[2016] FWC 8520

FAIR WORK COMMISSION

DECISION

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

Sparta Mining Services Pty Ltd
(AG2016/2507)

Coal industry
COMMISSIONER SPENCER	BRISBANE, 15 DECEMBER 2016

Application for approval of the Sparta Mining Services Pty Ltd Enterprise Agreement 2016 – new objection recorded at Appeal - whether agreement genuinely agreed – further facts emerged before Full Bench since initial hearing – consideration of recent Full Bench authority – provision or access to policies incorporated in Agreement – reconsideration of provision – based on further evidence

Introduction

[1] This Decision relates to an application made pursuant to section 185 of the Fair Work Act 2009 (the Act) by Sparta Mining Services Pty Ltd (the Applicant/Sparta) for the approval of the Sparta Mining Services Pty Ltd Enterprise Agreement 2016 (the proposed Agreement/the Sparta Agreement).

[2] The Construction, Forestry, Mining and Energy Union (the CFMEU/the Union), whilst not a bargaining representative, sought to intervene in the proceedings and opposed the application on the basis that the Agreement did not meet the statutory approval tests under the Act.

[3] The Commission, as currently constituted, conducted a hearing in respect of the CFMEU’s intervention and objections to the approval. A series of objections were dealt with in the Decision at first instance. A Decision was released on 5 July 2016 1 which considered these matters. A further Decision approving the Agreement was released on 6 July 20162.

Appeal Decision

[4] The CFMEU lodged an appeal against these Decisions and raised an objection not previously taken as to whether there were reasonable grounds for believing that the Agreement had not been genuinely agreed to by the employees. The Full Bench noted that the CFMEU did not raise this argument in the first instance hearing, but sought a consideration of this issue in any rehearing. The Full Bench confirmed this with the CFMEU at the hearing of the Appeal:

“VICE PRESIDENT HATCHER: You didn't run a genuinely agreed point, in the general sense, under 180(8)(c), at first instance, did you?

MR WALKADEN: We didn't, your Honour.” 3

[5] The Full Bench referred to (in referring this matter back for rehearing), the Decision of KCL Industries Pty Ltd (KCL) 4, which was not released at the time of hearing.

[6] In line with the appeal by the CFMEU, the Full Bench 5 referred the matter for review as to whether the approval requirements in s.186(2)(a) were satisfied taking into account the requirement in s.188(a)(i) for compliance with s.180(2); and the requirement for section 188(c) regarding whether there are no reasonable grounds for believing that the Agreement has not been genuinely agreed to by the employees. The parties were permitted to adduce further evidence in this process.

Re-determination – further facts and further case law

[7] Accordingly, further Directions were set for the filing of material, Directing the parties to file any further evidence in respect of the following matters:

“Whether the approval requirement in s.186(2)(a) of the Act was satisfied having regard to:

1. the requirement in s.188(c) for the Commissioner to be satisfied that there are no reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

2. the requirement in s.188(a)(i) for compliance with s.180(2).”

[8] The Applicant and the CFMEU filed submissions and evidence in response to the Directions. The Applicant filed submissions and an Affidavit of Mr Keenan Algie, Managing Director of the Applicant, and Mr Lee Jansen, former Human Resources Manager of the Applicant. The CFMEU filed submissions and an Affidavit of Mr Aaron Smith, Diesel Fitter employed by Broadmeadow Mine Services Pty Ltd at the Broadmeadow Mine.

[9] The matter was heard in Brisbane on 12 December 2016.

[10] The Applicant was represented by Mr John Merrell, Counsel and instructed by Mr Scott McSwan, solicitor, McKays Solicitors. The CFMEU was represented by Mr Adam Walkaden, Legal Officer of the Union.

The relevant Agreement provisions under consideration

[11] The Agreement incorporated policies and procedures by reference in the following clauses:

“2.5 This Agreement is supported by policies and procedures determined by the Employer from time to time. These policies and procedures will not reduce the Employee's substantive entitlements contained in this Agreement but provides guidelines for the fair and efficient administration of the employment relationship.

...

6.1 The Employer agrees to comply with State and Commonwealth Occupational Health & Safety laws and any relevant industry codes of practice.

6.2 The Employee agrees to carry out any instructions, policies and decisions made to promote and maintain a safe workplace required by relevant occupational Health and Safety legislation, including any further requirements specific to the Employer’s industry and workplace – even if not specified in the legislation.

...

14.4.2 You will not be required to work more than 5 hours without taking a break unless there are extenuating circumstances and in accordance with the site 'Fitness for Work' and 'Fatigue Management Policy'.”

Relevant Legislation

[12] Section 180 of the Act provides:

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.

(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.

(underline added)

[13] Section 186 of the Act provides:

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; ...

(underline added)

[14] Section 188 of the Act provides as follows:

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

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

(underline added)

s.188(c) - no reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

[15] With respect to whether there were reasonable grounds for believing that the Agreement had not been genuinely agreed to by the employees, as stated, the Full Bench noted that the CFMEU did not raise this argument in the first instance hearing, but sought a consideration of this issue in any rehearing 6.

[16] Further facts emerged during the Appeal hearing regarding events subsequent to those in existence at the time of the initial approval hearing. The Full Bench observed as follows:

“[29] Two additional factual matters emerged during the hearing of the appeal, largely in response to inquiries from the bench. The first was that the three employees who voted upon the Agreement were no longer employed by Sparta, but were now employed by another labour hire company at the same coal mine sites. Whether this other labour hire company was of a Lacedaemonian character was not disclosed. Second, Sparta now employs approximately 40 employees.

[30] Those facts (which were not disputed by Sparta) give rise, we consider, to arguable grounds for concluding that the Agreement was not genuinely agreed to by the employees. They are capable of giving rise to the inference that the vote in favour of the Agreement by the three employees was not authentic because the employees were selected to be employed by Sparta purely for the purpose of making the Agreement, the provisions of the Agreement were not intended to apply to the three employees, and the employees were not to continue to be employed by Sparta after the Agreement was approved. 7

[31] In light of those facts, we consider that it would be in the public interest and would enhance confidence in the agreement approval process for the rehearing to involve a reconsideration of the requirements of s.186(2)(a) and s.188(c). In order that this issue be re-determined appropriately, we consider that it will be necessary to allow Sparta and the CFMEU to adduce further evidence if they wish to do so.” 8

(underline added)

[17] The first additional factual matter emerged in the Full Bench hearing as follows:

“MR MERRELL: My instructions are that those three employees are no longer employed by Sparta at all.
…

VICE PRESIDENT HATCHER: Who are they employed by now?

MR MERRELL: As far as we know other labour hire companies on the same site. They're my instructions, your Honour.” 9

[18] The second additional factual matter emerged as follows:

“VICE PRESIDENT HATCHER: How many employees does Sparta have now?

MR MERRELL: Forty to 45, your Honour.” 10

[19] The Full Bench observed as follows in relation to this issue of genuinely agreed (as per s.188(c)), in their Decision, as follows:

“ the very similarly-named Spartan Mining Services Pty Ltd (Spartan) was a pre-existing labour hire company which had operated in the coal mining industry for many years and had a number of employees;

Sparta and Spartan were associated corporate entities, with a common management team, common premises and common addresses; 11

Mr Jansen was Human Resources Manager for both Spartan and Sparta, and from his perspective apart from the fact that they were different legal entities there was “not a lot” of difference between them;

the three employees of Sparta who voted upon the Agreement were previously employed by Spartan, and were employed by Sparta for the sole purpose of negotiating the enterprise agreement; 12

the three employees were selected (in about November/December 2015) on the basis that they had the “intellectual ability” to go through the enterprise agreement process; 13

two of the three employees were supervisors of persons employed by Spartan; 14

Sparta intended to “ramp up the manning” once the Agreement was approved; 15

the Agreement was voted upon by a show of hands in Mr Jansen’s office; 16

the three employees were not paid in accordance with the provisions of the Agreement, but at all times were paid above-award rates, and entitlements which were superior to the Agreement, which Sparta committed to continue for them only; 17

Sparta had not developed any policies and procedures of its own dealing with workplace health and safety notwithstanding that it operated in the coal mining industry. 18” 19

[20] The Full Bench also referred to the analysis of ‘genuinely agreed” in the Decision of a Full Bench of the Commission in KCL Industries Pty Ltd (KCL) 20. This Decision in KCL had not been released at the time of the first instance hearing. The development of the requirement for “genuine agreement” and the development of case authority in respect of this issue was discussed by the Full Bench in KCL as follows (citations omitted):

“[23] The second reason why we consider that the Agreement is incapable of approval is that we do not consider that, on any reasonable view, it could be regarded as having been “genuinely agreed” as required by s.186(2)(a) of the FW Act having regard to s.188(c). Section 188, which explicates the “genuinely agreed” in s.186(2)(a), provides:

188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

[24] The “genuinely agreed” requirement has its origin in the scheme for the making and certification of collective agreements under the Workplace Relations Act 1996. Section 170LT(6) of that Act (as it was prior to the amendments effected by the Workplace Relations Amendment (Work Choices) Act 2005) provided, as a requirement in order for an agreement with employees to be certified, that “a valid majority of persons employed at the time whose employment would be subject to the agreement must have genuinely made the agreement”. In CFMEU v Australian Industrial Relations Commission (Gordonstone) the Federal Court Full Court said that s.170LT(6) “plainly betokens a concern with the authenticity and, as it were, the moral authority of the agreement”. An example of the application of Gordonstone under the Workplace Relations Act was Grocon Pty Ltd Enterprise Agreement (Victoria), in which it was held that an agreement had not been genuinely agreed because the employees’ consent was not informed and they were not advised of the consequences of their vote.

[25] The Explanatory Memorandum for the Fair Work Bill 2008, in relation to subclause 188(c) of the Bill, made express reference to Gordonstone and Grocon as follows:

“796. Paragraph 188(c) provides that FWA must only approve an agreement if there are no other reasonable grounds to believe that the agreement was not genuinely agreed to by the employees. FWA can refuse to approve an agreement where there are reasonable grounds to believe that the agreement has not been genuinely agreed to by the employees who will be covered by the agreement.

797. In determining whether there are reasonable grounds for believing that the agreement has not been genuinely agreed to by employees, FWA may consider whether the agreement has been validly made in accordance with clause 182 (see, e.g., Construction Forestry Mining and Energy Union v Australian Industrial Relations Commission (1999) 93 FCR 317 and the decision of the AIRC in Grocon Pty Ltd Enterprise Agreement (Victoria) (2003) 127 IR 13).”

