the first application, so there is no impact on the numbers.”

The Commissioner inquires if it is possible to ascertain from the Balloting officer in the first application if there is visibility as to Ms Ambrosetti’s vote in the ballot of 4 December 2019?  The Applicant is directed to reply to chambers and to the Respondent on this issue by 4:00pm Thursday, 21 May 2020.”

[18] Ms Ambrosetti provided a second witness statement dated 20 May 2020, describing her attempts to vote in the first ballot of 4 December 2019. Her evidence is as follows:

(a) She voted in the first ballot during her lunch break;

(b) At the time she believed her vote was successful;

(c) She does not remember seeing any messages on her phone that she had not voted correctly or that her vote was invalid; and

(d) She does not have a message on her phone from 4 December 2019 showing her vote and she generally does not keep text messages on her phone for long as she regularly deletes old text messages.

Mr Devjee’s evidence

[19] Mr Devjee’s witness statement of 25 May 2020 stated the following relevant to the first vote on 4 December 2019:

(a) Ms Ambrosetti was sent an initial invitation to cast her vote at 7:00am and another later in the day. The balloting system reported successful delivery of the messages;

(b) She did not register a compliant vote, however at 12:14pm she attempted to lodge a non-compliant vote;

(c) She would have received the following response, “Your answer is invalid. Please reply Y for Yes or N for No” if her phone was in range and switched on.

[20] Relevant to the second vote of 27 March 2020, Mr Devjee’s evidence is:

(a) Ms Ambrosetti was sent an initial invitation to cast her vote at around 7:00am and a reminder at 12:05pm. The balloting system reported successful delivery of the messages;

(b) She attempted to lodge a non-compliant response on two occasions; and

(c) On 31 March 2020 (and not 30 March 2020 as stated by Ms Ambrosetti) she replied “N” which is a compliant response, but it was cast outside the ballot window which closed at 3:00pm on 27 March 2020.

Views of the CFMMEU

[21] Relevant to s.223(d) of the Act, requiring the Commission to take into account the views of the CFMMEU, it is submitted that there is at least one employee who had difficulties in casting a valid vote, whose vote was ultimately not counted. If it had had been counted, a majority would not exist.

[22] It was submitted that prior to the second vote being undertaken, Drummond did not formally notify the CFMMEU of its intention to have the Agreement terminated. This is despite the Agreement requiring consultation when the employer is seriously considering workplace change that is likely to have a significant effect on the employees.

Mr Hack’s evidence

[23] Mr Hack’s witness statement included evidence of an email sent by Mr Michael Aird, NSW District Secretary, CFMMEU Manufacturing Division, on 25 March 2020 to Ms Cumner which includes the following:

“…..we hold serious concerns that employees have not been properly consulted with and advised of the nature of the decision that is currently before them for balloting on Friday 27 March 2020.

……..

We advise that it is our view that a ballot to terminate an agreement is major change that requires appropriate consultation processes be undertaken with the workforce. It is our concern that there appears to be unnecessary haste to ballot.

…….

…….

We seek the ballot be postponed for a brief period to enable consultation to occur. We do not seek the ballot be put off indefinitely just for a brief period to enable consultation….”

[24] Mr Hack’s evidence reveals that on 26 March 2020 he attended the Drummond workplace having exercised his right of entry permit. He met with Ms Frances Alford, Drummond employee and CFMMEU delegate. Mr Hack and Ms Alford dialled into a meeting also attended by telephone by Mr Aird, Ms Cumner, Ms Moltoni and “Karen and Chris”.

[25] During the meeting Mr Hack and Mr Aird submitted to Drummond that there had not been adequate consultation regarding the vote to occur the next day, the union had not been formally advised, and among other things, the vote should be delayed. Ms Alford suggested that the effects of COVID-19 meant that people were under a lot of stress, and she suggested the termination of agreement process be put off until the coronavirus goes away . Mr Hack’s evidence is that he was available to meet with employees over the lunch break and the afternoon tea break, however he was required to meet with employees outside.

[26] On 27 March 2020, Mr Hack received a call from Ms Moltoni to advise the vote was going ahead that day.

[27] Mr Hack’s evidence is that on 30 March 2020 he became aware of at least three employees, including Ms Ambrosetti, who had difficulties voting by telephone on 27 March 2020. The difficulty by the three employees was the same; they had sent a text “No” instead of “N”. Mr Hack did not provide evidence relevant to the other two employees.

