Ogs Project Services Pty Ltd
[2022] FWC 2728
•12 OCTOBER 2022
| [2022] FWC 2728 |
| FAIR WORK COMMISSION |
| REASONS FOR DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Ogs Project Services Pty Ltd
(AG2022/1013)
| DEPUTY PRESIDENT ASBURY | BRISBANE, 12 OCTOBER 2022 |
Application for approval of the OPS Enterprise Agreement 2022.
Background
In a Decision[1] issued on 19 September 2022 in relation to an application by OGS Project Services Pty Ltd (OGS) for approval of the OPS Enterprise Agreement 2022 (Agreement), I found that the Hydrocarbons Industry (Upstream) Award 2020 (Hydrocarbons Award) and the Manufacturing and Associated Industries and Occupations Award 2020 (Manufacturing Award) covered employees for the purposes of the better off overall test (BOOT). In this regard, clause 7.6 of the Agreement provides that where OGS engages or directs an Employee to perform work which would otherwise be covered by the Manufacturing Award or the Hydrocarbons Award, the employer will pay the employee the greater amount of the rate of pay in the Agreement or the base rate of pay for the relevant classification in the relevant award plus 10% and any applicable allowances, overtime and penalties provided in the award, plus 10%.
I also decided – over the objections of OGS – to exercise the discretion in s. 590 of the Fair Work Act 2009 (FW Act) to inform myself in relation to the application by hearing from the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU). In deciding to hear from the CEPU, I considered that the submissions of the CEPU would assist with my deliberations in relation to these matters. I also had regard to the fact that the CEPU has membership within at least one of the subsidiaries of the OGS Group and could provide information about the type of work performed by its members, relevant to the consideration of the award coverage issue and that, as there was no contradictor to the approval of the Agreement, I would be assisted by the submissions of the CEPU in relation to the BOOT. I further decided that I would hear from the CEPU only in relation to the relevant awards for the purposes of the BOOT and whether the Agreement passed the BOOT.
The CEPU objected to the limitations I placed on its involvement in the hearing and contended that having exercised the discretion in s. 590 to hear from the Union, the Commission could not limit the subject matter of those submissions. For the reasons set out in my decision, I rejected this contention and heard from the CEPU in relation to the BOOT and the relevant awards.
After considering the submissions made by the CEPU in relation to the scope of the Agreement, I decided that the Electrical, Electronic and Communications Contracting Award 2020 (Electrical Contracting Award) could also cover employees of OGS and that this Award was also relevant for the purposes of the BOOT. Consistent with the Decision of a Full Bench of the Commission in CFMMEU v Specialist People Pty Ltd[2] I indicated that I would accept an undertaking consistent with clause 7.6 of the Agreement, with respect to the Electrical Contracting Award and that such undertaking would resolve any concerns about whether the Agreement was genuinely agreed, arising from a failure on the part of OGS to explain the terms of the Agreement and the effect of those terms with reference to the Electrical Contracting Award.
To expedite the determination of whether the Agreement would be approved, I set out provisional views in relation to BOOT matters raised by the CEPU and invited OGS to provide any further submissions or undertakings in response to my provisional views. I also indicated that the CEPU could make any further submissions it wished to make in relation to the undertakings and whether the Agreement passed the BOOT. This decision deals with the undertakings proposed by OGS and further submissions made by the CEPU in relation to the BOOT.
For reasons which will become apparent, despite being given leave to be heard in relation to the approval of the Agreement, the further submissions of the CEPU in relation to the BOOT have not been of assistance in the consideration of the matters I am required to decide and consisted of assertions which are at best hypothetical. I turn now to consider those submissions.
CEPU Submissions
The CEPU submissions were set out in an email dated 21 September 2022 as follows:
“1. The FWC has determined that the Electrical Contracting Award, Hydrocarbon Award, Manufacturing Award and Construction Award are each relevant for the purpose of the BOOT and other pre-approval requirement (Asbury DP at [82]). Section 193 of the FW Act however requires the FWC to identify all of the Awards that current or prospective employees would be covered by. This is because the FWC must be satisfied that each prospective employee must be better of overall than if the agreement applies. While the FWC has made a determination that the Electrical Contracting Award, Manufacturing Award, Hydrocarbon Award and Construction Award, the question which remains is whether these are the only awards which apply.