[26] The reference in paragraph 797 to clause 182 is to the requirements for making agreements now contained in s.182 of the FW Act. In s.182(1), a single-enterprise non-greenfields agreement is treated as having been made when a majority of employees that will be covered by the agreement and who cast a valid vote approve the agreement.

[27] Of relevance to this matter, the Explanatory Memorandum made a further observation concerning subclause 188(c) in the context of its discussion about the better off overall test (underlining added):

“824. The better off overall test also refers to prospective award covered employees because sometimes an agreement may cover classifications of employees in which no employees are actually engaged at the test time. Extending the application of the better off overall test to these types of employees guarantees the integrity of the safety net. Note that where an agreement covers a large number of classifications of employees in which no employees are actually engaged there may be a question as to whether the agreement has been genuinely agreed - see clause 188.”

[28] Section 188 was considered in general terms by a Full Bench in Ostwald Bros Pty Ltd v Construction, Forestry, Mining and Energy Union. The Full Bench majority (Watson SDP and Gooley C, as she then was) said:

“[78] ...“Genuinely agreed”, in s.188 is expressed in terms of satisfaction that particular bargaining provisions within the Act have been complied with (ss.188(a) and (b)) and satisfaction of a more general criterion in s.188(c), rather than in terms of a general consideration of whether in the circumstances of a particular agreement a member is satisfied that the agreement has been genuinely agreed to by the employees.

[79] As the Full Bench in Galintel 10 noted “Section 188 establishes a set of requirements, each of which must be satisfied if the necessary finding is to be made under s186(2)(a).”

[80] Section 188 of the Act does not provide a wide general discretion for determining whether employees have genuinely agreed to an enterprise agreement focussed at the point of approval. Rather it requires specific actions to have been undertaken (in ss. 188(a) and (b) at specified times in advance of approval), with s 188(c) then requiring satisfaction that there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees. Section 188(c) of the Act, although itself a broad discretionary consideration, is an additional matter about which [the Commission] needs to be satisfied and relates to grounds other than those arising in relation to the ss. 188(a) and (b) matters”.

[29] In Central Queensland Services Pty Ltd, Asbury DP undertook a detailed analysis of decided cases relevant to the proper interpretation and application of s.188(c). The Deputy President referred to the above passage in Ostwald and then continued as follows:

“[65] The approach to considering whether employees have genuinely agreed has been discussed in a number of cases considering s. 188(c) and similar provisions in earlier versions of the legislation and can be summarised as follows:

• In deciding whether there are no other reasonable grounds for believing that an agreement has not been genuinely agreed to [by] employees who will be covered, the circumstances to be considered are those that existed when the agreement was voted on.

• A consideration of all relevant circumstances revealed by the material before the Commission, at the time the Commissions considers the application for approval is required, in order to ascertain whether there are reasonable grounds for rejecting the genuineness of the agreement;

• Circumstances including the provision of material or information to employees which has the character of being misleading or intimidating, or where approval is affected by a material non-disclosure, or there is a scheme underpinning the agreement about which employees are not informed, will be relevant to the Commission’s assessment of whether the agreement has been genuinely agreed by the employees;

• Genuine agreement requires that the consent of employees was informed and that there was an absence of coercion.

• Section 188(c) is only a basis for finding that an agreement is not genuinely agreed to if there are found to be reasonable grounds for this belief. This requires a consideration of the soundness of the agreement.

• The requirement for genuine agreement considered in conjunction with the objects of the Act in relation to agreement making betokens a concern with the authenticity and moral authority of an agreement.

[66] The facts in the cases where the genuineness of the agreement of employees has been brought into question are instructive. In Re Toys “R” Us (Australia) Pty Limited Enterprise Flexibility Agreement 1994 it was found that the material supplied by the Company to employees did not fully disclose the impact of the agreement when compared to the existing award conditions. It was also found that the union with coverage of the employees was hampered in its efforts to disseminate an alternative view, at least over two crucial days when the ballot for approval of the Agreement was held. As a result it was found that the employees had not genuinely agreed to the agreement.

[67] The Manfield Colair Enterprise Agreement involved circumstances where the employer resisted the approval of an agreement that had been voted on and approved by employees, on the ground that the final version of the agreement distributed to employees by the employer contained a significant mistake. Vice President Lawler found that there was no indication that the agreement was other than the product of a bona fide bargaining process. It was also held that a unilateral mistake made by the employer in the version of the agreement that was distributed, did not mean that the version of the Agreement voted on was not the true agreement and that there was no question of there being some other agreement, different to the one annexed to the application for approval that is the “true agreement”. On appeal, a Full Bench of the Commission upheld that decision and held that an employer who wishes to propose an agreement to its employees has an obligation to ensure that the agreement reflects its intentions.

[68] In Re MSS Security Pty Ltd Enterprise Agreement 2012 the matters that were held to constitute reasonable grounds for the Commission to believe that the agreement was not genuinely agreed to were that employees were incorrectly advised of the date upon which the approval ballot would close and as the percentage of employees who cast a vote was small, it was more probable than not that a significant number of employees did not vote because of incorrect information about the closing date of the ballot. The version of the Agreement that was voted on by the employees in that case was also missing pages.

[69] The Decision of the Federal Court in Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission and Others (Gordonstone) dealt with the issue of whether an agreement was validly made in circumstances where the group of employees who made it were not yet employed and may never have been employed in the relevant single business. The Court concluded that the agreement had not been genuinely made.

[70] In Grocon Pty Ltd Enterprise Agreement (Victoria) it was held that the employer had created a structure or scheme involving employees being covered by a number of agreements in circumstances where the employees who voted to approve an agreement had been misinformed or had not been informed about the effect of the arrangements, and in particular the fact that they could be the only employees bound by the conditions in the agreement while other employees had different conditions. As a result, the vote of employees to approve the agreement was not genuine.

[71] It can be seen from the cases that the question of whether the Commission is satisfied that there are no other reasonable grounds for believing that an agreement has not been genuinely agreed to by employees is not limited to a consideration of whether there has been coercion or misinformation in relation to the agreement and its effect. The consideration under s.188(c) is not limited to these matters and incorporates all of the relevant circumstances surrounding the process by which employees indicate their agreement.”

[21] The Full Bench in KCL 21 agreed with and adopted the majority analysis in Ostwald Bros Pty Ltd v Construction, Forestry, Mining and Energy Union 22, and that of Deputy President Asbury in Central Queensland Services Pty Ltd23.

[22] In KCL, the Full Bench held that that Agreement had not been genuinely agreed, as follows:

“[31] In this matter there is an obvious disjunction between the content of the Agreement and the characteristics of those who entered into it. The Agreement describes itself as applicable to all employees of KCL, whether full-time, part-time, casual or temporary. 26 It sets out classifications and pay rates for private sector clerical employees, manufacturing employees, and production and staff employees in the black coal mining industry (with the last category including classifications for surveyors, safety officers, deputies, forepersons, open cut overseers, geologists, chemists, production supervisors and undermanagers).The Agreement also contains provisions whereby individual employees can enter into agreements with the employer for flat rates of pay on a “better off overall basis”, and contains redundancy pay provisions equivalent to the NES redundancy pay provisions.

…

[36] In summary, the position is that the Agreement covers a wide range of classifications most of which have no relevance to the work performed by KCL’s three existing employees, encompasses industries in which KCL does not currently operate, and contains rates of pay which, even in respect of those classifications relevant to the current employees, are not to apply to those employees. In those circumstances we do not consider that any authenticity could attach to the agreement of the two employees to the rates and conditions in the Agreement. The employees had no “stake” in the Agreement’s rates of pay, since they were assured that their existing, higher rates of pay would remain in place (subject to “operational needs and satisfactory performance”), and they could not have given informed consent in relation to occupation and industries in which they did not work and presumably had no experience.

[37] The latter consideration applies with particular force to the Agreement’s coverage of work in the black coal mining industry. The award covering that industry, the Black Coal Mining Industry Award 2010, contains a range of provisions which are specifically tailored to the unique circumstances of that industry. An example of that is the industry-specific redundancy scheme contained in clause 14 of the Award, which provides for severance and retrenchment benefits greatly in excess of the NES redundancy pay provisions. Those benefits have not been included in the Agreement, and thus would not apply to hypothetical future coal mining employees. The two employees who agreed to this outcome could never have received the benefit of these provisions, because their work is not covered by the Black Coal Mining Industry Award, and there is nothing to suggest that they had any knowledge of the existence of these benefits. It is impossible to conclude that the provisions of the Agreement applicable to black coal mining were agreed with the informed consent of the existing employees.

[38] A situation not dissimilar to this was considered by the Commission in McMah Pty Ltd. In that matter Commissioner Bull (as he then was) said (footnote omitted):

“[30] As discussed above, the Agreement incorporates industries that no voting employee was engaged in at the time. Adopting the principle of “the moral authority of the agreement” it is hard to see where the moral authority of the Agreement exists, for example, in respect of medical practitioners or law graduates.

[31] It is understandable and unremarkable that employees voting on an agreement will not always cover the full range of classifications in a modern award that the agreement is to either supplant or as in this Agreement, incorporate, subject to the terms of the Agreement. It is another matter for employees to make an enterprise agreement covering industries where no employees in any classification are engaged when the agreement is made and may possibly never be engaged. The Act provides the ability for employers to enter into Greenfield agreements in situations that relate to new enterprises that employers are establishing or propose to establish but have not yet employed any persons necessary for the conduct of that enterprise who will be covered by the agreement.

[32] A further example of the difficulty is found at Clause 12 of the Agreement Hours of Work. This clause provides that where the relevant award stipulates the days on which ordinary hours can be worked and/or the span of ordinary hours and the relevant award allows for a variation by agreement between the employer and employee, it is taken that agreement has been reached to the extent permitted by the relevant award. It is difficult to accept how agreement could be reached on the span of hours or days worked where no employees in a particular industry have voted on the Agreement.”

[39] In McMah the problem identified by the Commissioner was resolved by his acceptance of undertakings “to reduce the Agreement’s coverage to industries of the type and nature the employees covered by the Agreement are engaged in” (that is, the industries of the existing employees at the time the agreement was made). However, it has since been held at the Full Bench level that an undertaking which sought to confine the coverage of an enterprise agreement in a significant way could not be accepted because it would necessarily result in a significant change to the Agreement contrary to the requirement in s.190(3)(b) of the FW Act. Accordingly we do not consider that course would be available here even if such an undertaking was proffered by KCL (which it has not been).

