Geocon Constructors (ACT) Pty Ltd T/A Geocon

[2019] FWC 5509

[2019] FWC 5509

FAIR WORK COMMISSION

DECISION

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

Geocon Constructors (ACT) Pty Ltd T/A Geocon
(AG2018/3411)

DEPUTY PRESIDENT KOVACIC CANBERRA, 13 AUGUST 2019

Application for approval of the Geocon Constructors (ACT) Pty Ltd and Employees Enterprise Agreement 2018 - 2022.

[1] This decision concerns an application made on 25 July 2018 for approval of an enterprise agreement known as the Geocon Constructors (ACT) Pty Ltd and Employees Enterprise Agreement 2018-2022 (the Agreement). The application was made by Geocon Constructors (ACT) Pty Ltd T/A Geocon (Geocon – the Applicant) pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single-enterprise agreement.

[2] The application was the subject of an earlier decision 1 on 24 April 2019 regarding a request by the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) to be heard in respect of the application. That decision sets out much of the background to the application. In that decision, the Fair Work Commission (the Commission):

•  decided to exercise the discretion available to under s.590 of the Act and hear from the CFMMEU regarding the application for approval of the Agreement; and

•  foreshadowed that the application would be listed for mention and directions to set a timetable for determining the application for approval of the Agreement.

[3] Following a telephone mention and directions hearing on 3 May 2019, the application was listed for substantive hearing on 19 June 2019. At that hearing Mr Jack Tracey of Counsel appeared with permission for Geocon, while Mr Tom Fischer, a Legal/Industrial Officer with the CFMMEU, appeared for the CFMMEU.

[4] For the reasons outlined below, I am satisfied that the Agreement was genuinely agreed to by employees. Subject to the receipt of an undertaking foreshadowed by Geocon regarding shiftwork, I am also satisfied that each of the requirements of ss.186 and 187 are met in this case. A decision approving the Agreement will be issued once an undertaking in acceptable terms regarding shiftwork is received by the Commission.

The Applicant’s case

[5] Geocon in its written submissions noted that, as the Commission found in its decision of 24 April 2019, the CFMMEU was not a bargaining representative for the Agreement. Geocon also posited that the CFMMEU in its written submissions invited the Commission to speculate, encourage conjecture and draw various inferences of sinister conduct based on no more than its unfounded suspicions and an unfair and unreasonable approach to the evidence, adding that it was an approach that was not reasonably open.

[6] Geocon in its submissions also set out what it described as the various propositions that could be distilled from the CFMMEU’s attack on the Agreement. Those propositions were as follows:

1. the Commission could not be satisfied that all employees were provided with a copy of the text of the Agreement and any other material incorporated by reference into the Agreement as required by s.180(2) of the Act;

2. the Commission could not be sure that the effect of the terms of the Agreement were properly explained to the workers;

3. the Commission could not be satisfied that the Agreement had been genuinely agreed to by employees, with Geocon surmising that this proposition appeared to be a reference to a supposed lack of “moral authority and authenticity” as a result of the vote on the Agreement occurring about 18 months before the Agreement would have any practical effect;

4. the Commission could not be satisfied that the Agreement had been genuinely agreed to by employees because of the use by Geocon of a letter of 30 May 2018 which invited employees to appoint a bargaining representative after they had read the Notice of Employee Representational Rights (NoERR);

5. various assertions to the effect that the bargaining representatives for the Agreement were somehow invalidly appointed;

6. the NoERR was somehow incomplete;

7. the Form F17 – Employer’s statutory declaration in support of an application for approval of an enterprise agreement (other than a greenfields agreement) was so flawed as to have rendered the application for approval of the Agreement invalid; and

8. the application for approval of the Agreement was somehow out of time because the Form F17 that was filed in time was incorrect and time should not be extended.

[7] Geocon submitted that the CFMMEU’s contentions or objections to the approval of the Agreement should all be rejected by the Commission. More specifically, Geocon submitted as follows in respect of its distillation of the CFMMEU’s contentions set out above:

•  contention 1 – it accepted that employees were not provided with a copy of the terms of the relevant modern award, the Building and Construction General On-site Award 2010 2 (the Award), which it acknowledged the Agreement made some limited reference to, positing that:

– taking all reasonable steps to give employees a copy of the Award terms was not required by s.180(2)(a)(ii) of the Act as the relevant terms of the Award did not fall within the definition of “any other material incorporated by reference into the Agreement”,

– if not giving the Award to employees in this case had the effect that it did not comply with s.180(2) of the Act, the Commission should not conclude that the Agreement was for that reason not genuinely agreed to by employees as the non-provision of the Award was a minor procedural error within the meaning of s.188(2) of the Act and employees were not likely to have been disadvantaged by the error because:

o Geocon’s current enterprise agreement, the Geocon Constructors (ACT) Pty Ltd and Employees Enterprise Agreement 2015-2019 3 (the 2015 Agreement), included essentially the same references to the Award such that employees were already subject to the same terms and conditions of the Award to which the Agreement referred,

o the evidence before the Commission illustrated that employees were engaged in the making of the Agreement and bargaining, and

o the statutory declarations of the three employee bargaining representatives in particular supported the proposition that employees genuinely agreed to the Agreement and its content;

•  contention 2 – having regard to the evidence of the three employee bargaining representatives and Mr Urbaniak, the Commission should be satisfied that the terms of the Agreement were explained to employees, noting that each employee bargaining representative was diligent in explaining the Agreement to employees and, like Mr Urbaniak, in being available to answer and address the employees’ questions or concerns;

