Lamont Plant Hire Pty Ltd

[2016] FWC 2033

[2016] FWC 2033

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a multi-enterprise agreement

Lamont Plant Hire Pty Ltd
(AG2016/257)

Mining industry
DEPUTY PRESIDENT ASBURY	BRISBANE, 7 APRIL 2016

Application for approval of the Lamont - Dugald River Enterprise Agreement 2016 - 2018.

1. BACKGROUND

[1] This Decision concerns an application by Lamont Plant Hire Pty Ltd (the Applicant) for approval of the Lamont - Dugald River Enterprise Agreement 2016-2018 (the Agreement). The Form F16 – Application for approval of an enterprise agreement filed by the Applicant states that there are no Union or employee bargaining representatives involved in the agreement making process. The Construction, Forestry, Mining and Energy Union (the CFMEU) sought to be heard in relation to the application. Following a hearing on 15 March 2015, I dismissed the application for approval of the Agreement and indicated that I would provide reasons for this in due course. Those reasons are as follows.

[2] On 23 February 2016, my Associate corresponded with the Applicant in relation to a preliminary concern about whether a valid notice of employee representational rights had been issued. The Applicant responded to that correspondence and provided an explanation in relation to those concerns. On 2 March 2016, My Associate again corresponded with the Applicant by email in relation to the following issues:

• Coverage of the Agreement;



• Ballot of employees for approval of the Agreement;



• Failure of the Applicant to file a signed copy of the Agreement;



• Dispute resolution clause; and



• Nominal expiry date.

[3] The Applicant provided a response to that email on 4 March 2016. After considering that response I determined to list the application for Hearing. A notice of listing was issued on 4 March 2016 for a hearing on 15 March 2016.

2. CFMEU REQUEST FOR DOCUMENTS

[4] At 8.05 am on 15 March 2016, Mr Ashley Borg, Senior Industrial Officer of the CFMEU, sent an email to my Associate requesting “documents filed by the Employer in relation to the proposed enterprise Agreement”. This was the first contact from the CFMEU indicating an interest in the application. Given that the Commission publishes on its website copies of Agreements for which approval is sought, and that the Agreement was published in this way, it was assumed that the CFMEU request was for the provision to the CFMEU of the Form F16 and Form F17 filed by the Applicant (the application documents). At 8.18 am on 15 March 2016, My Associate responded to Mr Borg’s email stating that it is not my usual practice to release these documents to non-parties but that if the CFMEU asserts some basis for being given access to the application documents or otherwise being heard, the Union could attend the Hearing and any such submission would be considered at that time.

[5] Mr Pederson, the representative of the Applicant, was copied into the response to the CFMEU’s request and to the email from the CFMEU making that request and responded objecting to the application documents being provided to the Union. Mr Pederson’s objection – copied to the CFMEU – was made on the basis that the employees covered by the proposed Agreement had indicated a preference to represent themselves in the negotiations. At 8.46 am on 15 March 2016, the CFMEU again corresponded with my Associate asserting that it had members covered by the proposed agreement and was a bargaining representative. That correspondence further advised that the CFMEU wished to consider the application documentation and was not seeking to be heard “at this stage”. The email went on to state that should the documentation not be provided the CFMEU would seek to be heard at the hearing scheduled for 10.00 am. I did not accede to the CFMEU’s request for the documents.

[6] At 9.50 am on 15 March 2016, the CFMEU forwarded a Form F18 –Statutory declaration of employee organisation in relation to application for approval of an enterprise agreement – indicating that the CFMEU was a bargaining representative in relation to the Agreement and that it did not support the approval of the Agreement. The Form F18 further indicated that the CFMEU sought to be bound by the Agreement in the event that it was approved.

