Quickway Constructions Pty Ltd
[2019] FWC 655
•27 FEBRUARY 2019
| [2019] FWC 655 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Quickway Constructions Pty Ltd
(AG2018/3510)
DEPUTY PRESIDENT MASSON | MELBOURNE, 27 FEBRUARY 2019 |
Application for approval of the Quickway Constructions Pty Ltd Agreement 2018.
[1] An application has been made for approval of the Quickway Constructions Pty Ltd Agreement 2018 (the Agreement). The application was made pursuant to section 185 of the Fair Work Act 2009 (the Act). It has been made by Quickway Constructions Pty Ltd (the Applicant). The Agreement is a single enterprise agreement.
[2] A notice of employee representational rights was provided to employees on 21 May 2018 and the notice complied with the regulations. The Applicant states that employees were provided with access to the Agreement and information about the effect of the terms of the Agreement on 5 July 2018.
[3] The Applicant states that employees were notified of the time, place and method of voting via a Notice and an employee meeting on 5 July 2018 and that voting occurred on 20 July 2018. A majority of those who voted approved the Agreement. 1
[4] The Applicant filed a statutory declaration in support of the Agreement. The statutory declaration noted that the relevant award for the purpose of the better off overall test (the BOOT) was the Building and Construction General On-site Award 2010 (the Award). 2
[5] The statutory declaration noted that some provisions in the Agreement were more beneficial than the Award or were not conferred by the Award. No less beneficial terms were identified.
[6] The Construction, Forestry, Mining, Maritime and Energy Union (CFMMEU) wrote to the Fair Work Commission (the Commission) on 17 December 2018 seeking to be heard in relation to the application. In doing so, it enclosed submissions in respect of its right to be heard and its contention that the Agreement ought not be approved on a number of grounds. The CFMMEU correspondence was forwarded to the Applicant on 18 January 2018 to which the Applicant was invited to also respond on or by the close of business on 25 January 2019.
CFMMEU Standing
[7] Before turning to consider the application it is necessary for me to deal with the CFMMEU’s request to be heard in relation to the matter.
[8] There are four potential avenues by which an employee organisation might establish standing to be heard in relation to an application for approval of an proposed agreement:
(a) As a bargaining representative of one or more employees to be bound by the proposed agreement;3
(b) As a matter of procedural fairness if the employee organisation is able to establish a right, interest or legitimate expectation that it will be adversely affected by the decision;4
(c) If invited by the Commission in the exercise of its power under s 590 of the Act to inform itself;5
(d) On appeal, if the employee organisation can show a grievance, which will be suffered as a result of the decision complained of, beyond that of an ordinary member of the public.6
[9] The fourth avenue is only available on appeal and not at first instance. The fact that an employee organisation may have a right of appeal against a decision to approve an enterprise agreement does not of itself create a right to be heard in relation to the application at first instance.
[10] The CFMMEU concede that they do not believe they are a bargaining representative for the Agreement and implicitly acknowledge that they did not have standing to appear as of right. The CFMMEU contend, however, that they should be heard by virtue of s 590(1) of the Act.
[11] The avenue by which the CFMMEU contend that it should be heard in relation to the approval of the Proposed Agreement is via s 590 of the Act. The Commission may, in the exercise of its powers under s 590 of the Act, choose to hear from an employee organisation about the approval of an agreement even though the employee organisation may not otherwise have a right to be heard.7
[12] Section 590 of the Act confers on the Commission a broad power to inform itself in relation to any matter in such manner as it considers appropriate, including (but not limited to) by inviting oral or written submissions from a person or organisation; by taking evidence under oath or affirmation; and by requiring a person to provide copies of documents or records.8
[13] The CFMMEU have a long history of industrial representation in the building and construction industry and the industrial right to represent employees of the Applicant who would be covered by the Agreement. As a consequence, they have a high degree of familiarity with the reference award, the work arrangements in the construction sector, and enterprise agreement terms and conditions similar to those contained in the Agreement. The CFMMEU can provide a perspective independent of the proponent of the Agreement.
