Nortek Developments Pty Ltd
[2022] FWCA 3436
•10 OCTOBER 2022
| [2022] FWCA 3436 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Nortek Developments Pty Ltd
(AG2022/3674)
Nortek Developments NSW South Western Enterprise Agreement 2022
| Coal industry | |
| COMMISSIONER MCKINNON | SYDNEY, 10 OCTOBER 2022 |
Application for approval of the Nortek Developments NSW South Western Enterprise Agreement 2022.
Nortek Developments Pty Ltd (Nortek) has applied for approval of a single enterprise agreement known as the Nortek Developments NSW South Western Enterprise Agreement 2022 (the Agreement). The Agreement covers and applies to work at underground black coal mines in the South Western Mining District of NSW.
The Construction, Forestry, Maritime, Mining and Energy Union was a bargaining representative for the Agreement. It opposes approval of the Agreement under section 188(1)(a) of the Fair Work Act 2009 (Act) or in the alternative, section 188(1)(c) of the Act, on the basis that the Agreement was not genuinely agreed to by the employees.
The Union’s opposition to approval relies upon a slide included as part of a “Ballot 2 Highlights” presentation to employees that said this:
“Primary Goal
Approval of this Enterprise
Agreement will create fulltime
positions for a significant
majority of current employees”
The Union also submits that Nortek’s failure to respond to its request for confirmation that a significant majority of employees would be converted to full-time employment shortly after commencement of the Agreement is evidence that the representation made to employees in the slide above was actually a misrepresentation. No issue is taken with the content of other slides in the presentation, which include a comparison of proposed wage rates with those of three identified competitors and highlight additional leave, training and redundancy benefits in the Agreement as well as a bonus effective as of 1 July 2022.
Mr Jesse Yvanoff, Business Manager for Nortek, submits that the slide in question reflects what Nortek had consistently stated to its employees. That is, its goal was to have a full-time workforce at the Appin Mine on work that it has tendered for but not yet obtained. Mr Yvanoff explained that in this regard, employees were told:
The approval of the Agreement before the FWC is the first step to reach that goal.
The Agreement will provide Nortek with its best chance to win the tender. Nortek is considered an industrial risk without the Agreement.
Nortek tendered for a wide scope of work. The tender was submitted with Nortek’s labour requirements engaged on a full-time basis.
If Nortek is awarded the contract at Appin, the process areas where Nortek is responsible will be confirmed.
A review of current employees will be undertaken after Nortek is awarded the contract at Appin to ascertain which process areas employees will be assigned to.
The review will include converting current casual employees to full-time positions.
There is no evidence to suggest that this was not, in substance, what employees were told in connection with the Agreement. It is consistent with the inclusion of the slide in the presentation, highlighting Nortek’s “primary goal” in relation to the Agreement. I accept that employees were given the information described by Mr Yvanoff in addition to the content of the explanation as set out in documents filed with the application.
Section 188(1)(a)
The Union submits that the Agreement was not genuinely agreed to under section 188(1)(a) of the Act, on the basis that Nortek did not take all reasonable steps to explain the terms of the Agreement and their effects, to employees as required by section 180(5) of the Act. This is because the representation that approval of the Agreement will create full-time positions for a significant majority of current employees was a representation as to the effect of the Agreement, and no such provision can be found in the terms of the Agreement. The Union also submits that the representation does not make the conversion to full-time employment on a successful tender for the Appin Mine, or any other commercial contract.
Section 180(5) of the Act required Nortek to take all reasonable steps to ensure that the terms of the Agreement, and the effect of those terms, were explained to relevant employees before asking them to vote on the agreement. In my view, the contents of the slide “Primary Goal” did not contain a representation about the terms of the Agreement, or about the effect of one or more of those terms. It does not point to any term of the Agreement or say what the effect of one or more terms of the Agreement will be. It is not a promise about what will happen if the Agreement is approved. To read it in that way would be to ignore the context in which the representation was made – which was to highlight a “primary goal” of Nortek in relation to the Agreement. At its highest, the representation was a statement of intention about Nortek’s post-approval conduct if the Agreement is approved.
I accept that the slide in dispute does not expressly refer to the Appin Mine tender. However, the slide forms only part of the explanation given to employees. It must be read in connection with the other information given to employees about the Agreement, including the information set out in paragraph [3] above. I am satisfied that in explaining its intentions in relation to the Agreement to employees, Nortek clearly tied the making and approval of the Agreement with a successful tender for the Appin Mine works, which will clear the way for a significant increase in the number of full-time employees employed under the Agreement.