2. The CEPU’s submissions have focused on the electrical contracting award. However, the CEPU has also submitted that there are potentially other Awards which would apply to employees (CEPU Submissions at [61]), including:
a.Aluminium Industry Award;
b.Black Coal Mining Industry Award;
c.Cement, Lime and Quarrying Award;
d.Electrical Power Industry Award;
e.Gas Industry Award;
f.Joinery and Building Trades Award;
g.Hydrocarbons Industry (Upstream) Award;
h.Manufacturing and Associated Industries and Occupations Award;
i.Maritime Offshore Oil & Gas Award;
j.Mining Industry Award; and
k.Oil Refining and Manufacturing Award.
3. The very broad nature of the Enterprise Agreement’s coverage clause make it reasonably likely that there will be awards other than the Building Award, Manufacturing Award, Hydrocarbons Award and Electrical Contracting Award which apply. For example, the Agreement covers the activity of ‘maintenance’ and doesn’t limit it to any type of industry or work site (instead extending the activity of maintenance to ‘any work’ and ‘anywhere within Commonwealth of Australia’). There are a very wide range of awards which include the activity of ‘maintenance’.
4. Before considering the BOOT and inviting any undertaking, the FWC must determine the full extent of the potential award coverage. In other words, the FWC must first be satisfied of either of the following:
a.The Building Award, Electrical Award, Hydrocarbon Award and Manufacturing award are the only awards which would cover prospective employees; or
b.That there are other awards covering prospective employees, in which case it must be satisfied of what those awards are.
5. The CEPU submits the correct approach to identifying the reference awards is as follows:
a.Take all the activities listed in clause 3.1 of the agreement, being maintenance, modification, repair, fabrication, commissioning, decommissioning, construction, metal, and engineering construction, on site building, civil construction;
b.Identify all modern awards which include work in or in association with one of those activities; and
c.Identify all of those awards which include a classification which is equivalent to one of the classifications under the agreement.
6. The CEPU notes that the FWC has determined that the Electrical Contracting award is a relevant reference award and has invited undertakings.
7. There is currently no material before the FWC comparing the electrical contracting award to the Agreement. The Applicant has also made no submission about whether or not the agreement passes the BOOT test when compared to the Electrical Contracting Award. The FWC thus cannot be satisfied that the agreement passes the BOOT.
8. The FWC may nevertheless approve an agreement with an undertaking but may only accept an undertaking if it is satisfied that it meets a relevant concern under s 186. As this relates to the BOOT and the electrical contracting award, the FWC must therefore determine whether the agreement is not better off than the electrical award, and if so in what way. The latter is a necessary step in determining what (if any) undertaking would actually address the concern.”
Consideration
Given that clause 7.6 of the Agreement specifically provides that where OGS engages or directs an employee to perform work covered by the Manufacturing Award or the Hydrocarbons Award 2020, and the conclusions in my decision relating to the coverage of those Awards and the Full Bench Decision in CFMMEU v Specialist People, it is surprising that the CEPU would make a submission dealing with the Manufacturing and Hydrocarbons Awards.
Clause 7.6 of the Agreement will operate in the eventuality that employees undertake work that would otherwise be covered by the Manufacturing or Hydrocarbon Awards and I do not intend to entertain any further submission from the CEPU in relation to those Awards. I have also concluded that the other Awards nominated by the CEPU are not relevant for the purposes of the BOOT.
I do not accept that the Aluminium Industry Award 2020 covers work within the scope of the Agreement. In relation to work of the kind undertaken by OGS, clause 4.2(d) of that Award relevantly provides:
“4.1 This industry award covers employers throughout Australia in the aluminium industry and their employees in the classifications listed in Schedule A—Classification Definitions to the exclusion of any other modern award.
