Kane Constructions Pty Ltd

[2020] FWC 3184

[2020] FWC 3184

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Kane Constructions Pty Ltd
(AG2020/546)

Building, metal and civil construction industries
DEPUTY PRESIDENT MASSON	MELBOURNE, 18 JUNE 2020

Application for approval of the Kane Constructions Pty Ltd (NSW and ACT Employees) Enterprise Agreement 2020 - 2024

[1] An application has been made for approval of the Kane Constructions Pty Ltd (NSW and ACT Employees) Enterprise Agreement 2020 - 2024 (the Agreement). The application was made pursuant to section 185 of the Fair Work Act 2009 (the Act). It has been made by Kane Constructions Pty Ltd (the Applicant). The Agreement is a single enterprise agreement.

[2] A notice of employee representational rights (NERR) was provided by the Employer to employees on 21 January 2020 and the notice complied with the regulations. The Employer in its Form F17 states that employees were provided with access to the Agreement and incorporated materials on 10 February 2020 and were provided with information about the effect of the terms of the Agreement in a meeting on 20 February 2020.

[3] The Employer further states that employees were notified of the time, place and method of voting by way of a written notice handed to employees on 10 February 2020 and that voting occurred on 28 February 2020. A majority of those who voted approved the Agreement. 1

[4] The Employer filed a statutory declaration in support of the Agreement dated 4 March 2020. The statutory declaration noted that the relevant award for the purpose of the better off overall test (BOOT) was the Building and Construction General On-Site Award 2010 2(the Award).

[5] The statutory declaration noted that some provisions in the Agreement were more beneficial than the Award. No less beneficial terms were identified.

[6] In correspondence to the Fair Work Commission (the Commission) on 6 March 2020, the Construction, Forestry, Maritime, Mining and Energy Union (the CFMMEU) sought to be heard in relation to the application, and requested access to the Form F16 and Form F17 and Notice of Employee Representation Rights (NERR) filed with the Commission.

[7] The CFMMEU’s request to be heard was dealt with and acceded to in a separate decision by the Commission on the 4 May 2020. 3 It was determined that while the CFMMEU had not established a right to be heard the Commission would exercise its discretion pursuant to s. 590(1) of the Act and hear from the CFMMEU.

[8] Directions for the filing of submissions and material were subsequently issued by the Commission in response to which the Applicant and the CFMMEU filed various submissions and material in compliance with directions. Both the Applicant and the CFMMEU consented to the application being dealt with on the papers.

CFMMEU Objections

[9] The CFMMEU’s objections to approval of the Agreement can be summarised as follows;

(i) The Commission cannot be satisfied that the proposed agreement has been genuinely agreed by employees covered by the Agreement, as required by s. 186(2)(a), as the Commission cannot be satisfied that the Applicant provided the relevant employees with all documents incorporated into the agreement as required by s. 180(2) of the Act;

(ii) the Commission cannot be satisfied that the Agreement passes the better off overall test (the BOOT) and that the Applicant’s Form F17 was inaccurate in relation to the BOOT; and

(iii) there are other reasonable grounds for believing that the agreement was not genuinely agreed, going to the moral authority of the selected group of workers.

Provision of incorporated material – s. 180(2)

[10] The CFMMEU raise two concerns in relation to whether the Applicant has complied with s. 180(2) of the Act.

[11] Firstly, they refer to the Form F17 and the responses provided by the Applicant at questions 2.5 and 2.7. At question 2.5 the Applicant states that employees “were physically handed a written copy of the proposed Enterprise Agreement and were also provided with access to the relevant Modern Award and Building Code 2016 referred to in the proposed Enterprise Agreement.” At question 2.7 the Applicant states that employees who were to be covered by the Agreement “were advised on how to access the Building and Construction General On-Site Award 2010 on the FWC website…and the Building Code on the ABCC website….”

[12] The CFMMEU submit that based on the responses at questions 2.5 and 2.7 of the Form F17 there is an open question over what employees were told in relation to access to the Award and the Building Code, that is, whether they were provided with access or merely advised on how to access those documents.

[13] The second issue raised by the CFMMEU in relation to s. 180(2) is that of a further document incorporated by clause 8.4 of the Agreement which deals with inclement weather. Clause 8.4 of the Agreement provides employees with an entitlement to payment for ordinary time lost due to inclement weather of up to 32 hours in every calendar month, and that the “calendar shall operate in accordance with the Inclement Weather Calendar published by the Master Builder Association of NSW.” The CFMMEU submit there can be no doubt that the Inclement Weather Calendar published by the Master Builders Association of NSW (the MBA Calendar) is an incorporated document. Further, that without the physical provision of the document to the relevant employees in the circumstances of this matter (i.e. the document was not readily accessible on the MBA NSW website to the relevant employees) then the relevant employees cannot have had access to all incorporated documents.

[14] The Applicant submits that the requirements of s. 180(2) have not been met and that the application should be immediately dismissed.

BOOT concerns

[15] The CFMMEU submit that the Agreement does not provide rates of pay for apprentices or for persons classified at CW1(a), (b) or (c) under the Award. As the Award is incorporated by reasons of clause 3.4.2 it is submitted by the CFMMEU that the Award rates of pay are incorporated in respect of the above-referred classifications, and that the effect of the detrimental provisions in the Agreement relative to the Award when weighed against the beneficial provisions relative to the Award are such that the BOOT requirement may not be satisfied.

[16] Relevant to the BOOT assessment, the CFMMEU identified the following provisions in the Agreement as less beneficial than the comparable provisions in the Award;

•  The casual conversion clause in the Agreement is less beneficial in that it does not preserve the ‘right of election’, the Award provides for enhanced consultation rights and greater protection around conversion to full-time or part-time employment, the Award provides for a form of good faith bargaining during the conversion process and protects against ‘sham’ engagements.

