JWLand Construction Pty Ltd
[2024] FWCA 4497
•19 DECEMBER 2024
| [2024] FWCA 4497 [Note: An appeal pursuant to s.604 (C2025/449) was lodged against this decision.] |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
JWLand Construction Pty Ltd
(AG2024/4278)
JWLAND CONSTRUCTION ENTERPRISE AGREEMENT 2024-2028
| Building, metal and civil construction industries | |
| COMMISSIONER MCKINNON | SYDNEY, 19 DECEMBER 2024 |
Application for approval of the JWLand Construction Enterprise Agreement 2024-2028.
JWLand Construction Pty Ltd (JWLand) has applied for approval of a single enterprise agreement known as the JWLand Construction Enterprise Agreement 2024-2028 (the Agreement). The application is opposed by the Construction, Forestry and Maritime Employees Union (CFMEU).
The CFMEU was not involved in bargaining for the Agreement. It submits that four of the five employees who made the Agreement with JWLand are its members. That would likely mean it was a default bargaining representative for the Agreement. The CFMEU submits that the Agreement has not been genuinely agreed; that information given to the Commission in support of the application for approval is deficient including in relation to the better off overall test; and that the Agreement omits certain mandatory terms.
Has the Agreement been genuinely agreed?
The CFMEU submits that the Agreement has not been genuinely agreed because:
Employees do not have a sufficient interest in the Agreement: the CFMEU submits that 4/5 employees who made the Agreement are paid $1/hour more than minimum rates of pay in the Agreement. These overpayments absorb future wage increases with the result that there will be no actual pay increase over the life of the Agreement.
The explanation of the Agreement was unreasonable in the circumstances: the CFMEU submits that construction workers do not feel comfortable with writing and calculations and the majority did not understand the spreadsheets they were given to help explain the Agreement. Employees also did not feel comfortable raising issues with JWLand in meetings about the Agreement.
Rostered days off (RDOs): the CFMEU submits that it was not explained to employees that the approach to RDOs could change because the Agreement does not ‘lock in’ the current approach of following the CFMEU RDO calendar, including “lockdown” weekends. The failure to provide a proposed calendar of RDOs was also a failure to provide employees with relevant information.
Sufficient interest: I am satisfied that the employees who voted to approve the Agreement have a sufficient interest in its terms. Each is employed in the role of Construction Worker, either Level 2 or Level 3. As their skills and experience develop, they will have the opportunity to advance through the classification structure in the Agreement. The terms and conditions of the Agreement are derived from the Building and Construction General On-site Award 2020 (the Award) which would apply to the employees if they were not covered by an enterprise agreement. The Agreement applies to employees who are predominantly engaged by JWLand to undertake on-site general building and construction work that is covered by the Award. It provides for annual wage increases at the discretion of JWLand, subject to an annual review following the Commission’s Annual Wage Review decision each year and a guarantee that the Agreement will be more advantageous overall for employees than the Award. In the circumstances, the submission that there will be no actual pay increase over the life of the Agreement is not a factual one. It is a hypothetical scenario. The possibility cannot be excluded although another equally available possibility is that employees will receive a pay increase over the life of the Agreement having regard to the annual review described above and because of the express commitment to provide employees with more advantageous conditions than the Award. The best that can be said is that these are both possibilities rather than probabilities, and neither is overly helpful in assessing whether the Agreement can and so must be approved.
Explanation of the Agreement: I do not accept the submission that because of the relative unsophistication of construction workers in dealing with written materials, and/or their discomfort about raising issues with JWLand in meetings to discuss the Agreement, the Agreement has not been genuinely agreed. The submissions do not give employees in the construction industry the credit they deserve, while also seeking to elevate the test for genuine agreement beyond what is reasonable in the circumstances. Notes of meetings held to discuss the Agreement after they had been provided with relevant explanatory materials confirm that the employees did ask questions about their entitlements under the Agreement, and proposed changes to the Agreement that resulted in improvements to their terms and conditions of employment. Although most appear to have had the CFMEU as their default bargaining representative, and each had received a Notice of Employee Representational Rights, none sought to involve the union in bargaining. This tells against a conclusion that the employees were somehow lacking in capacity or interest to bargain for themselves with JWLand.
Rostered days off (RDOs): Employees currently work to the CFMEU RDO Calendar by reason of a practice adopted by JWLand. There is no obligation in the Award to structure work in this way and the Agreement aligns more closely to the Award. The CFMEU submits that the Agreement does not ‘lock in’ the CFMEU RDO calendar, including “lockdown” weekends, and employees were not told that the approach to RDOs could change or be given a proposed RDO calendar. I agree that employees were not given this information. Although the explanation of RDOs given to employees compared the Award and Agreement entitlements, it did not alert employees to the possibility of what could be a significant change to their roster. In my view, explaining this change was a reasonable step that needed to be taken to explain the Agreement to employees. JWLand has given an undertaking to address the concern.
