DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Falcon Mining Pty Ltd
(AG2021/7588)

FALCON MINING ENTERPRISE AGREEMENT 2021

Mining industry
DEPUTY PRESIDENT COLMAN	MELBOURNE, 24 NOVEMBER 2021

Application for approval of the Falcon Mining Enterprise Agreement 2021 – better off overall test – black coal industry – contingent award benefits – maximum term contracts – relevance for BOOT of benefits not prescribed by the agreement

[1] This decision concerns an application made by Falcon Mining Pty Ltd (Falcon) under s 185 of the Fair Work Act 2009 (Act) for approval of an enterprise agreement known as the Falcon Mining Enterprise Agreement 2021 (2021 Agreement). The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU), which was a bargaining representative for the agreement, opposed the application on the basis that the agreement does not pass the ‘better off overall’ test (BOOT).

[2] Section 186(2)(d) of the Act provides that, before the Commission approves an enterprise agreement, it must be satisfied that it passes the BOOT. Section 193 states that an agreement passes the BOOT if:

“… the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.”

[3] The CFMMEU sought to be heard in respect of its objection to the approval of the 2021 Agreement. Pursuant to directions, the union filed submissions setting out the grounds of its objection. Falcon filed a submission in reply. The application for approval of the 2021 Agreement was listed for hearing on 17 November 2021.

[4] The CFMMEU advanced five grounds on which it contended that the Commission could not be satisfied that the 2021 Agreement passed the BOOT in respect of particular categories of employees employed under the 2021 Agreement, namely: those employed in the entry level classification of inexperienced mineworker; employees engaged on maximum term contracts, who would be excluded from redundancy benefits; production workers engaged on a casual basis, for which no provision is made in the Award; employees undertaking shift work on weekends, whose penalties under the Award would be compounding; and employees who receive an aggregated rate of pay under clause 13.6 of the 2021 Agreement.

Rate of pay for ‘inexperienced mineworkers’

[5] The CFMMEU submitted that the rate of pay prescribed in clause 13 of the 2021 Agreement for the entry level classification of ‘inexperienced mineworker’ ($24.38 per hour) was lower than the rate of pay for the equivalent classification in the Black Coal Mining Industry Award 2010 (Award), which is ‘mineworker induction level 1’ ($25.03). The union’s submission is correct. However, in response to concerns raised by the Commission prior to the CFMMEU’s request to be heard, Falcon had offered an undertaking under s 190 of the Act, whereby it would increase the rate of pay for the inexperienced mineworker to $25.50. During the hearing, Falcon stated that it…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Falcon Mining Pty Ltd

Details

AGLC: Falcon Mining Pty Ltd [2021] FWC 6424
Case: [2021] FWC 6424
Decision Date: 24 NOVEMBER 2021

CaseChat Overview and Summary

The matter before the court involved an application by Falcon Mining Pty Ltd for approval of the Falcon Mining Enterprise Agreement 2021. The dispute centred around the better off overall test (BOOT), which the Fair Work Commission must apply when considering whether an enterprise agreement is likely to ensure employees are better off overall than under the relevant award. The case was heard in the Federal Court of Australia. The legal issues that the court needed to resolve were primarily whether the benefits provided in the agreement, particularly those that were contingent and not explicitly prescribed, could be considered in the BOOT analysis. This included the consideration of benefits derived from maximum term contracts within the black coal industry.

The court examined whether the contingent award benefits and maximum term contracts should be factored into the BOOT analysis. It was determined that these benefits, even if not explicitly prescribed by the agreement, could indeed be relevant to the overall assessment. The court held that the BOOT is a holistic test and must take into account all aspects of the agreement, including those that may not be explicitly stated but are nonetheless provided to the employees. This included the consideration of contingent benefits and the impact of maximum term contracts on employee conditions. The court found that these benefits, while not explicitly prescribed in the agreement, could still be relevant in determining whether employees were better off overall.

As a result of the court's reasoning, the application for approval of the Falcon Mining Enterprise Agreement 2021 was successful. The court found that the agreement did meet the better off overall test, taking into account all relevant benefits, including those not explicitly prescribed. The court's decision emphasised the importance of considering all aspects of an enterprise agreement when applying the BOOT. The final orders of the court approved the agreement, allowing it to proceed as intended by the parties.

Orders