1
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Falcon Mining Pty Ltd
(AG2016/1347)
Coal industry
DEPUTY PRESIDENT ASBURY BRISBANE, 14 SEPTEMBER 2016
Application for approval of the Falcon Mining Pty Ltd Enterprise Agreement 2016 –
Concerns about whether Agreement can be approved – CFMEU objections to approval –
Effect of incorrect information in NERR – Effect of incorrect information in application
documents including employer statutory declaration – Requirement to take all reasonable
steps to give NERR to employees – No requirement for NERR to be given to each individual
employee – Reasonable steps may include giving notice individually and collectively - NERR
only required to be given to employees employed at the notification time - Requirement to take
all reasonable steps to give an explanation of the terms of the Agreement and their effect to
employees – Other reasonable grounds for the Commission to believe that the Agreement was
not genuinely agreed – Whether Agreement contains unlawful terms – Interaction between
NES and Award in relation to personal/carer’s leave and public holidays – Whether exclusion
of NES term can be addressed by undertaking – Whether Agreement passes the BOOT –
Whether undertakings required to meet Commission’s concerns about BOOT issues result in
substantial change to the Agreement – Approval refused.
1. BACKGROUND
[1] Falcon Mining Pty Ltd (Falcon) applies in accordance with Part 2-4 of the Fair Work
Act 2009 (the Act) for approval of the Falcon Mining Pty Ltd Enterprise Agreement 2016 (the
Agreement). The parties to the Agreement are Falcon and employees of Falcon employed in
NSW (excluding the Southern Mining Region) in classifications set out in clause 8 of the
Agreement. The Agreement applies to the exclusion of all Awards and other Agreements. The
nominal expiry date of the Agreement is expressed to be three years from the date on which
the Commission may approve the Agreement.
[2] The application for approval of the Agreement was made on 27 May 2016. The
application is objected to by the Construction, Forestry, Mining and Energy Union Mining &
Energy Division – Northern Mining and NSW Energy District (the CFMEU) on the basis that
the CFMEU asserts that the Agreement does not meet the requirements for approval under the
Act.
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DECISION
E AUSTRALIA FairWork Commission
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[3] By correspondence dated 1 June 2016, the CFMEU sought to be heard in relation to
the application for approval of the Agreement and to be provided with the application
documents in respect of the Agreement. The request for the provision of application
documents was refused on the basis that the CFMEU did not assert that it was a bargaining
representative for the Agreement.1 The Union had access to the Agreement, which was
published on the Commission’s website in accordance with usual practice for enterprise
agreements awaiting approval. The CFMEU subsequently obtained the application documents
from an unknown source and raised further objections on the basis of information set out in
those documents.
[4] Subsequent to seeking to be heard in relation to the application, the CFMEU filed a
Notice of representative commencing to act in respect of an employee of Falcon, Mr Steve
Ryan, who would be covered by the Agreement in the event that it was approved. At the
commencement of the Hearing in respect of the application for approval of the Agreement it
was conceded by Falcon that the CFMEU had a right to participate in the hearing on the basis
of representing Mr Ryan.2 I decided to hear from the CFMEU pursuant to my powers under
s.590 of the Act, on the basis that the participation of the CFMEU as an industrial
organisation with an interest in the black coal industry, would assist me to inform myself in
relation to whether the Agreement should be approved. I also determined to allow the
CFMEU to call evidence and cross-examine witnesses on the basis that the CFMEU was
representing Mr Ryan who wished to give evidence in opposition to the application for
approval of the Agreement. Given the general right to be heard granted to the CFMEU and the
breadth and complexity of the matters to be dealt with in the hearing, permission was granted
pursuant to s.596 of the Act for Falcon to be represented by a lawyer.
[5] The application was heard over two days. Evidence for Falcon was given by Ms
Vivienne Gayton, Executive General Manager Human Resources. Extensive submissions
were made by Falcon and the CFMEU. This Decision is unusually lengthy for a Decision
dealing with application for approval of an Agreement, but it was necessary to deal with the
significant number of issues raised by the CFMEU and the complications caused by a series
of errors and omissions on the part of Falcon in relation to the pre-approval process and
application documents. Although some of the findings I have made are individually a
sufficient basis for the application to be dismissed, I have addressed all of the matters raised.
[6] In summary I have decided that:
Incorrect statements in the Form F16 Application for approval of the Agreement and
the Form F17 Employer declaration in support of approval of the Agreement did not
invalidate the application, and could be corrected (s.586(a));
Incorrectly naming the employer in the Notice of Employee Representational Rights
(NERR) issued by Falcon did not invalidate the notice (s.174(1A));
Falcon was not required to give the NERR to Mr Ryan on the basis that he was not
employed at the notification time for the Agreement (s.173(1)(b));
I am not satisfied that Falcon took all reasonable steps to give a NERR to relevant
employees (s.173(1));
I am not satisfied that Falcon took all reasonable steps to provide an explanation to
relevant employees about the effect of the Agreement and its terms or to provide the
explanation in an appropriate manner given the rosters and other circumstances of
employees (s.180(5)(a));
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The cumulative effect of errors made in the application documentation and other
omissions (while individually not fatal to an application for approval) are reasonable
grounds for the Commission to believe that the Agreement was not genuinely agreed
(s.188(c));
The Agreement does not contain unlawful terms (s.186(4));
To the extent that the dispute settlement procedure may not comply with s.186(6) of
the Act, the matter could be addressed by an undertaking if the Agreement was
approved;
The Agreement does in part exclude the National Employment Standards (the NES)
(s.186(2)(c));
The NES exclusion relates to a provision about which an undertaking could be
provided if the Agreement was otherwise able to be approved (s.190(1));
The Agreement does not pass the better off overall test (the BOOT) (s.186(2)(d)); and
Undertakings could address the BOOT issues if the Agreement was approved, but the
number undertakings that would be required to meet concerns about the Agreement
would result in substantial changes to the Agreement (s.190(3)).
[7] As a result of these findings I must not approve the Agreement and the application
must be refused. My reasons for these findings are set out below.
2. OBJECTIONS TO THE APROVAL OF THE AGREEMENT
[8] The CFMEU’s objections to the application for approval of the Agreement, can be
summarised as follows (in the order I intend to deal with them in this Decision):
There are irregularities in the Form F16 and Form F17 such that the application for
approval is not validly made Agreement cannot be approved (the application issues);
The NERR did not correctly name the employer and was not provided to employees at
the time or in the manner required by the Act so that the requirements of ss.173, 174
and 174(1A) were not met (the NERR issues);
Reasonable steps were not taken during the access period for the Agreement to
provide employees with a copy of the written text of the Agreement and other
incorporated material (as required by s.180(2) of the Act) or to explain the terms of the
Agreement (as required by s.180(5) of the Act) and there are other reasonable grounds
for the Commission to believe that the Agreement has not been genuinely agreed so
that s.188(c) of the Act applies (the genuine agreement issues);
The terms of the Agreement contravene s.55 of the Act by excluding provisions of the
NES in relation to carers’ leave and public holidays (the NES issues);
The Agreement contains a term about settling disputes that does not meet the
requirements set out in s.186(2) of the Act (the dispute settlement term issue);
The Agreement does not pass the BOOT when compared to the relevant reference
instrument – the Black Coal Mining Industry Award 2010 (the Award) – and
undertakings necessary to ensure that the Agreement passes the BOOT would infringe
s.190(3) of the Act by resulting in substantial changes to the Agreement so that the
undertakings necessary for the Agreement to pass the BOOT could not be accepted by
the Commission (the BOOT issues).
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3. THE APPLICATION ISSUES
[9] The application issues include the employer being incorrectly named in parts of the
Form F16 Application for approval of an enterprise agreement and Form F17 Employer
declaration in support of approval of an enterprise agreement. At item 1.2 of the Form F16
the name of the Agreement is incorrectly stated to be Falcon Pty Ltd Enterprise Agreement
instead of the correct name which is (as set out in the Agreement attached to the application) –
Falcon Mining Pty Ltd Enterprise Agreement. The Form F17 requires a copy of the NERR
which was given to employees to be attached to the Form. The error in respect of the Form
17 is said to be that an incorrect version of the NERR was attached to the Form F17.
[10] In relation to this matter, Ms Gayton filed a further Affidavit sworn on 5 July 2016
(after giving oral evidence to the Commission in which she was unable to state what version
of the NERR was given to employees) attaching the original NERR said by her to have been
issued to employees on 10 and 11 February 2016. That version of the NERR states the correct
name of the Agreement but continues to refer, incorrectly, to the employer as “Falcon Pty
Ltd”.
[11] Further issue was taken with the Form F17 Employer declaration on the basis that in
response to question 3.5 – which asks whether the Agreement contains terms less beneficial
than those in the Award – Ms Gayton checked the box beside the response “No”. The
CFMEU contends that this statement is wrong and that there are terms in the Agreement that
are less beneficial than those in the Award.
[12] In an affidavit sworn on 22 June 2016, Ms Gayton said that she misunderstood
question 3.5 of the Form F17 and thought that it was asking if she thought that the Agreement
contained terms and conditions that are less beneficial than the terms and conditions in the
Award on an overall basis. Ms Gayton said that she answered the question on the basis of her
belief that employees who would be covered by the Agreement would be better off overall
than if the Award applied, because of the rates of pay under the Agreement and that this was
an honest misinterpretation of the question.3 Ms Gayton said that she did not intend to
mislead the Commission and now understands the question to be asking whether the
Agreement contains any terms that are less beneficial than the equivalent terms and conditions
in the Award, when considered on a clause by clause basis. Ms Gayton conceded that she
misinterpreted the question, and I assume by that concession that she accepts that the correct
answer to the question was ‘yes’ although Ms Gayton did not directly state this in her
affidavit of 22 June 2016.
[13] Ms Gayton agreed under cross-examination that she holds: a Diploma of Business; a
Post-Graduate Certificate in Industrial Relations; a Masters of Business Administration; and
has held the position of Manager, Human Resources for the Mastermyne Group for six years.
Ms Gayton disagreed with the proposition that she has a high degree of industrial relations
expertise. It was not put to Ms Gayton that her answer to question 3.5 in the Form F17 was
dishonest or that she had intended to mislead the Commission.
[14] Mr Coonan for Falcon submitted that the Form F16 application could be corrected or
amended by the Commission using the power in s.586(a) of the Act, or by the Commission
waiving the irregularity, and that the Affidavit of Ms Gayton sworn on 22 June 2016
addressed the incorrect response to question 3.5 in the Form F17. Ms Short for the CFMEU
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submitted that the Form F16 clearly instructs the person completing it to state the name of the
Agreement exactly as it appears in the title and that this could not be classified as a simple
error capable of being corrected by the Commission. The submissions and evidence in
relation to the employer and the name of the Agreement being incorrectly stated in the NERR,
are dealt with below.
4. THE NERR ISSUES
4.1 Form and content of the NERR
[15] The first issue raised by the CFMEU goes to the form and content of the NERR and
centres on the effect of errors in the NERR, which were an incorrect reference to the
Company name and the name of the Agreement. The evidence from Falcon about this issue
left much to be desired and was set out in the Form F17 Employer declaration, and a further
Affidavit sworn by Ms Gayton 5 July 2016.4
[16] Section 174 of the Act deals with the content and form of the NERR and relevantly
provides:
“174 Content and form of notice of employee representational rights
Application of this section
(1) This section applies if an employer that will be covered by a proposed enterprise
agreement is required to give a notice under subsection 173(1) to an employee.
Notice requirements
(1A) The notice must:
(a) contain the content prescribed by the regulations; and
(b) not contain any other content; and
(c) be in the form prescribed by the regulations.
....”
[17] The effect of the provisions relating to form and content of the NERR is that the
NERR must be in the form prescribed by the Regulations and contain only the prescribed
content. In Peabody Moorvale Pty Ltd v CFMEU5 a five Member Full Bench of the
Commission held that failure of an employer to comply with the content and form
requirements in s. 174(1A) goes to validity and means that the Commission cannot approve
an enterprise agreement.6
[18] Relevantly, Schedule 2.1 to the Fair Work Regulations 2009 contains the required
form for a NERR. The introductory paragraph of Schedule 2.1 prescribes the following form
for a NERR:
“[Name of employer] gives notice that it is bargaining in relation to an enterprise agreement
([name of the proposed enterprise agreement]) which is proposed to cover employees that
[proposed coverage]…”
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[19] The employer is required to insert the required information and delete other parts of
the form in circumstances where they are not relevant.
[20] In the present case, the NERR was prepared by Ms Gayton who also signed the Form
F17 Employer’s statutory declaration filed by Falcon in support of the approval of the
Agreement. A copy of a NERR, said by Ms Gayton to have been given to employees, was
appended to the Form F17. The copy of the NERR appended to the Form F17 contains the
following introductory paragraph:
“Falcon Pty Ltd gives notice that it is bargaining in relation to an enterprise agreement
Falcon Mining Pty Ltd Enterprise Agreement 2016 which is proposed to cover employees that
are engaged by Falcon Pty Ltd in the classifications defined in the Agreement…”7
[21] Ms Gayton’s evidence is that bargaining was initiated by Falcon when the NERR was
given to employees. Ms Gayton said in the Form F17 that this occurred on 18 February 2016
and, later, by way of a further affidavit sworn on 5 July 2016, Ms Gayton said that the NERR
was given to employees on 10 and 11 February 2016. The issue about the date on which the
NERR was given to employees is in dispute and is dealt with below.
[22] When cross-examined about the version of the NERR that was given to employees,
Ms Gayton agreed that the Company “corrected” the original NERR at some point by
inserting the word “Mining” after the word “Falcon” in the name of the Agreement as set out
in the NERR but was not sure whether this occurred before or after the NERR was given to
employees. Ms Gayton could not definitively state that the version of the NERR appended to
the Form F17 declared by her, was the version that was actually given to employees when
bargaining was initiated. Ms Gayton also said that the corrected version was “made
available” at site in hard copy form, but was unable to give evidence about how many
employees had been given a corrected version.8
[23] I note that the “corrected” version of the NERR accurately states the name of the
Agreement but continues to inaccurately refer to the Company giving the notice and
employing employees covered by the proposed Agreement as Falcon Pty Ltd instead of
Falcon Mining Pty Ltd. Ms Gayton also said that employees were given a document entitled
“FALCON PTY LTD ENTERPRISE AGREEMENT 2016 EMPLOYEE
REPRESENTATIVE NOMINATION” at the same time as they were given the NERR, to
enable them to nominate an employee representative if they wished to do so. Mr Ryan
tendered that document and said it was emailed to him on 23 February 2016. That document
also incorrectly states the name of the Agreement in three places.
