LCR Group Pty Ltd

[2015] FWC 7311

[2015] FWC 7311

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.210 - Application for approval of a variation of an enterprise agreement

LCR Group Pty Ltd
(AG2015/3647)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 10 NOVEMBER 2015

Summary: allegation by CFMEU that employer concocted ballot for variation – sham redundancy – claims not made out – claimed opposition to variable rates of pay in crane market – objection by CFMEU dismissed.

[1] This decision concerns an application under s.210 of the Fair Work Act 2009 (“FW Act”) for approval of a variation of an enterprise agreement by LCR Group Pty Ltd (“the Company”) in relation to the LCR Group Pty Ltd Mobile Crane Enterprise Agreement 2011 (“the Agreement”). The application was objected to by the CFMEU, for reasons that are set out below.

Relevant legislative provisions

[2] Subsection 211(1) of the FW Act provides:

When the FWC must approve a variation of an enterprise agreement

Approval of variation by the FWC

(1) If an application for the approval of a variation of an enterprise agreement is made under section 210, the FWC must approve the variation if:

(a) The FWC is satisfied that had an application been made under section 185 for the approval of the agreement as proposed to be varied, the FWC would have been required to approve the agreement under section 186; and

(b) The FWC is satisfied that the agreement as proposed to be varied would not specify a date as its nominal expiry date which is more than 4 years after the day on which the FWC approved the agreement;

unless the FWC is satisfied that there are serious public interest grounds for not approving the variation.

Note: the FWC may approve a variation under this section with undertakings (see section 212).

[3] Subsection 186(2) of the FW Act provides:

186 When the FWC must approve an enterprise agreement—general requirements
[…]

Requirements relating to the safety net etc.

(2) The FWC must be satisfied that:

(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; and

(b) if the agreement is a multi-enterprise agreement:

(i) the agreement has been genuinely agreed to by each employer covered by the agreement; and

(ii) no person coerced, or threatened to coerce, any of the employers to make the agreement; and

(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and

(d) the agreement passes the better off overall test.

[4] Subsection 188(c) of the FW Act provides:

188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

[…]

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

[5] The CFMEU opposes the variation sought by the Company. The CFMEU does so on the basis that it is covered by the Agreement in accordance with s.183 of the Act and it contends that the various interrelated legislative requirements for approval of the variation are unable to be met in the circumstances. Generally, the position of the CFMEU is that the evidence adduced in this matter points inexorably to the conclusion that the ballot for the variation of the Agreement was contrived by the employer by sham redundancies (intended to reduce the voting cohort) and that the Agreement variation as made was not genuinely agreed as the employees who voted were subject to coercion by their employer. I will detail the CFMEU’s claims and the evidence it brings in support of those claims further below.

[6] The thrust of the Company’s argument in response was that the CFMEU have concocted an evidentiary case in order to build the basis for an inference that the Company has acted in a conspiracy to dismiss its employees to procure its commercially desired ballot outcome. The Company contends the CFMEU has acted in such a way because it opposes the variation to the Agreement only because this would mean there were differentiated rates of pay in the crane market, which is contrary to its industrial policy imperatives.

Background

[7] By way of background, the Agreement applies to the Company’s operations in depots based at Hendra and (principally) Wacol (“the South East Queensland operations”) and Roma and Chinchilla (“the South West Queensland operations”). The Company has other operations in Mackay and Rockhampton (the Central Queensland operations), but a different enterprise agreement applies to those depots.

[8] The Company’s principal operations concern the provision of services including mobile cranes, transport and heavy haulage and labour hire to the resources and building and construction industries.

[9] The Company formed the view, it claims, that as a consequence of the economic downturn in the Queensland resources sector and absence of new infrastructure projects, it needed urgently to address its cost structures, which had been struck at a high point in the business cycle. In essence, the business had become uncompetitive in the adjusted market which serviced the resources sector in South West (and Central) Queensland and infrastructure and civil construction projects in South East Queensland.

[10] The Company claimed that it took steps firstly to attend to the situation in Central Queensland, before moving to address issues in its South East Queensland operations after October 2014:

“[…] We'd been reviewing southeast Queensland since October last year consistently through the process. What we wanted to do was see how January came out, it continued to get worse. In normal prior years, you see an upside in February. That has not come and has still not come and it is the worst operating conditions we've ever seen. Also, that's for the whole business; gas, resource and infrastructure.” 1

“[…] we only started to see […] the downturn in South East Queensland in about October last year. Central Queensland has been hit substantially for the last 18 months under the resources downturn.” 2

[11] As of May 2015, it was contended by the Company that its South East Queensland operations were continuing to lose approximately $30,000 operating profit per month owing to their high operating costs, and employees were not always able to be provided useful work. There were no major projects to come on stream that could ameliorate the position. As it was put in the examination of Mr Colin Partington, the Company’s Managing Director and Chief Executive Officer, the Company looked to redundancies in its South East Queensland operations as a means of addressing its cost issues:

“And that impact, how did that downturn impact the business? Substantially. South East Queensland had up to about 50 per cent of its cranes under-utilised just not doing any work, and people sitting in terminals, and that's why February we made the first round of redundancies.” 3

“And it was then put to you I believe - and I'm paraphrasing but essentially that the South East Queensland redundancies were - or the impact for the South East Queensland was not genuine or was not real. Can you tell me then about at the time of those redundancies what was occurring at the depot in South East Queensland? Particularly Wacol people, the cranes were parked up. People were sitting in the depots doing nothing. There was just no work for these people and, you know, we had no choice. I mean, the last thing I wanted to do was see anybody made redundant in this company but the economic - the marketplace just doesn't have the work here for us.

