Hicrete Precast Systems Pty Ltd

[2021] FWC 5985

[2021] FWC 5985

FAIR WORK COMMISSION

DECISION

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

Hicrete Precast Systems Pty Ltd
(AG2021/5505)

COMMISSIONER SIMPSON BRISBANE, 24 SEPTEMBER 2021

Application for approval of enterprise agreement – agreement not genuinely agreed – application dismissed.

[1] An application has been made for approval of an enterprise agreement known as the Hicrete Precast Systems Pty Ltd Enterprise Agreement 2021 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) by Hicrete Precast Systems Pty Ltd (the Applicant/Employer). The Agreement is a single enterprise agreement.

[2] On 9 June 2021, the matter was allocated to me. On 11 June 2021, my Chambers sent correspondence to the Applicant outlining several preliminary concerns with the application and inviting responses to those concerns by 17 June 2021.

[3] On 15 June 2021, the Applicant replied by email, providing a revised signatory page, outlining its response to the above concerns raised and proffering undertakings.

[4] On 25 June 2021, the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU/Union) sent an email to the Commission as follows:

“…We have relevant member employed by the applicant within the scope of the agreement and as such was a bargaining representative.

So far as we are aware we were not served with a copy of this agreement from the applicant, we have become aware of the application today through the fair work commission website, this agreement was not listed under the building, metal and civil construction industries.

We do not have all relevant document and so we are not in a position to provide a fulcrum response to the application at present but we do wish to indicate our interest and seek to be heard. We would be grateful if we could provide with all relevant documents, an opportunity to considerer these documents, and a time frame to consider these document (sic) and a time frame to advise of any concern having done so…”

[5] A mention/directions hearing took place on 7 July 2021, and prior to this mention/directions hearing, also on 7 July 2021, the CFMMEU emailed my Chambers attaching a Form F18 –Declaration of employee organisation in relation to an application for approval of an enterprise agreement (other than a greenfields agreement), wherein they advised that the Union opposed the approval of the Agreement. In that email, the CFMMEU gave the following overview of the basis for their objection:

“1. Whether the Agreement passes the BOOT having regard to it covering workers that would be covered by the Building and Construction General On-Site Award 2020, noting its extensive classifications relating to the installation of pre-cast concrete. It is our belief that the Agreement will fail the BOOT against that award in a number of ways, including having regard to the range of permissible ordinary hours and shift work. (the BOOT Issues)

2. Whether the Agreement was genuinely agreed, noting that the explanation document speaks of union involvement in the negotiation of the agreement and the form f17 speaks of union involvement in explanation. We seek further information about what the employer purports occurred in this regard, so far as I am presently instructed no union official or employee had any involvement in the negotiation or explanation of the agreement. The accuracy or not of these comments has the capacity to give rise to a concern that the Agreement was not genuinely agreed as required by s 188 of the Act.” (the Genuine Agreement Issues) 1

(brackets my inclusions)

[6] In the same email, the Union stated that whilst it considered itself to be a bargaining representative (despite not having participated in the bargaining process), it submitted in the alternative that the Commission should consider the decision of Colman DP in Civil Sydney Pty Limited Enterprise Agreement 2019-2023 2and allow the Union to be heard pursuant to s.590 of the Act.

[7] I determined that I would be assisted in the matter by hearing from the CFMMEU, pursuant to s.590 of the Act. Permission was also granted pursuant to s.596 for the Applicant to be represented by Mr Earles, Solicitor of Fair Work Lawyers. Directions were issued for the filing of materials and the matter was set down for a future directions hearing which occurred by Microsoft Teams on 16 August 2021. Submissions and materials received were as follows:

•  On 20 July 2021, the CFMMEU filed submissions and BOOT modelling;

•  On 3 August 2021, the Applicant filed submissions, 3 PDF documents containing modelling and revised undertakings proffered by the Applicant; and

•  On 6 August 2021, the CFMMEU filed submissions in reply

[8] At the directions hearing on 16 August, both parties indicated a view that the matter should be dealt with on papers, although from different perspectives.

[9] It was said for the Applicant that there is a live question as to Award coverage and the Union’s submissions sought to deal with that complex issue. However it is unnecessary to do so in the circumstances, where despite the Applicant holding a view that the Concrete Products Award 2020 (the Concrete Award) covers all of the work performed by their employees, the Applicant has submitted undertakings to avoid lengthy proceedings in order to deal with the Union’s BOOT objections.

[10] The Applicant submitted that they are prepared to have a hearing if required however their normal working day commences between 6am and 10am, and the issues around shift work are inherently improbable given the nature of the work.

[11] The Union submitted that the Applicant took positive steps to explain to its employees that the Concrete Award was the relevant Award, and they were incorrect about the Award and further that there was no evidence concerning the text message purporting to represent the CFMMEU.

[12] The parties relied upon their written submissions. The outstanding issues which the Commission must deal with are the BOOT Issues and the Genuine Agreement Issues. These issues were further expanded in the written and oral submissions of the parties. In determining these matters, I have had regard to all of the materials.

BOOT ISSUES

[13] The Union referred to the decisions of the Commission having established that the Better Off Over all Test (the BOOT) must be conducted against the conditions and patterns of work that an Agreement permits, unless there is objective evidence that a particular work pattern is not practicable or cannot or is unlikely to be worked. 3

[14] The Union submitted that the Agreement covers employees that are covered by the classifications contained within the Agreement. This included “concrete panel erection workers”. The Union submitted that it is apparent that the classifications contemplate the Agreement covering and being applied to workers, including riggers and workers performing labouring on building sites. 4

[15] The Union submitted that the work of erecting concrete panels on building sites is work that squarely falls within the scope of the Building and Construction Industry General On-Site Award 2020 (the Building Award), and the description of the on-site building, engineering and civil construction industry within that Award. By contrast, the definition of the concrete products industry in the Concrete Award is limited to the fabrication and manufacturing of cement or concrete products. 5 The classifications contained within the Concrete Award do not extend to, or cover, tasks performed by workers erecting or installing concrete products. There is, for example, no classification for on-site riggers.

