Oz Labour Solutions Pty Ltd

[2018] FWCA 2546

[2018] FWCA 2546

FAIR WORK COMMISSION

DECISION

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

Oz Labour Solutions Pty Ltd
(AG2017/4112)

OZ LABOUR SOLUTIONS PTY LTD ENTERPRISE AGREEMENT - 2017 - 2019

Building, metal and civil construction industries
DEPUTY PRESIDENT SAMS	SYDNEY, 9 MAY 2018

Application for approval of the Oz Labour Solutions Pty Ltd Enterprise Agreement 2017 – 2019 – whether agreement genuinely agreed to by the employees to be covered by it – undertakings – no BOOT issues – agreement approved with undertakings

[1] This decision will determine an application filed on 8 September 2017 by Oz Labour Solutions Pty Ltd (the ‘applicant’), pursuant to s 185 of the Fair Work Act 2009 (the ‘Act’). The application seeks the approval of the Fair Work Commission (the ‘Commission’) of a single enterprise agreement to be known as the Oz Labour Solutions Pty Ltd Enterprise Agreement, 2017-2019 (the ‘Agreement’). The Agreement is to cover 5 employees, although the Agreement’s coverage extends to various construction and maintenance classifications, including labourers, tradespersons, operators, crane drivers, loading hands and apprentices. The employer is a labour hire contractor and the Agreement purports to cover employees who are engaged as labour hire employees, in all States and Territories of the Commonwealth.

[2] By reference to the Form 17 – Statutory Declaration filed by Mr Patrick McTigue, Director, the employees were last notified of their representational rights on 4 August 2017. Each employee nominated themselves as a bargaining representative. Voting for the Agreement’s approval took place on 28 August 2017. The time limits under s 181(2) of the Act, are thereby satisfied. A vote of the 5 employees was conducted by a show of hands. There was unanimous support from the 5 employees for the approval of the Agreement. The application for the approval of the Commission was lodged on 8 September 2017, thereby satisfying s 185(3) of the Act.

[3] In the F17, Mr McTigue identified the Building and Construction General On-Site Award 2010 (the ‘Award’) as the relevant reference instrument for the purposes of the Better Off Overall Test (‘BOOT’). Mr McTigue said that the Agreement provides for higher wage rates (around 2-3% for most classifications) and a compensation allowance of $2.00 an hour for all the time worked, in recognition of all site and general wage related allowances. Most of the other conditions and entitlements, including shift penalties and overtime are similar to corresponding provisions in the Award. He claimed there are no less beneficial terms than those in the reference instrument. The rates of pay are to be increased by 1% on 1 July 2018 and 1% on 1 July 2019. The Agreement provides for the mandatory flexibility and consultation terms at Cl 4.7 and 12.6 respectively, and a dispute resolution procedure at cl 18 provides for arbitration by the Commission.

[4] Since its filing, the application has had some history, which I set out in summary below. On 6 October 2017, the Construction, Forestry, Mining and Energy Union (the ‘Union’) (as the Union was then known), while not a bargaining representative for the Agreement, filed submissions opposing the Agreement’s approval on a number of grounds going to the pre-approval processes and the terms of the Agreement. In accordance with the Commission’s triage process for all enterprise agreements, the Triage Team prepared a report on 26 November 2017, noting the Union’s objections. As to whether the Agreement passed the BOOT, pursuant to s 193(1) of the Act, the report’s summary said:

‘BETTER OFF OVERALL TEST (BOOT)

This agreement intends to cover full time, part time and casual employees as well as apprentices engaged in the building and construction industry, NSW.

The rates of pay in the agreement are marginally higher than the award and are summarised below:

Permanent: 0.71% - 3.31%

Junior Apprentices: 0.24% - 4.24%

Adult Apprentices: 2.63% - 11.83%

Most of the entitlements in the agreement are similar to the award, including shift penalties and overtime loadings. The agreement provides that where it is silent in relation to an award provision, the award will apply unless there is a contrary intention.