So when you say that the cranes were parked up, what percentage of - - -? About 50 per cent of them, yes, at least.” 4

[12] There appear on Mr Partington’s evidence to have been some 23 redundancies across the two depots in South East Queensland, involving administrative staff, management and crane operators. There also appear to have been two tranches of redundancies, one in February 2015 and the other in June 2015. Both crane operators and administrative staff were affected at this time.

[13] The Company also indicated that on or about 1 June 2015 its South East Queensland mobile crane and transport operations were placed in care and maintenance in order to reduce the continuing operating losses. As a consequence a number of positions were made redundant. The CFMEU was advised in writing by the Company of its intentions in this regard on 3 June 2015.

[14] The depots affected were based in Hendra and Wacol. Full-time mobile crane operators, dogmen, riggers, administration and supervisory staff were all affected.

[15] On 11 June 2015 the Company notified the CFMEU of its intention to consult with its employees in relation to a proposed variation to their enterprise agreement. The variation was intended to reduce the Company’s cost structures and reposition itself in the market. With the South East Queensland depots placed in care and maintenance and its relevant workforce made redundant, the employees covered by the Agreement were those in the South West Queensland depots, at Chinchilla and Roma.

[16] An information sheet distributed on 12 June 2015 to employees indicated, amongst other things, that:

“The reason for this proposed variation is to ensure that LCR remains competitive in a very tough market. LCR has lost many of its major clients to competitors due to labour costs being 20% to 30% higher.”

[17] The Company notified its employees that the proposed variation that it sought would mean a 5% pay increase effective 1 July 2015 as specified in the Agreement would be varied to nil. The Company noted that between 1 July 2011 to 1 July 2014 pay rates had increased by 20% and the hourly rate of pay for a full-time dogger/rigger had increased to $36.28 per hour whilst the hourly rate for full-time mobile crane operator operating a 500t capacity mobile crane had increased to $48.49 per hour. The Company believed that a further 5% increase on 1 July 2015 was not commercially realistic in the market.

[18] The notice indicated that the employees at the various depots covered by the Agreement would have an opportunity to exercise an anonymous vote on 22 June 2015.

[19] The resultant vote indicated that a majority of employees were in favour of the variation.

[20] The Company argued that the variation to the Agreement was only one facet of the measures that it took to reduce its operating costs. Executive employees also took a 5% pay cut and have received no increases subsequently. Administrative and management employees have reduced their working days and/or hours. In addition, leave balances have been exhausted or rundown where practicable.

The CFMEU objection

[21] The CFMEU claimed that the second tranche of redundancies in the South East Queensland operations was a step taken to manipulate the ballot for the variation vote by removing those employees (in the South East Queensland depots) who were said to have opposed the earlier variation (discussed immediately below).

[22] In this respect, the CFMEU pointed out that on 27 May 2015 a vote of employees rejected the proposal to alter the wage cost structures within the Agreement (that is to remove the 5% wage increase and to remove a late penalty). The vote at that time was 27 votes against the variation as opposed to 9 votes in favour thereof.

[23] It was said by the CFMEU that on 5 June 2015, the Company set about terminating the employment of a large number of employees in its South East Queensland operations (in Hendra and Wacol) on the basis of redundancy. The CFMEU contended that the only employees whose employment was preserved and not made redundant were two small groups of employees working at the depots at Chinchilla and Roma.

[24] The CFMEU’s contention, in effect, was that the redundancies at the Hendra and Wacol depots were fabricated in order to reduce the voting cohort in a known, forthcoming further ballot (held on 22 June 2015). It was alleged further that the voting cohort in South West Queensland was then subject to threats by the Company to the effect that they would be made redundant in the manner of their work colleagues in the South East Queensland operations if they did not support the variation of their enterprise agreement.

[25] To support this contention, the CFMEU pointed to what it alleged were comments made by the Company’s managers.

The South East Queensland claims

[26] The CFMEU - through the written statement of Mr Andrew Sutherland, CFMEU organiser, argued that the relevant employees were terminated (made redundant) on the basis of being informed by Mr Darren Murray, Operations Manager for the Company, that:

“If you can hold off for four weeks, you can get rehired, but on a lesser rate.”

[27] That is, Mr Sutherland claimed in a written statement that a number of the employees who were made redundant had been informed by Mr Murray that whilst the employer currently claimed their positions were no longer required, the Company intended to re-start the operations once the lower wage structure was in place (following a further ballot of the remaining employees).

[28] The employees whose employment was made redundant and to whom Mr Murray allegedly spoke were Mr Peter Hoyer, Mr Jamie Brown and Mr Shaun Desmond (the CFMEU delegate). These employees had been employed at the Hendra and Wacol depots.

[29] Mr Sutherland did not convey in his written statement that he had direct evidence himself as to conversations between Mr Murray and the three employees.

[30] Mr Sutherland himself did not appear to give evidence in support of his statement. Mr Sutherland and the CFMEU were put on lengthy prior notice of the date of the hearing, but Mr Sutherland’s non-availability was only advised at the commencement of the (third and final) day of the hearing.

[31] Notwithstanding this, Mr Shaun Desmond gave evidence which supported Mr Sutherland’s claims as to what was claimed to have been said by Mr Murray and to whom. That is, Mr Desmond effectively adopted the evidence of Mr Sutherland.

