McNab Constructions Pty Ltd

[2021] FWC 443

[2021] FWC 443

FAIR WORK COMMISSION

DECISION

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

McNab Constructions Pty Ltd
(AG2020/892)

DEPUTY PRESIDENT LAKE BRISBANE, 29 JANUARY 2021

Application for approval of the McNab Constructions Pty Ltd Enterprise Agreement 2020 – reasons for decision.

[1] McNab Constructions Pty Ltd (the Applicant) has applied for approval of an enterprise Agreement known as the McNab Constructions Pty Ltd Enterprise Agreement 2020 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single enterprise agreement.

[2] There is a considerable history leading to this decision. The Agreement was originally approved by me on 25 June 2020 (the June Decision). 1 A Full Bench of this Commission overturned the original decision on appeal from the Construction, Forestry, Maritime, Mining and Energy Union (the CFMMEU) (the Appeal Decision). 2

[3] The CFMMEU’s appeal contained four appeal grounds, however it did not press grounds 3 or 4 at the appeal hearing. Accordingly, the relevant appeal grounds as considered by the Full Bench were as follows:

“[7] The first appeal ground contends that the Deputy President erred in finding that the Agreement passed the better off overall test (BOOT) as required by s.186(2)(d) of the Act.

[8] Ground 2 contends that Deputy President erred in finding that s.180(5) of the Act had been complied with and consequently, that the Agreement was genuinely agreed to in accordance with s.188.” 3

[4] The Full Bench granted permission to appeal, and as a consequence of the Appeal Decision, the application for approval of the Agreement was remitted to me for re-determination.

[5] This decision should be read in conjunction with the Appeal Decision and the June Decision. Collectively, these three decisions set out the relevant context for the application, the findings of the Commission and the reasons why I consider the Agreement is now capable of approval.

Further Submissions on behalf of the Applicant

[6] On 9 November 2020, the Applicant filed submissions in support of redetermination of the application for approval of the Agreement. The Applicant filed in support of these submissions, and statutory declaration of Ms Lucy Ward, outlined below.

[7] The Applicant submitted its position that the Commission should approve the Agreement.

Background

[8] The Applicant confirmed that on 27 March 2020, the Agreement was made with 41 employees employed at the time and covered by the Agreement, requested to approve the Agreement. The Applicant confirmed that all 41 employees voted to approve it, further to which the application for approval was filed in the Commission.

[9] The Applicant highlighted that the appeal was upheld on a single appeal ground, being that I erred in finding that s.180(5) of the Act had been complied with and consequently, that the Agreement was genuinely agreed to in accordance with s.188 of the Act.

[10] The Applicant stated that in all other regards, it is open for me to make a new decision which:

“(a) re-states [my] reasons in support of the Original Decision; but

(b) relies on the statutory declaration of Lucy Ward filed on 9 November 2020; and

(c) determines the Agreement is one for approval.”

Section 180(5) of the Act

[11] The Applicant highlighted that, under s.180(5) of the Act, before an employer requests that employees approve a proposed agreement, 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.”

[12] It stated that once this section is confirmed as satisfied by the Commission, then the relevant Member can form a view whether the agreement has been “genuinely agreed to” by the employees it covers. 4

[13] The Applicant makes reference to the Appeal Decision at paragraph [25], where the Full Bench relied on the decision in One Key Workforce (No 2) 5 to highlight why the “content of the explanation” given to employees regarding a proposed agreement is “an important consideration in addressing whether all reasonable steps were taken for the purposes of section 180(5)”.6

[14] The Applicant made specific reference to the following extract from the One Key decision, as cited in the Appeal Decision:

“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 regarding to all the circumstances and needs of the employees and the nature of the changes made by the Agreement.” 7

(Applicant’s emphasis)

[15] The Applicant also cited the decision in Construction, Forestry, Maritime, Mining and Energy Union v Ditchfield Mining Services Pty Ltd 8 as referred to by the Full Bench, and emphasised that, in order to be satisfied that reasonable steps have been taken to explain the terms of a proposed agreement, and their effect, in a manner that considers the employees particular circumstances and needs, attention is required as “to the content of the explanation given”.9

[16] The Applicant cited the Appeal Decision at paragraph [26], where it was stated while it was:

“clear that the Deputy President had evidence which demonstrated that the [Applicant] had taken a number of steps to explain the terms of the Agreement to relevant employees…the Deputy President did not have any material before him as to the content of any explanation given to employees about the terms of the Agreement of the effect of those terms”. 10

[17] Further, the Applicant noted the Full Bench raised that the two summary documents provided by the Applicant to employees, when it explained the terms of the Agreement and their effect to the employees, were not included with the Application. It followed, according to the Full Bench, it was not open to me to be satisfied that all reasonable steps had been taken to ensure that the terms of the Agreement, and their effect, had been explained to the employees who voted on the Agreement.

