Visy Paper Pty Ltd; Visy Board Pty Ltd

[2017] FWCA 1395

[2017] FWCA 1395

FAIR WORK COMMISSION

DECISION

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

Visy Paper Pty Ltd; Visy Board Pty Ltd
(AG2017/24)

VISY (SMITHFIELD, WARWICK FARM, DANDENONG, O'CONNOR) ENTERPRISE AGREEMENT 2016

Manufacturing and associated industries
COMMISSIONER ROE	MELBOURNE, 10 MARCH 2017

Application for approval of the Visy (Smithfield, Warwick Farm, Dandenong, O'Connor) Enterprise Agreement 2016.

[1] An application has been made for approval of an enterprise agreement known as the Visy (Smithfield, Warwick Farm, Dandenong, O’Connor) Enterprise Agreement 2016 (the Agreement). The application was made pursuant to Section 185 of the Fair Work Act 2009 (the Act). It has been made by Visy Paper Pty Ltd and Visy Board Pty Ltd as single interest employers (Visy). The employers covered by the Agreement are related bodies corporate or employers engaged in a common enterprise and therefore are single interest employers (Section 172(5)). The Agreement is therefore a single enterprise agreement.

[2] I raised a small number of concerns about the BOOT and the NES with Visy. These matters have been resolved by the submissions received or the undertakings offered in respect to personal leave, maximum weekly hours and redundancy for part time employees. The bargaining representatives have been consulted about the undertakings and have not raised any concerns. I am satisfied that the undertakings do not result in any financial detriment to an employee and are not a substantial change to the Agreement. If the Agreement is approved the undertakings will form part of the Agreement and will be attached to it.

[3] I received F18 Forms from the AMWU, CFMEU and the AWU. These unions will be noted as covered. The AWU was not listed on the F16 Form, however, I have satisfied myself that the AWU had one member at the Dandenong site covered by the proposed Agreement at the time the Agreement was negotiated and made.

[4] I had some concerns that the Agreement had not been properly signed. Visy provided a new signature page which I am satisfied meets the requirements of the Act. I am satisfied that the employee who has signed the Agreement is an employee who is in the class of employees covered by the Agreement. Having considered all of the circumstances I am satisfied that there is a great deal of controversy surrounding this Agreement and there are strong emotions both in support of the Agreement and in opposition to the Agreement. I consider that there are special circumstances which justify an Order that the name of the employee who signed the Agreement be kept confidential.

[5] The Agreement does not on its terms cover maintenance and supervisory employees. The application term of the Agreement is as follows:

“This Agreement applies to all employees at Visy Board Pty Ltd and Visy Paper Pty Ltd (the Company); who are engaged in positions covered by the classification structures described in Appendix 3 or 6 and employed at the sites listed in Appendix 1 of this Agreement, but does not apply to employees engaged at the Material Recovery Facility (MRF), 6 Herbert Place Smithfield.”

[6] There are no classifications in Appendix 3 or 6 which include maintenance or supervisory employees. There is some coverage of leading hands. There is no ambiguity or uncertainty about whether or not maintenance or supervisory employees are covered by the Agreement.

[7] It is accepted that the AMWU has traditionally represented the production, maintenance and supervisory employees and that the maintenance workers have been involved in the representative and consultative processes on site. However, that is a different matter from the question of coverage by the Agreement. Evidence of the subjective intention of a party is not relevant. The plain words of the coverage clause of the Agreement exclude maintenance and supervisors. In my view that is the end of the matter. At the hearing Visy accepted my decision in respect to that aspect of the matter.

[8] There were some maintenance and supervisory employees who voted for the Agreement. There is some dispute about the number of such employees who voted and whether or not the vote of those employees would have impacted the outcome.

[9] In earlier material the unions suggested that there was a lack of clarity about the nature of the vote and raised the alleged inadequacy of absentee vote arrangements. These objections were not pressed in the proceedings.

[10] The parties agreed that the matters which are outstanding are confined to the following:

a. Did a valid majority vote for the Agreement? In respect to this matter I need to determine first:

• Whether or not I can or should accept an undertaking to broaden the coverage on the grounds that this would reflect the custom and practice and mutual intention of the parties or alternatively should I allow a correction of the Agreement pursuant to Section 586 of the Act and then allow Visy to give an undertaking concerning the wage rates for maintenance employees and supervisors who are covered by the Agreement?



• If I cannot or do not accept an undertaking and/or amendment can I still be satisfied that a there was a valid majority?

b. Was Section 180(5) satisfied in respect to the information provided to employees? If Section 180(5) is not satisfied then Section 188(a) is not satisfied and then I cannot approve the Agreement because of Section 186(2)(a). In particular:

• Were all reasonable steps taken to ensure that the effect of the income protection term was explained to relevant employees (Section 180(5)(a)).



• Was the explanation provided in an appropriate manner given that some employees do not have English as their first language (Section 180(5)(b)).

c. Are there other reasons why there was not genuine agreement? (Section 188(c)). This is largely a restatement of the issues in respect of Section 180(5) dealt with in (b) above and an argument that the information provided was misleading.

