West Cranes & Access Hire Pty Ltd
[2023] FWC 3486
•29 DECEMBER 2023
| [2023] FWC 3486 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
West Cranes & Access Hire Pty Ltd
(AG2023/3969)
| DEPUTY PRESIDENT MILLHOUSE | MELBOURNE, 29 DECEMBER 2023 |
Application for approval of the West Cranes & Access Hire Pty Ltd and The Australian Workers’ Union Wind Farm Agreement 2023
An application has been made for approval of an enterprise agreement known as the West Cranes & Access Hire Pty Ltd & The Australian Workers’ Union Wind Farm Agreement 2023 (Proposed Agreement). The application was made pursuant to s 185 of the Fair Work Act 2009 (Cth) (Act).
The name of the applicant as set out in the Form F16 application for approval is West Cranes & Access Hire Pty Ltd (Employer). The Proposed Agreement is a single enterprise agreement. The Australian Workers’ Union (AWU) was involved in the agreement-making process as a bargaining representative and supports the approval of the Proposed Agreement.
The notification time for the Proposed Agreement and the date that the Proposed Agreement was made post-date 6 June 2023. Accordingly, the legislative changes to the Act in relation to the genuine agreement provisions and the better off overall test requirements apply to this approval application.[1]
Procedural history
In correspondence to the Commission dated 1 November 2023 the Construction, Forestry, Maritime, Mining and Energy Union, now the Construction, Forestry and Maritime Employees Union (CFMEU), advised that it sought to be heard in respect of this application notwithstanding that it was not a bargaining representative involved in the making of the Agreement.
The CFMEU has raised six concerns with the Proposed Agreement,[2] relating to the identity of the Employer, the method of voting, an apparent failure to explain the Proposed Agreement by reference to the relevant underpinning modern award, potential concerns with respect to the better off overall test, whether the employees entitled to vote on the Proposed Agreement were a sufficiently representative sample of the group of employee classifications to be covered by the Proposed Agreement, and non-compliance with the requirements of s 181(2) of the Act, as only 14 days had passed between the issuance of the notice of employee representational rights and the vote.
Consistent with the Commission’s standard practices, the application material was redacted and provided to the CFMEU. The views of the parties were sought and both the Employer and the AWU opposed the CFMEU’s request to intervene.
Upon review of the parties’ respective submissions I determined, pursuant to s 590(1) of the Act, to allow the CFMEU to be heard on the application on the basis that it retained a right to appeal any decision approving the Agreement pursuant to s 604 of the Act.[3] Directions were issued for the provision of submissions and evidence from the CFMEU and the Employer on the CFMEU’s objections to the application and the preliminary concerns identified by the Commission.
In accordance with the directions, the CFMEU filed submissions and a witness statement of Ms Emma Barnes-Whelan on 16 November 2023 and further submissions and a further witness statement of Ms Barnes-Whelan on 8 December 2023. The Employer filed submissions on 10 November and 27 November 2023. The AWU filed submissions on 28 November 2023.
Noting the issues in dispute, the matter proceeded to a hearing on 14 December 2023. Evidence was given in the proceedings by Mr Gary West (General Manager/Operational Manager for the Employer) and Mr Cesar Melhem (Principal, CM Consulting Australia, being the Employer’s bargaining representative). Following the hearing, the CFMEU filed supplementary submissions dated 15 December 2023, and the Employer and the AWU filed supplementary submissions on 18 December 2023.
I have, at this stage, dealt only with the CFMEU’s concerns insofar as they relate to whether the Proposed Agreement has been genuinely agreed to.
Failure to explain terms – genuine agreement
Section 186(2)(a) provides that in order for a proposed agreement (that is not a greenfields agreement) to be approved by the Commission, the Commission must be satisfied that “the agreement has been genuinely agreed to by the employees covered by the agreement.”
Section 188(1) provides that the Commission must take into account the statement of principles made under s 188B in determining whether it is satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement. Section 188(4A) further provides that the Commission cannot be satisfied that the agreement has been genuinely agreed to by the employees covered by the agreement unless the Commission “is satisfied that the employer complied with subsection 180(5) in relation to the agreement.”
Section 180(5) of the Act deals with the requirement to explain, inter alia, the terms of the Proposed Agreement to employees. It provides as follows:
(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.
