Master Builders Association of New South Wales

[2021] FWC 1425

[2021] FWC 1425

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Master Builders Association of New South Wales
(AG2020/3632)

Building, metal and civil construction industries
COMMISSIONER JOHNS	SYDNEY, 16 MARCH 2021

Application for approval of the Hansen Yuncken Pty Ltd Collective Agreement 2020 - 2023

[1] An application has been made for the approval of an enterprise agreement known as the Hansen Yuncken Pty Ltd Collective Agreement 2020 – 2023 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (FW Act) on 27 November 2020. The application was made by The Master Builders’ Association of New South Wales (MBA NSW) on behalf of the employer, Hansen Yuncken Pty Ltd (Hansen/Employer). The Agreement is a single enterprise agreement.

[2] Until it is replaced, the employees are covered by the Hansen Yucken Pty Ltd / CFMEU Collective Agreement 2018 1(2018 Agreement). The 2018 Agreement passed its nominal expiry date on 31 December 2018. The Employer commenced bargaining when it issued a Notice of Employee Representational Rights (NERR) on 13 and 14 January 2020.

[3] The application was accompanied by a Form F17 - Employer’s Declaration in support of an application for approval of an enterprise agreement (Form F17) declared by John Wilson, NSW Operations Manager of the Employer. In relation to s.180(5) of the FW Act. In answer to the question “What steps were taken by the employer to explain the terms of the agreement, what was explained and how was the effect of those terms explained to the relevant employees”, Mr Wilson declared that on 2 November 2020,

•  All Employees attended a discussion meeting at 2pm on 2 November 2020 conducted to explain the contents of the proposed Hansen Yuncken Collective Agreement 2020 – 2023. The discussion meeting was conducted at Building 1, Level 3, 75 – 85 O’Riordan Street Alexandria NSW 2015.

•  At the Formal Discussion Meeting, the terms of the Hansen Yuncken Collective Agreement 2020 – 2023, and the effect of those terms, were explained by comparing the proposed agreement to the existing Hansen Yuncken Pty Ltd /CFMEU Collective Agreement 2018 (AG2018/752).

•  The terms of the Hansen Yuncken Collective Agreement 2020 – 2023, and the effect of those terms were explained successfully to Employees.

[4] An administrative legislative assessment of the Agreement, including compliance with the necessary pre-approval steps, was conducted. In accordance with my usual practice, on 1 December 2020, I sent a copy of the Legislative Checklist to the MBA and the Employer. The Legislative Checklist noted that,

“Explanation of Agreement: The response to Question 22 [in] the Form F17 indicates that a formal discussion meeting was held where the agreement was explained. While explanatory documents and presentations during the meeting were provided, no information has been provided on any additional steps taken to explain the agreement. Unclear if the requirements of s.180(5) of the Act and the One Key decision have been satisfied. Further information/submissions invited.”

[5] The reference to One Key was a reference to the decision of the Federal Court of Australia (Flick J) in Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd. 2 In that decision his Honour was required to address what it means to comply with s.180(5) of the FW Act.

[6] Section 180(5) provides that,

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.

(my emphasis)

[7] His Honour held that,

“[108] The response provided to the Commission in para 2.6 of the F17 Statutory Declaration was misleading to the extent that it asserted on behalf of One Key Workforce that the “terms of the Agreement and the effect of the terms were explained to the relevant employees” by means of either the 25 August 2015 email or during the “telephone conversations”.

[109] Such reasons as were provided by the Commissioner at para [9] of his reasons for decision expose jurisdictional error. Little, if any, consideration was given to what were the “steps” in fact taken by the employer or the adequacy of those steps. Such consideration as was given was more directed to the subject-matter of the information communicated rather than to the content of the information communicated or the effectiveness of the communication of that information or (for that matter) what was not communicated.

[110] Separate from that source of jurisdictional error is the further conclusion that there must in fact be compliance with s 180(5) before the power of the Commission to “approve” the agreement arises. Although the Commission must form a state of “satisfaction” for the purposes of s 188(a)(i) of the Fair Work Act as to whether an employer has “complied with” s 180(5), its statement of having reached that state of “satisfaction” cannot transform a manifestly inadequate explanation process into one which complies with s 180(5). That factual inquiry, on this alternative basis, remains a matter that this Court can examine.

