1
Fair Work Act 2009
s.604 - Appeal of decisions
Construction, Forestry, Mining and Energy Union
v
Australian Workers’ Union
&
TCQ Labour Pty Limited
(C2017/128)
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT GOSTENCNIK
COMMISSIONER BISSETT SYDNEY, 5 MAY 2017
Appeal against decision [[2016] FWCA 9249] of Deputy President Lawrence at Sydney on 23
December 2016 in matter number AG2016/5442
Introduction
[1] A Greenfields Agreement titled TCQ Labour Pty Limited / AWU Civil Construction
Metro Greenfield Agreement 2016 (Agreement) was made by TCQ Labour Pty Limited
(TCQ) and the Australian Workers' Union (AWU) on 31 August 2016. By application dated
31 August 2016 and lodged on 1 September 2016, the AWU applied for the approval of the
Agreement. The Construction, Forestry, Mining, and Energy Union (CFMEU) opposed the
approval of the Agreement and, though not a bargaining representative for the Agreement, it
was permitted to make submissions in opposition and to appear at a hearing in relation to the
application to approve the Agreement. The matters about which the CFMEU was permitted to
make submissions were confined to the questions whether the Agreement related to a genuine
new enterprise, whether the Agreement passed the better off overall test and whether it was in
the public interest to approve the Agreement.1
[2] The Agreement was approved with undertakings by Deputy President Lawrence
pursuant to a decision issued on 23 December 2016 (Decision).2 By its notice of appeal
lodged on 9 January 2017, the CFMEU seeks permission to appeal and appeals the Decision
under s.604 of the Fair Work Act 2009 (FW Act).
[3] The scope of the work in relation to which the Agreement is expressed to apply is
“civil construction, engineering, excavation and/or related works (except in relation to
tunneling (sic) and associated works) performed in the Sydney metropolitan area” and the
1 [2016] FWC 8190 at [22] and [30] – [35] and [2016] FWCA 9249 at [6] – [7]
2 [2016] FWCA 9249
[2017] FWCFB 2296
DECISION
E AUSTRALIA FairWork Commission
[2017] FWCFB 2296
2
Agreement is expressed to cover TCQ employees employed under the classification structure
specified in an appendix to the Agreement.3
[4] TCQ is a labour hire company established to supply labour to other contractors
engaged on “new civil construction projects” in the Sydney metropolitan area.
Grounds of appeal
[5] By its amended notice of appeal dated 6 February 2017, the CFMEU advanced a
number of grounds of appeal. It maintained that the Deputy President erred in the following
ways:
1. failed to give any or adequate reasons for his decision in finding that:
a. the Agreement related to a ‘genuine new enterprise for the purposes of s.
172(2)(b) of the FW Act;
b. it was in the public interest for the Agreement to be approved in circumstances
where the AWU and TCQ had provided erroneous information in their
respective statutory declarations;
2. it was in the public interest for the Agreement to be approved in circumstances
where the AWU and TCQ had provided erroneous information in their respective
statutory declarations;
3. failed to take into account the inconsistent evidence presented by the AWU and
TCQ in their Form F21 and F20’s respectively in respect to the nature of the
alleged new enterprise;
4. made a serious error of fact in concluding that there was a genuine new enterprise
in circumstances where the descriptions of that enterprise by the AWU and TCQ
in their Form F21 and F20’s were irreconcilably contradictory;
5. failed to take into consideration in assessing whether there was a genuine new
enterprise the fact that TCQ had provided erroneous information on its Form F20
statutory declaration;
6. failed to take into consideration in assessing whether it was in the public interest
to approve the greenfields agreement that TCQ had provided erroneous
information on its Form F20;
7. erred in approving the Agreement in circumstances where it contravened s.55 of
the FW Act by impermissibly excluding the provision of the NES relating to
voluntary emergency management leave;
8. erred in accepting undertakings that the Agreement apply only to new projects,
and that no employee at the time of certification of the agreement who worked
under another agreement with a company known as ‘Telum Civil Projects’ could
3 See Agreement clause 2 and 3 (specifically, “Parties” and “Scope and Application”)
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3
work under the Agreement without their consent, in circumstances where such an
undertaking did not and could not relate to a concern under ss.186 or 187 of the
FW Act;
9. erred in approving the Agreement in circumstances where, by the requirement
that TCQ provide an undertaking that the Agreement would apply only to new
projects, he manifested a concern that the Agreement did not pertain to a genuine
new enterprise.
