The GO2 People Australia Pty Ltd

[2019] FWC 8505

[2019] FWC 8505

FAIR WORK COMMISSION

DECISION

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

The GO2 People Australia Pty Ltd
(AG2019/2930)

DEPUTY PRESIDENT ASBURY BRISBANE, 17 DECEMBER 2019

Application for approval of the GO2 People Australia Pty Ltd Black Coal Mining Industry Enterprise Agreement 2019.

1. BACKGROUND

[1] The GO2 People Australia Pty Ltd (GO2 People/the Applicant) applies for approval of the GO2 People Pty Ltd Black Coal Mining Industry Agreement 2019 (the Agreement) pursuant to s.185 of the Fair Work Act 2009 (the Act). An analysis of the Agreement and supporting material conducted by staff of the Commission identified a number of concerns in relation to pre-approval steps and whether the Agreement passes the better off overall test (BOOT) when compared to the Black Coal Mining Industry Award 2010 (the Black Coal Award). The application was allocated to me and I corresponded with the Company setting out concerns in relation to these matters.

[2] The Construction, Forestry, Maritime, Mining and Energy Union, Mining and Energy Division (CFMMEU) corresponded with the Commission in relation to the application seeking that the Commission exercise its discretion under s. 590 of the Act to hear from the Union in relation to its opposition to the approval of the Agreement. The CFMMEU conceded that it has no members employed by GO2 People and was not a bargaining representative for the Agreement but maintained that its detailed knowledge of the Award and the industry generally, would be of assistance to the Commission in undertaking an analysis of the Agreement for the purposes of considering whether it should be approved.

[3] I decided to exercise the discretion in s. 590 of the Act to hear from the CFMMEU on the basis its participation as an industrial organisation with an interest in the black coal industry would assist me to inform myself in relation to whether the Agreement should be approved, and given the absence of a contradictor in the proceedings. It is also the case that there were no employee bargaining representatives for the Agreement as evidenced by the Form F16 Application for approval of an enterprise agreement. Further, as Masson DP observed in Ausdrill Limited, if the Union’s submissions are without merit then this will be established in the proceedings. I also note that the CFMMEU engaged with the Commission in a timely manner and responded to requests to provide details of the basis upon which it sought to be heard and its objections to the approval of the Agreement, in advance of the hearing.

[4] A hearing into the application for approval was held on 22 October 2019. Written submissions in advance of and subsequent to the hearing were made. Oral submissions were also made at the hearing by GO2 People and the CFMMEU. I have had regard to all submissions and material advanced by GO2 People and the CFMMEU.

2. ISSUES

[5] The issues raised by me in correspondence with GO2 People can be summarised as follows. In relation to the explanation of the terms of the Agreement, the Form F17 Employer’s statutory declaration in support of the approval states that employees were issued with an Explanatory Notes document comparing the Agreement to the Award and that telephone calls were made and SMS messages sent to employees during the access period. The Form F17 further states that employees were provided with a copy of the Agreement, the Award and the NES. The Form F17 contains some information about what steps the employer took to explain the terms of the Agreement and their effect. The Explanatory Notes are not exhaustive.

[6] In relation to the BOOT, my correspondence noted that the Agreement provides (subject to some exceptions) that the terms of the Award as varied from time to time are incorporated into the Agreement and that where there was inconsistency the Agreement prevails. In order to be satisfied that the Agreement passed the BOOT, the Company was requested to confirm each clause of the Award incorporated into the Agreement said to be inconsistent with the Agreement and the extent of such inconsistency – that is whether the Award provisions were partially or totally incorporated – so that the effect of any inconsistency could be considered.

[7] Concern was also expressed about a wages reconciliation clause included in the Agreement, and whether that clause was consistent with the requirements for such provisions explained by a Full Bench of the Commission in Shop Distributive and Allied Employees Association v Beechworth Bakery Employee Co Pty Ltd t/a Beechworth Bakery 1 on the basis that it did not specify the frequency at which reconciliations would occur.

[8] The issues raised by the CFMMEU in correspondence with the Commission can be summarised as follows:

•  The Commission cannot be satisfied on the basis of the material filed by the Respondent that all reasonable steps were taken to explain the terms of the Agreement and their effect;

•  In particular, the explanation with respect to casual employment and the effect of terms of the Agreement in this respect was deficient in the circumstances;

•  The Commission cannot be satisfied that the Agreement does not contravene s. 55 of the Act, and the Agreement is therefore incapable of approval; and

•  The Agreement does not pass the Better Off Overall Test (BOOT).

3. EVIDENCE AND SUBMISSIONS

3.1 The genuine agreement issue

[9] GO2 People relies on the following material to establish that the requirements with respect to genuine agreement have been met. Firstly, in the Form F17 Employer statutory declaration made on 9 August 2019, Mr Ross Lovell, the Executive General Manager – Recruitment of GO2 People, states at item 2.7 that the following steps were taken to explain the terms of the Agreement and their effect:

“Each relevant employee was sent by email to their nominated personal email address a copy of the proposed enterprise agreement, detailed explanatory notes for the enterprise agreement, a copy of the Black Coal Mining Industry Award and a copy of the NES (extracted from the Fair Work Act 2009. The covering email requested that employee questions or queries be referred to … (the employer’s State Manager – Queensland – Recruitment) or … (the employer’s bargaining representative) at the numbers provided in the email.”

