Tomkins Commercial & Industrial Builders Pty Ltd

[2021] FWC 125

[2021] FWC 125

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Tomkins Commercial & Industrial Builders Pty Ltd
(AG2020/3715)

DEPUTY PRESIDENT ASBURY BRISBANE, 23 FEBRUARY 2021

Application for approval of the Tomkins Commercial and Industrial Builders Pty Ltd Enterprise Agreement 2020.

Background

[1] This Decision concerns an application under s. 185 of the Fair Work Act 2009 (FW Act) by Tomkins Commercial and Industrial Builders Pty Ltd (Tomkins) for approval of the Tomkins Commercial and Industrial Builders Pty Ltd Enterprise Agreement 2020 (Agreement). The Construction Forestry Maritime Mining and Energy Union (CFMMEU) corresponded with the Fair Work Commission (Commission) Member Assist Team asserting that it had a material interest in the matter and wished to be heard in relation to the application. The CFMMEU also sought, and was provided with, the Form F16 Application for approval of enterprise agreement and Form F17 Employer declaration in support of approval of enterprise agreement, lodged by Tomkins.

[2] The matter was allocated to me to consider whether the Agreement should be approved. Correspondence was sent from my chambers to Tomkins via its representative, the Master Builders Queensland, raising questions in relation to whether certain provisions were consistent with the National Employment Standards (NES) and the Agreement passed the Better Off Overall Test (BOOT) in respect of some employees.

[3] I also caused my Associate to communicate with the CFMMEU requesting confirmation that the Union sought to be heard in relation to the approval application and requiring an outline of submissions setting out the basis for this. The CFMMEU confirmed that it wished to be heard in relation to the approval of the Agreement and sought a further period in which to provide its outline of submissions. Over the objection of Tomkins, the further period was granted, and to expedite the matter in the event that the CFMMEU was heard on the application, the Union was also directed to file an outline of submissions setting out the basis upon which it objected to the approval of the Agreement.

[4] On 22 December 2020, I corresponded with the parties and indicated my provisional view that I would hear from the CFMMEU in relation to the approval of the Agreement. The matter was listed for hearing on 24 December 2020 to deal with whether the CFMMEU should be heard, and if necessary, its objections to the approval of the Agreement. The CFMMEU then sought an adjournment of the hearing, which was granted, on the basis that Tomkins did not object to an adjournment until the new year. The matter was listed for hearing on 4 January 2021. A further adjournment was granted at the request of Tomkins due to non-availability of relevant managers until the week of 11 January 2021. A hearing was conducted on 12 January 2020. Tomkins was represented by Ms E Kirkby, Manager – Workplace Relations, Master Builders Queensland and the CFMMEU by Ms E Barnes-Wheelan, National Legal Officer.

Permission for CFMMEU to be heard

[5] In relation to permission to be heard, the CFMMEU conceded that it was not a bargaining representative for the Agreement. However, in circumstances where there would otherwise be no contradictor, the CFMMEU submitted that the Commission would be assisted by hearing from the CFMMEU in respect of whether the Agreement meets the requirements for approval. The CFMMEU also submitted that the request to be heard is consistent with the broad discretionary power contained in section 590 of the FW Act, which allows the Commission to inform itself in relation to any matter and in any manner as it considers appropriate, including via oral or written submission 1 and by conducting a conference or hearing.2 Other considerations relevant to hearing from the CFMMEU were said to be that the Union:

•  Has tens of thousands of members throughout Australia in the building and construction industry;

•  Is eligible under its Rules to cover employees who will be covered by the Proposed Agreement;

•  Is the primary union which covers employees engaged under the Building and Construction General On-Site Award 2010 (Award) and has an extensive history of industrial representation of workers in respect of work covered by the Award; and

•  Would be a “person aggrieved” by any decision to approve the Proposed Agreement for the purposes of s.604 of the FW Act.

[6] The CFMMEU also asserted the following matters weighed in favour of the Union being heard:

•  There are key omissions and inaccuracies in the F17 and correspondence provided to employees, which indicate a likelihood that the requirements contained in s.180(5) and s.188(1)(c) of the FW Act have not been satisfied;

•  The wide scope of the Proposed Agreement and the small cohort of employees that voted in support of its approval gives rise to concerns that it lacks moral authority and therefore, was not genuinely agreed to; and

•  Tomkins failed to give, or provide access to, all incorporated materials as required by s.180(2) of the FW Act.

