Electrotechnology Industry Group Training Company Ltd
[2021] FWCA 6239
•12 OCTOBER 2021
| [2021] FWCA 6239 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Electrotechnology Industry Group Training Company Ltd
(AG2021/6704)
ETU AND ELECTROGROUP GROUP TRAINING APPRENTICE ENTERPRISE AGREEMENT 2021-2022
Electrical contracting industry | |
COMMISSIONER JOHNS | SYDNEY, 12 OCTOBER 2021 |
Application for approval of the ETU and Electrogroup Group Training Apprentice Enterprise Agreement 2021-2022.
[1] An application has been made for approval of an enterprise agreement known as the ETU and Electrogroup Group Training Apprentice Enterprise Agreement 2021-2022 (Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (FW Act) on 13 August 2021. The application was made by Electrotechnology Industry Group Training Company Ltd (Electrogroup/Employer). The Agreement is a single enterprise agreement.
[2] Until it is replaced the employees in the ACT are covered by the Electrotechnology Industry Group Training Company Limited Enterprise Agreement (ACT) 2005 (AG2005/5634) (ACT/2005 Agreement). The ACT Agreement passed its nominal expiry date on 30 September 2007. Employees in NSW are covered by the Electrical, Electronic and Communications Award 2010 [MA000025] (EEC Award).
[3] Electrogroup commenced bargaining when it issued a Notice of Employee Representational Rights on 8 July 2021.
[4] On 14 August 2021, correspondence was received from the National Electrical and Communications Association (NECA) for copies of the application documents. In line with the usual practice of the Fair Work Commission (Commission) the documents requested by NECA were provided to it on 16 August 2021.
[5] An administrative legislative assessment of the Agreement was conducted by staff of the Commission (Legislative Checklist). In accordance with my usual practice, on 23 August 2021, I sent a copy of the Legislative Checklist to the Employer. When sending the Legislative Checklist to an applicant I make it clear that I have not formed any view about the identified issues. Rather, as a matter of procedural fairness, I invite the applicant to make submissions, file any evidence and documents, or offer undertakings to address the issues that have been identified.
[6] In the present matter, the Legislative Checklist identified possible issues with the Agreement in relation to the mandatory terms, the National Employment Standards (NES) and the Better Off Overall Test (BOOT). I directed that the Employer respond to concerns raised in the Legislative Checklist by 27 August 2021. I also programmed the matter for hearing on 10 September 2021.
[7] On 27 August 2021 the Employer provided undertakings purporting to address the issues raised in the Legislative Checklist. On the same day the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU/Union) wrote to my Chambers consenting to the proposed undertakings.
[8] On 27 August 2021, NECA wrote to my Chambers seeking leave to be heard on the application. Noting that NECA was not a party to the proceeding or a bargaining agent, I received NECA’s submissions under s.590 of the FW Act. I was assisted by them. I then invited the Employer to reply to the NECA submissions in accordance with the Directions previously issued. I deal with the submissions made by NECA and the reply to them below.
[9] NECA’s principal submission was that the Employer did not take all reasonable steps to explain the effect of the agreement as required by s180(5) of the FW Act.
[10] What it means to comply with s.180(5) was addressed in the decision of the Federal Court of Australia (Flick J) in Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd. 1
[11] Section 180(5) provides that,
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.
(my emphasis)
[12] His Honour held that,
“[108] The response provided to the Commission in para 2.6 of the F17 Statutory Declaration was misleading to the extent that it asserted on behalf of One Key Workforce that the “terms of the Agreement and the effect of the terms were explained to the relevant employees” by means of either the 25 August 2015 email or during the “telephone conversations”.
[109] Such reasons as were provided by the Commissioner at para [9] of his reasons for decision expose jurisdictional error. Little, if any, consideration was given to what were the “steps” in fact taken by the employer or the adequacy of those steps. Such consideration as was given was more directed to the subject-matter of the information communicated rather than to the content of the information communicated or the effectiveness of the communication of that information or (for that matter) what was not communicated.
[110] Separate from that source of jurisdictional error is the further conclusion that there must in fact be compliance with s 180(5) before the power of the Commission to “approve” the agreement arises. Although the Commission must form a state of “satisfaction” for the purposes of s 188(a)(i) of the Fair Work Act as to whether an employer has “complied with” s 180(5), its statement of having reached that state of “satisfaction” cannot transform a manifestly inadequate explanation process into one which complies with s 180(5). That factual inquiry, on this alternative basis, remains a matter that this Court can examine.
[111] On this alternative basis, it is further concluded that the approval process entrusted to the Commission miscarried.”
[13] An appeal against the decision of Flick J was dismissed by the Full Federal Court of Australia (Bromberg, Katzman and O’Callaghan JJ) in One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union.2 The Full Court observed that,
“[111] The only material before the Commission on compliance with s 180(5) was contained in Ms Ind’s statutory declaration. Although the statutory declaration was silent as to the content of the explanation or, indeed, as to the substance of the communications, OKW submitted that the declaration itself was some evidence upon which the Commission could form the requisite state of satisfaction. That may be so, but it was by no means enough to enable the Commission to lawfully reach that state.
[112] It is common ground that the Commission was never told what was said to the relevant employees. It was simply told that they had been given an explanation of the terms of the Agreement and the effect of those terms. In effect, this amounted to little more than a self-serving statement that the employer had complied with its obligation under the Act. OKW contended that the fact that it made such a statement in a statutory declaration was significant.
