MACA Mining Pty Ltd T/A Maca Mining
[2019] FWCA 1761
•19 MARCH 2019
[2019] FWCA 1761
The attached document replaces the document previously issued with the above code on 19 March 2019.
This Agreement has been amended by updated the Agreement title in preamble.
Associate to Commissioner Wilson
Dated 19 March 2019
| [2019] FWCA 1761 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
MACA Mining Pty Ltd T/A Maca Mining
(AG2018/6234)
MACA MINING PTY LTD BLUFF COAL MINE ENTERPRISE AGREEMENT 2018
Coal industry | |
COMMISSIONER WILSON | MELBOURNE, 19 MARCH 2019 |
Application for approval of the MACA Mining Pty Ltd Bluff Coal Mine Enterprise Agreement 2018.
[1] This decision concerns an application by MACA Mining Pty Ltd T/A Maca Mining (MACA) for approval by the Fair Work Commission (the Commission) pursuant to s.185 of the Fair Work Act 2009 (the Act) of the MACA Mining Pty Ltd Bluff Coal Mine Enterprise Agreement 2018 (the Agreement).
[2] While MACA propose that the application is capable of approval, the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) argue that the Agreement is incapable of approval for several reasons. It is argued by the CFMMEU that the terms of the Agreement were not explained to employees adequately to allow for genuine agreement; that a majority of employees who voted for the Agreement did not vote to approve the Agreement given that some employees who voted will not be covered by the Agreement; and that the Agreement was not genuinely agreed to as MACA has employed approximately 100 production workers subsequent to lodging the Agreement for approval.
[3] MACA argued that the CFMMEU has no right to be heard before the Commission on the subject since they are not a bargaining agent.
[4] After considering the matters in question, I initially granted the CFMMEU the right to make submissions on the matter of the better off overall test (BOOT), taking into account the union’s knowledge of the black coal mining industry and the likely utility of submissions on the subject. Despite giving the CFMMEU such opportunity, its written submissions on the matter of the BOOT disclosed that the union “does not wish to raise any issues in respect of the Better Off Overall Test (BOOT), beyond the clarification already sought by the Commissioner”.
[5] While putting forward that submission, the main body of the union’s submissions dealt with other matters, for which permission for submissions had not been granted. In particular, and relevant to the matter of genuine agreement, it submitted that it believed eight people had voted in the ballot for the Agreement, of whom three “are staff and one of those is employed in an administrative role”. It also contended that it believed “since the application for approval of the Agreement was made, around 100 production workers have been engaged by the employer, all of whom will be covered by the Agreement”. No evidence of these assertions has been put to the Commission by the CFMMEU.
[6] After receiving this submission, the Commission encouraged the Applicant to file such evidence in relation to the CFMMEU’s assertions as it wished to provide on those matters, which it did on Tuesday, 12 February 2019.
[7] As part of those submissions MACA submitted that five production and maintenance employees voted for approval of the Agreement, all of which were eligible, denying that eight people voted and that any employees voted who were not eligible to do so. MACA also confirmed that currently they employ 144 employees who will be covered by the Agreement.
[8] Because of these disputed matters the application was set down for hearing on 7 March 2019 and both MACA and the CFMMEU were afforded a further opportunity to provide additional evidence to the hearing, as well as to make submissions on the matters in dispute. In the case of the CFMMEU they remained constrained to evidence and submissions relating to the matters of the BOOT and the limited engagement granted by me in relation to the question of whether the Agreement had been genuinely agreed.
[9] Mr Andrew Herbert of Counsel, instructed by Mr Michael Moy and Ms Jessica Rose of McCulloch Robertson appeared for MACA after being granted permission by me for the Applicant to be represented by lawyers pursuant to s.596 of the Act, with me being satisfied that legal representation would enable the matter to be dealt with more efficiently taking into account the complexity of the matter (s.596(2)(a)). Ms Eliza Sarlos a National Legal Officer appeared for the CFMMEU.
[10] I deal now with each objection raised by the CFMMEU in turn.
EXPLANATION OF TERMS OF THE AGREEMENT
[11] In subdiv B, which deals with the Fair Work Commission’s approval of enterprise agreements, s.186 sets forth what it describes as the “general requirements” to be satisfied where the Commission is called upon to approve an agreement. That section provides in part as follows:
“When the FWC must approve an enterprise agreement—general requirements
Basic rule
(1) If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.
Requirements relating to the safety net etc.
(2) The FWC must be satisfied that:
(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; and
(b) if the agreement is a multi-enterprise agreement:
(i) the agreement has been genuinely agreed to by each employer covered by the agreement; and
(ii) no person coerced, or threatened to coerce, any of the employers to make the agreement; and
(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and
(d) the agreement passes the better off overall test.
The phrase “genuinely agreed” as employed in s 186(2)(a) is defined in s 188.”
[1] Section 188 sets forth provisions as to when employees have “genuinely agreed” to an enterprise agreement. That section provides as follows:
“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
(a) 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
(b) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.
[1] Subsections 180(5) and 180(6) are part of the “pre-approval steps” set forth in subdiv A of Div 4 to Pt 2-4 and relevantly state:
“Terms of the agreement must be explained to employees etc.
(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.
(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:
(a) employees from culturally and linguistically diverse backgrounds;
(b) young employees;
(c) employees who did not have a bargaining representative for the agreement.