•  The travel allowance at clause 6.1.4 of the Agreement includes a radial area of 80km which is 60% greater than provided at clause 25.2 of the Award which provides for a radial area of 50km. This has the effect of increasing the number of sites covered by the flat travel allowance at clause 6.1 of the Agreement.

•  Clause 34.1(e) of the Award provides for crib breaks on shift work whereas the Agreement omits such entitlement.

•  Clause 8.12 of the Agreement provides the employer with the discretion as to whether to send workers home in wet weather in certain circumstances, whereas clause 23.13 of the Award makes this an entitlement of the workers.

[17] The CFMMEU acknowledge that aside from the wage rates in the Agreement which are higher than the Award (except in respect of apprentice and CW1(a), (b) or (c) rates referred to above), clauses that are more beneficial than the Award include;

•  Clause 6.1.4 of the Agreement which provides for a $30 travel allowance rather than $17.43 provided by clause 25.2 of the Award.

•  Clause 7.6.1 of the Agreement provides for a meal allowance of $15.50 rather than the $15.38 provided for at clause 20.2 of the Award.

[18] The CFMMEU submit that the combined effect of the above in circumstances where apprentices are covered by the Agreement and receiving Award rates of pay are that they may be in a position where the detrimental provisions are not offset by the higher travel allowance (in 50 km or less travel to site scenarios) and slightly increased meal allowance. The CFMMEU posit the example of an Adult Apprentice on an hourly rate of $22.38 required to travel more than 50km to a site. In circumstances where the apprentice was required to travel 45 minutes between the site and the 50km radial boundary the CFMMEU contends they would be entitled to a flat $30 travel allowance under the Agreement versus $17.43 + $16.79 travel time under the Award, resulting in the apprentice receiving less than he or she would receive under the Award. Further, that detriment would be compounded if the apprentice was affected by shift work or wet weather.

[19] In response to the undertaking proffered by the Applicant in relation to apprentices, which is referred to below at [26], the CFMMEU contend that the effect of the undertaking is unclear as to whether the apprentices are employed under the terms of the Award or the Agreement. The CFMMEU propose a simplified undertaking to resolve that uncertainty;

“The Company undertakes that this Agreement will not apply to any Apprentices or Trainees employed by the Company.’

Lack of genuine agreement

[20] The CFMMEU contend that there is a live issue as to whether the three workers on the one site who voted in support of the Agreement were ‘fairly chosen’. This submission was made on the basis that the Applicant is a ‘major construction company’ with operations up and down the east coast of Australia with multiple projects in NSW and the ACT.

[21] The CFMMEU further submit that the Applicant erroneously completed the Form F17 when at Question 3.5. and 3.6 it stated that there were no less beneficial terms or omitted Award provisions. For this reason, the CFMMEU state that the F17 is inadequate and cannot be taken to meet the requirements of s 185(2) of the Act. Further, and relying on the decision of DP Asbury in Application by Falcon Mining Pty Ltd 4 (Falcon Mining), the fact that the Applicant has failed to identify less beneficial provisions in the Form F17 constitutes reasonable grounds for believing that the Applicant failed to disclose to employees the impact of the Agreement when compared to the Award.

Applicant’s case

[22] The Applicant rejects the CFMMEU submissions regarding approval of the Agreement and make the following submissions in reply.

Provision of incorporated material

[23] As regards the provision of the Award and Building Code to employees, the Applicant states that the CFMMEU’s ‘limited portrayal’ of s. 180(2) is inaccurate in suggesting there is only one way that an employer is able to disseminate incorporated material, that is by the physical distribution of the incorporated materials to employees. The Applicant refers to the recent decision of Deputy President Colman in Civil Sydney Pty Limited Enterprise Agreement 2019-2023 5(Civil Sydney).

[24] The Applicant submits that its responses at questions 2.5 and 2.7 of the Form F17 establishes that employees were advised on how to access the relevant documents and had access to those documents during the access period. The Applicant further submits that the employees were able to access the relevant documents via the smart phones they were in possession of and that the method of access to the on-line documents was preferred to the provision of a physical copy as the on-line version is more likely to be up to date. According to the Applicant, it matched the access arrangements to the individual and collective circumstances of the employees.

[25] Turning to the CFMMEU submissions regarding the MBA Calendar, the Applicant rejects the submission that its failure to provide employees with physical access to this document should result in the dismissal of the application. In doing so it submits that the failure to provide employees with a copy of the MBA Calendar should not be fatal to the application for the following reasons;

(i) The Applicant does not agree with the apparent premise of the CFMMEU submission that the Agreement cannot operate successfully or at all without the MBA Calendar being available.

(ii) The fundamental and shared principle of the operation of the Inclement Weather Clause in both the Award and Agreement is that of an employee having potential access to up to 32 hours per month (rolling 4 week calendar), and the MBA Calendar provides guidance to the parties as to the rate of accrual and when each 4 week period/calendar commences and expires.

(iii) The MBA Calendar was not considered by the Applicant to be of material relevance to the operation of the Inclement Weather clause in the Agreement as it remains consistent with the equivalent standard in the Award. Failing to provide or discuss the MBA Calendar with employees at the time of the explanation of the terms of the Agreement does not detrimentally affect the efficacy of the Inclement Weather clause in the Agreement.

(iv) The three employees that participated in the Agreement making process are relatively long serving employees and have been employed under the terms and conditions of the Applicant’s existing agreement; the Kane Constructions Pty Ltd (NSW and A.C.T. Employees) Enterprise Agreement 2016-2020 6 (the 2016 Agreement), which includes an almost identical Inclement Weather clause that similarly refers to the MBA Calendar. In these circumstances the employees are familiar with the Inclement Weather standards.

