Link Mining Services Pty Ltd

[2016] FWC 8910

[2016] FWC 8910

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Link Mining Services Pty Ltd
(AG2016/6275)

DEPUTY PRESIDENT ASBURY BRISBANE, 12 DECEMBER 2016

Application for approval of the Link Mining Enterprise Agreement 2016 – Right of Union that is not a bargaining representative to be heard – Refusal to provide application documents to Union that is not a bargaining representative – Consideration of whether Agreement passes BOOT – Genuine Agreement – Failure by employer to explain effect of scope of coverage clause of Agreement to employees – Commission unable to be satisfied that Agreement was genuinely agreed – Application for approval refused.

1. BACKGROUND

[1] Link Mining Services Pty Ltd (Link Mining) applies for approval of an enterprise agreement known as the Link Mining Enterprise Agreement 2016 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single-enterprise agreement.

[2] On 14 October 2016 Construction, Forestry, Mining and Energy Union (CFMEU) corresponded with the Commission to advise of concerns with respect to pre-approval processes for the Agreement and regarding the satisfaction of the “Better off Overall Test” (BOOT). The CFMEU was not a bargaining representative for the Agreement and it was acknowledged that the Union does not have members employed by Link Mining. Notwithstanding this the CFMEU sought access to the Form F16 and Form F17 (the application documents) lodged by Link Mining and sought to be heard in relation to its concerns about the pre-approval requirements and the BOOT and in addition in relation to the request that the Union be provided with the application documents.

[4] Link Mining objected to the CFMEU being heard in relation to the approval of the Agreement and to the Union being provided with application documents. In a response to that correspondence sent to the CFMEU by my Associate, the Union was informed that it is generally not my practice to provide application documents to persons or organisations but that I would hear from the CFMEU in relation to the matters raised in its correspondence. The CFMEU was also requested to provide written submissions outlining the matters upon which it bases its objection to approval of the Agreement.

[5] The matter was subsequently listed for Conference/Hearing on 7 November 2016. Link Mining did not attend the hearing notwithstanding that the Notice of Listing was sent to the nominated representative of the Company. My Associate contacted Link Mining and received confirmation that it intended to proceed with the application for approval of the Agreement. On 10 November 2016, Link Mining filed submissions in response to the CFMEU submissions and the matter was listed for hearing by video link to Sydney, on 22 November 2016. Due to a power failure in the Commission’s Sydney premises, the listing was vacated and the application was heard on 23 November 2016.

2. CONSIDERATION

2.1 Overview of issues

[10] The CFMEU provided a 27 page submission outlining its standing to be heard; request for F16 and F17 forms; pre-approval issues pursuant to s. 180(5) of the Act; and BOOT and genuine agreement issues. 1 The CFMEU submitted that the Commission should exercise its power under s. 590 of the Act to inform itself of matters as it considers appropriate and allow the CFMEU to be heard in relation to the application for approval of the Agreement.2

[13] The CFMEU further submitted that access to the application documents should be provided on the basis that there is nothing confidential or privileged with respect to the documents and further that in the event that the Commission grants the CFMEU the capacity to be heard, it would go against the principles of procedural fairness to not provide the CFMEU with all necessary material in order for them to provide information to the Commission.

[1] In response, Link Mining submitted that the CFMEU did not establish a sufficient basis in its submissions to appear in this matter. Further, the Company submitted that it is the role of the Commission to determine whether the Agreement passes the BOOT when compared to the corresponding modern award and that this is a role which the Commission frequently undertakes without the intervention of an industrial organisation which is a stranger to the proceedings. In the alternative, Link Mining submits that the CFMEU’s appearance should be limited to only making submissions in relation to the BOOT and no other matter.

[2] Further, the Company submits that my approach with respect to providing the application documents to bargaining representatives and refusing to provide them to the CFMEU in circumstances where it is not a bargaining representative is correct. Link Mining further submits that the application documents are of no relevance to the objections raised by the CFMEU. It is information that the CFMEU would otherwise be unentitled to unless the Union was a bargaining representative and the request for access to these documents should be rejected.

[3] The CFMEU submitted that there are confusing and/or contradictory terms in the Agreement and that this is an indication that the requirements in s.180(5) of the Act had not been met on the basis that such terms could not have been properly explained to employees. It was further submitted that had those terms been properly explained to employees the Agreement would not have been approved. 3

[4] The Company in its response submitted that it is in a position to lead further evidence regarding the steps taken to explain the terms of the Agreement in the form of written minutes of meeting which were taken at the relevant meetings.

[5] The issues in relation to genuine agreement and the question of whether the Agreement passes the BOOT, are dealt with below.

2.2 BOOT issues

[6] Clause 2.2.1 – Full time employee: It was submitted by the CFMEU that the Agreement at Clause 2.2.1 provides that a full time employee means … “an Employee not engaged for not less than an average of 35 ordinary hours” whereas the corresponding provision in the Black Coal Mining Industry Award 2010 (the Award) provides that ordinary hours of work for a full time employee are an average of 35 per week. The CFMEU asserted that the Agreement provided for the opportunity for full time employees to be engaged for more ordinary hours on average per week than the Award and as such, the Agreement is not more beneficial to an employee than the Award with respect to full time ordinary hours. Alternatively, the CFMEU argued that Clause 2.2.1 was at least confusing in its nature. The Company disagreed and submitted that the clause provides that a full time employee can be engaged on averaged hours that cannot be below 35 per week.

