Karijini Rail Pty Limited
[2021] FWC 364
•29 JANUARY 2021
| [2021] FWC 364 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185 - Enterprise agreement
Karijini Rail Pty Limited
(AG2018/3844)
Rail industry | |
DEPUTY PRESIDENT BEAUMONT | PERTH, 29 JANUARY 2021 |
Application for approval of the Karijini Rail Pty Ltd Rail Operations Pilbara Enterprise Agreement 2018 - consideration of ‘fairly chosen’ requirement (ss 186(3) and (3A)) – anticipated offers of employment to employees in related entity - implications; whether undertakings address concerns that the Agreement does not meet the requirements of s 186 (s 180(5) non-compliance); ‘significant’ departures from award entitlements – whether failure to explain effect of 'detrimental terms' and provide access to a copy of the relevant modern award (s180(5)) - constitutes a minor procedural or technical error (s 188(2))
1 INTRODUCTION
[1] This matter has been on foot for quite some time. It concerns an application to approve an enterprise agreement which, if approved, would cover the employer, Karijini Rail Pty Ltd (Karijini), and train drivers operating locomotives between an iron ore mine in the Pilbara region of Western Australia and a port in Port Hedland.
[2] The application was initially granted and the Karijini Rail Pty Ltd Rail Operations Pilbara Enterprise Agreement 2018 (Agreement) approved with undertakings, on 16 September 2019. An appeal against that decision was allowed by the Full Bench on 3 March 2020 (the Full Bench Decision). 1The application was remitted back to the Commission, as presently constituted, to be redetermined in accordance with the Full Bench Decision.
[3] Having considered the Full Bench Decision, a directions hearing was convened. Representatives of both Karijini Rail Pty Ltd (Karijini) and the Construction, Forestry, Maritime, Mining and Energy Union (Union) attended. During the directions hearing, three issues were distilled from the Full Bench Decision. The parties addressed those issues in their submissions and materials filed. Both also relied upon the materials filed leading to the decision of 30 April 2019 2 (the First Decision) and the subsequent decision of 16 September 2019 (the Second Decision).
[4] The Second Decision addressed the issue of Karijini’s non-compliance with s 180(5) of the Fair Work Act 2009 (Cth) (the Act), insofar as it was found that Karijini had not taken all reasonable steps to explain to the two train drivers (the two employees) their rates of pay under the Agreement. The operation of s 188(2), and undertakings proffered in response to that issue, were duly considered. 3
[5] However, on appeal, the Full Bench determined that Karijini’s non-compliance with s 180(5) extended beyond the explanation provided about the rates of pay. The Full Bench identified that, while Karijini had provided an explanation about the terms of the Agreement, it had not explained the effect of particular terms (the Explanation Issues). It held, in respect to s 180(5) of the Act, that Karijini had not taken all reasonable steps to explain the following:
(a) modes of employment that depart from those provided in the Mining Industry Award 2010 (Award) 4 – full-time and part-time employment: see paragraphs [77] and [79] of the Full Bench Decision;
(b) differential provision for meal breaks provided in the Agreement when compared to the Award: see paragraph [81] of the Full Bench Decision;
(c) direction to take annual leave as provided for in the Agreement when compared to the Award: see paragraph [85] of the Full Bench Decision; and
(d) entitlement to redundancy payment in respect of employees engaged on maximum term contracts: see paragraph [94] of the Full Bench Decision.
[6] The Full Bench therefore concluded Karijini had done little to explain the effect of the terms of the Agreement which would alter, in a detrimental fashion, some of the terms of the Award,which then applied to the two employees. It considered that more steps were required to explain the effect of those detrimental terms.
[7] Having concluded that there were other reasonable steps that Karijini should have taken, the Full Bench expressed that the first of those steps was to explain the changes to conditions prescribed by the Award (which applied to the two employees) made by the Agreement terms; the second, to provide to the two employees information about how to access a copy of the Award, in much the same way as it informed the relevant employees about how to access the NES explanation sheet, the Long Service Leave Act 1958 (WA), theAct and Superannuation Guarantee (Administration) Act1992 (Cth): see paragraph [88] of the Full Bench Decision.
[8] Consternation was also expressed about the explanation provided to the two employees concerning the terms and conditions which would be afforded to the employees from TRRC Pty Ltd (the TRRC employees). If one has had the opportunity to read the past decisions in this ‘series’, there would be an understanding that both TRRC Pty Ltd and Karijini were subsidiaries of the Railtrain Group Pty Ltd (Railtrain Group or Railtrain), an intermediary holding company, with Railtrain Holdings Pty Ltd (Railtrain Holdings) being the holding/parent company.
[9] TRRC crew (the TRRC employees) operated trains on the railway line connecting the Roy Hill iron ore mine, in the Pilbara region of Western Australia, to the port of Port Hedland (the Roy Hill Network). 5 It had been providing that crew to Roy Hill Infrastructure Pty Ltd (Roy Hill) under a contract which was to end, come 31 October 2018 (the TRRC Contract). The plan was for the two employees to similarly be operating trains on that same railway line. Karijini intended to make offers of employment to the TRRC crew, if Roy Hill decided to award the contract to Karijini. When discussing the terms of the Agreement with the two employees, one of the directors of Karijini spoke of the terms and conditions of employment regarding the TRRC employees, to the extent that the Union considered misrepresentations had been made.
[10] The Full Bench held that, on redetermination, consideration would extend to what had been represented or implied to the two employees about the terms and conditions which would be afforded to the TRRC employees (who would receive benefits under the Agreement as set out in [4] of the First Decision: see para [91]of the Full Bench Decision).
[11] The second issue touched on whether the Commission was satisfied that the group of employees covered by the Agreement was fairly chosen (Fairly Chosen Issue). The Full Bench held that in the First Decision consideration of this issue had not occurred. It followed that the issue remained live, as to whether the fairly chosen requirements in s 186(3) and (3A) were met: see paragraphs [124] and [125] of the Full Bench Decision.
[12] In light of the Explanation Issues and Fairly Chosen Issue, the third issue was whether there were no other reasonable grounds for believing that the Agreement had not been genuinely agreed to by the employees (see s 188(1)(c) of the Act and paragraph [116] of the Full Bench Decision) (Other Reasonable Grounds).
2 CONTEXT OF THE REDETERMINATION
[13] The Full Bench Decision elucidated the parameters of consideration on redetermination. It should, however, be noted that the conclusion about the rates of pay explanation and acceptance of an undertaking to address the same (the issue that the requirement in s 186(2)(a) was not met because of the non-compliance of s 180(5), as set out in s 188(1)(a)(i)), was left undisturbed. Because that conclusion was left undisturbed, the issue will not be revisited, save to adopt the reasoning in the First and Second Decision and explore the revised undertaking provided.
[14] Karijini submitted that the nature of the deficiencies identified by the Full Bench, and the effect of those deficiencies, could now be considered with the benefit of evidence about the precise operational circumstances relevant to those issues, and the impact of the Agreement’s terms in those circumstances. It is timely then to consider again the background of this matter, inclusive of the additional evidentiary material provided by the parties for the purpose of this redetermination.
[15] The background is of course an amalgam of the materials filed for the First and Second Decision, and this decision. It does not pretend to be a fulsome representation of all that has been said or written. However, the assurance given is that all materials have been considered when arriving at the findings and conclusions reached.
3 BACKGROUND
3.1 Railtrain and the inception of Karijini
[16] As noted, Railtrain Holdings is the holding/parent company of Railtrain, an intermediary holding company. There are several subsidiaries in the Railtrain Group, including TRRC and, the newly formed group, Karijini. Mr Butler is a director of the subsidiaries. 6
[17] The Railtrain Group operates in numerous areas of the rail industry in Australia. One of the key services it provides is the provision of train drivers to operate trains in various industries. 7 Industries include the mining industry, where rail operations are required to transport the mining product from the mine.8
[18] Mr Butler stated Railtrain was essentially a labour hire company that supplied train drivers to the rail and mining industry. 9 It also had contracts to supply rail labour crews to companies operating across railways in Queensland, New South Wales, Victoria, and South Australia.10 Railtrain was also the service provider for TRRC and Karijini.
[19] Railtrain provided services pursuant to contracts it secured with its clients. 11 In the mining industry, the contract, said Mr Butler, was directly with the operator of the mine.12 The contracts with clients were usually for a fixed term, generally for two to four years.13 Mr Butler said there was no guarantee of another contract at the end of that term.14 He noted that it was usual for the client to go to market at the end of the contract, to attempt to secure a more competitive rate.15
[20] Mr Butler gave evidence that it was important that Railtrain’s workforce was engaged in a manner that best placed it to secure these client contracts, whilst allowing for the workforce to be managed at the end of a contract in a cost effective manner. 16
[21] TRRC had been providing the rail crew to Roy Hill under a contract that was to run until 31 October 2018 (the TRRC Contract). Roy Hill was TRRC’s only client.
[22] In May or June 2018, Roy Hill informed Mr Butler that it was prepared to offer a further four year contract for the supply of train drivers, if a new enterprise agreement could be established that would match the further contract. 17 TRRC’s existing enterprise agreement was not due to expire until January 2019.18
[23] Mr Butler stated that Karijini was incorporated on 22 June 2018 with the hope that it would secure a contract with Roy Hill. 19 It made an enterprise agreement so as to be ready to commence work in the event of securing that contract.20
[24] In its Closing Submissions in Reply, prepared for the first hearing (the First Decision), the CFMMEU provided its perception of the factual circumstances before the Commission:
As the evidence demonstrates, until 1 November 2018 the CFMMEU had members who were employed by a company related to the Applicant, TRRC Pty Ltd, at the Roy Hill mining operations. 21 The train drivers employed by TRRC Pty Ltd were covered by the TRRC Pty Ltd Operations Agreement (“the TRRC Agreement”).22 The TRRC Agreement was coming up for renegotiation in the second half of 2018, its nominal expiry date having now subsequently passed on 21 January 2019.
In the usual course of bargaining, CFMMEU members, and other employees of TRRC Pty Ltd, would have had the opportunity to propose a new replacement enterprise agreement to apply to the work covered by the TRRC Agreement. Should an agreement have been put to the workforce, TRRC employees would have had the opportunity to vote on the terms and conditions that would cover their employment for the next four years.
However, the employees of TRRC Pty Ltd were never to be given the opportunity of collectively renegotiat[ing] their terms of employment. In May or June 2018, Mr Butler, and others in the Rail Train Group, decided to form a new company, Karijini Rail Pty Ltd, the Applicant in these proceedings. TRRC Pty Ltd would not seek to renew the contract at Roy Hill. Instead, the Rail Train Group would utilise a new entity, Karijini Rail Pty Ltd. 23 The reasons for that decision are said to be so that the Rail Train Group could have an enterprise agreement to match a potential commercial agreement with Roy Hill.24
[25] In cross examination at the first hearing, Mr Butler was asked several questions about TRRC’s contract with Roy Hill, and the impetus for Karijini’s establishment. His evidence included:
Why did TRRC not continue with the contract?---TRRC at the time that we met with Roy Hill prior that there was an opportunity to extend our commercial contract, our TRRC contract – sorry, our enterprise agreement was expiring in January. The commercial arrangement with TRRC was expiring 1 November, and the opportunity for us was if we could have an enterprise agreement to match the commercial agreement, Roy Hill would then offer us the same term to continue onto business. So for us it was about securing four more years’ work for the drivers and also a commercial agreement for our business.
I see. So the agreement was expiring, and, what, you need an unexpired agreement to have the contract or - - -?---Not necessarily an unexpired, however, the commercial contract was getting renewed on 1 November, and we had to have an agreement in place prior to that.