[40] KCL submitted that the Commission had commonly approved enterprise agreements “where only a handful of employees are currently engaged yet the Enterprise Agreement provides for wide-ranging classification levels and/or scales” because such agreements are “legitimate on the basis that the intention of the employer is usually to grow the business, and that in time more and varied employees will come on board”. In that connection KCL referred to the Full Bench decision in CEPU v Sustaining Works Pty Ltd as supporting the proposition that providing for prospective employees in a business that is intended to grow is reasonable and legitimate.

[41] That submission does not pay regard to the distinction adverted to in McMah between an agreement which accommodates a wider range of classifications in the business in which the employer is currently engaged, and an agreement which extends into industries in which the business has never previously operated. Sustaining Works, which was not concerned with the “genuinely agreed’ approval requirement but rather whether the agreement in that case satisfied the requirement in s.186(3) that the “group of employee covered by the agreement was fairly chosen”, concerned a scenario which fell into the former category. The employer’s business, in which the employees who approved the agreement worked, was to obtain “small-scale supplementary gas supply project work in the Surat Basin”, and because it was necessary for the employer “to have an enterprise agreement which covered the whole range of functions required by this work”, the Full Bench found that there was an “intelligible and legitimate business rationale for the selection by Sustaining Works of the employees to be covered by the Agreement”. None of that reasoning supports the proposition that the “genuinely agreed” requirement in this case is capable of satisfaction.”

Applicant’s submissions on s.188(c)

[23] The Applicant submitted that the Agreement was genuinely agreed to by the employees and submitted that there was no evidence that the information given by Mr Jansen to the employees at the time that the Agreement was being made, had the character of being misleading or intimidating or that there had been an immaterial non-disclosure by the employer to the relevant employees. 24

[24] The Applicant submitted that the evidence of Mr Jansen was that the Agreement between the Applicant and the Applicant’s three employees was made on the basis of their fully informed consent; and that there was no evidence that the employees were coerced into voting in favour of the Agreement notwithstanding that the vote was by way of a show of hands. 25

[25] The Applicant distinguished the facts of the present case from those in the Full Bench Decision of KCL. The Applicant submitted that in the KCL case, the agreement covered a wide range of classifications most of which had no relevance to the work performed by KCLIndustries Pty Ltd’s three existing employees; the agreement encompassed industries in which KCL Industries Pty Ltd did not currently operate; the agreement contained rates of pay which, even in respect of the classifications relevant to the current employees, were not to apply to those employees.²⁶

[26] The Applicant submitted that, whilst the Agreement in the present case was made with three employees, the Agreement covered the Industry in which the Applicant operates; covered the classifications in which the three relevant employees work; and applied to the employees in relation to their occupations and an Industry in which they worked and had experience.²⁷ For these reasons, the Applicant submitted that the three employees had a “stake” in the Agreement.

[27] The Applicant submitted that the three employees would be paid at rates of pay above those in clause 23 of the Agreement but would not be subject to any conditions (such as operational needs and satisfactory performance as in KCL 28); would be paid for their annual leave at those higher rates of pay;29 and would be paid weekly.30 However, the Applicant submitted that the other provisions of the Agreement had application to them.

[28] New evidence emerged during the Full Bench hearing that the 3 employees, who voted on the Agreement, were no longer employed by the Applicant 31. The Applicant submitted that the 3 employees of the Applicant who made the Agreement resigned from the Applicant at or about time Spartan Mining Services Pty Ltd lost its contracts at the Broadmeadow Mine (on or about 18 May 2016) and the Carborough Mine (on or about 30 June 2016). The Applicant was supplying labour to Spartan Mining Services Pty Ltd for those contracts. The Applicant submitted that, as a consequence of Spartan Mining Services Pty Ltd losing its contracts at the Broadmeadow Mine and the Carborough Mine, the Applicant lost its contracts with Spartan Mining Services Pty Ltd.32

[29] With respect to the matter of genuine agreement, Mr Algie, Managing Director of the Applicant, provided the following evidence in relation to the employment of new employees by the Applicant:

“13. On or about 2 September 2016 the Applicant entered into an agreement with Spartan Mining Services Pty Ltd by which Spartan Mining Services Pty Ltd assigned the benefit of a mining services contract it held with the Dendrobium Mine in NSW. The Applicant purchased this assignment for value on arms length terms. As part of this transaction the Applicant took on about 45 employees that had been previously working for Spartan Mining Services Pty Ltd at that Mine site.

14. The Applicant commenced providing services at the Dendrobium Mine on or about 6 September, 2016. Since this date the Applicant has taken on about 30 new employees who work at that Mine Site.” 33

[30] With respect to the matter of genuine agreement, Mr Jansen, former Human Resources Manager of the Applicant, did not provide any evidence in relation to the 3 employees no longer being employed, or the employment of new employees, in his Affidavit dated 1 November 2016.

[31] In cross examination, Mr Walkaden provided a series of company searches to Mr Algie. Mr Algie gave evidence that Spartan Mining Services Pty Ltd and Spartan Mining Group Pty Ltd were placed in administration at the same time. Mr Algie confirmed that this occurred after the contract for services at the Dendrobium Mine was transferred from Spartan to Sparta.

[32] Mr Algie gave evidence that he negotiated sub-contracting arrangements on behalf of Sparta with his father, who was acting on behalf of Spartan and that Sparta began sub-contracting one employee at Broadmeadow Mine, shortly after the contract there started in June or July 2015.

[33] With respect to the Dendrobium contract, Mr Algie gave evidence that negotiations for the transfer occurred through a solicitor located on the Gold Coast and a meeting was held in July 2016. Mr Algie gave evidence that the agreement was that Sparta would purchase the contract for the valuation price.

[34] Mr Algie gave evidence that at the time the Agreement was being created, in February to March 2016, Spartan had between 60 to 90 employees at the Broadmeadow Mine and between 12 to 14 employees at the Carborough Downs Mine. Of these Spartan employees, Mr Algie stated that 1 employee was selected from the Broadmeadow Mine and 2 from the Carborough Downs mine, to be employed by the Applicant.

[35] With respect to the negotiations for the Agreement, Mr Algie stated that this was Mr Jansen’s responsibility and that he had said to Mr Jansen that the Applicant needed to get an enterprise agreement, and left it to Mr Jansen to work through the details. Mr Algie confirmed that the intention was for the Applicant to get an agreement approved and then tender for work in New South Wales.

[36] Mr Algie was questioned as to whether the Applicant’s preference was to employ skilled and competent workers from Spartan. Mr Algie stated that this was incorrect, however, he conceded that the Applicant began to employ 45 employees of Spartan as a result of the Dendrobium contract, where it could have hired non-Spartan employees.

[37] Mr Algie stated that there was an absence of intention as to whether the 3 employees who voted on the Agreement would remain employed by the Applicant, and that this depended on the contracts with the mine site operators.

[38] Mr Algie gave evidence that the Applicant introduced its own policies and procedures in August 2016. When questioned as to whether they were largely reflective of those that Spartan had, Mr Algie responded that they could be because both were in the mining industry. Mr Algie declined it was a “cut and paste” job and stated that he had a training and safety employee from the Applicant to redo them, which Mr Algie read and approved.

CFMEU’s submissions on s.188(c)

[39] The CFMEU, by way of background, noted that Spartan Mining Services Pty Ltd (Spartan)is a labour hire company that has operated for many years in the coal mining industry and that Spartan and the Applicant are associated entities. The CFMEU submitted that, other than the name, there was no (practical) difference between the entities. The CFMEU submitted that both entities only operate in the coal mining industry, have a common management team and share the same premises and other resources. The CFMEU submitted that emails sent by Mr Jansen during bargaining for the Agreement came from Mr Jansen's Spartan email address with relevant details of Spartan in the foot of the emails. The CFMEU also submitted that Mr Jansen had reluctantly accepted that there was not a lot of difference between Spartan and the Applicant Company.

[40] Further, the CFMEU submitted that the scope of the Agreement was ‘incredibly broad’ and that the Agreement applies to all production and engineering employees of the Applicant that are working at black coal mine sites in both Queensland and New South Wales. The CFMEU submitted that, despite the broad scope of the Agreement, it was made with just 3 employees and at the point in time that the matter was before the Commission for approval, the Applicant only employed 3 persons that voted on the Agreement. Subsequent to this, as emerged before the Full Bench, further employees had been employed.

[41] The CFMEU submitted that 2 of these 3 employees were Supervisors and were at the very top of the classification structure of the Agreement (classified at the Mineworker - Specialised level). The CFMEU submitted that the workers that are supervised by these 2 Supervisors include employees of Spartan. The CFMEU submitted that the other employee was an Operator and classified as a Mineworker. It was submitted by the CFMEU that the effect of this was that there were no occupants of the 3 other classification levels, namely the Mineworker - induction Level 1, Mineworker - Induction Level 2/Mineworker - Training, and Mineworker - Advanced, when the Agreement was made.

[42] The CFMEU submitted that there was no actual bargaining in relation to the Agreement and that none of the 3 employees appointed a bargaining representative, and there was no union involved in the making of the Agreement. It was noted by the CFMEU that there were only 2 meetings held prior to the vote on the Agreement taking place; the first meeting was held on 16 February 2016, where the 3 employees were given a copy of the Notice of Employee Representational Rights and the second meeting was held on 17 February 2016, where the Agreement was explained, and information was provided, to the employees. The CFMEU noted that the vote on the Agreement was conducted 10 March 2016 by way of a show of hands in Mr Jansen's office.

[43] In respect of the requirement in s.188(c) for the Commission to be satisfied that there are no reasonable grounds for believing that an agreement has not been genuinely agreed to by the employees, the CFMEU now, in conducting this objection, relied on the Full Bench decision of KCL as it concerned s.188(c) of the Act. Whilst the CFMEU acknowledged that they did not take this objection at the time of the first instance hearing, it was submitted that there were some similarities between the facts relevant to KCL and the facts in the current matter.

[44] It was submitted by the CFMEU that both agreements cover a range of classifications that have no relevance to the small number of employees that the agreements were made with and further, such employees had no "stake" in the Agreement. In this regard, the CFMEU submitted that there were 5 classifications in the Agreement, but only 2 of those classifications were filled by the persons with whom the Agreement was made, and there were 3 “vacant” classifications.

[45] It was submitted by the CFMEU that these matters demonstrated that there was a lack of authenticity about the Agreement.

