Waterdale Enterprises Pty Ltd as Trustee for the Boag Family Trust T/A Peel Finance Brokers

No judgment structure available for this case.

[2010] FWA 4509

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.185—Approval of enterprise agreement

Waterdale Enterprises Pty Ltd as Trustee for the Boag Family Trust T/A Peel Finance Brokers
(AG2010/9123)

Banking finance and insurance industry
COMMISSIONER ROE	MELBOURNE, 21 JUNE 2010

Application for approval of the Peel Finance Brokers Enterprise Agreement 2009 – genuine agreement – whether the signing of individual agreements constitutes voting – application refused.

[1] An application has been made for approval of an Enterprise Agreement known as the Peel Finance Brokers Enterprise Agreement 2009 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). Section 185 is in Part 2–4 of the Act which provides for the making of Enterprise Agreements between an employer and their employees who are employed at the time the agreement is made and who will be covered by the agreement. The application has been made by Waterdale Enterprises Pty Ltd as Trustee for Boag Family Trust trading as Peel Finance Brokers. The Agreement is a single-Enterprise Agreement. The Applicant is a small enterprise providing finance broking services and only 5 employees are proposed to be covered by the Agreement. The F17 Form states that all 5 employees to be covered by the Agreement voted in favour of the proposed Agreement.

[2] The application for approval was received by Fair Work Australia on 10 May 2010. On 13 May 2010 my Associate wrote to Mr Nigel Irvine, Workplace Negotiations (WA) who was acting for the applicant setting out a number of concerns I initially had with the application. The issues raised in that correspondence were as follows:

“Re: Application by Waterdale Enterprises Pty Ltd as Trustee for the Boag Family Trust T/A Peel Finance Brokers - AG2010/9123

The Commissioner has made an initial assessment of the Peel Brokers Enterprise Agreement 2009.

1. The Commissioner is concerned that the agreement may not be a collectively bargained instrument consistent with the objects of the Fair Work Act. This concern arises from the facts that:

The parties to the agreement are not the employees of the company but “the employee whose name, details and signature appear at the end of this agreement”. The Commissioner is concerned that this means that any new employee would not be covered by the agreement and he doubts that this is consistent with Section 186(3) and (3A) which requires that the group of employees to be covered by the agreement is fairly chosen.

The agreement is in the form of a statutory individual contract and this directly contradicts Section 3(c) of the Act which states that statutory individual contracts “can never be part of a fair workplace relations system”

The agreement attempts to include common law agreement provisions into the collective agreement document thus exposing employees to penalties and also making enforceable terms which might not otherwise be enforceable at common law. For example clause 2.4 which binds employees to “any polices and procedures formulated and amended from time to time by the employer” and clause 23 Confidential information which amongst other things restricts future employment in a manner which is unlikely to be fully enforceable at common law.

2. The Commissioner is concerned that the procedures for bargaining the agreement may not be fully consistent with the requirements of the Act. In particular the Commissioner is concerned that the signature pages are signed in some cases by the employer on 16 February 2010 which is the date on which the F17 statutory declaration says employees were given a copy of the agreement, a copy of the notice of their representational rights, and a letter outlining the process and proposed voting date. Four employees have signed the document on 16 March which is the date when according to the statutory declaration employees were first requested to approve the agreement. One employee signed the document on 30 April. The employer declared at question 2.1 that the agreement was made and the voting process concluded on 23 April 2010. In order to clarify this situation the Commissioner would appreciate a copy of all the materials provided to employees on 16 February.

3. The Commissioner notes that the agreement was made on 23 April but the application for approval was signed and dated and was in fact also received on 10 May which is a total of 17 days. The application needs to be made within in 14 days (Section 185(3)) however the Commissioner does have the discretion to grant an extension to this limit. Please advise the Commissioner on what grounds he should consider an extension to the time period.

4. The Commissioner is concerned that Clause 2.4 purports to make the policies and procedures of the company a part of the agreement. However, there is no evidence from the statutory declaration that all employees were provided with a copy of these documents on 16 February or in the alternative provided with access to these documents throughout the period leading up to the ballot. In order to clarify this situation the Commissioner would appreciate any information on steps the employer took to provide employees with access to these documents during the period between 16 February and the ballot.

