1
[2013] FWCFB 2142
The attached document replaces the document previously issued with the above code on 11
April 2013.
The document has been edited at paragraph [31] to remove the word “It” at the beginning of the
fourth sentence and replace it with “The Agreement”.
Ruchi Bhatt
Associate to Senior Deputy President Harrison
18 April 2013
2
[Note: refer to the Federal Court decision dated 24 February 2015 [2015]
FCAFC 15 for result of appeal.]
[2013] FWCFB 2142
DECISION
Fair Work Act 2009
s.604 - Appeal of decisions
Communications, Electrical, Electronic, Energy, Information, Postal,
Plumbing and Allied Services Union of Australia; Construction, Forestry,
Mining and Energy Union and Automotive, Food, Metals, Engineering,
Printing and Kindred Industries Union (known as the Australian
Manufacturing Workers’ Union)
v
MI&E Holdings Pty Ltd
(C2012/6132)
SENIOR DEPUTY PRESIDENT HARRISON
DEPUTY PRESIDENT SMITH
COMMISSIONER ROBERTS SYDNEY, 11 APRIL 2013
Appeal against decision [2012] FWA 9503 of Deputy President McCarthy at Perth on 6
November 2012 in matter number AG2012/1272, application and coverage clause of
enterprise agreement inconsistent with the Fair Work Act 2009, group of employees not fairly
chosen.
The appeal and background
[1] This decision concerns an appeal made under s.604 the Fair Work Act 2009 (the Act)
by the Communications, Electrical, Electronic, Energy, Information, Plumbing, Postal and
Allied Services Union of Australia (CEPU), the Construction, Forestry, Mining and Energy
Union and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union
(known as the Australian Manufacturing Workers’ Union) (the Appellants). The challenge
that is made is to the approval of an enterprise agreement known as the MI&E Holdings Pty
Ltd Western Division Enterprise Agreement 2012 (the Agreement). The appeal is opposed by
MI&E Holdings Pty Ltd (MI&E), the employer covered by the Agreement. It was not in issue
that the Appellants are persons aggrieved by the approval decision and have standing to make
this appeal.
AUSTRALIA FAIR WORK COMMISSION
http://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2015/2015fcafc0015
http://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2015/2015fcafc0015
[2013] FWCFB 2142
3
[2] The terms of the coverage and application clause of the Agreement and the pre-
approval processes drew the Appellants’ attention to it. The Agreement is expressed to
operate throughout all of Western Australia and covers employees in excess of 70
classifications which are those similar to classifications found in building, construction and
electrical contracting modern awards. Despite this breadth of coverage the Agreement was
only voted on by four employees who were based at a workshop in Bibra Lake, a Perth
suburb.
[3] None of the Appellants had participated in bargaining for the Agreement. They sought
and were granted permission to appear before the Deputy President and opposed the approval
of the Agreement.1
[4] The key clause of the Agreement is clause 2 and it is in these terms:
“2. Coverage and Application of this Agreement
(a) Subject to clause 2(b), this Agreement shall apply to;
• MI&E Holdings Pty ltd (MIE) ("the Company"); and
• Employees of the Company employed in and performing work as set out in
the classifications specified in Schedule 1 - Classifications, of this
Agreement in Western Australia.
(b) The Company undertakes separate project or site specific work that is
regulated by its own site specific terms and conditions. This Agreement does not cover
or apply to any employees working at those project sites where any of the following
agreements are in operation (whether before their nominal expiry dates or not);
a) A greenfields agreement made in accordance with section 172(4) of the
Act or predecessor legislation; or
b) Any other enterprise agreement made with employees in replacement
or, or as a successor to, a greenfields agreement in (a).”
[2013] FWCFB 2142
4
The Deputy President’s decision
[5] The Deputy President commented on the fact that only four employees were involved
in the making of the Agreement and, at that time, over 200 employees were covered by
greenfields agreements with MI&E on what was described as the Shenton Park project and
the Worsley project. Work at those projects had been completed but since then “200 other
employees had been engaged for work at two other major construction sites, the Wheatstone
project and the Macedon project.”2
[6] His Honour noted the Appellants’ submission that the group of employees who will be
covered by the Agreement was not fairly chosen and the argument of MI&E that the group
covered was geographically, operationally and organisationally distinct. He referred to the
employer’s assertion that the Agreement did no more than support the express capacity within
the Act for parties to make greenfields agreements for new projects despite overlap with an
agreement covering employees of an existing business.3
[7] The Deputy President referred to the evidence given by two witnesses called by
MI&E. Key aspects of that evidence included that MI&E was divided operationally between a
Western Division (incorporating Western Australia, Northern Territory and South Australia)
and an Eastern Division (incorporating Queensland and New South Wales). The company had
wanted to operate in Western Australia in a way it had previously operated in Queensland.