[7] Tomkins submitted that the CFMMEU is not a bargaining representative and that the value of a contradictor is doubtful. In this regard, reference was made to the decision of Williams C in Macmahon Contractors Pty Ltd [2018] FWC 869 (Macmahon), which dealt with an application for approval of an Agreement where the CFMEU (as the Union was then known) was not involved in the bargaining process but sought to be heard as a contradictor to the Agreement.

[8] Tomkins summarised the principles in Macmahon which held that that the absence of a contradictor does not warrant a grant of leave for a third party, external to the bargaining process, to be heard in a matter. While specific paragraphs of the decision were not cited, the following extracts illustrate the approach taken by William C in that case:

“[31] The CFMEU points to the absence of a contradictor as a purportedly relevant distinguishing characteristic. Macmahon readily accepts that the absence of a contradictor may in certain cases warrant leave being granted. This, however, is not such a case. The CFMEU’s objections concern whether the Agreement satisfies the BOOT and complies with the NES. Those are matters which the Commission – assisted, as it is in matters such as these, by the Member Support Research Team – is plainly able to adequately address without granting leave to a third party intervenor. They are not matters which would be illuminated by cross-examination. In this respect, the present matter may be distinguished from the decisions to which the CFMEU refers (and other recent decisions of this Commission) in which compliance with sections 180(2), 180(5) and 188(c) – being matters concerning which cross-examination of the form F17 deponent would likely assist the Commission – were squarely in issue. No such matters are raised here, nor is there a proper basis to do so.

[32] At its heart, the CFMEU’s submission amounts to an assertion that the absence of a contradictor of itself warrants a grant of leave. This cannot be so. Were that the case, Parliament would have enacted provisions granting a right of intervention to unions with constitutional coverage of employees to be covered by the Agreement, or at the very least an obligation for employers to notify such unions of approval applications. The fact that Parliament did neither is instructive.

[33] What Parliament in fact enacted neatly illustrates the second matter which ought to guide the Commission’s exercise of discretion. Parliament enacted a regime dealing with the making and approval of enterprise agreements intended (amongst other objects) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, and to facilitate the making of enterprise agreements through ensuring that applications to the Commission for approval of enterprise agreements are dealt with without delay.

[34] To this end it is submitted, it is difficult to envisage how granting leave to a third party to appear and make submissions on matters which the Commission is compelled by the Act to consider for itself, and which the Commission is plainly able to adequately address on its own motion, could be said to be either “simple, flexible and fair”. Nor could such an approach be said to facilitate the making of the Agreement by ensuring that the approval application is dealt with without delay; any grant of leave will necessarily (and, for the reasons set out above, needlessly) prolong the approval process.”

[9] At the Hearing, I advised the parties that I had considered their submissions and determined that in the circumstances, I would exercise the discretion in section 590 of the Act to hear from the CFMMEU as a contradictor, on the basis that it would assist the Commission. I also considered that should the Agreement be approved, the CFMMEU would be an aggrieved party in any appeal where it would probably advance the same submissions. Further, I had regard to the fact that the CFMMEU complied with directions to file its material and that the involvement of the Union in the proceedings did not unduly delay the hearing and determination of the application for approval of the Agreement.

Issues raised by the Commission

[10] In correspondence to the Applicant the Commission raised the following issues with the Agreement. Firstly, the Agreement contains a potential inconsistency with the National Employment Standards on the basis that it provides that an employee who has abandoned employment may not be entitled to notice on termination, in circumstances where the employer terminates the employment and other than for reasons of serious misconduct. It was also noted that the Agreement contains a clause that gives precedence to NES provisions and that they prevail over the provisions in the Agreement and that any decision approving the Agreement would simply note the potential inconsistency.

[11] In relation to the Better Off Overall Test (BOOT) clarification was sought as to the basis upon which the Building and Construction General On-site Award 2010 is incorporated into the Agreement. Clarification was also sought in relation to a clause of the Agreement which allows the employer to review and adjust individual wage rates for employees covered by the Agreement.

CFMMEU Issues

Genuine Agreement

[12] The CFMMEU advanced two grounds in support of its contention that the Agreement was not genuinely agreed to for the purposes of section 188(1) of the FW Act as follows:

•  There are key omissions and inaccuracies in the F17 and correspondence provided to employees, which indicate a likelihood that the requirements of s.180(5) and s.188(1)(c) of the FW Act have not been satisfied; and

•  The wide scope of the Agreement and the small cohort of employees that voted in support of its approval gives rises to concerns that it lacks “moral authenticity.”