[7] The Company’s response misses the point – the clause as presently drafted allows for hours that average more than 35 per week to be worked. The Agreement has no other limitations on ordinary working hours and as a result employees may be required to work for longer hours at ordinary rates compared to the ordinary hours they could be required to work under the Award. This is a detriment for the purposes of the BOOT and I will require the Company to address this issue if the Agreement is approved.

[8] Clause 2.2.2 – Part-time employee: The CFMEU raised a similar point with respect to Clause 2.2.2 regarding part time employees. Clause 2.2.2 of the Agreement provides that a part time employee works less than an average of 35 ordinary hours per week, compared to the Award which provides that part time employees work less than 35 hours per week. The effect of this being that the Agreement allows for a part time employee to work more than 35 hours per week so long as the overall average is less than 35 per week and being less beneficial when compared to the provisions of the Award.

[9] Furthermore, the CFMEU argued that the Award provides that upon commencement, part time employees will agree in writing to a regular pattern of hours to be worked, and the days of which those hours will be worked on. As the Agreement has no such provision, the CFMEU outline that the provisions of the Agreement are less beneficial with respect to part time employees than when compared to the Award.

[10] Lastly, with respect to part time employees, the Award provides that all hours worked in excess of the hours as mutually agreed to be overtime and paid as such. The Agreement does not provide for such an entitlement and the CFMEU suggest that the provisions in the Award are more beneficial than the Agreement with respect to part time employees.

[11] The Company disagrees with the CFMEU and submits that the clause clearly states that a part-time employee averaged hours will be less than 35 hours per week. The Company submits that Clause 5.2.1 provides that all hours worked in excess of rostered hours are paid at double time.

[12] In relation to this matter, the issue is that the Award provides that ordinary hours of work for part-time employees will be less than 35 per week. The Award does not permit averaging so that part-time employees can work 35 hours or more in a week. Further the Award provides for protection for part-time employees in relation to requirements that they have reasonably predictable hours of work; agree in writing on a regular pattern of work; record any variations to the pattern of work in writing; and are paid overtime for all hours in excess of those mutually agreed. The absence of such provisions in the Agreement is a detriment relevant to the BOOT as is the fact that part-time employees may be rostered to work more ordinary hours in a week than would be permitted under the Award. This is a matter that I will require the Company to address if the Agreement is to be approved.

[13] Casual employment: The CFMEU submitted that the Agreement provides for casual employment with respect to the classifications set out in Schedule A – Production and Engineering Employees, however the Award does not. This leads to a conclusion that due to the uncertain nature of the industry, it is less beneficial under the Agreement for employees to be employed in this position on a casual basis than had they been employed under the Award, on a part time or full time basis. The CFMEU further submits that the Agreement is contradictory with respect to casual loading, as at sub clause 2.2.3 of the Agreement it is indicated that the casual loading is all-purpose, but clause 5.2.2 indicates that the casual loading is not an all-purpose loading.

[14] In its response, the Company acknowledged that the Award does not provide for casual employees, however, there is no reason that an agreement cannot do so. As the remuneration a casual employee receives for ordinary time worked is far in excess of that a part time employee would earn under the Award for working the same hours, casual employees are not worse off under the Agreement. Further, the Company acknowledge a typographical error at Clause 2.2.3 and are willing to provide an undertaking to the effect that the casual loading is not an all-purpose loading.

[15] I accept that the mere inclusion of provisions in relation to casual employment in an Agreement will not cause the Agreement to fail the BOOT simply on the basis that the relevant Award does not provide for casual employment. The 25% casual loading is an established standard that has been calculated to compensate casual employees for entitlements that are enjoyed by weekly employees. There are numerous enterprise agreements in the coal industry with casual employment provisions including some to which the CFMEU has agreed to be bound.

[16] In relation to the issue of whether the casual loading is “all purpose” it appears that the real issue is whether the fact that the overtime provisions in clause 5.2.2 make it clear that the casual loading is not compounded by overtime penalties means that there is an inconsistency between the provisions in clause 5.2.2 of the Agreement and those in clause 2.2.3 which states that the casual loading is an all purpose payment.

[17] The common meaning of the term “all purpose” when used in connection with an allowance or other monetary amount prescribed in an industrial instrument is that it is paid for all purposes of the instrument including when employees are on paid leave or working overtime or at times when a penalty is payable. However, not every all purpose allowance is compounded by the overtime or penalty payment. An all purpose allowance may be payable to employees working overtime in circumstances where it is not compounded by the overtime rate. Whether an allowance including an all purpose allowance is compounded by overtime depends on the terms of the particular instrument. It is not uncommon for an industrial instrument to provide that a casual loading is paid in addition to another penalty payment but not compounded by it. The Black Coal Mining Industry Award provides in Schedule A.8 at item A.8.1 that allowances specified in that Schedule are payable in addition to the employee’s classification rate but are not taken into account in the calculation of any other penalty rate prescribed by the Award except where specifically indicated. As previously noted this Award does not contain provisions for casual employees.