That is, it would have a permanent workforce based at Bibra Lake “but with a capacity to
have project conditions for onsite work for employees on major projects”. The aim of MI&E
was described as “to employ this permanent workforce on projects and bring them back into
the Bibra Lake workshop for short periods of time in between projects”. Thus the company
could have a permanent workforce at Bibra Lake that could be deployed to different sites “and
if there wasn't any work at other sites to be able to bring them back to Bibra Lake.”4
[8] MI&E acknowledged it had two greenfields agreements in operation at the time the
Agreement was made (Shenton Park and Worsley) but said that employees at those projects
were not included “as the work was nearing completion at the time of making the agreement
and the expectation was that they would soon finish their employment” with MI&E. 5
[2013] FWCFB 2142
5
[9] The Deputy President found that the group covered by the Agreement was
geographically, operationally and organisationally distinct.6 He found it was appropriate that
employees on the Shenton Park and Worsley projects were excluded from involvement in the
making of the Agreement.7 He found that there were good grounds why the Agreement
excluded employees that would be covered by a greenfields agreement or a replacement for a
greenfields agreement.8 He found the group was fairly chosen.
[10] The Deputy President acknowledged and accepted the business strategy of MI&E
which underpinned the Agreement and the manner in which it understood it would operate.
He identified the common practice in the industry for greenfields agreements to be established
in respect to major construction projects. He approved the Agreement subject to the provision
of an undertaking which is not relevant to the matters raised by this appeal.
A summary of the challenges to the decision
[11] The Appellants challenge the finding made by the Deputy President that the group of
employees covered by the Agreement was fairly chosen. They argued that it was in the public
interest to grant permission to appeal due to the nature of the issues raised which concern the
circumstances in which the group of employees covered by the Agreement was chosen and
whether they had genuinely agreed to the making of the Agreement. The grounds and
submissions on appeal raised a number of arguments which, in summary, concerned the
inconsistency between the coverage clause of the Agreement and provisions of the Act, the
effect of the Agreement undermining the objects and purposes of the Act and the right to
participate in collective bargaining, whether the pre-approval steps were complied with and
whether employees had genuinely agreed to the Agreement.
Other relevant terms of the Agreement
[12] We have earlier reproduced clause 2 of the Agreement. It provides that it operates
throughout the State of Western Australia in respect of employees in classifications specified
in it. The classifications are contained within eight pay groups that are contained in a schedule
to the Agreement and within those pay groups there are in excess of 70 classifications. The
classifications are broad and encompass those which would be expected to be associated with
a “Construction, Maintenance and Industrial Services Industry”9 employer. The classifications
[2013] FWCFB 2142
6
include ones which are contained within two other agreements which covered MI&E being
the Worsley Efficiency and Growth Project MI&E Holdings Pty Ltd Electrical Trades
Agreement 2008 (the Worsley agreement) and the MI&E Holdings Pty Ltd Shenton Park
Solid Waste Treatment Plant CEPU Agreement 2011 (the Shenton Park agreement). We refer
to these two agreements later in this decision. Additionally, and as examples of the broad
range of the classifications in the Agreement we note the following classifications: labourer,
cleaner, store person, scaffolder, boilermaker, rigger, sheet metal worker, excavator, bitumen
sprayer, concrete finisher, mobile crane operator, tradesperson and welder.