[6] These grounds overlap in a number of respects and it is convenient that we deal with
the grounds under the following five general themes:
the adequacy of reasons;
a failure to take into account relevant considerations;
whether there was a genuine new enterprise in relation to which the Agreement
related;
exclusion of the National Employment Standards (NES); and
the impermissible acceptance of undertakings.
[7] We deal with each of these in turn below.
Consideration
Adequacy of reasons
[8] The CFMEU contended that there was an absence of, or inadequacy in, the reasons
given by the Deputy President in the Decision to support his findings that the Agreement
related to a ‘genuine new enterprise’. There are two limbs advanced by the CFMEU under
this theme. Before turning to those limbs we would make the following observations.
[9] A Member of the Commission is obliged to provide adequate reasons for reaching
conclusions on matters that fall for determination in a proceeding.4 The obligation to give
reasons arises from the Commission’s duty to afford parties procedural fairness and to act
judicially.5 Whilst there is no imperative for a decision-maker to provide elaborate or
extensive reasons, reasons must identify the basis for the decision reached and detail the
extent to which parties’ submissions have been understood, accepted or rejected.6 The
essential grounds for reaching a decision must be articulated and need to address material
questions of fact and law in a manner disclosing the steps that led to a particular result.7 A
4 P R Barach v UNSW [2010] FWAFB 3307 at [16]; Ainger v Coffs Harbour City Council [2005] NSWCA 424 at [43] and
[48]; Pinawin v Domingo (2012) 219 IR 128 at [21]
5 CFMEU v Fair Work Commission [2014] FWCFB 2709 at [182]; Edwards v Justice Giudice and Others [1999] FCA 1836
at [44]
6 Ainger v Coffs Harbour City Council [2005] NSWCA 424 at [48]
7 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 279-280.
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4
decision-maker is bound to engage with the issues raised by the parties.8 However it is not
necessary for a decision-maker to refer to every piece of evidence and every contention made
by a party,9 and reasons for decisions are not to be scrutinised with an eye to discerning error
where none truly exists.10
[10] A failure to give reasons, may lead to the parties being left guessing about what it was
that informed a decision. A failure to give adequate reasons may amount to a denial of
procedural fairness and jurisdictional error, resulting in the quashing of a decision.11 But there
remains no unqualified and universally applicable legal requirement to refer to every
submission advanced by a party. Much is dependent on the importance of the submissions to
the issue or issues requiring determination.12 A failure to address a submission which is
significant and touches upon the core duty being discharged or which is centrally relevant to
the decision being made may, in some circumstances, found a conclusion that the submission
has not been taken into account and may thereby expose jurisdictional error.13
[11] The first limb of the adequacy of reasons theme relates to that which the CFMEU has
variously described as conflicting, contradictory or irreconcilable descriptions of the genuine
new enterprise by the AWU on the one hand, and TCQ on the other. The sources of these
conflicting descriptions is said to be the statutory declarations (Forms F20 and F21) filed by
the AWU and TCQ in support of the AWU’s application to approve the Agreement.
[12] Contrary to the submissions filed on appeal by TCQ, there seems to us little doubt that
the CFMEU advanced this issue as part of its case in opposition during proceedings before the
Deputy President. A short extract from the transcript recording the argument advanced by the
CFMEU during the hearing on 25 November 2016 will suffice to make this point:
“MR BONCARDO: . . .