[18] In the present case, the casual loading is stated in clause 2.2.3 to be an all purpose payment. In clause 5.2.2 it is stated that the casual loading is not an all purpose payment. Casual employees under the Agreement are not entitled to paid annual leave or sick leave. They are however, entitled to overtime payments under clause 5.2.2. Clause 5.2.2 states that casual loadings are paid in addition to overtime rates but are not compounded by those rates. There are no penalty payments in the Agreement other than those factored into the annual salary and the question of whether the casual loading is or is not compounded by payments other than overtime payments in clause 5.2.2 does not otherwise arise. The only payment for which it is relevant that the casual loading is or is not all purpose, is the overtime payment in clause 5.2.2.

[19] Accordingly, there is an inconsistency in the provisions and employees may have assumed that the casual loading would be compounded by the overtime payment. The undertaking proposed by the Company is that clause 2.2.3 is amended to state that the casual loading is not all purpose and that such an undertaking would correct a typographical error. I do not agree. To resolve the inconsistency in the manner proposed by the Company, would mean that casual employees would not be receiving their casual loading as an all purpose payment for overtime, in circumstances where the only circumstance in which the all purpose nature of the payment is relevant. In these circumstances, I am, concerned that the undertaking that is proposed by Link Mining would not meet the requirements in s. 190(3)(a) in that it would result in financial detriment to casual employees.

[20] Apprentices and Trainees: The CFMEU also pointed to the fact that the Agreement contemplates employment of apprentices and trainees but does not provide classifications or wage rates for either category of employee. The CFMEU submitted that this meant that an assumption could be made that apprentices and trainees will not be paid and that this a detriment compared to the Award. Link Mining responded by offering an undertaking that the wages table in the Agreement will apply to apprentices and trainees so that they are required to be paid the full Agreement rates, which is a benefit compared to the rates in the Award. Subject to the views of the bargaining representatives, I am satisfied that the undertaking proposed by Link Mining will address the matter.

[21] Classification levels and translation to Award classifications: The CFMEU argues that the Agreement does not make it possible to sufficiently ascertain the skills required at each level and the differences between employee classifications. By contrast the Award provides clear and concise definitions of each classification, minimum wage rates for each level and actual skills required at each level. The CFMEU submits that as there is no ability to properly conduct a comparison of classifications in the Agreement with those in the Award, the Commission cannot be satisfied that the Agreement passes the BOOT.

[22] The Company submits that Annexure 1 of the Agreement shows the specific skills the employer requires employees to have in order to progress through the levels and that it is not necessary to list a group of skills that the employer will not want the employee to utilise. Further, the Company submits that the Agreement provides a sufficient amount of information to allow a comparison to be undertaken against the Award as all of the skills shown in the Agreement are mentioned in the Award classification section.

[23] I note that the salary structure in the Agreement and appended to the Form F17 filed by the employer does not (as required by the Form 17) identify how the classifications in the Agreement relate to the classifications in the reference instruments. However, I also note that the salaries for each classification level in the Agreement are significantly in excess of the award rates for all classification levels. I will require a proper translation of the classification levels in the Agreement against those in the Award if the Agreement is approved.

[24] The CFMEU further raised concern with Clause 2.5 which indicates that an employee will provide training to other employees. As this provision is not replicated in the Award, the CFMEU submitted that this vagueness raised a problem that informed consent and consequentially genuine agreement and the BOOT were not satisfied. The Company submits that the meaning of Clause 2.5 is very clear, in that the clause contemplates the normal on the job mentoring and assistance which would occur at the workplace. I accept the Company’s submission in relation to this matter and in my view the inclusion of such a provision is not a detriment for the purposes of the BOOT.

[25] Travel and accommodation: The CFMEU submit that Clause 2.7 regarding travel and accommodation provides in that employees must comply with the Company’s travel and accommodation policy. As there is no obligation for Link Mining to distribute the policy and as it provides a legal obligation, the provision is less beneficial when compared to the Award and raises a BOOT concern. The Company offered an undertaking that it will not apply this clause during the life of the Agreement.

[26] Reimbursement of training costs: The CFMEU further submits that Clause 2.8 – Reimbursement of training costs – provides that where an employee’s employment ends within 12 months of the completion of training, the employee will reimburse the Company on a sliding scale the cost of that training and that this is less beneficial than the Award, as no similar provision exists.

[27] The Company submits that there is nothing unusual regarding Clause 2.8 as it is in place to protect the employer’s interest. This is because of the high cost of training and the loss to the employer when an employee leaves employment after gaining a particular skill. I do not accept that this provision is a detriment in terms of the BOOT. However, if the Agreement is approved I will require an undertaking that any deduction from the wages of an employee will be consistent with the provisions in Division 2 Part 2-9 of the Act, and will accept such undertaking subject to the views of the bargaining representatives.