The application for approval and the statutory declaration in support of approval of the
Agreement
[13] We should refer briefly to the application for approval and the employer statutory
declaration in support. The application for approval indicates that no employee organisations
were bargaining representatives for the Agreement but that four signed instruments of
appointment by employees of bargaining representatives were given to MI&E. The employer
statutory declaration identifies that the Agreement does not cover all employees but that those
covered had been “fairly chosen on a geographical and operational basis”. It indicates that the
Agreement covers employees on industrial services and electrical work in Western Australia
except those covered by a greenfields agreement or a successor agreement to a greenfields
agreement. It indicates that the reason for the distinction is that “those projects are already
covered by their own agreed site-specific arrangements tailored for use at those particular
projects”.10
[14] The statutory declaration indicates that the representational rights notice was given to
employees on 23 February 2012. A copy of the proposed agreement was given to employees
on 7 March and the “Final Agreement” was given to them on 5 April 2012. The Agreement
was made on 13 April 2012. The answers given to paragraph 2.9 in the statutory declaration
reveal that four employees will be covered by the Agreement, four cast a valid vote and four
voted to approve it. The relevant modern awards referred to as being applicable to the
application of the better off overall test are the Electrical, Electronic and Communications
Contracting Award 2010 and the Building and Construction General On-site Award 2010.
The other enterprise agreements and other employees of MI&E
[2013] FWCFB 2142
7
[15] We have earlier referred to the Deputy President’s decision where he identified the
fact that at the time the Agreement was made there were over 200 employees covered by
greenfields agreements and that since the Agreement was made some 200 employees had
been engaged to work on the Wheatstone and Macedon projects. We should refer in a little
more detail to these matters.
[16] At the time the Agreement was made there were two other relevant enterprise
agreements which covered MI&E and operated within Western Australia. They were each
made as greenfields agreements and the CEPU is covered by each of them. They are the
Worsley agreement and the Shenton Park agreement. We refer to the Worsley agreement first.
It is a workplace agreement11 lodged with the then Workplace Authority. Its operative date is
8 September 2008 and its nominal expiry date is expressed in terms of remaining in force for
a period of 3½ years after it was lodged with the Workplace Authority “or until the practical
completion of the Worsley Efficiency and Growth Project, whichever occurs sooner.” As we
understand the evidence the practical completion of the project was in late 2011 but that up
until May 2012 employees were still employed. The Worsley agreement had well passed its
nominal expiry date by February 2012 when MI&E distributed the representational rights
notice and commenced negotiations for the Agreement.
[17] The evidence and submissions before the Deputy President established that during the
time when the notice was given, negotiations held and the Agreement voted upon a much
larger number of employees than the four at Bibra Lake were in employment.12 As is clear
from the preceding paragraph the Worsley agreement reached its nominal expiry date upon
practical completion. We refer later to the consequences of this group of employees being
excluded from the scope of the Agreement and also to the consequence of them being denied
the opportunity to participate in negotiations and the vote.
[18] Clause 3 of the Worsley agreement provides that it was binding on the CEPU and
MI&E and its employees engaged in classifications contained in the agreement undertaking
on-site construction and commissioning work part of the Worsley Efficiency and Growth
Project. The classifications include Trades Assistant, Communication Technician, Electronics
Tradesperson, Electrician Special Class, Electrical Fitter/Installer, Licensed Plumber,
[2013] FWCFB 2142
8
Boilermaker (Electrical) and Sprinkler Plumber which are also classifications in the
Agreement.
[19] We turn to the Shenton Park agreement. That is an enterprise agreement made under
the Act. It was approved in October 2011 and has a nominal expiry date of 4 October 2014. It
covers the CEPU, MI&E and employees of MI&E engaged on the Shenton Park Solid Waste
Treatment Plant Project and in classifications contained in the agreement. Similar
classifications are contained in the Agreement.
[20] At the time of the hearing before the Deputy President there were in excess of 200
employees working on what was described as the Wheatstone and Macedon projects as well
as at Bibra Lake. Surprisingly, MI&E could not advise the Deputy President when it had bid
for work on those projects. A fair inference could be drawn however that it was seeking work
on those projects at the same time it was negotiating the Agreement. MI&E had been applying
the Agreement terms to those employees even though it had not been approved. An additional
amount was also being paid to the employees on the Wheatstone project to bring them up to a
rate equivalent to the rate that was in an agreement which applied to a principal or head
contractor on that site.
The Act and the Fair Work (Transitional Provisions and Consequential Amendments)
Act 2009
[21] A number of provisions of the Act are relevant to our consideration of the matters
raised in this appeal. Those provisions relate to the concept of enterprise agreements covering
or applying to employees and the interaction rules between certain instruments in relation to
their operative effect. Before referring to those sections we should indicate that in addressing
the manner in which MI&E proposed that clause 2 would operate, the variation and
termination of enterprise agreements provisions contained within Division 7 of Part 2-4 of
Chapter 2 of the Act were not addressed. We need not refer to them.