[24] Under cross-examination Ms Gayton agreed that she created the NERR in pdf form
and was shown a document detailing the properties of the pdf version attached to the Form
F17. When it was put to her that the properties of the pdf document attached to the Form F17
showed that it was created on 17 May 2016, Ms Gayton said that the pdf version of the NERR
attached to the Form F17 was not the NERR that was originally given to employees. Ms
Gayton said that she was not aware of a company known as Falcon Pty Ltd or that it had been
deregistered. Ms Gayton also said that the reference to Falcon Pty Ltd was an error on her
part and her intention had been to refer to the Company as Falcon Mining Pty Ltd, both in the
body of the NERR and in the name of the Agreement.
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[25] The further Affidavit sworn by Ms Gayton on 5 July 2016, was tendered after Ms
Gatyon gave her oral evidence. The further Affidavit was tendered without objection at a
hearing conducted for the purpose of the parties making submissions in relation to whether
the Agreement should be approved. In that Affidavit, Ms Gayton said that she had searched
for a copy of the original NERR issued to employees on 10 and 11 February 2016 and had
located what she believed to be a true copy of the version originally given to employees. That
version was appended to Ms Gayton’s further affidavit sworn on 5 July 2016 and contained
the following opening paragraph:
“Falcon Pty Ltd gives notice that it is bargaining in relation to an enterprise agreement
Falcon Pty Ltd Enterprise Agreement 2016 which is proposed to cover employees that are
engaged by Falcon Pty Ltd in the classifications defined in the Agreement…”9 (underlining
added)
[26] The CFMEU submitted that the Commission could not be satisfied that a NERR in the
required form was given to employees because the Company failed to append the original
notice to its Form F17 statutory declaration and had not clarified exactly what was given to
employees. In relation to the NERR, it was contended that it contained incorrect information
with respect to the name of the Company and the Agreement and was not valid because of the
incorrect information. That incorrect information was submitted to have changed the coverage
of the Agreement and to have created a situation where employees could have been confused
about the coverage. Ms Short contended that Falcon Pty Ltd is a deregistered company
evidenced by an ASIC search, which had been conducted by the CFMEU but not tendered to
the Commission. Mr Ryan did not give any evidence of confusion in relation to the identity of
his employer or the entity that had negotiated the Agreement.
[27] In relation to errors in the NERR, Mr Coonan for Falcon, submitted that these are
procedural errors and that the NERR is not invalid because the name of the Company and/or
the name of the Agreement are incorrectly stated. In this regard, reference was made to the
Full Bench Decisions in Peabody Moorvale Pty Ltd v Construction Forestry Mining and
Energy Union10 and Australian Maritime Officers Union v Harbour City Ferries Pty Ltd and
Others11 (Harbour City Ferries). In both of those cases, it was held that the only scope given
to the employer to modify the NERR was in respect of the three bracketed fields in the first
paragraph. In the present case, the form of the NERR has not been modified in any respect.
The issue is the information inserted in the bracketed part of the form.
[28] In Harbour City Ferries, the Full Bench found that an employee who receives the
NERR must be able to understand who is and who would be covered by the proposed
agreement, and that the proposed coverage may evolve as bargaining proceeds. The Full
Bench in that case also found that a minor typographical error or mistaken description in the
information required to be inserted by an employer, does not invalidate the NERR. Falcon
also relied on the Decision of Commissioner Bull (as he then was) in Lovisa Enterprise
Agreement 201412 where an administrative error in the name of the Agreement inserted into
the NERR was held not to invalidate it. In the present case, there is no evidence that any
employee was misled or misunderstood the identity of the employer.
4.2 Giving NERR to employees
[29] By virtue of s. 186(2)(a) of the Act the Commission must be satisfied that an
enterprise agreement has been genuinely agreed to by employees in accordance with s.188.
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Section 188 of the Act stipulates that one of the prerequisites for employees to be taken to
have genuinely agreed to an enterprise agreement is that the employer complied with s.181(2)
of the Act, which requires that employees not be requested to approve an agreement until 21
days after the last NERR under s. 173(1) is given. Section 173 provides, in relation to the
giving of a NERR, as follows:
“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.
Notification time
(2) The notification time for a proposed enterprise agreement is the time when:
(a) the employer agrees to bargain, or initiates bargaining, for the agreement; or
(b) a majority support determination in relation to the agreement comes into
operation; or
(c) a scope order in relation to the agreement comes into operation; or
(d) a low paid authorisation in relation to the agreement that specifies the
employer comes into operation.
Note: The employer cannot request employees to approve the agreement under section 181
until 21 days after the last notice is given (see subsection 181(2)).
When notice must be given
(3) The employer must give the notice as soon as practicable, and not later than 14 days,
after the notification time for the agreement.
Notice need not be given in certain circumstances
(4) An employer is not required to give a notice to an employee under subsection (1) in
relation to a proposed enterprise agreement if the employer has already given the employee a
notice under that subsection within a reasonable period before the notification time for the
agreement.
How notices are given
(5) The regulations may prescribe how notices under subsection (1) may be given.”
[30] In relation to how a NERR is given to employees, Regulation 2.04 of the Fair Work
Regulations 2009 provides:
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“Notice of employee representational rights--how notice is given
(1) For subsection 173(5) of the Act, each of the following is a manner in which the
employer for a proposed enterprise agreement may give employees who will be covered by the
agreement notice of the right to be represented by a bargaining representative for the
agreement.
(2) The employer may give the notice to the employee personally.
(3) The employer may send the notice by pre-paid post to:
(a) the employee's residential address; or
(b) a postal address nominated by the employee.
(4) The employer may send the notice to:
(a) the employee's email address at work; or
(b) another email address nominated by the employee.
(5) The employer may send to the employee's email address at work (or to another
email address nominated by the employee) an electronic link that takes the employee directly
to a copy of the notice on the employer's intranet.
(6) The employer may fax the notice to:
(a) the employee's fax number at work; or
(b) the employee's fax number at home; or
(c) another fax number nominated by the employee.
(7) The employer may display the notice in a conspicuous location at the workplace
that is known by and readily accessible to the employee.
(8) Subregulations (2) to (7) do not prevent the employer from using another manner
of giving the notice to the employee.”
[31] Mr Ryan states that he is employed by Falcon as a casual employee but is on a
permanent roster at the Ulan Mine. Mr Ryan agreed that he commenced work for Falcon on
18 February 2016. Mr Ryan states that he did not receive a NERR or a document similar to it.
According to Mr Ryan, the only document he received was a form to nominate a bargaining
representative, provided on 23 February 2016 by email. Mr Ryan completed the form and
nominated a work colleague to be his representative.
[32] Ms Gayton’s evidence about how the NERR was given to employees was contained in
the Form F17 and a number of subsequent statements and in oral evidence. In the Form F17
Employer declaration completed by Ms Gayton, in response to a question requesting a
description of the steps taken to give employees notice of their right to be represented by a
bargaining representative, the following statement appears:
“Meetings were held with employees at site where the employer discussed the right for
employees to be represented by a bargaining representative. The Form 2.1 was
handed to employees at this meeting.”
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[33] The Form F17 does not indicate the date on which those meetings were held or when
the NERR was issued. The Form F17 does indicate that the last NERR was given on 26
February 2016. In a supplementary witness statement dated 30 June 2016, filed in connection
with the hearing of the application for approval of the Agreement,13 Ms Gayton said that the
NERR was issued to employees on 10 and 11 February 2016 at meetings held at Wambo and
Ulan.14 Appended to that witness statement was a chronology of events. The information
contained in that document is to the effect that the NERR and a form which employees could
use if they chose to nominate a bargaining representative, was handed to employees at
meetings on 10 and 11 February and they were told that they needed to read and understand
the NERR. The chronology makes no reference to any other steps being taken to give the
NERR to employees. Further, Ms Gayton did not amend the Form F17 or seek to give further
evidence in relation to the date upon which she declared that the last NERR was given.
[34] In response to Mr Ryan’s evidence that he did not receive the NERR, Ms Gayton
states that Mr Ryan commenced employment with Falcon Mining Pty Ltd on 18 February
2016 and was therefore not employed at the time the NERR was given to employees (ie. on
10 and 11 February 2016). Ms Gayton also points to the fact that on 23 February 2016, Mr
Ryan used the form that was given to employees with the NERR to nominate a bargaining
representative.15
[35] Mr Ryan said that when he commenced employment, he was working a roster where
ordinary hours were worked on Friday, Saturday and Sunday. Mr Ryan was still working that
roster at the time he made his witness statement – 28 June 2016. Mr Ryan also gave evidence
that there are two other rosters in operation at Ulan West Underground Mine, which provide
for employees of Falcon to work a fixed Monday to Thursday, 12 hour night shift from 6.00
pm until 6.00 am, and a 12 hour day shift operating between 6.00 am and 6.00 pm from
Monday to Thursday.
[36] In her supplementary witness statement dated 30 June 2016, Ms Gayton said that when
she made her initial statement, she believed that employees were no longer working a roster
that required them to work ordinary hours on weekends and that she now knew that this was
incorrect. Ms Gayton agreed that it was possible that when the NERR was handed out there
were three employees working rosters whereby they worked all of their hours on Friday,
Saturday and Sunday each week and that those employees did not attend the meetings on 10
and 11 February. Ms Gayton also said that it was her belief that those employees – or two of
them – were not employed when the NERR was distributed.
[37] Ms Gayton said that the one employee who was working weekends and who was
employed when the NERR was distributed on 10 and 11 February 2016, received the NERR
when it was handed out on site. Ms Gayton also said that copies of the NERR were kept at
site, and project co-ordinators were responsible for making sure that any employees who may
have been missed were given a copy of the NERR.16 In relation to the two employees working
the weekend roster who commenced employment after the NERR was distributed, Ms Gayton
said that it was her understanding that it was not a requirement to issue them with the NERR
and that the project co-ordinator informed her that he told the new starters where they could
access the notice.17
[38] In relation to the notification time for the Agreement, it was declared in the Form F17
that the employer initiated bargaining (given there was no majority support determination,
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scope order or low paid authorisation) on 18 February 2016. It was also declared that the last
NERR was given to an employee who will be covered by the Agreement on 25 February
2016.
[39] Under cross-examination, Ms Gayton said that in the form F17 Employer declaration
filed with the Agreement, she stated that the Company initiated bargaining on 18 February
2016 on the basis that this was the date the first notice informing employees about bargaining
meetings was sent out. Ms Gayton said that on 10 and 11 February she addressed employees
at site, gave them the NERR and explained their right to be represented. Ms Gayton said that
in her view, bargaining was initiated on 10 February 2016 and not 18 February and that the
information in the Form F17 in relation to this was incorrect.18
[40] On the basis of Ms Gayton’s evidence, Falcon submits that bargaining was initiated on
10 and 11 February 2016 when the NERR was given to employees, and not on 18 February,
as incorrectly stated in the Form F17 Employer declaration. Accordingly, there was no
requirement to give an NERR to Mr Ryan because he was not employed when bargaining was
initiated. Falcon submits that there is no requirement to continue to give a copy of a NERR to
employees who are employed after bargaining is initiated. It is further submitted that Mr
Ryan completed and returned the form nominating a bargaining representative, which was
given to employees with the NERR.
[41] The CFMEU submitted that each employee was required to be given a copy of the
NERR, notwithstanding that Regulation 2.04 provides for a display of the NERR in a
conspicuous place. In support of this proposition reference was made to the Decision of
Commissioner Cambridge in Re Rebel Tenpin Pty Ltd t/as Holiday Lanes & Storm Bowling
Aust19 where it was determined that the employer must give the NERR to each individual
employee.
[42] It was further submitted that if bargaining was initiated on 10 February 2016, and not
18 February as declared in the Form F17 by Ms Gayton, then Mr Ryan was employed only
eight days later, which was during the notification period. While the Company gave Mr Ryan
a copy of the nomination form, it failed give him a copy of the NERR. As a result, the
Company failed to take all reasonable steps to distribute the NERR to each employee as
required by s. 173 of the Act. Because Mr Ryan was an employee during the notification
period, the NERR was not given to each employee or to the last employee. Further, Falcon
requested Mr Ryan to nominate a bargaining representative without giving him an opportunity
to review the relevant information regarding the appointment of bargaining representatives as
set out in the NERR.
[43] With respect to the nomination form provided to Mr Ryan, the CFMEU submitted that
the Act provides that the appointment of a bargaining representative comes into force on the
day specified in the instrument of appointment and the nomination form did not specify such
a date. This was also submitted to have invalidated the provision of the NERR.
5. THE GENUINE AGREEMENT ISSUES
[44] The general requirements for approval, specifically s.186(2)(a) requires:
“(2) The FWC must be satisfied that:
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(a) if the agreement is not a greenfields agreement—the agreement has been genuinely
agreed to by the employees covered by the agreement...”
[45] When employees will be taken to have genuinely agreed to an enterprise agreement is
dealt with as follows in s.188 of the Act:
“188 When employees have genuinely agreed to an enterprise agreement
An enterprise agreement has been genuinely agreed to by the employees covered by the
agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied
with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to
approve an enterprise agreement until 21 days after the last notice of employee
representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1)
or (2) applies (those subsections deal with the making of different kinds of enterprise
agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not
been genuinely agreed to by the employees.”
[46] With respect to each of the provisions referred to in s.188 of the Act, s.180(2) requires
that the employer take all reasonable steps to ensure that during the access period the
employees who will be covered by the Agreement are given a copy of the written text of the
Agreement and any other material incorporated into it. By virtue of s.180(4) of the Act, the
access period is the 7 day period ending immediately before the start of the voting process
referred to in subsection 181(1).
[47] In the form F17 Statutory Declaration filed with the application for approval of the
Agreement, Ms Gayton declared the steps taken to explain the terms of the Agreement and
their effect were that she held meetings with employees on 24 February, 26 April and 27 April
2016 and had email communication with employee representatives and all employees eligible
to vote on 26 February, 10 March, 16 March, 22 March and 30 April and provided
explanations to individual employees on 4 March, 9 March, 23 March and from 20 to 25 April
2016. These steps included inviting employees to attend a meeting where the Agreement was
explained and they were provided with an opportunity to ask questions about it.
[48] In a witness statement dated 27 June 201620, Ms Gayton said that the meetings on 24
February 2016 were held in Newcastle (for employees working at Wambo) and Mudgee (for
employees working at Ulan). Employees’ rosters were changed so that they could attend the
meetings. At those meetings Ms Gayton explained that the Agreement was being negotiated
to provide for easier application of minimum provisions for the employees and Falcon and to
provide flexibility for Falcon in the current market. Ms Gayton said that she told employees
that the Agreement was a base level agreement to maintain Falcon’s flexibility to move up
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and down with the market. Ms Gayton handed employees a draft hard copy of the Agreement
at those meetings and made sure that hard copies were available at their respective sites.