•  contention 3 – the evidence of the employee bargaining representatives strongly undermined the CFMMEU’s proposition, adding that the making of the Agreement well in advance of the date when it could commence operation was a lawful and reasonable option for it to take given its concerns about the potentially lengthy timeframe for approval of the Agreement, the need for industrial certainty and Ms Lucie Hood’s (Geocon’s Human Resources Director) evidence that the employees who voted on the Agreement in 2018 were all highly likely to be continuing employees of Geocon when the Agreement commenced operation;

•  contentions 4 and 5 – there was nothing in the NoERR or the 30 May 2018 letter that supported a conclusion that the employees had not genuinely agreed to the Agreement or to the appointment of the employee bargaining representatives, adding that there was no suggestion that any employee did not intend to appoint their fellow employees to represent them;

•  contention 6 – the NoERR was complete and in the form required by Schedule 2.1 of the Fair Work Regulations 2009; and

•  contentions 7 and 8 – these contentions must be rejected, particularly as the concept of invalidity of an application for approval of an enterprise agreement had no work to do and lead nowhere so far as compliance with the statutory regime in Part 2-4 of the Act.

[8] As to the better off overall test (BOOT), Geocon submitted that the Agreement passed the BOOT and noted that the CFMMEU had made no submissions about the application of the BOOT. Geocon further submitted that to the extent the Commission was of the view that undertakings were required in order for the Agreement to pass the BOOT, as previously indicated, it would be willing to give undertakings in accordance with s.190 of the Act. In conclusion, Geocon submitted that the Commission should approve the Agreement.

[9] At the hearing, Geocon largely reiterated the keys aspects of its written submissions, stating that it relied on its written submissions and the evidentiary material it had filed (i.e. Exhibits 1-5). In doing so, Geocon also indicated that it no longer pursued the argument outlined in its written submissions it was not required to give employees a copy of the Award by s.180(2)(a)(ii) of the Act as the relevant terms of the Award did not fall within the definition of “any other material incorporated by reference into the Agreement”. Beyond that, Geocon highlighted that the Agreement was a ‘roll over’ agreement which was very similar to the 2015 Agreement.

[10] In support of its submissions, Geocon relied on the decision of Vice President Hatcher in Greenfreight Logging (NSW) Pty Ltd 4 (Greenfreight) in which the Vice President was satisfied inter alia that the applicant’s failure in that case to take all reasonable steps to provide copies of or access to the incorporated material was a minor “procedural or technical error” and that employees covered by the relevant agreement were not likely to have been disadvantaged by that error. Geocon also drew the Commission’s attention to the decisions in Bachy Soletanche Australia Pty Ltd5 and BGC Contracting Pty Ltd T/A BGC6.

[11] Also at the hearing the Commission noted that based on its examination of the Agreement, it appeared that the Agreement referred to the Award in substantive terms in two areas, i.e. clause 18 – Apprentices and clause 45 – Redundancy pay. Against that background, the Commission asked Geocon whether it employed any apprentices at the time the Agreement was made. Geocon’s response was that it did not.

[12] As noted above, at the hearing Geocon stated that it relied on the evidentiary material it had filed in this matter. That evidentiary material comprised several statutory declarations made by a number of Geocon employees. Specifically, statutory declarations were provided by Mr Adam Urbaniak, Geocon’s Construction Manager 7; Mr Wayne Steele, an employee bargaining representative for the Agreement8; Mr Michael Sharpe, an employee bargaining representative for the Agreement 9; Mr Dean Lewis, an employee bargaining representative for the Agreement 10; and Ms Hood11. The CFMMEU did not object to the statutory declarations being received by the Commission, nor were the deponents called to give oral evidence.

[13] In his statutory declaration Mr Urbaniak deposed that on 24 May 2018 all employees were emailed a copy of the NoERR by Mr Damon Smith, Geocon’s General Manager – Construction, explaining that Geocon was commencing negotiations for a new enterprise agreement. Mr Urbaniak further deposed that prior to the first bargaining meeting all employees were provided with bargaining nomination forms and these forms were signed and returned to him, adding that no pressure was placed on any employee to sign these forms. Beyond that, Mr Urbaniak deposed that on 6 July 2018 he visited all of Geocon’s construction sites to talk through the changes reflected in the proposed agreement with employees. More specifically, Mr Urbaniak deposed that at each site he sat down with groups of between 3-8 employees and went through the amendments reflected in the proposed agreement page by page, explaining what the proposed changes were and how they would be applied. Mr Urbaniak stated that employees were able to ask any questions during these discussions and that he informed them that if they had any further questions they could talk with one of the employee bargaining representatives or himself at any time prior to the vote on the proposed agreement occurring.

[14] In their respective statutory declarations Messrs Steel, Sharpe and Lewis provided an overview of the bargaining process for the Agreement. Among other things, Mr Lewis deposed that Geocon “called a meeting to arrange nominated [sic] for the Enterprise Agreement” and that he “understood that we were able to nominate another worker, myself or a Union.” 12 Mr Lewis also deposed, as did Mr Sharpe, that he supported approval of the Agreement. Mr Sharpe in his statutory declaration deposed that employees were provided with a written form to fill out to nominate their representative with everyone voting.