[32] Mr Desmond is now an employee of the CFMEU, and as noted above was the CFMEU delegate at the Company’s operations where he was employed. Whilst he stated that he was not well informed about the Company’s business circumstances at the time he was an employee/delegate, Mr Desmond claimed that he had noted that he was not given as much work as he had been in the past and that had been plainly obvious to everyone. He had also observed some cranes parked up in the yard and there were full time employees directed to perform other duties around the yard.

[33] Mr Desmond also maintained that Mr Murray had informed him after his position had been made redundant that if he could hold off for four weeks he could be re-employed on a lesser rate of pay.

[34] Mr Desmond also claimed that the closure of the Hendra and Wacol depots was a fiction in so far as the business continued to operate and was not in care and maintenance. Mr Desmond claimed that the Company was putting up tower cranes for Hutchinson builders and continuing to work on various Energex projects and Queensland Rail projects. He contended that various named employees continued to perform work at the depots.

[35] Mr Hoyer, for his part, claimed in his written statement that he had approached Mr Murray about the prospect of LCR reopening (for the purposes of being re-employed) and Mr Murray had stated to him that LCR “will start up again” (though he - Mr Murray - could not say when).

[36] Mr Hoyer also claimed that Mr Murray went on to say words to the effect that once the wage rates had been varied to reflect the lower wage rates of its competitors, LCR would recommence operations. Mr Hoyer’s evidence as a whole will be discussed below.

[37] Mr Murray, for his part, claimed that the allegations made by Mr Sutherland, and more particularly through the evidence of Mr Desmond and Mr Hoyer, were not true.

[38] In relation to the claim by Mr Desmond that LCR remained operational, Mr Murray claimed, along with Mr Partington, that but for some residual work arising from prior contracts, the South East Queensland operations had been placed in care and maintenance, and there were no new major contracts to service. Mr Murray’s duties now seem to extend to supervising a dry hire business, effectively.

[39] Mr Murray stated that he had never had a conversation with Mr Sutherland.

[40] Mr Murray rejected much of Mr Hoyer’s evidence. He firstly claimed that he could not have met Mr Hoyer when he claimed he did in his written statement as Mr Hoyer had been overseas at the time.

[41] Mr Murray however conceded he did meet with Mr Hoyer - at Mr Hoyer’s invitation - at another time, in fact about one month earlier than Mr Hoyer maintained.

[42] Mr Murray contended that when they did meet Mr Hoyer asked him whether there was a likelihood of getting his job back upon his return from a pending overseas trip (of 3-5 weeks duration). Mr Murray stated that he replied:

“I don’t know the answer to that, you’ll have to call when you return, it’s not my call.”

[43] Mr Murray claimed he spoke in such terms to Mr Hoyer because he had no idea how things might change in the future and Mr Hoyer would need to contact someone in authority to address any future employment query.

[44] Mr Murray expressly claimed that it was untrue that he had said to Mr Hoyer words to the effect that, “LCR will start up again”, or that he was “unsure when LCR would start back up again exactly.” Mr Murray also claimed he had not stated to Mr Hoyer that “LCR would start up again once wage rates under the EBA had changed” or that LCR’s wage rates “would probably be similar to the rates at [named non-union EBA competitor]” (as Mr Hoyer had stated in his written evidence).

[45] Mr Murray recalled only that he had had a general discussion with Mr Hoyer about the state of play in a competitive crane market, and other than that he had had no further conversation with Mr Hoyer until Mr Hoyer returned from his overseas trip in August (whereupon Mr Hoyer indicated he was working with another crane company).

[46] As set out above, Mr Sutherland alleged (as did Mr Desmond through Mr Sutherland’s evidence) that Mr Murray had said words to Mr Jamie Brown to the effect that though he had been made redundant by the employer in the South East Queensland operations he could be re-employed shortly thereafter on a lower rate of pay.

[47] Mr Brown for his part had no recollection of Mr Murray having said to him the words claimed to have been said to him by Mr Sutherland (above) and as agreed to by Mr Desmond.

[48] Mr Brown also denied having made any comment to Mr Desmond following his (Mr Brown’s) redundancy from LCR, that LCR was going to recommence operations in the future (on lower rates of pay). Mr Brown was adamant on the point under cross examination, and said so in the context of a person who was no longer an employee of LCR and did not wish to return to LCR as an employee in the future. That said, Mr Brown did not deny having had a conversation with Mr Desmond, but it was likely to have concerned employment opportunities in a depressed market (about which Mr Desmond had some apparent influence), not commentary on LCR’s affairs as alleged.

[49] Over the course of the proceedings there was some time spent on examining Mr Partington’s apparent interactions with his industry representatives, which was intended to illuminate Mr Partington’s otherwise concealed strategic intentions. In the end, the matter did not culminate in any completed evidentiary context as the CFMEU’s witness did not appear, but I will set some of the material out for purposes of completeness.

[50] The CFMEU introduced a witness statement by Mr Joachim Schalk, head of the steering committee of the Crane Industry Council of Australia (CICA). Because of the filing of this statement - on the second day of the hearing - the examination process was rearranged so that Mr Colin Partington could give evidence in chief in relation to those claims.

[51] As it was, Mr Schalk did not ultimately appear in support of his evidence, despite - like Mr Sutherland - having had extended notice of the date of the hearing on which his evidence was to be heard. Mr Schalk’s statement was withdrawn.