Should the coverage clause of the Agreement be varied?

[11] Visy submit that the fact that the AMWU has not sought to independently bargain on behalf of maintenance employees and/or supervisors to include them in the Agreement or a separate agreement infers that it considered that these classes of employees were covered by the Agreement and its predecessors. Visy submits that the maintenance employees at VB O’Connor have never been covered by an Agreement as they are salaried employees. They argue therefore that the majority support determination sought by maintenance employees at that site is not relevant. I am satisfied that the distinction between salaried and other employees is an arbitrary matter determined by the company. The coverage of the Agreement and its predecessors is not determined by whether or not the company designate an employee salaried or not. I am therefore satisfied that the majority support determination application for the O’Connor site is a relevant consideration in establishing that the issue of coverage by maintenance and supervisory employees is not without contention.

[12] I also consider that the fact that one of the AMWU representatives in the negotiation process for the Agreement was an electrician is not determinative of the issue. I accept that there may be some opportunism in the position of the unions given that maintenance and supervisory employees probably participated in the agreement making process, including voting, in the past.

[13] In respect to the issue of accepting an undertaking to alter the coverage clause of the Agreement I drew the Full Bench decision in CEPU and AMWU v Main People Pty Ltd 1 to the attention of the parties. At paragraphs 34 and 35 the Full Bench concluded as follows:

“We consider that in two respects the Deputy President erred in approving the Agreement on the basis of the undertaking proposed by Main People. First, we consider that acceptance of paragraph 1 of the undertaking, which confined the coverage of the Agreement to work covered by the Metals Award, resulted in a significant change to the Agreement contrary to the requirement in section 190(3)(b) of the FW Act. It may be accepted that an undertaking which clarifies an ambiguous provision of an agreement for which approval is sought in accordance with the intention of the parties will not be likely to cause a significant change in that agreement. However, this was not a case of ambiguity. The breadth of the classifications in the Agreement, and the geographical scope of its coverage, made it apparent that it had application beyond work covered by the Metals Award. The first Full Bench made a clear finding to that effect in the Appeal Decision with which we agree.

The scope of coverage of an enterprise agreement is one of its fundamental features. The coverage provision of an agreement serves to identify the class of persons who will be entitled to its benefits while it is in operation. The importance of an agreement's coverage is signified by the fact that, under the FW Act, section 186(3) requires the group of employees covered by the agreement to be fairly chosen. For that reason an undertaking which purports to alter the coverage of an enterprise agreement by excluding classes of persons who, on the face of the agreement, would be covered by it, will always be likely to be a significant change.

And then in paragraph 36, it goes on to say:

“Further, it was with respect an incorrect approach to attempt to discern the parties' common intention concerning the coverage of the Agreement from the statutory declarations supporting the application for approval of the Agreement rather than from the text of the Agreement itself.”

And then the Full Bench decision quotes from Golden Cockerel decision:

“Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement.””

[14] Of course, this case is distinguishable from Main People in that the undertaking would be about expanding the coverage rather than narrowing the coverage, but it seems to me that the two fundamental principles expressed in Main People are: firstly, that the scope of an agreement is a very fundamental part of the agreement and therefore a change to the coverage would be regarded as a substantial change to the agreement; and secondly, that when looking at the issue of the coverage of the agreement and mutual intention it's the language the parties have used to express the agreement that I should rely on, not the subjective intention of the parties.  For those reasons, I am satisfied that maintenance and supervisors are not covered by the agreement and I could not accept an undertaking to substantially alter the coverage. Visy accepts in its final submission that an undertaking cannot on its own be used to alter the scope of the Agreement.

[15] The power in Section 586(a) to “allow a correction or amendment of any application or other document relating to a matter before the FWC on any terms that it considers appropriate” is a power relating to the conduct of matters before the Commission. It is distinguishable from the powers to correct obvious errors in a decision or vary or revoke a decision or deal with ambiguity or uncertainty. The Commission is not permitted to vary or revoke a decision made in respect to an enterprise agreement. An agreement is only able to be varied in specific circumstances and subject to specific procedures. I do not consider that it would be appropriate or consistent with the scheme of the Act to use the power to correct or amend a document under Section 586(a) to change the substance of an agreement. To do so would be to undermine the protections in the Act which limit the capacity to vary an agreement. The cases referred to by Visy where the Commission has utilised Section 586 have been to correct administrative or obvious errors or to rectify procedural failings. It is possible that this might extend to correcting some minor error in the name of a party or the wording of a classification or job title in a scope clause but I doubt that it could extend to a substantial change to the scope of an agreement even if the problem with the scope clause was unintended.

[16] I accept that prior to 2007 the Visy agreements covered maintenance employees, however, the subsequent agreements were varied in their coverage terms and do not cover maintenance or supervisory employees. There is nothing unreasonable or unusual about the inclusion of maintenance and supervisory employees in various consultative and other arrangements which are provided for under the agreements. To include classifications and pay rates for maintenance and supervisory employees would be a substantial and significant change to the Agreement.