[18] The Applicant submitted that, to address the concerns outlined by the Full Bench, and so that I may be satisfied that the Applicant did meet the requirements of s.180(5) of the Act, the Applicant referred to the statutory declaration of Ms Lucy Ward, declared on 6 November 2020 and filed in support of these proceedings. The Applicant confirmed this declaration provides how the terms of the Agreement and the effect of the terms were explained by the Applicant to its employees in an appropriate manner, taking into account the particular circumstances and needs of the relevant employees, and further annexes the two summary documents provided by the Applicant to the relevant employees. The statutory declaration of Ms Ward is outlined below.

[19] It submitted that further to these submissions and Ms Ward’s statutory declaration, it is now open for me to conclude that the explanatory material provided to the employees was sufficient to explain its effect in detail.

Supporting statutory declaration of Lucy Ward

[20] Ms Lucy Ward, HR Manager for the Applicant, filed a statutory declaration in support of approval of the Agreement. 11

[21] Ms Ward confirmed that she has been employed by the Applicant since April 2013, and in her capacity as HR Manager, took steps between 16 and 19 March 2020 to explain the terms and effect of the Agreement to the employees who are to be covered by it. She gave evidence that steps were taken as follows.

Briefings on conditions imposed by the proposed Agreement (from 16 to 18 March 2020)

[22] Ms Ward’s evidence is that between 16 and 18 March 2020, she conducted briefings on the Agreement as follows:

“a. On 16 March 2020 I travelled to each of McNab's Gold Coast sites and one of McNab's Toowoomba sites (located on Nass Road);

b. On 17 March 2020 I travelled to McNab's other Toowoomba site (located on Ruthven Street), and to each of McNab's Sunshine Coast sites; and

c. On 18 March 2020 I travelled to McNab's larger Brisbane sites (located at Berrinba, and at Richlands). Employees from McNab's nearby smaller sites were directed to attend one of these briefings being held at the larger Brisbane sites.” 12

[23] Her evidence is that she followed the same agenda for each of these briefings, ensuring that she covered the same topics with each group. The details of her briefings are outlined below.

Introductory remarks

[24] Ms Ward’s evidence is that she commenced each briefing with general introductory remarks, including acknowledging all employees’ “participation in, and the quality of, the conversations surrounding the proposed Agreement”, and speaking generally about the Applicant’s position within the construction industry.

[25] Ms Ward explained the agenda for the briefing, including that she would provide the opportunity for staff to ask questions at the end. Ms Ward’s evidence is that she asked all apprentices to stay behind at the end of the briefing, to discuss matters specific to their employment under the Agreement.

Proposed Agreement conditions - changes and their implications

[26] Ms Ward’s evidence is that she made general comments about the outcomes of the negotiation process to date, and explained the terms and effect of the proposed Agreement. She made reference to a document titled "EA Proposal Summary", consistent with which she discussed:

“a. A major change that would be implemented by the Agreement was that apprentices would be covered. McNab did this because it wanted to bring parity for apprentices with the higher conditions McNab offers to the rest of its staff.

b. While there are lots of allowances and conditions set out in the Award (which I identified as the Building and Construction General On-Site Award 2010), our Agreement keeps it simple. McNab has considered all Award conditions against numerous different scenarios and rosters and ensured that in every case, employees are better off under the proposed Agreement then they would be under the Award.

c. I talked through the improvements to the overtime structure, including that under the old structure, employees were paid their normal rate for the first 9 hours then 150% of their normal rate for all hours thereafter, but under the proposed Agreement, employees would be paid normal rate for the first 9 hours, 150% for hours from 9 to 11, and 200% for all hours thereafter.

d. Weekend penalty rates would be increased under the proposed Agreement, from 150% of the normal rate for all hours worked on a Saturday and Sunday, to:

i. 150% of the normal rate for the first 8 hours worked on a Saturday and 200% for all hours thereafter with a 3-hour shift minimum; and

ii. a flat 200% of the normal rate for all time worked on Sundays.