[16] The Union submitted that when the Applicant provides services erecting concrete panels in construction, it is in the on-site building, engineering and civil construction industry. The Union submitted that the Applicant may well be covered by two Modern Awards and there is no relevant exclusion clause that would prevent both the Building Award and the Concrete Award from applying.

[17] The Union submitted that, to the extent that the Applicant indicated that it would argue about the substantial character of the employer’s business in respect of Award coverage, it is well established that this is not the appropriate test for determining Award coverage and relied on the Full Court of the Federal Court decision in Transport Workers’ Union of Australia v Coles Supermarkets Australia Pty Ltd (Transport Workers). 6

[18] The Union submitted that whilst there has been judicial consideration of the principles for resolving potential conflicts between Award coverages with respect to particular workers, these considerations do not arise in this matter as there is no conflict between the Awards, their classifications and coverages. The Union submitted that workers treated as ‘erectors’ by the proposed Agreement do not fall within the Concrete Award’s classifications, and expressly fits within the classifications in the Building Award. For example, a rigger is expressly classified under the Building Award.

[19] Therefore, the Union submitted that the Building Award must be considered for the purposes of the BOOT and argued that the Agreement would fail the BOOT for the following reasons:

•  The ordinary hours are inconsistent with the Building Award, including that they are permitted to occur at any time between 5am and 6pm.

•  A comparison of the rates for CW1(d) in the Building Award to Level 1 under the Agreement suggests that those workers would not be better off; and

•  A comparison of any number of classifications under the Agreement to the Building Award in circumstances where 5am starts are conducted reveals that those workers would not be better off.

[20] The Union produced modelling to this effect. It can be understood that if “continuously worked” shifts do not leave workers better off, and broken shifts within the meaning of clause 17 of the Building Award would leave workers substantially worse off. The Union submitted that the Commission should undertake modelling against the Building Award and also the Road Transport and Distribution Award 2020.

[21] The Applicant submitted that any BOOT concerns arose in circumstances that were unlikely to occur. For example, concerns related to shift work were unlikely to occur because concrete panels are not likely to be erected at night. 7 However, the Applicant submitted that, whilst unlikely, it had proffered undertakings that dealt with any potential BOOT concerns.

[22] The Applicant maintained that contrary to the Union’s submissions, Transport Workers determined that on an objective reading the terms of some awards – being awards that define “industry” by reference to the work performed by the employee and not the work of the employer – the substantial character test was no longer relevant.

[23] The Applicant submitted that it adopted the analysis of the FWC Full Bench in Mitolo Group Pty Ltd v National Union of Workers (Mitolo), 8particularly paragraphs [41] to [43]. The Full Bench said as follows at paragraph [43]:

“[43] We would derive from the Full Court’s decision the proposition that the “substantial character” test will not be appropriate in determining coverage of a modern industry award at least where the relevant industry is not defined in a way which operates by reference to a characterisation of the employer’s business taken as a whole.”

[24] The Applicant submitted that the Full Bench noted that the Court in Transport Workers focussed on the importance of the phrase “including where the work performed is ancillary to the principal business, undertaking or industry of the employer” in that particular Award which meant that the particular Award was defined by reference to the work performed by the employee rather than the employer.

[25] The Applicant submitted that both the Concrete Award and the Building Award are not defined by reference to the employee’s work, but by reference to the employer’s work and the “principal purpose test” is therefore, the appropriate test.

[26] The Applicant submitted there was no hard boundary between the Concrete Award and the Building Award. The Applicant submitted the existence of a classification of “rigger” in the Building Award does not advance the issue any further in circumstances where there are multiple classifications in the Concrete Award which relate to crane operations, of which rigging is an integral part. The Applicant submitted that there are classifications within the Concrete Award that covers all of the work performed by those employees as well.

[27] The Applicant submitted that it does not perform any onsite installation of any concrete panels except for those it manufactures itself. The Applicant submitted that the bulk of their labour (around 60 – 70%) is engaged in the manufacturing process and there is some cross-over of workers from factory work to site work. The Applicant submitted in this sense, properly characterised, it is in the industry of concrete panel manufacturing which the Commission should find that the employees appropriately belong in, and absent the production (the substantial character), there would be no installation work.

[28] The Applicant submitted the bulk of the Union’s concerns related to shift work, giving the Commission the impression that it is likely that concrete panels would regularly be erected at night. The Applicant submitted the Commission should, from its own knowledge, be able to determine that this is inherently improbable. They advised that the construction industry is heavily regimented in terms of working times and it is obviously impracticable to provide sufficient light to safely manoeuvre panels at night.

[29] The Applicant stated that the modelling provided by the CFMMEU does not assist the Commission as it compares what appears to be arbitrary classifications with little attempt to assess the duties performed. For example, the CFMMEU compared a Grade 1 under the Agreement (in essence, an entry level labourer) to a CW1(d) (an experienced trades assistant). 9 Modelling provided by the Applicant showed that workers were better off under most working arrangements. The Applicant was prepared through the offering of an undertaking to conduct a BOOT assessment in the event of the following circumstances:

•  Where a Level 2 worker works between 9.5 and 10 hours on Monday-Friday;

•  Where a Level 3 worker works precisely 10 hours on Monday-Friday; and

•  Where an employee is required to commence work after 10:00am or before 6:00am

[30] The Applicant also stated that whilst it acknowledged that the Level 1 rate would be below the Award rate when the industry allowance is included (assuming the Building Award was applicable), it was prepared to undertake that no employee would be employed below Level 2 of the Agreement. 10

[31] The Applicant provided calculations saying it used the Allstyle model which it said is a worst-case scenario including the meal allowance and crib break, which accounts for a significant proportion of the calculations but does not include any ‘double time’ where the above Award component for each hour worked is amplified to the workers’ benefit.