[17] Ms Ford gave evidence that the issue of the coverage of maintenance employees had been a matter of some contention and that an employer bargaining representative had expressed the view that the maintenance employees were not covered. I am not satisfied that the evidence established a common understanding or intention or even a consensus about the historical application of the agreements. Mr Ford’s evidence was that the AMWU did not understand that the Agreement would apply to these workers.

[18] I am not satisfied that I should allow a correction to the scope of the Agreement under Section 586(a) of the Act and I consider that I cannot accept an undertaking to alter the scope of this Agreement.

Is there a valid majority?

[19] I am satisfied that:

● The maintenance and supervisory employees must be excluded from the vote.
● There is no evidence that the maintenance and supervisory employees influenced the other voters.
● If there is still a valid majority after all those who do not fall within the coverage of the Agreement are excluded then I could still be satisfied that there is a valid majority.

[20] I am satisfied that union representatives were present as scrutineers for the ballot in each location. Given the highly contested nature of the ballot I am satisfied that the unions are in a good position to provide evidence of any alleged irregularities including persons voting who should not have voted. The unions have challenged some 65 votes. 2 Visy accept that 40 or 41 employees should be excluded on the basis that I have found that the maintenance and supervisor employees must be excluded. The reason for the doubt in the numbers is that there are three employees at Visy Board Warwick Farm lists with the name Mr Van Tran. They are all described on the classification list as operator. One of them is included on Visy’s list on the basis that “evidence before the Commission that he is a Leading Hand”. The other appears in the Visy disputed list. I am satisfied that they are two different employees and therefore the number Visy accept should be excluded is 41.
[21] There are two types of list that form part of the evidence in this proceeding:

● The voting rolls utilised at the Visy Board Dandenong, Smithfield and Warwick Farm sites.
● Lists for each site covered by the Agreement constructed by Visy which showed the classification of employees who were on the voting rolls.

[22] There are some minor inconsistencies between the two lists. I am satisfied that where there are inconsistencies between the two lists the voting roll should be utilised as the list which shows who voted. The classification list has been constructed by Visy from matching the roll and the classifications which have come from the payroll system and the errors arise from that process. The classification list is to be utilised to assist in determining which employees who are on the voting list should be excluded because they fall outside the coverage of the Agreement. They are also the only lists in evidence in respect to the 64 employees said to be eligible to vote from Visy Paper (including Visy Recycling) and the 70 employees said to be eligible to vote from Visy Board O’Connor.

[23] In respect to Mr Van Tran, Mr Hines gave evidence that Mr Van Tran was only acting in the supervisory role and that he has now returned to the role of assistant operator. Mr Lay who gave evidence for the AMWU agreed that Mr Tran had now returned to the role of assistant operator. The AMWU submit that Visy regularly promotes workers from operator roles into supervisory roles and that whilst in those supervisory roles they may be called upon to perform operator duties. I accept that this is the case in respect to at least some of those who are classified as supervisors. However, in respect to Mr Van Tran I am satisfied that the evidence establishes that he was only temporarily acting in a supervisory role and that his substantive classification is as an operator within the scope of the Agreement.

[24] In respect to Visy Board Smithfield there are two employees in dispute; Mr Rodriguez and Mr Dalgleish. Mr Rodriguez is a fitter and he is on the voting roll but he is not listed as having cast a vote on the day. However, given that some postal votes were received, I consider that it is possible that Mr Rodriguez voted by post.

[25] In respect to Mr Dalgleish, he does not appear on the list constructed to identify the classification of employees. The AMWU delegate, Mr Stojanovski did not challenge Mr Dalgleish’s right to vote. We do not know what Mr Dalgleish’s classification is and as a result it is possible that he may be a maintenance or supervisory employee.

[26] In respect to Visy Board Dandenong there are four employees in dispute; Mr Yassin, Mr Braganolo, Mr O’Meara, and Mr Dipaolo. Mr Yassin is an operator/supervisor on the classification list. He is noted as absent on the voting roll. However, given that some postal votes were received, I consider that it is possible that Mr Yassin voted by post.

[27] In respect to Mr Bragagnolo, Mr Rustemovski for the AMWU gave evidence that Mr Bragagnolo is a heavy dispatch supervisor whilst Mr Beaton gave evidence that he runs the sheet line and is the site’s heavy duty forklift driver and is therefore covered by the Agreement classifications. I found Mr Rustemovski to be a convincing witness with a long history at Visy and I consider that he would be familiar with the work of his members in the relevant area. I therefore accept his evidence concerning Mr Bragangnolo.

[28] In respect to Mr O’Meara he appears on the classification list as a forklift driver. Mr Rustemovski gave evidence that he is a storeman. Mr Beaton gave evidence that he is a storeman and that the majority of his work is using the forklift and doing purchasing for the site. 3 I am not satisfied that the classification forklift driver under the Agreement should be read so narrowly as to exclude the role of a storeman who utilises a forklift for much of his or her work. I therefore accept that Mr O’Meara is covered by the Agreement.