The agreement provides for a part time daily hire classification. The BCGOA does not appear to contemplate such a classification. Unclear if this affects the BOOT’.

[5] As a result of a number of concerns raised by DP Gostencnik, the applicant, through its industry body, the Masters Builders’ Association NSW (the ‘MBA’), provided a number of undertakings and clarification of other matters, to address the Deputy President’s concerns. Nevertheless, the CFMEU indicated it wished to be heard on the following grounds:

1. ‘The CFMEU has constitutional coverage of the work proposed to be performed under the proposed agreement;

2. The CFMEU has a long history of industrial representation of the work proposed to be performed under the Agreement;

3. The CFMEU is a party to the relevant modern award the Building and Construction On-site Award 2010;

4. In the future, given the nature of the company’s business it is likely that other members of the CFMEU will be employed in classifications covered by the proposed agreement;

5. The CFMEU will have the right to appeal any decision given in the present proceedings under s 604 of the Act.

6. The Commission may choose, in a particular case, to hear from an employee organisation or any other person about the approval of an agreement even though the organisation or person may not be a party to the agreement. The Commission has a broad power to inform itself in relation to any matter in such a manner as it considers appropriate, including by inviting oral or written submissions from a person or organisation’.

[6] The application was remitted to me and listed for hearing. I listed the matter for mention/directions on 19 February 2018 and issued directions for the filing and service of submissions and witness statements with the final submissions filed on 28 March 2018. By consent, the matter is to be determined on the ‘papers’.

SUBMISSIONS

[7] Both the MBA, on behalf of the applicant and the Union filed short submissions which narrowed the differences between them to one issue; namely, whether the employees had genuinely agreed to the Agreement, pursuant to s 188 of the Act. Section 188 is expressed in the following terms:

Sect 188 - When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a)  the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i)  subsections 180(2), (3) and (5) (which deal with pre-approval steps);

(ii)  subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b)  the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

(c)  there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

[8] As both parties’ submissions are relatively brief, I set them out in full below:

The MBA submitted:

1. ‘The CFMEU raised the question of whether the Agreement was ‘genuinely agreed’, as that term is defined at s.188 of the Fair Work Act 2009. During the telephone mention, the Deputy President enquired as to the coverage of the Company’s employees at the time of the vote, and how that ‘stacked up’ against the Company’s declaration in the F17.

2. At Question 2.2 of the F17 filed in support of the application for approval of the Agreement, the Company indicated that the Agreement covers all the employees of the employer other than senior executives.

3. The Company can now confirm that the employees in question, the eligible employees’, were in fact performing a variety of labouring and trades tasks that are properly categorised as ‘building work’ for the purposes of the relevant award.

4. The Company further advises that other employees not covered by the Agreement, who carry out marketing, accounting and other administrative duties on behalf of the Company’s directors, are considered ‘senior executives’, and as such excluded from the coverage of the Agreement.

5. The Company therefore confirms that the workers who voted for the Agreement were in fact, at the time of the vote, eligible to do so as they were performing work that is covered by the relevant award’.

The Union submitted:

4. ‘Section 188(c) of the Act requires the FWC to be satisfied that there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees. The applicant has a responsibility to satisfy the FWC that there are no other reasonable grounds.

5. The CFMEU has previously raised a number of issues as to whether this requirement has been appropriately addressed by the applicant. In particular, the CFMEU has raised concerns about the eligibility of the employees to participate in the vote, in circumstances where the applicant has failed to provide sufficient information to satisfy the FWC.

Applicant’s submissions

6. In accordance with the directions issued on 24 February 2018, the applicant was required to file an outline of submissions, any witness statements and any other documentary evidence on which it relied by 9 March 2018. Curiously, the applicant chose only to file a one and half page submission and no documentary evidence or statements.

7. The applicant’s submissions make further claims, which were set out in the F17 and were therefore not previously available to the FWC. The CFMEU notes, that there is no evidence currently before the FWC to support those claims.