[10] Mr Lovell declares that this step was undertaken on 20 July 2019. The Declaration goes on to state that:

“During the access period … (the employer’s State Manager – Queensland – Recruitment) made telephone calls and sent SMS messages to all relevant employees to check on the employees’ understanding of the explanatory notes provided and the effect of the enterprise agreement. Questions asked by the employees were answered by the Mr Dan Ford [State Manager – Queensland – Recruitment].”

[11] This process was said to have been undertaken from 23 to 26 July 2019. Appended to the Form F17 was a copy of the Explanatory Notes provided to employees and a statutory declaration made by Mr Daniel Ford, State Manager – Queensland – Recruitment, on 9 August 2019 attesting to his contacts with employees during the access period. The explanatory notes relevantly deal with the following matters.

[12] In relation to clause 4 which deals with the subject matter “Status of the Agreement” the notes state that the terms of the Award are incorporated into the Agreement and become terms of the Agreement. The notes further state that the clause provides that where there is any inconsistency between the Award and the Agreement the Agreement provisions will apply, and that this means if both the Award and the Agreement specify a particular entitlement, obligation or requirement about a matter, but the specifications are different, the Agreement provision will apply instead of the Award. It is then stated in relation to clause 10.1 of the Award that:

“The only Award provision not incorporated into the Agreement is Award clause 10.1 which does not include casual employment as an employment option for production and engineering employees (only for staff roles). The Agreement clause 6 specifically permits employment of production and engineering employees as casuals (an essential feature of the GO2 employment arrangements).”

[13] In relation to clause 6 Employment Arrangements the explanatory notes state:

“This clause describes the employment options under the Agreement. The Agreement clause allows for employment of production and engineering employees as casuals – that is not contemplated by the Award (which only provides for the employment of staff as casuals). The Agreement provides for payment of a casual loading of 25% in lieu of paid leave entitlements.

Employees should understand that if they are engaged on a casual basis, their employment might be considered to be less secure than if they were employed full time or part time. As well, as a casual the employee would not be entitled to paid leave – however, the employee will be paid a casual loading of 25% on the base wage rate for the hours worked.

The clause also permits full time and part time employment on a fixed term basis, meaning that at or before the expiry of the fixed term, the employment may come to an end. That arrangement might be considered as less secure than ongoing employment. It is an arrangement that is not specifically identified in the Award as an employment type, although the Award does mention “fixed term / specified task” employment in its redundancy term.”

[14] With respect to clause 7 – Wages Terms and Conditions of the Agreement, the Explanatory Notes emphasise that the Agreement rates are the minimum that can be provided to an employee and that the minimum is the rates established by the Award plus a “premium of 1%” to ensure that at all times an employee covered by the Agreement will be at least 1% higher than the Award. It is also stated that:

“GO2 may at its discretion pay an employee more than the Award base rate plus 1% and/or provide more favourable terms and conditions than those provided by the Award.”

[15] Mr Ford declares that on 20 July 2019 GO2 People issued to the 22 relevant employees copies of: the Agreement, the Explanatory Notes, the Award and the NES. The access period commenced on 20 July and ran to 26 July 2019. It is declared that all 22 employees were engaged to work 24/7 shift work on a FIFO basis and were assigned to work various shifts at six different mine operations sites across Central Queensland. During the access period, some employees were rostered to work while others were rostered off. Mr Ford states that it was not possible to meet with the 22 employees to be covered by the Agreement within the 7 day access period to explain the terms of the Agreement and their effect. For this reason, on 23 July 2019, Mr Ford sent a text message to the employees to be covered by the Agreement asking them to advise of a time to schedule in a phone call as he needed to speak to the employees regarding the proposed Agreement emailed to them the previous week. Mr Ford also declares that he followed this up with further text messages to the relevant employees asking them to ensure that they had read through the Agreement and explanatory notes and to jot down any questions for their discussions with him.

[16] It is further declared that 10 employees advised that they had read through the proposed Agreement and explanatory notes and had no questions; 2 employees had questions which the State Manager answered; and 10 employees did not respond to SMS messages, telephone calls and voicemail messages. These steps are said satisfy the requirement that GO2 People take all reasonable steps to explain the terms of the Agreement and their effect. In relation to what was done when the employer explained the terms of the Agreement and their effect to the relevant employees to take into account their particular circumstances and needs, GO2 People referred to the telephone calls and SMS messages sent to employees to check their understanding of the Explanatory Notes and the terms of the enterprise agreement.

[17] In response to the initial email from the Commission requesting further information about the explanation of the terms of the Agreement and their effect, GO2 People sent an email setting out further submissions and attaching a copy of Mr Forde’s notes recording his attempts to contact each employee. Those notes indicate attempts to contact all relevant employees and where contact was made, whether the employee had questions and if so, the questions and the response provided.

[18] In its submissions in support of the application for approval of the Agreement GO2 People states that the steps outlined in the Form F17 and the supporting documentation evidence all of the steps that the Company took to ensure that the terms of the Agreement and their effect were explained to employees.

[19] Issues raised by the CFMMEU in relation to whether the agreement was genuinely agreed are as follows. In relation to the explanation of the terms of the Agreement and the effect of those terms, the CFMMEU contends that where the Explanatory Notes document provided to employees refers to a term of the Black Coal Award it simply restates that term and does not explain the terms of the Agreement. Further the CFMMEU asserts that the explanation of the effect of the terms is deficient on the basis that the explanatory notes document is not exhaustive and does not deal with some clauses and that centring the explanation on the BOOT means that the central function of the explanation – that employees know what it is they are being asked to agree to and enable them to understand how wages and conditions might be affected – is not adequately dealt with. In particular, the CFMMEU points to the issue of casual employment and the explanation in relation to this matter provided to employees who voted to approve the Agreement.