[111] On this alternative basis, it is further concluded that the approval process entrusted to the Commission miscarried.”

[8] An appeal against the decision of Flick J was dismissed by the Full Federal Court of Australia (Bromberg, Katzman and O’Callaghan JJ) in One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union. 3 The Full Court observed that,

“[111] The only material before the Commission on compliance with s 180(5) was contained in Ms Ind’s statutory declaration. Although the statutory declaration was silent as to the content of the explanation or, indeed, as to the substance of the communications, OKW submitted that the declaration itself was some evidence upon which the Commission could form the requisite state of satisfaction. That may be so, but it was by no means enough to enable the Commission to lawfully reach that 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] HCA 40; (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?

[117] As there was no evidence of these matters before the Commission, it necessarily follows that the Commission purported to be satisfied that OKW’s obligations under s 180(5) had been discharged without taking those matters into account. That was a jurisdictional error because the Commission did not have authority to make the decision unless its satisfaction had been informed by them. As is often the case, there are several ways of describing the error. It could be characterised as a misconception as to what the exercise of the statutory power entails or an error “as to an important attribute of the decision to be made”: Graham at [68]. Equally it could be seen as a misunderstanding on the part of the Commission of the nature of the opinion it was required to form: Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 at [31] (Gleeson CJ, Gaudron and Hayne JJ). Had the Commissioner applied his mind to the question of what the putative explanation entailed, he would inevitably have inquired into its content and terms.

[9] One Key mandates the Commission to focus its enquiry on the steps actually taken to comply s.180(5) and to consider whether:

a) the steps taken were reasonable in the circumstances; and

b) these were all the reasonable steps that should have been taken in the circumstances. 4

[10] The task before the Commission “requires attention to the content of the explanation given.” 5

[11] If the explanation is in writing the task of assessing the reasonableness of the explanation is relatively easy. If it was not in writing (as in the present case) then it is vitally necessary to understand what words were spoken.

[12] On 11 December 2020 I directed that the MBA/Employer respond to the concerns raised in the Legislative Checklist, including the One Key Issue, by 8 January 2021. I also programmed the matter for hearing on 4 February 2021. 6

The hearing

[13] The matter was heard on 5 February 2021. The Applicant was granted permission to be represented pursuant to s.596 of the FW Act by Mr R Goot of Senior Counsel and with him Mr B Rauf of Counsel, instructed by Mr B Austin of Oakes Austin Lawyers. 7 I also determined that I would be assisted by the participation of the CFMMEU. I granted the Union a limited opportunity to participate in the proceedings pursuant to s.590 of the FW Act.8 The Union was represented by Mr S Crawshaw of Senior Counsel.

[14] In coming to my decision, I have had regard to all of the material filed in this matter, including the following documents:

1	Form 16 dated 27 November 2020
2	Form 17 dated 27 November 2020
3	Attachment A Email Notice to Employees New Collective Agreement dated 13 January 2020
4	NERR no date
5	Attachment B Email Replacement Collective Agreement & Voting Information various dates
6	Appointment of Employer Bargaining Representative dated 12 February 2020
7	Hansen Yuncken Collective Agreement 2020-2023
8	Form F54 dated 7 December 2020
9	Form F53 dated 7 December 2020
10	Letter from Master Builders Association re Submission dated 21 December 2020
11	Undertaking Section 190 dated 18 December 2020
12	Statutory Declaration of John Wilson dated 18 December 2020
13	Updated Hansen Yuncken Collective Agreement 2020 2023 Signature Classifications
14	Applicant's Outline of Submissions dated 15 January 2021
15	CFMMEU Outline of submissions dated 22 January 2021
16	Applicant's Outline of Submissions in reply dated 1 February 2021
17	Amended statement of John Wilson dated 1 February 2021
18	Annexure A to Statement: Track Changes Agreement
19	Fair Work Commission Agreement Checklist
20	General Submissions from the CFMMEU filed 5 February 2021
21	CFMMEU List of Authorities

Witness evidence provided

[15] When the application for approval of the agreement was lodged, the Employer filed a Form F17 Employer’s declaration in support of the application. The Employer was asked to explain what steps were taken to explain the terms of the Agreement and the effect of those terms. As stated above, the explanation was inadequate.