[22] The sections of the Act of particular relevance to the considerations in this appeal are
ss.52, 53, 54 and 58. Each of them has been reproduced in an appendix to this decision. We
refer to s.58 in particular. It provides that only one enterprise agreement can apply to an
employee at a particular time. If there is an earlier agreement applying to the employee in
[2013] FWCFB 2142
9
relation to particular employment and another enterprise agreement that covers that employee
in relation to the same employment comes into operation then, until the earlier agreement has
passed its nominal expiry date, the later agreement cannot apply. When the earlier agreement
does pass its nominal expiry date the latter can apply to the employee. At that stage the earlier
agreement cannot apply again. The submissions proceeded on the basis that regardless of the
type of agreement which was in contemplation they all concerned employment with MI&E in
the range of classifications in the Agreement at any location throughout Western Australia.
[23] A number of provisions of the Fair Work (Transitional Provisions and Consequential
Amendments) Act 2009 (TP&C Act) are also relevant. The TP&C Act contains a number of
provisions relevant to collective agreements like the Worsley agreement.13 In summary, the
effect of them is as follows. The Worsley agreement became a collective agreement-based
transitional instrument by virtue of the TP&C Act. The concepts of agreements covering and
applying to employees were referred to in that act and were subject to a number of other
provisions which dealt with the interaction between these transitional instruments and
enterprise agreements under the Act. In particular, item 30(2) of Schedule 3 provides that if an
enterprise agreement under the Act started to apply to an employee or an employer covered by
a collective agreement-based transitional instrument then that instrument ceases to cover (and
could never again cover) the employee or the employer.
Was the group fairly chosen?
[24] Because of the way the clause was drafted the group with whom negotiations were
held and who could vote on the Agreement excluded any employees of MI&E other than the
four employees at Bibra Lake. But for the exclusion of existing greenfields agreements in
clause 2 the Worsley agreement employees would be covered by the Agreement. The Worsley
agreement had reached its nominal expiry date but employees remained employed until
probably May 2012 (in any event at least throughout the time the Agreement was being
negotiated and voted upon). Upon approval of the Agreement it immediately applied to all of
those employees. By virtue of the TP&C Act the Worsley agreement ceased to cover and
could never again cover them. The clause attempts to continue the time expired greenfields
agreement in operation and allow those employees to be excluded from coverage of the
Agreement. This is not consistent with the provisions of the TP&C Act. No good reason has
been established for excluding this group of employees. The drafting of the clause is such as
[2013] FWCFB 2142
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to attempt to minimise the number of employees who, under s.181 of the Act, were entitled to
vote for it. That section required MI&E to request employees who were employed at the time,
and who would be covered by the Agreement, to approve it by voting for it.
[25] The matters addressed in the preceding paragraph are considerations which, in our
opinion, are appropriate to be taken into account in the application of ss.186(3) and 186(3A)
of the Act. The manner in which those sections of the Act should be applied was considered
by a Full Bench in Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union and
others14. The Full Bench said:
“[20] It is important to appreciate that whether or not the group of employees covered
by the agreement is geographically, operationally or organisationally distinct is not
decisive, rather it is a matter to be given due weight, having regard to all other relevant
considerations.
[21] It is not appropriate to seek to exhaustively identify what might be the other
relevant considerations. They will vary from case to case and will need to be
demonstrated to the satisfaction of the tribunal. The word ‘fairly’ suggests that the
selection of the group was not arbitrary or discriminatory. For example, selection
based upon employee characteristics such as date of employment, age or gender would
be unlikely to be fair. Similarly, selection based on criteria which would have the
effect of undermining collective bargaining or other legislative objectives would also
be unlikely to be fair. It is also appropriate to have regard to the interests of the
employer, such as enhancing productivity, and the interests of employees in
determining whether the group of employees was fairly chosen. In this regard, it is not
only the interests of the employees covered by the agreement that are relevant; the
interests of those employees who are excluded from the coverage of the agreement are
also relevant. We note that there is a suggestion to the contrary in the oral submissions
put on behalf of Cimeco when counsel submitted that:
“It was an erroneous approach to introduce the identification of the persons who
were relevantly employed at the time of the making of the agreement for the
purposes of testing the group chosen.”
