Lendlease Engineering Pty Limited

[2017] FWC 3080

[2017] FWC 3080

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Lendlease Engineering Pty Limited
(AG2017/1537)

COMMISSIONER ROE MELBOURNE, 6 JUNE 2017

Application for approval of the Lendlease Engineering Pty Ltd New South Wales Enterprise Agreement 2016 - Genuine Agreement.

[1] An application has been made for approval of an enterprise agreement known as the Lendlease Engineering Pty Ltd New South Wales Enterprise Agreement 2016 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Lendlease Engineering Pty Limited (Lendlease). The Agreement is a single enterprise agreement.

[2] The CFMEU, the AWU and 14 individual employees were bargaining representatives for this Agreement. The bargaining process continued over a period from July 2016 until March 2017. There were 10 bargaining meetings, the last of which was held on 28 March 2017. The Agreement replaces an earlier agreement and is largely based upon that earlier agreement. Protected industrial action was taken during two periods during the bargaining process, in December 2016 and March 2017.

[3] Lendlease used a telephone text message electronic voting system operated by a company called Cirrena IVS. Mr Ryan, a Workplace Relations Manager, Engineering, for Lendlease, monitored the voting on a regular basis as it occurred and was able to identify, which employees had not yet voted and how many had voted yes and how many had voted no. The bargaining representatives did not have access to this system.

[4] Lendlease submitted a document to the ABCC in December 2016 for preliminary assessment. The ABCC advised on 21 March 2017 that some terms were not consistent with the Building Code and Lendlease then sought to remove those items from the document at the next bargaining meeting on 28 March 2017. At the 28 March 2017 meeting, Lendlease also agreed to make some changes to the document including increasing the relevant rates of pay and allowances. Lendlease also indicated that they would not agree to other claims made by the unions.

[5] The evidence of the parties is consistent that at the 28 March 2017 meeting:

• Although some of the union concerns had been addressed by Lendlease, the unions were still not happy with the proposal, particularly in respect to the wages outcome.



• It was accepted by all parties that a revised document which reflected the outcome of the meeting would be put to a vote of employees in the near future.

[6] Lendlease gave evidence that it was understood that Lendlease would be seeking a further ABCC preliminary assessment of a revised document. Mr Kelly, CFMEU organiser, does not recall this. Mr Maher certainly told Mr Hughes, the AWU organiser, about this and Mr Reilly, the other CFMEU organiser confirmed that he was aware that this was happening.

[7] The unions gave evidence that there was an understanding that the revised document would be provided to the unions for checking prior to any proposal to go to a vote. Mr Kelly gave evidence that this was specifically requested at the 28 March 2017 meeting. On 10 April 2017, Mr Kelly emailed Mr Maher for Lendlease with a copy to the other organisers and delegates as follows:

“Still waiting for your response to issues raised at our last meeting Kevin-hope to be at o2k this Wednesday or Thursday to report back to members….”

[8] Mr Maher responded on the same day, with a copy to the other organisers and delegates and also to his fellow manager Mr Ryan, as follows:

“The Company will make a comprehensive response to all matters raised by the combined employee and union bargaining reps at the last EBA meeting as soon as possible, you will recall however that the Company has made a number of definite responses to a number of your claims already….” (Attachment A to the Statement of Mr Kelly).

[9] Mr Hughes, AWU organiser, gave evidence that on Wednesday 12 April 2017, he had a conversation with Mr Maher in which he also asked for an update on the bargaining. In that conversation, Mr Maher told him that the document was still with the ABCC and that the Company would proceed to a vote once it was approved. Mr Hughes says that he told Mr Maher that he would not expect anything to happen before Easter and Mr Maher agreed with that. Mr Hughes then asked Mr Maher to let him know when the ABCC response came through and then provide the union with a copy, so it could be reviewed prior to going out to employees. Mr Hughes says that Mr Maher said that was a reasonable request. Mr Maher largely agrees with Mr Hughes’ version of the conversation but Mr Maher says that he said that it was a reasonable request if there were any changes proposed by the ABCC.

[10] Mr Maher gave evidence that they only proposed to provide the unions with a revised document if the ABCC raised any new issues and that the wording of the email was unfortunate and possibility misleading.