[7] The CFMEU – represented by Mr Borg – attended the hearing on 15 March 2016 by telephone. I determined, over the objections of the Applicant, to hear from the CFMEU pursuant to s. 590 of the Act. Mr Borg pressed the request that the CFMEU be provided with the application documents. In pressing for the provision of the application documents Mr Borg asserted that the Union was seeking that it be provided with the Forms F16 and F17 and a signed copy of the Agreement and asserted that I would “fall into error” if I refused to provide the CFMEU with those documents.

[8] I informed Mr Borg that when the CFMEU requested the “application documents” it was taken to be requesting the Forms F16 and F17 filed with the Agreement given that the Agreement (without the signature page) is published on the Commission’s website and is publicly available. I further informed Mr Borg that:

• If the CFMEU had requested that my Associate provide the Union with a copy of the Agreement itself, that request would have been granted but the signature page would not be provided unless and until the Union established that it was a bargaining representative for the Agreement;



• My Associate would immediately email a copy of the Agreement as published on the Commission’s website to the CFMEU;



• If the CFMEU wished to press its request for the Forms F16 and F17 and a signed copy of the Agreement I would require it to establish that the Union was a bargaining representative for the Agreement and would put in place appropriate mechanisms if the Union wished to keep the names of members confidential; and



• If the CFMEU wished to establish that it is a bargaining representative for the Agreement it could request an adjournment of the hearing to enable it to provide evidence to the Commission to establish its status.

[9] As the hearing developed, it was not necessary for these matters to be dealt with or for these steps to be taken.

3. PROVISION OF APPLICATION DOCUMENTS

[10] During the hearing Mr Borg made a number of assertions which called into question my approach to hearing from organisations of employees in applications for approval of agreements. That approach and the basis for it is as follows.

[11] In Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Ltd 1 (Collinsville) a Full Bench of the Commission held that an organisation of employees that is not a bargaining representative for an enterprise agreement has no standing to be heard in that capacity in relation to its approval. Where enterprise agreements may confer or deal with the rights of employee organisations, vis-à-vis the employees, an employee organisation that is not a bargaining representative may have a right to be heard in relation to the approval of the agreement. The Full Bench went on to observe that the Commission has a broad power to inform itself in relation to any matter before it in such a manner as it considers appropriate, including by inviting – subject to any terms and conditions it determines – oral or written submissions.

[12] Consistent with the Full Bench Decision in Collinsville, when an organisation of employees requests to be provided copies of application documents for approval of agreements, including a signature page showing names and addresses of persons who have signed the Agreement, the organisation of employees would ordinarily need to assert some basis for being granted such access. The usual basis is that the organisation of employees is a bargaining representative of at least one employee who will be covered by the Agreement. In cases where the status of the employee organisation is not clear (eg the employee organisation is not named as a bargaining representative on the application documents) it is also usual for the Commission to seek comment from the applicant for approval of an agreement about whether the documents should be provided.

[13] Where there is a dispute about the status of an organisation of employees as a bargaining representative, the applicant for approval of an agreement and the employee organisation seeking to obtain copies of application documents, may each be given an opportunity to provide information to support their contentions. If necessary such a dispute can be resolved by each party forwarding lists of employees/members, for the Commission to consider on the basis that the list provided by each party will be dealt with confidentially and not shown to the other party. It may also be necessary that the Commission consider any instruments of appointment given to the employer by individual employees.

[14] When an application for approval of an enterprise agreement is made, a copy of the agreement is published on the Commission’s website. Prior to approval by the Commission, signature pages for Agreements are not published as these are required to contain names and addresses of signatories for the employer and employees. There is no requirement for the Commission to publish application documents or copies of agreements containing signature pages. Such documents typically contain details of employees who have appointed themselves as bargaining representatives or who have signed agreements on behalf of other employees. In my view, it would be inappropriate in most instances to provide such documents to organisations or persons who are not bargaining representatives for the Agreement in question, or in circumstances where there is a dispute about whether the organisation seeking the documents is a bargaining representative.

