[2020] FWC 2306

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Parliament Constructions Pty Ltd
(AG2019/4303)

COMMISSIONER WILSON

MELBOURNE, 7 MAY 2020

Application for approval of the Parliament Constructions and Employees Enterprise Agreement 2019 - 2023.

[1] An application has been made for approval of an enterprise agreement known as the Parliament Constructions and Employees Enterprise Agreement 2019 - 2023 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Parliament Constructions Pty Ltd. The Agreement is a single enterprise agreement.

[2] Shortly after the application commenced, the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) requested they be provided with a copy of the Form F16 initiating application, the Form F17 Employer’s Support Statutory Declaration, the Notice of Employee Representational Rights (NERR) and any other documentation submitted by the Applicant in support of their application. The Commission provided redacted copies of the requested documents to the union the following day.

[3] Following preliminary consideration of the Agreement in the usual course, my Chambers sent correspondence to the parties named in the initiating application setting out the concerns I held in relation to the Agreement in respect of pre-approval matters, mandatory terms, the National Employment Standards (NES) and the Better Off Overall Test (BOOT).

[4] Parliament Constructions provided a response to the matters set out in the correspondence including a revised Form F17 Employer’s Support Statutory Declaration, together with unsigned draft undertakings which addressed some, but not all of the Commission’s concerns.

[5] Since the CFMMEU was not a bargaining representative for the Agreement it was directed to provide material pertinent to its interest. That direction elicited a response which relied upon an exercise by the Commission of its discretion to hear the union, consistent with the Commission’s broad power to inform itself in relation to any matters in such manner as it considers appropriate. 1 The union particularly sought to be heard in respect of its general interest in affairs in the construction industry, and especially in relation to its interest in maintaining and furthering the safety net established by the Award., which it considered to be undermined by the Agreement. It did not assert that it has any members employed by Parliament Constructions.

[6] The Applicant objected to the CFMMEU being accorded status in these proceedings, arguing the Commission’s discretion to hear from the union should not be exercised. It noted the union is not a bargaining representative and suggested that any need on the part of the Commission to inform itself can be furthered through means other than involvement of the CFMMEU. It contended that if standing were given to the union it should be narrowed to specific issues.

[7] After being satisfied that involvement of the CFMMEU in this matter may assist the discharge of the Commission’s functions, I granted standing to the union because of its general interest. Directions were then issued for the CFMMEU to particularise its objections and for Parliament Constructions to provide a response.

[8] After reviewing the material submitted by the CFMMEU, together with the responses by the Applicant I held the view that at least some of the matters referred to within the CFMMEU objections were also the subject of concerns identified to the Applicant by the Commission as part of its review of the Agreement. Further, I considered that to that point Parliament Constructions had still not adequately addressed all of the matters of concern identified by the Commission. As a result, further submissions were invited from both Parliament Constructions and the CFMMEU.

[9] Neither party sought to be heard over their submissions, or to bring forward oral evidence; consequently, the application has been determined by me on the papers. For the reasons set out below, I do not approve the Agreement, since I am not satisfied it was genuinely agreed within the meaning of the Act.

SCOPE OF THIS DECISION

[10] This is a decision relating to provisions within the Act’s Part 2 – 4, Enterprise Agreements.

[11] Part 2 – 4, Division 3 (Bargaining and representation during bargaining) sets out certain procedural steps for the commencement of bargaining and bargaining itself. The CFMMEU contended the Applicant has not complied with its obligation to provide employees with a compliant NERR and that at least one of the bargaining representatives was not sufficiently independent (ss.173 – 176).

[12] Part 2 – 4, Division 4 (Approval of enterprise agreements) provides requirements to be undertaken before the Commission considers approval of an Enterprise Agreement:

• In relation to the matters set out within Subdivision A (Approval of enterprise agreements by the FWC), whether the terms of the agreement have been explained to employees as required by s.180(5) requires consideration; as does the matter of whether the requirements for the signing of an enterprise agreement have been complied with (s.185(5); r.2.06A) and whether a notice of vote was provided to each employee (s.180(3)) Because of matters within the documents provided to the Commission, consideration must also be given to whether steps taken in relation to s.181(1) and s.182(1) allow the Commission to be satisfied that the Agreement has been genuinely agreed (s.188).

• In relation to the matters set out within Subdivision B (Approval of enterprise agreements by the FWC), whether ss.186(2)(c) and (d) have been satisfied (on the subjects of inconsistency with the NES and the BOOT) requires determination, as does the question of whether the Agreement had been genuinely agreed (s.188).

[13] The Commission is also required to consider whether any concerns it holds in relation to s.186 may be remedied through an undertaking given under s.190.

[14] The provisions of Subdivision D (Unlawful terms) require consideration for reason of the content of one of the proposed undertakings.

[15] The provisions of Subdivision E (Approval requirements relating to particular kinds of employees) do not require consideration.

[16] The provisions of Subdivision F (Other matters) require consideration insofar as the matter of the model flexibility term is concerned.

CONSIDERATION

[17] As part of its consideration process, the Commission wrote to the Applicant expressing 13 matters of concern, inviting either the provision of submissions that would persuade the Commission the expressed concern does not require further consideration, or the provision of an undertaking that would ensure the concern is removed. The matters identified to Parliament Constructions as concerns were these:

Pre-approval and Mandatory Terms:

1. Distribution of the Notice of Employee Representational Rights (NERR) – It was unclear in the initial documents how the NERR was provided to employees.

2. Provision of Agreement and incorporated materials – The initial Form F17, Employers Support Statutory Declaration was not clear as to how employees were provided with a copy of the Agreement and the materials incorporated by reference.

3. Explanation of Agreement – At item 2.7 of the Form F17, Employers Support Statutory Declaration filed with the initiating application, it was unclear if the terms of the Agreement and the effect of the terms of the Agreement had been explained to employees as required by s.180(5) of the Act.

4. Shiftworker definition – The Agreement did not contain a definition of a shiftworker for the purposes of the NES, nor did the Agreement provide 5 weeks’ annual leave to employees who are shiftworkers.

5. Statements within the Form F17 – The original Form F17, Employers Support Statutory Declaration at item 3.5 provided that there are no less beneficial terms in the Agreement when compared to the Modern Award. The BOOT analysis conducted by the Commission however identified that the Agreement does provide less beneficial terms in comparison to the Award. The Commission raised a concern with how employees could have genuinely agreed to the Agreement if the less beneficial terms had not been disclosed to them during the explanation of the Agreement.

6. Flexibility Term – The Flexibility Term in Clause 11 of the Agreement does not comply with each of the requirements of the Act, with the Commission noting an undertaking could not be accepted and the Model Flexibility Term would apply as a term of the Agreement.

Potential inconsistencies with the National Employment Standards (NES):

7. Annual Leave – The Commission was concerned that the Agreement provides for an accrual of annual leave expressed in days and not weeks as provided for in the NES. The Commission was concerned this was inconsistent with the finding of the Full Court of the Federal Court in Mondelez v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union (AMWU) 2 and invited an undertaking to address the concern.

8. Personal Leave – Clause 31.3 of the Agreement provides personal leave accrues at the rate of approximately 1.461 hours per week not progressive accrual as required under s.96(2) of the Act. The Commission invited an undertaking that Clause 31.3 will be subject to s.96(2) of the Act.

9. Public Holidays – Clause 34 of the Agreement lists public holidays that are recognised under the Agreement. It does not provide that other days declared as public holidays as per s.115(1)(b) of the Act are recognised under the Agreement. The Commission invited an undertaking that Clause 34 will be subject to s.115(1)(b) of the Act.

Whether employees will be better off overall under the Agreement:

10. Apprentices rates of pay – The Commission’s analysis suggested the rates of pay for junior and adult apprentices (other than stage 1 and stage 2 employees who have not completed Year 12) were 0.04% - 0.07% below the Modern Award. These classifications were matched with the carpentry tool allowance included since the indicative duties for the classifications suggested predominantly carpentry work.

11. Overtime for shift workers – Clause 22 of the Agreement provides that for shiftworkers, the relevant Award provisions will apply, with shiftwork loadings applied to an employee’s base rates. Clause 34.1(i) of the Award provides that all work in excess of shift hours, Monday to Friday, are paid at 200%. It was unclear whether the Agreement provisions also apply to the overtime provisions for shiftworkers, which may be an issue for the better off overall test (BOOT) for some classifications.

12. Part-time employees – overtime in excess of agreed hours – Part-time employees under the Agreement do not receive overtime outside of their ordinary hours. Under the Award, part-time employees receive overtime outside their ordinary hours (as set in Clause 13 of the Award). Given overtime is payable under Clause 36.2 for “all time worked beyond an employee’s ordinary time of work”, the rates of pay on the Commission’s modelling did not appear high enough to compensate for this reduction. The Commission invited an undertaking to the effect that part-time employees are entitled to overtime penalties for work performed in excess of agreed hours.

13. Allowances – The rates of pay in the Agreement did not appear to be high enough to compensate for the lack of allowances provided in the Agreement when CW1(a) and CW1(b) employees are working a 50-hour week. The Commission invited submissions as to which Award allowances are applicable for work performed under the Agreement or an undertaking which provides the allowances which employees would be entitled to under the Award. The Applicant addressed this concern by way of submissions and provided modelling to support their position.

[18] The CFMMEU submissions canvassed numerous matters, including non-compliance with s.173 of the Act (pertaining to the NERR); whether the bargaining representatives were independent (s.176 and r.2.06); whether the Agreement and incorporated material had been provided to employees and explained to them and whether employees were notified of the voting arrangements (ss.180(2), (3) and (5)); that the Agreement is detrimental to employees when compared to the NES (s.55(1)); and whether the better off overall test (BOOT) had been met in relation to employees covered by the Agreement (s.186(2)(d) and s.193).

[19] It was argued by the union that the Act’s agreement making prerequisites had not been met, with the Commission unable to be satisfied a valid NERR was distributed (s.173); or that a notice of vote was provided to each employee covered by the Agreement (s.180(3)); or that employees were provided with a sufficient explanation of the terms of the Agreement and the effect of those terms in order for the Commission to be satisfied the Agreement has been genuinely agreed (s.180(5); s.188).

[20] The union further argued the employee representative who signed the Agreement is not sufficiently independent of management for the Commission to find the Agreement has been signed in the required manner (s.185; r.2.06A). It also argued that the Employer Support Statutory Declaration (the Form F17) does not sufficiently identify potentially detrimental provisions of the Agreement to be relied upon by the Commission.

[21] Finally, the union argued that some contents of the Agreement contravenes the NES and that other parts of the Agreement mean the Commission is unable to be satisfied the Agreement passes the BOOT.