Impact of termination of Agreement on current employee terms and conditions

[28] The CFMMEU submitted that if the Agreement is approved to be terminated, it will represent a significant diminution of the current terms and conditions of employment of affected employees.

[29] As detailed and relied upon by the CFMMEU in the first application, in this application it was submitted that there would be a diminution of entitlements in the following way if the Agreement is terminated and the employees’ conditions revert to the Award:

(a) Ordinary hours of work and rostering: An increased span of ordinary hours from 7:00am – 5:00pm under the Agreement to 7:00am – 7:00pm under the Award, together with potential changes of averaged hours;

(b) Consultation requirements: the Agreement provides for a broader set of circumstances when the consultation clause is triggered, the definition of ‘significant effects’ is wider under the Agreement, there is a more enhanced role of the union representing its members under the Agreement, and under the Award there would be a loss of right for employees to meet with the union, or other representatives in paid team to discuss the proposed changes;

(c) Dispute resolution procedure: the Agreement has a wider scope about which disputes may be raised under the Agreement than under the Award. Under the Agreement employees may consult with their chosen representative during paid time and at any stage of the procedure, and the employees’ representative has a right to be given access to all relevant documents and materials. Any dispute under the procedure may be arbitrated by the Commission, as opposed to consent arbitration under the Award. The Agreement provides for an express status quo term;

(d) Health and safety requirements: employees would lose, as a right the ability to have the Commission arbitrate a dispute about employees’ safety, health and welfare, and it could only be arbitrated under the Award by consent;

(e) Equal opportunity and anti-discrimination requirements: employees would lose, as a right the ability to have the Commission arbitrate a dispute about equal employment opportunities and it could only be arbitrated under the Award by consent;

(f) Skill level classification mechanism: employees would lose, as a right the ability to have the Commission arbitrate a dispute about the appropriate skill level classification and it could only be arbitrated under the Award by consent; and

(g) Loadings, penalties and allowances: will allowances and the like increase in the same manner as wages are proposed to be increased over the life of the Agreement?

[30] The CFMMEU noted that in asking employees to vote for the second application, Drummond did not provide to employees an enforceable guarantee or undertakings to commit to certain above-Award conditions. Drummond did so in the first vote, but not in the second vote.

[31] The CFMMEU submitted the Commission should dismiss the application.

Drummond’s evidence and submissions

Section 223(a)

[32] Drummond submitted that relevant to the Commission’s satisfaction that s.220(2) has been complied with, all employees entitled to vote were provided with a ballot notice. The notice clearly set out:

(a) The time and place at which the voting would occur; and

(b) The method of voting to be used.

[33] Drummond submitted that pursuant to s.220(2)(b), employees were given a reasonable opportunity to make a decision with respect to the termination.

Section 223(b)

[34] In considering whether s.221(a) has been met, Drummond submitted that a majority of employees who cast a valid vote approved the termination of the Agreement. The instructions provided were clear and concise, with Drummond going to significant lengths to ensure that all employees entitled to vote were given an equal opportunity to vote. Drummond does not accept that the outcome, being a majority of employees voting in favour of termination of the Agreement is not a true or accurate reflection of the intention of the majority of the voting group.

Section 223(c)

[35] It was submitted that there are no other grounds to believe that employees have not agreed to the termination. Drummond submitted that clear instructions were provided to Ms Ambrosetti on how to submit a valid vote, both in the ballot notice and the text message sent to her on 27 March 2020. It was submitted that had Ms Ambrosetti followed the clear and concise instructions she could have submitted a valid vote. Details of third-party organisations available to provide assistance to employees to vote was provided in the ballot notice, together with the ability to contact management.

[36] Drummond submitted that voting either Y or N was clear to those who voted, and no other employees raised concerns. Ms Ambrosetti’s failure to cast a valid vote is simply a matter of fact. If there were, indeed, a further two employees who intended to vote but had difficulty doing so, they have not provided evidence to the Commission for consideration.

[37] It was submitted that it would defeat the purpose of engaging in a voting process if employees could, after failing to submit a valid vote, claim that they wished to express an opinion on a ballot that had already been certified.