[29] In respect to Mr Dipaolo, he appears on the classification list as an operator. Mr Rustemovski gave evidence that he is a scheduler. He was asked if he is often called upon to run machines and Mr Rustemovski said that “he shouldn’t be, but he probably is. I’m not sure. I haven’t seen him.” 4 Mr Beaton agreed that Mr Dipaolo is “our scheduler” and gave evidence that he could also “run nearly all of our machines”.5 I am not satisfied that the classification operator under the Agreement should be read so narrowly as to exclude an operator who also performs scheduling duties. I therefore accept that Mr Dipaolo is covered by the Agreement.

[30] In respect to the O’Connor WA site, the classification list includes some employees who are listed as operator class 1A and some who are listed as operator class 1 and some who are listed as operator class 2 and some who are listed as operator class 2A. There are 15 or 16 employees who are classified as operators but without the A or B sub-categorisation. The classification structure in the Agreement for this site is not clearly marked but by a process of elimination I am satisfied that it is the structure found at the top of page 40 of the Agreement. That structure refers to Class 1A, 1B, 2A and 2B and not to Class 1 and Class 2. The AMWU did not ask any questions of the Visy witnesses in respect to this issue and did not call any evidence in respect to the O’Connor site. The AMWU argues that because Visy’s payroll system continues to classify some employees who have been promoted to supervisory roles as operators the classification on the Visy list does not provide certainty that the employees are not supervisors.

[31] I am not satisfied that the failure to include A or B after Operator 1 or Operator 2 raises any real doubt about coverage under the Agreement. Consideration of the Agreement as a whole and the structure of the classifications in particular, leads me to conclude that the Agreement is intended to cover the classification of operators, however described.

[32] There are two other employees whom the AMWU say should be excluded. Mr Bahn and Mr MacLean are designated as “forklift” on the Visy classification list. Forklift drivers are not specifically covered by the classifications for the O’Connor site. I am not satisfied that the classification of operator should be read narrowly as excluding forklift drivers. The fact that forklift drivers are identified separately on the payroll system does not mean that these employees are not appropriately classified under one of the operator grades in the Agreement.

[33] In respect to the Visy Paper and Visy Recycling employees only 11 out of 64 voted in favour of approving the Agreement. The AMWU argues that some of those 43 Visy Paper employees who are classified in the Visy classification list at the highest level (i.e. VP Smithfield Existing Band 5) could be supervisors. They raise this because of the unreliability of the Visy classification list. They also point to one employee of Visy Recycling, Mr Andrew Fairweather who they say was ineligible to vote. They say this because his classification is said to be “VP Smithfield Operation”. That classification does not appear in the classification structure for Visy Recycling. The classifications in the Agreement for Visy Recycling are sorter/operator, mobile equipment and leading hand. I am satisfied that it is more likely than not that Mr Fairweather falls within the sorter/operator classification.

[34] I am therefore satisfied from the evidence that in addition to the 41 persons identified by Visy who are supervisors and maintenance employees who voted there are four other employees who should be excluded: Mr Rodriguez, Mr Dalgleish, Mr Yassin, and Mr Bragagnolo. The result with the disputed employees included was 443 voted, 247 in favour and 196 against. If one assumes that all 45 excluded employees voted yes then the remaining total voting is 398, 202 in favour and 196 against. On this basis I can be satisfied that there is still a majority in favour of the Agreement after excluding all those who are supervisors and maintenance employees.

[35] The AMWU argue that this is too close for me to be confident that there was in fact a valid majority. They argue that there may well be other employees who are in fact supervisors who have been included on the roll and may have voted. They argue that the Visy payroll system classifies some of the supervisors who are paid weekly as operators.

[36] In Supplementary Submissions for Visy there are lists of the disputed employees at paragraphs 25 and 26. Visy accept in their chart that the classifications of the following employees are incorrect on the lists produced by Visy utilising their payroll system:

● VB Warwick Farm: Cesaraono, Demamiel, Van Tran. These employees were listed as operators or forklift when they are supervisors.
● VB Smithfield: Gardner. This employee was not on the classification list. I am satisfied that this was a clerical/administrative error rather than a classification error.
● VB Dandenong: Husen, Lewis, Morelo, Tuyau, Walkenden. These employees were listed as operators when they are supervisors.

[37] In addition to the above I have found that Mr Bragagnolo who was classified as an operator on the Visy list is in fact a supervisor.

[38] The AMWU submit that there are other reasons to doubt the correct classification of employees on the roll. The AMWU submit that it is not reasonable to expect that the AMWU delegates would identify every potentially ineligible voter. In particular they suggest that:

● It is likely that the Visy Paper and Recycling lists would contain some schedulers, planners, stores and quality control workers as were identified at Dandenong. For the reasons set out earlier I did not find that those workers fell outside of the classification structure.
● At the O’Connor site it is likely that some of those listed on the Visy list as operators are in fact supervisors. In the absence of any evidence to the contrary I am also not prepared to conclude that some of those listed as operators at the O’Connor site are in fact supervisors. The proportion of supervisors included in the lists varied between sites. There was only one supervisor included in the Visy Board Smithfield list whilst there were many more in the Warwick Farm and Dandenong lists. The proportion of those whom I have found were wrongly classified in the lists also varied. There were none in the Visy Board Smithfield list.