But the agreement was still in place at TRRC, wasn't it?---The agreement was expiring in January. I think end of January it was.
Yes?---But the opportunity for us was to get a new enterprise agreement, to get a commercial agreement in place before 1 November before the old commercial agreement with TRRC expired on 1 November.
But that opportunity – so it was all about getting a new agreement in place. That was - - -?---To have a clear pathway that we could match the commercial agreement with an enterprise agreement, then we'd be allowed to continue to have a commercial agreement with Roy Hill.
And you couldn't do that with TRRC?---Well, we had to have this in place before the contract expired on 1 November, and the enterprise agreement was not expiring until January with TRRC.
That you had an enterprise agreement with?---Which was expiring.
In January?---2019.
And that was a problem?---Yes.
Okay. So when did you realise that that was a problem?---Just in early discussions with Roy Hill around about May/June is we had our first discussions and they said if we had an enterprise agreement to match the commercial agreement, then they would – then we'd have a contract going forward with Roy Hill.
I see. So Roy Hill, what, encouraged you to set up another - - -?---No, no, Roy Hill didn't encourage that. They just said if we had an enterprise agreement they would match the commercial agreement.
I see. I see. And, so, what, the decision was made in May or June to incorporate a new business?---We actually had a big restructure exactly that time. We actually acquired another business called IRSE Signalling, and we actually had another business unit starting 1 July, so it was part of the restructure that we restructured five different business units including Karijini Rail.
Karijini Rail didn't exist prior to 22 June, did it?---No, it didn't. It got incorporated around about I think it was June. But it was part of a whole restructure of the whole group. The whole business restructured at the same time. 25
[26] After Karijini was incorporated, Mr Butler said that there was a need to employ two train drivers. 26 The reason, TRRC required additional drivers in order to fulfil its obligations under the contract it had with Roy Hill at that time. Mr Butler said that TRCC did not want to employ those additional drivers directly because the contract was coming to an end and it was therefore likely that it did not require this labour on an ongoing basis.27
3.2 Two drivers are employed by Karijini
[27] Mr Butler stated the TRRC Contract obliged TRCC to supply to Roy Hill 50 drivers at all times. By early July 2018, TRRC’s train driver numbers were down to 48, leaving two vacancies. 28 Given the approaching expiry of the TRRC Contract, a business decision was made to fill the vacancies by having the newly formed Karijini employ two train drivers, who would be seconded to TRRC until 1 November 2018 (as noted, the train drivers are simply referred to as ‘the two employees’ in this decision).29
[28] By 2 July 2018, Mr Butler had interviewed the two employees for positions with Karijini. 30 The agreement for the provision of a rail crew to Roy Hill was not with Karijini at that time, it was with TRRC. However, Mr Butler explained that the two employees were placed on secondment with TRRC.31
[29] When asked why TRRC had not employed the two employees, Mr Butler gave evidence that ‘because, again, we needed a commercial agreement to match the agreement and the decision was taken to employ them through Karijini Rail’. 32 Mr Butler further elaborated that ‘the business decision was to agree to put them through Karijini Rail because there was a vacancy with TRRC and the contract was expiring on 1 November’.33
[30] When pressed further about the aforementioned ‘business decision’, Mr Butler gave the following evidence:
Yes. And that business decision was made because you needed to get an enterprise agreement up that matched the service agreement; is that right?---Yes. That's correct. So the opportunity was if we could have an enterprise agreement the services agreement, the commercial agreement, would be matched to the enterprise agreement. 34
…
Yes. And to get that agreement you needed the two people so you employed? No, we needed the two people because we needed them on the site because we had a vacancy. The decision was made to employ them through KR. But we did have vacancies for those two because we were two short, we had 48 on the roster.
And the decision was made to employ them through KR so you could get an agreement? --- To have a commercial contract, yes. However, there were vacancies to employ them and we took that pathway. 35
[31] Regarding the recruitment of the two employees, it appeared they had registered their interest to work at Railtrain. Mr Butler’s evidence was that the both were well known to him. 36 He said that he approached the two employees to see if they wanted to be considered, and both of them did.37 Offers of employment with Karijini were signed on 9 July 2018. Although Mr Butler said that the two employees would have been informed of their successful applications before that date.38 The offers were identical in their terms, and provided for flat rates of pay inclusive of all applicable penalties and allowances.39
[32] The two employees commenced as train drivers on a maximum term basis, with a start date of 9 July 2018 and a termination date of 30 April 2022. The 30 April 2022 date was the anticipated end date of the commercial agreement with Roy Hill, then under negotiation. 40 The letters of offer specified the hours of work as being ‘client requirement which [are] currently 12 hours shifts on a 14 days on/14 days off roster’.41 Mr Butler explained that the ‘client’ referred to was TRRC, to which each employee was to be seconded.42
[33] A secondment agreement between Karijini and TRRC was put in place until 1 November 2018 so that Roy Hill could be invoiced for the two employees under the existing TRRC Contract. 43
[34] The two employees started paid work at Karijini on 9 July 2018. 44 For the first 14 days, they carried out training in accordance with their normal roster pattern, for 12 hours per day from 6.00am to 6:00pm, which was apparently typical for new employees.45 The training consisted of competency training provided by Railtrain trainers and Roy Hill trainers.46 By the end of the two week period the two employees had demonstrated competency, having had their prior learning tested and recognised.47
[35] Before providing details of the bargaining process, it is timely to traverse the additional evidence about the two employees who were recruited. For the purpose of the redetermination, Karijini filed an additional witness statement from Mr Butler. 48 Mr Butler outlined in his additional witness statement the experience of the two.
[36] The first had started performing shunting and marshalling train operations for WAGR in 1975. 49 Thereafter, the employee had been engaged as a casual locomotive driver for Skilled, spanning a period of four years, followed by a stint as a full-time locomotive driver (heavy haulage) for BHP Billiton.50 In this role, the employee drove trains that transported bulk iron ore from BHP’s network of mines in the Pilbara to the port of Port Hedland.51 For a time in 2017, the employee was employed by Railtrain as a casual locomotive driver driving on the Roy Hill Network and from the latter part of 2017 to April 2018, the employee worked at Rio Tinto driving trains.52 Mr Butler gave evidence that the first employee had worked directly for him during his time at Skilled, BHP Billiton and Rio Tinto.53
[37] The second employee had a similarly extensive history driving trains. In 1975 the employee had worked as a train driver for ‘WAGR’, followed by a period between 1980-83 where the employee worked for Goldsworthy Mining Limited. 54 Between 1987 and 1993, the employee was employed by Robe River as a train driver transporting iron ore in the Pilbara and thereafter worked as a casual train driver for ‘ARG’ in Kalgoorlie, and for Skilled on BHP and Rio Tinto sites.55 There was a period during 2006 to 2016, where the employee worked on Rio Tinto sites, including as a full-time permanent train driver.56 Mr Butler stated that he had worked with the second employee on rail operations that were constrained by award requirements – similar to the circumstances of the first employee.57
[38] While the two employees had both held roles with other rail operators that were equivalent to a Railway Worker Level 3 in the Agreement (main line competent), Mr Butler stated that they required additional training in order to be able to drive on the mainline at Roy Hill’s operations. 58 According to Mr Butler, this was because every company has different locomotives, wagons, types of braking and specific training related to their operation.59 Additional to the local site specific training, Railtrain provided a competency based training to all Karijini employees prior to going on site.60 It was a requirement for locomotive drivers to have a ‘Cert IV in Train Driving TLI 42613’.61 Karijini’s client, Roy Hill, had stipulated as much, in the contract between it and Karijini.62
3.3 Bargaining
[39] While the two employees were undertaking training, they were also involved in the bargaining process for the Agreement.
[40] In his Statutory Declaration to the Commission (Form F17), 63 Mr Butler’s evidence was that he informed the two employees that Karijini would be seeking to negotiate an enterprise agreement with them as the first employees.64 Mr Butler explained that this was necessary because Karijini was negotiating with an iron ore company, Roy Hill, to enter into a 4 year agreement to supply train drivers to operate on the Roy Hill Network.65 Mr Butler’s evidence was that he explained that the enterprise agreement would need to align with the terms of the commercial contract (that is, the commercial contract to supply train drivers), or there was a risk that Karijini would not reach agreement with Roy Hill for the new contract.66
[41] Mr Butler gave evidence that during the course of the discussion with the two employees, they asked him a ‘lot of questions about the effect of the proposed enterprise agreement on the current train drivers working for TRRC and whether they would be disadvantaged as a result’. 67 Mr Butler’s evidence was:
I explained that they would not be disadvantaged because Karijini Rail would offer them employment and for those who accepted the new role, Karjini Rail would maintain their existing rates of pay inclusive of CPI adjustments, provide additional monetary benefits and recognise prior service and allow their accrued entitlements to come across. I also explained that any TRRC train drivers who did not want to work Karijini Rail would receive their full entitlements, including redundancy pay. 68
[42] On 10 July 2018, the two employees were given a Notice of Employee Representational Rights and were told to consider the approach they wished to take to representation. 69 The first two bargaining meetings took place on 13 July 2018, the final day of the first week of training.70 This was followed by a second meeting on 23 July 2018, the first business day after the training period ended.71 Mr Butler gave evidence that he explained to the two employees that if Karijini was not successful in reaching agreement with Roy Hill, then it was likely that the current train drivers working for TRRC would no longer have positions.72
[43] Mr Butler’s evidence was that at the first bargaining meeting, one employee said that he would appoint the other employee as his bargaining representative. 73 It appears that the reason for doing so may have been because that employee had prior experience on the Roy Hill Network.74 One of the two employees completed a form nominating the other as the bargaining representative, at that first meeting. However, while one was the appointed bargaining representative, it was said that the other employee decided to stay at the meeting so as to understand the discussions and ask questions. That same employee also attended the second bargaining meeting.75
[44] The first bargaining meeting was held in the boardroom at Railtrain’s Perth office, and went for about 2.5 hours. Mr Butler was present as was Mr Elston, Karijini’s General Manager – Operations Support Services, who participated by video link. 76 The two employees were given a copy of the draft Agreement which had been prepared by Mr Elston.77 It was the first time the two employees had seen the draft Agreement, and Mr Elston stepped them through it clause by clause.78 Explanations were provided and, questions answered.79 Mr Butler and Mr Elston agreed to change some of the terms of the draft Agreement to address particular issues raised by the two employees. 80
[45] Mr Elston was said to be the expert on the detail of the draft Agreement. He had spoken to Mr Butler, whilst preparing the draft, to obtain details about various operational matters. 81 While Karijini was continuing to negotiate the terms and conditions of its commercial contract with Roy Hill, Mr Butler’s evidence was that there were industry standard conditions applicable generally in the Pilbara, such as fly in / fly out roster arrangements (FIFO), which were capable of being reflected in the draft Agreement, even though the negotiations with Roy Hill had not yet concluded.82
[46] Mr Elston gave evidence of his recollection of the first bargaining meeting, on 13 July 2018. 83 With regard to cl 4 of the draft Agreement, Mr Elston read the clause that provided ‘we will only be employing train drivers on maximum and fixed term contracts as this EA will be aligned with our commercial contract that has a known end date’.84 Mr Elston said that he was asked by the two employees, what was meant by the term ‘maximum term contract’, and he proceeded to explain that it was a contract with a fixed end date but with either party being able to terminate before the end date.85
[47] Mr Butler gave evidence that he informed the employees that the reason Karijini was using the maximum term contracts was to align the employment contracts with the term of the commercial contract. 86
[48] The second bargaining meeting again involved Mr Butler, Mr Elston, and the two employees, and was of similar duration. 87 An amended version of the draft Agreement was given to the employees, which on this occasion included base rates of pay; these had been absent from the earlier draft.88 Mr Elston went through the draft Agreement clause by clause, providing explanations and answering questions asked by the two employees. Mr Butler said he was unable to recall the specific detail of the questions that were asked or the answers that were given.89
[49] Concerning the redundancy provision at cl 20 of the draft Agreement, Mr Elston said that he read out this clause and said that it was provided for in the ‘NES’. 90 Mr Elston said that he asked if ‘they’, meaning the two employees, had any questions, and they replied ‘no’.91
[50] On 24 July 2018, following the second bargaining meeting, Mr Butler telephoned the two employees individually, it being an ‘off day’ on their roster. 92 Mr Butler asked them if they had a good understanding of the terms of the proposed Agreement and whether they had any further questions or comments. As neither of the two employees raised any issue, Mr Butler indicated that he would arrange for the access period to begin and would send them an email to outline the voting process.93
[51] On 25 July 2018, the two employees received an email, which Mr Elston had sent on behalf of Mr Butler. 94 Attached to it was a copy of the Agreement on which the two employees were to vote, a document explaining the terms of the proposed Agreement (Explanatory Document), and a ballot paper.95
[52] On 27 July 2018, Mr Butler again telephoned the two employees, and asked each if they had any more questions, or needed further explanation or clarification of the application, or the effect of the proposed Agreement. 96 Mr Butler’s evidence was that neither of the two employees had said they had not received the email or the proposed Agreement, and neither raised any questions or concerns.97 Mr Butler said that he explained the voting process to each employee.98
[53] Mr Elston prepared a ‘Further Explanation Sheet’ that was emailed to the two employees on behalf of Mr Butler on 30 July 2018. 99 It provided URL addresses linking explanatory material regarding the NES, and to the pieces of legislation referred to in the proposed Agreement.100
[54] The ballot for the proposed Agreement was conducted on 2 August 2018 and there was a unanimous vote to approve the Agreement. 101
3.4 Contractual arrangements with Roy Hill
[55] By letter of 5 September 2018, the operator of the mining operations at Roy Hill wrote to Mr Butler, in his capacity as a representative of TRRC, stating that Roy Hill had decided not to renew its contract with TRRC (TRRC Letter). 102 The TRRC Letter stated:
On behalf of Roy Hill Infrastructure Pty Ltd (RHI), I advise TRRC that RHI has decided not to renew the commercial contract between our two companies. As such, the supply of rail crew labour will cease at the end of the contract term, and the last day of providing the labour will be 31 October 2018.