[22] In relation to the possible contravention of the NES, the CFMMEU argued the Agreement provides for fewer public holidays than the NES. The union’s argument in relation to the BOOT are to the effect that allowances in the Agreement are inferior; that the rates of pay for adult apprentices are lower than the Award; that there are numerous allowance exclusions from the Award; and that some additional provisions of the Agreement and especially the standdown provision are inferior to the protections that would otherwise apply.

[23] The final undertakings given by Parliament Constructions on all matters which have been the subject of exchanges with the Commission or objections made by the CFMMEU are in the following form:

“The following undertakings with respect to the Parliament Constructions Pty Ltd and Employees Enterprise Agreement 2019-2023 are provided:

1. An employee who engages in a system of consecutive shifts throughout the 24 hours of each of at least six consecutive days without interruption (except during breakdown or meal breaks or due to unavoidable causes beyond the control of the employer) and who is regularly rostered to work those shifts will be considered a continuous shiftworker. An employer who is a continuous shiftworker will be provided with annual leave in accordance with clause 38.1 of the Award. Notwithstanding clause 22, a shiftworker who works overtime will be paid in accordance with the requirements of clause 34.1 (i) of the Award.

2. Notwithstanding clause 30, when an Employee is paid annual leave at no time shall the amount paid to the Employee for Annual Leave fall below the employee's protected entitlements pursuant to the NES set out in the Fair Work Act 2009, including shiftwork entitlements in any calculations. The Employer undertakes that entitlements will be accrued progressively as required under section 87(2) of the Act.

3. Notwithstanding clause 31, when an Employee is paid personal leave at no time shall the amount paid to the Employee for Personal Leave fall below the employee's protected entitlements pursuant to the NES set out in the Fair Work Act 2009. The Employer undertakes that clause 31 .. 3 will operate subject to section 96(2) of the Act.

4. Notwithstanding clause 34, days that are declared as public holidays in accordance with section 115(1 )(b) of the Act will be recognised under the Agreement, and clause 34 will operate subject to section 115( 1 )(b) of the Act.

5. An employee who is employed on a part-time basis will be entitled to overtime penalties for work performed in excess of agreed hours in accordance with clause 36.2 of the Award.

6. Notwithstanding Item 2.4 and 2.5 of Appendix A, all Apprentice Base rates of pay, including Junior and Adult Apprentices, are to be increased by 0.5%.” 3

[24] I now give consideration to each of the matters identified by the Commission or raised as an objection by the CFMMEU.

Pre-approval, genuine agreement and mandatory terms

1. Distribution of the Notice of Employee Representational Rights (NERR)

[25] The Commission’s concern as expressed to Parliament Constructions was that it was unclear in the initial documents how the NERR was provided to employees. In response the Applicant provided an amended Employer’s Support Statutory Declaration (Form F17) which clarified at item 2.4 that the NERR was distributed in hardcopy to employees at a meeting on 14 August 2019.

[26] The CFMMEU’s objection in relation to this matter was clearly connected with it only being provided with a subset of the material filed as part of the originating application, including parts of documents that were redact by the Commission. Insofar as is relevant to this part of its objection, the CFMMEU was not provided with a copy of the NERR. The union submitted in this regard that “[i]n the absence of this document, the commission cannot assess whether or not an NERR in the appropriate format was provided to all staff as required by s173(1) of the Fair Work Act”. 4

[27] Beyond this submission no further material or evidence was provided by the CFMMEU on the subject. The union’s objection may therefore be characterised as a contention that because it had not seen the document, the Commission should find that the document was not provided by the employer as required.

[28] Against this position of the union, it is to be noted that the CFMMEU did not seek a hearing on this or any subject and did not seek to cross-examine the person who declared either the original or amended Form F17 statutory declarations, Mr Michael Wood, a Director of the Applicant, about his statements, including that the NERR was distributed to each employee on 14 August 2019 5 with it being given to each employee on that date at a meeting held “with all employees that would be covered under the EBA”. At the same meeting Mr Wood told employees there was an option for the document to be emailed to them, with employees also been given an opportunity to ask any questions they had about the NERR.6 This evidence is capable of acceptance by me and stands uncontradicted by any evidence brought forward by the CFMMEU.

[29] I find that the Notice of Employee Representational Rights was given to each employee who would be covered by the Agreement and was employed at the notification time consistent with the requirements of s.173.

2. Whether genuinely agreed

[30] Before approval of an enterprise agreement, the Commission is required to be satisfied the agreement has been genuinely agreed (s.186(2)(a)), with that term being defined in s.188(1) as including satisfaction that certain procedural steps have been undertaken. Section 188(2) enables genuine agreement to be discerned even though s.188(1) is not satisfied, provided that certain other tests are met:

“188 When employees have genuinely agreed to an enterprise agreement

(1) 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.

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

(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and

(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.”

[31] Evidently from the foregoing, it is necessary to in turn consider the provisions of ss.180(2), (3) and (5), which are in these terms:

“180 Employees must be given a copy of a proposed enterprise agreement etc.

Pre-approval requirements

(1) Before an employer requests under subsection 181(1) that employees approve a proposed enterprise agreement by voting for the agreement, the employer must comply with the requirements set out in this section.

Employees must be given copy of the agreement etc.

(2) The employer must take all reasonable steps to ensure that:

(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:

(i) the written text of the agreement;

(ii) any other material incorporated by reference in the agreement; or

(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.

(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:

(a) the time and place at which the vote will occur;

(b) the voting method that will be used.

(4) The access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1).

[ss.(4A), (4B) and (4C) omitted]

Terms of the agreement must be explained to employees etc.

(5) The employer must take all reasonable steps to ensure that:

(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and

(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.

(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:

(a) employees from culturally and linguistically diverse backgrounds;

(b) young employees;

[32] The Commission’s initial concerns on these matters identified two relevant matters pertaining to the provision of information about the Agreement to employees and the necessary explanation of its terms and the effect of those terms.

s.188(1)(a)(i) – whether s.180(2) complied with (provision of or access to materials)

[33] The Commission communicated that the initial Form F17, Employer’s Support Statutory Declaration was not clear as to how employees were provided with a copy of the Agreement and the materials incorporated by reference. The CFMMEU notes the Commission has not been provided with copies of any of the documents given to employees at the meeting on 18 October 2019. 7

[34] In the amended Form F17 filed on 10 January 2020, at item 2.5 it was stated that the employer provided a copy of the Agreement and material incorporated by reference via hardcopy at a meeting on 18 October 2019. The employee bargaining representatives, Mr Adam Corcoran and Mr Colin Baker confirm employees were given a hardcopy of the proposed Agreement. 8

[35] As a result of this additional information, I am satisfied that s.180(2) of the Act has been complied with.

s.188(1)(a)(i) – whether s.180(3) complied with (notification of vote)

[36] Section 180(3) requires an employer to take all reasonable steps to notify all relevant employees by the start of the access period the time and place at which the vote will occur and the voting method that will be used. The CFMMEU notes that no document supporting compliance with this section was provided to it. 9

[37] The original and amended Form F17’s assert that at the meeting held with employees on 18 October 2019, “[e]mployees were provided Notice of Vote by hand at the meeting held in the office. At this time, they were also notified that the voting method to be used would be secret ballot”. 10 This detail was confirmed in each of the three employee statutory declarations received by the Commission.11

[38] I am therefore satisfied the requirements of s.180(3) were complied with by Parliament Constructions.

s.188(1)(a)(i) – whether s.180(5) complied with (explanation of terms and effect of terms)

[39] In relation to what had been explained to employees covered by the Agreement, the Commission expressed a concern that item 2.7 of the Form F17, Employer’s Support Statutory Declaration filed with the initiating application, was unclear on whether the terms of the Agreement and the effect of the terms of the Agreement had been explained to employees as required by s.180(5) of the Act. In the revised Form F17 filed by Parliament Constructions in response to the Commission’s concerns, the Applicant provided further material about the steps taken to explain the terms and effect of the terms of the Agreement on employees. This included a meeting on 18 October 2019 with a question and answer session, at which a comparison to the Award was given, and the Agreement distributed. Employees with any queries were encouraged to speak to their bargaining representatives or management.

[40] The CFMMEU’s objection regarded what it saw as the Applicant’s insufficient explanation of the terms of the Agreement and the effect of these terms relies on a critique of the material provided by Parliament Constructions about the meeting it held with employees on 18 October 2019 for the purpose of explanation. The union submitted that even after several attempts to elicit information from the Applicant insufficient material came forward, particularly regarding how the Agreement affects rights employees may have if they continued to work under the Award; “at no point does the Applicant claim to have distributed a copy of the Award; nor is it apparent that at any time that they provided a hyperlink to the document”. 12 The union argued that since there was only a “verbal explanation set out, and no hardcopy of the Award provided, there is no possibility that workers could have been adequately informed of the changes that the Agreement would make to their conditions of work as set out in the Award”.13

[41] Four explanations have been given to the Commission regarding the Applicant’s endeavours to explain the terms of the Agreement and their effect to employees, with the first three consisting of this information:

• From the original Employer Statutory Declaration (Form F17), declared by Michael Wood on 12 November 2019:

There was, on 18 October 2019, “[a] meeting explaining to all employees the EBA's main clauses was held which also made comparison to the Building and Construction General OnSite Award (MA000020). At this time employees asked questions and answers were provided.”

• From an amended Employer Statutory Declaration (Form F17), declared by Michael Wood on 10 January 2020:

“A meeting explaining to all employees the EBA's main clauses was held which also made comparison to the Building and Construction General On-Site Award (MA000020), At this time employees asked questions and answers were provided.

The employees were advised that if they had any difficulty understanding the EBA or needed any additional information they could organize to have Michael Wood and/or there representative explain it to them at a date of their choosing, alternately they could contact the MBA for help.”

• From a further Statutory Declaration of Michael Wood declared on 21 February 2020:

“On 18 October 2019, a meeting was held with all employees to be covered by the agreement. The purpose of the meeting was to thoroughly explain the terms of the Agreement and the effect of those terms relating to each employee. I explained clauses of the Agreement and its effects relating to each employee. I also explained how it differed from the Award that they currently fall under. Employees were encouraged to ask questions or voice out any clarification they required, which they did, and answers were provided. All Employees are proficient in the English language. Employees were also advised to contact their Bargaining Representatives, myself, a member of management, or the MBA should they require further assistance or explanation of the EBA.”

