Mining and Energy Union v Specialised Mine Services Pty Ltd
[2025] FWCFB 103
•23 MAY 2025
| [2025] FWCFB 103 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604—Appeal of decision
Mining and Energy Union
v
Specialised Mine Services Pty Ltd
(C2023/7933)
| VICE PRESIDENT ASBURY | BRISBANE, 23 MAY 2025 |
Appeal against decision [2023] FWCA 3811 of Deputy President Dean at Canberra on 27 November 2023 in matter number AG2023/3500 – Approach to providing unredacted documents relating to application for approval of enterprise agreement – Principles of open justice were not applied – Refusal to provide unredacted documents relating to application for approval of enterprise agreement resulted in denial of procedural fairness – Requirement to take Statement of Principles made under s 188B into account in deciding whether enterprise agreement genuinely agreed – Further evidence allowed in appeal – Evidence discloses relationship of employer party to agreement with another entity – Four employees who purported to make enterprise agreement may have been transferring employees - Possible transfer of business – Terms of Agreement and their effect not explained to employees – No real bargaining occurred – Agreement was not genuinely agreed to by employees – Appeal upheld – Decision to approve agreement quashed – Application for approval of agreement dismissed.
Introduction and background
The Mining and Energy Union (Appellant/MEU) has lodged an appeal, for which permission is required, under s. 604 of the Fair Work Act 2009 (the FW Act), against a Decision[1] of Deputy President Dean made on 27 November 2023, approving with undertakings, the Specialised Mine Services Enterprise Agreement 2023 (SMS Agreement).[2] The Agreement was made by a ballot of four casual employees and covers a single employer, Specialised Mine Services Pty Ltd (SMS). The activity of SMS is described in the Form F17B Employer’s declaration in support of approval of the SMS Agreement as “black coal industry subcontractor”.
In summary, the background to the matter is that the application for approval of the SMS Agreement was made on 29 September 2023. The MEU corresponded with the Fair Work Commission (Commission) seeking copies of the Form F16 Application for approval, Form 17 Employer declaration in support of approval and any related documents (application documents). After being provided with redacted versions of the application documents by the Commission’s Agreements Team, the MEU made further requests, in the form of submissions directed to the Chambers of the Deputy President, to whom the application had been allocated, for the application documents to be provided in unredacted form.
The redacted information that the MEU sought to access was the names of the persons who signed the application documents on behalf of SMS and demographic information including whether the four employees who approved the SMS Agreement were casual employees. In its submissions seeking that the Deputy President provide the unredacted application documents, the MEU raised specific concerns that went to the authenticity of the SMS Agreement. The MEU asserted (with reference to company searches filed with the submission) that:
· Mr Sam Perkins and Mr Jesse Yvanoff, respectively a director, and a shareholder of SMS, were involved in making the SMS Agreement;
· Mr Perkins and Mr Yvanoff were also respectively the General Manager and Business Manager of a company known as Nortek Pty Ltd (Nortek);
· Nortek was a mining contractor as was SMS and both companies undertook the same or similar work;
· Nortek and its employees were covered by an in-term enterprise agreement known as the Nortek Developments NSW South Western Enterprise Agreement 2022 (Nortek Agreement); and
· The close relationship between SMS and Nortek demonstrated the need for the identity of those involved in the making of the SMS Agreement and the identity of the employees covered, to be disclosed.
The Deputy President refused the request for provision of the unredacted application documents and after inviting and receiving a written submission from the MEU further detailing its objections to the approval of the SMS Agreement, decided to deal with the application on the papers, and as we have stated, approved the SMS Agreement with undertakings.
In the appeal, the MEU contended that by refusing to provide it with unredacted copies of the application documents, the Deputy President failed to apply the principles of open justice established in binding decisions of Full Benches of the Commission and denied the MEU procedural fairness by depriving the Union of an opportunity to advance its case and achieve a successful outcome. The MEU also contended that in approving the SMS Agreement, the Deputy President erred by concluding that the SMS Agreement was genuinely agreed including by failing to consider the Fair Work Statement of Principles on Genuine Agreement, Fair Work Instrument 2023 (Statement of Principles), that the SMS Agreement passed the better off overall test (BOOT), and in accepting undertakings that resulted in substantial changes to the SMS Agreement, contrary to s. 190 of the FW Act and which were not capable of meeting relevant concerns.
The MEU was given access to the application documents in unredacted form, during the appeal. Those documents substantiated the contentions made by the MEU in submissions to the Deputy President with respect to the involvement of Mr Perkins and Mr Yvanoff in SMS and Nortek and in the making of the SMS Agreement. The MEU applied for Orders under s. 590(2) of the Act, requiring Mr Perkins and Mr Yvanoff to attend the hearing of the appeal for the purpose of giving evidence and SMS and Nortek to produce business records relating to the employment of persons said to be covered by the SMS Agreement identified as signatories to the SMS Agreement or as recipients of emails about the bargaining process sent by SMS. The Commission made orders in the form sought. The orders were complied with by the relevant persons and companies without objection. Mr Perkins and Mr Yvanoff gave evidence and the MEU sought to rely on that evidence and to tender documents produced by SMS as evidence in the appeal. For reasons we develop later, we decided to receive that evidence.
The evidence received in the appeal also led to the MEU contending that the employees who purportedly made the SMS Agreement were properly covered by the Nortek Agreement at the relevant time, by virtue of the provisions in Chapter 2, Part 2 – 8, dealing with transfer of business and transfer of instruments. Because this argument was developed during the appeal, it was necessary for us to allow the MEU an opportunity to make further written submissions after the hearing of the appeal and to allow SMS to reply to those submissions. SMS did not avail itself of this opportunity.
For reasons that follow, we have decided to grant permission to appeal, uphold the appeal, quash the decision approving the SMS Agreement and dismiss the application for approval of the SMS Agreement. It is necessary to commence by traversing some of the background to the making of the SMS Agreement, the application for approval, and the sequence of events that preceded its approval.
Application for approval of the Agreement
SMS applied to the Commission for approval of the SMS Agreement on 29 September 2023.[3] Unredacted versions of the application documents show that the SMS Agreement was signed by Mr Perkins in his capacity as General Manager and his signature was witnessed by Mr Mark Hatch, who states that his position is “Supervisor”. The SMS Agreement was signed on behalf of employees by Mr Will Davidson who stated that his position is “Trade (Mechanical)”, and his signature was witnessed by Mr Luke Sissons who stated that his position is “Operator”. All signatories signed the SMS Agreement on 15 September 2023.
The Form F16 Application was signed on behalf of SMS by Mr Yvanoff, on 29 September 2024, in the capacity of Stakeholder Relations Manager of SMS. Mr Yvanoff stated that there were no employee organisations or employee bargaining representatives involved in the agreement making process. The Form F17B Employer’s declaration in support of the approval of the SMS Agreement was made by Mr Sam Perkins, who declared that he is the General Manager of SMS and that the primary activity of the employer is “black coal industry subcontractor”. Mr Perkins declared that the SMS Agreement does not cover all employees of SMS but covers employees performing production and/or engineering roles as defined by the Black Coal Mining Industry Award 2020 (BCMI Award) who perform “blue collar work” and does not cover employees performing managerial and/or clerical work. Mr Perkins also declared that the SMS Agreement would operate in New South Wales, that at the time of the vote there were four employees covered by the SMS Agreement and that all four employees covered were casual employees.
In relation to award coverage, Mr Perkins declared that the modern award covering the employees and employer covered by the SMS Agreement, is the BCMI Award and that classifications in the SMS Agreement correspond with those in that Award from A.2.2 Mineworker – Induction Level 2 / Mineworker – Training to A.2.5 Mineworker – Specialised. Mr Perkins identified terms of the SMS Agreement said to be more beneficial than the terms of the BCMI Award as follows:
Wage rates at least 10% higher than the BCMI Award equivalent; and
The SMS Agreement provides long service leave and unpaid leave which are not provided for in the BCMI Award.
Mr Perkins also declared that the SMS Agreement contains terms that are less beneficial than equivalent terms in the BCMI Award as follows:
The casual ordinary time rate will be used for all purposes other than for shift rates, public holiday rate and weekend work, and the calculation in these cases will be the ordinary rate; and
Family and domestic violence leave is authorised unpaid leave.
The effect of the SMS Agreement provisions relating to casual loading, is that it is not compounded by penalty rates for ordinary time worked on weekends and for work on public holidays. With respect to the response in relation to casual rates, Mr Perkins declared that it is intended that the actual total payment calculation in the SMS Agreement exceeds the equivalent total payment calculation in the Award for the same hours worked. A note in relation to family and domestic violence leave being unpaid states that it is intended “that the Agreement clause 3.5 will apply as it appears the NES ‘provides a greater benefit’.” Clause 3.5 of the SMS Agreement deals with the relationship between the Agreement and the National Employment Standards (NES) and states that in the case of inconsistency where the NES provides a greater benefit, the NES provision will apply to the extent of the inconsistency. Mr Perkins declared that the SMS Agreement passes the better off overall test (BOOT) because of clause 3.5 in relation to the NES, the fact that the Agreement rates are at least 10% higher than the rates in the BCMI Award and it is intended that total payment for hours worked under the SMS Agreement will be greater than equivalent payment under the BCMI Award.
The notification time for the SMS Agreement was said to be 1 August 2023 and Mr Perkins declared that all employees received the notice of employee representational rights (NERR) by email on 12 August 2023, followed by a telephone call on 14 August 2023 to ascertain that the NERR had been received. An email filed in the Commission with the SMS Agreement attaching the NERR, dated 12 August 2023, was copied to eight persons: Bradley Field, Jack Field, Jack Passlow, Liam Wesley, Luke Sissons, Robert Poole, Tane Wesley and William Davidson. Mr Perkins declared that the employees entitled to vote on the SMS Agreement were provided with a full copy of the Agreement by email and were provided with incorporated material via hyperlinks in a ballot letter that was sent them by email on 5 September 2023.
A covering email filed with the Form F17B by SMS indicated that the ballot letter was sent to: Mark Hatch, Luke Sissons, Robert Poole, William Davidson and Paul Wilson. No explanation is provided as to why the NERR was sent to eight persons, the ballot letter was sent to five persons, and only four voted to approve the SMS Agreement. We also note that the recipients of the email included Mark Hatch who witnessed Mr Perkins’ signature on the SMS Agreement in the capacity of Supervisor and it is unclear whether Mr Hatch was intended to be covered by the SMS Agreement. We are satisfied that the four employees who purportedly made the SMS Agreement, and who are described in the Form F17 as casual employees, were Mr Sissons, Mr Poole, Mr Davidson and Mr Wilson. In relation to the steps taken by the employer to explain the terms of the SMS Agreement and the effect of those terms, Mr Perkins declared that a meeting was held with employees at a “Mudgee residence” of the employer on 10 September 2023 and at the Steelers Club in Wollongong on 11 September 2023, and that an oral presentation was made. The outline of the contents of the oral presentation indicates that its focus was on differences between the SMS Agreement and the BCMI Award.
In relation to the explanation of the terms of the SMS Agreement to employees with particular circumstances and needs, Mr Perkins said that this was undertaken via the meetings at Mudgee and Wollongong on 10 and 11 September respectively. Employees were notified of the time and place for the vote and the voting method in the ballot letter sent on 5 September 2023. The voting was said to have been conducted by secret ballot commencing at 6.00 am on Wednesday, 13 September and to have closed at 6.00 pm on Friday, 15 September 2023. It was also declared by Mr Perkins that the ballot was conducted at the employer supplied residence at Mudgee and that the ballot process allowed employees to collect a ballot paper that had no employee identification included on it. The ballot process allowed for a “proxy” to vote on behalf of any employee who wished to cast a vote and was not able to be present at the Mudgee site. The SMS Agreement was said to have been made on 15 September 2023.
In relation to how the employees who were requested to vote on the Agreement had an interest in the terms of the Agreement and were sufficiently representative having regard to the employees the Agreement is expressed to cover, Mr Perkins declared:
“On the 1st of August 2023, the employer met with its employees to inform the employees that the employer wished to commence bargaining for a single enterprise agreement.
The oral presentation included viewing the steps as presented in the Fair Work Commission website.