4.2 The aluminium industry means bauxite operations and the treatment of bauxite, alumina, aluminium or any of their derivatives, including:
(a)resource drilling, extraction, rehabilitation work and treatment of bauxite;
(b)all processing, refining, smelting, melting, casting and rolling operations performed in connection with the treatment of bauxite, alumina, aluminium and any of their derivatives;
(c)activities ancillary to the activities in clauses 4.2(a) and 4.2(b) including but not limited to:
(i).the generation and/or transmission of power and/or steam that is ancillary or incidental to the employer’s activities in clauses 4.2(a) or 4.2(b) (albeit that excess power may be sold into the grid); and
(ii).bulk materials handling at a wharf or any load out/in facility, including the loading and unloading of bauxite, alumina and other bulk materials for the purpose of such activities by employers engaged in such activities;
(d)the servicing, maintaining (including mechanical, electrical, fabricating or engineering) or repairing of plant and equipment used in the activities set out in clauses 4.2(a), 4.2(b) and 4.2(c) by employees principally employed to perform work on an ongoing basis at a location where such activities are being performed; and
(e)the provision of supplementary labour services used in the activities in clauses 4.2(a), 4.2(b) and 4.2(c) by supplementary labour personnel principally engaged to perform work at a location where such activities are being performed.
NOTE: The placement by a contractor of employees at an aluminium industry facility for the period of a programmed maintenance shutdown would not bring the contractor within the aluminium industry under clause 4.2(d).”
To the extent that OGS obtained a contract to perform work described in clause 3.1(b) of the Agreement at a site within the aluminium industry, clause 4.2(d) of the Aluminium Industry Award would exclude the coverage of that Award on the basis that employees of OGS would not be principally employed to perform work on an ongoing basis at a location where activities set out in clause 4.2(a) – (c) of the Aluminium Award are performed. If OGS provided labour to a labour hire contractor performing work in the aluminium industry it is also likely that the exclusion for contractors in the Note to the clause 4.2 would apply.
The coverage of the Black Coal Mining Industry Award 2020 (Black Coal Award) has an extensive history and is well established. Clause 4.1 of the Black Coal Award provides that it covers employers of coal mining employees and coal mining employees, with such employees being defined as:
“(i) employees who are employed in the black coal mining industry by an employer engaged in the black coal mining industry, whose duties are directly connected with the day to day operation of a black coal mine and who are employed in a classification or class of work in Schedule A—Production and Engineering Employees or Schedule B—Staff Employees of this award;
(ii) employees who are employed in the black coal mining industry, whose duties are carried out at or about a place where black coal is mined and are directly connected with the day to day operation of a black coal mine and who are employed in a classification or class of work in Schedule A—Production and Engineering Employees or Schedule B—Staff Employees of this award; and
(iii) employees employed by a mines rescue service.”
The black coal mining industry is defined in clause 4.2 of the Black Coal Award, as follows:
“4.2 For the purposes of this award, black coal mining industry has the meaning applied by the courts and industrial tribunals, including the Coal Industry Tribunal. Subject to the foregoing, the black coal mining industry includes:
(a)the extraction or mining of black coal on a coal mining lease by means of underground or surface mining methods;
(b)the processing of black coal at a coal handling or coal processing plant on or adjacent to a coal mining lease;
(c)the transportation of black coal on a coal mining lease; and
(d)other work on a coal mining lease directly connected with the extraction, mining and processing of black coal.”
Clause 4.3 (d) of the Black Coal Award provides that the black coal mining industry does not include construction work on or adjacent to a coal mine site. A Note to clause 4.3 of the Black Coal Award provides that:
“NOTE: The coverage clause is intended to reflect the status quo which existed under key pre-modern awards in relation to the kinds of employers and employees to whom those awards applied and the extent to which the awards applied to such employers and employees.
An example of the types of issues and some of the case law to be considered when addressing coverage matters can be found in Australian Collieries Staff Association and Queensland Coal Owners Association – No. 20 of 1980, 22 February 1982 [Print CR2297] and in the Court decisions cited in this decision.”
The relevant decisions cited in the decision in Australian Collieries Staff Association and Queensland Coal Owners Association establish the following principles:
· Whether an employer is engaged in the black coal mining industry for the purposes of clause 4.1 of the Black Coal Mining Industry Award 2010 depends on the substantial character of the industrial enterprise in which the employer and the employee are concerned.[3]
· The supply of goods or services to companies in a particular industry is not sufficient to identify that the supplier is in the industry to which the goods and services are supplied.[4]
· The fact that an activity is carried out at a coal mine is not the sole determinant of the issue. The difference depends on circumstances, the chief of which must be separateness of establishments in point of control, organisation, place, interest, personnel and equipment, and is a matter of degree.
