[2021] FWC 5548

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Shaw Building Group Pty Ltd
(AG2021/6059)

DEPUTY PRESIDENT CROSS

SYDNEY, 6 SEPTEMBER 2021

Application for approval of the Shaw Building Group Pty Ltd and Employees Enterprise Agreement 2021-2025.

[1] An application for the approval of an enterprise agreement known as the Shaw Building Group Pty Ltd and Employees Enterprise Agreement 2021-2025 (the Agreement), was made by Shaw Building Group Pty Ltd (the Applicant) pursuant to s 185 of the Fair Work Act 2009 (Cth) (the Act).

[2] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) have made submissions requesting to be heard in relation to the approval of the Agreement pursuant to s.176 and s.590 of the Act. The Applicant opposes the CFMMEU’s request to be heard.

The CFMMEU Application to be Heard

[3] Both the Applicant and the CFMMEU filed written submissions regarding the CFMMEU’s application to be heard, on 6 and 18 August 2021, respectively. The CFMMEU advanced its application to be heard on two grounds. Firstly, the CFMMEU believed that it was a bargaining representative for the proposed agreement on the basis that it had members employed by the Applicant who would be covered by the proposed agreement at the time the agreement was made (S.176 of the Act).

[4] In the alternative, the CFMMEU sought that the Fair Work Commission (the Commission) use its discretion to hear from CFMMEU pursuant to s590(1) of the Act, so as to “inform itself in relation to any matter in such manner as it considers appropriate.” 1 The CFMMEU submitted that it sought to put forward submissions that address the BOOT, as well as submissions dealing with the procedural elements of the Agreement.

[5] The Applicant resisted the CFMMEU’s application to be heard. The Applicant submitted:

(a) The CFMMEU was not a bargaining representative for the Agreement and therefore has no right under the framework of the Act; and

(b) The exercise of the Commission’s discretion under Section 590(1) of the Fair Work Act is not warranted in the circumstances of this Application; and

[6] The CFMMEU was not a bargaining representative in the negotiation, or the making, of the Agreement. While the CFMMEU asserted that it had reason to believe that it had members that may be covered by the Agreement, that issue was resolved by the Applicant and the CFMMEU each, on 9 August 2021, providing to the Commission on a confidential basis with lists of employees covered by the Agreement and members of the CFMMEU respectively.

[7] I considered each list provided by the Applicant and the CFMMEU and note that none of the members contained in the CFMMEU’s list of members are on the list of employees to be covered by the Agreement provided by the Applicant. The three employees that will be covered by the Agreement all cast votes in relation to the Agreement, and all voted to approve the Agreement.

[8] Regarding the CFMMEU’s application that I exercise my discretion under s.590(1) of the Act, I note, in addition to the CFMMEU not being a bargaining representative for the Agreement, that:

(a) The Agreement does not alter or interfere with an employee’s right to choose to become a member of the CFMMEU, and the approval of the Agreement will not affect the CFMMEU’s rights to participate in bargaining for future enterprise agreements with the Applicant, or the CFMMEU’s relevant rights to represent employees under the Agreement; and

(b) The discrete issues sought to be raised by the CFMMEU will need to be addressed by the Commission as part of the approval process in any event, and the Commission can determine whether to approve the Agreement absent a contender or third-party intervener. 2

[9] In CFMEU v Collinsville Coal Operations Pty Limited, 3 the Full Bench of the Commission stated the following in respect of s.590 of the Act (in the context of the Commission’s enterprise agreement role):

“[65] In our view the right, interest or legitimate expectation that is said to be affected by application of the kind before the Senior Deputy President must be identified and understood against the framework of enterprise bargaining and agreement making established by the FW Act. It is not enough, without more, to point to the status of the CFMEU as an employee organisation with a history of representation at the workplace or in the industry. Moreover, this is not a case where some of the members of the CFMEU voted against the approval of the Agreement or did not vote at all. All of the employees covered by the Agreement voted, and all of those employees (including Employee 2) voted in favour of approving the Agreement

…

[75] We would make the observation however, that the Commission may choose, in a particular case, to hear from an employee organisation or any other person about the approval of an agreement even though the organisation or person may not otherwise have a right to be heard. 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 of organisation.”

[10] The discrete issues the CFMMEU seeks to address go to the satisfaction, or otherwise, of the requirements of the Act. Those are issues I need to address as part of the agreement approval process. Having had those discrete issues identified by the CFMMEU, I would be assisted by the CFMMEU’s submissions in resolving those issues. I therefore grant leave for the CFMMEU to intervene in the approval of the Agreement.

The Approval of the Agreement?