[39] The Act allows for a great deal of flexibility concerning the conduct of a vote for an agreement. In the case of this vote there was a great deal more scrutiny than the minimum standards required by the Act. For example, despite its deficiencies there was a voters’ roll. The union had active scruitineers participating throughout the voting process.

[40] I must be satisfied that a majority of the employees that will be covered by the Agreement who cast a valid vote were in favour of the Agreement. Based upon the evidence before me, even if I were to assume that every invalid vote was a vote in favour of the Agreement, there is still a majority.

[41] I accept that it is possible that there were other employees who have not been excluded who were supervisors or maintenance employees. If I was satisfied that the inclusion of the supervisors and the maintenance employees on the voting roll was a tactic by Visy to secure a yes vote then I would be more concerned about this matter. However, I am satisfied that maintenance and weekly paid supervisors were included in the vote for past agreements. Given the active role of the union I am satisfied that this would have been challenged if it was regarded as improper. I have no doubt that Visy encouraged those whom they could best influence to vote “yes” and the unions encouraged those whom they could best influence to vote “no”. However, I do not consider that there is any basis to conclude that Visy deliberately manipulated the voting roll.

[42] If I am to speculate about the probability of other errors in the roll then it would be appropriate to also speculate about the assumption that all the excluded employees voted “yes”. I do not consider that there is any reason to assume that the maintenance employees who voted would have voted any differently to the other employees who cast a valid vote. They are equally affected by the key issue in contention, the income protection insurance. They just as likely to be members of the union as the other employees. There was evidence that some of them are union representatives who participated in the bargaining. I therefore consider it unlikely that all of those employees voted yes when not much more than 50% of the votes cast in total were in favour. 19 of the excluded votes come from maintenance employees.

[43] On balance I am satisfied that a majority of the employees that will be covered by the Agreement who cast a valid vote were in favour of the Agreement.

Was there a genuine agreement?

[44] I am satisfied that the Agreement is a “roll over agreement.” The rates of pay and conditions in the current agreement were superior to the Award conditions and pay by a considerable margin. It was only necessary to explain the changes from the last agreement. In that respect apart from minor technical changes the only changes were the wage increases and the change to the income protection insurance provisions. The only issue concerning the adequacy of the explanation of the effect of the Agreement relates to the information provided concerning the income protection insurance changes. The active involvement of the union in the debate about this matter should also be taken into consideration.

[45] The AMWU and the CFMEU argue that due to misleading information circulated by Visy and in particular the information concerning the effect of the changes to the income protection clauses the employees cannot be said to have given informed consent to the Agreement.

[46] Section 188 provides a follows:

“188. When employees have genuinely agreed to an enterprise agreement

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

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

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

(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.”

[47] The unions are effectively arguing that Section 180(5)(a) has not been met because all reasonable steps were not taken to ensure that the effect of the income protection term was explained to relevant employees, the requirement of Section 188(a)(i) has not been met and the Agreement cannot be approved. They also argue that Section 188(c) has not been met because the process leading up to the making of the Agreement was tainted by misinformation and non-disclosure.

[48] The clause in the Agreement that deals with income protection is Clause 18:

“18. SALARY CONTINUANCE

18.1 Income protection cover will be provided by Visy via a nominated Income Protection provider or an agreed alternative income protection provider. All benefits, entitlements, obligations are as per the Visy Policy document and the Company will not be required to provide additional income protection benefits and/or self-insure in any way.

18.2 The benefits available to employees under this insurance arrangement are as follows:

a) Two year benefit period (i.e. 104 weeks)
b) Coverage for total and partial incapacity
c) 90% of employees’ salary is covered under the policy
d) The benefit is calculated on the average of the previous 2 years’ earnings
e) Employees are covered for all illnesses/injuries if working normal hours and doing normal duties at commencement of the policy except – war, self-inflicted injury (deliberate self-harm) and pregnancy
f) There is a 28-day wait for the benefit to commence and any benefits are paid in arrears. Employees are entitled to paid leave in accordance with their entitlements during this waiting period
g) Worldwide cover for 13 weeks, after this period employees will need to notify the insurer to maintain cover
h) Age limits to be set at 75 years of age for illness and injury. Death by any cause up to 70 years of age
i) Mental illness up to a maximum of 104 weeks. After 26 weeks you must be receiving treatment from a qualified psychiatrist, physiologist or qualified rehab provider
j) Weekly benefit is 90% of average weekly income plus 10.22% Superannuation

18.3 Life cover of $20,000 will also be provided under a separate insurance arrangement.

This benefit will be up to 2 times superannuation salary, tapered down from age 51. This policy shall provide for TPD cover in addition to the TPD benefits provided under the Visy Industries Superannuation Fund of up to 3 times superannuation salary.