[2013] FWCFB 2142
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[22] To the extent that it is suggested that the interests of the excluded employees are
irrelevant we reject that submission. In evaluating whether the group to be covered by
the agreement has been fairly chosen it is entirely appropriate to have regard to the
consequences of that choice, that is, which employees have been excluded from the
agreement.”
[26] In our opinion the exclusion of the Worsley agreement employees was unfair. In
finding to the contrary the Deputy President was in error.
Other issues about whether the group covered by the Agreement was fairly chosen
[27] Additional considerations arise out of the way in which the group of employees
covered by the Agreement was expressed. Again we return to the terms of clause 2. Despite
the submissions of MI&E we are not persuaded that the clause is clear. We are also not
satisfied the description about how it was intended to operate is consistent with the terms of
the Act.
[28] In some parts of the Deputy President's reasons for decision it seems he thought the
exclusion clause would only relate to greenfields agreements that were made subsequent to
the approval of the Agreement. Clause 2 is not so limited however and it was not
satisfactorily explained to us on appeal why, if it was to be so limited, MI&E did not make
that expressly clear. It was not the way in which the witnesses had described it was intended
to operate and no undertaking reflecting it was given to the Deputy President. If what was
really intended was a narrow interpretation of the clause no satisfactory explanation was given
why clear words to that effect were not used. The exclusion of the Worsley agreement
employees suggests it was not intended to operate that way.
[29] In our opinion the clause is such that it creates significant doubt as to who will be
covered by the Agreement. Firstly clause 2(b) refers to project or site work MI&E undertakes
that is regulated by “its own site-specific terms and conditions”. Although not clear from
those words the parties seem to have proceeded on the basis it should be read as applying to
agreements to which MI&E is a party or is covered. The clause goes on to provide that such
agreements, whether they are before or after their nominal expiry date are excluded from
coverage. As is apparent from the sections of the Act and the TP&C Act we have referred to if
[2013] FWCFB 2142
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there is an agreement which has reached its nominal expiry date then the Agreement will
apply to MI&E and the employees. The earlier time expired agreement cannot be saved
consistent with the Act in the way the clause seems to envisage. It will cease to apply and can
never apply again.
[30] Next the clause provides that the Agreement is not to apply to employees at project
sites where there is any other enterprise agreement made with employees as a replacement of,
or as a successor to, a greenfields agreement. This clause envisages that it would not
necessarily need to be an agreement made under the Act. We do not understand how this
clause could have the practical effect of operating in a way so that the Agreement would
somehow cease to apply to MI&E or its employees prior to its nominal expiry date.
[31] Assuming it is intended that the clause excludes greenfields agreements made
subsequent to the approval of the Agreement there is still some real doubt as to how this
would be allowable under the Act. The coverage and application of clause 2 has been referred
to numerous times by us. It applies in respect of any employment with MI&E throughout
Western Australia of persons in the large number of classifications referred to in the
Agreement. The Agreement envisages that work will be undertaken on project sites and
contains a site allowance for such work. It envisages that employees may be required to work
at the workshop (presumably Bibra Lake) or transfer between locations covered by the
Agreement, and when at those other locations they may be paid a higher rate of pay or receive
additional allowances.15 It is not at all apparent how MI&E could enter into any greenfields
agreement that would come within the Act’s definition of such.
[32] In summary, MI&E wished to move its employees between Bibra Lake and any other
site in Western Australia where it may have work and then back again to Bibra Lake (or
presumably some other site in Western Australia where it had work for the employees to do).
Clause 2 was designed to apply to employees when at Bibra Lake and then to allow another
agreement (either a greenfields, an enterprise agreement or some other agreement not
regulated by the Act, either in or outside of any nominal expiry date) to apply whilst the work
was being done and then the Agreement would again apply. It is clear that the Act and s.58 in
particular does not allow for this to occur. The suggestion that whilst on specific site work the
Agreement application to an employee was somehow suspended or displaced finds no support
in the Act.
[2013] FWCFB 2142
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[33] The coverage of the Agreement was not consistent with the Act and the Agreement
could not operate in the way MI&E had wished. In our opinion this consideration is also
relevant to whether the group of employees covered by it was fairly chosen and weighs
against our being satisfied such a finding should have been made.