BOOT concerns

[26] The Applicant confirmed that there are no apprentice rates in the Agreement because it is not intended that the Agreement covers apprentices. The Applicant refers to clause 4.1.1 of the Agreement which makes no provision for apprentices. This position according to the Applicant renders moot the BOOT concerns raised by the CFMMEU and which are referred to at [18] above. The Applicant states that it currently does not and has no intention of employing apprentices. To further reinforce that position the Applicant proffered the following undertaking;

“2. Consistent with the scope and intent of clause 4.1.1 of the Agreement, in the circumstances that the Company employs an Apprentice, the Company undertake to do so under the relevant terms and conditions of the Building and Construction General On-site Award 2010.”

[27] With respect to the silence of the Agreement on CW1(a), (b) & (c) classifications, the Applicant confirmed that the CW1(d) classification, which is in the Agreement, is the highest CW1 labourer classification and that consequently the Applicant will have no choice but to employ CW1 labourers at that classification and pay the commensurate rate of pay under the Agreement. For the avoidance of doubt the Applicant proffered the following undertaking;

‘3. Where the Company employs Labourers at the CW1 Classification Levels comprising CW1(a), CW1(b) and CW1(c) as defined in Schedule B (Classification Definitions) of the Building and Construction General On-site Award 2010, the Company undertake to pay them the rate prescribed, for a Level 1 Employee (as defined in Appendix 1 – Agreement Classifications of the Agreement), in the relevant table contained in Appendix 2 – Wage Rates of the Agreement.”

[28] On the specific BOOT issues raised by the CFMMEU the Applicant relevantly states as follows;

(i) The casual conversion clauses at clause 14.8 of the Award referred to by the CFMMEU are best described as facilitative. The fact that particular casual clauses referred to by the CFMMEU are not addressed in the Agreement does not remove the right of conversion for a casual employee under the Agreement.

(ii) The Applicant rejects the CFMMEU characterisation of the Agreement’s travel allowance provisions as being less beneficial than the relevant Award provisions and posited an example of travel to a job site applying at an 80km radial distance. The Applicant contends that the relevant comparison in the example raised by the CFMMEU is that under the Agreement an employee would be entitled to $30 whereas under the Award they would be entitled to $28.00. 7

(iii) The Applicant accepts that clause 7.11 of the Agreement is silent on shift work crib breaks. However, clause 3.4.3 of the Agreement which deals with the interaction of the Agreement with the incorporated Award, makes clear that where the Agreement is silent on a provision otherwise provided by the Award then the relevant Award provision will apply. Consequently, the Award provision on shift work crib breaks apply.

(iv) The Applicant does not agree with the CFMMEU submission on the inclement weather standards in the Agreement. It concedes that clause 8.12 of the Agreement provides it with the ability to deploy affected employees to other locations or work however the employees remain paid for their time in the event they remain on site or in the alternative that there is no meaningful work and they are sent home.

[29] The Applicant further submits that the rates of pay in the Agreement are between 57% and 79% above the Award and to the extent that any of the issues raised by the CFMMEU represent detriments relative to the Award, the substantial margin of Agreement rates of pay above Award rates of pay ensure the BOOT is met.

Lack of genuine agreement

[30] The Applicant rejects the CFMMEU submission that there are reasonable grounds for believing that that the Agreement has not been genuinely agreed. As regards the CFMMEU suggestion that the Agreement lacked ‘moral authority’ because of the small number of employees that participated in the making of the Agreement, the Applicant submits that it only employs three employees that would be covered by the Agreement in NSW and the ACT and only deploy those employees to larger projects. It’s business model relies heavily on specialist subcontractors to undertake physical construction work and the size and scope of the NSW and ACT business has remained consistent for many years according to the Applicant.

[31] With respect to the CFMMEU contention regarding the alleged inaccurate responses at questions 3.5 and 3.6 of the Form F17 the Applicant disagreed that its responses were erroneous. It submits that the term ‘less beneficial’ (per question 5) and ‘omitted’ (per question 3.6) are ‘subjective and open to some degree of value-based judgement’. While acknowledging that there were a number of provisions in the Award that were not included in the Agreement, they still applied by reason of the Award incorporation provision at clause 3.4.3. It was against this background that the Applicant responded at question 3.5 that there were no less beneficial terms in the Agreement and responded at question 3.6 that there were no Award terms omitted.

[32] The Applicant submits that in the context of the above and given that questions 3.5 and 3.6 were in that section of the Form F17 titled “Part 3 – Better off overall test”, it never understood that it was required to list every single Award term not addressed in the Agreement when responding to question 3.6 which dealt with ‘omitted terms’. To alleviate any concern that it may not have accurately completed the Form F17, the Applicant filed an amended Form F17 dated 18 May 2020 in which it listed at question 3.6 those clauses of the Award that are not included in the Agreement. The list includes some 20 clauses and 4 Schedules to the Award.

Statutory framework

[33] In order for an Agreement to be approved by the Commission, it must be satisfied that a number of statutory requirements are met. They are found in s 186, which relevantly provides for the purpose of the present matter as follows:

“186  When the FWC must approve an enterprise agreement—general requirements

Basic rule

(1) If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.

Note: The FWC may approve an enterprise agreement under this section with undertakings (see section 190).

Requirements relating to the safety net etc.

(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;

……..

(d) the agreement passes the better off overall test.” (my emphasis added)

[34] Section 188 of the Act deals with the requirements necessary to establish that employees have genuinely agreed to an enterprise agreement and provides as follows;

“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.

[35] Section 180 of the Act details the pre-approval steps required to be undertaken by the employer so as to satisfy the Commission that employees genuinely agreed to the Agreement;

“180 Employees must be given a copy of a proposed enterprise agreement etc.

Pre‑approval requirements

(1) Before an employer requests under subsection 181(1) that employees approve a proposed enterprise agreement by voting for the agreement, the employer must comply with the requirements set out in this section.