[11] Lendlease submitted a revised document which reflected the changes discussed at the 28 March 2017 meeting for preliminary assessment by ABCC following the 28 March 2017 meeting. Lendlease also then began preparatory work to put the Agreement to a vote. Lendlease requested the ballot agent to make preparations. On 11 April 2017, Mr Ryan emailed Cirrena that “we are preparing to go to access for this Thursday 13 April…we will be including your letter in our access pack. Are you able to provide a final version of this letter, dated 13 April.” Mr Ryan gave evidence that there was considerable discussion about the issue of putting the Agreement to a vote internally within Lendlease and that a final decision was made on 12 April 2017, that they would proceed if they got the go ahead from the ABCC. Mr Ryan said that based on past experience, and given that an earlier version had been assessed; he expected that a preliminary assessment would be made by the ABCC within about two weeks. Lendlease received a positive preliminary assessment on the Agreement from the ABCC early on the 13 April and the access packs which had been prepared were distributed later that day.

[12] On 13 April 2017, Lendlease attempted to provide all employees with:

• A copy of the Agreement



• A web address link to the relevant Award which is to some extent incorporated in the Agreement



• A notice about the time, place and method of voting.

[13] The documents were provided to the unions by email after normal business hours on 13 April 2017.

[14] Lendlease provided those employees who were available with an explanation of the terms of the Agreement and their effect. Lendlease attempted to contact other employees who were not present at the meetings, in order to provide them directly with an explanation or a copy of the presentation utilised. The presentation particularly focused on the differences between the Agreement and the current agreement in place. The presentations were held on 13 April and 18 April. About 16 employees were absent from work and were unable to attend the on-site information sessions. Lendlease tried to contact these employees and provide them with a copy of the presentation. Three employees were unable to be contacted.

[15] Lendlease also sought to confirm the accuracy of each employees mobile phone number.

[16] The access period began on Good Friday, 14 April 2017 and voting began on Saturday 22 April 2017 at 10am and closed on Sunday 23 April 2017 at 7pm.

[17] A ballot reminder was handed out on 20 April 2017. 15 employees were not at work that day and Mr Maher rang and spoke to 10 of them and read them the letter. The other five employees were sent the letter by SMS. Arrangements were made for Mr Harris who was overseas to vote.

[18] One employee, Mr Keagan, contacted Cirrena and advised that he had not received the expected confirmation message when he voted. Cirrena responded and advised that the vote had been successfully received.

[19] The unions provided evidence which established that:

• They were not informed that Lendlease intended to call for a vote on the Agreement prior to the notices being provided to employees on 13 April 2017.



• They had not seen a copy of the Agreement prior to it being provided to the employees on 13 April 2017.



• They had limited opportunity to communicate with employees during the access period because some employees were on leave throughout the period, and at least two of the three union officials responsible for the site and the negotiations were on leave during the period. Mr Reilly was on leave but he did not tell anyone from Lendlease that he would be on leave. Mr Hughes says that he told Lendlease that he was going to be on leave. Mr Maher from Lendlease denies that he was told Mr Hughes was on leave. Mr Kelly says that he was on leave and that he told Mr Maher that he would be on leave. However, Mr Reilly gave evidence that he thought Mr Kelly was not on leave. The Easter Weekend was from 14 April to 17 April inclusive and there was a further public holiday for Anzac Day on 25 April and some people took a long weekend from 22 April to 25 April inclusive.



• Once the unions became aware that the vote was to occur, they contacted Lendlease and asked Lendlease to postpone the ballot. The AWU provided written notice in accordance with Section 229(b) of the Act that they believed that Lendlease were acting inconsistently with their good faith bargaining obligations and asked that they confirm that they will not proceed with the ballot. Lendlease did not respond to the AWU correspondence.

[20] The period from Tuesday 18 April until Friday 21 April inclusive, were normal work days at all sites except Jordan Springs. Jordan Springs was one of the smaller work sites covered by the Agreement. The face to face briefing meeting was held at Jordan Springs on the 13 April 2017.

[21] The Agreement covered 112 employees at a range of dispersed civil construction sites. 96 employees voted of whom 50 voted in favour of the Agreement and 46 employees voted against the Agreement. 16 employees did not vote.

[22] The rates of pay in the Agreement are between 17% and 57% better than the rates in the Building and Construction General Onsite Award 2010. Generally, the other terms of the Agreement are equivalent to the Award entitlements. I am satisfied that there are no BOOT or NES issues. I am satisfied that the group to be covered was fairly chosen and it is operationally and organisationally distinct. I am satisfied that other than the issues in contention listed below, the other requirements for approval of the Agreement in Sections 186 and 187 of the Act and the other relevant pre-approval requirements are met.

[23] The issues in contention are:

1. The unions argue that some employees did not receive a copy of the Agreement and the notice concerning the vote. The unions submit that the employer did not take all reasonable steps to notify the relevant employees of the time and place at which the vote would occur and the method of voting.