8. Bald assertions in submissions do not amount to evidence. The applicant now asserts that “the ‘eligible employees’ were in fact performing a variety of labouring and trades tasks that are properly categorised as ‘building work’ for the purposes of the relevant award” despite providing no evidence to support a conclusion. It was incumbent on the applicant provide some form of evidentiary proof to properly satisfy the FWC.

9. The applicant bears the onus of satisfying the FWC that an order should be made. The applicant has failed to discharge its onus and has failed to provide the FWC with enough information for it to be satisfied that the employees have genuinely agreed to the agreement.

10. The applicant’s failure to avail itself of the option to provide additional evidence speaks volumes and raises further questions as to why the applicant has chosen not to provide such evidence.

Genuine Agreement

11. In respect to the Applicant’s submissions dated 7 March 2018, the CFMEU notes that no evidence has been provided to the FWC in relation to whether the relevant employees were covered by the reference award. The relevant section of the Building and Construction general ON-Side Award 2010 reads:

4.6 This Award covers any employer which supplies labour on an on-hire basis in the industry set out in clause 4.1 in respect of on-hire employees in classifications covered by this award, and those on-hire employees, while engaged in the performance for work for a business in that industry. This subclause operates subject to the exclusions from coverage in this award.

12. The employees could only be covered by the Award while they are “engaged in the performance of work for a business in that industry.” The issue of workers making an agreement relating to a Award or Awards under which they are not employed, and of which have little knowledge of experience was considered by Flick J in Construction Forestry Mining and Energy Union v One Key Workforce Pty Ltd [2017] FCA 1266 at [116] and [123]

[116] But considerable difficulty is expressed in respect to the prospect that three employees with a very confined employment experience (and covered by a limited number of Awards) could approve an agreement that would “cover” employees falling within such a diverse range of Awards as those set forth in cl 2.1(b) of the Agreement. Such an agreement would lack “authenticity” and “moral authority” (cf. CFMEU v AIRC).

…

[123] It was a failure to give any – or any adequate or proper – consideration to such matters which vitiated the decision of the Commissioner to approve the Agreement and which exposed the jurisdictional error in his decision. The simple fact, moreover, was that there was no material before the Commissioner, and no assistance provided to him, which could support a conclusion that the agreement had been “genuinely agreed to by the employees covered by the agreement”, being those employees covered by the many and diverse Awards listed in cl 2.1(b) of the Agreement as opposed to the more limited agreement of Messrs O’Brien, Raymond and Marfell.

13. There is no material before the FWC proving the employees covered by the agreement have performed any labouring or trade tasks that can be properly categorised as building work for the purposes of the relevant award. The FWC cannot be satisfied that the employees covered by the agreement were at any stage engaged in the nature of work covered by the award.

14. The FWC cannot be satisfied that there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees. The FWC cannot be satisfied that the employees genuinely agreed to the agreement as required by section 186(2)(a) of the Act’.

In reply, the MBA submitted:

4. ‘The only part of s.188 invoked by the Union related to subsection (c) which gives the Commission a discretionary power to reject an application for approval of an agreement should it discover ‘reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees’.

5. It is axiomatic that an employer-business that brings an application for approval of an enterprise agreement before the Fair Work Commission, and swears a statutory declaration in support of that application, does so on the basis that the agreement being offered for approval was genuinely agreed at the time it was made.

6. If ‘reasonable grounds’ arise for the Commission to believe otherwise, then the application may be rejected.

7. Therefore, it is mischievous for the Union to claim that the Applicant has ‘a responsibility to satisfy the FWC that there are no other reasonable grounds’ for believing that the Agreement in question was not genuinely agreed to.

8. The Applicant has no such responsibility.

9. If the Deputy President wishes to question the validity of the application because there is material to suggest that there are reasonable grounds for it to suspect that the agreement was not genuinely agreed, then the Applicant stands ready, willing and able to cooperate and respond.

Coverage and eligibility to vote

10. To assist the Commission, the Applicant will now deal with the question of genuine agreement, as has been raised by the Union.