[20] The CFMMEU submits that the Applicant failed to identify or explain the specific components of the casual employment clause within the Agreement including the manner in which it allows the applicant to designate employees as casuals, the inability of casual employees to access leave that would otherwise be available under the Black Coal Award and/or the National Employment Standards (NES), and that casual employees under the Agreement will be engaged for four hour periods and not continuously. The CFMMEU also submits that the Applicant has not addressed the specific context of casual employment within the Black Coal Award as it relates to the relevant employees. In relation to this point, the CFMMEU submits that the Black Coal Award makes no provision for the engagement of production and engineering employees as casual employees. Given the nature of the work that the Applicant performs in the black coal mining industry, the CFMMEU further submits that at least some of the employees who will be covered by the Agreement and who cast a vote in the ballot are currently engaged in production and engineering positions under the Black Coal Award. As the Applicant has declared in the Form F17 that each of the relevant employees are casual employees and it is understood that they are covered by the Black Coal Award, the only available conclusion is that the employees and/or the Applicant had a misconceived understanding of the correct characterisation of their employment.

[21] The CFMMEU asserts that for an explanation to be adequate for the purposes of s. 180(5), it must be capable of enabling employees to understand how their wages and conditions of employment may be affected by a decision to approve the Agreement. In order to properly understand the effect of an agreement employees must be properly informed of the terms and conditions of their current employment so that they are in a position to understand how that may change under the new agreement. This has not been the case with respect to the present application.

[22] Further, the CFMMEU asserts that the Commission is in a position where the material before it is not a sufficient basis upon which to reach a conclusion that a proper explanation of the terms of the Agreement and their effect was given to employees and that emailing documents to employees who are performing work in the black coal industry that is not computer based, was not the most effective way to provided such explanation. Other relevant contextual matters are that the employees may be working shift work and were asked to consider documents provided to them without the context of bargaining and without the assistance of bargaining representatives.

[23] In relation to the genuine agreement issue articulated by the CFMMEU, GO2 People submits that all reasonable steps were taken to provide an explanation of the terms of the Agreement and the effect of those terms to the relevant employees. The Company submits that its explanation of the terms of the Agreement in relation to casual employment and the effect of those terms was reasonable and met the requirements in s. 180(5). In relation to the method by which the explanation was given to employees, GO2 People submits that it was not reasonable for face to face meetings to be conducted with employees in the limited time that was available in the 7 day access period for the explanation to be provided. In this regard reference was made to the statutory declaration made by Mr Ford in relation to the hours and locations at which employees were working during the access period. GO2 People also submits that there is no requirement for meetings to be conducted to satisfy the requirements of s. 180(5). Further, there is no requirement for employees to understand every term of a proposed agreement or even to read a proposed agreement. What is required is that all reasonable steps are taken to explain the terms of the agreement and their effect and the Company has taken such steps.

3.2 The NES issue

[24] The NES issue raised by the CFMMEU also centres on the fact that the Agreement provides for the engagement of employees who are covered by the Black Coal Award and employed in production and engineering classifications, on a casual basis. In relation to paid leave entitlements in accordance with the NES, the CFMMEU submits that:

•  The characterisation of employees as casuals under the Agreement raises significant issues in relation to leave entitlements given that the Applicant has the capacity under the Agreement to designate casuals in a manner that is inconsistent with the way that such employees are defined for the purposes of the NES;

•  The interaction between clauses 6.5 (casual employment) and 10 (leave) of the Agreement is confusing and may exclude the NES so that the requirement in s. 186(2)(c) of the Act is not met; and

•  Alternatively the effect of the Agreement as it relates to the NES is ambiguous, ostensibly incapable of being understood and therefore impossible to explain or take reasonable steps to explain.

[25] In relation to public holidays, the CFMMEU submits that the Agreement provides that entitlements to public holidays will be in accordance with the Award and that clause 27.2 and 27. 3 of the Award are inconsistent with s. 114 of the Act. The effect of these inconsistencies is that the Commission cannot be satisfied that that the terms of the Agreement do not contravene s. 55 of the Act, and the Agreement is incapable of approval.

[26] GO2 People submits that the Agreement does not contravene s. 55 of the Act simply on the basis that it provides for casual employment and that it is consistent with the NES that some leave provisions do not apply to casual employees.

[27] The CFMMEU submits in relation to the BOOT, that although the Agreement provides that employees will receive the benefit of a 1% premium on the Black Coal Award rates, it has concerns as to whether this can offset the detriments that may be experienced by individual employees arising from matters including the relationship between the Award and the Agreement, the reconciliation with respect to loaded rates and the challenges of navigating terms and conditions of employment which are significantly obscured by the ambiguity in the drafting of the Agreement and reliant on undertakings to pass the BOOT.

[28] GO2 People maintains that the Agreement passes the BOOT and in this regard points to the fact that it provides for a premium of 1% above rates in the Black Coal Award and that the casual loading of 25% provided for in the Agreement compensates employees for leave entitlements. In support of the assertion that the Agreement passes the BOOT, GO2 People referred to a Decision of a Full Bench of the Commission in CFMMEU v SESLS Industrial Pty Ltd 2 (SESLS Industrial Pty Ltd) which considered inter alia how an assessment of whether an enterprise agreement passed the BOOT should be made in circumstances where the relevant award was the Black Coal Award and the agreement provided for casual employment for employees in classifications who could not be employed on a casual basis under the Black Coal Award.

