Greenfreight Logging (NSW) Pty Ltd

[2019] FWCA 1954

[2019] FWCA 1954

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Greenfreight Logging (NSW) Pty Ltd
(AG2018/4983)

GREENFREIGHT LOGGING (NSW) PTY LTD ALBURY DEPOT ENTERPRISE AGREEMENT 2018

Road transport industry; Timber and paper products industry
VICE PRESIDENT HATCHER	SYDNEY, 25 MARCH 2019

Application for approval of the Greenfreight Logging (NSW) Pty Ltd Albury Depot Enterprise Agreement 2018.

[1] An application has been made for approval of an enterprise agreement known as the Greenfreight Logging (NSW) Pty Ltd Albury Depot Enterprise Agreement 2018 (Agreement). The application was made pursuant to s 185 of the Fair Work Act 2009 (FW Act) by Greenfreight Logging (NSW) Pty Ltd (Greenfreight). The Agreement is a single enterprise agreement. The application was accompanied by a Form F17 statutory declaration made by Christopher Jones, Logging NSW Manager, on 28 August 2018.

[2] The Transport Workers’ Union of Australia (TWU) filed a Form F18 statutory declaration made by Bradley Gibson on 11 October 2019 which relevantly states that the TWU was a bargaining representative for the Agreement, supported its approval, and gave notice pursuant to s 183 of the FW Act that it wished to be covered by the Agreement.

[3] Mr Heath Filippe, a truck driver employed at Greenfreight, filed a Form F18A statutory declaration made by himself on 3 October 2019 which relevantly declared that he was an employee bargaining representative and that the employees he represented supported the approval of the Agreement.

[4] On 24 December 2018, 8 February 2019 and 21 February 2019, I caused correspondence to be issued to Greenfreight identifying a number of issues and concerns with the application. They were as follows (in the terms communicated to Greenfreight):

(1) The answer to Q2.3 in the Form F17 statutory declaration of Chris Jones states that the Notice of Employee Representational Rights (NERR) was “made available” to employees on 13 April 2018 but does not specify how this was done.

(2) The answer to Q2.4 in the Form F17 statutory declaration of Chris Jones leaves unclear the manner in which a copy of the Agreement was provided or made available to employees. Additionally, it is unclear whether the incorporated award was provided or made available to employees and, if it was, how this occurred.

(3) Clause 12 of the Agreement, which deals with “Major Change and Consultation”, does not include any express reference to consultations in relation to any change in regular roster hours as required by s 205(1)(a)(ii) of the Fair Work Act 2009 (FW Act), nor does it require, in accordance with s 205(1A) in relation to a change to the employees' regular roster or ordinary hours of work, the employer to:

(a)  provide information to the employees about the change; and

(b)  invite the employees to give their views about the impact of the change (including any impact in relation to their family or caring responsibilities); and

(c)  consider any views given by the employees about the impact of the change.

(4) Clause 22.3 of the Agreement, in relation to the cashing out of annual leave, does not provide that the employee must retain a minimum balance of 4 weeks’ leave as required by s 93(2)(a) of the FW Act.

(5) Clause 28 of the Agreement provides for the continuation for current employees of the practice of drivers splitting shift allowance payments by agreement. It is unclear what this practice is and whether employees who participate in it would be better off overall compared to the relevant modern awards.

(6) The copy of the Agreement filed does not identify the address of any of the signatories as required by reg 2.06A(2)(b)(i) of the Fair Work Regulations 2009.