[42] Having received these explanations with the union maintaining its objection, the Commission advised Parliament Constructions that what had been provided to date did not allow satisfaction the statutory requirements had been met. The Applicant’s attention was drawn to the standard of explanation expected, as established in relevant authorities:

[3] That which has so far been provided is of a very general nature only. For example, the statutory declaration from Mr Wood states that “On 18 October 2019, a meeting was held with all employees to be covered by the agreement. The purpose of the meeting was to thoroughly explain the terms of the Agreement and the effect of those terms relating to each employee. I explained clauses of the Agreement and its effects relating to each employee. I also explained how it differed from the Award that they currently fall under.” This statement is a repetition of the amended Form F17, the Employer Statutory Declaration with neither document elaborating upon the contents of the explanation which was given and the terms in which it was conveyed. This of course is problematic for the Commission’s consideration of the application with it being necessary for the Commission to be informed about what was said to the relevant employees, being more than a bare statement that an explanation has been given. Satisfaction of the criteria within s.180(5) requires the Commission to form a view that all reasonable steps have been taken to ensure the explanation given was contextually sufficient and appropriate. The absence of such information means the Commission cannot form the view required by s.180(5).

[4] These requirements flow from the judgement of the Full Court in One Key Workforce Pty Ltd v CFMEU 14; in which it was held:

“112 It is common ground that the Commission was never told what was said to the relevant employees. It was simply told that they had been given an explanation of the terms of the Agreement and the effect of those terms. In effect, this amounted to little more than a self-serving statement that the employer had complied with its obligation under the Act. OKW contended that the fact that it made such a statement in a statutory declaration was significant. It is not. As the CFMEU argued, whether all reasonable steps were taken to ensure that the effect of the terms of the Agreement was explained in an appropriate manner is a question of substance, not form. The recital of a conclusion on the very question the Commission was required (through an evaluative process) to determine is not, without more, a sufficient basis for the satisfaction of the statutory test. In other words, a bare statement by an employer that an explanation has been given is an inadequate foundation upon which to reach a state of satisfaction. …

113 A consideration of the subject-matter, scope and purpose of the relevant provisions of the Fair Work Act indicates that the content of the explanation and the terms in which it was conveyed were relevant considerations to which the Commission was bound to have regard. The absence of that information meant that the Commission was not in a position to form the requisite state of satisfaction. Put differently, without knowing the content of the explanation, it was not open to the Commission to be satisfied that all reasonable steps had been taken to ensure that the terms and their effect had been explained to the employees who voted on the Agreement or that they had genuinely agreed to the Agreement.”

[5] The steps required in this consideration have been summarised by the Full Bench in AWU v Rigforce 15 as follows:

“[35] … The nature of the requirement in s 180(5) was analysed in detail by the Federal Court (Flick J) in CFMEU v One Key Workforce Pty Ltd. 16 We adopt the summary of that analysis set out in CFMMEU v Ditchfield Mining Services Pty Limited17, which reduced it to the following four propositions:

(1) whether an employer has complied with the obligation in s 180(5) depends on the circumstances of the case;

(2) the focus of the enquiry whether an employer has complied with s 180(5) is first on the steps taken to comply, and then to consider whether:

• the steps taken were reasonable in the circumstances; and

• these were all the reasonable steps that should have been taken in the circumstances;

(3) the object of the reasonable steps that are to be taken is to ensure that the terms of the agreement, and their effect, are explained to relevant employees in a manner that considers their particular circumstances and needs. This requires attention to the content of the explanation given; and

(4) an employer does not fall short of complying with the obligation in s 180(5) of the FW Act merely because an employee does not understand the explanation provided.

[36] Additionally, we also adopt the analysis of Gostencnik DP in BGC Contracting Pty Ltd 18concerning the nature of a statutory obligation to take “all reasonable steps” as follows (footnote omitted):

“[43] A requirement or obligation to take “all reasonable steps” seems to me to require the identification of the steps a reasonable person would regard as reasonable in the circumstances that apply. Whether particular steps are reasonable will depend on the particular circumstances existing at the time the obligation arises. A requirement to take all reasonable steps does not extend to all steps that are reasonably open in some literal or theoretical sense…”

[6] As the state of the material in the matter stands, the Commission cannot be satisfied the requirements of s.180(5) and (6) have been met. To the extent that s.188(2) may also have application to the matter there is presently insufficient information before the Commission that would enable the categorisation of any deficiencies in the explanation to be “minor procedural or technical errors”. 19

[43] The Master Builders Association ACT, on behalf of the Applicant, contended this analysis was not correct. After noting that the Act “only requires reasonable steps to be taken to ensure that the terms and conditions are explained to employees”, it argued drawing on the authority of the Full Bench in Re McDonald’s Australia Pty Ltd 20 that “there is no requirement in the FW Act for the employer to provide a full explanation of the terms of a proposed agreement before requesting that the employees vote on the agreement”.

[44] Nonetheless the Applicant considered the Commission’s advice and submitted a further Statutory Declaration of Mr Wood, which this time gave greater detail of what was said and discussed in the meeting of 18 October 2019:

“3. On 18 October 2019, a meeting was held with all employees to be covered by the agreement. The purpose of the meeting was to thoroughly explain the terms of the Agreement and the effect of those terms relating to each employee. I explained clauses of the Agreement and its effects relating to each employee. In particular, the following explanations were provided to employees:

a) Annual wage increases were explained to employees. Particularly, it was explained when wages would increase annually and how the amount of increase was to be determined.

b) Dispute Resolution clause was explained. Particularly, it was explained that the clause sets out the procedure to be used to resolve a dispute around employment terms and conditions under the Agreement or NES.

c) Part 5 of the Agreement was explained to employees, particularly hours of work, overtime and weekend work. Particularly, it was explained what the number of hours of work each day would be, when overtime/weekend payments would be applicable and loadings that would apply.

d) Living Away from home Allowance was explained. It was explained that this allowance would be applicable where the employee is required to work at a construction site away from their usual place of residence and where it would be unreasonable for them to return home each day. Further, that the employer will provide reasonable board and lodging during any such period at the rates stated or some other arrangement as long as they are not disadvantaged.

e) Each and every leave entitlements were explained to employees including the family and domestic violence leave and parental leave scheme in accordance with the NES and the Paid Parental Leave Act 2010.

f) Travel allowance and the amount payable was explained. In particular, it was explained that where the company provides an employee with a fully maintained company vehicle, or where the employee is offered or provided with transport free-of-charge from home to the construction site and return, the travel allowance will not be paid.

g) Notice of termination was explained. In particular, it was explained that the clause sets out the minimum notice periods where an employee's employment with the employer is to be terminated. These notice periods are based on continuity of service and payment in lieu of the notice period can occur at the employer's discretion.

h) Appendix A - Classification of employees, base rates of pay, allowances and loadings were explained. In particular, it was explained that the classification of employees is based on skill, experience and qualifications, in conjunction with the Award. Further, it was explained that the rates of pay that are applicable to each classification is stated in the table in the Appendix and allowances are applicable in addition to the base rates of pay.

i) Inclement weather clause was explained to employees. In particular, it was explained that the decision to shut down a site would be at the discretion of the site supervisor due to the different situations that could arise such as internal fit-out work, fit-out in open building structures, external work in shares or external work in direct sun, etc.

4. I also explained how the Agreement was better off than the Award. In particular, the following comparisons with the Award were made:

a) The base rates of pay were compared to the Award;

b) The living away from home allowance was compared to the Award and was made to be consistent with the Award;

c) The hours of work, overtime /weekend work and loadings was explained and made to be in conjunction with the Award; and

d) The rate of travel allowance was compared to the Award.

5. Employees were encouraged to ask questions or voice out any clarification they required, which they did, and answers were provided. All Employees are proficient in the English language. Employees were also advised to contact their Bargaining Representatives, myself, a member of management, or the MBA should they require further assistance or explanation of the EBA.

6. Employees were also provided a notice of vote on 18 October 2019 by hand. The notice of vote included all referenced materials covered by the Agreement. Employees were advised that if they had trouble accessing a computer, one would be provided for them at Parliament's office.

7. Based on all my dealings with the employees and the bargaining representatives during the process of bargaining for and making the proposed agreement, I am satisfied that I had taken all reasonable steps to ensure the terms of the proposed Agreement and its effects were explained to employees. I am also convinced that all employees had a full opportunity to consider the content of the agreement and that those who voted in favour of it genuinely agreed to its content.”

[45] The Applicant’s submission that “there is no requirement in the FW Act for the employer to provide a full explanation of the terms of a proposed agreement before requesting that the employees vote on the agreement” with its reliance upon the reasoning in Re McDonald’s Australia Pty Ltd 21 is not accepted by me as an accurate reflection of the tests required to be applied. In that matter, the Full Bench was required to reconcile a circumstance in which a third party (a union) provided information to employees with the obligation within s.180(5) for the employer to take all reasonable steps to explain the terms of an agreement and the effects of those terms. A lesser issue for consideration by the Full Bench in that matter was the substantive explanations given by anyone to employees, and whether such explanations were sufficient. The Full Bench gave comprehensive consideration to the agency of explanation:

“The requirements of s 180(5)(a)

[27] The Commissioner commenced her consideration of this matter as follows:

“Ensuring that the terms of the agreement, and the effect of those terms, are explained to the employees

[57] The pre-approval step in s.180(5)(a) of the Act requires that an employer must ensure the terms of the agreement, and the effect of those terms, are explained to the employees. In the statement, I accepted Ms Allen’s evidence that at least some employees were not provided with relevant information until they attended information meetings held as late as 14 December 2009 in anticipation of a vote opening on 17 December 2009. Accepting this to be the case, then the application would fail to meet the requirements of the Act, because such information was provided within the access period.

[58] Against that background, the applicant’s case now contends it provided access to relevant information as to summary information on Metime in such a way as would otherwise satisfy the pre-approval requirements. I do not accept this to be the case.”

[28] The Commissioner then reviewed the various communications by the SDA and McDonald’s. She said:

“[74] I do not accept the proposition that electronic posting on Metime of SDA documents (or manual posting on a notice board at the workplace or provision of such documents at information sessions) satisfies the obligations on the applicant itself to provide such information. The applicant cannot come before Fair Work Australia saying it did not actually provide the information contemplated by s.180(5) of the Act, but the application should be approved because another organisation or person provided such information. It is irrelevant, in terms of satisfying the applicant’s own obligations for the purposes of s.180(5) of the Act, whether, for example, an officer of a union wishes to extol what he or she personally perceives as the benefits of an enterprise agreement and, in so doing, provides some summary of the terms of the agreement (as in the case of Exhibit 9-SDA15), and the applicant determined to post that commendation on Metime. Similarly, the minimalist brochure in Exhibit 9-SDA11, for South Australia, is bereft of any information which reasonably could be regarded as satisfying the requirements of s.180(5) of the Act – but nothing turns on that, because it was the applicant’s statutory responsibility to comply with s.180(5), not that of the South Australian Branch of the SDA.