[11] The Applicant filed a Form F16 application (the Application) for the approval of the Agreement pursuant to s.185 of the Act. In addition to the Form F16, the Applicant also filed a Form F17 Statutory Declaration (the Form F17), a copy of the signed Agreement, and supplementary documents relevant to the Application.

(a) Initial Issues Identified

[12] On 14 July 2021, my Chambers emailed to the Applicant and the appointed Bargaining Representatives a list of apparent issues that I considered warranted submissions or other responses from the Applicant prior to consideration of the Application (the Initial Issues). Other than the issue of the CFMMEU’s intervention, these issues related to pre-approval requirements, the terms of the Agreement, the National Employment Standards (NES) and the better off overall test (BOOT). A copy of the part of the email outlining the Initial Issues is replicated below:

Issues Raised:

SECTION 1: FORMS AND REPRESENTATION
Issue raised	Response requested
Request for documents: On 7 July 2021 the CFMMEU has requested application documents and have notified the Commission that they wish to be heard. On 8 July 2021 the request for documents were actioned.	The Applicant is invited to provide a view on the CFMMEU appearing as a party to the matter.
Section 2: Pre-approval requirements - Form F17
Issue raised	Response requested
Notification of vote: Q20 of the Form F17 states that employees received the notice of vote via email. Q20 does not state the specific time, location or method of the vote. The applicant has not provided the notice of vote email. As it is not clear what was explained to employees regarding the notification of the vote, this raises the issue of whether the Commission can be satisfied that the employer took all reasonable steps to notify employees of the method of vote as required by s.180(3)(b) of the Act. We note that Q26 indicates that 3/3 employees covered by the Agreement at the time of voting cast a valid vote.	The Applicant is invited to provide submissions outlining the steps taken to notify employees of the time, place and method of vote by the start of access period and/or seek lodgment of the notice of vote email.
Access to the Agreement: Q21 of the Form F17 indicates that employees received a copy of the Agreement via email. However, the applicant has not lodged these emails.	The Applicant is invited to submit the email that gave employees access to the Agreement.
Explanation of Agreement: Q22 and Q24 indicate that on 16 April 2021 and 28 April 2021, the employer explained to employees each clause of the Agreement page by page. Employees were given a summary of terms which appears to explain each clause of the Agreement. Employees were given the opportunity to ask questions. The Agreement appears to be a rollover.	The Applicant is requested to provide submissions outlining the reasonable steps taken to explain the terms of the Agreement and the effect of the terms for the purposes of s.180(5)(a) of the Act.

Section 3: Terms of the Agreement
Issue raised	Response requested
Shiftworker for the purpose of the NES: The Agreement provides for shift work, but does not provide for a definition of a shift worker or an extra week of annual leave. As clauses 2 and 31.1 of the Award defines a shiftworker as for the purpose of the additional week of leave provided by the NES, a shiftworker means a continuous shiftworker this is inconsistent with s.196 of the Act.	The Applicant is invited to provide an undertaking in relation to this clause.
Section 4: National Employment Standards (NES)
Issue raised	Response requested
NES Precedence clause: Clause 8.1 of the Agreement contains a NES Precedence clause. Deduction of monies due to the employee under the NES on termination: Clause 46.7 of the Agreement provides that where the Employee fails to provide the required period of notice, the Employer may withhold from any monies due to the Employee in accordance with clause 16.2 of the Award. We note that clause 16.2 of the Award relates to hours of work and accrual towards RDOs. Clause 46.7 and clause 16.2 of the Award do not appear to limit the source of monies which may be deducted. The effect of this is that this clause appears to permit the employer to withhold monies owing to the employee under the NES (such as accrued but unused annual leave or long service leave on termination). This raises the issue that Clause 20.4 may be inconsistent with Chapter 2 Part 2.2 Division 2 of the Act.	The Applicant is invited to provide submissions relating to this inconsistency and/or submit undertakings in relation to the apparent NES issues.
Better off overall test (BOOT)
Issue raised	Response requested
Test time rates: Clause 7 appears to indicate that the rates of pay in the Agreement apply from commencement. We note that s.193 of the Act requires the Commission to assess the BOOT at test time (i.e. the time the application was made).	The Applicant is invited to provide undertakings in relation to the apparent BOOT issues.

(b) Applicant Response to Initial Issues

[13] The Applicant responded to the Initial Issues on 21 July 2021, by providing the Commission with a Submission, various documents, and the following two Undertakings.

1. Shift work (Clause 22)

A shift worker covered by the Agreement is defined as per the Building and Construction General On – Site Award 2020.