It is not. As the CFMEU argued, whether all reasonable steps were taken to ensure that the effect of the terms of the Agreement was explained in an appropriate manner is a question of substance, not form. The recital of a conclusion on the very question the Commission was required (through an evaluative process) to determine is not, without more, a sufficient basis for the satisfaction of the statutory test. In other words, a bare statement by an employer that an explanation has been given is an inadequate foundation upon which to reach a state of satisfaction. OKW submitted that if the Commission had erred in this respect, it was an error in fact finding or an error in process, which would be an error within its jurisdiction. We reject this submission. In order to reach the requisite state of satisfaction that s 180(5) had been complied with, the Commission was required to consider the content of the explanation and the terms in which it was conveyed, having regard to all the circumstances and needs of the employees and the nature of the changes made by the Agreement. It is true that the Act does not expressly say that. But the question of whether an administrative decision-maker is required to consider a matter is not determined only by the express words of the Act; it may also be determined by implication from the subject-matter, scope and purpose of the Act: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39–44 (Mason J).
[113] A consideration of the subject-matter, scope and purpose of the relevant provisions of the Fair Work Act indicates that the content of the explanation and the terms in which it was conveyed were relevant considerations to which the Commission was bound to have regard. The absence of that information meant that the Commission was not in a position to form the requisite state of satisfaction. Put differently, without knowing the content of the explanation, it was not open to the Commission to be satisfied that all reasonable steps had been taken to ensure that the terms and their effect had been explained to the employees who voted on the Agreement or that they had genuinely agreed to the Agreement.
[114] The following considerations point inexorably to that conclusion.
[115] The Commission was required to be satisfied that OKW had taken “all reasonable steps to ensure” that both the terms and the effect of the terms had been explained to the relevant employees as an element in the inquiry as to whether “genuine” agreement had been obtained from them. The agreed purpose of the obligation imposed on employers by s 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.
[116] In order for the employer to comply with the obligation it must take into account the particular circumstances and needs of those employees, including their cultural and linguistic backgrounds, their youth, and the absence of a bargaining representative. That is made explicit in s 180(6). How could the Commission decide whether the steps the employer had taken were “all reasonable steps” unless it knew what the employees had been told before they cast their votes? Without knowing the terms in which the explanation had been conveyed how could the Commission form an opinion on the sufficiency of the explanation, particularly having regard to the considerations mentioned in s 180(6)? Ultimately, how could the Commission decide that a genuine agreement had been reached without having evidence upon which it could answer both these questions?
[117] As there was no evidence of these matters before the Commission, it necessarily follows that the Commission purported to be satisfied that OKW’s obligations under s 180(5) had been discharged without taking those matters into account. That was a jurisdictional error because the Commission did not have authority to make the decision unless its satisfaction had been informed by them. As is often the case, there are several ways of describing the error. It could be characterised as a misconception as to what the exercise of the statutory power entails or an error “as to an important attribute of the decision to be made”: Graham at [68]. Equally it could be seen as a misunderstanding on the part of the Commission of the nature of the opinion it was required to form: Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 at [31] (Gleeson CJ, Gaudron and Hayne JJ). Had the Commissioner applied his mind to the question of what the putative explanation entailed, he would inevitably have inquired into its content and terms.
[14] One Key mandates the Commission to focus its enquiry on the steps actually taken to comply s.180(5) and to consider whether:
a) the steps taken were reasonable in the circumstances; and
b) these were all the reasonable steps that should have been taken in the circumstances.3
[15] The task before the Commission “requires attention to the content of the explanation given.”4
The hearing
[16] The matter was heard on 10 September 2021. The Employer was represented by Mr Robert Carcary, Chief Executive. The CEPU was represented by Mr Daniel Austin, Research Officer.
[17] In coming to my decision, I have had regard to all of the material filed in this matter, including the following documents:
EXHIBIT | DOCUMENT |
1 | Form F16 dated 12 August 2021 |
2 | Form F17 dated 12 August 2021 |
3 | NERR dated 8 July 2021 |
4 | FAQ document |
5 | Explanation of terms |
6 | F18 CEPU dated 12 August 2021 |
7 | Proposed Agreement – ETU and Electrogroup Training Apprentice Enterprise Agreement 2021-2022 |
9 | Summary of Issues Checklist |
10 | NECA Submissions dated 27 August 2021 |
11 | ElectroGroup and ETU Submissions dated 8 September 2021 |
12 | s190 Undertakings dated 27 August 2021 |
13 | Statutory Declaration Robert Carcary dated 9 September 2021 |
14 | Evidence in Relation to Literacy and Numeracy Level of the ElectroGroup |
15 | Attachment 1 |
16 | Attachment 2 |
17 | Attachment 3 |
18 | Attachment 4 |
19 | Attachment 5 |
What explanations were given to the employees?
[18] As is made clear in One Key it is not enough that an employer says it explained the terms of the agreement and the effect of those terms to employees. Self-serving statements to that effect will not give rise to the necessary satisfaction required of the Commission. What is needed is evidence of the explanation given to the employees. The actual content of the explanation is required to be provided by the employer.
[19] The only evidence before the Commission about what Electrogroup did to explain the terms of the Agreement and the effect of those terms is contained in the Form F17 – Employer’s declaration in support of an application for approval of an enterprise agreement declared by the Employer’s Company Secretary, Andrew Crebbin.
[20] Mr Crebbin declared that the employees were covered by the Electrotechnology Industry Group Training Company Limited Enterprise Agreement (ACT) 2005 (2005 Agreement) and that the underlying reference instrument was the Electrical, Electronic and Communications Award 2010 [MA000025] (EEC Award).
[21] In answer to question 22, about what steps the Employer took to explain the Agreement, Mr Crebbin declared that,
“On 27 July 2021, the Company emailed all relevant employees with a copy of a FAQ document and explanation of terms of the agreement.”