[49] In relation to the terms of the Agreement and their effect, Ms Gayton said that she
explained to employees that the Award applied to their employment because there was no
enterprise agreement in place and that if the Agreement was approved by the Commission
their terms and conditions would be those in the Agreement and not the Award. Ms Gayton
also said that she gave employees information about how to find the Award and agreements of
other companies on the internet and offered to provide copies of those documents on request.
[50] Changes to the Agreement were made following the February meetings and an
amended version was circulated. A ballot of employees was held from 16-18 April 2016 and
resulted in the majority of employees refusing to approve the Agreement. Further meetings
were held with employees about the Agreement on 26 and 27 April 2016. Ms Gayton again
explained why Falcon was going through the process of making the Agreement. Following
further minor changes to the Agreement it was sent by email to employees and in a ballot of
employees conducted between 14 and 16 May 2016, the Agreement was approved by
employees.
[51] Ms Gayton also gave evidence about an unregistered 2012 Agreement, which had
been implemented by former owners of Falcon Mining and maintained when that business
was purchased by Mastermyne Pty Ltd. Ms Gayton said that she explained to employees
during meetings about the Agreement, that the 2012 Agreement was unregistered and that the
Award applied to their employment because there was no agreement approved by the
Commission. This information was also provided to employees by email dated 22 March
2016.
[52] In relation to Mr Ryan’s evidence that he did not attend bargaining meetings, Ms
Gayton said the notification of the February 24 meeting was sent to employees by email dated
18 February 2016, which was the date that Mr Ryan commenced employment. Further, Ms
Gayton said that Mr Ryan’s bargaining representative attended the meeting on 24 February
2016 and all subsequent meetings. Ms Gayton also said that Mr Ryan was also informed of
all meetings regarding Agreement negotiations. Those meetings were held at a central
location during non-rostered working hours to give all employees an opportunity to attend.
[53] In relation to Mr Ryan’s evidence that he was not told to seek advice on the
Agreement, Ms Gayton said that this was conveyed to his bargaining representative at
meetings and Mr Ryan received emails from her on 26 February, 10 March, 16 March and 22
March advising that he could raise any questions about the Agreement.21 Ms Gayton
appended a chronology of events to her witness statement dated 30 June 2016, which included
meetings, email and SMS communication, in which the terms of the Agreement and their
effect were explained to employees.22 As previously noted, Ms Gayton said that she was not
aware when she made her statement for these proceedings, that there were employees working
rosters which required them to work ordinary hours on weekends.
[54] Mr Ryan said that he never attended a meeting at which the contents of the proposed
enterprise agreement were explained to him and that meetings were held at times when he was
unable to attend because he worked a weekend roster. Mr Ryan did not attend the meeting on
24 February 2016 where the proposed agreement was explained and was not told to refer to
the Award for his terms and conditions of employment. Mr Ryan said that until recently, he
[2016] FWC 5315
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had understood that the terms and conditions of his employment were set out in the 2012
Agreement and that this document was referred to in his written contract of employment. Mr
Ryan attempted to obtain a copy of the 2012 Agreement but had been unable to do so. He
was informed by an Industrial Officer of the CFMEU that there was no such agreement in
existence.
[55] Mr Ryan received various drafts of the Agreement by email and a number of
‘Question and Answer’ documents in relation to it. Material received by Mr Ryan stated that
the Agreement would lock in a higher base rate of pay and did not mention any term of the
Agreement being less than the Award. Mr Ryan was also told that he would be “no worse
off” under the Agreement and understood this to mean that all terms and conditions under the
Agreement were not worse than the terms he was lawfully entitled to – ie. the terms and
conditions then applicable to his employment. In this regard, Mr Ryan said that he was
thinking of the 2012 Agreement and not the Award. An email was tendered by Mr Ryan
dated 22 March 2016, setting out final ‘Questions and Answers’ in relation to the Agreement.
That email states that: “In reality, at present the Award forms your very minimum terms and
conditions…In fact, the base rates in the EA are higher than the Award base rates (thereby
the EA locks in a higher base than what covers employees presently). …”23
[56] Mr Ryan said that he works a weekend roster and resides many hours drive from the
mine at which he works. During the week, Mr Ryan cares for his children. Mr Ryan said he
could not recall any emails giving him reasonable advance notice of meetings. On 27 April
2016 at 9.30 am Mr Ryan received a text message informing him of a meeting to explain the
terms of the Agreement. That meeting was scheduled for 1.00 pm on that date. Mr Ryan was
not able to drive several hours to the mine to attend that meeting. Mr Ryan also said that he
was not told by anyone that he should do his own research about the Agreement and seek
advice from other sources in relation to it, or that he should refer to the Award as stated by Ms
Gayton. Mr Ryan did receive a form to nominate a bargaining representative and nominated a
work colleague to represent him. Mr Ryan said that he was not aware that many terms of the
Agreement are less than the Award and had he known this, would not have voted for the
Agreement.
[57] Under cross examination, Mr Ryan agreed that he received copies of various drafts of
the Agreement by email and was informed of changes that had been made to it. Mr Ryan also
agreed that when he received the text message inviting him to a meeting on 27 April 2016, he
responded by text to the Project Manager advising that he could not attend and did not really
need to do so. Further, Mr Ryan agreed that numerous emails received by him had informed
him that he could ask questions of various managers about the Agreement and that he had not
done so.
[58] Ms Short for the CFMEU submitted that the Commission could not be satisfied that,
as required by s.182(2) of the Act, the employer took all reasonable steps to ensure that during
the access period, employees who would be covered by the Agreement were given a copy of
it. It was submitted that based on Ms Gayton’s evidence, emails were sent to employees on 6
May advising that a hard copy of the Agreement could be obtained on-site the following day,
and the ballot took place on 14 May 2016. Because 6 May 2016 was a Friday, employees
who were not rostered to work on Saturday 7 May would not have the seven day period and
would not have obtained a copy of the Agreement until Monday 9 May 2016.
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[59] It was also submitted that because the explanation of the Agreement referenced the
Award and not the 2012 Agreement, employees were misled as to the effects of the
Agreement. Further, it was submitted that the negotiation sessions and the meetings to
explain the terms of the Agreement were one and the same meeting. Mr Ryan did not attend
any of the meetings and it was not sufficient that his bargaining representative attended.
[60] Further, it was submitted that because the Employer statutory declaration in support of
approval of the Agreement completed by Ms Gayton incorrectly stated that there were no
terms and conditions less beneficial than those in the Award, the Commission should infer
that an incorrect explanation of the effect of the terms of the Agreement was provided to
employees. In support of this proposition, Ms Short referred to Mr Ryan’s evidence that had
he known that the terms of the Agreement were less than the Award he would not have voted
to approve it. The CFMEU also took issue with the manner in which the explanation was
provided and submitted that it did not take into account the particular circumstances and
needs of employees given the nature of the rosters they were working. In particular, Mr Ryan
was not able to attend any of the meetings held for this purpose.
6. THE NES ISSUES
[61] In respect of the CFMEU’s objection regarding the NES, s.186(2)(c) provides that:
“(2) The FWC must be satisfied that:
...
(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.)”
[62] Section 55 of the Act provides:
“Interaction between the National Employment Standards and a modern award or
enterprise agreement
National Employment Standards must not be excluded
(1) A modern award or enterprise agreement must not exclude the National Employment
Standards or any provision of the National Employment Standards.
Terms expressly permitted by Part 2-2 or regulations may be included
(2) A modern award or enterprise agreement may include any terms that the award or
agreement is expressly permitted to include:
(a) by a provision of Part 2-2 (which deals with the National Employment Standards);
or
(b) by regulations made for the purposes of section 127.
Note: In determining what is permitted to be included in a modern award or enterprise
agreement by a provision referred to in paragraph (a), any regulations made for the purpose of
section 127 that expressly prohibit certain terms must be taken into account.
(3) The National Employment Standards have effect subject to terms included in a modern
award or enterprise agreement as referred to in subsection (2).
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Note: See also the note to section 63 (which deals with the effect of averaging
arrangements).
Ancillary and supplementary terms may be included
(4) A modern award or enterprise agreement may also include the following kinds of terms:
(a) terms that are ancillary or incidental to the operation of an entitlement of an
employee under the National Employment Standards;
(b) terms that supplement the National Employment Standards;
but only to the extent that the effect of those terms is not detrimental to an employee in any
respect, when compared to the National Employment Standards.
Note 1: Ancillary or incidental terms permitted by paragraph (a) include (for example)
terms:
(a) under which, instead of taking paid annual leave at the rate of pay required by section 90,
an employee may take twice as much leave at half that rate of pay; or
(b) that specify when payment under section 90 for paid annual leave must be made.
Note 2: Supplementary terms permitted by paragraph (b) include (for example) terms:
(a) that increase the amount of paid annual leave to which an employee is entitled beyond
the number of weeks that applies under section 87; or
(b) that provide for an employee to be paid for taking a period of paid annual leave or
paid/personal carer's leave at a rate of pay that is higher than the employee's base rate of pay
(which is the rate required by sections 90 and 99).
Note 3: Terms that would not be permitted by paragraph (a) or (b) include (for example)
terms requiring an employee to give more notice of the taking of unpaid parental leave than is
required by section 74.
Enterprise agreements may include terms that have the same effect as provisions of the
National Employment Standards
(5) An enterprise agreement may include terms that have the same (or substantially the same)
effect as provisions of the National Employment Standards, whether or not ancillary or
supplementary terms are included as referred to in subsection (4).
Effect of terms that give an employee the same entitlement as under the National Employment
Standards
(6) To avoid doubt, if a modern award includes terms permitted by subsection (4), or an
enterprise agreement includes terms permitted by subsection (4) or (5), then, to the extent that
the terms give an employee an entitlement (the award or agreement entitlement ) that is the
same as an entitlement (the NES entitlement ) of the employee under the National
Employment Standards:
(a) those terms operate in parallel with the employee's NES entitlement, but not so as
to give the employee a double benefit; and
(b) the provisions of the National Employment Standards relating to the NES
entitlement apply, as a minimum standard, to the award or agreement entitlement.
Note: For example, if the award or agreement entitlement is to 6 weeks of paid annual
leave per year, the provisions of the National Employment Standards relating to the accrual
and taking of paid annual leave will apply, as a minimum standard, to 4 weeks of that leave.
[2016] FWC 5315
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Terms permitted by subsection (4) or (5) do not contravene subsection (1)
(7) To the extent that a term of a modern award or enterprise agreement is permitted by
subsection (4) or (5), the term does not contravene subsection (1).
Note: A term of a modern award has no effect to the extent that it contravenes this
section (see section 56). An enterprise agreement that includes a term that contravenes this
section must not be approved (see section 186) and a term of an enterprise agreement has no
effect to the extent that it contravenes this section (see section 56).”
[63] The CFMEU submits that two clauses of the Agreement contravene s.55 of the Act in
that they provide entitlements that are less than the NES: clause 16 Personal/Carer’s Leave
and clause 19 Public Holidays.
[64] In relation to Personal/Carers Leave, the relevant NES provisions are found in
Division 7 of the Act as follows:
“96 Entitlement to paid personal/carer's leave
Amount of leave
(1) For each year of service with his or her employer, an employee is entitled to 10
days of paid personal/carer's leave.
Accrual of leave
(2) An employee's entitlement to paid personal/carer's leave accrues progressively
during a year of service according to the employee's ordinary hours of work, and
accumulates from year to year.”
[65] And:
“107 Notice and evidence requirements
Notice
(1) An employee must give his or her employer notice of the taking of leave under this
Division by the employee.
(2) The notice:
(a) must be given to the employer as soon as practicable (which may be a time after the leave
has started); and
(b) must advise the employer of the period, or expected period, of the leave.
Evidence
(3) An employee who has given his or her employer notice of the taking of leave under this
Division must, if required by the employer, give the employer evidence that would satisfy a
reasonable person that:
(a) if it is paid personal/carer's leave--the leave is taken for a reason specified in section 97; or
(b) if it is unpaid carer's leave--the leave is taken for a permissible occasion in circumstances
specified in subsection 103(1); or
[2016] FWC 5315
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(c) if it is compassionate leave--the leave is taken for a permissible occasion in circumstances
specified in subsection 105(1).
Compliance
(4) An employee is not entitled to take leave under this Division unless the employee
complies with this section.
Modern awards and enterprise agreements may include evidence requirements
(5) A modern award or enterprise agreement may include terms relating to the kind of
evidence that an employee must provide in order to be entitled to paid personal/carer's leave,
unpaid carer's leave or compassionate leave.
Note: Personal information given to an employer under this section may be regulated under
the Privacy Act 1988.”
[66] Clause 16 of the Agreement in relation to Personal/Carer’s Leave provides that
entitlements are in accordance with the NES and that the clause supplements those
entitlements. The clause goes on to state that the entitlement is to 105 hours of
Personal/Carer’s Leave per year and to specify the rate of accrual in accordance with the
roster the employee is working. In relation to notice and evidence requirements, clause 16.3
provides as follows:
“16.3 Evidence and Notice
To be eligible for payment for personal leave, Employees must:
a) Notify Falcon of their inability to attend for duty and the estimated duration of
their absence, as soon as reasonably practicable and prior to the commencement
of their first absent shift; and
b) Provide Falcon with evidence of illness or injury in a form satisfactory to Falcon
(including a medical certificate as satisfactory evidence of illness or injury), as
soon as reasonably practicable. Satisfactory evidence is at the sole discretion of
the Project Manager.
Notwithstanding the requirement to notify, Employees must also complete relevant leave
Forms in accordance with Company procedures”
[67] Further, the CFMEU submits that the NES entitlement is to 10 days of personal/carer’s
leave per year of service and that applying the accrual formula in clause 16 of the Agreement
to the rosters generally worked in the coal industry would result in employees under the
Agreement being entitled to less than 10 days of personal/carer’s leave per year. The CFMEU
also pointed to the fact that the figures in the table setting out accrual rates for
personal/carer’s leave do not equal 105 hours when multiplied by the number of weeks in a
year. Further, the CFMEU submits that the Agreement prescribes notice and evidence
requirements in respect of personal/carer’s leave that are inconsistent with the NES in that
employees may not be entitled to payment for a period of personal/carer’s leave under the
Agreement to which they would otherwise have been entitled under the notice and evidence
requirements of the NES.