[14] The CFMMEU has identified potential issues in relation to whether the Proposed Agreement was genuinely agreed and whether the Agreement passes the BOOT.
[15] In correspondence to the Commission on 11 February 2019, the Applicant acknowledged the Commission’s “authority” to hear from the CFMMEU and did not oppose that course of action by the Commission.
[16] I am satisfied that the CFMMEU may provide information relevant to my deliberations as to whether the BOOT is satisfied, whether any undertakings are appropriate, and whether the Agreement was genuinely agreed.
[17] By permitting the CFMMEU to make submissions, lead any evidence which it does have and to cross-examine witnesses, the Commission can properly inform itself in relation to the matters which have been raised and satisfy itself that the requirements for the approval of the Proposed Agreement have been fully met. If, as the Applicant asserts, the CFMMEU’s concerns are without merit then this will be established by the Applicant in the Commission’s consideration of this application.
[18] The Commission is required to ensure that the Agreement complies with the Act and the resolution of the concerns which have been identified should be conducted with transparency and appropriate rigor:
“Employee organizations with a legitimate interest in the industry and occupations covered by the Agreement may assist in the resolution of these issues of concern. In this way, a process involving open, diligent and comprehensive scrutiny should provide for the correct outcome, and also enhance the broader confidence in the Commissions enterprise agreement approval role.”9
[19] In the particular circumstances of this matter, I am satisfied that the CFMMEU has established a basis upon which it should be invited to be heard. Thus, the CFMMEU shall be entitled to be heard in respect to the application.
[20] I will now proceed to consider the application based on the submissions and materials filed by the parties pursuant to Directions previously issued. It is noted that in correspondence dated 13 February 2019, the Applicant and CFMMEU were both invited to advise the Commission whether they sought a formal hearing or were content to rely on filed materials. Both parties advised the Commission that they did not seek to be heard formally and were content for the application to be dealt with on the basis of the filed materials.
Commission Concerns with Agreement
[21] In reviewing the Agreement for approval, Commission identified a number of concerns in relation to the Agreement and supporting documentation. These included pre-approval requirements, National Employment Standards (NES) compliance and better off overall test (BOOT) assessment considerations. The Commission wrote to the Applicant on 12 December 2018 and identified a number of issues requiring a response.
[22] The following issues were raised with the Applicant in the Commission’s correspondence dated 12 December 2018:
1. It was unclear whether the Applicant took all reasonable steps to explain the terms of the Agreement and the effect of those terms to employees as required pursuant to s 180(5) of the Act.
2. A number of National Employment Standard (NES) issues were raised including:
a) The definition of “shift worker” under the Agreement is less beneficial than the Award and fails to define a shift worker for the purposes of the NES.
b) Clause 14.2 of the Agreement provides for the giving of five days’ notice of termination in the case of a probationary employee, which is less than the one week required by the NES.
3. A number of BOOT concerns were also raised including:
a) Agreement is silent on adult apprentice minimum rates of pay.
b) Method of working shifts may be varied by agreement between the Applicant and employees, which raises a concern that the Agreement provides for a variation to the Agreement other than in accordance with the Act.
c) Clause 16.3 appears to contain a cross-referencing error, in respect of which, the Applicant was invited to seek a correction pursuant to s 586 of the Act.
d) The Travel Allowance provided for at clause 20.4 of the Agreement is less beneficial than the Award, which raises BOOT concerns having regard to minimum rates of pay under the Agreement.
e) Span of ordinary hours.
f) Overtime and minimum engagement provisions less beneficial than the Award.
CFMMEU Objections
[23] The CFMMEU contend that there are numerous grounds on which the Agreement cannot and should not be approved by the Commission. Those grounds can be summarised as follows:
1. The Commission cannot be satisfied that the Agreement has been genuinely agreed to by employees covered by the Agreement as required by s186(2)(a) of the Act since doubt exists as to whether the employees voting were covered by the Award and had or have a real interest in the terms of the agreement. The CFMMEU relied on the reasoning of the Federal Court in Construction, Forestry, Mining and Energy Union v One Key Resources Pty Ltd 10 (One Key) in its submission.