2. The unions submit that documents which are incorporated by reference in the Agreement were not provided, or reasonable access to them was not provided throughout the access period.

3. The unions argue that some employees did not have a reasonable opportunity to vote and given the closeness of the vote, this may have affected the outcome.

4. The unions argue that employees did not receive adequate explanation of the Agreement and the effect of the Agreement because some were unable to attend meetings on the 13 April as they were already on leave.

5. The unions argue that Lendlease misled employees by the inclusion in the Agreement of a provision which indicated that the CFMEU and the AWU are likely to seek to be covered by the Agreement. This wrongly gave employees the impression that the unions supported the Agreement.

6. The unions argue that the provision which notes that the CFMEU and the AWU are likely to seek to be bound by the Agreement is an unlawful term because it is an attempt to coerce the unions to be covered by the Agreement.

7. The unions argue that the requirements of Section 187(2) of the Act, re good faith bargaining are not met or in the alternative there was a lack of genuine agreement (Section 188(c) of the Act) because of:

• The timing of the access period. Employees had inadequate opportunity to get advice from their bargaining representatives or to discuss the issue amongst themselves due to the Easter and Anzac Day weekends falling during the access and voting period.



• Lendlease misled the unions who were expecting to receive a revised document and that voting would not occur over the Easter period.



• Lendlease were aware that at least one of the key union officials would be on leave over the period.

Were the requirements of Section 180(2) and (3) met? Did Lendlease take all reasonable steps to notify the relevant employees of the time and place at which the vote will occur and the method of voting and provide employees with a copy of the Agreement?

[24] The evidence of Mr Maher was unchallenged on this point. He gave evidence as to how a notice containing this information was provided to all employees who would be eligible to vote and who were at work on the 13^th April 2017 and the access period commenced on the 14^th April 2017. There were three employees who were finishing work prior to the ballot, who did not take the information. Mr Maher then described the steps taken to contact those employees who were not present at work on the 13^th April 2017. They were contacted by telephone or email and provided with electronic copies of the notice. Five could not be contacted. These five were all given the documents on either 14 April or 18 April. The evidence of Mr Maher was supplemented by Mr Maybury and Mr Vaughan.

[25] The requirement in Section 180(3) of the Act is that “all reasonable steps” are taken.

[26] The employer referred to a decision by DP Sam’s in Morris Corporation (WA) Pty Ltd [[2014] FWCA 7106 at paragraph 111] where he observed:

“The test is not whether other steps might have been taken, but is whether the steps taken by the employer were of themselves individually or collectively reasonable. Put another way, the Commission’s powers do not extend to identifying what other steps might have been or should have been taken to meet the threshold of reasonableness.”

[27] To the extent that this observation suggests that so long as the steps taken by the employer were reasonable, the Commission must find that all reasonable steps were taken, I respectfully disagree. The Commission must be satisfied that all reasonable steps have been taken and this must mean that the Commission must evaluate what steps should reasonably have been taken in the particular circumstances.

[28] Not much more than 10% of the employees were absent on the day. This is not an abnormally high rate of absence. All reasonable efforts were made to contact those who were not at work. Mr Maher gave evidence that all employees were successfully contacted and provided with the Agreement and the notice either in paper form or in digital form. I think that in the circumstances of this case, on balance, the employer took all reasonable steps to ensure the notice was given to employees.

Did Lendlease take all reasonable steps to provide employees with or with reasonable access to any material incorporated by reference in the Agreement? (Section 180(2) of the Act)

[29] The documents referred to by the unions were the Building Code and associated State documents and the Award. The Building Code and associated State and Federal regulations are referred to in Clause 10.6 of the Disputes Settlement clause of the Agreement. The clause provides that if a matter is being arbitrated by FWC in settlement of a dispute, the outcome cannot be inconsistent with these documents. I am not satisfied that this clause incorporates the Code into the Agreement. Rather, it is a provision which effectively prevents FWC from arbitrating in cases where the provisions of the Agreement are inconsistent with the Code. In this sense, it is distinguishable for the case in Viridian [[2015] FWCFB 3889].

[30] There is also a reference to the Code in Clause 9.7, which limits the material which can be placed on the union noticeboard to material which complies with the law and the Code and provides that the employer can remove material if it does not comply. Again, I do not consider that this provision incorporates the Code. It simply qualifies the entitlement to place material on the union notice board by allowing the employer to remove material which does not comply with the law or the Code.

