Molonglo Financial Services Limited

[2021] FWC 415

[2021] FWC 415

FAIR WORK COMMISSION

DECISION

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

Molonglo Financial Services Limited
(AG2020/3489)

DEPUTY PRESIDENT CROSS SYDNEY, 29 JANUARY 2021

Application for approval of the Molonglo Financial Services Limited Enterprise Agreement 2020.

[1] An application has been made for approval of an enterprise agreement known as the Molonglo Financial Services Limited Enterprise Agreement 2020 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (Cth) (the Act), and is a single-enterprise agreement. It has been made by Molonglo Financial Services Limited (the Applicant). There are two nominated Employee Bargaining Representatives.

[2] The Application was lodged to the Commission on 17 November 2020. The F17 Form provided by the Applicant stated that there were 14 persons who will be covered by the Agreement, if it were to be approved, and of the 13 voting employees, 13 voted to approve the Agreement.

[3] On 30 November 2020 my Chambers wrote to the Applicant advising them of some initial concerns, including that it appeared that the Agreement had not been fully explained to Employees in so far that it was not compared to the relevant Modern Award; the Banking Finance, and Insurance Award 2020 (the Award). I also detailed a number of other problems with the content of the Agreement which I indicated could be rectified by the provision of appropriate undertakings.

[4] In response to my concerns, the Applicant supplied in an email on 2 December 2020, which annexed a number of undertakings to “address any discrepancies found between the MFSL Enterprise Agreement 2020 and the Banking, Finance and Insurance Award 2020”.

[5] In response to the Applicant on 3 December 2020, my Chambers wrote:

“Thank you for providing the additional undertakings that aim to address BOOT discrepancies that arose between the Enterprise Agreement and the Banking, Finance and Insurance Award 2020.

It is still unclear from the F17 and subsequent submissions whether the employer sufficiently explained the terms of the Enterprise Agreement and the effect of those terms. This is particularly so in the circumstance that the Agreement was not compared against the relevant modern award, the Banking, Finance and Insurance Award 2020.

Explanation of terms grounded in comparison between the new Agreement for approval and an older agreement may not be sufficient to satisfy appropriate explanation as is required for genuine agreement.  Referring to Award update and case law, in JM Industries Trust & Piagno Discretionary Trust T/A Paradise Orchards, the Full Bench refers to Gray “….the explanation provided to employees in respect of the forthcoming changes to the Award must reflect the actual nature of the forthcoming changes…… ” implying that updates to Awards where changes are forthcoming should be explained to employees.

Please advise the Commission of your submissions in relation to the above.”

[6] The Applicant wrote to Chambers in reply:

“Good morning

We currently have the Employer and the Employee representatives wanting to progress on this agreement with the submissions and undertakings as is.

Could you please explain a way forward to Fair Work Australia’s satisfaction.”

[7] The request for submissions in relation to explanation of the Agreement, and the comparison to the provisions of the Award, was repeated to the Applicant by email on 14 December 2020.

[8] In an effort to remedy the explanation issue the Applicant detailed its efforts to travel to the Applicant’s branches to retrospectively meet with employees and seek their views. An email was provided to my Chambers that was sent from the Applicant to a number of employees on 14 December 2020. That email did not raise the issue of Agreement explanation and comparison with the Award, but instead focussed on the undertaking supplied to the Commission in remedy of BOOT issues. The Applicant invited those employees to contact a number of representatives should they have concerns about the changes that would be affected by the undertakings.

[9] Both Employee Bargaining Representatives contacted my Chambers on 16 December 2020 advising that no staff members had approached them with concerns, and that they supported the approval of the Agreement.

[10] A further email was sent to the Applicant from my Chambers on 21 December 2020 inviting further submissions on the issue and identifying that the application for approval was doomed to fail. That email stated:

“Based on the material contained in the form F17, and subsequent submissions, it appears that employees were not provided with any comparison between the Agreement proposed for approval, and the relevant modern award; Banking, Finance and Insurance Award 2010.  “

Without having formed a definite view about the matter, the Deputy President is concerned that such a failure suggests that the application for approval is doomed to fail.

Compliance with s.180(2) and s180(5)(a) of the FW Act is a mandatory pre-approval step.

The provision of the proposed agreement and incorporated material is essential to the satisfaction that the Agreement was genuinely agreed to (s.188(1) of FW Act).

It is therefore apparent that non-compliance with s.180(2) and s.180(5)(a) cannot amount to a minor procedural error (s.188(1)(2)(a)), and represents a genuine agreement concern.

Consequently, it appears that, absent evidence to the contrary, the Commission cannot be satisfied that the agreement was genuinely agreed to (s.186 of the FW Act). Retrospective explanation, and evidence of questions not being raised by employees, does not obviate the above concern.

The Applicant is again invited to provide submissions in relation to the concern outlined above and in an email from Chambers dated 3 December 2020. If no such evidence exists then the Applicant is invited to consider whether, in all the circumstances, it should file a Notice of Discontinuance in relation to the application.”

[11] In response to that correspondence, the Applicant forwarded to Chambers on 21 January 2021 an email detailing further consultation undertaken by the Applicant. That email also attached a number of documents including an email to staff sent of 5 January 2021:

“Ok we are all still working on this one. At this stage, Fair Work Australia (FWA) is concerned that there isn't genuine agreement that the Enterprise Agreement has been made, and a large part of this is that we haven't gone through the Banking Finance and Insurance Award 2020 and compared to the Enterprise Agreement.

So, I attach 4 documents for you:

1. MFSL Enterprise Agreement, as already negotiated and agreed.

2. Banking, Finance and Insurance Award 2020.

3. Undertakings document - This is a list of undertakings the company will take in order to pass the agreement as is, without needing to go to the drawing board. They bring it up to scratch and address some concerns FWA had.

The final document is a comparison document I've just created. It lists each clause in the Award and shows where to find its corresponding clause in the EBA. Where there are discrepancies or concerns from FWA, I have noted the differences, and how they are being addressed.

I encourage everyone to read through this document and see if anything sticks out to you.

In addition, I will attend each of your branches one morning soon to go through this document as groups, and to answer any questions.

After the last meeting, we will take another week, and then hold another vote.”

[12] Despite considerable efforts to retrospectively explain the Agreement, and the relevant comparison to the Award, as evidenced by the correspondence on 5 January 2021, the explanation issue cannot be cured retrospectively. Such explanation must occur during the access period (s.180(4)), and prior to the making of the Agreement.

[13] I have therefore concluded that the Applicant did not take all reasonable steps to ensure that the terms of the Agreement, and the effect of those terms, were explained to the relevant employees. I therefore conclude that the mandatory pre-approval requirements of s.180(5)(a) have not been met and I cannot approve the Agreement.

[14] The Application for approval of the Agreement is dismissed.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR726479>