[15] In circumstance where an organisation of employees is not a bargaining representative, it may be appropriate that the organisation be heard in relation to whether the agreement passes the Better Off Overall Test (BOOT) on the basis that the Commission can inform itself about matters before it as it sees fit, although it will always remain a matter of discretion for the Member determining the application. Where the Commission allows such an organisation to be heard, it is a matter for the Member in the circumstances of the particular case, whether such a right is extended to allow the organisation to cross-examine witnesses or to lead evidence.

[16] In circumstances where an organisation of employees is not a bargaining representative, but asserts on arguable grounds that its interests will be affected by an agreement in the manner described by the Full Bench in Collinsville, it may be appropriate to provide application documentation to the organisation. There may also be other grounds for providing such documentation and allowing the organisation to cross-examine witnesses or lead evidence, such as an assertion that there has been coercion or other inappropriate conduct in relation to the making of an agreement. None of those circumstances arise in the present case.

[17] In its initial request for “application documents” the CFMEU did not assert that it is, or was, a bargaining representative for the Agreement. The applicant employer, when invited to comment on the request that the documents be provided, opposed the request and inferred that the employees had appointed themselves as bargaining representatives (although this was not clear on the face of the application documents). Given that the CFMEU left its run until the morning of the Hearing, I determined to deal with the matter of the Union’s involvement at that Hearing. I did so in light of the fact that the issues I had identified with the application for approval of the Agreement and the response of the Applicant to those issues indicated that the Agreement would probably not be capable of approval and it would be unnecessary for the Commission to hear from the CFMEU.

[18] The issues that lead to my refusal to approve the Agreement are set out below. Those issues are related to the manner in which the Agreement was made. Although it is not necessary in the circumstances of this case, I also set out some issues with the terms of the Agreement relevant to whether it passes the BOOT, in the event that the employer seeks approval of an Agreement in its present for at some future time.

4. ISSUES WITH THE AGREEMENT

4.1 Coverage

[19] An enterprise agreement made under the Act may be a single or multi-enterprise agreement. A single enterprise agreement may be made by one employer or a number of employers who are single interest employers, engaged in a joint venture, common enterprise or where the employers are related entities. In the present case, although it is arguable that the employer parties are related entities, the Form F17 states that the Agreement is a multi-enterprise agreement.

[20] An enterprise Agreement must include a term specifying its coverage by identifying matters such as:

• the employer;



• the group of employees to be covered (which must be fairly chosen);



• the work the employees will perform; and



• the location at which that work will be performed.

[21] Relevantly, clause 2 of the Agreement in the present case provides as follows:

“This Agreement is made between the parties:

• Lamont Plant Hire Pty Ltd (ABN 37156218594) of [address redacted]



• Businesses engaged by Lamont Plant Hire Pty Ltd to perform works or provide workers or services on the project (see Section 48)



• Employees of the above named entities whilst working on the project.

Note: Employees working on the project undertook a period of consultation and negotiation; and voted by majority to adopt this Enterprise Agreement.”

[22] Clause 48 of the Agreement, entitled “Declaration of Acceptance”, is signed on behalf of two employers – Lamont Plant Hire Pty Ltd and Lamont Labour Services Pty Ltd – who are referred to as Employer 1 and Employer 2. In correspondence sent to the Applicant by my Associate on 2 March 2016, a concern was expressed that the coverage of the Agreement is uncertain. In this regard there is a single employer named in clause 2 and the Agreement has been signed by two employers. Further, the reference in clause 2 to “Businesses engaged by Lamont Plant Hire Pty Ltd to perform works or provide workers or services on the Project” evidences an intention that the Agreement will cover other entities which may be contracted to Lamont Plant Hire Pty Ltd or Lamont Labour Services Pty Ltd while the Agreement is in operation. If the Agreement is a multi-employer agreement, then each of the employers who will be covered by the Agreement must be identified clearly. The Agreement is deficient in this respect.