[16] On 18 December 2020 the Employer’s NSW Operations Manager John Wilson, filed a Statutory Declaration in support of the approval of the Agreement. Mr Wilson declared,

“I confirm that at the Formal Discussion Meeting, Dean Marcon, Construction Manager, HY and I conducted a line-by-line and clause-by-clause explanation of the terms of the Proposed Agreement, and the effect of the terms of the Proposed Agreement with all

Employees. At the Formal Discussion Meeting, a question-and-answer session was also held with all Employees, and any queries from Employees in relation to the terms of the Proposed Agreement, and the effect of the terms of the Proposed Agreement, were answered by either Mr Marcon or myself, including as follows:

a) That the Building and Construction General On-site Award would apply in instances where the Proposed Agreement is silent as set out in clause 4 of the Proposed Agreement.

b) That HY is proposing to maintain in the Proposed Agreement the existing flexible RDO calendar (as included in the Hansen Yuncken Pty Ltd / CFMEU Collective Agreement 2018 (AG2018.752) (Existing Agreement)).

c) That the rate increases as proposed in the Proposed Agreement are increases on the rates as set out in the Existing Agreement.

[17] It is readily apparent from the 18 December 2020 Statutory Declaration is that, as at 18 December 2020, I was still none the wiser about the content of the explanation given to employees before they voted.

[18] On 1 February 2021 Mr Wilson filed a further witness statement purporting to detail what was explained to employees on 2 November 2020. Mr Wilson’s evidence was that,

14. “On Monday 2 November 2020 HY conducted the foreshadowed second discussion meeting at HY’s Office in Sydney Corporate Park Building Alexandria, to explain the Proposed Agreement to the CWs (Discussion Meeting)

15. Dean Marcon, HY’s Construction Manager and I, conducted the Discussion Meeting, which was attended by 6 CWs in person (Duane Karaka, Daniel Vitti, Tony Nouhra, Sam Hinton, Rick Frecklington, Dennis Riley) and 7 CWs who attended via Microsoft teams from a confidential meeting room on each of the sites where they were (Milo Vukicevic, Leon Redmond, Stuart McInnes, Scott Winfred, Alan Shennan, Jake Rigelsford, Daniel Attard).

16. The Discussion Meeting commenced at 2:00pm and concluded prior to 3:00pm.

17. At the Discussion Meeting, Dean Marcon and I, went through the Proposed Agreement clause by clause, focussing on the changes from the Expired Agreement, by reference to both Agreements.

18. Although I did not have it available in that form at the time, a composite document has been prepared for these proceedings showing all the changes from the Expired Agreement in the Proposed Agreement. That document is Annexure “A” to this Statement.

19. As either Dean or I, read through each section, we highlighted and explained any changes and confirmed where the clause remained unchanged. At the same time, we answered any questions and clarified any uncertainties.”

[19] I deal with the explanations given below.

What explanations were given to the employees?

[20] Accepting as evidence of what was explained to employees, the contents of the:

a) Form F17;

b) Statement of Mr Wilson dated 18 December 2020; and

c) Statement of Mr Wilson dated 1 February 2021,

I make the following findings:

Clause	What changed from 2018 Agreement?	What was explained to the employees?	What is the effect of the clause and was it explained?
1. Title	New Title of the Agreement	The name of the agreement was changed. We confirmed the specific change in the line-by-line descriptions	Inconsequential change. Obvious effect (it changes the name of the Agreement). Not a material change. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i)).
3. Parties	At the request of the CFMMEU, the Union no longer listed as a party.	Removal of all references to “Union” wherever appearing in the agreement including in the No Extra Claims Clause.	Not an inconsequential change. The effect of the CFMMEU not having the agreement apply to it is that it could not commence a civil penalty proceeding in respect of a breach of the Agreement (see s.539, Item 4, FW Act). It could have in respect of the 2018 Agreement. This was not explained to the employees.
5. Duration of Agreement	New nominal expiry date (NED) of 31 December 2022.	Changing the duration to confirm remain in force until 31 Dec 2022.	Not an inconsequential change. The effect of a NED is that it makes “unprotected” any industrial action engaged in during the life of the Agreement (see ss. 408, 409, FW Act). Industrial action that is not protected industrial action can be the subject of a stop order by the Commission (see s.418, FW Act). This was not explained to the employees.
8. No extra claims	Reference to Union removed.	Removal of all references to “Union” wherever appearing in the agreement including in the No Extra Claims Clause.	Obvious change. Inconsequential amendment because the CFMMEU did not want to be covered by the Agreement. Explanation reasonable in the circumstances.
10. Objectives	No substantive changes.	The objectives of the Agreement were reconfirmed and discussed.	Inconsequential change. Obvious effect. Not a material change. Unlikely to have any impact on the genuine agreement of employees (s.188(1)(a)(i), FW Act).
11.2(m) Protective Clothing	Removal of obligation on Union to recognise certain matters.	Part of the clause was deleted because of its reference to the Union, but I emphasised the Company’s continuing obligations.	Obvious change. Inconsequential amendment because the CFMMEU did not want to be covered by the Agreement. Explanation reasonable in the circumstances.
12.1(a) Wage rates	We said that the CW rate wages increased by 2.5% from 1 October 2020. A further 3% from 1 October 2021. A further 3% from 1 October 2023 as per the updated appendix B. This was then spelt out in appendix B. The actual amounts were nominated in Appendix B - additional benefits were reconfirmed.	Obvious change. Beneficial term to employees. Explanation reasonable in the all the circumstances.
12.5 Superannuation	Reconfirmed payment in accordance with the Superannuation Guarantee Levy (SGL).	No change. Explanation reasonable in all the circumstances.
13.3(c) Resignation/ termination	Reference to union removed.	Noted that the Clause had been removed as there was no Union Delegate. Clause 13.3 (c) has been replaced by 13.4 (a), with the only difference being the Union Delegate has been removed.	Obvious change. Inconsequential amendment because the CFMMEU did not want to be covered by the Agreement. Explanation reasonable in the circumstances.
13.4 Representatives	Reference to union removed.	Removed “union” reference	Obvious change. Inconsequential amendment because the CFMMEU did not want to be covered by the Agreement. Explanation reasonable in the circumstances.
21.2. Family violence leave	Confidentiality reconfirmed.	Inconsequential.
25.1(c) Security of employment	Reference to union removed.	Reference to Union Delegate has been removed.	Obvious change. Inconsequential amendment because the CFMMEU did not want to be covered by the Agreement. Explanation reasonable in the circumstances.
27(d) Dispute resolution	Reference to union removed.	Reference to the “Union” has been removed.	Obvious change. Inconsequential amendment because the CFMMEU did not want to be covered by the Agreement. Explanation reasonable in the circumstances.
28. Rostered Days off	The existing flexible RDO calendar was retained with 6 fixed RDOs. The updated calendars are provided in Appendix E pages 62-65.	Beneficial term.
29. Picnic Day	Picnic Day reconfirmed	Beneficial term.
30. Rights and representation.	Reference to union removed.	Rights and Representation reconfirmed. Reference to “Union” removed.	Obvious change. Inconsequential amendment because the CFMMEU did not want to be covered by the Agreement. Explanation reasonable in the circumstances.
30.1	References to Union delegate replaced by Employee Representative.	Obvious change. Inconsequential amendment because the CFMMEU did not want to be covered by the Agreement. Explanation reasonable in the circumstances.
32	Union reference replaced by Employee representative.	Obvious change. Inconsequential amendment because the CFMMEU did not want to be covered by the Agreement. Explanation reasonable in the circumstances.
34. Severability	Reconfirmed.	Inconsequential.
35. Application of appendices	Restated.	Inconsequential.
36	Endorsement of the Agreement and references to the CFMMEU removed.	Obvious change. Inconsequential amendment because the CFMMEU did not want to be covered by the Agreement. Explanation reasonable in the circumstances.