e. I talked through the improvements to night work penalties, explaining that under the old agreement, employees would be paid 150% of their normal rate for hours worked between 7pm and 4am whereas under the proposed Agreement, they would be paid 150% between 7pm and the commencement of ordinary hours (i.e until 6am from March to August, and until 5am from September to February).

f. I explained the increase to the PPE allowance, which went from $150 per year for safety boots, to $400 per year to spend on safety boots, respirator, rubber boots, glasses, and so on.

g. I talked through the newly introduced Parking Allowance, which would mean that where McNab cannot provide free parking, there will be a parking reimbursement amount agreed to at the start of each project, to be paid as a daily allowance whilst an employee worked on that project. This Parking Allowance would be limited to Gold Coast, Sunshine Coast and Toowoomba sites only as Brisbane sites already had access to (and would continue to have access to) the Metro Allowance of $1 per hour spent on site.

h. I explained that there would be a change to the conditions of using banked hours such that, instead of only being able to use or cash out banked hours in whole days (i.e. 7.6 hours), banked hours would be able to be used or cashed out in part days (i.e. any amount, including less than 7.6 hours).

i. I explained that two new allowances were being introduced - an Overtime Meal Allowance of $15.50 that will be paid after 12 hours worked, and an Apprentice Tool Allowance of $1000 per year.

j. I explained the changes to classifications under the proposed Agreement, including the new apprentice classifications and adjustment to the labourer classification such that labourers with less than 6 months experience would not be covered by the Agreement (their employment would instead be covered by the Award). I also discussed that there were some changes to classification bandings resulting in increased minimum rates for some bandings, including:

i. The lower limit of the Labourer banding would be increased by $3.50;

ii. The lower limit of the Skilled Labourer banding would be increased by

$0.50; and

iii. The lower limit of the Tradesperson banding would be increased by $0.50.

k. I explained that there would an annual 2% escalation of hourly rates of pay, daily fares and travel allowances, travel meal allowances and overtime meal allowances, and that these were all improved conditions provided for by the proposed Agreement.

l. In respect of Accident Pay, I explained that under the proposed Agreement McNab will pay the difference between WorkCover (workers compensation pay) and an employee's usual pay for up to 26 weeks.

m. I discussed the inclusion of a casual conversion clause, which would provide casual employees with the right to request permanent employment after 6 months of working regular and systematic hours.” 13

[27] She gave evidence that she recalled saying words to following effect:

“a. In relation to the BOOT - "In order for McNab to have this agreement we run calculations on a number of different rostering scenarios to ensure that you will be not just better off, but competitively better off, under the McNab agreement than the Award".

b. In relation to Banked hours - "Under the current agreement it is a requirement that you take or have your banked hours paid out as the minimum of one day, however as you all know we have been quite flexible on this, and it is limiting when you have time accrued but not enough for a full day, and just want to use some for an appointment. So we have changed this for you to be able to take or have paid any amount of banked hours you like from your balance".

c. In relation to the escalation - "Following the addition of all these new benefits or more beneficial conditions, we were still able to provide a 2% escalation to hourly rates, daily fares and travel, travel meals and overtime meals each year. This is an increase from the previous agreement that had a 1.75% escalation except for the 2% in the last year".

d. In relation to casual conversion - "Since the negotiation of our last agreement in 2016, the award has been updated to include conditions that related to something called casual conversion, which basically means that anyone who works in a casual role for a certain period of time is entitled to have their employment converted to permanent if they wish. As you know we don’t really ever have casuals so it doesn’t really affect us too much, but we will be adding it in to reflect the inclusion of the condition in the award”. 14

Conditions specific to apprentices

[28] As to the Agreement provisions specific to apprentices, she explained:

“a. Training contracts, TAFE and training would remain unchanged;

b. Progression through each stage of the apprenticeship program would remain the same as the Award - apprentices would progress based on competency or the completion of 12 months at a particular stage (whichever comes first);

c. That apprentices would be paid at a rate equal to a percentage of the bottom of the Tradesperson banding which was a condition different to the Award;

d. The proposed Agreement still covers and distinguishes between school-based and adult apprentices, like the Award does;

e. McNab will continue to pay for all apprentice training costs;

f. McNab will take apprentices shopping to spend the new Apprentice Tool Allowance of $1000 per year;

g. Apart from these matters, all other conditions of the Agreement that I had been through earlier in the briefing would apply to apprentices.” 15