[46] In respect of the 3 employees who voted to approve the Agreement, the CFMEU argued they had ‘no stake’ in the Agreement. The CFMEU relied on the following evidence from the cross-examination of Mr Jansen in the hearing at first instance on 16 May 2016:

“a) The Applicant guaranteed to the 3 employees that they would receive a higher rate of pay than the rates of pay set out in the Agreement; 34

b) The Applicant guaranteed to the 3 employees that they would be paid annual leave based on 'projected roster' and not the base rate (with the Agreement providing that annual leave is paid on the base rate); 35 and

c) The Applicant guaranteed to the 3 employees that they would be paid weekly and not monthly (with the Agreement providing for monthly pay) 36”

[47] The CFMEU submitted that Mr Jansen had accepted that wages, the payment of annual leave and frequency of pay were significant terms of employment, and the CFMEU noted that, in relation to those significant terms, the Agreement had no application to the 3 employees with whom it was made. Further, the CFMEU submitted that the guarantee of superior entitlements that was given to these 3 employees does not apply to any 'new starters'.

[48] The CFMEU submitted that the following evidence of Mr Jansen, concerning the 3 employees that the Agreement was made with, clearly demonstrated that there was a lack of authenticity about the Agreement:

“PN315: Were these three persons previously employed by Spartan Mining? --- Yes.
PN316: What was the time gap between these persons being employed by Spartan Mining to becoming employees of Sparta Mining? --- Within a matter of a couple of days, I think, or days.
PN317: They finished work for Spartan Mining on one day and the very next day they commenced employment with Sparta Mining, is that right? ---If it wasn't the very next day it would've been within one or two days, I would say, yes.
PN318: Can you explain why these employees ceased employment with Spartan Mining and became employees of Sparta Mining? –Through this process.
PN319: So they became employed for the sole purpose of negotiating this enterprise agreement, is that correct? --- Yes.
PN320: You accept, don't you, that Sparta needs more than three employees to be profitable?--- No, I don't accept that necessarily.
PN321: You say that the company is happy with the profit margin it extracts from having these three employees? --- My opinion is that it would be happier with more employees, yes.
PN322: And the plan is to ramp up, isn't it? --- Yes, absolutely.
PN323: So once this agreement is approved the company plans to ramp up the manning?--- Yes.”

[49] The CFMEU further relied upon paragraphs [28] to [30] of the Full Bench Appeal Decision 37 in this matter, which is extracted above at paragraphs [16] and [19].

[50] Further, in arguing that the Agreement was not genuinely agreed, the CFMEU submitted 38, as follows:

“It is inconceivable that the applicant will continue to operate with just three production and engineering employees. It is evident that the applicant has deliberately depressed the number of employees required to carry out work in the coal mining industry. The sole reason for this is to get in place a substandard Agreement made with a docile workforce.

It is evident that if the Agreement is approved, the applicant will significantly increase its workforce. Any new starters will then be denied the opportunity to bargain and instead be covered by the Agreement for at least four years.

Secondly, the Agreement was made with a very small number of employees and in the circumstances described at paragraphs 2 – 5 above. This is a not a 'start-up' company. The circumstances are more akin to a phoenix arrangement between Spartan and the applicant.”

[51] The CFMEU submitted there are reasonable grounds for believing that the Agreement has not been genuinely agreed by the employees and that the Commission cannot be satisfied of s.188(c) and by extension s.186(2)(a) of the Act.

[52] The CFMEU also relied on Mr Algie’s evidence, given at the hearing on 12 December 2016, that Mr Algie had indicated to Mr Jansen that the Applicant wished to have in place an enterprise agreement, and the motivation for such was to win work in New South Wales. The CFMEU pointed to a conflict between the objective to conduct business in New South Wales and the manner in which the Agreement was negotiated with 3 Queensland based employees. The CFMEU submitted that this was squarely an issue about the moral authenticity of the Agreement and an inference could be drawn that the persons with whom the Agreement was negotiated were never persons who would have the benefit of the Agreement.

[53] The CFMEU submitted that the evidence from Mr Algie as to sharing of directors between the Applicant and the Spartan companies and that Mr Algie had been closely involved in Spartan companies (and a held position as regional manager) was evidence of the close connection between Spartan and the Applicant.

[54] The CFMEU relied on Mr Algie’s evidence that the use of the office and facilities of Spartan by the Applicant at the BMA mine would be unusual for other labour hire companies and Mr Algie’s evidence that BMA would “laugh at him” in response to a request for separate facilities for the Applicant, was evidence of the “legal fiction” that there was an “arms lengths divide” between the companies.

[55] The CFMEU referred to Mr Algie’s evidence that at time the Agreement was made, Spartan employed 60-80 employees at the Broadmeadow Mine, and that of those 60-80 employees, only 1 was selected to cease employment with Spartan and almost the very next day commence employment with the Applicant. The CFMEU submitted that an inference could also be drawn that there was a careful selection to pick that one employee. The CFMEU made a similar submission with respect to the 2 employees selected from the Carborough Downs Mine.

[56] Given Mr Algie’s evidence, the CFMEU submitted that this, in conjunction with Mr Jansen’s evidence as to the selection of employees to negotiate an agreement, demonstrated that the Agreement was a sham, and the Applicant’s “intention was to game the system” by employing 3 people for the sole purpose of negotiating an agreement and this went to the moral authenticity of the Agreement.

[57] The CFMEU submitted that the facts in the present matter were similar to those referred to in the matter of CFMEU v Australian Industrial Relations Commission (Gordonstone) 39. The CFMEU submitted that the agreement in the Gordonstone case was made with a handful of employees, in circumstances where, given a change of ownership was imminent; the number of production employees covered by the Agreement would significantly increase. The CFMEU submitted that, in that case, there was a concern with the moral authenticity of the Agreement, where the larger group had no say in the making of the agreement. The CFMEU submitted that that arrangement falls foul of what is now s.188(c).

[58] The CFMEU relied on the Explanatory Memorandum of the Fair Work Act 2009, and submitted that Gordonstone was still good law. Further, the CFMEU submitted that the KCL Decision referred to Gordonstone, and that the Full Bench in the Appeal Decision had referred to the consideration of this case.

Consideration – s.188(c)

[59] The Full Bench in the Appeal Decision referred to two facts which had emerged during the Full Bench proceedings that they considered were relevant to the issue of whether the agreement had been genuinely agreed, which had not been in issue at the original proceedings.

3 employees no longer employed

[60] The first was that the 3 employees who voted to approve the Agreement were no longer employed by the Applicant. Mr Algie gave evidence in his Affidavit in the re-hearing proceedings that these employees resigned after the Applicant lost its contracts with Spartan, who had lost its contracts at the Broadmeadow Mine and the Carborough Downs Mine. Mr Algie stated that this had occurred on or about 18 May 2016 and 30 June 2016 respectively.

[61] The hearing at first instance occurred on 16 May 2016, but by the time of the approval of the Agreement on 6 July 2016, the Applicant no longer employed any employees. The loss of contracts was not put before the Commission at the original proceedings.

Applicant now employs 40 employees

[62] However, the CFMEU stated at the re-hearing that they did not rely on the emergence of the fact that none of the 3 employees who voted on the Agreement remained employed by the Applicant, in support of their argument that the Agreement was not genuinely agreed, but that these employees were not sufficiently connected with the Agreement at the time it was made and that the intention was to “ramp up” or take on a significantly larger workforce which occurred shortly after.

[63] The second fact identified by the Full Bench in terms of events that emerged after the first instance hearing was that the Applicant now employed 40 employees. Mr Algie gave evidence that on 2 September 2016, the Applicant entered into an agreement for Spartan to assign to the Applicant the benefit of a mining services contract with Dendrobium Mine in New South Wales. Mr Algie stated that the Applicant took on 45 employees of Spartan that had been working at that mine, and that since that time, the Applicant had employed 30 new employees who work at that mine.

[64] It was not in dispute in the first instance proceedings that the Applicant intended to increase the number of its employees after the Agreement was approved; Mr Jansen affirmed in cross-examination that the Applicant intended to “ramp up” the “manning”. 40

[65] Mr Algie confirmed under cross-examination at the re-hearing that the Applicant was under no obligation to continue the employment of the 45 employees of Spartan. The CFMEU submitted that because the Applicant had done so when not required to, this was evidence of the Applicant’s intention to create an Agreement and employ workers from Spartan.

[66] However, it is noted that the increase in employment came about as a result of the purchase of a mining services contract from Spartan, and there was no evidence put forward at the re-hearing that the Applicant Sparta, had secured any contracts that did not involve Spartan.

[67] The evidence given at the re-hearing was that Spartan is now under voluntary liquidation as a result of a Director’s resolution.

SDA v ALDI Case

[68] In the recent Decision of the Federal Court in Shop, Distributive & Allied Employees Association v ALDI Foods Pty Ltd 41 (ALDI) (released 29 November 2016 after the Full Bench Appeal Decision), the issue of genuine agreement by employees “covered” by an Agreement was discussed by Justice White as follows:

“134.The matters listed in s 188 to which the FWC is to have regard in determining whether there has been genuine agreement to an enterprise agreement seem, with the possible exception of (c), to be of an objective kind. Nevertheless, it is the genuineness of the agreement by particular persons which the FWC is to assess, these persons being the employees “covered by” the agreement. There is, accordingly, an inherent requirement in s 186(2)(a) and s 188 that there be such persons. That is to say, it is implicit in s 186(2)(a) that there be persons covered by the agreement whose genuineness in agreeing to it (on the basis identified in s 188) can be assessed by the FWC. Persons who will become covered by the agreement only at some time in the future do not answer that description, even if they did, by some means, vote to approve it.

135.Further, in my opinion, the expressions “will be covered” and “covered by” in the scheme established by Pt 24 are counterpoints. Sections 172 to 181 use the former expression because they are concerned with the sequence of events until an enterprise agreement is made and because a contemplated enterprise agreement cannot cover anyone until it is made. The immediate change to the present tense following the final step in the sequence, that is, the making of the agreement (s 182), is an indication that those whom it was previously contemplated would be covered by the agreement are now, on the making of the agreement, covered by it (subject of course to the approval the FWC and the commencement of operation of the agreement pursuant to s 54). The change in terminology occurs because the work done by the term “will be covered” is complete. Because the two expressions are counterpoints, the expression “who will be covered by the agreement” is a reference to those who, upon the making of the agreement, are covered by it and is not a reference to those who, at some future time will become covered by it.”

[69] The majority of the Federal Court held that because none of the 17 employees were working in their prospective positions under the Agreement at the time they voted on it, the s.186(2)(a) requirement that the Agreement be agreed by employees "covered by" it, was not properly considered.