[2] As part of their originating application, MACA provided a Form F17 Statutory Declaration in support of the application with the following answers going to the steps taken to explain the terms of the Agreement and their effect to employees:
“2.6 What steps were taken by the employer to explain the terms of the agreement, and
the effect of those terms, to the relevant employees?
An email describing in detail each clause of the Agreement and each relevant clause of the incorporated Award was sent to all employees covered by the Agreement on 23 October 2018. A copy of an example of that email is attached to this form.
On 24 October, Monika Eames, HR Consultant- Bluff for MACA, telephoned each employee covered by the Agreement and read out the email description of each clause of the Agreement. She asked them whether they had any questions about the terms or their effect.
2.7 When you explained the terms of the agreement to the employees, what did you do to take into account the particular circumstances and needs of the relevant employees?
All employees covered by the Agreement could speak, read and write English.”
[3] MACA also provided the email referred to in their answer at Q2.6 explaining the terms of the Agreement to employees which was sent to employees on 23 October 2018 and provides as follows:
“Dear All
Following on from my recent email containing the MACA Mining Pty Ltd Bluff Coal Mine Enterprise Agreement 2018 (Agreement), the Black Coal Mining Industry Award 2010 and notification that the vote to approve the Agreement will take place on 1st November 2018, MACA Mining Pty Ltd (MACA) is required to explain the terms of the Agreement and their effect on you.
Explanation of terms of MACA Mining Pty Ltd Bluff Coal Mine Enterprise Agreement 2018
1 Clause 1 is the title of the Agreement – the ‘MACA Mining Pty Ltd Bluff Coal Mine Enterprise Agreement 2018’.
2 Clause 2 defines a number of terms used in the Agreement.
3 Clause 3 explains that the parties to the Agreement are your employer, MACA Mining Pty Ltd, and its employees who are employed by MACA Mining Pty Ltd in any classification in Schedule A of the Agreement who are engaged to work at, or in connection with, the Bluff Coal Mine Project. It then explains that the Agreement must be read and interpreted as incorporating the terms of the Black Coal Mining Industry Award 2010 (Black Coal Award), provided that where there is any inconsistency between the Agreement and the Black Coal Award, the Agreement shall take precedence to the extent of the inconsistency. That means that if the Black Coal Award contains a term that is inconsistent with a term in the Agreement, the term in the Agreement will take precedence.
Explanation of the Black Coal Award terms that are incorporated into the Agreement:
(a) Clause 3 defines a number of terms that are used in the Black Coal Award.
(b) Clause 4 explains who the Black Coal Award covers. It explains that the Black Coal Award covers coal mining employees and their employers and defines coal mining employees to include:
(i) employees who are employed in the black coal mining industry by an employer engaged in the black coal mining industry, whose duties are directly connected with the day to day operation of a black coal mine and who are employed in a classification or class of work in Schedule A—Production and Engineering Employees or Schedule B—Staff Employees of this award;
(ii) employees who are employed in the black coal mining industry, whose duties are carried out at or about a place where black coal is mined and are directly connected with the day to day operation of a black coal mine and who are employed in a classification or class of work in Schedule A—Production and Engineering Employees or Schedule B—Staff Employees of this award; and
(iii) and employees employed by a mines rescue service.
We have explained the classification structure of the Black Coal Award below.
(a) Clause 10 explains that employees can be employed on a full-time, part-time or for staff employees (which this Agreement does not cover), casual basis. The clause then sets out distinguishing features of each type of employee. For instance, a full-time employee is an employee whose average ordinary hours of work will be 35 hours per week and a part-time employee is an employee that works less than 35 hours per week, has reasonable predictable hours work and who receives, on pro-rata basis, equivalent pay and conditions to those of full-time employees who do the same type of work. It also explains that because casual employees do not receive leave entitlements, casual employees, for working ordinary hours, will be paid 1/35th of the appropriate weekly rate, plus 25%. Casual employees must also receive a minimum four hours payment for each engagement.
(b) Clause 12 explains that you must perform the work reasonably required of you by MACA Mining and undertake training that MACA Mining reasonably requires. If you refuse to do either of those things, you are not entitled to payment for the period. It also states that MACA Mining may direct you to carry out any duties within your skills, competence and training, consistent with your classification, provided such duties are not designed to promote deskilling and provided that the duties are within safe working practices and statutory requirements.
(c) Clause 13 explains that MACA Mining will provide you with notice of termination in accordance with the National Employment Standards (NES). The NES are set out in the Fair Work Act 2009 (Cth). It explains that you will not be entitled to notice of termination if you are dismissed for serious misconduct. Under this clause, you are required to provide MACA Mining with one week’s notice of termination if you resign. The clause also sets out the payments that will be paid to you on termination of your employment and the minimum amount of notice of termination that must be provided to you in the case of your position being made redundant.
(d) Clause 14 sets out the circumstances where you will be entitled to redundancy pay. The clause also explains your entitlement to redundancy pay - you are entitled to one ordinary week’s pay for each completed year of employment. The clause also explains specified circumstances where you are entitled to retrenchment pay in addition to redundancy pay. The amount of retrenchment pay you are entitled to is (like redundancy pay) dependent on your length of service. The clause also explains that you will not be entitled to severance or retrenchment payment in circumstances where MACA Mining obtains, or causes to be made available, alternative work for you that satisfies the criteria listed in clause 14.5 of the Black Coal Award. The clause also explains that it is open to MACA Mining to make an application for the Fair Work Commission to be granted relief from the obligation to pay retrenchment pay.