2. Employee Termination (Clause 46.7)

Clause 46.7 is amended to read, “Where an Employee terminates their employment, they must provide notice on the basis indicated in the table in clause

46.3. Where the Employee fails to provide the required period of notice, the Employer may withhold from any monies due to the Employee in accordance with clause 40.1 (d) of the Building and Construction General On-Site Award 2020, subject to written authorisation by the Employee.”

[14] Regarding notification of the vote and access to the Agreement, the Applicant provided copies of emails sent to all three employees notifying of the time and place of the vote, providing a copy of the Agreement, and noting that hard copies of the Agreement would be provided at the meeting where the vote was to take place. The Applicant submitted that all employees had access to the Agreement throughout the access period.

[15] The Notice of Vote was particularly instructive, and provided hyperlinks to numerous documents referred to in the Agreement. It was in the following terms:

“Notice of vote on enterprise agreement

Dear Employee,

As you are aware, Shaw Building Group Pty Ltd is currently negotiating an enterprise agreement (Shaw Building Group Pty Ltd and Employees Enterprise Agreement 2021-2025) with its employees.

You will have an opportunity to vote on whether you approve the enterprise agreement on Friday the 25^th of June 2021 at 2.30pm at 27 Altree Court Phillip ACT. The voting method that will be used is a show of hands vote.

If a majority of employees who attend the meeting approve the enterprise agreement, it will be made. An application will then be made to the Fair Work Commission for its approval. The enterprise agreement will take effect seven days after its approval by the Fair Work Commission.

A copy of the enterprise agreement is attached.

Please note that the enterprise agreement also references (but does not incorporate) the following material where it might also apply to your employment:

Building and Construction General On-Site Award 2010 Work Act 2009 (Cth) which includes the National Employment Standards Work Regulations 2009 (Cth) - for the Tendering and Performance of Building Work 2016 Guarantee (Administration) Act 1992 (Cth) Act 1958 (ACT) Service (Portable Schemes) Act 2009 (ACT) Service Leave Act 1976 (ACT) Parental Leave Act 2010 (Cth) Health and Safety Act 2011 (ACT) Health and Safety Regulation 2011 (ACT) you have any questions about the enterprise agreement or the vote, please speak to myself or your bargaining representative.”

[16] The Applicant submitted that the Commission should be satisfied that the terms of the Agreement and the effect of those terms were explained to employees in accordance with Section 180(5)(a) because:

(a) As the Agreement is a rollover Agreement, employees were already experiencing and subject to the same terms and conditions as the Agreement;

(b) On 16 April 2021, the Applicant provided an explanation of the terms of the Agreement to employees at a meeting by explaining each clause of the Agreement page by page to employees, and encouraging employees to ask questions and seek clarification of those clauses;

(c) Employees were provided with a copy of the Agreement and a comprehensive and detailed Enterprise Agreement summary sheet; and

(d) On 28 April 2021, the Applicant held another meeting with the employees at which the terms of the Agreement were again discussed and explained to all employees. The Applicant answered questions raised by employees and provided clarification on the terms where necessary.

[17] Regarding undertakings suggested in the Initial Issues, the Applicant noted that it had provided undertakings to address the shift worker and deduction of monies on termination concerns in the Initial Issues. In relation to the issue raised with Clause 7 of the Agreement, the Applicant clarified that Clause 7 applies to annual wage increases only. The intended effect of Clause 7 is that during the life of the Agreement, rates of pay as stated in Appendix A will increase annually from the first pay period after 1 November.

[18] The Applicant submitted that the test time as defined in s.193(6) of the Act, is the time the application for approval of the Agreement by the Commission was made. For the relevant purposes, that is the date of 6 July 2021. Consequently, the Commission must be satisfied that as at 6 July 2021, each Award covered employee and each prospective Award covered employee for the Agreement would be better off overall if the Agreement applied to the employee than if the relevant Award applied to the employee. The Applicant submitted that the relevant wage rates that are to be considered by the Commission for the purposes of the BOOT test are those specified in Appendix A of the Agreement. Clause 7 of the Agreement is relevant only insofar as it allows for an annual increase to the rates of pay at a future date as opposed to the rates of pay on 6 July 2021. The Applicant submitted that the Commission should be satisfied that the rates of pay in Appendix A of the Agreement meet the requirements of Section 193 of the Act, however, if the Commission does not agree with this view, the Applicant is willing to provide an undertaking that would clarify the intended purpose of Clause 7 being to provide an annual increase to workers as at 1 November each year during the life of the Agreement.

(c) CFMMEU Submission Regarding Approval

[19] At paragraph [8] of its submission regarding standing, the CFMMEU submitted:

“CFMEU seeks to put forward submissions that address the BOOT, as well as submissions dealing with the procedural elements of the agreement.”

