Prime Projects (NSW) Pty Ltd

[2018] FWCA 2360

[2018] FWCA 2360

FAIR WORK COMMISSION

DECISION

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

Prime Projects (NSW) Pty Ltd
(AG2018/424)

THE PRIME GROUP COLLECTIVE AGREEMENT 2017-2021

DEPUTY PRESIDENT COLMAN MELBOURNE, 1 MAY 2018

Application for approval of the Prime Group Collective Agreement 2017-2021

[1] This decision concerns an application by Prime Projects (NSW) Pty Ltd for approval of an enterprise agreement known as The Prime Group Collective Agreement 2017-2021 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (Act) and relates to a single-enterprise agreement. In addition to the applicant company, the Agreement will cover Prime Constructions Pty Ltd, a related body corporate of the applicant. The two companies are therefore ‘single interest employers’ for the purposes of s.172(5).

[2] On 12 February 2018, the Commission received an email communication from the Construction, Forestry, Mining and Energy Union (I will refer to the now merged entity, the CFMMEU) requesting copies of the application and accompanying materials. The Commission provided the union with the documentation on 15 February 2018, consistent with the decision of the Full Bench in CFMEU v Ron Southon Pty Ltd. 1

[3] On 16 February 2018, the CFMMEU advised the Commission and the company of a concern that the Agreement contained references to the union, but that it had not been involved in the negotiations for the Agreement, was not a bargaining representative, and did not otherwise support the Agreement. The union contended that it had an interest in the matter and wished to be heard in relation to its concern.

[4] The Commission has a broad power to inform itself in relation to any matter, in such manner as it considers appropriate, including by inviting oral or written submissions from a person or organisation (s.590). 2 Although the CFMMEU was not a bargaining representative for the Agreement, I determined that it was reasonable and appropriate to afford the union an opportunity to be heard in relation to its concern, and that my consideration of the application for approval of the Agreement would be assisted by taking into account its submissions.

[5] On 19 March 2018, the CFMMEU provided to the Commission written submissions contending that, because of the references to the union in the Agreement, the approval requirements in the Act had not been met, and that the Commission should dismiss the application for approval of the Agreement. The union submitted that the Commission could not be satisfied that the Agreement was genuinely agreed, and that the references to the union constituted unlawful terms, such that the Agreement could not be approved.

[6] On 3 April 2018, the Master Builders Association, on behalf of the companies, provided to the Commission written submissions in response to those of the CFMMEU. It contended that the references in the Agreement to the CFMEU were simply a mistake and that this did not affect the genuineness of employees’ agreement, or otherwise constitute an impediment to the Commission’s approval of the Agreement.

[7] On 10 April 2018, correspondence was sent from my chambers to the companies’ representative, and copied to the union, asking whether any steps had been taken to verify that none of the employees who voted on the Agreement believed that the CFMMEU was involved in the making of the Agreement or that it had endorsed or otherwise supported the Agreement.

[8] On 17 April 2018, the companies provided a further submission, advising that they had obtained signed statements from seventeen of the eighteen employees who were asked to approve the Agreement by vote, confirming that they had not believed that the union was involved in the making of the Agreement or otherwise endorsed or supported it. The eighteenth employee ceased employment shortly after the vote.

[9] The companies submitted copies of the signed statements to my chambers. They requested that, in the interests of the privacy and freedom of association of the employees concerned, the statements not be provided to the union. I decided that it was not necessary or appropriate to provide the statements to the union. Their contents were described in the companies’ further submission. I address the form and content of the statements further below.

[10] On 17 April 2018, I sent the companies’ further submission to the union and stated that any reply should be filed by 19 April 2018 (subsequently extended to 20 April 2018), and that thereafter I intended to determine the application on the papers.

[11] On 20 April 2018, the CFMMEU filed a brief submission in reply, maintaining its opposition to the approval of the Agreement on the bases identified above. On 23 April 2018, the union sent further correspondence to my chambers, requesting (without resiling from its opposition to the approval of the Agreement) that in the event the Agreement were to be approved, the Commission exercise its powers under s.586 of the Act to amend the Agreement and delete the references to the CFMEU.