18.4 Transition Arrangements

Any employees who have a salary continuance claim accepted as at 26 November 2004 shall be entitled to continue to receive salary continuance benefits as per the Visy Industries Enterprise Agreement NSW 2001 and the Visy Industries Southern EBA 2001.

18.5 Re-Training

The Company is committed to retraining employees on salary continuance as soon as it becomes evident that they cannot return to their pre-injury/illness duties, usually within the first 52 weeks. The following provisions shall not affect the quantum or the duration of salary continuance benefits provided for in the policy.

The Company will endeavour to identify an existing available position that suits the employee’s medical restrictions, within the employee’s existing workplace, where the employee has the capability to perform the alternate duties.

Where a suitable available role exists, the retraining will form part of an employee's return to work program and will be paid for by the Company. The employee will participate fully in this program. The relevant FOC/MOC shall be kept informed of retraining and return to work programs where requested by the affected employee.

Transition to the new role must be as mutually agreed between the Company and the employee and confirmed in writing.

Where a suitable available role carries a lower base pay rate, the employee's current base hourly rate shall be preserved (red circled) and adjusted by 50% of any future wage increase until exceeded by the new rate.

For the purposes of this clause, base rate shall be the superannuation salary definition.

18.6 In the event of a dispute regarding the application of this clause, it shall be resolved in accordance with the Dispute Settlement Procedure provided for in this Agreement.

18.7 Provider Performance

Any rejected claim overturned by the Financial Ombudsmen’s Services prompts a formal review of the nominated Income Protection Provider. A formal review will lead to triggering a revert back to the previous Income Protection Provider. Any revert to the previous Income Protection provider must be in accordance with competitive terms, including sub clause 18.2, and will be subjected to the performance monitoring terms of this clause, which will trigger a tender process.

Visy can not be adversely impacted by a revert condition. This sub clause will be reviewed in any future enterprise agreement negotiations.”

[49] The alleged misinformation or misleading information relates to:

● Employees were told that the effect of the Agreement was to change providers from WageGuard to QBE. However, the unions say that Clause 18.1 gives Visy a unilateral right to select and change providers.
● Employees were told that there would be a provider performance clause which would lead to a reversion to WageGuard if QBE rejected claims unfairly. However, the unions say that Clause 18.7 does not compel a return to WageGuard but leaves the change of provider essentially as a discretionary matter for Visy.
● Employees were told that the QBE policy would mean employees would be better off, however, they failed to disclose that: the QBE policy does not contain cover for death by suicide or illness whilst the WageGuard policy does; the QBE policy allows QBE to unilaterally cancel the policy; and the QBE policy allows for deduction of potential earnings from weekly benefits which is not allowed under the WageGuard policy.

[50] In the AMWU bulletin to members of 8 December 2016, which was also provided in Vietnamese language, the union states when explaining why employees should vote no to the proposed Agreement:

“Instead they inserted QBE as the new insurance provider and changed Clause 18. Clause 18 no longer refers to IUS (WageGuard) and now takes away any rights employees and the union have in choosing an alternative provider and gives no protection if QBE rejects claims without valid reasons”.

[51] In a “Truth Alert” to members dated 8 December 2016, also published in Vietnamese language, the AMWU states:

“We want to make sure that the concerns that we have about general insurers and the QBE claims process are addressed”.

[52] In a bulletin dated 12 December 2016 the AMWU provided detailed comments on Clause 18. They included:

● In respect to Clause 18.1: “nominated by Visy means that income protection insurance is solely chosen by Visy. Your union and YOU have lost any right to be involved in this choice.”
● In respect to the list of benefits in Clause 18.2: “this means that Visy will not be obligated to honour any of the entitlements listed at 18.2. For example in 2 years under the policy QBE has the right to change the policy…. This means for example that they could decide that mental health will no longer be covered.”
● In respect to Clause 18.7 Provider Performance: “We wanted to make sure that if a new insurance provider did not work out (for example they were denying too many claims) we wanted a clause to say that we would return to WageGuard…. Visy did not consult with the union and wrote it themselves. The way this clause is written means nothing. It gives you not protection”. “No mention of IUS or WageGuard”. “Definition of “May” means probably not.” “Visy has inserted this because it automatically means that it will not be WageGuard.”
● “The AMWU was concerned about the following things: 1. Life vs general insurers, WageGuard is a life insurer and QBE is a general insurer. There is a common perception that life insurers always pay a claim and general insurers first step is to decline claims. 2. The fact that QBE is able to change the policy every two years, which means nothing is guaranteed. A terms of a life insurance policy can never by changed.”