The Full Bench decision in Construction, Forestry, Maritime, Mining and Energy Union v Ditchfield Mining Services Pty Limited,[4] in summarising the decision in Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd[5] set out the following propositions with respect to the inquiry pursuant to s 180(5):
[65] First, whether an employer has complied with the obligation in s.180(5) depends on the circumstances of the case.
[66] Secondly, the focus of the enquiry whether an employer has complied with s.180(5) is first on the steps taken to comply, and then to consider whether:
·the steps taken were reasonable in the circumstances; and
·these were all the reasonable steps that should have been taken in the circumstances.
[67] Thirdly, the object of the reasonable steps that are to be taken is to ensure that the terms of the agreement, and their effect, are explained to relevant employees in a manner that considers their particular circumstances and needs. This requires attention to the content of the explanation given.
[68] Fourthly, an employer does not fall short of complying with the obligation in s.180(5) of the Act merely because an employee does not understand the explanation provided.
[69]That the content of the explanation given is an important consideration in assessing whether all reasonable steps were taken for the purposes of s.180(5) is made clear by the Full Court of the Federal Court in One Key Workforce (No 2).
(citations omitted)
Principle 8 offers guidance on how an employer can discharge its obligations under s 180(5). An employer is required to take all reasonable steps to explain the terms of the proposed agreement, their effect, and “at a minimum” how the proposed agreement will alter their existing minimum entitlements and other terms and conditions of employment. Where the terms and conditions of employment are not governed by an existing enterprise agreement but instead, a modern award, Principle 8(b) states:
“where a proposed enterprise agreement will not replace an existing enterprise agreement—it will generally be necessary to explain the differences in entitlements and other terms and conditions between the proposed agreement and any applicable modern award.”
The respective contentions
The CFMEU submits that the Employer has not discharged the above obligations as it has failed to explain the terms of the Proposed Agreement by reference to the applicable award, being the Mobile Crane Hiring Award 2020 (Mobile Crane Award).
The CFMEU contends that it is plain from the Employer’s website that it operates in the mobile crane hiring industry, being the service industry involving the hiring of mobile cranes and like equipment and operating personnel to clients whose requirements include, amongst other things, earthmoving and construction plant hire and civil contracting.[6] It relies upon information regarding the services offered by the Employer, obtained from its website, in support of this contention. This material provides, in relation to the Employer, as follows:[7]
· The Employer has the largest Mobile Crane Hire and Access Boom Hire fleet in Western Victoria, with a large array of hire equipment to accommodate the growing needs of various industries such as farming and agriculture, wind energy, land mineral resources, mining road and rail, festivals, functions and events.
· The Employer has a comprehensive fleet of cranes and heavy equipment for hire, including steel rigging hire, scissor lift hire and elevated work platform hire, general equipment for hire and other specialised machinery for aerial access needs.
The material also demonstrates the type of services the Employer has provided in the context of various (unrelated) projects, such as in relation to the Mount Gellibrand Wind Farm, and relevantly provides:[8]
· The Employer has been a major contributor throughout the development and construction of the $258 million Wind Farm Project at the 132MW Mt Gellibrand Wind Farm.
· The Employer has provided an “array of services and hire equipment” such as all terrain mobile cranes, pick & carry cranes, rigging services, truck cranes and other hire services.
It is not in dispute that the Proposed Agreement covers four employees. The Employer contends that the Building and Construction General On-site Award 2020 (Building Award) covers it and the four employees.[9] It submits that the employees “typically perform crane work, steel fixing and, from time to time, general labouring duties.”[10] The Employer’s position is that during negotiations for the Proposed Agreement, it “explained to employees that it was looking to tender for future work including steel fixing, formwork and other civil work, hence the extended classifications proposed.”[11] Accordingly, it says that employees voting on the Proposed Agreement “therefore knew that the coverage of the Proposed Agreement was important for the Company’s ability to tender for future work.”[12]
The Form F17B declaration filed by the Employer with the application for approval of the Proposed Agreement contains classification matching between the Proposed Agreement and each of the Mobile Crane Award and the Building Award. Relevantly, it is declared in the Form F17B that employees engaged as “crane crew” and “rigger/dogman” are aligned to level 4 in the Mobile Crane Award.[13] The Employer submits that an “explanation of the Proposed Agreement with reference to the Mobile Crane Hiring Award 2020…was provided to employees during the access period,”[14] although nothing further is said about the content of this explanation.