(7) After having had attention drawn to the 2016 agreement currently in operation, there is a concern that the provisions in Appendix 1 concerning the remuneration of Log Loader Operators may not satisfy the BOOT. In respect of piecework, clause 12.5(b) of the Timber Industry Award requires an employee to be paid rates which would allow the employee to earn not less than 25% above the appropriate weekly base rate in that award for an ordinary week’s work. Appendix 1 of the Agreement provides instead for an ordinary time rate of $26.99 per hour. It is not clear that this is in fact more than 25% above the applicable Timber Industry Award rate. Further, Appendix 1 appears to provide that $26.99 will be a flat rate payable for overtime, or for hours worked on weekends or public holidays, or for shiftwork, as part of the guarantee of a minimum paid amount “if work is not available on a tonnage basis”. It is not clear when the guarantee applies, and where it does apply the flat rate is not high enough to pass the BOOT when hours that would attract penalty rates under the award are worked. It is noted that, in respect of the 2016 Agreement, undertakings were accepted concerning the payment of award overtime rates and shift allowances.

(8) Clause 17.1 permits, by agreement, ordinary hours to be worked on Saturday or Sunday at ordinary rates of pay. Clause 22.2 of the Road Transport and Distribution Award 2010 permits ordinary hours to be worked on Saturday and Sunday by agreement, but clause 28.1 requires that ordinary hours of work performed on Saturdays be paid at time and a half and on Sundays at double time, within a minimum payment for 4 hours. Similarly, clause 27.2(b) of the Timber Industry Award 2010 provides that ordinary hours may be worked on Saturday and Sunday by agreement, but clause 27.6(a) provides that ordinary hours of work performed on Saturdays be paid at time and a half and on Sundays at double time. Noting that the Agreement has higher base rates of pay, can it be explained that employees under the agreement will be better of overall when working on Saturdays and/or Sundays?

[5] Greenfreight has responded to the above issues and concerns in various items of correspondence to the Commission and at a hearing in relation to the application conducted on 20 January 2019 (which was attended by representatives of Greenfreight and the TWU, and by Mr Filippe).

Issue 1

[6] Greenfreight submitted that the NERR was placed on each individual employee’s clip on 13 April 2018. Each employee was described as having their own clip in the amenities/locker room and all written communication to employees is conveyed using the individual clip as well as a general notice board.

[7] I consider this to be a satisfactory response to the issue raised and demonstrates compliance with the requirement in s 173(1) that all reasonable steps be taken to give the NERR to all relevant employees.

Issue 2

[8] Greenfreight referred to correspondence issued to employees on 14 August 2018 which stated:

“A copy of the proposed Agreement is available from your nominated bargaining representative or site Manager and is available on the Noticeboard.”

[9] It also submitted that had any employee asked for access to any award material incorporated into the Agreement, it would have provided it.

[10] I am satisfied that Greenfreight took all reasonable steps to ensure that employees had access to a copy of the Agreement during the access period in accordance with s 180(2)(b). However the position is different with respect to material incorporated by reference in the Agreement.

[11] Clause 4.1 of the Agreement provides that it incorporates the Road Transport and Distribution Award 2010. Other provisions of the Agreement (e.g. clause 7 and the Schedule) incorporate by reference provisions of the Road Transport and Distribution Award 2010 and the Timber Industry Award 2010. The correspondence to employees of 14 August 2018 made no reference to the incorporated award material, and I do not consider a preparedness to provide a copy of incorporated award material on request is sufficient to comply with s 180(2) if employees are not actually informed about this. The awards are readily available in the public domain, including on the Commission’s own website and the Fair Work Ombudsman’s website. Googling the name of either award readily produces a link to a copy of the award. The Full Bench decision in McDonalds Australia Pty Ltd 1would suggest that this is sufficient for compliance with s 180(2). However, the correctness of McDonalds has been cast into doubt by the Federal Court Full Court decision in One Key Workforce Pty Ltd v CFMMEU2 and the more recent Full Bench decision in CFMMEU v Dawson Maintenance Contractors Pty Ltd.3 At the very least, whether it is sufficient that incorporated material is in the public domain should be tested by reference to the characteristics of the workplace and the composition of the workforce.4 I do not consider that in this case there is evidence that the workforce was so sophisticated that requirement to “take all reasonable steps” in s 180(2) in respect of the provision of copies of or access to incorporated material could be satisfied by effectively taking no steps. Had Greenfreight informed its employees that the incorporated material would be made available on request, the position would have been different, in the circumstance where the Agreement was a “rollover” of previous enterprise agreements and incorporated the two awards in the same way as those previous agreements.