5. The Commissioner is also concerned that the policies and procedures of the company could be changed in a manner which altered the conditions of employment. This means that employees could not have genuinely agreed to the agreement given that they could not know what it is they were agreeing to. It also means that the Better Off Overall Test could not be met as the conditions could change during the life of the agreement. It also means that the Commissioner cannot be sure that the agreement does not contain conditions which are unlawful or discriminatory. The provisions of clause 23 may also breach the better off overall test.

6. The Commissioner is concerned that clause 19 public holidays does not include the right of employees to reasonably refuse to work on a public holiday as required by the National Employment Standards. The Commissioner is concerned at the provision the a probationary employee is only to have 1 days notice of termination (Clause 24.4 of the Agreement) rather than the one week provided for in the National Employment Standards. The Commissioner is concerned that ability of the employer in clause 24.12 of the agreement to deduct from entitlement any period of notice not provided by the employee may be in breach of the National Employment Standards.

7. The Commissioner is concerned that Clause 26.2 which allows the employer to stand down an employee without pay whilst under investigation for misconduct may be an unlawful term (Section 194 of the Act) in that it reduces the entitlements an employee may have in respect to unfair dismissal and it may also be a breach of the Better Off Overall Test when compared to the Award. In addition clause 6.8 defines serious or gross misconduct in a way which is more expansive than the definition in the Act and this is also likely to be a breach of Section 194 of the Act.

8. The Commissioner is concerned that the Better Off Overall Test may not be met. In this respect the Commissioner notes that in the F17 form the employer has declared that there are no terms of the agreement which are less beneficial than the reference award which is the Banking, Finance and Insurance Award 2010. However, it appears to the Commissioner that at least the following matters are less beneficial than the reference award:

Casual loading (clause 6.3) is at 20% whilst the award is 25%

All overtime is at ordinary rates

The employee is required to provide their own fully serviced motor vehicle

No shift penalties for work outside of spread of hours

No annual leave loading

No allowances

The Award rates of pay are currently identical to the rates of pay listed in Clause 13 of the Agreement. Clause 15 provides for a pay increase of 2% from 30 June 2010 and 2.5% from 30 June 2011.

Therefore at the time the agreement would be approved there is no allowance for the value of any of the matters listed above which could potentially be very considerable in value.

The Commissioner would appreciate your response to the above issues by May 19 2010 so that the Agreement can be dealt with without delay. Some of the problems outlined may be capable of being resolved through the provision of an appropriate undertaking. “

[3] On 25 May 2010 Mr Irvine replied as follows:

“RE: Application by Waterdale Enterprises Pty Ltd – AG2010/9123

Thank you for your letter of the 13^th May 2010.

I apologise for the delay in responding to your letter, although we have had registered other enterprise agreements, none of the concerns have been raised before and so it has taken some time to reflect on the Commissioner’s comments.

Para 1:1 The enterprise agreement (EA) was offered to every current employee for their deliberation and an opportunity was given to them to sign the document. The intention of the employer is to have all future employees who come within the scope of the agreement also covered.

Para 1:2 The EA is a collective agreement, but unfortunately does not expressly state that. Every employee received the same document and the conditions therein are the same for all employees and the intention is that all future employees will be covered by the same conditions.

Para 1:3 The EA attempts to highlight the rights and responsibilities of both employer and employee and does not intend to include terms or conditions that are not already applicable.

Para 2 See attachments

Para 3 I apologise for submitting the application late, I am seeking an extension to the application for approval time limit. The employer went on holiday immediately after the signing of the EA by the first group of employees and gave too much time for them all to sign. I correlated the documents on the Friday 7^th May but ran out of time to lodge on that day and was only able to lodge on the next business day being the 17^th.

Para 4 The procedures and policies alluded to in Clause 2.4 are only oral directions given by the employer to the employees from time to time. As employees are required to obey all lawful directions from their employer and this clause is only highlighting this labour rule.

Para 5 Policies and procedures may be changed from time to time irrespective of whether that clause was in the contract or not. The term Policies and procedure is only referring to the way the employee does their work. This business is engaged in the finance industry, which from time to time places requirements on brokers to operate and perform in certain ways and to certain standards. The employer must be able to operate a flexible workplace to respond to those requirements.

Para 6 This business does not work any public holidays, however clause 9.3 gives the employee the right to refuse to work.

Para 7 I agree with the Commissioner’s statement, the employer must be very careful in such circumstances not to act unlawfully, however there may be occasions when this may be appropriate.

Para 8 Yes, again I concur with the Commissioner. I will address these issues with the employer and respond asap.