[70] Whilst, in the current matter, there is no dispute that the 3 employees who voted on the Agreement were working for the Applicant at the time they voted on it, and therefore, were “covered” by the Agreement, Justice White made the following observations in relation to “genuine agreement” which are relevant to this current matter:

“145.There is another line of reasoning which may indicate that the Regency Park Agreement is not an enterprise agreement of the kind contemplated by s 172(2)(a). This line of reasoning arises from the indications in the FW Act, and in Pt 24 in particular, that the enterprise agreement contemplated by s 172(2)(a) is one made by an employer with existing employees working in the enterprise to which the enterprise agreement will relate.

146.One of the objects of the FW Act is the “achieving [of] productivity and fairness through an emphasis on enterpriselevel collective bargaining” (s 3(f)). The Guide to Pt 24 contained in s 169 includes at its commencement the statement that an enterprise agreement is made at “the enterprise level”. Likewise, s 171(a) states that an object of Pt 24 is to provide a framework enabling collective bargaining in good faith, particularly at “the enterprise level”, for enterprise agreements which deliver productivity benefits. There is accordingly an emphasis on the making and negotiation of enterprise agreements at the enterprise level. Putting to one side the case of a greenfields agreement, this seems to assume implicitly that enterprise agreements are made in relation to existing enterprises and with existing employees working in them. The notion that there should be “collective bargaining in good faith” provides some support for this view.

147.Reasoning of this kind would support the inference that s 172(2)(a) refers, implicitly, to employees who are employed in the enterprise at the time the agreement is made and who will be covered by the agreement, and that it is only in relation to genuine new enterprises in which there are no such persons that the employer may negotiate an enterprise agreement with one or more relevant employee organisations.

148.Another possible indication to the same effect is the concept of a “single enterprise” used in the FW Act. Section 172 does not use the term “single enterprise”: only the term “singleenterprise agreement”. The definition of “single enterprise” in s 12 of the FW Act refers the reader to s 168A. Section 168A(3) provides (relevantly) that a single enterprise is “a business, project or undertaking that is carried on by an employer”. That definition replicates substantially, but not wholly, the definition of “enterprise” in s 12. The matter of significance for present purposes is the use of the present tense in “is carried on”, thereby implying an existing business, project or undertaking. If that be accepted, it may be but a short step to conclude that the reference to employees “who are employed at the time the agreement is made” in s 172(2)(a) and its cognates in ss 180 and 181 is a reference to employees who are employed by the employer in the enterprise to which the enterprise agreement is to relate, and not to employees employed in some other enterprise of the employer.

149.However, the SDA did not contend that the present application should be determined by the Court adopting this view of Pt 24. Accordingly, the resolution of the present application does not require a decision to be made on this line of reasoning. It is appropriately left to an occasion when the matter does arise for determination and when the Court will receive full argument.”

[71] As the written material relied on by the parties for the re-hearing was filed prior to the release of the ALDI Federal Court Decision, both parties were given an opportunity to make submissions in relation to this authority. Neither party sought to do so.

[72] The new Full Bench authority along with these comments of Justice White above lend support to the argument that, in the present matter, an Agreement made with 3 employees, who had commenced employment with the Applicant (from the related company Spartan) for the sole purpose of making the Agreement, as confirmed by Mr Jansen in cross-examination 42, is not an agreement of the kind contemplated by s.172(2)(a), that is:

172 Making an enterprise agreement

…

Single-enterprise agreements

(2) An employer, or 2 or more employers that are single interest employers, may make an enterprise agreement (a single-enterprise agreement):

(a) with the employees who are employed at the time the agreement is made and who will be covered by the agreement; or…

[73] In addition to the case authorities as referred to, the admission of Mr Jansen that the 3 employees who voted in favour of the Agreement were selected to be employed by the Applicant purely for the purpose of making the Agreement 43, coupled with the evidence given by Mr Algie that these employees were no longer employer after 18 May 2016 and 30 June 2016 and that the Applicant employed new employees after the approval, gives rise to reasonable grounds for believing the Agreement was not genuinely agreed.

[74] Having considered the observations of the Full Bench in KCL, it is considered pertinent that the aagreements in the KCL case, and in this current matter, both covered a range of classifications that have no relevance to the limited number of employees that the agreements were made with. Further, while the Agreement in the current matter covered the employees’ classifications who voted on the Agreement (unlike in KCL), these employees who voted on the Agreement, as in KCL, would receive a higher rate of pay than the provisions of the Agreement afforded to new employees who would be covered by the Agreement. In accordance with KCL, that the employees who voted were to be paid at higher rates and with better conditions than in the Agreement (rates which would not apply to new employees who did not vote on the Agreement), indicates that the vote was not authentic, and questions the moral authenticity of the Agreement, as the three employees had little or no real stake in the Agreement.

[75] In addition to the employment of the employees from Spartan by the Applicant for the purpose of making the Agreement, that the Applicant has not secured contracts or directly employed new employees without the involvement of Spartan, brings into question the genuineness of the Applicant as a separate enterprise and the purpose of the Agreement.

[76] Taking into account the above considerations 44, and the emergence of additional facts relating to the cessation of employment of those employees who voted on the Agreement, and the employment of new employees, in circumstances where this employment is as a result of the involvement of Spartan, there are reasonable grounds for believing that the Agreement has not been genuinely agreed to by the employees, and therefore the approval of the Agreement (based on the further facts and recent case authorities) should be quashed. Given this finding on this new objection, it is unnecessary to determine the further matters, however, given their referral, the following is provided.

s.188(a)(i) - compliance with s.180(2)

[77] The CFMEU had argued in the first instance matter that s.180(2) had not been complied with because clauses 2.5, 6.1, 6.2 and 14.4.2 incorporated by reference certain documents external to the Agreement, which were not provided to employees prior to the vote. These provisions of the Agreement as follows:

...

6.1 The Employer agrees to comply with State and Commonwealth Occupational Health & Safety laws and any relevant industry codes of practice.

...

[78] At the relevant time, prior to the vote, Sparta submitted that it had no policies in place of the type referred to in clauses 2.5, 6.2 and 14.4.2.

[79] The Full Bench referred issues for consideration as to whether s.180(2) had been complied with. The issues included whether Sparta had complied with s.180(2) in relation to the industry codes of practice referred to in cl.6.1 and the policies of coal mine operators referred to in clauses 6.2 and 14..4.2. The Full Bench held that the undertaking provided by the Applicant in the first instance could not address an issue with compliance under s.180(2) 45.

[80] The Full Bench considered the issue of compliance with s.180(2) as follows:

“…The statutory purpose of s.180(2) is clear: where a proposed enterprise agreement contains, as material incorporated by reference in the agreement, entitlements or obligations derived from an external document, that document is to be provided to employees to be covered by the agreement before they vote upon it so that they know what the content of those entitlements or obligations are when they consider whether to approve the agreement. That is why compliance with s.180(2) is an element of the requirement for an enterprise agreement to have been “genuinely agreed” by the employees who voted upon it. A failure to provide any such external documents is not answered or addressed by providing employees with the documents after they have voted and after the agreement has already taken effect.” 46

Applicant’s submissions on s.180(2)

[81] The Applicant submitted that, in general, the extent of an obligation to take “all reasonable steps” was an objective test, namely, what a reasonable person would regard as being all reasonable steps in the particular circumstances existing at the time the obligation arose. Further, the Applicant submitted that the obligation does not extend to all steps that are reasonably open in some narrow or theoretical sense, such as matters not directly within the particular knowledge or experience of a relevant party 47.

Clause 6.1

[82] The Applicant submitted that the material referred to at clause 6.1 of the Agreement, the State and Commonwealth Occupational Health and Safety Laws and “any relevant industry codes of practice” were available in the public domain on the internet and were freely available.

[83] The Applicant submitted that the evidence of Mr Jansen and Mr Algie demonstrated that internet access was available to workers for work related purposes at the relevant mine sites; the relevant employees had internet access through laptops owned by Spartan Mining Group Pty Ltd while they were on site at the Broadmeadow Mine; on a simple Google search using the phrase “coal mining health and safety act”, and by clicking on two links from the displayed web pages, access could be obtained to the relevant standards, guidelines and codes of practice applicable in Queensland and New South Wales. In this respect, the Applicant referred to previous case authorities.

[84] The Applicant referenced the Decision in McDonald’s Australia Pty Ltd v Shop, Distributive and Allied Employees Association 48(McDonald’s), in particular, the following extract:

“[43] We have reviewed the terms of the Agreement and agree with that submission. References in the Agreement to the NES do not incorporate the terms of the NES into the Agreement. The South Australian Long Service Leave Act 1987 is however incorporated because the terms of the agreement provide for its application in Broken Hill - which is beyond its legislative effect. The benefits are greater than those provided by New South Wales legislation. The laws of the land are available to Australian citizens in a variety of ways. We find that the employer was not required to take any further steps to ensure that the relevant employees had access to the South Australian legislation. Because the legislation is freely available in the public domain, no further steps were required.”

(underline added)

[85] The Applicant also made reference to the following extract from the Decision in National Tertiary Education Industry Union v University of New South Wales 49(NTEU):

“[20] The need for His Honour to consider this section arises by virtue of s.188(a)(i) which made compliance with s.180(2) a precondition for him to be satisfied that the Agreement was genuinely agreed to by employees. The clauses of the Agreement which are the subject of this challenge are clauses 38.3 and 38.4(a). They are in the following terms:

“38.3 Casual Employees

A casual employee will be eligible for long service leave in accordance with the New South Wales Long Service Leave Act 1955.

38.4 Recognition of Other Employment and Service

(a) For persons entering employment with the University on or after 1 January 1974, eligibility for long service leave will be determined taking into account prior continuous full-time and part-time paid service with the University and other Australian universities in accordance with the provisions in place the day before the commencement of this Agreement. A copy of these provisions will be in an easily accessible location on the University's web site.”

[21] The Appellant submits the Long Service Leave Act 1955 (LSL Act) and the material referred to in clause 38.4(a) is incorporated by reference into the Agreement by virtue of those provisions. As copies of the LSL Act and material in clause 38.4(a) were not provided to employees s.180(2)(a)(ii) was not complied with. Therefore, it submits His Honour should not have been satisfied the Agreement had been genuinely agreed.

[22] His Honour dealt with this challenge when made below in this way:

“[41] Clause 9(c) provides:

“(c) Nothing in this Agreement will be taken as incorporating as a term of this Agreement any University policy, procedure or guideline referred to in it.”