[13] The CFMMEU submitted that s. 180(5) of the FW Act places an obligation on an applicant for the approval of an enterprise agreement to explain the terms of the agreement, and their effect, to employees. The provision is designed to ensure that employees are as fully informed as practicable about the terms and effect of the terms of the terms of an enterprise agreement before voting on it. 3

[14] At section 12 of the Form F17 filed by the Applicant in support of the Agreement, the Applicant identified clause 6.3.3 as being the only less beneficial term when compared to the Award. In doing so, it failed to identify the following provisions that the CFMMEU submits impose a range of obligations on employees which, if contravened, could foreseeably give rise to disciplinary proceedings or alternatively, an allegation that section 50 of the FW Act has been breached:

•  6.8 - Confidentiality

•  6.10 – Other employment and conflict of interest;

•  6.11 – Misconduct;

•  17.1 – Fitness for Work;

•  17.2 – Company Plant, Equipment and Vehicles; and

•  17.3 – Health and Safety.

[15] The CFMMEU submitted that consistent with the Decision of a Full Bench of the Commission in CFMEU v Shamrock Civil Pty Ltd 4(Shamrock) an incorrect and untrue declaration that an agreement does not contain less beneficial terms, gives rise to a concern as to the nature of the explanation given to employees about the terms of the agreement and their effect. The concern may be greater where there are a significant number of less beneficial terms which are not identified in the declaration.

[16] Shamrock involved consideration of an application to approve an enterprise agreement in circumstances whereby the Form F17 filed in support of an application failed to accurately identify terms that were more or less beneficial when compared to the relevant modern award. At paragraph 33, the Full Bench made the following comments:

“[33] It is important to note that the Form F17 is a statutory declaration as to what the Applicant declares that they have done to satisfy the various requirements of the legislation. While in some circumstances an Applicant will incorrectly answer question 3.4 and/or question 3.5 because they have omitted one or some items from the list, and because the omitted items are not particularly significant this may not necessarily be a cause for concern. However, in this case a declaration that there are no less beneficial terms does give rise to concern as it is apparent that in fact there were a significant number of less beneficial terms. Aside from the obvious concern that the declarant has made a declaration which is untrue, it gives rise to a further concern as to the nature of the explanation given to employees as to terms of the Agreement and the effect of those terms. That is, it at least raises a real question as to the explanation to employees about the terms of the Agreement and in particular the effect of those terms, in circumstances where the employer is attesting that the agreement has no less beneficial terms.”

[17] The CFMMEU also referred to the Full Bench decision in CFMEU v Dawsons Maintenance Contractors Pty Ltd 5 where consideration was given to the implications of the Federal Court decision in One Key and whether the FWC could be satisfied in the circumstances of the matter before it, that the requirements of section 180(5) had been met:

“[57] None of the matters which undertakings were given by Dawsons were evidenced as being the subject of any explanation within the material provided by Dawson to its employees prior to the ballot. There was no other evidence or submissions before the Commission that would reasonably lead to a view that any of the subject matters for which undertakings had been given and accepted were even identified to employees let alone explained to them in the manner that might be expected within s.180(5) of the Act. As a result, we find that the Commissioner could not have been satisfied that the statutory requirements for approval had been met.

[58] For these reasons, we uphold appeal ground 1. It is apparent to us, that there was an insufficient basis for the Commissioner to be satisfied that Dawsons had taken all reasonable steps to ensure that the relevant employees were given copies of or had access to material incorporated by reference into the Agreement; that it had taken all reasonable steps to ensure that the terms of the Agreement and the effect of those terms were explained to the relevant employees; and that it had advised the relevant employees of the terms of the Agreement that are less beneficial compared to the relevant Award terms.”

[18] The CFMMEU also raised that s.188(1)(c) of the Act required that the Commission be satisfied that there are no reasonable grounds for believing that the agreement was not genuinely agreed. The CFMMEU argued that s.188(1)(c) focuses on the authenticity and moral authority of an enterprise agreement 6 and a critical issue under section 188(1)(c) is whether the agreement of the voting cohort of employees is capable of being described as having authenticity or moral authority based on a real and true understanding of the consequences of the proposed agreement.7

[19] The CFMMEU submitted that a number of matters may bear on the genuineness of employees’ agreement under section 188(1)(c) but matters particularly relevant in the present case are:

•  The provision of false or misleading information by the Applicant regarding the scope of the Agreement; and

•  Whether the small cohort of employees that voted on the Proposed Agreement are representative of the classes and categories of employees who could in the future be covered by the Agreement if it is approved.