Thank you for your very helpful comments. I will phone you early next week for your feedback and discussion on how to move forward.”

[4] The document sent to all employees concerning the Enterprise Agreement referred to in the F17 Form and the attachments in para 2 in the letter of 25 May 2010 was received on 9 June 2010 and it reads as follows:

“16 February 2010

Dear Colleen,

RE: Enterprise Agreement

Peel Finance Brokers is seeking to implement an Enterprise Agreement to accommodate recent changes in Federal Government Fair Work legislation.

To that end we have provided you with the following information:

Proposed Enterprise Agreement 2009

Notice of employee representative rights

To be registered under the provisions of the Fair Work Act 2009, all employees will be given an opportunity to sign the Enterprise Agreement.

The employer will provide a representative of the firm to answer any questions and to explain the Enterprise Agreement prior to being asked to approve the agreement.

You will have one month to peruse the Enterprise Agreement and thereafter be given an opportunity to sign.

Under the new Agreement, your wage rate level will start at:

Class: Loans Officer Level: 3

Yours Faithfully,

Terry Boag
PRINCIPAL”

[5] My Associate sent a further response to the applicant on 9 June 2010 as follows:

“Re: Application for approval of the Peel Finance Brokers Enterprise Agreement – AG2010/9123 – Further letter

You kindly provided a response to our letter of 13 May 2010 raising a number of issues with the application to approve the Peel Brokers Enterprise Agreement 2009 on 25 May 2010 and the attachment referred to in that correspondence on 9 June 2010.

The Commissioner is still concerned that the procedures for bargaining for the agreement do not fully meet the requirements of the legislation. It appears from the documentation that agreement may in fact have been made on 16 March 2010 since that is the date on which a majority of the employees signed the agreement. One further employee signed on 30 April 2010. The F17 Form states that the voting was concluded on 23 April 2010 but none of the employees signed on that day. The application was lodged on 10 May 2010. The employer signed the documents for four of the five employees on 16 February 2010 which is the same day that a notice of representational rights was given to employees. This suggests that there was no opportunity for employees to exercise their representational rights and to negotiate around the agreement which is clearly the purpose of the requirements in the legislation for the notice to be issued and for there to be a minimum period between the issue of the notice and the voting on the agreement. Furthermore, the voting process outlined in the letter to employees on 16 February is that “you will have one month to peruse the Enterprise Agreement and thereafter be given an opportunity to sign”. This also suggests that the one employee who signed on 30 April may have been given the notice of representative rights and the proposed agreement on 31 March 2010, the date on which the employer has signed the agreement for that individual.

The Agreement cannot simply cover those who sign it as that would not be a group of employees which is fairly chosen as stated in the letter of 13 May 2010. If it is the intention of the employer that the agreement cover all employees within the scope of the classification structure in the agreement then an undertaking to this effect would be required.

If it is the intention of the employer that the policies and procedures referred to in the document are not part of the agreement and do not and cannot alter the agreement then an undertaking to this effect would also be required and also an undertaking that the provisions of clause 23.4 do not form a part of the agreement for the reasons set out in the letter of 13 May 2010.

The Commissioner remains concerned that clauses 26.2 and 6.8 are unlawful terms for the reasons set out in the letter of 13 May 2010. If this is accepted the problem may be overcome through an appropriate undertaking.

The Commissioner remains concerned that the Better Off Overall Test is not met for the reasons set out in the letter of 13 May 2010.

The Commissioner is obliged to deal expeditiously with applications to approve enterprise agreements. The Commissioner therefore proposes to call a hearing by video conference at 12 noon Eastern Time, 10 am Perth Time, on Friday 11 June to deal with the application to approve the agreement and requests your attendance at that hearing. It would be appreciated if you would provide any additional comments or material you may wish the Commissioner to take into consideration by close of business on Thursday 10 June.”

[6] A hearing was held on Friday 11 June 2010. At that hearing Mr Irvine on behalf of the applicant advised that the applicant was prepared to make undertakings to deal with the issues of concern. Those undertakings were received on 21 June 2010. Those undertakings are as follows:

“Clause 1 of the Agreement: To avoid doubt the Agreement shall apply to all existing and future employees employed within the scope of the classification structure in this Agreement.

Clause 23.4 of the Agreement: The Policies and Procedures referred to in this clause are not part of this Agreement and can not alter this Agreement.