[42] I agree with the submission of the NTEU that, generally speaking, if a particular provision explicitly incorporates another document by reference then the presence of a general provision such as clause 9(c) cannot take effect to prevent that incorporation by reference. However, clause 9(c) may be relevant in determining whether a particular provision, on its proper construction, has the effect of incorporating material by reference.

[43] In any event, to the extent that clause 38.3 incorporates the LSL Act into the Agreement by reference, I consider myself bound by the decision of the Full Bench in Re McDonald’s Australia Enterprise Agreement 2009 which made it clear that there is no need to take further steps to provide access to materials, like legislation, that is freely available in the public domain.

[44] However, I disagree with the NTEU that the material referred to in clause 38.4(a) is properly to be regarded as being incorporated into the Agreement. Rather, that paragraph does no more than identify that, in particular circumstances, an entitlement will be as it was immediately prior to the commencement of the Agreement, noting that the documents specifying that entitlement will be available on UNSW’s website. That is not incorporation by reference.”

[23] The decision in Re McDonald’s Australia Enterprise Agreement 2009 referred to by His Honour contains the following comments which we understand to be what His Honour is referring to above in paragraph 43 of his decision. This extract also happens to be paragraph 43 of the Full Bench decision:

…

[24] Although it is not entirely clear that the effect of clause 38.3 is to incorporate the LSL Act we proceed on the basis that it appears His Honour found it to be. We say “it appears” as we note His Honour’s comments in paragraph 43 of his decision that “....to the extent that clause 38.3 incorporates” the LSL Act. We assume that as the Agreement extends to employees in the ACT it is in that respect His Honour accepted the LSL Act was incorporated. His Honour was correct to find he was bound to follow the decision of the Full Bench in McDonalds and no sufficiently persuasive submission was put to establish a basis that may have allowed him not to do so. We are not persuaded a sufficient argument has been made out to revisit the approach taken in McDonalds. We do acknowledge however that there may be cases where the characteristics of the workplace and the composition of the workforce may require more than what that Full Bench indicated was adequate. This is not such a case.

[25] We accept the UNSW submission that there was sufficient evidence before His Honour to be satisfied the requirements of s.180(2) were met. In this respect we note the unchallenged evidence of Mr Ward that every employee has access to a computer and there was no evidence to suggest that any employee did not have access to their computer during the access period.

[26] We have not been persuaded that His Honour’s conclusion that the material referred to in clause 38.4(a) was not incorporated into the Agreement is erroneous. To adopt the NTEU submission is to place no weight on the express terms of clause 9(c) of the Agreement that provides as follows:

“Nothing in this Agreement will be taken as incorporating as a term of this Agreement any University policy, procedure or guidelines referred to in it.”

…

[28] Finally we should observe that had we found error in His Honour’s finding that the material in clause 38.4(a) was incorporated then we would have also found that requisite access as required by s.180(2)(a) had been given. As has earlier been noted all employees had electronic access to the material which was located on the UNSW website and all employees had a computer from which the website could be accessed.

(underline added)

[86] Therefore, the Applicant submitted there was compliance with section 180(2) of the Act in respect of clause 6.1 as the “relevant industry codes of practice” were freely available, to the relevant employees, in the public domain on the internet in the same way and with the same amount of effort as were the “laws of the land”.

[87] The Applicant submitted that a reasonable person would regard the Applicant to have taken all reasonable steps to give access to that material to the 3 employees during the access period.

Clauses 6.2 and 14.4.2

[88] The Applicant submitted that the site policies concerning occupational health and safety referred to at clauses 6.2 and 14.4.2 of the Agreement were available to the three employees when they visited the Broadmeadow Mine and Carborough Downs sites.

[89] The Applicant submitted that the three employees who voted on the Agreement worked at those two mine sites; and the relevant occupational health and safety policies that applied at those mine sites were available to the three employees at those mine sites.

[90] Therefore, the Applicant submitted that a reasonable person would regard the Applicant to have taken all reasonable steps to have provided access to those policies to the three employees during the access period.

[91] Mr Jansen’s Affidavit dated 1 November 2016 set out the following in relation to mine site policies:

“4. I have visited Broadmeadow Mine on a few occasions, but I do not recall what dates I visited it on.

5. I have never visited Carborough Downs Mine, but I understand that each mine has a similar set up.

6. These mine sites have various policies, including health and safety policies and a site fitness and fatigue policy.

7. These policies are accessible by intranet access on public use computer(s) available on site.”

[92] Mr Jansen further stated, in relation to the industry codes of practice, as follows:

“8. On or about 26 October, 2016 I performed a google search for “coal mining health and safety act”.

9. The first result on the google search was a link to the Coal Mining Safety and Health Act 1999 (Qld).

10. The second result was a link to the Coal Mining Safety and Health Regulation 2001 (Qld).

11. The third result was a link to a web page on the Queensland Government Portal within the Mining and Resources section titled “Legislation, standards and guidelines”.

12. I clicked through to the second page of the guide. This page provided links for the various recognised standards, guidelines and guidance notes. Exhibited hereto and marked “LJ10” is a print out of that page.

13. The fourth link was a link to a page on the NSW Resources and Energy web site titled “NSW mine safety legislation”, which provides further links to legislation, codes of practice, guidance notes, mining design guidelines, fact sheets and other information for the black coal mining industry in NSW. Exhibited hereto and marked “LJ11” is a print out of that page.”

[93] Mr Jansen’s Affidavit provided as annexures extracts of screen shots of the computer search for the documents.

[94] In cross examination, Mr Walkaden requested that Mr Jansen repeat the Google search live before the Commission.

[95] In relation to the “industry codes of practice” for Queensland incorporated by the Agreement, Mr Walkaden asked Mr Jansen to click on the third result from a search of the words “coal mining health and safety act” and Mr Jansen confirmed that the first page that opened (from the third result), did not include the words “code of practice”. Mr Jansen was asked to follow a link on this page, which led to the webpage annexured at LJ10 to Mr Jansen’s Affidavit. Mr Jansen confirmed that this webpage did not contain the words “code of practice”.

[96] Performing this search in relation to New South Wales “industry codes of practice”, Mr Jansen confirmed that the codes of practice referred to at clause 6.1 of the Agreement were those listed on the New South Wales website.

[97] Mr Walkaden requested Mr Jansen to search “industry codes of practice”. Mr Jansen confirmed that Queensland has its own separate legislation relating to health and safety with respect to the coal industry.

[98] Mr Keenan Algie gave the following evidence in his Affidavit dated 1 November 2016 in relation to the provision of policies and procedures:

“15. I have visited the Broadmeadows Mine on numerous occasions over the years.

16. I visited Broadmeadow Mine in or about February and March 2016 in order to attend various meetings as part of a tender process. However, I do not recall the number of occasions or the precise dates on which I did so.

17. Further, I visited the Broadmeadow Mine prior to 2016 on a number of times, but I am unable to recall or estimate how many times I did so.

18. I visited the Carborough Downs Mine a few times over the last decade. I am unable to recall how many times I did so or when.

19. There are public use computers that are freely available at the Broadmeadows mine site which have intranet access. I have used these computers myself when visiting the site. These computers do not require any permission or access code/password to use. The Broadmeadows Mine policies and procedures are available on these computers.

20. Additionally, a worker at the Broadmeadows Mine can access the site policies and procedures by:

20.1. attending the Safety and Training Department and requesting a printed version of the policy; or

20.2. attending the control room and requesting a printed version of the policy.

21. In addition to those computers mentioned at paragraph 19 above, there are public access computers at Broadmeadow Mine that had internet access. I have also used these computers myself. These computers require permission to access. Access is only granted for work related purposes.

22. Further, employees of the Applicant had access to laptops owned by Spartan Mining Group Pty Ltd while on site at the Broadmeadows Mine. These laptops required an access code to open. The access code was freely provided when use was requested for a work related purpose.

23. Based on my visits to the these two Mine Sites, my visits to other mine sites and my experience in the mining industry, other mine sites adopt similar policies and procedures and allow access to these policies and procedures in a similar way.

24. On the basis of the above, I verily believe that the site policies and procedures are and were also available at the Carborough Downs Mine by similar means.”

CFMEU’s submissions on s.180(2)

[99] The CFMEU disagreed with the Applicant’s submissions that because the policies incorporated by clause 6.1 of the Agreement (namely, State and Commonwealth Occupational Health and Safety Laws and industry codes of practice) were available in the public domain and were freely available, meant that s.180(2) was complied with. The CFMEU submitted that the Applicant took no steps to give a copy or provide access to that material, and the CFMEU, referring to the demonstration of the virtual Google search, argued they were not freely available.

[100] The CFMEU submitted that the Full Bench Decision in McDonald's 50 (relied on by the Applicant) did not establish a binding principle of general application that is to be automatically or rigidly applied. For ease of reference, the relevant paragraph of McDonald’s is extracted as follows:

“…The laws of the land are available to Australian citizens in a variety of ways. We find that the employer was not required to take any further steps to ensure that the relevant employees had access to the South Australian legislation. Because the legislation is freely available in the public domain, no further steps were required.”

[101] The CFMEU also relied on the Decision of the Full Bench in National Tertiary Education Industry Union v University of New South Wales 51 (NTEU). The CFMEU submitted that in the NTEU case, the Full Bench acknowledged that the “characteristics of the workplace and the composition of the workforce may require more” than what the Full Bench in McDonald’s indicated was adequate. The CFMEU also noted that, in the NTEU case, the Full Bench noted that every employee in that matter had access to a computer and there was no evidence to suggest that any employee did not have access to their computer during the access period.

[102] The CFMEU distinguished the circumstances in the NTEU Decision, from the current matter, as it dealt with academics and general staff with open access to computers, and referred to the evidence of Mr Aaron Smith in comparison, in relation to the availability of computers at the mine site. The CFMEU submitted that this fell below the standard in the NTEU case, where there was unchallenged evidence that every employee had access to a computer. The CFMEU submitted it was not the case that the Commission should rigidly apply McDonald’s and find that just because one can find legislation or codes of practice by a Google search, that s.180(2) is met. Applying NTEU, the CFMEU submitted there was a need to consider the composition and characteristic of the workforce and in the current matter, this is not a workforce where every employee had computer access and the path to the relevant documents on a search was not direct.