[28] Medical tests: The CFMEU submits that Clause 2.9 requiring an employee to attend a medical or other health professional at the Company’s discretion results in a BOOT issue as there is no similar provision in the Award. The Company argues that this clause does not disadvantage employees and seeks to look after the interests and health of employees. I do not accept that this clause is detrimental to employees for the purposes of the BOOT. However, given that it creates an obligation that is not found in the Award, I will require an undertaking that the Link Mining will not pursue a civil penalty for breach of the clause, if the Agreement is approved and will accept such undertaking subject to the views of the bargaining representatives.

[29] Hours of work: The CFMEU submits that employees, at the discretion of the employer, may be engaged to work shifts of up to 12.5 hours in duration. This is compared with the Award, which provides that employees will work no more than 10 hours per shift, without it being consented to by the majority of employees and the employer. The effect of this is that subject to agreement between the parties, overtime would be payable to employees under the Award for hours in excess of 10 per day, whereas the Agreement provides that employees can be paid at ordinary rates for hours in excess of 10 per day, amounting to a less beneficial provision under the Agreement when compared to the Award.

[30] I do not accept that this provision is detrimental to employees when compared to the Award. The Award provides for ordinary hours in excess of 10 per day to be worked by agreement between the employer and the employees concerned and the clause does no more than put such an agreement in place. In any event, the rates in the Agreement are sufficiently above those in the Award to compensate for any overtime that would be payable under the terms of the Award for a shift length that was not agreed for which was in excess of the maximum shift length under the Award.

[31] The CFMEU further submits that the terms of the Agreement relating to hours of work for day workers are contradictory. Clause 3.1.3 provides that ordinary hours of work for day workers will be 10 hours per day, with the ordinary hours worked between Monday to Sunday, 6am – 6pm. However, the Agreement subsequently states at Clause 3.2 that day workers will be required to work 10 hours per day Monday to Friday. This contradiction has the effect according to the CFMEU that an employee could not have given informed consent and accordingly, genuinely agreed to the Agreement.

[32] The Company’s response does not address the issue. There is an apparent contradiction in the terms of the Agreement with respect to the weekly spread of days when ordinary hours may be worked. The Award provides for work on any of the seven days of the week, but contains loadings for ordinary hours worked on Saturdays and Sundays. It is not clear whether the Agreement provides for day workers to work ordinary hours on Monday to Friday or Monday to Sunday. This is a matter about which I require clarification.

[33] The CFMEU contends that the Agreement allows for the Company to change day workers to work shift work from time to time at their discretion. However, the Award provides that where a day worker is switched to shift work, the employee will receive overtime rates for the first shift where the shifts will continue for at least three consecutive days and overtime for each shift where the shifts will not continue for at least three consecutive days. The CFMEU submit that this provision in the Agreement is less beneficial than when compared to under the Award.

[34] The Company submits that the reason all employees are on the same salary whether they work day or shift work is to allow employees to change from day work to shift work on minimal notice. As day workers are receiving the same salary as shift workers, in effect they are being paid as shift workers and will not be disadvantaged when asked to move to shift work to occasionally cover absences.

[35] Furthermore, the CFMEU submits that the shift definitions provided for in the Agreement are less beneficial than when compared to those provided for in the Award, especially when engaged in permanent night shift under the Award. It is also submitted that the Award is more beneficial when it comes to notice for change of shift, as the Award provides seven days’ notice when an employee’s place on the roster is changed and where that is not possible, overtime is paid from the time the shift has changed until seven days’ notice has expired – the Agreement provides no such entitlement.

[36] The Company submits in response that the Agreement shows the starting and finishing time of the shifts to be worked and further provides an employee who works night shift will receive shift allowance for doing so. The Company also submits that permanent night shift will not be worked. If the Agreement was approved I would require an undertaking that permanent night shift would not be worked on the basis that the salaries in the Agreement would not be sufficiently in excess of the Award to compensate for a permanent night shift penalty in addition to the other Award entitlements that are compensated for by the salary.

[37] Meal and rest breaks: The CFMEU submits that the Agreement at Clause 3.4 provides for one 30 minute meal break for a shift of up to 10.5 hours. The Award on the other hand provides for a meal break for each five hours of work. Further, the Agreement at Clause 3.4.3 contradicts itself by indicating that employees will not be forced to work more than five hours without receiving a meal break. Given the Agreement contradicts itself regarding meal breaks, the CFMEU argue that employees could not have genuinely agreed to the Agreement.

[38] The Company indicate that this is a typographical error and will provide an undertaking to the effect that employees will not be required to work more than five hours without receiving a meal break. That undertaking addresses this issue and subject to the views of the bargaining representatives will be accepted.

[39] The CFMEU claims that Clause 3.5 of the Agreement is less beneficial than when compared to the Award. The Agreement provides that an employee will receive a 10 hour rest period between shifts, but qualifies this by allowing employees to have a shorter rest period whilst having regard to health and safety arrangements. The Award however, provides a 10 hour rest period between shifts, and where an employee does not receive 10 hours, they are to be paid at double time until such time that the employee receives a 10 hour rest period.

