Marshall & Brougham (Constructions) Pty Ltd

[2022] FWCA 1164

[2022] FWCA 1164

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.185—Enterprise agreement

Marshall & Brougham (Constructions) Pty Ltd

(AG2021/9068)

Marshall & Brougham Constructions Pty Ltd Enterprise Agreement 2021

Building services
COMMISSIONER SIMPSON	BRISBANE, 1 APRIL 2022

Application for approval of the Marshall & Brougham Constructions Pty Ltd Enterprise Agreement 2021

1. An application has been made for approval of an enterprise agreement known as the Marshall & Brougham Constructions Pty Ltd Enterprise Agreement 2021 (the Agreement). The Application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Marshall & Brougham (Constructions) Pty Ltd (the Applicant). The Agreement is a single enterprise agreement.

CFMMEU Request to be Heard

1. Prior to this matter being allocated to me, the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) wrote to the Commission seeking to be heard and requested the documents on file. On 10 January 2022, the CFMMEU were sent the redacted documents relating to this application. On 12 January 2022 this matter was allocated to me and on 14 January 2022, my chambers wrote to the parties seeking that the CFMMEU advise if they still wished to be heard on the matter. On 18 January 2022, the CFMMEU advised they did still wish to be heard. Accordingly, I listed the matter for Conference/Directions on 31 January 2022.

1. On 1 February 2022, I issued directions for filing of material relating to whether the CFMMEU should be heard. Both the CFMMEU and the Applicant filed material.

1. The CFMMEU relied upon the decision of Deputy President Colman in Civil Sydney Pty Limited Enterprise Agreement 2019-2023 [2020] FWCA 1033.  

1. Subsequent to the listing held in this matter, the CFMMEU identified that they do believe that they have relevant members within the scope of the Agreement and accordingly that they are a relevant bargaining representative.

1. The Applicant submitted that the CFMMEU has not provided evidence to support its “belief” that it has members who will be covered by the proposed agreement, and accordingly has not established its status as a bargaining representative.

1. In any event, the Applicant submitted that the CFMMEU was not involved in the bargaining process for the Agreement, and have no right, interest or legitimate expectation concerning the approval of the Agreement, and no particular knowledge of relevant events. The Applicant submitted that it is not sufficient that the CFMMEU has coverage, experience, history, knowledge and/or an interest in the industry for it to be granted a right to be heard for the purpose of section 590 of the Act. The Applicant contended that the “concerns” raised by the CFMMEU are without basis and there is no need for the Commission to inform itself of these matters further.

Better off overall concerns

1. The CFMMEU provided two sets of modelling which demonstrated circumstances in which workers under the Agreement are not better off under the Agreement than under the Award in particular:

1. Circumstances in which a meal break is not provided, as the Agreement does not contain appropriate overtime rates in that circumstance; and

2. Circumstances in which scaffolding allowance pursuant to s 23.10(c) of the Award is payable.

1. As a result of the above, the CFMMEU submitted that the Agreement cannot in its current form pass the better off overall test.

1. The Applicant submitted that the scenario that the CFMMEU modelling is based on is a pattern of working hours that is not practicable, or cannot or is unlikely to be worked. The express terms of the agreement require employees to take meal breaks, and hence, it is therefore not feasible that employees will be required to work more than five hours without a meal break.

1. If required, the Applicant submitted they could provide objective evidence confirming that the Applicant currently has, and has always had, a system whereby employees take meal breaks within the first five hours of the commencement of work. Notwithstanding this, the Applicant was agreeable to providing an undertaking to address this issue, if the Commission considered it necessary.

1. The Applicant explained that the undertaking would be to the effect that employees will be paid penalty rates for all hours worked beyond five hours without a meal break, until such a break is taken, in circumstances where the employer requires an employee to work through the employee’s meal break (as per clause 29.6 of the Building and Construction General On-site Award 2020).