[29] It is apparent that the agreement under consideration in SESLS Industrial Pty Ltd had similarities to the Agreement in the present case – it incorporated the majority of provisions of the Black Coal Award; applied all relevant penalties and loadings; guaranteed that employees would receive 1% more than the remuneration they would have received under the Black Coal Award; provided for the employment of casual employees; and provided for a loading of 25% for casual employees in lieu of leave entitlements.

[30] The Full Bench in SESLS Industrial Pty Ltd concluded that for the purposes of the BOOT, the presence in the Black Coal Award of a 25% loading for casual staff employees is a matter which can be taken into account in considering the adequacy of the 25% loading in the Agreement for BOOT purposes. The Full Bench went on to conclude that there was no error in the decision of the Member of the Commission at first instance in the application of the BOOT or the decision to approve the Agreement. In reaching this conclusion the Full Bench said:

“[51] … the Agreement incorporates the Award, and guarantees that employees will receive 1% more than the remuneration they would have received under the Award. The casual engagement of production and engineering employees is not permitted under the [Black Coal] Award; it is permitted under the Agreement, but affords a 25% loading. In our view, the Commissioner’s conclusion that the Agreement satisfied the BOOT was not affected by appealable error.” 3

4. CONSIDERATION

4.1 Was the Agreement genuinely agreed?

[31] Section 186 of the Act insofar as it relates to genuine agreement, provides as follows at subsection (2):

(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; and

(b)  if the agreement is a multi-enterprise agreement:

(i)  the agreement has been genuinely agreed to by each employer covered by the agreement; and

(ii)  no person coerced, or threatened to coerce, any of the employers to make the agreement; and

(c)  the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and

(d)  the agreement passes the better off overall test.

[32] Section 188 of the Act defines when an agreement is genuinely agreed to as follows:

188 When employees have genuinely agreed to an enterprise agreement

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

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre‑approval steps);

(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

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

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

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

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

[33] Relevantly in the present case, s. 180(5) provides:

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

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

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

[34] In One Key Resources v CFMEU 4 the Full Court of the Federal Court considered the legislative provisions relating to genuine agreement. The Court held that a bare statement by an employer that an explanation has been given is an inadequate foundation upon which to reach the required state of satisfaction. The Court said:

“… In order to reach the requisite state of satisfaction that s. 180(5) had been complied with, the Commission was required to consider the content of the explanation and the terms in which it was conveyed, having regard to all the circumstances and needs of the employees and the nature of the changes made by the Agreement.” 5

[35] The Court also said that:

“The Commission was required to be satisfied that OKW had taken “all reasonable steps to ensure” that both the terms and the effect of the terms had been explained to the relevant employees as an element in the inquiry as to whether “genuine” agreement had been obtained from them. The agreed purpose of the obligation imposed on employers by s 180(5) is to enable the relevant employees to cast an informed vote: to know what it is they are being asked to agree to and to enable them to understand how wages and working conditions might be affected by voting in favour of the agreement.

In order for the employer to comply with the obligation it must take into account the particular circumstances and needs of those employees, including their cultural and linguistic backgrounds, their youth, and the absence of a bargaining representative. That is made explicit in s 180(6). How could the Commission decide whether the steps the employer had taken were “all reasonable steps” unless it knew what the employees had been told before they cast their votes? Without knowing the terms in which the explanation had been conveyed how could the Commission form an opinion on the sufficiency of the explanation, particularly having regard to the considerations mentioned in s 180(6)? Ultimately, how could the Commission decide that a genuine agreement had been reached without having evidence upon which it could answer both these questions?” 6

[36] The relevant principles applicable to s 180(5) were summarised in paragraphs [35]-[36] of the Full Bench decision in AWU v Rigforce Pty Ltd where it was stated that:

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

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

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

•  the steps taken were reasonable in the circumstances; and

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

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

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

[36] Additionally, we also adopt the analysis of Gostencnik DP in BGC Contracting Pty Ltd 11 concerning the nature of a statutory obligation to take “all reasonable steps” as follows (footnote omitted):

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

[37] It is well established that s. 180(5) of the Act requires that more than an explanation of the terms of an agreement is provided to employees. The section also requires that employees are provided with an explanation of the effect of the terms of an agreement. The statutory requirements with respect to the explanation to employees are qualified by the fact that the Commission must be satisfied that reasonable steps are taken, but requirement to take “reasonable steps” is enhanced by the by the inclusion of the term “all”.

[38] In some circumstances the effect of a term of an agreement will be straightforward. For example:

•  The relevant award provides X and the agreement provides Y and the effect is you will be entitled to Y and not X; or

•  The existing agreement provides X and the replacement agreement provides Y and the effect is that you will now be entitled to Y instead of X.

[39] In such cases, it may be more readily established that the requirement to take all reasonable steps to explain the terms of a proposed agreement and the effects of those terms has been met. Whether all reasonable steps have been taken to provide an explanation about the terms of an agreement and the effect of those terms may also depend on context. In cases where employees have been actively engaged in bargaining either directly or through bargaining representatives and numerous drafts of an agreement have been circulated, discussed and amended it may also be more readily established that the requirements in s. 180(5) have been met than where a process of an NERR and preliminary information and a proposed agreement is provided to employees as a fait accompli within the precise timing required by the Act with no discussion or negotiation of the agreement terms.