[52] However, given the order in which the evidence was taken, it is necessary to outline the claims made by Mr Schalk in order to properly characterise the evidence of Mr Partington as a whole.

[53] Mr Schalk’s statement, at least as it purports to be, claimed he was informed by Mr Smith, President of the CICA, that Mr Partington had discussed with him (Mr Smith) the proposal for a wage freeze and the prospect of other crane companies also introducing wage freezes as LCR was seeking to do.

[54] Mr Partington, in direct evidence, denied having made such a comment but instead claimed that he discussed his business goal of seeking a wage freeze and sought advice from Mr Smith about who might be able to assist him with advice about facilitating that outcome:

“So you accept, don't you, that you explained to Mr Smith LCR's intentions with regard to your EBA? That's not correct. That's not correct.

So at no time did you discuss any possible pay freeze? I would have mentioned to him in my discussion that we were seeking to get - you know, get a wages freeze. I would have, and at that time I was then asking him who I - who could give me some guidance on this matter, just some advice and direction.

So you did in essence therefore talk about the variation insofar as - - -? I would have said to him that I was looking to get - you know, I was looking to get some advice on how to seek to go forward in seeking a wages freeze. More so the - you know, someone to guide me through down here.” 5

[55] Mr Partington did concede he had had discussions with other companies (at the initiative of those companies) about wage increases in the industry, but had not discussed wage rates or sought to collude with other employers:

“I'm not accusing you of collusion, Mr Partington. That's not my question. My question is whether or not in the context of talking about industry standards you spoke about the level of wage rates, amongst at least some employers? No, you're totally wrong. What I did - they brought the discussion to me about the - at the - they raised it with me about the 15 per cent pay increase in the industry being sought by the CFMEU. They did raise that with me.

So it is the case therefore that wage rates were discussed? Not rates, but the increase. The increase that the CFMEU were looking to push with all of the crane companies.

I understand? Not wage rates. I never discussed rates.” 6

[56] Further, Mr Partington contended that contrary to Mr Desmond’s claims, the Company’s South East Queensland operations had indeed been placed in care and maintenance, and what activity Mr Desmond might refer to as ongoing work related only to completion of residual contracts by suitably qualified employees for those purposes. No employees have been employed out of the Wacol depot, according to Mr Partington.

[57] The CFMEU otherwise in the cross examination, amongst other comments, sought to bring into question Mr Partington’s credibility by contending his witness statement was contrived in so far as it did not reflect a simple chronology (but seemingly was structured around responses to claims advanced in the CFMEU witness statements). 7

The South West Queensland claims

[58] The CFMEU objections also pointed to alleged conduct by the employer in respect of the vote taken in Chinchilla and Roma in support of the variation.

[59] Mr Sutherland’s purported statement (as adopted by Mr Desmond) also contended that employees at the Chinchilla and Roma depots were told by Mr Trent Henry, regional manager of the employer’s South West Queensland operations, words to the effect that:

“If you don't want what happened in Brisbane to happen here, you have to vote for the variation.”

[60] The employees to whom Mr Henry was said to have made such comments included Mr Terry Willis and Mr Jason Cahill.

[61] Here it was argued that the comment by Mr Henry referred to the redundancies at the Hendra and Wacol depots. Mr Henry, it was said, had acted to coerce the employees to vote in support of the variation of the Agreement at the ballot of 22 June 2015.

[62] Thus, the CFMEU contends that the vote that took place on 22 June 2015 was tainted by the coercive conduct of the employer, which included manipulating the voting cohort by contriving to reduce the presence of employees who held a negative view of the variation process and were members of the CFMEU.

[63] As stated above, the CFMEU through Mr Desmond’s amended evidence, claimed that Mr Trent Henry had stated to employees including Mr Terry Willis and/or Mr Jason Cahill that they should support the variation or else risk being made redundant as occurred in the South East Queensland operations.

[64] Mr Henry, for his part, said Mr Sutherland’s unsupported claim was untrue. He denied saying any such words to the employees named. Mr Henry continued that he had never had any conversations with Mr Sutherland regarding the vote held on 20 May 2015 or the vote held on 22 June 2015 or any other matters relating to the variation of the Agreement.

[65] Mr Jason Cahill was said by Mr Sutherland to have been the recipient of Mr Henry’s comments.

[66] Mr Cahill gave evidence that Mr Henry had never said words to him to the effect as claimed by Mr Sutherland.

[67] Like Mr Henry, Mr Cahill stated that he had never had a conversation with Andrew Sutherland regarding either the vote held on 20 May 2015 or else the vote held on 22 June 2015 or in respect of any other matters relating to the variation of the Agreement.

[68] Mr Terry Willis, to whom Mr Henry was alleged to have spoken in the same terms as he was alleged to have spoken to Mr Cahill, did not appear as a witness in these proceedings. Mr Sutherland’s claims, as they may have been, were left untested and unsupported in this respect.

Consideration: Part One

The South East Queensland operations: market weakness and redundancies

[69] The CFMEU’s claims in respect of the continuing operational status of the Company’s South East Queensland operations were not made out. Mr Partington gave evidence, on the basis of his direct knowledge of the business, about the commercial circumstances affecting the business. Mr Murray’s evidence went some way to supporting Mr Partington’s evidence in so far as it demonstrated that Mr Murray’s duties had been affected by the South East Queensland operations being placed in care and maintenance, and the residual nature of the operations thereafter.