1. Furthermore, the Applicant contended that the CFMMEU modelling is flawed in that it only includes the scaffolding allowance as being payable under one scenario only. Notwithstanding clause 5.4.2 of the Agreement, the Applicant submitted that the scaffolding allowance is in fact paid to all employees who hold an intermediate scaffolding licence for all hours worked (as well as periods of leave), regardless of whether the employee is performing scaffolding duties. The Applicant submitted that it was agreeable to providing an undertaking to this effect. The Applicant otherwise relied on the modelling that was submitted with the application for approval of the Agreement.

Genuine Agreement

1. The CFMMEU submitted that the Commission should, in assessing whether ‘Genuine Agreement’ exists as defined by s.188 of the Act consider the question consistently with the approach described by the Full Court of the Federal Court in One Key Workforce v CFMMEU [2018] FCAFC 77. The requirement for genuine agreement mandates ‘an informed and genuine understanding of what is being approved’.

1. The CFMMEU submitted that the matters that the Commission must be reasonably satisfied of in respect of genuine agreement before approving an agreement include:

1. that the pre-approval  steps  including  the  requirement  to  take  all  reasonable  steps to explain the agreements terms and their effect have been complied with;

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

1. The Full Court in One Key identifies at paragraph [142] amongst matters that may be relevant to s 188(c) of the Act the provision of misleading information.

1. The CFMMEU submitted that the Form F17 appears to rely upon bargaining actions as the acts taken to explain the terms of the Agreement, and they are concerned that the information provided with the Agreement, although redacted, appears to have the potential to mislead. In particular, the document attached to the application comprising an email containing the pay rise does not appear to include relevant context and is not properly explained. The CFMMEU submitted that it appears to reflect a ‘cherry picked’ modelling to suggest that workers are financially better off in circumstances where the Agreement contains lower accumulative pay rises. The basis of the modelling is not revealed in the email. The email, as it appears, is capable of having mislead workers as to the proper effect of the proposed rises compared to what appears to be workers claims such that the Agreement. Absent further explanation, the CFMMEU submitted that the Commission cannot be reasonably satisfied that there are no other grounds upon which to conclude that the Agreement was not genuinely agreed.

1. The Applicant submitted that all reasonable steps to explain the terms of the Agreement and their effect to all employees were taken. This included the provision of a detailed explanatory memorandum and meetings with employees. Further, the Applicant contended that the email sent to employees on 30 November 2021 should be read in this context, and accurately reflects the effect of the proposed rates, and the substance and form of the explanations are sufficient to satisfy the Applicant’s compliance with s.180(5) of the Act.

1. The Applicant rejected the assertion of the CFMMEU that the email sent to employees on 30 November 2021 does “not appear to include relevant context, and is not properly explained.” The Applicant submitted that the submissions of the CFMMEU do not articulate how the email can be said to “be capable of having mislead workers”, except for a self-serving assertion that the email reflects “cherry picked modelling”, nor has the CFMMEU sought to adduce evidence that any employee was mislead by the email and/or the other explanatory material that was provided.

Decision on CFMMEU Request to be heard

1. On 28 February 2022, my chambers emailed the parties advising as follows:

“Dear Parties,

The Commissioner has considered the respective submissions of the parties in relation to whether the CFMMEU should be heard in relation to the application.

The Commissioner has decided to exercise his discretion to grant permission for the CFMMEU to be heard.

The Commissioner has considered the submissions in relation to the BOOT concerns raised in the CFMMEU submissions regarding meal breaks and scaffolding allowance.  The Commissioner advises that it his preliminary view that if the Respondent is prepared to offer the undertakings foreshadowed in relation to these two issues it would resolve the concerns raised in relation to the BOOT and the Commissioner requests that the Applicant provide these undertakings in the appropriate form and that those undertakings are also provided to any bargaining representatives. 

The Commissioner also notes the submissions already filed by the Applicant and the CFMMEU in relation the issue of whether the Agreement was genuinely agreed.  The Commissioner requests that the Applicant and the CFMMEU advise whether either party wishes to file any further submissions or evidence or alternatively whether they are content to rely on the material already filed by 5pm Wednesday 2 March 2022.”