[31] There is no doubt that the Award is incorporated where the Agreement is silent. In my view, the authorities now establish that just because a document like the Award is publicly available, does not mean that the employer does not have to take all reasonable steps to ensure that employees are either given a copy of the Award or have access to the Award throughout the access period. The approach taken by the Full Bench in McDonald’s [McDonald’s Australia Pty Ltd v Shop, Distributive and Applied Employees Association [2010] FWAFB 4602 [29]] has been modified by subsequent Full Bench authority. What are all reasonable steps will depend upon the circumstances. If the Agreement contains wages and conditions which are very close to the Award, then more active steps may be required than if the wages and conditions are way above the Award. If the Agreement is comprehensive and the Award is only required in a small number of instances in order for entitlements to be properly understood, then less active steps may be required than in a case where important wages and conditions cannot be properly understood without reference to the Award. Where the proposed agreement is closely based upon an existing agreement and the changes are relatively minor, then less may be required in order for the Agreement and its entitlements to be properly understood. In many cases, all reasonable steps cannot be established unless employees are physically given a copy of the Award or are assisted to be able to access the Award on line and have access to facilities to do so at work.

[32] In this case, the Agreement is replacing an earlier agreement. There are some changes between the two documents but not a wholesale rewriting. The rates of pay are well above the Award and the other conditions are generally consistent with the Award or better than the Award. There was a lengthy bargaining process. Employees were actively represented including by their unions. The CFMEU organiser, Mr Kelly, described the situation as follows:

“Lendlease Engineering is a highly unionised workforce and I believe employs over 90 financial CFMEU members and around 20 AWU members. It is an active and supportive membership, with a delegate structures for both the AWU and the CFMEU.” (Statement of Mr Kelly paragraph 3).

[33] The level of understanding of the Agreement could therefore be expected to be reasonably high. The Agreement is a comprehensive Agreement and there are only a relatively small number of matters where conditions are derived from the Award, or require the Award to be understood. I accept the submissions of the unions that the web link to the Award that was provided in the information pack had quotation marks around it which might have reduced the effectiveness of the advice. I also accept the submission of the unions that some employees may not have had good access to the internet if they were on holidays during the access period. However, taking all the issues into consideration, I am satisfied that providing advice about the relationship between the Award and the Agreement together with a link to the Award was sufficient in the circumstances of this case to meet the test of “all reasonable steps”.

Did a valid majority support the Agreement?

[34] In a circumstance when the vote happens on site by a ballot or a show of hands, the notice which is provided at the beginning of the access period effectively advises employees that they are requested to vote at the time and place and in the manner notified. The request to vote is then the actual voting process – being handed a ballot paper or being asked to indicate by a show of hands. The request to vote must be at least 21 days after the day on which the last notice of representational rights has been issued, and at least 7 days after the day on which the notice concerning the date, time, place, and method of voting was issued. I do not consider that the vote by SMS is any different. Instead of being handed a ballot paper or being asked to raise a hand, the employee is being asked to respond to a text message. Just as when there is an attendance ballot, there are some employees who are unable to attend or choose not to attend, so it is with an SMS vote. Some employees will choose not to reply to the SMS and it is possible that some employees may not receive the SMS message because their phone is switched off throughout the voting period or is out of range throughout the voting period.

[35] For the ballot to be a valid process, the employer must make reasonable efforts to enable all employees to participate.

[36] The notice which was provided concerning the time, place and method of voting provided a contact point for employees if they had queries about the voting process or difficulties being able to vote. The information was also provided on the reminder notice. This included a situation where an employee was unsure as to whether or not their vote had been successfully cast, that is where the confirmation SMS reply was not received.

[37] An SMS voting method has a number of advantages and a number of disadvantages when compared to alternative methods. These include:

• As it is not an attendance process, there is less opportunity for employees to discuss the matter collectively prior to voting.



• The voting process is very quick and can occur at almost any time or place. In most cases, the method is more accessible for those at dispersed locations or sick or on holidays.



• When compared to an attendance ballot, there is a greater risk that the employee does not know if their vote has been successfully received. However, this is also a feature of a postal ballot.



• An employee may have difficulty voting if they do not have a mobile phone or if they are out of range.



• With an attendance ballot, there are difficulties for those who are sick or on holidays. With a postal ballot, there can be issues with old addresses, mistaken addresses or with the reliability of the postal service.



• The employer is able to monitor the voting process and can make interventions to influence participation, whilst the bargaining representatives are excluded from this. With an attendance ballot, other bargaining representatives also have a capacity to influence and monitor.

[38] The Act does not prescribe any particular ballot process. It is to be expected that in any ballot process, there will be some employees who have some difficulty in participating.