(e) Clause 16 explains that the minimum wages and allowances provided for in the Black Coal Award are set out in Schedule A and Schedule B of the Black Coal Award. It explains that, under the Black Coal Award, you would be paid at the highest rate for the whole shift where you perform mixed functions that fall within different classifications. It explains that you will be paid weekly by electronic fund transfer or cheque unless agreed otherwise by MACA Mining and a majority of the employees. You will not be paid if you are absent from work unless paid absence is agreed to by MACA Mining or permitted by the Black Coal Award or the law. The clause also explains that MACA Mining and yourself may agree to a salary sacrifice arrangement.
(f) Clause 17 sets out when you will be entitled to overtime and the rate of pay for overtime. For example, the clause provides that on Sunday an employee is entitled to double time. The clause explains that if an employee gets called in to work overtime on a Saturday or a Sunday then the employee must be paid for at least three hours. It explains that MACA Mining may require that you work reasonable additional hours in addition to your rostered hours. The clause provides for a ‘rest period’ after working overtime and sets out conditions that will apply when an employee does not get the specified ‘rest period’. It also provides that an employees will receive a call-back payment when the employee is recalled to work overtime after leaving the mine. It sets out the call-back payment amount and circumstances where the employee will not be entitled to the call-back payment. The clause then sets out your meal break entitlement during non-rostered overtime. Under this clause, it is open to the employer and employee to agree in writing that the employee take time off instead of being paid for a particular amount of overtime worked. The clause then sets out a number of conditions for taking time off instead of being paid for overtime worked, for example, how it is to be paid and when it must be taken.
(g) Clause 18 provides for accident pay. Accident pay is an entitlement for employees who are receiving workers’ compensation payments to receive top-up payments for 78 weeks (first 39 weeks at a higher rate than the second 39 weeks).
(h) Clause 19 explains that the Allowances are set out in Schedule A and Schedule B of the Black Coal Award and explains how the expense allowances will be adjusted based on the applicable consumer price index.
(i) Clause 21 explains that your ordinary hours of work will be 35 hours per week which will be averaged over the roster cycle. It then sets out the applicable rates for Monday to Friday, Saturday and Sunday work. For example, employees are entitled to time and a half for the first four hours on Saturday when those hours are ordinary hours.
(l) Clause 22 is the shiftwork clause. It sets out the definitions of the different types of shifts - afternoon shift, night shift and permanent night shift. For example, night shift means any shift, the ordinary hours of which finish after midnight and at or before 8.00am. The definition of permanent night shift employees includes an employee who stays on night shift for a longer period than four consecutive weeks. The clause then sets out the shift rate for each type of shift. For example, a permanent night shift worker working ordinary hours will receive 125% of the ordinary time rate.
(m) Clause 23 is the rostering clause. Under this clause, MACA Mining is able to determine the type of rosters to be worked and the start and finish times (within specified limits). For example, the shift length can be set by MACA Mining so long as ordinary hours do not exceed 10 hours. It explains the circumstances where rosters can be changed by the employer. The clause sets out the conditions around RDOs, for example, what happens if you are required to work on an RDO, payment for working on a RDO and when and how an RDO may be moved to another day.
(n) Clause 24 – This clause explains that you are entitled to a meal break of 30 minutes without deduction from pay for each five hours works during rostered hours. It explains that if there is an agreement between yourself and MACA Mining, you may work for more than 5 hours without a break, and if this occurs you will, unless otherwise agreed, be paid for any work beyond five hours at the applicable overtime rates until a meal break is taken.
(o) Clause 25 – This clause sets out your entitlements to annual leave. It explains that in addition to your annual leave entitlements provided for in the NES you are also entitled to additional annual leave under this clause. Under this clause, your total entitlement to annual leave pursuant to the NES and the Black Coal Award is a cumulative total of 5 weeks’ annual leave (six weeks for an employee on a specific roster set out at clause 25.2(b)). The clause explains how annual leave accrues, when it can be taken, the amount of annual leave to be taken at a time and when annual leave can be taken in advance of its accrual and the taking of annual leave during a shutdown. The clause also explains that you are able to cash out annual leave if done so in accordance with clause 25.11 of the Black Coal Award. For example, one condition of cashing out is that must not result in your remaining accrued entitlement to paid annual leave being less than 4 weeks.
(p) Clause 26 – This clause sets out your entitlements to personal/carer’s leave. It explains that in addition to your personal/carer’s leave entitlements provided in the NES, you have additional entitlements to personal/carer’s leave under this clause. It explains that a full-time employee is entitled to 105 ordinary hours of personal/carer’s leave (which is inclusive of the NES entitlement) and that personal/carer’s leave that is not taken will accumulate without limitation. The clause then explains the evidence required for taking personal/carer’s leave.
(q) Clause 27 – This clause sets out that your entitlements to Public Holidays is provided for in Division 10 of the NES. It explains how you will be paid on public holidays when you are not required to work and how you will be paid when you are required to work. For instance, if you are required to work a public holiday you are entitled to be paid at a rate of double time for work performed during ordinary hours. If you are required to work outside ordinary hours on a public holiday, you are entitled to treble time. This clause requires that MACA Mining (on a date agreed) nominate which public holidays will be worked in the following 12 months by employees (other than employees working shifts of up to 8.5 ordinary hours on weekdays, who, other than in exceptional circumstances, will not be required to work on public holidays), provided that work will not be carried out on two such holidays.
