Fredon Industries Pty Ltd T/A Fredon

[2020] FWCA 5198

[2020] FWCA 5198

FAIR WORK COMMISSION

DECISION

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

Fredon Industries Pty Ltd T/A Fredon
(AG2020/1731)

FREDON INDUSTRIES PTY LTD NSW ENTERPRISE AGREEMENT 2020

Electrical contracting industry
DEPUTY PRESIDENT DEAN	SYDNEY, 29 SEPTEMBER 2020

Application for approval of the Fredon Industries Pty Ltd NSW Enterprise Agreement 2020 – agreement approved.

[1] An application has been made for approval of an enterprise agreement known as the Fredon Industries Pty Ltd NSW Enterprise Agreement 2020 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009. It has been made by Fredon Industries Pty Ltd. The Agreement is a single enterprise agreement.

[2] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) objected to the approval of the Agreement.

[3] At a conference held on 2 July 2020, the CEPU confirmed its only objection to the approval of the Agreement was that it was not properly made because one of the three employees who voted in favour of the Agreement was in fact not covered by the Agreement at the time it was made. On this basis, directions were issued as to the filing of submissions and other evidentiary material, with Fredon being required to file its material first.

[4] The CEPU’s objection subsequently extended to a second ground, being:

1. the persons who voted to approve the Agreement are not “employees employed at the time who will be covered by the agreement” and therefore the Agreement was not validly made in accordance with s.182(1); and

2. the Agreement was not genuinely agreed to by the employees covered by the Agreement (s.188(1)(c)).

[5] The matter was heard by video on 27 July 2020. At the hearing Ms A Deboos of Kingston Reid appeared for Fredon and Mr R Reitano of Counsel with Mr A Jacka (Industrial Officer) appeared for the CEPU. Both were granted permission to appear pursuant to s.596 of the Act.

ORDER FOR PRODUCTION

[6] The CEPU sought an order requiring the production of various documents by Fredon. The CEPU sought to amend the application at the commencement of the hearing to expand the request for documents. The documents sought by the CEPU were as follows:

1. Any documents or copies of documents showing the names of any employees (“the employees”) who was issued with a Notice of Employee Representational Rights (NERR) on or about 2 March 2020.

2. Any contract of employment, variation of any contract of employment, letter of offer of employment and position description, howsoever described for any employee who was issued the NERR.

3. For the period 1 October 2019 to 10 July 2020 any document, including any letters, emails, memoranda and file notes, of any communication between FredonIndustries Pty Ltd and the employees concerning the employment or proposed employment of the employees by Fredon Industries Pty Ltd.

4. Any documents or copies of documents showing the payslips of Mr Siegfried Eichholz and Mr Michael Taylor in the period 1 October 2019 to 10 July 2020.

5. Any documents or copies of documents in relation to the decision, including the reasons for the roles at the Grafton Prison Project redundant.

6. Any documents in the period 3 March 2020 to 18 June 2020 concerning the employment of employees or proposed employment of employees by FredonIndustries Pty Ltd to electrical maintenance roles including the role of Electrical Worker Grade 5 Electricians and Electrical Worker/Grade 5 Leading Hand in or around the Grafton Prison Project.

7. Any document in the period 1 October 2019 to 30 May 2020 concerning the employment or proposed employment of Mr Michael Taylor by Fredon Industries Pty Ltd including but not limited to the “communications” referred to in the 27 April 2020 letter from Fredon Industries Pty Ltd to Mr Taylor.

8. Any documents in the period 1 October 2019 to 30 May 2020 concerning the employment or proposed employment of Mr Siegfried Eichholz by Fredon Industries Pty Ltd including but not limited to the “communications” referred to in the 27 April 2020 letter from Fredon Industries Pty Ltd to Mr Eicholz

9. Any document in the period 1 October 2019 to 4 March 2020 concerning the employment or proposed employment of Mr Matthew Betts by Fredon Industries Pty Ltd.

10. All document in the period 1 October 2019 to 30 May 2020 concerning the employment or proposed employment of Mr Sam Sinclair by Fredon Industries Pty Ltd.

11. Any document or copies of documents in relation to the decision and the selection process to redeploy employees whose roles were made redundant at the Grafton Prison Project redundant including:

a. Mr Michael Taylor.

b. Mr Siegfried Eichholz.

c. Mr Matthew Betts.

d. Ms Samuel Sinclair.

12. Any document or copies of documents in relation to the decision, including the reasons, to retrench and terminate the employment of Mr Matthew Betts and Mr Sam Sinclair.

13. Any document or copies of documents in the period 1 October 2019 to 3 March 2020 in relation to the Union’s request to Fredon Industries Pty Ltd in October 2019 to commence bargaining for a new enterprise agreement.

14. Any document or copies of documents in relation to any of the employees nominating the Union as a bargaining representative in bargaining for a new enterprise agreement.