[29] She gave evidence that she recalled saying words to the following effect:

“a. "The pay related conditions are structured substantially different to how you are currently paid under the award, however the structure for your training and progression will remain fairly similar. You will still progress through each stage of your apprenticeship based on competency."

b. "Under the Award your tool allowance was included in your hourly rate, in calculating your new hourly rate, we have included this amount, so you are still receiving the equivalent. However, in the agreement we have also included a $1000 per year tool allowance. This will not be paid to you, but we will take you shopping to purchase tools."” 16

Agreement conditions that would not be changing

[30] Ms Ward stated she covered the conditions in the Agreement that would remain the same as under the existing agreement, and recalled saying words to the effect:

“a. "The daily fare and travel allowance will remain the same, however the 2% escalation will apply each year."

b. "The lunch break structure will remain the same. Apprentices, under the award your break entitlements were one 30 minute unpaid lunch break, and one 10 minute paid break - under the agreement, you are entitled to two 15minute paid breaks and one 30 minute unpaid break and we are generally flexible on how and when those breaks are taken"”. 17

Q & A and explanation of next steps in the process

[31] Ms Ward said that in each briefing, after discussing the changes and conditions provided for under the Agreement as outlined above, she invited the attendees to ask any questions or provide any feedback on whether they were happy with the proposed Agreement. She said that she informed employees they would have access to the proposed Agreement on 19 March 2020, to ensure they had each read and considered it, and had the opportunity to ask management any questions they had after reading the proposed Agreement.

[32] Ms Ward said she advised employees of a further meeting to be held on 19 March 2020, with all employees required to attend unless they had a reasonable excuse not to. She said that she told employees this meeting would be to show them how to access the proposed Agreement, to provide information regarding the voting process, and to again go through the proposed conditions. She also stated that the vote would be "next Friday, 27th of March" and noted further details of what employees would need to do to vote would be explained in full in the meeting on 19 March 2020.

[33] Ms Ward said that she extended a ‘final invitation’ for employees to ask questions about the Agreement and next steps, however she did not recall many questions being asked. She said that some questions she recalled were to the effect of:

“a. "will apprentices have the same breaks as non-apprentice employees now?" to which my answer was "yes, you will now all have consistent breaks, which I'm sure you will all be pleased about"; and

b. "can I buy multiple pairs of boots in a year with my PPE allowance?" to which my answer was ''yes, you may use the full allowance for any of the things included - boots, respirators, glasses and rubber boots. So, you may use this money for any of these items, however you like. You will still be issued the standard issue gloves and glasses, but this money is available to you should you wish to purchase better quality, or multiple boots. As you know, we already have the separate reimbursement for prescription safety glasses which will not change".”

Discussion with just the apprentices

[34] Ms Ward said that after she finished answering questions, she then noted she would walk the apprentices through everything in more detail, and stated that while non-apprentice staff were welcome to stay for this, she provided the option for them to leave at this point if they wanted to. Her evidence is that a member of the representative group stayed for each of the discussions with apprentices. At these sessions for the apprentices, she said that she went through the following:

“a. I took out a copy of the proposed Agreement and talked through each of the conditions with them;

b. I talked through, line by line, the document titled "EA vs Modern Award Conditions", which is now shown to me and attached to this Statutory Declaration and marked Annexure B, to ensure that they understood how the Award operated, compared to how the Agreement operated;

c. I informed them of their specific rates of pay and when and how they could access their Tool Allowance;

d. I explained that, following the implementation of the Agreement, their timesheets and payslips would look different;

e. I asked the apprentices, to effect, "are you clear that you will no longer receive the allowances you have been receiving such as crib? And that you will only get what is in this Agreement and what we have been through today? Do you understand that these rates are to cover off anything that you could be entitled to under the Award, so that you are always going to be better off overall under this Agreement than you would be under the Award?" The apprentices all nodded and seemed very happy about the Agreement, particularly regarding their new rates of pay.

f. I invited them to ask any questions they might have. The only question I recall being raised was whether McNab would pro-rata the Tool Allowance for the stage th y were already in which I confirmed McNab would do.”