(r) Schedule A – Production and Engineering Employees:
(i) This schedule sets out the classification structure for production and engineering employees. It sets out the different classification levels and the type of work completed by employees under each level. Your classification level will determine the minimum weekly wage payable to you under the Black Coal Award. For example, classification levels include ‘Mineworker – Induction Level 1’ at the most junior level and ‘Mineworker – Specialised’ for the most senior mineworker employees. The Schedule also sets out how you advance through the levels. The Schedule then sets out the minimum weekly wage payable for each classification level. For instance, a ‘Mineworker –Advanced minimum weekly wage (based on a basic weekly 35 hour rate) is $931.60. The Schedule also details the types of advancement competencies that are indicative for both open cut and underground mines. Schedule A also sets out the weekly minimum wage that apprentices will receive under the Black Coal Award. The minimum weekly wage for apprentices will depend on their classification level. An apprentice’s weekly wage is a specified percentage of the weekly wage that a non-apprentice mineworker receives at their level. An apprentice’s minimum weekly wage will also depend on the year of their apprenticeship and whether they are classified as an adult apprentice or an ‘apprentice other than adult apprentices’. It also sets out the minimum weekly wages for juniors (employees aged between 15 and 18 years).
(ii) This schedule also sets out the allowances payable to employees that fall within the classification levels of this Schedule and provides a description of each allowance. The allowances are:
Wage related allowances and reimbursements
(A) Washery Allowance;
(B) Water money;
(C) Shaft work (Electrical / Mechanical);
(D) Dirty work;
(E) Confined spaces allowances (Electrical / Mechanical);
(F) Height money (Electrical / Mechanical);
(G) First Aid Officer allowance (does not apply to employees employed under the open cut or underground work models);
(H) First Aid Attendant allowance (does not apply to employees employed under the open cut or underground work models);
(I) Boom Welding allowance (does not apply to employees employed under the open cut work model);
(J) Underground allowance (Electrical/ Mechanical);
(K) Additional shift allowance—Open cut employees;
(L) Working clothes and safety boots;
(M) Damage to clothing and tools (Electrical/ Mechanical);
(N) Transport;
Expense related allowances
(O) Tool allowance; and
(P) Meal allowance.
(s) Schedule B – Staff Employees:
(i) This schedule sets out the minimum weekly wages for employees that are covered by the Black Coal Award but are employed in white-collar work. The Schedule defines the types of roles that fall under this schedule, for example, Mine surveyor, Production Supervisor, Chemist and Paymaster. It also sets out the minimum weekly wages for juniors and graduates.
(i) This schedule also sets out the Allowances that apply to employees that fall within the classification levels of Schedule B and provides a description of each Allowance:
Wage related allowances and reimbursements
(A) First Aid Officer allowance;
(B) First Aid Attendant allowance;
(C) Working clothes and safety boots;
(D) Transport; and
Expense related allowances
(E) Meal.
(t) Schedule C sets out the Transitional Provisions of the Black Coal Award.
1 Clause 4 of the MACA Mining Pty Ltd Bluff Coal Mine Enterprise Agreement explains that the Agreement shall operate on and from the day that is seven days after the Agreement is approved by the Fair Work Commission until the nominal expiry date (that is, the date that is four years after the date the Agreement is approved by the Fair Work Commission). It then says that the Agreement shall remain in force until it is terminated or replaced. This means that, after the nominal expiry date, the Agreement will remain in force until it is terminated or replaced by a new enterprise agreement.
2 Clause 5 provides that the ordinary hours of work for full-time employees is 35 hours per week, averaged over a roster cycle.
3 Clause 6 explains that rosters can be determined by the Company, within the conditions of that clause. Those include that the ordinary hours in a shift cannot exceed 10, unless agreed between the company and a majority of affected employees. The clause provides that the Company may vary the number and spread of ordinary shifts. It provides that your place on a roster will not be changed unless you are given one week’s notice of any change (failing which, you must be paid at overtime rates for all work from the time of the change of shift until the week’s notice would have expired).
4 Clause 7 sets out that the minimum rates of pay are in Schedule A. Schedule A sets out the Minimum Base Hourly Rates for both Production and Maintenance employees, including the Minimum Base Rate for employees working a 7 days; 7 off; 7 nights; 7 off roster, which includes the 15% shift penalty for all shifts worked on that roster. It also include the rules for advancement through the classifications and a Trainer/Assessor Allowance which is paid while performing such duties.
5 Clause 8 explains that the overtime and penalty rates from the Black Coal Award will be paid to you.
6 Clause 9 is the superannuation clause. It requires MACA Mining Pty Ltd to make superannuation contributions on your behalf into a complying superannuation fund nominated by the Employee. If an Employee does not choose a superannuation fund, the Company will make contributions into a ‘MySuper’ compliant default fund nominated by the Company. That fund may be altered by MACA Mining Pty Ltd. The clause says that contributions to other funds will only be by agreement between you and MACA Mining Pty Ltd. This clause clarifies that ‘ordinary hours’ (for superannuation purposes only) are the rostered hours. As such, superannuation contributions will be calculated on the basis of rostered hours, rather than the base 35 hours per week, which are the ordinary hours for all other purposes.