[32] The Applicant submitted that to provide an additional buffer, the calculations also align Level 2 with CW1(d) when the Applicant said it is likely to be CW1(c) as the appropriate level, and Level 3 with CW3, when many of those employees would be actually CW1 workers where not riggers or trades.

[33] The Applicant submitted that the modelling shows under the ‘worst case’ analysis that there are some BOOT issues with Level 2 employees (casual and full time) and full time Level 3 employees, whereas Level 4 and Level 5 employees are plainly better off.

[34] The Applicant submitted that a detailed analysis of the numbers for Level 2 and 3 employees shows that the value of the meal allowance ($77.55) and the crib break ($77.90 - $102.00, depending on the classification) accounts for the differential.

[35] The Applicant submitted that in terms of allowances, the meal allowance under the Award is payable when an employee works 9.5 hours (i.e at least 1.5 hours overtime), and under the Agreement, the meal allowance is payable after 2 hours overtime.

[36] In relation to the Crib Break under the Award, it is payable where an employee works 10 hours or more whereas under the Agreement it is payable after 10 hours.

[37] The Applicant submitted that what this means is that after an employee works 10 hours, these two entitlements are payable under the Agreement, and employees are better off and significantly so. However, if an employee works less than 9.5 hours then the meal allowance or crib breaks would not impact the calculations.

[38] The Applicant referred to sensitivity analysis it had undertaken itself that is submitted showed the following:

•  A Level 2 full time employee is better off for any time worked less than 9 and a half hours on any day (ie before the meal allowance applies)

•  A Level 2 casual employee and a Level 3 full time employee are better off in all scenarios except if they work exactly ten hours (ie even a minute more, or a minute less leads to being better off). The Applicant submits this is explained by the differential in timing of the crib break.

•  A Level 3 casual employee is better off. Penalty rates are paid on the loaded up casual rate under the Agreement, but under the Award the overtime rate and the casual loading are not compounded.

•  All Level 2 and 3 employees are substantially better off if more than 10 hours are worked.

•  This leaves a small window of 9.5 hours or more, but less than 10, for Level 2 employees, and 10 hours ‘on the nose’ as the only windows where this could be an issue.

[39] The Applicant submitted that on-site workdays are typically 9 hours or less and this is consistent with the evidence led previously by the Union about the typical working week in Adelaide commercial construction, referring to what it said was evidence presented by the Union in the matter of Application by Square Ceilings 11 about the typical working week in Adelaide commercial construction.

[40] The Applicant submitted that it accepted that the BOOT needs to consider theoretical propositions to some extent, however this must be conducted in a manner that “avoids unnecessary technicalities” including the laborious process of trying to pick holes in an agreement where there is real world evidence of its operation and more generally the industry that it would operate in.

[41] Finally, the Applicant said that shift work is inherently improbable given the nature of the work, however not withstanding this the employer is prepared to provide an undertaking that where ‘shift work’ occurs, a BOOT assessment will be performed to avoid the need for lengthy proceedings. The totality of the undertakings to address concerns raised by the Commission and the Union are as follows:

1. Employees will be entitled to use a superannuation fund of their choice.

2. To avoid doubt, where a part-time employee works beyond their agreed ordinary hours, those hours will be treated as overtime and paid accordingly.

3. Casual employees will be engaged for a minimum of four (4) hours on any weekday.

4. To avoid doubt, the Agreement does not apply to apprentices.

5. To avoid doubt, hours worked outside of the span of ordinary hours will be treated as overtime.

6. Employees working on a public holiday will be paid double time and a half for such hours worked, with a minimum pay of four (4) hours.

7. In respect of an employee who is wholly or predominately engaged on to perform work on construction sites:

a. Hicrete will not pay an employee less than the Level 2 rate, and

b. The Company will conduct a BOOT Calculation in the event that any of the following happens:

i. If, in any week, a Level 2 worker works a day Monday to Friday, and that shift that is at least 9. 5 hours, but not more than 10 hours, or

ii. If, in any week, a Level 3 worker works a day Monday to Friday, and that shift that is precisely 10 hours, or

iii. An employee is required to commence work at a time that is after 10am or before 6am (Monday to Friday).

8. "BOOT Calculation" means that where required, the Company will ensure that the employee's total gross earnings for that period is more than what the employee would have been entitled to under the Building and Construction General Onsite Award 2020 (the Award). If an employee's total gross earnings for that period is not at least equal to an employee's entitlement under the Award, the Company will adjust the employee's total gross earnings for that period to equal the total gross earnings that would otherwise be payable to the affected employee under the Award, plus $1.00.

[42] In reply, the Union submitted that the Applicant mistakes the effect of the Full Court of the Federal Court decision in Transport Workers, and the Full Bench decision in Mitolo. The Union said the Full Courts commentary in Transport Workers is not limited to the Transport Industry Award, nor is it open to read Mitolo as suggested. The Union submitted that the Full Court at [22] makes plain that the correct approach is to “discern the objective meaning of the words used bearing in mind the context in which they appear and the purpose they were intended to serve.” 12

[43] The Union said that paragraph [43] of the Full Bench decision in Mitolo does not provide support for relevance of the substantial character test in this matter, as was submitted by the Applicant, and the Full Bench was actually saying that it would only be relevant in circumstances where the coverage term of the Award was crafted so as to expressly define coverage by the nature of the employer’s business as a whole.

[44] The Union submitted that the Commission must, in determining whether the Building Award applies to erectors of concrete panels on building sites, objectively construe the coverage clause of the Building Award and the Concrete Award.

[45] The Unions said the difficulty with the Applicant’s position is that there is nothing in either Award that supports in any way an argument that, when objectively construed, only one Award can cover an employer, or that the Concrete Award could cover the field for an employer to the exclusion of the Building Award.