[53] The information Visy provided to employees included:

● “As part of the QBE Policy offer, Visy has put into the EBA terms that allow for a revert back to WageGuard if QBE was to reject claims in an unreasonable manner.” 6

“WageGuard has also failed to meet any of the enhanced benefits offered by QBE including extension of the age (75years), mental health inclusion and additional superannuation payment.” 7

● “AMWU demands WageGuard despite the proposed QBE offer which meets and exceed the current terms and includes many extra benefits for all our employees.” 8
● A table comparing QBE and WageGuard issued on 14 December 2016. That table does not refer to the three issues raised by the union: the exclusion from death cover of suicide or illness; capacity of QBE to unilaterally cancel the policy; and that the QBE policy allows for deduction of potential earnings from weekly benefits.
● An explanation of the terms of Clause 18 was provided on 14 December 2016. In respect to Clause 18.1 it states: “this clause provides that income protection cover will be provided by Visy to employees through a nominated or agreed upon insurer.” In respect to 18.2 it states: “This clause sets out the benefits available to employees under the income protection cover. The effect of this clause entitles employees to this level of coverage regardless of the insurer the policy is held with.” In respect to Clause 18.7 it states: “Under this clause, if the insurer rejects a claim that is later overturned by the Financial Ombudsmen’s Services, a formal review of the insurer will be undertaken and will result in a revert back to the previous insurer.”

[54] In respect to the issue of Visy’s right to change provider the Visy bulletin of 14 December 2016 does state that income protection cover will be provided through a nominated provider. I accept that Visy did not highlight this in its other material and Visy may have encouraged employees to think that the Agreement reflected that the provider would be QBE. However, the unions in their campaign material highlighted this issue. The impact of this issue is tempered by the fact that Clause 18.2 makes the central benefits of any income protection policy binding upon Visy.

[55] In respect to the provider performance clause (Clause 18.7) Mr Harmer for Visy gave the following evidence:

“One of the concerns was what would happen if claims were being unreasonably refused?---We believe that we addressed that within the terms of the clause.

We'll get to how you addressed it?---Okay.

One of the concerns was that claims might be unreasonably refused by an insurance provider?---It was raised during the meetings in which we were involved, yes.

That was raised.  It was raised by the AMWU, wasn't it?---Yes.

What was raised was we want a safety net.  We're trying something new.  If it goes wrong, we want to be able to go back to what we know works, is that about right, as to what they were saying?---No, not necessarily.  I think the AMWU's approach was that we don't want to change.  We want to stay with WageGuard irrespective.

Talking about the provider performance clause, Mr Harmer, the point of that clause is it's - - - ?---Well, that was really our decision to give some comfort to employees that may have felt that there was that risk and we did draft that clause and inserted that into the - into the agreement.

You're giving comfort to these employees.  The comfort is if things go wrong with QBE for whatever reason, you'll go back to WageGuard?---That is the undertaking under that clause, yes.

That's the undertaking.  That's how you explain it to employees?---Yes.  Well, again not me personally but management at that site.
That's your understanding of how Visy explained it to employees?---Yes.

Certainly you've put out a number of bulletins.  That's what message you were trying to convey with the documents you've distributed.  Isn't that right?---Yes.” 9

[56] I am satisfied that the overall advice from Visy to employees was that this clause meant that if things go wrong with QBE then you’ll go back to WageGuard. The most conservative statement issued was in the explanation of terms document where the effect of the clause was described as follows: “Under this clause, if the insurer rejects a claim that is later overturned by the Financial Ombudsmen’s Services, a formal review of the insurer will be undertaken and will result in a revert back to the previous insurer.” I am not satisfied that this accurately describes the effect of the clause. I am satisfied that the requirements in respect to no adverse impact on Visy, a tender process and competitive terms mean that reversion is not guaranteed.

[57] Ms Ford for the AMWU gave evidence that she sought approval to conduct paid time mass meetings during the access period but that Visy refused this. She said that AMWU organisers exercised right of entry during the period to speak to workers about the agreement. Although the AMWU was not permitted to have paid time meetings during the access period I am not satisfied that it was prevented from effectively communicating its concerns about the income protection clause to employees. I accept that Visy was able to conduct information meetings with employees during which it encouraged a vote in favour of the Agreement and promoted what it saw as the benefits of Clause 18.

[58] It is neither appropriate nor necessary for me to make an assessment of the advantages and disadvantages of the clause in the current agreement when compared to the Agreement. The explanation required is about the effect of the proposed Agreement.

[59] I accept the evidence of Visy that they conducted at least two onsite meetings and invited the independent assessor selected by the AMWU to present to employees. In that respect I am satisfied that information concerning the impact of Clause 18.2 which sets out the income protection conditions were explained to employees. In my view the provisions of Clause 18.2 put a floor on the benefits Visy must provide to employees. Therefore the concern raised by the CFMEU that the policy could be cancelled or weekly benefits reduced could not operate to reduce the benefits specified in Clause 18.2. I therefore do not consider that there was any significant failure to explain the effect of the Agreement in this respect. In respect to the issue of death cover I am satisfied that there are many aspects of the competing policies and it would be unreasonable to expect that every aspect is explained in detail. I am satisfied that the role of the independent assessor selected by the AMWU assisted in ensuring that there was a reasonable explanation of the comparative effect of the policies. The unions had the opportunity to ensure that employees were aware of their concerns about any issues they felt were detrimental in the policies. The balance on this question is one where reasonable minds can legitimately differ and the unions and Visy legitimately argued for their respective positions. I am not satisfied that it was misleading for Visy to claim that the QBE policy was superior, nor, was it misleading for the unions to argue against that proposition.