15. Any document or copies of documents showing the employment contract and job classification of Mr Wayde Brennan.

16. Any document or copies of documents showing when Mr Wayde Brennan performed work and the work performed at the Grafton Prison Project in the period April 2020 to 24 July 2020.

17. Any document or copies of documents showing the employment contracts and job classifications of the “Brisbane employees” referred to in Mr Cameron Stanfield’s statement dated 23 July 2020.

18. Any document or copies of documents showing when the “Brisbane employees” referred to in Mr Cameron Stanfield’s statement dated 23 July 2020, performed work and the work performed at the Grafton Prison Project in the period April 2020 to 24 July 2020.

[7] The CEPU argued that the documents were relevant to the matters the Commission was required to determine, and submitted as follows:

“The power under section 590(1)(c) of the Fair Work Act 2009 (Cth) (FW Act) is a discretionary power, which is guided by the principles adopted by courts in civil proceedings when compelling a person to produce documents.

Those principles are that the records or documents sought must be capable of being relevant to a fact in issue, or put another way, the party must have a legitimate forensic purpose in obtaining the records or documents in question. The test is whether the documents sought have an apparent relevance to the issues in dispute between the parties to the proceedings.

Fredon asks the Commission to determine the relevance of the documents sought. However, the consideration of relevance in relation to an application for an order for the production of documents does not require the final determination of relevance. Whether a document is relevant is to be determined at hearing.

The Union submits that on the evidence before it, the Commission cannot be satisfied that only employees employed at the time who will be covered by the agreement voted in the ballot of the agreement and that the Agreement was made in accordance with s182 of the Act. If at least one of either Mr Eichholz’s or Mr Taylor’s votes are removed from the ballot the Agreement was not made by a majority of employees as required by the Act.   There is a second question to be considered as to whether there are other reasonable grounds for believing the agreement was not genuinely agreed by the employees. In the circumstances above, the Commission would not be satisfied as to the authority and authenticity of the present agreement and was consistent with an employer genuinely seeking to make an agreement with its workforce.

It is clear that the documents sought have apparent relevance. The documents sought are capable of being relevant to a fact in issue, namely:

a. they will show the terms of engagement and period of engagement of the relevant employees, relevant to the question whether they were “employed at the time” and “would be covered” by the agreement.

b. they will show if in fact the agreement was made at the time of the vote.

c. The documents in categories 1 to 8 will show when and during what period the employees were engaged, whether they were employed at the time and would be covered by the agreement.

d. The documents in categories 9 to 14 will show whether there are other reasonable grounds for believing the agreement was not genuinely agreed by the employees.”

[8] Fredon objected to the production of the documents requested. Fredon noted the documents in paragraphs 1-8 of the Notice to Produce were designed to show when and during what period the employees in question were engaged, and whether they were employed at the relevant time. Fredon submitted that it had already put on evidence dealing with these matters, including annexing the contracts of employment to the witness statements of one of its witnesses. In terms of the documents in paragraphs 9-14, this went to whether the Agreement was genuinely agreed by the relevant employees. Fredon also argued that the documents sought in part related to individuals who were not employed at the relevant time, that being when it asked employees to vote to approve the Agreement.

[9] Both the CEPU and Fredon expanded on these submissions in the hearing and addressed the new group of documents sought by the amended application provided to the Commission.

[10] Section 590(2) provides that the Commission may inform itself in relation to any matter before it in such manner as it considers appropriate. I did not consider on this occasion the production of the documents sought (and not already put into evidence) would assist me in determining the present matter. In particular:

a. a number of the documents sought had already been submitted as part of Fredon’s evidence, such as the employment contracts for those employees who did vote;

b. some documents sought related to individuals who were not employed at the relevant time (and therefore not relevant), noting in this regard there was no dispute that Mr Betts and Mr Sinclair were not employed at the time of the vote;

c. documents relating to the reasons for the decision to make certain positions redundant near that end of a project (when evidence has already been submitted in this regard); and

d. I was not satisfied that payslips of the two employees who voted in favour of the Agreement were relevant given their employment contracts were in evidence.

[11] Overall, I was not satisfied that the documents requested, which had not already formed part of Fredon’s evidence, were necessary and/or relevant to the matters I needed to determine, or otherwise had minimal probative value given what had already been filed on behalf of both parties.

[12] For the above reasons, I refused to issue the order.

RELEVANT LEGISLATIVE PROVISIONS

[13] Section 181 of the Act provides that an employer that will be covered by a proposed enterprise agreement may request the employees employed at the time who will be covered by the agreement approve the agreement by voting for it.

[14] Section 182(1) relevantly provides that if employees of the employer that will be covered by a proposed single-enterprise agreement that is not a greenfields agreement have been asked to approve the agreement under subsection 181(1), the agreement is made when a majority of those employees who cast a valid vote approve the agreement.