[21] The obligation imposed on employers by s.180(5) of the FW Act is of critical importance. It goes to the integrity of the understanding of employees, their vote and the making of the agreement.

[22] In BGC Contracting Pty Ltd⁹ Deputy President Gostencnik was concerned (amongst other things) with a replacement enterprise agreement that, unlike the predecessor agreement, incorporated the Black Coal Award. He held,

[86] I accept BGC’s contentions that it should not be required to overcome a “higher than usual bar” in respect of the s.180(5) obligation. But s.180(5) is concerned with the taking of all reasonable steps to explain. How many steps and the content of those steps will necessarily depend on the circumstances. Some employers may, by reasons of the prevailing circumstances, need to take more or fewer steps than other employers with different agreements facing different circumstances. The steps which may in a given case be required by “all reasonable steps” is be assessed by reference to the circumstances of the particular case.

[87] I also accept that compliance with s.180(5) will not always require an employer to identify detriments in an agreement vis-à-vis the reference instrument or for the employer to provide an analysis between an agreement and the relevant reference instrument in circumstances where an existing enterprise agreement, not a reference instrument, applies to the employees in their employment with the employer. But as I have already stated, the question of compliance with s.180(5) is to be judged against the circumstances that pertain at the time at which compliance was required. Section 57 of the Act makes clear that a modern award does not apply to an employee in relation to particular employment at a time when an enterprise agreement applies to the employee in relation to that employment. That was the case at the relevant time that explanations were given vis-à-vis the 2012 Enterprise Agreements and the Mining Award, it would continue to be so in relation to the Agreement, if the Agreement is approved by the Commission. That is the effect of an operative enterprise agreement, save in circumstances where an agreement itself incorporates a modern award, but those terms operate in relation to relevant employees as terms of the agreement. Here there was an additional circumstance, the incorporation of the identified provisions of the Coal Award. These were new provisions to be introduced into the Agreement, which were not part of the 2012 Enterprise Agreements and the Coal Award did not cover the relevant employees.

[88] The relevant employees to be covered by the Agreement were at the relevant time, subject to the application of existing enterprise agreements. Insofar as the terms of the Agreement would have had any relevant effect on existing terms and conditions, it was to displace the application of the terms of the existing agreements. That effect was explained to those employees in considerable detail, in particular as set out in the comparative table.

….

[93] With the exception of the terms of the Coal Award incorporated in the Agreement by Schedule A thereof, I would otherwise be satisfied that BGC took all reasonable steps to explain the terms of the Agreement and their effect to the relevant employees. In my opinion, BGC did this through a combination of communications with relevant employees. The evidence is that it did so during return to site meetings, pre-shift meetings and consultative committee meetings. It did so on an ad hoc basis through discussions with individual employees. It did so through a series of FAQ documents. It also did so by providing to employees the Final Information Pack. This included detailed tables comparing the terms of the Agreement and the 2012 Enterprise Agreements, the Reference Document, and information about the Preserved Conditions Contracts.

[94] Turning then to the issue of the explanation of the incorporated terms of the Coal Award. BGC readily conceded that it did not initiate or publish any explanation about the Agreement as it would apply to employees performing work in black coal mining. 96 It is uncontroversial that no relevant employee was working in black coal mining at the time of the explanations and at the time that employees voted to approve the Agreement. There is also no evidence that the relevant employees had any particular or relevant experience in black coal mining. The distinction BGC sought to make between One Key Workforce (No 1) and the circumstances applicable here, by pointing to the differing “effect” vis-à-vis the reference or existing industrial instruments of the impugned agreement in One Key Workforce (No 1) does not assist it. It was required to take all reasonable steps to explain the effect of the incorporated provisions of the Coal Award, but it took no steps to do so.

[95] BGC contends that as there were no employees employed by it at the relevant time engaged in the black coal mining industry it was reasonable in the circumstances to make available an opportunity for employees to ask questions of management about all matters concerning the Agreement including the terms and effect of those terms as they would apply to employees who might work in the coal mining sector in the future.  BGC did explain to employees that it was seeking an Agreement in order that it may remain competitive in the market and to win new work including in coal mining.