[20] On 7 August 2021, the Commission issued further directions that included the following:

“By no later than 4pm Wednesday 11 August 2021, the CFMEU file with Commission and serve on the Applicant and all bargaining representatives any submissions it is prepared to provide as referenced in paragraph 8 of their 6 August 2021 submission.”

[21] On 11 August 2021, the CFMMEU outlined in submissions their objections to the approval of the Agreement. The CFMMEU summarised those objections as follows:

The CFMMEU opposes approval of the proposed agreement on the basis that:

a. The proposed agreement was not validly made under s182 of the Act, since;

i. The Applicant did not provide copies of other material incorporated into the agreement as required by s180(2);

ii. The Commission cannot be satisfied that the Applicant complied with s180(3);

iii. The Commission cannot be satisfied that the Applicant took all reasonable steps to ensure that the terms of the agreement and the effects of those terms were explained to the relevant employees as required by s180(5);

b. The Commission cannot be satisfied that the proposed agreement passes the better off overall test, as required by s186(2)(d).

(i) Material Incorporated by Reference in the Agreement

[22] The CFMMEU noted that Question 21 of the Form F17 filed with the Application goes to the Applicant’s compliance with s180(2) of the Act, dealing with the distribution to workers of the text of the Agreement and any incorporated documents during the access period.

[23] The CFMMEU submitted that, considered together, the large range of documents, legislation and materials that the Applicant had nominated as incorporated by reference into the Agreement were both vast and highly technical. They provide a range of protections, limitations and benefits to the Applicant’s employees that impact on every part of the Agreement. In addition, clauses 18.3, 18.4, 22.1 and 47.1 of the Agreement directly incorporate elements of the comparator Award, the Building and Construction On-site General Award 2020 (the Award).

[24] The CFMMEU noted that it would appear that none of the incorporated documents, or the Award, were distributed to employees at any time, and while the written summary of terms appears to include links to the National Employment Standards and s.65(1A) of the Fair Work Act, it does not provide links of any kind to the range of materials that the Applicant states are incorporated into the Agreement.

[25] The CFMMEU concluded that given this failure to provide any of the incorporated documents necessary to comprehend the agreement, the relevant workers could not have been fully informed about the full range of their rights under the Agreement, and the Applicant had failed to meet the pre-approval step at s180(2). In addition, without the workers having had access to the documents incorporated by reference, it cannot be said that the Agreement had been genuinely agreed within the meaning of s188, and therefore cannot be approved under s186.

(ii) Notice of Vote

[26] The CFMMEU noted that an email the Applicant claims was sent on the 10th June 2021, setting out the time, place and method of voting has not been produced by the Applicant. Without provision of the original document, the Commission cannot be satisfied of the Applicant’s compliance with s180(3).

(iii) Explanation of the Terms

[27] The CFMMEU noted Question 22 of the Form F17 goes to the compliance of the Applicant with s180(5), namely, that during the access period, the employer must take all reasonable steps to ensure that the terms of the agreement and the effects of the terms are explained to the relevant employees. The Form F17 notes that an explanation of the Agreement occurred on the 16th April 2021, and the evidence of the Applicant is that they provided an explanation of the agreement at that time. Specifically, the deponent Mr Damiano Serenellini stated:

“The Employer explained each clause of the Agreement, page by page in person at a meeting. The explanation was provided with the assistance of a summary of terms document which was provided to each employee.”

And

“The Employer explained the terms of the Agreement that were the subject of discussions and clarified and answered any questions raised by Employees on those clauses.”

[28] At question 24 of the Form F17, Mr Serenellini deposed that at both meetings on 16 and 28 April 2021:

“The Employer encouraged employees to ask questions and made it clear that if employees were in doubt that they should raise any questions with the Employer including any Management staff.”

[29] The CFMMEU submitted that in One Key Workforce v Construction, Forestry, Mining and Energy Union, 4 the Full Court of the Federal Court considered what the Commission required to satisfy itself in relation to the explanation provided to workers. Specifically, the Full Court concluded as follows: “… In order to reach the requisite state of satisfaction that s 180(5) had been complied with, the Commission was required to consider the content of the explanation and the terms in which it was conveyed, having regard to all the circumstances and needs of the employees and the nature of the changes made by the Agreement.”

[30] Further, the CFMMEU noted the decision of the Full Bench in CFMMEU v Dawson Maintenance Contractors Pty Ltd 5 deals more specifically with the issue of Award provisions.