7 Clause 10 is the model flexibility term from the Fair Work Regulations. The term allows MACA Mining Pty Ltd and an individual employee to agree to vary the effect of certain terms and conditions of the Award to the benefit of the employee. For instance, the employee and the employer could agree to vary the effect of the overtime clause such that the employee will receive a lesser rate for overtime than they would under the Award, in exchange for a higher base hourly rate than the Award.
8 Clause 11 is the dispute resolution procedure which explains that disputes about any matters arising under the Agreement and in relation to the National Employment Standards must be handled according to the procedure outlined in the clause. If the dispute is not resolved at the conclusion of the procedure, either party can refer the dispute to the Fair Work Commission for arbitration.
9 Clause 12 is the model consultation term in the Fair Work Regulations is taken to be a term of this Agreement. The term requires MACA Mining Pty Ltd to consult with you about decisions to introduce a major change to production, program, organisation, structure or technology in relation to its enterprise that is likely to have a significant effect on the employees, or if it proposes to introduce a change to your regular roster or ordinary hours of work. The term explains that you can appoint a representative for the purposes of such consultation.
10 Clause 13 allows employees to cash out personal/carer’s leave subject to the following conditions:
(a) Personal/carer’s leave must not be cashed out if the cashing out would result in your remaining accrued entitlements to personal/carer’s leave being less than 210 hours;
(b) Each cashing out of a particular amount of personal/carer’s leave must be by a separate agreement in writing between us and you; and
(c) You must be paid at the Minimum Base Rate noted in Schedule A for each cashed out hour.
14 Clause 14 explains that you will not, during the term of this Agreement, pursue any further claims about any matter which pertains to the employment relationship.
If you have any queries about any aspect of the Agreement, or you are unclear on what any term means or its effect on you will be, you should call me on [phone number removed).
Regards,”
(hyperlinks omitted)
[1] The CFMMEU submit that the email sent to employees only “recites and paraphrases the terms of the documents, on some occasions providing a brief explanation” that ‘it does little to explain their effect.” 1 Moreover, it puts forth that no evidence was provided to correct mistakes made in the email; explain how the terms of the Agreement would interact with each other, or the Black Coal Mining industry Award (the Award) being the relevant Award; nor does it address terms provided for in the Award which are incorporated into the Agreement.2
[2] The CFMMEU also put forth that there was no evidence provided by MACA that there were any further explanations provided by the HR Consultant who sent the email to employees nor any evidence of engagement with employees to discuss the terms further after the email was sent.
[3] In Diamond Offshore General Company 3the Full Bench discussed the principles of genuine Agreement raised in Flick J’s OneKey decision and the Full Courts’ subsequent appeal stating:
“[22] In Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd 4 the Federal Court (Flick J) observed thatthe nature of the task of the Commission under s. 180(5) of the FW Act and other terms requiring its satisfaction or otherwise about a state of affairs is to make a broadly-based value judgment.5 On appeal from that decision,6 the Full Court of the Federal Court held that the matters in s. 180(5) were matters to which the employer was required to attend but were not jurisdictional facts for the purpose of the exercise of the Commission’s approval powers. The Full Court went on to hold that a condition precedent to the exercise by the Commission of its jurisdiction under s. 186 to approve an enterprise agreement was its satisfaction that the employer had complied, among other things, with s. 180(5). The Full Court determined that satisfaction as to whether s. 180(5) had been complied with involved an evaluative judgment as to whether “reasonable steps” were taken by the employer. The Full Court went on to state:
“112 It is common ground that the Commission was never told what was said to the relevant employees. It was simply told that they had been given an explanation of the terms of the Agreement and the effect of those terms. In effect, this amounted to little more than a self-serving statement that the employer had complied with its obligation under the Act. OKW contended that the fact that it made such a statement in a statutory declaration was significant. It is not. As the CFMEU argued, whether all reasonable steps were taken to ensure that the effect of the terms of the Agreement was explained in an appropriate manner is a question of substance, not form. The recital of a conclusion on the very question the Commission was required (through an evaluative process) to determine is not, without more, a sufficient basis for the satisfaction of the statutory test. In other words, a bare statement by an employer that an explanation has been given is an inadequate foundation upon which to reach a state of satisfaction. OKW submitted that if the Commission had erred in this respect, it was an error in fact finding or an error in process, which would be an error within its jurisdiction. We reject this submission. In order to reach the requisite state of satisfaction that s 180(5) had been complied with, the Commission was required to consider the content of the explanation and the terms in which it was conveyed, having regard to all the circumstances and needs of the employees and the nature of the changes made by the Agreement. It is true that the Act does not expressly say that. But the question of whether an administrative decision-maker is required to consider a matter is not determined only by the express words of the Act; it may also be determined by implication from the subject-matter, scope and purpose of the Act: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39–44 (Mason J).
113 A consideration of the subject-matter, scope and purpose of the relevant provisions of the Fair Work Act indicates that the content of the explanation and the terms in which it was conveyed were relevant considerations to which the Commission was bound to have regard. The absence of that information meant that the Commission was not in a position to form the requisite state of satisfaction. Put differently, without knowing the content of the explanation, it was not open to the Commission to be satisfied that all reasonable steps had been taken to ensure that the terms and their effect had been explained to the employees who voted on the Agreement or that they had genuinely agreed to the Agreement.