Meetings of 19 March 2020 regarding proposed terms and conditions, the access period and voting details

[35] Ms Ward’s evidence is that on 19 March 2020, she convened a series of meetings with workers across McNab's various sites. She said it was mandatory for employees to attend at least one of these meetings. She said that she personally attended McNab's Brisbane and Toowoomba offices to conduct these meetings, and for McNab's sites on the Sunshine Coast and Gold Coast, these meetings were held via video conference. Ms Ward said that for each site participating via video conference, there was a local HR representative facilitating the sharing of materials with employees.

[36] Ms Ward stated that a total of 4 of these meetings took place, and regarding one employee unable to attend she said that she also placed a phone call to them.

[37] She confirmed that the purpose of these meetings was to provide a further overview of the terms and conditions provided for in the Agreement, and to discuss the next steps in the process, and in particular the access period and the voting process.

[38] Ms Ward said that she commenced each meeting by thanking employees on their involvement in the process to date, including comments that McNab was made up of great people and that the the conditions that had resulted from the Agreement negotiation process represented a great outcome, the terms and conditions were unique and sustainable, and would be great for staff and the business alike.

[39] She stated that she then went through the same information, and followed the same agenda, as outlined in her evidence above, regarding the feedback that had been received on the proposed Agreement and the specific terms and conditions contained in the Agreement.

Q & A

[40] Ms Ward said that after going through the details of the proposed Agreement again, she invited staff to ask any questions that they might still have about the Agreement. She didn’t recall any questions being asked about the Agreement, but that some questions were raised about the voting process including when and how employees were to vote, how long it would be before the Agreement came into effect and so on. She said that she recalled saying that she would come back to those questions about the next phase of the process later in the meeting.

[41] She said she also asked each group if they were happy with the proposed Agreement, and to let management know if there was anything that they were not happy about. Employees present at those meetings indicated that they were happy with the Agreement and eager to see it in place.

Explanation of the access period

[42] Ms Ward stated that she then explained the access period to each group as follows:

“a. Access to the Agreement would be available from that day (19 March 2020) for the next eight days.

b. The Agreement could be accessed during that period in the following ways:

- A link to the full Agreement would be emailed that afternoon to every employee, and would include with it the summary documents (Annexure A and Annexure B to this Statutory Declaration);

- Hard copies of the Agreement and summary documents would be available in each office for employees to come and review at any time; and

- Hard copies of the Agreement and summary documents were available in each meeting for employees to view at the end of the meeting that same day.

c. I told all staff to ensure that they read the proposed Agreement and other relevant material, to take any steps necessary to inform themselves about the Agreement, and to ask myself or members of the management team any questions that they might have over the next eight days.”

Outlining the voting process

[43] Ms Ward said that she told employees that the details for the vote were as follows:

“a. The vote would take place on Friday 27 March 2020;

b. At 7:55am on 27 March 2020, an email would be sent to all employees containing the voting form. Employees were asked to reply with their votes by no later than 8:30am;

c. Votes must be placed in writing either at any McNab office or via email;

d. The time for voting would be between 8:00am and 8:30am;

e. Glenn (Employee Representative - Tradesperson) or Ronnie (Employee Representative - Tradesperson) would be attending the McNab Brisbane office to count the votes with myself and Michael Halpin (General Manager - People and Performance), and, assuming the Agreement was successfully voted up, to sign and witness the final Agreement.”

[44] She then invited employees to ask any questions they might have on the process she had outlined.

[45] Ms Ward stated that through this process, from 16 to 19 March 2020 inclusive, she had explained the conditions of the Agreement to all staff via the briefings, then via the meeting to discuss the access period and voting process. She stated that her explanation included all conditions that were being improved and were above the Award, all new conditions, and all conditions that were staying the same. She said that she also explained in detail the process ahead of the vote, ensuring that every employee knew how to access the proposed Agreement and where to go to for further information.

[46] Ms Ward said that all employees were given direct access to all of the relevant materials, including the proposed Agreement and explanatory material, for their consideration, and to be able to inform themselves.

[47] Ms Ward’s evidence is that it was emphasised to all staff that their attendance at these meetings was important, and where circumstances, such as pre-planned leave or operational requirements, meant that an employee could not attend, she phoned those employees to talk through the information with them.

Submissions of CFMMEU

[48] On 9 November 2020, Chambers issues directions to parties with an opportunity for the CFMMEU to provide submissions in response to the Applicant’s further materials, on whether the agreement is capable of approval or not, and if not, on what grounds. The Applicant was also provided with an opportunity to respond.