[15] Section 188(1) of the Act sets out the requirements of which the Commission must be satisfied when an enterprise agreement has been genuinely agreed. It provides:

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

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);

(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

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

BACKGROUND

[16] Fredon commenced bargaining for the Agreement on or about 2 March 2020. The Agreement, if approved, will replace the Fredon Industries Ply Ltd NSW Enterprise Agreement 2016 (the 2016 Agreement). The 2016 Agreement has a nominal expiry date of 22 March 2020.

[17] The scope of the Agreement is set out in clause 5:

“5. SCOPE AND APPLICATION OF AGREEMENT

This Agreement applies to the Company in respect of all its Employees falling into the classifications specified in Schedule 'A' when they perform work anywhere in the state of NSW.

This agreement does not cover the following Employees:

Employees who perform work that is within the scope of the following industrial instruments:

• Fredon Industries Pty Limited & ETU Sydney Construction Enterprise Agreement 2019

• Fredon NORTHCONNEX & CEPU PROJECT AGREEMENT; or

• FREDON INDUSTRIES Pty Ltd lllawarra Enterprise Agreement 2016”

[18] Employees falling into the classifications specified in Schedule A include Electrical Worker Grade 1 to 5 and Leading Hand.

[19] There is no dispute that the NERR was issued on 2 March 2020 to five employees, including Mr Matthew Betts, Mr Sam Sinclair and Mr Dylan Squillari.

[20] Apart from Mr Squillari, the four employees worked at the same site on a project known as the Grafton Prison Project (the Project).

[21] On or about 4 March 2020, CEPU was nominated as a bargaining representative and subsequently took part in the bargaining meetings.

[22] In April 2020, the four employees (including Mr Betts and Mr Sinclair) were made redundant when the Project was completed. Mr Elchholz and Mr Taylor, who previously held management roles, were redeployed to a Grade 5 Electrician classification on or about 27 April 2020.

[23] The ballot for the Agreement was conducted on 5 June 2020. Three employees (Mr Squillari, Mr Taylor and Mr Elchholz) who remained employed under the 2016 Agreement were asked to vote and all cast valid votes. Two voted in favour of the Agreement and one voted against.

[24] On the basis that the Agreement was approved by a majority of employees, Fredon lodged an application for its approval on 18 June 2020.

[25] As noted earlier in this decision, the CEPU contends that Mr Taylor and Mr Elchholz who voted in favour of the Agreement are not employees “employed at the time” and “who will be covered by the Agreement” within the meaning of s.181(1) of the Act. The CEPU also contends that the Fredon has manipulated the bargaining process so as to affect the cohort, and as a result the Commission cannot be satisfied that the Agreement has been ‘genuinely agreed’ pursuant to s.188(1)(c).

EVIDENCE AND SUBMISSIONS

[26] Oral and/or written evidence in support of the parties’ respective arguments was provided by the following persons:

•  Leigh Sargent (Human Resources Business Partner)

•  Cameron Stanfield (General Manager, Electrical, QLD)

•  Matthew Betts (former employee of Fredon)

•  Samuel Sinclair (former employee of Fredon)

•  Beau Malone (Union Organiser, CEPU)

[27] Also relevant is a declaration made by Mr Chris Stanin (General Manager NSW Construction) in the form F17 – Employer’s Declaration in Support of Application for Approval of Enterprise Agreement. Mr Stanin in the declaration set out the various steps taken in compliance with s.180(5) which are not disputed by the CEPU.

[28] Both parties made detailed oral and written submissions.

[29] All of the evidence and submission have been considered even if not directly referred to in this decision.

The Case for Fredon

Ms Sargent

[30] Ms Sargent gave oral evidence and submitted two witness statements in support of Fredon’s application. She has been employed in her role as Human Resources Business Partner since August 2019 and has responsibility for providing support and guidance to the senior management team of the electrical businesses within the Fredon Group.

[31] Ms Sargent said that amongst the five employees who were issued a NERR on 2 March 2020, four of them worked on the Project. During the period between the issuance of the NERR and the vote, the Project was completed which led to the four roles being made redundant. This resulted in the termination of employment of two employees (Mr Betts and Mr Sinclair) and the redeployment of Mr Taylor and Mr Elchholz.

[32] Mr Taylor, Mr Elchholz and Mr Dylan Squillari were the three employees requested to vote in the ballot on 5 June 2020. Ms Sargent in her statement set out their employment history and attached to her statement copies of their respective employment contracts.

[33] According to Ms Sargent, Mr Taylor:

•  commenced employment with Fredon on 29 May 2018 in the position of Grade 5 Leading Hand under the 2016 Agreement, working on the Project;

•  was promoted to the role of Foreperson based at the Project from 23 October 2018 and was no longer covered by the 2016 Agreement;

•  in his role as Foreperson, was considered part of the management team and was responsible for the delegation of work on the project and to ensure the project is completed safely and in accordance with all requirements;

•  entered into consultation with Fredon following the completion of the Project which resulted in his position of Foreperson being abolished;

•  was offered and accepted redeployment to Grade 5 Leading Hand under the 2016 Agreement on 27 April 2020.