[39] I accept the evidence that Mr Cotchin and Mr Sharwood were away from work during the ballot period and were in parts of the country where mobile phone access was difficult. This does not automatically make the process invalid, even though the vote was very close and Mr Cotchin and Mr Sharwood indicated that they would have voted against the Agreement if they had voted.

[40] We have evidence about Mr Harris who was overseas and who raised this issue in response to the relevant notice and arrangements were made to enable him to vote. We also have evidence of the case of Mr Keagan, who did not receive the response SMS message when they voted. Mr Keagan used the contact arrangements in the relevant notice to check whether or not his vote had been received. It was confirmed that the vote was in fact received. An order for discovery of all relevant communications between the vote provider and employees was made. This revealed that there were a very limited number of cases where employees contacted the provider to seek assistance.

[41] Mr Cotchin and Mr Sharwood gave evidence that they received the copy of the Agreement and the notice concerning the time, place and method of voting. They gave evidence that they did not take any active steps to seek to cast a vote. They did not seek help from their union, from management or the ballot provider even though they were aware that a ballot was to be conducted and were in possession of the relevant notice. I am satisfied that it is possible that Mr Cotchin and Mr Sharwood did not receive the SMS vote on their phones in a timely manner, either because their phone was off or because they were not in a reception area. During the voting period, both employees spent much, but not all of the time, in areas with poor mobile reception. It is also possible that they did receive the SMS vote on their phones at some stage during the ballot period but chose not to respond. Neither employee excluded this possibility. Both employees conceded that at some stages during the period they were in places where they did have mobile phone reception. I am satisfied that if they had read the notice and had wanted to vote, they could have made contact with the vote provider and arrangements for their vote would have been made. I accept that this would have resulted in some effort and inconvenience but I do not consider it to be unreasonable effort or inconvenience in the circumstances.

[42] I accept that some employees were on leave during the access period. However, except at one of the smaller work sites, work was scheduled as normal during the period from Tuesday to Friday inclusive of the access period. Neither Mr Cotchin nor Mr Sharwood were on scheduled leave during the period but for personal reasons both took leave at short notice. The employer could not reasonably be expected to have been able to anticipate that these two employees would be on leave.

[43] I am satisfied that all reasonable efforts were made to notify employees of the time, place and method of voting. The vote occurred in accordance with that notice. I am not satisfied that Mr Cotchin or Mr Sharwood were prevented from voting even though I accept that the quality of their mobile phone reception may have made it more difficult or inconvenient.

[44] Mr Hughes says that three workers told him after the vote that “they did not get to vote”. No further detail was provided in respect to this matter. I am not satisfied that the evidence is sufficient to establish that these three employees were denied an opportunity to vote.

[45] There is no basis for concluding that employees were denied reasonable opportunity to vote or that employees votes were not counted. There is no suggestion that employees who were not eligible to vote, voted, or that employees who would be covered by the Agreement were excluded from the voting roll, or that employees were coerced or misled, or that the integrity of the ballot was compromised. The rate of participation in the ballot was high. I am satisfied that a valid majority of those who voted, albeit a narrow majority, supported the Agreement.

Did Lendlease take all reasonable steps to ensure that the terms of the Agreement and the effect of those terms were explained, taking into account the particular needs and circumstances of employees? (Section 180(5) of the Act)

[46] Mr Maher’s uncontested evidence establishes that almost all employees, other than those who were absent on leave, attended meetings either on the 13 April or during the access period at which they received a presentation about the terms of the Agreement and the effect of those terms. A copy of the presentation was provided with Mr Maher’s evidence and I am satisfied that it identified most of the significant changes between the current agreement and the new Agreement. Given that the wages and conditions in both documents are generally well above the Award, this is a reasonable way to ensure that the terms of the Agreement and their effect was explained. There is no evidence that any employees had particular needs which necessitated a more detailed explanation or an explanation in a different language. The presentation stated that employees including those who might have special needs could get further information. I am also satisfied that given the long period of active bargaining and the strong involvement of the unions, employees had already received significant information during the process and could get further information from the unions if they wished.

[47] Taking this context into account, Mr Maher gave evidence which satisfied me that Lendlease took all reasonable steps to provide an explanation to those employees who were absent from work. I am satisfied that the requirements of Section 180(5) of the Act have been met.

Did Lendlease mislead employees by the inclusion in the Agreement of a provision which indicated that the CFMEU and the AWU would seek to be covered by the Agreement?

[48] The unions argue that Lendlease misled employees by the inclusion in the Agreement of a provision which indicated that “it is anticipated that the Unions will give notice to the FWC pursuant to s183 of the Act in order that this Agreement will cover them” (Clause 1.4 of the Agreement). They argue that this wrongly gave employees the impression that the unions supported the Agreement.