Employees informed the employer at this meeting that their preference was to have a ‘secret’ ballot conducted at the Mudgee residence. An employee representative was duly elected by the employees during the meeting. The stated purpose of the representative was not for bargaining rather to be the representative to assist in communications, assist the ballot officer and sign an approved Agreement on behalf of the employees. The employer was not present during the election process.
All employees stated that they had experience in enterprise agreement making and were aware of seeking external representation if they wished to.”
This response does not engage with the question in the Form. The ballot letter filed with the Agreement included “key points” of the SMS Agreement, and employees were informed that more detailed explanations would be provided at the scheduled information sessions. The key points were set out in a table as follows:
| Clause | Subject Matter | Key Point (s) |
| 3.2 | Term | The proposed term is 4 years with a nominal expiry date of 1 July 2027. |
| 3.4 | Industry Award Connection | The Agreement will be a stand-alone Agreement where the Award will be used as guidance if a dispute arises regarding an Agreement term or omission. |
| 6 | Consultation – Major Workplace Change | A detailed process that requires definitive discussion where significant events affect your employment. |
| 7 | Consultation – Regular Roster or Hours of Work | A detailed process that requires definitive discussion to change work arrangements such as rosters, start and finish times and sites. |
| 8 | Disputes Procedure | A detailed process that manages grievances and disputes. |
| 10.4 | Casual Employment | Creation of “casual ordinary time rate” that includes the 25% loading. Detailed process where an employee may elect to convert from a casual status to another relevant employment category. |
| 10.5 | Fixed Term | Details around fixed term employment. Fixed term employees are not entitled to redundancy. Maximum Term is 12 months. Contract payout for early termination. Intention statement to not misuse this term to avoid full-time employment status. |
| 11 | Termination of Employment | Detailed process of how termination is applied. Does not apply to a casual employee. |
| 12 | Redundancy | Detailed process of how redundancy is applied. Does not apply to casual or employees on a fixed term. |
| 13 | Remuneration | Annual Wage Rate increases set at 2% per annum. Ordinary Rates above Award rates. |
| 15 | Rostering, Starting and Finishing Times | Arrangements to align with mine site rosters. Changes to work arrangements made using consultative clauses and |
| 22 | Unpaid Leave | Additional approved leave provision. |
In accordance with usual process, after being filed with the Commission, the SMS Agreement was sent to the Commission’s Agreements Team to assess its compliance with the statutory approval requirements in the FW Act. The Agreements Team produced an analysis in the form of a checklist on 6 October 2023, and the matter was allocated to the Deputy President for determination. The checklist identified several provisions of the SMS Agreement which were potentially inconsistent with the NES and that the SMS Agreement stated that where there is any inconsistency with the NES and the NES provides a greater benefit, the NES provision will apply to the extent of the inconsistency.
In relation to BOOT issues, the checklist identified that the rates in the SMS Agreement are 10.01% to 10.03% above those in the BCMI Award. In relation to part-time employees, it was noted that in contrast to the BCMI Award, the SMS Agreement does not mention that there must be an agreement in writing at the time of engagement in relation to a regular pattern of work, that alterations must be in writing and that all time worked in excess of the mutually agreed hours, is overtime. In relation to casual employees, it was noted that clause 10.4 of the SMS Agreement allows for employment of any employees on a casual basis. In contrast, the BCMI Award only allows casual employment for staff employees employed under Schedule B of that Award, and not production and engineering employees employed under Schedule A, and there is no like for like comparison between the BCMI Award and the SMS Agreement. It is also noted that casual employees under the SMS Agreement are paid the same percentages above the BCMI Award as permanent employees. The Team referred to the Full Bench Decision in CFMEU v SESLS Industrial Pty Ltd [4] (SESLS) in relation to these issues and stated that once they were resolved, there would appear to be no other issue that would cause concern in relation to the Agreement passing the BOOT.
On 9 October 2024, the MEU corresponded with the Agreements Team requesting the provision of copies of the Form F16, Form F17 and any associated documents lodged in support of the application for approval of the SMS Agreement. On 11 October 2023, copies of those documents, with certain information redacted, were provided to the MEU. The Form F16 Application for approval of the SMS Agreement as provided to the MEU, had the name of the contact person redacted (Mr Yvanoff). The Form F17B Declaration had the following details redacted:
The name of the declarant of the Form F17B (Mr Perkins);
Demographics of the group of employees who made the SMS Agreement including that those employees were all casual employees;
The number of employees who cast a valid vote; and
The number of employees in the four-person voting cohort who voted to approve the SMS Agreement.
Also on 11 October 2023, the Deputy President’s Associate corresponded with SMS advising that the Deputy President had concerns that the copy of the SMS Agreement submitted was unsigned and that provisions of the Agreement in relation to casual conversion, family and domestic violence leave and redundancy, appeared to be inconsistent with the NES. In relation to the BOOT, the correspondence advised that overtime and engagement provisions for part-time employees were inconsistent with the terms of the BCMI Award so that those employees may not be better off. SMS was invited to provide submissions or undertakings to resolve these issues and did so by correspondence sent on 30 October 2023.
On 16 October 2024, the MEU filed a submission, directed to the Chambers of the Deputy President, advising that it held concerns with the content of the Agreement and that the Agreements Team had provided the MEU with redacted copies of the approval documents. It was asserted in the submission that the redactions included information in the documents that related directly to the authenticity of the bargaining process. The MEU requested that the Deputy President provide unredacted copies of the documents, citing Full Bench decisions in CFMEU v Ron Southon Pty Ltd[5] (Ron Southon) and CFMMEU v Mobilise Group Pty Ltd[6] (Mobilise Group) as authority for the proposition that consistent with the principles of open justice, and absent special circumstances warranting confidentiality, Commission files are available for inspection by any member of the public. The MEU’s submission also highlighted that there were only four employees covered by the Agreement and asserted that the unredacted Form F17B was essential to enable the Union to determine how many of those employees were employed on a casual basis. The MEU stated that it wished to be heard in opposition to the approval of the SMS Agreement, requested a reasonable period after the provision of the unredacted documents, to outline the nature of its objections and advised that it would await any further direction from the Deputy President.
By correspondence sent on 16 October 2023, the MEU was informed that the Deputy President refused the request for the provision of unredacted documents and considered that the MEU had been provided with sufficient information to raise any concerns it wished to raise. The MEU was also informed that it would be given until 5.00 pm on Friday 20 October to file any written submissions and other material it wished to file in respect of the application. On 23 October 2023, the MEU filed a further submission raising additional concerns about the SMS Agreement. Those submissions, amounting to 25 pages can be summarised as follows. The MEU repeated its request for the provision of the unredacted documents asserting that the refusal to provide them was inconsistent with Full Bench authority (again citing Ron Southon and Mobilise Group) and the documents were central to the submissions. The MEU submissions also addressed the matters dealt with in the Statement of Principles pointing out that they related to the authenticity or moral authority of an agreement as discussed by the Full Court of the Federal Court in One Key Workforce v Construction, Forestry, Mining and Energy Union[7] (One Key) and in the earlier decision of the Federal Court in Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission.[8]
The MEU submissions emphasised firstly, that there was nothing before the Commission that could possibly result in the Commission being satisfied as to s.188(2) of the Act and that responses to relevant questions in the Form F17B do not engage with that question. Secondly it was contended that the information presently available to the Union (noting the Deputy President’s refusal to provide unredacted copies of documents filed in support of approval) indicated that the number of employees who made the Agreement is at odds with the scope of the Agreement, and absent information about classifications, types of employment, mine sites where each of the four employees worked and whether they were paid in accordance with the SMS Agreement, meant that it was incapable of approval. Thirdly, the MEU pointed to the lack of real bargaining for the Agreement as evidenced by the documents filed. Fourthly reference was made to the SMS Agreement being “base line”. Fifthly, the MEU made the following submissions in relation to persons it said appeared to be involved in the making of the SMS Agreement:
“37.It appears that Sam Craig Perkins was involved in the making of this Agreement. Mr Perkins is currently the sole director of the Applicant. There are 3 companies that hold shares in the Applicant. The Perkins Family Group Pty Ltd is a majority shareholder in the Applicant. Mr Perkins holds 10 shares in the Perkins Family Group Pty Ltd. The other 10 shares are held by Sherry Anne Maree Perkins. Ivanov Enterprises Pty Ltd is a minority shareholder in the Applicant. Jesse Yvanoff holds 10 shares in Ivanov Enterprises Pty Ltd. The other 10 shares are held by Chanda Nogra-Yvanoff. Mr Yvanoff is well-known to the MEU. He has been involved in a succession of mining contractors, especially in the Illawarra.
38.Another person that was involved with the Applicant was Aaron Brett Mulhall. Mr Mulhall appears to have been a director of the Applicant for just one day – namely, the 3 October 2023. That, perhaps, coincidentally was a few days after the Applicant filed the application for approval of the Agreement.
39.Mr Perkins was, and it appears continues to be, involved with another mining contractor. Namely, Nortek Development Pty Ltd (Nortek). Mr Perkins remains displayed on Nortek’s website as the ‘General Operations Manager’.
40.On 10 October 2022, and over the opposition of the MEU, the FWC approved the Nortek Developments NSW South Western Enterprise Agreement 2022. Attached and marked G is a copy of the approval decision and that agreement (Nortek Agreement). Mr Perkins signed the Nortek Agreement on behalf of the employer. Mr Yvanoff was also involved with both Nortek and the making of the Nortek Agreement. Mr Yvanoff is recorded as Nortek’s ‘business manager’ and appeared for Nortek before the FWC.
41.Interestingly, one of the employees that signed the Nortek Agreement was Adam Mulhall. Given both Mr Perkins and Mr Yvanoff’s involvement with Nortek, the connection between Aaron Brett Mulhall and Adam Mulhall will need to be explained.
42.Moreover, it is these close connections that demonstrate the need for the identity of those involved in the making of this Agreement – including the identity of the 4 employees – to be disclosed. Relevant information about the employment of these 4 persons must also be disclosed. It is unclear whether the circumstances surrounding the making of the Agreement are like those recently considered by a Full Bench in appeal by the Australian Workers’ Union [2023] FWCFB 157.
43.The facts discussed above clearly demonstrate that the Agreement lacks authenticity and ‘moral authority’.”
The assertions in relation to the involvement of Mr Perkins and Mr Yvanoff in SMS and Nortek, were supported by Company Extracts from the Australian Securities and Investment Commission (ASIC) data base for SMS and entities holding shares in that Company[9]. We discuss these documents later. Also appended to the MEU submission was a copy of the Nortek Agreement bearing the names of Mr Yvanoff and Mr Perkins as signatories for the undertakings provided, the Agreement and the application documents.[10] The MEU also asserted that the SMS Agreement had been made for the purpose of the employer obtaining “a four-year insurance policy from the prospect of genuine bargaining” and that it was incapable of approval pursuant to s. 188(2) of the FW Act. The submissions went on to assert issues with the BOOT additional to those identified in the Form F17B as being less beneficial, including the base rates in the SMS Agreement not being high enough to cover allowances, provisions relating to the hours of work of part-time employees, annual leave provisions, notice for personal/carer’s leave being inconsistent with the NES, deductions from leave taken for less than half a shift, public holiday rates, shift penalties, shift length and time worked as ordinary hours on shift, change of roster provisions, direction to work at different mine sites, notice periods in the event of redundancy, meals or meal allowance on non-rostered overtime, and non-provision of time off in lieu of overtime. In addition to these matters, issues were raised with the inclusion of casual employment in the SMS Agreement when it is not provided for in the Part of the BCMI Award covering employees who would be covered by the Agreement. In relation to casual employment, it was also submitted that the fact that the casual ordinary rate, excluding the casual loading, would be used to calculate rates for casual employees working on shiftwork, public holidays, overtime and weekend work, was contrary to the provisions in the BCMI Award which do allow for the employment of casuals, in classifications other than those provided for in the Agreement.
Issue was also taken with the explanation provided by SMS to employees covered by the Agreement and omissions in the document provided to employees headed: “Summary of key terms & conditions”. In this regard, reference was made to the Statement of Principles, the ballot process undertaken for approval of the SMS Agreement, and the fact that the Agreement was not signed in accordance with the requirements of the Act. For those reasons, it was submitted that the SMS Agreement was incapable of approval and that the application for approval should be dismissed.