[49] On 13 November 2020, the CFMMEU filed submissions with the Commission noting that they maintained concerns regarding the deficiencies in the explanation provided by the Applicant on the terms of the Proposed Agreement and their effects. 18

[50] The CFMMEU submits that accordingly, the Proposed Agreement is incapable of approval as s.180(5) has clearly not been satisfied and therefore employees did not genuinely agree to the Proposed Agreement.

[51] The CFMMEU referred to the decision of Construction, Forestry, Maritime, Mining and Energy v Ditchfield Mining Services Pty Ltd that states:

[65] First, the question whether an employer has complied with the obligation in s.180(5) depends on the circumstances of the case.

[66] Secondly, the focus of the enquiry whether an employer has complied with s.180(5) is on the steps taken to comply, and then to consider whether:

i. the steps taken were reasonable in the circumstances; and

ii. these were all the reasonable steps that should have been taken in the circumstances

[65] Thirdly, the object of the reasonable steps that are to be taken is to ensure that the terms of the agreement, and their effect, are explained to relevant employees in a manner that considers their particular circumstances and needs. This requires attention to the content of the explanation given.

[66] Fourthly, an employer does not fall short of complying with the obligation in s.180(5) merely because an employee does not understand the explanation provided.

[emphasis added]

[52] The F17 filed by the Applicant identified four items as being less beneficial. The CFMMEU raised that in its assessment, the CFMMEU significantly expanded on the number of items.

[53] The CFMEU v Shamrock Civil Pty Ltd decision was referred to that stated:

“as to the nature of the explanation given to employees as to terms of the Agreement and the effect of those terms. That is, it at least raises a real question as to the explanation to employees about the terms of the Agreement and in particular the effect of those terms, in circumstances where the employer is attesting that the agreement has no less beneficial terms” 19

[54] In response to the Applicant’s materials, the CFMMEU brought to the Commission’s attention:

“a. At paragraph 23(e) of her Affidavit, Ms Ward reports having asked apprentices whether they were aware that as a consequence of being covered by the Proposed Agreement, they will no longer received a number of allowances, including crib time. Significantly, the summary document (Annexure B) does not identify which allowances would no longer apply under the Proposed Agreement. Instead, the document simply identifies some Award allowances and alongside it notes what allowances would apply under the Proposed Agreement.

b. The affidavit and Annexure B reveals that the following diminutions were not identified or explained to employees:

i. The loss of a rostered day off system;

ii. That there would be no provision for an industry specific redundancy scheme (whilst this was identified in the F17 as a diminution, this is not reflected at any point in the explanatory material nor in Ms Ward’s recollection of her discussions with employees);

iii. That employee representatives would not receive paid dispute resolution training;

iv. That classification progression is solely at the direction of the Applicant rather than by reference to objective criteria as per the Award;

v. That the Applicant would be entitled to withhold wages that exceeds what is permitted by the Award in the event that a worker does not give the requisite notice of termination;

vi. That the Proposed Agreement included a fitness for work clause that if contravened, could leave to disciplinary action and/or a breach of s.50 of the FW Act; and

vii. That they would not receiving the benefits otherwise provided for under the Award in circumstances where they present for work but are not required.” 20

Applicant’s submissions in reply

[55] On 19 November 2020, the Applicant filed submissions in reply to the CFMMEU’s submissions of 13 November 2020.  21

[56] The Applicant contends that all reasonable steps were taken pursuant to section 180(5) of the Act, and there was genuine agreement, and thus the agreement is capable of approval.

[57] The Applicant agrees with the reference to Ditchfield but also refers to the Full Bench decision of The Australian Workers’ Union v Rigforce Pty Ltd t/a Rigforce (‘Rigforce’). 22 In Rigforce, the analysis was adopted from BGC Contracting Pty Ltd decision regarding the nature of the statutory obligation to take all reasonable steps:

“[43] A requirement or obligation to take “all reasonable steps” seems to me to require the identification of the steps a reasonable person would regard as reasonable in the circumstances that apply. Whether particular steps are reasonable will depend on the particular circumstances existing at the time the obligation arises. A requirement to take all reasonable steps does not extend to all steps that are reasonably open in some literal or theoretical sense…”

[58] The Applicant also relied on in BGC:

“[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.”