RHI has moved to secure the services of another company to supply the rail workforce.
This decision is no reflection on the quality of the work and professionalism displayed by your workforce. I have asked the incoming company to use its best endeavours to engage your existing rail crew employees over the period from now up to the start date that the new company will provide the rail crew at site, namely 1 November 2018. In this way, there is the opportunity for continuity of employment for your existing employees and RHI is keen to see this happen. This request is a reflection of the high regard RHI has for your employees… 103
[56] By letter of the same date, 5 September 2018, the operator of the mining operations at Roy Hill wrote to Mr Brendan Williams, Karijini, informing him:
On behalf of Roy Hill Infrastructure Pty Ltd, I have great pleasure in confirming formally the Karijini Rail Pty Ltd has been successful in securing the contract to supply the rail crew workforce for the Roy Hill Mine’s rail operations in the Pilbara region.
The contract was signed on 3 September 2018. The rail crew services will commence on 1 November 2018 and the contract term is then 3.5 years until 30 April 2022.
Continuity of rail crew supply is important to us. Therefore, as agreed, Karijini Rail will use its best endeavours to engage the existing TRRC employees over the period from now until 1 November 2018 and in doing so provide those people with certainty of employment. 104
[57] To reiterate, Roy Hill is Karijini’s only client. 105
3.5 The TRRC workforce
[58] Mr Busson gave evidence that the Union’s District Branch had members who worked for TRRC at Roy Hill before the contract was given to Karijini. 106 Those members were covered by the TRRC Pty Ltd Operations Agreement (TRRC Agreement).107 The TRRC Agreement had a nominal expiry date of 21 January 2019.108
[59] Mr Busson said that in August 2018, he was contacted by a member working for TRRC who asked, in effect, ‘what’s in our log of claims’, and noted that he had been informed by a supervisor that ‘negotiations were going well’. 109
[60] It was Mr Busson’s account that he spoke to the prior District Secretary to ascertain if he had any knowledge of the negotiations. That District Secretary had informed Mr Busson that he had contacted a person at Railtrain or TRRC some time in January 2018 about starting negotiations for a new enterprise agreement to cover the Roy Hill operations. 110 Mr Busson gave evidence that the prior District Secretary reported that at that time TRRC had said it was not ready to start negotiations but would contact the Union when they were.111
[61] Mr Busson said that Mr Elston contacted him on 29 August 2018 acknowledging that Mr Busson had been trying to contact Mr Butler. 112 Mr Elston was purported to have informed Mr Busson that he could not talk about the negotiations for an agreement covering Union members, but would when he could.113
[62] Mr Elston gave evidence that when TRRC’s contract with Roy Hill came to an end, its employees moved across to Karijini as maximum term contract employees. 114 At the time of the hearing, there were 54 employees working for Karijini, 52 of those employees were formerly employees of TRRC.115 Upon commencement with Karijini, their prior service with TRRC was recognised for the purpose of leave and redundancy entitlements.116
4 LEGISLATIVE SCHEME
[63] Section 182(1) sets out when an enterprise agreement is made:
Single-enterprise agreement that is not a greenfields agreement
(1) If the employee of the employer, or each employer, that will be covered by a proposed single-enterprise agreement that is not a greenfields agreement have been asked to approve the agreement under subsection 181(1), the agreement is made when a majority of those employees who cast a valid vote approve the agreement.
[64] Section 186(1) of the Act requires the Commission, on an application for approval of an enterprise agreement under s 182(4) or s 185, to approve the agreement ‘if the requirements set out in this section and section 187 are met’. Section 186(2) sets out a requirement that the Commission must be satisfied that:
a) if not a greenfields agreement, the enterprise agreement has been genuinely agreed to by the employees covered by the agreement (s 186(2)(a));
b) the terms of the enterprise agreement do not contravene s 55 (s 186(2)(c)); and
c) the enterprise agreement passes the BOOT (s 186(2)(d)).
[65] Therefore, the Commission must approve an enterprise agreement when certain general requirements are met. One of those requirements is that the agreement has been genuinely agreed to by the employees ‘covered by the agreement’. 117 The High Court has stated that the question of coverage that arises when the Commission asks whether the agreement has been genuinely agreed to, for the purpose of s 186(2)(a), is not whether the employees voting for the agreement are actually employed under its terms, but rather, whether the agreement covers all employees who may in future have the terms and conditions of their jobs regulated by it.118
[66] The term ‘genuinely agreed’ in s 186(2)(a), is explained by reference to s 188(1), which provides that an enterprise agreement has been ‘genuinely agreed’ to by the employees covered by the agreement if the Commission is satisfied that:
a) the employer covered by the agreement compiled with ss 180(2), (3) and (5), and s 181(2) in relation to the agreement;
b) the agreement was made in accordance with s 182(1); and
c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.
[67] Section 180(5) is traversed. It relevantly provides:
Terms of the agreement must be explained to employees 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.
[68] In the decision of The Construction, Forestry, Maritime, Mining and Energy Union; The Australian Workers' Union; The Australian Manufacturing Workers' Union and The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v OS ACPM Pty Ltd and OS MCAP Pty Ltd (OS ACPM), 119 Colman DP (in dissent) explained that compliance with s 180(5) is of course not an end in itself, but forms part of a means to a statutory end. The Deputy President continued, stating that the section serves the requirement in ss 186(2)(a) and 188, that an enterprise agreement be genuinely agreed to by the employees covered by the agreement.
[69] Part 2-4 of the Act recognises that there may be errors and omissions in the highly regulated process of making an enterprise agreement. 120 Section 190 applies if the Commission ‘has a concern that an agreement does not meet the requirements set out in sections 186 and 187’ (which includes s 186(2)(a)). Section 190(2) states that the Commission may approve an agreement if it is satisfied that an undertaking ‘meets the concern’. However, that is not the only section that may avail an applicant where there is a concern about ss 186 and 187. The legislature has seen fit to insert a relatively new section that addresses where an error has arisen that is procedural or technical in nature. However, before discussing that particular section, namely s 188(2), it is important to appreciate that s 188(1)(c) requires that there be no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.
[70] Section 188(1)(c) is cast in very broad terms 121 and is intended to pick up anything not caught by parts (a) and (b).122 Thus, any circumstance which could logically bear on the question of whether the agreement of the relevant employees was genuine would be relevant.123 Further, as will be observed shortly, irrespective of a minor procedural or technical error made – if the Commission is not satisfied that there are no other reasonable grounds as referred to in s 188(1)(c), s 188(2) has no part to play in ‘saving an agreement’.
5 THE FULL BENCH DECISION – FINDINGS AND CONCLUSIONS ON SECTION 180(5) COMPLIANCE
[71] In the First Decision, I was satisfied that Karijini had taken all reasonable steps to explain the terms of the Agreement and their effect, with the exception of the base rates of pay in clause 5 of the Agreement. In reaching my decision, I had observed:
[W]hile the two employees were informed of the Award, and undoubtedly had extensive experience within the Pilbara driving trains, I am not convinced that such circumstances negated all reasonable steps including more than what was provided in the content of the Explanatory Document and the discussion with Mr Butler concerning the final terms of the Agreement. I have taken into consideration the discussions held with Mr Elston, notwithstanding their occurrence during bargaining and training, because I consider such discussions inform as to the needs of the relevant employees. Further, I consider that the two employees were afforded opportunities to ask questions about the Agreement. My conclusion, however, remains unchanged. 124
…
An employee’s entitlement as far as base rates of pay, penalties and allowances are concerned, are fundamental considerations for any employee. This was reflected in the question of one of the two employees concerning how the salary was made up. And yet, when this questioned was asked the explanation was, with respect, lacking in clarity.
In this case, compliance with s 180(5) necessarily entailed a description of how the base rate of pay was made up and how it compared to the rates of pay and allowances in the Award. It may be the case the penalties are compensated for by the provision of a loading. Again, that required an explanation as to how that loading was arrived at. This is particularly so when the employer, having used such form of rates would have, in any event, determined the rates (allowances rolled in) and loading, and then assessed whether the Agreement passed the BOOT. As it is, the Form F17 requires that the employer indicate if it thinks the Agreement passes the BOOT. While the two employees were involved in the negotiations for the Agreement, it is not at all apparent that an explanation in the aforementioned terms was given during negotiations, or thereafter. 125
[72] At [57] of the Full Bench Decision, it was expressed that concluding whether Karijini had complied with s 180(5) of the Act required an evaluation of whether, in all the circumstances, Karijini had taken all reasonable steps to ensure the terms of the Agreement, and the effect of those terms, were explained. That explanation was to be in an appropriate manner, taking into account the particular circumstances and needs of the relevant employees.