Section 223(d)

[38] Drummond submitted that whilst the views of the CFMMEU should be taken into account, the CFMMEU’s objection should not be a bar to approve the termination of the Agreement.

Consultation with the CFMMEU

[39] It was submitted that the CFMMEU was aware of Drummond’s intention to terminate the Agreement given that a previous application was already on foot and a decision of the Commission was reserved. Further, all employees were emailed the ballot notice and document comparing the Agreement and the Award on 19 March 2020. Discussion was held with Ms Alford on 26 March 2020, prior to the vote occurring.

[40] Relevant to whether consultation is required under the Agreement, Drummond submitted:

(a) No change to the employees’ actual hours of work or their roster is being proposed. Unless Drummond makes a decision to actually change the hours of work of employees, the Award provision will not be invoked. The only change is a technical change to the potential span of hours; and

(b) Termination of the Agreement does not constitute a change to the legal or operational structure of Drummond.

[41] It was submitted that even if consultation is deemed inadequate, a failure to consult with the CFMMEU should not be a bar to approval of termination of the Agreement. There is no requirement under Part 2-4 of the Act that the employer engage in consultation prior to proposing the termination of an agreement. Drummond denied that the meeting held on 26 March 2020 was “cursory” as submitted by the CFMMEU.

Impact of termination on employees’ terms and conditions

[42] It was submitted that any diminution of employees’ terms and conditions is not a bar from the Commission approving the application as it is not a relevant consideration under s.223 of the Act. The objection by the CFMMEU should not result in the decision of a majority of employees being overturned.

[43] As to the diminution of employees’ terms and conditions if they were to revert to the Award, Drummond submitted that the CFMMEU’s concerns have been largely overstated. Any proposed change to require employees to work within the larger span of hours will require consultation to occur. Relevant to when consultation is required, Drummond submitted that the difference between “seriously considering workplace change” and “makes a definite decision” is minor.

[44] Relevant to the role of the CFMMEU, employees would still be entitled to be represented by the CFMMEU under the Award. Whilst employees are not guaranteed paid time to meet with the CFMMEU, this has not been precluded; employees may still arrange with the employer to use paid time for the purposes of consultation.

[45] Employees were shown the difference between the consultation provisions under the Agreement next to the Award provisions in the comparative table provided on 19 March 2020. With respect to the dispute resolution procedure, Drummond submitted that minor changes have been made. With respect to the submissions relied on by the CFMMEU, Drummond stated:

(a) Employees will receive similar rights to deal with disputes under the Award that they did under the Agreement;

(b) The additional matters that may be raised under the dispute resolution clause (i.e. Union Rights and General Protections) in the Agreement may nevertheless be raised by employees; simply, disputes in relation to Union Rights and General Protections will not fall under clause 10 of the Award;

(c) Employees still have the ability to appoint a representative under clause 10.7 of the Award. They are entitled to engage in meetings and consult with these representatives. The right to paid time to consult with representatives is not expressly provided in the Award, however the Award does not preclude an employer from giving an employee paid time to discuss the dispute with the CFMMEU;

(d) Whilst the right of a representative to access all relevant documents and materials has not been expressly included, the principles of natural justice will still apply to any process engaged in by Drummond. Additionally, clause 9.2 of 10 the Award provides that documentation must be provided to the employee and their representatives as part of the consultation process;

(e) A matter may still be arbitrated under the dispute resolution procedure in the Award. Parties may agree to engage in consent arbitration pursuant to clause 10.5 of the Award. It was submitted that this is not a significant change from the current agreement; and

(f) Contrary to the CFMMEU’s submission, the Award sets out an express status quo term, this will operate in largely the same manner as the Agreement.

[46] Relevant to health and safety, Drummond maintains that the health and safety of employees is sufficiently protected under legislation. Whilst there is no corresponding clause in the Award, Drummond still has duties under law to protect the health and safety of employees. The removal of this express provision from the Agreement will not impact the rights of employees.

[47] Relevant to the loss of a clause dealing with anti-discrimination laws, Drummond submitted that these obligations exist under anti-discrimination laws. Whilst there is not corresponding clause in the Award, Drummond still has duties under law to ensure equal opportunity and to protect employees from discrimination. The removal of this express provision from the Agreement will not impact the rights of employees.