[40] Similarly, where an agreement is the latest in a series of agreements in a workplace where there is a history of engagement in bargaining and the latest iteration of an agreement is substantially the same as the previous iteration it may also be more readily established that those requirements have been met. In such cases there will be little doubt that employees understand the basis upon which they are employed, their existing entitlements and the source of those entitlements. This understanding on the part of employees can be inferred where there is evidence of engagement in bargaining or of previous bargaining and such evidence can be placed before the Commission by bargaining representatives where there is any question as to whether the requirements in s. 180(5) have been met.

[41] In the present case I am unable to be satisfied that GO2 People took all reasonable steps to explain the terms of the Agreement and their effect to the relevant employees. I have reached this conclusion for the following reasons. The Black Coal Award covers employers of coal mining employees as defined in clause 4.1(b) of the Award. Clause 4.1(b) provides as follows:

“4.1 This award covers:

(a) employers of coal mining employees as defined in clause 4.1(b); and

(b) coal mining employees.

Coal mining employees are:

(i) employees who are employed in the black coal mining industry by an employer engaged in the black coal mining industry, whose duties are directly connected with the day to day operation of a black coal mine and who are employed in a classification or class of work in Schedule A—Production and Engineering Employees or Schedule B—Staff Employees of this award;

(ii) employees who are employed in the black coal mining industry, whose duties are carried out at or about a place where black coal is mined and are directly connected with the day to day operation of a black coal mine and who are employed in a classification or class of work in Schedule A—Production and Engineering Employees or Schedule B—Staff Employees of this award; and

(iii) employees employed by a mines rescue service.”

[42] The Black Coal Award permits the employment of casual employees only in classifications in Schedule B – Staff Employees. The Black Coal Award does not permit the employment of Production and Engineering Employees in classifications in Schedule A on a casual basis.

[43] The Form F17 Employer statutory declaration filed by GO2 People states that at the time of the vote, 22 employees were covered by the proposed Agreement and further indicates that there were 22 casual employees covered by the proposed Agreement at that time. The Statutory Declaration further indicates that the modern award that covers the employer and any of the employees covered by the Agreement is the Black Coal Award. The Form F16 Application also states the industry of the employer as being “recruitment and labour supply/black coal mining.” I therefore conclude that at least some of the employees proposed to be covered by the Agreement were, at the time the Agreement was approved, employed on work that is described in the production and engineering classifications under the Black Coal Award. I also conclude that GO2 People purports to employ those employees on a casual basis.

[44] In SESLS Industrial Pty Ltd as part of its consideration of whether the agreement in that case passed the BOOT, the Full Bench made a number of observations which are pertinent in the present case in relation to whether a prospective employee performing production and engineering work under the agreement on a casual basis would be covered by the Black Coal Award as follows:

“[33] If a prospective employee were to be employed as a production worker on a casual basis under the Agreement, would that person be ‘covered’ by the Award? Coverage is dealt with in s48 of the Act. An award covers an employee if the award ‘is expressed to cover’ the employee. Clause 4 of the Award states that it covers ‘coal mining employees’, who are defined as including employees employed in the black coal mining industry and whose duties are directly connected with the day to day operation of a black coal mine, and are employed in classifications covered by the award.

[34] If a prospective casual production or engineering employee were employed under the Award, such an employee would fall within the coverage provision in clause 4 of the Award. The employer would evidently be in breach of the limitation on casual employment in clause 10.1 – it is only ‘in the case of classifications in Schedule B – Staff Employees’ that casual employment can be used. However, this does not necessarily mean that the casual employee would not be covered by the award.

[35] Returning again to the wording of s193(1), the next question is whether this employee would be better off overall if the agreement applied to him or her than if the relevant modern award applied. Section 47 of the Act explains when an award applies to an employee, namely if the award covers the employee, is in operation, and no other provision of the Act has the effect that the award does not apply (for example, by virtue of an agreement applying to the person). It appears then that the Award could apply to a prospective casual production employee. The above suggests that, at least on one analysis, the BOOT could be conducted in relation to a prospective award covered casual employee.

[36] The BOOT, in relation to prospective employees, addresses a hypothetical scenario. It is established for the purposes of comparing the position of the notional employee under the agreement on the one hand and the award on the other. The hypothetical scenario is a construct. It does not require that one work backwards to construct a realistic narrative about the employer’s hypothetical decision to engage an employee either under the award or the agreement.

[37] Against this, it could be contended that, because of the limitation on the use of casual employment for production and engineering employees in the Award, the prospective casual employees is not covered by the Award. On this argument, the question of coverage is defined not simply by the ‘coverage clause’, but by the terms of the Award as a whole. The presence of a prohibition on the use of casual employment should inform the construction of award in relation to the question of whom it covers. However, if this argument is correct, the consequence is that the casual employee is not covered by the Award at all, and the BOOT test cannot be undertaken.

[38] The union’s position is that the BOOT test can be undertaken, and that the appropriate comparator is the position of a full time or part time employee under the Award. This may seem reasonable. But is it right? We have some difficulty in identifying how the analysis of s193 leads to this outcome. Perhaps the hypothetical scenario requires a reasonable accommodation to be made of the practical circumstances that might underpin the hypothesis, and that such an accommodation could go so far as to assume that the employee had been employed on some other lawful basis under the Award – that one compare casuals under the agreement with whatever is possible under the award.