Relevant provisions of the SMS Agreement and undertakings
The provisions of the SMS Agreement relevant to this appeal are as follows. Clause 2 sets out the “Parties”:
“2. AGREEMENT PARTIES & COVERAGE
2.1 This Agreement will cover and apply to:
(a) Specialised Mine Services Pty Ltd; and
(b)The employees employed by the employer at projects in New South Wales that work in production and/or engineering roles; and
(c) Together will be known as the Parties.”
Clause 3 outlines the nominal expiry date and how the SMS Agreement will operate in conjunction with the NES:
“3. OPERATION OF THE AGREEMENT
…
3.4This Agreement will be a stand-alone Agreement and not incorporate the Award. However, where a dispute arises from a term in this Agreement, the parties may refer to the Award for guidance.
3.5This Agreement will be read and interpreted in conjunction with the NES. Where there is an inconsistency between this Agreement and the NES, and the NES provides a greater benefit, the NES provision will apply to the extent of the inconsistency.”
SMS provided an undertaking on 30 October 2023, in relation to clause 3.4 whereby it agreed to “delete” clause 3.4 (as set out above) and replace it with the following:
“3.4This Agreement will be read and interpreted in conjunction with the Award. Where there is an inconsistency between this Agreement and the Award, and the Award provides a greater benefit, the Award provision will apply to the extent of the inconsistency.”
Clause 12 of the SMS Agreement relates to redundancy. In the undertakings filed on 30 October 2023, SMS undertook to effectively “delete” most of the subclauses in clause 12 and replace those provisions with the following:
“12.2 Redundancy arrangements will be in accordance with the Award.”
Clause 13, together with Schedule 1, sets out four classification levels and their rates of pay. Sub-clause 13.2 provides that the ordinary rates contained in Schedule 1 will increase by 2% per annum on the first pay period after 1 July 2024, 1 July 2025 and 1 July 2026. Schedule 1 sets out the ordinary rates and classifications for “Operators and Trades” as follows:
| Ordinary Rates | Ordinary Rate per hour effective first pay period after 1 July 2023 |
| Classification (Operators and Trades) | |
| Inexperienced (Operators and Trades) | 31.05 |
| Experienced Rate – Operator (Indicative 12+ months) | 33.19 |
| Experienced Rate – Trades (Indicative +12 months) | 34.80 |
| Line Leader (Non-Statutory) (BCMI MW Specialised) | 38.37 |
Note: * BCMI MW is “Black Coal Mining Industry Mineworker” classification in the Award.
In relation to casual employment, the Agreement provides as follows at clause 10.4:
“10.4 Casual employment
(a) A casual employees’ engagement comes to an end at the completion of each shift.
(b)Either the employer or the employee may terminate the employment at any time with one (1) hours’ notice or payment in lieu of notice.
(c)In the event where a casual employee attends for work and such work is cancelled before or during the shift, they shall be paid a minimum of four (4) hours pay.
(d) For each ordinary hour worked, a casual employee must be paid:
(i) the ordinary time rate; and
(ii)a loading of 25% of the ordinary time rate for the classification in which they are employed; and
(iii) this loaded rate will be known as the casual ordinary time rate; and
(iv)the casual ordinary time rate will be used for all payment purposes other than for shift rates, public holiday rate and weekend work. The calculation in these cases will be the ordinary rate. (emphasis added)
(e)The 25% casual loading is in lieu of all paid leave including annual leave, personal/carer's leave and public holidays not worked (excluding long service leave).
(f) Where a casual employee has worked:
(i)for a period of 6 months or more and in a systematic pattern of hours on an ongoing basis, which the employee could continue to perform in a full-time or part-time arrangement without significant adjustment; then
(ii)The casual employee may request to convert to a full-time or part-time employee however the employer may refuse such a request on reasonable business grounds. Reasonable business grounds maybe related to the tenuous nature of the commercial contract.
(iii)If a casual employee is re-engaged within one (1) month of the completion of their employment period which is less than six (6) months, their previous service will count towards the (6) month duration.” (emphasis added)
Clause 14.2 provides in relation to ordinary hours of work:
“14.2 Ordinary hours worked by an employee will be paid as follows:
Day of week Rate of pay Monday to Friday Single Time Saturday & Sunday Double Time
Clauses 16.1 and 16.2 deal with shift work and are in the following terms:
“16.1 Definitions
(a)Afternoon shift means any shift, the ordinary hours of which finish after 6.00pm and at or before midnight.
(b)Night shift means any shift, the ordinary hours of which finish after midnight and at or before 8.00 am.
16.2 Shiftwork rates are payable as follows:
Type of shift Shift rates Day shift Ordinary time Rotating Rosters or ad hoc shifts that include afternoon and/or night shifts: (a) Ordinary hours (a) 115% of the ordinary time rate (b) Overtime hours 6 or 7-day roster (b) Overtime penalty rate plus 15% of the ordinary time rate for time worked (c) All others (c) Overtime penalty rate Night shifts other than those worked in rotating shift rosters: (a) Ordinary hours (a) 125% of the ordinary time rate (b) Overtime hours 6 or 7-day roster (b) Overtime penalty rate plus 25% of the ordinary time rate for time worked (c) All others (c) Overtime penalty rate
Clause 23.1 of the Agreement deals with family and domestic violence leave in the following terms:
“23. 1An employee is entitled to take leave contained in this clause 23 in accordance with the Award and/or the NES other than the payment provision for Family and Domestic Violence Leave.”
On 30 October 2023, SMS offered an undertaking to delete clauses 23.1 and insert:
“23.1 An employee is entitled to take leave contained in this clause 23 in accordance with the Award and/or the NES.”
The Nortek Agreement
When the application for approval of the SMS Agreement was made on 29 September 2024, an enterprise agreement known as the Nortek Developments NSW South Western Enterprise Agreement 2022 (Nortek Agreement) was in effect. The application for approval of the Nortek Agreement was made on 1 September 2022. The Nortek Agreement was approved by Commissioner McKinnon in a Decision[11] issued on 10 October 2022 and operates from 17 October 2022. The Nortek Agreement has a nominal expiry date of 1 July 2025.
Information on the file in relation to the Nortek Agreement shows that the application for its approval was made by Mr Jesse Yvanoff, in the capacity of Nortek’s Business Manager. The Nortek Agreement was signed by Mr Sam Perkins in the capacity of Nortek’s General Manager. According to the Form F17 Employer declaration filed in support of the application for approval of the Nortek Agreement, also made by Mr Sam Perkins, Nortek is a subcontractor to black coal industry mine owners and is in the business of installing and maintaining conveyor installations, fixed plant civil works and general labour hire. The Form F17 Declaration also states that 119 employees were covered by the Nortek Agreement when it was made, including 89 casual employees.
Clause 1 of the Nortek Agreement states that Nortek is a project-based contractor specialising in the civil, mechanical and electrical installation of conveyor, mechanical and electrical systems and that Nortek supports completed installs with ongoing repair, maintenance and upgrade programs. The parties to the Nortek Agreement are the Nortek and its employees in the South Western Mining District of New South Wales, defined in clause 5.17 as “the geographical boundaries as determined by the Union”.
The MEU objected to the approval of the Nortek Agreement asserting that the Agreement had not been genuinely agreed because a representation was made to employees orally and as part of a PowerPoint slide presentation explaining the terms of the Nortek Agreement, that on approval, full time positions would be created for a significant majority of the casual employees of Nortek. Commissioner McKinnon accepted the submissions of the MEU on this point, and found that, pursuant to s. 188(1)(c) there was a concern as to whether the Agreement was genuinely agreed. In this regard, the Commissioner noted that of the 119 employees covered by the Agreement, 89 were casual employees and that it was likely at least some casual employees relied on the representation. To resolve BOOT issues associated with these provisions, the Commissioner accepted an undertaking given by Nortek that subject to the company being awarded a particular contract, it would undertake a review and offer to convert the employment of casual employees employed at the time the Agreement was made, and who were covered by the Agreement, to full time employment.
In deciding to approve the Nortek Agreement, the Commissioner observed that the rates prescribed in the Agreement were at that time, between 31.51% and 47.47% above the rates in the BCMI Award, which was incorporated into the Agreement and applied where the Agreement is silent. The rates in the Nortek Agreement set out at Schedule 1, are as follows:
| Rate – Ordinary Hour | *Ordinary Hourly Rate effective first pay period after 1 July 2022 | Ordinary Hourly Rate effective first pay period after 1 July 2023 | Ordinary Hourly Rate effective first pay period after 1 July 2024 |
| Classification (Operators and Trades) | |||
| New to Industry (Operators and Trades) | $35.10 | $35.54 | $35.99 |
| Inexperienced (Operators and Trades) | $39.36 | $39.85 | $40.35 |
| Experienced Rate – Operator (Indicative +12 months) | $41.48 | $42.00 | $42.53 |
| Experienced Rate – Trades (Indicative +12 months) | $43.61 | $44.15 | $44.71 |
| Line Leader (Non-Statutory) | $45.74 | $46.32 | $46.90 |
Note: *The ordinary hourly rate will take effect on the first pay period after 1 July 2022, however payment shall be made within a reasonable time following approval of the Agreement.
As can be seen, the rates in the Nortek Agreement at the point it commenced operation on 17 October 2022 were higher than those in the SMS Agreement when it commenced operation on 4 December 2023 and continue to be higher. The rates in the Nortek Agreement were back paid from 1 July 2022. The classification structure in the Nortek Agreement includes a classification designated “New to Industry”. The hourly rate specified for employees in that classification was $35.10 when the Nortek Agreement was approved and increased to $35.54 per hour from 1 July 2023. For the classification of Inexperienced (Operators and Trades), an hourly rate of $39.36 was provided for when the Nortek Agreement commenced, and that rate increased to $39.85 per hour from 1 July 2023. The rate for these classifications increased further from 1 July 2024.
In contrast, the SMS Agreement does not contain a classification level for employees new to the industry and the entry level in that Agreement is designated “Inexperienced (Operators and Trades)”. The SMS Agreement prescribes a rate of $31.05 per hour for Inexperienced Operators and Trades and an increase to that rate of 2% per annum is provided for in clause 13.2 of the SMS Agreement from 1 July in each year from 2024 to 2027. Accordingly, the rate for Inexperienced (Operators and Trades) in the SMS Agreement will increase to $31.67 (rounded to the nearest cent) on 1 July 2024 compared to a wage rate of $40.35 for the Inexperienced (Operators and Trades) classification in the Nortek Agreement from the same date. There are equivalent differences in the rates for other classifications.
A further difference between the Nortek Agreement and the SMS Agreement is that the casual employment provisions in clause 12.4 of the Nortek Agreement define the “ordinary time rate” for casual employees to include the casual loading of 25%. As a result, the multiplier for overtime rates, shiftwork rates, Saturday and Sunday penalties for ordinary work and public holiday rates is applied to the casual rate including the 25% loading. The casual loading in the SMS Agreement is not compounded by penalty rates including those applicable to work in ordinary time. The Nortek Agreement includes at clause 12.4(a), a provision stating that a casual employee’s employment comes to an end at the completion of each shift. The same provision is found at clause 10.4(a) of the SMS Agreement. This provision is not found in the BCMI Award which provides for casual employment only in the classifications in Schedule B – Staff Employment of the BCMIA.