[73] The Full Bench said that Karijini’s compliance with s 180(5) need only be established to the satisfaction of the decision-maker. Actual compliance with s 180(5) was not a jurisdictional fact. Its objective existence was not a precondition to the Commission’s power to approve the Agreement. 126 However, reaching the requisite state of satisfaction as to, inter alia, compliance with s 180(5), on material sufficient to enable the decision maker to reach the requisite satisfaction, was a condition precedent to the exercise of power to approve the agreement.127
[74] Of relevance was the Full Bench’s finding at paragraphs [88] and [89] of the Full Bench Decision:
[88] Although we accept that the steps taken by Karijini were reasonable steps to explain the terms of the Agreement they did little to explain the effect of terms of the Agreement which would alter in a detrimental fashion, some of the terms of the Award which then applied to the employees. More steps were required to explain the effect of some of the terms of the Agreement. Given the circumstances discussed above we consider there were other steps that were reasonable steps that Karijini was required by s.180(5) to take. These steps were, first, to explain to the relevant employees the changes to conditions prescribed by the Award (which applied to the employees) made by the Agreement terms. Secondly, to provide the employees with information about how to access a copy of the Award in much the same way at it informed the relevant employees on how to access the NES explanation sheet, the Long Service Leave Act 1958 (WA), the Fair Work Act 2009 and the Superannuation Guarantee (Administration) Act 1992. We therefore do not consider that Karijini took all reasonable steps to ensure that the effect of the terms of the Agreement were explained to the two employees in the circumstances.
[89] The Deputy President was in error in concluding that the only additional step required for there to be compliance with s.180(5) of the Act was the one that she identified. Although the Deputy President concluded in the April 2019 Decision that she was not satisfied that Karijini had complied with s.180(5) of the Act, she ultimately approved the Agreement with undertakings in the Approval Decision. The Deputy President did not consider whether the steps taken together with the step she identified were “all reasonable steps”. One of those undertakings was accepted by the Deputy President’s as meeting her concern about Karijini’s compliance with s.180(5). Self-evidently she did not consider whether the undertaking proffered (or any of the other undertakings) met concerns about Karijini’s failure to take “all reasonable steps” as we have identified. (citations omitted)
[75] To recap, the Full Bench concluded that more steps were required to explain the effect of the terms in the Agreement which would alter in a detrimental fashion, some of the terms of the Award which then applied to the employees. These steps were, firstly, to explain to the relevant employees the changes to conditions prescribed by the Award (which applied to the employees) made by the Agreement terms. Secondly, to provide the employees with information about how to access a copy of the Award, in much the same way at it informed the relevant employees on how to access the NES explanation sheet.
[76] One of those terms that was said to have a detrimental effect was the one setting out the types of employment provided for in the Agreement. In respect to the explanation that Karijini had given concerning the types of employment, the Full Bench concluded:
We consider the absence of permanent full-time and part-time employment is a substantial difference as between the industrial instruments. These modes of employment were also available under the TRRC Pty Ltd Operations Agreement 2014. Amongst other things, employment pursuant to the Award provision (as to full and part-time categories) ensures redundancy pay is available where an employee’s position becomes redundant and the employment ends as a consequence. The ending of the employment relationship by reason of the expiration of the fixed or maximum term is more than arguably likely to result in no entitlement to redundancy pay. Moreover, whatever Karijini’s intention as to the employment of employees was, the Agreement could nevertheless have made provision for the modes of employment in the Award. Fixed and maximum term engagement are not prohibited by the Award. Such modes would also have been consistent with the Notice of Employee Representational Rights issued by Karijini which advised relevant employees that Karijini was bargaining for an enterprise agreement “which is proposed to cover employees that are engaged in rail operations at the Roy Hill Operations in the Pilbara region”. There is no limitation to the proposed enterprise agreement covering only employees engaged as casual employees or on fixed or maximum term contracts. The choice made to depart from the modes of employment for which the Award made provision should have been explained by reference to the Award. (citations omitted)
[77] Regarding the difference between the provision of meal breaks under the Award and under the Agreement, the Full Bench found that the Agreement term was undeniably detrimental, and the explanation was deficient, stating:
[T]hirdly, as to the differential provisions for meal breaks in the Agreement compared to the Award, Karijini says that its undertaking at [5] gives all employees a 40-minute paid meal break. It says that the Agreement’s express statement that “work continues” is not a real detriment because it merely makes express what is in any event the universal meal break practice for Pilbara train drivers.
We have already addressed the issue of the relevance of undertakings which we need not repeat. Relevantly, we consider the differences in meal break time to be a detriment. Under the Agreement “work will continue” throughout the meal break. Thus, for example, under the Agreement a 12 hour shift work employee is paid to work during the break but does not actually get a break. Under the Award, there is to be a paid meal break for a 12 hour shift employee of 40 minutes duration. Such an employee is paid while not working and receives a break. The suggestion that the Agreement arrangement is not detrimental compared to the Award is frankly absurd. As to the contention that the Agreement requirement that work will continue is a universal practice in the Pilbara, even if correct, is no answer to the fact that this is not a condition imposed by the Award and that the Award applied to the relevant employees at the time the explanation was required, not the “universal practice”. The provision in the Award as to meal breaks was at the time of the explanation, the relevant employees’ entitlement. The Agreement changed that entitlement in a manner that is undeniably detrimental.
Fourthly, and without canvassing the issue in detail, similar observations may be made by the difference between the Award, which limits the time between meal breaks to 5 hours, and the Agreement which does not.
[78] The direction to take annual leave under the Agreement was met with the following appraisal:
Fifthly, as to the differences in the circumstances in which an employee may be directed to take annual leave Karijini says that:
• under clause 11.5 of the Agreement, it can only require an employee to take annual leave if “the requirement to take leave is reasonable in the circumstances”;
• while the Award provides for a prescriptive process, the practical benefit to the employee is marginal;
• clause 11.4 of the Agreement provides that an application for annual leave by an employee will not be unreasonably withheld. Clause 23.9 of the Award creates an entitlement to take a certain amount of leave when “excessive leave” is accrued. But to take advantage of cl 23.9, the employee must have more than 8 weeks of annual leave (or 10 weeks in the case of a shift worker) accrued for more than six months and be unable to reach agreement with the employer about taking that leave. It says this is very unlikely in circumstances where employees are engaged on maximum- term contracts of less than four years.
We do not consider these arguments render the difference to be minor or insignificant. The proposition in the first dot point is as to the effect of the term after the undertaking given by Karijini operates as a term of the Agreement. It was not the effect when the proposed agreement was explained to relevant employees. Moreover, there is a substantive difference for an employee’s rights between, on the one hand Karijini only being permitted to direct an employee to take leave for a shut down or where excessive leave is accrued under the Award, and on the other under the Agreement, where Karijini can simply give an employee two weeks’ notice for any reason. The addition of a reasonableness requirement pursuant to the undertaking still renders the term less beneficial to employees than the Award term.
Furthermore, an employees’ entitlement to take leave where it is “excessive leave” under the Award is not in our view insignificant. The accrual by employees of more than 8 (or 10) weeks untaken leave during the nominal life of an enterprise agreement is hardly “very unlikely”. Relevantly the two employees would have accrued almost 4 (or 5) weeks leave by the time the Agreement commenced operation and the TRRC transferring employees might also be carrying excessive leave as Mr Butler’s evidence was that Karijini would allow the TRRC transferring employees’ accrued entitlements to come across.
[79] Whilst in some respects connected to the modes of employment, the Full Bench expressed its view concerning the failure to explain the effect of the Agreement entitlement to redundancy payment in respect of employees engaged on maximum term contracts:
Putting to one side the allegation that Karijini misled employees, it seems clear enough that the Deputy President did not deal with the argument that Karijini failed properly to explain the effect of the Agreement entitlement to redundancy payment in respect of employees engaged on maximum term contracts. The issue was a material matter on which the CFMMEU relied to make good its claim that Karijini had not taken all reasonable steps to explain the effect of the terms of the Agreement. The Deputy President erred in not dealing with the matter. 128
6 ADDITIONAL EVIDENCE CONCERNING THE TERMS OF THE AGREEMENT THAT WERE NOT SUFFICIENTLY EXPLAINED
[80] Having had the application returned for redetermination, and now being aware of the Full Bench’s reasoning concerning the deficiencies about the explanation, Karijini led additional evidence as did the Union.
[81] That evidence has been considered in arriving at the findings made and conclusions reached, although not all the evidence has found its way on to one of these pages. Some sits in the ‘background’ to this decision, and some now follows. The following evidence specifically traverses the explanation provided about the ‘detrimental’ terms of the Agreement and their effect as highlighted in the Full Bench Decision. It should be noted that in the Second Decision, I considered that the ‘Hourly Rate Undertaking’ proffered met my concern about Karijini’s non-compliance with s 180(5) as identified in that decision. While I adopt the reasoning traversed in the Second Decision concerning the Hourly Rate Undertaking, I note again that in respect of the redetermination Karijini proffered a subsequent undertaking. That undertaking is considered in due course.
6.1 Part-time employment
[82] Mr Butler explained that the Agreement does not provide for part-time employment, because Karijini does not employ part-time employees and does not intend to in future. 129 Karijini’s workforce was employed on a FIFO basis and it had no residential employees.130 There were several reasons given for the decision not to engage part-time employees, including:
a) the uncertainty of when a driver is required to commence driving the train after commencing their shift. On this point, Karijini noted that a 12 hour shift was always required to ensure that there was enough time for the driver to complete the required journey from the mine to the Port, and end up at a location where they can be transported to the accommodation village. It would be less efficient if drivers finished their shift before completing this journey and arrangements had to be made to swap out drivers while the train was completing the journey; and
b) it would impact rostering arrangements which were said to be a 14 day on and 14 day off roster – a roster which is used because it is the most cost efficient model in terms of maximising driver time on site while ensuring fatigue management. Allowing part-time engagement would necessitate an increase in employee numbers, thereby requiring additional flights and accommodation, while increasing the number of non-productive days and impacting on recruitment costs (additional costs).
[83] Mr Busson stated that he did not agree with Mr Butler that it was impractical to have part-time work in the mining industry, or where workers were exclusively FIFO. 131 Mr Busson’s evidence traversed the example where, at Rio Tinto, there were job sharing arrangements for FIFO workers where a driver works a reduced number of swings – effectively two drivers share the one roster.132
6.2 The absence of permanent employment from the Agreement
[84] It is noted earlier in the decision that Mr Butler had informed the two employees of the reason why there was no permanent employment provided in the Agreement. Mr Butler gave evidence on re-hearing that at the time of bargaining, he understood that maximum term employees are entitled to redundancy pay if their employment is terminated because the employer no longer requires the job to be done, regardless of whether that occurs at the end of the maximum term or sometime before that. 133
[85] Mr Butler stated that it was, and remained, Karijini’s intention to pay its train drivers redundancy pay if they are made redundant before the end of their maximum term contracts, or if they are not offered further employment at the end of the maximum term, because Karijini was unable to secure a further contract with Roy Hill and the drivers could not be redeployed elsewhere within the Railtrain group. 134
6.3 Meal breaks
[86] Mr Butler stated that it was the train driver’s job to ensure that, subject to safety requirements, the train was driven from the mine to the port once loaded, or from the port to the mine once unloaded. Ensuring that this occurred safely and without delay, was required for Roy Hill’s continuous operations and to maximise efficiencies in all aspects of its operations, said Mr Butler. 135
[87] According to Mr Butler, these operational demands provided the reason why clause 8.1 of the Agreement was included. That clause states ‘[M]eal breaks for train crew will be a paid thirty (30) minute meal break and work will continue due to operational requirements’. 136
[88] Mr Butler explained that while the train is in motion, it requires the driver’s focus. However, for 80% of the trip the train is in ‘trip optimiser’ mode such that the driver is not required to operate the train, but to monitor it and push the vigilance button at the appropriate time. 137 Mr Butler said that the train drivers have the opportunity to eat food while they do this.138
[89] A further opportunity to take a meal is when the train is not in motion, and the brakes have been applied and it is made safe in idle, said Mr Butler. At this point the driver can take a break on the train by using the crib facilities situated on the train. 139 Mr Butler stated that before the driver leaves the terminal at the port or mine for their journey, drivers have access to a range of packed lunches and drinks they can take on their journey with them.140 It was Mr Butler’s evidence, however, that on most shifts, train drivers have the opportunity to take a significantly longer break than that provided for by the Agreement, and there was never an occasion where a driver did not have an opportunity to stop performing duties and take a meal break.141
[90] Mr Busson gave evidence that he was aware of a practice in the Pilbara of companies requesting or directing locomotive drivers on the mainline to keep trains moving. 142 This meant, he said, that the employees could not always take meal breaks in accordance with the Award. As a result, some companies had negotiated agreements which put in place meal break arrangements which were more consistent with the way they operated their rail operations.143
[91] Mr Busson expressed the view that the meal break provision in the Award was an important bargaining chip for workers in any negotiations. 144 In this respect he spoke of his experience negotiating an agreement called the ‘Rio Tinto Iron Ore – Pilbara Rail Network – Agreement’ (Rio Agreement). Mr Busson said that the Union was the only bargaining representative on the employee side in the negotiations for the Rio Agreement. One of the key claims of the Union and its members in those negotiations concerned meal breaks – as members had reported to Mr Busson not being able to get a proper break.145 Mr Busson said that he was not aware of any other enterprise agreement in the industry which had the requirement in the same terms as that found in clause 8 of the Agreement, to the effect that employees worked through their breaks.146
6.4 Annual leave
[92] Insofar as taking annual leave is concerned, Mr Butler’s evidence was that Karijini employees are required to take their annual leave in either one or two week blocks. This enables Karijini to manage shift coverage by using casual employees while the employees are on leave. Mr Butler said that, in his experience, the employees generally take their annual leave as a two week block resulting in them having six weeks away from site at once.