[34] Another consideration also arises and that is whether the employees who did vote for
the Agreement genuinely agreed to it. If the Agreement could not operate in the manner
MI&E wished a real issue arises as to the explanation about it which was given to the four
employees who voted for it. A combination of ss.186(2) and 188 necessitate the Agreement
having been genuinely agreed to by the employees and that includes the necessity for its terms
to have been explained to the relevant employees. An explanation about how an agreement
would operate that is contrary to the Act raises real doubts as to whether it was genuinely
agreed to. We raised this concern with MI&E on appeal. We acknowledge that it was not
expressly argued in this manner below and that MI&E objects to its having to now address it
on appeal. We have some sympathy for this position but do note that it is not a discretionary
issue; it goes to the mandatory pre-approval steps. We have decided in the circumstances that
as we have found error in other respects we will not deal with this matter any further.
Did all relevant employees have an opportunity to vote?
[35] We have earlier referred to the explanation given by MI&E as to why it had not given
employees engaged on the greenfields projects an opportunity to vote on the Agreement.
Whilst it is not free from doubt as to whether the employees to which the Shenton Park
agreement applied, which was still within its nominal life, should have voted (the Appellants
submit they should have) in our opinion those on the Worsley project clearly were entitled.
The explanation given by MI&E that they did not allow them to vote because they expected
their employment would be finishing up shortly after the Agreement was made does not
justify them declining to give them the opportunity to do so. They were persons who under
s.181 of the Act would be covered by the Agreement and were employed at the time and
therefore should have been requested by MI&E to approve the Agreement by voting for it.
[36] Had clause 2 been drafted in a manner consistent with the Act the Worley project
employees in employment at the time negotiations commenced (which was in February 2012)
[2013] FWCFB 2142
14
would have been entitled to have participated in the negotiations for the Agreement and in the
vote for it. This consideration goes to the compliance with the pre-approval steps and whether
the Agreement was validly made. The acceptance by the Deputy President (albeit in the
context of his consideration of whether the employees were fairly chosen)16 that it was
appropriate to exclude these employees is erroneous.
Is this a matter that can be cured by an undertaking?
[37] We should refer to the issue of an undertaking however given the errors we have
identified we intend to refuse to quash the approval of the Agreement. Section 190 of the Act
provides that if the Commission has a concern that an agreement does not meet the
requirements of ss.186 and 187 it may approve the agreement if it is satisfied that an
acceptable undertaking meets the concern. An undertaking will not be accepted if the effect of
it is likely to result in substantial changes to an agreement.
[38] No undertaking could be given which would meet the concerns we have identified
(that is the appealable errors). Even if MI&E were to give an undertaking that clause 2 would
be read in a way much narrower than its terms indicate, for example that it only relates to new
greenfields agreements that may be entered into, or that it would not operate at all, this would
not meet the concerns we have expressed about the group of employees not being fairly
chosen. That is, any undertaking will not rectify the exclusion of Worsley agreement
employees from participating in the negotiations and voting for the Agreement. Additionally,
such an undertaking would be such as to result in a substantial change to the Agreement.
Conclusion
[39] We have decided that it is in the public interest to grant permission to appeal. The
issues raised by the appeal concern important issues about the terms of application and
coverage clauses in enterprise agreements and the interaction provisions of the Act. As is
apparent from our reasons we are also of the opinion that the decision of the Deputy President
is attended with sufficient doubt as to warrant the grant of permission to appeal.
[40] We find that the Deputy President was in error in finding that the group was fairly
chosen. We have considered that matter ourselves and for the reasons given have decided the
[2013] FWCFB 2142
15
group was not fairly chosen. We allow the appeal and quash the decision to approve the
Agreement.
[41] In conclusion, we should indicate that this decision does not rule in an exhaustive way
on the practice of employers and unions entering into greenfields agreements in respect of a
genuine new enterprise at a time when a relevant enterprise agreement is still within its
nominal life. We are aware it is not uncommon (particularly in Western Australia) for this
practice to be recognised in some way in the wording of an enterprise agreement. It may be
wise for there to be some further consideration of the wording being adopted by these parties
in their enterprise agreements. When doing so consideration should be given to this decision
and to the recent decision of Commissioner Gooley in Abigroup Contractors Pty Ltd.17 This
decision was not referred to in the submissions before us.