[103] The CFMEU relied on the Full Bench in the Appeal Decision 52 in the current matter, and the following passage where the Full Bench discussed the McDonald’s Decision:

“[22] We consider the above passage is to be read on the basis that the Full Bench took judicial notice of the fact that legislation, including South Australian legislation, is readily available to citizens in a number of ways (most notably on the internet), and therefore presumed for the purpose of s.180(2)(b) that it was accessible to employees during the access period. However it must be noted that the subsequent Full Bench decision in National Tertiary Education Industry Union v University of New South Wales left open the possibility that paragraph [43] of McDonalds above may not be universally applicable, but rather that “that there may be cases where the characteristics of the workplace and the composition of the workforce may require more than what that Full Bench indicated was adequate”. We further note that McDonalds did not explain how the mere availability of material in the public domain meant that there was no reasonable step at all which the employer could have taken to ensure access to a copy of the material.

[23] In any event, we do not consider the conclusion in McDonalds is automatically applicable to the industry codes of practice referred to in cl.6.1…”

[104] The CFMEU submitted that simply the ability to conduct a Google search of occupational health and safety laws or industry codes of practice does not satisfy the requirement in s.180(2), given the characteristics and composition of workforce in this matter. The CFMEU also relied on the Full Bench discussion of the McDonald’s and NTEU in the Appeal Decision at paragraph [22] and their observation that the mere availability of material in public domain meant that the employer could not or did not have to take reasonable steps to ensure access to the material.

[105] The CFMEU contended that s.180(2) should be applied consistent with the approach taken by another Full Bench (albeit in a different context) in Maritime Union of Australia, The v Northern Stevedoring Services 53 (Northern Stevedoring). The CFMEU relied on the following paragraphs from that Decision as follows:

“Did NSS fail to take all reasonable steps?

[32] The MUA approached the second question on the basis that any failure by NSS to comply with clause 4.2.23 in the relevant year which caused a supplementary employee to be allocated work ahead of an available permanent employee who subsequently had hours carried forward was a failure to take a reasonable step to exhaust the permanent employee’s annual hours and that such a failure automatically results in circumstances where NSS has not taken all reasonable steps to exhaust annual hours. We disagree.

[33] The expression “all reasonable steps”, and the case authorities concerning that and similar expressions were discussed at length in the decision of the Industrial Relations Commission of NSW in Court Session Bluescope Steel Ltd v The Australian Workers' Union, New South Wales 5. The following propositions may be derived from the Court’s analysis:

reasonable steps are what a reasonable man or woman would regard as being reasonable steps in the circumstances which apply;

the obligation to take “reasonable steps” depends on the particular circumstances existing at the time the obligation arises; and

a requirement to take all reasonable steps does not extend to all steps that are reasonably open in some narrow or theoretical sense (such as, for example, matters not directly within the particular knowledge or experience of a relevant party).

[34] Additionally in Parland Pty Ltd & Ors v Mariposa Pty Ltd 6 the Tasmanian Supreme Court said, in relation to a requirement for a party to use its best endeavours to achieve a particular object, that a failure to take a particular step had to be assessed by reference to its materiality to the failure to achieve the relevant object. The Court said:

“In any event quite apart from authority it would seem to me to be an untenable proposition that a party could be held to have failed to satisfy a condition requiring it to use its best endeavours in relation to an application because it failed to take some particular step if in fact the application would have been unsuccessful even had that step been taken.”

[35] That proposition appears to us to be equally applicable to consideration of whether an obligation to take all reasonable steps has been complied with.”

[106] The CFMEU stated that it was common ground that there are State and Commonwealth Occupational Health and Safety Laws and industry codes of practice and that the Applicant took no steps at all to give a copy or ensure that the relevant employees had access to that material.

[107] The CFMEU further relied on the following passage from the Full Bench Appeal Decision in this matter 54:

“…Although we understand these industry codes of practice to be instruments made pursuant to workplace health and safety legislation, we have no particular knowledge as to how readily accessible they are, nor did the evidence in the matter deal with this. We suppose they are available somewhere on the internet for someone who knows where to look, but it does not necessarily follow from that conjectural proposition that it was not reasonable for Sparta to take any steps at all to give employees copies of them or otherwise provide access to them in order to comply with s.180(2). Sparta’s submission concerning cl.6.1 therefore does not answer the failure to deal with that provision in the context of s.180(2) in the First Decision.”

[108] The CFMEU submitted that the evidence relied upon by the Applicant in relation to clause 6.1 did not establish that s.180(2) had been satisfied.

[109] With respect to the mine owner/operator's policies incorporated by clauses 6.2 and 14.4.2 of the Agreement, the evidence was that the 3 employees with whom the Agreement was made were working at the Broadmeadow Mine or the Carborough Downs Mine. The CFMEU submitted that the owner/operators of these mines had in place policies incorporated by clauses 6.2 and 14.4.2 of the Agreement and that the Applicant took no steps at all to give a copy or ensure that the relevant employees had access to such policies. The CFMEU submitted that this was confirmed by Mr Jansen during the cross-examination in the hearing on 16 May 2016 55.

[110] Applying the principles set out in Northern Stevedoring, the CFMEU contended that the taking of no steps by the Applicant to give or provide access to the policies incorporated by clauses 6.2 and 14.4.2, especially where, on Mr Jansen's evidence it would have been 'easy' to have done so, meant that the Applicant did not comply with s.180(2) of the Act.

[111] The CFMEU noted that s.180(2) expressly places the obligation on 'the employer' and submitted the Applicant could not point to any action taken by the employer, rather, the Applicant could only point to how such material may have been accessed by the relevant employees from a third party. The CFMEU submitted that this reinforced that the Applicant had not complied with s.180(2) of the Act.

[112] The CFMEU, in support of their argument with respect to s.180(2) provided an Affidavit of Mr Aaron Smith, a Diesel Fitter employed by Broadmeadow Mine Services Pty Ltd at the Broadmeadow Mine, who stated as follows with respect to computer access at the Broadmeadow Mine:

“11 . In general terms, the trades based workers -fitters, electricians etc work from a workshop on the surface (hereafter the Workshop). There is only 1 workshop on the surface. The Workshop houses both the permanent employees (including me) and the contractors/labour hire workers.

12. There is 1 computer in the Workshop (hereafter the Workshop Computer). The Workshop Computer has internet and intranet access.

13. Access to the Workshop Computer requires a BMA log in. I understand that a minority of the permanent employees of the Company have a BMA log in. I have a BMA log in. It is primarily the trades based employees that have a BMA log in and are able to access the Workshop Computer. As a general rule, contractors/labour hire workers are not provided with a BMA log in and are unable to access the Workshop Computer. The exception to this general rule is that about 5 or 6 contractors/labour hire workers have been provided with a BMA log in and have been able to access the Workshop Computer. Access was granted to these small number of contractors/labour hire workers because they were deemed to be filling a position that was usually occupied by a permanent employee. I am unsure of the identity or the actual employer of these 5 or 6 contractors/labour hire workers.

14. The Workshop Computer is only used for work purposes. The typical tasks that are completed on the Workshop Computer include raising and closing of work orders, ordering parts and tools, and raising notifications. The Workshop Computer is not used to simply 'surf the net or to undertake general Google searches.

15. The trades based workers (who have a BMA log in) are main users of the Workshop Computer.

16. The matters set out above are based upon my own use of the Workshop Computer and my observations of other workers using the Workshop Computer.

17. Other than the trades based workers described above, the rest of the production and engineering workforce work underground. There are no computers underground. The overwhelming majority of these employees are not required to use a computer at all in performing their work. It is only when a small number of these workers (say 3 or 4) are working on the surface for a period of time that they may be required to use the Workshop Computer.”

[113] Mr Smith stated as follows in relation to non-workshop computers:

“18. Staff employees are required to use a computer in performing their work. I understand that staff employees are provided with a computer for their exclusive use (hereafter the Staff Computers).

19. There is 1 computer in the Muster Room just outside the Site Senior Underground Manager's Office (hereafter the Muster Room Computer). I understand that the Muster Room Computer was installed because the 'I Pick machine (hereafter the I Pick) was regularly out of service or not working properly. The I Pick is a touch screen kiosk that is also located in the Muster Room.

20. At the date of making this witness statement, both the I Pick and the Muster Room Computer remain in the Muster Room.

21. Both the I Pick and the Muster Room Computer have intranet access. The I Pick and the Muster Room Computer don't have internet access.

22. At start of each shift, I attend a pre-start meeting in the Muster Room.

23. My own direct observation is that workers (including both permanent employees and contractor/labour hire) don't use either the I Pick or the Muster Room Computer. During my period of employment at the Mine, I have almost never seen a worker use either the I Pick or the Muster Room Computer.”

[114] Mr Smith stated, in response to Mr Algie’s Affidavit, that he was unclear as to the computers that Mr Algie referred to and that his understanding was that the only computers at the Mine are the Workshop Computer, the Muster Room Computer, the I Pick and the Staff Computers.

[115] In response to Mr Jansen’s Affidavit, Mr Smith stated that his understanding was that

the Workshop Computer, the Muster Room Computer and the I Pick are the only computers at the Mine that would enable a person to access Company policies and procedures.

Applicant’s material in reply – s.180(2)

[116] The Applicant in reply provided a further Affidavit of Mr Keenan Algie, Managing Director of the Applicant, who stated as follows in response to the Affidavit of Mr Aaron Smith filed by the CFMEU:

“4. In relation to paragraph 18 of Mr Smith’s statement, I agree that staff employees are provided with computers for their exclusive use and reiterate paragraph 20 of my affidavit sworn 1 November, 2016 (my first affidavit) wherein I noted that a worker may request a staff employee to print out a copy of a policy.

5. In relation to paragraphs 19 to 23 of Mr Smith’s statement:

5.1. I say that the Muster Room Computer and the I Pick are one and the same as the public use computers I referred to at paragraph 19 of my first affidavit; and

5.2. I cannot speak to whether or not workers choose to use the Muster Room Computer or the I Pick, however, workers, including contractors, are permitted to use these computers; and

5.3. I have used the I Pick computer myself to look up site procedures.

6. In relation to paragraph 25 of Mr Smith’s statement, I refer to paragraph 5.1 of this affidavit.

7. In relation to paragraph 26 of Mr Smith’s statement I say:

7.1. the computers I referred to in paragraph 21 of my first affidavit were located in the training room and I believe that these computers were for use by training staff. However, workers and contractors could request to use these computers for a work related purpose. I myself have used these computers in this way. Alternatively, a worker could ask training staff to print off a document for them, as outlined at paragraph 20.1 of my first affidavit; and

7.2. the laptop computers referred to in paragraph 22 of my first affidavit had internet access. In addition, BMA had issued to Spartan a computer with intranet access. This computer was a desktop computer that any Sparta Mining Services employee could use. It was situated in the Spartan Mining Services Office, which was located above ground.” 56

Consideration – s.180(2)

[117] In terms of the material relevant to clause 6.1, the State and Commonwealth Occupational Health & Safety (OHS) laws, are in the public domain, as per the McDonald’s and the NTEU Decisions. However, there is a distinction between the Queensland and New South Wales legislation in respect of OHS legislation. The CFMEU’s submission was that in Queensland, a Google search would readily pull up the State OHS legislation, but for New South Wales, primarily, the coal mining health and safety regime has been incorporated into industry wide legislation.