Clause 26.2 and 6.8 of the Agreement: Nothing in these clauses can be used to have the effect of reducing an employee’s entitlements to unfair dismissal protection under the Fair Work Act or to allow an employee to be stood down without pay whilst under investigation for misconduct.

Clauses 6.3, 8.1, 9.1, 11.1 and 13.1 of the Agreement: Notwithstanding the provisions of these clauses of the Agreement all loadings, penalty rates, overtime rates, shift penalties and allowances will be paid as per the Bank, Finance and Insurance Award 2010.

Clause 22.4 will not apply.

Clause 22.2.1 of the Agreement: This clause applies to commission only employees.”

[7] I am satisfied that the undertakings would resolve the concerns about the Better Off Overall Test, the unlawful terms, the fairness of the group of employees who will be covered by the Agreement and the status for the policies and procedures which did not form part of the approval process. The scope of these undertakings is quite extensive and hence there might be some question as to whether they constitute substantial changes to the Agreement. On balanceI am satisfied that the effect of the undertakings are not likely to cause financial detriment to any employee covered by the Agreement; or result in substantial changes to the Agreement. Acceptance of the undertakings is consistent with the object of Part 2-4 of the Act to facilitate the making of agreements. The bargaining representatives Fair Work Australia is aware of have been consulted and support the undertakings.

[8] The application advises that the Agreement was made on 23 April 2010 but the application for approval was signed, dated and received on 10 May 2010 which is a total of 17 days. This exceeds the 14 days required by Section 185(3). All employees except one signed the proposed Agreement on 16 March 2010 which is the date on the F17 form that the employer says employees were first requested to approve the agreement by voting for it. This suggests that the Agreement may in fact have been made on 16 March 2010. Regardless, the Applicant has sought that I exercise my discretion as provided for by Section 185(3)(b) to grant an extension of the 14 day time limit on the grounds that the employer of this small business went on holiday and the fact that there was a weekend between the Friday on which the Application should have been lodged and the Monday on which it was in fact lodged. I am satisfied in the circumstances that an extension of time should be granted.

[9] Hence apart from the issue as to whether the Agreement has been genuinely agreed to as required by Section 186(2)(a) and Section 188 of the Act, I am satisfied that the requirements for approval of the Agreement have been met. I indicated to Mr Irvine in correspondence of 13 May 2010 and 9 June 2010 and again at the hearing on 11 June 2010 that I still had serious concerns as to whether the Agreement had been genuinely agreed to as required by Section 186(2)(a) and Section 188. Mr Irvine was given the opportunity to make submissions on this matter arising from the correspondence of 13 May 2010 and 9 June 2010 and at the hearing on 11 June 2010.

[10] The facts in this matter are not in dispute.

On 16 February 2010 the employer provided 4 of the 5 employees with a copy of a proposed Agreement which the employer had drafted. There was no prior negotiation concerning the content of the proposed Agreement.

The Applicant confirmed in the letter of 25 May 2010 that “every current employee was given the EA for their deliberation and an opportunity was given to them to sign the document.” There is no suggestion that there was a vote or any other negotiation process.

The Applicant provided the letter of 16 February 2010 in response to my request of 13 May 2010 for “all of the material provided to employees.” There is no suggestion that there was any other communication with employees.

On 16 February 2010 the employer provided four of the five employees with a copy of the notice of employee representative rights

On 31 March 2010 the employer provided the fifth employee with a copy of the proposed Agreement and a copy of the notice of representative rights.

The copies of the proposed Agreement provided to each employee were already signed and dated by the employer. For 4 of the employees the proposed Agreement was signed and dated 16 February 2010 and for the remaining employee it was signed and dated 31 March 2010.

The letter of 16 February 2010 for 4 employees and the letter of 31 March 2010 for the remaining employee advised that all employees would be given the opportunity to sign the Agreement, that the employer was available to answer any questions and to explain the Agreement and that “you will have one month to peruse the Enterprise Agreement and thereafter be given an opportunity to sign”.

The copy of the proposed Agreement provided to the 4 employees on 16 February and to the remaining employee on 31 March included a signature page already signed and dated by the employer but which provided for the employee to sign and date and also for the employee to appoint themselves or another person as a bargaining agent.

Each of the 5 employees signed and dated the Agreement one month after the date of the employer’s signature.

3 of the 5 employees also signed to appoint themselves as bargaining agents but clearly they only did that on the same day as they signed the Agreement. That is at the same time as the Agreement was made, not before. The other 2 employees did not purport to appoint a bargaining agent.