SENIOR DEPUTY PRESIDENT
Appearances:
R. Reitano, counsel and K. Sneddon and A. Kentish for the Appellants
C. Gianetti, solicitor and D. Brajevic for the respondent
Hearing details:
2013
Sydney
16 January and 11 March
Printed by authority of the Commonwealth Government Printer
Price code C, PR535507
[2013] FWCFB 2142
16
1 There were previous proceedings concerning the Agreement which we do not need to refer to - see CEPU and others and
MI&E Holdings Pty Ltd [2012] FWAFB 6817
2 Paragraph [7]
3 Paragraphs [8] and [9]
4 Paragraphs [20],[21],[22]
5 Paragraph [23]
6 Paragraphs [31] to [36]
7 Paragrpah [37]
8 Paragraph [47]
9 The description is by MI&E in the application for approval of the Agreement and in the employer’s statutory declaration
10 Paragraph 2.2 and 2.3
11 Workplace Relations Act 1996 Part 8, Division 2
12 Appellants written “Outline of Objections” undated para [7], Appellant’s written submissions filed at the hearing para [5],
Appellant’s written submissions filed after the hearing, para [8] and transcript eg 122,218,445,543, appeal PN117
13 In the Workplace Relations Act 1996 ss.347,348, 351 (provisions comparable to the Act also applied to whether an
employer or employee could take protected action in support of a new agreement - ie not until after the nominal expiry
date see ss.440,494). T&C Act Schedule 3 items 2,3 and 30(2)
14 [2012] FWAFB 2206
15 Clauses 11 and 12
16 Paragraph [37]
17 [2012] FWA 9755
[2013] FWCFB 2142
17
Appendix
52 When an enterprise agreement applies to an employer, employee or employee
organisation
When an enterprise agreement applies to an employee, employer or organisation
(1) An enterprise agreement applies to an employee, employer or
employee organisation if:
(a) the agreement is in operation; and
(b) the agreement covers the employee, employer or organisation;
and
(c) no other provision of this Act provides, or has the effect, that
the agreement does not apply to the employee, employer or
organisation.
Enterprise agreements apply to employees in relation to particular employment
(2) A reference in this Act to an enterprise agreement applying to an
employee is a reference to the agreement applying to the employee in relation
to particular employment.
53 When an enterprise agreement covers an employer, employee or employee
organisation
Employees and employers
(1) An enterprise agreement covers an employee or employer if the
agreement is expressed to cover (however described) the employee or the
employer.
Employee organisations
(2) An enterprise agreement covers an employee organisation:
(a) for an enterprise agreement that is not a greenfields
agreement—if the FWC has noted in its decision to approve the
agreement that the agreement covers the organisation (see subsection
201(2)); or
(b) for a greenfields agreement—if the agreement is made by the
organisation.
Effect of provisions of this Act, FWC orders and court orders on coverage
[2013] FWCFB 2142
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(3) An enterprise agreement also covers an employee, employer or
employee organisation if any of the following provides, or has the effect, that
the agreement covers the employee, employer or organisation:
(a) a provision of this Act or of the Registered Organisations Act;
(b) an FWC order made under a provision of this Act;
(c) an order of a court.
(4) Despite subsections (1), (2) and (3), an enterprise agreement does not
cover an employee, employer or employee organisation if any of the following
provides, or has the effect, that the agreement does not cover the employee,
employer or organisation:
(a) another provision of this Act;
(b) an FWC order made under another provision of this Act;
(c) an order of a court.
Enterprise agreements that have ceased to operate
(5) Despite subsections (1), (2) and (3), an enterprise agreement that has
ceased to operate does not cover an employee, employer or employee
organisation.
Enterprise agreements cover employees in relation to particular employment
(6) A reference in this Act to an enterprise agreement covering an
employee is a reference to the agreement covering the employee in relation to
particular employment.
54 When an enterprise agreement is in operation
(1) An enterprise agreement approved by the FWC operates from:
(a) 7 days after the agreement is approved; or
(b) if a later day is specified in the agreement—that later day.
(2) An enterprise agreement ceases to operate on the earlier of the
following days:
(a) the day on which a termination of the agreement comes into
operation under section 224 or 227;
(b) the day on which section 58 first has the effect that there is no
employee to whom the agreement applies.
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Note: Section 58 deals with when an enterprise agreement ceases to apply to
an employee.
(3) An enterprise agreement that has ceased to operate can never operate
again.
Subdivision C—Interaction between one or more enterprise agreements
58 Only one enterprise agreement can apply to an employee
Only one enterprise agreement can apply to an employee
(1) Only one enterprise agreement can apply to an employee at a particular
time.