[15] The key aspects of Ms Hood’s statutory declaration were that:

•  Geocon had strong grounds for believing that all or most of the 20 employees who voted on the Agreement (all of who would be classified as Construction Workers under the Agreement) would be covered by the Agreement on 13 January 2020 for number of reasons including that:

– as at the date of her statutory declaration all 20 of those employees remained employed by Geocon,

– Geocon employed all but one of its Construction Workers on a permanent basis, and

– the average length of tenure of employees engaged on a permanent basis was 2.8 years; and

•  Geocon’s rationale for commencing negotiations for a replacement enterprise agreement some 18 months prior to the nominal expiry date of the 2015 Agreement was based on several factors including:

– the lengthy timeframe of approximately 10 months it took to get the 2015 Agreement approved,

– industrial certainty, and

– its understanding that the Commission was taking several months to review and approve enterprise agreements.

The CFMMEU’s case

[16] The CFMMEU relied on its written submissions of 24 May and 13 March 2019 and 31 August 2018. In short, the CFFMEU opposed approval of the Agreement on the basis that:

•  the Commission could not be satisfied that all workers were provided with a copy of the text of the Agreement and any other material incorporated by reference into the Agreement as required by s.180(2) of the Act;

•  the Commission could not be sure that the effects of terms of the Agreement were properly explained to workers;

•  the Commission could not be satisfied that the Agreement had been genuinely agreed to by employees; and

•  the application was attended by such significant errors that it should not be granted, adding inter alia that the Form F17 provided was so flawed as to have rendered the application invalid.

[17] Beyond that, key aspects of the CFMMEU’s submissions included that:

•  it was evident that the bargaining representative nomination forms attached to Ms Hood’s statement of 12 March 2019 had been prepared by Geocon and distributed to employees;

•  the Commission should conclude that Geocon had either interfered in the nomination process for bargaining representatives or at best had failed to allow employees a proper opportunity to consider their representation and seek advice in relation to that issue;

•  the Commission should inquire into whether workers were advised that completing the bargaining representative nomination form was voluntary and not mandatory;

•  the Commission was required to have regard to whether the employees who voted on the Agreement had a stake in its rates of pay and conditions;

•  there was a genuine question over what stake the employees who voted on the Agreement had in its operation given that the 2015 Agreement had a nominal expiry date of 13 January 2020, noting that the Agreement was made more than 15 months before the Agreement could have any effect on any person and that a significant proportion and potentially the majority of workers currently employed by Geocon would not be employed by it at the time the Agreement would apply;

•  this matter must be distinguished from the determination in ALDI Foods Pty Ltd v Shop, Distributive & Allied Employees Association 13 (ALDI) and the issue of ‘stake’ based on the reasoning in BGC Contracting Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, Australian Workers’ Union & Construction, Forestry, Mining and Energy Union14; and

•  Geocon had provided no reason for its choice to initiate and conclude an agreement more than a year in advance of the 2015 Agreement’s nominal expiry date, adding that the irresistible inference was that the reason was to limit bargaining to the current cohort of employees who had a limited interest in and ability to affect the outcome of bargaining and exclude from bargaining employees who may be employed over the next 12-15 months.

[18] The CFMMEU in its submissions of 24 May 2019 stated that it no longer pressed its earlier submissions that the NoERR had not been validly issued in this case.

[19] The CFMMEU led no evidence in support of its submissions.

[20] At the hearing the CFMMEU stated that it relied on its written submissions and disputed Geocon’s contention that the failure to provide employees with access to a copy of the Award was a minor procedural error as per s.188(2) of the Act. The CFMMEU also rejected Geocon’s criticism of its submissions in this matter (Geocon had described the CFMMEU’s submissions as a “moving feast”). While the CFMMEU acknowledged that it had withdrawn aspects of its objections to the Agreement, it contended that this was not its fault but simply served to highlight the deficiencies in the Form F17 filed with the application.

[21] In response to a question from the Commission which highlighted two aspects of the Agreement which substantively drew on the Award, i.e. apprentices and redundancy pay, the CFMMEU stated that the Agreement included a different definition of redundancy to that in the Award, defined misconduct differently and did not define what ACIRT (the Australian Construction Industry Redundancy Trust) was and how it operated. The CFMMEU further posited that the Commission could not be satisfied that the Agreement captured the key elements of the industry specific redundancy scheme in the Award, adding that the underlying Award scheme was more complex.

[22] When questioned as to what weight should be attached to Geocon’s characterisation of the Agreement as a roll over agreement, the CFMMEU stated that in none of the statutory declarations provided by workers do they mention what they understood to be the redundancy scheme contained in the Agreement.

Consideration of the issues

[23] As can be seen from above, the CFMMEU’s objections to the approval of the Agreement go largely to the issue of whether the Agreement had been genuinely agreed to by employees. The relevant statutory provision in that regard is s.188 of the Act which provides as follows:

“188 When employees have genuinely agreed to an enterprise agreement

(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.

(2) An enterprise agreement has also been genuinely agreedto by the employees covered by the agreement if the FWC is satisfied that:

(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and

(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.

[24] Set out below are the various pre-approval steps which are cross-referenced in s.188(1)(a)(i) above:

“180 Employees must be given a copy of a proposed enterprise agreement etc.

Pre-approval requirements

(1) ...

Employees must be given copy of the agreement etc.

(2) The employer must take all reasonable steps to ensure that:

(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:

(i) the written text of the agreement;

(ii) any other material incorporated by reference in the agreement; or

(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.

(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:

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

(b) the voting method that will be used.

…

Terms of the agreement must be explained to employees etc.

(5) 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.”