The AWU supports the Employer’s position and made oral submissions at the hearing that any failure to explain the terms of the Proposed Agreement in reference to the relevant award did not disadvantage the employees having regard to the rates of pay in the Proposed Agreement which exceed both the Mobile Crane Award and the Building Award.
The Proposed Agreement
Clauses 5.1 and 5.2 of the Proposed Agreement concern the Application and Scope of the Proposed Agreement. Clause 5.1 states that the Proposed Agreement applies to work performed by employees “who are engaged in classifications set out in Appendix A” on “Wind Farm projects.”
By clause 5.2, the works on a project “that fall within the scope” of the Proposed Agreement “include the construction of roadworks, earthworks, bridges, structures, renewable energy construction projects, service relocations, associated buildings and structures, and traffic management.”
Clause 5.3 of the Proposed Agreement specifies that the Building Award is incorporated into the agreement.
Appendix A to the Proposed Agreement is titled “Classification” and it provides:[15]
“CRANE CREW (VIC ONLY) – Crane crew classification shall be defined as in schedule A of the Mobile cranes hiring Award 2020.”
“RIGGER/DOGMAN – Employees engaged as Rigger/Dogman and who are not prepared to or required to operate cranes.”
Schedule 1 of Appendix A provides wage rates for crane crew, and for rigger/dogman. It further states that “crane crew classification shall be defined as in Schedule A of the Award”[16] and “Rigger/Dogman rates shall only apply to employees that are employed as Rigger/Dogman and who are not prepared or required to operate cranes.”[17] Additional rates are paid to crane crew “as defined in schedule A of the Award” for each additional 50 tonnes lifting capacity over 100 tonnes.
Schedule 2 of Appendix A contains a “Construction worker classification structure” and “rate of pay.” It provides that “where an employee’s classification is silent in this clause the classification structure in the Building and Construction General On-site Award 2020 classification will apply for the purpose of identifying a classification.” The classifications in Schedule 2 set out a range of work performed within classifications CW1 to CW6. Classification CW4 (which the Employer declared in the Form F17B to be aligned to CW5 in the Building Award and the applicable classification for the four employees) refers to the following duties: marker, compactors, excavators, backhoe loader, wheel and track loader, crawler tractors, graders, scrapers and trucks.
I consider that the terms of the Proposed Agreement demonstrate that it is intended to cover two broad categories of employees. First, there are employees who fall within the provisions of Schedule 1 of Appendix A. This comprises of employees in the classifications of crane crew in Victoria or rigger/dogman. Such employees are paid the wage rates at Schedule 1 of Appendix A of the Proposed Agreement. The crane crew classification is “defined as in schedule A” of the Mobile Crane Award. The rigger/dogman rates of pay apply to employees who are “not prepared or required to operate cranes” or are not yet “qualified and competent” to do so. Once a rigger/dogman becomes willing and/or competent they will “move to the crane crew classification” in Schedule 1.
Second, there are employees who may fall within the provisions of Schedule 2 of Appendix A. This comprises of construction workers in classifications CW1 to CW6. In addition, where the Proposed Agreement is “silent” on a construction worker’s classification, the “classification structure” in the Building Award will apply for the purposes of identifying a classification. Such employees are paid the wage rates in Schedule 2 of Appendix A of the Proposed Agreement.
The evidence before the Commission is that the four employees covered by the Proposed Agreement typically perform crane work, steel fixing and, from time to time, general labouring duties. The Employer submits that it is clear from the Proposed Agreement that the employees will not solely be performing crane work.[18] However, Mr West’s evidence is that to the extent that the employees perform other work, it is limited to “helping the steel fixers sort steel and things like that.”[19] Having regard to the Employer’s submissions, the performance of steel fixing duties forms part of its “future work” package, being “steel fixing, formwork and other civil work, hence the extended classifications proposed.”[20]
Considering the duties performed by the four employees and the industry in which the Employer is engaged, I do not accept the Employer’s contention that the employees fall within the CW5 classification of the Building Award (which, according to the Employer’s Form F17B, is aligned to CW4 in the Proposed Agreement).[21] The Employer has not explained how the roles specified in CW4 of the Proposed Agreement align to the work it says is performed by the relevant employees and the connection is not apparent on the materials before the Commission. That the Employer has self-classified the four employees as construction workers in Schedule 2 of Appendix A to the Proposed Agreement is not determinative.