114 The following considerations point inexorably to that conclusion.
115 The Commission was required to be satisfied that OKW had taken “all reasonable steps to ensure” that both the terms and the effect of the terms had been explained to the relevant employees as an element in the inquiry as to whether “genuine” agreement had been obtained from them. The agreed purpose of the obligation imposed on employers by s 180(5) is to enable the relevant employees to cast an informed vote: to know what it is they are being asked to agree to and to enable them to understand how wages and working conditions might be affected by voting in favour of the agreement.
116 In order for the employer to comply with the obligation it must take into account the particular circumstances and needs of those employees, including their cultural and linguistic backgrounds, their youth, and the absence of a bargaining representative. That is made explicit in s 180(6). How could the Commission decide whether the steps the employer had taken were “all reasonable steps” unless it knew what the employees had been told before they cast their votes? Without knowing the terms in which the explanation had been conveyed how could the Commission form an opinion on the sufficiency of the explanation, particularly having regard to the considerations mentioned in s 180(6)? Ultimately, how could the Commission decide that a genuine agreement had been reached without having evidence upon which it could answer both these questions?”
(references from original)
[4] The evidence before the Commission is that the Agreement is relatively short in length spanning 10 pages only with 15 clauses and one Schedule covering production and maintenance workers who work at the Bluff Coal Mine Project in Queensland. The Award is incorporated at clause 3.2 and at the time that the Agreement was voted on only five employees were employed who would be covered by the Agreement. The email provided by MACA was sent to all five employees on Tuesday, 23 October 2018 nine days prior to the commencement of the vote on 1 November 2018. The explanation provided to employees while not required, does address each clause of the Agreement. 7 While each clause is not necessarily explained in depth, each clause is identified relative to the information it provides. For example, short clauses with a small amount of information or relatively non-complex information have short explanations, while longer more complex clauses provide a more extensive explanation. Employees were also provided with a contact within the organisation should they have any further queries regarding the terms of the Agreement. The Form F17 provided indicates that all five of these employees voted for the Agreement and voted for approval of the Agreement. The Commission has received no evidence that any employee did not receive the email explaining the terms of the Agreement nor that those employees who voted for the Agreement were not able to contact the employer to discuss the Agreement further should they have wished.
[5] Moreover, while CFMMEU submit that the Award terms and its interaction with the Agreement were not explained it is clear that this is not correct. The email specially discussed the role of clause 3 and its interaction with the Award as well as indicating throughout the Agreement which clauses and entitlements are derived from the Award. As such, I find that reasonable steps were taken to explain the terms of the Agreement to employees.
MAJORITY APPROVAL
[6] As previously discussed, under s.186 of the Act the Commission must approve an application for approval of an enterprise agreement if the enterprise agreement has been ‘made’ in accordance with the provisions of s.188(b) of the Act. Relevantly, this requires that:
“182 When an enterprise agreement is made
Single-enterprise agreement that is not a greenfields agreement
(1) If the employees of the employer, or each employer, that will be covered by a proposed single-enterprise agreement that is not a greenfields agreement have been asked to approve the agreement under subsection 181(1), the agreement is made when a majority of those employees who cast a valid vote approve the agreement.”
[7] The Agreement covers ‘the Company’ and ‘all Employees employed by the Company in any classification set out in Schedule A who are engaged to work at, or in connection with, the Bluff Coal Line Project Queensland.” 8 Schedule A then provides four levels of classifications both for production workers and maintenance workers, as provided below:
“Production Structure
Production Classification | Positions | Minimum Base Rate plus shift penalty | Minimum Base Rate | |
7 Days 7 Off 7 Nights 7 Off (i.e. Shift work, 115% of the Ordinary Time Rate | 7 Days 7 Off (i.e. Ordinary time rate) | 5 Day 2 Off (i.e. Ordinary time rate) | ||
Mineworker – Trainee | Trainee – An employee employed at this level is a person who is new to coal mining. Classification at this level will be for a maximum 12-month period. | $32.82 | $28.54 | $28.54 |
Mineworker | Operator e.g. Truck Operator – An operator with at least 12 months mining experience and 1 Core minimum Equipment Skill competency | $33.97 | $29.54 | $29.54 |
Mineworker – Multi-skilled | All Rounder e.g. Truck & Watercart, Grader or Dozer Operators and Blast Crew – An Operator with at least 3 Minimum Equipment Skill competencies who is operating at this level. | $37.42 | $32.54 | $32.5 |
Mineworker – Specialised | Lead Production Operator – e.g. Excavator and Drill Operators and Shotfirers – A Operator with at least 3 Mining Equipment Skill competencies (including Excavator) who is operating at this level. | $39.72 | $34.54 | $34.54 |
Maintenance Structure
Production Classification | Positions | Minimum Base Rate plus shift penalty | Minimum Base Rate | |
7 Days 7 Off 7 Nights 7 Off (i.e. Shift work, 115% of the Ordinary Time Rate | 7 Days 7 Off (i.e. Ordinary time rate) | 5 Day 2 Off (i.e. Ordinary time rate) | ||
Maintenance Worker – Unskilled | Trainee Trades Assistance (as appointed by the Company) | $32.82 | $28.54 | $28.54 |
Maintenance Worker – Semi-skilled | Semi-skilled Tradesperson (as appointed by the Company) | $37.42 | $32.54 | $32.54 |
Maintenance Worker – Trade Qualified | Qualified Tradesperson (as appointed by the Company) | $39.72 | $34.54 | $34.54 |
Maintenance Worker – Experience Trade | Experienced Tradesperson (must have at least 2 years post trade experience in coal mining and be appointed by the Company to the role) | $42.02 | $36.54 | $36.54 |
[8] While neither production nor maintenance workers are defined in the Agreement in any detail other than what is provided at Schedule A next to each classification, the production classifications do appear to mirror those found in the Award.