The Decision under appeal
As we have noted, the Deputy President did not conduct a hearing in relation to the approval of the SMS Agreement and dealt with the application for approval on the papers. The Deputy President’s Decision is four pages in length and commences with a statement that the MEU had expressed concerns about the approval of the SMS Agreement and had sought to be heard but was not a party to the Agreement. The Decision records that the Deputy President provided the MEU with an opportunity to file written submissions, and it did so on 23 October. After observing at paragraph [5] of the Decision that the MEU filed a 25-page submission, the Deputy President summarised the submissions, given the breadth of issues raised. The summary is set out in full below:
“a.Whether the Agreement was compliant with s188(2) of the Act, going to the authenticity or ‘moral authority’ of the Agreement. In essence, the Union contended there was nothing before the Commission that could result in the Commission being satisfied as to s188(2) of the Act, and further that the Agreement was made with only four employees, being just above the statutory minimum for making an enterprise agreement. The Union argued that the size of the employee cohort was seriously at odds with the scope of the Agreement which extended to employees employed by the employer at projects in NSW that work in production and/or engineering roles. The Union also raised concerns about which classification the four employees fell under, whether they were employed on a full time, part time or casual basis, and which sites they performed work.
b.Additional concerns raised by the Union included that there was no actual bargaining or negotiation with respect to the Agreement and it was evidence that the Agreement was not the product of an authentic exercise in agreement making. It also contended that the Agreement was a “base-line” agreement in that the sole term that was more beneficial to the Award was the hourly wage rate, and some of the persons involved in the employers business were “well known” to the Union and as a result the identity of the four employees would need to be disclosed to the Union.
c.The Union raised a number of BOOT concerns including that the Agreement omitted various provisions of the Black Coal Mining Industry Award 2020 and as a result was less beneficial for employees.
d. The Agreement introduced casual employment for certain classifications where this was not allowable under the Award. Further, it contended that a reduction in the casual rate of pay was ‘fatal’ to the approval of the Agreement.
e.In terms of s180(5) of the Act, the Union submitted that the employer failed to take all reasonable steps to explain the terms of the Agreement and the effect of those terms. It contended that the explanation was manifestly inadequate. The Union submitted that the ‘Summary of key terms and conditions’ document had a number of failings including omitting key terms such as part time employment, annual leave and public holidays.
f. In relation to s188(4A), the Union contended that the Commission could not be satisfied that the Agreement was genuinely agreed to by the employees because the Commission could not be satisfied that the employer complied with subsection 180(5) of the Act.
g. The Union raised concerns about the ballot process, in particular that it allowed a process by which employees could vote by proxy.
h. The Union raised concerns about whether the signature requirements under s.185(2)(a) had been complied with.”
The Deputy President next set out at paragraph [6], a summary of submissions in reply filed by SMS on 30 October 2023, as follows:
“a.The Employer denied that the requirements of s.188(2) had not been met. It said the Union’s arguments were based on speculation with no evidence to support any of its allegations. It noted the information provided in the Employer’s declaration to the effect that all employees stated they had experience in making enterprise agreements and were aware of their right to be represented if they chose. Given their experience, the Employer submitted that they knew what they were doing and consequently genuinely agreed as required under the Act.
b. The Employer highlighted other aspects of the Employer’s declaration and said the veracity of this evidence could not be doubted given the significant consequences for it if it were found to have provided a false declaration.
c. In terms of the cohort size, the Employer noted that the Agreement met the requirement of s172(6) in that at least two employees are required to make an agreement, and the suggestion that a workforce of four employees is irreconcilable with black coal mining could not be universally applied as a rule for all businesses.
d. In terms of whether genuine bargaining occurred, the Employer said that the fact limited bargaining took place is not automatically indicative that there was no genuine agreement, particularly when the four employees were experienced in agreement making.
e. The Employer submitted that the Agreement satisfied the BOOT and the fact that the sole more beneficial term identified was the hourly wage rated did not change this.
f. As to the connection between certain individuals involved in the employer’s business, the Employer said this was irrelevant for the purpose of determining whether the requirements of the Act had been met.
g. In response to the concern raised about the ballot process, the Employer referenced the evidence provided in the Employer’s declaration about the ballot process and contended that the requirements of the Act in this regard had been met.
h. The Employer noted that the Commission had already advised it that it filed an unsigned copy of the Agreement, and that a signed copy had subsequently been filed with the Commission.
i.The Employer also noted the undertakings it had already provided to the Commission in response to matters that had been raised.”
At paragraph [7] of the Decision, the Deputy President observed that the approval of enterprise agreements involves a review by Commission staff in addition to the review undertaken by a Commission Member in deciding whether to approve an agreement. The Deputy President recorded that in the present case, this process had resulted in various matters being raised with SMS with respect to which written undertakings had been provided and her satisfaction that the undertakings would not cause financial detriment to any employee covered or result in substantial change to the SMS Agreement. Subject to the undertakings filed by SMS on 30 October 2023, the Deputy President was satisfied that each of the requirements in ss. 186, 187, 188 and 190 had been met and approved the SMS Agreement. At paragraph [9] of the Decision, the Deputy President concluded as follows:
“[9] In particular, I am satisfied of the following:
a.The size of the cohort meets the statutory minimum, and I accept the submission of the Employer that a small business is not irreconcilable within the coal industry;
b.The BOOT concerns are addressed by the written undertakings provided; in particular, an undertaking that the Agreement is to be read and interpreted in conjunction with the Award such that any more beneficial provisions in the Award will prevail to the extent of inconsistency.
c.The employees covered by the Agreement are sufficiently experienced in bargaining and as a result no concerns arise in respect of whether genuine bargaining occurred;
d. The ballot process was not inconsistent with the Act; and
e.The explanation of terms and the effect of the terms was sufficient to meet the requirements of the Act.”
Other than observing at paragraph [5](b) of the Decision that the MEU had contended that some of the persons involved in the employer’s business were “well known” to the Union, the Deputy President did not refer to the submissions of the MEU about Mr Perkins and Mr Yvanoff, or the relationship between SMS and Nortek, or consider whether one or more of the four casual employees who made the SMS Agreement may have been previously employed by Nortek, and the implications if this was the case. The Deputy President accepted that the SMS Agreement was genuinely agreed. The Decision does not refer to the Statement of Principles which s. 188(1) requires the Commission to take into account, in deciding whether an agreement has been genuinely agreed. As we have noted, due to redactions to the application documents provided to the MEU, the MEU could not have confirmed that Mr Yvanoff made the application for approval of the SMS Agreement, Mr Perkins made the Form F17B Employer declaration, or that the four employees who voted to approve the Agreement were all employed on a casual basis. Nor did the MEU have any way of knowing how many of the four employees who voted, voted in favour of approving the Agreement. Further, without being provided with information about the identities of the four employees who had purportedly made the SMS Agreement, the MEU had no way of knowing whether they had been employed by Nortek before they commenced employment with SMS.
Appeal grounds
The MEU’s notice of appeal filed on 18 December 2023 sets out four overarching grounds of appeal and eight specific grounds by which it contends that the Deputy President erred in her Decision to approve the Agreement. The notice of appeal was amended and two grounds – 6(a) and 8 – were not pressed in the appeal. The grounds of appeal that the MEU presses, are as follows:
“Redacted Material
1.The Deputy President erred (at [4] of the Decision) by acting contrary to the principles of open justice by declining the Appellant’s requests to be provided with an unredacted copy of the Form F17B and its attachments (Documents).
2.The Deputy President erred (at [4] of the Decision) by failing to afford the Appellant procedural fairness by denying the Appellant access to an unredacted copy of the Documents.
Genuine Agreement
3.The Deputy President erred by confining her consideration of s 188 of the Fair Work Act 2009 (FW Act) to the matters set out at paragraph [9] of the Decision and, in so doing, failed to take into account and/ or give proper consideration to each of the statement of principles made under s 188B when reaching the state of satisfaction required by s 188 of the FW Act.
4.The Deputy President erred in being satisfied (at [8] and [9] of the Decision) that the employees requested to approve the Agreement had sufficient interest in the terms of the Agreement, and were sufficiently representative having regard to the employees the Agreement is expressed to cover, in accordance with s 188(2) of the FW Act in that she:
a. had insufficient information before her as to how this could be established; and
b.did not consider the authenticity of the agreement where there were legitimate concerns expressed about the identity of officers of the Respondent and their involvement with an associated entity of the Respondent.
5.The Deputy President erred in finding that she was satisfied (at [8] and [9] of the Decision) that the requirements of ss 186(2)(a) and 188 of the FW Act had been met in finding that the respondent had taken all reasonable steps within the meaning of s 180(5) of the FW Act, in circumstances where:
a.there was not adequate evidence of the content of the oral explanations, including insufficient evidence of the way in which the effect of the terms of the Agreement were explained (if at all); and
b. the written explanation provided to employees did not explain, or alternatively did not adequately explain, the terms of the Agreement and did not explain any of its effects.
BOOT & NES
…
6b. [The Deputy President] failed to properly consider and/ or incorrectly determined whether the Agreement passed the better off overall test (BOOT), including:
i. by failing to undertake the global assessment required by s 193A(2) of the Act; and
ii. how Undertaking 1 would operate to ensure that each reasonably foreseeable employee would be better off overall.
Undertakings
7. The Deputy President erred in accepting undertakings in circumstances where:
a. Undertaking 1 resulted in substantial changes to the Agreement; and
b. Undertakings 1 and 4 were not capable of meeting the relevant concerns.
…
9. Any such other reasons as the Commission determines.”
The MEU contended that it is in the public interest for the Commission to grant permission for the appeal for reasons including that the appeal raises significant issues of importance and general application in respect of the approval of enterprise agreements; the decision is disharmonious with recent Full Bench decision insofar as the Deputy President refused to provide unredacted copies of the approval documents;[12] and raises the novel issues of the application of the recently amended s 188 of the FW Act and the matters which the Commission is required to take into account when determining whether it is satisfied that these requirements have been met.
Evidence and submissions
New evidence in the appeal
As we have stated, the MEU sought, and was granted, Orders requiring Mr Perkins, the General Manager, Director and Secretary of SMS and Mr Yvanoff, Stakeholder Manager, to attend before the Commission and give evidence in the appeal. The MEU sought to adduce and rely on new evidence in the appeal in the form of oral evidence given by Mr Yvanoff and Mr Perkins and the bundle of material produced by Nortek and SMS in response to a notice to produce issued at the request of the MEU. The MEU also relied on the unredacted documents filed as part of the application for approval of the SMS Agreement. The notices to SMS required the production of documents relating to the recruitment, employment and transfer of employees who were copied into emails by which approval documents related to the SMS Agreement were sent: Luke Sissons, Robert Poole, William Davidson, Mark Hatch and Paul Wilson (the relevant employees), including contracts of employment, tax file declarations, rosters, pay slips or other documents as evidence that the they employed by SMS at the relevant time. The MEU also sought documents relating to the registration of SMS for Coal Industry Portable Long Service Leave Scheme and obtaining a workers compensation policy. Further, the MEU sought documents evidencing communications between SMS and the relevant employees on or before 1 August 2023 in relation to their employment with SMS and the making of the SMS Agreement. The Notice to Nortek required production of documents relating to the employment of any of the relevant employees.
The documents produced by SMS and Nortek without objection included:
1. Letters of offer from Nortek to three of the four employees who made the SMS Agreement – Luke Sissons, Robert Poole and William Davidson;
2. Letters of offer from SMS to Mr Wilson, Mr Sissons, Mr Davidson, and Mr Poole;
3. Payslips for Mr Wilson, Mr Sissons, Mr Poole and Mr Davidson issued by Nortek and SMS between 6 October 2021 and 15 September 2023 when the Agreement was made;
4. Correspondence and documents relating to SMS obtaining its workers compensation policy with Coal Mines Insurance Pty Ltd and registering with Coal LSL to pay the long service leave levy; and
5. Correspondence in relation to the first draft of the Agreement.
Section 607(2) of the FW Act confers a discretion on the Full Bench to “admit further evidence” and “take into account any other information” on appeal. The approach to whether the discretion is exercised to admit new evidence or to consider further material is set out in Akins v National Australia Bank[13] and requires that three conditions are met:
it must be established that the evidence could not have been obtained or adduced with reasonable diligence for use at first instance;
it must be evidence which is of such a high degree of probative value that there is a probability that there would have been a different result at first instance; and
the evidence must be credible.
It has also been recognised that in considering whether to exercise the discretion in s. 607(2) it is permissible in an appropriate case to depart from the principles set out in Akins and they need not be strictly applied.[14] An appropriate case may include that the Commission receiving the evidence is consistent with the requirement that it decide matters according to equity, good conscience and the substantial merits of the case.