Employees must be given copy of the agreement etc.

(2) The employer must take all reasonable steps to ensure that:

(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:

(i) the written text of the agreement;

(ii) any other material incorporated by reference in the agreement; or

(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.

(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:

(a) the time and place at which the vote will occur;

(b) the voting method that will be used.

……………………….

(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.”

Consideration

Provision of incorporated material – s 180(2)

[36] Dealing firstly with the issue raised by the CFMMEU as to the provision of the Award and Building Code to employees by the Applicant. I do not accept that a physical copy of the Award and Building Code must be provided to employees. I respectfully agree with the reasoning of Deputy President Colman in Civil Sydney where he stated as follows;

“[6] To the extent that the union contends that compliance with s 180(2)(b) requires physical access to the relevant documents, I disagree. Section 180(2) contemplates two alternatives. Employees must either be ‘given a copy’, during the access period for the agreement, of the written text of the agreement and materials incorporated by reference; or, throughout the access period, employees must ‘have access’ to a copy of these materials. I see no reason why either of these requirements cannot be satisfied through electronic communication, but particularly so in the case of providing employees ‘access’ to materials. ‘Access’ means a way, means or opportunity of approach. It does not connote physical possession.” 8

[37] The Applicant states in its Form F17 that employees were advised as to how to ‘access’ the Award and Building Code on the Fair Work Commission and ABCC websites and employees confirmed during the meeting held on 20 February 2020 that they were able to access those documents. Having regard to the use of modern technology and the familiarity that most employees will have with the use of smart phone technology, ‘access’ to incorporated materials via a website is certainly no less effective and arguably more effective for reasons of ensuring access to the most up to date documents, then via the provision of a hard copy of the documents. I am satisfied in the circumstances that the employees had ‘access’ to the incorporated Award and Building Code throughout the access period.

[38] Turning now to the issue of the MBA Calendar. Clause 8 of the Agreement details the Inclement Weather Procedure. It provides that an employee is entitled to receive payment for ordinary hours of work lost due to inclement weather of up to and no more than 32 hours in a four week period. The Applicant correctly points out that the 32 hour entitlement provided for in the Agreement is essentially the same as that provided for in the Award. Where the Agreement departs from the Award is in respect of the description of when the 4 week period commences for the purpose of calculating the entitlement.

[39] The Award relevantly states as follows;

“23.8 (a) If an employee commences employment during a four week period the employee will be credited with:

•  32 hours where the employee commences on any working day within the first week;

•  24 hours where the employee commences on any working day within the second week;

•  16 hours where the employee commences on any working day within the third week; and

•  eight hours where the employee commences on any working day within the fourth week in any four week period.

(b) The first period will be deemed to commence on the first Monday after 28 December 2009 and subsequent periods will commence at four weekly periods thereafter, provided that a calendar that was being used immediately before 15 July 2013 may still apply.” (my emphasis added)

[40] By contrast the Agreement states as follows at clause 8.4;

“8.4 An Employee will be entitled to payment by the Company for ordinary time lost through inclement weather for up to 32 hours in every calendar month. The calendar shall operate in accordance with the Inclement Weather Calendar published by the Master Builders Association of NSW. No employee will be entitled to receive more than 32 hours inclement weather payment in any period of four weeks.” (my emphasis added)

[41] It is apparent from the above and I accept that the substantive entitlement under the Agreement of up to 32 ordinary hours per month for inclement weather is unaffected by the Applicant’s failure to provide a copy of or access to the MBA Calendar. Where the MBA Calendar is required however is in identifying when each 4 week period starts and ends in order to calculate the entitlement available to an employee at any particular point in the relevant four week period. As the employees who participated in the making of the Agreement are covered by the 2016 Agreement which includes an almost identical term which specifically refences the MBA Calendar, it is unlikely that employees were unaware of how the inclement weather provision is intended to operate. Nevertheless, I accept the CFMMEU submission that the MBA Calendar is necessary for the purpose of ‘certainty and enforceability of the reference instrument through the Agreement’ 9 I am also satisfied that the MBA Calendar is a document that is incorporated by reference within the Agreement at clause 8.4. It is not contested, and I am satisfied, that the Applicant did not provide a copy of or access to the MBA Calendar to employees throughout the access period.

BOOT concerns

[42] It appears that the BOOT concerns raised by the CFMMEU are particularly raised in the context of apprentices and CW1(a), (b) & (c) classifications. That is, if the Agreement covers these classification and Award rates of pay apply in respect of these classifications, then the weight of detrimental provision versus more beneficial provisions in the Agreement relative to the Award may result in the Agreement not meeting the BOOT, particularly in respect of apprentices. Before turning to the particular classifications of apprentices and CW1 (a), (b) & (c) I will deal with the terms of the Agreement claimed by the CFMMEU to be less favourable then the Award.

[43] The provisions in the Agreement specifically identified by the CFMMEU as less favourable than the Award include those provisions dealing with casual conversion, travel allowance, shift work crib breaks and inclement weather provisions.

Casual conversion

[44] Clause 4 of the Agreement deals with casual employment and in particular at sub-clauses 4.3.6, 4.3.7 and 4.3.8 provides for the rights of casual employees to elect to convert to permanent full-time and part-time employment. The threshold of that right arising, that is at 6 months for other than irregular casual employees, is the same as the Award. It is true as the CFMMEU submit that the Agreement is silent on certain provisions found within the Award. That the Agreement may be silent on those additional provisions does not displace the Award rights. That is because clause 3.4.3 of the Agreement operates so as to incorporate those terms on which the Agreement is silent. In these circumstances I am not persuaded that the terms of the Agreement in respect of rights of casual employees converting to permanent employment are less beneficial then the Award.