[48] Relevant to the skill level provisions in the Agreement, Drummond submitted that a dispute could still be dealt with by the Commission under the Award.

[49] With respect to the concerns raised by the CFMMEU around loadings, penalties and allowances, Drummond submitted that loadings, penalties and allowances under the Agreement apply in accordance with the Award, and therefore there will be very little change to the underpinning conditions of employees.

[50] Regarding the fact that Drummond has not provided any undertakings to preserve employees’ conditions under the Agreement, Drummond submitted that there is no requirement to preserve all of the terms of an Agreement when it is being terminated. It was submitted that if this were the case there would be no reason for an employer to terminate an agreement.

CFMMEU reply submissions

[51] The CFMMEU filed submissions in reply. Relevant to the consideration the Commission must have, the CFMMEU submitted that s.223(d) requires the Commission to consider that it is appropriate to approve the termination taking into account the views of the employee organisation(s) (if any) covered by the Agreement [added emphasis].Being appropriate includes concepts of ‘suitable’ or ‘proper in the circumstances’. It is not a question of whether the Commission ‘may’ take the CFMMEU’s views into account; it is a positive obligation which is required to be met for a termination of an agreement under s.223 to be approved.

[52] The CFMMEU submitted that employees were not provided with a reasonable opportunity to decide. ‘Reasonable opportunity’ is capable of including issues of the time period within which the employees’ vote is to cast and whether the method of voting (primarily SMS phone ballot) was suitable in all the circumstances.

[53] It was submitted that the vote, undertaken between 7:00am and 3:00pm on Friday, a workday, was quite narrow. Ms Ambrosetti’s evidence detailed what she needs to do within her 30-minute unpaid meal break and Drummond’s policy regarding mobile phone use by employees during work hours.

[54] It was submitted, without direct evidence, that Ms Ambrosetti was not the only employee who experienced difficulty in attempting to vote no. There is no evidence before the Commission as to the number of informal votes or votes otherwise invalidated because the voting procedure was not followed correctly. It was submitted that there was a commonality of error beyond one employee, indicating that there is an issue in the way that the ballot question was asked, which is a relevant consideration, particularly pursuant to s.220(2)(b).

[55] In response to Drummond’s contention that Ms Ambrosetti could have advised management of her difficulties in voting, Ms Ambrosetti did inform Ms Silva, but concluded that she didn’t really respond, so she continued working.

[56] Regarding consultation with the CFMMEU, it was submitted that Mr Hack’s evidence demonstrates that only because the CFMMEU raised it with Drummond, the intention to hold the second ballot with employees on 27 March 2020 would not have been confirmed. Drummond did not initiate consultation with the CFMMEU. It is submitted that there is no evidence before the Commission that Drummond consulted with employees regarding the proposed termination of the Agreement.

[57] Relevant to the span of hours, it was submitted that Drummond’s contention that there would be no change to the ordinary hours of work arising from the termination of the Agreement is not sustainable, as the hours will increase from 7:00am – 5:00pm, to 7:00am – 7:00pm.

[58] Regarding the diminution of conditions, the CFMMEU submitted that it is a relevant consideration under the test in s.223(d) as part of the Commission’s determination as to whether it is appropriate to terminate the Agreement, taking into account the CFMMEU’s views.

[59] I have taken into account the further submissions made by the CFMMEU, but need not reproduce them here relevant to:

(a) Hours of work and rostering being a significant change, and the ability of Drummond to make changes to the hours of work;

(b) Consultation rights where the CFMMEU does not agree that the changes are minor;

(c) The dispute resolution procedure where the CFMMEU does not agree that the changes are minor;

(d) Skill level classification mechanism where there is no right of arbitration in the event of a dispute; and

(e) The effects of loadings, penalties and allowances reverting to the Award.

[60] The CFMMEU submitted that all the statutory tests under s.223 of the Act have not been satisfied, including that it is not appropriate for the Commission to approve the termination of the Agreement, and therefore the application should be dismissed.

Consideration

[61] The conditions which must be met for an agreement to be terminated are set out in ss.220-223 of the Act.

Consideration of s.220

[62] I have earlier stated that I am satisfied that there were 36 employees eligible to vote to terminate the Agreement. All of the 36 employees were provided with a ballot notice and documents provided by Drummond, one providing a clause-by-clause comparison of the terms of the Agreement and the Award.