[12] I set out below my assessment of the matters raised in the union’s submissions, and the companies’ responses. I do not address other issues raised by the Commission with the companies directly which have been resolved to the Commission’s satisfaction.

Genuinely agreed

[13] Section 186(2)(a) of the Act requires that, before approving an agreement, the Commission be satisfied that it has been ‘genuinely agreed’ to by the employees covered by the agreement. Section 188 provides that an enterprise agreement has been ‘genuinely agreed’ to by employees if the Commission is satisfied that the pre-approval steps in sections 180, 181 and 182 have been complied with, and that there are ‘no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees’ (s.188(c)).

[14] In considering whether there are other reasonable grounds for believing that an agreement has been genuinely agreed to by employees, the Commission considers all of the circumstances, including in particular those that existed when the agreement was voted on, based on all of the material before it. If misleading material or information has been provided to employees, or where there is some material non-disclosure, this will be highly relevant to the Commission’s assessment of whether employees’ agreement was genuine. Genuine agreement requires that employees provide their informed and free consent. If employees were misled about an agreement, including the question of whether a union endorsed an agreement, this could be a basis to conclude that their agreement was not genuine. It would not in my view matter that this occurred as a result of an oversight, or that there had been no intention on the part of the employer to mislead employees. 3

[15] The Agreement contains two references to the CFMEU. The definitions section in Part 1 at the start of the Agreement defines ‘The Union’ as ‘Construction, Forestry, Mining and Energy Union’. Further, on the last page of the Agreement, under the heading ‘Part IV Endorsement of the Agreement’, the following text appears:

‘A. The signatures below testify the fact that the Agreement has been ratified at the peak Company and Union levels. The parties agree that this Agreement has been tailored to suit the needs of Company and its Employees. Nothing in this Agreement shall be used as a precedent for other Agreements.’

[16] The Agreement then sets out three signature provisions. The first states ‘Signed (on behalf of Prime Constructions Pty Ltd)’. There is a field in which to sign and insert the date. Then in typed text and on successive lines are the words ‘Full Name’, ‘Address’ and ‘Position’, with vacant fields next to each. A signature appears, dated, together with the full name, address and position of the signer. The same framework is repeated in respect of ‘Prime Projects (NSW) Pty Ltd’, as well as ‘Employee bargaining representative’. There is no signature provision for the CFMEU.

[17] The union contended that the Commission cannot be satisfied on the material before it that the Agreement was genuinely agreed for the purposes of s.188 of the Act, and in particular s.188(c). It submitted that the references in the Agreement to the CFMEU were misleading as to the position of the union in relation to the Agreement.

[18] The union submitted that the references to the union suggest that it was involved in the making of the Agreement and that the references have misleadingly created the impression to employees voting on the Agreement that the union supports it. The union contended that the Commission must consider the likely effect of this information on employees, 4 and that in the present circumstances it is likely that employees would have believed the union endorsed the Agreement. In this regard, I note that the preamble to the execution page states that the signatures ‘testify’ that the Agreement ‘has been ratified at the peak Company and union levels.’

[19] The companies submitted that the two references in the Agreement to the union were made inadvertently and incorrectly. They agreed that there should have been no reference in the Agreement to the union, and that the union had not been involved in the making of the Agreement, and was not consulted about it.

[20] The companies contended that employees had not been misled, and that the accidental references to the union did not present an impediment to the Commission approving the Agreement. In this regard, thirteen of the eighteen employees who were asked to vote on the Agreement had nominated themselves as bargaining representatives. The five other employees had nominated other employees (four nominating one individual employee, and a fifth nominating a different employee). The individual notices of appointment of bargaining representatives, which were provided to the Commission, specified five options for employees to consider, with a ‘tick box’ appearing next to each. An employee could appoint as bargaining representative any of the following: himself; a nominated employee; a legal representative; an employee association; or ‘other’, which the employee could nominate. The companies contended that as no employee sought to have the union act as a bargaining representative, and each of them nominated a representative, none could have been misled about the union endorsing the Agreement or otherwise being involved in its making.