Shift work crib breaks

[45] Turning briefly to shift work crib breaks, clause 7.11 of the Agreement deals with shift work. While meal and rest breaks during ordinary day work hours, on overtime and on weekend crib breaks are dealt with at clauses 7.5 and 7.6 of the Agreement, clause 7.11 of the Agreement makes no provision for meal or rest breaks in respect of shift work. I agree that the Agreement is silent on crib breaks on shift work. In these circumstances clause 35.2 of the Award which specifically deals with meal breaks on shift work would be incorporated and apply by reason of clause 3.4.3 of the Agreement. I am consequently not persuaded that the Agreement is less beneficial than the Award.

Travel allowance

[46] Turning now to the travel allowance provisions in the Agreement. Clause 6.1.4 of the Agreement relevantly provides for payment of a Daily Fares Allowance of $30.00 for each day worked on a site within an 80 km radial area of the relevant GPO or principal post office in a regional city or town. By comparison the Award at clause 25.2 provides for payment of a daily allowance of $17.43 for each day worked on a site within a 50 km radial area of the relevant GPO or principal post office in a regional city or town. Self-evidently, the Agreement is more beneficial then the Award in respect of the travel allowance payable where the site is within a 50km radial boundary from the relevant GPO or principal post office in a regional city or town. The Agreement in this scenario provides for a $30 per day payment versus $17.43 under the Award.

[47] However, when the job site is at a radial distance of 80km from the relevant GPO or principal post office in a regional city or town, a different picture emerges. Applying the apprentice example raised by the CFMMEU the Agreement the travel allowance payable would remain that of $30 per day where the site is at an 80km radial distance from the relevant GPO or principal post office in a regional city or town. The Award however provides that where an employee is required to travel beyond the 50km radial boundary they are entitled to;

(i) $17.43;

(ii) Payment at ordinary time for additional travel time to/from the 50km radial boundary and the site when that additional travel is undertaken outside ordinary hours of work; and

(iii) $0.47 per kilometre for travel to/from the 50 km radial boundary to the site in circumstances where an employee uses their private vehicle.

[48] While some uncertainty arises in calculating the Award entitlement with respect to the travel time component, one could reasonably foresee that if the site was at the 80km radial boundary from the relevant GPO or principal post office then an employee undertaking the additional travel outside of their ordinary hours could spend an extra 30 minutes driving between the 50 km radial boundary and the site. That equates to an additional hour per day to be paid at ordinary time. The employee in this example would also be entitled to $0.47 per km for the additional 60km per day if they used their own vehicle.

[49] Using the adult apprentice carpenter rate of $22.38 and assuming the employee used his or her own vehicle and travelled outside their ordinary hours of work, then the entitlement under the Award using the 80km example would produce the following daily travel allowance; $17.43 + $22.38 (1 hour at ordinary time) + $28.20 ($0.47 x 60km) = $68.00. Under this particular 80km scenario the Award clearly provides a more favourable entitlement then the Agreement travel allowance of $30.

[50] The relative detriment of the Agreement versus the Award will diminish the closer the site is to the 50km radial boundary from the relevant GPO or principal post office. To illustrate using the example of the apprentice carpenter, as soon as the apprentice was required to travel more than 1.5 km beyond the 50km radial boundary the Award provisions would be more beneficial. That is evident by the following calculation where the site is at a 51.5 km radial boundary from the relevant GPO or principal post office: $17.43 + $11.19 (minimum 30 min payment) + $1.41 ($0.47 x 3km) = $30.03.

[51] It follows from the above that for travel to and from a site that is within a 50km radial distance from the relevant GPO or principal post office in a regional city or town the Agreement is more beneficial than the Award. For travel beyond a 50km radial distance and up to an 80km radial distance, under almost all scenarios (except where the site is at the 51 km radial distance) the Award provisions are more beneficial than the Agreement.

[52] I would note in conclusion on the travel allowance that there was no material before me as to the incidence of work being performed beyond the 50 km radial distance. It may well be that the incidence of travel to sites beyond a 50 km radial distance is low in which case the Agreement travel allowance payment of $30 would be beneficial for all travel to work sites up to the 50km radial distance, and may more than offset the detriment for travel that occurs beyond the 50km radial distance. Nevertheless, the Agreement clearly envisages travel beyond a 50km radial area from the relevant GPO or principal post office hence the detriment described must be weighed in the conduct of the BOOT assessment.

Inclement weather provisions

[53] Turning now to the inclement weather provisions in the Agreement which the CFMMEU contend are less beneficial than the Award. As previously stated, the CFMMEU argue that Clause 8.12 of the Agreement provides the employer with the discretion as to whether to send workers home in wet weather, whereas clause 23.13 of the Award makes this an entitlement of the workers.

[54] The relevant provisions of the Agreement are as follows;

“…………………

8.12 Where Employees are prevented from working by inclement weather, and have not been assigned duties where it is reasonable and safe to work, the Company may release Employees from the requirement to remain on-site.

Employees may be released from duty where Employees have been prevented from working:-

•  For more than an accumulated total of four hours of ordinary time in any one day; or after the meal break,

•  For more than an accumulated total of 50% of the normal afternoon work time; or

•  During the final two hours of the normal work day for more than an accumulated total of one hour.” (my emphasis added)

[55] The relevant provisions of the Award are as follows;

“23.13 Additional wet weather procedure

(a) Remaining on site

Where, because of wet weather, the employees are prevented from working:

(i) for more than an accumulated total of four hours of ordinary time in any one day; or

(ii) after the meal break, as provided in clause 35.1, for more than an accumulated total of 50% of the normal afternoon work time; or

(iii) during the final two hours of the normal work day for more than an accumulated total of one hour;

the employer will not be entitled to require the employees to remain on site beyond the expiration of any of the above circumstances.