[68] Falcon submits that it is a mistake to convert days of leave to hours of leave as the
CFMEU has done, and “reverse engineer” some different entitlement. The Agreement is
[2016] FWC 5315
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explicit and states that personal/carers leave entitlements are provided for in the NES. The
NES provides that for each year of service with an employer, employees are entitled to ten
days of paid carers leave which accrues from year to year and the Agreement does not
contravene s.55 of the Act.
[69] In relation to notice of personal leave, Falcon submits that the intention of clause
16.3(a) of the Agreement is to ensure wherever possible that leave absences are notified
before a shift commences. Further, Falcon submits that the Act permits the Agreement to
specify the type of evidence Falcon requires for personal leave, and clause 16.3(b) of the
Agreement does so.
[70] The NES entitlement to public holidays is provided for in s.114 of the Act as follows:
“Employee entitled to be absent on public holiday
(1) An employee is entitled to be absent from his or her employment on a day or part-day that
is a public holiday in the place where the employee is based for work purposes.
Reasonable requests to work on public holidays
(2) However, an employer may request an employee to work on a public holiday if the request
is reasonable.
(3) If an employer requests an employee to work on a public holiday, the employee may
refuse the request if:
(a) the request is not reasonable; or
(b) the refusal is reasonable.
(4) In determining whether a request, or a refusal of a request, to work on a public holiday is
reasonable, the following must be taken into account:
(a) the nature of the employer’s workplace or enterprise (including its operational
requirements), and the nature of the work performed by the employee;
(b) the employee’s personal circumstances, including family responsibilities;
(c) whether the employee could reasonably expect that the employer might request
work on the public holiday;
(d) whether the employee is entitled to receive overtime payments, penalty rates or
other compensation for, or a level of remuneration that reflects an expectation of,
work on the public holiday;
(e) the type of employment of the employee (for example, whether full-time,
part-time, casual or shiftwork);
(f) the amount of notice in advance of the public holiday given by the employer when
making the request;
(g) in relation to the refusal of a request—the amount of notice in advance of the
public holiday given by the employee when refusing the request;
(h) any other relevant matter.”
[71] Clause 19.2 of the Agreement provides as follows:
“19.2 Employee not required to work on a public holiday
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An Employee who is not required to work on a holiday which would otherwise have been a
working day for that Employee, will be paid the rostered hours (not worked) for that day at the
Employee’s Base Hourly Rate, unless the Employee, without good and sufficient reasons, fails
to work on the Employee’s:
Last working day immediately before the holiday; or
First working day after the holiday,
In which case the Employee is not entitled to payment for such holiday.”
[72] The CFMEU’s concerns regarding clause 19, Public Holidays, are that the provision
mandates that employees “will” work on public holidays, on which they are rostered, to
support the operational needs of the site and that clause 19.2 sets out conditions when an
employee is not entitled to payment for a public holiday (being where an unreasonable
absence occurs immediately before or after the public holidays). Clause 19.2 of the
Agreement is also said to exclude the NES because it imposes additional requirements on
employees with respect to an entitlement to be paid for public holidays.
[73] Falcon points to s.114 of the Act, which specifies in relation to the requirement to
work on public holidays, circumstances where such a request is reasonable. According to
Falcon it is standard practice in many industries for certain conditions to be met for
employees to be eligible to receive payment for a public holiday which they did not work.
[74] Without accepting the CFMEU’s position, and notwithstanding its position that it is
not required to do so Falcon has offered the Commission a number of undertakings in respect
of personal/carer’s leave and public holidays, in order to expedite approval of the Agreement.
These are considered later in this Decision in relation to the BOOT issues.
7. THE UNLAWFUL TERMS ISSUE
[75] As to unlawful terms, s.186(4) of the Act requires as follows:
“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).”
[76] Relevantly, unlawful term is defined by s.194 of the Act as follows:
“Meaning of unlawful term
A term of an enterprise agreement is an unlawful term if it is:
(a) a discriminatory term;…”
[77] Section 195(1) of the Act defines a discriminatory term as a term of an enterprise
agreement that discriminates against an employee because of reasons, or reasons including,
age. The CFMEU points to sub-clauses 23.1 and 23.4 of the Agreement which provide as
follows:
“23.1 Once an Employee has completed their probationary period either party may terminate
the Employee’s employment on the giving of the following amount of notice:
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Employee’s period of continuous services (sic) with Falcon Period of notice
Not more than 1 year 1 week
More than 1 year but not more than 3 years 2 weeks
More than 3 years but not more than 5 years 3 weeks
More than 5 years 4 weeks
Where Falcon gives notice this period is to be increased by one (1) week where the Employee
is over the age of 45 years and has completed two (2) years of continuous service with Falcon
at the time of giving notice.
...
23.4 If an employee fails to give the requisite notice, the equivalent wages for the notice that
should have been given will be deducted from the Employee’s termination pay. An amount in
lieu of notice will be calculated at the rate required by the Act, namely the amount that the
Employee would otherwise have been entitled to, had the Employee worked during the notice
period.”
[78] The CFMEU submits that these clauses discriminate against persons who have
reached the age of 45 on the basis that such persons are required to give an additional period
of notice (or are liable for deduction where notice is not given) to the periods of notice
required to be given by other employees with the same periods of service who are not 45
years of age.
[79] Falcon submits that the CFMEU’s submission misrepresents or fails to understand the
terms of the Agreement. Clause 23.1 of the Agreement provides for notice of termination of
employment in addition to the standard notice periods. Where Falcon gives notice, the
standard period is increased by one week where the employee is over 45 years of age and has
completed two years of continuous service with Falcon at the time of giving notice. The
clause does not require employees who are over 45 years of age and have completed two
years of continuous service to give additional notice. Only Falcon is required to give the
additional notice.
8. THE DISPUTE SETTLEMENT PROCEDURE ISSUE
[80] The Commission must be satisfied that an enterprise agreement includes a term about
settling disputes consistent with s.186(6) of the Act which provides as follows:
“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)).
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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).”
[81] Clause 6 of the Agreement contains the procedure to be followed in the event of a
dispute relating to the implementation of the terms and conditions of employment in the
Agreement or in relation to the NES. Clause 6.5 states:
“Any party to the dispute in question may be represented from step 4 as they see fit.”
[82] The CFMEU submits that as the procedure does not give employees the right to be
represented at all stages of the dispute resolution process, the Commission cannot be satisfied
that the Agreement meets the approval requirements in s.186(6)(b) of the Act.
[83] Falcon maintains that the Dispute Settlement Procedure does provide a right for
employees to be represented from Step 4 of the Agreement. Notwithstanding this, Falcon is
prepared to provide an undertaking that any party may be represented at any step of the
process in order to facilitate approval of the Agreement.
9. BOOT ISSUES
[84] In respect of the BOOT, s.186(2) of the Act provides:
“Requirements relating to the safety net etc.
(2) The FWC must be satisfied that:
...
(d) the agreement passes the better off overall test.”
[85] An Agreement passes the BOOT if the Commission is satisfied in relation to the
matters in s.193 of the Act as follows:
“193 Passing the better off overall test
When a non greenfields agreement passes the better off overall test
(1) An enterprise agreement that is not a greenfields agreement passes the better off
overall test under this section if the FWC is satisfied, as at the test time, that each award
covered employee, and each prospective award covered employee, for the agreement would be
better off overall if the agreement applied to the employee than if the relevant modern award
applied to the employee.
FWC must disregard individual flexibility arrangement
(2) If, under the flexibility term in the relevant modern award, an individual flexibility
arrangement has been agreed to by an award covered employee and his or her employer, the
FWC must disregard the individual flexibility arrangement for the purposes of determining
whether the agreement passes the better off overall test.
When a greenfields agreement passes the better off overall test
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(3) A greenfields agreement passes the better off overall test under this section if the
FWC is satisfied, as at the test time, that each prospective award covered employee for the
agreement would be better off overall if the agreement applied to the employee than if the
relevant modern award applied to the employee.
Award covered employee
(4) An award covered employee for an enterprise agreement is an employee who:
(a) is covered by the agreement; and
(b) at the test time, is covered by a modern award (the relevant modern award)
that:
(i) is in operation; and
(ii) covers the employee in relation to the work that he or she is to
perform under the agreement; and
(iii) covers his or her employer.
Prospective award covered employee
(5) A prospective award covered employee for an enterprise agreement is a person who, if
he or she were an employee at the test time of an employer covered by the agreement:
(a) would be covered by the agreement; and
(b) would be covered by a modern award (the relevant modern award) that:
(i) is in operation; and
(ii) would cover the person in relation to the work that he or she would
perform under the agreement; and
(iii) covers the employer.
Test time
(6) The test time is the time the application for approval of the agreement by the FWC
was made under section 185.
FWC may assume employee better off overall in certain circumstances
(7) For the purposes of determining whether an enterprise agreement passes the better off
overall test, if a class of employees to which a particular employee belongs would be better off
if the agreement applied to that class than if the relevant modern award applied to that class,
the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee
would be better off overall if the agreement applied to the employee.”
[86] For the purposes of the BOOT, the relevant award is the Black Coal Mining Industry
Award 2010. The CFMEU has provided comprehensive submissions as to those matters that it
says should lead to a finding that the Agreement does not pass the BOOT. Falcon has
provided the Commission with extensive BOOT calculations.
[2016] FWC 5315
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[87] At the conclusion of the Hearing on 30 June 2016, and at the suggestion of the parties,
I conducted a Conference to explore whether issues in relation to the BOOT could be resolved
by undertakings. As a result, a number of undertakings have been provided by Falcon to
address any concerns I may have about the application of the BOOT. Consistent with the
requirement that the views of the bargaining representatives be sought in relation to any
undertakings, I caused a statement to be issued to the bargaining representatives attaching the
undertakings discussed at the Conference and offered by Falcon, and seeking their views.
[88] The CFMEU submits that even if the undertakings meet the Commission’s concerns
about whether the Agreement passes the BOOT, the undertakings are not capable of
acceptance as they result in substantial changes to the Agreement. Each of the BOOT issues
identified by the CFMEU and the proposed undertakings offered by Falcon are set out below.
Clause 5 Major Workplace Change
[89] The CFMEU submits that clause 5 of the Agreement does not provide for the same
consultation process as clause 8 of the Award. In particular, the CFMEU submits that under
clause 5 of the Agreement, Falcon is not required to provide relevant information in writing to
employees or require discussions concerning measures to avert or mitigate the adverse effects
of the major change.
[90] Falcon submits that if the Commission is of the view that clause 5 of the Agreement
does not comply with the mandatory requirements of the Act with respect to consultation
terms, then it is a matter of the Commission deciding that the model consultation term is a
term of the Agreement.
Clause 6 Dispute Resolution
[91] In addition to its submission that the Commission could not be satisfied that the
Agreement contained a dispute settling procedure consistent with the Act, the CFMEU
submits that the disputes procedure in clause 6 of the Agreement is a detriment to be taken
into account in assessing the Agreement against the BOOT, because it differs from the dispute
resolution clause in clause 9 of the Award, which the CFMEU contends also provides for
employees to be represented at any stage of the process.
Clause 7 Contract of Employment
[92] The CFMEU’s concerns in respect of this clause are summarised as:
Part-time employees under the Award are entitled to a written agreement setting a
regular pattern of award (10.3(b) of the Award); any variation to that pattern will be in
writing (10.3(c) of the Award); and time worked in excess of the mutually agreed
hours will be overtime and paid as such (10.3(d) of the Award); the Agreement does
not contain provisions comparable to these entitlements;
For production and engineering employees, the Award does not provide for casual
employment; the casual loading in the Agreement does not adequately compensate
casual employees for accident pay or for the inherent loss of job security attendant to
casual employment and other incidents of casual employment;
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Clause 7.4 of the Agreement stipulates various matters upon which continued
employment is contingent such as coal board medicals, site inductions etc. and reduces
job security in a manner not provided for in the Award;
Clause 7.6 of the Agreement allows Falcon to deduct overpayments and monies owing
from employee wages, which cannot be disputed by an employee and is something
that is not provided for in the Award;
Clause 7.7 of the Agreement provides that an employee terminated within their
probationary period may be required to reimburse Falcon the cost of work clothing
that has been supplied by Falcon;
Clause 7.8 of the Agreement obliges employees to comply with Falcon’s policies and
procedures, as well as the policies and procedures of client employers. This may
expose employees to an action for civil penalties for breaching a term of an enterprise
agreement.
[93] Falcon submits that the matters enunciated in the Agreement in clause 7.4 for
commencement and continuation of employment, are minimum requirements under the
relevant Mine safety legislation. An employee would not be capable of being engaged as a
mine worker without meeting these requirements. Further, the Award does not prevent such
requirements such that it is not a matter for consideration in respect of the BOOT.
[94] Falcon submits that it does not employ any part-time employees but has offered an
undertaking in this respect to apply terms and conditions set out in the part-time provisions of
the Award. Falcon also disputes the CFMEU’s concerns regarding clause 7.8 of the
Agreement.
[95] Falcon disputes that the inclusion of casual employment in the Agreement is a
detriment for the purposes of the BOOT. Falcon submits that the clauses in respect of
deduction of monies are not a detriment for the purposes of the BOOT. It is submitted that
prior to deducting monies, Falcon is required to consult with the employee and any residual
dispute that may remain after that consultation can be disputed under the dispute resolution
procedure of the Agreement. Further, Falcon submits that the Award does not provide for an
employer to pay for training or to deduct the cost of training and that these are matters that
Falcon would be able to require at common law in any event.
[96] In relation to clause 7.7 of the Agreement, dealing with deductions in respect of work
clothing, Falcon submits that the ability of Falcon to deduct the full cost of clothing is offset
by the fact that under the Agreement employees are entitled to an additional set of clothing
than they would be entitled to receive under the Award.
[97] In relation to clause 7.8 Agreement Falcon submits that the obligation does not go
beyond the obligations imposed on employees at common law and in the overall
consideration of the benefits in the Agreement, does not cause the Agreement to fail the
BOOT. Notwithstanding this submission, Falcon offered an undertaking to expedite the
approval of the Agreement to the effect that the clause will be read so that policies and
procedures will apply rather than obligating employees to follow them.
Clause 8 Classifications and Base Rates
[98] The CFMEU submits that the Agreement does not provide for the payment of any
allowances. Clause 8.5 provides that the base hourly rates of pay in the Agreement are
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inclusive of all Award allowances, except where otherwise indicated in the Agreement. The
CFMEU does accept that the base hourly rates of pay provided for in the Agreement are
higher than the Award but maintains that employees are worse off than under the Award.
[99] Falcon submits that the base hourly rates incorporate all relevant allowances and
employees are not worse off under the Agreement.