General rule—later agreement does not apply until earlier agreement passes its
nominal expiry date
(2) If:
(a) an enterprise agreement (the earlier agreement) applies to an
employee in relation to particular employment; and
(b) another enterprise agreement (the later agreement) that covers
the employee in relation to the same employment comes into operation;
and
(c) subsection (3) (which deals with a single-enterprise agreement
replacing a multi-enterprise agreement) does not apply;
then:
(d) if the earlier agreement has not passed its nominal expiry date:
(i) the later agreement cannot apply to the employee in
relation to that employment until the earlier agreement passes
its nominal expiry date; and
(ii) the earlier agreement ceases to apply to the employee in
relation to that employment when the earlier agreement passes
its nominal expiry date, and can never so apply again; or
(e) if the earlier agreement has passed its nominal expiry date—the
earlier agreement ceases to apply to the employee when the later
agreement comes into operation, and can never so apply again.
Special rule—single-enterprise agreement replaces multi-enterprise agreement
(3) Despite subsection (2), if:
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(a) a multi-enterprise agreement applies to an employee in relation
to particular employment; and
(b) a single-enterprise agreement that covers the employee in
relation to the same employment comes into operation;
the multi-enterprise agreement ceases to apply to the employee in relation to
that employment when the single-enterprise agreement comes into operation,
and can never so apply again.
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:
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(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.
...
Greenfields agreement
(3) A greenfields agreement is made when it has been signed by each employer
and each relevant employee organisation that the agreement is expressed to
cover (which need not be all of the relevant employee organisations for the
agreement).
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Subdivision B—Approval of enterprise agreements by the FWC
186 When the FWC 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, the FWC must approve the agreement under this section if
the requirements set out in this section and section 187 are met.
Note: The FWC may approve an enterprise agreement under this section with
undertakings (see section 190).
Requirements relating to the safety net etc.
(2) The FWC must be satisfied that:
(a) if the agreement is not a greenfields agreement—the agreement
has been genuinely agreed to by the employees covered by the
agreement; and
(b) if the agreement is a multi-enterprise agreement:
(i) the agreement has been genuinely agreed to by each
employer covered by the agreement; and
(ii) no person coerced, or threatened to coerce, any of the
employers to make the agreement; and
(c) the terms of the agreement do not contravene section 55 (which
deals with the interaction between the National Employment Standards
and enterprise agreements etc.); and
(d) the agreement passes the better off overall test.
Note 1:For when an enterprise agreement has been genuinely agreed to by
employees, see section 188.
Note 2:The FWC 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)).
Requirement that the group of employees covered by the agreement is fairly chosen
(3) The FWC must be satisfied that the group of employees covered by the
agreement was fairly chosen.
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(3A) If the agreement does not cover all of the employees of the employer or
employers covered by the agreement, the FWC must, in deciding whether the
group of employees covered was fairly chosen, take into account whether the
group is geographically, operationally or organisationally distinct.
Requirement that there be no unlawful terms
(4) The FWC must be satisfied that the agreement does not include any
unlawful terms (see Subdivision D of this Division).
Requirement that there be no designated outworker terms
(4A) The FWC must be satisfied that the agreement does not include any
designated outworker terms.
Requirement for a nominal expiry date etc.
(5) The FWC must be satisfied that:
(a) the agreement specifies a date as its nominal expiry date; and
(b) the date will not be more than 4 years after the day on which the
FWC approves the agreement.
Requirement for a term about settling disputes
(6) The FWC must be satisfied that the agreement includes a term:
(a) that provides a procedure that requires or allows the FWC, or
another person who is independent of the employers, employees or
employee organisations covered by the agreement, to settle disputes:
(i) about any matters arising under the agreement; and
(ii) in relation to the National Employment Standards; and
(b) that allows for the representation of employees covered by the
agreement for the purposes of that procedure.
Note 1:The FWC or a person must not settle a dispute about whether an
employer had reasonable business grounds under subsection 65(5) or 76(4) (see
subsections 739(2) and 740(2)).
Note 2:However, this does not prevent the FWC from dealing with a dispute
relating to a term of an enterprise agreement that has the same (or substantially
the same) effect as subsection 65(5) or 76(4).
188 When employees have genuinely agreed to an enterprise agreement
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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.