[63] Where I was critical of Drummond in the first decision because of the provision of potentially misleading and misleading information to employees, I am satisfied that the comparison document provided to employees relevant to this application was a factual document, allowing employees to review it over a reasonable amount of time, to determine for themselves if they wished to vote yes or no for termination of the Agreement.

[64] Having reviewed the ballot notice and the text message provided to employees, I am satisfied that before making the request for employees to vote, Drummond took all reasonable steps to notify the employees of the time and place at which the vote will occur and the voting method that will be used. I consider the method of voting to be suitable in all the circumstances.

[65] What is known is that 33 out of 36 employees voted during the ballot period. That is a very high percentage of employees, and they were able to do so between the hours of 7:00am and 3:00pm on a workday, if in fact it was a day of the week worked by all of the relevant employees. All of those 33 employees were able to understand the clear instructions to respond to an SMS on their phone that invited them to respond with a Y or a N.

[66] The large majority of those employees had also participated in a vote in identical terms on 4 December 2019, where 27 valid votes were made. With respect, it is not a difficult task to respond to a text message requiring a Y or a N response. When faced with the return text message:

“Your answer is invalid. Please reply Y for Yes or N for No.”

Ms Ambrosetti again text No.

[67] Ms Ambrosetti has not provided any evidence to the Commission that she is illiterate, and I do not consider the task presented to employees to require any intellectual stretch. Regrettably, Ms Ambrosetti did not cast a valid vote, but it was not beyond her to do so, and it was not such a difficult task that it should render the ballot invalid.

[68] No direct evidence was provided by the CFMMEU relevant to any difficulty other employees experienced in casting a valid vote. It was open for the CFMMEU to produce statements of other employees and to allow the opportunity for cross-examination. With a very high voter turnout, I do not accept that there was any barrier to employees to send a Y or a N in response to an SMS on their phone in a window of eight hours for which at least some of it, in Ms Ambrosetti’s case, was before she commenced work. She received a text message at around 7:00am and did not commence work until 8:30am. She was not prevented from casting a valid vote during the window of opportunity available. She was reminded again at the commencement of her lunch break.

[69] I am satisfied that employees were provided with a reasonable opportunity to decide whether they want to approve the proposed termination.

Section 221(1)

[70] The vote was 17 for, and 16 against termination of the Agreement, resulting in 33 out of 36 eligible employees voting.

Section 223(a)

[71] Section 223(a) is satisfied pursuant to my findings above at [62] – [69].

Section 223(b)

[72] I am satisfied that s.221(1) has been met as the termination is agreed to when a majority of the employees who cast a valid vote approve the termination.

Section 223(c)

[73] Ms Ambrosetti’s failure to cast a valid vote during the ballot period is regrettable, and certainly would have changed the outcome of the vote, rendering it 50% for and 50% against. The application to the Commission could not have been made if Ms Ambrosetti had cast a valid vote.

[74] It is important that employees understand the time and place at which the vote will occur, and the voting method that will be used. There is no obligation for Drummond to accept Ms Ambrosetti’s vote cast on 31 March 2020, outside of the voting period.

[75] I am satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination.

Section 223(d)

[76] An employee organisation covered by an agreement has rights under the Act that do not exist for employee organisations not covered by an agreement. Section 223(d) and s.226(b)(i) and (ii) are important provisions, requiring the Commission to take into account the views of the employee organisation, and relevant to s.226(b)(ii), the effects of a termination of an agreement.

[77] Taking into account the views of the employee organisation is a strict requirement in the consideration of a s.222 application. It does not, however, mean that simply because an employee organisation covered by an agreement objects to termination of an agreement pursuant to s.222, that the Commission should dismiss an application.

[78] The test is whether it is appropriate to approve the termination of the agreement taking into account the views of the CFMMEU, in this case.