· The fact that two industries are carried on at the same place does not abolish the distinction between them.[5]
· The relationship of employer and employee must have some connection with the activity of mining of coal.[6]
Based on the evidence before me, I am satisfied that OGS is not engaged in the black coal mining industry, and nor is it likely that the Company will be so engaged. OGS undertakes work involving maintenance, modification, repair, fabrication, commissioning, decommissioning, construction, metal and engineering construction, on-site building and civil construction and related or associated works. That such work may be carried out at or adjacent to a black coal mine, does not result in OGS being covered by the Black Coal Award. OGS is not under the control of a mine owner or contractor conducting mining operations. If employees are provided to contractors on mine sites, there is no indication that that they will undertake work in the black coal industry.
The Cement, Lime and Quarrying Award 2020 covers employees in the cement and lime industry and/or the quarrying industry as defined in clause 4.2 and 4.3 in classifications listed in the schedules to that Award. Schedule A contains classification descriptions for the cement and lime industry covering employees working in production, yard, despatch, control room, packaged products and laboratories. Schedule B covers the quarrying industry and describes competencies associated with the operation of quarries including weighbridge, laboratories, wash plants, drilling, shotfiring, development and crane operation. To the extent that the Award covers maintenance, it is limited to maintenance of plant in quarries. I do not accept that there is any likelihood that employees of OGS would undertake work covered by the Cement, Lime and Quarrying Award nor is there any likelihood that it would it provide labour to contractors undertaking such work.
By virtue of clause 4.3(a), the Electrical Power Industry Award 2020 does not apply to:
“a contractor who is covered by the Electrical, Electronic and Communications Contracting Award 2020, the Building and Construction General On-site Award 2020 or the Mobile Crane Hiring Award 2020 and the employees of that contractor;”
Given the work undertaken by OGS and the Awards which would otherwise apply to its employees, it is improbable that employees would undertake work within the scope of the Electrical Power Industry Award.
The Gas Industry Award 2020 does not cover employers and employees covered by the Hydrocarbons Industry (Upstream) Award 2020.[7] Given the coverage of the Gas Industry Award and my finding that the Hydrocarbons Award covers work within the scope of the Agreement, I do not accept that the Gas Industry Award would have application to employees of OGS performing work within the scope of the Agreement.
The Joinery and Building Trades Award 2020 covers employees in the joinery and building trades industries and occupations. Joinery work is defined in clause 2 of the Joinery and Building Trades Award to exclude work located on an on-site construction project and specifically excludes employers or employees covered by the Building and Construction Industry General On-site Award 2020. Patently, given that the coverage of the Agreement is principally defined by reference to that Award, the prospect of the Joinery and Building Trades Award 2020 covering work within the scope of the Agreement is nil.
The Maritime Offshore Oil and Gas Award 2020 (Maritime Offshore Oil and Gas Award) covers employers in the maritime oil and gas industry and their employees in classifications listed in that Award.
Clause 4.2 of the Maritime Offshore Oil and Gas Award defines the maritime offshore oil and gas industry to mean “…the operation, utilisation, control, maintenance, repair, and service of vessels (as defined) in or in connection with offshore oil and gas operations.” Clause 4.3 provides that “[t]his award does not cover employers in the following industries” and goes on to list the Manufacturing and Associated Industries and Occupations Award 2020”.
The classifications in the Maritime Offshore Oil and Gas Award have no relevance to the work undertaken by OGS and include Masters and Officers of vessels, Integrated Ratings, Stewards, Caterers and Mates. The classifications of Engineers covered by the Maritime Offshore Oil and Gas Award are those who undertake work on vessels – Marine and Power Engineers – and it his highly improbable that OGS would undertake such work under the Agreement if at all, given its application and the operations of OGS.
With respect to the Mining Industry Award 2020, the definition of the mining industry for the purposes of the coverage of the Mining Industry Award, excludes:
“(d) the servicing, maintaining (including mechanical, electrical, fabricating or engineering) or repairing of plant and equipment used in the activities set out in clauses 4.2(a) to 4.2(c) by employees principally employed to perform work on an ongoing basis at a location where those activities are being performed; or
(e) the provision of temporary labour services used in the activities set out in clauses 4.2(a) to 4.2(d), by temporary labour personnel principally engaged to perform work at a location where the activities described above are being performed.”