[49] The unions are covered by the current Agreement and actively participated in the lengthy negotiations for the Agreement. The clause which indicated that they were likely to seek to be covered by the Agreement was included in the earlier drafts of the Agreement and the unions did not object to it. The highest the evidence reaches on this point is that one union official asked a question about the clause. The direct evidence from employees in the proceedings is that they were well aware that the CFMEU had been opposing the Agreement and they had no reason to believe that this had changed. Industrial action had been taken only a few weeks before the notice that the Agreement would be put to a ballot. The unions had held meetings with about 50 of the employees on the day the notice of the ballot and the Agreement were distributed (I prefer the evidence of Mr Reilly about the number of employees at the meeting because he says he actually counted the number of participants). The union organisers confirmed that members at the site were active and that there were union delegates on site. There is no substantial evidence of any employee being misled by this clause.

[50] The clause does not say that the unions will be covered by the Agreement but rather that it is likely that they will seek to be covered. It is commonplace that unions often give notice to be covered by an agreement they have participated in the bargaining for, even where they do agree with the outcome of the bargain. Of course, there are cases where unions decline to seek to be covered by an agreement they do not support but in my experience, there are just as many cases where they seek to be covered notwithstanding they did not support the content of the agreement. I am not satisfied that a clause which says that the unions may be covered by the Agreement is a clause which can be properly understood as meaning that the unions support the Agreement.

[51] I am not satisfied that the coverage clause misled employees.

Is the provision which notes that the CFMEU and the AWU are likely to seek to be bound by the Agreement an unlawful term because it is an attempt to coerce the unions to be covered by the Agreement?

[52] The clause does not say that the unions will be bound by the Agreement. The unions were involved in the bargaining for the Agreement and as a consequence, it is not unreasonable for the clause concerning union coverage to be included. The clause allows for the possibility that the unions may decline to be covered by the Agreement. I am not satisfied that the clause is an attempt to coerce the unions to be covered by the Agreement.

Were the requirements of Section 187(2) of the Act re good faith bargaining breached by Lendlease or in the alternative there was a lack of genuine agreement (Section 188(c) of the Act) because of

• The timing of the access period. Employees had inadequate opportunity to get advice from their bargaining representatives or to discuss the issue amongst themselves due to the Easter and Anzac Day weekends falling during the access and voting period.



• Lendlease misled the unions who were expecting to receive a revised document and that voting would not occur over the Easter period.



• Lendlease were aware that at least one of the key union officials would be on leave over the period?

[53] I found the evidence from the union organisers to be direct and convincing. They readily conceded points even when it did not assist their case. For example, Mr Hughes conceded that he was able to contact his members through text message, phone and email and that, despite being on leave, he sent an SMS during the access period to members urging them to vote no to the Agreement. Mr Reilly, CFMEU organiser, similarly accepted that his members could be contacted by text message, phone and email. Mr Kelly, the other CFMEU organiser, considered that mass meetings were the best form of communication with members but he accepted that other forms of communication were available.

[54] I am satisfied that the email of 10 April 2017 from Mr Maher to the union organisers has a clear meaning. Considered in context, Mr Maher made a commitment to provide the unions with a comprehensive response following the 28 March 2017 meeting. I am satisfied that this was a commitment to provide the revised agreement document to the unions prior to proceeding to the next step which was a ballot. The alternative explanation provided by Mr Maher was unconvincing. I also prefer the evidence of Mr Hughes concerning the conversation he had with Mr Maher. I am satisfied that Mr Maher confirmed that the vote would not be initiated before Easter and also that the request for the document to be provided to the unions in advance was a reasonable request. The unions then put Lendlease on notice that they believed that the calling of the ballot using the timetable proposed by Lendlease was a breach of good faith bargaining.

[55] Mr Maher gave this evidence about the discussion at the meeting on 28 March 2017.

“The significant thing from the company's point of view was the point made by Mr Kelly of the CFMEU that irrespective of any concessions made unless there was significant wage increases, increases in allowances and a number of clauses added, he's been instructed by the CFMEU to oppose the agreement and he was seeking to have the agreement bought on for a vote.  That vote was to be held on or before 7 April.  My comment to Mr Kelly was that whilst the company was keen to put the agreement to a vote as soon as possible, we were waiting for a response from the ABCC as to whether or not a draft agreement we submitted was compliant with the new code.” (PN142)

[56] This evidence is not consistent with other evidence which establishes that the ABCC provided a response to the earlier draft of the agreement prior to the 28 March 2017 meeting and that in fact, changes arising from their response were discussed at the 28 March 2017 meeting. Lendlease then only submitted a revised document to the ABCC for preliminary assessment sometime after the 28 March 2017 meeting. Mr Maher’s confusion on this point was subsequently repeated in response to a question from myself:

“So how was the document going to be updated for the concessions?---That document would've been updated once – in the event that we got a clearance from the ABCC that the document that we lodged with them back in December, if that was given the go ahead we would've made the changes to the concessions which were matters to do with rates of pay, allowances.”(PN153)

[57] Mr Maher rejected the statement of Mr Kelly that he asked for a copy of the draft agreement to be provided prior to the vote being initiated and that Mr Maher agreed to provide the document.