I am otherwise satisfied that the Agreement has been genuinely agreed. On 10 and 13 September 2024, employees were sent relevant information about the Agreement, including a Notice of Employee Representational Rights, draft copy of the Agreement, copy of the Award, form to use to appoint a bargaining representative as well as comparisons and an explanation of the Agreement and its effect in relation to the Award. A meeting was held with employees on 17 September 2024 and 2 October 2024. A final draft of the Agreement was provided to employees on 8 October 2024. Employees were invited to contact the representative of JWLand with any questions about the Agreement between 10 September 2024 and 16 October 2024.
Employees were given a reasonable opportunity to vote on the Agreement in a free and informed manner including emails on 24 September 2024 and 8 October 2024 with information about the time, place and method of the vote, and a follow up call to each employee to confirm the voting information. Voting occurred on 16 October 2024 by secret ballot using a paper form. The result of the ballot was that the Agreement was approved by majority of employees covered by the Agreement.
Adequacy of information provided to the Commission
The CFMEU submits that award calculation spreadsheets provided to the Commission omit certain entitlements found in clause 19 of the Building and Construction General On-site Award 2020 (the Award), with the result that the margin ‘over-Award’ is smaller than represented by JWLand. JWLand has conceded an error in its calculations relating to the industry allowance as an ‘all purpose allowance’. It has provided revised spreadsheets correcting the error. These confirm that despite the error, employees will earn more overall under the Agreement than the Award. This is consistent with the Commission’s own analysis of the Agreement for the purposes of the better off overall test.
The better off overall test
It is not in dispute that employees will earn more under the Agreement than the Award. Rates of pay are more than 60% above the Award and the other terms and conditions are generally in line with the Award although there are some differences, including award terms not included in the Agreement because they are not relevant having regard to the nature of work performed by employees who are covered by the Agreement.
The CFMEU has raised concerns about meal and crib breaks and minimum breaks between shifts. JWLand has explained the operation of these provisions in relation to the Agreement, including that some were requested by employees as improvements and others are not part of the working pattern at JWLand. I accept these explanations.
I am satisfied on balance that employees will be better off overall under the Agreement than under the Award. And because this is the net effect of the explanation provided to employees about the benefit of the Agreement compared to the Award, I remain satisfied that the Agreement has been genuinely agreed despite the errors in the spreadsheets provided to employees by JWLand described above.
Other deficiencies in the Agreement
The CFMEU correctly identifies that the Agreement does not include a workplace delegates rights term or a term providing for the right to disconnect. The workplace delegates’ rights term in the Award is taken to be a term of the Agreement. Enterprise agreements are not required to contain a ‘right to disconnect term’. However, the fact that modern awards all now include such a term mean that the absence of an equivalent term in an enterprise agreement might bear on whether the better off overall test is met in a particular case. In this case, where I am satisfied that otherwise employees will be better off overall, I give the matter limited weight on the basis that the right to disconnect is also found in the Act. Employees covered by an enterprise agreement have the right to disconnect regardless of whether that right is sourced in the enterprise agreement, or in a relevant modern award, or in the Act.
Other matters
After the hearing of this application, the CFMEU filed submissions introducing new arguments and anonymous witness evidence without leave. I declined to accept those materials for the purposes of my consideration of the application in the interests of procedural fairness and having regard to the objects of Part 2-4 of the Act, and in particular s.171(b)(iii). The new arguments could have been made at the hearing on 28 November 2024 but were not, and the explanation given was inadequate: steps could have been taken to clarify the purpose of the hearing ahead of time and if as seems to be the case, the CFMEU was a bargaining representative for the Agreement, it did not require leave to be heard in any case. Anonymous evidence will rarely be of relevant probative value including because it cannot be tested. The admission of this evidence would not have aided my overall assessment of the application.
Agreement approval
A written undertaking has been given in accordance with section 190 of the Fair Work Act 2009 (Act) and is attached at Annexure A. I am satisfied that the undertaking is not likely to cause financial detriment to any employee covered by the Agreement or result in substantial changes to the Agreement. The undertaking is taken to be a term of the Agreement.
With the undertaking now provided, and having had regard to the Statement of Principles[1], I am satisfied that each of the requirements of ss.186, 187 and 188 of the Fair Work Act 2009 as are relevant to this application for approval have been met.
The Agreement is approved and will operate from 26 December 2024. The nominal expiry date of the Agreement is 19 December 2028.
In accordance with s.205A(2) of the Act, the workplace delegates’ rights term in the Building and Construction General On-site Award 2020 is taken to be a term of the Agreement.
COMMISSIONER
Annexure A
[1] Fair Work (Statement of Principles on Genuine Agreement) Instrument 2023.
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