[31] The CFMMEU submitted that the Act does not require that an employer take some reasonable steps or only those steps that it thinks necessary. Instead, the Act requires that employers must take all reasonable steps to provide the requisite information. Mere blandishments to the effect that the Agreement has been explained or that questions have been answered will inevitably be insufficient, as it is unlikely, if not impossible for the Commission to be satisfied that a genuine agreement has been reached on the basis of such general statements. The information provided by the Applicant’s F17 and the statement in is insufficient to allow the Commission such satisfaction. The statement that the Applicant had explained “each clause of the Agreement, page by page at a meeting” does not convey the content or terms of that explanation as required by s180(5).

(iv) Junior Apprentice Rates

[32] The CFMMEU noted that at clause 8.2, the Agreement excludes the Award, which has the effect of excluding a range of allowances and conditions. At 2.4 of Appendix A, the base rate for a “Junior Apprentice” at Stage 3 is given as $22.50/hr. Under the Award, an apprentice carpenter and/or joiner at stage 3 of their apprenticeship is entitled to a base rate of $23.60.

[33] The impact of a base rate around 5% below the Award is felt not only in ordinary wages, but is magnified by any overtime or penalty rates the apprentice might receive. In addition, on off-the-job training days and RDOs, the apprentices would not receive the higher travel allowance which might otherwise go some way to making up the shortfall. On this basis, the CFMMEU submitted the Agreement could not be said to meet the BOOT.

(d) Applicant’s Further Submission

[34] My Chambers sent an email to the Applicant at 3.27pm on 11 August 2021. That email invited the Applicant to provide any submissions in reply that it wished to make to the CFMMEU submissions of 11 August 2021, by 4:00pm on Friday 13 August 2021.The Applicant responded to that email as follows:

“Dear Associate,

Due to the number of issues raised by Mr Fischer we respectfully request more time by which to provide submissions in reply.

Regards,”

[35] The Applicant was granted an extension until 4:00pm 18 August 2021, to provide any submissions or other documents it wished to make in reply to the CFMMEU submissions of 11 August 2021.

[36] On 18 August 2021, the Applicant filed a Submission in Reply that was said to be responding to the CFMMEU’s Submission of 6 August 2021, which related to the issue of the CFMMEU’s standing. Those submissions disregarded the substantive submissions of the CFMMEU filed on 11 August 2021. The Applicant had been specifically directed to respond to the CFMMEU’s substantive submission by email from the Commission at 3.27pm on 11 August 2021, and had sought and obtained a variation to those directions.

[37] At 4.47pm on 26 August 2021, the Applicant contacted the Commission. In that email correspondence, the Applicant stated as follows:

“I refer to the Notice of Listing and Directions made on 23 August 2021 in relation to the abovementioned matter.

I am seeking clarification as to the purpose of the hearing that has been listed for Monday – whether it to be to hear from the parties in relation to CFMEU’s application to be heard or whether it is to deal with the approval of the Enterprise Agreement. This will provide me with clarification on the documents that are required to be filed for the Applicant by tomorrow’s deadline.

I note that submissions and undertakings have already been filed with the Commission to deal with those issues raised by the Commission in its email of 14 July 2021. I am seeking clarification on this point as it would be my understanding that these issues would not be a basis upon which further submissions would need to be prepared and/or served upon the CFMEU, unless they were to be heard in this matter.

I also note that CFMEU requests to be heard in relation to the BOOT as well as the procedural elements of the Agreement. I would appreciate the opportunity to be able to reply to CFMEU on these matters, should they be heard in relation to this application, however, would respectfully request that any such matters be raised prior to the hearing, where possible.

I have copied Mr Fischer into this email for the purposes of transparency. I look forward to receiving your response at your earliest convenience.

Kind regards,”

[38] At 10.28am on 27 August 2021, my Chambers wrote to the Applicant’s representative, and copied to the CFMMEU, an email (the 27 August Email) in the following terms:

“I note that the CFMMEU have been directed to provide submissions in this matter, and as such, the Deputy President seeks to hear from the Union in relation to the application. The Deputy President has indicated that reasons in relation to the matter of standing will be addressed in the final Decision issued in this matter.

I confirm that the application for the approval of of the Act the above agreement will be heard, on a final basis, on Monday [later adjourned to Thursday 2 September 2021]. This hearing is of the substantive merits of the matter, and is not a procedural hearing.

The Listing issued on 23 August 2021 contained Directions allowing for the further submission of any written materials that the Applicant or the Union wishes to put before the Deputy President. I note that the parties have each already made submissions in the matter thus far, and that these Directions allow for an additional opportunity to put any further materials or submissions before the Hearing. If you wish to simply rely on materials and submissions that are already before the Deputy President, you may do so – what submissions are put and the manner in which they are put is a matter for the parties.