[70] This presentation of the status of the business was not challenged in any substantive way by any other witnesses. Though Mr Desmond insisted in his evidence that he was unaware of the employer’s business circumstances, he conceded that his experience-based knowledge was that the market had slowed:

“We weren’t getting as much work as we used to but that was plainly obvious to everyone in the yard I suppose.” 8

[71] As mentioned earlier, Mr Desmond also indicated that on certain days he had observed that machines were parked up in the yard. Mr Desmond also gave evidence that on “certain days” there were full time employees sitting around the yard not carrying out income generating duties in relation to those cranes.

[72] Mr Desmond agreed that as site delegate he had been involved in discussions about a round of redundancies though he would not concede that this was related to any downturn as such (but claimed the redundancies rather related to “a clean-up of the yard” of some manner).

[73] Mr Desmond went on to claim (in his viva voce evidence at least) that he was of the belief that four months after he was made redundant the South East Queensland operations remained in care and maintenance.

[74] But having said this, further into his examination he indicated (his further or contrary belief) that LCR was continuing to operate and utilising labour hire services or two sub-contractors, and the work that was being undertaken involved both “new” and “old” work.

[75] Mr Desmond had no knowledge of any contractual arrangements relating to the South East Queensland operations that might relate to any of its crane movements. Arguably, they might arise from the dry hire business now overseen by Mr Murray or for the service of prior contracts. It is exceedingly difficult - given his claims about lack of intimacy with the financial arrangements affecting South East Queensland operations when an employee - to accept that from his current vantage point as a CFMEU employee Mr Desmond could now accurately describe the contractual basis to any activities relating to LCR’s South East Queensland operations as they may now be. No evidence was called by the CFMEU to support its claims other than through Mr Desmond’s assertions as a now stranger to the business.

[76] Mr Hoyer, for his part, gave evidence that was somewhat contrary to that of Mr Desmond’s as to workflow in the business, and indicated that he was fully engaged in work, and seemed to indicate that whilst there were some cranes sitting idle, the cranes he had observed were not based in the South East Queensland operations and had been brought in from other regional depots. In the end, however, Mr Hoyer conceded that he had no informed basis to his own claims in that latter regard (see further below). Mr Hoyer’s evidence did not ultimately illuminate the status of the operations in any way.

[77] The evidence of Mr Desmond and Mr Hoyer presented no reasonable challenge to that of Mr Partington and Mr Murray, and in respect of Mr Desmond the evidence he led provided some support for LCR’s characterisation of its circumstances.

[78] Mr Partington’s explanation of the state of the South East Queensland operations was such that it is reasonable to conclude that the steps taken to address the lack of work and escalating costs/losses by way of redundancies was unexceptional. I very much doubt (for the further reason given below) that the redundancies on the scale implemented (and which affected long standing employees) were merely a sham process to conceal an agenda to obtain the support of the remaining employees to a wage freeze, and then to re-establish the business in the following month with many of the same employees.

[79] That doubt aside, the only sound, direct evidence I have before me is that bar residual work, arising in particular from prior contracts and the dry hire business, the South East Queensland operations remain in care and maintenance to this day.

[80] Mr Partington may well have raised such issues about wage escalation with other employers, but given the state of the evidence in which these claims were left, this does not seem out of the ordinary given the market conditions. Such circumstances do not illuminate any relevant mischief on Mr Partington’s part.

[81] These matters (in hand with the discussion below) all go to the wider conduct of the employer in relation to the representations made to the employees in respect of the variation agreement, and whether it was possible in the circumstances for the employees to genuinely approve the Agreement as it is sought to be varied.

[82] Generally, on the evidence discussed so far, there is no sound basis on which to relevantly question the declared basis for the agreement variation. But there was more to the CFMEU’s claims - what can be made of the allegations made of Mr Murray’s alleged comments to Mr Desmond and Mr Hoyer, as mentioned earlier?

South East Queensland operations: sham closure

[83] I do not see in the materials put before me sound evidence that Mr Murray admitted to conduct that would have seen LCR make their employees redundant only to offer them re-employment at lower rates under a varied EBA at a short time in the future.

[84] I accept Mr Murray’s evidence in this regard. My reasons for doing so are as follows.

[85] Firstly, Mr Brown himself denied the claims as made by Mr Desmond that Mr Murray had given him (Mr Brown) an indication that LCR would re-start in some four weeks after instigating the redundancies and lowering the EBA wage rates. Mr Murray, of course denies the same claims, including that he provided similar advice to Mr Desmond and Mr Hoyer. I have no sound reason to set his evidence aside.

[86] In respect of Mr Desmond, it appears to me to be most unusual (to the point of being unnatural as evidence) to accept that Mr Murray would have told the 8 year experienced CFMEU delegate - Mr Desmond - that he would be offered his job back only four weeks after his redundancy and once the Company had lowered the wage rates (given that the delegate was said on his own evidence to have not supported the wage variation). And further to this, it seems equally incredulous that Mr Desmond (as the 8 year experienced CFMEU delegate) would not have complained or raised any issue at the time about this undertaking and admission as purportedly made by Mr Murray, and its affect on his own employment.

[87] Further, Mr Desmond gave no evidence as to when or where the conversations with Mr Murray took place, the context or structure. Mr Desmond simply asserted abstractly that such conversations took place. This did not strike me as being naturalistic evidence.