The Mobile Crane Award
The Mobile Crane Award is an industry award. By clause 4.1 the Mobile Crane Award covers employers in the mobile crane hire industry and their employees in the classifications within Schedule A to the exclusion of any other award. The mobile crane hire industry is defined at clause 4.2 and relevantly captures “the hiring of mobile cranes” and:
“operating personnel to clients whose requirements include but are not limited to the provision and service of materials handling equipment, lifting and machinery movement equipment, earthmoving and construction plant hire and civil contracting.”
The classifications found at Schedule A of the Mobile Crane Award specify that employees performing rigging, dogging and crane operator duties are covered by the award.
I find that the Employer, whose services include the hiring of mobile cranes and like equipment in the mobile crane hire industry, in addition to the provision of supporting labour, is covered by the Mobile Crane Award. The work performed by the four employees fall within the descriptions of crane crew, rigger or dogman in clause 2 of the Mobile Crane Award.[22] The Employer accepts in its Form F17B that the Mobile Crane Award applies to the crane crew and rigger/dogman classifications in the Proposed Agreement and no enterprise agreement otherwise applies.[23]
In my view, it was therefore necessary for the Employer to take all reasonable steps to explain how the Proposed Agreement will alter the four employees’ existing minimum entitlements and other terms and conditions of employment under the Mobile Crane Award. This included identifying detriments in the Proposed Agreement vis-à-vis the Mobile Crane Award. I do not accept the Employer’s contention that the Building Award is the most appropriate award for the work performed by the employees covered by the Proposed Agreement and the environment in which they perform their work.[24]
Consideration
The question of compliance with s 180(5) is to be assessed against the circumstances that pertain at the time at which compliance was required.[25] By its written submissions, the Employer contends that it explained the Proposed Agreement by reference to the Mobile Crane Award.[26] It is therefore necessary to consider the content of the explanation given by the Employer through the steps taken by it.
In response to Question 22 of Part 3.4 of the Form F17B declaration, the Employer declared that on 11 October 2023, a “brief written summary” was emailed to employees which outlined the “main pay and conditions contained in the Agreement.” On 12 October 2023, an updated email was sent to the employees which “included more details about when likely the vote will take place.” In response to Question 23 of the Form F17B declaration, it is stated that the Employer compared the terms of the Agreement to the Building Award.
No detail about the content of the explanation is set out in the declaration. Before the Commission is the 11 October 2023 email which was sent to each of the four employees and relevantly attaches a copy of the Building Award, the Mobile Crane Award, the Statement of Principles, a copy of the Proposed Agreement, and a document titled, “Notice to all West Cranes & Access Hire employees covered by the proposed by the proposed EBA: West Cranes & Access Hire & the Australian Workers Union EBA 2023” (11 October 2023 Summary Document). The email is from Mr Melhem and states, “I will give you a call individually to discuss and answer any questions.”
The 11 October 2023 Summary Document relevantly states:
West Cranes & Access hire has now completed the negotiation with your AWU representative for a revised EBA.
Main changes to the previous agreement is:
New agreement will only apply to Wind farm projects
The scope will now cover Civil construction work in addition to Cranes.
Here is a brief summary of the proposed EBA.
Agreement will commence after its certified by the Fair Work Commission.
Expiry date 28 Feb 2025
Current rates of pay have been increased in line with the industry pattern EBA as of March 2023
The reference to the “previous agreement” in the 11 October 2023 Summary Document is not a reference to an existing enterprise agreement, but rather to a proposed agreement earlier made which was the subject of an application lodged for approval by the Employer with the Commission but that was subsequently withdrawn. The CFMEU notes that the Form F17B filed by the Employer in respect of that earlier application, dated 20 September 2023, specified that the relevant underpinning award covering the same four employees was the Mobile Crane Award.
The 11 October 2023 Summary Document proceeds by setting out a table containing base rates of pay for classifications CW1 to CW6, a comparison to the rates of pay in the Building Award, an explanation as to the site allowance, and areas where the Proposed Agreement “includes a higher rate of pay and conditions to the Award” including redundancy, ordinary hours, income protection, rostered days off, shift loading and concludes by referring to an attached copy of the Proposed Agreement and the Building Award.
There is no reference to the Mobile Crane Award in the 11 October 2023 Summary Document.