We decided to receive the documents and to hear the new evidence upon which the MEU sought to rely. We were satisfied that it was appropriate in this case to admit that evidence for the following reasons. The MEU was denied access to the unredacted Form F16 and Form F17, which when made available to the Union in the appeal, supported the assertions it had raised in its submissions at first instance about the authenticity of the SMS Agreement. The Deputy President did not conduct a hearing and curtailed the role of the MEU in the proceedings relating to approval so that the Union was precluded from placing the evidence it sought to call, before the Deputy President. The MEU was diligent in its attempts to place evidence before the Commission at first instance, and there were no further steps that the Union could reasonably have taken in this regard. We were also of the view that the matters canvassed in the MEU’s submissions were not hypothetical and raised a real possibility that the SMS Agreement was not a genuine exercise in bargaining. The new evidence comprises business records of Nortek and SMS and oral evidence from two persons involved in the making of the Agreement. The records are credible and the evidence if accepted, would establish to the required standard, that the SMS Agreement was not genuinely agreed and was not capable of approval.
The documents produced by SMS and Nortek were formulated into a Court Book for reference in the appeal. The documentary and oral evidence we received in the appeal can be summarised as follows.
William Davidson
By letter dated 26 May 2022, Mr Davidson was offered conditional employment with Nortek as a casual Operator – New to Industry, at the Appin Mine, with a start date to be advised on the basis that his terms and conditions of employment were governed by the Nortek Agreement. The rate of pay offered to Mr Davidson was $34.67 per hour for a roster described as “Week Day Night shift”. Mr Davidson signed an acceptance of the offer on 26 May 2022. The employment offer was signed for Nortek by Mr Perkins, General Manager – Underground Operations.[15]
By letter dated 22 June 2023, Mr Davidson was offered conditional employment with SMS as a casual Operator – Inexperienced, at the Ulan Mine, with a start date of 26 June 2023. The offer was made on the basis that Mr Davidson’s terms and conditions of employment would be governed by the BCMI Award. The rate of pay offered to Mr Davidson was $54 per hour on a “7-day Dayshift Roster”. Mr Davidson signed an acceptance of that offer on 29 June 2023. The employment offer was signed for SMS by Mr Perkins, General Manager – Underground Operations.[16]
Mr Davidson’s payslips indicated that he was paid an hourly rate of $54 and a “Ulan KPI Inexperienced” of $5.71 per hour in the pay periods from 26 June to 2 July 2023. From 3 July to 4 September 2023, Mr Davidson was paid an hourly rate of $69, an overtime rate of $70 per hour and a “Ulan KPI 7 Day Roster” payment of $8.16 per hour. In the pay periods from 4 September to 24 September 2023. Mr Davidson was paid an hourly rate of $51 and a “Ulan KPI” of $14.2857 per hour. In the pay period from 25 September to 1 October 2023, Mr Davidson was paid $57 per hour and a “Ulan KPI” of $10.4167 per hour.[17]
Luke Sissons
By letter dated 31 March 2023, Mr Sissons was offered conditional employment with Nortek as a casual Operator (Experienced), at the Dartbrook Mine, with a start date to be advised on the basis that his terms and conditions of employment were governed by the BCMI Award. The rate of pay offered to Mr Sissons was $59.41 per hour for a roster described as “Week Day Day shift”. Mr Sissons signed an acceptance of the offer on 31 March 2023. The employment offer was signed for Nortek by Mr Perkins, General Manager – Underground Operations.[18]
By letter dated 5 May 2023 Mr Sissons was offered conditional employment with Nortek as casual Operator (Experienced) at the Ulan Mine, with a start date to be advised on the basis that his terms and conditions of employment were governed by the BCMI Award, and not the Nortek Agreement. The rate of pay offered was $64 per hour for a roster described as “Week Day Night Shift”. Mr Sissons signed an acceptance of the offer on 5 May 2023. The employment offer was signed for Nortek by Mr Perkins, General Manager – Underground Operations.[19]
By letter dated 22 June 2023, Mr Sissons was offered conditional employment with SMS as a casual Operator, at the Ulan Mine with a start date of 26 June 2023 on the basis that terms and conditions of employment were governed by the BCMI Award. The rate of pay offered was $64 per hour on a “Weekday Night shift” roster. Mr Sissons signed an acceptance of the offer on 23 June 2023. The employment offer was signed for SMS by Mr Sam Perkins, General Manager – Underground Operations.[20]
Pay slips produced by SMS for Mr Sissons showed that he was paid at the rate of $64 per hour for the pay period from 26 June 2023 to 2 July 2023 and received a “Ulan KPI” payment of $14.29 in addition. The payslips for 17 July 2023 to 21 August 2023 indicated an hourly rate of $69 and a “Ulan KPI 7 Day Roster” payment of $8.16 per hour. For the period from 22 August 2023 to 4 September 2023, Mr Sissons was paid an amount of $70 per hour. For the period from 28 August 2023 to 1 October 2023, Mr Sissons was paid $57 per hour. Mr Sissons also received a “Ulan KPI” payment ranging from $8.16 to $14.2857 for the period. Mr Sissons was paid overtime hours at $70 per hour.[21]
Robert Poole
By letter dated 5 May 2023, Mr Poole was offered conditional employment with Nortek as a casual Operator (Experienced), at the Ulan Mine, with a start date to be advised on the basis that his terms and conditions of employment were governed by the BCMI Award and not the Nortek Agreement. The rate of pay offered was $81 per rostered hour on a roster described as “Week End Night shift”. Mr Poole signed an acceptance of the offer on 5 May 2023. The employment offer was signed for Nortek by Mr Sam Perkins, General Manager – Underground Operations.[22]
By letter dated 26 June 2023, Mr Poole was offered conditional employment with SMS as a casual Operator, at the Ulan Mine, with a start date of 26 June 2023, on the basis that his terms and conditions of employment were governed by the BCMI Award. The rate of pay offered was $81 per hour for a “Weekend Night shift” roster. Mr Poole signed an acceptance of the offer on 8 July 2023. The employment offer was signed for SMS by Mr Sam Perkins, General Manager – Underground Operations.[23]
Pay slips produced by SMS for Mr Poole showed that he was paid at the rate of $81 per hour for the pay period from 26 June to 1 October 2023, an overtime rate of $70 per hour and a “Ulan KPI” payment of $14.29/$14.2857 in addition. Public holidays were paid at the rate of $105 per hour.[24]
Paul Wilson
There is no documentation to indicate that Mr Wilson worked for Nortek prior to being offered employment with SMS, which occurred by letter dated 3 July 2023, when Mr Wilson was offered a position as a casual Electrician Inexperienced at the Metropolitan Mine, with a start date of 4 July 2023. Mr Wilson’s hourly payment for working a “B Night Shift Roster – Thursday to Saturday night shift 3*12” – was specified as $82 per hour. The terms and conditions of Mr Wilson’s employment were said to be governed by the BCMI Award. Mr Wilson signed an acceptance of the offer on 4 July 2023. The employment offer was signed for SMS by Mr Perkins, General Manager – Underground Operations.[25]
Payslips for Mr Wilson produced by SMS indicate that for the pay period from 3 July to 9 July 2023, Mr Wilson was paid $65 per hour for inductions/training and thereafter, an ordinary rate of $82 per hour and an overtime rate of $84 per hour. For the pay period from 10 July to 16 July 2023, Mr Wilson was paid an hourly rate of $80 per hour. From 17 July to 30 July 2023, Mr Wilson was paid an ordinary rate of $82 per hour and an overtime rate of $84 per hour. For the pay periods from 15 August 2023 to 18 September 2023, Mr Wilson was paid an induction/training rate of $57 per hour for 6 hours and thereafter an hourly rate of $88, a “Dendrobium KPI” payment of $12.50/$12.857 per hour, a tool allowance of $4 per hour and a travel allowance of $10 per hour.[26] There are no payslips indicating that Mr Wilson worked at the Ulan Mine.
Other documents produced by SMS and Nortek
The letters of offer from SMS to Mr Wilson, Mr Sissons, Mr Poole and Mr Davidson were accompanied by a document in the form of an audit report, indicating that each of the letters of offer was created by Marcus Nuutinen whose email address was a Nortek address.[27] These documents are in the same form as others provided with the letters of offer from Nortek that were also produced. Other documents produced by SMS included a form completed by Ms Melissa Bennett, Commercial Manager of SMS requesting Coal Mines Insurance Pty Ltd to issue the Trustee for Specialised Mine Services Unit Trust trading as Specialised Mine Services Pty Ltd, with a policy to provide indemnity under the Workers Compensation Act 1987 (NSW) for the period of 15 June 2023 to 30 June 2023. The day-to-day business activity of SMS was said to be “providing contracted labour for underground black coal mines”.[28] The employees of SMS were said to be classified in the trades of electrician and fitter and to be paid under the BCMI Award. The completed form stated that 70% of SMS’ activities were undertaken on an underground mine site, and 10% of activities involved operational mining service onsite. Total employee numbers were said to be five, with estimated wages during the insurance period being $31,150 including superannuation, and it was also stated that no employees were working in New South Wales in non-coal industry business activities.[29]
Documents evidencing registration of SMS with Coal LSL, and the creation of an account with that body were produced by SMS, and tendered by the MEU, including employer registration forms dated 7 July 2023 and 3 August 2023.[30] The forms were signed by Ms Bennett as the authorised officer but included Ms Sherry Perkins as an additional contact and stated Ms Perkins’ position as “Director”. Ms Perkins is the wife of Mr Perkins.
A draft of the SMS Agreement was also produced and marked as “EA Version 1”.[31] In that draft, the heading of clause 11.4 dealing with casual employment is highlighted. The clause does not contain an equivalent provision to clause 10.4(iv) as it appears in the final version of the SMS Agreement, providing that the 25% casual loading is not compounded by shift rates, public holiday rates and rates for weekend work.
Evidence of Jesse Yvanoff
Mr Yvanoff’s evidence, given in response to questions posed by Ms Sarlos for the MEU, can be summarised as follows. Nortek is a Queensland company that established itself at Tahmoor and Appin Mine. While there are no directors in common between Nortek and SMS, there is at least one shareholder in common.[32] Mr Yvanoff confirmed that at all material times, Nortek was performing work at the Ulan Mine under purchase orders issued periodically rather than a longer-term written contract. Mr Yvanoff said in relation to purchase orders: “they are a contract of such but we don’t have a written contract.”[33]Nortek was in negotiation for a long term contract at the Ulan Mine when the SMS Agreement was established and at the time Mr Yvanoff gave his evidence, Nortek was still in those negotiations.[34] The Ulan Mine is owned by Glencore, the entity with which those negotiations were taking place.
According to Mr Yvanoff, there was a discussion amongst the partners of Nortek about creating a new entity to renegotiate contract rates with clients – Nortek under a different name.[35] Anew entity was necessary because the contract rates paid to Nortek were fixed. Mr Perkins wanted to run a “completely separate” business where he was managing director, rather than having the “constraints of Nortek” and SMS was established.[36] Mr Yvanoff also said that: “We were talking about changing the contract to – from Nortek to SMS that didn’t quite occur.”[37] Mr Yvanoff said that by the creation of SMS it was also intended to obtain higher rates from clients to pass on to employees through wage increases, because the rates being paid to employees by Nortek were not high enough to retain them.[38] Mr Yvanoff explained the intention in the following exchange with Ms Sarlos:
“If Nortek has this reputation of being a higher payer than other operators, I just don’t follow the logic as to why you needed to then move employees over to this other entity to pay them more, when there's already that reputation that they're paid more?‑‑‑Because we were losing people. We couldn't keep them, even under the Nortek agreement.
And what about the specialised agreement did you think would help with retention?‑‑‑I would give us flexibility because, as we came to understand, the corporate body viewed enterprise agreements as a primary contractual matter, but the operational people didn't. So the Nortek agreement was seen to be, let’s say, expensive and therefore the length of the contract would be limited. In fact, it was mainly a purchase order arrangement rather than a formal contract. So our strategy was to have something that looked like it was meeting, let’s call, the market that area, which was lower then the Nortek area. At least get the contract in place and then the operational people could, with us, negotiate better rates within that contract.
Okay. So just in shorthand, Nortek is seen as too expensive to get the contracts - - -?‑‑‑Correct.
- - - the kind of commercial contracts you wanted so you'd create this agreement which was lower rate agreement, get the contract and then work out some more beneficial arrangement for employees that was Nortek or higher?‑‑‑Correct.It seems like quite a convoluted process to go through to pay your employees more?‑‑‑It was, and that’s what - that's why Ulan was a difficult prospect for us, and that's why we only have two employees left.