[25] Having regard to the parties’ submissions and the relevant provisions of the Act concerning the issue of genuine agreement, the matters which the Commission needs to determine in that regard concern:

•  whether the appointment of the bargaining representatives was flawed;

•  whether employees were provided with a copy of the written text of the Agreement;

•  whether the failure by Geocon to provide employees with access to a copy of the Award constitutes a minor procedural error for the purposes of s.188(2) of the Act and if so whether employees were likely to have been disadvantaged by the error;

•  whether the terms of the Agreement, and the effect of those terms, were explained to employees who would be covered by the Agreement;

•  whether the employees who voted on the Agreement had a stake in the Agreement; and

•  whether there are any other reasonable grounds for believing that the Agreement had not been genuinely agreed to by employees.

[26] Beyond that, the Commission also needs to determine whether or not the Agreement passes the BOOT.

[27] I will deal with each of those issues separately:

The appointment of bargaining representatives

[28] The CFMMEU contended that Geocon had either interfered in the nomination process for bargaining representatives or at best had failed to allow employees a proper opportunity to consider their representation and seek advice in relation to that issue. The CFMMEU led no evidence to support its contention.

[29] The only evidence before the Commission regarding the appointment of bargaining representatives is the unchallenged evidence of Messrs Urbaniak, Lewis and Sharpe. As previously mentioned, Mr Urbaniak deposed that no pressure was placed on any employee to sign the bargaining representative nomination form, while Mr Lewis deposed that he understood that employees were able to nominate another worker, himself or a Union as their bargaining representative. Mr Sharpe deposed that employees were provided with a written form to fill out to nominate their representative, adding that all employees voted.

[30] With regard to the CFMMEU’s contentions, I note that the provision of bargaining representative forms to employees does not of itself equate to interference. As to the CFMMEU’s contention that Geocon had failed to allow employees a proper opportunity to consider their representation and seek advice in relation to that issue, as noted in my 24 April 2019 decision, the NoERR was emailed to employees on 24 May 2018 and the bargaining representative nomination forms were separately provided to employees at the meeting of 30 May 2018 15. In other words, employees had around six days to consider the representation issue and take any advice that they may wish to in that regard. This does not support the CFMMEU’s contention.

[31] Having regard to the evidence before the Commission and in circumstances where the NoERR given to employees who would be covered by the Agreement met the requirements of the Act, I am not satisfied that the appointment of bargaining representatives in this case was flawed such as to support a finding that the Agreement was not genuinely agreed to by employees.

Were employees provided with a copy of the written text of the Agreement?

[32] The CFMMEU submitted that the Commission could not be satisfied that employees were provided with a copy of the text of the Agreement. The response to Question 2.4 of Mr Damon Smith’s Form F17 which goes to this issue does not indicate what steps were taken to ensure that employees were given a copy of the written text of the Agreement. Accordingly, this issue was raised in the Commission’s correspondence of 15 January 2019 to Geocon which canvassed several issues regarding the Agreement. Ms Hood responded on 1 February 2019 regarding this issue in the following terms:

“To comply with Section 180(a) and (b) of the Fair Work Act 2009 (Cth) (‘the Act’), Mr Damon Smith (General Manager, Construction) emailed all employees and bargaining representatives with a copy of the proposed agreement (Geocon Constructors (ACT) Pty Ltd and Employees Enterprise Agreement 2019-2023) (‘the Agreement).”

[33] Further, a copy of Mr Smith’s email of 4 July 2018 was attached to Mr Urbaniak’s statutory declaration as was a subsequent email from Ms Hacey Bunn (an Executive Assistant/HR and Systems Coordinator with Geocon) which was sent less than 10 minutes after Mr Smith’s email and which attached a copy of the draft agreement.

[34] Having reviewed Mr Smith’s and Ms Bunn’s emails of 4 July 2018, I am satisfied that employees were provided with a copy of the written text of the Agreement on that day.

The failure to provide a copy of the Award to employees

[35] It was not disputed that employees who would be covered by the Agreement were not provided with either a copy of the Award or access to a copy of the Award during the access period for the Agreement.

[36] Before considering this issue in more detail, I set out those aspects of the Agreement which either displace the Award or draw on the Award in a substantive way. Firstly, clause 8 – Relationship to other workplace laws of the Agreement states that the Agreement replaces the Award and that the Award is not incorporated into the Agreement. Specifically, clause 8 includes the following:

“8.1 This Agreement replaces in its entirety any potentially applicable modern awards, such as the Award, except where otherwise stated in this Agreement.

8.2 For the avoidance of doubt, neither the Award, nor ... are incorporated into this Agreement and do not form part of an Employee’s contract of employment.” 16 (Underlining added)

[37] The provisions of the Agreement which draw on the Award in a substantive way are clauses 17.5 – Casual Conversion, 18 – Apprentices, 21.8 – Part-Time Employees, 44.7 – Employee termination and 45.1 – Industry-specific redundancy scheme. The clauses are set out below:

“Casual Conversion

17.5 Casual employees have the right to elect to have their contract of employment converted to full or part-time employment, per clause 14.8 of the Award.

18 Apprentices

…

18.2 Apprentices will receive the same conditions of employment as set out in clause 15 of the Award.

Off-the-job training

...

18.4 In accordance with the Award, unless there is unsatisfactory progress by an Apprentice in their contract o training, the Employer will pay for, or reimburse the cost of:

(a) any fees payable for off-the-job training as per their contract of training with their registered training organisation; and

(b) the cost of prescribed textbooks.

Wage progression

18.5 In accordance with the Award, for hours worked Apprentices will be entitled to the applicable Base Rates indicated in Appendix A, either on the basis of time-served or competency.