[40] The Company argue that any disadvantage of the clause in the Agreement is compensated via the payment of higher base salaries. I accept that this is the case. Clause 3.5 of the Agreement provides that it will only be in exceptional circumstances that an employee does not have a ten hour break between shifts and in my view the salary payable under the Agreement compensates employees for the double time payment they would have otherwise received under the Award, in circumstances where they did not get the break.

[41] The CFMEU submits that Clause 4.6 – Abandonment of employment is less beneficial than the Award as it provides that should an employee be absent from work for a continuous period of three working days without employer consent, the Company may deem them to have abandoned employment. As there is no such provision provided in the Award, the CFMEU argue that this is less beneficial than the Award as it provides for an additional means of termination of employment.

[42] The Company indicate that this is purely procedural and does not in any way take any rights from the employees. I accept this submission and I am satisfied that this term does not derogate from rights employees may have with respect to unfair dismissal. I am also of the view that the clause is not detrimental to employees for the purposes of considering whether the Agreement passes the BOOT.

[43] With respect to Clause 6 – Annual leave, the CMFEU submits that annual leave accrual for day workers who work shift work is less beneficial than the Award. Further, in the event of a close down, the Company can direct employees by giving them four weeks’ notice to take annual leave, or where an employee has insufficient leave available, unpaid leave. The Award however provides that where an employee has insufficient leave available, they may elect to take leave in advance and on that basis, the Award is more beneficial than the Agreement.

[44] The Company submits that Clause 6.1.3 makes provision for any time a day worker is transferred to shift work they shall accrue additional annual leave whilst they are on shift work. The Award provides that employees can be directed to take annual leave with 28 days’ notice (clause 25.4(c)) and on that basis the Agreement is not detrimental to employees compared to the Award. I do not accept that the Award gives employees the right to “elect” to take leave in advance during an annual shutdown. Rather, clause 25.10 of the Award provides that leave in advance can be taken during an annual shutdown in accordance with clause 25.9 of the Award. The latter clause provides that leave in advance can only be taken by agreement between the employer and the employee. This matter is not a detriment to employees for the purposes of the BOOT.

[45] Public Holidays: The CFMEU submits that Clause 6.7.1 – Public Holidays provides that employees will receive public holidays as gazetted in Queensland. The CFMEU submits that the Company cannot provide for public holidays based on Queensland law to employees in States or Territories other than Queensland. The Agreement also does not appear to provide overtime to employees working on a public holiday, whereas the Award provides triple time for working on a public holiday.

[46] The Company has offered an undertaking that the Agreement will only apply in Queensland. Further, the Company submits that employees will not be working non-rostered overtime on public holidays and will provide an undertaking to this effect. I have dealt with the issue of the scope of the Agreement elsewhere in this Decision.

[47] Rates of Pay: Lastly, the CFMEU submits that whilst on face value, the rates of pay provided to employees under the Agreement appear above that provided to employees under the Award, there are numerous entitlements provided for in the Award that are not provided for in the Agreement, such as:

• Minimum payment of three hours when working overtime on a Saturday;



• Call back provisions of a minimum of four hours pay at the appropriate overtime rate;



• Allowances;



• Payment for working ordinary hours on a Saturday;



• Payment for working ordinary hours on a Sunday;



• Rostered days off; and



• Wage rates for apprentices and trainees

[48] The Company submits that it is not a requirement that all award terms and conditions be in the Agreement. All that is required is that the Agreement on the whole provides for more beneficial terms and conditions overall.

[49] Furthermore, the CFMEU acknowledge s. 190 of the Act allows the FWC, where it has identified a concern that the Agreement does not meet the requirements as set out in ss. 186 and 187 of the Act, it may then approve the Agreement if it is satisfied the undertakings meet the concerns held. The acceptance of undertakings is subject to it not causing any financial detriment to any employee covered by the Agreement and that it does not result in substantial changes to the Agreement as per s. 190(3) of the Act. The CFMEU submits that the Company, in addressing the numerous issues under the Agreement would be required to provide an extensive amount of undertakings which would well and truly result in substantial changes to the Agreement.

[50] The Company submits that the CFMEU has no right to appear and if any right is given, it should be restricted to submissions on the BOOT only. Further, taking into account the advantages of the Agreement as well as the proposed undertakings offered, the Agreement passes the BOOT and that the Agreement should be approved on the submissions provided.

2.3 Genuine agreement issues

[51] The CFMEU contends that there are a number of contradictory and confusing provisions in the Agreement and that as a result, employees could not have possibly given informed consent to the Agreement and as such could not have genuinely agreed to the Agreement. In summary, the CFMEU submits that the Company has not complied with s.180(5) of the Act which requires an explanation about the terms of the Agreement and that it follows that the Company has therefore not complied with s. 188(a)(i) and s. 186(2)(a) of the Act and the Commission must refuse to approve it. In support of this submission the CFMEU refers to a number of provisions of the Agreement which are said to be contradictory and confusing:

● Clause 2.2.4 which mischaracterises what should be an outer limits contract rather than fixed term employment. This clause is said to provide for an unconditional right of termination resulting in a situation, where again the employees could not have given informed consent and as such could not have genuinely agreed to the Agreement.