Where, by agreement between the employer and the employees, employees remain on site beyond the periods specified above, any such additional wet time will be paid for but will not be debited against the employees’ hours. Wet time occurring during overtime will not be taken into account for the purposes of this subclause.” (my emphasis added)

[56] Both the Agreement and Award provisions deal with the release of employees from site in circumstances of inclement weather preventing the performance of normal work and where alternate duties have not been assigned. I accept that the Agreement does not compel the release of employees when the particular inclement weather lost time thresholds are reached under either 23.13(a)(i), (ii) or (iii). Rather, it allows for the release of employees at the discretion of the Applicant. By comparison the Award provision prevents an employer from requiring employees to remain on site when the particular inclement weather lost time thresholds are met. I am satisfied that the Agreement confers a discretion on the Applicant in the release of employees whereas the comparable Award provision does not confer such a discretion.

[57] The above-described employer discretion in the Agreement is a detriment relative to the Award in that an employee covered by the Agreement may be required to remain on site beyond the inclement weather threshold having been met, despite the inclement weather preventing the performance of work whereas under the Award they would be entitled to leave the work site. While I am satisfied the difference in the Agreement provision constitutes a detriment, I am not persuaded that it is a financial detriment as under either the Award or Agreement an employee would be entitled to payment, subject of course to the 32 hour per calendar month limit on payment for inclement weather. No submissions were made by the CFMMEU as to the weight that should be accorded to the detriment. In the circumstances I accord it little weight.

Apprentices

[58] The Applicant has sought to address the particular concern of whether apprentices are covered by the Agreement by the provision of the following undertaking;

“2. Consistent with the scope and intent of clause 4.1.1 of the Agreement, in the circumstances that the Company employs an Apprentice, the Company undertake to do so under the relevant terms and conditions of the Building and Construction General On-site Award 2010.”

[59] Clause 4.1.1 in the Agreement which is referred to in the undertaking states as follows;

“4.1.1 Employees under this Agreement shall be employed in one of the following categories:

(a) Full-time weekly hire Employees

(b) Part-time weekly hire Employees

(c) Casual Employees”

[60] Also relevant to the question of whether the Agreement applies to apprentices is Clause 3.2 Application which states as follows;

“3.2 Application

3.2.1 This Agreement deals with matters pertaining to the employment relationship between:

(a) The Company; and

(b) Employees of the Company who are engaged in any of the callings or classifications defined by the Appendices of this Agreement.” (my emphasis added)

[61] Appendix 1 of the Agreement details all of the ‘callings or classifications’ covered by the Agreement but does not include apprentices.

[62] The apparent intent of the undertaking proffered by the Applicant is to make clear that the Agreement does not and will not apply to apprentices. The undertaking seeks to clarify that if apprentices are engaged by the Applicant then their terms and conditions of employment will be regulated only by the Award, not by the Agreement.

[63] Having regard to Clause 3.2 Application when read in conjunction with Clause 4.1.1 I am satisfied that the Agreement does not cover apprentices. That is so because the classification of apprentices is not defined within the callings or classifications in Appendix 1. The Agreement only applies to ‘Employees’ under the Agreement, those being the ‘Employees’ that fall within a calling or classification in Appendix 1. The Award incorporation does not in my view alter the clear intent and effect of the above referred clauses that limits coverage of the Agreement to callings and classifications within Appendix 1 of the Agreement.

[64] It follows from the above that the undertaking proffered by the Applicant in relation to apprentices is unnecessary to resolve the claimed uncertainty cited by the CFMMEU. That uncertainty is resolved through the interaction of clauses 3.2 and 4.1.1 and Appendix 1 of the Agreement. The Agreement does not and will not cover apprentices. As such I do not hold a concern that the BOOT is not met in relation to apprentices. Pursuant to s190 of the Act I may only accept an undertaking if I hold a concern that the requirements of ss 186 & 187 are not met. As I do not hold such a concern, I am unable to accept the undertaking proffered. Should the Agreement be capable of approval the Applicant will be invited to withdraw undertaking 2.

CWI (a), (b) & (c) classifications

[65] The CFMMEU say that the Agreement is silent with respect to the entry level CWI (a), (b) & (c) classifications and while it may be the intention of the Applicant that all labourers come in at Level 1, the Agreement only refers to the CW1(d) labourer classification which raises the question as to whether the CWI (a), (b) & (c) classifications and rates of pay in the Award are incorporated. If so incorporated, the question of whether the BOOT is met in respect of the CWI (a), (b) & (c) classifications may arise if Award rates of pay only apply in respect of these particular entry level classifications.

[66] The Applicant submits that the Agreement is intended to capture the entry level classifications and that any employee coming in at the entry level would be classified at Level 1 under the Agreement which aligns with the CW1(d) classification in the Award. As it (Level 1) is at higher level than CW1(a), (b) & (c) no BOOT issues arise.

[67] I accept there is some uncertainty as to whether the entry level classifications and rates of pay in the Award for CW1 (a), (b) & (c) classifications are or are not incorporated into the Agreement. If they are incorporated and the relevant Award rates of pay apply, then I have a concern that the BOOT may not be met having regard to the travel allowance detriment to which I have referred to above. The Applicant has proposed an undertaking that clarifies that an employee that would otherwise be classified at CW1 (a), (b) or (c) under the Award would, if employed by the Company, be paid at the Level 1 rate of $35.62 per hour under the Agreement which is approximately 58% higher than the Award.

[68] My concern as to the BOOT not being met in respect of CW1(a), (b) & (c) entry level classifications in the Award is addressed by the proposed undertaking.

Conclusion on BOOT

[69] Turning now to weigh the financial detriment of the travel allowance and the non-financial detriment of the inclement weather provisions described above, I deal firstly with the travel allowance. Using an 80 km radial boundary example and applying it to an employee who is classified at Level 1 under the Agreement, such classification enjoying the smallest wage rate margin of 57% above the Award of all the Agreement classifications, the following comparison is provided.