[22] The explanation of the terms of the Agreement was in the form of a comparison table (CT). The CT is therefore relevant to the question about whether the Employer satisfied its obligation to explain the terms of the Agreement and the effect of those terms. The CT is the primary evidence of the explanation given to employees. The Agreement is also evidence of the explanation given to employees.
[23] In considering the sufficiency of the explanation it is important to remember that the reason why the explanation of effect of terms in an enterprise agreement is important is because it is intended to enable the relevant employees to cast an informed vote. That does not mean that every word or every clause needs to be explained before the employer satisfies the statutory requirement.
[24] Further, terms beneficial to employees are unlikely to need as much of an explanation as do detrimental terms. This is because beneficial terms are less likely to cause employees to vote against an Agreement. Detrimental terms, in particular, could influence how an employee casts their vote. If a term of an Agreement will remove a benefit otherwise provided for by a Modern Award, employees must be told about the effect of that term. It might cause employees to vote against approval of the Agreement. To fail to explain the effect of a detrimental term likely deprives employees of the ability to make an informed vote. It is a matter that goes to the heart of genuine agreement.
[25] In the covering document to the CT, the Employer explained,
“Employees engaged in the Australian Capital Territory who would be covered by the Proposed Agreement are currently covered by the … (ACT Agreement) and to consider the proposed changes from the terms and conditions of the ACT Agreement. Those employees should also consider proposed changes to minimum rates that are currently said by the [EEC Award], as the conditions of the Award a more beneficial overall than the ACT Agreement.
All other employees would be covered by the Proposed Agreement are currently covered by the [EEC Award] and should consider the changes to the conditions of the Award by operation of the Proposed Agreement.”
[26] I make the following findings:
Cl | What changed from the 2005 Agreement or EEC Award? | NECA Submission | Extract from the Employer’s comparison table | Joint Employer/ETU submission | Finding |
3 | New and amended definitions | The table does not refer to clause 3 Definitions of the Agreement and in particular does not refer to the Building Code definition. 5 | N/A | The CT does explain that the Building Code is. That is left to the Agreement itself. Clause 3 of the Agreement (a document that employees were given access to) is headed “Definitions.” By definition, clause 3 contains the definitions (i.e. the explanation) of defined terms in the Agreement, terms, including “Building Code”. In the Agreement, “Building Code” is explained to mean “the Code for the Tendering and Performance of Building Work 2016 and any other legislative instrument that supplements or replaces the Building Code.” That is an entirely sufficient explanation. The fact that the explanation was given in the Agreement means it was unnecessary to include it in the CT. In any case, the only other reference to the Building Code is in paragraph 32(b)(ix) of the Agreement. It provides, “Any outcome resulting from this dispute settlement procedure must be consistent with the requirements of the FW Act, the National Code of Practice for the Construction Industry, and the Building Code.” Unlikely to have any negative impact on genuine agreement of employees (s.188(1)(a)(i)). | |
5 | Provides for more beneficial terms of a Host Employer’s Enterprise Agreement to apply to employees over the Proposed Agreement. Clause 15 of the 2005 Agreement applies all terms of the Host Employers Agreement regardless of the terms being more or less beneficial to employees. | The comparison with the Award table does refer to clause 5(a), the ‘Pull Up’ clause, but does not advise the employees that such a clause has been found to be non-compliant with the Building Code and does not explain the consequences. of such non-compliance. That Employers hosting Electro Group apprentices may not be able to tender for Commonwealth funded building work because clause 5(b) calls for the application of terms and conditions contained in an enterprise agreement that does not apply to or cover the employees was not explained to the employees. Section 7 of the Building Code requires code covered entities and sub contractors to comply with the Code when engaged in Commonwealth funded building work. The “Explanation of Terms” attachment to the F17 says in part “The terms of the Host Employer’s enterprise agreement may apply to some apprentices under the Proposed Agreement, where the Host Employer’s agreement is more beneficial overall.” This is an obvious reference to the ‘Pull Up’’ clause 5(b) of the Agreement. Such a ‘Pull Up’ clause has been adjudged to be inconsistent with the Code. The Australian Building and Construction Commission (ABCC) assessed a clause in a proposed Group Training Company enterprise agreement that said: “Where a host employer is a party to a site agreement or is obligated by a site that has superior wages and conditions then the following provisions of the host employer's agreement will apply to the Company's apprentices in lieu of the provisions in this agreement while working for that host employer: - Hours of Work - Wages - Allowances - Inclement Weather - Overtime - Living Away from Home - Redundancy trust payments” and held: “This clause does not meet the requirements of section 11. The clause is inconsistent with section 11A(1)(b) because it requires or provides for the application of terms and conditions contained in an enterprise agreement that does not cover and apply to the relevant employer and employees. A clause of this kind imposes or purports to impose limits on the right of a code covered entity to manage its business or improve productivity.” 6 | If the Enterprise Agreement of a Host Employer is more beneficial than the conditions overall of the Proposed Agreement, the terms of the Host Employer’s Enterprise Agreement will apply. Award No equivalent. Without the Proposed Agreement in place, the terms of the Award will apply regardless of the conditions that apply in the Host Employer’s Enterprise Agreement with its employees. ACT Agreement Clause 15 applies all terms of the Host Employer’s Enterprise Agreement, regardless of whether the terms of that Agreement are more or less beneficial than the agreement with EGT. The Proposed Agreement ensures employees are not worse off overall under the Host Employer’s Enterprise Agreement. 