“That's incorrect.  There was no agreement by me on behalf of the company to provide any document to the bargaining reps.  Save for a document that may have come back from the ABCC requiring more change in which case we would probably have had to have called another bargaining meeting to discuss those changes.” (PN150)

[58] I am not satisfied that this evidence clearly establishes what Mr Maher actually said in response to Mr Kelly’s request. I prefer the evidence of Mr Kelly to that of Mr Maher.

[59] I am satisfied that Mr Hughes told Mr Maher that he would be on leave during the access period and the ballot period. I am also satisfied that Mr Reilly did not tell Lendlease that he was going to be on leave. There is some conflict in the evidence about whether or not Mr Kelly was on leave. Mr Reilly says that he was not on leave but Mr Kelly gave evidence that he was on leave and that he told Mr Maher that he was going to be on leave. (PN574)

[60] I am satisfied that the timing of the ballot on the weekend had the effect of limiting the capacity of employees to discuss issues collectively and also had the effect of limiting the capacity of the unions to influence employee votes. I am also satisfied that the timing of the access period had the effect of limiting the capacity of employees to discuss issues collectively and the capacity of the unions to provide advice to employees. There were significantly fewer working days during the access period than normal due to the holiday break.

[61] The process chosen had the clear effect of reducing the capacity for collective discussion and the capacity for union input. This is particularly the case because the work construction sites in this case are dispersed and not in major centres.

[62] I can see no reason why Lendlease could not have extended the access period and conducted the ballot during normal working days after the Easter/Anzac Day holiday period. Given that the unions raised these objections at the time and Lendlease still proceeded as planned, I am satisfied that it is reasonable to infer that one of the reasons why Lendlease chose the timing of the ballot and failed to provide the unions and other bargaining representatives with a copy of the document and advance notice was to limit the capacity for collective discussion and union influence.

[63] Of course, I accept that the unions had other means by which they could have accessed employees during the period and the unions could have lodged a good faith bargaining application but failed to do so.

[64] Considering all of the factors, I am satisfied that the actions of Lendlease in misleading the unions about when the ballot would occur and about their intention to provide employees with a copy of the revised document, and in failing to provide the document to the unions as promised prior to initiating the ballot, was conduct inconsistent with their good faith bargaining obligations. I also consider that in these circumstances, the timetable for the access period over the Easter holiday period and the ballot on the weekend when employees were not rostered for work were inconsistent with good faith bargaining obligations.

[65] The CFMEU argue that as a consequence the Agreement cannot be approved due to the operation of Section 187(2) of the Act which provides as follows:

“The FWC must be satisfied that approving the agreement would not be inconsistent with or undermine good faith bargaining by one or more bargaining representatives for a proposed enterprise agreement, or an enterprise agreement, in relation to which a scope order is in operation.”

[66] The courts have adopted the somewhat surprising view, given the circumstances in which the Act was created, that in considering whether or not the scope of an agreement has been fairly chosen, it is not relevant to consider consistency with the objects of the Act which relate to Australia’s international obligations to encourage collective bargaining with unions. The CFMEU referred to the key judgement which led to this view which is the decision of Sciopis J in John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union [[2014] FCA 286]. In that judgment Sciopis J observed:

“Further, in my view, the words “was fairly chosen” in s 186(3) are not to be construed as “was chosen in a manner which would not undermine collective bargaining”. Notwithstanding the patient argument of Mr Reitano at the hearing, I am of the view that s 578(a) of the Fair Work Act does not support giving that construction to the words of s 186(3).