I also advise that if the Union or the Applicant raise any matters in their submissions that warrant reply from either party, the opportunity for reply will be available at the Hearing of the matter.

Regards,”

(e) Further Submissions of the CFMMEU

[39] At 4.33pm on 1 September 2021, the CFMMEU filed further submissions that related to whether it had received an email invitation to a bargaining meeting.

(f) Further Submissions of the Applicant

[40] At 4.52pm on 1 September 2021, the Applicant filed further submissions, a Witness Statement of Damiano Serenellini, and a Witness Statement of Orce Petreski, all dated 27 August 2021.

[41] The further submissions included the following passages:

2. The Applicant has previously filed the following documents in the Fair Work Commission (‘the Commission’):

…

(c) Submissions in reply dated 18 August 2021 in response to the submissions made by the CFMEU of 6 August 2021.

…

3. The Applicant maintains that it has addressed the issues raised by the Commission in relation to the pre-approval process, terms of the Agreement and the better off overall test (BOOT) as requested. Where the Commission was not satisfied with the Submissions and/or Undertakings provided, the Applicant would appreciate the opportunity to address these matters.

…

8. The Applicant wrote to the Commission seeking clarification as to the purpose of the Hearing scheduled for 30 August 2021. The CFMEU were also copied into this communication. The Applicant is concerned that should it provide documents pertaining to the pre-approval process, documents such as meeting minutes or other documents, that documents would need to be disclosed with CFMEU without being granted permission to be heard in relation to these matters.

[42] Notwithstanding the direction provided by the 27 August Email, the further submissions of the Applicant again disregarded the substantive submissions of the CFMMEU filed on 11 August 2021, although the reason for that failure became apparent in the hearing of the matter.

[43] The Statement of Damiano Serenellini, the General Manager of the Applicant, addressed the invitation to a meeting in March 2021 that was forwarded to the CFMMEU, and issues as to what occurred at bargaining meetings on 28 April and 25 June, 2021.

[44] The Statement of Orce Petreski, an employee covered by the Agreement, addressed correspondence received by Mr Petreski from the Applicant on 29 March, 16 April and 10 June 2021, and issues as to what occurred at bargaining meetings on 28 April and 25 June 2021.

Consideration

[45] The matter was heard on 2 September 2021. In the hearing of the matter on 2 September 2021, it became apparent that there had been an internal transfer within the representative of the Applicant, and the new representative was unaware of the existence of the substantive submissions of the CFMMEU filed on 11 August 2021. A short adjournment was allowed to enable the representative to obtain instructions in order to be able to respond to the substantive submissions of the CFMMEU. There was also brief cross-examination of Mr Serenellini.

[46] The Applicant’s response to the Initial Issues provided satisfaction of all issues raised by the Commission but for pre-approval requirements regarding access to the Agreement and incorporated materials, and explanation of the terms of the Agreement, as well as BOOT issues. Not unusually, the issues sought to be agitated in the substantive submissions of the CFMMEU filed on 11 August 2021, reflected those issues. The CFMMEU had also raised an issue of notification of the time, place and method of voting, and possible non-compliance with s180(3). In the hearing of the matter the CFMMEU was provided with the email of notification and did not press this issue.

[47] The CFMMEU maintained its submission that the Agreement did not meet the BOOT in the area of Junior Apprentice rates. The Applicant conceded that the Agreement did not meet the BOOT in relation to the identified classifications, and expressed a willingness to remedy such failure by provision of an appropriate undertaking.

[48] The only outstanding issues from the Initial Issues and the substantive submissions of the CFMMEU were:

(a) Material incorporated by reference in the Agreement; and

(b) Explanation of the terms of the Agreement.

[49] The Commission must be satisfied that in accordance with s.186(2)(a) of the Act that an agreement that is not a Greenfields agreement has been genuinely agreed by the employees covered by the Agreement. Relevantly, pursuant to s.188(1)(a) the Commission will be satisfied an agreement has been genuinely agreed if a number of provisions are satisfied, in particular that the pre-approval steps in s.180(2) and 180(5) of the Act.

[50] Section 180(2) provides:

(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;

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

[51] Section 180(5) of the Act requires provides:

(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.

(i) Material Incorporated by Reference in the Agreement

[52] I agree with the CFMMEU’s submission that the large range of documents, legislation and materials that the Applicant nominated as incorporated by reference into the Agreement were both vast and highly technical. None of those incorporated documents, or the Award, were distributed to employees at any time, and while the written Summary of Terms of the Agreement appeared to include links to the NES and the Act, it did not provide links of any kind to the range of materials that the Applicant stated were incorporated into the Agreement.