[20] Regarding the concern in relation to the scope of the Agreement, the CFMMEU referred to documents submitted by the Applicant including the F16, F17, the Notice of Employee Representational Rights and a letter provided to employees regarding – amongst other matters – the location and method of the vote. The CFMMEU submitted that this letter described the coverage of the Agreement as follows:

“We intend the coverage of the agreement to include the company and employees, undertaking building and construction work in Queensland…”

[21] At the hearing, the CFMMEU submitted that the phrase ‘building and construction’ was broad enough to cause concern as to the geographical coverage of the Agreement. The CFMMEU argued that this representation was at odds with the actual coverage of the Agreement and the Form F17, which confirmed that the Agreement covers building and civil construction work across Australia (and therefore is not limited to Queensland).

[22] The CFMMEU submitted that the information in response to question 26 of the Applicant’s F17 revealed that only 5 individuals were invited to vote to approve the Agreement. The CFMMEU argued that the Agreement has considerably broad coverage which spans across both civil and building construction work nationwide. In these circumstances, it is unlikely that the voting cohort is representative of the group of employees who could foreseeably be covered by the Agreement and the terms and conditions contained therein in the future, and that it was likely that this cohort of employees would have limited occupational scope. The CFMMEU argued that the voting cohort was therefore unlikely to have been capable of giving real and authentic consent to an agreement that captures a vast range of occupations beyond their own, or in relation to which they have no conceivable interest. The CFMMEU submitted that the Agreement was not genuinely agreed to and therefore, was not capable of approval under the Act.

Pre-approval issues

[23] Section 180(2)(a) requires the Applicant to have taken all reasonable steps to ensure that, during the access period for the agreement, employees were given a copy of the Agreement as well as any other material incorporated by reference in the agreement. Subsection (b) requires that the employees have access to a copy of those materials throughout the access period.

[24] The Agreement contains several references to company policies, with the first of such references being at clause 17.1.1 (Fitness for Work), which requires employees to “adhere to the employer’s WH&S policies, rules and procedures at all times in the workplace.”The clause goes further to state, “Any breach of the employer’s WH&S policies, rules and procedures may be deemed to be misconduct and may lead to disciplinary action or dismissal”.

[25] Similarly, clause 17.3.2 of the Agreement (Health and Safety) states the following:

“To facilitate this all employees will be made aware of the employer’s WH&S policies, rules and procedures. Employees are to ensure that they adhere to the employer’s WH&S policies, rules and procedures at all times in the workplace. Any breach of the employer’s WH&S policies, rules and procedures may be deemed to be misconduct and may lead to disciplinary action or dismissal”.

[26] The CFMMEU argued that clauses 17.1.1 and 17.3.2 of the Agreement impose obligations on employees. Based on the information available to it, including the F17 which only refers to the Award as being the incorporated material made available to employees during the access period, the CFMMEU submitted that it is likely that these documents were not provided to employees. As such, the CFMMEU submitted that the Applicant failed to discharge its obligations under s.180(2) of the FW Act.

[27] In view of the provisions of the Agreement identified at paragraph 7 above, and the fact that they were not identified in the Applicant’s F17 as being less beneficial terms when compared to the Award, the CFMMEU argued it is important that further documentation provided to employees (if any) is provided to the Commission and scrutinised.

[28] In reply, Tomkins submitted that it was clear that the policies referred to by the CFMMEU were not incorporated. Tomkins referred to the Full Bench decision in Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Limited 8which held that it was sufficient that employees were made aware of a fatigue management policy incorporated by reference into an enterprise agreement, during an induction process in which they were informed about the availability of that material by electronic means. It was also held by the Full Bench in that case that there is no requirement that incorporated material be explained to employees during the access period and that an explanation of the incorporated material can be given before the access period has begun. It was also relevant in that case that the incorporation of a fatigue management policy did not displace the requirements of State occupational health & safety laws or the requirements of such laws relating to the content and formulation of a fatigue management policy. The Full Bench went on to conclude that it was unnecessary for the employer to explain the impact of the Agreement vis-a-vis the requirements of the legislation.