[46] The Union stated that evidence regarding the improbability of shift work, and that on-site working days are typically 9 hours or less, should not be accepted as the Applicant had not led any evidence from which the Commission could form a view about the likely work patterns under the Agreement. 13

[47] The Union submitted that in each instance, the Award provides that it covers employers in the relevant industry (as defined by the Award), and the employees within the Award classifications. The Union said that the Applicant has not submitted that the work of erecting pre-cast concrete panels on building sites and in civil construction is not work that fits within the industry definition in the Building Award, and its submission at paragraph 8 appears to concede it does engage in work relating to construction of buildings, structures or works which it describes as ‘site work’. 14

[48] The Union referred to clauses 4.6 and 4.8 in the respective Awards that provides that for circumstances where an employer is covered by more than one Award, an employee of that employer is covered by the Award classification which is most appropriate to the work performed by the employee and to the environment in which the employee normally performs the work.

[49] The Union submitted that both Awards recognise an employer can be covered by that Award and another, and both express that the appropriate way to determine which Award then applies to a particular worker is to have regard to the work that they perform and the environment in which they perform it. Neither Award provides a relevant exclusion for the other.

[50] The Union submitted that it is plain when considering persons erecting concrete products on a building site, that those workers are normally performing work in the environment of the on-site building, engineering, and civil construction industry, and that the classifications contained in that Award provide a more appropriate coverage of the work required. 15

[51] The Union submitted that the Applicant made a forensic decision to not lead any evidence from which the Commission could form a view about the likely work patterns under the Agreement, and instead seeks to have factual findings made on the basis of mere submissions. The Union submitted that this approach cannot be taken to the application of the BOOT and referred to the Full Bench decision in the Loaded Rates Agreements case. 16

[52] The Union submitted that the BOOT must be conducted having regard to what the Agreement permits, objectively construed, and also having regard to the Agreement’s terms, it being taken that those terms were intended to have operation and binding effect. 17 The Agreement’s terms provide no limitations suggested by the Applicant, rather it expressly contemplates workdays with ordinary hours beginning at 5am, a time that is shift work under the Building Award.18

[53] The Union stated that the Applicant’s submissions on shift work, which refers only to ‘night shift’, are a gross simplification of shift work provisions at clause 17 of the Building Award which classifies a broad range of potential work patterns as shift work, almost all of which are capable of being wholly or substantially worked during day light hours, particularly during summer months. 19

[54] The Union also submitted that modelling submitted by the Applicant was of little assistance as it relies on assertions regarding the application of the classification structure. 20 The Union submitted that the proposed undertakings operate on a narrower basis for the purposes of determining Award coverage, with the effect being that workers who would be covered by the Building Award not receiving the benefit of the undertakings.21 With regards to the BOOT reconciliation component of the undertakings, the Union stated this was defective as it did not include a timeline over which the reconciliation is to occur.22 It stated that a late payment detriment is a relevant consideration that the Commission needs to consider.23 The Union stated that the undertakings do not put the Agreement in a position where all Award covered employees or potential employees would be better off overall. The undertaking does not cure the BOOT concerns and cannot be accepted.24

[55] The Union submitted that the Applicant has not made any submissions or provided any information with respect to the potential application of the Transport Award, and this matter still requires investigation by the Commission.

[56] Section 193(1) of the Act provides as follows:

When a non-greenfields agreement passes the better off overall test

(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award employed to the employee.

[57] Section 193(4) of the Act provides as follows:

Award covered employee

(4) An award covered employee for an enterprise agreement is an employee who:

(a) is covered by the agreement; and

(b) at the test time; is covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and

(iii) covers his or her employer.

[58] In applying the BOOT, the Commission is required to determine, at the time of filing the application for approval of the Agreement, whether the employees covered by the Agreement were covered by a Modern Award in relation to the work they perform under the Agreement, and that the Award covered their employer.

[59] The Concrete Award defines the concrete products industry as follows:

“4.2 The concrete products industry means the fabrication or manufacture of cement products or concrete products including concrete panels, concrete pipes, monier or concrete tubs, baths, sinks, ventilating shafts, troughs, blocks, rollers, tiles, pavers, slabs, gutter bridges, plates, pile armours, bridge piles and similar articles and preparing reinforcement of steel or wire for use in making such articles.”

[60] The Building Award defines its coverage at clause 4 including the following:

“4.1 This industry award covers employers throughout Australia in the on-site building, engineering and civil construction industry and their employees in the classifications within Schedule A – Classification Definitions to the exclusion of any other modern award.

4.2 For the purpose of clause 4.1, on-site building, engineering and civil construction industry means the industry of general building and construction, civil construction and metal and engineering construction, in all cases undertaken on-site.

4.3 For the purposes of clause 4.2:

(a) general building and construction means:

(i) the construction, alteration, extension, restoration, repair, demolition or dismantling of buildings, structures or works that form, or are to form, part of land, whether or not the buildings, structures or works are permanent and maintenance undertaken by employees of employers covered by clause 4.1 of such buildings, structures or works;

(ii) site clearance, earth-moving, excavation, site restoration, landscaping and the provision of car parks and other access works associated with the activities within clause 4.3(a)(i); and

(iii) the installation in any building, structure or works of fittings and services;

(b) civil construction means:

(i) the construction, repair, maintenance or demolition of:

n civil and/or mechanical engineering projects;

n power transmission, light, television, radio, communication, radar, navigation, observation towers or structures;

n power houses, chemical plants, hydrocarbons and/or oil treatment plants or refineries;

n silos; and/or

n sports and/or entertainment complexes;

(ii) road making and the manufacture or preparation, applying, laying or fixing of bitumen emulsion, asphalt emulsion, bitumen or asphalt preparations, hot pre-mixed asphalt, cold paved asphalt and mastic asphalt;

(iii) the prefabrication and installation of geomembranes, geotextiles and appurtenances;

(iv) dredging or sluicing work for or at premises provided for persons mentioned in or in connection with work under clause 4.3(b)(i);