On 12 October 2023, Mr Melhem sent a further email to the four employees providing an “updated notice for the EBA summary including details for the meeting tomorrow.” The email attached an updated copy of the 11 October 2023 Summary Document which differs from the version of the Summary Document circulated on 11 October in three key respects (12 October 2023 Summary Document).
First, the 12 October 2023 Summary Document set out the base rates of pay for “crane crew,” stating that “crane crew classification shall be defined as in Schedule A” of the Mobile Crane Award. It also provided for the classification of rigger/dogman and extracted the content that appears in Schedule 1 of Appendix A of the Proposed Agreement.
Second, the 12 October 2023 Summary Document provided the details for a meeting to be held “to discuss the proposed agreement” on 13 October 2023.
Third, the 12 October 2023 Summary Document specified that a copy of the Mobile Crane Award was attached, in addition to a copy of the Building Award.
During the hearing, Mr Melhem gave evidence that he attended a meeting with the four employees on 13 October 2023 for the purposes of explaining the terms of the Proposed Agreement. Mr Melhem referred to the 12 October 2023 Summary Document. Mr Melhem gave evidence that he explained the terms of the Proposed Agreement, which was Wind Farm Project specific, the proposed wage rate, how the RDO system will work, how the overtime payment will work, the shift rate and “went through the proposed agreement” without addressing every clause.[27]
As “a matter of reference,” Mr Melhem said he referred to the two awards, noting that the Building Award is incorporated into the Proposed Agreement, and explained that:
“the content of the agreement pretty much mirrored the award in relation to wages and conditions, because it is a comprehensive agreement and in the reference to the Mobile Crane Award, the particular schedule Appendix A, I think from memory, the actual rates of pay and descriptions was done just for reference.”[28]
Mr Melhem accepted during cross examination that each of the matters he had explained were entitlements arising from the Building Award. Mr Melhem further stated his view that as the Mobile Crane Award did not apply, he did not go through it “clause by clause” although noted that a copy of it was attached to the Summary Document provided to employees.[29]
I accept Mr Melhem’s evidence, which was given in a candid manner. I understand Mr Melhem’s position, which he accepted,[30] to be that there was no need to explain the terms of the Proposed Agreement by reference to the Mobile Crane Award because the work performed by the four employees under the Proposed Agreement is covered by the Building Award.
I am satisfied, and I find on the evidence before the Commission, that the Proposed Agreement was not explained by reference to the Mobile Crane Award. This had the result that various detrimental terms in the Proposed Agreement when compared to corresponding terms in the Mobile Crane Award were not explained to the four employees. This includes, but is not limited to:
(1)the terms of clause 30 of the Proposed Agreement which limits the payment of a higher duties payment for the whole day to employees who have performed the duties of the higher classification for two hours or more, whereas clause 12.3 of the Mobile Crane Award provides payment at the higher rate for the whole day on any day an employee performs work in a classification attracting a higher pay rate;
(2)the terms of clause 43.12 of the Proposed Agreement which contains a cap on the hours an employee can claim payment for due to inclement weather compared to clause 20 of the Mobile Crane Award which is uncapped (although it is noted that the award provision requires that payment be made only where work has ceased by agreement with the employer, subject to safety considerations);
the terms of clause 20.1 of the Proposed Agreement relating to notice of termination which are detrimental when compared to the provisions of clause 34.3 of the Mobile Crane Award which provides additional notice entitlements in circumstances where an employee is retrenched;
the terms of clause 23.4 of the Proposed Agreement which provide that the Employer’s contributions to an industry specific redundancy scheme are intended to satisfy its redundancy obligations under the Agreement and the National Employment Standards, which are inferior to the severance payments in clause 34.4 of the Mobile Crane Award which provides for three weeks’ pay for each year of service to a maximum of 27 weeks;
the terms of clause 20.7 of the Proposed Agreement which deal with the payment of public holidays to retrenched employees that fall within a 10-day window from the employee’s final day of employment, which is less favourable when compared to the 20 days provided by clause 34.5(a) of the Mobile Crane Award; and
the terms of clause 34.5(c) of the Mobile Crane Award dealing with the payment of accumulated sick leave to a maximum of 10 days to retrenched employees, which has no comparable entitlement in the Proposed Agreement.