For these reasons, I do not hold a concern under section 188(1)(a) of the Act in relation to whether the Agreement has been genuinely agreed to.
Section 188(1)(c)
I do hold a concern about the matter under section 188(1)(c) of the Act. Specifically, I am not satisfied that there are no other reasonable grounds for believing that the Agreement has not been genuinely agreed to, because of the words used in the slide in question and the audience to which the presentation was given, being a substantially casual workforce in the black coal mining industry, where casual employment can be controversial.
At the time the application was made to the Commission, there were 119 employees covered by the Agreement. Of those, 89 were casual employees. It is likely that at least some of these casual employees relied upon the contents of the slide as a promise to deliver them greater job security in the industry, despite it being only an expression of intent. I am not satisfied that the outcome of the vote in relation to the Agreement would necessarily have been the same if the slide had been either omitted from the presentation or worded differently.
Though headed “Primary Goal”, the slide says that approval of the Agreement “will create” full-time employment for a significant majority of current employees. The positive language deployed in this regard may have given employees the impression that upon approval of the Agreement (tied, as I have found, to a successful tender for work at the Appin Mine), there would be nothing standing in the way of a significant number of current casual employees being offered full-time employment.
As the Union submits, the outcome of full-time employment is not one that is guaranteed under the Agreement. The mechanism for conversion from casual to full‑time employment in clause 12.4 of the Agreement permits Nortek to refuse a casual employee’s request to convert to full-time employment on reasonable business grounds, including the “tenuous nature of the commercial contract”. If the Agreement is approved and the Appin Mine contract is won, Nortek will retain the right of refusal to convert current casual employees to full-time employment despite its primary goal at the time the Agreement was made as communicated to employees.
I have invited Nortek to give an undertaking to address my concern that casual employees who were employed at the time the Agreement was made are likely to have relied on the slide as a conditional promise of job security when voting to approve the Agreement.
The undertaking
Nortek has given an undertaking to meet the concern. The undertaking ensures that, consistent with the explanation given to employees, approval of the Agreement and a successful tender for the Appin Mine works will result in offers of full-time employment for the significant majority of casual employees who were covered by the Agreement at the time it was made.
The Union submits that the undertaking cannot be accepted because the concern cannot be remedied by an undertaking. In the alternative, it submits that the undertaking given by Nortek does not remedy the concern because the slide about Nortek’s “primary goal” made full-time employment dependent only upon the approval of the Agreement (and not also on the successful tender for the Appin Mine contract). I have rejected this submission for the reasons above.
It is now settled that undertakings can be accepted to remedy a concern in relation to whether an enterprise agreement has been genuinely agreed to by the employees who are covered by it. I accept the undertaking because it gives certainty where the Agreement does not: giving effect to what employees were told in connection with the making of the Agreement. In short, it ensures that if the tender is won, a significant majority of current employees will have the opportunity to secure full-time employment.
The undertaking is given in accordance with section 190 of the Act and is attached at Annexure A. I am satisfied that the undertaking is not likely to cause financial detriment to any employee covered by the Agreement and does not result in substantial changes to the Agreement. The undertaking is taken to be a term of the Agreement.
Other relevant matters
A large majority of employees participated in a vote to approve the Agreement. The Agreement was made when the Agreement was approved by a majority of those employees.
The Agreement meets the form and content requirements of the Act and does not exclude the National Employment Standards. I am satisfied that the group of employees covered by the Agreement is geographically and operationally distinct and was fairly chosen.
Employees will be better off overall under the Agreement. Rates of pay are between 31.51% and 47.47% above the Black Coal Mining Industry Award 2020, which is incorporated in the Agreement and applies where the Agreement is silent. Employees under the Agreement can be employed as new entrants, black coal operators, tradespersons and line leaders, each corresponding to mineworker classifications under the Award. In this regard, employees who voted to approve the Agreement are representative of the group of employees covered by the Agreement.
Approval of the Agreement
With the undertaking now given, I am satisfied that each of the requirements of sections 186, 187, 188 and 190 of the Act, as are relevant to this application for approval, have been met.
The Agreement is approved and will operate from 17 October 2022. The nominal expiry date of the Agreement is 1 July 2025.
The Agreement covers the Construction, Forestry, Maritime, Mining and Energy Union.
COMMISSIONER
Appearances:
J Yvanoff for the applicant.
J Patrick for the Construction, Forestry, Maritime, Mining and Energy Union.
Hearing:
2022.
Sydney (by video):
September 15.
Printed by authority of the Commonwealth Government Printer
<AE517651 PR746515>
Annexure A
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