[12] Accordingly I do not consider that Greenfreight’s response satisfied my concern about compliance with s 180(2) in respect of material incorporated by reference in the Agreement. That raises an issue about whether the Agreement was “genuinely agreed” to having regard to s 188(1)(a)(i) of the FW Act. Consequently I invited Greenfreight to make submissions as to whether s 188(2) of the FW Act was applicable in respect of that issue.

[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 5I consider that the Agreement was genuinely agreed within the meaning of s 188(2).

Issue 3

[16] I am satisfied by Greenfreight’s response that the model consultation term provided by reg 2.09 of the Fair Work Regulations (FW Regulations) will operate pursuant to s 205(2) of the FW Act.

Issue 4

[17] Greenfreight proposed the following undertaking to resolve the concern:

“2. In relation to clause 22.3, an employee’s annual leave will not be cashed out if this cashing out would result in the employee’s remaining accrued entitlement to annual leave being less than 4 weeks.”

[18] I am satisfied that acceptance of this undertaking would resolve my concern.

Issue 5

[19] Greenfreight initially responded to the concern on 18 January 2019 as follows:

“…The base rates of pay in the proposed Agreement are substantially higher ($5.65 per hour) than the Award rates of pay. By way of example the application of a 15% Loading on the EBA hourly rate of $28.3048 results in an hourly rate of $32.55 per hour which is higher than a 30% loading on an Award based employee which would be $29.44 per hour ($22.65 + 30%).

Further the practice if applied only applies to current employees and can only be done by mutual agreement.

The Agreement also contains at Clause 8 an undertaking that ‘At no time will an employee earn less than the rates contained in the relevant Industry Award as determined and adjusted by the Fair Work Commission’.”

[20] I found this response to be unsatisfactory for the following reasons (which were communicated in writing to Greenfreight):

● It made assumptions about what the “current practice” referred to in clause 28 is without actually setting out what the terms of the practice are or providing any evidence of this. This made any proper BOOT assessment impossible.

● Clause 28 has, in at least one respect, a substantially different legal effect than the equivalent clause 28 of the 2016 agreement currently in operation. The 2016 agreement applies the practice only to employees employed as at the date of the agreement (12 May 2016), and provides that for persons engaged after the agreement commenced operation (4 August 2016) the terms for shift work would be as per the Road Transport and Distribution Industry Award. However clause 28 of the current Agreement provides that the practice will be applied to employees engaged as at the date of that agreement (which was made on 23 August 2018), and the award will apply to those employees engaged after the agreement commences operation (which is yet to occur). Thus clause 28 of the current Agreement would apply the practice to a class of employees who are currently, under the 2016 agreement, entitled to full award shift work benefits. No evidence had been provided that this change, let alone the practice itself, was ever explained to employees as required by s 180(5) of the FW Act.

● Clause 8 did not resolve the difficulty because it would only ensure that employees did not earn less than the relevant modern award. It did not ensure that employees are better off overall than they would be under the modern award. Nor did it provide for a mechanism for any alternative calculation of remuneration.

[21] Greenfreight gave a further response on 8 February 2019 explaining that:

● The term “current practice” as referred to in Clause 28 first appeared in the 2016 agreement and arose at the initiative of the employees.

•  was to give effect to an agreed arrangement between employees to effectively split shift allowances to provide that both Day shift and Night shift received a 15% shift allowance rather than Day shift receiving nothing and Night Shift receiving 30%.

•  practice continues by way of mutual agreement between employees to average the shift allowance payable.’

● Clause 28 was introduced into the 2016 agreement at the initiative of the employees and remains in the proposed Agreement at the request of the employees.

● An undertaking would be given to ensure that overtime and shift loadings would be paid when hours attracting such payments were worked.