How can your Honour place any weight on what Mr Neesan says in those
circumstances? Coupled with that - coupled with that is the incongruity between what
is described by Mr Nessan as the new enterprise, in respect to the regional and the
metro agreements, and what is described by the AWU in respect to the new
enterprises. Now Mr Neesan says in general terms the metro agreement applies to the
Sydney metropolitan area in respect to civil construction projects, and the regional
agreement applies to regional New South Wales. They are not agreements limited to a
site, they are not agreements limited to a location or project.
The AWU curiously in their statutory declaration and in respect to the metro and the
regional agreements, refers at paragraph 5(b) to the greenfield project ensuring that:
8 Ainger v Coffs Harbour City Council [2005] NSWCA 424 [48]
9 WAEE v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 184 at [46]; Reece v Webber
[2011] FCAFC 33 at [67], (2011) 192 FCR 254 at 277
10 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-272
11 CFMEU v Fair Work Commission [2014] FWCFB 2709 at [182]
12 Linfox Australia Pty Ltd v Fair Work Commission [2013] FCAFC 157 at [47]
13 Ibid; see also Fox v AIRC [2007] FCAFC 150 at [39]; WAFP v Minister for Immigration and Multicultural & Indigenous
Affairs [2003] FCAFC 319 at [21]; Soliman v University of Technology, Sydney [2012] FCAFC 146 at [55]-[56], (2012) FCR
277 at 295
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The project proceeds in a productive basis undisrupted by further bargaining
and potential industrial action.
At 5(c):
The agreement will provide terms and conditions of employment, more
particularly tailored to the circumstances and requirements of the location of
the work.
And (e):
The agreement will provide for workers to be employed on the site to which it
relates.
That is to which the agreement relates. A more relevant, more convenient and more
accessible catalogue of the terms and conditions of their employment.
According to the AWU, the regional and metro agreements are site and project
specific agreements. According to my friend's clients, they're agreements that
establish a new business - I think that's his case - in respect to huge geographical areas
and no specific project, no specific location. How in those circumstances, I ask
rhetorically, can the Commission be satisfied that there is a genuine new enterprise.
There is a juxtaposition, an inconsistency which is irreconcilable between what the
AWU are saying and what my friend's clients are saying. And my friend's clients had
the opportunity to put on some evidence to tell your Honour why this company TCQ
Labour which was incorporated in 2009, why all of a sudden on 31 August this year
did it decide to commence a new business. They didn't avail themselves of that
opportunity. They haven't told your Honour at all - - -
. . .
Now he could make that submission if he filed some evidence about that but he didn't.
There is no evidence at all before your Honour in respect to what TCQ Labour
ordinarily does. There is no evidence at all before your Honour of any substance - no
doubt my friend will take you back to the form F20 and say the bald assertions in that
are sufficient for his evidential case. But your Honour noted in your decisions that the
issue of genuineness of the new enterprise would be determined today, and that my
friend's client had the opportunity to put on some evidence to perhaps tell your Honour
what the new enterprise was and it didn't do that. In circumstances where you've got
this inconsistency between what is in the AWU's form F21 and what is in my friend's
client's form F20, your Honour cannot be satisfied in my submission that there is a
genuine new enterprise.
. . .
Your Honour has seen Mr Neesan at all the proceedings of any substance, I think, and
your Honour knows that directors of companies, particularly small companies like
these ones, small private companies - and I say that only in respect to - only in regards
to if you like the fact that it is a small private company as opposed to a limited
company, are usually controlled by their directors. In my submission, that is the
inference that follows here when you take all those circumstances into account, and
you take into account the inconsistencies and the inaccuracies in the statutory
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declarations, your Honour cannot be satisfied that the metro and regional agreements
apply in respect to genuine new enterprises”.14 [Our underlining]
[13] The Deputy President dealt with the question of whether the Agreement related to a
genuine new enterprise at [28] – [34] of the Decision. At [28] – [29] of the Decision, the
Deputy President referred to the judgement of Rares J in National Union of Workers, New
South Wales v HP Distribution Pty Ltd15 and then proceeded with his analysis as follows:
“[30] Although, the facts are much simpler in this case, a practical analysis leads to the
conclusion that this is a genuine new enterprise. The use of different corporate
structures and/or entities should not be a bar, as Rares J found, to the conclusion that
the enterprise is genuinely new if the overall facts indicate that this is the case.