[39] We were not addressed on these issues at hearing. Given the conclusions we have reached further below, it is not necessary for us to decide them. We proceed to consider the union’s contentions in relation to the BOOT assuming (but not necessarily accepting) that the BOOT test for prospective casual employees requires a comparison between casual employment under the Agreement and part-time or full-time employment under the Award.” 7

[45] The present case deals with actual as well as prospective employees and the BOOT must be applied both as a hypothetical and an actual construct. In this regard, it is clear from Mr Ford’s statutory declaration that there are currently employees engaged by GO2 People conducting work that is production and engineering work as defined in the Black Coal Award at various black coal mines in Queensland who have been designated by GO2 People as casual employees. Whether or not those employees are casual employees is debateable and is a matter for another day. As the Full Court of the Federal Court observed in Workpac Pty Ltd v Skene:

“It may be accepted that the term “casual employee” has no precise meaning and that whether any particular employee is a casual employee depends upon an objective characterisation of the nature of the particular employment as a matter of fact and law having regard to all of the circumstances. That the expression lacks precise definition and that the shade of its colour is dependent upon context does not deny that the term has acquired a legal meaning, especially where the general law has laid down indicia by which the factual circumstances are to be assessed in the process of characterisation.” 8

[46] In the present case either the relevant employees were not covered by the Black Coal Award when they voted to approve the Agreement or if they were covered by that Award they were employed by the employer in breach of the limitation in the Award. This is not a case where a group of casual employees employed on work covered by another modern award or an enterprise agreement that did provide for casual employment voted to approve an agreement which would have been utilised to deploy those employees (and future employees) to perform work covered by the Black Coal Award in production and engineering classifications on a casual basis. The relevant employees were already deployed and there is no relevant modern award or enterprise agreement that provides for casual employment which covers those employees.

[47] In my view an explanation of the terms of an enterprise agreement and the effect of those terms starts from the premise of existing terms and conditions of employment for those employees. As I have previously noted there will be cases where it is reasonable to infer that employees understand their existing terms and conditions of employment, or where the basis of those terms and conditions is so objectively obvious that it would not be reasonable to require a detailed explanation. In the present case, there is no basis upon which I could be satisfied that the relevant employees understood the effect of the terms of the Agreement on their existing terms and conditions of employment, given the lack of clarity about the basis of those terms and conditions.

[48] Absent evidence of an explanation in relation to this matter being provided to employees, I am unable to be satisfied that all reasonable steps were taken by GO2 People to explain the terms of the Agreement and the effect of those terms to the relevant employees.

[49] The explanatory material in relation to casual employment provided to the relevant employees, states no more than the fact that the employment of casuals is not contemplated by the Black Coal Award and that the Award does not include casual employment as an option. In my view the explanatory material explains the term of the Agreement dealing with casual employment but does not explain its effect, at least not to the extent that would be required for me to be satisfied that all reasonable steps were taken in this regard. It is true that there is a term of the Agreement that provides for casual employment and one effect is that it allows employment under the Agreement on a basis that it not permitted under the Award. That effect was explained to employees.

[50] However, there is no evidence that the explanation to the relevant employees covered the effect of approving the Agreement on their current employment status. Depending on what the employment status of the relevant employees was – full time or casual - the approval of the Agreement could materially change that status. The Explanatory Notes stated that the effect of the Agreement terms dealing with casual employment would be that the employment of production and engineering employees as casuals would be permitted and that this is an essential feature of the GO2 employment arrangements. This explanation says nothing about the basis upon which existing employees are employed and the effect on that status of the Agreement being approved and making provision for casual employment where no such provisions presently exists under the award which covers the employees.

[51] There is no evidence in the present case of engagement by employees or employee bargaining representatives in a bargaining process by which an understanding of the effect of the terms of the Agreement could be inferred. The Form F16 Application filed by GO2 People indicates that there were no employee bargaining representatives. The Form F17 Employer declaration states that the Notice of Employee Representational Rights was given to employees on 5 July 2019. The ballot for approval of the Agreement was conducted on 27 July 2019 which is effectively the earliest date upon which employees could have been asked to approve the Agreement. The employees were informed of the ballot and the manner in which it would be conducted on 19 July 2019. The Form F17 also indicates that employees were provided with the Agreement, the Award, the NES provisions and the Explanatory Notes on 20 July 2019. There is no evidence of any engagement in bargaining prior to the final version of the Agreement being sent to employees or before the ballot was conducted. There is no evidence that employees saw the Agreement or any version of it prior to being provided with a copy during the access period and asked to approve it. The Agreement is not replacing an earlier enterprise agreement and there is no evidence of engagement in bargaining at an earlier time.

[52] The circumstances of the present case can be contrasted with those in CoreStaff NSW Pty Ltd T/A CoreStaff NSW. 9 In that case, Deputy President Saunders was considering approval of an enterprise agreement to cover employees in the black coal industry which made provision for casual employment. The facts were that the employees were covered by an existing agreement which provided for casual employment as did the replacement agreement. Accordingly, the rights and obligations conferred and imposed on casual employees arose from the existing agreement rather than from the Award. In that case the Deputy President found that casual employees had not been misled about their status or entitlements and that there was no requirement for the employer to inform casual employees that they were entitled to the benefits that apply to full-time or part-time employees under the Black Coal Award. The Deputy President also concluded that this was not a basis for concluding that the agreement was not genuinely agreed to. The Decision of Deputy President Saunders was upheld on appeal.10

[53] In the present case there is no relevant contextual basis for concluding that the requirements of s. 180(5) were met. For example, this is not a case where the Agreement covers employees who would be covered by other modern awards in addition to the Black Coal Award and where some of those awards do permit casual employment and the relevant employees were covered by such an award. It is also not a case where there is an existing enterprise agreement providing for casual employment.