[34] Ms Sargent’s evidence is that although Mr Taylor was redeployed as Grade 5 Leading Hand, the duties he was required to perform were that of a Grade 5 Licensed Electrician who was to remain on site at the Project to undertake defect work and final electrical tasks. Ms Sargent explained that Mr Taylor was remunerated above the correct classification so as to recognise his seniority and experience and having considered the fact that he was previously in the position of Foreperson.

[35] As to the employment history of Mr Elchholz, Ms Sargent deposed as follows:

•  He was employed by Fredon on 29 October 2018 in the position of Foreperson based at the Project.

•  His role of Foreperson was abolished when the Project came to an end. In late March/early April 2020 consultation occurred between Fredon and Mr Elchholz. On 27 April 2020 he was offered and accepted redeployment to Grade 5 Leading Hand under the 2016 Agreement.

•  He remained on site for the Project to perform specific tasks which required critical power (UPS) and medium voltage experience. Despite the role being performed by a Grade 5 Licensed Electrician, Mr Elchholz was also paid above the correct classification (Grade 5 Leading Hand) to recognise his seniority and experience.

[36] Ms Sargent said that Mr Squillari commenced employment with Fredon on 3 December 2019 in the position of Grade 5 Licensed Electrician under 2016 Agreement based at a project site in Tweed Heads, NSW.

[37] Mr Taylor, Mr Elchholz and Mr Squillari were issued with a NERR on 2 March 2020. Ms Sargent said that due to the change of their roles following the redeployment, Fredon re-issued a NERR to Mr Taylor and Mr Elchholz on 11 May 2020.

[38] In relation to Mr Betts and Mr Sinclair, Ms Sargent deposed that in or about September 2019 Fredon commenced site wide consultation with employees regarding potential redundancies due to the fact that the Project was nearing completion. Mr Betts and Mr Sinclair were amongst other employees who were invited to participate in the voluntary redundancy process but both declined to do so.

[39] Ms Sargent claimed that Fredon continued to consult with its employees which resulted in further voluntary and involuntary redundancies. Mr Betts and Mr Sinclair were notified in April 2020 that their roles where made redundant, which took effect on 17 April. Their redundancies were the subject of a dispute notification made by the CEPU on 15 April. Their employment was extended to 20 April due to the dispute. The CEPU subsequently withdrew the dispute on 20 April 2020.

[40] Ms Sargent said that Mr Eichholz is now the only employee remaining in employment in relation to the Project. Mr Taylor remains employed on the site but is employed under Fredon’s maintenance contract, not the construction contract.

[41] In a reply statement to the evidence of Mr Betts and Mr Sinclair, Ms Sargent said that although Mr Sinclair expressed interest in a role for the maintenance contract, he was not identified as suitable for filling the role. As to Mr Betts’ interest in a role at the Tweed Head Hospital (the Tweed Project), Ms Sargent said that Fredon was not awarded the project and therefore could not offer him a role on the Tweed Project.

[42] Ms Sargent denied that Mr Betts and Mr Sinclair were selected for redundancy due to their union membership, or their decision in choosing CEPU as a bargaining representative or for reasons relating to the negotiation of the Agreement.

Mr Stanfield

[43] Mr Stanfield gave oral evidence and submitted a witness statement. He has held the role of General Manager since May 2020, following the resignation of the previous General Manager, Mr Michael Stuart. Prior to this, Mr Stanfield was the Construction Manager from September 2018. He was responsible in this role for the construction contract of the Project and had complete oversight of it since June 2019.

[44] Mr Stanfield’s statement provided an overview of the current employment status of Mr Taylor and Mr Eichholz. In summary:

•  Mr Taylor is currently engaged to perform work on the planned preventative maintenance contract at the Grafton gaol site. The work is performed under a contract awarded to Fredon by Serco which commenced in May 2020. Mr Taylor is not responsible for the supervision of anybody or any other Fredon employees in his current role.

•  Mr Eichholz is currently employed to “work through defects and defect liability for the original construction contract at the Grafton gaol site. While construction of the gaol is complete from Fredon’s perspective, Mr Eichholz remains employed as Fredon maintains an obligation to ensure that the construction works were carried out correctly. Mr Eichholz’ role is to identify and rectify any defects with the construction work previously performed by Fredon. This is a temporary arrangement as Fredon is required to guarantee the work through a phase that is called “commercial acceptance”. This phase will only last approximately 12 months; however, as time passes, there will be fewer defects to correct and less work for Mr Eichholz to perform.” Mr Elchholz is not responsible for the supervision of anybody or any other Fredon employees in his current role.

Fredon’s submissions

[45] Fredon submitted that there were three employees covered by the Agreement on the date it was made and that the Agreement was ‘made’ after being approved by a valid majority.

[46] Fredon contended that although Mr Taylor and Mr Eichholz were previously engaged as Forepersons and while in that role were not covered by the 2016 Agreement nor the Agreement, both were offered and accepted redeployment to the role of Leading Hand and as a result became covered by both agreements on and from 28 April 2020.