Consideration

[29] The CFMMEU’s contention that the Agreement was not genuinely agreed to by employees centres on clauses of the Agreement which are not found in modern awards, and in particular the Building and Construction General On-site Award 2010 which is the relevant award for the application of the better off overall test (BOOT) in relation to the Agreement. The CFMMEU also contends that there is no evidence that employees were given an explanation about these terms and their effect and they were not identified as detrimental in the Form F17 Employer’s declaration, so that the Commission could not be satisfied that the Agreement was genuinely agreed.

[30] In summary, those clauses deal with the following matters. Clause 6.8 of the Agreement requires employees to maintain confidentiality in relation to commercially sensitive information that they access in the course of their employment. The clause also purports to impose an obligation on employees in relation to confidential information after employment has ceased. Clause 6.10 of the Agreement provides that employees will disclose to the employer if they are contemplating or engage in other employment which may result in a conflict of interest. Clause 6.11 outlines various forms of misconduct including serious misconduct and provides that employees may be summarily dismissed for engaging in serious misconduct.

[31] Clause 17.1 deals with fitness for work and provides that employees affected by drugs or alcohol will not be permitted to work or operate equipment on Company projects. The clause also provides that: “Employees are to ensure that they adhere to the employer’s WH&S policies, rules and procedures at all times in the workplace. Any breach of the employer’s WH&S policies, rules and procedures may be deemed to be misconduct and may lead to disciplinary action or dismissal”. Clause 17.2 sets out responsibilities of employees with respect to the operation of Company plant, equipment and vehicles in relation to matters including competency and safety and provides that a breach in relation to matters set out in the clause may result in disciplinary action being taken. Clause 17.3 deals with Health and Safety and is in the following terms:

“17.3 HEALTH AND SAFETY

17.3.1 The parties to this agreement are committed to the safe operation of machinery and equipment, to the observance of safe working practices, the proper use of all personal safety equipment and to the safety and health of all employees and other persons who may enter the workplace.

17.3.2 To facilitate this all employees will be made aware of the employer's WH&S policies, rules and procedures. Employees are to ensure that they adhere to the employer's WH&S policies, rules and procedures at all times in the workplace. Any breach of the employer's WH&S policies, rules and procedures may be deemed to be misconduct and may lead to disciplinary action or dismissal.

17.3.3 Smoking is not permitted inside the employer's premises (including toilets), machinery or vehicles.

17.3.4 Employees should immediately notify management by completion of the relevant form if they injure themselves at work or subsequently become aware of any injury or disease that they may have sustained during the course of employment with the employer. Failure to adhere may be deemed to be misconduct and may lead to disciplinary action.

17.3.5 The employer has the responsibility to provide a safe work environment for all employees. This environment is monitored by safe work reporting systems that review and record the critical items of hazard, incident and injury reports. It is therefore the responsibility of all employees to report to the immediate supervisor any of the encountered hazards or incident items as soon as practical but before the close of business.”

[32] I accept that some of these provisions are potentially detrimental to employees. While provisions such as those dealing with confidentiality and restraint of trade may be included in employment contracts which operate in conjunction with awards and expose employees to common law action for breach, they are not found in awards. As a result of including such matters in the Agreement employees are potentially exposed to civil penalties for breach of the Agreement by virtue of s. 50 of the Act which provides that a person must not contravene a term of an enterprise agreement. As a result, there is a possible detriment to employees covered by the Agreement on the basis of such exposure. Given the quantum of civil penalties, it is difficult to assess the full extent of the potential detriment. It is also potentially detrimental to employees to have obligations purportedly imposed on them by an enterprise agreement after their employment ends.

[33] Furthermore, the provisions in 17.2.3 (h) and (j) and clause 17.2.4 of the Agreement place onerous obligations on employees which they would not be subject to if their employment was covered by a modern award including financial obligations for loss and damage suffered by the Company or third parties.

[34] While I accept that it is appropriate for enterprise bargaining agreements to set out mutual rights and obligations applicable to employers and employees and that these can be more detailed and more prescriptive than the provisions in Awards, the exposure of employees to detriment of the kind described above, is relevant to the BOOT. It is not to the point that such obligations may be sought to be imposed in employment contracts. An enterprise agreement has a statutory effect and is distinct from a contract of employment. Including such terms in an enterprise agreement gives them an effect which they would not have if included in a common contract of employment and to the extent that the effect is potentially detrimental to employees, it is relevant for the purposes of deciding whether an agreement passes the BOOT.