[75] I do not consider the applicant’s own obligations under s.180(5) are somehow delegable in the way that has been adopted in this matter. If the applicant’s contention were to be accepted that it can rely on the SDA’s materials as having discharged its own responsibilities under s.180(5) of the Act, then there could be, by extension to other applications that may come before Fair Work Australia, some perverse outcomes. For instance, an employer could come to Fair Work Australia saying it had not provided any information whatsoever to employees proposed to be covered by an enterprise agreement, but the application should be approved because: (a) the employer was aware another organisation, such as a union, had provided a summary document for the information of employees/members in recommending a vote for or against a particular agreement; and (b) the employer was aware these union materials had been posted on the staff notice board or the union notice board at the workplace; or (c) the employer had, for example, allowed a union to disseminate its materials concerning the enterprise agreement on the internal email system at the workplace.

...

[79] I would dismiss the application as I have not been satisfied the requirements of s.180(5) of the Act have been met. The evidence does not support a conclusion the applicant properly discharged its own responsibilities concerning the provision of documentation such as might otherwise satisfy the requirements of s.180(5)(a) of the Act.”

[29] These extracts reveal a number of errors. First, the Commissioner has not accurately stated the test under s 180(5)(a). The heading and introductory paragraphs of this aspect of the decision express the test as an absolute requirement to ensure particular outcomes are achieved. The section does not establish any such requirement. It requires only that the employer take reasonable steps to ensure that the terms and conditions are explained to employees. In misstating the test the Commissioner erred.

[30] Secondly there is no requirement in the Act that there be a full explanation of the terms of the agreement prior to the employer requesting employees vote on an agreement. The requirement in s 180(5)(a) is that the employer take reasonable steps to ensure that explanations are provided. Under s 180(1) the employer must comply with this requirement before requesting employees to approve an enterprise agreement. In our view these provisions do not preclude explanations being given during the access period. It is open to an employer to make arrangements for subsequent explanations prior to requesting employees to vote. If the arrangements are reasonable steps, s 180(5)(a) is satisfied.

[31] Thirdly there is no impediment in the Act to collaborate with bargaining representatives to provide relevant explanations. The Commissioner rejected certain explanations because they were given by the SDA. In some cases SDA documents were communicated by McDonald’s by electronic means. In our view the Commissioner was quite wrong to disregard these steps. In our view an employer would be taking reasonable steps to ensure terms are explained to employees if it collaborated with a bargaining representative to arrange for this to be undertaken.” 22

[46] Re McDonald’s Australia Pty Ltd 23 was, in any event, decided well before the Full Court in One Key Workforce,24 and to the extent to which it is relied upon as authority for the proposition that anything other than a full explanation should be given, such submission is to be rejected. There is no doubt that “a bare statement by an employer that an explanation has been given is an inadequate foundation upon which to reach a state of satisfaction”,25 in which case the Commission must reject an application for approval of an agreement.

[47] It follows that the Applicant’s proposition that “there is no requirement in the FW Act for the employer to provide a full explanation of the terms of a proposed agreement before requesting that the employees vote on the agreement” cannot be sustained. Whether “all reasonable steps” have been taken to explain the terms of the Agreement and their effect requires an examination of the full explanation and whether that examination leaves the Commission satisfied there has been compliance with the statutory requirement. The explanation will “require the identification of the steps a reasonable person would regard as reasonable in the circumstances that apply. Whether particular steps are reasonable will depend on the particular circumstances existing at the time the obligation arises. A requirement to take all reasonable steps does not extend to all steps that are reasonably open in some literal or theoretical sense…”. 26

[48] The CFMMEU argued the Agreement has not been genuinely agreed. Its case is that either there were no steps or insufficient steps were taken by Parliament Constructions to explain the terms of the Agreement or their effect. Its submission on the subject contended that the information within the original Form F17 Employer’s Support Statutory Declaration was insufficient for the Commission to be satisfied, to the requisite standard of the obligation on the Applicant to have taken all reasonable steps to explain the terms of the Agreement and their effect. 27 The union saw the Applicant’s explanation, at least as given in the original Form F17, as to the effect that it had explained to employees “the EBAs clauses” as neither conveying the content or terms of the explanation given, as well as suggesting the explanation was partial, rather than a serious attempt to explain the effect of every term on the relevant employees.28 The union also noted that because the original Form F17 provided to it had the relevant information redacted it was unable to see that such explanation as was given adequately address the needs of any culturally and linguistically diverse employees or employees from other vulnerable groups. Parliament Constructions rejected this argument by submitting that all employees speak English.29 The original and amended Form F17s record that none of the employees engaged at the time of the making of the Agreement come from a non-English speaking background and that 1 is an Aboriginal or Torres Strait Islander.30 As a result of the Applicant’s material on the subject, I am satisfied its explanation of the terms of the Agreement and effect of those terms was provided in an appropriate manner, taking into account the particular circumstances and needs of the relevant employees.

[49] In forming my views about the explanation given to employees by the Applicant I have taken into account that the Agreement covers a single employer in the construction industry, with two individual employee bargaining representatives and up to 28 employees at the time it was made. I have also taken into account that this is a first enterprise agreement with employees otherwise covered by the Building and Construction General On-site Award 2010. The Award is not incorporated within the Agreement, although there are several parts of the Agreement which either stipulate that something is to be done “in accordance with” or “per” or “in conjunction with” the Award, 31 or that “the relevant Award provisions will apply” or an entitlement is “under” the Award.32

[50] Mr Wood’s evidence is that he explained at least the nine matters set out above and provided the opportunity for employees to ask questions about his explanation. There is no contrary evidence before the Commission such that would suggest he did not explain these things. One of the employee bargaining representatives, Adam Corcoran, confirms employees were given a copy of the proposed Agreement. Both he and another bargaining representative, Colin Baker who also signed the Agreement, confirmed that Mr Wood went through the proposed Agreement and encouraged questions. Another employee, Dominic Duncan, confirmed the Agreement was explained to employees by Mr Wood and that comparisons were made between the Award and the proposed Agreement.

[51] I am disinclined though to accept these statements as accurate, taking into account all the circumstances presented by the material now before me.

[52] The Agreement is signed by Colin Baker, an employee bargaining representative, who signed the Agreement in that capacity on behalf of employees. Mr Baker submitted a statutory declaration in support of the application for approval of the Agreement, in which he states he is a “Site Supervisor” 33. Another employee bargaining representative, Adam Corcoran, stated the same in his statutory declaration. In response to a question from the Commission for the purposes of considering the CFMMEU’s objection to Mr Baker’s signing of the Agreement, the Applicant’s representative confirmed Mr Baker is covered by the Agreement and classified for that purpose as a Senior Tradesperson.34

[53] Against this assertion of coverage, it is to be noted that the Agreement provides that Site Supervisors are not covered by it with the relevant clause providing the following:

“3 Coverage

3.1 The Agreement applies to the Employer and its Employees who are predominantly engaged in undertaking on-site building and construction works (including renovation and demolition) and who are covered by the classifications in Appendix A.

3.2 For the avoidance of doubt, this Agreement does not apply to:

(a) employees engaged predominantly in administrative tasks; and

(b) senior management employees, including but not limited to forepersons / site supervisors, safety managers and project managers etc.” (underlining added)

[54] The Applicant’s submissions accept that what is provided for within the Agreement is not consistent with expectations, submitting that the Agreement as made contains an error:

“Parliament identifies an ambiguity at question 2.2 of Form 17 and clarifies that the Agreement is not intended to cover Senior Management employees on a salary but does cover Site Supervisors who are on wages. Site Supervisors are given the choice of whether they would like to be paid a salary-based remuneration or remain on an hourly wage. Please refer to Statutory Declaration of Michael Wood dated 21 February 2020 which clarifies this ambiguity. Parliament is willing to provide an Undertaking to have the coverage clause of the Agreement edited to reflect this clarification” 35

[55] Parliament Constructions’ final submissions to the Commission took this suggestion further, proposing:

“… the following undertaking that will resolve any ambiguity around the question of whether Site Supervisors/Forepersons are adequately classified under the Agreement:

Notwithstanding Clause 3.2(b), The Agreement does not apply to senior management employees on a salary, including but not limited to forepersons / site supervisors, safety managers and project managers etc.” 36

[56] Unfortunately for the Applicant, this both cements the likelihood a finding should be made that the Agreement was not genuinely made, as well as proposing a resolution – if there can be one – which invites the inclusion of an unlawful term, which of course is impermissible for reason of s.186(4).

[57] Both the original and amended Form F17’s stated in relation to the Agreement’s coverage that:

“The agreement applies to employees who are predominantly engaged in undertaking on-site building and construction works.

The agreement doesn't cover employees predominantly engaged in administrative tasks and senior management employees, including but not limited to forepersons, site supervisors, safety managers and project managers.”

[58] Mr Wood’s statutory declaration on the subject of intended coverage says this:

“I wish to clarify an ambiguity in my Form 17 Stautory (sic) Declaration at question 2.2. In line with common Construction Industry practice, Senior Management staff on a salary are not covered by the Agreement. This includes Site supervisors, Safety supervisors and Project Managers. Site Supervisors are given the choice of whether they want to convert onto a salary based remuneration. Some Site Supervisors prefer to be paid an hourly wage and are therefore covered by the Agreement.” 37 (underlining added)

[59] Respectfully, there is no ambiguity in the F17 statement or, for that matter the coverage clause of the Agreement. The things stated therein may be wrong, but they are not ambiguous, at least in the manner Mr Wood endeavours to suggest.

[60] The NERR stated that notice was given by Parliament Constructions for “bargaining in relation to an enterprise agreement Parliament Constructions Pty Ltd and Employees Enterprise Agreement 2019 -2023 which is proposed to cover employees that are predominantly engaged in undertaking on-site building works” (underlining added). That notification is comprehensively broad – and sufficiently broad to cover site supervisors, as long as they are predominantly engaged in undertaking on-site building works.

[61] While the NERR is at odds with the outcome of the bargaining, such is not an unusual situation. The combination of the provisions of Clause 3 of the Agreement and the Form F17s do not allow for the ambiguity Mr Wood endeavours to assert; with the Agreement categorically not covering “senior management employees, including but not limited to forepersons / site supervisors, safety managers and project managers etc”. However, at least Mr Baker and Mr Corcoran appear to have bargained for and voted in the ballot for the Agreement when – depending on one’s view – they were either not entitled to do so, or mistaken about their impression that the actual words within the proposed Agreement covered their employment.