Okay. Is the intention to recruit more employees?‑‑‑Yes, it is.”[39]
In contrast with the oral evidence given by Mr Yvanoff, the documents produced by SMS show that Mr Sissons, Mr Poole and Mr Davidson were employed by Nortek prior to their employment with SMS. There was no documentation evidencing that Mr Wilson was employed by Nortek prior to commencing with SMS. Mr Yvanoff was questioned about the employment history of those persons. Mr Yvanoff accepted that Mr Sissons and Mr Poole were employed by Nortek prior to commencing with SMS. Mr Yvanoff also said that Mr Davidson was not employed by Nortek and that Mr Wilson may have been. Later, Mr Yvanoff said that Mr Wilson was not employed by Nortek and had been employed by SMS on 3 July 2023 at the Dendrobium Mine and the Metropolitan Mine. Mr Yvanoff was unable to explain why Mr Sissons, and Mr Poole were employed by Nortek undertaking work covered by the Nortek Agreement and were told in documents relating to their employment with that company, that their terms and conditions of employment would be governed by the BCMI Award. Mr Yvanoff said that this must have been an error.[40]
As we have stated, contrary to Mr Yvanoff’s evidence, the documents produced by Nortek show that Mr Davidson was offered employment with Nortek on 22 May and commenced on 26 May 2022 and was offered employment with SMS on 22 June 2023 and commenced on 26 June 2023. Those documents also make clear that Mr Sissons, Mr Poole and Mr Davidson were being paid rates in excess of the rates in the SMS Agreement at the point they purported to make that Agreement. The wage rates being paid to those employees were also in excess of the wage rates in the Nortek Agreement.
In relation to the circumstances in which the former Nortek employees, left their employment with that Company and commenced employment with SMS, Mr Yvanoff said that he thought there was “some form of separation with Nortek before we got the contract or at least the ability to supply employees at Ulan and these were prime candidates for us to put on”.[41] Mr Yvanoff later said that Nortek had the contract with Ulan and the capability to “put people on” and that the Mr Poole, Mr Sissons and Mr Davidson were employed by Nortek to perform work at Ulan, before they were employed by SMS.[42] Mr Yvanoff had the following exchange with Ms Sarlos:
“Okay. Going back to those employees, and you talked about that separation, I'm just keen to understand what that meant, when you say there was a separation with Nortek. Is that some kind of separation agreement and then there was a period of time and then they started with - - -?‑‑‑No, there was no physical separation.
Okay. So one day there was Nortek, they signed the respondent agreement and the next day they're doing the same work - - -?‑‑‑Correct.
- - - for the respondent?‑‑‑Correct.”[43]
Later, Mr Yvanoff said that the former employees of Nortek “were offered employment with SMS and they accepted that employment. So they did, in effect, resign from Nortek”.[44] In relation to how the SMS Agreement was negotiated, Mr Yvanoff said that the employees who made the SMS Agreement were told, while they were still working for Nortek, that it was the intention of SMS to make an enterprise agreement.[45] This occurred because there were issues around people leaving and it was necessary to “placate some of that anxiety” by holding discussions with employees about how a longer arrangement with Glencore – the owner of Ulan – could be made,[46] and the need to make an enterprise agreement because the Nortek Agreement rates were seen as being too high.[47]
According to Mr Yvanoff, the employees with whom he had this discussion requested that something be put together so that they could see what an enterprise agreement would look like and were provided with a draft of the SMS Agreement by email on 20 July. [48] The covering email stated: “Please find attached our draft vI for discussion in the coming weeks.[49] Mr Yvanoff said that at this point, SMS had not begun bargaining and did not have an intention to bargain.[50] Mr Yvanoff also agreed that less than two weeks later, on 1 August 2023, SMS indicated an interest in commencing bargaining and sent out the NERR on 12 August 2023.
When asked whether Mr Wilson was provided with a NERR, Mr Yvanoff said he did not remember and agreed that there was no evidence that this had occurred. Between the draft Agreement being sent to employees on 20 July 2023 and the ballot letter being sent on 5 September 2023, Mr Yvanoff could not recall if any other versions of the Agreement had circulated. [51] SMS did not produce a version of that email showing how many employees it was sent to and the identity of those employees. Mr Yvanoff’s evidence about the explanation of the terms of the SMS Agreement provided to the four employees with whom it was made, was that:
he explained the terms of the SMS Agreement at the Mudgee and Wollongong meetings;
the Mudgee meeting was attended by Mr Sissons and Mr Davidson and the Wollongong meeting was attended by Mr Wilson;
Mr Poole was not available to attend either meeting, but Mr Yvanoff had a telephone discussion with Mr Poole in similar terms to the discussions at the meetings;[52]
the discussion about casual employment under the SMS Agreement related to the casual rate of pay and did not cover the status of casual employees or that the BCMI Award did not provide for casual employment for employees in equivalent classifications to those covered by the SMS Agreement.[53]
In response to questions about whether the employees were informed about the need to create a new entity because Nortek was too expensive, Mr Yvanoff confirmed that the employees were told about the “strategy” during the agreement explanation presentation.[54] In response to questions about the differing rates of pay of the four SMS employees, Mr Yvanoff confirmed that this was due to the rosters worked by the employees because the rates of pay were “all in one rates”.[55] Mr Yvanoff said that the rate of pay “was never worked out based on what you know in the award as an ordinary rate” but rather SMS ensured that it “met, at least, that total number if they worked those rosters under the award”.[56] Mr Yvanoff also agreed that the contracted rates were based on rosters and if the rosters changed, the rate would also change.[57] In relation to the differing rosters, Mr Yvanoff said that this would be changed based on the needs of the client and as the employees were employed on a casual basis, SMS could supply workers as needed by Ulan.[58] Mr Yvanoff confirmed that SMS had a direct relationship with Ulan even though it did not have a contract with that company.[59] In response to a question about whether clause 10.4(a) of the Agreement had been explained to the employees, Mr Yvanoff confirmed that he had told the employees that at the end of every shift their employment ends, except to the extent that they had a roster.[60] Mr Yvanoff also confirmed that it was SMS’ intention for the employees to continue their employment under the roster.
As we have noted, the principles of open justice require that the Commission’s file on the SMS Agreement, was available to be viewed by any member of the public. Consistent with the Full Bench Decision in Renewable Technical Services, the principles of open justice required, as a minimum, that the identity of the person who made the Form F17B Declaration and demographic information about the employees who made the SMS Agreement, to be provided to the MEU. It must be remembered that the MEU is not simply a member of the public with no interest in the approval of enterprise agreements in the black coal mining industry. To the contrary, the MEU is a registered organisation with rules providing coverage of the work to be performed under the SMS Agreement and the BCMI Award that underpins it and has a real and legitimate interest in maintaining what it views as acceptable standards for pay and conditions in that industry.
There is nothing illegitimate about employers seeking to make enterprise agreements providing for lower wages and conditions than the MEU believes are acceptable or market standards, subject to compliance with all requirements for making an enterprise agreement and seeking its approval. Conversely, the MEU has the right to agitate for higher wages and better conditions for workers in the industry including by seeking to examine the processes by which enterprise agreements are made, to ensure that they are genuinely agreed to, and seeking to be heard in the approval of enterprise agreements, regardless of whether it was a bargaining representative, subject to being granted leave by the Member of the Commission dealing with the approval. In the present case, the MEU’s initial submissions cited Full Bench authority as to why it should be provided with the application documents and highlighted that it required information as to the how many of the four employees who made the SMS Agreement, were employed on a casual basis. When the application documents were not provided, the MEU made a further submission, which as we have stated, made a cogent case for scrutiny of the process by which the SMS Agreement was made and the business activities of the employer representatives involved in making that Agreement.
The MEU did not seek private contact details for the persons who signed the SMS Agreement and supporting declarations on behalf of the employer and nor did the Union seek private contact details of employees who made the Agreement. In its second request to the Deputy President the Union sought an unredacted email that would have identified the four employees who purportedly made the SMS Agreement. The email could have been provided in partially unredacted form by redacting the email addresses of those employees, or it would have been open to the Deputy President to request the provision of further information to establish whether any, or all, of the four employees who made the SMS Agreement had ever been employed by Nortek and if so, the relevant periods. The redacted information the MEU sought was critical to the case the Union sought to advance, and the Deputy President’s refusal to provide the unredacted application documents effectively prevented the MEU from joining issue with the Respondent on the matter of whether the SMS Agreement was authentic and had been genuinely agreed by the persons who purported to make it. This was a denial of procedural fairness of the kind referred to by the Full Bench in Renewable Technical Services.
Demographic information in application documents about the cohort of employees who made an enterprise agreement may be significant to deciding whether the employees have a sufficient interest in the terms of the agreement. As the Statement of Principles indicates, matters including the extent to which the employees entitled to vote to approve an enterprise agreement are employed across the full range of classifications in the agreement, the types of employment it covers (for example full-time part-time and casual) are relevant to whether employees have a sufficient interest in its terms.
In the context of the legal framework within which the Decision to approve the SMS Agreement was to be made, the genuineness of an enterprise agreement is a matter about which the Commission must be satisfied before the agreement can be approved. Having heard the evidence in the appeal that the MEU was unable to bring at first instance, we are satisfied that had the Union been provided with the unredacted application documents, and been given an opportunity to advance the case it conducted in the appeal, the outcome of the application for approval would likely have been different, and approval refused on the ground the SMS Agreement was not genuinely agreed to by the four employees who purportedly made it.[140] We are unable to be satisfied that the MEU would not have established that at least three of those employees were covered by another enterprise agreement (the Nortek Agreement) at the point they purportedly made the SMS Agreement. We are also satisfied that even absent a finding in relation to transfer of business from Nortek to SMS, the evidence considered in the context of the Statement of Principles would have resulted in a finding that the terms of the SMS Agreement and their effect was not properly explained to all four of the employees who purportedly made it and those employees did not have a sufficient interest in the terms of the SMS Agreement to have genuinely agreed to it. We uphold appeal ground 2.
Grounds 3 – 5: Genuine Agreement
Appeal grounds 3 – 5 concern whether the SMS Agreement was genuinely agreed within the meaning of s. 188 of the FW Act. We have set out the relevant legislative provisions above, and in summary they are as follows. Section 188(1) requires the Commission to take into account the Statement of Principles in determining whether it is satisfied that the agreement is genuinely approved. To take something into account means to evaluate it and give due weight, having regard to all other relevant factors.[141]
Relevantly in the present case, the principles deal with the following matters:
Steps that will be generally sufficient to satisfy the requirement in s. 180(5) of the FW Act in relation to explaining to employees how a proposed agreement will alter their terms and conditions of employment, including where the agreement replaces an existing agreement (Principle 8);
The effect of an incorrect or misleading representation made by an employer about a significant term of the proposed agreement (Principle 9);
Whether the employees are to be paid the rates in the agreement (Principle 17(a));
The extent to which employees entitled to vote on the agreement are employed across the full range of classifications in the agreement and types of employment it provides for.
Section 188(2) provides that the Commission cannot be satisfied that an enterprise agreement has been genuinely agreed to by employees covered, unless the employees have a sufficient interest in the terms of the agreement and are sufficiently representative having regard to the employees the agreement is expressed to cover. Section 188(4A) provides that the Commission cannot be satisfied that an enterprise agreement is genuinely agreed unless it is satisfied that the employer complied with the requirements in s. 180(5), which broadly requires that the employer take all reasonable steps to explain the terms of an enterprise agreement and their effect to employees employed at the time who will be covered by the agreement, having regard to their particular circumstance and needs. Based on the evidence in the appeal, our findings of fact above and the reasons which follow, we consider that it was not reasonably open to the Deputy President to be satisfied that any of the requirements for genuine agreement in s. 188(1), (2)(a) or (b), and (4A) were met.
It is convenient that we deal with grounds 3 – 5 together. There is no reference to the Statement of Principles in the Deputy President’s Decision. There is also no indication in the Decision that the Deputy President took the Statement of Principles into account in deciding that the SMS Agreement was genuinely agreed. This was an error of principle, which of itself meant that the Deputy President did not comply with the requirement in s. 188(1) to take the Statement of Principles into account.