[21] The companies further contended that the absence of any signature block for the union following the preamble to the execution provision further shows that there was no expectation that the union would approve or be bound by the Agreement. In addition, the companies contended that the persons expressed to be bound by the Agreement in clause 1 are the companies and their employees. No reference is made to the union.

[22] The circumstance that each of the 18 employees nominated an individual bargaining representative indicates that employees are unlikely to have been under the impression that the union was involved in the making of the Agreement. Nevertheless, it is possible that some employees might have thought that the references to the union in the text of the Agreement were an indication that the CFMMEU approved of or endorsed the Agreement, and that this false assumption affected their decision to approve the Agreement. Similarly, the absence of an execution provision for the union does not mean that some employees might have thought that the union had in some way blessed (‘ratified’) the Agreement.

[23] It was for these reasons that I asked the companies whether any steps had been taken to verify that none of the employees who voted on the Agreement believed that the CFMMEU was involved in the making of the Agreement or that it endorsed or otherwise supported the Agreement.

[24] In its further submission, the companies explained the steps they took, evidently in reaction to my question, to verify that employees had not been misled by the references to the union in the Agreement. They said that a written statement was prepared on company letterhead, which read:

‘As an employee covered by ‘The Prime Group Collective Agreement 2017-2021, I never formed the opinion, took the view or believed that the CFMEU (The Union) was involved in the making of the agreement, or that it had endorsed or otherwise supported the Agreement when it was presented to me by the Company prior to the vote and my vote.’

[25] The companies submitted to the Commission 17 signed documents, bearing the above statement. Each statement had fields for an employee to insert their name, signature and the date. The union expressed concern that, if the statements were in petition form (a single document), the Commission could not be satisfied that employees were not influenced to sign it by the presence of their fellow employees’ signatures. However the document was not in petition format; each employee completed a separate document.

[26] The union’s reply submissions contended that the companies had not explained the way in which the signatures of the seventeen employees were procured, such as who was involved in the process and whether employees were able to seek external advice before being requested to sign pre-prepared statements. Further, the union submitted that the statements reflected what the companies believed the Commission wanted to hear, not necessarily employees’ actual version of events, and that for this reason the statements should be afforded limited weight in considering whether employees were misled.

[27] However, the companies’ further submission did explain the process that was employed in relation to obtaining the statements. On 12 April 2018, the documents were hand-delivered to fourteen employees of the companies working at a particular site. Employees were advised to sign and date the document if they agreed with it, or alternatively, not sign and date the document if they did not agree with it. All fourteen employees signed and dated the document and returned it to a company representative. On 13 April 2018, the same process was repeated in respect of the remaining three employees, who also signed and dated the documents.

[28] It is true that there is no statement from the company representative who undertook or oversaw this process. On the other hand, the Commission has before it signed statements from seventeen of the eighteen employees who were asked to vote on the Agreement on 31 January 2018 (the eighteenth having ceased employment on 2 February 2018). The seventeen names and signatures match those appearing on the individual instruments of appointment of bargaining representatives submitted with the application for approval of the Agreement. In these circumstances, there is sufficient information for me to accept the statements as a genuine reflection of the employees’ position, and to be comfortably satisfied that the employees were not misled about the union’s involvement in, or support for, the Agreement.

[29] I do not consider that it is necessary to conduct a further investigation into this matter, by listing the application for hearing, or by other means. The union raised a legitimate concern about the presence of two references to it in an Agreement with which it clearly had no involvement and the possibility that employees might have been misled. However, as employees each appointed an employee as a bargaining representative (and not the union), and all bar one (who has ceased employment) have signed the statement above, I am satisfied that the erroneous references to the union did not affect the genuineness of employees’ agreement for the purposes of s.188 of the Act.

[30] I do not consider that these circumstances are indicative of a lack of genuineness, such as to constitute other ‘reasonable grounds’ for believing the Agreement has not been genuinely agreed to by employees.

