Gippsland NDT Pty Ltd

[2021] FWCA 5835

[2021] FWCA 5835

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Gippsland NDT Pty Ltd
(AG2021/6594)

AMWU AND GIPPSLAND NDT PTY LTD METAL ENGINEERING MELBOURNE METRO TUNNEL AND STATIONS PROJECT AGREEMENT 2018 – 2022

Metal industry
COMMISSIONER MCKINNON	MELBOURNE, 15 SEPTEMBER 2021

Application for approval of the AMWU and Gippsland NDT Pty Ltd Metal Engineering Melbourne Metro Tunnel and Stations Project Agreement 2018 – 2022 – whether genuinely agreed – failure to provide access to incorporated award terms.

[1] Gippsland NDT Pty Ltd has applied for approval of a single enterprise agreement known as the AMWU and Gippsland NDT Pty Ltd Metal Engineering Melbourne Metro Tunnel and Stations Project Agreement 2018 – 2022 (the Agreement).

[2] The Agreement is intended to apply to employees of Gippsland NDT who perform on-site construction work on the Melbourne Metro Tunnel and Stations Project in Victoria. It follows a pattern agreement established by the Project’s principal contractor that subcontractors then adopt. The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) assisted in the roll out of the Agreement to employees of Gippsland NDT. It seeks to be covered by the Agreement.

[3] The materials disclose the following information about the process adopted by Gippsland NDT in connection with the making of the Agreement:

14 May 2021 A hard copy of the notice of employee representational rights was issued to employees at a meeting. During a meeting in the office employees and management went over the terms of the draft agreement that was given out that day and the effects that the terms may have. Employees were advised they could ask questions at any time if they needed clarification on any part of the agreement or “its associated award”. Copies of the Building and Construction General On-site Award 2020 were also made available to employees.

28 June 2021 An updated draft agreement was handed to employees at a meeting in the office. All sections were reviewed and explained. Updates to the agreement including a superannuation clause were discussed and reviewed. A hard copy of the modern award was also made available to them. Employees were advised orally that a vote would be held on the Agreement at a meeting in the workshop office on 23 July 2021 by show of hands 1. Voting details were displayed on a notice board accessible to employees.

23 July 2021 Employees voted on the Agreement by show of hands at Gippsland NDT’s Morwell site at 8.00am. Six employees voted unanimously to approve the Agreement.

6 August 2021 The application for approval of the Agreement was made to the Commission.

[4] Clause 7 of the Agreement describes the relationship between the Agreement and the terms of three industrial instruments that are incorporated by reference in the Agreement. These are the Building and Construction General On-site Award 2010 (as varied) – now the Building and Construction General On-site Award 2020, as well as terms of the National Metal and Engineering On Site Construction Industry Award 1999 ("the 1999 Award"), as it stood in 2002, and terms of the National Metal and Engineering On-Site Construction Industry Award 2002, as varied, ("the 2002 Award"). The terms of the modern award and the 2002 Award only apply where they are more beneficial to employees covered by the Agreement than the terms of the 1999 Award. Express provisions of the Agreement prevail over incorporated award terms to the extent of inconsistency.

[5] For the Agreement to be approved, I must be satisfied that the Agreement has been genuinely agreed to by relevant employees, or if I am not so satisfied, that an undertaking has been given to meet my concern(s) in this regard. 2 The requirement in relation to genuine agreement includes being satisfied that the employer has taken all reasonable steps to ensure that during the access period for the Agreement, either:

1. the employees employed at the time who will be covered by the agreement were given a copy of both the written text of the agreement and any other material incorporated by reference in the agreement, or
2. the employees had access to a copy of those materials. 3

[6] I am not satisfied that this requirement has been met in relation to the Agreement. On the material before me, no steps were taken to give employees a copy of the 1999 Award or the 2002 Award, or to make either of these instruments accessible to employees.

[7] Employees had access to the modern award during the agreement-making process and during the access period for the Agreement. However, they were not given a copy of the 1999 Award or the 2002 Award and no steps were taken to make the instruments accessible to the employees. Employees were left to their own devices to seek out these instruments if they wished. This was problematic for two reasons. Firstly, the content of these instruments is essential to an understanding of the content of the Agreement. Secondly, the obligation to ensure that employees have access to incorporated terms of an enterprise agreement sits positively with the employer.

[8] The ability of employees to find the 1999 Award is also likely to have been constrained by the complexity that its actual title is the National Metal and Engineering On-site Construction Industry Award 2002, itself a simplified version of the National Metal and Engineering On-site Construction Industry Award 1989. This may be a matter known to sophisticated industrial parties in the metal and engineering industries, but it is unlikely to be common knowledge to employees engaged in on-site “non-destructive testing” work. It is not a matter that can readily be ascertained by a simple internet search, and it is not evident that the employees who will be covered by the Agreement have such a level of knowledge and understanding of historical industrial conditions relevant to the work covered by the Agreement that they can be taken to have understood them in any meaningful way.