[35] To address the potential detriment, while maintaining the terms the employer and employees have agreed to, the Applicant may consider providing undertakings that where an employee breaches these clauses, it will not seek a civil penalty in relation to the breach and that clause 6.8 does not impose any obligation after employment ends. Consideration may also be given to an undertaking that the employer will not refer to, rely on or apply clause 17.2.3 (h) and (j) and clause 17.2.4 of the Agreement. If such undertakings were offered, I would accept that it resolved my concerns about whether the Agreement passes the BOOT in relation to these clauses.

[36] In relation to the argument that the clauses expose employees to disciplinary action, I am of the view that the employer would be entitled to discipline an employee engaging in conduct which is the subject of the clauses and that this would be the case regardless of the inclusion of the clauses in the Agreement. I also note that the Dispute Resolution Process in clause 11 of the Agreement applies to disputes in relation to these clauses on the basis that it concerns disputes arising under the Agreement, so that employees could raise disputes about them and their operation. Further, it is the case that employees who are dismissed may make an application for a remedy under various provisions of the Act in relation to dismissal and the inclusion of the clauses in the Agreement does not impact these rights.

[37] The CFMMEU also submitted that the failure of the employer to identify these provisions as detrimental in its Form F17 Employer declaration, evidences a failure to take all reasonable steps to explain the terms of the Agreement to employees, resulting in the Agreement not being genuinely agreed citing Construction, Forestry, Mining and Energy Union v Shamrock Civil Pty Ltd 9(Shamrock)and CFMMEU v Dawsons Maintenance Contractors Pty Ltd10(Dawsons).

[38] In Shamrock, a Full Bench of the Commission held that in circumstances where an enterprise agreement contained a number of significant reductions in award entitlements it was apparent that an explanation which did not identify the reductions was wrong. The employer in that case answered “No” to a question in the Form F17 Employer declaration as to whether there were any terms and conditions that were less beneficial than equivalent terms and conditions in relevant modern awards, when there were a significant number provisions such as no requirement in the consultation term to provide written information, entitlements for shift workers, redundancy, meal breaks and rest periods, the absence of a minimum engagement on Saturdays and public holidays, reduced notice of annual shut down and averaging of hours over a 12 month period, which were either detrimental to employees or may have resulted in scenarios where employees may be worse off under the Agreement. The Full Bench said:

[36] …We accept that an explanation of the terms of the Agreement and the effect of those terms to employees may not be perfect and may, depending on the circumstances, still satisfy the requirement of s.180(5) of the Act. However, an explanation which is clearly misleading (as in this case) cannot possibly meet the requirement…

[37] Where the Commission is provided with a statutory declaration which is at odds with the real position in important respects, a number of practical difficulties can be raised in determining an application for approval. The applicant stated in its application that there were no reductions on the award when in fact there were, which gradually became apparent during the proceedings at first instance. Such an employer understanding would presumably lead it to provide the same misleading explanation to employees, and it is now conceded by the employer that this was the case. As in this present matter this may well have implications in many proceedings for the question of whether or not there was genuine agreement within s.186(2)(a), and therefore whether the agreement can be approved, which the Commission must endeavour to examine in greater detail as the real facts become apparent.

[39] Similarly in Dawsons the Full Bench noted that some ten undertakings had been required in order for the agreement to be approved. The Full Bench held that the nature and number of matters for which undertakings were sought (which included rates of pay below those in the relevant award), together with the very limited explanatory material and information provided to employees, and the fact that significantly less beneficial terms of the proposed Agreement had not been identified by the Company, resulted in circumstances where the Commissioner who approved the agreement could not been satisfied that employees had genuinely agreed to the Agreement. Further, the Full Bench noted that each of the undertakings were given and accepted for reasons that without an undertaking on the matters it would be unlikely that the Agreement would pass the BOOT.

[40] The Full Bench concluded that none of the matters about which undertakings were given by Dawsons were evidenced as being the subject of any explanation within the material provided by the Company to its employees prior to the ballot and there was no other evidence or submissions before the Commission that would reasonably lead to a view that any of the subject matters for which undertakings had been given and accepted were even identified to employees let alone explained to them in the manner that might be expected within s.180(5) of the Act.