Unlawful terms

[31] The union contended that the references in the agreement to the CFMEU constituted unlawful terms. Section 186(4) of the Act provides that the Commission must be satisfied, before approving an agreement, that it does not contain any such terms. Section 194(b) of the Act defines unlawful terms as including ‘objectionable terms’. Section 12 of the Act defines an objectionable term as one that:

‘objectionable term means a term that:

(a) requires, has the effect of requiring, or purports to require or have the effect of requiring; or

(b) permits, has the effect of permitting, or purports to permit or have the effect of permitting;

either of the following:

(c) a contravention of Part 3-1 (which deals with general protections);

(d) the payment of a bargaining services fee.’        

[32] In this regard, the union noted that s.345 of the Act (which is contained within Part 3-1) states:

‘345 Misrepresentations

(1) A person must not knowingly or recklessly make a false or misleading representation about:

(a) the workplace rights of another person; or

(b) the exercise, or the effect of the exercise, of a workplace right by another person.

Note: This subsection is a civil remedy provision (see Part 4-1).

(2) Subsection (1) does not apply if the person to whom the representation is made would not be expected to rely on it.’

[33] The union contended that the employers made a representation that the union was involved in the formation of the Agreement, and that it supported the Agreement. This, the union says, was knowingly or recklessly misleading. It can be accepted that the references to the union might be considered misleading representations. On one view, it was ‘about the exercise of a workplace right’, as it had a connection with the vote on the Agreement. I do not consider that the representations were intentionally made; I accept the employers’ submission that they were a mistake. And there is an insufficient basis to conclude the representation was ‘reckless’. In any event, given my finding above that employees did genuinely approve the Agreement and were not misled, s.345(2) is relevant – in the circumstances, one would not expect the persons to whom the representation was made to rely on it. Indeed I have concluded that they did not rely on it.

[34] Finally, it does not appear to me that the two references in the Agreement to the union either require or permit a contravention of s.345 or any other provision in Part 3-1, for the purposes of the definition of ‘objectionable term’ in s.12 of the Act.

[35] It was also contended by the union that by including the two references to the CFMEU in the Agreement, the companies placed pressure on the union to become bound by it, which amounted to an intention to coerce the union in the exercise of a workplace right. However, I cannot see any basis for this contention. The union’s submission was that it was not involved in the formation of the Agreement, or consulted in relation to it. In these circumstances, it is difficult to see how the companies could have sought to overbear the union’s will or negate its choice. The companies made an enterprise agreement with their employees, and did not seek to have the union be bound by the Agreement.

[36] I am satisfied that the Agreement does not contain any unlawful terms.

[37] Section 586 provides that the Commission may allow a correction or amendment of any document relating to a matter before it, on any terms that it considers appropriate. The companies submit that there are two errant references to the union in the Agreement. The union submits that, in the event that the Agreement is to be approved, I should allow a correction or amendment to remove these references. I agree that it is appropriate to adopt this course.

[38] I allow a correction to the document containing the Agreement, so as to remove from the definitions section in Part 1 of the Agreement the words ‘The Union: Construction, Forestry, Mining and Energy Union’, and to remove from clause A of Part IV the words ‘at the peak Company and Union levels’.

Conclusion

[39] I have considered the application and the submissions of the companies and the CFMMEU.

[40] I note that pursuant to s.205(2) of the Act, the model consultation term prescribed by the Fair Work Regulations 2009 is taken to be a term of the Agreement.

[41] The companies have provided written undertakings. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.

[42] Subject to the undertakings referred to above, and on the basis of the material contained in the application and accompanying statutory declarations, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.

[43] The Agreement is approved today, 1 May 2018, and in accordance with s.54 of the Act it will operate from 8 May 2018. The nominal expiry date of the Agreement is 1 May 2022.

DEPUTY PRESIDENT

Annexure A

 1   CFMEU v Ron Southon Pty Ltd[2016] FWCFB 8413

 2   CFMEU v Collinsville Coal Operations Pty Ltd[2014] FWCFB 7940 at [75]

 3   See Application by Central Queensland Services Pty Ltd [2015] FWC 1554 at [65] and following

 4   SDA v Karellas (2008) 166 FCR 562

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