(v) batch plants and precast yards at a construction site in or in connection with work under clause 4.3(b)(i);

(vi) traffic management in or in connection with work under clause 4.3(b)(i);

(vii) construction and/or establishment of landscape gardens in or in connection with work under clause 4.3(b)(i), provided that this award does not apply to the:

n maintenance or horticultural establishment work following practical completion of work as specified under the terms of the construction contract or project; and/or

n laying-out, construction, cultivation or keeping in order of gardens in connection with private houses;

(viii) the industry or calling of either or both catering and cleaning for or at premises provided for persons mentioned in clause 4.3(b)(i);

(ix) car parks excepting car park buildings and car parks within the alignment of a building; and

(x) railways, tramways, roads, freeways, causeways, aerodromes, drains, dams, weirs, bridges, overpasses, underpasses, channels, waterworks, pipe tracks, tunnels, water and sewerage works, conduits, and all concrete work and preparation incidental thereto;

(c) metal and engineering construction means:

(i) metal trades work performed in the work of construction, fabrication, erection and/or installation work or work incidental thereto when it is carried out at a construction site which is specifically established for the purpose of constructing, fabricating, erecting and/or installing the following:

n power stations, oil refineries, terminals and depots; chemical, petro-chemical and hydrocarbon plants; and associated plant, plant facilities and equipment;

n major industrial and commercial undertakings and associated plant, plant facilities and equipment including undertakings for the processing and/or smelting of ferrous and non-ferrous metals, the processing of forest products and associated by-products, acid and fertiliser plants, cement and lime works, and other major industrial undertakings of a like nature;

n plant, plant facilities and equipment in connection with the extraction, refining and/or treatment of minerals, chemicals and the like;

n transmission and similar towers, transmission lines and associated plant, plant facilities and equipment;

n lifts and escalators as prescribed in clause 42—Lift industry;

n facilities and equipment in other engineering projects; and

n maintenance and/or repair and/or servicing work carried out on-site by the employees of contractors or subcontractors in connection with contracts for on-site construction work referred to in clause 4.3(c)(i). This does not include any work which is incidental to or of a minor nature in relation to the work normally performed by an employee of an employer not engaged substantially in metal and engineering construction.”

[61] I agree with the Union’s submission that in determining the Award application for ‘Concrete Panel Erection Workers’ who perform work on building and construction sites, it is necessary to objectively construe the coverage clause of the Building Award and the Concrete Award. I agree with the submission that there is nothing in either Award that supports the conclusion that only one of the Awards can cover an employer, and therefore I accept that both Awards can apply to the Applicant.

[62] Despite not having specific evidence on the point, the Applicants accept in their submissions that their employees go to site to perform the work of erecting pre-cast concrete panels on construction sites, and that is sufficient for me to be satisfied that this work fits within the industry definition under the Building Award.

[63] Having considered the classifications in the respective Awards, on the basis of the materials before the Commission, I have formed the view that even if employees classified as a ‘Concrete Panel Erection Worker’ working on site under the Agreement do fall within a classification in the Concrete Award on the basis that the Award includes classifications for operating cranes, and they are working within the industry of the employer (which would seem doubtful when working on a construction site) applying clauses 4.6 and 4.8 of the respective Awards leads to a conclusion that the appropriate award to cover them when working on site is the Building Award.. This is on the basis that the work of erecting concrete panels on a building site more appropriately fits within the classifications in the Building Award. For example, a rigger classified at CW3 and to the environment in which they perform that work being on-site which is more closely aligned to the Building Award then the Concrete Award.

[64] I therefore agree that the Building Award must be considered for the purposes of applying the BOOT in relation to those employees.

[65] The Applicant has taken an approach of focussing on what it says is the substance of the matter and seeking to avoid becoming engaged in a protracted hearing by offering undertakings that it submits circumvent the necessity for a hearing.

[66] The Union has submitted that the Commission cannot be satisfied in relation to its BOOT objections on the basis that the Applicant has failed to call evidence to support its submissions.

[67] In the particular circumstances of this case, I am satisfied that the approach adopted by the Applicant is permissible for the purposes of assessing whether the Agreement passes the BOOT. I agree with the Applicant’s submission that concerns related to shift work are unlikely to arise because concrete panels are not likely to be erected at night, and from the Commissions own knowledge, the commonly understood hours of operation in the commercial construction sector in Adelaide, and the analysis provided by the Applicant using the Allstate model, the Commission has adequate information to reach a state of satisfaction in assessing the BOOT in this case. In addition to this information, the Applicant has offered a series of undertakings which, subject to two issues that I will address below, the undertakings will address any potential BOOT concerns in any event.

[68] The Union has raised a concern about the use of the language “In respect of an employee who is wholly or predominately engaged to perform work on construction sites” as it pertains to the seventh and eights undertakings offered, on the basis as I understand it, that the test to be entitled to qualify for a reconciliation is more narrow than the coverage that the Building Award would otherwise have. I am inclined to agree with this submission.

[69] I have found that the Applicant and its employees are covered by both Awards and the Building Award would apply to particular work performed if not for the Agreement. In those circumstances, if a reconciliation needs to be conducted against the Building Award because some work is performed on-site, it should be done for all hours of work that are covered by the Building Award, and the undertaking should not be constrained by an employee having to clear another hurdle to qualify for the reconciliation.

[70] If I had been satisfied that the Agreement was genuinely agreed to, I would have invited the Applicant to provide an amended undertaking removing the language “is wholly or predominantly” from the seventh undertaking. However for the reasons as set out below, that will not be necessary.

[71] Whilst it is arguable that the language offered in the eighth undertaking is intended to be referring to an adjustment being made in the particular pay period, the expression ‘period’ is ambiguous. It would have been preferable for the undertaking to refer to the ‘pay period’ to make clear for the purposes of the BOOT calculation, and the adjustment to total gross earnings that the reconciliation will occur for the particular pay period in question, and not at some undefined time. This would put, beyond doubt, the concern raised by the Union that the reconciliation clause does not provide a timeline for the reconciliation to occur.

