KAEFER Integrated Services Pty Ltd

[2018] FWCA 1624

[2018] FWCA 1624

FAIR WORK COMMISSION

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 excluded by the agreement, if this were to have a significant bearing on working arrangements.”

[9] The Applicant submitted that it is relevant to consider this quote in its full context:

“[40] In our view, simply increasing the quantum of various benefits will not ordinarily result in “substantial changes” for the purposes of s 190(3). It seems to us that the legislative concern is to avoid imposing on employees arrangements that they have not approved; employees are not likely to object to higher monetary amounts. The position might be more complex in relation to the reintroduction through undertakings of award-based benefits that were otherwise excluded by the agreement, if this were to have a significant bearing on working arrangements. However, this does not arise in the present matter.

[41] Section 190(3) does not permit undertakings that result in the wholesale reshaping of the agreement, such that it bears no resemblance to the pre-undertaking agreement that was approved by employees.”

[10] They submitted that when read in full, it becomes abundantly clear that the Appeal Decision does not stand for the proposition that the CFMEU asserts it does.

[11] The Applicant further submitted that the additional undertakings provided merely improve upon entitlements already provided for under the Agreement, in circumstances where the Agreement already provided rates of pay above the Award. They submit that these improvements could not on any reasonable view have changed the nature of the Agreement such that it could have affected the way employees chose to vote on the Agreement or the outcome of the vote.

[12] I have considered the submissions of both parties and I am satisfied that the undertakings do not have a significant bearing on the working arrangements approved by the employees and therefore will not result in substantial changes to the Agreement. I am also satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement.

[13] Subject to the undertakings referred to above, 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. The Agreement does not cover all of the employees of the employer, however, taking into account the factors in Section 186(3) and (3A) I am satisfied that the group of employees was fairly chosen.

[14] Pursuant to s.205(2) of the Act, the model consultation term prescribed by the Fair Work Regulations 2009 is taken to be a term of the Agreement.

[15] The Agreement was approved on 19 March 2018 and, in accordance with s.54, will operate from 26 March 2018. The nominal expiry date of the Agreement is 19 March 2022.

COMMISSIONER

Annexure A

 1   Construction, Forestry, Mining and Energy Union v KAEFER Integrated Services Pty Ltd[2017] FWCFB 5630

 2   Ibid. [50]

 3   Ibid. [51]

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