[41] The circumstances in the present case can be distinguished from those in Shamrock and Dawsons. In the present case, the Agreement replaces the Tomkins Commercial and Industrial Builders Pty Ltd Enterprise Agreement 2016 (the 2016 Agreement). The Form F17 Employer’s declaration completed on behalf of Tomkins identifies clause 16 Confidentiality; clause 10 Other employment; clause 6.11 Misconduct and clause 17 Miscellaneous (which includes the workplace health and safety provisions) as terms and conditions different to those in the Award. The Declaration also states that an explanation of the Agreement was provided by the HR Manager who met with employees and stepped through clause by clause, with attention to those clauses which had changed from the previous version of the Agreement. It is also the case that the clauses with which the CFMMEU takes issue were included in the 2016 Agreement in identical terms.

[42] I consider that the potential detriment I have identified as a result of the clauses discussed above, differs from detriment in the sense of reductions in pay rates and other Award entitlements and can be rectified by an undertaking which does not substantially alter the terms of the Agreement. I am satisfied that the requirement in s. 180(5) are met and that the employer took all reasonable steps to explain the terms of the Agreement and their effect to employees. Accordingly, I do not consider that the inclusion of those provisions is a basis for me to find that the Agreement was not genuinely agreed by employees.

[43] Further, I do not consider that the Applicant has made false or misleading declarations in the Form F17 in relation to the scope of the Agreement. The coverage of the Agreement is set out in clause 3 as follows:

“3. COVERAGE

This agreement covers:

(a) Tomkins Commercial and Industrial Builders Pty Ltd ACN 98 061 732 778; and

(b) All employees, excluding apprentices, of the employer as classified within Appendix A of the Agreement and engaged in on-site construction work including civil construction work within Australia.”

[44] That clause is in identical terms to the coverage clause in the 2016 Agreement. In its Form F17 Employer declaration, Tomkins declares that the Agreement will operate in all States and Territories. These matters indicate that the explanation to employees about the terms of the Agreement included information about its scope. The Notice of employee representational rights (NERR) given to employees, and appended to the Form F17 Employer declaration, indicates that employees were notified that the Agreement was proposed to cover employees who perform work on the Company’s projects. A covering letter provided to employees with the NERR (and also appended to the Form F17) indicates that the Agreement replaces the 2016 Agreement and says nothing about the scope of the Agreement.

[45] I do not consider that there is any basis for employees being confused about the scope of the Agreement or that the Company mislead employees with respect to its explanation of the terms of the Agreement. The information in the NERR and the covering letter is not inconsistent with the application of the Agreement as set out in clause 3 or the information in the Form F17.

[46] An additional BOOT issue identified by the Applicant in the Form F17 as a potential detriment is that clause 5(e) of the Agreement excludes clauses in 14.8 of the Award which deals with casual conversion to full-time or part-time employment. I am concerned that this provision causes the Agreement to fail the BOOT in relation to casual employees, notwithstanding that the Form F17 indicates that there were no casual employees at the time the Agreement was made. I consider that the Company address this matter by providing an undertaking that over-rides the provision and renders it of no effect so that the terms of the incorporated Award in relation to casual conversion apply to employees covered by the Agreement.

[47] While the exclusion of the casual conversion provisions is a BOOT issue, I do not accept that it is an issue that is relevant to whether the Agreement was genuinely approved. Firstly, the Applicant identified the matter as a detriment in the form F17 Employer declaration. If failure to identify such matters weighs against genuine agreement then the fact that a detriment is identified weighs in favour of genuine agreement on the basis that acceptance by the Applicant that a term is detrimental suggests that this was explained to employees. Secondly, the same exclusion was found in the 2016 Agreement and was not a new issue for employees. Thirdly, the Form F17 Employer declaration states that there were no casual employees at the point the Agreement was approved by all 5 employees who are covered.

[48] I also do not accept that the fact that the Agreement covers only five employees is a ground to find that it was not genuinely agreed. The number of employees covered by an agreement, it not of itself, a matter from which lack of genuine agreement can be inferred. In the present case, while the number of employees covered by the Agreement is small – 5 employees – all employees are presently covered by the same agreement and would be covered by a single modern award if there was no agreement. This is not a case where a small group of employers performing work that would be covered by one award have made an agreement with scope that covers a much wider group of employees. The Agreement covers only employees performing on-site construction work including civil construction work, all of which is covered by the Building and Construction General On-site Award. If more employees are employed during the operation of the Agreement, they will do the same or similar work on the same or similar projects as the employees who voted to approve the Agreement. Accordingly, there is no basis for a finding that the employees who voted to approve the Agreement could not have given their real and authentic consent when they did so.