[53] In CFMMEU v Dawson Maintenance Contractors Pty Ltd, 6 (Dawson), the Full Bench of the Commission observed:

“Notwithstanding the argument that employees were familiar with the classification descriptors under the relevant modern awards, given that the same descriptors were used in the predecessor agreement, there is an obligation that an employer proposing an enterprise agreement takes all reasonable steps to either provide those materials to employees or ensure that they have access to the materials during the agreement access period. The legislation does not require that an employer take some reasonable steps or only those steps that it thinks necessary. Instead the legislation requires that employers must take all reasonable steps to provide the requisite information.

At the least, taking all reasonable steps to provide this information would require no less than providing employees with a hard copy of the descriptors, perhaps in their lunchrooms or pinned to notice boards; or even to provide each person to be covered by the agreement with a hyperlink to the relevant clause of the applicable modern award. In turn, satisfaction on the part of the Commission that all reasonable steps have been taken would logically require cogent evidence on the part of the applicant employer as to the nature and detail of the explanation given. Mere blandishments to the effect that the agreement has been explained or that questions have been answered will inevitably be insufficient, as it is unlikely, if not impossible for the Commission to be satisfied that a genuine agreement has been reached on the basis of such general statements.”

[Original emphasis]

[54] Unlike the agreement the subject of the proceedings in Dawson, which was described in a company notice to employees as “Summary of changes to the current EA Minor changes only to comply with changes to the law,” 7 it was agreed by the parties that the Agreement is “dramatically different” to that currently applying to the Applicant. While the Agreement was said to be a template emanating from the Master Builders Association of the Act, the agreement currently applying to the Applicant was based on a document emanating from the CFMMEU.

[55] Two salient examples may be outlined to exhibit the difficulty that arose from the Applicant failing to provide copies of incorporated materials in a more directed way. They are as follows:

(a) Clause 8 of the Agreement provides:

Relationship to other workplace laws

8.1 This Agreement will be read and interpreted in conjunction with the National Employment Standards (NES). Where there is inconsistency between this agreement and NES, and the NES provides a greater benefit, the NES provision will apply to the extent of the inconsistency.

8.2 For the avoidance of doubt, any applicable legislation, regulation, industrial instruments, and any policies and procedures of the Employer are not incorporated into this Agreement and do not form part of an Employee’s contract of employment.

The written Summary of Terms of the Agreement provided the following explanation:

Clause 8 – Relationship to other workplace laws

This clause states that the Enterprise Agreement will operate in conjunction with the National Employment Standards (NES). Where there is inconsistency between the Enterprise Agreement and NES, and the NES provides a greater benefit, the NES provision will apply to the extent of the inconsistency.

Hourly base rates of pay and allowances are payable to Employees as per the Agreement. No hourly base rates of pay and / or allowances are payable to Employees under the Award.

Only in the Summary of Terms document is the Award identified, and no link is provided to that Award. An employee would have to seek a link to the relevant award and then seek to interpret what hourly rates and/or allowances were to be foregone. Were such an employee to have followed the hyperlink in the Notice of Vote, or the definition of “Award” in the Agreement, that employee would have been directed to the Building and Construction General On-Site Award 2010, and not the current award being the Building and Construction General On-site Award 2020.

(b) Clause 10.7 of the Agreement provides:

10.7 The parties to the dispute agree to be bound by a decision made by FWC in accordance with this term. Any decision by the FWC must be consistent with the Code for the Tendering and Performance of Building Work 2016.

The written Summary of Terms of the Agreement did not refer to the Code for the Tendering and Performance of Building Work 2016, nor provide a link to that document. Were an employee to have found that Code they would have been required to divine how that Code may affect any decision made.

[56] The failure to provide any of the incorporated documents necessary to comprehend the Agreement, which was so vastly different to the agreement currently applying to the Applicant, meant that the relevant workers could not have been fully informed about the full range of their rights under the Agreement, and the Applicant has failed to meet the pre-approval step at s180(2).

(ii) Explanation of the Terms

[57] In the Form F17, the Applicant stated that an explanation of the Agreement occurred on the 16th April 2021. Specifically, the deponent Damiano Serenellini stated that on 16 April 2021:

And, on 28 April 2021:

“The Employer explained the terms of the Agreement that were the subject of discussions and clarified and answered any questions raised by Employees on those clauses.”

[58] At question 24 of the Form F17, Mr Serenellini deposed that at both meetings on 16 and 28 April 2021:

“The Employer encouraged employees to ask questions and made it clear that if employees were in doubt that they should raise any questions with the Employer including any Management staff.”