[9] Question 2.10 of the Form F17 provided by MACA indicates that five employees were employed at the time of the vote who will be covered by the Agreement and that all five of those employees voted and voted to approve the Agreement. MACA further confirmed in later submissions that:
“13. The classifications of the five employees covered by the agreement at the time of voting on the Agreement and the Agreement being made include: one employee classified as Mineworker – Multi-skilled, and four employees as Mineworker – Specialised as outlined in Schedule A of Agreement. The Relevant Employees hold the positions of production operators, drill operators (Drill and Blast) and operator and fitters.
14. Each of the Relevant Employees remain employed by MACA Mining at the Bluff Coal Mine Project in those positions.” 9
[10] The CFMMEU opposes this information putting forth that:
“23. The Agreement covers only Production and Maintenance employees engaged to work at or in connection with the Bluff Coal Mine Project. While the CFMMEU only have access to a redacted copy of the Agreement and so do not have detail about the vote on the Agreement, we are instructed that around eight people voted on the Agreement. Of those eight, we are instructed that three of those are staff and one of those is employed in an administrative role. If these instructions are correct, this means that the Agreement was voted up in circumstances where the Agreement will not cover at least half of those employees voting on the Agreement.” 10 (references omitted)
[11] MACA opposes the CFMMEU’s submissions that more than five employees voted and that any employee voted who was not eligible to do so.
[12] The evidence supports that employees at the time of the vote were employed in two of the eight classifications provided in the Agreement and were only employed in the production stream not the maintenance stream. There has been no evidence provided by the CFMMEU that any of the employees who voted were not covered by the Agreement nor that employees other than those provided for in MACA’s submissions voted on the Agreement, as such I find that in accordance with s.182(1) of the Act that a majority of employees voted to approve the Agreement.
GENUINE AGREEMENT - EMPLOYEES COVERED
[13] Section 188(1)(c) provides the Commission with the ability to take into consideration matters outside those specially prescribed in the Act which may affect whether the Agreement has been genuinely agreed to. It provides that:
“188 When employees have genuinely agreed to an enterprise agreement
An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
…
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.
[14] The CFMMEU put forth that one such consideration should be that since the application was lodged a further 100 production workers have been employed by MACA who will be covered by the Agreement and that the principles of the Full Court in OneKey 11should be applied in this instance.
[15] MACA opposed these submissions. While confirming that 144 employees are now employed by MACA and will be covered by the Agreement, MACA submits that the circumstances of this application differ from that of the factual matrix in One Key. Relevantly, MACA puts forth that OneKey was based on an application for approval of an enterprise agreement whereby the agreement covered 11 awards and was made by three employees, with those employees only representing two of the industries covered by the 11 awards. Alternatively, the current application deals with two ‘categories’ of classifications with the five employees who voted having ‘experience’ in both the production and maintenance roles in the Queensland coal mining sector. 12
[16] MACA further puts forth the proposition that the Full Bench in OneKey accepted that an enterprise agreement can be made with as few as two or three employees and that the notion that because an agreement has been approved with only a few employees does not of itself negate genuine agreement for the agreement, what is needed is a look into the factual matrix surrounding the circumstances of the agreement to determine whether there has been genuine agreement. MACA further relied on the Full Bench decision in Thiess Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union 13 as authority for the similar proposition that:
“merely because, at the time an agreement is negotiated and made, the employer only has a small number of employees with whom to negotiate, and the coverage of the resultant agreement encompasses a much wider range of employees, it does not follow that the process has been manipulated and the “fairly chosen” requirement has not been met’.
[17] The meaning of “genuinely agreed” under s.188 of the Act was discussed in some depth by the Full Court in OneKey against the backdrop of agreements in which a small number of employees voted for approval of the agreement (three employees) after which there was a swift influx of recruitment of employees in classifications which were note represented by those employees who voted to approve the agreement. The Full Court relevantly stated that:
“151. An enterprise agreement made early in the life of an enterprise with two or three employees and before the employment of the much larger workforce necessary to operate the business of the enterprise is, in terms of the process by which it was made, far more likely to reflect characteristics akin to individual bargaining than collective bargaining. As the facts of this case demonstrate, there will be no bargaining with the collective of employees because, in substance, the collective is yet to be formed. In the absence of any real opportunity for employees to form an effective collective, the power imbalance will reflect that of individual bargaining. As the Full Court said in a similar context in Construction, Forestry, Mining and Energy Union v PilbaraIronCompany (2011) 194 FCR 269 at [38]:
If it were possible for an employer to choose any employees it wishes, and to designate them as the employees in part of its single business with whom it wishes to make a collective agreement, the underlying purpose of promoting collective negotiation might be subverted.
152. Still, it is abundantly clear that an enterprise agreement may be made with two or three employees and, in relation to a new enterprise, may be made as a non-greenfields agreement where some employees of the enterprise are already employed (see ALDI at [76]). That that should be so is not really surprising. Enterprises come in all shapes and sizes. Nor, as the High Court observed at [84] in ALDI, is it implausible for the legislature to have intended that a small group of employees should be able to fix the terms and conditions of employment of a larger group of employees who are later employed and covered by the enterprise agreement.