Section 578(a) relevantly provides that Fair Work Australia must, in exercising its powers, take into account any objects of the Fair Work Act and the objects of any part of the Act. However, I am of the view that the general words in s 578(a) do not permit Fair Work Australia to imbue the words of the statute with concepts which are not to be found in those words when properly construed. In my view, the proper construction of s 186(3) is informed by s 186(3A). That section prescribes the nature of the considerations to which Fair Work Australia is to have regard in exercising its power under s 186(3). Therefore, in my view, Fair Work Australia is not at liberty to exercise its s 186(3) powers on some other basis in reliance upon the general provisions in s 578(a) of the Fair Work Act. In other words, the general words in s 578(a) must yield to the specificity embodied in s 186(3A) in relation to the proper construction of the words “was fairly chosen” in s 186(3).

Further, there are specific provisions in Pt 2-4 of the Fair Work Act which give Fair Work Australia powers to withhold approval on grounds which reflect conduct inconsistent with the objects of Pt 2-4 identified in s 171. Thus, for example, s 187(2) permits Fair Work Australia to withhold approval for an agreement if approval would not be consistent with, or would undermine, good faith bargaining. It is significant, therefore, that there is no similar provision permitting Fair Work Australia to withhold approval on the grounds that it is of the view that the approval of the agreement would undermine collective bargaining. In the absence of that power having been conferred expressly on Fair Work Australia, it is, in my view, not open to Fair Work Australia to exercise such a power under the rubric of s 186(3) of the Fair Work Act.

Plainly, the Full Bench was of the view that there was something wrong with three employees being able to make an agreement which covered work classifications other than their own. However, if there is a lacuna in the Fair Work Act, on which I express no view, then the remedy would appear to lie in legislative amendment.”

[John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union [2014] FCA 286 Paragraphs 37-40]

[67] To the extent that this observation suggests that Section 187(2) of the Act allows an agreement to be rejected on the basis that it does not meet good faith bargaining requirements, this conflicts with the explanatory memorandum which says that Section 187(2) is only applicable in cases where a scope order is in operation.

[68] The Explanatory Memorandum for the Fair Work Act 2009 explains Section 187(2) as follows:

“788. Subclause 187(2) provides for an additional approval requirement where a scope order is in operation in relation to a proposed enterprise agreement, or enterprise agreement. This subclause is intended to deal with the situation where a bargaining representative has made an application for FWA approval of an enterprise agreement that is not expressed to cover all the employees and employers specified in a scope order issued by FWA in relation to that agreement. FWA may approve an enterprise agreement in that situation provided that it is satisfied that the approval of the agreement would not be inconsistent with or undermine good faith bargaining by one or more of the bargaining representatives.

789. If (despite a scope order) the bargaining representatives have subsequently all agreed to make an agreement of a different scope, this may not undermine good faith bargaining. However, if the employer has obtained employee approval for an agreement despite a scope order against the wishes of a group of employees who should have been covered (or excluded) as a result of the scope order, then this clause is likely to be triggered.”

[69] I consider that the view expressed in the explanatory memorandum reflects the plain words of the statute. Section 187(2) is not relevant in the present circumstances.

[70] The CFMEU argues that in the alternative the Agreement should not be approved because of the operation of Section 188(c). That provision is as follows:

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:

   (a)  the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

   (i)  subsections 180(2), (3) and (5) (which deal with pre-approval steps);

   (ii)  subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

   (b)  the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

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

[71] I am not satisfied that the test in Section 187(2), undermining or inconsistent with good faith bargaining, and the test in Section 188(c), grounds for believing the agreement has not been genuinely agreed to by employees,” are the same. Section 188(c) goes to matters which affect the integrity of the vote. This includes matters such as misinformation, denial of access, intimidation, or manipulation. In this case, there is no evidence of this sort of practice. The conduct of which the unions complain relates to the bargaining process. The remedy for such defects lies in an application for good faith bargaining orders. The unions did not make such an application despite giving notice that they may do so. The evidence was not sufficient to establish that it is likely that the conduct of which the unions complain affected the integrity of the ballot. The participation rate in the ballot was high and the relevant pre-approval steps to ensure the integrity of the ballot process were complied with.

[72] I am not satisfied that there are other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

Conclusion

[73] Having found that the requirements of the legislation have been met, I must approve the Agreement. I give notice that I intend to issue a decision approving the Agreement in 48 hours. In the meantime the unions have the opportunity, should they wish, to provide the employer, FWC and the other bargaining representatives with a copy of an F18 should they wish to be covered by the Agreement.

COMMISSIONER

Appearances:

B Gee of FCB Workplace Law for the applicant

T Fischer appeared for the Construction, Forestry, Mining and Energy Union

A Gounis appeared for The Australian Workers’ Union

Hearing details:

2017

Melbourne and Sydney (by video):

May 31

Melbourne–Sydney–Brisbane (by videolink):

June 2

Printed by authority of the Commonwealth Government Printer

<Price code C, PR593509>