2. The application for the Agreement was not properly made in accordance with s 185(2) of the Act since the Form F17 provided with the application is not accurate.
3. By reason of the exclusion of the Award, there are a significant number of provisions that are either less beneficial relative to the Award or there are Award provisions not conferred by the Agreement, which would lead to the Agreement failing the BOOT. Provisions under the Award that are not conferred by the Agreement include:
a) The Agreement excludes a number of Award allowances and the rates of pay in the Agreement are not high enough to compensate for those foregone allowances;
b) Causal conversion rights;
c) Meal allowance for workers living locally to the job site;
d) Additional wet weather procedures;
e) Rest and relaxation travel for distant work;
f) Travel allowance where working within 50 km of a GPO;
g) Ordinary hours of work beginning at 7.00 am;
h) Agreement on RDO usage;
i) Work after midday Saturday required to be paid at double time; and
j) Minimum Saturday and Sunday engagement period.
Applicant Submissions and Undertakings
[24] In correspondence to the Commission on 11 February 2019, the Applicant provided an amended Form F17, undertakings to address issues raised by the Commission and a response to contentions of the CFMMEU regarding the agreement making process and BOOT issues raised.
[25] In relation to the issues raised by the CFMMEU, the Applicant variously submits that:
1. The Applicant has “complied with all aspects of the FWC formulation of an Enterprise Agreement and all eligible employees were consulted and provided with copies of and explanations provided, the employees voted in favour of the proposed agreement.”
2. There were 14 employees eligible to vote, nine of whom voted in favour of the Agreement.
3. It rejects the CFMMEU submission that the Award was not the relevant underpinning instrument.
4. It rejects the CFMMEU submission that employees of the Applicant were asked to make an agreement relating to an Award or Awards under which they were not employed.
5. It rejects the CFMMEU submission that the Agreement fails to meet the BOOT and proffered several undertakings to address concerns raised by the Commission and the CFMMEU.
[26] In relation to the specific concern raised by the Commission as to whether the Applicant took all reasonable steps to explain the terms of the Agreement and the effect of those terms to employees as required pursuant to s. 180(5) of the Act, the Applicant submits as follows in its revised Form F17:
“The company utilised the companies bargaining rep and the employees nominated rep to explain each clause of the Agreement and allow employees to ask questions and seek clarifications Quickway Constructions explained the rates within the Agreement which are superior to the relevant Award and the benefit of having the travel allowance included in the all purpose rate which provided a higher rate for overtime calculations.
In addition emphasising the compliance requirements and processes on both parties on specific clauses within the Agreement such as the disputes procedure and explanation of code compliance.”
[27] The Applicant proffered undertakings to address various concerns raised by the Commission and the CFMMEU. Those undertakings sought to address concerns raised in relation to the following matters:
1. Definition of a shift worker for the purposes of the NES;
2. Application of notice of termination provisions under the Act to probationary employees;
3. Adult apprentice rates of pay;
4. Span of ordinary hours to be in accordance with the Award;
5. Variation of hours of work may only be undertaken in accordance with the Act;
6. Minimum engagement for work on a weekend to be four hours;
7. Increase the Level 1 rate of pay in the Agreement by 50 cents per hour to provide a new base rate of pay for that level of $25.34.
Statutory Provisions
[28] Section 186 of the Act requires, amongst other things, that in order for an enterprise agreement that not is a greenfields agreement to be approved, the Commission must be satisfied that employees have genuinely agreed to it. Section 186 relevantly provides as follows:
“186 When the FWC must approve an enterprise agreement—general requirements
Basic rule
(1) If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.
Note: The FWC may approve an enterprise agreement under this section with undertakings (see section 190).
Requirements relating to the safety net etc.
(2) The FWC must be satisfied that:
(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; an
(b) if the agreement is a multi-enterprise agreement:
(i) the agreement has been genuinely agreed to by each employer covered by the agreement; and
(ii) no person coerced, or threatened to coerce, any of the employers to make the agreement; and
(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and
(d) the agreement passes the better off overall test.
[29] Section 188 prescribes when employees are held to have genuinely agreed to an enterprise agreement where it states:
“188 When employees have genuinely agreed to an enterprise agreement
An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(a) 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
(b) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.”