While there will be cases where there are no apparent issues with the making of an enterprise agreement, and a brief reference to the Statement of Principles, either directly or by dealing with a submission asserting consistency with the Principles, will be sufficient to address contested issues concerning genuine agreement[142], in the present case, the MEU raised cogent concerns about the SMS Agreement to which the Statement of Principles was directly relevant. In paragraph [9] of the Decision, the Deputy President dealt with the size of the voting cohort, the BOOT concerns, the bargaining experience of the employees who made the SMS Agreement, the ballot process and found that the explanation of the terms of the Agreement was sufficient to meet the requirements of the Act. As a result of these conclusions, the Deputy President found that the SMS Agreement was genuinely agreed.
In the context of the case advanced by the MEU in opposition to the approval of the SMS Agreement, these conclusions and related findings were not open to the Deputy President without reference to the Statement of Principles. The conclusions are also not open in light of the information provided in, and appended to, the application documents. In paragraph [5](a) the Deputy President noted that the MEU had taken issue with the fact that the SMS Agreement had been made with only four employees and that the Union had questioned whether the employees were employed on a full-time, part-time or casual basis. While the number of employees who made an agreement is not of itself a cause for concern about its authenticity, there were other factors that would have raised concerns if considered in the context of the Statement of Principles. As the application documents and attached material indicated:
Principle 1:
The number of employees who were sent a copy of the NERR was larger than the number who voted (principle 1).
Principle 8:
The explanation of the terms of the Agreement and their effect set out in the Form F17B was self-evidently inadequate and simply repeated the contents without explaining them.
The MEU submissions combined with the information in the Form F17B was sufficient to establish real concerns about the possibility that the Nortek Agreement applied to the four employees who made the SMS Agreement, which warranted further examination.
If the Nortek Agreement applied to the employees who purportedly made the SMS Agreement, the explanation about the terms of the SMS Agreement and their effect, should have referred to the Nortek Agreement.
If the BCMI Award applied to the employees the explanation should have included information to the effect that the Award does not permit employment of employees in classifications in Schedule A on a casual basis and that in contrast with the BCMI Award, the SMS Agreement contains a provision mandating that the employment of casual employees ends at the completion of every shift, notwithstanding Mr Yvanoff’s evidence that this was not the practice of SMS.
If the casual provisions applicable to Part B of the BCMIA were relevant, the explanation should have at least included the fact that in contrast to the SMS Agreement, the BCMI Award provides for casual loading to be compounded by certain penalty rates.
The evidence about the provision of the explanation was entirely unsatisfactory, one employee did not attend, and the evidence about the number of employees present at the Mudgee residence when the explanation was provided gives rise to significant doubt as to whether all employees who were eligible to vote were given an opportunity to do so, given the differences between the numbers of persons present for the explanation and copied into documents sent by SMS, and the number of employees who purportedly made the SMS Agreement.
There was no reasonable explanation for the evidence of Mr Perkins which established that the number of employees who attended the briefing, exceeded the number who voted to approve the SMS Agreement.
Principle 10:
The rationale for making the SMS Agreement that Mr Yvanoff informed the Full Bench had been explained to the employees who made the SMS Agreement would not have stood up to scrutiny had the issues raised by the MEU been examined and considered in more detail.
The rationale as explained by Mr Yvanoff and Mr Perkins in the hearing is implausible and therefore likely to have misled employees to whom it was given.
Any undertaking to employees who made the SMS Agreement to maintain their existing rates of pay, was arguably unenforceable, for reasons including they were casual employees whose employment was stated in the Agreement to end at the conclusion of every shift, particularly when it was not clear what those rates of pay were, given that they altered depending on rosters worked. Mr Yvanoff could not satisfactorily explain the fluctuations in his evidence in the appeal and we are not convinced that he explained this matter to the four employees who made the Agreement.
Principle 12:
Although an explanation of the terms of an agreement may be given orally, in the context of the present case, the absence of a record of what was said, the inconsistencies between the numbers of employees who were sent the NERR and the number who voted, and the fact that the explanation was given at a residence maintained by the company for employees would have given rise to concerns and justified a hearing to examine this matter further.
Our views about the “strategy” and its explanation under principle 10 are also relevant in relation to principle 12.
Principle 17
The employees who purportedly made the SMS Agreement were not to be paid the rates of pay provided for in that Agreement and had no stake or interest in it for this reason.
If the Nortek Agreement applied to the four employees who purportedly made the SMS Agreement, the latter Agreement could not have applied to them at the relevant time.
Alternatively, given the arguably unenforceable undertaking about maintaining current rates they were provided with, when they made the SMS Agreement those employees believed they would not be paid the rates in the Agreement and for that reason had no stake or interest in it.
The SMS Agreement covers categories of employment in addition to casual employment, namely full-time, part-time and fixed term employment, giving rise to further concerns about whether the four employees who purportedly made it are sufficiently representative as required by s. 188(2)(b) of the FW Act.
Principle 18:
· On the evidence before the Full Bench, which was also available when the SMS Agreement was approved, it was not the product of an authentic exercise in agreement making.
· The employees who made the SMS Agreement were selected for that purpose, it was never intended that they would be paid the rates provided for in the Agreement, a proposed version of the Agreement was provided to the employees two weeks before bargaining was initiated, there was no bargaining, and the Agreement that was approved was the same as the proposal version.
· It is more probable than not that the conception and making of the SMS Agreement was an exercise in avoidance of the terms of the Nortek Agreement via a company related to Nortek so closely, that regardless of which entity made the contract with Ulan and was paid for work performed under that contract, the architects of the strategy, Mr Perkins and Mr Yvanoff, benefited.
The Deputy President’s Decision engages only on a peripheral level with the MEU submissions and does not indicate the reasons for the matters raised in those submissions not being fully considered. As we have observed, there may be cases where limited consideration of a submission in relation to approval of an enterprise agreement, is sufficient to meet the requirements for the Commission to provide reasons for decisions. This was not such a case, as indicated by the submissions the MEU made at first instance. As we have set out in our consideration of the evidence, the grounds upon which the MEU contended that the SMS Agreement should not be approved were substantive and reasonably arguable. The grounds were set out in comprehensive and cogent submissions and have now been found to largely be established in this appeal.
The factual matters asserted by the Union in its submissions were also objectively verifiable from the unredacted filing documentation. The persons the MEU asserted to have been involved in the making of the SMS Agreement (Mr Yvanoff and Mr Perkins) had signed the application for approval of the SMS Agreement, the Declaration in support of its approval and the SMS Agreement itself. The MEU had provided ASIC searches verifying the roles of Mr Perkins and Mr Yvanoff in Nortek and SMS and informed the Deputy President that an agreement covering Nortek and its employees, performing the same or substantially the same work in the same geographical area as SMS, had been approved by the Commission and was still well within its term. The unredacted filing documents lodged with the Agreement by SMS contained the names of all the persons to whom the NERR had been sent and the discrepancy between the number of persons who were sent the ballot email containing information about the Agreement and the number who purportedly made the SMS Agreement was evident.
The Deputy President had access to those application documents, which on their face, indicated that the MEU’s concerns were well founded and raised issues that the Statement of Principles is designed to address. As we have noted, the information could have been provided without providing contact details of the persons who were involved in making the SMS Agreement, to the MEU.
We uphold appeal grounds 3 – 5 and find that the SMS Agreement was not genuinely agreed and was accordingly not capable of approval.
Ground 6(b) the better off overall test
It is not necessary that we determine ground 6(b) given that we have upheld grounds 1 – 5. It is sufficient to note the following matters. Firstly, the Decision does not engage with the issue of casual employment in classifications covered by Schedule A of the BCMI Award. As a Full Bench of the Commission observed in SESLS,[143] the BCMI Award could apply to a prospective casual production employee notwithstanding that the employer would evidently be in breach of the limitation on casual employment in the Award.[144] Significantly, the Full Bench in that case also said in relation to the employees who made the agreement:
[30] From the F17, it is evident that 3 employees voted on the Agreement. There is no indication as to their mode of engagement however they were presumably not casual production or engineering employees; the award does not allow for it, and the Agreement, which would permit it, is not yet in operation. The concern relating to the BOOT does not appear to affect award covered employees.[145]
The Full Bench went on to consider whether the agreement passed the BOOT on the hypothetical basis that the casual provisions in Part B of the BCMI Award applied to prospective casual employees under the agreement. The Full Bench noted that the agreement incorporated the BCMI Award, applied all relevant penalties and loadings, assigned a 25% loading for casuals, and affords an additional 1% remuneration, so that whatever the total payments under the Award would have been at least 1% more was paid under the agreement. On that basis, the Full Bench found that the agreement passed the BOOT.
In the present case, the mode of engagement of all four employees who made the SMS Agreement is stated to be casual. This is relevant to the explanation of the terms of the SMS Agreement and their effect for reasons we have discussed in relation to genuine agreement. In relation to the application of the BOOT to the SMS Agreement, it is not the case that employees are entitled to receive all relevant penalties and loadings in the BCMI Award and to have those loadings compounded by the 25% casual loading. The Agreements Team did not specifically note the effect of the 25% loading not compounding penalty rates but simply noted that the issue of casuals under the SMS Agreement would need to be considered in light of the Full Bench decision in SESLS. The Agreements team also noted that the Agreement rates were some 10% in excess of the BCMI Award rates for permanent full-time employees. It was also noted that the Agreement provided for work Monday to Sunday on varying shift patterns and that employees may work six or seven day rosters.
Applying SESLS, for the Deputy President to have been satisfied that the SMS Agreement passed the BOOT, it was necessary to consider whether the BCMI Award rates for the classifications covered by the Agreement, including all relevant penalty rates for rosters worked or likely to be worked by employees, were less than the rates an employee working the same rosters under the SMS Agreement would receive, with the casual loading not compounding the Agreement rates and penalties and taking into account any other relevant benefits and detriments provided by the SMS Agreement.
There is no indication in the Decision that this comparison was conducted. It is not immediately apparent that the rates in the SMS Agreement are sufficiently above those in the BCMI Award that it would pass the BOOT if the comparison was conducted in the manner we have identified. It is also not apparent that the undertaking provided by SMS addresses this issue. That undertaking is that where there is an inconsistency between the Agreement and the Award, and the Award provides a greater benefit, the Award provision will apply to the extent of the inconsistency. On one view, this undertaking simply guarantees that employees will be paid the same amount as they would be entitled to be paid under the Award rather than that they would be better off overall.
In light of the issues raised in the Full Bench decision in SESLS it is unclear how the SMS Agreement would interact with the Award, in circumstances where the employees covered by the Agreement are said to be engaged on a casual basis prior to the SMS Agreement being approved, which as we have noted, is of itself, inconsistent with the Award. This question would have been relevant if it was found that the Nortek Agreement did not apply to the employees at the time they purportedly made the SMS Agreement. Given our conclusions in relation to that matter and the appeal grounds concerning genuine agreement, it is not necessary for us to decide this matter.
In relation to appeal ground 7, on its face the undertaking accepted by the Deputy President would generally resolve minor BOOT related inconsistencies between an enterprise agreement and an award, in the circumstances of this case, and absent consideration of the BOOT issue we have discussed in relation to appeal ground 6(b), it is not apparent how the undertaking could have resolved those issues. Also because of our conclusions in relation to the appeal grounds concerning genuine agreement, it is not necessary that we decide this matter.
Conclusion
In conclusion, we note that the importance of open justice, including the provision of access to material on the Commission’s files relevant to the question of whether an enterprise agreement has been genuinely agreed, has been heightened in recent cases where registered employee organisations have appealed decisions to approve enterprise agreements and thereby exposed sham agreements, the provision of false information in declarations, or agreements which are the product of ingenuine and fake arrangements.[146] Members of the Commission are reliant on the integrity of parties making declarations. If an agreement is approved and later asserted to be a sham, there is no power to revoke or vary the approval decision on the Member’s own initiative.[147] The only mechanism by which the Commission can deal with an assertion that an enterprise agreement that has been approved, is ingenuine or a sham, is a successful appeal by a person aggrieved by the decision to approve the agreement, resulting in that decision being quashed.