1. The CFMMEU advised on 2 March 2022 that they sought a time period within which to file submissions relating to the genuine agreement issue and indicated they would be grateful if the Applicant could indicate whether it is its position that the Commission ought hold the BOOT concerns identified by the union, or that it seeks a finding that work patterns of the kind discounted ought be disregarded for the purposes of the BOOT. The CFMMEU submitted that if it persists in that submission, then as previously foreshadowed it was their view that the Applicant would need to lead evidence going towards the possibility of particular work patterns not being possible. The CFMMEU stated that depending upon the Applicant’s answer, it may be necessary for further evidence and submissions on this point as well.

1. The Applicant replied noting that in light of the undertakings provided, the matters raised were obsolete.

1. Further, the CFMMEU indicated they do have at least one relevant member, and as such were a default bargaining representative.

1. On 3 March 2022, as per the CFMMEU’s request, I set directions for filing of material regarding the ‘genuine agreement issue’. This noted that the CFMMEU was to file any material relating to this issue by 8 March 2022, and the Applicant was to provide a reply by 11 March 2022. 

1. On 9 March my chambers sent email correspondence to the CFMMEU requesting the Union advise if it intended to file submissions. The CFMMEU was sent a further email on 14 March advising that if the Union intended to file submissions regarding the genuine agreement issue it was to do so by 5pm that day. 

1. Later on 14 March, the CFMMEU sent an email to my chambers outlining that they did not propose to file further detailed submissions. However, noted the following:

“With respect to the Applicant’s position: the undertaking only resolves the BOOT difficulty if its client does not press a finding that the particular work patterns are not to be considered further purpose of the BOOT- i.e. that a concern exists. An undertaking cannot be accepted unless the concern exists.

Upon review, it is our respectful position that our previous submissions identified the correct authority, although relevant authority is also contained in CFMMEU v Karijini Rail Pty Ltd [2020] FWCFB 958 in which between [57] and [60] the Full Bench detailed the considerations for the Commission in considering whether the requirements of 180(5) have been met. In so doing, the Full Bench applied the Full Bench reasons from AWU v Rigforce Pty Ltd, including its adoption of the reasons of Deputy President Gostencnik in BGC Contracting.

Paragraph 9 of our submissions captures adequately the difficulty in the explanation provided: it provides little information about the basis for the work pattern applied and does not appear to contain relevant information about the different work patterns that the Agreement would permit. Providing the modelling as a typical or guaranteed outcome had the capacity to mislead. The provision of relevant context was a reasonable step in circumstances where the example was provided.”

1. On 17 March 2022, the Applicant provided a reply to this, noting that their submissions were provided in response to the directions issued, which permit the CFMMEU to provide “submissions regarding the genuine agreement issue.” The Applicant stated that the submissions of the CFMMEU erroneously seek to address the better off overall test (BOOT), and accordingly, those submissions should be disregarded, and the Applicant is not compelled to respond to them. In any event, the Applicant noted that the concerns in relation to the BOOT have been resolved.

1. The Applicant submitted that the sole concern identified by the CFMMEU in respect of genuine agreement relates to the “document attached to the application comprising an email containing the pay rise.” In the absence of any precise identification of the document, the Applicant understands that the document is the email sent from the Applicant’s General Manager, Daryl Crebbin, to the employees who are to be covered by the Agreement, dated 30 November 2021 and timestamped 2:39pm (the 30 November email).

1. The Applicant submitted that the 30 November email contains a simple breakdown of the proposed rate increases over a three-year period, followed by a breakdown of the hourly rate (both with and without the scaffolding allowance.) The Applicant understands that it is this latter “modelling” that the CFMMEU claims was “capable of having mislead workers”, and that insufficient information was provided “about the basis for the work pattern applied.”  The Applicant submits the submissions of the CFMMEU are without basis.

