DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Metalrig Pty Ltd
(AG2018/2331)

VICE PRESIDENT HATCHER

SYDNEY, 5 AUGUST 2018

Application for approval of the Metalrig Pty Ltd Enterprise Agreement 2018 – Pre-approval steps – Non-compliance with s 180(3) – Agreement does not pass ‘genuine agreement’ test – Application for approval of agreement

Introduction and factual background

[1] An application has been made by Metalrig Pty Ltd (Metalrig) for approval of an enterprise agreement known as the Metalrig Pty Ltd Enterprise Agreement 2018 (Agreement). The application was made pursuant to s 185 of the Fair Work Act 2009 (the Act). This decision specifically concerns the issue of compliance with s 180(3) of the Act in order to permit the Agreement to be approved.

[2] Section 180(3) of the Act provides:

(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:

(a) the time and place at which the vote will occur;

(b) the voting method that will be used.

[3] The “access period” referred to in the above provision is defined in s 180(4) as follows:

(4) The access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1).

[4] The voting process referred to in s 181(1) is the process whereby an employer requests relevant employees to vote to approve a proposed enterprise agreement.

[5] Section 180(3) is a “pre-approval step”, compliance with which is a necessary element for an enterprise agreement to have been “genuinely agreed”: s 188(a)(i). Such genuine agreement is a pre-requisite for the approval of an enterprise agreement: s 186(2)(a). Therefore an enterprise agreement cannot be approved if s 180(3) has not been complied with.

[6] In Construction, Forestry, Maritime, Mining and Energy Union and Ors v CBI Constructors Pty Ltd 1(CBI decision) a decision issued on 21 June 2018, the Full Bench said in relation to the determination of when, under s 180(4), the access period commences and ends:

“[42] The above considerations cause us to conclude that s 180(4) is to be construed on the basis that the access period consists of seven clear calendar days, and that by the application of s 36(1) of the AI Act 2 the access period ends at the end of the calendar day immediately preceding the day on which the voting process for a proposed agreement commences.”

[7] This Full Bench decision confirmed the longstanding position concerning the interpretation of s 180(4) established in McKechnie Iron Foundry (2010) 3 and Hydro Electric Corporation (2014).4 It did not represent the statement of any new legal proposition.

[8] The Form F17 statutory declaration made by Christopher Lane on 31 May 2018 that accompanied the application for approval of the Agreement stated (at [2.8]) that voting for the agreement commenced on 17 May 2018. The access period therefore…

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.

Continue reading Metalrig Pty Ltd

Details

AGLC: Metalrig Pty Ltd [2018] FWC 5588
Case: [2018] FWC 5588
Decision Date: 5 AUGUST 2018

CaseChat Overview and Summary

Metalrig Pty Ltd sought approval of an enterprise agreement under the Fair Work Act 2009. The enterprise agreement in question was the Metalrig Pty Ltd Enterprise Agreement 2018. The dispute arose when the Fair Work Commission found that the application for approval of the agreement did not comply with section 180(3) of the Fair Work Act 2009. The primary concern was that the agreement did not pass the ‘genuine agreement’ test, which is a requirement for pre-approval steps under the Act. The Fair Work Commission was tasked with determining whether the agreement complied with the necessary legal standards and whether the pre-approval steps were properly followed.

The legal issues the court had to decide included whether the pre-approval steps as outlined in section 180(3) of the Fair Work Act 2009 were properly followed, and whether the agreement satisfied the ‘genuine agreement’ test. The court had to examine if the process for reaching the agreement was fair and transparent and if the agreement reflected the genuine terms agreed upon by the parties involved. Additionally, the court needed to determine if there was any procedural defect that would invalidate the pre-approval steps.

The Fair Work Commission found that the pre-approval steps did not comply with section 180(3) of the Fair Work Act 2009. The Commission concluded that the agreement did not pass the ‘genuine agreement’ test as it was not a genuine agreement between the employer and the employees. The court emphasised that the process for reaching the agreement had to be fair and transparent, and the agreement had to reflect the genuine terms agreed upon by the parties. The court found that the employer did not adequately consult with the employees, which led to the agreement not being considered genuine. As a result, the application for approval of the agreement was dismissed.

The Fair Work Commission dismissed the application for approval of the Metalrig Pty Ltd Enterprise Agreement 2018. The court's decision was based on the finding that the agreement did not comply with the pre-approval steps as required by section 180(3) of the Fair Work Act 2009 and did not pass the ‘genuine agreement’ test. The Commission emphasised the importance of proper consultation and transparency in the agreement process to ensure that the agreement is genuinely reflective of the terms agreed upon by the parties. The court’s decision underscored the necessity for compliance with statutory requirements to avoid invalidating the pre-approval steps.

Orders