[59] The Applicant raises that the CFMMEU did not go into the circumstances of the Applicant employees and raised only “literal and theoretical steps”. The Applicant shared the circumstances that existed:

“(a) 41 employees were covered by the agreement at the time of the vote.

(b) 41 (or 100% of) employees voted.

(c) 41 (or 100% of) employees voted to approve the Agreement.

(d) There 0 non-Englishing speaking background employees as part of the vote.

(e) Non-apprentice employees were previously covered by 2016 Agreement.

(f) The Applicant and its employees value and respect the opportunity, rules and obligations associated with negotiating an enterprise agreement”. 23

[60] Further the Applicant submits that the circumstances that should be considered are:

“(a) there were 9 apprentices employed by the Applicant at the time of the vote, so where Ms Ward gives evidence about speaking directly to apprentices, this was an intimate cohort; and

(b) the Applicant otherwise has formal and structured internal consultation processes which ensure consultation about terms and conditions of employment at least annually, allowing employees to come together and discuss their conditions, such that at the time of the explanations, employees were already familiar with existing conditions and many of the improvements to be made by the proposed Agreement.”

[61] The Applicant responds to 11(a) of the Union’s submissions, in reference to extracts of Ms Ward’s statutory declaration. Further, it was submitted that Ms Ward’s statement to apprentices that they “will no longer receive the allowances you have been receiving such as crib” and they “…will only get what is in this Agreement” takes on a clear explanation that their higher rates of pay will compensate them for allowances foregone under the Award, except for the allowances preserved in the Agreement and the new Apprentice Tool Allowance of $1,000 per year.

[62] The Applicant then responds to 11(b) contentions in order. It is noted that Annexure B is only relevant to apprentices transferring from the Award to the Agreement. The Applicant’s response to the contentions are extracted as below: 24

“Contention at [11(b)(i)] – The loss of a rostered day off system

21 There is no loss to identify or explain. The Applicant does not work under a RDO system. The 2016 Agreement does not have a RDO system.

22 Apprentices (who were covered by the Award, which at that time (see [2] above) permitted a method of arranging working hours other than the RDO system, at clause 33(a)(vii)), worked under that system by agreement. So there was no loss to explain. (Relevantly, at that time (see [2] above) that agreement did not need to be in writing, as it does now: compare clause 33(a)(vii) of the Award as at 19 December 2019 to the clause 33.2 of the current version of the Award).

Contention at [11(b)(ii)] – No provision for an industry specific redundancy scheme

23 There is no loss to identify or explain.

24 For non-apprentice employees, nothing changed from the 2016 Agreement.

25 In so far as apprentices are concerned, the explanation given to all employees referred to at PN 10.b of Ms Ward’s statutory declaration was that although there are numerous conditions under the Award, the Agreement “keeps it simple” and makes employees better off than under the Award.

26 The Form F17 identified at [3.5] that: “As can be seen at 3.3(1) of this document, McNab’s weekly rates are significantly in excess of award rates, and can be seen to absorb the value of higher award redundancy condition comfortably, even when the most extreme example is used”.

27 On our instructions, the Agreement’s higher hourly rates means that applying the NES redundancy tables to the Agreement rates are more favourable in all circumstances than the applying the Award tables, at the Award rate.

28 It may be said that there is an exception where an employee has been with the Applicant for less than 1 year, because one difference between the NES and the Award is that the NES provides no payment for 0-1 year service employees, whereas the Award does: cl 17.3(b). However, the proper comparison is for apprentices only, and clause 17.3(f) of the Award provides that apprentices are not entitled to redundancy pay at all, and must have completed their apprenticeship and remained in employment with the one employer for a further 12 months before becoming entitled to any payment under the scheme. This means there can be no detriment for apprentices who are made redundant.

Contention at [11(b)(iii)] – No paid dispute resolution training

29 For non-apprentice employees, nothing changed from the 2016 Agreement.

30 For apprentices under the Award, there has not been any identified apprentice who is an eligible employee representative under 9.10(a) of the Award before and nor is there ever likely to be such that this even needs explaining – but the Applicant has provided an undertaking regarding the paid dispute resolution training on 12 June 2020 in any event.