There is no evidence that there was any negotiation with any employees individually or collectively in the period between the issuing of the notice of representational rights and the making of the Agreement.

[11] The following Sections of the Act are particularly relevant in this case. Section 186 prevents approval of an agreement when there is not genuine agreement. Section 188 defines the requirements for genuine agreement. Sections 173(1), 181(1), 180(3), 182(1) are particular requirements arising from Section 188 which are relevant in this matter.

“186 When FWA must approve an enterprise agreement—general requirements

Basic rule

(1) If an application for the approval of an enterprise agreement is made under section 185, FWA must approve the agreement under this section if the requirements set out in this section and section 187 are met.

Note: FWA may approve an enterprise agreement under this section with undertakings (see section 190).

Requirements relating to the safety net etc.

(2) FWA must be satisfied that:

(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; and

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

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

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

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

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

Note 1: For when an enterprise agreement has been genuinely agreed to by employees, see section 188.

Note 2: FWA may approve an enterprise agreement that does not pass the better off overall test if approval would not be contrary to the public interest (see section 189).

Note 3: The terms of an enterprise agreement may supplement the National Employment Standards (see paragraph 55(4)(b)).

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 FWA 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.

173 Notice of employee representational rights

Employer to notify each employee of representational rights

(1) An employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who:

(a) will be covered by the agreement; and

(b) is employed at the notification time for the agreement.

Note: For the content of the notice, see section 174.

180 Employees must be given a copy of a proposed enterprise agreement etc.

Pre-approval requirements

(1) Before an employer requests under subsection 181(1) that employees approve a proposed enterprise agreement by voting for the agreement, the employer must comply with the requirements set out in this section.

Employees must be given copy of the agreement etc.

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

(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:

(i) the written text of the agreement;

(ii) any other material incorporated by reference in the agreement; or

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

(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:

(a) the time and place at which the vote will occur;

(b) the voting method that will be used.

(4) The access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1).

Terms of the agreement must be explained to employees etc.

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

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

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

(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:

(a) employees from culturally and linguistically diverse backgrounds;

(b) young employees;

(c) employees who did not have a bargaining representative for the agreement.

181 Employers may request employees to approve a proposed enterprise agreement

(1) An employer that will be covered by a proposed enterprise agreement may request the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it.

(2) The request must not be made until at least 21 days after the day on which the last notice under subsection 173(1) (which deals with giving notice of employee representational rights) in relation to the agreement is given.

(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.

182 When an enterprise agreement is made

Single-enterprise agreement that is not a greenfields agreement

(1) If the employees of the employer, or each employer, that will be covered by a proposed single-enterprise agreement that is not a greenfields agreement have been asked to approve the agreement under subsection 181(1), the agreement is made when a majority of those employees who cast a valid vote approve the agreement.”

[12] I do not believe that the employer requested “the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it” as required by Section 181(1). The applicant says that the signing and dating by each individual employee constitutes a valid vote in favour of the proposed Agreement. However, there is nothing on the form which the employees signed which indicates that it is a vote in favour of the proposed Agreement rather the document is simply headed signatures of the parties. The letter of 16 February 2010 which accompanied a copy of the Agreement and the notice of representational rights said nothing about voting for the Agreement but simply that you will be given an opportunity to sign the agreement. The only reference to approval is in the context of “the employer will provide a representative of the firm to answer any questions and to explain the Enterprise Agreement prior to being asked to approve the agreement.” And this is immediately followed by the statement that “you will have one month to peruse the Enterprise Agreement and thereafter be given an opportunity to sign.” I also do not believe that this satisfies Section 180(3) which is a requirement for genuine agreement under Section 188 in that employees were not advised at the start of the access period of “the time and place at which the vote will occur and the voting method that will be used.”

[13] The Act does not prescribe the voting method to be used. There is not a requirement for a secret ballot as there is for example with the provisions for protected action ballots. However, the voting method does need to be advised at least seven days in advance. Furthermore the voting method needs to be consistent with the general requirement for genuine agreement. It would not be appropriate for there to be a direct or implied message from an employer that failure to vote in favour of an agreement could have negative consequences for an employee. In this case the fact that the employee knows that the employer will be directly aware of how each employee individually responds, that the circumstances very strongly send a message to employees that they are expected to sign the agreement, and that the agreement is expressed as an individual employment contract implying that failure to sign might mean that the employee does not have a continuing contract with the employer militate against genuine agreement. Hence even if I am wrong in finding that the employees were not advised of the voting method and that the process adopted was not a vote, the process adopted is not consistent with the requirement for genuine agreement and I should not approve the Agreement because of Section 188(c).