21 Overtime

…

Part-Time Employees

21.8 Part-time employees will receive payment for overtime in accordance with clause 36.2 of the Award.

44 Notice of Termination

…

Employee termination

44.7 … Where the Employee fails to provide the required period of notice, the Employer may withhold from any monies due to the Employee in accordance with clause 16.2 of the Award.

45 Redundancy pay

Industry-specific redundancy scheme

45.1 Redundancy pay is provided as per section 17 of the Award which is replicated below.”

[38] I note that clauses 17.5, 18.2 and 21.8 mirror undertakings provided in respect of the 2015 Agreement. I also note that clauses 18.4, 18.5, 44.7 and 45 all mirror provisions in the 2015 Agreement (though in the 2015 Agreement the provisions are numbered 18.3, 18.4, 42.7 and 43 respectively). In other words, the provisions involve no change from the existing arrangements which cover employees.

[39] I turn now to consider Geocon’s contention that its failure to provide employees who would be covered by the Agreement with either a copy of the Award or access to a copy of the Award during the access period for the Agreement was a minor procedural error and that the employees covered by the Agreement were not likely to have been disadvantaged by the error as per s.188(2) of the Act. As previously mentioned, Geocon relied on the decision Greenfreight in support of its submission in this regard. By way of background, the circumstances in Greenfreight were that the availability of copies of the two modern awards which were explicitly incorporated into the proposed agreement in that case was not brought to the attention of employees raising doubts about whether the agreement had been genuinely agreed to by employees. As a result, Vice President Hatcher invited Greenfreight to make submissions as to whether s.188(2) of the Act was applicable. As can be seen from the following extract from his decision, the Vice President concluded that s.188(2) was applicable:

“[13] Greenfreight made a further submission on 27 February 2019 pursuant to s188(2) of the FW Act that:

“Given the history and circumstances of the Company and its employees, the history of previous negotiations and bargaining representatives and the fact that the agreement was a ‘roll over’ agreement we would submit that the error is minimal in nature and had no impact on the course of bargaining as evidenced by the high proportion and vote of the employees”

[14] I am satisfied as to the following matters:

•  Greenfreight’s failure to inform employees that copies of the incorporated material were available on request, and thereby failing to take all reasonable steps to provide copies of or access to the incorporated material, was a “procedural or technical error” made in relation to the s 180(2) requirement mentioned in s 188(1)(a)(i). There is no basis to conclude that Greenfreight deliberately sought not to comply with s 180(2).

•  The error was “minor”. The employees were provided with access to the primary document, being the Agreement. As earlier discussed, the enterprise agreement was a “rollover” document which incorporated by reference the same awards as the previous agreements in the same way as previously, and the awards were readily accessible in the public domain.

•  But for the minor and technical error concerning compliance with s 180(2) as mentioned in s 188(1)(a)(i), the Agreement would have been genuinely agreed to within the meaning of s 188(1).

•  The employees covered by the Agreement were “not likely to have been disadvantaged by the error”. As earlier stated, the incorporation of the awards repeated the position which applied in previous agreements (including the agreement which was in effect at the time of the vote), and the substantive changes to the existing position (concerning adjustments to the rates payable) are contained in the Agreement itself.

[15] Accordingly, consistent with the principles stated in Re Huntsman Chemical Company Australia Pty Limited t/a RMAX Rigid Cellular Plastics I consider that the Agreement was genuinely agreed within the meaning of s 188(2).” 17 (Endnotes not included)

[40] The factual matrix in this case is analogous though not identical to that in Greenfreight in that the Agreement reflects the bulk of the 2015 Agreement and the employees who would be covered by the Agreement were not provided with either a copy of the Award or access to a copy of the Award during the access period for the Agreement. Beyond this, I note that there is nothing before the Commission suggesting or pointing to this failure being a deliberate decision by Geocon to not comply with s.180(2) of the Act. I also note that the provisions in the Agreement which draw on the Award are in identical terms to those of the 2015 Agreement (inclusive of the undertakings given by Geocon). Against that background, drawing on the approach in Greenfreight and for similar reasons, I am satisfied that the failure to provide employees with a copy of the Award was a minor procedural error and that the employees covered by the Agreement were not likely to have been disadvantaged by the error.

[41] Finally, as previously noted, at the hearing in response to a question from the Commission the CFMMEU stated that the Agreement included a different definition of redundancy to that in the Award, defined misconduct differently and did not define what ACIRT (the Australian Construction Industry Redundancy Trust) was and how it operated. While the CFMMEU’s response in respect of ACIRT is correct, the response is not otherwise borne out by a comparison in the table below of the definition of redundancy in the Agreement and the Award.

Agreement

Award

Definition

45.3 For the purposes of this clause, redundancy means a situation where an Employee ceases to be employed by an Employer to whom this Award applies, other than for reasons of misconduct or refusal of duty. Redundant has a corresponding meaning.

17.2 Definition

For the purposes of this clause,redundancymeans a situation where an employee ceases to be employed by an employer to whom this award applies, other than for reasons of misconduct or refusal of duty. Redundanthas a corresponding meaning.

[42] More broadly, I note that the redundancy pay provision replicated in the Agreement is in almost identical terms to the industry specific redundancy scheme in the Award. The key differences being in respect of ACIRT and the non-inclusion of clause 17.7 – Transfer of business of the Award. Further, the Agreement provision relating to ACIRT is exactly the same as the equivalent provision in the 2015 Agreement.

Were the terms of the Agreement, and the effect of those terms, explained to employees?

[43] The CFMMEU submitted that the Commission could not be sure that the effects of terms of the Agreement were properly explained to workers. By way of background, Mr Smith’s response to Questions 2.6 and 2.7 in his Form F17 included the following regarding the explanation of the terms of the Agreement to employees:

“2.6 What steps were taken by the employer to explain the terms of the agreement, and the effect of those terms, to the relevant employees?