[70] The Level 1 classification under the Agreement would receive an hourly rate of pay of $35.62 compared to the Award CW1(d) rate of $21.61 per hour. On the basis of a 38 hour week, an employee at Level 1 under the Agreement would receive 7.6 ordinary hours per day at $35.62 per hour which equals $270.71 per day. In the 80km travel example they would also receive the $30 travel allowance bringing their daily base earnings to $300.71.

[71] Under the Award, an employee classified at CW1(d) is paid $21.61 per hour and for a 7.6 hour day would receive $164.23. Applying the Award travel allowance provisions to the 80 km example, the employee would also receive $17.43 + $21.61 (1 hour at ordinary time) + $28.20 ($0.47 x 60km) = $67.24. The daily base earnings would consequently be $231.47 which is significantly less than the Agreement provisions provide.

[72] I am satisfied that the Agreement meets the BOOT notwithstanding I have accepted that there are two provisions in the Agreement that are less beneficial than the Award. I have reached this conclusion by weighing those detriments against the significant wage rate margins between the Agreement and Award which range between 57% and 80%. As all other monetary benefits in the Agreement are comparable to the Award, any financial detriment attributable to the travel allowance payable in +50km and up to 80km radial travel scenarios and the non-financial inclement weather clause detriment are more than offset by the higher hourly rates of pay under the Agreement.

Lack of genuine agreement

[73] The CFMMEU raise a concern that the three employees who participated in the making of the Agreement were not fairly chosen and in support of that submission refer to the size and scope of the Applicant’s business within NSW and the ACT. The Applicant responded that its business model relies on sub-contracting to specialist contractors and that its employees are only placed on major projects. The CFMMEU while raising the concern have not adduced any material that would call into question the veracity of the statements made by the Applicant at question 2.11 of the Form F17 as to the number of employees that were covered by the Agreement at the time of the Agreement ballot. I am not persuaded that the employees who participated in the making of the Agreement were not ‘fairly chosen’ or that the agreement lacked moral authority.

[74] Turning now to the CFMMEU submissions regarding the Applicant’s answers to questions 3.5 and 3.6 in the Form F17 dated 4 March 2020. The CFMMEU submit that the Applicant failed to identify that the Agreement contained less beneficial provisions and also failed to identify that there were Award terms that were omitted from the Agreement. The CFMMEU also submit that the failure of the Applicant to accurately answer questions 3.5 and 3.6 constitutes reasonable grounds for believing that the Applicant failed to disclose to employees the impact of the Agreement when compared to the Award. The CFMMEU relied on the reasoning of Deputy President Asbury in Falcon Mining when she said as follows;

“[159] I am also of the view that the error in the Form F17 Employer declaration, where it is wrongly stated that there are no terms of the agreement less beneficial than those in the Award, makes it more probable than not that Ms Gayton made comments to this effect during her explanation about the terms of the Agreement. While I accept that the incorrect statement was unintentional, and that Ms Gayton did not set out to mislead the Commission or employees when she made that statement, the provision of incorrect information in a statutory declaration is a matter I can take into account in deciding whether the Agreement was genuinely agreed. I also note that while swearing an affidavit acknowledging the error, Ms Gayton has not provided any statement as to what terms of the Agreement are less beneficial when compared to the terms of the Award and there is insufficient evidence upon which I could reasonably be satisfied that an explanation addressing this matter was provided to employees.

[160] In my view the entirety of the failure to comply with requirements for approval of the Agreement – failure to correct typographical errors in the NERR (despite two attempts); failure to establish that reasonable steps were taken to give the NERR to employees (despite being given numerous opportunities to provide evidence to that effect); the incorrect statement about less beneficial terms of the Agreement in the Form F17 Employer Declaration; failure to properly correct that statement and to provide particulars; failure to provide particulars about the terms of the Agreement which are less beneficial than those in the Award; and Mr Ryan’s evidence about the inadequacy of the explanation of the terms of the Agreement – are reasonable grounds for believing that reasonable steps were not taken to explain the terms of the Agreement and their effect, and that the Agreement was not genuinely agreed.” 10

[75] Before turning to the circumstances in the matter before me I would observe that the Deputy President in Falcon Mining in declining to approve the agreement in that matter had identified a range of significant deficiencies with the application. So much is clear from the summary of her decision helpfully provided at paragraph [6] of her decision. Critically, she found that it was…. “The cumulative effect of errors made in the application documentation and other omissions (while individually not fatal to an application for approval) are reasonable grounds for the Commission to believe that the Agreement was not genuinely agreed (s.188(c)).” 11 (my emphasis added)

[76] Turning to the CFMMEU complaint that the Applicant’s answer at questions 3.5 of the Form F17 that there were no terms in the Agreement less beneficial than the equivalent Award terms was inaccurate, I have identified two provisions that are arguably less beneficial than the Award, those being the travel allowance where travel beyond the 50km radial boundary is required and the non-financial detriment of the inclement weather provision discussed above. In the context of the overall benefits of the Agreement, those detriments are not significant, and I am not persuaded that not identifying those limited detriments in the Form F17 was intentional or intended to deceive employees. The comments of Deputy President Gostencnik in BGC Contracting Pty Ltd 12 (BGC), with which I agree, are also on point when he states;

[89] Further, while any inaccuracy in a Form F17 lodged by BGC may impact upon my assessment of whether there has been compliance with s.180(5), that assessment is not conducted in a vacuum; Rather, it is undertaken in light of all the relevant evidence about the actual steps taken by BGC to explain the terms of the Agreement, and the effect of those terms. I accept that employers, or more properly those completing a Form F17, cannot be expected to be completely objective and absolutely knowledgeable, and as a consequence mistakes and omissions in the information provided in a Form F17 will occur. It would be a different matter if the errors made in the Form F17 were communicated to relevant employees when the employer was taking steps to explain the terms of the agreement, and the effect of those terms to those employees. But there is no suggestion in the evidence that that occurred here. Nor, without more, am I prepared to infer that it occurred.