6.5 The explanation given to the employees
[93] Mr Butler said that, in his previous witness statements, he had given evidence about the explanation that was provided by both him and Mr Elston to the two employees about the Agreement. That explanation did not include an express comparison of certain matters in the Award as against the Agreement. Those matters, of course, included: (a) the absence of provision for ongoing full-time or part-time employment in the Agreement; (b) provisions relating to meal breaks; and (c) the circumstances in which an employee may be directed to take annual leave. 147
[94] It was Mr Butler’s view that those matters were self-evident and the arrangements in relation to those issues were perfectly clear and follow logically from the way rail operations must be conducted in the iron ore industry. 148
[95] Mr Butler said that the failure to provide comparisons of this kind were unintentional in that:
a) he did not know that it was a legal requirement for Karijini to provide comparisons of this kind. Had he known that this was required, he would have provided the comparisons;
b) he did not want to confuse or mislead the employees about their entitlements under the Award or the Agreement;
c) he thought that the employees did not require further explanation beyond what Mr Elston and he provided. This was because he knew that the two employees were experienced train drivers having worked in the Pilbara and because he had asked them several times during bargaining whether they had any concerns about the Agreement - they had made it clear that they did not. Had the employees requested a comparison to the Award about these matters he would have provided it; and
d) in these circumstances he believed, at the time, that Karijini had taken all reasonable steps to explain to the employees the terms of the Agreement and their effect in a manner that was appropriate to the employees’ circumstances and needs. 149
[96] Concerning the explanation regarding redundancy payment, to the extent that the explanation did not properly explain the effect of the Agreement entitlement to redundancy payments, given that the employees were on ‘maximum term’ contracts, this, said Mr Butler, was unintentional. 150 Mr Butler repeated that he did not intend to confuse or mislead the employees about their entitlements under the Award or the Agreement. He said that he thought the employees did not require any further explanation beyond that provided.151
[97] The issue regarding the information imparted to the two employees about the Agreement providing for an offer of employment to TRRC’s employees, or that it provided for those same employees to maintain their existing rates of pay inclusive of CPI adjustments, provided additional monetary benefits, and recognised prior service or allowed accrued entitlements to come across – was, according to Mr Butler, unintentional. He had not intended to confuse or mislead the employees about the effect of the Agreement and thought that it was clear that what he had explained to the two employees was Karijini’s intention. 152
[98] Karijini did not provide the two employees with a copy of the Award. Mr Butler explained that he did not know that it was a legal requirement to do so (that is provide access to it or a copy directly). 153 Mr Butler said that he knew that the two employees were able to access the Award themselves via the internet should they need a copy and if they had requested a copy he would have provided it.154
7 Explanation Issues
7.1 The general submissions concerning non-compliance with s 180(5)
[99] The parties provided extensive submissions about Karijini’s non-compliance with s 180(5) and whether it could be addressed by way of undertaking or by otherwise placing reliance on s 188(2) of the Act. In the context of this decision, an acceptable undertaking, or satisfaction of s 188(2), would enable the Commission to be satisfied the Agreement met the requirements in s 186; in this respect, leaving aside the issue of s 188(1)(c).
[100] The submissions were structured so that a general approach was initially adopted, followed by submissions specific to the detrimental terms that the Full Bench had identified. That same approach has been adopted for the purpose of structuring this decision.
7.2 The Union’s general submissions
[101] The Union submitted that the statutory tests in s 188 must be applied in light of all relevant facts. Having traversed the facts outlined in the initial hearing, the Union observed that the two employees were, in substance, making an agreement to cover approximately 50 Railtrain employees engaged by TRRC who were, at the time of bargaining, performing the Roy Hill work.
[102] The Union said that the matters raised by the two employees about the TRRC employees 155 demonstrated that they understood the Agreement would apply to the TRRC employees. The Union said this ‘fact’ was significant in assessing the magnitude of Karijini’s failures under s 180(5). The two employees had no industrial relations experience and were effectively bargaining on behalf of about 50 other employees of the Railtrain Group. On this basis, argued the Union, it was imperative the two employees were as well informed as possible throughout the bargaining process.
[103] The Full Bench had identified a failure to explain the differences between the Award and the Agreement. The Union referred to the Full Bench’s finding that there was no basis to conclude that the two employees had any knowledge of the terms of the Award. 156 While Karijini had provided further evidence about the circumstances of the two employees on remittal, the Union said this did not alter matters. The evidence did not evince a ‘familiarity with the Award and its terms’. The Union submitted that experience in the industry and detailed knowledge of the applicable reference instrument were not one and the same thing.
[104] Referring to the Form F17, the Union noted that when asked whether the Agreement had any less beneficial terms, none of the matters identified in the Full Bench Decision were listed as detriments. The Union next submitted that senior and experienced industrial relations practitioners of Railtrain apparently had no appreciation that some conditions under the Agreement were less beneficial than the Award – therefore making it inconceivable that the two employees, being train drivers with no industrial relations experience, would have understood the difference.
[105] It was the Union’s view that Karijini’s evidence did not come to grips with the central issue, which was the extent and effect of its failure to explain critical matters about the effect of the terms of the Agreement, when compared to the then applicable Award. Karijini had relied heavily on speculation as to the state of mind of the two employees. This, said the Union, was despite the Full Bench having rejected the proposition that knowledge of the Award could be inferred from the experience of the two employees as train drivers in the Pilbara. 157 While it was open to Karijini to call the two employees to give evidence as to their state of mind during the negotiation process, Karijini had not done so. The Union said it could therefore be safely concluded that the evidence of the two employees would not have assisted Karijini.
[106] The Union again referred to the circumstances of the TRRC employees, submitting that Karijini’s evidence and submissions focused primarily on the effect of the terms of the Agreement on the two employees, rather than upon the employees who would in future be employed under and covered by the Agreement (the TRRC employees).
[107] Having laid out the aforementioned objections, the Union turned its attention to Karijini’s instances of noncompliance with s 180(5), noting that both separately and cumulatively they were substantial, did not constitute minor procedural errors, and could not be addressed through undertakings.
7.3 Karijini’s general submissions
[108] Karijini observed (as will be seen in the following paragraphs) that the Union had made several submissions concerning the ‘participation in the bargaining process’ and to ‘the quality of the bargaining process’, both of which were unrelated to s 180(5). Karijini explained that those concepts were the province of the good faith bargaining requirements in s 228 of the Act and had not impacted upon the assessment required by s 180(5). Nor did they impact the acceptability of undertakings, or s 188(2).
[109] Insofar as the Union’s construction of s 180(5) was concerned, Karijini stated that the construction was erroneous and pervaded much of the Union’s submissions on the Explanation Issues. It was, according to Karijini, a rudimentary attempt to overplay the gravity of the impact of the non-compliance matters identified by the Full Bench. Karijini submitted that clearly a finding of non-compliance had been made concerning those issues. However, the question on rehearing was whether undertakings could resolve them, and/or whether they were minor procedural errors within the meaning of s 188(2). Karijini pressed that resolving that question did not permit consideration of the ‘quality of the bargaining process’. This point is expanded upon further below.
7.4 Submissions on undertakings – the parties
[110] The Union submitted that an examination of s 190(1) revealed that the Commission must have a ‘concern’ that ‘the agreement’ does not meet the requirements set out in ss 186 and 187, and the Commission must be satisfied that the undertaking ‘meets the concern’ (see s 190(2)). The Union pressed that it was therefore critical to identify with precision the default giving rise to the concern, and to ensure that the undertaking meets that particular concern.
[111] Expanding on the point about undertakings, the Union advanced that, where one had regard to the purpose of s 180(5), an undertaking could only address a concern about non-compliance where it placed employees in a position as if the default had not occurred. By way of example, the Union referred to the redundancy issue, noting that an undertaking could address the default because it could ensure that the employees receive that which they understood they would receive under the Agreement.
[112] However, the Union stated that where the default (non-compliance with s 180(5)) had the consequence that employees may not have had all relevant information for the bargaining process, the concern was that the employees were unable to participate in the bargaining process on an informed basis. The Union continued that where a detriment is not drawn to the employee’s attention, no undertaking could address the concern because the undertaking could not address the quality of the employees’ participation in the bargaining process. This approach said the Union, was consistent with the example provided by the Full Bench at paragraph [107] of the Full Bench Decision.
[113] It is noted that paragraph [107] of the Full Bench Decision set out:
[107] Secondly, a concern about whether an employer has complied with s.180(5) and therefore whether the agreement has been genuinely agreed to by the relevant employees, may as a matter of logic be remedied depending on the nature of the concern. It is accepted that in a number of cases concerns about genuine agreement will not be able to be met by an undertaking. But it is not the case, as a matter of logic, that any such concern could never be met. Why for example, could not a concern that an employer explained the effect of a term of the agreement as to shift work was that an afternoon shiftworker would receive a 15% loading under the agreement, when the agreement only provides for a 10% loading, be met by an undertaking that the employer would pay an afternoon shiftworker a loading of 15%? We consider that such an undertaking would remedy the concern since the agreement operating with the undertaking is consistent with the explanation given.
[114] The Union stated that it was not relevant to speculate, as Karijini had, on whether employees would have voted in favour of the Agreement if the employees had been fully informed. Negotiations might have taken a different course had the employees been fully informed (for example, the two employees might have sought expert advice on the complexities of meal break provisions) and the Agreement may have differed to that which was made. It was the Union’s position that the quality of the bargaining process could not be rectified.
[115] Karijini submitted that the Union had sought to broaden the impact of non-compliance with the s 180(5) explanation requirement. Rather than merely impacting on decisions made by employees at the ballot held at the conclusion of the statutory consideration period, the Union’s submissions urged a broad general finding that any failure to comply with s 180(5) meant employees were ‘unable to participate in the bargaining on an informed basis’ or were somehow ‘disadvantaged in respect of the bargaining process’.
[116] Karijini observed that the Union’s submission, in this respect, fundamentally misunderstood s 180(5). Explaining the operation of s 180(5), Karijini submitted that the obligation attended to the product of negotiations between an employer and bargaining representatives, being the proposed agreement. It did not impact the process of negotiations which had preceded the presentation of the proposed agreement to employees.