…

Employer representative met with all employees to explain the agreement and any amendments that have been made to the new agreement. – 6/07/18

...

2.7 When you explained the terms of the agreement to employees, what did you do to take into account the particular circumstances and needs of the relevant employees?

– The entire agreement was covered verbally, the changes that we were wanting to implement were explained in detail.

– All of our workers are from the English speaking backgrounds and of mature age.

– Once the Agreement was verbally communicated the employees had the opportunity to ask any questions regarding the Agreement, including if they required any clarity.”

[44] The correspondence of 15 January 2019 from the Commission’s Agreements Team to Geocon included the following:

“The information provided at question 2.6 and 2.7 of the F17 may not contain enough details to satisfy the requirements outlined in the OneKey decision. Further information may be required detailing the steps taken to explain the terms of the agreement to the employees covered by the Agreement (Q2.6), as well as the effect of the Agreement on them (such as how the application of the relevant awards is varied), and copy of any materials given to employees to explain the terms and the effect of the terms of the agreement, having regard to the decision in One Key Workforce Pty Ltd v CFMEU [2018] FCAFC 77.” (Underlining as per original)

[45] Ms Hood responded on 1 February 2019 as follows regarding the above:

“Question 2.6

To comply with Section 180(5) of the Act, the Employer met with all individuals who would be covered by the proposed agreement to explain the terms and conditions, and the effect of those terms.

On the 6 July 2018, Mr Adam Urbaniak (Site Manager) went to all four Geocon construction sites being, Belconnen (Republic), West Block (Barton), Abode Kingston and Midnight (Braddon) to meet with the employee’s to discuss the proposed changes and the effect of those terms. The proposed agreement, whilst very similar to the previous enterprise agreement, has several key changes that were explained in detail to the employees. These included (but are not limited to):

•  Inclusion of a new Leading Hand Allowance of $100 per week

•  Inclusion of a new Classification under Appendix A titled “Unskilled worker” – being a new entrant to the industry with up to 12 months of experience

•  Inclusion of a shiftwork provision, including confirmation regarding payment for a night shift.

During these discussions, employees were provided with an opportunity to ask any questions in relation to the proposed changes in the effect of those proposed changes on their employment.

Additionally, employees were advised throughout the negotiations and during the access period that should they have any questions or concerns in relation to the proposed agreement they could discuss these matters with either an employee representative, or the site management team.

The Employer can provide further evidence in order to satisfy the Commission of these actions having had occurred, if required.

Question 2.7

To comply with Section 180(6) of the Act, the Employer confirms that Mr Urbaniak visited each of the sites and met face-to-face with employees to discuss the proposed changes. It was also reiterated throughout the negotiations and during the access period that employees could raise any questions or discuss the proposed agreement with their nominated bargaining representatives or with site management.

The Employer can provide further evidence in order to satisfy the Commission of these actions having had occurred, if required.)”

[46] Mr Urbaniak’s evidence was that on 6 July 2018 he visited all of Geocon’s construction sites, sat down with groups of between 3-8 employees and went through the proposed amendments to the agreement page by page, explaining what the proposed changes were and how they would be applied. Mr Lewis in his statutory declaration confirmed that Mr Urbaniak visited the West Block site to discuss the Agreement and ask employees if they had any other questions, while both Mr Steele and Mr Sharpe deposed in the statutory declarations that they informed employees on their respective sites of the changes to the agreement.

[47] In One Key Workforce v Construction, Forestry, Mining and Energy Union (OKW)  18 a Full Court of the Federal Court considered what the Commission was required to have regard to in satisfying itself whether s.180(5) of the Act had been complied with. Specifically, the Full Court concluded as follows:

“… 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) 162 CLR 24 at 39-44 (Mason J).” 19 (Underlining added)

[48] As previously mentioned, Geocon in its submissions highlighted that the Agreement was a ‘roll over’ agreement which was very similar to the 2015 Agreement. This is borne out by a comparison of the Agreement against the 2015 Agreement which indicates the following key differences:

•  Contents – notes relating to junior and adult apprentices which appeared under clause 2 of Appendix A (Base Rates of pay) in the contents section of the 2015 Agreement do not appear in the Agreement;

•  clause 2 (Interpretation) – definitions of ‘Continuous Shiftworker’ and ‘Night Shift’ have been added;

•  clause 10.7 (Dispute resolution) – the Code for the Tendering and Performance of Building Work 2016 is cited as opposed to the 2014 version of the Code which was referred to in the 2015 Agreement;

•  clause 12.4 (General duties) which provides that performance reviews will be carried out every 12 months from September 2018 has been added, there is no equivalent provision in the Award;

•  clause 19.1 (Ordinary Hours) – the words “averaged over a 4 week cycle in accordance with the paid roster day off (RDO) regime set out in clause 20” (emphasis as per original) which appeared in the 2015 Agreement do not appear in the Agreement;

•  clause 20.7 (Taking and banking RDOs) has been varied to among other things provide that Geocon’s RDO calendar may be varied at any time to suit its operational requirements;

•  clause 20.8 (Taking and banking of RDOs) which deals with ‘Lockdown Weekends’ (as defined in the clause) has been added;

•  clause 20.12 (Cashing-out RDOs) – the words “as long as at least 3 days RDO are still “banked” and on the agreement of management” which appeared in the equivalent clause in the 2015 Agreement (i.e. clause 20.10) do not appear in the Agreement;

