Gauge Constructions Pty Ltd
[2024] FWC 2797
•8 OCTOBER 2024
| [2024] FWC 2797 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Gauge Constructions Pty Ltd
(AG2024/3185)
| DEPUTY PRESIDENT SAUNDERS | NEWCASTLE, 8 OCTOBER 2024 |
Application for approval of enterprise agreement – genuine agreement – application dismissed.
Introduction
On 20 August 2024, Gauge Constructions Pty Ltd applied for approval of an enterprise agreement known as Gauge Constructions Pty Ltd Enterprise Agreement 2024 - 2028, which covers employees of Gauge, other than administrative employees, who are engaged in various types of construction related work and who are employed in one of the classifications set out in Appendix 1 of the Agreement.
The Agreement was made on 9 August 2024. At the time of the vote, two employees were covered by the Agreement, Mr Paul Deas and Mr Timothy Boyle, both of whom cast a valid vote to approve the Agreement.
Both Mr Deas and Mr Boyle are employee bargaining representatives for the Agreement.
On 11 September 2024, my Associate sent an email to Gauge, requesting that, among other things, they provide submissions in relation to the issue of how the two employees who voted to approve the Agreement could be considered sufficiently representative with regard to the employees the Agreement is expressed to cover.
On 20 September 2024, Gauge provided submissions in relation to the sufficient interest and sufficiently representative issue.
A request for additional information regarding the two employees who voted on the Agreement was sent to Gauge on 23 September 2024.
On 25 September 2024, Gauge provided responses to my request for additional information.
I have had regard to all the material filed by Gauge in determining this matter.
Determining whether an enterprise agreement has been genuinely agreed to by employees
Relevant principles
Section 186(2)(a) of the Fair Work Act 2009 provides that the Commission must be satisfied that a single enterprise agreement (other than a greenfields agreement) has been genuinely agreed to by the employees covered by the agreement. Section 188(2) of the Act requires that the Commission cannot be satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement unless the Commission is satisfied that the employees requested to approve the agreement by voting for it (a) have a sufficient interest in the terms of the agreement and (b) are sufficiently representative, having regard to the employees the agreement is expressed to cover.
Section 188(1) of the Act states that the Commission must take into account the Statement of Principles on Genuine Agreement made under section 188B of the Act in determining whether it is satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement. Principle 17 of the Statement of Principles states:
“17. In considering whether employees have a sufficient interest in the terms of an enterprise agreement as required by section 188(2)(a) of the Fair Work Act, and whether the employees are sufficiently representative as required by section 188(2)(b), the FWC may take into account:
- whether the employees entitled to vote on the enterprise agreement are to be paid the rates of pay provided for in the agreement, and
- the extent to which the employees entitled to vote on the enterprise agreement are employed across the full range of:
- classifications in the agreement
- types of employment in the agreement (for example, full-time, part-time and casual)
- geographic locations the agreement covers, and
- industries and occupations the agreement covers.”
In One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union[1] the Full Court of the Federal Court held that the Commission had erred in approving an enterprise agreement that had been voted on and approved by three employees. The decision contains an in-depth examination of the meaning of the phrase “genuinely agreed”, including the following analysis which is relevant to the present case:[2]
“157 Ordinarily, non-greenfields agreements are made with the participation of the employees who are representative of the range of employee classifications covered by the enterprise agreement. The capacity to provide consent based upon a true understanding of the consequences of the proposed agreement across the breadth of classifications covered is likely to be adequate, including because representatives of each classification or classificational grouping will be involved. While it is correct to say, as OKW submitted, that the group of employees who vote are not required by the Fair Work Act to be representatives for, or agents of, the wider group of employees who may ultimately be covered by the agreement, the fact that the group does not broadly reflect the occupational scope of the proposed agreement restricts the terms and conditions in the agreement for which the group can genuinely speak.