Clause 10 Overtime Rates of Pay
[100] The CFMEU submits that the Agreement provides that overtime will be paid at time
and a half for the first three hours and double time thereafter, with all overtime on Sundays to
be double time. The Award provides, for certain classes of employees, that all overtime is to
be paid at double time. In addition six and seven day roster employees working under the
Award would receive shift penalties in addition to overtime.
[101] Falcon submits that it currently does not require employees to work ordinary hours on
weekends or to work six or seven day rosters. In any event, Falcon submits that higher base
hourly rates in the Agreement should be taken into account in the global assessment of the
BOOT. Falcon also submits that it does not engage employees that would fall within the
categories of employees entitled to receive all overtime at double time under the Award.
Clause 11 Shiftwork Penalty
[102] The CFMEU submits that the Agreement does not provide shift penalties for shift
work performed on the weekend, and that this is detrimental in comparison with the Award.
It is also submitted that shift penalties are not payable in addition to overtime for six or seven
day roster employees in contrast with the Award. The definition of night shift in the
Agreement is also said to be less beneficial for employees than would be the case under the
Award on the basis that the Agreement definition of night shift is limited to shifts where
ordinary hours “start after” 6.00 pm.
[103] Falcon has offered an undertaking in respect of the definition of night shift.
Clause 15 Annual Leave
[104] The CFMEU submits that employees rostered to work ordinary shifts on public
holidays and not less than 272 ordinary hours per year on Sundays are not entitled to the
additional week of annual leave that they would receive under the Award. Further, the
CFMEU submits that the Agreement provides that employees will be paid while on annual
leave at the base hourly rate for their ordinary hours of work when under the Award they
would be entitled to either a loading of 20% or their rostered earnings, whichever is greater.
[105] Falcon submits that it does not currently use rosters that would mean employees fall
within the category of employees identified by the CFMEU. However, Falcon has offered an
undertaking in respect of the payment to be received by employees while on a period of
annual leave and an undertaking in respect of the additional category of shift worker
identified by the CFMEU.
Clause 16 Personal/Carer’s Leave
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[106] In addition to the NES issues related to Personal/Carers Leave under the Agreement,
the CFMEU points to the fact that none of the rosters specified in the table setting out accrual
rates appear in the Agreement and that multiplying the accrual rates in the table by the
number of weeks in the year, gives an accrual of 81 or 91 hours. This is less than the Award
entitlement of 105 hours which is required to be credited to each employee on commencement
of employment and each anniversary of commencement (clause 26.2).
Clause 19 Public Holidays
[107] In addition to the concerns identified in relation to the NES public holiday provisions,
the CFMEU points to clause 23(f) of the Award, which provides that where an employee is
entitled to an RDO that falls on a public holiday, that employees is to be paid at the discretion
of the employer, at the employee’s classification rate or credited with an additional day for
each such public holiday, payable at ordinary rates (other than a Monday to Friday employee
working shifts up to 8.5 ordinary hours). There is no equivalent provision in the Agreement.
The CFMEU submitted that an employee working a seven day four panel roster would receive
under the Award, an additional 5.5 days off per annum or equivalent payment. The
Agreement does not contain a provision for employees rostered off on a public holiday.
Clause 23 Termination of Employment
[108] The CFMEU submits that the Award only requires an employee to provide one week’s
notice of resignation (or forfeit one week’s wages) whereas the Agreement provides for notice
that is the same as an employer’s obligation (that is, 1, 2, 3, 4 or 5 weeks’ notice dependent
upon length of service). The CFMEU also submits that the requirement for an employee over
the age of 45, and with at least 2 years’ service, to give an additional week’s notice is
discriminatory.
[109] Further the CFMEU submits that the Award requires that in the event of redundancy,
an employee receive a minimum of four weeks’ notice of termination. Also, the Award
provides that an employee whose employment is terminated for specific reasons relating to ill-
health or by death may be entitled to be paid accrued but untaken personal leave or to have
their personal leave payments continued until their accruals are exhausted or they are fit to
return to duty.
[110] As previously noted, Falcon submits that the issue raised by the CFMEU in relation to
notice of termination of employment being given by an employee, involves an incorrect
construction of the terms of the Agreement. Falcon has offered a number of undertakings in
relation to termination of employment to address other matters raised by the CFMEU.
Clause 26 Training & Medicals
[111] Clause 26 of the Agreement provides for the employer to deduct the cost of courses,
refresher courses and medicals where an employee leaves employment within three months of
the date of the course or medical.
[112] The CFMEU’s objection in relation to this matter is similar to the objection raised in
relation to other deductions from wages in clauses 7.6 and 7.7 of the Agreement.
Clause 28 Stand Down
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[113] The CFMEU submits that the Agreement provides for a broad set of conditions under
which Falcon could stand down an employee without pay and there is no limit on the period
that a stand down could be enforced. The Award does not provide for unpaid stand downs.
[114] Falcon submits that the Award does not “interfere” with an employer’s right to stand
down employees under the Act or at common law. Falcon submits that on that basis clause 28
cannot be said to be less beneficial than the terms of the Award.
Breadth and scope of undertakings
[115] Regardless of whether the CFMEU accepts that the undertakings offered by Falcon
mean that the Agreement passes the BOOT it is submitted by the CFMEU that the
Commission cannot accept the undertakings as the “breadth and scope and the number of
undertakings”24 would result in substantial changes to the Agreement, contrary to s.190(3)(b)
of the Act.
[116] In support of this submission the CFMEU referred to the Decision of Commissioner
Lee in Re: E C Birch Proprietary Limited25, and the comments of a Full Bench of the
Commission in Aldi Foods Pty Ltd v Transport Workers’ Union of Australia26 expressing
reservations about whether the undertakings offered were capable of acceptance as the
“number and extent” of the undertakings resulted in substantial change to the Agreement.
[117] Reference was also made to the Full Bench Decision in Re: AKN Pty Ltd T/A Aitken
Crane Services27, where it was observed that the opportunity to provide undertakings is
“necessarily limited and cannot involve a wholesale reshaping of the Agreement which has
already been made”.
[118] Falcon submits that there is nothing “radical”28 contained in the undertakings that it
offers. Some undertakings are in respect of NES entitlements or mandatory terms; some relate
to matters which Falcon submits were to be the case anyway (undertaking 3); some relate to
categories of employees that Falcon does not employ or modes of employment that it does not
use (part-time employees and shift workers on particular rosters); one relates to “semantics”
(undertaking 6); and some are not required but Falcon is prepared to provide them to the
Commission to facilitate approval of the Agreement.
10. CONSIDERATION
10.1 Is the application for approval of the Agreement validly made?
[119] I do not accept that the errors in the Form F16 and F17, considered in isolation,
invalidate the application for approval of the Agreement. There are occasions when errors are
made in factual material set out in applications to the Commission and are not fatal to an
application for approval of an Agreement. In the present case, the HR Manager for the
Mastermyne Group of Companies has mistakenly documented the name of an entity which
has been acquired by the Group in the Form F16 application. That mistake is also reflected in
the name of the Agreement for which approval is sought, as set out in the Application. The
employer is correctly named in the Form F17 and the Agreement appended to the Form 17
and filed in the Commission for approval is correctly titled.
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[120] Nothing turns on these errors when they are considered in isolation. There is no
evidence that there was any intention to mislead any person with an interest in the application
or that any such person was misled. There is no question that Falcon Mining Pty Ltd is the
employer of the employees who will be covered by the proposed Agreement and that it made
the Agreement with those employees. Ms Gayton states that the error in documenting the
name of the Applicant employer was unintentional and I accept her evidence. No suggestion
to the contrary was put to Ms Gayton or articulated in the submissions for the CFMEU.
[121] Such an error in the Form F16 Application document can be corrected by the
Commission exercising the power under s.586(a) of the Act to amend the name of the
Applicant employer or by the Commission waiving the irregularity. Section 586 of the Act
provides the Commission with a wide discretion to permit a party to amend an application. In
CEPU v Sustaining Works Pty Limited29 a Full Bench of the Commission allowed an
application for approval of an Agreement to be corrected by the applicant lodging a signed
copy of the Agreement so as to comply with a mandatory requirement in s.185(2) of the Act.
[122] In the present case, to allow the amendment to correct the name of the employer as it
appears in the Form F16 Application does not fundamentally change the nature of the
application or the rights of the parties to the application. If the Agreement was capable of
approval, I would exercise the power in s.586(a) of the Act to correct the application.
[123] The Form F17 is a Statutory Declaration and as indicated in the notes to the Form F17,
serious implications arise when a person intentionally makes a false statement in a Statutory
Declaration. The Form F17 is in a question and answer format. Ms Gayton completed and
signed the Form F17. Some of the answers given by Ms Gayton to the questions in the Form
F17 are factually incorrect. Question 3.5 in the Form F17 asks the deponent:
“Does the agreement contain any terms that are less beneficial than the equivalent terms and
conditions in the reference instrument(s) listed in questions 3.1 and 3.2 and/or does the
agreement confer any entitlements that are not conferred by those reference instruments.”
[124] Ms Gayton has answered this question in the negative by marking a “No” box on the
Form. That answer is incorrect. The Agreement contains a number of terms that are less
beneficial than the equivalent terms in the reference instrument – the Black Coal Award 2010.
To correctly complete the Form F17 Ms Gayton should have marked the “Yes” box and then
gone on, as required by the Form, to identify the terms and conditions of the Agreement that
are less beneficial than the Award and/or not conferred by the Award, and indicated whether
only some employees are affected and which groups of employees are affected.
[125] In an Affidavit sworn on 22 June 2016, Ms Gayton said that she misunderstood the
question and that her incorrect response was unintentional. I accept that it was an error and
was not intentional. However, while acknowledging the error, Ms Gayton did not correct it in
the Form F17 by identifying the terms of the Agreement that are less beneficial or that confer
entitlements that are not conferred by the reference instrument.
[126] There is also an error with respect to the date on which bargaining was said to have
been initiated in response to a question in 2.8 of the Form F17. Ms Gayton corrected this
error in her oral evidence (albeit under cross-examination and not in her evidence in chief)
stating that bargaining was initiated on 10 February 2016 when the NERR was handed to
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employees, and that she had also misunderstood this question and believed that bargaining
was initiated when the first meeting was held rather than when the NERR was issued.
[127] These errors are surprising, particularly given Ms Gayton’s qualifications and
experience and the position that she holds. However, I am of the view that these errors,
considered in isolation, do not invalidate the application for approval of the Agreement. If the
Agreement was capable of approval, these errors could have been addressed by a further
statutory declaration or affidavit, or by oral evidence.
[128] Notwithstanding that the errors in the Form F16 and Form F17 considered in isolation
do not invalidate the application for approval of the Agreement they are matters that can be
taken into account in the overall consideration of whether the Agreement should be approved,
and whether there are other reasonable grounds for the Commission to believe that the
Agreement was not genuinely agreed to by employees.
10.2 Does the NERR comply with content and form requirements of the Act?
[129] In AMOU v Harbour City Ferries Pty Ltd30, a Full Bench of the Commission
considered a NERR which did not contain a description of the coverage of the proposed
agreement. The NERR in question, in the field in which the proposed coverage was to be
inserted, referred to an attached appendix, which was not attached to the NERR. The Full
Bench observed in relation to the prescribed form for the NERR in Schedule 2.1 of the
Regulations that:
“In our opinion, the whole of the document that is in Schedule 2.1, including the fields to be
populated by the employer, constitutes the prescribed notice and must therefore comply with
the constraints in s.174(1A). In the first paragraph it contains text that identifies the subject
matter of three fields into which an employer must make entries. It also contains text which,
depending on whether individual agreement-based transitional instruments or a low-paid
authorisation exist, is to be included or excluded. Finally, it contains text which must be
included in all NERRs.”31
[130] The Full Bench in that case went on to observe that the terms of the prescribed form
necessitate the provision of information so that an employee is able to assess whether he or
she is an employee who would be covered by the proposed agreement and that the employee
who is reading the NERR must be able to understand who it is “who would be covered” by the
proposed agreement. The coverage identified may be only proposed coverage at the point the
NERR is issued but it is required to be identified. Further, the Full Bench stated that:
“The only scope given to the employer to modify the content of the notice with respect to the
three fields in the first paragraph is to delete the italicised words and put words in the
corresponding space that meet the description of the subject matter.”32
[131] In response to the submission that the legislature had left it open for the employer to
determine the content of the variables notated by the italicised portion of the NERR and that a
mistake in that content was not intended to result in its invalidity, the Full Bench in Harbour
City Ferries concluded that Parliament intended that those parts of the form in Schedule 2.1
that are to be populated by an employer are part of the prescribed content and form. In
holding that the NERR in that case was not valid because it contained no content in relation to
the proposed coverage of the agreement the Full Bench said that:
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“We accept that when a NERR contains, say, a minor typographical error, there may remain
some room for judgement by a Commission member as to whether it renders the notice
invalid.”33
[132] An earlier Decision of Commissioner Bull (as he then was) in Lovisa Enterprise
Agreement 201434 also found that a typographical error in the name of the employer giving a
NERR did not invalidate the notice on the basis that employees were not misled.35
[133] In the present case, I am of the view that the error in the fields of the NERR in respect
of the name of the employer and the name of the Agreement, amount to a minor typographical
error that does not render the NERR invalid. I have reached this conclusion for the following
reasons. The fields in the Agreement contain information that generally meets the description
of the information required to be inserted. There is an Agreement name and an employer
name – albeit not the full name of the employer. There is no evidence that the typographical
error resulted in any confusion on the part of employees to be covered by the Agreement as to
the identity of their employer. There is no evidence that employees were misled about the
coverage of the Agreement or the identity of the employer party who was proposing that it be
made. I am also of the view that it is more probable than not that employees reading the
NERR would have been able to assess on the basis of the information in the NERR whether
they were covered by the proposed Agreement.
[134] It is common for the scope of an agreement to be the subject of negotiation. It is also
probable that there will be cases where the name of an agreement itself is the subject of
negotiation and changes in the period between when an NERR is given to employees and
when the Agreement is approved. In such cases it could not be suggested that the NERR is
invalid, and that the process of giving it to employees must be repeated.
[135] The requirements associated with the NERR are strict and failure to comply with those
requirements goes to validity. The process of downloading a form, inserting information in
identified fields and deleting irrelevant information could not be any more straightforward. In
the present case there were two unsuccessful attempts to correctly complete the form that is
the notice. Although surprising – particularly given that a “corrected” version of the notice
still contains the same error – it is a clerical error made by the Human Resources Manager of
a large group of companies in relation to an agreement for a company that had relatively
recently been added to the group. The NERR is not invalid on this basis. However, this is not
an isolated error and is part of the overall context in which I must consider whether to approve
the Agreement.