•  clause 22 (Shiftwork) has been added – the clause provides among other things for a loading of 100% when an employee is engaged on a night shift;

•  clause 25.3b) (Superannuation) – a Leading Hand Allowance (see below) has been added;

•  clause 26.2 (Travel Allowance) which deals with the reimbursement of reasonable parking costs has been varied to provide that the definition of reasonable parking cost will be determined by Geocon on a case-by-case basis;

•  clause 30 (Leading Hand Allowance) which provides for a weekly allowance of $100 has been added;

•  clause 36.6 (Public holiday loading) which provides that an employee who is required to work on a public holiday must be paid their applicable base rate of pay plus a loading of 100% calculated on their base rate of pay (the 2015 Agreement provided for a loading of 150%);

•  clause 2 of Appendix A has been varied to include the classification of ‘Unskilled Worker’ with the classification criteria for a Casual Construction Worker Level 1(a) varied to include a ‘Time Served’ criterion, with the words “[a]t least 12 months experience in building and construction” added to the classification criteria for a Construction Worker Level 1(a);

•  clause 3 of Appendix A (Allowance summary) – reference to the Leading Hand Allowance has been added; and

•  clause 4 of Appendix A (Loadings summary) – the reference to Public holiday loadings has been varied to reflect the abovementioned lower loading of 100%.

[49] What is apparent from the above comparison is that the nature of many of the changes reflected in the Agreement are relatively modest, with some of little or no apparent practical effect, e.g. the non-inclusion of the abovementioned notes from the Contents section of the Agreement. Further, the introduction of a Leading Hand Allowance is advantageous for some employees, while the only obvious disadvantageous change appears to be the reduction in the public holiday loading from 150% to 100%. Other than that, the impact on employees of some of the other changes reflected in the Agreement, e.g. the introduction of annual performance reviews, is unknown.

[50] In circumstances where the Agreement is very similar to the 2015 Agreement, an explanation of the terms of the Agreement which focussed on the key changes to employee’s existing terms and conditions of employment was in my view appropriate in this case. Further, the evidence before the Commission, particularly Mr Urbaniak’s unchallenged evidence, supports a finding that the terms of the Agreement and the effect of those terms were appropriately explained to employees who would be covered by the Agreement. To that end, I note also the response to question 4.3 of the Form F17 which states that there are no employees of a non-English speaking background or of Aboriginal or Torres Strait Islander descent covered by the Agreement and only one employee under the age of 21 covered by the Agreement.

[51] Taken together, the above analysis and the unchallenged evidence in this matter, supports a finding that Geocon took all reasonable steps to ensure that the terms of the Agreement, and the effect of those terms, were explained to employees. Drawing on what the Commission is required to have regard to in satisfying itself whether s.180(5) of the Act had been complied with as set out in OKW, such a finding supports a conclusion that Geocon has satisfied the requirements of s.180(5) of the Act in this case.

Did the employees who voted on the Agreement have a stake in the Agreement?

[52] The issue of ‘stake’ was considered by the Full Bench in KCL Industries Pty Ltd 20. In that case the Full Bench determined as follows:

“[36] In summary, the position is that the Agreement covers a wide range of classifications most of which have no relevance to the work performed by KCL’s three existing employees, encompasses industries in which KCL does not currently operate, and contains rates of pay which, even in respect of those classifications relevant to the current employees, are not to apply to those employees. 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 occupation and industries in which they did not work and presumably had no experience.” 21 (Underlining added)

[53] In this case the CFMMEU posited that there was a genuine question over what stake the employees who voted on the Agreement had in its operation given that the Agreement was made more than 15 months before the Agreement could have any effect on any person and that a significant proportion and potentially the majority of workers currently employed by Geocon would not be employed by it at the time the Agreement will apply.

[54] That contention was rebutted by Ms Hood’s unchallenged evidence that, inter alia, as at the date of her statutory declaration (i.e. 14 June 2019 which was some 11 months after the Agreement was made) all 20 of the employees who voted on the Agreement remained employed by Geocon and that the average length of tenure of employees engaged on a permanent basis was 2.8 years.

[55] I accept that it is highly unusual for an employer to make an agreement some 18 months in advance of the nominal expiry date of a current enterprise agreement. However, the Act does not expressly preclude such an outcome. In this case the evidence points to the likelihood that most, if not all, of the 20 employees who voted on the Agreement continuing to be employed by Geocon when the Agreement commences in reality to govern the terms and conditions of employment of employees (i.e. after the 2015 Agreement passes its nominal expiry date on 13 January 2020). Further, I note the views of the plurality of the High Court in ALDI which stated:

“…while s 186 operates on the assumption that there are employees covered by the agreement at the time the application for approval is made, it does not follow that the agreement must apply to them in the sense of operating to fix their rights and obligations in the work actually being performed by them at that time.”

[56] Against that background and having particular regard to Ms Hood’s unchallenged evidence, I am satisfied that the employees who voted on the Agreement have the necessary stake in the Agreement in that the Agreement will (if approved) for most of them, if not all of them, actually govern their terms and conditions of employment once the 2015 Agreement passes its nominal expiry date on 13 January 2020.

Any other reasonable grounds for believing the Agreement had not been genuinely agreed to by employees?