Open justice can be achieved by providing sufficient information to enable an organisation of employees with sufficient interest, to heard on approval, to be provided with information in the Form F16 and F17B, including at least, demographic information about the cohort of employees who made the relevant agreement and the name of the person who signed the Form F17B Employer declaration. In appropriate cases, open justice may require information about the identity of individual employees who were involved in making the agreement, subject to the Member receiving appropriate undertakings about the use that will be made of the information. If there is a concern in relation to privacy, it is also open to the Member to consider the information in Chambers, after obtaining information from the employer, and inform the parties (including those opposing the approval of an agreement) of preliminary conclusions about the information, for the purposes of addressing concerns. The Commission routinely takes this approach in dealing with the question of whether there is a majority for the purposes of a majority support determination application under s. 236 of the FW Act.
For the purposes of lodging an appeal, a registered organisation of employees eligible to represent the industrial interests of the employees covered by an enterprise agreement, will generally be a person aggrieved for the purposes of s. 604 of the FW Act and will have standing to appeal, notwithstanding that the organisation was not a bargaining representative for the agreement and had no right or standing to be heard at first instance, other than by leave of the Member dealing with the application for approval. New evidence may be allowed in an appeal against a decision to approve an enterprise agreement, in accordance with the principles in Akins v National Australia Bank[148] discussed above. An appeal, particularly where new evidence is permitted to be called, may be a lengthy process. As a result, a sham agreement may operate for an extensive period until the decision approving the agreement is quashed, with the result that it has not validly operated at all. This can have significant implications for the employer and the employees who purported to make the agreement, not the least being uncertainty in relation to the source of entitlements.
Members have discretion about the extent (if any) to which a registered employee organisation is permitted to be heard in relation to an application for approval of an enterprise agreement for which it is not a bargaining representative and to place limitations on the matters such an organisation will be permitted to address and the manner in which the matters are articulated by the organisation – by written or oral submission or by being granted permission to call evidence. There may be cases where such an organisation provides no basis upon which the discretion should be exercised or where the involvement of a registered organisation that is not a bargaining representative is limited to providing a written submission outlining its objections, which can be considered and addressed without a hearing. The present case is not one of those cases. It evidences the assistance a contradictor can provide in relation to the accuracy of declarations filed in support of approval, whether an agreement is genuinely agreed or whether it passes the BOOT. The present case also illustrates the desirability of these matters being dealt with at first instance rather than on appeal.
For these reasons, where a prima facie case that an enterprise agreement is ingenuine or a sham is sought to be advanced, it is preferable that it be dealt with at first instance, rather than on appeal. Any concerns that a Member of the Commission dealing with an approval application or the parties to an enterprise agreement may have about the involvement of third parties in the process, can be addressed by the Commission Member dealing with the application for approval.
Conclusion and Orders
We Order as follows:
Permission to appeal is granted.
Appeal grounds 1, 2, 3, 4, 5, are upheld.
The decision of Deputy President Dean of 27 November 2023 ([2023] FWCA 3811) is quashed.
The application for approval of the Specialised Mine Services Enterprise Agreement 2023 (matter AG2023/3500) is dismissed.
VICE PRESIDENT
Appearances:
E Sarlos, Appellant.
J Yvanoff, Respondent.
Hearing details:
2024.
Sydney:
March 11.
Final written submissions:
Appellant, 13 March 2024.
[1] [2023] FWCA 3811 (‘Decision’).
[2] AE522304.
[3] Matter AG2023/3500.
[4] [2017] FWCFB 3659.
[5] [2016] FWCFB 8413.
[6] [2021] FWCFB 552.
[7] (2018) FCAFC 77.
[8] (1999) FCR 317.
[9] Appeal Book pp. 106 – 120.
[10] Appeal Book pp. 121 – 166.
[11] [2022] FWCA 3436, AE517651.
[12]With reference to CFMEU v Ron Southon Pty Ltd[2016] FWCFB 8413 and CFMMEU v Mobilise Group Pty Ltd[2021] FWCFB 552.
[13] (1994) 34 NSWLR 155.
[14] J Richards & Sons Pty Ltd v Transport Workers’ Union of Australia (2010) 202 IR 180; [2010] FWAFB 9963at [95]; Mermaid Marine Vessel Operations Pty Ltd v Maritime Union of Australia (2014) 241 IR 35; [2014] FWCFB 1317 at [17]; Cozsoy v Monstamac Industries Pty Ltd[2014] FWCFB 2149 at [21] -[25]; Perry v Rio Tinto Shipping Pty Ltd [2016] FWCFB 6963at [11].
[15] Court Book pp. 66 – 67.
[16] Court Book pp. 110 – 111.
[17] Court Book pp. 142 – 154.
[18] Court Book pp. 68 – 69.
[19] Court Book pp. 71 – 72.
[20] Court Book pp. 104 – 105.
[21] Court Book pp. 116 – 126.
[22] Court Book pp. 74 – 75.
[23] Court Book pp. 107 – 108.
[24] Court Book pp. 128 – 140.
[25] Court Book pp. 101 - 102.
[26] Court Book pp. 156 – 164.
[27] Court Book pp. 103, 106, 109 and 112.
[28] Court Book p. 79.
[29] Court Book pp. 78 – 86.
[30] Court Book pp. 92 – 99.
[31] Court Book pp. 167 – 194.
[32] Transcript of appeal PN199.
[33] Ibid PN141.
[34] Ibid PN217 – 218.
[35] Ibid PN91.
[36] Ibid PN91.
[37] Ibid PN85.
[38] Ibid PN85 – 87.
[39] Ibid PN97 – 102.
[40] Ibid PN204 – 209.
[41] Ibid PN80.
[42] Ibid PN81.
[43] Ibid PN93 – 94.
[44] Ibid PN197.
[45] Ibid PN153.
[46] Ibid PN154.
[47] Ibid PN114 – 116.
[48] Ibid PN158.
[49] Court Book p. 166; Transcript PN153.
[50] Transcript PN157 – 160.
[51] Ibid p. 180.
[52] Transcript of Proceedings on 11 March 2024 PN40 – 49.
[53] Ibid PN62 – 63.
[54] Ibid PN103 – 106.
[55] Ibid PN119 – 121.
[56] Ibid PN124.
[57] Ibid PN124 – 126.
[58] Ibid PN127 – 132.
[59] Ibid PN133.
[60] Ibid PN181 – 188.
[61] Ibid PN88.
[62] Ibid PN189 – 190.
[63] Ibid PN191 – 193.
[64] Ibid PN196.
[65] Ibid PN237 – 240.
[66] Ibid PN325.
[67] Ibid PN249.
[68] Ibid PN248.
[69] Ibid PN256.
[70] Ibid PN243 – 263.
[71] Ibid PN306 – 307.
[72] Ibid PN317.
[73] Ibid PN325.
[74] Ibid PN359 – 364.
[75] Ibid PN329.
[76] Ibid PN333.
[77] Ibid PN334.
[78] Ibid PN339.
[79] Ibid PN344.
[80] Ibid PN343.
[81] Ibid PN347
[82] Ibid PN370 – PN372.
[83] Ibid PN392.
[84] Ibid PN531 – 532.
[85] Ibid PN393.
[86] Ibid PN422 – 427.
[87] Ibid PN435.
[88] Ibid PN436.
[89] Ibid PN439 – 444.
[90] Ibid PN448.
[91] Ibid PN446 – 447.
[92] Ibid PN450 – 451.
[93] Ibid PN460.
[94] Court Book p. 164.
[95] Court Book p. 212.
[96] Ibid PN485 – 492.
[97] Ibid PN514 – 515.
[98] Transcript of appeal PN556.
[99] Edwards v Giudice and ors (1999) 94 FCR 561, [5] (per Moore J) in relation to s. 170GC of the Workplace Relations Act 1996 (Cth); ALH Group Pty Ltd trading as the Royal Exchange Hotel v Mulhall[2002] AIRC 329, [51].
[100] [2018] FWCFB 5694.
[101] Transcript of appeal PN565 - 566.
[102] Ibid PN591.
[103] Ibid PN619 - 620.
[104] [2024] FWCFB 48, [97].
[105] Ibid PN621.
[106] Ibid PN622.
[107] Ibid PN654.
[108] Explanatory Memorandum, Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (EM), [705].
[109] Transcript of appeal PN661.
[110] Appeal Book p. 59.
[111] Appeal Book pp. 179 - 182.
[112] Transcript of appeal PN626 - 627.
[113] Ibid PN628 - 635.
[114] Decision at [9].
[115] [2010] FWAFB 9985.
[116] Shop, Distributive and Allied Employees Association v Allen Family Pty Ltd t/a Subway Clare, Subway Findon, Subway Broken Hill, Subway Kadina, Subway Port Adelaide, Subway Port Pirie [2024] FWCFB 48 at [76].
[117] Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24.
[118] (1987) 16 FCR 167 at 184; cited with approval by Hely J in Elias v Federal Commissioner of Taxation (2002) 123 FCR 499 at [62] and by Katzmann J in Construction, Forestry, Mining and Energy Union v Deputy President Hamberger (2011) 195 FCR 74 at [103].
[119] [1936] HCA 40, 55 CLR 499 at 504-505; Coal and Allied Operations Pty Ltd v AIRC [2000] HCA 47, 203 CLR 194 at [19]‑[21] per Gleeson CJ, Gaudron and Hayne JJ; Minister for Immigration and Border Protection v SZVFW [2018] HCA 30, 264 CLR 541 at [35]-[50] per Gageler J; Donnybrook Holdings Pty Ltd v CEPU[2021] FWCFB 1825 at [20]; National Electrical and Communications Association v Electrotechnology Group Training Company Ltd [2021] FWCFB 6073 at [29].
[120] [2017] HCA 53, 262 CLR 593.
[121] Transcript of appeal PN333.
[122] The Form F17B Employer’s declaration in relation to the SMS Agreement was signed on 29 September 2023 by Mr Sam Perkins, Specialised Mine Services Pty Ltd, General Manager.
[123] Transcript of appeal PN338, 431.
[124] Appeal Book pp. 108 – 111.
[125] Appeal Book pp. 106 – 109.
[126] Appeal Book pp. 110 – 113.
[127] Appeal Book pp. 114 – 116.
[128] [2016] FWCFB 8413.
[129] Construction, Forestry, Mining and Energy Union v Mobilise Group Pty Ltd [2021] FWCFB 552 at [22].
[130] Ibid [26].
[131] [2021] FWCFB 552.
[132] [2024] FWCFB 47.
[133] Ibid [41].
[134] Ibid [42].
[135] Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326 [28] – [30] (Kiefel, Bell and Keane JJ).
[136] [2019] FWCFB 4022.
[137] Minister for Immigration and Border Protection v WZARH Op. cit. [59] – [61] (Gageler and Gordon JJ).
[138] (2000) 204 CLR 882.
[139] Ibid [104].
[140] Compare Communications, Electrical, Electronic, Postal, Plumbing and Allied Services Union of Australia v The Australian Workers’ Union; Renewables Technical Services Pty Ltd[2024] FWCFB 47 at [44].
[141] Nestle Australia Ltd v Federal Commissioner of Taxation (1987) 16 FCR 167 at 184; cited with approval by Hely J in Elias v Federal Commissioner of Taxation (2002) 123 FCR 499 at [62] and by Katzmann J in Construction, Forestry, Mining and Energy Union v Deputy President Hamberger (2011) 195 FCR 74 at [103].
[142] CEPU v AWU; Renewables Technical Services op. cit. at [46].
[143] [2017] FWCFB 3659.
[144] Ibid [34] – [35].
[145] Ibid [30].
[146] Appeal by the Australian Workers’ Union (Workforce Logistics) [2023] FWCFB 157 at [85], [90]; Australian Workers’ Union v Altrad APTS [2024] FWCFB 21; United Workers’ Union v Hot Wok Food Makers Pty Ltd [2023] FWCFB 4; United Workers’ Union v Hot Wok Food Makers Pty Ltd [2022] FWCFB 191.
[147] Fair Work Act 2009 s. 603(3)(b) with reference to Division 4 of Part 2-4 which deals with the approval of enterprise agreements.
[148] (1994) 34 NSWLR 155.
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