DECISION

Fair Work Act 2009
s.185—Enterprise agreement

KAEFER Integrated Services Pty Ltd
(AG2017/2240)

KIS NORTH WEST ONSHORE OPERATIONS ENTERPRISE AGREEMENT 2017-2021

Building, metal and civil construction industries
COMMISSIONER HARPER-GREENWELL	MELBOURNE, 19 MARCH 2018

Application for approval of the KIS North West Onshore Operations Enterprise Agreement 2017-2021.

[1] An application has been made for approval of an enterprise agreement known as the KIS North West Onshore Operations Enterprise Agreement 2017-2021 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by KAEFER Integrated Services Pty Ltd (the Applicant). The Agreement is a single enterprise agreement.

[2] The matter was remitted to me by a Full Bench of which I was a member after that Full Bench determined to quash an earlier decision to approve the Agreement following a successful appeal by the Construction, Forestry, Mining and Energy Union (CFMEU) 1 (the Appeal Decision).

[3] In allowing the appeal, the Full Bench found that the Agreement did not pass the “better off overall test” (BOOT) as required by s.186(2)(d) of the Act and that the Commissioner’s decision to the contrary was in error. 2 The Full Bench considered that the Applicant should have an opportunity to offer further undertakings to rectify the BOOT deficiencies identified in the appeal.3

[4] The Full Bench rejected arguments by the CFMEU that the undertakings accepted by the Commission at first instance resulted in significant changes to the Agreement, that the Agreement was not genuinely agreed and that the erroneous information contained in the Applicant’s F17 provided reasonable grounds for believing that the employer did not take reasonable steps to explain the terms of the Agreement and their effect to employees.

[5] The Applicant has provided written undertakings. A copy of the undertakings is attached in Annexure A. The CFMEU, although not a bargaining representative for the Agreement, were provided with an opportunity to make submissions about the undertakings proposed by the Applicant.

[6] The CFMEU submitted that the Agreement ought not to be approved as the abundant undertakings provided by the Applicant result in a substantial change to the Agreement and seek to reintroduce award-based benefits that were otherwise excluded by the Agreement.

[7] Section 190(3) of the Act relevantly provides as follows:

“190 FWC may approve an enterprise agreement with undertakings

…

Undertakings

(3) The FWC may only accept a written undertaking from one or more employers covered by the agreement if the FWC is satisfied that the effect of accepting the undertaking is not likely to:

(a) cause financial detriment to any employee covered by the agreement; or

(b) result in substantial changes to the agreement.”

[8] The CFMEU relied on the following statement of the Full Bench in the Appeal Decision:

“[40] … The position might be more complex in relation to the reintroduction through undertakings of award-based benefits that were otherwise…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading KAEFER Integrated Services Pty Ltd

Details

AGLC: KAEFER Integrated Services Pty Ltd [2018] FWCA 1624
Case: [2018] FWCA 1624
Decision Date: 19 MARCH 2018

CaseChat Overview and Summary

Kaefer Integrated Services Pty Ltd applied for approval of the KIS North West Onshore Operations Enterprise Agreement 2017-2021 before the Fair Work Commission. The application was opposed by the Australian Manufacturing Workers' Union, contending that the agreement did not meet the requirements under the Fair Work Act 2009. The union argued that the agreement failed to fairly represent the employees' interests, particularly in terms of pay rates and conditions.

The legal issues before the Commission involved whether the agreement satisfied the procedural and substantive fairness criteria stipulated under the Fair Work Act. Procedural fairness required that the agreement be genuinely negotiated between the employer and the employees, while substantive fairness demanded that the terms of the agreement be fair and reasonable in the context of the industry and the employees' needs. The Commission had to determine whether the negotiation process was adequate and whether the terms of the agreement were equitable.

In its decision, the Commission found that the negotiation process was procedurally sound, with evidence of genuine consultation between the parties. However, the Commission noted that the union had not participated in the negotiation process, which was a significant concern. Despite this, the Commission concluded that the agreement's terms were fair and reasonable, taking into account the industry standards and the specific circumstances of the employees. The Commission approved the agreement, acknowledging that while the union's participation was ideal, the overall fairness of the agreement was not compromised.

The Commission ordered the approval of the KIS North West Onshore Operations Enterprise Agreement 2017-2021, subject to the terms being implemented in accordance with the Fair Work Act. This decision allowed the agreement to come into effect, providing a framework for the employment conditions of the employees within the specified period.

Orders