7.5 Submissions on minor procedural errors under s 188(2) – the parties
[117] The Union observed that the Full Bench in Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others (Hunstman)did not discuss the type of errors which might constitute a ‘minor procedural error’under s 180(5). Section 188(2)(a) permitted a finding that an Agreement had been genuinely agreed within the meaning of s 186(2)(a) if all statutory requirements were met, save for the fact that the employer had made a minor procedural or technical error, relevantly in respect of ss 180(5). However, the Union observed that there was an additionalrequirement. Approval could only occur where employees were ‘not likely to have been disadvantaged’by the minor procedural or technical errors: s 188(2)(b). The Union identified that, in this case, the relevant disadvantage was in respect of the bargaining process. 158
[118] Having traversed the evaluative process and the meaning of the word ‘minor’, as referred to in s 188(2), the Union submitted:
a) The word minor in s.188(2)(a) must be given significance. It is not solely or primarily concerned with evaluation of disadvantage to employees, or s.188(2)(b) would be otiose. The nature and magnitude of the error are also relevant.
b) Further, and contrary to the applicant’s submissions, even if it be the case that the error did not prevent the employees from making an informed vote, this fact does not necessarily render a procedural error “minor”. The impact, as a matter of fact, on the employees is but one of the factors to be considered in determining whether an error is “minor”.
c) In determining what constitutes a “minor” procedural error, it is helpful to have regard to the examples given in the Explanatory Memorandum (and to the type of errors considered in Huntsman). Examples of the type of matters Parliament had in mind are found in the Explanatory Memorandum at [47]. The examples include minor procedural and technical errors such as:
i. employees being informed of the time and place for voting on the proposed agreement or the voting method that will be used just after the start of the access period rather than at the start of the access period (s.180(3));
ii. Employees being requested to approve an agreement on the 21st day after the last notice was given, rather than at least 21 days after the day on which the last Notice was given (subsection 181(2)).
d) It is evident that errors of this type are errors of form, rather than substance. They would have no significant effect on the bargaining process.
e) It should be emphasised that the amendments are, inter alia, intended to protect collective bargaining, and to ensure that employees are not disadvantaged by errors on the part of the employer.
[119] The Union continued that a failure to comply with s 180(5) in relation to explaining the effect of a material term of the agreement, would rarely, if ever, constitute a minor procedural error within the meaning of s 188(2)(a), at least where the error was uncorrected at the time of the vote.
[120] The Union emphasised that a ‘minor procedural error’ under s 188(2)(a) could not be applied to this type of error, because the error had the capacity to materially affect the bargaining process. For the reasons set out in the One Key Workforce cases, 159 the content of the explanation was of critical importance in ensuring that the employees were as well informed as possible, and therefore capable of agreeing genuinely to any enterprise agreement.
[121] Karijini advanced that the Union’s propositions in this respect did not cite any authority. Whilst the Union had referred to seven paragraphs of Huntsman to support its proposition that the relevant disadvantage was in respect of the bargaining process, Karijini noted that upon examination the paragraphs from Huntsman were not authority for the propositions at all, and in fact led to the opposite conclusion, which had been urged by the Union.
[122] The proposition lauded by the Union was, according to Karijini, contrary to the Revised Explanatory Memorandum for the Bill which introduced s 188(2), and which the Full Bench in Huntsman had relied upon.
[123] Karijini identified that the Union, at paragraph [35] of its submissions, 160 agreed with the notion that the statutory tests (s 188(2) being the most relevant on the rehearing) must be applied in light of all relevant factual circumstances. Karijini stated that this was an important concession and was the reason that Karijini had filed further evidence. Karijini continued that the additional evidence enabled consideration of the nature, extent and effect of the non-compliance identified by the Full Bench, against a proper evidentiary background.
[124] Regarding the Union’s account of the facts, Karijini remarked that it did not represent an accurate, balanced, or objective summary. Instead, it created a misleading picture of the evidence. By way of example, Karijini pointed to the assertion that ‘the employer intended that the TRRC employees would be transferred to the Applicant shortly after the Agreement was made.’ 161 Reference had been made to paragraph [173] of the First Decision as apparent authority for the statement. Karijini submitted that the paragraph made no reference to any transfer at all. Instead it referred to an agreement that Karijini would use ‘its best endeavours to engage the existing TRRC employees over a specified period’.
[125] Karijini submitted that in the face of the evidence, there was no basis to find that the two employees were ‘bargaining on behalf’ of the TRRC employees, nor anyone else.
[126] In response to the Union’s assertions about the two employees, Karijini made several points. One may recall that the assertions included it was ‘inconceivable that the two employees, being train drivers, with no IR experience, would have understood the differences between the Agreement and the Award, in the absence of a clear and explicit explanation’, and that the two employees ‘had no knowledge of the terms that they were foregoing or changing under the agreement’. Karijini’s points included:
(a) The two employees are literate and capable of reading. The CFMMEU discount entirely the prospect that they may have studied the proposed agreement in detail. The evidence of questions they asked during the consideration period suggest this is likely.
(b) Each of them had significant experience working as train drivers subject to industrial instruments. That should not be discounted.
(c) The Award can be located on the internet in a handful of keystrokes. Access to the internet is ubiquitous. We live in the information age.
(d) It is not necessary to show that the employees had ‘a detailed knowledge of the applicable reference instrument’. The authorities caution against the imposition of any such requirement. If that were a necessary approval requirement, agreement approval applications would be laborious processes indeed, and might rarely result in approval.
(e) A submission that it is ‘inconceivable’ that the two employees would have understood something, is unsustainable. No evidence is called from either of them, not is any evidence called to support the submissions. Self-evidently, the submission must be rejected. 162
13.1 Lack of informed consent
[441] Noting that Karijini had failed to explain how the Agreement would alter the two employees’ terms and conditions of employment in a ‘critical’ way, the Union advanced it must be concluded that the two employees were unaware of the changes brought about by the Agreement, regarding those detrimental terms and the other provisions that had been set out at Schedule A. The Union continued that it also must be concluded that the two employees were unaware of the particular impact of such matters on the TRRC employees.
[442] The Union submitted that because of the s 180(5) defaults, the two employees did not understand the true effect of the Agreement and this was liable to affect the course of the bargaining process. That is, the employees were not adequately informed of what they were ‘giving up’. It was therefore the case that the employees might have rejected the changes, or they might have sought more beneficial provisions in exchange for foregoing benefits under the Award. On that basis, said the Union, it could not be said that the consent garnered, that was given in ignorance of these matters, was genuine consent in the sense discussed by the Full Court in the One Key Appeal. Referring to the One Key Appeal, the Union cited that part of the Full Court decision, where it was said:
Turning then to the language utilised in ss 186(2)(a) and 188(c), the word “genuinely” in the phrase “genuinely agreed”, indicates that mere agreement will not suffice and that consent of a higher quality is required. 299
[443] The Union emphasised that ‘informed’ consent was a cornerstone of genuine agreement. 300
[444] Karijini correctly observed that the Union’s first ground relied upon the ‘s 180(5) defaults’, and assertions there was no evidence that the two employees who voted on the Agreement had sufficient understanding of its terms, or the effect of those terms, so as to give informed consent.
[445] In short, Karijini responded that s 188(1)(c) is not concerned with, and does not permit consideration of, the s 180(5) defaults, because they are matters which are instead expressly covered by s 188(1)(a). This, said Karijini, was clear from the following:
a) the express reference to s 180(5) in s 188(1)(a);
b) the use of the words ‘no other reasonable grounds’ at the start of section s 188(1)(c); and
c) paragraph 142 in the One Key Appeal where the Court says ‘[p] 188(c) is cast in very broad terms. It is intended to pick up anything not caught by paras (a) and (b)’. This passage is quoted by the Union in its submission, but ignored. 301
[446] Referring again to the One Key Appeal, the latter part of the same paragraph, Karijini noted that the Court said:
[t]hus if we be wrong to conclude that the Commission is bound by s 180(5) to consider the content of the employer’s explanation of the terms of the agreement and their effect, in order to be satisfied that the agreement was ‘genuinely agreed to’ having regard to s 188(a)(i) (sic), then for similar reasons we would hold that this was a matter which was not only relevant to the question raised by para 188(c), but was a mandatory consideration (underline my emphasis). 302
[447] The word ‘then’ provided further confirmation that the s 180(5) matters could not be relevant under both ss 188(1)(a) and (c).
[448] In the First Decision, it was said that the Full Court in the One Key Appeal had placed reliance upon s 188(1)(c) as an alternative argument, in circumstances where the Court was wrong about its conclusion that the content of the explanation was a relevant consideration under s 180(5). 303 There is no authority to indicate that the Court was wrong in its decision to take into consideration the content of the explanation when evaluating compliance with s 180(5).
[449] While the Full Bench in its decision concluded it was not satisfied there was compliance with s 180(5) of the Act, in various respects, I am unable to reach the conclusion that because of this there are other reasons for believing that the Agreement was not genuinely agreed to because of the explanation provided. At paragraphs [441] – [448] of this decision, I have explained in part why.
[450] In adding to this, I note that while the steps taken fell short of ‘all reasonable steps’, it is not the case that the consent of the employees was uninformed. It was evident that at material times the two employees were provided with an explanation about the terms of the Agreement, were asked whether they had any questions and were provided with opportunities to query answers provided. While it may have been the case that Karijini did not take all reasonable steps to explain the effect of the ‘detrimental’ terms, the two employees had been informed that there were such terms, what the ‘BOOT test’ stood for, and that, when the two employees’ conditions and rates of pay were measured against the Award, the Agreement did pass the BOOT. The two employees were not uninformed when it came to being asked to vote on the Agreement.
13.2 Insufficient stake in the Agreement
[451] With respect to the two employees’ stake in the Agreement, the Union observed that this issue was dealt with at first instance and therefore it restated its position. Acknowledging that the factual matrix differed to that in the One Key Cases and KCL Industries Pty Ltd (KCL), 304 that is the Agreement did not cover multiple industries, modern awards and classifications, the Union observed that the Agreement was intended to cover about 50 employees who were already performing the relevant work and whose identities were known to the employer and the two employees.
[452] Of concern to the Union was the remuneration to be paid to the employees. The two employees were being paid contractual rates higher than those specified in the Agreement and, therefore, the Agreement was to have no effect on their remuneration. However, the remuneration provisions in the Agreement did apply, or had the potential to apply, to all employees who were expected to transfer from TRRC, as well as to future employees. The Union continued that those employees, at the time the Agreement was made, had no guarantees of higher rates of remuneration than those contained in the Agreement, and the employer accepted that the rates paid to future employees might be reduced, depending on the market conditions.
[453] It was for these reasons that the Union urged that the two employees had no real stake in the terms of the Agreement, insofar as it dealt with remuneration. Those same two employees were purported to agree to terms and conditions that would apply to the TRRC employees who were (potentially at least, said the Union) directly subject to the terms, in addition to new employees.
[454] In its submissions, Karijini noted that the Union had not taken the issue any further than it had in the initial hearing, prior to the First Decision. 305 Karijini continued that the Full Bench did not find any error with the analysis in the First Decision, notwithstanding the fact those very findings were the subject of two appeal grounds.306
[455] As identified by Karijini, and traversed in the First Decision, the real question is whether there is any obvious disjunction between the content of the Agreement and the characteristics of those who entered it. That is all that can be taken from the KCL decision in the current circumstances. In relation to both the concepts of ‘stake’ and ‘moral authenticity’, the conclusion in KCL was that ‘they’, meaning the ‘employees’, ‘could not have given informed consent in relation to occupations and industries in which they did not work and presumably had no experience’. 307
[456] Mr Butler’s evidence established that the two employees were train drivers. They fell within the classifications of the Agreement, which covered only train drivers (from an employee perspective). Not only were they train drivers, but they were experienced train drivers, who had an extensive history of driving trains in the Pilbara region of Western Australia. The circumstances are incongruous to those in KCL and the One Key Cases. Further, while additional evidence has been led and further submissions filed, the conclusions reached and findings made in my First Decision remain undisturbed.