[59] In the Initial Issues, the Commission noted the answers to Questions 22 and 24 of the Form F17, and outlined the response requested as follows:

The Applicant is requested to provide submissions outlining the reasonable steps taken to explain the terms of the Agreement and the effect of the terms for the purposes of s.180(5)(a) of the Act.

[60] The totality of the Applicant’s submission on this issue was the following:

Explanation of Agreement

9. Shaw Building submits that the Commission should be satisfied having regard to the evidence, that the terms of the Agreement and the effect of those terms were explained to employees in accordance with Section 180(5)(a) for the following reasons:

a. As the Agreement is a rollover Agreement, employees were already experiencing and subject to the same terms and conditions as the Agreement subject of this application.

b. On 16 April 2021, Shaw Building provided an explanation of the terms of the Agreement to employees at a meeting. At that meeting, Shaw Building explained each clause of the Agreement page by page to employees, and they were encouraged to ask questions and seek clarification of those clauses.

c. Employees were provided with a copy of the Agreement and an Enterprise Agreement summary sheet. The Enteprise Agreement summary sheet is comprehensive and detailed and includes all clauses contained in the Agreement. Shaw Building relies on the Enterprise Agreement summary sheet which has already been filed with the Commission.

d. On 28 April 2021, Shaw Building held another meeting with employees at which the terms of the Agreement were again discussed and explained to all employees. Shaw Building answered questions raised by employees and provided clarification on the terms where necessary.

10. For the reasons outlined in 6(a) – (d)(sic), Shaw Building submits that the Commission should be satisfied that the requirements of Section 180(5)(a) has been met.

[61] It is immediately apparent that sub-paragraphs (b) to (d) in the above submission do not in any way provide more detail of how the terms of the Agreement were explained than the answers to Questions 22 and 24 of the Form F17.

[62] More concerning, however, is sub-paragraph (a), which is simply wrong. As noted above, it was agreed by the parties that the Agreement is “dramatically different” to the agreement currently applying to the Applicant. It was plainly incorrect to submit that the Agreement was a “roll-over”, and that “employees were already experiencing and subject to the same terms and conditions as the Agreement subject of this application.”

[63] I note that the Applicant disregarded the substantive submissions of the CFMMEU filed on 11 August 2021, which related in part to explanation of the Agreement, and that such failure resulted from the Applicant’s representative being unaware of that submission. The Applicant did, however, file a statement of Mr Serenellini, the General Manager of the Applicant. While it was, in the absence of knowledge of the CFMMEU’s substantive submission, unremarkable that Mr Serenellini did not address explanation of the Agreement in detail, I note that Mr Serenellini was cross-examined regarding such explanation and his answers can only be described as vague as to what occurred. Specifically, in response to a question suggesting that employees were not informed of differences between the Award and the Agreement, he responded “I guess so”.

[64] I am not satisfied that the Applicant took all reasonable steps to provide the explanation required by the Act. None of the Applicant’s attempts to outline what explanation occurred could be said to be more than mere blandishments to the effect that the Agreement has been explained or that questions have been answered. I am not satisfied that a genuine agreement has been reached on the basis of such vague, general and incorrect statements.

Conclusion

[65] I am not satisfied that the requirements of s.188 of the Act have been met. Therefore the Agreement cannot be approved under s186. In particular, I find:

(a) The Applicant did not take reasonable steps to ensure that during the access period for the Agreement, the employees were given a copy of material incorporated by reference in the Agreement (s.180(2)); and

(b) The Applicant did not take all reasonable steps to ensure that the terms of the Agreement, and the effect of those terms, were explained to the employees (s.180(5)).

[66] The Application is dismissed.

DEPUTY PRESIDENT

Appearances:

Ms K Burt, on behalf of the Applicant
Mr T Fischer, on behalf of the CFMMEU.

Hearing details:

2021.
September 2
Sydney (via videoconference)

Printed by authority of the Commonwealth Government Printer

1 CFMEU v Collinsville Coal Operations Pty Ltd [2014] FWCFB 7940, at [75] and [76].

2 Macmahon Contractors Pty Ltd [2018] FWC 869.

3 (2014) 246 IR 21; [2014] FWCFB 7940.

4 Construction Forestry Mining and Energy Union v One Key Workforce Pty Ltd [2017] FCA 1266.

5 CFMMEU v Dawson Maintenance Contractors Pty Ltd[2018] FWCFB 2992.

6 CFMMEU v Dawson Maintenance Contractors Pty Ltd[2018] FWCFB 2992 at [47] and [48].

7 Dawson at [31].