[62] Mr Wood’s evidence referred to above provides what at first glance appears to be a comprehensive list of things explained to employees about the proposed Agreement in the meeting on 18 October 2019. However, the list makes no reference to what he explained about the coverage of the proposed Agreement. That is a curious omission given what is now evident about the circumstance of Mr Baker and Mr Corcoran and the “ambiguity” Mr Wood later perceived with the Form F17 and the Agreement’s coverage clause. In order to accept that the explanation of the terms of the Agreement and the effect of the terms had been sufficiently comprehensive one would assume there had been at the very least a discussion recorded in relation to coverage along the lines of “the proposal is for an Agreement to cover everyone except senior managers, which includes salaried site supervisors, but in this case that exclusion is not a reference to Mr Baker or Mr Corcoran who are both covered by the Agreement”. If there was evidence of such a discussion then, even if the product of that explanation was at odds with the actual words of the coverage clause, it may be possible to be persuaded there had been a sufficient explanation to then allow a correction to the clause through a later undertaking.

[63] If there was an explanation given consistent with what Mr Wood says he intended from the Agreement, then plainly no reference was made to the hardcopy document circulated at the meeting, since no discrepancy was picked up by those at the meeting. In the alternative if any explanation was given of the words of the document, as opposed to the intent, no one thought what was explained was inconsistent with the intent. More likely, given what is now apparent, is that there was no discussion of the coverage and thereby no reading of the relevant clause.

[64] Section 180(5) requires an employer to take all reasonable steps to ensure that the terms of the agreement, and the effect of those terms, are explained to the relevant employees with the explanation being in an appropriate manner taking into account the particular circumstances and needs of the relevant employees. The Commission has held about the obligation to take “all reasonable steps” that such requires the identification of the steps a reasonable person would regard as reasonable in the circumstances that apply; that whether particular steps are reasonable will depend on the particular circumstances existing at the time the obligation arises; and that a requirement to take all reasonable steps does not extend to all steps that are reasonably open in a literal or theoretical sense. 38

[65] In this case, those reasonable steps would likely extend to an actual discussion about who the Agreement covers, and who it does not. There is no evidence of such an explanation before the Commission, and the fact that Parliament Constructions now endeavours to fix up an obvious problem with the drafting of the coverage clause, leads inexorably to the conclusion there was no such explanation.

[66] I am therefore not satisfied s.180(5) was complied with by Parliament Constructions. It follows that I am not satisfied of the requisite element is s.188(1)(a)(i).

s.188(1)(c) – no other reasonable grounds for believing the agreement has not been genuinely agreed

[67] It is relevant to consideration of s.188(1)(c) to take into account that there was likely an insufficient explanation of the Agreement given to employees, and that such led to employees voting when they were not eligible to vote and/or they did not understand what they were voting for. These matters cause me to be concerned that the vote was conducted in such a way as to not allow me to be satisfied “there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees”.

[68] This is because at least two employees and possibly more purportedly covered by the Agreement participated in the vote when they apparently had no entitlement to do so. Even though the ballot was carried by 23 of 28 voters and these are just two who may have voted in error, the fact that this occurred casts a question over the voting procedure. At least Mr Baker and Mr Corcoran and potentially an unknown number more participated in the vote when they apparently had no right to do so because on the face of the Agreement, they were not a person who would be covered by it.

[69] If each was covered by the Agreement, it follows that the document given to them had not been explained properly to them, since a proper explanation would reasonably have led to a scrutiny of the clause, leading in turn to an alert that it did not say what it intended. If they were not covered by the Agreement, then they were not entitled to vote.

[70] Because of these circumstances I am not satisfied of the element within s.188(1)(c) and I therefore do not find the Agreement has been genuinely agreed.

3. Whether Agreement signed in accordance with the Act

[71] Section 185(2) requires an application for the Commission’s approval of an enterprise agreement be accompanied by a signed copy of the Agreement, with regulations able to be made about requirements relating to the signing of enterprise agreements. Fair Work Regulation s2.06A(2)(a)(ii) requires an agreement to be signed by at least 1 representative of the employees covered by the agreement. Relatedly, r.2.06(a) and (b) require a bargaining representative of an employee to be free from control or improper influence by the employer or another bargaining representative.

[72] The CFMMEU contended that Mr Baker, who signed the Agreement as an employee representative was not in a position to do so. Its submissions on the subject included that, as forepersons, Mr Baker and the other employee bargaining representative, Mr Corcoran were a “manifestation of managerial authority” who were not in a position to be “sufficiently independent” of the employer, which could therefore wield improper influence over bargaining. Because it had only been provided with a version of the Agreement which omitted the signatories, the union then argued that if the application lodged included the signature only of either man on behalf of employees the application had not been validly made. 39 Its submissions on the subject relied on an earlier decision of the Commission for the proposition that an issue may be created about genuine and good faith bargaining if the employer was in a position to veto bargaining representatives.40

[73] Parliament Constructions rejected the CFMMEU’s characterisations arguing that the bargaining representatives “were nominated independently of the employer and that it is open for employees to appoint Site Supervisors as their Bargaining Representative” and that the representatives, as well as another employee, Mr Duncan verified their independence and the independent choice held by employees. 41

[74] Despite what I have to say in the earlier section about the deficiencies of the ballot, it is the case that employees were both entitled to appoint Mr Baker and Mr Corcoran as their employee bargaining representatives and for them in turn to act in that capacity. No evidence has been brought forward that either is actually or likely to be under the control of management; and what is relied on is not much more than an assumption by the union.

[75] It follows that I accept Mr Baker was entitled to sign the Agreement as an employee representative, and that such accords with the requirements of s.185(2) and r.2.06A(2)(a)(ii).

4. Shiftworker definition

[76] The Commission raised a concern with Parliament Constructions that the Agreement did not contain a definition of a shiftworker for the purposes of the NES, which is a requirement of s.196(2), and that neither did the Agreement provide 5 weeks’ annual leave to employees who are shiftworkers, which is a term of the NES (s.87(1)(b)) and the Award (Clause 38.1). An undertaking has been provided by the Applicant in response to the concern framed in the following way:

[77] I am satisfied the undertaking resolves the Commission’s concern.

5. Whether Form F17s misleading and not to be relied upon

[78] The Commission identified a concern to the Applicant regarding material in its Form F17, Employer’s Support Statutory Declaration. Item 3.5 of the original document stated there were no less beneficial terms in the Agreement when compared to the Modern Award. The concern identified by the Commission was that its BOOT analysis indicated there were less beneficial terms in comparison to the Award. The Commission raised a concern with how employees could have genuinely agreed to the Agreement if the less beneficial terms not been disclosed to them during the explanation of the Agreement. The Applicant provided submissions in reply to the effect that employees could genuinely agree to terms of the Agreement because they will be better off once it has been implemented when compared to the Award.

[79] The CFMMEU’s submissions on the subject were that the Form F17 was inadequate, with implications for ascertainment of genuine agreement. It argued the Form is deficient, since:

“42. At question 2.13, the F17 asks whether there are terms or conditions of employment less beneficial than the NES. As previously noted, the agreement excludes two public holidays. By answering No, the Applicant has incorrectly answered question 2.13.

43. At question 3.2, the F17 asks whether there are classifications different than the reference instrument. The Junior Tradesperson classification in the Agreement is not listed in the reference instrument, even though it may be comparable. By answering No, the Applicant has incorrectly answered question 3.2.

44. At question 3.5 and 3.6, the F17 asks whether there are terms or conditions of employment less beneficial than the reference instrument or omitted entirely. As previously noted, the agreement excludes every allowance in the Award, and a host of other conditions. By answering No, the Applicant has incorrectly answered questions 3.5 and 3.6.” 42

[80] Omissions of this type, it argued, have been found by the Commission as being sufficient to find there was no genuine agreement. 43

[81] The Form F17s – original and amended – are plainly wrong in the manner set out by the CFMMEU. The most significant of the errors is the negative response to item 3.5, which asks “Does the agreement contain any terms or conditions of employment that are less beneficial than equivalent terms and conditions in the modern award(s) listed in your answer to question 3.1?” The Agreement plainly provided that the Award provisions are not incorporated and then just as plainly did not provide all the things provided for the by the Award. The Applicant should have answered “yes” to the question and then listed, as required “the terms and conditions of the agreement that are less beneficial than equivalent terms and conditions in the modern award(s)”.

[82] The purpose and significance of the Form F17, the Employer Statutory Declaration has been extensively discussed by the Full Bench, and there are penalties for persons who deliberately provide an erroneous declaration; see Pennyco Pty Ltd t/a Zarraffas West Ipswich 44; Derbarl Yerrigan Health Service Inc.45However, in this matter, I am not persuaded the information set out in the Form F17 was deliberately wrong.

[83] While that may be the case, it is unsatisfactory that the complete story about the Agreement and what it provided for or not was not volunteered to the Commission at the earliest possible opportunity. It should not be for the Commission to have to lift enough rocks to find the things which are less beneficial for employees. The merits of the Agreement– argued as leaving all employees better off overall – balanced by identified less beneficial terms should be there for all to see. Shyness about an Agreement’s less beneficial terms will not assist a speedy consideration by the Commission of its merits.

[84] In finality though, because I am not satisfied for other reasons that the Agreement has been genuinely agreed, I do not find that the deficiencies in the Form F17 are such as to cause me to reject the Agreement. The lack of candour in the Form F17 does not assist Parliament Construction’s case that the Agreement has been genuinely agreed, but it does not cruel it either.

6. Flexibility Term

[85] The Commission identified to the Applicant it held a concern the Flexibility Term in Clause 11 of the Agreement did not comply with the requirements of the Act and advised that since the Commission cannot accept an undertaking to address concerns about the Flexibility Term that the Model Flexibility Term will apply as a term of the Agreement. 46 The Flexibility Term is a mandatory requirement of the Act arising for reason of ss.202 and 203(2)(a), which require both that an agreement include a Flexibility Term and that the relevant term be consistent with the things specified by the Act. In this case Clause 11 of the Agreement does not “set out the terms of the enterprise agreement the effect of which may be varied by an individual flexibility arrangement agreed to under the flexibility term” (s.203(2)(a). The Applicant did not provide submissions on the subject. Accordingly, if approved, the Model Flexibility Term would be taken to be a term of the Agreement (s202(4)).

Potential inconsistency with the NES

[86] Several terms of the Agreement were identified by the Commission as being contrary to the National Employment Standards (NES), namely the accrual rates for annual and personal leave, and the public holidays provided for within the Agreement. The CFMMEU also objected to the public holiday clause as being inconsistent with the NES.

[87] The matters of accrual rates for annual leave and personal leave are dealt with by me together.