[79] In the first decision, relevant to any obligation to consult, I stated the following:

“[113] In any event, I do not consider it to be a relevant consideration in the Commission’s determination of a s.222 application, to be satisfied that an employer has met its consultation obligations under the Agreement proposed to be terminated. It has not, to my knowledge, ever been raised as an issue before the Commission, and there are scores of Agreements terminated by the Commission annually, without any such consideration. In 2018, the CFMMEU made hundreds of applications to the Commission pursuant to s.222 of the Act, seeking to terminate agreements in the construction industry which were no longer compliant with the Code for the Tendering and Performance of Building Work 2016 (the Code). As an estimate, I approved the termination of at least 80 such applications, where the CFMMEU was the applicant, and simultaneously sought to have approved new agreements made by employers with their employees that were Code compliant. I always ensured the matters were approved alongside each other to ensure the relevant employees always remained covered by an enterprise agreement. In none of those applications did the CFMMEU address the Commission as to whether the relevant employer had followed the relevant consultation clause within the agreement proposed to be terminated, in order to satisfy the Commission that the relevant agreement could be terminated. Quite simply, the applications were determined pursuant to s.222 and s.185 of the Act, respectively.

[114] In my view, if parliament had intended it to be a relevant consideration, it would be so stated in the Act.”

[80] I confirm my view on this issue.

[81] Relevant to the concerns held by the CFMMEU as to the diminution of employee entitlements if the employees revert to the Award as a result of termination of the Agreement, I agree that there will be a diminution of entitlements. Unsurprisingly, Drummond would not have taken the termination to a vote if it was comfortable with the terms of the Agreement continuing. It is not obliged to state its reasons for seeking termination of the Agreement. It is not even obliged to share its reason with relevant employees.

[82] As stated in the first decision, there will indeed be a loss of entitlements to employees. Despite Drummond’s submissions that some of these are minor, I do not agree. The loss of a right to have disputes (including, for example, skill classification disputes) in the workplace arbitrated by the Commission, without requiring Drummond’s consent, is a substantial loss to employees. It is one, however, that was campaigned against by the CFMMEU during the first vote. 2

[83] Drummond’s statement in these proceedings that because it doesn’t presently wish to require employees to work ordinary hours between 5:00pm and 7:00pm doesn’t represent a diminution of entitlements is not correct. Reverting to the Award will allow it to happen, if Drummond so wishes, with appropriate consultation under the Award.

[84] In the first decision, relevant to taking into account the views of the CFMMEU and the diminution of employee entitlements I stated the following:

“[115] It is necessary for the Commission to take into account the views of the CFMMEU relevant to this application. I understand that the CFMMEU considers that employees could not have validly voted to terminate an agreement and return to award coverage due to the loss of benefits to employees. Termination of the Agreement will result in the loss of beneficial provisions for the employees. In particular, the loss of the more beneficial consultation and dispute resolution clauses is a significant and detrimental change for the employees.

[116] Unsurprisingly, employees in many industries do vote to terminate agreements and return to awards conditions, even with the loss of entitlements within an agreement.

[117] As explained during the hearing, the consideration in s.222 as to the CFMMEU’s concerns, are not the same considerations the Commission must have relevant to a s.225 application where the circumstances of the employer, the employees and the CFMMEU must be taken into account, including the likely effect that the termination will have on each of them. Where it is appropriate in a s.225 application to have regard to what the entitlements of employees will be if the agreement is terminated, it is not a consideration in a s.222 application. Parliament has put in place very different considerations.

[118] If I was considering s.223(d) in isolation only, having taken into account the views of the CFMMEU, I would consider it appropriate to approve the termination of the Agreement.”

[85] I confirm my view on this issue. I accept reversion to the Award will result in a diminution of employee entitlements when compared with the Agreement. The employees have, however, voted to terminate the Agreement (by the slimmest of margins), with the views of the CFMMEU opposing the termination known. It has not been a secret how the CFMMEU has viewed the vote put to employees, as is evident in the earlier flyer issued to employees in December 2019, and by way of Mr Hack’s attendance at site on 26 March 2020. Despite this, a majority of employees have concluded that they wish for the Agreement to be terminated. There is no evidence before the Commission of inappropriate communication to employees relevant to their vote to terminate the Agreement.

[86] I consider it appropriate to approve the termination taking into account the views of the CFMMEU.

Conclusion

[87] The consideration at s.223 requires that the Commission must approve the termination of an agreement if all the requirements in ss.223(a) to (d) are met. For the reasons set out above, I have determined that I am satisfied that all these requirements have been met.

[88] I approve the termination of the Agreement effective from 10 June 2020.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<AE895347 PR719627>

 1   [2020] FWC 2396.

 2 Ibid at [63].