Notwithstanding the matters at (3) to (6) above, the Employer declared in its Form F17B that the Proposed Agreement contains redundancy terms that are more beneficial to employees.[31] Having regard to these matters, I do not consider the Employer’s non-compliance with s 180(5) in this case to be immaterial, notwithstanding that the rates of pay in the Proposed Agreement exceed the base rates in the Mobile Crane Award by between 117.33% and 127.97%. While a copy of the Mobile Crane Award was distributed to the four employees on 11 October and 12 October 2023, the evidence demonstrates that it was for the confined purpose of providing employees with a comparison point for the wage rates applicable to “crane crew” and “dogman/rigger” under the Proposed Agreement and the terms were not otherwise explained.
Conclusion - explanation of Proposed Agreement
Section 180(5) of the Act is concerned with the taking of all reasonable steps to explain, inter alia, “the terms of the agreement” and “the effect of those terms” to the relevant employees. The expressions, “the terms” and “those terms” refer to all the terms, not merely some of them.[32] The Employer explained the Proposed Agreement by reference to its own terms and the terms of the Building Award in circumstances where it says that the four employees “knew” that the extended coverage of the Proposed Agreement was important for the Employer’s ability to tender for future work.
Having regard to all the circumstances of the case, I am not satisfied that the steps taken by the Employer were sufficient to comply with its obligation in s 180(5) of the Act. The evidence demonstrates that the Employer did not take any steps to explain the terms of the Proposed Agreement to the relevant employees by reference to the Mobile Crane Award, being the instrument that currently applies to their employment with it. This is the case notwithstanding that the Employer declared in the Form F17B that the crane crew and rigger/dogman classifications are aligned to the Mobile Crane Award, and in circumstances where the Proposed Agreement contains terms that are detrimental to employees when compared to the Mobile Crane Award.
Sufficient interest – genuine agreement
As earlier explained, in addition to the crane crew and rigger/dogger classifications in Schedule 1 of Appendix A to the Proposed Agreement, the Proposed Agreement also provides at Schedule 2 of Appendix A classifications CW1 to CW6 drawn from the Building Award.
Section 188(2) of the Act provides:
Sufficient interest and sufficiently representative
(2) The FWC cannot be satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement unless the FWC is satisfied that the employees requested to approve the agreement by voting for it:
(a) have a sufficient interest in the terms of the agreement; and
(b) are sufficiently representative, having regard to the employees the agreement is expressed to cover.
Paragraph 17 of the Statement of Principles provides that in considering whether employees have a sufficient interest in the terms of an enterprise agreement as required by s 188(2)(a) and whether the employees are sufficiently representative as required by s 188(2)(b), the Commission may take into account:
(a) whether the employees entitled to vote on the enterprise agreement are to be paid the rates of pay provided for in the agreement, and
(b) the extent to which the employees entitled to vote on the enterprise agreement are employed across the full range of:
i. classifications in the agreement
ii. types of employment in the agreement (for example, full-time, part-time and casual)
iii.geographic locations the agreement covers, and
iv.industries and occupations the agreement covers.
Principle 18 states that an enterprise agreement “will generally not have been genuinely agreed to” unless the agreement was the product of an authentic exercise in agreement-making, and the employees who voted for the agreement had an informed and genuine understanding of what was being approved. Principle 19 makes it clear that where an employee organisation acting as a bargaining representative for a significant proportion of employees covered supports the approval of the agreement and does not have concerns that the agreement was not genuinely agreed to by the employees covered, then this should be given “significant weight” in considering whether the agreement has been genuinely agreed.
The respective contentions
The CFMEU relies upon the observations of the Full Court of the Federal Court in One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union[33] that whether an agreement has been genuinely agreed involves consideration of the authenticity of the agreement of the employees, including whether the employees who voted for the agreement had an informed and genuine understanding of what was being approved. The CFMEU’s position is that the Commission cannot be satisfied that the four employees that voted on the Proposed Agreement have performed work (or will perform work) in the range of classifications contemplated by Appendix A.
The Employer contends that the four employees voting on the Proposed Agreement were able to provide informed consent because they had knowledge of the building and construction industry and had a stake in the Employer’s strategy for seeking the Proposed Agreement with a broader range of classifications. Further, the Employer notes that the rates of pay in the Proposed Agreement exceed the minimum rates in the Building Award by 84.93% - 98.73% and further, the rates of pay for employees engaged under the Mobile Crane Award are between 117.33% and 127.97% higher than that award.