…164 The statutory declaration supporting KCL’s application for approval of the Agreement indicated that three employees, two of whom were casuals, would be covered by the Agreement. All three were tradespersons working under the Manufacturing and Associated Industries and Occupations Award. The Full Bench noted at [36], however, that the Agreement covered a wide range of classifications (most of which were irrelevant to the work performed by KCL’s three employees), encompassed industries in which KCL did not then operate, and contained rates of pay which, even in respect of classifications relevant to the current three employees, were not to apply to them. The Full Bench then said:
‘In those circumstances we do not consider that any authenticity could attach to the agreement of the two employees to the rates and conditions in the Agreement. The employees had no ‘stake’ in the Agreement’s rates of pay, since they were assured that their existing, higher rates of pay would remain in place (subject to ‘operational needs and satisfactory performance’), and they could not have given informed consent in relation to occupations and industries in which they did not work and presumably had no experience.’”
Gauge’s submissions
Gauge submits that principle 17 of the Statement of Principles should be applied as set out in SDA v Allen Family Pty Ltd [3] at [76]:
“The important point to be made is that while the Commission is required to take into account the Statement of Principles in determining whether an agreement has been genuinely agreed, it does not operate as a set of mandatory rules that must be complied with by an employer absent which the Commission cannot be satisfied that an agreement has been genuinely agreed. Where an employer follows pre-approval steps that are consistent with the Statement of Principles, that would weigh more favourably towards a conclusion that an agreement has been genuinely agreed. The converse is equally true of course. The requirement to take into account the Statement of Principles does not displace the requirement to consider each of the other matters set out in s 188 in determining whether an agreement has been genuinely agreed.”
Gauge’s further submissions may be summarised as follows:
· the business operations of Gauge should be taken into account;
· the fact that Gauge had only two employees at the time of the making of the Agreement should not, prima facie, prohibit the Commission from approving the Agreement;
· although Gauge only has two employees at the moment due to a downturn in the construction industry, Gauge is currently using labour hire to fill the other positions, and Gauge intends that the other positions will be filled by employees “should the business prospects of the Company improve”;
· the application to approve the Agreement does not fall into the scenarios described in One Key; and
· One Key “was concerned with a small number of employees operating as proxies for a ‘wide range of other classifications and jobs in which they have no conceivable interest’, [whereas] the proposed agreement contains a streamlined classification structure that is suited to the business operations of the Applicant, in an industry sector where flexibility is required.”
Consideration
As set out in SDA v Allen Family Pty Ltd above, the Statement of Principles is not a set of mandatory rules. However, s 188(a) of the Act requires that I take into account the Statement of Principles in determining whether I am satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement. Further, and consistently with SDA v Allen Family Pty Ltd above, “The requirement to take into account the Statement of Principles does not displace the requirement to consider each of the other matters set out in s 188 in determining whether an agreement has been genuinely agreed”.
The Agreement covers employees of Gauge across Australia where Gauge undertakes general building and construction work and the employee is engaged in one of the following callings or classifications: Trades Labourer (level 1), Rigger, Dogger (level 2), Machine Operator – Group B (level 3), Operator Group H – Crane Driver (level 4), or Leading Hand (level 5). Employees within these classifications may be employed as a full-time, part-time or casual employee (clause 4.1.1 of the Agreement).
The two employees covered by the Agreement at the time it was made:
(a) are both full-time employees;
(b) both live in Sydney;
(c) are both paid higher rates of pay than are provided for in the Agreement; and
(d) are employed in the positions of Truck Driver and Crane Operator respectively.
Having regard to these matters and the Statement of Principles, I am not satisfied that the employees requested to approve the Agreement by voting for it (a) have a sufficient interest in the terms of the Agreement and (b) are sufficiently representative, having regard to the employees the Agreement is expressed to cover. It follows that I am not satisfied that the Agreement has been genuinely agreed to by the employees covered by it.
Conclusion
For the reasons given, I am not satisfied that the Agreement has been genuinely agreed to by Gauge’s two employees within the meaning of section 188 of the Act. Gauge’s application for approval of the Agreement is therefore dismissed.
I note that it would be open to Gauge to engage employees under the applicable award until such time as its business position improves and enables it to hire more employees across the broader range of employment classifications contemplated by the Agreement, and at rates of pay that will be governed by the Agreement.
DEPUTY PRESIDENT
[1] (2018) 277 IR 23 (One Key)
[2] One Key [140] – [170]
[3] [2024] FWCFB 48
Printed by authority of the Commonwealth Government Printer
<PR780036>
0
0
0