[60] I accept that the explanation in respect to Clause 18.7 was inaccurate and incomplete. However, what are reasonable steps to explain the terms and conditions and their effect depends upon the circumstances. Where an employer tells employees that they will be better off if they vote for an agreement and that agreement manifestly contains significant terms which are detrimental when compared to the award then reasonable steps cannot have been taken to explain the terms and conditions and their effect. However, the requirement to explain the terms operates in the real world of industrial relations. Employers cannot be expected to be totally objective and knowledgeable. Mistakes and omissions will occur. The information provided needs to be looked at as a whole and in context. In this case there is no issue in respect to the BOOT and no substantial issue in respect to the NES. The issue of Clause 18 was central in the bargaining for this Agreement and therefore it needed to be central in any explanation about the Agreement. Although the explanation in respect to one aspect of Clause 18 was inaccurate and incomplete I am not satisfied when considered as a whole that this is sufficient to conclude that Visy failed to take all reasonable steps. On balance I am satisfied that Visy took all reasonable steps to ensure that the terms and conditions and their effect were explained to employees. I accept that the explanations were in an appropriate manner and for the reasons set out in the Visy Supplementary submission it took into account the needs of employees whose first language is not English. 10

[61] I now turn to the issue of Section 188(c). I am not satisfied that Visy accurately explained the effect of Clause 18.7 to employees. I am satisfied that Visy gave the impression that there would be a reversion to WageGuard in the event that there were problems with QBE. In one document this was narrowed to circumstances where the insurer rejects a claim that is later overturned by the Financial Ombudsmen’s Services. However, I am satisfied that even that explanation was inaccurate because the reversion to the previous insurer is in fact subject to restrictive conditions which may not be met.

[62] The Full Bench recently addressed the concept of genuinely agreed in the context of Section 188(c) of the Act in KCL Industries Pty Ltd. 11 The Full Bench adopted the principles outlined by Asbury DP in Central Queensland Services Pty Ltd.12 Asbury DP summarised the approach as follows:

a. The circumstances to be considered are those that existed when the agreement was voted on.
b. A consideration of all the relevant circumstances revealed by the material before the Commission.
c. Circumstances including the provision of material or information that is misleading or intimidating or where approval is affected by non-disclosure, will be relevant to the Commission’s assessment.
d. Genuine agreement requires informed consent of employees and an absence of coercion.
e. Section 188(c) is only a basis for finding that an agreement is not genuinely agreed to if there are found to be reasonable grounds for this belief.
f. The requirement for genuine agreement in conjunction with the objects of the Act betokens a concern with the authenticity and moral authority of the agreement. 13

[63] I am not satisfied that there was coercion in this case. I am satisfied that the information provided by Visy concerning the effect of Clause 18.7 was to some extent misleading and affected by non-disclosure. However, I am satisfied that the adequacy and effect of Clause 18.7 was the subject of heated contention between the unions and Visy. Both sides told employees to consider the facts and tried to set out the facts on this matter as they understood them. I am satisfied that in a well unionised work environment employees are unlikely to accept the opinion of the employer as incontrovertible fact. The employees are also likely to consider the views expressed by the unions particularly through its delegates.

[64] On balance and taking into account all of the circumstances I am not satisfied that there are other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees. I am satisfied that there has been genuine agreement because there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees and because I am satisfied that Visy took 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 the explanation was provided in an appropriate manner.

[65] The application will therefore be approved. The undertakings which now form part of the Agreement are attached.

[66] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), Construction, Forestry, Mining and Energy Union and The Australian Workers’ Union have given notice under Section 183 of the Act that they want the Agreement to cover them. In accordance with Section 201(2) of the Act I note that the Agreement covers the three organisations.

[67] The Agreement is approved and, in accordance with Section 54 of the Act, will operate from 17 March 2017. The nominal expiry date of the Agreement is 30 September 2019.

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 1   [2015] FWCFB 4467.

 2   See Visy submission at paras 25 and 26.

 3   PN823.

 4   PN495.

 5   PN828.

 6   Bulletin from Mr Harmer of 13 December 2016.

 7   Bulletin from Mr Harmer of 13 December 2016.

 8   Bulletin from Mr Harmer of 13 December 2016.

 9   PN548 to PN557.

 10   Visy Supplementary Submission at para 63.

 11   [2016] FWCFB 3048.

 12   [2015] FWC 1554.

 13   KCL Industries Pty Ltd [2016] FWCFB 3048 at [29]; Central Queensland Services Pty Ltd [2015] FWC 1554 at [65].