By its oral submissions, the AWU relevantly submits when considering whether the employees are sufficiently representative within the meaning of s 188(2)(b) of the Act, it does not consider that the four employees have been disadvantaged by “any failure” or “any potential unintentional mischaracterisation.”[34] I observe that these submissions are largely intertwined with the AWU’s views as to compliance with s 180(5) and the quality of the Employer’s explanation of the Proposed Agreement. This is consistent with the AWU’s 28 November 2023 written submissions in which I understand that the AWU agrees that the Building Award is the most appropriate award for the work performed by the employees the subject of the Proposed Agreement and the environment within which it is performed, such that the employees are sufficiently representative. Consistent with Principle 19, I will give the AWU’s view significant weight.
Consideration
The four employees to be covered by the Proposed Agreement fall within Schedule 1 of Appendix A to the Proposed Agreement and are currently covered by the Mobile Crane Award.
An enterprise agreement may not always cover the full range of classifications in the relevant underpinning modern award.[35] However, the material before the Commission demonstrates that in this case, the Proposed Agreement contains a series of classifications in Schedule 2 of Appendix A that are drawn from an award that has no practical application to the work currently performed by the Employer or its four employees.
During negotiations for the Proposed Agreement, the Employer says that it “explained to employees that it was looking to tender for future work including steel fixing, formwork and other civil work, hence the extended classifications proposed.”[36] The Employer submits that employees voting on the Proposed Agreement knew that the coverage of the Proposed Agreement was important for the Company’s ability to tender for future work.[37]
Notwithstanding the significant weight afforded to the AWU’s view as set out at [61] above, the AWU’s position is informed by its view that the Building Award covers the work performed by the four employees, which I have not accepted to be the case. The classifications in Schedule 2 of Appendix A comprising of CW1 to CW6 roles extend into the building industry, being an industry which, on the evidence before the Commission, the Employer (a) has not previously operated, (b) does not presently operate, and (c) may possibly never operate if the Employer is not successful in its future tenders for such work. In these circumstances, I accept the CFMEU’s contention that classifications CW1 to CW6 drawn from the Building Award relate to work the Employer aspires to perform, not work that is currently being performed by it.
Conclusion – sufficient interest
In these circumstances, the material before the Commission is insufficient to satisfy me that the Proposed Agreement has been genuinely agreed to within the meaning of s 188(2)(b) of the Act. This is because I cannot be satisfied on the evidence that the four employees are sufficiently representative, having regard to the employees the Proposed Agreement is expressed to cover given the wide range of classifications in Schedule 2 of Appendix A and the narrow scope of the work the employees are said to perform.
Employer’s request for Commission to consider possible undertakings
In this case, I have found that:
(1)there was a failure by the Employer, for the purposes of s 188(4A) of the Act, to comply with s 180(5) in relation to the Proposed Agreement; and
the four employees are not sufficiently representative of the employees the Proposed Agreement is expressed to cover, within the meaning of s 188(2)(b) of the Act.
Consequently, I am not satisfied that the Proposed Agreement has been genuinely agreed to by the employees covered by it pursuant to s 186(2)(a) of the Act.
The Commission may accept an undertaking in circumstances where it has a concern that the requirements of ss 186 and 187 have not been met. It is not in dispute that such undertakings may address “genuine agreement” concerns. A decision to exercise the discretion to accept an undertaking is to be made by reference to the matters in s 190 of the Act, taking into account the nature of the concern and the circumstances of the particular approval application under consideration.[38]
The Commission must be satisfied that the undertaking meets the concern,[39] and is not likely to cause financial detriment to any employee covered by the agreement or result in substantial changes to the agreement.[40]
The Employer seeks the opportunity to consider whether it may be able to provide the Commission with undertakings to resolve the above concerns. With respect to the issues concerning non-compliance with s 180(5) of the Act, the CFMEU submits that not all instances of non-compliance with s 180(5) may be curable by undertakings. As observed by the Full Bench in CFMMEU v Mechanical Maintenance Solutions Pty Ltd,[41] where there has been a “wholesale failure” to comply with s 180(5) of the Act, of the type dealt with in One Key, such an issue “is not capable of rectification.”[42] Further, the CFMEU has indicated its likely opposition to any undertaking proffered by the Employer to remedy the s 188(2) concern – for instance, by reducing the coverage of the Proposed Agreement to industries of the type and nature the employees covered by the Proposed Agreement are engaged in[43] – on the basis that such an undertaking is likely to result in substantial changes to the Agreement and accordingly, will be inconsistent with s 190(3)(b). However, I note that each case will turn on its own facts and any undertakings proffered are to be considered by reference to the relevant facts and the concerns sought to be remedied.