[30] Section 180 of the Act details the steps that must be taken by the employer to ensure that, prior to a ballot for an agreement, employees are properly informed as to the agreement and are notified of the ballot process. The relevant provisions are as follows:
“180 Employees must be given a copy of a proposed enterprise agreement etc.
Pre-approval requirements
…………………..
(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.
…………………..”
Consideration
Pre-approval matters
[31] I turn first to consider whether the Applicant has taken all reasonable steps to explain the terms of the Agreement and the effect of those terms to employees as required under s 180(5) of the Act.
[32] The Applicant states in its revised Form F17 in response to question 2.6 that “the Company utilized the companies bargaining rep and employees nominated rep to explain each clause of the Agreement and allow employees to ask questions and seek clarifications.”
[33] There are a number of provisions in the Agreement that are less beneficial than the Award including meal and travel allowances; the span of ordinary hours; overtime and minimum weekend engagement; and adult apprentice rates of pay. There are also a significant number of provisions in the Award that are not conferred by the Agreement including numerous work and expense related allowances; RDO arrangements; casual conversion; and distant work.
[34] In satisfying the requirements under s 180(5) of the Act as to the explanation by the Applicant of the meaning and effect of the terms of the Agreement to employees, it is incumbent on the Applicant to satisfy the Commission that it took all reasonable steps.
[35] The Applicant has failed to provide submissions or material that would satisfy the Commission that it took all reasonable steps to explain the terms of the Agreement and the effects of those terms to employees. Specifically, there is no material before me that would satisfy me that the Applicant, in its explanation of the terms of the Agreement to employees, canvassed those provisions in the Agreement that were less beneficial than the Award or identified those Award provisions that were not conferred in the Agreement. In the absence of such evidence and given there is no reference to less beneficial provisions in the Form F17 statutory declaration, a reasonable inference may be drawn that no such explanation of less beneficial provisions occurred.
[36] In the circumstances, I am not satisfied that the Applicant took all reasonable steps to explain the terms and effect of those terms of the Agreement to the relevant employees, specifically the less beneficial provisions in the Agreement. Consequently, the Applicant has not satisfied the Commission with respect to its compliance with s 180(5) of the Act. Further and consequently, I am not satisfied that employees genuinely agreed to the Agreement as required under s 186(2)(b)(i) of the Act.
[37] As a consequence of my findings above in relation to pre-approval requirements, it is unnecessary for me to deal with other issues raised in relation to the Agreement’s approval.
Conclusion
[38] In order to approve the Agreement, the Commission must, as part of its consideration, be satisfied in respect of s 180(5), s 186(2)(c) and s 188(a)(i) requirements under the Act. For the reasons detailed above, I am not satisfied in respect of those requirements. Consequently, the application for approval of the Agreement is dismissed. An order reflecting this decision will be separately issued.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR704544>
1 Section 180 of the Fair Work Act 2009.
2 MA000020.
3 Section 176(1) Fair Work Act 2009 (Cth) and Construction, Forestry, Mining and Energy Union (CFMEU) v Collinsville Coal Operations Pty Limited [2014] FWCFB 7940 at [16].
4 CFMEU v Collinsville Coal Operations Pty Limited[2014] FWCFB 7940 at [72].
5 Ibid at [48] and [75].
6 Tooheys Ltd v Minister for Business and Consumer Affairs (1981) 36 ALR 64; CEPU andAMWU v Main People Pty Ltd[2014] FWCFB 8429; Construction, Forestry, Mining and Energy Union (CFMEU) v Collinsville Coal Operations Pty Limited[2014] FWCFB 7940 at footnote 13; and Inco Ships Pty Ltd v The Australian Institute of Marine and Power Engineers and The Australian Maritime Officers’ Union[2016] FWCFB 3370 at [15].
7 CFMEU v Collinsville Coal Operations Pty Limited[2014] FWCFB 7940 at [75].
8 Section 590, Fair Work Act 2009.
9 Inco Ships Pty Ltd [2016] FWC 1637 at [25].
10 [2017] FCA 1266.
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