[57] The CFMMEU contended inter alia that the Form F17 provided was so flawed as to have rendered the application invalid. More specifically, the CFMMEU submitted that the Form F17 was incorrect or misleading on its face at questions 2.4, 2.6 and 2.8 and was not completed by the attachment of the document required by question 2.3 until 27 July 2018. By way of background, questions 2.4, 2.6 and 2.8 of the Form F17 in general terms go respectively to the provisions of the text of the Agreement and any incorporated materials, the steps taken to explain the terms of the Agreement to employees and key dates in the agreement making process (e.g. the date of notification time and the date the Agreement was made). Question 2.3 relates to the NoERR which was given to employees.

[58] It is clear from the consideration of the issues dealt with elsewhere in this decision that aspects of the Form F17 filed with the application were not as fulsome and detailed as they could have been. However, Geocon has provided further details in response to the Commission’s concerns. More importantly, the responses in the Form F17 do not point to employees having been misled about the terms of the Agreement such that would give rise to concerns about whether the Agreement had been genuinely agreed to by employees.

[59] In summary, there are no other reasonable grounds for believing the Agreement had not been genuinely agreed to by employees.

Does the Agreement pass the BOOT?

[60] The Agreement offers adult rates of pay between 11.59% and 101.90% above the Award, while apprentices also receive rates of pay above the Award (as at late 2018 when the Agreement was assessed by the Commission’s Agreements team). Beyond this, I note that:

•  the Agreement does not incorporate the Award;

•  the rates of pay in the Agreement will increase by a minimum of 5% annually from the first pay period on or after 1 February 2019;

•  the Agreement offers penalty rates similar to or slightly higher than compared with the Award for overtime, shift and weekend work, the exception being the loading paid for work performed on public holidays; and

•  the Agreement is silent on most allowances found in the Award.

[61] Modelling undertaken by the Commission’s Agreements Team indicates that employees’ earnings are at least $136 per week above the Award based on a 50 hour week.

[62] In its 15 January 2019 correspondence to Geocon the Commission’s Agreements Team raised the following BOOT related issues:

“Better Off Overall Test (“BOOT”)

•  The Agreement is silent on all shift penalties except night shift which is paid at 200% and is defined consistently with the Award as a shift which commences between the hours of 3pm and 11pm. It is unclear as to whether this is the only shiftwork that can be performed under the agreement for the purposes of assessing the BOOT.

•  The Agreement is silent on most allowances found in the Building and Construction General On-site Award 2010. You may wish to identify which allowances found in the Award are applicable and would normally apply to employees covered by this Agreement.”

[63] Ms Hood responded to that correspondence on 1 February 2019 in the following terms:

“Better of Overall Test (“BOOT”)

Clause 22. Shift Work

The Employer seeks to confirm that night shift is the only shift that is to be performed under the proposed agreement. The Employer also seeks to confirm that the proposed shift penalty of 100%, calculated on the employee’s applicable base rate of pay will be paid consistent with the Award provision, being a shift commencing between the hours of 3pm and 11pm.

The Employer is willing to submit undertakings in this regard.

Allowances

The proposed Agreement provides the following allowances:

•  Travel allowance

•  Meal allowance

•  Living Away from home Allowance

•  Leading Hand Allowance

The Employer confirms the following allowances contained in the Award that would apply to an employee covered under the proposed agreement have been included in the employee’s base rates of pay. These include:

•  Industry allowance

•  Special allowance

•  Tool allowance

•  Multi-storey allowance

•  Confined space allowance

•  In Charge of Plant allowance

The Employer is willing to submit undertakings confirming the above listed allowances (excluding travel, meal leading hand and living away from home), payable to an employee under the Award, are provided for in the employee’s base rate of pay.”

[64] As noted above, the Agreement does not include a number of allowances which are provided for in the Award. Beyond this, under the Agreement work performed on a public holiday attracts a loading of 100%, whereas under the Award such work attracts a loading of 150%. However, these less beneficial aspects of the Agreement when compared to the Award are outweighed by the more beneficial aspects of the Agreement, particularly the higher rates of pay provided for in the Agreement.

[65] Having regard to the above analysis and subject to Geocon providing an undertaking in acceptable terms regarding the shiftwork issue, I am satisfied that employees will be better off overall under the Agreement.

Next steps

[66] For all the above reasons, I am satisfied that the Agreement was genuinely agreed to by employees. Subject to the receipt of the abovementioned undertaking foreshadowed by Geocon regarding shiftwork, I am also satisfied that each of the requirements of ss.186 and
187 are met in this case. A decision approving the Agreement will be issued once an undertaking in acceptable terms regarding shiftwork is received by the Commission.

Appearances:

J. Tracey of Counselfor the Applicant.

T. Fischer for the Construction, Forestry, Maritime, Mining and Energy Union.

W. Steele, M. Sharpe and D. Lewis as employee bargaining representatives.

Telephone Hearing details:

2019.

Canberra:

June 19.

Printed by authority of the Commonwealth Government Printer

<PR711131>

 1   [2019] FWC 2775

 2   MA000020

 3   AE417409

 4   [2019] FWCA 1954

 5   [2019] FWCA 4042

 6   [2018] FWC 6936

 7   Exhibit 1

 8   Exhibit 2

 9   Exhibit 3

 10   Exhibit 4

 11   Exhibit 5

 12   Exhibit 4 at paragraphs 1 and 2

 13 (2017) 92 ALJR 33

 14   [2017] FWCFB 2741

 15   [2019] FWC 2775 at [15]

 16   Clause 2.1 of the Agreement provides that “in this Agreement ... Award means the Building and Construction General On-site Award 2010, as in force from time-to-time.”

 17   [2019] FWCA 1954 at [13]-[15]

 18 (2018) 277 IR 23

 19   Ibid at 112

 20   [2016] FWCFB 3048

 21   Ibid at [36]