Accordingly, the Employer is directed to file and serve any undertaking(s) it wishes to rely on in support of its application for approval of the Proposed Agreement by 4:00pm on 5 January 2024. If undertakings are proffered, the AWU and the CFMEU will be given the opportunity to provide responsive views.
Should the Employer provide an undertaking that is capable of resolving the concerns identified in this decision, the balance of the matters raised by CFMEU in opposition to the approval application will be subsequently addressed.
DEPUTY PRESIDENT
Appearances:
C Melhem for the applicant
S Miller for the AWU
E Barnes-Whelan for the CFMEU
Hearing details:
2023.
Melbourne:
December 14.
Final written submissions:
CFMEU, 15 December 2023.
Applicant, 18 December 2023.
AWU, 18 December 2023.
[1] The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Amending Act) broadly commenced operation with respect to the genuine agreement provisions and the better off overall test provisions of the Act on 6 June 2023. The transitional arrangements under the Amending Act are not applicable to the present application
[2] CFMEU submissions dated 16 November 2023
[3] Collinsville Coal Operations Pty Limited [2014] FWC 5628 (affirmed on appeal in [2014] FWCFB 7940, 246 IR 21); Inco Ships Pty Ltd [2016] FWC 1637 (permission to appeal refused in [2016] FWCFB 3370); One Key Coal QLD Pty Ltd [2018] FWC 256
[4] [2019] FWCFB 4022
[5] [2017] FCA 1266; 270 IR 410
[6] Mobile Crane Hiring Award 2020, clause 4.2
[7] Witness statement of Ms Barnes-Whelan dated 16 November 2023 at EBW-2
[8] Ibid
[9] Form F17B Employer’s declaration in support of an application for approval of a single-enterprise agreement dated 24 October 2023 (Form F17B) at [8]
[10] Employer submissions dated 27 November 2023 at [3]
[11] Employer submissions dated 27 November 2023 at [4]
[12] Employer submissions dated 27 November 2023 at [5]
[13] Form F17B at [9]
[14] Employer submissions dated 27 November 2023 at [11]
[15] Proposed Agreement, Appendix A Schedule 1 a)
[16] Proposed Agreement, Appendix A Schedule 1 b)
[17] Proposed Agreement, Appendix A Schedule 1 c)
[18] Employer submissions dated 27 November 2023 at [28]
[19] Transcript of proceedings dated 14 December 2023 (Transcript) at [63]
[20] Employer submissions dated 27 November 2023 at [4]
[21] Form F17B at [9]
[22] See Mobile Crane Hiring Award 2020, clause 2 “crane crew,” “dogger,” and “rigger”
[23] Form F17B at [7] and [9]
[24] Transport Workers’ Union of Australia v Coles Supermarkets Australia Pty Ltd [2014] FCAFC 148
[25] CFMMEU v Ditchfield Mining Services Pty Limited[2019] FWCFB 4022 at [71]-[72]
[26] Employer submissions dated 27 November 2023 at [11]
[27] Transcript of proceedings dated 14 December 2023 (Transcript) at [414]
[28] Transcript at [414]
[29] Transcript at [425]
[30] Transcript at [446]
[31] Form F17B at [10], cf [11]
[32] Construction, Forestry, Maritime, Mining and Energy Union v Mechanical Maintenance Solutions Pty Ltd [2022] FCAFC 15; 289 FCR 508 at [76]
[33] [2018] FCAFC 77; (2018) 262 FCR 527
[34] Transcript at [260]
[35] See Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Acciona Construction Australia Pty Ltd[2023] FWCFB 219 at [45]
[36] Employer submissions dated 27 November 2023 at [4]
[37] Ibid at [5]
[38] Appeal by Ausdrill Pty Ltd [2022] FWCFB 223 at [41]
[39] CFMMEU v Mechanical Maintenance Solutions Pty Ltd [2022] FCAFC 15 at [176]
[40] Fair Work Act 2009 (Cth), s 190(3)
[41] [2020] FWCFB 1918 at [36]
[42] Ibid
[43] See Appeal by KCL Industries Pty Ltd [2016] FWCFB 3048 at [39]
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