7 | Clause 5(a) of the Agreement incorporates more beneficial terms of an enterprise agreement covering an employee’s Host Trainer where the enterprise agreement covers employees of the Host Trainer that work on the same site as the first employee. Electro Group did not describe any impacts of this clause on the status of ElectroGroup under the Code for the Tendering and Performance of Building Work 2016 (the Code). ElectroGroup is a building industry participant insofar as it engages employees to perform construction work. Section 6 of the Code relevantly provides: 6 Application of the code of practice (1) A building contractor or building industry participant that could be required to comply with this code of practice by section 34 of the Act becomes subject to this code of practice (a code covered entity) from the first time they submit an expression of interest or tender (howsoever described) for Commonwealth funded building work on or after the date this code of practice commences. The Code has effect only to the extent ElectroGroup submits an expression of interest or tender for Commonwealth funded building work. The effect of the Code is to limit the type of work that ElectroGroup may tender for. That is an effect on the structure of ElectroGroup’s business but not an effect on the wages and working conditions of the employees. 8 | The Employer’s submission is a complete answer to the complaint made by NECA. The term is, in substance, a beneficial term. How it might interact with the Building Code in the future is speculative, because it depends on the type of work being tendered for. The direct impact would be on the employer tendering for work under the Code (if they choose to do so). A possible speculative indirect impact on employees is not something that an employer needs to explain to employees under s.180(5) of the FW Act. The task before the Commission is to assess the Agreement as against the requirements of the FW Act. The Commission does not regulate compliance with the Building Code. The FW Act does not require that enterprise agreements comply with the Building Code. The complaint made by NECA has no bearing upon s.180(5) of the FW Act. |
7.2(b) | New clause: “b) Subject to the laws applicable to apprentices in New South Wales and/or the Australian Capital Territory, the Company commits that all electrical apprentices will undertake the Certificate III in Electrotechnology (Electrician) based on the traditional four (4) year apprenticeship and will not support any reduction in this apprenticeship training or engage any apprentices under a reduced/shorter training package, provided the qualification outcome specified in the training agreement is consistent with that established for apprenticeship in the trade training package determined from time to time by the EE-0Z Industry Skills Council (ElectroComms and EnergyUtilities Industry Skills Council) or its successor and endorsed by the National Skills Standards Council.” The EEC Award also specifies at Clause 12.10 the period of apprenticeship will be 4 years. | Clause 7.2(b) mandates an apprenticeship duration of four years. The employees are not advised that generally, it is possible to complete an apprenticeship in less than four years. Some apprentices also take longer than four years to attain competency to the required standards and so would be left unqualified at the conclusion of their apprenticeship term if a fixed period is mandated. 9 | EGT must ensure that training is provided to apprentices that complies with relevant State and Territory legislation, including: - Endorsed training in Cert III Electrotechnology - A 4 year apprenticeship period - Reimbursement of TAFE fees within 6 months of commencement of each stage of the apprenticeship - Provision of or payment for the expense of prescribed text books - Payment at ordinary rates for 1 re-sit of an exam per unit of study - Supervision by a suitably qualified Tradesperson Award Substantially similar terms, however no payment for resitting exams. ACT Agreement Substantially similar terms, however no payment for resitting exams. 10 | The effect clause 7.2(b) of the Agreement is to ensure that the minimum period for an apprenticeship under the Agreement is four years. This is consistent with the reference Award. The ordinary words of clause 7.2(b) do not limit an apprenticeship to a maximum of four years. All employees are engaged in apprenticeships of a minimum of four years, according to standards set by the ElectroComms and Energy Utilities Industry Skills Council referred to in the clause. The clause therefore effects no change to the status quo for the employees and has no effect on their wages or working conditions. 11 | The plain language used in the CT is an entirely satisfactory explanation of the clause and the effect of the clause. |
7.4 | New Clause: “a) The Company authorises and agrees to annual meeting/s of Employees, of not more than two hours duration during normal working hours without loss of pay. b) The meeting will be related to the monitoring of this Agreement and seeking the views of the Employees on this Agreement’s operation. c) The Company will be provided with 30 days’ notice of the intention to hold these meetings. d) These meetings will not commence before 1pm and the meeting location/s will be agreed to by the parties. e) All employees are required to attend such meetings and sign a register which will be provided to the Company as proof of attendance. Proof of attendance is required for payment to occur.” | The table does not refer to clause 7.4, Discussions about the operation of the Agreement. There is no similar clause in the Award or the ACT Enterprise Agreement. This clause may be non-compliant with the Building Code. 12 | Clause 7.4 provides for paid meetings of employees. It was not specifically addressed in the explanation to members. It has no adverse effect on their wages or working conditions. 13 | The clause gives rise to an entitlement in favour of employees. It is a beneficial term. Unlikely, to have any negative impact on the genuine agreement of employees (s.188(1)(a)(i)). | |
7.6 | New Clause: “Personal information is specific information about personal or factual characteristics relating to a certain natural person or a natural person who can be specified (“PI”). PI includes information such as the employees name, address, telephone number, date of birth, medical information, TFN, Superannuation details, bank details, etc.; a) The Company acknowledges that: (i) it is in possession of a significant amount of personal information about the employees; (ii) there is a growing risk of fraudulent and unconscionable behaviour that relies on access to PI; and (iii) it is important to properly secure PI and only release it where absolutely necessary. b) Accordingly, the Company agrees that it will comply with all required legislation in relation to the protection of employee personal information and will insofar as is practically possible, subject to the contractual obligations and limitations placed upon the Company, endeavour to protect the personal information of the employees provided to clients of the Company during site induction processes. c) Further, the Company where possible, will require the return or destruction of any PI by any third party that has received the PI and there is no legitimate purpose for the third party keeping such PI; d) The Company will provide any information/documents, in the control, custody or possession of the Company, about any suspected improper use of PI to the relevant employee and immediately notify and disclose all information known by the Company to the relevant employee about any improper use of PI.” | The table does not refer to clause 7.6, Personal Private Information. This is a significant clause and one that is not easily understood. A detailed explanation of the clause was warranted. 