[72] Whilst modelling has now been done for the Road Transport and Distribution Award 2020 it is unnecessary to deal with that issue on the basis of the findings below.

GENUINE AGREEMENT ISSUES

[73] With respect to the Genuine Agreement Issues, the Union stated that the Commission should decline to approve the agreement on the basis that:

•  The Applicant did not take all reasonable steps to explain the terms of the Agreement and their effect (s.180(5) and s.188(1)(a) of the Act); 25 and

there are reasonable grounds to otherwise believe that the Agreement was not genuinely agreed (s.188(1)(c))

[74] There were two elements to the Union’s Genuine Agreement objection. The first was that the Applicant had provided an explanation of the effect of the Agreement that contained significant defects in respect of the relevant Modern Awards that would be displaced by the proposed Agreement. 26 The second element to this objection was that the Applicant had misled workers to the extent that it intimated CFMMEU involvement in the negotiation of the Agreement.

Explanation of the Modern Award

[75] The Union submitted that the explanation given to employees regarding the Modern Awards that would be displaced by the Agreement contained significant defects. 27

[76] The Union submitted that the explanation given to workers included:

“The substantial character of Hicrete Precast systems Pty Ltd’s (HPS) operations places us in the concrete products industry. This industry is governed by the Concrete Products Award.”

[77] The explanation provided a link to the Concrete Award and included the following:

“You may wish to consider the terms of the Building and Construction General On-Site Award 2020 which is an industry award that covers an adjacent industry with some crossover of work…”

[78] The Union submitted that employees were likely to understand that only the Concrete Award was relevant to the employer’s operations as a result of the Applicant applying the ‘substantial character test’. An approach the Union submitted has been discredited. 28

[79] The Union stated that the Building Award was provided, but belatedly and without any explanation that a significant number of the classifications in the Agreement would have been covered by it. Workers were not given an appreciation that they were being asked to approve an Agreement that presented a substantial departure from the terms and conditions that exist in the Building and Construction industry, or the manner in which the Agreement would vary the minimum standards for such workers.

[80] The Union referred to the decision in One Key Workforce Pty Ltd v CFMEU [2018] FCAFC 77 where the Full Federal Court stated:

“How it was that the three employees might be regarded as having had a sufficient appreciation of the appropriateness of the terms and conditions proposed for the disparate occupational classifications covered, including in industries foreign to their own, was not identified by the Commissioner as a factor relevant to the genuineness of the approval and was not the subject of his consideration. Whether the three employees had appreciated the terms and conditions provided for by the Agreement, beyond those of direct interest and relevance to them, and thereby “genuinely agreed” to its terms (not just those that directly affected them) should have been considered. As the primary judge held, the Commissioner’s failure to do that evinced jurisdictional error.” 29

[81] The Union submitted that the Commission should hold similar concerns. It stated that workers who had been told that a Modern Award could not apply to classes of workers or potential workers to be covered by the scope of the Agreement were unlike to have the requisite understanding of the Award and were denied the opportunity to understand that the Building Award could apply to workers erecting products on site and were, therefore, denied the opportunity to properly choose between the conditions contained within the Agreement and those under the Award. 30

[82] The Applicant submitted that the difficulty with the submissions in relation to the Building Award is that there is an existing agreement. It was submitted with reference to the Full Bench decision in CFMEU v Ditchfield Mining Services (Ditchfield Mining) 31 that there is no requirement to explain the terms and effect of an Award in circumstances where the terms of the Award are not incorporated in the agreement, nor is one of the effects of the Award that the operation of the Award would be displaced.

[83] The Applicant referred to the explanation provided to employees in its explanation document, which said:

“The Current Agreement and the proposed agreement both displace the award in their entirety. This means that if the new agreement is made, it will replace the existing agreement and the award will continue to not apply.”

[84] The Applicant stated that this is a clear explanation of the effect that the terms of the Agreement had on the conditions that would apply to employees. 32 Further, the Applicant stated that the explanation document directs readers to both the Concrete Award and the Building Award (via hyperlink) with the following explanation:

“You may also wish to consider the terms of the Building and Construction General Onsite Award 2020 which is an industry award that covers an adjacent industry with some crossover of work.”

[85] The Applicant submitted that a hyperlink to the Building Award was provided to assist the employees in that consideration. The Applicant also said a further clear statement about how any other Award might interact with the Agreement is then provided as follows:

“The effect of making this Agreement will be that no award will be apply to the work, which will be that the proposed agreement operates to the exclusion of any modern award.”

[86] The Applicant also noted that the document directed employees who had questions to a member of staff and provided a mobile phone number at which he could be contacted. The Applicant submitted that these matters, taken together, should satisfy the Commission that insofar as the Building Award was relevant to the explanation, the effect of the proposed Agreement and how it interacts with any applicable Award was clearly explained. 33

[87] In reply, the Union stated that whilst the instruments that applied at the time of the application is one relevant circumstance, but not necessarily wholly determinative. 34 The Union stated that the problem was not that the Applicant had remained silent about the Award, but that the explanation and reference that it provided was wrong and had the capacity to significantly mislead workers, particularly those that fell within the scope of the Building Award, by telling them they did not fall within its coverage.35

[88] The Union submitted that the Applicant’s submissions quote an extract from their written explanation but does not quote the paragraph of the written explanation that immediately follows:

“In addition to reviewing these materials, you should review the award and the Current Agreement carefully to see what items may have been traded off as part of the agreement making process”.

[89] The Union submitted that the explanation subsequently advises workers that as the result of the substantial character test, the relevant Award is the Concrete Award.

[90] The Union submitted that it was open to workers to seek to terminate the Agreement that they were currently employed under and revert to the Award if they preferred those conditions, or to bargain and campaign for better conditions knowing their proper entitlement to legal minimums. The Union submitted that this formed part of their relevant decision in bargaining, and in deciding whether to approve the Agreement for coming years.