[47] A NERR was issued to both employees at least 21 days prior to the date that the access period commenced.

[48] Fredon submitted that it was immaterial what roles Mr Taylor or Mr Eichholz were employed in prior to the vote. What was relevant was that they were covered by the Agreement at the time of the vote for the approval of the Agreement and were therefore eligible to vote.

[49] For the same reason Fredon argued that Mr Betts and Mr Sinclair were not employed at the time Fredon asked its employees to vote to approve the Agreement and therefore their views on the Agreement were not relevant to the Commission’s consideration as to whether the relevant requirements had been satisfied.

[50] Fredon submitted that the relevant test time is the time the employer asks the employees to vote for the Agreement, and it does not matter whether the relevant employees may previously have been employed in different positions that would not have been covered by the Agreement.

[51] Fredon submitted that a consideration of whether ss.181 and 182 of the Act were complied with does not and should not involve a consideration of who was issued a NERR under s.173. In this regard Fredon relied on the decision in National Tertiary Education Union v Swinburne University of Technology 1(Swinburne) where Jessup J held:

[23] … There should, therefore, be no assumption that the employees employed at the notification time for the agreement under s 173 would be the same employees as those employed… “at the time” of the employer’s request under s 181.

[24] Indeed, in my view, the legislature must be taken to have made the contrary assumption. The architecture of these provisions inescapably involves the perception that those who are provided with a copy of the agreement and are requested to vote, on the one hand, need not be the same as those who were, at some previous point, notified of their representational rights, on the other hand. Those to who a request under section 181(1) should be addressed are confined, in my view, to that who are employee at that time. No other conclusion makes sense of the statutory scheme.”

[52] It was submitted that Swinburne made it clear that each of the employees who has been issued a NERR is not required to vote to approve an agreement, unless they otherwise meet the requirements of s.181. Mr Betts and Mr Sinclair did not meet the requirements of section 181 and therefore should not have been asked to vote to approve the Agreement. The evidence of Mr Sinclair and Mr Betts relied on by the CEPU was therefore irrelevant to the considerations of the Commission as to whether the Agreement has been validly made.

[53] In terms of the CEPU’s contention that the Agreement was not genuinely agreed, Fredon submitted that the evidence relied on by the CEPU does not support it’s contention. Specifically Fredon made the following submissions:

1. The fact that persons who were not covered by the Agreement at the time of the vote, that is, Mr Sinclair and Mr Betts, would not have voted to approve the Agreement, is not relevant to the Commission’s consideration.

2. The CEPU’s contention that Mr Sinclair and Mr Betts were made redundant during bargaining for reasons relating to the Agreement has no evidentiary basis. In particular, that contention had previously come before the Commission where the allegations were denied by Fredon and the dispute was subsequently withdrawn. If there was a basis for Mr Sinclair, Mr Betts or the CEPU to make this claim, there were a number of options which could have been taken to address those issues, however none of those options were taken.

3. There can be no legitimate contention that the Agreement was not genuinely agreed simply because a small number of employees were employed at the time. In this regard, Fredon relied on the decision in Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd 2 (One Key) where Flick J stated:

“[115] There is no difficulty in a small number of employees voting in favour of an enterprise agreement which has the potential to “cover” (Fair Work Act s 53) a large number of future employees …”

[54] In rejecting the CEPU’s submission that the Agreement lacks ‘authenticity’ and ‘moral authority’, Fredon submitted the following:

“1. there is no suggestion that the Agreement had not been genuinely agreed because the employees’ consent was not informed and they were not advised of the consequences of their vote

2. the employees who voted for the Agreement has actual experience of the work and its place of performance;

3. the employees did not have confined employment experience relative to the award which covers the employees covered by the Agreement; and

4. there is no evidence that the employees did not understand the wages and working conditions in the Agreement or that they were provided misleading or false information by the Applicant about the Agreement.”

[55] In Fredon’s submissions in reply, it argued that while much had been made of the timing of the dismissal of Mr Betts, the evidence was clear that a material matter had arisen, which was that Fredon did not have a ‘Tweed Hospital project’ for him to transfer to. In this regard, there was an early works project in relation to the Tweed Hospital and Fredon had tendered for a new package of work. However, it had not been awarded to Fredon at the time and accordingly, Mr Betts could not have transferred to this project because it simply did not exist.

[56] It highlighted that the evidence in relation to Mr Taylor and Mr Eichholz was clear in that they accepted redeployment to a role (rather than be made redundant) which was covered by the Agreement when the Project was coming to an end.

[57] Fredon characterised the basis for the CEPU’s opposition of the approval of the Agreement as ‘a conspiracy theory which was preposterous and bizarre’, as it would require any or all of the following to have occurred:

1. That Fredon had concocted the end of the Project, and was lying when it said the Project demobilised, all for the purpose of making people redundant so they would be left with only three employees to vote for the Agreement;

2. That Fredon had concocted the need for specialist work to be performed on the Project in March/April 2020;

3. That Fredon was lying about the Tweed Hospital project, in that there was somehow a contract that had been awarded to Fredon and the work hadn’t started simply to deprive Mr Betts and/or Mr Sinclair of an alternate job just to ensure they wouldn’t be employed at the time of the vote.