11. In this instance, the Union’s ‘concern’ about the Application before the Commission amounts to nothing more than a suspicion that the employees who are party to the Agreement, were not eligible to participate in the vote for approval of their own Agreement.

12. This assertion is mere speculation, completely unsupported and unfounded.

13. In our submission dated 9 March 2018, at para 3 we stated:

“The Company can now confirm that the employees in question, the ‘eligible employees’, were in fact performing a variety of labouring and trades tasks that are properly categorised as ‘building work’ for the purposes of the relevant award.”

14. This information was submitted on behalf of the employer, not as ‘additional evidence’, but in response to the Deputy President’s own question raised in the Tele-Conference of 19 February 2018, when the DP enquired as to the coverage of the Company’s employees at the time of the vote, and how that ‘stacked up’ against the Company’s declaration in the F17?

15. We clearly understood that the Deputy President was seeking clarification, and wanting to satisfy himself, that the workers in question were indeed performing ‘building work’, which draws coverage of the Building and Construction General On-Site Award 2010.

16. This was what the Applicant deposed at Qs.3.1 to 3.2 of the F17, and Qs 2.1 and 5.3 of the F16, where the position of each of the five employees who voted on the Agreement is clearly described as ‘labourer’’.

CONSIDERATION

[9] It should not be lost sight of that the employer has sworn a statutory declaration which included a statement that the Agreement had genuinely been agreed to by the employees to be covered by the Agreement. That precondition is met if the Commission is satisfied that certain other of the Act’s requirements for approval of an agreement have been met and that there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

[10] The signing of a statutory declaration, attesting to various matters required under the Act, is a serious and mandatory step in the Agreement approval process. Providing false information in a statutory declaration is a very serious matter for which criminal penalties, including imprisonment, may be a consequence; see: Pennyco Pty Ltd t/a Zarraffas West Ipswich [2017] FWCFB 4852.

[11] With this in mind, the starting point of any inquiry as to whether the Agreement has been genuinely agreed to by the employees, is the information contained in the F17 and any further evidence provided as a result of inquiries made by the Commission in the telephone conference. I note the employee bargaining representative who signed the Agreement described his position as Labourer and the applicant gave this assurance to DP Gostencnik on 9 March, 2018:

“The Company can now confirm that the employees in question, the ‘eligible employees’, were in fact performing a variety of labouring and trades tasks that are properly categorised as ‘building work’ for the purposes of the relevant award.”

[12] True it is that the onus falls on the applicant to demonstrate the Agreement should be approved. However, unless the Commission is provided with cogent evidence contrary to a conclusion that the Agreement was genuinely agreed to by the employees, the Commission cannot be satisfied that ‘reasonable grounds’ exist for believing that the Agreement has not been genuinely agreed.

[13] No such evidence was provided to rebut that presumption. Unsupported speculation or mere assertion, does not assist the Commission in believing ‘on reasonable grounds’ that the Agreement was not genuinely agreed. Indeed, not only are there no reasonable grounds to so conclude, the Union advanced no grounds to justify its assertions. Consequently, satisfaction of section 188(c) must be met in these circumstances. Accordingly, the Union’s objection to the approval of the Agreement is not made out.

[14] From my own review of the pre-approval process documentation and the terms of the Agreement itself, I am satisfied that all of the requirements of the Act, in particular ss 180, 186, 187, 188, 190 and 191, in so far as relevant to this application, have been met. The most recent consolidated undertakings provided by the applicant on 6 February 2018 and annexed to this decision as Annexure A, will become terms of the Agreement, pursuant to s 191(2).

[15] Accordingly, I approve a single enterprise agreement known as Oz Labour Solutions Pty Ltd Enterprise Agreement – 2017-2019. Pursuant to s 54 of the Act, the Agreement shall operate from 16 May 2018 and have a nominal expiry date of 2 years from that date; namely, 16 May 2020.

DEPUTY PRESIDENT

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