[22] Greenfreight ultimately offered an undertaking that clause 28 would be modified to operate as follows:

“28.1 Employees classified as drivers whose employment with the Company commenced on or before 12 May 2016 may elect, with the agreement of the Company, to be paid a loading of 15% on day shift and 15% on night shift when performing rotating day and night shiftwork on Monday-Friday.

28.2 Employees classified as drivers whose employment with the Company commenced after 12 May 2016 shall be paid for shiftwork in accordance with the shiftwork provisions of the Road Transport and Distribution Award 2010.

28.3 Remuneration for shiftwork shall be calculated by reference to the base rate of pay for drivers in Appendix 1.”

[23] The above undertaking would resolve my concern.

Issue 6

[24] Greenfreight has subsequently provided the Commission with a copy of the Agreement containing a revised signature clause.

Issue 7

[25] Greenfreight ultimately proposed an undertaking as follows:

“In relation to Appendix 1, the following provisions additional to those under the heading “Loader Operator Rates” will apply to Log Loader Operators paid on a piecework basis (Piecework employees):

(d) The Company will each pay period calculate and pay to each Piecework employee the higher of:

(i) the remuneration payable to the employee under Appendix 1 as a piecework employee for the work performed; or

(ii) the remuneration payable to them under this Agreement if paid wholly on an hours and overtime basis.

(e) At no stage will a Piecework employee earn any less than they would have received if paid on an hours and overtime basis under this Agreement.”

[26] The above undertaking would resolve my concern.

Issue 8

[27] In response to this concern, Greenfreight submitted that the base rates of pay in the Agreement were sufficiently higher than those in the relevant awards such that if an employee worked on a Saturday or Sunday on ordinary-time rates under clause 17.1 of the Agreement, they would still be better off than under the relevant awards. This submission substantially resolved my concern, but there remained a residual concern that if an employee worked a Saturday and a Sunday under the Agreement, or worked nine or more hours on a Sunday, on ordinary time rates they would not be better off overall than under the relevant awards. In response to this, Greenfreight offered the following undertaking:

“The following conditions apply to the operation of clause 17.1:

(a) An employee may agree to work ordinary hours at ordinary rates of pay on a Saturday or a Sunday, but cannot work ordinary hours on a Saturday and a Sunday in a given week.

(b) An employee may not work in excess of 9 ordinary hours on a Sunday.”

[28] The above undertaking would resolve my concern.

Conclusion

[29] A copy of the final consolidated version of the undertakings is attached as Annexure A. I accept the undertakings. I am satisfied that they will not cause financial detriment to any employee covered by the Agreement and will not result in substantial changes to the Agreement. In a number of cases the undertakings increase the remuneration payable to employees under the Agreement.

[30] On the basis of the material contained in the application, the accompanying statutory declaration, the further information provided by Greenfreight and the undertakings attached as Annexure A, I am satisfied that each of the requirements of ss 186, 187, 188 and 190 as are relevant to this application for approval have been met.

[31] Pursuant to s 205(2) of the Act, the model consultation term prescribed by reg 2.09 of the FW Regulations is taken to be a term of the Agreement. In accordance with s 201(1) I note that the model consultation term is included in the Agreement.

[32] As earlier stated, the TWU has given notice under s 183 of the FW Act that it wants the Agreement to cover it. In accordance with s 201(2) I note that the Agreement covers the TWU.

[33] The Agreement is approved and, in accordance with s 54 of the FW Act, will operate 7 days from the date of approval. The nominal expiry date of the Agreement is 30 June 2021.

VICE PRESIDENT

Printed by authority of the Commonwealth Government Printer

<AE502494 PR706185>

Annexure A

 1   [2010] FWAFB 4602, 196 IR 155 at [43]

 2 [2018] FCAFC 77, 277 IR 23

 3   [2018] FWCFB 2992, 281 IR 124 at [45]-[52]

 4   National Tertiary Education Union v University of New South Wales[2011] FWAFB 5163, 210 IR 244 at [24]

 5   [2019] FWCFB 318