[58] Fredon strongly contended that the evidence of Mr Betts and Mr Sinclair was wholly irrelevant and should be afforded no weight. Neither were employed at the time the Agreement was made and nothing they say about how they may have voted could be relevant. Further, Mr Sinclair and Mr Betts had had their chance to dispute their dismissal via an unfair dismissal application or a general protections claim, in addition to the dispute notification which was made by the CEPU and subsequently withdrawn. The CEPU also had remedies available to it under the Act if it had concerns with the bargaining process, which were also not pursued. The fact that no such claims were made, in Fredon’s submission, goes to the credit of the theory the CEPU put in this case.

[59] The submissions on behalf of Fredon concluded that three employees who would be covered by the proposed Agreement were employed at the relevant time, and all of these three employees cast a valid vote. Two out of the three employees voted in favour of the Agreement. As a result, a majority of employees voted in favour of the approval of the Agreement and this is all that s.182(1) of the Act requires.

The case for the CEPU

[60] The CEPU filed witness statements from Mr Betts, Mr Sinclair and Mr Malone, none of whom were required for cross examination.

Mr Betts

[61] The evidence of Mr Betts went to the work he performed on the Project as an electrician and Leading Hand. He gave evidence that Mr Eichholz was the Site Supervisor on the Project.

[62] On 14 February 2020 he was advised by five permanent employees on the Project they had been made redundant, and a further three permanent employees were made redundant about one week later, which left three permanent employees on site, being Mr Betts, Mr Sinclair and Mr Taylor. He also gave evidence of the discussions he had with the Project Manager, Mr Hale, as to other roles that may be available within Fredon.

[63] Mr Betts also detailed the meetings and discussions he had been involved in relating to the bargaining process.

[64] Mr Betts said that on 31 March he was advised he was at risk of being made redundant. He was surprised because he had understood there would be other work for him to perform, so he spoke with his supervisor who informed him that “things have changed, there’s no work available in Brisbane”. He was told that the reason for no work being available was in part as a result of COVID-19. Mr Betts was subsequently made redundant on 3 April 2020.

Mr Sinclair

[65] Mr Sinclair gave evidence about his role and the negotiation process, and confirmed that the majority of the construction work on the Project was finished in April. He said he was interviewed along with two other employees for one of two ongoing maintenance roles on the Project. His evidence was that he considered he was better qualified than Mr Taylor and the other candidate (who subsequently resigned to take up other employment) to fulfil the maintenance roles. He gave evidence that it became ‘common knowledge’ that he and Mr Taylor had won the ongoing maintenance roles on the Project. He said his supervisor had a discussion with him in late March about the provision of a company car in order for him to be able to perform the maintenance role on the Project. However, five days later, Mr Sinclair and Mr Betts were called into a meeting and given a letter notifying them they were at risk of being made redundant.

[66] Mr Sinclair said he was subsequently advised by Fredon that the scope of work for the maintenance work had changed, and that Fredon only needed one person to fill the maintenance role, not two.

Mr Malone

[67] Mr Malone, an organiser with the CEPU, gave evidence of the bargaining process, Fredon’s contracts, and other matters including the employment status of Mr Eichholz and Mr Taylor.

The CEPU’s submissions

[68] CEPU submitted that Fredon failed to demonstrate that each of the three employees who cast a vote were both ‘employed at the time’ and ‘will be covered by the agreement’ as contemplated by s.172(2).

[69] CEPU submitted that this question was critical, given if one of the two employees who voted in favour of the Agreement did not fall within that description, the Agreement was not made by a majority of employees. The Commission could not therefore be satisfied that the Agreement was made in accordance with s.182(1) and the application for approval must fail.

[70] CEPU submitted that the Commission would not be satisfied on the evidence that Mr Elchholz and Mr Taylor were both “employed at the time” and “will be covered by the agreement” when the Agreement is asserted to have been made. It argued that Mr Elchholz and Mr Taylor were employed in management positions and that their roles were not covered under the classifications of both the 2016 Agreement and the Agreement. It argued that Fredon had not submitted sufficient evidence to demonstrate that Mr Elchholz and Mr Taylor were no longer performing management duties and that they were covered by the Agreements at the relevant time. Absent the evidence as to the nature of their employment and the duties they performed, the Commission could not be satisfied that they were employed in the role of Grade 5 Leading Hand or Electrical Worker at the date of the vote.