14 | Clause 7.6 restates the current obligations of ElectroGroup under the Privacy Act 1988 (Cth) and the Privacy Principles established by that Act. It is not a substantial change to the rights and entitlements of employees, except that employee may enforce those same rights and entitlements under the Fair Work Act 2009 (Cth) if the Agreement is approved. Clause 7.6 has no adverse effect on their wages or working conditions. 15 | The clause is unremarkable. It basically says, the employer will comply with its obligations under privacy laws. The clause gives rise to an entitlement in favour of employees (it provides for an enforceable right under the Agreement). It is a beneficial term. Unlikely, to have any negative impact on the genuine agreement of employees (s.188(1)(a)(i)). | |
7.7 | New clause: “The parties acknowledge that: (i) Suicide prevention of employees in the construction industry is an important issue; (ii) Construction workers are more than twice as likely to suicide than other people in Australia; (iii) Construction workers are six times more likely to die by suicide than through a workplace accident; (iv) Apprentices in construction are two and a half times more likely to suicide than other young men their age; (v) Mental health on construction sites is now accepted as an industry safety concern; (vi) Employees can find it difficult to discuss feelings and emotions with colleagues at work, especially in the construction industry. (vii) Accordingly, to try and reduce the chance of suicide by an employee, the Company agrees to provide training to at least one employee per site where 5 or more apprentices are engaged, to recognise potentially suicidal behaviour and to give them the simple skills needed to intervene and to keep that employee safe until they can gain professional help. Where possible third or fourth year apprentices should undertake such training ahead of first and second year apprentices. Such training is to be conducted by “Mates in Construction” or similar program during normal working hours. (viii) Awareness training providers will be agreed through the Consultative Committee.” | There was no explanation given to the employees that clause 7.7, Suicide Prevention has no equivalent in the Award. 16 | Clause 7.7 provides for mental health and suicide awareness training of employees. It was not specifically addressed in the explanation to members, but has no adverse effect on their rights or entitlements. 17 | After setting out the context of suicide in the construction industry, the clause provides that “to try and reduce the chance of suicide by an employee, the Company agrees to provide training…” Nothing more needed to be explained. NECA’s criticism is dumbfounding. One would have thought that an industry association in the same industry would commend the parties for the inclusion of such a term. The clause gives rise to an entitlement in favour of employees. It is a beneficial term. Unlikely, to have any negative impact on the genuine agreement of employees (s.188(1)(a)(i)). | |
8.1 | Provides for a 36 hour ordinary work week in comparison to 38 hours under the 2005 Agreement and the EET Award. | Clause 8.1 mandates a 36 hour week. The table does not explain that this reduction in ordinary hours from the award prescribed 38, will create an added expense for host employers through overtime payments. Electrical contracting companies may be discouraged from hosting Electro Group apprentices as apprentice hours need to align with their supervising tradesperson’s hours and most electricians work a 38 hour week. 18 | Ordinary hours for full-time employees are 36 hours per week. The reduction in ordinary hours from 38 to 36 hours per week would result in a higher proportion of hours attracting overtime rates for employees who are regularly rostered to work more than 36 hours in a week. It otherwise results in a reduced number of guaranteed hours per week. The reduction in ordinary hours of work will result. in a reduction in the rate of accrual of leave and the amount of pay received for a single day of leave or RDO. Award: Ordinary hours are 38 hours per week ACT Agreement: Ordinary hours are 38 hours per week. 19 | NECA makes submissions that the effect of this clause on the added expense to host trainer through additional overtime payments in respect of the employees should have been discussed. However, an effect to the obligations of a host trainer under a contract with ElectroGroup is not an effect to the employee. 20 | Noting the explanation that was given, the plain language used in the CT is an entirely satisfactory explanation of the clause and the effect of the clause. A direct impact on a host trainer, that, may nor may not, have an indirect effect on an employee is too remote of a possible effect and does not need to be reasonably explained under s.180(5) of the FW Act. |
9 | New Clause: “a) The National Employment Standards (NES) apply at all times to an Employee(s) covered by this Agreement. b) Where the NES provides, or is varied to provide, a benefit or condition or entitlement more favourable in a particular respect than that contained in this Agreement, the benefit or condition or entitlement contained in this Agreement shall be overridden to the extent of any less favourable inconsistency with the NES.” | There is no reference to clause 9, National Employment Standards in the table and, it follows, no explanation of what the National Employment Standards are. 21 | Clause 9 deals with National Employment Standards applicable to all employees relevant under their current reference instrument. The wages and conditions of employees are not adversely impacted by terms of clause 9. 22 | The clause deals with the National Employment Standards that commenced operation on 1 January 2010. The NES is renowned. All new employees are given an Information Statement. The Fair Work Information Statement explains the NES. In their explanation of the effect of an enterprise agreement employers are not expected to explain: ● “there is a Fair Work Act”, The FW Act speaks of “reasonable steps”, not perfect steps. I have always taken the view that some industrial reality and practicality is involved in assessing what is reasonable. It is not the role of the Commission to make enterprise bargaining, and the pre-approval steps, a disincentive to bargaining or a nightmare for employers. I am surprised that an employer association is advocating for such a prescriptive approach to the operation of s.180(5). I wonder whether NECA would complain if, in future, their agreements and those of their members, are assessed against the same unreasonably high standard that they presently advocate for. In any case, the clause gives rise to an entitlement in favour of employees. It is a beneficial term. Unlikely, to have any negative impact on the genuine agreement of employees (s.188(1)(a)(i)). | |