[88] Despite Mr Desmond’s claims as to what Mr Hoyer had said to him about Mr Murray’s comments, Mr Hoyer’s evidence was not to the same effect. That is, Mr Hoyer did not maintain that Mr Murray had said to him that the South East Queensland operations would recommence in about 4 weeks’ time. As I discuss below, Mr Hoyer’s evidence - particularly his viva voce evidence - was to a very different effect.

[89] In view of this discussion of the evidence, I have found Mr Desmond’s evidence to be unpersuasive.

[90] But what then is to be made of Mr Hoyer’s claims in their own right?

[91] Mr Hoyer claimed, as stated above, that Mr Murray had indicated to him (once he - Mr Hoyer - had indicated his hopefulness of being re-employed in the future) that the South East Queensland operations would restart at an unknown point in the future and on (lower) wage rates (similar to one of its competitors).

[92] Mr Hoyer’s evidence ultimately indicated that Mr Murray was uncertain about when and if the South East Queensland operations would re-start. When Mr Hoyer claimed he pressed Mr Murray about these issues Mr Murray merely indicated, “probably” and “maybe” and that “he didn’t say no”:

“[…] we were all keen to go back and get started again and all this sort of thing and we were hoping. I think it was more or less hope more than anything. So I was pretty keen and I was pumping him for information and you know what I mean?

He said to you "I don't know mate"? He said probably. He actually said probably. He said he didn't know. I said when mate, when? "I can't tell you that. I don't know for sure. But it will be probably and maybe". He didn't say no.” 9

[93] A little later Mr Hoyer recast his recollection and claimed in relation to the prospect of being re-employed Mr Murray had said:

“[…] he did say to me, he says more than likely, maybe, probably. I think his exact words were more than likely we will open up again but it will be under a different EBA.” 10

[94] Under re-examination, Mr Hoyer stated that Mr Murray had “more or less” stated or alternatively “implied” that LCR would re-open:

“So I just - let me just - So you do say that Pip had told you that - words to the effect that LCR would start up again once wage rates had changed?---Yes, that's more or less what he said to me.  Yes.  That's what he implied.” 11

[95] Mr Hoyer also claimed Mr Murray had specified that the business would re-open under a different rates of pay:

“[…] he says up to 100 tonnes, they were his exact words, he said you'll be on $31 an hour and that's what I was on.  That means I'd [drop] almost $10 an hour. […] It's the only way we can compete" and that was his words.” 12

[96] What Mr Hoyer construed from the exchange between himself and Mr Murray was an offer of future employment at lower rates. Mr Murray claimed he had no more than a hopeful discussion about the South East Queensland operations future, should it recommence, and the prospect that if it did it would employ “people who were known to the business.” Mr Murray said that he also informed Mr Hoyer that he would have to call him upon his return from his overseas trip to determine if any opportunities were available.

[97] Mr Murray conceded that he had discussed wage rates in the competitive crane industry in the same conversation, but did not do so in the context of there being specific rates that would apply in the business once it was re-started.

[98] There is some overlap between Mr Hoyer and Mr Murray’s narratives. But as I have said above, I prefer Mr Murray’s account of the exchange as it better accommodates the admitted uncertainty as to the future of LCR that Mr Hoyer claimed in his cross examination had been conveyed to him by Mr Murray (and that reflected Mr Murray’s own uncertainty).

[99] Mr Hoyer’s evidence is problematic for reason that it had various formulations or representations.

[100] Mr Hoyer was said by Mr Sutherland (purportedly) and Mr Desmond to have been told by Mr Murray that:

“If you can hold off for four weeks, you can get rehired, but on a lesser rate.”

[101] None of Mr Hoyer’s own evidence suggests he used such words in describing what Mr Murray had said to him. Nor did Mr Hoyer ever suggest in his own evidence that Mr Murray referred to a particular time period within which LCR’s operations would recommence. But the claim by Mr Desmond for the CFMEU, and purportedly also though the evidence of Mr Sutherland, is that Mr Hoyer said otherwise, and that Mr Hoyer conveyed specificity in respect of the time period within which LCR would restart.

[102] Whilst the words claimed to be used by Mr Murray by Mr Desmond were qualified as being said to this “effect” only, it is not possible for specific references referring to certainties and particular periods of time to be other than that - certainties and particulars.

[103] The CFMEU case was weakened in other respects. Mr Hoyer’s written statement indicated that Mr Murray said to him that:

“LCR will start up again.”

[104] This is a positive and direct indication of intention.

[105] But Mr Hoyer’s viva voce evidence (some of which I have set out above) conveyed no such positivity or certainty. I have set much of that evidence out above. There were many representations of Mr Murray’s purported comments around this final claim.

[106] Further, if Mr Hoyer had indeed been informed by Mr Murray that LCR - when it was to restart - would restart under the rates that one of its (named) competitors (presumably a non CFMEU EBA crane company) pays (as Mr Hoyer states in his written witness statement he was told by Mr Murray) then it would be reasonable to assume that Mr Hoyer would have conveyed that demonstrably industrially salient information to Mr Sutherland or Mr Desmond in recounting his conversation with Mr Murray. But no such specificity (in this instance) is included in the statements of Mr Sutherland or Mr Desmond.

[107] It seems unreasonable to me that in any conversation with Mr Sutherland or Mr Desmond about what Mr Murray had said to Mr Hoyer, such industrially pertinent information would have remained undisclosed by Mr Hoyer.