[54] Accordingly, I do not accept that the explanation of the terms of the Agreement and the effect of those terms was sufficient to ensure that employees cast an informed vote in the sense that they were told the effect of what they were agreeing to and its impact on their terms and conditions of employment.

[55] In reaching this conclusion, I do not accept that an employer should be required to explain on a hypothetical basis, the effect of every clause in an enterprise agreement in order to be found to have met the requirements in s. 180(5) of the Act. However, where it is probable that a term of an enterprise agreement will impact on employees in a real rather than a hypothetical sense, all reasonable steps to provide an explanation of the terms of an Agreement should encompass more than an explanation about the term and what it allows. Employees should be told the effect of the term on their wages and working conditions. It is axiomatic that to understand the effect of a term of an enterprise agreement which will have a real impact on them, employees be given information about the starting point – their current terms and conditions of employment and the basis for those terms and conditions.

[56] In my view, reasonable steps (much less all reasonable steps) to provide an explanation of the terms of the Agreement and their effect would have included – in the circumstances of the present case – information about these matters. The explanation did not include such information and accordingly all the reasonable steps that could have been taken were not taken. It follows that the requirements of s. 180(5) of the Act were not met.

4.2 Does the Agreement exclude the NES in contravention of s. 55 of the Act?

[57] I do not accept that the fact that the Agreement characterises employees who would otherwise be covered by the Black Coal Award as casuals, results in an inconsistency with the leave provisions of the NES such that the NES is excluded in contravention of s. 55 of the Act.

[58] Provided that the requirements of the Act with respect to approval are met, there is no rule preventing an enterprise agreement providing for casual employment which covers employees who would otherwise be covered by the Black Coal Award and who are employed in Production and Engineering classifications, from being approved. This is so notwithstanding that the Black Coal Award does not provide for casual employment.

[59] In the present case, the Agreement clearly states at clause 6.5(b) that casual employees are entitled to be paid 1/35th of the weekly rate applicable to a full time employee performing the same kind of work, plus a loading of 25% in instead of paid leave entitlements under the Award. There is nothing unclear about this provision.

[60] I do not accept the CFMMEU submission that the Agreement gives GO2 People the ability to designate employees as casuals in a manner that is inconsistent with the way that casual employees are defined for the purposes of the NES. In relation to this argument the CFMMEU refers to the decision of Workpac Pty Ltd v Skene. As I have previously noted the Full Court of the Federal Court in that case observed that the term casual employee has no precise meaning and whether an employee is a casual employee depends upon the objective characterisation of the nature of the particular employment as a matter of fact and law. The Court in Skene found that a particular employee was not as a matter of fact or law a casual employee as defined in the relevant enterprise agreement.

[61] I do not accept that the fact that an enterprise agreement contains provisions for casual employment in circumstances where a modern award that would otherwise cover the relevant employees does not, is of itself a basis to refuse to approve the agreement on the ground that it excludes the NES. If an employee under an enterprise agreement is misclassified as a casual employee the NES is not excluded. Similarly if an enterprise agreement is inconsistent with the NES the NES will prevail. If the Agreement in the present case is otherwise capable of approval I would not refuse approval on the ground that it excludes the NES simply on the basis that the agreement provides for casual employment.

4.3 Does the Agreement pass the BOOT?

[62] Other than the casual employment issue, GO2 People has addressed the BOOT issues that were identified in correspondence from me by providing undertakings. The first issue I identified is the operation of clause 4 of the Agreement insofar as it incorporates terms of the Black Coal Award. That clause provides as follows:

“4. AGREEMENT STATUS

4.1 Subject to clause 4.2 below,

(a) this Agreement stands alone, and all other agreements (including prior agreements

whether registered or unregistered), awards, and workplace and industrial instruments

are, to the extent permitted by law, excluded from having any application to the

employment arrangements covered by this Agreement.

(b) Where any legislation, policy, procedure or other document is referred to in the Agreement it is not incorporated by reference or otherwise into this Agreement and does not form part of this Agreement.

4.2 Incorporation of award

(a) Subject to (b) and (c) below, the terms of the Black Coal Mining Industry Award 2010 (“Award”) as varied from time to time are incorporated into this Agreement. Upon incorporating Award terms into the Agreement, the incorporated Award terms are to be read as altered with the appropriate changes to make them provisions of the Agreement rather than provisions of an award. In this Agreement references to the Award shall mean the Award as incorporated into the Agreement unless the context requires otherwise.

(b) To the extent that there is any inconsistency between the Award clauses, terms and conditions and those of this Agreement, the clauses, terms and conditions of this Agreement shall prevail to the extent of the inconsistency.