Annual Leave accrual

[88] The Commission expressed the concern to the Applicant that the Agreement provides for an accrual of annual leave expressed in days and not weeks as provided for in the NES and expressed the view that this may be inconsistent with the finding of the Full Court of the Federal Court in Mondelez v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union 47 and invited an undertaking to address the concern.

[89] Further, Clause 30.3 of the Agreement provides that annual leave accrues at the rate of approximately 2.293 hours per week which is not for the same reason as above a “progressive accrual” as required under section 87(2) of the Act, given the Act makes reference to the annual entitlement being in weeks, not days or hours.

Personal Leave

[90] Clause 31.3 of the Agreement provides personal leave accrues at the rate of approximately 1.461 hours per week not progressive accrual as required under section 96(2) of the Act. Relying on the same grounds as for the matter of annual leave accrual, the Commission invited an undertaking that Clause 31.3 will be subject to section 96(2) of the Act. The Applicant provided a draft undertaking framed as:

“Notwithstanding clause 31, when an Employee is paid personal leave at no time shall the amount paid to the Employee for Personal Leave fall below the employee’s protected entitlements pursuant to the NES set out in the Fair Work Act 2009. The Employer undertakes that clause 31.3 will operate subject to section 96(2) of the Act.”

[91] The context of both matters is that one of the requirements for approval of an enterprise agreement is that the Commission must be satisfied its terms do not contravene s.55 which deals with the interaction of agreements with the NES. So far as is relevant, s.55 provides that an agreement must not exclude any provision of the NES (s.55(1)), but may include any terms expressly permitted by an element of the NES in Part 2 – 2 of the Act (s.55(2); and may also include certain ancillary, incidental or supplementary terms (s.55(4)). An agreement may also have terms which have the same effect as a term in the NES (s.55(5)).

[92] While not making submissions on these subject, Parliament Constructions provided undertakings in response to the concerns identified by the Commission, now shown in their final form:

“2. Notwithstanding clause 30, when an Employee is paid annual leave at no time shall the amount paid to the Employee for Annual Leave fall below the employee's protected entitlements pursuant to the NES set out in the Fair Work Act 2009, including shiftwork entitlements in any calculations. The Employer undertakes that entitlements will be accrued progressively as required under section 87(2) of the Act.

3. Notwithstanding clause 31, when an Employee is paid personal leave at no time shall the amount paid to the Employee for Personal Leave fall below the employee's protected entitlements pursuant to the NES set out in the Fair Work Act 2009. The Employer undertakes that clause 31.3 will operate subject to section 96(2) of the Act.”

[93] While satisfied the undertakings address the requirement for progressive accrual, I continue to hold a concern the provisions, as amended by the undertakings, do not adequately address the concern about the accrual rate.

[94] The Applicant was advised that the Commission saw the relevant clauses as inconsistent with the provision in the Act that an employee is entitled to either 4 or 5 weeks of paid annual leave (s.87(1)) accrued “progressively during a year of service according to the employee’s ordinary hours of work” (s.87(2)) as well as 10 days of paid personal/carer’s leave, also accrued progressively during a year of service (ss.96(1) – (2)). 48 The request made of the Applicant was to address the issue by providing undertakings specifically addressing these concerns so that a lay person reading the Agreement may understand their entitlements. While this has some practical difficulty in the current environment, noting that “the pro-rating of such entitlements must occur in accordance with the NES provisions (noting that this is an issue of some controversy which will presumably be settled by the Mondelez litigation)”,49 what has been put forward by Parliament Constructions as a proposed undertaking does not sufficiently remove the core problem identified by the Commission.

[95] The undertakings are heavily conditioned by jargon – the phrase “employee’s protected entitlements” is not defined anywhere in the Agreement, the Act or the Award and likely would invite more controversy than it may settle. I would be concerned that a lay worker or anyone advising them may be unable to precisely discern what was actually meant in a particular case. In the case of these matters, an appropriate undertaking would be in these forms:

“The Employer undertakes that Clause 30.3 which provides that “Annual leave accrues during Ordinary Hours and accumulates from year-to-year. Annual leave accrues at the rate of approximately 2.923 hours per week” will not be relied upon and instead will be implemented on the basis that it provided “The Employer undertakes that annual leave entitlements will be accrued progressively and accumulate from year to year as required by section 87(2) of the Act”;

and

“The Employer undertakes that Clause 31.3 which provides that “Personal / carer’s leave accrues during Ordinary Hours and accumulates from year to year. Personal/carer’s leave accrues at the rate of approximately 1.461 hours per week.” will not be relied upon and instead will be implemented on the basis that it provided “The Employer undertakes that personal/carers leave entitlements will be accrued progressively and accumulate from year to year as required by section 96(2) of the Act”.”

Public Holidays

[96] Clause 34 of the Agreement includes a list of public holidays recognised as such under the Agreement. However, it does not provide that other days declared as public holidays by s.115(1)(b) of the Act are recognised under the Agreement. After drawing this concern to Parliament Constructions attention, the Commission invited an undertaking that Clause 34 will operate in subject to the provisions of s.115(1)(b). The CFMMEU expressed a similar objection, arguing the effect of the Agreement as made was to not recognise two ACT public holidays, Easter Sunday and an additional public holiday on Monday 28 December 2020. 50

[97] In response to the Commission’s concern, the Applicant provided an undertaking, now provided in its final form:

“4. Notwithstanding clause 34, days that are declared as public holidays in accordance with section 115(1)(b) of the Act will be recognised under the Agreement, and clause 34 will operate subject to section 115(1)(b) of the Act.”

[98] I am satisfied the undertaking overcomes the Commission’s concern.

Matters associated with the BOOT

[99] I turn to consideration of the remaining approval matters, including whether employees under the Agreement will be better off overall.

1. Apprentice rates of pay

[100] The concern expressed by the Commission in relation to this matter was that other than for stage 1 and stage 2 apprentices who have not completed year 12, the rates of pay for junior and adult apprentices were 0.04% - 0.07% below the Modern Award. These classifications were matched inclusive of the carpentry tool allowance as the duties provided that employees work predominantly carpentry work. The Applicant in response submitted that they would be willing to increase the rates of pay of all apprentices by 0.5% and would be willing to provide an undertaking to give effect to the increase.

[101] The CFMMEU objected that the rates of pay for an adult apprentice are inferior to those provided in the Award. 51

[102] Parliament Constructions indicated in its response to the Commission it was prepared to resolve the matter through an undertaking marginally increasing the rates of pay for apprentices. The final form of the proposed undertaking is this:

“6. Notwithstanding Item 2.4 and 2.5 of Appendix A, all Apprentice Base rates of pay, including Junior and Adult Apprentices, are to be increased by 0.5%.”

[103] I would not be inclined to accept the form of the undertaking, since it does not specify the actual hourly amount an apprentice would receive but would be prepared to accept an amended undertaking which included actual dollar amounts per hour.

2. Overtime for shift workers

[104] The Commission raised a concern with the Applicant that overtime provisions for part-time employees were unclear, which meant it may not be satisfied employees were better off overall. In this regard, it was noted that Clause 22 of the Agreement provided that for shiftworkers “the relevant Award provisions will apply, with shiftwork loadings applied to an Employee’s Base Rates”. Clause 34.1(i) of the Award provides that all work in excess of shift hours, Monday to Friday, are paid at 200%. The Applicant was advised it was unclear to the Commission whether the Agreement provisions also apply to the overtime provisions for shiftworkers. The Commission’s analysis suggested that if this was the case, then some classifications were not better off overall.

[105] In response, Parliament Constructions has provided an undertaking in this final form, addressing not only the matter of overtime for shiftworkers, but also the matter of the definition of shiftworker (which is, as indicated earlier, no longer a matter of concern to the Commission because of the undertaking):

“1. An employee who engages in a system of consecutive shifts throughout the 24 hours of each of at least six consecutive days without interruption (except during breakdown or meal breaks or due to unavoidable causes beyond the control of the employer) and who is regularly rostered to work those shifts will be considered a continuous shiftworker. An employer who is a continuous shiftworker will be provided with annual leave in accordance with clause 38.1 of the Award. Notwithstanding clause 22, a shiftworker who works overtime will be paid in accordance with the requirements of clause 34.1 (i) of the Award.” (underlining added)

[106] The Award’s Clause 34.1(i) provides “[a]ll work in excess of shift hours, Monday to Friday, other than holidays must be paid for at double time (excluding shift rates).” As a result, I am satisfied the proposed undertaking would remove the Commission’s concern.

3. Part-time employees - overtime in excess of agreed hours

[107] The Commission expressed the concern to the Applicant that part-time employees working under the Agreement do not receive overtime outside of their ordinary hours. In comparison, under the Award, part-time employees receive overtime outside their ordinary hours (as set in Clause 13 of the Award) given overtime is payable under Clause 36.2 is for “all time worked beyond an employee’s ordinary time of work.” The rates of pay on the Commission’s modelling are not high enough to compensate for this reduction. The Commission invited an undertaking to the effect that part-time employees are entitled to overtime penalties for work performed in excess of agreed hours, in response to which Parliament Constructions provided an undertaking the final form of which is in these terms:

“5. An employee who is employed on a part-time basis will be entitled to overtime penalties for work performed in excess of agreed hours in accordance with clause 36.2 of the Award.”

[108] The undertaking sufficiently addresses the Commission’s concern.

4. Allowances

[109] In its initial correspondence to Parliament Constructions, the Commission indicated that the rates of pay in the Agreement did not appear to be high enough to compensate for the lack of allowances provided in the Agreement when CW1(a) and CW1(b) employees are working a 50 hours week. The Commission invited submissions as to which Award allowances are applicable for work performed under the Agreement or an undertaking which provides the allowances which employees would be entitled to under the Award.

[110] Part of the CFMMEU’s objection was that the exclusion from the Agreement of most Award allowances generally for most employees working under the Agreement “creates a situation where the pattern of hours and circumstances of work becomes critical to assessing whether or not the BOOT has been passed”. 52

[111] The Applicant’s response to these matters was to the effect that matters were alleviated through a combination of the Agreement’s higher hourly rates and higher rate of travel allowance. In relation to the Commission’s concerns, it argued:

“The Employer does not currently employ any employees who are considered to be a CW1(a) or a CW1(b). All labourers have currently been employed for more than three (3) months and are paid accordingly (at a higher rate than the minimum hourly rate specified in the enterprise agreement). The Employer would continue to pay a travel allowance of $30.00 per day, which is almost 42% higher than the amount required to be paid to an Employee under the Award. No other allowances are ordinarily paid to Employees that are classified as CW1(a) and/or CW1(b).