11 | Increase to Rates of Pay in Schedule A compared to those in Schedule A of the 2005 Agreement and schedule B.4 of the EEC Award. | the table refers to Schedule A, Rates of Pay and says that the rates of pay in the Agreement are more beneficial than the Award or the ACT Agreement. It is not explained to the employees that these rates may discourage employers from hosting Electro Group apprentices. 23 | NECA asserts that the wage rates in clause 11 would discourage Host Trainers from hosting apprentices from ElectroGroup. That is not an effect that follows from the terms of clause 11 or from the wage rates table and is therefore not captured by s.180(5). The explanation provided under s.180(5) is made based on an assessment of the effects of the clause as at the time the agreement is made. It is not possible for the ElectroGroup to anticipate market reactions to its wage rates with any certainty and it is therefore not a reasonable step to take in explaining the effects of the Agreement. 24 | Noting the plain language used in the Schedule it is an entirely satisfactory explanation of the clause and the effect of the clause. Employees understand when they are going to get paid more. Likely, the Schedule is the only part of the Agreement that the employees looked at. It is the most beneficial part of the Agreement. Unlikely, to have any negative impact on the genuine agreement of employees (s.188(1)(a)(i)). An entirely speculative direct impact on an employer (i.e. that they are less competitive and, consequently, may win less work), that, may or may not, have an indirect effect on an employee is too remote of a possible effect. It does not need to be reasonably explained under s.180(5) of the FW Act. Section 180(5) of the FW Act, does not require an employer to explain the law of supply and demand from Sir James Steuart's, 1796, “Inquiry into the Principles of Political Economy”. | |
13 | Provides for the taking of Rostered Days Off on a fortnightly basis rather than monthly as provided for by the 2005 Agreement and the EET Award. | There is no reference to clause 13, Rostered Days Off and no explanation that allowing an RDO each fortnight is inconsistent with the Award that allows an RDO each four weeks. Similarly, although the table makes some explanation of clause 13.1, which mandates that RDOs are taken in accordance with the calendar at Schedule G, it is not explained that this may be inconsistent with the dates on which RDOs are taken by the host employer’s other employees. Host Employers may have difficulty in allowing an RDO for apprentices on scheduled dates. For example, host employers may provide RDOs to employees on other dates with the result that the host employer will be unable to comply with the supervision requirements of Schedule E of the Agreement on the host employer’s RDOs. 25 | RDOs shall be taken in accordance with the calendar at Schedule G. 26 | Clause 13 provides greater flexibility than the Award for the taking of Rostered Days Off (RDOs), which may be taken fortnightly rather than monthly. The effect of clause 13 is not detrimental to the working conditions of the employees. A Host Employer has contractual obligations and obligations under the Home Building Act to ensure that apprentices are supervised when performing electrical work. The work of a Host Employer in planning the work of other employees around the RDO of an employee of ElectroGroup is a matter for the Host Employer. While the Host Employer has obligations to ensure the supervision of apprentices, the working conditions of the employees are not adversely affected by the additional RDOs. 27 | Noting the explanation that was given, the plain language used in the CT is an entirely satisfactory explanation of the clause and the effect of the clause. It is a beneficial part of the Agreement. Unlikely, to have any negative impact on the genuine agreement of employees (s.188(1)(a)(i)). Speculative direct impacts on the employer that, may or may not, have an indirect impact on employees do not need to be reasonably explained. |
15 | Providing an increase to overtime rates to 200% on Monday to Sunday and 250% on Public Holidays The EEC Award and 2005 Agreement provide for: Monday-Friday 150% for the first two hours, after ordinary hours 200% thereafter Saturday 150% for the first two hours 200% thereafter Sunday 200% Public Holidays 250% | There is no reference to clause 15, Overtime and no explanation that the increased overtime rate (all at double time for Monday to Sunday work) will be an added cost for host employers. 28 | Overtime for dayworkers is paid: 1. At 200% after ordinary hours Monday- Friday, 2. 200% for all hours Saturday and Sunday 3. 250% for all hours on Public Holidays Award and ACT Agreement Overtime for dayworkers is paid: 1. Monday-Friday 150% for the first two hours, after ordinary hours 200% thereafter 2. Saturday 150% for the first two hours 200% thereafter 3. Sunday 200% for all hours 4. Public Holidays 250% for all hours. 29 | additional costs to a Host Employer as a result of additional overtime rates in clause 15 are not a part of the wages or working conditions of the employees. They are an impact to a third party under a separate contract between ElectroGroup and the Host Trainer. That market impact for ElectroGroup’s business is at best an indirect effect of the clause and not an effect ‘to’ or ‘on’ the employee or their wages or work conditions. 30 | Noting the explanation that was given, the plain language used in the CT is an entirely satisfactory explanation of the clause and the effect of the clause. It is a beneficial part of the Agreement. |
27 | Equivalent provided for by clause 25 of the 2005 Agreement. In addition, the proposed agreement in 27(b) provides for the Company and a majority of their affected Employee/s to agree to substitute the Picnic Day for another day. | There is no reference to clause 27 Picnic Day which has no equivalent in the Award. The advice of the ABCC is “The implementation of the clause may result in conduct which is not compliant with the Building Code if the clause is applied in such a way that the employer requires employees to produce evidence of attendance at the picnic where only members of a building association are permitted to purchase such tickets. Such a practice would discriminate against employees who are not members of a building association and indirectly require a person to disclose whether or not they are a member of a building association.” 31 | Clause 27 provides for an additional Public Holiday for the employees. Its effect is entirely beneficial to the employees. NECA raises in its submissions that the clause could be used in a manner inconsistent with the Building Code, if evidence of attendance of the picnic day is reserved for members of an industrial association. The clause does not require that only members of an industrial association may attend the picnic day or that evidence must be for a picnic day hosted by an industrial association. The Clause does not have the effect alleged. 32 | It is a beneficial part of the Agreement. Unlikely, to have any negative impact on the genuine agreement of employees (s.188(1)(a)(i)). In assessing an enterprise agreement for approval under the FW Act, I do not (like I did in a previous role) have any statutory responsibility for ensuring compliance with the Building Code. It is not a relevant consideration. | |