[118] Further, the evidence in this hearing demonstrated that the 3 employees did not have ready computer access or immediate access to their own computer, and did not work at computers, unlike those employees in the NTEU Decision. There was evidence that computers were present on the Mine Sites, but it also accepted that it was not usual for employees to use some of these computers (the “I Pick” and the “Muster Room” computers). Further, there was no evidence that the employees were directed exactly where to find the relevant material. These considerations are also relevant with respect to the industry codes of practice incorporated by clause 6.1. Further, as demonstrated in cross-examination, Mr Jansen’s evidence was that the industry codes of practice incorporated by the Agreement were not directly apparent from a Google Search.

[119] With respect to clause 6.2, whilst it is accepted that Sparta had no instructions, policies or decisions that could have been provided to employees prior to the vote, the Full Bench held (in respect of both clauses 6.2 and 14.2.2) that “the policies of relevance to the obligations under these provisions were primarily those of the operators of coal mines to which Sparta provided labour, as Mr Jansen accepted in his evidence.” Therefore, it must be considered whether the Applicant took reasonable steps to ensure that during the access period employees were given a copy of, or had access, throughout the access period, to the relevant policies of the coal mine operators. With respect to clause 14.4.2, as with clause 6.2, the Full Bench held that the policies of relevance were primarily those of the coal mine operators; the sites’ 'Fitness for Work' and 'Fatigue Management’ policies.

[120] Mr Jansen gave evidence that it would have been easy to provide the employees with copies of such policies. For the same reasons as stated above with respect to those documents incorporated by clause 6.1, the Applicant had not taken reasonable steps to ensure access to documents incorporated by clauses 6.2 and 14.4.2. Whilst the practical implications of this are that every labour hire company has to provide or ensure access to all operators policies (if incorporated into an Agreement), which may be numerous, if the labour hire company is supplying labour to multiple sites, this is the implication of including such against the requirements under the Act.

[121] Taking into account the further evidence, against the composition and characteristics of the workforce in these circumstances, the evidence before the Commission is that the Applicant did not take reasonable steps to ensure access to the documents incorporated by clauses 6.1, 6.2 and 14.4.2.

Conclusion

[122] The matter was referred by the Full Bench for the purpose of re-determining whether the approval requirement in s.186(2)(a) was satisfied having regard to the requirement in s.188(a)(i) for compliance with s.180(2) and the requirement in s.188(c) for the Commission to be satisfied that there are no reasonable grounds for believing that the Agreement has not been genuinely agreed to by the employees.

[123] As Ordered by the Full Bench, the Applicant and the CFMEU were permitted to file further evidence in respect of the issues for re-determination, and a hearing was held on 12 December 2016.

[124] With respect to s.188(c) (the further objection), as to whether there were reasonable grounds for believing the Agreement was not genuinely agreed, the initial decision did not consider the Full Bench Decision of KCL. This Decision had not been released at the time of hearing. Of relevance, the ALDI Full Bench Decision has been released since the Full Bench consideration of this first instance matter. Both parties were given the opportunity to provide a submission in relation to this Decision but neither did, or required the opportunity to do so. Similar to the circumstances in KCL, the employees who voted on the Agreement were paid at a rate and had terms and conditions above those actually contained in the Agreement, which would not apply to new starters, and further, the 3 employees who voted on the Agreement only filled 2 of the 5 classifications under the Agreement. In the circumstances of this matter, it is not considered that the employees had a genuine stake in the Agreement. The comments in the ALDI Decision regarding agreements made in relation to existing enterprises and with existing employees working in them, coupled with Mr Jansen’s evidence that the employees were selected from Spartan for the purpose of making an enterprise agreement, also go to the genuineness of the agreement by the employees.

[125] For the reasons as stated above it is determined that the Commission cannot be satisfied that the Agreement has been genuinely agreed to by the employees, and therefore the requirement under s.188(c) is not met.

[126] Given the finding on s.188(c), a mandatory requirement for the approval of the Agreement has not been met; the Agreement was incapable of approval and therefore, given this, it is proposed that an Order for the revocation of the approval Decision should issue (to be affirmed by the Full Bench). The findings on s.180(2) are simply provided to discharge all matters. Given the evidence that is now currently before the Commission, it is determined that the Applicant has not taken reasonable steps to give a copy of, or ensure access to the documents incorporated by clauses 6.1, 6.2 or 14.4.2, and therefore the requirement in s.188(a)(i) for compliance with s.180(2) has not been met. The approval requirement in s.186(2)(a) of the Act has not been satisfied.

[127] The matter is referred to the Full Bench.

COMMISSIONER

Appearances:

A. Walkaden for the Construction, Forestry, Mining and Energy Union.

J.W. Merrell of counsel with S. McSwan solicitor for Sparta Mining Services Pty Ltd.

Hearing details:

2016.

Brisbane:

12 December.

1 Sparta Mining Services Pty Ltd [2015] FWC 3100.

2 Sparta Mining Services Pty Ltd [2016] FWCA 4528.

3 Transcript 21 September 2016 at PN190 - PN191.

4 [2016] FWCFB 3048 at [24]-[42].

5 Construction, Forestry, Mining and Energy Union v Sparta Mining Services Pty Ltd[2016] FWCFB 7057.

6 [2016] FWCFB 7057 at [25].

7 See the analysis in KCL Industries Pty Ltd [2016] FWCFB 3048 at [24]-[42].

8 [2016] FWCFB 7057.

9 Transcript 21 September 2016 at PN480, PN503-PN504.

10 Transcript 21 September 2016 at PN483-PN484.

11 First Decision at [4]; Transcript 16 May 2016 PNs 98-99.

12 Transcript 16 May 2016 PN 319.

13 Transcript 16 May 2016 PN 299.

14 Transcript 16 May 2016 PNs 324-325; Affidavit of Lee Jansen sworn 4 May 2016, paragraph 46.

15 Transcript 16 May 2016 PNs 322-323.

16 Transcript 16 May 2016 PN 370.

17 Transcript 16 May 2016 PNs 374-378, 389-416.

18 Transcript 16 May 2016 PN 421-429.

19 [2016] FWCFB 7057.

20 [2016] FWCFB 3048 at [24]-[42].

21 [2016] FWCFB 3048 at [30].

22 [2012] FWAFB 9512.

23 [2015] FWC 1554.

24 Paragraphs 4 to 32 of Exhibit 3 of first instance Hearing.

25 Paragraphs 33 to 36 of Exhibit 3 of first instance Hearing.

26 KCL Industries Pty Ltd (2016) 257 IR 266; [2016] FWCFB 3048 at [36] per Hatcher VP, Gostencnik DP and Simpson C.

27 Clause 1 of the Agreement, clause 20 of the Agreement and paragraph 46 of Exhibit 3.

28 Transcript 16 May 2016, PN357.

29 Transcript 16 May 2016, PN396.

30 Transcript 16 May 2016, PN407.

31 Transcript 21 September 2016 at PN480, PN503-PN504.

32 Affidavit of Mr Keenan Algie dated 1 November 2016 at paragraphs 9 to 12.

33 Affidavit of Mr Keenan Algie dated 1 November 2016.

34 Transcript 16 May 2016 PN371 - PN378.

35 Transcript 16 May 2016 PN379- PN400.

36 Transcript 16 May 2016 PN401 - PN407.

37 Construction, Forestry, Mining and Energy Union v Sparta Mining Services Pty Ltd[2016] FWCFB 7057.

38 CFMEU’s submissions dated 19 April 2016 (erroneously dated 19 April 2015).

39 [1999] FCA 847.

40 Transcript 16 May 2016 PN322 - PN323.

41 [2016] FCAFC 161.

42 Transcript 16 May 2016 PN319.

43 Transcript 16 May 2016 PN319.

44 Including those summarised by the Full Bench at [28] of the Appeal Decision in Construction, Forestry, Mining and Energy Union v Sparta Mining Services Pty Ltd[2016] FWCFB 7057.

45 Construction, Forestry, Mining and Energy Union v Sparta Mining Services Pty Ltd[2016] FWCFB 7057 at [15].

46 Ibid.

47 Bluescope Steel Ltd v The Australian Workers’ Union, New South Wales [2004] NSWIRComm 22: (2004) 137 IR 176 at [70] to [71] per Wright J, President, Walton J, Vice President and Marks J.

48 [2010] FWAFB 4602 at [43] per Watson VP, Kaufman SDP and Raffaelli C.

49 [2011] FWAFB 5163; (2011) 210 IR 244 at [19] to [28] per Harrison SDP, Sams DP and Deegan C.

50 [2010] FWAFB 4602 at [43].

51 [2011] FWAFB 5163 at [19]- [25].

52 Construction, Forestry, Mining and Energy Union v Sparta Mining Services Pty Ltd[2016] FWCFB 7057.

53 [2016] FWCFB 1926 at [32]- [35].

54 Construction, Forestry, Mining and Energy Union v Sparta Mining Services Pty Ltd[2016] FWCFB 7057 at [23].

55 Transcript 16 May 2016 PN472, PN475.

56 Affidavit of Mr Keenan Algie dated 29 November 2016.

Printed by authority of the Commonwealth Government Printer

Sparta Mining Services Pty Ltd

[2016] FWC 8520

15 DECEMBER 2016

DECISION

Introduction

Appeal Decision

Re-determination – further facts and further case law

The relevant Agreement provisions under consideration

Relevant Legislation

s.188(c) - no reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

Applicant’s submissions on s.188(c)

CFMEU’s submissions on s.188(c)

Consideration – s.188(c)

s.188(a)(i) - compliance with s.180(2)

Applicant’s submissions on s.180(2)

CFMEU’s submissions on s.180(2)

Applicant’s material in reply – s.180(2)

Consideration – s.180(2)

Conclusion