The Employer has reviewed the hourly rates specified for the CW1(a) and CW1(b) classification and compared to the Award, has calculated that a CW1(a) employee would be $130.71 better off under the Agreement than under the Award.” 53

[112] In relation to the CFMMEU’s objection, Parliament Constructions submitted:

“The Agreement provides for a Travel Allowance of $30.00 per day which is almost 42% higher than the amount payable under the Award. The Base rates of pay under the Agreement is also significantly higher than those provided for under the Award. As such, Parliament submits that the Agreement passes the BOOT test because the less beneficial aspects of the Agreement when compared to the Award are outweighed by the more beneficial aspects of the Agreement, particularly the higher rates of pay and travel allowance under the Agreement” 54

[113] The Commission notes Parliament Construction’s submissions and that, in particular, it relies upon the higher wage rates in the Agreement as the basis upon which a finding could be made of employees being better off overall if the Agreement were to be approved. While the omission of most allowances could conceivably, in some circumstances, have a significant impact on wages, the wage elevation for adult non-apprentices working under the Agreement is likely to more than outweigh the absence of allowances that would otherwise apply under the Award. The Agreement’s wages for adult non-apprentices are between 11.5% and 30% above the Award. Modelling undertaken by the Commission for a general labourer, at the CW1(a) classification (where the Agreement wage rate is 11.5% above the Award rate) indicates that on a 50 hour week, with overtime, and taking into account allowances that would be payable under either instrument is about 3.9% better off under the Agreement than the Award.

[114] The Commission is satisfied with the Applicant’s response on these matters and does not find employees would not be better off overall with the absence of the allowances referred to by the CFMMEU.

5. Non-allowance matters

[115] The CFMMEU submitted there are numerous non-allowance matters which required being taken into account in assessment of the BOOT:

“a. Dispute Resolution proecedure (sic) training leave at 9.10 of the Award;

b. Casual conversion clauses at clause 14.8 of the Award;

c. Weekend Return Home and rest and recreation while living away from home (clauses 24.7(e) and 24.7(f));

d. Accident pay at clause 27 of the Award;

e. The change in the bandwidth of ordinary hours from 7am to 6am at 19.1 of the Agreement and clause 33.1 of the Award;

f. Minimum recall to work of 3 hours, as at clause 36.5 of the Award;

g. Minimum 10 hours between shifts at clause 36.9 of the Award;

h. Additional crib breaks at ordinary finishing time (35.3(a)) and on Saturdays and Sundays (clause 37.7).

i. Annual Closedown (clause 38.3)”. 55 (spelling as per original)

[116] The CFMMEU did not elaborate on all of its objections provided in this list. It did however elaborate on the casual conversion clause and the living away from home allowance stating the importance of both on employees. 56

[117] In considering these matters, I refer to and rely upon my findings about the wages differential in the passages immediately above. At least some of the non-allowance matters referred to above are predictably infrequent in their application and, for reason of the wages uplift as well as the absence of cogent evidence on the subjects, questions of employees not being better off overall do not arise. Notwithstanding this observation, there are three matters which require particular consideration in the context of this decision:

• The CFMMEU refers to the absence of a casual conversion clause in the Agreement, otherwise provided for in the Award at Clause 14.8, with the Clause providing the following:

“(a) A casual employee, other than an irregular casual employee, who has been engaged by a particular employer for a sequence of periods of employment under this award during a period of six months, thereafter has the right to elect to have their contract of employment converted to full-time or part-time employment if the employment is to continue beyond the conversion process.”

The Parliament Constructions amended Form F17 discloses it employed 3 casual employees when the Agreement was made. I consider the Award’s casual conversion provisions are a significant right for employees, and that the absence of such provision under the Agreement would result in casual employees at least not being better off overall.

In order to be satisfied the BOOT for the Agreement has been met on this subject, an undertaking would be required from Parliament Constructions to the effect that the provisions of Clause 14.8 and 14.9 the Award would apply to employees under the Agreement.

• The matter of the change of ordinary hours bandwidth at Clause 19.1 of the Agreement is something open to employees to vote to approve – which is what they did – if they believe that works for them as an individual. I do not find that such change would lead to a finding that employees are not better off overall because of the change.

• The CFMMEU identifies that the Agreement does not provide for a minimum payment in the event an employee is recalled to work overtime. Clauses 36.3 and 36.4 of the Award (and not Clause 36.5 as indicated by the CFMMEU) provide for the following:

“36.3 An employee recalled to work overtime after leaving the employer’s business premises (whether notified before or after leaving the premises) must be paid for a minimum of three hours’ work at the appropriate rates for each time the employee is so recalled. The employee will not be required to work the full three hours if the job the employee was recalled to perform is completed within a shorter period, unless unforeseen circumstances arise.

36.4 Clause 36.3 will not apply in cases where it is customary for an employee to return to the employer’s premises to perform a specific job outside ordinary working hours or where the overtime is continuous (subject to a reasonable meal break) with the completion or commencement of ordinary working time.”

I am satisfied that this is an important provision which is likely to have work to do in the context of Parliament Construction’s work and employment. Notwithstanding that wages for most classifications under the Agreement are significantly higher than the Award, the wage differential at the lower end of the classification scale is not likely to be a sufficient buffer if overtime recalls are anything other than isolated. It would thus be appropriate for the matter to be put beyond doubt were the Agreement to be approved through the provision of an undertaking to the effect that Clauses 36.3 and 36.4 of the Award would apply to employees under the Agreement.

6. Stand-down provisions

[118] The CFMMEU also contended the Agreement’s stand-down provisions go beyond those provided for in the Act, but did not greatly elaborate on the subject, submitting only that “additional requirements at 40.64 (sic) that gives the employer the ability to stand down the worker without pay, beyond the very limited situations envisaged by the Fair Work Act”. 57

[119] The Agreement’s Clause 40.6 provides for a stand-down due to unfitness for work:

“40.6 If the Employer reasonably believes that an Employee is unfit for work due to the reasons outlined in clause 39.2 above, to the extent that the Employee presents as a work health and safety risk to themselves or others, the Employer may direct the Employee to stand down from work until the Employee is fit to safely perform their duties. The Employee may access accrued annual leave or personal leave for the period of stand down. If the Employee has no leave accrued or is a Casual Employee, then leave without pay will be approved by the Employer.”

[120] Clause 39.2 in turn provides for a duty on the part of employees to care for their own safety and that of others:

“39.2 Employees must take reasonable care for their own health and safety and take reasonable care that their acts or omissions do not risk the health and safety of other persons.”

[121] There is nothing before me that would indicate when or why these clauses may be used or not, or the effects their use may have on employees. The reference to the limited situations referred to in the Act is presumably a reference to the provisions of s.524, which deals with the circumstance in which an employer desires to stand-down one or more employee because they “cannot usefully be employed”. Such is an entirely different circumstance than an employee who is unfit for work, and arguably unable for that shift at least to perform the inherent requirements of their job.

[122] I do not hold a concern that this provision would mean employees are not better off overall if the Agreement were to be approved.

Conclusion on NES and BOOT matters

[123] The sum of my consideration of these matters is that I am satisfied that certain of the NES and BOOT concerns have been resolved through undertakings already given and that others may be resolved through amended or additional undertakings. For the purposes of clarity,

• The following undertakings are in acceptable form:

Undertaking 1 – shiftworker definition and shiftworker overtime;

Undertaking 4 – public holidays;

Undertaking 5 – overtime for part-time employees;

• The following undertakings require amendment:

• Undertakings 2 and 3 – annual leave and personal leave accrual;

• Undertaking 6 – apprentice rates of pay;

• Further undertakings would be required in relation to the non-allowance matters of casual conversion and recall to work overtime.

FURTHER CONSIDERATION ON “GENUINE AGREEMENT”

[124] For the reasons set out above, after consideration of the elements of s.188(1) I am not satisfied there has been genuine agreement, and in particular for reason either of s.188(1)(a)(i), pertaining to the requirement to explain the terms of the Agreement and the effect of those terms (which is in turn a reference to s.180(5)), or s.188(1)(c) because I am not satisfied there are no other reasonable grounds for believing that the Agreement has not been genuinely agreed.

[125] The deficits identified under s.188(1)(a)(i) could feasibly be dealt with through the discretion available to the Commission in s.188(2) which enables the requisite finding of genuine agreement if what has occurred are “minor procedural or technical errors” and if employees were not likely to have been disadvantaged by the errors. Parliament Constructions submitted that the section could be used to overcome such adverse findings as the Commission may be disposed to make on the subject of its explanation of the Agreement:

“If the Commission is minded to find that the explanation was not sufficient because it was not strictly compared to the Award, Parliament contends that this was a minor technical or procedural error under s188(2) and the employees were not likely to have been disadvantaged by this error, for the following reasons:

a. Employees were provided a comprehensive and detailed explanation of the Agreement;

b. The employees would be better off under the Agreement once it has been implemented when compared to the Award when base rates of pay are taken in conjunction with allowances such as the travel allowance and therefore cannot be said to be disadvantaged by this error.” 58

[126] The purpose and use of s.188(2) was discussed by the Full Bench in the matter of Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others (Huntsman). 59 In that matter, the Full Bench held that a failure to comply with a procedural requirement will constitute a “procedural error” with a procedural requirement being one which requires an employer to follow a particular process or course of action.60 A procedural error is to be distinguished from a technical error which includes an obligation to comply strictly with the form and content of an instrument. While a single error may have both procedural and technical components, what constitutes a “minor” error calls for an evaluative judgement having regard to the underlying purpose of the relevant procedural or technical requirement which has not been complied with and the relevant circumstances. The Full Bench then concluded this about the characterisation and determination of minor errors:

“7. Generally speaking, the lower the level of non-compliance the more likely it is to be characterised as a ‘minor error’. For example, informing the employees of the matters in ss.180(3)(a) and (b) just after the start of the 7 day access period (say 6 days before the start of the voting process) is likely to be a ‘minor error’ in most cases. But it will depend on the circumstances. If it is the first Agreement at the enterprise; the bargaining representatives are inexperienced and the employees are predominantly from a non-English speaking background, then it may not be a ‘minor error’. Conversely, only informing the employees of the time and place at which the vote will occur some 4 days before the voting process starts may be a ‘minor error’ where there is a history of bargaining at the enterprise; the Agreement is, in effect, a ‘roll over’ Agreement; the employer takes further active steps to remind employees of the time and date of the vote; and a high proportion of employees actually vote.” 61