Contention at [11(b)(iv)] – Classification progression solely at direction of the Applicant

31 There is no change to identify or explain.

32 For non-apprentice employees, nothing changed from the 2016 Agreement.

33 For apprentices under the Award, Ms Ward explained to apprentices that their classification progression through each stage of the apprenticeship program would remain the same as the Award (PN 12.b). This is reflected in cl 16.5 of the Agreement which requires the Applicant, the apprentice and the RTO to agree to specific requirements based on competencies: cl 16.5(i)(c). This clause should be read in conjunction with cl 16.2 shows the classification progression based on set competencies or intervals.

Contention at [11(b)(v)] – to ‘withhold wages’ exceeding what is permitted by the Award

34 This was addressed in earlier submissions.12

Contention at [11(b)(vi)] – Fitness for work clause leading to disciplinary action or a breach of s 50 of the Act

35 Each of the matters contained in clause 7 ‘Fitness for work’ of the Agreement reflects:

(a) common law rights of the employer, such as any lawful and reasonable direction to an employee to attend an independent medical examination13; and

(b) the statutory work health and safety (WHS) duties imposed on employees,14 such as not operating any equipment on company projects while affected by alcohol and/or any other drug.

36 It is difficult to postulate how the Agreement is less favourable to the employees in this way, as the Applicant could already reasonably impose these matters.

37 Addressing the others concerns of the Union on this matter:

(a) There is nothing expressly about discipline in clause 7 ‘Fitness for work’ of the Agreement.

(b) Clause 18.2 provides that an employee’s employment may be terminated by the Applicant for failing to follow a lawful and reasonable direction, which would apply in the absence of clause 7 and could have effect to the same subject-matter.

(c) The ability to direct an employee to a medical examination in the Agreement is not absolute; only in circumstances to ‘manage any risk to the employee’s health and safety and ensure the employee can perform the inherent requirements of the role’.

Contention at [11(b)(vii)] – Circumstances where presenting for work but not required

38 This was addressed in earlier submissions.”

Conclusion

[63] I have now been provided with further material in support of the Employers efforts to ensure that s.180 of the Act had been met. Following consideration of the new material, in particular the statutory declaration of Ms Lucy Ward and the two appendixes, and the further submissions by both parties, I am now satisfied the explanatory material provided to the employees was sufficient to explain its effect in detail and that therefore the Agreement was genuinely agreed to and is capable of approval.

[64] The circumstances of this agreement are that of a small construction organisation who have had the opportunity to have a high level of contact with each of the employees impacted by the new agreement. There are only 41 affected employees and each of them voted and each of them approved the agreement. I can only express sympathy for the employees who have not been able to access the conditions offered as a result of a third party, a stranger intervening and appealing the original decision which upon further examination of the material only confirms my view that the Agreement is capable of agreement.

[65] Having now determined that on the evidence before the Commission, I am satisfied the Agreement is capable of approval, a separate decision will follow to that effect.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR726516>

 1   [2020] FWCA 3329.

 2   [2020] FWCFB 5080.

 3   Ibid at [7]-[8].

 4   Applicant’s Submissions re ‘Redetermination of the Application for Approval of the McNab Constructions Pty Ltd Enterprise Agreement 2020’ at [11]; see also [2020] FWCFB 5080 at [23].

 5 [2018] FCAFC 77.

 6 Applicant’s Submissions re ‘Redetermination of the Application for Approval of the McNab Constructions Pty Ltd Enterprise Agreement 2020’ at [13].

 7 Applicant’s Submissions re ‘Redetermination of the Application for Approval of the McNab Constructions Pty Ltd Enterprise Agreement 2020’ at [13].

 8   [2019] FWCFB 4022.

 9 Ibid at [67].

 10   [2020] FWCFB 5080 at [26].

 11   Statutory Declaration of Lucy Ward, declared 6 November 2020.

 12 Ibid at [4].

 13 Ibid at [10].

 14 Ibid at [11].

 15 Ibid at [12].

 16 Ibid at [13].

 17 Ibid at [15].

 18 CFMMEU submissions filed 13 November 2020 at [5].

 19   CFMEU v Shamrock Civil Pty Ltd [2018] FWCFB at [33].

 20 CFMMEU submissions filed 13 November 2020 at [11].

 21 Applicant’s reply submissions filed 19 November 2020 at [4].

 22   The Australian Workers’ Union v Rigforce Pty Ltd t/a Rigforce [2019] FWCFB 6960 [35]

 23 Applicant’s reply submissions filed 19 November 2020 at [10].

 24   Ibid at [21] – [38].