1. The Applicant contended that the 30 November email does not purport to depict a work pattern. It is simply a breakdown of the proposed hourly rate and allowances. It is therefore not capable of misleading the employees in the manner proposed by the CFMMEU.

1. Furthermore, the Applicant submitted that it is apparent from the CFMMEU modelling that the only concern it has in relation to the modelling and/or work pattern in the 30 November email relates to the exclusion of penalty rates where employees are required to work through meal breaks. In that regard, the Applicant refers to its previous submissions and the undertaking that was provided to the Commission. The Applicant submitted that they are not required to provide an explanation for a work pattern that is not practicable or cannot or is unlikely to be worked.

1. The Applicant submitted that the email should be considered in the context of other information that was provided to employees to explain the terms and effect of the Agreement and relies on its previous submissions in that regard.

1. Having regard to all of the circumstances, the Applicant concluded that the steps taken by the Applicant were reasonable, and satisfy the requirement contained at s.180(5) of the Act.

1. On 23 March an email was sent from chambers to the parties as follows:

“Dear parties,

The Commissioner notes the CFMMEU has indicated in their email of 4 February 2022 that they may wish to file an F18. Additionally, the CFMMEU has noted in their submissions that they do believe that they have relevant members within the scope of the Agreement and accordingly that they are a relevant bargaining representative.

The Commissioner advises that should the CFMMEU wish to submit a Form F18, it will be accepted that the CFMMEU are entitled to be covered by the Agreement, unless the Applicant wishes to be heard on the issue.

If the CFMMEU intend on submitting a Form F18, this is to be emailed to chambers by 5:00pm Friday, 25 March 2022.”

1. The CFMMEU did not file a Form F18. 

Consideration

1. In relation to the BOOT issue, the CFMMEU provided modelling that provided two circumstances where it submitted that the BOOT would not be satisfied, namely where a meal break is not provided, as the Agreement does not contain appropriate overtime rates in that circumstance; and where the scaffolding allowance pursuant to s 23.10(c) of the Award is payable.  

1. Employees generally appear to be better off overall; the rates of pay are slightly higher than the Award, and in the main the conditions of employment generally either align with, or are more beneficial than the Award.  I held a concern that if the circumstances provided in the CFMMEU submission arose that the Agreement may not pass the BOOT and the Applicant has agreed to provide undertakings in response to those concerns.  I am satisfied that the undertakings offered by the Applicant address any potential for concern that in the scenarios raised by CFMMEU the Agreement would not satisfy the BOOT. 

1. In regard to the matter of whether the Agreement was genuinely agreed, and the issue of a concern raised by the CFMMEU in this regard to a particular email that may have had a capacity to mislead employees, I have taken into account the explanatory memorandum relied on by the Applicant explaining the terms of the Agreement, and the submissions of the Applicant that the email it understood the CFMMEU was referring to, did not purport to depict a work pattern, and was a breakdown of the proposed hourly rate and allowances and could not mislead in the manner claimed.

1. The Applicant in its Form F17 Statutory Declaration states at Q22 and Q23 that the employer explained the Agreement to employees in meetings.  The CFMMEU was provided an opportunity to put on any further evidence to support the proposition that the Agreement was not genuinely agreed however did not take up this opportunity. 

1. As the Agreement appears to be a rollover Agreement from a previous 2018 Agreement, and on the basis of the material put forward by the Applicant, I am satisfied the steps taken were reasonable for the purposes of s.180(5) of the Act in light of the considerations set out in the One Key decision.

Conclusion

1. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.

1. Subject to the undertakings referred to above, I am satisfied that each requirement of ss186, 187 and 188 as are relevant to this application for approval have been met. The undertakings are taken to be a term of the Agreement.

1. Noting clause 1.4.4 of the Agreement, I am satisfied that the more beneficial entitlements of the NES in the Act will prevail where there is an inconsistency between the Agreement and the NES.

1. The Agreement is approved and will operate in accordance with s.54 of the Act.

COMMISSIONER

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