[71] CEPU submitted that the Commission could be satisfied that there are reasonable grounds for believing that the Agreement had not been genuinely agreed (s.188(1)(c)). In support of this contention CEPU proffered the following:

“a. The outcome of the ballot was a bare majority of two votes in favour of the Agreement and one against.

b. On 2 March 2020, Fredon issued an NERR to five employees. Two of those employees Mr Eichholz and Mr Taylor (even by Fredon’s evidence) were part of management and not covered by the current agreement or proposed agreement.

c. On or around 4 March 2020, Mr Betts nominated the CEPU as a bargaining representative. Mr Sinclair also made it known to Fredon that he was a member of the CEPU and endorsed the CEPU Log of Claims. Both of those employees’ employment was terminated effective 17 April 2020 purportedly because their roles were redundant.

d. On about 27 April 2020, Mr Eichholz and Mr Taylor were each offered redeployment and accepted roles purportedly covered by the 2016 Agreement.

e. Mr Eichholz and Mr Taylor voted in favour of the Agreement. The remaining employee Mr Squillari voted against the Agreement.

f. Fredon has purported to “negotiate” an agreement with 3 employees, the effect of which is to cover it operations in all of regional NSW (subject to certain exclusions).

g. The cohort of employees as at 5 June 2020 was (at best) 3, and was in reality 1.”

[72] CEPU concluded that in light of the matters raised above the Commission would not be satisfied as to the authority and authenticity of the Agreement. The requirement in s.188(1)(c) was therefore not met.

[73] In its oral submissions, and by reference to a number of decisions, the CEPU noted that the question of ‘genuine agreement’ in s.188(1)(c) focuses on the ‘authenticity or moral authority’ of an agreement. It argued that in this case, when regard is had to s.188(1)(c), there is no real agreement because the process was manipulated by Fredon to exclude people who otherwise would have voted in the process. The manipulation was said to arise because, when one looked at the circumstances (as set out in the chronology prepared by the CEPU), “it looks like there is something wrong” 3

[74] Its submissions in this regard were as follows:

“People who would have voted for the agreement, people who have identified themselves as, in Mr Betts' case in particular, as part of the union, are excised from the process and excised from the agreement-making process for what does not seem to be, on the evidence it's called, a legitimate reason.

Mr Hale, the day before the first meeting, is telling Mr Betts that there will be a role for him on the Tweed project - the Tweed Hospital project. It carries with it two aspects.  One is the fact that the Tweed Hospital project is something on the horizon and the other thing is that Mr Betts would be retained in employment.

What changed? What changed was the following day Mr Betts put his hand up in a meeting - and note that when he indicated that he wanted the union involved, in his evidence he tells you, 'I was asked to leave the meeting.'  And what we say is as a result of that process there is something that calls into question something inherently wrong about the circumstances in which this agreement is arrived at.

It raises a real question about whether there is a genuine real agreement at all in terms of the Act or whether circumstances have been manipulated so as to bring about the proposition that the agreement would get up, as it were, come hell or high water.

Now, there is nothing preposterous or bizarre about that proposition.  Nor is there anything preposterous or bizarre about suggesting that an employer who wanted to get up an agreement could legitimately run a campaign in favour of its agreement for its workforce.

What is preposterous and bizarre is that two employees who were until this process began - until this process began, part of the management team for the project, those two managers became of the principals voting in the process, as Mr Betts and Mr Sinclair who hitherto were promised ongoing employment and ongoing work were shown the door.  That's what's preposterous and bizarre about the circumstances of this case.” 4

[75] The question posed by the CEPU was “what could more question the moral authority of an agreement that the manipulation of the electorate by manipulating those that would vote in favour of the agreement and those who would vote against it, and that is what has happened here, and the moral authority, the authenticity of this agreement as an enterprise agreement is called into question.” 5

CONSIDERATION

[76] It is in the nature of the scheme established by the Act that a majority of the employees employed at the time an enterprise agreement is made can agree to terms and conditions of employment that will then bind future employees employed under the terms of that agreement. 6

[77] In Aldi Foods Pty Limited v SDA 7 White J held:

“134 The matters listed in s 188 to which the FWC is to have regard in determining whether there has been genuine agreement to an enterprise agreement seem, with the possible exception of (c), to be of an objective kind. Nevertheless, it is the genuineness of the agreement by particular persons which the FWC is to assess, these persons being the employees “covered by” the agreement. There is, accordingly, an inherent requirement in s 186(2)(a) and s 188 that there be such persons. That is to say, it is implicit in s 186(2)(a) that there be persons covered by the agreement whose genuineness in agreeing to it (on the basis identified in s 188) can be assessed by the FWC. Persons who will become covered by the agreement only at some time in the future do not answer that description, even if they did, by some means, vote to approve it.

135 Further, in my opinion, the expressions “will be covered” and “covered by” in the scheme established by Pt 2-4 are counterpoints. Sections 172 to 181 use the former expression because they are concerned with the sequence of events until an enterprise agreement is made and because a contemplated enterprise agreement cannot cover anyone until it is made. The immediate change to the present tense following the final step in the sequence, that is, the making of the agreement (s 182), is an indication that those whom it was previously contemplated would be covered by the agreement are now, on the making of the agreement, covered by it (subject of course to the approval the FWC and the commencement of operation of the agreement pursuant to s 54). The change in terminology occurs because the work done by the term “will be covered” is complete. Because the two expressions are counterpoints, the expression “who will be covered by the agreement” is a reference to those who, upon the making of the agreement, are covered by it and is not a reference to those who, at some future time will become covered by it.”