10.3 Was the NERR given to employees as required by the Act?
[136] Section 173(1) of the act requires that the employer take all reasonable steps to give
the NERR to each relevant employee. Regulation 2.04 provides a number of methods which
may be used to give the NERR to employees and provides that each is “a manner in which the
employer for a proposed enterprise agreement may give employees who will be covered by
the agreement notice of the right to be represented by a bargaining representative for the
agreement”.
[137] I do not accept that to satisfy the requirements of s.173(1) of the Act that the
employer must actually give the notice by a method that is individually directed to each
employee. I do not accept that an employer cannot discharge this obligation, at least in part,
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by a collective method of giving the notice which may include placing the notice in a
conspicuous place in the workplace. The legislative requirement in s.173(1) of the Act is that
the employer takes all reasonable steps to give the notice to each employee. In my view, to
construe the provision so that the employer is required to positively establish that each
employee was individually given the notice, overstates the requirement and ignores the
reference to “reasonable steps”.
[138] What s.173(1) of the Act requires is that the employer uses a method of giving the
NERR or a combination of methods that is appropriate in the context of the workplace and the
particular circumstances of the employees to whom the NERR is to be given so that the
Commission can be satisfied that all reasonable steps were taken to give the NERR to each
employee. For example, where employees are on a remote site with limited email access, it
may be appropriate to physically hand them the NERR and to supplement this method with
placing the NERR in a conspicuous place. Where employees spend large amounts of time
away from work – for example because they work an even time roster – it may be appropriate
to email them the NERR and to supplement the provision of the NERR by email by making
copies available at the site. It is also the case that Regulation 2.04 leaves open the possibility
that there may be other methods by which the NERR can be given.
[139] Section 173(1) also requires that the employer take reasonable steps to give the NERR
to each employee who will be covered by the agreement and who is employed at the
notification time for the Agreement. The notification time for an agreement is defined in
s.173(2) as the time when the employer agrees to bargain or initiates bargaining for an
agreement. As Vice President Hatcher observed in Transport Workers’ Union of Australia v
Hunter Operations Pty Ltd36 the definition of “notification time” in s.173(2)(a) indicates that
an employer’s agreement to bargain is referrable to a single event, which happens at a
particular time.37
[140] Further, the NERR must be given to the relevant employees not later than fourteen
days after the notification time for the Agreement. There is no requirement in s.173(1) that an
NERR be given to any employee who was not employed at the notification time. Further
there is no requirement that the employer continue to give the NERR to employees who are
employed after the notification time, including within the fourteen day period in which the
NERR is required to be given. The effect of the Decision in Transport Workers’ Union of
Australia v Hunter Operations Pty Ltd38, and a majority of the Full Bench of the Commission
in Uniline Australia Limited39, is that a NERR required to be given, to employees employed at
the notification time, given outside the 14 day period after the notification time for an
agreement is invalid.
[141] The majority in Uniline dealt with the question of failure to give the NERR within the
required time, to employees who were employed at the notification time for the Agreement.
An employer may continue to give NERRs to employees who are employed after the
notification time for an agreement, whether they are employed during the fourteen day period
after the notification time or outside that period and even up until employees are asked to
approve the agreement. The majority Decision in Uniline is not authority for the proposition
that an employer must continue to give the NERR to employees who commence employment
after the notification time. However, as there is no requirement to give such employees a
NERR, the process of giving the notice will not be invalid on that basis.
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[142] In short, the 14 day time limit applies only to employees employed at the notification
time, and the requirement with respect to employees not being asked to approve the
agreement until 21 days after the last notice is given, applies only employees who were
employed at the notification time and to whom the employer was required to give the NERR
by the terms s. 173 of the Act.
[143] In the present case, if the notification time for the Agreement was 18 February 2016,
then Falcon was required to take all reasonable steps to give Mr Ryan an NERR within the
fourteen day period after 18 February 2016, on the basis that Mr Ryan was employed at 18
February 2016 – ie. at the notification time.
[144] Ms Gayton initially declared in the Form F17 Employer declaration that the
notification time – being the date that Falcon initiated bargaining for the Agreement – was 18
February 2016. Under cross examination, Ms Gayton said that bargaining was initiated on 10
February 2016 when the NERR was given to employees at the first of two meetings held on
10 and 11 February at Wambo and Ulan respectively. Ms Gayton also said that she had
incorrectly stated in the Form 17 Employer declaration that bargaining was initiated on 18
February on the basis that this was the date that the Company emailed employees to inform
them of times for meetings about the Agreement.
[145] I note that the chronology of events setting out details of the meetings on 10 and 11
February at which the NERR was given to employees, was attached to a witness statement
made by Ms Gayton on 30 June 2016. That statement did not specifically assert that the
notification period for the Agreement was 10 and 11 February or correct the error in the Form
F17 Employer declaration, which stated that the notification time for the Agreement was 18
February 2016. It was only in cross-examination that Ms Gayton asserted that bargaining for
the Agreement was initiated on 10 February 2016. This was despite the fact that Mr Ryan’s
witness statement asserting that he had been employed on 18 February 2016 and was not
given an NERR was filed and served on 28 June 2016.
[146] Regardless of this, the chronology of events appended to Ms Gayton’s Supplementary
Witness Statement indicates that bargaining was initiated at the meetings held at Wambo and
Ulan on 10 and 11 February 2016 and I accept her evidence in this regard. That evidence
went only to handing the NERR to employees at those meetings. Evidence about other means
by which Ms Gayton said that employees were given the NERR also did not emerge until Ms
Gayton was being cross-examined. That evidence was essentially that Superintendents were
instructed to make copies of the NERR available to employees. There was no evidence about
how or when this was done.
[147] Given that Mr Ryan was not employed at the notification time there was no
requirement that he be given a NERR and there is no basis for finding that if there was a
failure to do so, the requirements of s.173 had not been met. However, there are a number of
other matters which lead me to conclude that Falcon did not take all reasonable steps to give
the NERR to each employee who was employed at the notification time for the Agreement.
Ms Gayton accepted that she erroneously believed that no employees were working weekend
shifts when the meetings on 10 and 11 February were conducted and that there was at least
one employee working such shifts at that time. There is also evidence that some employees
were working permanent night shifts and some were working permanent day shifts when the
NERR was given to employees. Absent evidence about how and when these employees were
given the NERR, or about what additional and reasonable steps were taken in respect of
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employees who may not have attended those meetings, I am unable to be satisfied that the
requirements of the Act in this regard have been met.
[148] It is also the case that the evidence as it stands is that the last NERR was given to an
employee on 26 February 2016. Even if the notification time is taken to be the later of the
dates nominated by Ms Gayton – 11 February 2016 – if the last employee given the NERR on
26 February 2016 was employed at the notification time then that employee was not given the
notice within the 14 day period required by s.173(3) of the Act. As previously noted, Ms
Gayton did not seek to correct or amend the date that she declares the last NERR was given to
an employee.
[149] As the applicant for approval of the Agreement, Falcon bears the onus of establishing
that the requirements for approval have been met. Mr Ryan’s evidence brings into question
whether the requirements of s.173(1) have been met. In circumstances where incorrect
information has been provided by Ms Gayton in the Form F17 Employer declaration and
further evidence has not been provided sufficient to satisfy me that all reasonable steps were
taken to give relevant employees a NERR, I do not accept that this requirement has been met.
I am also unable to be satisfied that the NERR was given in accordance with the requirements
of s.173(3) of the Act.
[150] In McDonalds Australia Pty Ltd40 a Full Bench of the Commission considered a case
where an employer’s declaration in support of approval of an agreement was incorrect and
incomplete and agreed with the Appellant’s submission that to refuse to approve an agreement
on this basis “incorrectly elevated a requirement to file accurate forms and declarations to a
requirement for approval of the agreement”41. The Full Bench went on to observe that:
“If there is an omission of information relevant to any of the tests that are required to be
determined it is prudent for [the Commission] to draw these matters to the attention of the
parties and given them an opportunity to supplement the material they have filed.”42
[151] Deficiencies in the material before the Commission have been brought to the attention
of Falcon. The Company is part of a large group of Companies and employs persons with
human resource management experience. Falcon was permitted legal representation at the
hearings in relation to the application for approval. Ms Gayton, who holds the position of
Manager Human Resources for the Mastermyne Group made three attempts to address the
omissions and inaccuracies in the material before the Commission. Ms Gayton provided a
witness statement dated 27 June 2016, a supplementary witness statement dated 30 June 2016
and a further affidavit dated 5 July 2016
[152] There are a significant number of issues which have not been addressed. After
considering all of that material I am not satisfied that Falcon took all reasonable steps to give
an NERR to employees.
10.4 Were the terms of the Agreement and their effect explained to employees?
[153] It is not in dispute that Mr Ryan (along with other employees) received copies of the
Agreement throughout the course of its development, and that during the access period for the
Agreement Mr Ryan had, or had access to, a copy of the Agreement. No issue has been taken
about the provision of incorporated material. Accordingly, I am satisfied that Falcon
complied with s.180(2) of the Act.
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[154] It is also not in dispute that Mr Ryan and other relevant employees were notified of the
time and place of the vote for the Agreement and the voting method to be used, as required by
s.180(3) of the Act. Mr Ryan asserts that he was not able to attend meetings for the purpose
of having the terms of the Agreement and their effect explained to him and that he was not
informed that he should refer to the Award in relation to his terms and conditions of
employment.
[155] Mr Ryan states that he was told that he would not be worse off under the Agreement
than he would be under the Award. Mr Ryan also asserts that had he known that the
Agreement provided terms of employment that were less beneficial than those provided for in
the Award, he would not have voted to approve the Agreement. The CFMEU asserts that Ms
Gayton’s incorrect answer to question 3.5 in the Form F17 Employer declaration – in which
Ms Gayton said that the Agreement did not contain any term or condition less beneficial than
the Award – indicates that Ms Gayton did not provide a proper explanation of the terms of the
Agreement and their effect to employees. The CFMEU also asserts that this should lead to a
finding that there are reasonable grounds for believing that employees have not genuinely
agreed to the Agreement as provided in s.188(c) of the Act.
[156] In relation to s.180(5) of the Act and the requirement for an explanation of the terms
of the Agreement and their effect to be provided to employees, I accept that Ms Gayton
conducted a number of meetings and communicated with employees by email to explain for
this purpose. Mr Ryan conceded under cross-examination that he was informed that the
Award and not the 2012 Agreement set the minimum terms and conditions of his
employment. Mr Ryan was informed of these matters by email. The Act does not stipulate
the manner in which an explanation of the terms of an Agreement must be provided and there
does not appear to have been any reason in this case why email was not an appropriate
method to provide such an explanation to Mr Ryan. Meetings were held and had he wished to
do so Mr Ryan could have attended them, notwithstanding that they were held on his days off
and he may have been inconvenienced by doing so.
[157] As a Full Bench of the Commission observed in McDonalds43, s.180(5) of the Act
does not establish an absolute requirement that a particular outcome be achieved, but requires
only that the employer take reasonable steps to ensure that the terms and conditions of the
Agreement are explained to employees. The reasonableness of the steps taken must be
considered in the context of:
The size of the employer;
The resources of the employer including available mechanisms and available expertise
to provide an explanation;
The role and qualifications of the persons who provide the explanation; and
Whether the capacity or the ability of employees to receive an explanation is impacted
by issues such as language, literacy, access to electronic media, hours of work,
rosters, the locations at which work is performed, travel to and from remote locations
or the availability of employees to receive an explanation.
[158] In the present case, I am not satisfied that reasonable steps were taken to give
employees an explanation of the terms of the Agreement and the effect of those terms. On
the basis of the evidence of Mr Ryan, I am satisfied that there were employees working
rosters that would likely have impacted on or prevented them from attending meetings at
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which the terms of the Agreement and their effect were explained. I am also satisfied that Ms
Gayton did not take steps to address this lack of access, on the basis that she was not aware
that employees were working such rosters at the relevant time.
[159] I am also of the view that the error in the Form F17 Employer declaration, where it is
wrongly stated that there are no terms of the agreement less beneficial than those in the
Award, makes it more probable than not that Ms Gayton made comments to this effect during
her explanation about the terms of the Agreement. While I accept that the incorrect statement
was unintentional, and that Ms Gayton did not set out to mislead the Commission or
employees when she made that statement, the provision of incorrect information in a statutory
declaration is a matter I can take into account in deciding whether the Agreement was
genuinely agreed. I also note that while swearing an affidavit acknowledging the error, Ms
Gayton has not provided any statement as to what terms of the Agreement are less beneficial
when compared to the terms of the Award and there is insufficient evidence upon which I
could reasonably be satisfied that an explanation addressing this matter was provided to
employees.
[160] In my view the entirety of the failure to comply with requirements for approval of the
Agreement – failure to correct typographical errors in the NERR (despite two attempts);
failure to establish that reasonable steps were taken to give the NERR to employees (despite
being given numerous opportunities to provide evidence to that effect); the incorrect
statement about less beneficial terms of the Agreement in the Form F17 Employer
Declaration; failure to properly correct that statement and to provide particulars; failure to
provide particulars about the terms of the Agreement which are less beneficial than those in
the Award; and Mr Ryan’s evidence about the inadequacy of the explanation of the terms of
the Agreement – are reasonable grounds for believing that reasonable steps were not taken to
explain the terms of the Agreement and their effect, and that the Agreement was not
genuinely agreed.
10.5 Does the Agreement contravene s.55 of the Act?
[161] As a Full Bench of the Commission observed in ALDI Foods Pty Ltd v Transport
Workers’ Union of Australia; National Union of Workers, NSW Branch44, s.55 of the Act
provides that an enterprise agreement must not exclude the NES or any provision of the NES
and that s.186(2)(c) of the Act makes this a pre-condition for approval.45
[162] In Canavan Building Pty Ltd46 the Full Bench said in respect of whether a term of an
Agreement can be said to “exclude” the NES:
“It is not necessary that an exclusion for the purpose of s.55(1) must be constituted by a
provision in the agreement ousting the operation of an NES provision in express terms. On the
ordinary meaning of the language used in s.55(1), we consider that if the provisions of an
agreement would in their operation result in an outcome whereby employees do not receive (in
full or at all) a benefit provided for by the NES, that constitutes a prohibited exclusion of the
NES.”47
[163] In the present case, clause 16 of the Agreement states that the Personal/carer’s Leave
entitlements in the Agreement supplement entitlements in the NES. The clause further states
that it sets out evidence required to be provided by employees when taking such leave. The
Agreement goes on to stipulate that employees are entitled to 105 ordinary hours of
Personal/carer’s leave hours per year and to stipulate the weekly rate at which such leave
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accrues. That the accrual rate in the table in clause 16 of the Agreement does not appear to
equal a total of 105 hours in a year is a matter I deal with in relation to BOOT issues. For
present purposes it is sufficient to note that the Agreement – as does the Award – provides an
annual entitlement for Personal/carers Leave of 105 ordinary hours per annum for each
employee.