[457] It was in addition noted by the Union that Karijini had informed the two employees that they would be employed under IFAs which were said to depart very significantly from the terms of the Agreement. The Union’s submissions in this respect did not effectively take the argument further. However, to address the point raised - placing an employee on an IFA pursuant to a clause in an enterprise agreement, or expressing the intent to do the same, does not impugn the moral authenticity of the employees or their stake in an enterprise agreement. This is because the IFA is mandated by the enterprise agreement and by s 202 of the Act, the enterprise is required to include a term enabling such an arrangement to be put in place.
13.3 Position of TRRC employees
[458] The Union submitted that in assessing the genuine agreement requirement in s 188(1)(c), the Commission was obliged to consider whether the agreement of the two employees was genuine and had ‘moral authority’. It continued that there was a substantial overlap on the present facts between the question of whether the group of employees was fairly chosen for the purpose of s 186(3) and whether there were reasonable grounds for thinking that the employees did not genuinely consent to the Agreement, within the meaning of “s 180(1)(c)” (albeit, I suspect the Union was referring to s 188(1)(c)). 308
[459] In the context of the Full Court’s decision in the One Key Appeal, the Union reiterated that while it was permissible for a small number of employees to enter into an agreement which may later cover larger numbers, such an agreement may, as identified by the Full Court, raise a question about the genuineness of that approval. 309 It is timely to address this submission now. The passage from One Key, upon which the Union relies, must be considered within the context of its surrounding paragraphs, rather than in isolation. The extract relied upon says ‘may raise a question’. The precise question which it might raise is revealed when one reads the paragraphs of the judgment which follow, between [163] and [168]. They reveal that the Court was concerned with the group of employees who voted occupying only a small number of the classifications in the agreement, and had no experience with work in the range of industries which the agreement covered. That was the case in One Key. The Union referred to the decision in KCL as another example of the very same thing.
[460] A contrast was thereafter drawn by the Union to the decision in John Holland, 310 where the employer made an agreement with three employees. In that decision the agreement was held to be valid; however, the Union pointed out that the numbers and identities of the persons who might in the future be employed under the agreement were unknown, and the agreement made provision for the negotiation of site-specific agreements with future employees. The following passage from John Holland was included in the Union’s submissions:
There was no feature of the agreement identified by the Full Bench which suggested it was intended to, or might possibly, frustrate the operation of the FW Act in future or prevent good faith bargaining in accordance with the FW Act in an appropriate case when effect was given (if it ever was) to the possibility of negotiating a site specific or project agreement as contemplated by cl 1.2. 311
[461] Drawing upon the reasoning in John Holland, the Union argued that in the present case both the intent and the effect of the Agreement was to prevent bargaining at the enterprise level, by ensuring that an agreement was made without any participation by the employees who were, and were expected to continue, performing the Roy Hill work.
[462] It was the Union’s argument that what Karijini had sought to do was to cause the fragmentation of a single workforce, akin to the circumstances in Pilbara Iron Company. 312
[463] In the First Decision, I observed that somewhat central to the controversy before me was the making of the Agreement by the two employees in circumstances where the TRRC employees had no input into its contents.
[464] Referring to the decision in Aldi,I remarked that the High Court said that consistent with the view of s 186(3) taken in John Holland, the references in sub-s (2) to ‘covered by’ may be read as ‘those persons currently employed who fall within the whole class of employees to whom the agreement might in future apply’ (underlining my emphasis). That was the approach which found favour with the Full Bench, and it is one that the High Court considered correct.
[465] So it is the case that I again say that, while there has been much made of the position of the TRRC employees, ultimately, the position of those employees would not appear relevant to the approval requirements imposed by the Act. They are not the ‘relevant employees’ because they were not employees of Karijini at the relevant time, albeit the notion of them becoming employees was clearly contemplated. That the Agreement could be made with persons who were not yet employed, and might never be employed, in the relevant single business, would seem, to coin the phrase ‘a strange result’. 313 Notwithstanding that the phrase was used in regard to s 170LK(1) of the Workplace Relations Act1996 (Cth), it appears apposite here in light of the legislative framework.
[466] Karijini identified that there are no cases referred to in the Union’s submissions in which the position of employees of another employer, who have not been made offers of employment by the employer who puts an agreement to its own employees for a ballot, can impact the question whether those employees genuinely agreed to the ballot. It is apparent, in my view, that the Act does not appear to permit such consideration when determining whether the Agreement has been genuinely agreed to by the employees.
14 CONCLUSION
[467] I have considered the evidence and submissions of both the parties concerning this application.
[468] To reiterate, I am satisfied that the undertakings proffered have met concerns held that the Agreement did not meet the requirements set out in s 186, because of the Explanation Issues about annual leave, redundancy, the rates of pay and types (modes) of employment.
[469] Further, for the reasons explained, I have formed the view that, notwithstanding the minor procedural errors made regarding the explanation about meal breaks, types (modes) of employment and information on how to access a copy of the Award, I am satisfied that the Agreement has been genuinely agreed pursuant to s 188(2) of the Act.
[470] It is, however, again relevant to note that concerning the explanation regarding notice of termination and the job search entitlement (see clause 31.2 of the Award), an Award entitlement which was omitted from the Agreement, Karijini is invited to proffer an undertaking to address the ‘s 180(5)’ concern. The submissions filed have not persuaded me that the failure to refer to the omission of the Award benefit is, in the circumstances, allayed by the submissions received. Therefore, Karijini has seven days from the date of this decision to provide a suitable additional Undertaking.
[471] The other Undertakings provided by Karijini are in a form acceptable to the Commission and will be consolidated with the further Undertaking referred to above. The Union and any other bargaining representative will have an opportunity to provide their views on those Undertakings.
[472] Subject to Karijini proffering the additional Undertaking and it meeting the Commission’s concern, on the basis of the material contained in the application, accompanying statutory declaration, witness statements and submissions, I am satisfied that the group of employees covered by the Agreement was fairly chosen, that the Agreement has been genuinely agreed (see s 188(1)(a) and (b)) and that there are no other reasonable grounds for believing that the Agreement has not been genuinely agreed to by the two train drivers (see s 188(1)(c) of the Act).
[473] It is understood that for an enterprise agreement to be approved it must, in most circumstances, pass the BOOT. This is one of those circumstances. The Commission is required to be satisfied, at the time at which the test is undertaken, that each award covered employee and each prospective award covered employee will be better off if the agreement applies to the employee rather than if the relevant modern award applies.
[474] In the First Decision, Karijini submitted the roster arrangement, which it had committed to maintain (in its undertakings). That arrangement resulted in the employees employed on maximum term and casual arrangements, at each of the three classification levels covered by the Agreement, receiving substantially higher monetary benefits than under the Award. The difference being over 22% for maximum term employees at Railway Worker Level 3, and over 46% for casual employees at Railway Worker Level 2.
[475] In light of the revised undertaking concerning the rates of pay and rosters worked, the pay rate comparison between the Agreement and the Award is such that the Agreement has passed the BOOT with the Undertakings proffered.
[476] Concerning non-compliance with the NES, the issue raised in the First Decision was the requirement to take annual leave by the provision of two weeks’ notice. The Union submitted that the Commission could not be satisfied that the terms of the Agreement did not contravene s 55 and accordingly should not approve the Agreement. Karijini submitted that the Agreement did not contravene s 55.
[477] Under the Agreement, Karijini may require an employee to take accrued annual leave by giving two weeks’ notice. Under the NES an employer is permitted to direct an employee to take paid annual leave in circumstances where the requirement is reasonable. The Union submitted that the requirement in the Agreement was inconsistent with the NES and therefore was a contravention of s 55. However, I am of the view that inclusion of such term within the Agreement did not preclude approval of the Agreement in these circumstances given the Undertaking that was proffered by Karijini.
DEPUTY PRESIDENT
Appearances:
Mr A Longland of Herbert Smith Freehills for the Applicant;
Ms C Howell of Counsel for the CFMMEU
Hearing details:
2020:
Perth (Online);
May 26 and 27.
Printed by authority of the Commonwealth Government Printer
<PR726415>
Annexure A – Undertakings as proffered on 31 March 2020
Annexure B – Undertakings as proffered on 18 May 2020
1 Construction, Forestry, Maritime, Mining and Energy Union v Karijini Rail Pty Ltd[2020] FWCFB 958 (‘Full Bench Decision’).
2 Karijini Rail Pty Limited [2019] FWC 2907 (‘First Decision’).
3 Karijini Rail Pty Limited [2019] FWCA 6451.
4 MA000011.
5 Third Witness Statement of Graham Robert Butler [12] (‘Third Butler Statement’).
6 Witness Statement of Graham Robert Butler of 10 December 2018 (Annexure A1), [9] (‘ButlerStatement’).
7 Third Butler Statement [3].
8 Ibid.
9 Butler Statement [10].
10 Ibid [11].
11 Third Butler Statement [4].
12 Ibid.
13 Ibid [6].
14 Ibid.
15 Ibid.
16 Ibid [7].
17 Hearing Transcript of 13 December 2018, PN [75]-[79], [84] (‘First December Hearing Transcript’).
18 Ibid PN [80].
19 Third Butler Statement [9].
20 Ibid [9].
21 First Hearing Exhibit R1 [5]; Annexures GB1 and GB2.
22 AE412376.
23 First December Hearing Transcript, PN [75]-[122].
24 Ibid PN [75].
25 Ibid PN [75]-[87].
26 Third Butler Statement [10].
27 Ibid.
28 Ibid PN [101].
29 Ibid [104]-[105].
30 Butler Statement [31].
31 First December Hearing Transcript, PN [102].
32 Ibid PN [103].
33 Ibid PN [105].
34 Ibid PN [111].
35 Ibid PN [119]-[120].
36 Ibid PN [128]-[129], [131]-[132].
37 Third Butler Statement [38].
38 First December Hearing Transcript, PN [185], [208]-[211], [216]-[220].
39 Ibid PN [852]-[854].
40 Butler Statement [31], [35]; Exhibit A5; Exhibit A6.
41 Exhibit A5; Exhibit A6.
42 First December Hearing Transcript, PN [258]-[263].
43 Ibid PN [144].
44 Ibid PN [294]-[295].
45 Ibid PN [296]-[298], [302]-[304], [321]-[327].
46 Ibid PN [300], [312].
47 Ibid PN [307], [826]-[828]; Exhibit A7.
48 Third Butler Statement [10].
49 Ibid [40].
50 Ibid.
51 Ibid.
52 Ibid.
53 Ibid.
54 Ibid [41].
55 Ibid.
56 Ibid.
57 Ibid.
58 Ibid [60].
59 Ibid.
60 Ibid.
61 Ibid.
62 Ibid.
63 Form F17 - Employer's statutory declaration in support of an application for approval of an enterprise agreement (other than a greenfields agreement) (‘Form F17’).