[14] Furthermore, I believe that the letter of 16 February completely undermines the concept of the Notice of Representational Rights and is not consistent with “genuine agreement.” To suggest that it is appropriate to appoint a bargaining representative at the same time as the Agreement is made rather than in order to negotiate an Agreement as the signature page suggests is not consistent with genuine agreement. Furthermore, this interpretation of the signature page is not fanciful as it was actually adopted by the majority of the employees who in fact appointed themselves as bargaining agents at the same time as they signed the Agreement. Furthermore, the letter of 16 February 2010 did not suggest that the Agreement was open for negotiation at all. The letter of 16 February 2010 advised that “Peel Finance Brokers is seeking to implement an Enterprise Agreement to accommodate recent changes in Federal Government Fair Work legislation. To that end we have provided you with the following information: Proposed Enterprise Agreement 2009, Notice of employee representative rights…” The only actions requested of employees were to “peruse” the Enterprise Agreement, ask any questions they might have of the employer and sign the document. The message that there was to be no negotiation was also reinforced by the fact that the copy of the proposed Agreement provided to each employee was already signed and dated by the employer. This clearly suggests the document is not open to any change. The Notice of Representational Rights must clearly be given to employees prior to the finalisation of the Agreement and must be able to be seen as a clear invitation for employees to negotiate concerning the content of the proposed Agreement.

[15] My view of the letter of 16 February 2010 and the format of the proposed Agreement and its signature page is reinforced by the Objects of Part 2-4 (Section 171) and in particular the objective to “enable collective bargaining in good faith” and to “facilitate good faith bargaining and the making of enterprise agreements”. The general Objects of the Act (Section 3) also reject “the making of statutory individual employment agreements of any kind given that such agreements can never be part of a fair workplace relations system” and support “an emphasis on enterprise-level collective bargaining”. The provision of a notice which asks employees to sign an individual agreement, even if it is the same agreement for each individual, is not consistent with these objects. The provision of a notice which does not allow for and/or which strongly suggests there is no opportunity for collective negotiation of a proposed Agreement is not consistent with these objects.

[16] The proposed Agreement provided to employees was in the form of an individual contract in that the parties are listed in Clause 1 as the employer and “the employees whose name, details and signature appear at the end of this agreement”. In addition Clause 24.1 states that: “Either party may terminate this Agreement at any time by giving the other party the required period of notice as specified in this clause.” Clause 24 is about termination and resignation and notice periods but it is in the language of an individual statutory employment contract. Of course under the Act an enterprise Agreement cannot be terminated by the unilateral action of a single party or even by mutual agreement without the approval of Fair Work Australia. The Agreement signature page in the document provided to each employee consists of a signature for the employer and a signature for the employee. The employee is not signing on behalf of the employees collectively but each employee was given a separate signature page. This is inconsistent with the objects of the Act and in my view inconsistent with a process which is capable of reaching a “genuine agreement” within the meaning of Section 188.

[17] For these reasons I find that there are “reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees” (Section 188(c)). Furthermore, I find that the requirement of Section 173(1) that “the employer must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee” has not been met because the giving of notice is not just a question of the content of the notice which is set out in Section 174 and the regulations but it is also about how the notice is given. The letter of 16 February and the proposed Agreement which accompanied the notice meant that notice of the right to be represented was not effectively given. Furthermore, the form to appoint a bargaining agent was on the same page as the signature to approve the agreement and hence there was no opportunity for an employee to appoint a bargaining agent prior to voting for the Agreement. The notice of representational rights is about employees appointing a representative to bargain an agreement which must clearly occur before it is made. The proposed Agreement and the letter comprehensively undermined the message of the notice in the terms of Section 174. I cannot approve an Agreement if these Sections are not complied with and this is made clear by Section 186(1) and (2) which requires genuine agreement and by Section 188 which defines the requirements for genuine agreement. I have found that Section 181(1) and Section 180(3) have also not been complied with and compliance with these provisions are mandatory conditions for genuine agreement under Section 188.