● Clause 2.2.5 - apprentices and trainees, which provides that these employees will be subject to the relevant Queensland legislation. The CFMEU submitted that as the coverage of the Agreement and its application is not restricted to Queensland, but Australia wide. This means that the Agreement purports to apply legislation confined to Queensland to other States and Territories where the Agreement also applies.

● Similarly, clause 6.7 provides that employees are entitled to public holidays recognised in Queensland or the region and the Agreement seeks to improperly apply Queensland specific public holidays to employees in other parts of Australia.

● Clause 2.2 provides for a probationary period of six months in accordance with ‘the Act’ and for that probationary period to be extended in certain situations. The CFMEU raises two issues of concern with this provision: first that it is not clear what ‘Act’ the provision is referring to, as it is not named; and second, that it is possible that the probationary period could extend beyond 12 months, where the employee would be eligible for two weeks’ notice of termination under the Act (assuming the Fair Work Act 2009 is the Act that is being referred to) where the Agreement only provides for a weeks’ notice of termination. This clause could also exclude a provision of the National Employment Standards and thereby be inconsistent with the Act.

● The Agreement does not contain clear classification definitions so that a proper comparison can be made to the Award and employees could not have genuinely agreed to the Agreement in these circumstances.

● Clause 5.2 – Overtime is confusing in nature and raised genuine agreement issues. The Agreement provides that a day worker who works in excess of 10 hours shall be paid at double time. This contradicts Clause 3.2 which states that the ordinary hours of a day worker are seven ordinary hours plus three hours rostered overtime. It is also said to contradict Clause 3.1.3 which provides that the hours of a day worker may be worked between 6am and 6pm, which provides for a total shift length of 12 hours.

[52] In response to these matters Link Mining submits that in relation to fixed term employees there are none employed at this stage and none voted on the Agreement. In relation to the assertion that it is attempting to apply Queensland legislation applicable to apprentices across Australia, Link Mining initially submitted that the Agreement applies only in Queensland and offered an undertaking to that effect.

[53] At the hearing in relation to the application for approval of the Agreement, I pointed out that clause 1.2 of the Agreement does not limit its operation to Queensland, and that this is inconsistent with the information set out in the Form F17 Employer Declaration in support of approval of the Agreement filed by Link Mining, which states that the Agreement only operates in Queensland. When I pointed out to the legal representative for Link Mining that an undertaking that changed the scope of the Agreement would bring about a substantial change and that such an undertaking would not be consistent with s. 190(3)(b) of the Act, it was submitted that the Agreement applied throughout Australia. An opportunity was provided for Link Mining to file further material in relation to the coverage of the Agreement and the explanation that was provided to employees about the coverage.

[54] A further written submission and statutory declaration was filed. It was submitted that there is nothing that prohibits an Agreement having a broad coverage from also having clauses that only apply to particular groups of employees. It was submitted that clause 2.2.5 of the Agreement which refers to apprentices and trainees should be interpreted such that these types of employees can only be engaged in Queensland. Thus clause 2.2.5 limits the geographical coverage for apprentices and trainees to Queensland and for any employee who is not an apprentice or a trainee, the Agreement has nation-wide coverage. It is also submitted that if there is any ambiguity in relation to the operation of the apprentice and trainee provisions being confined to Queensland, then an undertaking to that effect could be provided and would clarify an ambiguous provision of the Agreement “in accordance with the intention of the parties” consistent with the Full Bench Decision in CEPU v Main People Pty Ltd. 4

[55] In relation to public holidays, the Company submits that the use of the term “region” in clause 6.7 of the Agreement, means any region throughout Australia. Accordingly, employees under the Agreement are entitled to any of the public holidays listed in the table in clause 6.7 of the Agreement. It is further submitted that if the Commission believes that the clause is ambiguous then an undertaking can be provided that the term “region” in the clause means any region throughout Australia and that the clause applies to all public holidays in the region in which an employee may be working, without infringing the principles in Main People. Alternatively, as the relevant provision deals with an entitlement under the NES (s. 189 of the Act) an undertaking can be accepted that the provision of s. 189(1) will apply. 5

[56] An opportunity was given to Link Mining to provide further evidence about the explanation of the terms of the Agreement with respect to scope of coverage that was provided to employees. A second statutory declaration, made on 24 November 2016 was filed in which Mr John Davidson, Operations Manager of Link Mining declared:

“I made a Form F17 Statutory Declaration in relation to this matter on 7 October 2016

This is the first time I have ever been involved in seeking the approval of an Enterprise Bargaining Agreement. I had never completed a Form F17 Declaration before for this current application and I was unfamiliar with the document.

I have made an error in relation to 4.2 of the Form F17. When I completed clause 4.2, I ticked Queensland only as I had in mind that this was the only State in which the Company operates, its only employees work in Queensland and there is no intention in the foreseeable future for the Company’s operation to extend beyond Queensland.