[91] The Union submitted that workers who may have been inclined to take up the offer (to review the Award) were provided an Award with inferior conditions to the Building Award and were, therefore, misled about what they were trading off. 36 The Union submitted that while the employer provided a link to the Building Award, does not dissipate this concern as workers’ consideration of that Award was both made less likely, and if it was conducted would have been materially affected by having been told that it could not apply to them.37

[92] The Applicants submission that there is no requirement to explain the terms and effect of an Award in particular circumstances relying on the Full Bench decision in Ditchfield Mining needs to be considered in the context of the particular facts in this case. The Full Bench said as follows:

“[70] Section 180(5) of the Act is concerned with the taking of all reasonable steps to explain the terms of an agreement and the effect of those terms. How many steps and the content of those steps will necessarily depend on the circumstances. Some employers may, by reasons of the prevailing circumstances, need to take more or fewer steps than other employers with different agreements, facing different circumstances. The steps which may, in a given case, comprise “all reasonable steps” are to be assessed by reference to the circumstances of the particular case.

[71] Compliance with s.180(5) will not always require an employer to identify detriments in an agreement vis-à-vis the reference instrument, or for the employer to provide an analysis between the agreement and the relevant reference instrument, particularly in circumstances where an existing enterprise agreement, not a reference instrument, applies to the employees in their employment with the employer. The question of compliance with s.180(5) is to be judged against the circumstances that pertain at the time at which compliance was required. Section 57 of the Act makes clear that a modern award does not apply to an employee in relation to particular employment at a time when an enterprise agreement applies to the employee in relation to that employment. In the present case, when the explanations were given, no enterprise agreement applied to the employees and the Award did apply. An explanation of the effect of the terms of the Agreement vis-à-visthe Award was therefore capable of being relevant to the evaluative assessment of whether all reasonable steps were taken to explain the terms of the Agreement and the effect of those terms.

[72] The obligation under s.180(5) to take all reasonable steps to explain to relevant employees the terms of an enterprise agreement and the effect of those terms is an important function of the agreement-making scheme established by Part 2-4 of the Act. Its evident purpose, taking into account its role in assessing whether the employees who were asked to vote to approve an agreement genuinely agreed to the agreement, is to ensure that employees are as fully informed as practicable about the terms and effect of the terms of a proposed enterprise agreement before voting on whether to approve it.62 An employer’s discharge of its obligation under s.180(5) is intended to enable employees to know what they are being asked to agree to, and to understand how their wages and working conditions might be affected by voting in favour of an agreement.”63

[93] The Full Bench in Ditchfield Mining made clear that the extent of the explanation required depends on the prevailing circumstances. I am not persuaded that Ditchfield Mining is authority for the proposition that in every case where an existing enterprise agreement applies that explaining the conditions in an Award can never be relevant to the evaluative assessment of whether all reasonable steps were taken.

[94] In this case, the Applicant has proceeded on the basis that the Concrete Award covers its workforce, and this appears to be a perpetuation of the approach for the previously approved Agreement. Whilst this is an application seeking to roll over from one agreement to another, it is also the case that I have found against a proposition that the Applicant has adhered to in these proceedings and communicated to its employees. Excluding the non-particularised reference to the Building Award operating in an adjacent industry with some cross over of work, the Concrete Award has been communicated to the employees as the relevant comparator Award. That is not correct.

[95] I have acknowledged that the Applicant belatedly drew attention to the Building Award, but given my view that the classifications of Concrete Panel Erection Workers under the Agreement would be covered by the Building Award when working ‘on site’, this is something that needed to have been made clear to employees in the particular circumstances of this case, in order for the Applicant to have taken all reasonable steps to explain the terms of an agreement and the effect of those terms. The onus is on the Applicant to satisfy the Commission of genuine agreement.

[96] The Concrete Award is inferior to the Building Award in a number of important relevant areas that employees were entitled to be aware of in order to consent to the Agreement. The failure to be explicit about the fact of the Building Award covering ‘on site’ work that the proposed Agreement applies to leads to the inevitable conclusion that the Applicant did not take all reasonable steps to ensure that the terms of the Agreement, and the effect of those terms, were explained to the relevant employees.

[97] Section 186(2) of the Act relevantly provides:

(2) The FWC must be satisfied that:

(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement.

[98] Section 188 of the Act provides:

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 agreed to 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.

[99] Section 180(5) is one of a number of pre-approval steps that the Act sets out that an employer must take before employees that will be covered by an agreement are asked to approve that agreement. It relevantly provides at s.180(5) the following:

180 Employees must be given copy of the agreement 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.

[100] In order for the Commission to be satisfied that the Agreement has been genuinely agreed to by the employees covered by the Agreement, the Commission must be satisfied for the purpose of s.186(2)(a) that the employer complied with s.180(5) in relation to the Agreement.

[101] For reasons set out above for concluding that the Applicant has not complied with s.180(5), I am not satisfied that the Agreement has genuine agreement as contemplated in s.188(1)(a) because of that non-compliance.

[102] If the conclusions in relation to s.180(5) and s.188(1)(a) are wrong, I would also not be satisfied in relation to s.188(1)(c). Section 188(1)(c) is, in broad terms, directed to whether there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by employees. The failure to make clear to employees that the Building Award did cover classifications under the Agreement when working ‘on site’ constitutes either misleading information or alternatively, a failure to explain the coverage of the Building Award and therefore disclose the true position. I do not suggest this was a deliberate strategy, but it results in circumstances where the Commission cannot be satisfied that the agreement was genuine and therefore cannot be satisfied in relation to s.188(1)(c).

[103] I am also not satisfied that what has occurred would fall within the category of minor or procedural errors not likely to have disadvantaged workers.