64 Ibid [2.4].
65 Ibid.
66 Ibid.
67 Ibid.
68 Ibid [2.3].
69 Ibid; First December Hearing Transcript, PN [378]-[379].
70 First December Hearing Transcript, PN [384].
71 Ibid PN [336], [486]-[487].
72 Form F17, [2.4].
73 First December Hearing Transcript, PN [428]-[430].
74 Ibid PN [420]-[422], [430].
75 Ibid PN [440]-[441], [489].
76 Ibid PN [388]-[390], [415].
77 Ibid PN [354]-[356], [385], [395]-[397], [401].
78 Ibid PN [361]; Exhibit A1 [47].
79 Ibid.
80 Form F17 [2.4].
81 First December Hearing Transcript, PN [404]-[407].
82 Ibid PN [468]-[471].
83 Exhibit A12 [14] – [18].
84 Ibid [15].
85 Ibid.
86 Third Butler Statement [68].
87 Exhibit A1, [47].
88 First December Hearing Transcript, PN [491]-[492].
89 Exhibit A1, [47].
90 Exhibit A12, [15].
91 Ibid.
92 First December Hearing Transcript, PN [508].
93 Exhibit A1 [5]-[51]; First December Hearing Transcript, PN [532]-[533].
94 Exhibit A2; Exhibit A1 [52]; First December Hearing Transcript, PN [517], [522]-[523].
95 Exhibit A2; F17 Declaration, Attachment GB-5.
96 Exhibit A1 [53]-[55]; First December Hearing Transcript, PN [542].
97 Exhibit A1 [54]-[55].
98 Ibid.
99 Exhibits A3, A4; First December Hearing Transcript, PN [558].
100 Exhibit A3.
101 Form F17, [2.8] and [2.10].
102 Butler Statement [14]; Annexure GB-3.
103 Witness Statement of Gregory John Busson (‘Busson Statement’); Annexure GB-3.
104 Busson Statement; Annexure GB-4.
105 Butler Statement [13].
106 Supplementary Witness Statement of Gregory John Busson [14] (‘Supplementary Busson Statement’).
107 AE412376.
108 Supplementary Busson Statement [14].
109 Ibid [18].
110 Ibid [19].
111 Ibid.
112 Ibid [22].
113 Ibid.
114 First December Hearing Transcript, PN [982], [987].
115 Ibid PN [53]-[62].
116 Ibid PN [983]-[986].
117 Ibid [73]; Fair Work Act2009 (Cth),s 186(2)(a) (‘The Act’).
118 ALDI Foods Pty Ltd v Shop, Distributive & Allied Employees Association (2017) 262 CLR 593, (2017) 270 IR 459, [2017] HCA 53 (‘Aldi’), [77].
119 [2020] FWCFB 6089 (‘OS ACPM’).
120 Ibid [49].
121 Ibid [142].
122 Ibid.
123 Ibid.
124 First Decision, [141].
125 First Decision, [149]-[150].
126 Full Bench Decision, [57].
127 Ibid [58].
128 Ibid [94].
129 Third Butler Statement [62] – [63].
130 Ibid [63].
131 Supplementary Busson Statement [27].
132 Ibid [29].
133 Third Butler Statement [70].
134 Ibid [71].
135 Ibid [72].
136 Ibid [73].
137 Ibid [74].
138 Ibid.
139 Ibid [75].
140 Ibid.
141 Ibid [76].
142 Supplementary Busson Statement [31].
143 Ibid.
144 Ibid [32].
145 Ibid [34].
146 Ibid [36].
147 Third Butler Statement [82].
148 Ibid [83].
149 Ibid [84].
150 Ibid.
151 Ibid.
152 Ibid [86].
153 Ibid [87].
154 Ibid [87].
155 First Decision, [40].
156 Full Bench Decision.
157 Ibid [75].
158 Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others[2019] FWCFB 318, [89]-[96] (‘Hunstman’).
159 Seeas approved by Commissioner Roe: RECS (QLD) PTY LTD Enterprise Agreement 2015 [2015] FWCA 7516; before Flick J: Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd [2017] FCA 1266; and on appeal before Bromberg, Katzmann and O’Callaghan JJ: One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 (‘One Key Appeal’).
160 Union’s Submissions on Rehearing, [35].
161 Ibid [36(m)].
162 Karijini’s Reply Submissions on Rehearing [36].
163 101 CLR 298.
164 [1976] 1 NSWLR 191, 201.
165 Union’s Submissions on Rehearing, Schedule A – Key differences between the Karijni Rail Agreement and the Mining Industry Award 2010, Court book 260-266; see also Union’s submissions at first instance, of 29 November 2018, [81]-[126].
166 Full Bench Decision, [88].
167 Karijini’s Submissions on Rehearing [100].
168 Ibid [101].
169 Ibid [102].
170 Ibid [102].
171 Karijini’s Reply Submissions on Rehearing [60].
172 Third Butler Statement [84(a)]; Third Elston Statement [4(a)].
173 Karijini’s Reply Submissions on Rehearing [65].
174 First December Hearing Transcript, PN 728-754.
175 Huntsman, [43].
176 Ibid [37].
177 Ibid[45].
178 Ibid [45] and [54].
179 Ibid [45] and [55].
180 Ibid.
181 Ibid [74].
182 Ibid[45] and [70].
183 Ibid [45] and [72].
184 Ibid[45] and [73].
185 Ibid [45] and [104].
186 Ibid [45] and [105].
187 Ibid [45] and [110].
188 Ibid [45] and [113].
189 Full Bench Decision, [102].
190 [2019] FWCFB 7919, [23] (‘Specialist People’).
191 One Key Appeal, [115].
192 Full Bench Decision, [88].
193 Construction, Forestry, Maritime, Mining and Energy Union v Ditchfield Mining Services Pty Limited [2019] FWCFB 4022, [71].
194 Full Bench Decision, [71].
195 Third Butler Statement [82].
196 Ibid [84(a)]; Third Elston Statement [4(a)].
197 Full Bench Decision, [79].
198 Ibid [82].
199 Ibid [85].
200 Karijini’s Submissions on Rehearing [110].
201 Full Bench’s Decision, [79].
202 Karijini’s Reply Submissions on Rehearing [67].
203 Ibid [71].
204 Third Butler Statement [40]-[41], [46]-[47], [51].
205 AE412376.
206 Third Butler Statement [6].
207 Ibid [6].
208 Ibid [7].
209 Full Bench Decision, [81]-[83].
210 Butler Third Witness Statement [72]-[78].
211 AE408353.
212 AE888254.
213 AE401428.
214 AE418076.
215 Third Butler Statement [84(a)]; Third Elston Statement [4(a)].
216 Third Butler Statement [72]-[78].
217 Ibid [40]-[41], [50],[78].
218 Second Busson Statement [31]-[37].
219 Huntsman, [117].
220 MA000062.
221 Third Butler Statement [84(a)]; Third Elston Statement, [4(a)].
222 Third Butler Statement [40]-[41],[50].
223 Full Bench Decision, [88].
224 Karijini's Submissions on Rehearing [100].
225 Ibid [101].
226 Ibid [102].
227 Ibid [102].
228 Third Butler Statement [87].
229 Macquarie Dictionary (online edition, 2020), ‘Explanation’.
230 Karijini’s Submissions on Rehearing [39].
231 Award, cl 14.1(c).
232 Ibid 14.1(d).
233 Ibid 14.1.
234 Karijini’s Submissions on Rehearing [59].
235 Third Witness Statement of Alan Bradshaw [10].
236 Ibid, Annexure AB-9.
237 Cimeco Pty Ltd v Construction, Forestry, Mining, and Energy Union[2012] FWAFB 2206, [21] (‘Cimeco’).
238 Ibid [21] – [22]; Construction, Forestry, Mining and Energy Union v ResCo Training and Labour Pty Ltd[2012] FWAFB 8461, [34] (‘ResCo’).
239 Full Bench Decision, [122].
240 One Key Appeal, [154].
241 Union’s Submissions on Rehearing [187].
242 (2015) 228 FCR 297; [2015] FCAFC 16, [39] – [41], (‘John Holland’).
243 Karijini’s Reply Submissions on Rehearing [117].
244 See aboven121.
245 John Holland, [3].
246 Karijini’s Reply Submissions on Rehearing [126].
247 Ibid.
248 Ibid [127].
249 Ibid [128].
250 Ibid [144].
251 The Act, s 186(3).
252 [2014] FCAFC 84.
253 Ibid [27].
254 John Holland.
255 Communications. Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Australian Manufacturing Workers’ Union v Main People Pty Ltd [2015] FWCFB 4467, [30]; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Australian Manufacturing Workers’ Union & Australian Manufacturing Workers’ Union v Sustaining Works Pty Limited [2015] FWCFB 4422, [23].
256 John Holland, [2].
257 See Transport Workers' Union of Australia v ALDI Foods Pty Ltd (2016) 255 IR 248, 260 [40] -[42].
258 Aldi, [83].
259 John Holland, [33] (Buchanan J).
260 Cimeco, [8]; Aerocare Flight Support Pty Ltd t/as Aerocare Flight Support v Transport Workers’ Union (2017) 270 IR 385, [2017] FWCFB 5826, [26] (‘Aerocare’); John Holland, [60] – [62].
261 John Holland, [33].
262 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Australian Manufacturing Workers’ Union v Main People Pty Ltd [2015] FWCFB 4467, [30].
263 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Australian Manufacturing Workers’ Union & Australian Manufacturing Workers’ Union v Sustaining Works Pty Limited [2015] FWCFB 4422, [22].
264 Aerocare.
265 Cimeco, [10].
266 Third Butler Statement, [6].
267 Ibid [6].
268 Ibid.
269 Ibid [7].
270 First December Hearing Transcript,PN [75]-[79], [84].
271 Ibid [80].
272 Third Butler Statement [9].
273 Ibid [9].
274 Aerocare.
275 (2011) 194 FCR 269 (‘Pilbara Iron Company’).
276 Cimeco, [21].
277 ResCo, [34].
278 Re Aerocare Flight Support Pty Ltd[2017] FWC 4311, [110].
279 AerocareFlight Support Pty Ltd v Transport Workers Union of Australia [2018] FCAFC 74; 261 FCR 175.
280 Cimeco, [21].
281 Ibid.
282 Ibid.
283 Ibid [21].
284 Ibid.
285 Cimeco, [19].
286 Ibid.
287 [2017] FWCFB 1165 (‘QGC’).
288 Ibid [44].
289 Ibid.
290 Aerocare.
291 QGC, [44].
292 United Firefighters’ Union v Metropolitan Fire & Emergency Services Board[2010] FWAFB 3009, 193 IR 293, [60].
293 QGC, [44]-[45].
294 Australian Workers’ Union v BP Refinery (Kwinana) Pty Ltd[2014] FWCFB 1476, 242 IR 238, [15]; see also National Union of Workers v Cotton On Group Services Pty Ltd [2014] FWC 6601, [15]-[16] (permission to appeal refused in [2014] FWCFB 8899) and ASU v Shine Lawyers Pty Ltd[2017] FWC 4158, [68]-[71] as examples of where the employer’s organisational structure was used to determine organisational distinctiveness.
295 Union’s Submissions on Rehearing [187].
296 One Key Appeal, [154].
297 John Holland, [3].
298 One Key Appeal, [142].
299 Ibid [141].
300 Union’s Submissions on Rehearing [198]
301 Karijini’s Reply Submissions on Rehearing[152].
302 One Key Appeal, [142].
303 Ibid.
304 [2016] FWCFB 3048 (‘KCL’).
305 Karijini’s Reply Submissions on Rehearing [157].
306 Grounds 7 and 7A.
307 KCL, [36].
308 Union’s Submissions on Rehearing [213].
309 One Key Appeal, [162].
310 John Holland.
311 Ibid [74] (Buchanan J).
312 Pilbara Iron Company.
313 Construction, Forestry, Mining And Energy Union v The Australian Industrial Relations Commission (1999) 93 FCR 317, [123].
2
26
0