[23] The coverage of a proposed agreement may alter during negotiations. However, at very least, when employees who will be covered by the proposed agreement are given a copy the proposed agreement (or access to a copy) during the access period as required in s.180 of the Act, it is necessary that the coverage of the proposed agreement is clearly set out.

[24] In the present case, it is obvious that the coverage of the Agreement was not clearly set out at the point a copy of it was provided to the employees or when they voted on it. The coverage of the Agreement is uncertain. The Applicant offered an undertaking to clarify the coverage of the Agreement. However, for the reasons set out by a Full Bench of the Commission in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Main People 2(Main People), I am unable to accept such an undertaking on the basis that it would be likely to cause a significant change in the Agreement. As the Full Bench in Main People observed:

“The scope of coverage of an enterprise agreement is one of its fundamental features. The coverage provision of an agreement serves to identify the class of persons who will be entitled to its benefits while it is in operation. The importance of an agreement’s coverage is signified by the fact that, under the FW Act, s.186(3) requires the group of employees covered by the agreement to be fairly chosen. For that reason an undertaking which purports to alter the coverage of an enterprise agreement by excluding classes of persons who, on the face of the agreement, would be covered by it, will always be likely to be a significant change.” 3

[25] In the present case, an undertaking that limits the employers covered by the Agreement alters its coverage and is also a significant change to the Agreement. Employer parties cannot be added to a multi-enterprise agreement by way of an undertaking.

4.2 Ballot of employees

[26] The Form F16 states that the Agreement is a multi-enterprise Agreement. The Form F17 Employer’s statutory declaration in support of an application for approval of the Agreement states in response to question 2.10, that two employees will be covered by the Agreement “at present” and two employees cast a valid vote to approve the Agreement. Although it is also stated that there will be more than 10 employees covered by the Agreement in the future, the Agreement was “made” with only two employees and only those employees voted to approve it.

[27] By virtue of s.172(1)(a) of the Act, two or more employers, that are not single interest employers, may make a multi-enterprise agreement with the employees who are employed at the time the agreement is “made” and who will be covered by the Agreement. An Agreement is “made” when it is approved by a majority of employees in the manner set out in s.182 of the Act. If the Agreement relates to a genuine new enterprise that the employers are establishing or propose to establish and the employers have not employed any of the persons who are necessary for the normal conduct of the enterprise and who will be covered by the Agreement, the employers may make the Agreement with one or more relevant employee organisations (a greenfields agreement).

[28] Section 172(6) provides that an enterprise agreement cannot be “made” with a single employee. If the Agreement was a single enterprise agreement the fact it was made with two employees would not be an issue. However, because the Agreement is a multi-enterprise Agreement, there is a significant problem with the fact that it is made with two employees. Leaving aside the issue of the uncertainty about employers who are proposed to be covered by the Agreement, if there were two employees when the Agreement was made, then as a matter of mathematics one of the following scenarios applied:

• one of the employers employed both employees and the other had no employees; or



• each employer employed one employee.

[29] In the first of these scenarios the employer who employed no employees could not make a multi-enterprise agreement. It is also the case that if one of the employers had no employees and purported to make a multi-enterprise agreement, the Agreement could not be varied to remove that employer in the manner provided for in s.184 of the Act. That section applies in circumstances where a multi-enterprise agreement is made and is not approved by the employees of all the employers who make it. In the circumstances of the present case, if one of the employers could not have made the Agreement, s.184 has no application. In the second scenario the Agreement could not have been made at all because at the point it was made, each of the employers who purported to make the Agreement employed only one person.

4.3 Application documents

[30] Rule 24 of the Fair Work Commission Rules 2013 requires that each employer to be covered by the Agreement must lodge a statutory declaration in support of the application for approval by an officer or authorised employee within 14 days after the Agreement is made. Further, by virtue of s.185(2)(a) of the Act, an application for approval of an enterprise agreement must be accompanied by a signed copy of the Agreement. Regulation 2.06A of the Fair Work Regulations 2009 provides that for the purposes of s.185(2)(a) of the Act, a copy of an enterprise agreement is a signed copy only if it is signed by the employer covered by the Agreement and at least one representative of employees and includes the full name and address of each person who signs the agreement and an explanation of their authority to sign the agreement.