[104] The question then arises, can the proffered undertakings address this issue concerning genuine agreement. It has been found that in certain circumstances undertakings can address a failure to properly explain the terms of an agreement, for example where an undertaking completely addresses the failure. In this case, however, the undertakings cannot completely address the failings because the Commission is not in a position to be able to assess what may have transpired had the employees been properly informed about the coverage of the Building Award.

[105] On the basis of the findings above, it is strictly unnecessary to deal with the remaining objection raised by the Union concerning an explanation to employees that the Union was involved in negotiating the Agreement when it says it was not.

[106] The Union stated that whilst the Form F17 and the explanation given to employees referred to Union involvement, no CFMMEU employee or official was involved in the making of the Agreement. 38 The Union stated that should the Applicant be unable to provide satisfactory grounds for this claim, false statements advising employees that the union had negotiated the Agreement had the capacity to mislead workers about the quality of the bargain struck and that it was recommended by their union.39

[107] The Applicant submitted that the Agreement was negotiated with the shop steward for the Union. The Applicant understood that this person spoke on behalf of workers within that work group who were members of the Union. The Applicant said that it had provided the following statement in the explanation document:

“This has been negotiated for some time with your bargaining committee including union representatives, and now we wish to hold a ballot of employees seeking approval of the agreement”

[108] The Applicant submitted that on an objective basis, this statement is correct. Employees were aware of who was in their bargaining committee and the bargaining committee included the CFMMEU’s shop steward. The Applicant submitted that the above statement does not indicate that the CFMMEU support or endorsement of the Agreement and that there is nothing in the Agreement or surrounding documents that suggests that there is Union support or endorsement. 40

[109] In reply, the Union stated that the Applicant had made a decision not to lead evidence about the participation of persons in bargaining, or the involvement of persons in providing explanations to workers, or to provide any further information about the explanation that was given.

[110] The Union submitted that no evidence has been produced by the Applicant about its belief or understanding as to the real or ostensible authority held by the persons who it claims participated in negotiations to represent the union in negotiations for enterprise agreements. Further, there was no evidence adduced that employees were aware of the persons who formed the bargaining committee. The Union submitted that the Commission ought to draw a Jones v Dunkel 41 inference that evidence adduced by relevant witnesses who were not called by the Applicant would not have assisted the Applicant.

[111] The Union submitted that employees are more likely to trust that the conditions in those Agreements are favourable than in circumstances where there has been no union involvement. This is capable of influencing workers at the time that they vote and is a relevant factor in considering whether genuine agreement has been reached. Therefore, statements made about union involvement were likely to mislead employees and could affect the way that they voted.

[112] I have concluded that as both parties elected not to call any evidence on this point I am not in a position to reach a conclusion on its impact on the question of whether the Agreement was genuinely agreed. Given my findings above it has already been concluded that the determination of the application does not rely on resolving this issue, however if it did, I would have required further evidence.

CONCLUSION

[113] For the reasons set out above the application is dismissed.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR734295>

 1   Email from CFMMEU dated 7 June 2021.

 2   [2020] FWCA 1033, [15]-[16].

 3   Loaded Rates Agreements [2018] FWCFB 3610; Allstyle Concrete [2018] FWCFB 3823 at [9]-[10] CFMMEU v Hully Foundations Pty Ltd[2021] FWCFB 3659 at [20].

 4 Submissions of the CFMMEU dated 20 July 2021, at [4].

 5 Submissions of the CFMMEU dated 20 July 2021, at [5].

 6 [2014] FCAFC 148 at [21].

 7 Submissions of the Applicant dated 3 August 2021, at [11].

 8   [2015] FWCFB 2524.

 9 Submissions of the Applicant dated 3 August 2021, at [13].

 10 Submissions of the Applicant dated 3 August 2021, at [13].

 11   [2021] FWCFB 1498.

 12 [2014] FCAFC 148 at [22].

 13 Submissions of the CFMMEU dated 6 August 2021, at [19].

 14 Submissions of the CFMMEU dated 6 August 2021, at [11].

 15 Submissions of the CFMMEU dated 6 August 2021, at [14].

 16   Loaded Rates Agreements [2018] FWCFB at [106], [115(5)].

 17 Submissions of the CFMMEU dated 6 August 2021, at [21].

 18 Submissions of the CFMMEU dated 6 August 2021, at [21].

 19 Submissions of the CFMMEU dated 6 August 2021, at [22].

 20 Submissions of the CFMMEU dated 6 August 2021, at [24].

 21 Submissions of the CFMMEU dated 6 August 2021, at [49].

 22 Submissions of the CFMMEU dated 6 August 2021, at [50].

 23 Submissions of the CFMMEU dated 6 August 2021, at [50].

 24 Submissions of the CFMMEU dated 6 August 2021, at [53].

 25 Submissions of the CFMMEU dated 20 July 2021, at [13].

 26 Submissions of the CFMMEU dated 20 July 2021, at [18].

 27 Submissions of the CFMMEU dated 20 July 2021, at [18].

 28 Submissions of the CFMMEU dated 20 July 2021, at [21].

 29   One Key Workforce Pty Ltd v CFMEU [2018] FCAFC 77, [168].

 30 Submissions of the CFMMEU dated 20 July 2021, at [23].

 31   [2019] FWCFB 4022 at [71].

 32 Submissions of the Applicant dated 3 August 2021, at [33].

 33 Submissions of the Applicant dated 3 August 2021, at [38].

 34 Submissions of the CFMMEU dated 6 August 2021, at [28].

 35 Submissions of the CFMMEU dated 6 August 2021, at [29].

 36 Submissions of the CFMMEU dated 6 August 2021, at [31].

 37 Submissions of the CFMMEU dated 6 August 2021, at [33].

 38 Submissions of the CFMMEU dated 20 July 2021, at [24].

 39 Submissions of the CFMMEU dated 20 July 2021, at [25].

 40 Submissions of the Applicant dated 3 August 2021, at [42].

 41 (1959) 101 CLR 298.