McMahon Services Australia Pty Ltd - [2024] FWCA 4190

[2024] FWCA 4190

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.185—Enterprise agreement

McMahon Services Australia Pty Ltd

(AG2024/3584)

MCMAHON SERVICES AUSTRALIA PTY LTD (SCAFFOLDING) ENTERPRISE AGREEMENT 2024

Building, metal and civil construction industries
DEPUTY PRESIDENT COLMAN	MELBOURNE, 28 NOVEMBER 2024

Application for approval of the McMahon Services Australia Pty Ltd (Scaffolding) Enterprise Agreement 2024

McMahon Services Australia Pty Ltd (McMahon) has made an application under s 185 of the Fair Work Act 2009 (Act) for the Commission to approve the McMahon Services Australia Pty Ltd (Scaffolding) Enterprise Agreement 2024 (Agreement). The Construction, Forestry and Maritime Employees Union (CFMEU), a bargaining representative for the Agreement, lodged an F18 declaration by which it objected to the application on the grounds that the Commission could not be satisfied that the group of employees covered by the Agreement was ‘fairly chosen’ (see s 186(3)) or that the Agreement passed the ‘better off overall test’ (BOOT) against the Building and Construction On-Site Award 2020 (Building Award) (see s 186(2)(d)). It further contended that the Commission could not be satisfied that the Agreement was genuinely agreed to by employees because McMahon had not complied with s 180(5) by taking all reasonable steps to ensure that the terms of the Agreement were explained to employees (ss 186(2)(a) and 188(4A)). The CFMEU asked to be heard on its objections. The parties filed written submissions and materials pursuant to my directions.

Fairly chosen

The CFMEU contended that the group of employees covered by the Agreement was not fairly chosen because it was not relevantly distinct and unfairly excluded other employees. Clause 1.5.1 states that the Agreement is made between McMahon and employees of the company who are employed in its ‘Scaffolding operational unit’ and who are employed in one of the classifications listed in clause 4.1.1.1. These classifications are yard hand, driver/general hand, labourer, basic ticketed scaffolder, intermediate scaffolder, advanced scaffolder, and yard leading hand. Clause 1.5.1 does not explicitly state that the employees it describes are those ‘covered’ by the Agreement, however it is clear that this is its purpose. Clause 1.5.1 then goes on to state:

‘For clarity, this Agreement does not apply to employees covered in any other business unit including, but not limited to, the Events business unit.’

The CFMEU said that because the Agreement did not cover all of McMahon’s employees, s 186(3A) of the Act required that the Commission take into account whether the chosen group was ‘geographically, operationally or organisationally distinct’, and that in this case the chosen group was none of these things. It said that, based on information available on McMahon’s website, the events business unit involved storage, dispatching, distribution, installation and maintenance of temporary scaffolding, but that this was also the work of the scaffolding operational unit. The CFMEU said that there was no geographical, operational or organisational distinction between the construction and events parts of the company’s scaffolding business, and that it was unfair for the Agreement to cover the former, which was part of the work…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] FWCA 4190
Decision Date: 28 NOVEMBER 2024

CaseChat Overview and Summary

McMahon Services Australia Pty Ltd sought approval of an enterprise agreement, with the Fair Work Commission hearing the matter. The proposed agreement aimed to regulate employment terms and conditions within the scaffolding industry. Key issues included the coverage of the agreement, compliance with statutory requirements, and whether the agreement met the "better off overall test." The Commission examined whether the proposed agreement provided employees with outcomes no less favourable than their existing conditions or the relevant award, considering both direct and indirect benefits.

The court assessed whether the agreement adequately covered all employees within the intended scope and whether it complied with the Fair Work Act. It considered if the agreement provided for minimum wages, entitlements, and leave provisions that were at least as favourable as those set out in the relevant award. Additionally, the Commission evaluated the "better off overall test," which required a demonstration that the majority of employees would be better off under the new agreement than their current conditions. This assessment involved a detailed examination of the financial and non-financial benefits proposed in the agreement.

The Fair Work Commission concluded that the proposed agreement met all statutory requirements and adequately covered the intended employee group. It found that the agreement provided for conditions that were at least as favourable as those set out in the relevant award, both in terms of wages and other entitlements. Furthermore, the Commission determined that the agreement passed the "better off overall test," as it offered a balance of benefits that would leave the majority of employees in a more advantageous position. The Commission approved the enterprise agreement, confirming its compliance with the Fair Work Act and suitability for implementation.

The Commission issued an order approving the McMahon Services Australia Pty Ltd (Scaffolding) Enterprise Agreement 2024, effective from the date of approval. This decision authorised the agreement to be registered and enforceable under the Fair Work Act, providing a framework for the employment terms and conditions within the specified industry.

Orders