[18] The Act does not require bargaining representatives to be actually appointed. The Act does not require that there be negotiating meetings or changes made to a document initially proposed. However, the Act does require genuine agreement and that employees have a genuine opportunity to negotiate or bargain and to be represented if they so wish. The Act also requires that it be collective not individual bargaining and agreement. In this case I am not satisfied that there was any genuine opportunity to collectively negotiate or bargain or to be represented. I am not satisfied that what was proposed was a collective rather than an individual agreement(s). I am not satisfied that the outcome was a collective rather than an individual agreement(s).

[19] I am also not satisfied that Sections 180(5) and 180(6) of the Act have been complied with. These sections provide:

“Terms of the agreement must be explained to employees etc.

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

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

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

(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:

(a) employees from culturally and linguistically diverse backgrounds;

(b) young employees;

(c) employees who did not have a bargaining representative for the agreement.”

[20] The only steps taken by the employer were to advise employees in the letter of 16 February 2010 which was accompanied by a copy of the proposed Agreement that:

“The employer will provide a representative of the firm to answer any questions and to explain the Enterprise Agreement prior to being asked to approve the agreement”.

[21] In my view the Act requires more than this in a situation where the proposed Agreement contained pay rates identical to the relevant Award but removed virtually all entitlements to overtime, penalties and allowances and where the employees did not have a bargaining representative for the agreement and were therefore in a category which requires that the explanation be more thorough. Section 180(6)(c) and Section 180(5)(a) require that the “effect of the terms” needs to be explained and there is no evidence that employees were told that the effect of the proposed Agreement would have been to remove significant entitlements to which they would otherwise have had the benefit.

[22] The Explanatory Memorandum to the Fair Work Bill 2008 (Paragraph 796 and 797) makes reference to the fact that the Tribunal may consider “whether the agreement has been validly made in accordance with clause 182” in determining whether there are reasonable grounds for believing that the agreement has not been genuinely agreed to by employees”. In otherwords there cannot be genuine agreement unless there has been a valid majority vote of the employees that will be covered by the agreement. The Explanatory Memorandum draws attention to two cases which dealt with this issue under earlier legislation. (Construction Forestry Mining and Energy Union v AIRC (1999) 93 FCR 317 and Grocon Pty Ltd Enterprise Agreement Victoria 2003 127 IR 13) Those cases deal with circumstances in which the selection of the group to vote for an agreement and the level of information provided to employees who were asked to vote on the agreement was inappropriate or inadequate. I believe that the considerations I have made are generally consistent with this approach.

[23] Mr Irvine for the Applicant in his letter of 25 May 2010 submitted that: “although we have had registered other enterprise agreements, none of the concerns have been raised before”. I ascertained that Commissioner Williams had in fact approved three agreements submitted by Mr Irvine which are in similar form to this agreement namely the Clune Plant Hire Mobile Operators Enterprise Agreement 2009 (PR997530 approved 28 May 2010), the 3D Earth Moving Mobile Plant Operators Enterprise Agreement 2009 (PR993870 approved 24 February 2010) and the 3D Earth Moving Mechanics Fitters and Workshop Personnel Enterprise Agreement 2009 (PR994344 Approved 3 March 2010). It is understandable that employers and unions would expect that the Tribunal will seek to exercise its role in approving agreements in as consistent a manner as possible. For this reason I have examined the three agreements to ensure that my approach is not in error and does not cause unnecessary inconvenience to parties. In the case of the three Agreements they are slightly different to the Agreement in this case in that the signature page provides for the employer by signing to “I hereby cast a valid vote endorsing this Agreement” and for the individual employee to similarly sign “I hereby cast a valid vote endorsing this Agreement”. At the same time the employee also signs to “hereby appoint myself as my bargaining agent for the purposes of this agreement”. I do not believe it is a valid voting process where the employer purports to cast a number of “valid votes” in support of an agreement. In the present case however there is nothing in the documentation provided to employees which advises that there will be a vote or how that vote will take place. I also remain convinced that it cannot be a genuine agreement unless employees have a genuine opportunity to appoint a bargaining agent to negotiate an agreement before an agreement is made and not just at the time the agreement is actually voted on and made.

[24] In this case I cannot find that there has been genuine agreement and hence I cannot approve the Agreement.

[25] I hope that the employer will, having gone through the process of ensuring that the content of the Agreement complies with the requirements of the Act, now be able to satisfactorily complete the approval process in a manner which results in genuine agreement and then will be able to resubmit the Agreement for approval.

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