I understand that the Agreement has coverage throughout all States and Territories. Accordingly, I acknowledge that I have made an error in clause 4.2 in the Form F17 and I wish to correct that factual error accordingly.

The Company only employs two employees both of which are based in Queensland. The terms of the Agreement were comprehensively explained to the employees. Now shown to me and marked “JD-1” is a true and correct copy of the meeting minutes.

The Company does not currently employee any apprentices or trainees nor did it employ and apprentices or trainees during the bargaining period of the Agreement.”

[57] The attached minutes of a meeting held with employees on 26 September 2016 makes no reference to the Agreement operating throughout Australia or to the effect of the scope and coverage clause being explained to employees at all. It also indicates that a vote would be held on 4 October 2016 and that the method of approval would be by “show of hands”.

[58] I do not accept that the fact that the Agreement contains some contradictory and confusing provisions about terms and conditions of employment is a basis in the present case for finding that the Agreement was not genuinely agreed. The majority of the BOOT issues referred to by the CFEMU in support of this contention are matters that could be resolved by undertakings. However, the issue of the coverage and scope of the Agreement is another matter entirely.

[59] In CEPU v Main People Pty Ltd 6a Full Bench of the Commission said:

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

[36] Further, it was with respect an incorrect approach to attempt to discern the parties’ common intention concerning the coverage of the Agreement from the statutory declarations supporting the application for approval of the Agreement rather than what was stated in the Agreement itself….

[37] The Agreement disclosed in plain terms an intention for it to apply well beyond work covered by the Metals Award. In those circumstances, there was no basis for a different intention to be discerned from the statutory declarations supporting the application.”

[60] The agreement that was considered in Main People was expressed to apply to all employees engaged in one of the classifications, in all of the States and Territories across Australia. The issue in relation to the coverage of the Agreement was that it contained classifications which encompassed a wide range of work across industries where awards other than the award nominated by the employer as relevant for the purposes of the BOOT and against which the BOOT was applied.

[61] In the present case, the coverage of the Agreement as set out in clause 1.2, does not refer to any geographic area. It is not limited to Queensland and neither is it expressed as applying to employees in other States or Territories. Other provisions of the Agreement suggest that its operation is limited to Queensland. Clause 6.7 Public Holidays, provides for recognition of public holidays “in Queensland or the region, for the purposes of this Agreement”. The argument of the representative for Link Mining, that the term “region” means any region in Australia, is indicative of convenience rather than intent on the part of the employer that the Agreement apply outside Queensland. That it was intended to be limited to Queensland is further indicated by the terms of clause 2.2.5 which refers to Queensland legislation with respect to the employment of apprentices and trainees.

[62] It is arguable that there is an ambiguity and that it is permissible to examine the statutory declaration completed by the employer and filed with the Agreement, in order to construe the terms of the Agreement. The Form F17 statutory declaration contains a declaration by the employer representative who executed it that the Agreement applies only in Queensland.

[63] However, for present purposes, even if I accept that the Agreement applies across Australia, there remains an issue as to whether it has been genuinely agreed. This is because by virtue of s. 180(5) the employer must take reasonable steps to ensure that the terms of the Agreement and the effect of those terms are explained to employees. By virtue of s. 186(2) (a) and s. 188(a)(i), this is a mandatory requirement and the Commission must not approve an agreement unless it is satisfied in relation to that requirement.

[64] On the basis of the Form 17 statutory declaration filed by Link Mining in support of the approval of the Agreement, I am unable to be satisfied that reasonable steps were taken to explain the terms of the Agreement and their effect. The Form F17 statutory declaration states that there were two employees covered by the Agreement at the point it was made. There is no evidence of any explanation to those employees about the fact that they were being asked to approve an Agreement that would apply to all future employees employed throughout Australia. Given the fact that the deponent of the Form F17 stated that the Agreement only applied in Queensland, it is not surprising that no explanation was provided.

[65] It is also probable that given the terms of the Agreement referring to Queensland legislation with respect to apprentices and trainees and public holidays, and the fact that they were employed in Queensland, those employees would have believed that the Agreement only operated in Queensland. As previously noted, the scope of coverage of an enterprise Agreement is a significant matter, and it is to be expected that two employees in Queensland who are requested to approve an agreement with somewhat contradictory terms about coverage, would be given an explanation about the fact that they were actually approving an agreement that would apply across Australia to employees who were not yet employed.

[66] The supplementary statutory declaration dated 24 November 2016 filed by the employer does not assist. The declaration does not indicate what, if any, explanation was provided to the employees who voted to approve the Agreement about its scope and coverage. The attached minutes provide no information about such an explanation being provided to employees.

[67] It is not fatal to the approval of an enterprise Agreement that it is proposed to cover a small number of employees. However, the number of employees proposed to be covered is a relevant consideration in deciding whether the Agreement was genuinely approved. In the present case, the minutes of the meeting give me further cause for concern in relation to the manner in which employees were requested to approve the Agreement. I have significant reservations about two employees being asked to approve an agreement by show of hands. Presumably a manager of Link Mining was present for this event and counted the hands. Unsurprisingly, it is declared in the Form F17 that both employees voted to approve the Agreement. I can only wonder at what would have occurred if one or both of the said employees did not raise their hand. In the present case, it is not necessary to consider this further given my view that the employer did not take reasonable steps to explain the terms of the Agreement and their effect to the employees who were being asked to approve it.