[9] The 1999 Award is a comprehensive document, covering numerous historical terms and conditions of employment, many of which are likely to intersect with terms of the Agreement. It is very different in terms to the current modern award. For the purposes of the Agreement, the 1999 Award applies to the exclusion of other incorporated terms, including those in the modern award, where it is more beneficial. The primacy given to the 1999 Award in the Agreement means that access to the 1999 Award at the very least was, in my view, necessary to ensure that employees had a genuine opportunity to understand the full content of the Agreement they were being asked to approve.

[10] This case is not analogous to those where genuine agreement has been found despite a failure to provide employees with access to an incorporated modern award. That scenario has been dealt with on a number of occasions by the Commission, including Greenfreight Logging (NSW) Pty Ltd 4. In that case, the agreement was a ‘rollover’ agreement and the relevant modern award was readily accessible in the public domain. Here, the Agreement is a new, ‘project’ agreement that appears to cover at least some of Gippsland NDT’s Victorian employees. The applicable terms of the 1999 Award and the 2002 Award are not readily accessible in the public domain in the same way as a modern award might be said to be, including because they are historical instruments, incorporated as at a particular point in time, and in one case with a name that is different to the name used to describe the instrument in the Agreement.

[11] The failure to ensure that employees had access the incorporated award terms also has consequences for how the terms of the Agreement, and their effects, were explained to employees. Absent this information, I cannot be satisfied that the explanation of the Agreement included any explanation of the terms of the 1999 Award and/or the 2002 Award as they apply in the Agreement. An adequate explanation required more than a statement to the effect that the terms and conditions of employment will be no less beneficial than the modern award and its predecessor instruments ‘going back to’ 2002. The evolution of industrial instruments over the past 19 years is no simple matter, and nor is trying to ascertain precisely what the terms of the Agreement are once the various interaction rules in clause 7 of the Agreement are applied.

[12] The fact that employees are unlikely to have been disadvantaged by the error is a relevant but separate consideration to whether the prescribed procedural steps for approval of an enterprise agreement have been met. In addition, the discretion to waive non-compliance with these procedural requirements, including section 180(2)(a) of the Fair Work Act 2009 (Cth) (the Act), only applies in relation to minor procedural or technical errors or the issue of notices of employee representational rights.

[13] Failure to provide access to the 1999 Award and the 2002 Award to relevant employees was clearly an error. There is no evidence of any deliberate decision to omit this step, or to withhold the information from employees. However, the error was not ‘minor’ in nature. It was one of significance because it undermined the capacity of employees to know and understand the full content of the Agreement they were asked to approve.

[14] It follows that I am not satisfied that the Agreement has been genuinely agreed to by employees. The requirement in section 180(2)(a) of the Act has not been met in relation to the Agreement and the omission cannot be cured by section 188(2).

[15] The question is whether an undertaking can be given to resolve the concern. It is now established that an undertaking may cure a concern in relation to whether an Agreement has been genuinely agreed depending on the nature of the concern, and the effect of the undertaking given. In this case, the concern is that employees were not given access to a copy of the 1999 Award or the 2002 Award, or any explanation of the terms of those instruments or how they operate as terms of the Agreement. The result was that employees likely did not know the full content of the Agreement they were asked to approve.

[16] Gippsland NDT has given an undertaking in a bid to resolve the concerns. The undertaking confirms that the information not provided to employees before the Agreement was made has now been provided to employees, together with an explanation about the terms of the 1999 Award and the 2002 Award that will operate as terms of the Agreement. While the undertaking is perhaps novel, in my view it is capable of acceptance. The error in the agreement-making process did not cause employees to suffer any detriment in relation to their terms and conditions of employment. The terms of the Agreement that were not provided to employees and not explained were all more beneficial than the terms of the Agreement that employees voted to approve, because of the way those terms are incorporated into the Agreement on the ‘most beneficial’ basis. The undertaking does not result in any changes to the Agreement itself. It ensures that employees now have access to the information that they need to understand the full content of the Agreement as and when required.

[17] With the undertakings now given, I am satisfied that each of the requirements of sections 186, 187, 188 and 190 of the Act, as are relevant to this application for approval, have been met.

[18] The Agreement is approved and will operate from 22 September 2021. The nominal expiry date of the Agreement is 31 October 2022.

[19] The Agreement does not contain a flexibility term that meets the requirements of s. 202(1)(a) of the Act. The model flexibility term prescribed by the Fair Work Regulations 2009 is taken to be a term of the Agreement.

[20] The Agreement covers “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU).

COMMISSIONER

<AE513107  PR733988>

Printed by authority of the Commonwealth Government Printer

1   While the Form F17 identifies the date of the vote as “23/06/21”, the reference to June must be a typographical error as it pre-dates the meeting of 28 June 2021, when notice of the vote was given. The voting notice states that voting will take place at “Gippsland NDT Morwell, 23/07/2021, 0800”.

 2   Fair Work Act 2009 (Cth),ss.188; 190.

 3   Fair Work Act 2009 (Cth),s.180(2)(a).

 4   [2019] FWCA 1954.

Annexure A