[108] It is a matter of interest that Mr Hoyer’s evidence under cross examination makes no reference to Mr Murray having referred to the specific named competitor. In his various reconstructions of the exchanges with Mr Murray over the course of his cross examination, the named competitor is not referred to by Mr Hoyer at all in the course of Mr Hoyer’s reconstruction of his conversation with Mr Murray. In his cross examination Mr Hoyer indicated that he was informed about his rates in the future by Mr Murray expressly stating the dollar figures to him (see above). In his written statement, Mr Hoyer gleans the rate of pay as a matter of implication arising from being informed the rates would be the rates paid by the non-EBA competitor. It is only in re-examination when Mr Hoyer is prompted expressly by the CFMEU representative about the particular named competitor that Mr Hoyer includes the reference to the named competitor as having arisen in his conversation with Mr Murray (though precisely at what point and how was left unexplored).

[109] In other respects, Mr Hoyer also asserted positions only to recant them ultimately. That is, Mr Hoyer was disposed to assert a claim and then to deny the direct knowledge on which it was based. This was the case in respect of Mr Hoyer’s claims about there being idle cranes in the yard but that they were brought in from depots other than those in South East Queensland:

“And you said earlier on that LCR was busy but some of the cranes, a few cranes were parked up? Yes, there was a few parked up. Yes.

But they were from the West, is that correct? Yes. I felt like they were from the - yes, they were from the West. There was two truck cranes in particular and they were - one was a 250 and one was a 180 and they're "money cranes", if they're on a job they make good money. They were parked up.

And when you say "They were from the West", what do you mean by that? Do you mean by a depot west? Yes, I think - I think they were both from Blackwater yard. I've got an idea they might have been both from Blackwater yard, or one might have come off a site - a gas project site in Chinchilla, and just brought back to our yard, because there mightn't have been room for it in the Chinchilla yard or something like that. I can't definitely say that either, but that's what I think it was.

What would you regard as more likely, a crane from Chinchilla or from Blackwater? Definitely one was from Blackwater, and the other one was from Chinchilla. I'm only guessing. I'm only guessing that, I can't definitely say.” 13

[110] In all, I am not persuaded that Mr Hoyer’s evidence has relevant value to the current application.

Consideration: Part Two

The South West claims

[111] The CFMEU brings no evidence in support of its claims in relation to what was allegedly said by Mr Henry to various employees in an apparent effort to coerce the employees into supporting the variation to the Agreement. Mr Cahill, who was said by the CFMEU to have been one of the employees to whom Mr Henry had made the alleged threat, for his part claimed that Mr Henry said no such words to him.

[112] Mr Henry himself claimed that he did not make the comments as alleged by Mr Sutherland in any event, nor did he make the comments he was claimed to have made to Mr Cahill.

[113] I have heard Mr Cahill’s evidence and consider him to be a witness of truth – he gave his evidence in a matter of fact way, betrayed no outwards signs of fabrication or dissembling. He seemed frank in the manner he gave his evidence generally, and drew sensible distinctions between various claims. For example, Mr Cahill was pressed as to whether Mr Henry had made reference to the redundancies in Brisbane at the time there were discussions about the variation of the Agreement. Mr Cahill acknowledged having knowledge of the redundancies, but merely indicated that Mr Henry had raised issues about the state of the market (“which we all know”) and had said nothing more. His evidence neither suggested he was protecting Mr Henry or acting out of any concern for his position with his employer.

[114] Mr Willis, the second of the employees to whom Mr Cahill was alleged to have made his comments, did not appear in the proceedings. I draw no adverse inference from Mr Willis not having been called as a witness by either party. Mr Willis’ whereabouts are currently unknown, having left the employer’s business as a part of the redundancies in mid-2015.

[115] The CFMEU representative made much of Mr Henry’s role in telephone discussions with employees and the fact that Mr Henry did not disclose those discussions in his evidence. Mr Henry’s written evidence did not set out to establish his role in the various processes (as it dealt with a response to claims made about him by the CFMEU). Mr Partington’s evidence disclosed the relevant activities in that regard as a supplement to the declaration filed in support of the application.

[116] Mr Henry denied claims he had acted in some manner - in effect - to coerce employees to vote in support of the variation or to cause the employees who voted in support of the variation to not genuinely agree to the variation. I add that the only direct evidence I have about what Mr Henry said to an employee in the South West Queensland depot is Mr Cahill - and I have set this out above. Mr Cahill claimed that Mr Henry made no such comment to him as alleged by the CFMEU.

[117] There is insufficient evidence for me to conclude that the employer’s conduct in some manner caused the ballot not to be a reflection of the employees’ genuine approval. The only evidence that I have before me that is of a direct nature is that of Mr Henry and Mr Cahill. Mr Henry forthrightly denied the claims made about him by the CFMEU (to the point that he had in some manner coerced or intimidated the relevant employees to vote in support of the ballot). Mr Cahill, one of the employees to whom Mr Henry was said to have coerced prior to the ballot, rejected the CFMEU contention that Mr Henry had made any comments to him of the kind alleged by the CFMEU.

[118] The evidentiary case supports a finding that the employer did not interfere unreasonably in the ballot process and that the employer reasonably represented its commercial circumstances to its employees.

Other matters

[119] I add that the CFMEU pressed in its closing submissions that the Commission cannot approve the application because the Company issued no Notice of Employee Representative Rights (“NOERR”) for the purposes of s.173 of the Act.