28 | Amendments to the productivity allowances listed in schedule A of the 2005 Agreement. | The table at clause 28 should state what the non-expense related Award allowances are that are replaced by the productivity allowance. 33 | A productivity allowance applies in place of non-expense related allowances of the Award that are not provided for in the Agreement. 34 | Noting the explanation that was given, the plain language used in the CT is an entirely satisfactory explanation of the clause and the effect of the clause. | |
34 | New clause: “a) Redundancy shall only occur by mutual agreement between the parties to an Employees Training Agreement. b) If redundancy occurs where the Company makes a definite decision that it no longer wishes the job the Employee has been doing to be done by anyone and this is not due to the ordinary and customary turnover of labour and this may lead to termination of employment. Redundancy does not occur when the Employee is dismissed for unsatisfactory performance. …” | Clause 34, Redundancy Pay is internally inconsistent in that it only allows redundancy by mutual agreement while at the same time recognising that redundancy occurs where the job the employee has been doing is not required to be done by anyone.” 35 | Redundancy must be by mutual agreement if a Training Agreement applies to an employee. Award and ACT Agreement Redundancy arises where an employee’s role is no longer required, notwithstanding any lack of agreement. 36 | Clause 34 is not internally inconsistent. Clause 34(b) identifies the circumstances which enliven ElectroGroup’s discretion to decide that a role is no longer required to be performed by anyone and is redundant. Clause 34(a) suspends any termination of an employee under clause 34(b) unless and until ElectroGroup and the employees have agreed an Employee Training Agreement. 37 | Noting the explanation that was given, the plain language used in the CT is an entirely satisfactory explanation of the clause and the effect of the clause. |
52(c) | New clause: “c) The Company shall not relocate an elected Union delegate from a site or project without prior consultation with the affected delegate and notifying the parties to this agreement.” | Clause 52 (c) prohibiting the transfer of a union delegate without consulting the parties to the Agreement (which includes the ETU) may be in breach of the Building Code. The ABCC has found that a similar clause, would be non compliant because “To the extent that the clause requires agreement of the union and union delegate prior to the delegate being transferred, the clause limits or has the effect of limiting the right of an employer to make decisions about redundancy, demobilisation or redeployment of employees based on operational requirements.” 38 | EGT must not relocate a Union Delegate without consultation, and must provide reasonable time off with pay for delegates’ duties. Award No equivalent ACT Agreement Substantially Similar. 39 | Clause 52(c) has the effect that ElectroGroup must consult with the union before transferring a delegate. Consultation is defined within the Agreement and does not require agreement. The imposition of this additional process of consultation on the transfer of a delegate does not limit the right of the employer ultimately to make decisions about redundancy, demobilisation or redeployment of employees. Moreover, redundancy, demobilisation or redeployment of employees are significant changes subject to Consultation for all employees, regardless of their membership of an industrial organisation. There is therefore no breach of the Code in the effect of clause 52(c). 40 | In assessing an enterprise agreement for approval under the FW Act, I do not (like I did in a previous role) have any statutory responsibility for ensuring compliance with the Building Code. It is not a relevant consideration. |
Additional submission by NECA
[27] NECA submitted that:
“Electro Group did not take all reasonable steps to provide documents or notify each relevant employee of the place and time of the vote, and the voting method to be used
24. NECA is concerned that Electro Group did not comply with section 180(3) of the Act.
25. On 30 July 2021 Electro Group conducted a ballot of employees intended to be covered by the Agreement.
26. From the 336 employees on the roll of eligible voters:-
a. 95 employees (28.27%) registered a vote
b. 88 voted YES i.e. to approve the proposed Agreement (26.19% of roll and 92.63% of voters).
c. 7 voted NO i.e. to reject the proposed Agreement (2.08% of roll and 7.37% of voters).
27. Information requested at question 26 of the F17 submitted by Electro Group has been redacted. The Commission could not be satisfied on the evidence before it that all relevant employees were provided with the information required by section 180(3) of the Act.
28. Similarly, the Commission could not be satisfied that Electro Group took all reasonable steps to give the employees or give the employees access to a copy of the proposed agreement and other incorporated material on the basis of the information provided at question 21 of the F17.”
[28] The Employer was provided with the opportunity to fully reply to NECA’s submissions, however, they made no submissions to this issue.
[29] Low voter turnouts in relation to enterprise agreements are not uncommon. The FW Act requires only majority approval by those who bother to turn up to vote. Nothing more. There is no evidence in this matter that employees who were eligible to vote on the Agreement did not know about the place and time of the vote, and the voting method. NECA brought no evidence from an employee who was disenfranchised. No employee made such a complaint.
Additional concern raised – employees of a non-English speaking background and young employees
[30] None of NECA’s submissions have any merit.
[31] However, there was an issue I identified and was concerned about. During the hearing I noted that the Form F17 indicated that there are 29 employees with a non-English speaking background constituting about 9 per cent of the Employers workforce. I also noted that 126 employees, 37 per cent of the workforce are under the age of 21. 41
[32] Section 180(5)(b) of the FW Act requires an employer to ensure that “the explanation provided [is] in an appropriate manner taking into account the particular circumstances and needs of relevant employees.”
[33] Young workers and workers from non-English speaking backgrounds may have particular needs.
[34] My concern was that the only explanation of the Agreement given to employees was the CT and it was only provided in English.
[35] On 10 September 2021 the Employer filed additional evidence about the literacy levels of the employees in the form of a Statutory Declaration made by Mr Carcary.