3. CONCLUSIONS

[68] In relation to the provision of application documents to the CFMEU in the present case, I maintain the position that such documents should not be provided to a Union that is not a bargaining representative for the Agreement. I accept that the CFMEU has an interest in maintaining the standard of enterprise agreements in the mining industry and that it is the role of the Union to protect the interests of its members who enjoy conditions in excess of the minimum award standards or in excess of some agreements that are approved by the Commission. I respect the right of the CFMEU to vigorously defend the interests of its members by seeking to maintain the standards in agreements in the coal mining industry.

[69] However, the interest of the CFMEU in this regard does not give the Union the right to be heard in relation to the approval of an enterprise agreement in circumstances where the Union is not a bargaining representative for the Agreement. A Union which is not a bargaining representative for an agreement has no standing in that capacity to be heard in relation to approval of an enterprise agreement. 7 The CFMEU cannot obtain such standing by asserting that its rights, interests or legitimate expectation will be affected by the approval of an agreement. However, in deciding whether to approve an enterprise agreement, the Commission may inform itself in relation to any matter in such manner as it considers appropriate: s. 590(1). The ways in which the Commission may inform itself include by inviting, subject to any terms and conditions determined by the Commission, oral or written submissions.

[70] I can see no basis for the CFMEU to be given the application documents in circumstances where it is not a bargaining representative, and I remain unpersuaded by the arguments advanced in this regard. The CFMEU does not require the application documents in order to make submissions about whether the Agreement passes the BOOT. The agreement itself is posted on the Commission’s website and contains all of the information that the CFMEU requires to advance an argument about whether it passes the BOOT. There is no denial of procedural fairness in the refusal to provide the application documents to the CFMEU.

[71] I do not accept that the CFMEU has any standing or legitimate interest in arguing that employees it does not represent, have not genuinely approved an agreement. I do not accept that the CFMEU should be provided with the names and address of employee bargaining representatives in circumstances where the Union is not a bargaining representative. In circumstances of the present case where the CFMEU is not or was not a bargaining representative for the Agreement, the question of whether those employees covered by the Agreement have or have not genuinely agreed to it, is a matter for the Commission. Accordingly, there is no basis for giving the CFMEU the opportunity to undertake a forensic examination of application documents in an endeavour to establish lack of genuine agreement. 8 The question of whether the application documentation will be provided to a Union seeking to be heard in relation to the approval of an Agreement is a matter for the member dealing with the particular application.

[72] In the present case, I granted the CFMEU permission to be heard in relation to whether the Agreement passes the BOOT and have considered the submissions made by the Union. I did so because I considered it appropriate to hear from the Union in relation to this matter because of its expertise in relation to the Black Coal Mining Industry Award and because there would not otherwise be a contradictor in relation to an Agreement which was approved by two employees, and which I also consider may have provisions which could cause it to fail the BOOT.

[73] After considering the material filed by Link Mining and the submissions of the CFMEU, and undertaking my own analysis of whether the Agreement passes the BOOT, I am satisfied that the majority of the BOOT issues identified above are matters which could properly be addressed by undertakings. I am also satisfied that those undertakings, subject to the views of the bargaining representatives being sought, could be accepted by the Commission on the basis that they would not cause a significant change to the Agreement. However, I am not satisfied that undertakings could be accepted in relation to all matters of concern in relation to whether the Agreement passes the BOOT.

[74] In relation to the undertaking proposed by Link Mining to clarify the issue with respect to whether casual loading is all purpose, for the reasons set out above, I would not accept such an undertaking. The Agreement states at clause 2.2.3 that the casual loading is all purpose. The terms of the Agreement dealing with casual loading are ambiguous and the ambiguity should not be resolved by an undertaking that is detrimental to employees.

[75] However, for the reasons set out above, I am not satisfied that the Agreement has been genuinely agreed and accordingly I must refuse to approve it. I dismiss the application for approval in AG2016/6275 and an Order to that effect will issue with this Decision.

DEPUTY PRESIDENT

Appearances:

Mr C. Mossman of Macpherson Kelly Lawyers for the Company

Mr A. Thomas on behalf of the CFMEU

Hearing details:

2016.

23 November.

 1 Submissions of the CMFEU dated 28 October 2016 at para [5].

 2   Ibid at paras [8] and [11].

 3   Ibid at paras [21] to [23].

 4   [2015] FWCFB 4467 at [34].

 5   Armacell Australia Pty Ltd (2010) 202 IR 38.

 6   [2015] FWCFB 4467 at [34].

 7   Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Limited [2014] FWCFB 7940 at [26].

 8   See the Decision of Commissioner Riordan in Broadspectrum (Australia) Pty Ltd T/A Broadspectrum [2016] FWC 7936.

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