153. But it does not follow from the fact that agreement-making of that kind has not been prohibited by the Fair Work Act that the Act is unconcerned with agreement-making that may undermine or subvert its preference for collective bargaining. That concern, as the High Court observed in ALDI at [84] and [87], is addressed not by prohibition but by the Fair Work Act’s “protective provisions”.
154. Section 186(3) (the “fairly chosen” requirement) is one example of such a “protective provision”. A primary purpose of this provision is to avoid the workforce of an enterprise being broken up into artificial employee groupings with the consequence that the workforce of the enterprise is unable to bargain as a single collective: see Aerocare Flight Support Pty Ltd v Transport Workers’ Union of Australia [2018] FCAFC 74 at [19] (Jagot, Bromberg and Rangiah JJ). Another example of a protective provision referred to by the High Court in ALDI is the BOOT. Each of those provisions is an element of the approval process specified by Sub-division B of Part 2–4. Like those provisions, other provisions of that sub-division, including ss 186(2) and 188, have a protective purpose. That s 188 harbours a concern directed at agreements made by a small number of employees in circumstances where the agreement covers a wider range of employee classifications is confirmed by [824] of the Explanatory Memorandum which provides:
Note that where an agreement covers a large number of classifications of employees in which no employees are actually engaged there may be a question as to whether the agreement has been genuinely agreed – see clause 188.
155. Where employees working in few occupational classifications consent to an agreement which covers numerous other occupations or other occupations in many industries beyond their own, an explanation of the terms of the agreement and their effect may fall short of providing an adequate basis for the formation of genuine consent. The employees who voted may be indifferent to the impact of an agreement on other employees or prospective employees in occupational classifications outside their own training or experience. As Buchanan J observed in John Holland (Besanko and Barker JJ agreeing), in those circumstances the employees will presumably act out of self-interest (at [33]) with the possible result that “it may not be fair for an enterprise agreement made with three existing employees to cover a wide range of other classifications and jobs in which they may have no conceivable interest” (at [83]).
156. Therein lies the concern. The legislative objective of achieving “fairness through an emphasis on enterprise-level collective bargaining” could be undermined if the employees who vote on the agreement have no basis for appreciating its nature and terms. What is required by s 186(2)(a) is genuine agreement. To construe that requirement as mandating an informed and genuine understanding of what is being approved is consistent with the text of the provision (as defined) and accords with its underlying purpose.
157. Ordinarily, non-greenfields agreements are made with the participation of the employees who are representative of the range of employee classifications covered by the enterprise agreement. The capacity to provide consent based upon a true understanding of the consequences of the proposed agreement across the breadth of classifications covered is likely to be adequate, including because representatives of each classification or classificational grouping will be involved. While it is correct to say, as OKW submitted, that the group of employees who vote are not required by the Fair Work Act to be representatives for, or agents of, the wider group of employees who may ultimately be covered by the agreement, the fact that the group does not broadly reflect the occupational scope of the proposed agreement restricts the terms and conditions in the agreement for which the group can genuinely speak. “
[18] The evidence before the Commission discloses that five employees voted for approval of the Agreement. As discussed earlier, those employees were employed in two of the eight classifications provided in the Agreement and were only employed in the production stream not the maintenance stream at the two top levels. The fact that these employees have ‘experience’ in both the production and maintenance stream of the Agreement does not weigh upon my decision. The principles in One Key confirm that there is no requirement that all classifications in an agreement must be represented by those who vote. 14 I am satisfied however, that while only 25% of the classifications in the Agreement were represented by those who voted that this is a sufficient representation for there to have been genuine agreement. As such, I find that in accordance with s.188 that the Agreement has been genuinely agreed to.
CONCLUSION
[19] As set out above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.
[20] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 26 March 2019. The nominal expiry date of the Agreement is 19 March 2023.
COMMISSIONER
1 CFMMEU Submissions, dated 5 February 2019, [15].
2 Ibid, [16].
3 Diamond Offshore General Company v Michael Baldwin; Corey Billows; Brett Slocum; Craig Sandler; Daryl Byron; Adam Williams; James Richardson[2018] FWCFB 6907.
4 [2017] FCA 1266, 270 IR 410.
5 Ibid at [43] – [44] citing the judgement of Buchanan J in Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd [2015] FCAFC 16, 228 FCR 297, 247 IR 55.
6 One Key Workforce Pty Ltd v Construction Forestry Mining and Energy Union [2018]FCAFC 77, 277 IR 2.
7 National Tertiary Education Industry Union v University of New south Wales[2010] FWAFB 5163, [33].
8 MACA Mining Pty Ltd Bluff Coal Mine Enterprise Agreement 2018, cl.3.
9 Applicant Submissions, dated 12 February 2019.
10 CFMMEU Submissions, dated 5 February 2019.
11 One Key Workforce Pty Ltd v Construction Forestry Mining and Energy Union [2018]FCAFC 77, 277 IR 2, [122] – [156].
12 Applicant Submissions, dated 12 February 2019, [10](b)-(c).
13 [2018] FWCFB 2405, [43] referencing Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia Australian Manufacturing Workers' Union v Main People Pty Ltd [2015] FWCFB 4467 at [32].
14 One Key Workforce Pty Ltd v Construction Forestry Mining and Energy Union [2018]FCAFC 77, 277 IR 2, [152].
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