[49] I turn now to consider whether any clauses incorporate into the Agreement by reference, material which is external to the Agreement. Section 180(2) of the Act requires that the employer take all reasonable steps to ensure that during the access period employees are given a copy of material incorporated by reference into the Agreement. In Broadsword Marine Contractors Pty Ltd v Maritime Union of Australia and Others 11, Gostencnik DP considered that the question of whether policies referred to in an enterprise agreement were incorporated into the Agreement could be considered by asking whether the clauses of the Agreement imposed any obligations on employees covered by the agreement to comply with the policies to which reference was made.12

[50] The Agreement incorporates the Award, and the Form F17 Employer’s declaration indicates that copies of the Award were made available to employees. In addition, the clauses said by the CFMMEU to incorporate material by reference are clause 17.1 which deals with fitness for work and clause 17.3 deals with health and safety. Both clauses require that employees “ensure that they adhere” to the Company’s workplace health and safety policies, rules and procedures. Clause 17.3.2 also requires that the employer make employees aware of those policies, rules and procedures. On balance, I do not accept that these clauses place obligations on employees of the kind considered by Gostencknik DP in Broadsword. The language of the clauses is not expressed in a mandatory way and clause 17.3.2 places an onus on the employer to facilitate adherence by ensuring the relevant polices, rules and procedures are made known to employees.

[51] The clauses are facilitative and aspirational and do not therefore incorporate the material referred to. Accordingly, Tomkins was not required to provide copies of those documents to employees during the access period. The Building and Construction General On-site Award is incorporated in the Agreement and access to a copy of the Award was provided to employees as set out in the Form F17 Employer declaration. I am therefore satisfied that the requirements in s. 180(2) have been met.

Conclusion

[52] With the exception of the BOOT concerns identified above, I am satisfied that the requirements of the Act for approval of the Agreement are met. Those concerns are:

•  The exclusion of casual conversion provisions in the Building and Construction General On-site Award by virtue of clause 5(e) of the Agreement;

•  Clause 6.8 Confidentiality purporting to operate after employment has ended; and

•  The potential for employees to suffer detriment by being liable for a civil penalty for breach of the provisions of clauses 6.8, 6.10, 6.11 and clause 17; and

•  Clauses 17.2.3(h), and (j) and clause 17.2.4 which purport to make employees liable for loss or damage sustained to the employer’s property or to third parties or their property.

[53] For the reasons set out above, I am of the view that the Applicant could address these issues by providing undertakings. I am also of the view that in the context of this matter, including that the provisions are contained in the 2016 Agreement, the fact that undertakings are required does not result in the Agreement not being genuinely agreed.

[54] If the undertakings are provided I will accept them (subject to the views of any bargaining representatives) and approve the Agreement. The Applicant is required to advise whether it intends to provide the undertakings by 12.00 midday AEST on Thursday 25 February 2021. If the Applicant does not intend to provide the undertakings it is required to provide submissions in relation to why it asserts that they are not required in order for the Agreement to be found to pass the BOOT. Any such submissions are required to be filed in the Commission by 4.00 pm AEST on Tuesday 2 March 2021.

DEPUTY PRESIDENT

Appearances:

Ms E Kirkby of Master Builders Queensland for the Applicant

Ms E Barnes-Whelan for the CFMMEU.

Hearing details:

12 January.

2021.

By telephone.

Printed by authority of the Commonwealth Government Printer

<PR726105>

 1   Fair Work Act 2009 (Cth) s.590(2)(b)

 2   Fair Work Act 2009 (Cth) s.590

 3   Construction, Forestry, Maritime, Mining and Energy Union v One Key Workforce Pty Ltd [2017] FCA 1266 at [103]

 4   [2018] FWCFB 1772

 5   [2018] FWCFB 2992

 6   One Key Workforce at [143]

 7   CFMEU v AIRC (1999) 93 FCR 317 at [126] – [127]

 8   2014] FWCFB 7940

 9   [2018] FWCFB 1772.

 10   [2018] FWCFB 2992.

 11   [2015] FWC 6627.

 12 Ibid at [26].