[36] Having regard to the evidence I am satisfied as to the literacy of all the employees and their ability to understand the CT. Consequently, I am satisfied that the explanation of the terms and the effect of the Agreement meet the obligation imposed on the Employer to take all reasonable steps.
Conclusion
[37] For the reasons set out above I am satisfied that the Employer took all reasonable steps to explain the terms of the Agreement or the effect of those terms to relevant employees as required by s.180(5) of the FW Act
[38] The Employer has provided written 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.
[39] 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, including, without limitation, that the Agreement (incorporating the undertakings) passes the BOOT.
[40] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants the Agreement to cover it. In accordance with s.201(2) I note that the Agreement covers the organisation.
[41] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 19 October 2021. The nominal expiry date of the Agreement is 31 October 2022.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
< AE513478 PR734812>
Annexure A
1 [2017] FCA 1266.
2 [2018] FCAFC 77.
3 BGC Contracting Pty Ltd [2018] FWC 1466, [76].
4 BGC Contracting Pty Ltd [2018] FWC 1466, [77].
5 National Electrical and Communications Association Submission on permission to be heard and objection to approval of the ETU and Electro Group Training Apprentice Enterprise Agreement 2021-2022, at Court Book p. 119.
6 National Electrical and Communications Association Submission on permission to be heard and objection to approval of the ETU and Electro Group Training Apprentice Enterprise Agreement 2021-2022, at Court Book p. 119-120.
7 Form F17, at Court Book p. 30.
8 Electrotechnology Industry Group Training Company Limited & Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia Outline Submissions, at Court Book p. 130.
9 National Electrical and Communications Association Submission on permission to be heard and objection to approval of the ETU and Electro Group Training Apprentice Enterprise Agreement 2021-2022, at Court Book p. 120.
10 Form F17, at Court Book p. 30.
11 Electrotechnology Industry Group Training Company Limited & Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia Outline Submissions, at Court Book p. 131.
12 National Electrical and Communications Association Submission on permission to be heard and objection to approval of the ETU and Electro Group Training Apprentice Enterprise Agreement 2021-2022, at Court Book p. 120.
13 Electrotechnology Industry Group Training Company Limited & Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia Outline Submissions, at Court Book p. 131.
14 National Electrical and Communications Association Submission on permission to be heard and objection to approval of the ETU and Electro Group Training Apprentice Enterprise Agreement 2021-2022, at Court Book p. 120.
15 Electrotechnology Industry Group Training Company Limited & Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia Outline Submissions, at Court Book p. 131.
16 National Electrical and Communications Association Submission on permission to be heard and objection to approval of the ETU and Electro Group Training Apprentice Enterprise Agreement 2021-2022, at Court Book p. 121.
17 Electrotechnology Industry Group Training Company Limited & Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia Outline Submissions, at Court Book p. 131.
18 National Electrical and Communications Association Submission on permission to be heard and objection to approval of the ETU and Electro Group Training Apprentice Enterprise Agreement 2021-2022, at Court Book p. 121.
19 Form F17, at Court Book p. 31.
20 Electrotechnology Industry Group Training Company Limited & Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia Outline Submissions, at Court Book p. 131
21 National Electrical and Communications Association Submission on permission to be heard and objection to approval of the ETU and Electro Group Training Apprentice Enterprise Agreement 2021-2022, at Court Book p. 121.
22 Electrotechnology Industry Group Training Company Limited & Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia Outline Submissions, at Court Book p. 132.
23 National Electrical and Communications Association Submission on permission to be heard and objection to approval of the ETU and Electro Group Training Apprentice Enterprise Agreement 2021-2022, at Court Book p. 121.
24 Electrotechnology Industry Group Training Company Limited & Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia Outline Submissions, at Court Book p. 132.
25 National Electrical and Communications Association Submission on permission to be heard and objection to approval of the ETU and Electro Group Training Apprentice Enterprise Agreement 2021-2022, at Court Book p. 121.
26 Form F17, at Court Book p. 31.
27 Electrotechnology Industry Group Training Company Limited & Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia Outline Submissions, at Court Book p. 132.
28 National Electrical and Communications Association Submission on permission to be heard and objection to approval of the ETU and Electro Group Training Apprentice Enterprise Agreement 2021-2022, at Court Book p. 121.
29 Form F17, at Court Book p. 32.
30 Electrotechnology Industry Group Training Company Limited & Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia Outline Submissions, at Court Book p. 132.
31 National Electrical and Communications Association Submission on permission to be heard and objection to approval of the ETU and Electro Group Training Apprentice Enterprise Agreement 2021-2022, at Court Book p. 121.
32 Electrotechnology Industry Group Training Company Limited & Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia Outline Submissions, at Court Book p. 132.
33 National Electrical and Communications Association Submission on permission to be heard and objection to approval of the ETU and Electro Group Training Apprentice Enterprise Agreement 2021-2022, at Court Book p. 121.
34 Form F17, at Court Book p. 33.
35 National Electrical and Communications Association Submission on permission to be heard and objection to approval of the ETU and Electro Group Training Apprentice Enterprise Agreement 2021-2022, at Court Book p. 121.
36 Form F17, at Court Book p. 34.
37 Electrotechnology Industry Group Training Company Limited & Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia Outline Submissions, at Court Book p. 133.
38 National Electrical and Communications Association Submission on permission to be heard and objection to approval of the ETU and Electro Group Training Apprentice Enterprise Agreement 2021-2022, at Court Book p. 121.
39 Form F17, at Court Book p. 35.
40 Electrotechnology Industry Group Training Company Limited & Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia Outline Submissions, at Court Book p. 133.
41 Transcript PN16-20.
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