[77] As to the further criticism by the CFMMEU that the Applicant in its answer at question 3.6 of the Form F17 failed to identify all of the terms of the Award omitted by the Agreement, it is to be borne in mind that the Award is expressly incorporated into the Agreement and the provisions of the Award will apply where the Agreement is silent. To that extent the omitted terms the CFMMEU appear to be referring to are in fact incorporated into the Agreement and are not omitted. While technically unnecessary in my view, the Applicant filed a further Form F17 in which it sought to identify those omitted terms.

[78] I am not persuaded in the circumstances of this application that the Applicant’s errors in completing the Form F17, such as they are, are of such a nature as to be singularly fatal to the application. I have reached this view because of a number of factors. Firstly, the employees who would be covered by the Agreement are familiar with the terms which are largely identical to those in the 2016 Agreement. This was not effectively challenged by the CFMMEU. Secondly, the Agreement is a rollover agreement that incorporates the Award and applies rates of pay between 57% and 80% above Award rates of pay. Finally, unlike Falcon Mining, I have not found there to a be a litany of deficiencies which in their totality call into question whether the Agreement was genuinely agreed. It follows that I am not persuaded that there are other reasonable grounds for believing that the Agreement was not genuinely agreed.

Was the Agreement genuinely agreed?

[79] In order to approve the Agreement, the Commission must, as part of its consideration, be satisfied in respect of the s 186(2)(b)(i) requirements under the Act. Specifically, that employees have ‘genuinely agreed’ to the Agreement. Section 188, which is set out above, details the steps that an employer must take in order in order to satisfy the ‘genuinely agreed’ requirement. Relevantly, that includes the provisions of or access to the Agreement and incorporated materials (s 180(2)), notification of the ballot (s.180(3)) and the explanation of the terms and the effects of the terms of the Agreement (s. 180(5)).

[80] It is not challenged that the Applicant complied with the requirements of s 180(3). As to the explanation of the terms and the effects of the terms of the Agreement, the Applicant has detailed the steps taken by it in its Form F17 statutory declaration and notwithstanding the minor errors in the Form F17 discussed above, I am satisfied that the explanation provided to employees took into account the particular circumstances of the employees. That is, the Agreement is a rollover of the existing 2016 Agreement, is largely unchanged save for wage increases, the employees are unarguably familiar with the terms having worked under the 2016 Agreement and the Award is incorporated as it was in the 2016 Agreement.

[81] Turning now to s. 180(2), I have found above that the Applicant did not provide a copy of or access to incorporated material, that being the MBA Calendar. I am consequently not satisfied that the Applicant has taken ‘all reasonable steps’ to ensure that employees had access to all incorporated materials. By reason of s.188 it follows that I cannot be satisfied that employees ‘genuinely agreed’ to the Agreement.

[82] Notwithstanding the above it is open to the Commission to consider pursuant to s. 188(2) whether the Agreement would have been genuinely agreed but for a ‘minor procedural or technical error’ that was unlikely to have disadvantaged employees. The parties were invited to make submissions on this point.

[83] The CFMMEU contend that the “…..the omission of the incorporated document….produced a situation where an important and directly financially valuable clause of the agreement was not understandable to the workers voting…..It seems apparent that this directly undermines the purpose of s. 180(2)….This is not an error that should reasonably be considered either minor or technical.” 13 The CFMMEU go on to contend that if it is an error capable of being addressed through s 180(2) then the error must be combined with the other flaws in the explanation of the Agreement.

[84] As I have already stated at [41] above, the MBA Calendar does not alter the substantive entitlement but rather supports that entitlement by establishing the start of each 4 week period for the purpose of calculating the entitlement. I do not accept the CFMMEU submission in the circumstances of this case that employees who participated in the making of the Agreement would not have understood the entitlement. It is not challenged that the three employees were already working under the very same term in the 2016 Agreement.

[85] I am satisfied that the failure of the Applicant to provide a copy of or access to the MBA Calendar to employees was in the circumstances of this case a minor procedural error. I am further satisfied that employees would have been familiar with the inclement weather entitlement which was unchanged from the 2016 Agreement and which specifically included the very same reference to the MBA Calendar. It is in my view neither likely or probable that the Applicant’s omission of not providing to employees a copy of access to the MBA Calendar would have disadvantaged those employee’s in terms of their understanding of and consideration of the Agreement prior to voting, that being the protective purpose of s. 180(2).

[86] In the above circumstances I am satisfied that but for the minor procedural error to which I have referred, the Agreement would have been genuinely agreed to within the meaning of s 188(1) of the Act.

Summary and conclusion

[87] I am satisfied on a preliminary basis that, save for the undertaking issue I have identified in respect of apprentices at [64], the other statutory requirements necessary for approval of the Agreement are met and that the Agreement is capable of approval. Furthermore, the undertaking proffered in respect of Award classifications CW1(a), (b) & (c) will not cause financial detriment and will not result in substantial changes to the Agreement.

[88] The Applicant will be afforded an opportunity to provide revised undertakings by 4.00pm on Friday 18 June 2020 and in doing so is invited to withdraw the proposed apprentice undertaking.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

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 1   Section 180 of the Act

 2   MA000020

 3   [2020] FWC 2304

 4   [2016] FWC 5315

 5   [2020] FWCA 1033

 6   AE417831

 7   Applicant Outline of Submissions dated 11 May 2020

 8   Ibid at [6]

 9   CFMMEU Submissions, dated 7 February 2020 at [10]

 10   [2016] FWC 5315 at [159] – [160]

 11   Ibid at [6]

 12   [2018] FWC 1466 at [89]

 13   CFMMEU Submissions dated 16 June 2020 at [8]