[31] In the present case, only one of the employer parties to the Agreement – Lamont Plant Hire Pty Ltd – has lodged a statutory declaration as required. Further, the application for approval was not accompanied by a signed copy of the Agreement. While these issues could be rectified by the filing of the material as required and the Applicant seeking an extension of time in which to file the material, in circumstances where the Agreement is not otherwise capable of approval it is not necessary to deal further with this matters.

4.4 Dispute Resolution Procedure

[32] Section 186(6)(b) of the Act requires that the Agreement include a term about settling disputes arising under the Agreement and in relation to the National Employment Standards and that the term allows for the representation of employees covered by the Agreement for the purposes of the procedure. Clause 38 of the Agreement, which is entitled “Complaints and Dispute Resolution”, does not meet these requirements.

[33] In circumstances where the Agreement was capable of approval, the deficiencies with the procedure could be resolved by the employer providing an undertaking to the effect that the “Complaints and Dispute Resolution” procedure in clause 38 of the Agreement is the process by which disputes arising under the Agreement or in relation to the National Employment Standards will be settled dealt with.

5. BOOT AND OTHER ISSUES

[34] In addition to the matters set out above, I have some concerns about whether the Agreement passes the BOOT and some other issues. These are summarised below in the event that the Applicant employer rectifies the procedural matters I have identified and again seeks approval of the Agreement in its current form. The relevant modern Award for the purposes of the BOOT is the Mining Industry Award 2010 (the Award).

[35] Clause 3.0 of the Agreement provides that flexibility in a position, duties and remuneration may be agreed between the employer and the employee and expressed in a Job Role Description and Offer of Employment. It appears that this provision allows for a variation to the remuneration under the Agreement without using the Flexibility provision, required to be in the Agreement by s. 202 of the Act, and the guarantee that an employee who makes such an agreement will be better off overall.

[36] Clause 7 of the Agreement states that sub-contractors are not employees and are not bound by the Agreement and then goes on to define “independent contractors” and “sub-contractors” and stipulate that the Agreement forms part of their terms and conditions and to require their compliance with it. Such a term is not a permitted matter because it does not pertain to the relationship between the employer and employees. There are other references to contractors and sub-contractors through the Agreement.

[37] Clause 17 of the Agreement allows the employer to suspend employees without pay for disciplinary reasons. This is a matter that is not provided for in the Mining Industry Award 2010 and is arguably a detriment to employees that must be considered in an analysis of whether the Agreement passes the BOOT.

[38] Clause 18 of the Agreement deals with “Wages and Salaries” and is in the following terms:

“Employee shall be paid for the hours worked in each preceding pay period, as identified on the employee timesheet; and calculated at the rate as agreed in the Offer of Employment; as:

Hourly Rate:
The rate agreed between Employer and Employee for each ordinary hours worked; based on the relevant modern award and the worker level / grade; and shall be used to calculate wages, overtime and allowances (as applicable).

• Casual loading on hourly rate is plus 25%

Base Rate:
The rate agreed between Employer and Employee to provide flexibility; and includes provisions that offset all or any of – rostered overtime, public holidays and annual leave loading, shift loading and casual loading as applicable.

• Base rate is calculated to be equal to or greater than the applicable rates in the appropriate award as shown in the Better-Off-Overall Test calculator (annexure C).

Salary:
The agreed annual payment divided by the pay period frequency; and includes provisions that offset all or any of – rostered overtime, public holiday, annual leave loading, shift loading et al.

• Salary is calculated to be greater than the applicable rates in any appropriate award as shown in the Better-Off-Overall Test calculator (annexure C).