(c) The following Award term is not incorporated into this Agreement:

•  Clause 10.1”

[63] Significant and complex issues can arise where an enterprise agreement incorporates some terms of a modern award, particularly in circumstances where the Agreement also provides for the same matter. This complexity is exacerbated where there is a partial inconsistency between an agreement and an award. Where a modern award covers and applies to an employee, there are only two sources for an employee to consider in seeking to understand entitlements – the modern award and the NES and the relationship between these sources of entitlements is generally clear. If the Agreement in the present case was approved, employees would be required to comb through three sources to ascertain their entitlements and to determine whether the Black Coal Award provision is inconsistent with an Agreement provision and the extent of the inconsistency. Employees covered by the Award would not be in this position. In my view this is a potential detriment to employees if the Agreement is approved.

[64] I am also of the view that I cannot be satisfied that the Agreement passes the BOOT without further detail being provided in relation to:

•  Each clause of the Award that is incorporated into the Agreement and which it is said is not inconsistent with the Agreement; and

•  Whether any clauses of the Agreement are partially inconsistent with the Award and the effect or extent of such inconsistency.

[65] In response to my concern, GO2 People provided an undertaking identifying all such Award clauses and stating for the purposes of clause 4.2(b) whether the clause is incorporated into the Agreement and if it is inconsistent, the extent of the inconsistency. I accept that the undertaking offered by GO2 People addresses this concern and if the Agreement is otherwise capable of approval, I will accept the undertaking.

[66] A further BOOT issue I raised in correspondence with GO2 People prior to the hearing is the effect of clause 7.3(d) of the Agreement in relation to loaded rates. That clause is in the following terms:

“(d) Where an employee works additional hours to those in the defined roster or encounters work circumstances that give rise to Award payment entitlements that have not been included in the calculation of the loaded wage rate, the Company shall ensure that for the relevant pay period the employee is not paid less than the Award, plus the premium prescribed in clause 7.1(b) and if applicable, the casual loading prescribed in clause 6.5(b).”

[67] The concern I have with that clause is that it does not specify the frequency at which reconciliations will be undertaken and payments to rectify any shortfall will be made, thereby raising an issue of enforceability as identified by a Full Bench of the Commission in Shop Distributive and Allied Employees Association v Beechworth Bakery Employee Co Pty Ltd t/a Beechworth Bakery. 11

[68] In response to this matter, GO2 People offered an undertaking in the following terms:

“Clause 7.3 of the Agreement shall be reach and applied subject to the following:

The employer will conduct a reconciliation at four week intervals to establish whether, for work performed under the Agreement in the preceding four week period, the employee’s total wages were more than the employee would have been paid for performing the same work at the same times on the same days under the Black Coal Mining Industry Award 2010 (relevant to the employee’s classification). If the employee’s wages for the relevant period are less than the employee would have been paid for performing the same work at the same times on the same days under the Award, the employee will be paid in the following pay period an amount to ensure that the employee receives a higher amount than the employee would have received under the Award.”

[69] Upon further consideration, if the Agreement is otherwise capable of approval, I will require that the undertaking offered in relation to this matter also states that employees will receive the 25% casual loading provided for under the Agreement in addition to any higher amount identified in accordance with the reconciliation. Such an undertaking will then address all of my concerns in relation to the loaded rates issue.

[70] The casual employment issue identified in my consideration of whether the Agreement was genuinely agreed, is also relevant to consideration of whether the Agreement passes the BOOT. I accept, consistent with the Decision of the Full Bench in the SESLS Industrial Pty Ltd that the Agreement passes the BOOT with respect to prospective casual employees. In this regard, as was the case in SESLS Industrial Pty Ltd, the Agreement incorporates the Black Coal Award, guarantees that employees will receive 1% more than the remuneration they would have received under the Award and that while casual employment is not permitted under the Black Coal Award, the Agreement provides a 25% loading for such employees. Accordingly, I am satisfied that the Agreement passes the BOOT for prospective employees.

[71] However, I am unable to be satisfied that the Agreement passes the BOOT for the existing 22 employees who voted to approve it. This is because I am not satisfied as to the current status of their employment. If they are not casual employees because the Black Coal Award which covers and applies to them does not provide for employment on that basis, then I am not satisfied that the terms of the Agreement are sufficient to offset any detriment which may flow if the Agreement is approved and the present arrangements are regularised. This is one possible impact of approving the Agreement and while the potential to detrimentally impact on any current rights with respect to terms and conditions of employment that the relevant employees may have exists, I do not accept that the Agreement passes the BOOT for the 22 employees who voted to approve it.

5. NEXT STEPS

[72] Given my findings in relation to genuine agreement and the BOOT, I provide GO2 People with a further period to consider whether to attempt to address the issues identified in this Decision with further undertakings. I also provide GO2 People with a further opportunity to make written submissions in relation to these matters. Any proposed undertakings or written submissions are to be provided to [email protected] by 12.00 midday on Monday 23 December 2019. After considering any such submissions or undertakings I will determine whether I will approve the Agreement.

DEPUTY PRESIDENT

Appearances:

Mr M Moy of McCullough Roberston on behalf of the Applicant.

Ms E Sarlos on behalf of the CFMMEU.

Hearing details:

2019.

22 October.

Brisbane.

Printed by authority of the Commonwealth Government Printer

<PR715331>

 1   [2017] FWCFB 1664

 2   [2017] FWCFB 3659

 3 Ibid at [51].

 4 [2018] FCAFC 77.

 5 Ibid at [112].

 6   Ibid at [115] – [116].

 7   Ibid at [36] – [39].

 8 [2018] FCAFC 131 at [159].

 9   [2019] FWCA 4403.

 10   [2019] FWCFB 5916.

 11   [2017] FWCFB 1664