[164] Section 96(1) of the Act contains the NES entitlement to paid personal/carer’s leave
and provides that for each year of service with his or her employer an employee is entitled to
ten days of paid personal/carer’s leave. By virtue of s.96(2) of the Act, such leave accrues
progressively from year to year. Section 99 of the Act provides in relation to payment for
personal/carers’ leave that:
“If, in accordance with this Subdivision an employee takes a period of paid personal/carer’s
leave, the employer must pay the employee at the employee’s base rate of pay for the
employee’s ordinary hours of work in the period.”
[165] The term “base rate of pay” is defined in s.16 of the Act as the base rate of pay
payable to an employee for ordinary hours of work but not including:
Incentive based payments and bonuses;
Loadings;
Monetary allowances;
Overtime or penalty rates;
Any other separately identifiable amounts.
[166] It is apparent that the NES entitlement to personal/carer’s leave is for an employee
who is absent on such leave to be paid for ordinary hours on the day of the absence and to ten
such absences in a year. The effect of the way in which the NES entitlement to
personal/carer’s leave is expressed, was recently discussed by Buchanan J of the Federal
Court in CFMEU v Anglo Coal (Drayton Management Pty Ltd)48 who observed in relation to
the construction of an enterprise agreement provision:
“The period of “paid personal/carer’s leave” referred to in s 99, for which an employee must be
paid at the base rate of pay for ordinary hours, must necessarily be one or more of the “days”
(or part of a day) of leave referred to in s 96. The number of hours normally worked by, for
example, an 8-hour day worker and a 12-hour shift worker on a normal or rostered day of
work are self-evidently different, by a margin of 50%. Nevertheless, the entitlement to paid
leave is not referable to an hourly equivalent; it is expressed in days, and it necessarily
follows, I think, that the possibility exists that the statutory entitlement to 10 days leave (and
pay) may result in a greater hourly entitlement (and overall pay) in some cases than in others.
That, it appears to me, is the effect of the statutory arrangements, whatever position might
arise under the specific provisions of particular enterprise agreements.”49
[167] It is also the case that rostered hours may include ordinary time and overtime, so that,
for example, an employee working a rostered twelve hour shift is paid eight hours at ordinary
rates and four hours at overtime rates. Depending on the rosters worked by an employee, 105
hours may be sufficient to meet personal carer’s leave entitlements of that employee. In
circumstances where the Agreement provisions in relation to personal/carer’s leave
supplement the NES provisions, I do not accept that the Agreement excludes the NES
entitlement in respect of the quantum of personal/carer’s leave.
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[168] Insofar as the Agreement requires notice to be given as soon as reasonably practicable,
it is consistent with the requirements in s.107 and is arguably more favourable, as the term
“practicable” is qualified by the term “reasonably”. However, it is arguable that the
requirement that the employee notify of inability to attend work and the estimated duration of
the absence prior to the commencement of the first absent shift, is a more onerous
requirement than the notice requirements in s.107 of the Act. The use of the conjunction
“and” means that the clause could be construed so that an employee must notify of an absence
before the start of a shift, regardless of whether it is reasonably practicable for the employee
to do so. This is an outcome that could result in an employee not receiving, in full, a benefit
provided for by the NES and constitutes a prohibited exclusion.
[169] In my view this could be remedied if the employer applied the provision so that the
requirement to notify of an absence prior to the start of a shift was qualified so that this would
occur where reasonably practicable. I note that an undertaking in this respect has been
offered by Falcon. An undertaking about this matter is capable of being accepted to meet this
concern.
[170] I am also of the view that the nomination of the Project Manager as having sole
discretion as to whether or not to accept particular evidence provided by an employee
excludes the NES because there is no requirement in the Agreement that the Project Manager
exercise the discretion as to whether or not to accept the evidence, on the basis that it would
satisfy a reasonable person. This term is also inconsistent with the Award provision in
relation to evidence to support an application for Personal/carer’s leave which contains a
similar reference, requiring that the evidence prove to the reasonable satisfaction of the
employer that the absence from work was for reasons set out in the NES. This matter could
also be addressed by an undertaking.
[171] I am not satisfied that clause 19 impermissibly deals with entitlements to be absent
from work on public holidays. An employee is entitled to be absent from work on a public
holiday subject to an employer’s right to reasonably request that an employee work on a
public holiday, which is in turn subject to an employee’s right to reasonably refuse such a
request. The Act sets out those matters to be taken into account in determining whether an
employer’s request or an employee’s refusal is reasonable. Clauses in the nature of clause 19
of this Agreement are commonplace, including in enterprise agreements in the coal industry,
to which the CFMEU has agreed and is bound.
[172] In circumstances where the workplace is a mine site which operates on an essentially
continuous basis and where the employees are employed to work on that basis and are paid
rates which include compensation for public holidays, I am not satisfied that clause 19 of the
Agreement excludes NES entitlements. I also note that s.114 will apply to non-rostered work
on public holidays and is not excluded by the terms of the Agreement.
[173] In relation to clause 19.2 of the Agreement and absences before and after a public
holiday without good and sufficient reason disentitling employees to payment for a public
holiday, clause 19.2 of the Agreement is in identical terms to clause 27.3 of the Award. If
clause 19.2 of the Agreement excludes a term of the NES then so does clause 27.3 of the
Award. I do not accept that such a provision excludes a term of the NES.
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10.6 Does the Agreement contain a compliant term about settling disputes?
[174] Acceptance of the CFMEU’s submission in relation to the dispute settlement
procedure in the Agreement requires acceptance of the proposition that the effect of
s.186(6)(b) of the Act is that a dispute settlement procedure in an Agreement must allow for
representation of employees at any and all stages of the procedure.
[175] Section 186(6)(b) does not state that representation must be allowed for all purposes of
the procedure. The Model Term in Schedule 6.1 to the Regulations states that an employee
may appoint a representative for the purposes of the procedure. The fact that this statement
appears in (2) of the Model Term, which is located above the list of procedures prescribed by
the Model Term, implies that the Model Term allows for representation at any stage of the
procedure.
[176] However, the Model Term is not a default term in the way same way as the Model
Consultation Term and the Model Enterprise Flexibility Term. The Model Term is intended
to provide guidance to parties in agreeing to a dispute resolution term and they may include
all or part of the Model Term in an agreement.
[177] In Woolworths Ltd trading as Produce and Recycling Distribution Centre50a Full
Bench of the Commission determined that the Model Term does no more than illustrate the
types of procedures and powers that may be dealt with in a dispute resolution term and that
such an implication that a procedure for settling disputes must require that the Commission be
empowered to arbitrate, would be inconsistent with the express terms of s.739(3) of the Act,
which requires that in dealing with a dispute, the Commission must not exercise any powers
limited by the relevant dispute settlement term.
[178] It is arguable that it is not a requirement under s.186(6) that a dispute settlement term
of an agreement allow for an employee to be represented at every stage of the procedure. In
the present case it is not necessary to decide this point. Falcon has offered an undertaking to
the effect that the dispute resolution procedure in the Agreement will be applied so that an
employee can choose to be represented at any stage. Given that the CFMEU has also raised
this issue in relation to whether the Agreement passes the BOOT in light of the Dispute
resolution procedure in clause 9 of the Award, the undertaking offered by Falcon is capable of
acceptance by the Commission and this will resolve the issue in any event.
10.7 Does the Agreement contain a consultation term as required by the Act?
[179] The consultation term of the Agreement is clause 5. The clause does not conform in a
number of respects with the requirements of the Act as set out in s.205. In particular the
consultation term of the Agreement does not require consultation about a change to
employees’ regular roster or ordinary hours of work as provided in s.205(1A) of the Act. If
the Agreement was approved, this matter would be resolved by the operation of s.205(2),
which provides that if the Agreement does not include a consultation term that conforms with
the requirements of the Act, it is taken to include the model term provided in Regulation 2.09
and Schedule 2.3 of the Regulations.
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10.8 Does the Agreement contain an unlawful term?
[180] I do not accept that clause 23.1 of the Agreement is discriminatory and thereby an
unlawful term. The Agreement provides at clause 23.1 for an additional period of notice to be
given by Falcon. It does not require an employee giving notice to give an additional weeks’
notice based on his or her age. The term is not discriminatory and its inclusion in the
Agreement does not result in the Agreement not being capable of approval because of s.
186(4) of the Act. I accept the submissions of Falcon on this point.
10.9 Does the Agreement pass the BOOT?
[181] There have been numerous decisions of the Commission, including Full Bench
Decisions, where the consistent view has been expressed that in applying the BOOT (and
previously the no disadvantage test) consideration is given to a comparison between the terms
of the relevant award and the terms of the agreement. In Armacell Australia Pty Ltd51 a Full
Bench of the Commission described the proper application of the BOOT as follows:
“The BOOT, as the name implies, requires an overall assessment to be made. This requires
the identification of terms that are more beneficial for an employee, terms which are less
beneficial and an overall assessment of whether an employee would be better off under the
Agreement.”
[182] This approach was confirmed by a Full Bench in Solar Systems Pty Ltd52. That Full
Bench also observed that in order to be relevant to the BOOT a matter needs to be either
advantageous or disadvantageous and after identifying such matters, the Commission is
required to balance them and come to an overall view in respect of each award covered
employee.53 It is also well established that the BOOT must be applied on a global basis rather
than line by line. A provision of a proposed agreement that when considered alone, may be
less beneficial than a corresponding provision in a relevant modern award, will not result in
the proposed agreement failing the BOOT if there are other more beneficial provisions in the
proposed agreement which offset the less beneficial provision such that employees are better
of overall.
[183] It is also the case that an Agreement may confer a term that is not conferred by the
Award. An assessment of whether an agreement passes the BOOT may require an assessment
of the effect of terms of the agreement which are not conferred by the Award and
consideration of whether those terms benefit employees or create obligations with which they
must comply or impose requirements on them which are more onerous than would be the case
if the Award applied. In such a case detriment may be created which an employee would not
be subject to if the Award applied.
[184] In AKN Pty Ltd t/a Aitkin Crane Services, a Full Bench of the Commission considered
a decision at first instance refused to approve an agreement which allowed for deductions
from wages which may have been contrary to s. 326 of the Act. In that case, the Full Bench
said:
“There is nothing in ss.186 or 187, or elsewhere in the FW Act, which prohibits the approval of
an enterprise agreement because it contains any provision permitting deductions from wages
which, if the Agreement was approved, would not have effect because of s.326(1). Section
186(4) provides that, in order for an agreement to be approved, the Commission must be
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satisfied that it does not contain any “unlawful terms”. What constitutes an unlawful term is
defined by s.194. It is sufficient to say for present purposes that a provision which would not
have effect because of s.326(1) is not included in the definition of an unlawful term. Therefore
an enterprise agreement may be approved and be otherwise operative notwithstanding that it
contains a provision which does not have effect under s.326(1). So much was recognised by the
Federal Court Full Court in Toyota Motor Corporation Australia Limited v Marmara.
It may be that a disadvantageous deduction from wages provision which has a real potential
to cause financial detriment is something that needs to be brought to account in the
application of the better off overall test. However, that is not what the Commissioner did.
Rather he treated clauses 16.5 and 18.12 as simply not permitted by s.326(1) and therefore as
impediments to approval in themselves. We accept AKN’s submission that this approach
constituted appealable error.”54
[185] These comments indicate that provisions in enterprise agreements which have a real
potential to cause financial detriment to employees can be taken into account in consideration
of whether an agreement passes the BOOT regardless of whether or not they are contained in
a relevant modern award.
[186] I turn now to each of the matters identified by the CFMEU said to cause the
Agreement to fail the BOOT. I also have concerns about many, but not all of those matters.
In terms of benefits conferred by the Agreement, I accept that:
The wage rates in the Agreement are between 4.36% and 16.43% higher than the wage
rates for corresponding classifications under the Award; and
Under the Agreement employees are entitled each year to a set of clothing in addition
to the two sets they are entitled to under the Award.
[187] Falcon has not identified any other benefits and I am unable to discern any in the
Agreement.
[188] In relation to Major Workplace Change in clause 5 of the Agreement, I accept that the
Agreement does not confer the right for employees to be provided with relevant information
in writing about a change within the meaning in clause 8 of the Award and that this is a
detriment when compared with the rights of employees under the Award. I also accept that
this detriment is addressed by s.205(2), which is triggered in circumstances where the
Agreement does not contain a consultation term that meets the requirements in s.201(1) and
s.201(1A). The term in the Agreement does not require consultation in relation to changes in
working hours as required in s.205(1A) and as a result the Agreement is taken to include the
model term in Schedule 2.3 of the Regulations. This has the effect of addressing any BOOT
issue which arises from the consultation provisions in the Award with respect to major
workplace change.
[189] If, as the CFMEU asserts, the dispute settlement procedure in clause 6 of the
Agreement is detrimental to employees for the purposes of the BOOT because it does not
allow for representation at any stage, the undertaking offered by Falcon would address this
issue, as previously.
[190] With respect to part-time employees in clause 7.2.2 of the Agreement, I accept that the
Agreement does not contain provisions in relation to regular patterns of employment or
provisions to establish ordinary hours that would allow a proper analysis of when a part-time
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employee would be entitled to overtime payments. Because of the lack of definition of
ordinary hours for part-time employees I am unable to assess whether such employees are
better off under the Agreement than they would be under the Award. I do consider that part-
time employees are worse off under the Agreement, at least in terms of those matters
identified in clauses 10.3(b) to (d) of the Award. The entitlements in clauses 10.3(b) to (d) of
the Award are important and tangible benefits for a class of employees under the Award
providing as they do for regularity and predictability in relation to hours of work. The loss of
those entitlements is a detriment. I do not accept that the benefits in the Agreement outweigh
this detriment when considered in the context of other detrimental provisions. The
undertaking offered in this respect addresses my concern if the Agreement was approved.
[191] I accept that the Award does not provide for production and engineering employees to
be employed on a casual basis. The Agreement at clause 7.2.3 provides that employees may
be employed on a casual basis. I do not accept that because the Agreement provides for casual
employment that it does not pass the BOOT or that this is a detriment which is not
outweighed by benefits provided by the Agreement. The Agreement contains a casual loading
of 25%. It is well established in other modern awards that such a loading compensates casual
employees for the lack of leave and other entitlements enjoyed by weekly employees. The
wage rates in the Agreement to which the casual loading will apply exceed those in the
Award. Falcon has provided an undertaking that casual employees will be entitled to accident
pay under the Award. If that undertaking is accepted, then the inclusion of casual
employment in the Agreement does not result in the Agreement failing the BOOT with
respect to casual employees.