• Employees agree that it is their responsibility to maintain the level of performance and attendance required to retain their salary status and that this may be forfeited if they fail to do so.”

[39] Clause 18 also provides for overtime as follows:

“Overtime:
Overtime is an (award-based) entitlement for work performed outside the ordinary hours; and is reflected in salary and base rates; and is paid (as applicable) for hourly rate workers at the rate nominated by NES and Fair Work Act 2009 and revisions.

• Overtime rates are cal paid as per relevant award”

[40] Clause 17 of the Awardprovides for annualised salaries in satisfaction of a number of Award provisions: classifications and minimum wage rates; allowances, overtime and penalty rates; and annual leave payments. The annual salary must be no less than the amount the employee would have received under the Award for work performed over the year for which the salary is paid (or over a lesser period if employment ceases earlier) and that it must be reviewed annually by the employer to ensure it is appropriate having regard to the Award provisions which are satisfied by the payment of the annual salary. Clause 17 of the Award also provides that for the purpose of the NES the base rate of pay of an employee receiving an annual salary under the clause is the relevant minimum rate of pay under the Award for the employee’s classification and excludes any incentive-based payments, bonuses, loadings, monetary allowances, overtime and penalties.

[41] The terms of clause 18 of the Agreement are unclear. For example, is it intended that there are three ways in which employees can be paid: hourly rate, base rate or annual salary? If this is the case, then the Schedule of pay rates at clause 47 of the Agreement contains one set of rates for all of the classifications. The preamble to the clause states:

“This schedule lists the pay rates applicable to employees at various positions within the business and the increases provided in the Enterprise Agreement.”

[42] The distinction between hourly rate employees, base rate employees and those who are paid an annual salary is unclear. The rates set out in clause 47 of the Agreement appear to exceed those for the equivalent classifications under the Award. However, it is not clear whether these are hourly rates or base rates as defined in the Agreement. If the rates set out in clause 47 are base rates, then overtime, public holidays, annual leave loading, shift loading and casual loading are included in them, and those rates may not be sufficient to offset the removal of such payments, when compared to the entitlements of the Award.

[43] Ordinary hours in the Award are defined as follows:

• An average of 38 ordinary hours per week;



• A maximum of ten ordinary hours per day or twelve hours by agreement with the majority of affected employees.

[44] The Award also provides that ordinary hours may be worked in accordance with a work cycle and that weekly hours may be averaged over a period of 26 weeks. There are no equivalent provisions in the Agreement and there is no limit on the period over which ordinary hours can be averaged.

[45] The Award defines overtime as work done in addition to an employee’s ordinary hours. The definition of overtime in the Agreement is not consistent with that in the Award. The lack of clarity around the rates in the Agreement and whether they are base rates which include compensation for overtime or hourly rates which do not include compensation for overtime, combined with the issues in relation to the definition of ordinary hours and overtime, results in a situation where I am unable to be satisfied that the Agreement would pass the BOOT.

[46] Clause 21 of the Agreement provides for amounts of annual leave that are accrued on a weekly, fortnightly, ½ monthly, monthly and annual basis. The minimum work period for which leave will be accrued under the Agreement is one week. This is inconsistent with the National Employment Standards which simply provide that leave accrues progressively during a year of service.

[47] There are a number of provisions in the Agreement under which payments to employees can be withheld or deductions can be made from their wages. Those provisions appear to be inconsistent with the requirements of the Act in respect of deduction from wages as specified in Division 2, of Part 2-9 of the Act. These matters would be required to be addressed before the Agreement could be approved in the event that a further application for approval is made.

6. CONCLUSION

[48] For these reasons I refused to approve the Agreement and on 16 March 2016 issued an Order dismissing the application for approval.

DEPUTY PRESIDENT

 1   [2014] FWCFB 7940.

 2   [2015] FWCFB 4467.

 3 Ibid at [35].

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