[96] Whether the steps taken by an employer to explain the terms of an agreement and the effect of those terms to relevant employees were reasonable steps or were all reasonable steps is, as I have already indicated, to be assessed in the circumstances faced by the employer. Whilst the fact that there were no relevant employees employed by BGC at the relevant time working in black coal mining is a relevant circumstance, the absence of such an employee does not relieve the employer of the obligation to explain to the relevant employees the terms of the agreement and their effect. This is so even if those terms will have no immediate effect upon the relevant employees. Were it otherwise, an employer would only have an obligation to explain the terms of the agreement and their effect to employees insofar as those terms have any application to the relevant employees who are asked to vote to approve the agreement.

[97] Section 180(5) places an obligation on an employer to take all reasonable steps to explain the terms of an agreement and the effect of those terms to relevant employees. It does not delineate between those terms that may have effect on relevant employees and those terms which will have no effect on relevant employees. As I have already noted, the distinction between the effect of the impugned agreement in One Key Workforce (No 1) and this Agreement sought to be made by BGC does not assist it. The explanation given by an employer is one of the vehicles through which an employee becomes informed about the terms of the agreement and is able to then give informed consent, or to use the statutory phrase, to genuinely agree to the agreement. An employee voting to approve the agreement is not asked to vote to approve only those terms and conditions of an agreement which will have application to that employee. The employee and indeed all employees who will be covered by the agreement are asked to vote for or against the totality of the agreement not just aspects of it. It is for this reason that an employer is obliged by s.180(5) to take all reasonable steps to explain the terms of the whole agreement and the effect of those terms to relevant employees.

[98] The view I have expressed above is reinforced by the Full Court’s judgment in One Key Workforce (No 2).

[99] In this case, it is clear that apart from making available the opportunity at various fora to relevant employees to ask questions, BGC took no other material step to explain to relevant employees the terms of the Coal Award which are incorporated in the Agreement by Schedule A or the effect of those terms. The incorporated terms were not trifling, insignificant, or inconsequential so that no or minimal explanation need have been given. These were substantive terms. That the employees were not working in, nor had experience in, black coal mining, meant that a more not less comprehensive, explanation was warranted in the circumstances in order that informed consent might be given. The employer was required to take all reasonable steps to explain these terms and their effect and it did not do so. It took no step. In these circumstances I am not satisfied that the employer has complied with its obligation under s.180(5) of the Act to explain the terms of the Coal Award that are incorporated in the Agreement by Schedule A or the effect of those terms to relevant employees.

[23] That is to say, the non-explanation of the incorporation of the Coal Award (even when voting employees were not covered by it), resulted in the non-approval of the agreement. The matters I have identified above have actual relevance to the employees who voted for the Agreement.

[24] In this matter it is relevant context that the Agreement is largely a roll-over agreement with increased benefits.

[25] I accept that the meeting on 2 November 2020 and the page turn exercise were all reasonable steps. However, that is not the end of the matter. There were deficiencies in the explanation of the terms of the Agreement.

[26] In the table above I have identified clauses in the Agreement that are not trifling, insignificant, or inconsequential so that no or minimal explanation needed to be given. This is not about requiring a system of perfection. These are substantive terms that required a proper explanation. It would have been reasonable to do so. An omission to explain is of “particular significance in circumstances where there were material differences between” the old and new agreement: see Construction, Forestry, Maritime, Mining and Energy Union v McNab Constructions Pty Ltd. 10 The failure to explain the effect of them means that Hansen did not “take all reasonable steps” as required by s.180(5) of the FW Act.

Conclusion

[27] For the reasons set out above:

a) I am not satisfied that Hansen took all reasonable steps to explain the terms of the Agreement or the effect of those terms to relevant employees.

b) Consequently, I am not satisfied that the relevant employees genuinely agreed to the Agreement as described in s.188 of the FW Act.

c) Accordingly, I am not satisfied as to the matter in s.186(2)(a) of the FW Act.