[192] In relation to clause 7.4 of the Agreement, I accept Falcon’s submission that the
matters stipulated in that clause for the purposes of commencement and continuation of
employment are minimum requirements in relevant legislation for employees to be engaged
as mine workers. There is nothing in the Award that prevents an employer from requiring
compliance with the criteria set out in the clause. It is also the case that the clause does not
place obligations on employees or subject them to penalty in the event of non-compliance.
Rather the clause simply records what Falcon requires for employees to commence and
continue in their employment. The clause also provides that failure to comply may – rather
than will – result in termination of employment. As such, no right of an employee in respect
of termination of employment is removed or detrimentally affected.
[193] The objections to clauses 7.6, 7.7 and 26 of the Agreement centre on clauses giving
the employer the right to make deductions from employees’ wages in certain circumstances or
to require that they reimburse certain amounts. A deduction from wages may be authorised by
an employee in accordance with an enterprise agreement consistent with the Full Bench
Decision in AKN Pty Ltd,55 there is no basis for refusing to approve an agreement because it
contains a provision permitting a deduction from wages, which, if the Agreement was
approved, would not have effect because of s.326(1) of the Act. The Full Bench in that case
also noted that a disadvantageous deduction from wages which has a real potential to cause
financial detriment may be brought into account in the application of the BOOT. In the
present case, I accept that any deduction from the wages of employees may be
disadvantageous, when considered with other detrimental provisions of the Agreement and
this is a matter that I have weighed in considering whether the Agreement passes the BOOT.
[194] Clause 7.8 of the Agreement obliges employees to comply with rules “applicable at
the mine site” and with Mastermyne’s policies and procedures. The clause requires that
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where there is conflict between site specific policies and procedures and those of
Mastermyne, the policies and procedures providing the “highest obligation” apply. There is
no identification of the particular rules, policies and procedures that the clause obligates
employees to comply with other than a statement that employees can obtain copies of policies
and procedures from persons in nominated positions or seek confirmation as to the
appropriate policy and procedure from a supervisor if in doubt. The Agreement also provides
that policies and procedures do not form part of the Agreement or an employee’s contract of
employment.
[195] The effect of the provision is that any dispute about the appropriateness of policies and
procedures which employees are obligated to follow would be outside the parameters of the
dispute resolution process in the Agreement. Further, an employee who breached a policy or
procedure would breach a term of the Agreement and be exposed to a civil penalty for breach.
[196] For reasons set out in a number of Decisions56 I am of the view that a term of an
Agreement imposing an obligation on an employee, which is not imposed by the Award, and
which has the significant consequence if the employee breaches the obligation of exposing the
employee to a civil penalty for breach of an Agreement, is a detriment that is able to be
assessed in consideration of whether an agreement passes the BOOT. In the present case, the
benefits in the Agreement do not offset the possible detriment when considered in conjunction
with other detrimental provisions. Employees are not entitled to dispute the terms of the
policies and procedures, which they are obliged to follow because they are outside the terms
of the Agreement or the employee’s contract of employment. Falcon has offered an
undertaking that the clause will be applied so that employees will not be required to abide by
policies and procedures but rather, that policies and procedures will apply. This undertaking
addresses my concern about the clause 7.8 of the Agreement if the Agreement was approved.
[197] In relation to allowances, clause 8 of the Agreement contains wage rates which
incorporate allowances that would be payable under the Award. Those wage rates are higher
than the rates in the Award including allowances and I consider that the detriment is
addressed by the higher wage rates. With respect to clause 10 of the Agreement, I do not
accept that the wage rates are sufficiently in excess of the Award to offset the possible
reduction in overtime rates from double time to time and a-half when considered in
conjunction with other detrimental provisions in the Agreement.
[198] It is not to the point that Falcon does not currently require employees to work ordinary
hours on weekends or six or seven day rosters. The terms of the Agreement allow for such
arrangements by virtue of prescribing a penalty payment for ordinary hours worked on
weekends. This submission is also inconsistent with the submission made in respect of public
holidays to the effect that the “the workplace is a work environment where work is performed
27/7/52”.57 Accordingly, this is a detriment and I am unable to be satisfied that employees
will be better off notwithstanding that they are paid higher hourly rates for all time worked.
[199] Similarly, that Falcon does not currently roster employees to work ordinary hours on
weekends is not relevant to an assessment of clause 11 of the Agreement. The terms of the
Agreement allow ordinary hours to be worked on weekends. Clauses 21.2 and 22.2 of the
Award provide that shift allowances are payable in addition to the ordinary time rate, which
on Saturdays is time and a-half for the first three hours and double time thereafter, and on
Sundays, double time. Further, in contrast with clause 22.2 of the Award, under the
Agreement shift penalties are not paid in addition to overtime as the shift work penalty is only
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payable on Monday to Friday shifts. This is also a detriment and I am not satisfied that it is
offset by beneficial terms of the Agreement when considered in conjunction with other
detrimental terms. The undertaking by Falcon in respect of the definition of night shift does
not address the other issues of concern.
[200] The Agreement does not provide for an additional week of annual leave in accordance
with clause 25.2 of the Award, which provides for an additional week of annual leave (ie. a
total of six weeks) for seven day roster employees as defined. For reasons set out above it is
not to the point that Falcon does not currently employ persons on seven day continuous
rosters. Further, the Award entitles employees to be paid for annual leave at their rostered
earnings or a 20% loading, whichever is greater. The Agreement provides for employees to
be paid at their base hourly rate only, while on annual leave. I am not satisfied that the
Agreement provides for benefits sufficient to offset what is a significant detriment (in
conjunction with other detrimental provisions) of the potential loss of one week of paid leave
for employees working a seven day continuous roster as defined in the Award or for the
reduction in payments that employees are entitled to while on annual leave. Falcon has
offered an undertaking in relation to these issues, which would address my concern if the
Agreement was approved.
[201] In addition to the NES consideration, the CFMEU submits that the table setting out
the quantum of personal/carer’s leave entitlements in clause 16.2 of the Agreement results in
employees being entitled to less than the 105 hours of personal/carer’s leave they would be
entitled to under the Award. That submission is correct. There are insufficient benefits in the
Agreement to offset the detriment of a reduction in personal/carer’s leave entitlements under
the Award, when that detriment is considered in conjunction with other detrimental
provisions. Falcon has offered an undertaking in the following terms:
“Personal leave for full or part time employees will:
(a) accrue at the rate of 105 hours on commencement and then on the
anniversary date of the commencement of the employee’s employment;
(b) be deducted on ordinary hours only;
(c) be paid at the employee’s intended rostered earnings.”
[202] This undertaking addresses my concerns about the issue of personal/carer’s leave
under the Agreement. I also note the undertakings in relation to notice and evidence
requirements offered by Falcon and these have also addressed other issues with the personal
carer’s leave provisions related to the NES.
[203] In relation to public holidays falling on RDOs, I do not accept the submission that this
is irrelevant to the consideration of whether the Agreement passes the BOOT because Falcon
does not currently apply any RDO based roster arrangements. The Agreement clearly
provides for such arrangements, and does not contain an equivalent provision to clause
23(6)(f) of the Award. This potential detriment, amounting to a loss of 5.5 days of paid
absence from work in a year, when considered in conjunction with other detrimental
provisions of the Agreement, is not offset by the benefits provided in the Agreement. Falcon
has offered an undertaking which addresses this concern.
[204] The termination of employment provisions in the Agreement also have real potential
to cause detriment to employees compared to the terms of the Award. The Agreement
[2016] FWC 5315
45
imposes extended notice requirements on employees (other than the additional week) so that
they are liable to a deduction from their wages in the event that the notice is not given. Under
the Award, an employee who failed to give notice would be liable to have only one weeks’
wages deducted from his or her termination payments. The Award provides at clause 13.4 for
four weeks’ notice to be given to an employee in the event of termination due to redundancy.
There is no equivalent provision in the Agreement.
[205] Further, in contrast with clause 13.5(b) of the Award, the Agreement does not provide
for the payment of accrued personal/carer’s leave to employees whose employment is
terminated for the reasons listed in that clause. These matters are detrimental to employees
when compared to the terms that they would be entitled to under the Award, and when
considered in combination with other detrimental provisions of the Agreement, is not offset
by the more beneficial terms of the Agreement. Falcon has provided undertakings which
address these matters.
[206] In relation to clause 28 of the Agreement, which provides a right for Falcon to stand
employees down in certain circumstances, I do not accept that this is a matter relevant to the
consideration of whether the Agreement passes the BOOT.
[207] Section 524 of the Act which deals with stand down of employees operates regardless
of whether an enterprise agreement also contains a stand down provision. Those provisions
also apply to employees to whom modern awards apply. Further the Notes to the section
make it clear that an employer who may not stand down an employee under the Act, may be
able to do so under the terms of an enterprise agreement. The provisions in clause 28 of the
Agreement are consistent with the provisions of s.524 of the Act and this is not a matter that
is detrimental to employees when considered against the Award.
[208] I have identified the beneficial terms of the Agreement and those that are detrimental
to award covered and potential award covered employees, when compared to the Black Coal
Industry Award 2010. After weighing the beneficial terms of the Agreement against the
detrimental terms, I am not satisfied that the Agreement passes the BOOT. Falcon has
addressed most but not all of the issues upon which I have based this conclusion. I accept that
technically undertakings could be provided by Falcon to address these outstanding matters.
10.10 Do necessary undertakings substantially change the Agreement?
[209] Notwithstanding that undertakings have been and could be provided by Falcon in
relation to these issues, it is necessary to also consider whether the undertakings which would
be required in order to address my concerns about whether the Agreement meets the
requirements set out in ss.186 and 187 of the Act, would cause financial detriment to an
employee or substantially change the Agreement so that the undertakings could not be
accepted because of s.190(3) of the Act.
[210] I have reached the conclusion that the undertakings offered by Falcon are so
substantial, both in scope and in number, that they will substantially change the Agreement.
More undertakings than those offered by Falcon will be required in order to meet the
outstanding concerns I have about the Agreement. The Commission is not obliged to engage
in ongoing discussion or negotiation with parties seeking approval of an enterprise agreement
about such matters.58 Falcon was, as observed by the Full Bench in AKN Pty Ltd t/a Aitkin
Crane Services59, required to put its best foot forward and not just merely enter its opening
[2016] FWC 5315
46
bid when offering undertakings to the Commission. Falcon has had the opportunity to respond
to clearly articulated concerns about the Agreement, including the pre-approval processes, and
to make, in effect a second bid, to address those matters, but has not provided an adequate
response that addresses these matters.
[211] Accordingly, I am unable to accept the undertakings and as a result, the Agreement
does not meet the requirements in ss.186 and 187 of the Act.
11. CONCLUSION
[212] The Agreement does not meet the requirements of the Act for approval. The
application for approval of the Agreement is refused.
DEPUTY PRESIDENT
Appearances:
Mr M. Coonan for the Applicant.
Ms J. Short for the Construction, Forestry, Mining and Energy Union.
Hearing details:
2016.
30 June.
Brisbane.
2016.
5 July.
Brisbane by video to Newcastle.
Final written submissions:
19 July.
2016.
Printed by authority of the Commonwealth Government Printer
Price code G, PR583680
1 Application by Lamont Plant Hire Pty Ltd [2016] FWC 2033 at [10] to [16].
ORK COMMISSION AUSTRALIA THE SEAS OF FAIR
[2016] FWC 5315
47
2 PN4 to PN8.
3 Exhibit 1 – Affidavit of Vivienne Gayton sworn 22 July 2016.
4 Exhibit 7 Further Affidavit of Vivienne Gayton sworn 5 July 2016.
5 [2014] FWCFB 2042.
6 Ibid at [40] to [47].
7 Exhibit 7 – Affidavit of Vivienne Gayton sworn 5 July 2016 – Annexure “VFG-1”.
8 Transcript of Proceedings 30 June 2016, PRN 97 – 106 and PRN 129 – 137.
9 Exhibit 7 – Affidavit of Vivienne Gayton sworn 5 July 2016 – Annexure “VFG-1”.
10 [2014] FWCFB 2042.
11 [2015] FWCFB 3337.
12 [2014] FWCA 5077.
13 Exhibit 3 - Supplementary Witness Statement of Vivienne Gayton dated 30 June 2016.
14 Exhibit 3 paragraph 17.
15 Exhibit 3 – Supplementary witness statement of Vivienne Gayton – Annexure “VFG-1”.
16 Transcript of proceedings 30 June 2016 PN117.
17 Transcript of proceedings 30 June 2016 PN119.
18 Transcript of proceedings 30 June 2016 PN79.
19 [2010] FWA 562.
20 Exhibit 2 – Witness Statement of Vivienne Gayton dated 27 June 2016.
21 Exhibit 3 – Annexures “VFG-4”, “VFG-5”, “VFG-6” and “VFG-7”.
22 Exhibit 3 – Annexure “VFG-1”.
23 Exhibit 6 – Statement of Steve Ryan Annexure “SR-5”.
24 PN452.
25 [2012] FWA 2313.
26 [2012] FWAFB 9398.
27 [2015] FWCFB 1833.
28 PN443.
29 [2015] FWCFB 4422.
30 [2015] FWCFB 3337.
31 Ibid at [27].
32 Ibid at [32].
33 Ibid at [38].
34 [2014] FWCA 5077.
35 Ibid at [10].
36 [2014] FWC 7469.
37 Ibid at [52].
38 Ibid.
39 [2016] FWCFB 4969.
40 [2010] FWAFB 4602.
41 Ibid at [19].
42 Ibid at [21].
43 Ibid at [29] – [30].
44 [2012] FWAFB 9398.
45 Ibid at [33].
46 [2014] FWCFB 3202.
47 Ibid at [36].
48 [2016] FCA 689.
[2016] FWC 5315
48
49 Ibid at [10].
50 [2010] FWAFB 1464.
51 [2010] FWAFB 9985 at [41].
52 [2010] FWAFB 6937.
53 Ibid at [15].
54 [2015] FWCFB 1833 at [47] – [48].
55 Ibid at [47] – 48].
56 Re Smith and Nephew Pty Ltd [2010] FWA 7217; Re Glen Eden Thoroughbreds Pty Ltd t/a Ray White Shailer Park [2010]
FWA 7217; Re Jellifish! Pty Ltd [2010] 9640.
57 Submissions filed by Falcon on 23 June 2916.
58 [2015] FWCFB 1833 at [30].
59 [2015] FWCFB 1833.