[127] Pertinent to the consideration of s.188(2) and how it relates to the requirement of s.180(5), the same Full Bench in Huntsman 62 recorded that the “underlying purpose” of s.180(5) was to “[e]nsure that employees understand the effect of the agreement that is to be voted on, enabling them to make an informed decision” and that the failure to sufficiently do so might disadvantage employees because “[i]n the circumstances the steps may have been taken such that the employees might not be in a position to make an informed decision about the terms of the agreement upon which they are eligible to vote”. More recently the Full Bench, in CFMMEU v Karijini Rail Pty Ltd63 has confirmed that satisfaction about the elements of s.180(5) requires an evaluative approach on sufficient information:

“[57] In arriving at the requisite satisfaction as to Karijini’s compliance with s.180(5) of the Act, the Deputy President was required to evaluate whether in all the circumstances, Karijini has taken all reasonable steps to ensure that the terms of the Agreement, and the effect of those terms, were explained to the relevant employees in a manner appropriate, taking into account the particular circumstances and need of the relevant employees. As s.188(1) makes clear, Karijini’s compliance with s.180(5) need only be established to the satisfaction of the decision-maker. Actual compliance with s.180(5) is not a jurisdictional fact. Its objective existence is not a precondition to the Commission’s power to approve the Agreement. 64

[58] Nevertheless, that the Deputy President reached the requisite state of satisfaction as to, inter alia, compliance with s.180(5) of the Act on material sufficient to enable her to reach the requisite satisfaction, is a condition precedent to the exercise of the power to approve the Agreement. The approval of an agreement absent any evidence, or upon insufficient evidence, about an employer’s compliance with s.180(5) results in the agreement having been approved without authority and so there will be jurisdictional error. 65 In reaching the requisite state of satisfaction, there must be material available to the Deputy President to support reaching that state. An evaluative assessment of no or insufficient information in reaching a state of satisfaction is no assessment at all and will not provide a sufficient foundation for being satisfied as to the requisite compliance.

[59] Arriving at a state of satisfaction as to whether an employer has complied with the obligations in s.180(5) of the Act depends on the circumstances of the case. The focus of the enquiry involves considering and evaluating the steps taken to comply, and then assessing whether the steps taken were reasonable in the circumstances and whether these were all the reasonable steps that must have been taken in the circumstances.”

[128] Confirming Rigforce 66 and Ditchfield,67 the Full Bench held that this requires an examination of the content of the explanation and the terms in which they were conveyed68 ensuring that what was conveyed ensured employees are as fully informed as practicable before they vote so they know what they are being asked to agree to, and understand how their wages and working conditions might be affected by voting in favour of an agreement.69

[129] What is before the Commission in this case is an absence of information on the subject of the explanation of the coverage of the Agreement. The matter seems never to have arisen in the explanation. How the error got through the process of bargaining is not known. If the first time the employees saw the text of the proposed Agreement was in the “explanation” meeting on 18 October 2019, which seems likely, then there was an even more powerful obligation on the Applicant to explain the terms of the Agreement’s coverage. A “slip” in a final document which is inconsistent with earlier rounds of bargaining could indeed be characterised as a minor error, since there may not be a need to explain in detail something that had already been the subject of extensive debate; however this does not appear to be a drafting slip in the usual sense.

[130] I am therefore not satisfied the failure to explain the coverage term of the Agreement and the effect of the term was a minor procedural or technical error.

[131] With respect to the finding made by me that I am not satisfied of the element within s.188(1)(c) that “there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees” it is the case that s.188(2) has no application. The power in s.188(2) is plainly in relation to the requirements in s.188(1)(a) or (b) only, or the requirements of ss.173 – 174.

[132] An alternative action on the subject is the one put forward by Parliament Constructions to the effect that the coverage clause is in error; not saying what was bargained, with it then being proposed the matter could be remedied through an undertaking, intended to;

“…resolve any ambiguity around the question of whether Site Supervisors/Forepersons are adequately classified under the Agreement:

[133] The Applicant’s “solution” to the problem is to propose an undertaking which would likely be an unlawful term, since it would provide that Site Supervisors who did not wish to be paid a salary would be covered by the Agreement, and that those who agreed to be remunerated through a salary would not. The proposed undertaking is consistent with Mr Woods’ view that site supervisors would be“given the choice of whether they want to convert onto a salary-based remuneration. Some Site Supervisors prefer to be paid an hourly wage and are therefore covered by the Agreement.” 71

[134] A device such as that proposed by the undertaking would plainly not enable satisfaction on my part with the requirement for approval of an agreement that it “does not include any unlawful terms”. Section 194(ba) provides that an unlawful term is one “that provides a method by which an employee or employer may elect (unilaterally or otherwise) not to be covered by the agreement”.

[135] It is evident from the proposed undertaking that the “senior management” exclusion is intended to cover forepersons and site supervisors. Such a person who negotiated a salary with Parliament Constructions would, on the face of the undertaking, then have engaged in a method to elect, unilaterally or otherwise to not be covered by the Agreement. The proposed term is therefore to be viewed as an unlawful term and is not accepted as an undertaking by me.

CONCLUSION

[136] In conclusion, the identified NES and BOOT concerns expressed either as concerns by the Commission or objections put forward by the CFMMEU have been or are capable of being resolved, including where appropriate by the acceptance of an undertaking provided by the Applicant, or through the seeking of a revised or additional undertaking. In the case of the Flexibility Term, the concern expressed by the Commission is maintained, but is resolved through the Model Flexibility Term being taken to be a term of the Agreement.

[137] Resolution of those matters though is insufficient for approval of the Agreement.

[138] Because I am not satisfied the Agreement has been genuinely agreed by the employees covered, I am unable to approve it and the application must be dismissed. An order to that effect is published at the same time as this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

1 Relying upon CFMEU v Collinsville Coal Operations Pty Ltd[2014] FWCFB 7940, [75]; see also Fair Work Act 2009, s.590.

2 [2019] FCAFC 138.

3 Parliament Constructions, Final Undertakings, 28 April 2020.

4 CFMMEU Submissions, 7 February 2020, [4] – [5].

5 Original Form F17 Employer’s Support Statutory Declaration, 12 November 2019, items 2.4 and 2.9.

6 Amended Form F17 Employer’s Support Statutory Declaration, 10 January 2020, item 2.4.

7 CFMMEU Submissions, 7 February 2020, [11].

8 Statutory Declaration of Adam Corcoran, 21 February 2020, [2]; Statutory Declaration of Colin Baker, 21 February 2020, [3].

9 CFMMEU Submissions, 7 February 2020, [4].

10 Amended Form F17 Employer’s Support Statutory Declaration, 10 January 2020, item 2.6.

11 Statutory Declarations of Adam Corcoran [4]; Colin Baker, [4]; and Dominic Duncan, [5].

12 CFMMEU Final Submissions, 14 April 2020, [3].

13 Ibid, [6].

14 [2018] FCAFC 77; (2018) 277 IR 23.

15 [2019] FWCFB 6960.

16 [2017] FCA 1266, 270 IR 410 at [94]-[109]; affirmed on appeal: [2018] FCAFC 77, 277 IR 23.

17 [2019] FWCFB 4022 at [64]-[68].

18 [2018] FWC 1466.

19 FWC Correspondence, 23 March 2020.

20 [2010] FWAFB 4602.

21 Ibid.

22 Ibid.

23 Ibid.

24 [2018] FCAFC 77; (2018) 277 IR 23.

25 Ibid, [112].

26 BGC Contracting Pty Ltd [2018] FWC 1466, [43]; affirmed in AWU v Rigforce[2019] FWCFB 6960, [36].

27 CFMMEU Submissions, 7 February 2020, [14].

28 Ibid, [14] – [15].

29 Parliament Constructions Submissions, 2 April 2020, [9].

30 Original and Amended Form F17 Employer’s Support Statutory Declaration, 12 November 2019 and 10 January 2020, item 4.3.

31 See Clauses 18.3, 18.4, 42.7, 43, Appx A.

32 See Clauses 22, 24.

33 Statutory Declaration of Colin Baker, 21 February 2020.

34 Email from Master Builders Association of the ACT, 22 April 2020.

35 Parliament Constructions Submissions, 21 February 2020, [32].

36 Email from Master Builders Association of the ACT, 29 April 2020.

37 Statutory Declaration of Michael Wood, 21 February 2020, [6].

38 BGC Contracting [2018] FWC 1466, [43]; affirmed by the Full Bench in AWU v Rigforce[2019] FWCFB 6960, [36].

39 CFMMEU Submissions, 7 February 2020, [24] – [27].

40 Falls Creek Resort Management [2010] FWA 2847, [36].

41 Parliament Constructions Submissions, 21 February 2020, [33] – [34].

42 CFMMEU Submissions, 7 February 2020.

43 See Falcon Mining Pty Ltd [2016] FWC 5315, [159]-[160].

44 [2017] FWCFB 4852, [34].

45 [2018] FWCFB 2721, [34].

46 FWC “Concerns” Correspondence, 16 December 2019, item 6.

47 [2019] FCAFC 138.

48 With the concern derived from the Judgement of the majority of the Full Court in Mondelez v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union Known as the Australian Manufacturing Workers Union [2019] FCAFC 138, [199]; (2019) 289 IR 29, [199]; per Bromberg and Rangiah JJ.

49 4 yearly review - Health Professionals and Support Services Award 2010 and Horse and Greyhound Training Award 2010 [2020] FWCFB 1901, [20].

50 FWC “Concerns” Correspondence, 16 December 2019, item 9; CFMMEU Submissions, 7 February 2020, [29] – [32].

51 FWC “Concerns” Correspondence, 16 December 2019, item 10; CFMMEU Submissions, 7 February 2020, [35] – [36].

52 CFMMEU Submissions, 7 February 2020, [37].

53 Parliament Constructions Submissions, 10 January 2020.

54 Parliament Constructions Submissions, 21 February 2020, [29].

55 CFMMEU Submissions, 7 February 2020, [38].

56 CFMMEU Final Submissions, 14 April 2020, [7].

57 Ibid, [39].

58 Parliament Constructions Submissions, 2 April 2020, [10].

59 [2019] FWCFB 318.

60 Ibid, [117] (2) – (3).

61 Ibid, [117].

62 Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others[2019] FWCFB 318.

63 [2020] FWCFB 958.

64 One Key Workforce v CFMMEU [2018] FCAFC 77, (2018) 262 FCR 527 at [103].

65 Ibid at [117].

66 AWU v Rigforce Pty Ltd[2019] FWCFB 6960, [35] – [36].

67 CFMEU v Ditchfield Mining Services Pty Ltd[2019] FWCFB 4022, [71]-[72]

68 Construction, Forestry, Maritime, Mining and Energy Union v Karijini Rail Pty Ltd, [2020] FWCFB 958, [61].

69 Ibid, [62].

70 Email from Master Builders Association of the ACT, 29 April 2020.

71 Statutory Declaration of Michael Wood, 21 February 2020, [6].