[28] In BCG (No 2)  11 the Deputy President held,

[43] The evident purpose of ss.180(2) and (5), as is clear from their inclusion in s.188 and thus s.186(2)(a), is to ensure so far as is practicable that employees who are asked to vote to approve an agreement make an informed choice as to whether or not they will vote to approve the agreement. That is, the choice that an employee makes in deciding whether to cast a vote to approve the agreement is to be informed by, relevantly, having access to the agreement and any material incorporated by reference during the relevant period, and importantly by having the terms of that agreement (including incorporated terms) and their effect explained. The failure to take all reasonable steps vis-a-vis the material incorporated and the explanation of the terms and their effect means that employees who voted to approve the agreement were deprived of the benefit of very important pre-approval steps designed to ensure that relevant employees genuinely agree to the agreement.

[45] An employer cannot know which employees will and which will not vote in the agreement approval process, how employees will vote or the reason employees vote in a particular way. Voting is not compulsory. Thus the preapproval steps play an important role in providing information to employees so that the employees can each choose whether or not to participate in the voting process, and if so whether to vote to approve the agreement. The mischief sought to be overcome is to ensure that employees understand the terms of the agreement as a whole upon which they are asked to vote. This mischief and the concern that employees did not genuinely agree to the Agreement is not overcome or met by accepting the genuine agreement undertaking proffered by BGC, which in essence is about the ongoing application of the Agreement (through a self-imposed restraint on employment) in respect of certain classes of employees and not about the fundamental issue of whether the Agreement was genuinely agreed to by employees covered by it. That a future cohort of voting employees may make an informed choice about varying the Agreement (alone or coupled with a restraint on employment until any future variation takes effect) does not meet the concern that those employees asked to approve the Agreement in June 2016 did not have information designed to enable them to make an informed choice about whether to approve the Agreement.

[29] In the BCG matter the Deputy President allowed the employer an opportunity to offer up undertakings to deal with the genuinely agreed issue. Undertakings were offered, but the Deputy President was ultimately not “persuaded that the genuine agreement undertaking, [met] the concern identified in [his] earlier decision.” 12 The application for approval of the decision was dismissed.

[30] In this matter I have decided not to allow Hansen an opportunity to proffer undertakings aimed at curing the genuinely agreed issues. This is because s.180(5) is a pre-approval requirement concerned with ensuring employees have adequate information about the terms of a proposed enterprise agreement to facilitate their genuine agreement in bargaining. I am not satisfied that Hansen is capable of retrospectively curing its non-compliance with s.180(5) by proffering an undertaking at the agreement approval stage.

[31] This is not like the situation discussed in the Full Bench decision in Construction, Forestry, Maritime, Mining and Energy Union v Karijini Rail Pty Ltd. 13

[32] I cannot readily envisage an undertaking being proffered to meet the concerns I have raised. I should not engage in the theatre of providing Hansen with the opportunity to do so.

[33] In the circumstances, given the conclusions I have reached about the failure of Hansen in respect of s.180(5) of the FW Act, the Agreement cannot be approved and the application for its approval is dismissed.

[34] However, it seems to me that the deficiencies I have identified could be remedied quickly if Hansen were minded to re-commence the agreement making process. If it decides to do so, and, in the course of doing so, explains the effect of all of the terms of the Agreement, then, when it lodges its application for approval, I would be minded to expedite consideration (and if all issues are addressed pre-emptively, approval) of expedite the same.

COMMISSIONER

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 1   <AE427812>

 2 [2017] FCA 1266.

 3 [2018] FCAFC 77.

 4   BGC Contracting Pty Ltd [2018] FWC 1466, [76].

 5   BGC Contracting Pty Ltd [2018] FWC 1466, [77].

 6   This was later changed to 5 February 2021.

 7   Transcript of Proceedings, PN 5-6.

 8   Ibid, PN 5.

9 [2018] FWC 1466.

 10   [2020] FWCFB 5080, [26].

 11   [2018] FWC 6936.

 12   [2018] FWC 6936, 46.

 13   [2020] FWCFB 958 at [107].