[120] The relevant legislative provisions provide as follows:

211 When the FWC must approve a variation of an enterprise agreement

Approval of variation by the FWC

(1) If an application for the approval of a variation of an enterprise agreement is made under section 210, the FWC must approve the variation if:

(a) the FWC is satisfied that had an application been made under section 185 for the approval of the agreement as proposed to be varied, the FWC would have been required to approve the agreement under section 186; and

(b) the FWC is satisfied that the agreement as proposed to be varied would not specify a date as its nominal expiry date which is more than 4 years after the day on which the FWC approved the agreement;

unless the FWC is satisfied that there are serious public interest grounds for not approving the variation.

Note: The FWC may approve a variation under this section with undertakings (see section 212).

Modification of approval requirements

(2) For the purposes of the FWC deciding whether it is satisfied of the matter referred to in paragraph (1)(a), the FWC must:

(a) take into account subsections (3) and (4) and any regulations made for the purposes of subsection (6); and

(b) comply with subsection (5); and

(c) disregard sections 190 and 191 (which deal with the approval of enterprise agreements with undertakings).

(3) The following provisions:

(a) section 180 (which deals with pre-approval steps);

(b) subsection 186(2) (which deals with the FWC’s approval of enterprise agreements);

(c) section 188 (which deals with genuine agreement);

have effect as if:

(d) references in sections 180 and 188 to the proposed enterprise agreement, or the enterprise agreement, were references to the proposed variation, or the variation, of the enterprise agreement (as the case may be); and

(e) references in those provisions to the employees employed at the time who will be covered by the proposed enterprise agreement, or the employees covered by the enterprise agreement, were references to the affected employees for the variation; and

(f) references in section 180 to subsection 181(1) were references to subsection 208(1); and

(g) the words “if the agreement is not a greenfields
agreement—” in paragraph 186(2)(a) were omitted; and

(h) paragraph 186(2)(b) were omitted; and

(ha) references in paragraphs 186(2)(c) and (d) to the agreement were references to the enterprise agreement as proposed to be varied; and

(hb) subparagraph 188(a)(ii) were omitted; and

(j) the words “182(1) or (2)” in paragraph 188(b) were omitted and the words “209(1) or (2)” were substituted.

(4) Section 193 (which deals with passing the better off overall test) has effect as if:

(a) the words “that is not a greenfields agreement” in subsection (1) were omitted; and

(b) subsection (3) were omitted; and

(c) the words “the agreement” in subsection (6) were omitted and the words “the variation of the enterprise agreement” were substituted; and

(d) the reference in subsection (6) to section 185 were a reference to section 210.

(5) For the purposes of determining whether an enterprise agreement as proposed to be varied passes the better off overall test, the FWC must disregard any individual flexibility arrangement that has been agreed to by an award covered employee and his or her employer under the flexibility term in the agreement.

Regulations may prescribe additional modifications

(6) The regulations may provide that, for the purposes of the FWC deciding whether it is satisfied of the matter referred to in paragraph (1)(a), specified provisions of this Part have effect with such modifications as are prescribed by the regulations.

[121] An application for variation of an enterprise agreement does not necessitate the issuance of a NOERR as under s.173 of the Act. The schema of the Act under Division 3 of Part 2-4 of the Act (in which s.173 of the Act is found) and Division 7 of Part 2-4 of the Act (in which s.211 is found) differ in numerous respects. One important difference in that Division 3 regulates steps in the enterprise bargaining process, whilst Division 7 does not. Division 7 only imports, in effect, modified arrangements from Division 3 as a consequence. This is also why the Commission’s Rules and Forms pertaining to an application under s.210 of the Act do not require demonstration of the NOERR having been issued.

[122] There is no substance to the CFMEU’s argument that an application under s.210 of the Act must be accompanied by evidence of a NOERR under s.173 of the Act having been issued at a specified point in the variation procedure, as it is.

Conclusion

[123] This matter has led to prolonged proceedings. The evidentiary case is partly responsible as witness evidence has been introduced and then withdrawn, and witnesses themselves have been promised but then have not presented to support their claims. The availability of the employer’s legal representative also accounted for the delay.

[124] Having considered the evidence in relation to this application I am of the view that the objections pressed by the CFMEU have not been made out and are dismissed.

[125] I will by separate decision deal with the further requirements of the application for approval of the variation of the Agreement.

SENIOR DEPUTY PRESIDENT

Appearances:

S. McCartney of Clayton Utz for the applicant.

A. Borg of the Construction, Forestry, Mining and Energy Union (intervening)

Hearing details:

2015.

Brisbane:

August 3; September 1; October 19.

Final written submissions:

Applicant – 26 October and 3 November 2015.

CFMEU – 29 October 2015.

 1   Transcript of proceedings dated 1 September 2015 at PN256.

 2   Transcript of proceedings dated 1 September 2015 at PN261.

 3   Transcript of proceedings dated 1 September 2015 at PN689.

 4   Transcript of proceedings dated 1 September 2015 at PN707-708.

 5   Transcript of proceedings dated 1 September 2015 at PN550-552.

 6   Transcript of proceedings dated 1 September 2015 at PN645-647.

 7   See transcript of proceedings dated 1 September 2015 at PN743-762.

 8   Transcript of proceedings dated 19 October 2015 at PN58.

 9   Transcript of proceedings dated 19 October 2015 at PN308-309.

 10   Transcript of proceedings dated 19 October 2015 at PN316.

 11   Transcript of proceedings dated 19 October 2015 at PN327.

 12   Transcript of proceedings dated 19 October 2015 at PN316.

 13   Transcript of proceedings dated 19 October 2015 at PN331-334.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR573225>