Notwithstanding that OGS employees may perform work in the operations covered by the Mining Industry Award, that Award has no relevance for the purposes of the application of the BOOT to the Agreement whether OGS undertakes the work directly or provides labour on hire.
Clause 4.3(c) of the Oil Refining and Manufacturing Award 2020 excludes “employees engaged in commissioning, servicing, maintaining (including mechanical, electrical, fabricating or engineering and preparatory work), modifying, upgrading, or repairing facilities, plant and equipment other than when performed by employees of a refinery operator”.[8] Patently, OGS is not, and is not likely to be, a refinery operator.
The submissions advanced by the CEPU about other awards which may be relevant can be disposed of in short compass. The proper application of the BOOT requires that I be satisfied that each award covered employee or prospective employee will be better off overall if the Agreement applies instead of the relevant modern award that would have applied to that employee. Section 47 of the FW Act relevantly provides that a modern award applies to an employee or employer if it covers the employee and the employer. Section 48 provides that a modern award covers an employer or employee if it expressed to cover the employer or employee.
At the risk of stating the obvious, modern awards do not apply to or cover work per se. Modern awards apply to or cover employers or employees by reference to a range of matters which may include the occupations of employees or the industry in which the employer operates or the employee works. Contrary to the suggestion in the CEPU’s submission, modern awards do not operate cumulatively so that every award containing maintenance classifications simultaneously covers an employee or an employer. The application of the BOOT does not require the Commission to identify every award that covers maintenance work and other work or activities undertaken by employees described in the Agreement, and to determine whether every award that refers to such work applies to the work covered by the Agreement.
In the present case, the employer undertakes a range of maintenance, commissioning, decommissioning and construction work. The bulk of the work will likely be covered by the Building Construction Award or the Manufacturing Award or to a lesser extent, the Hydrocarbons Award or the Electrical Contracting Award. For the reasons set out above, other modern awards nominated by the CEPU would not apply to the employer or employees if the Agreement did not apply. I see no basis to trawl through other modern awards to undertake a similar exercise absent a cogent reason to do so. There is no such reason, despite the CEPU being heard in the proceedings and having an opportunity to point out any other relevant award. The employer has nominated the modern awards it asserts are relevant to the application of the BOOT and I have determined that an additional award – The Electrical Contracting Award – is also relevant for that purpose.
I do not accept the CEPU’s submission that having found that the Electrical Contracting Award is relevant for the BOOT, I cannot be satisfied that the Agreement passes the BOOT because no comparison has been undertaken between the Agreement and Electrical Contracting Award. I also do not accept that it is necessary to undertake the exercise referred to by the CEPU in its submissions. As indicated in my earlier decision, the issue of whether the Agreement passes the BOOT when considered against the Electrical Contracting Industry Award, can be resolved by the provision of an undertaking in similar terms to the undertaking accepted by the Full Bench of the Commission in CFMMEU v Specialist People Pty Ltd to the effect that where OGS engages or directs an Employee to perform work which would otherwise be covered by the Electrical Contracting Award, OGS will pay the employee the greater amount of the rate of pay in the Agreement or the base rate of pay for the relevant classification in the Electrical Contracting Award plus 10% and any applicable allowances, overtime and penalties provided in the award, plus 10%.
Conclusion
OGS has offered undertakings consistent with the provisional views set out in my earlier decision including an undertaking in relation to the Electrical Contracting Award set out above. For these reasons I have decided to approve the Agreement and a separate approval decision will issue.
DEPUTY PRESIDENT
[1] [2022] FWC 2501.
[2] [2019] FWCFB 7919.
[3] The King v Central Reference Board; Ex Parte Thiess (Repairs) Pty Ltd (1948) 77 CLR 123 at 135.
[4] Ibid at 135.
[5] The King v Drake Brockman; Ex parte National Oil Pty Ltd (1943) 68 CLR 51 at 57.
[6] Australian Collieries Staff Association and Queensland Coal Owners Association No. 20 of 1980, 22 February 1982 and [CR2297].
[7] Clause 4.3(d) of the Gas Industry Award 2020.
[8] Clause 4.3(c) of the Oil Refining and Manufacturing Award 2020.
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