[78] Both parties also referred to the decision in One Key Workforce Pty Ltd v CFMEU 8.

[79] Having considered all of the evidence, submissions and relevant decisions, I am satisfied that the Agreement should be approved.

[80] First, I accept that the Project came to an end, and as a result a number of employees were made redundant, not just Messrs Betts and Sinclair. Putting aside Fredon’s evidence, this is clear from the evidence of Messrs Betts and Sinclair.

[81] I accept the evidence of Ms Sargent and Mr Sinclair that Messrs Taylor and Eichholz were redeployed at the end of the Project to a role that was covered by the 2016 Agreement. It is immaterial that they had both previously held positions as Foremen. The evidence clearly shows that that position was made redundant, and both accepted redeployment to a role that was covered by the 2016 Agreement. As a consequence, they were eligible to vote on the Agreement.

[82] There is no dispute that Messrs Betts and Sinclair were not employed at the time of the vote. Clearly, they were therefore not eligible to vote, and their evidence as to how they might have voted had they been eligible is not relevant to my consideration of whether the Agreement should be approved.

[83] In light of the evidence, there is in my view no basis to find that the redundancy of Messrs Betts and Sinclair was for any reason other than what was put by Fredon – that is, the Project came to an end and other redeployment options (which had been explored with them) were simply not available. In terms of Mr Sinclair, the evidence does not disclose that that Fredon had been informed of Mr Sinclair’s involvement with the CEPU before the conversation with him that he was at risk of redundancy. In terms of Mr Betts, I accept the evidence that there was no Tweed Hospital project for Mr Betts to go to. To the extent that a role at Tweed Hospital was explored with him, I am satisfied that it was on the basis that Fredon anticipated it would be successful in being awarded the contract, but it did not eventuate. It is perfectly reasonable to explore the possibilities of alternative work with employees, but this does not guarantee that alternative employment will be available.

[84] That there were only three employees who were eligible to vote does not, in and of itself, mean that the Agreement was not genuinely agreed. This principle has been settled by the One Key decision referenced earlier.

[85] The CEPU’s ‘conspiracy theory’, as it was described by Fredon, is not grounded in the evidence. There is no basis to find that:

a. Fredon had concocted the end of the Project, and was lying when it said the Project demobilised, all for the purpose of making people redundant so they would be left with only three employees to vote for the Agreement;

b. Fredon had concocted the need for specialist work to be performed on the Project in March/April 2020;

c. Fredon was lying about the Tweed Hospital project, in that there was somehow a contract that had been awarded to Fredon and the work hadn’t started simply to deprive Mr Betts and/or Mr Sinclair of an alternate job just to ensure they wouldn’t be employed at the time of the vote.

[86] While the CEPU, Mr Betts and Mr Sinclair could have taken other action to dispute their dismissals or deal with any concerns regarding the bargaining process, I consider that the taking or otherwise of any such action is not relevant to whether the requirements have met for the approval of the Agreement. Accordingly, I have not taken this into account in coming to my decision.

[87] In terms of the question of genuine agreement, I do not accept that Fredon manipulated the process to exclude people who otherwise would have voted (ie Messrs Betts and Sinclair) for the reasons outlined above. Messrs Betts and Sinclair were the last of a number of people who were made redundant as the Project ended. They were not singled out.

[88] Unlike the circumstances in One Key, all three employees who voted for the Agreement are experienced electrical workers who, I am satisfied, were at the time of the vote employed to perform work in classifications covered by the Agreement.

CONCLUSION

[89] In conclusion, I am satisfied that Mr Eichholz and Mr Taylor were employees “employed at the time who will be covered by the agreement” and that the Agreement was made in accordance with s182 of the Act. I am also satisfied that there are no other reasonable grounds for believing the Agreement was not genuinely agreed by the employees. In these circumstances I am satisfied as to the authority and authenticity of the Agreement.

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

[91] I note that clauses 45(g) and 46 of the Agreement, relating to notice of termination and abandonment of employment, are likely to be inconsistent with the NES. However, noting clause 11(b) of the Agreement, I am satisfied the more beneficial entitlements of the NES will prevail where there is an inconsistency between the Agreement and the NES.

[92] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 6 October 2020. The nominal expiry date of the Agreement is 6 April 2024.

DEPUTY PRESIDENT

 1 [2015] FCAFC 98.

 2 [2017] FCA 1266.

 3   Transcript PN585.

 4   Transcript PN586-PN591.

 5   Transcript PN601.

 6   See CEPU and ors v Main People Pty Ltd[2014] FWCFB 8429 at [18].

 7 [2017] HCA 53.

 8 [2018] FCAFC 77.

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