[31] There is no question that the M4 East and new M5 WestConnex is a new project.
The CFMEU was forced to admit that this was the case.
[32] The proposed regional agreement has now been withdrawn. There is, therefore,
no evidence before the Commission that in areas of current dispute the proposed new
agreement could be used as a device to transfer employees covered by other
agreements and employed by other entities.
[33] It is not uncommon or improper for employers in contracting industries, in
particular, to have different corporate entities to be used for different purposes. There
is no evidence that this is not legitimate in this case. I have no reason to doubt the
assurance given that neither Telum Contract Labour Pty Limited nor TCQ Labour Pty
Limited have any employees. Moreover, an undertaking was given that the proposed
agreement would only apply to new projects.
[34] Accordingly, I am satisfied that the Agreement relates to a genuine new enterprise
as provided for in s.172(b).”16
[14] It seems evident from the above that the Deputy President did not expressly engage
with the argument advanced by the CFMEU, nor is it apparent from the Deputy President’s
Decision that he advanced any reasons for rejecting the argument.
[15] However, it does not follow in this case that the evident failure by the Deputy
President to engage with the argument advanced must result in the setting aside of the
Decision.
[16] As earlier indicated, the CFMEU’s criticism of that which it says was a conflicting
description of the genuine new enterprise rested upon the content of the statutory declarations
filed by the AWU and TCQ in support of the AWU’s application to approve the Agreement.
TCQ’s F20 statutory declaration made by its Director, Mr Arthur Neesan, contained inter alia
the following question and answer:
14 Transcript, 25 November 2016 at PN150 – PN171
15 [2013] FCA 139
16 The Australian Workers’ Union [2016] FWCA 9249
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“1.4 Does the agreement cover a genuine new enterprise the employer is
establishing or is proposing to establish?
[X] Yes
[ ] No
If you have answered yes to question 1.4—Please provide details of the genuine new
enterprise that the employer is establishing or proposing to establish.
The commencement of the new civil construction projects in Sydney Metro.”
[17] The AWU’s F21 statutory declaration made by Jamila Gherjestani, a solicitor in the
employ of the AWU, contained, inter alia, the following question and answer:
“5. Please provide details of how the approval of the agreement would be in the
public interest
See section 187(5)(b) of the Fair Work Act 2009
It is in the public interest for the Fair Work Commission to approve this agreement
because:
The Agreement results from co-operation and bargaining in good faith
between the employer and the AWU.
The Agreement will enable the results of bargaining by the AWU on
behalf of the workers who will be employed under its terms to be
available to them from the outset of the Greenfields project, thus ensuring
that the project proceeds in a productive basis, undisrupted by further
bargaining and potential industrial action.
The Agreement will provide terms and conditions of employment more
particularly tailored to the circumstances and requirements of the location
of the work.
The terms of the Agreement provide greater flexibility for the parties,
thereby promoting greater productivity in the development of industrial
infrastructure.
The Agreement will provide, for workers to be employed on the site to
which it relates, a more relevant, more convenient and more accessible
catalogue of terms and conditions of their employment.
The Agreement being in place prior to engagement of employees allows
potential workers the benefit of making informed decisions when
considering the terms and conditions of employment at the relevant site.
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If an agreement is not made, terms and conditions of employment will be
left to an instrument that provides for inferior conditions compared to the
Agreement.
The Agreement enables and assists in representation of employees in
work-related matters because the AWU is a party to the Agreement, thus
providing the workers to be covered by the Agreement a readily
identifiable and effective representative in respect of any grievance or
dispute/s that may arise at the workplace.”
[18] The CFMEU maintained that this material was contradictory and irreconcilable. It said
that the AWU’s statutory declaration set out that the Agreement pertained to the “Greenfields
project”, was tailored to “the location of the work” and related to workers employed on “the
site to which it relates”. These statements were said to stand in contradistinction to the
description of the “new enterprise” that TCQ was establishing or proposing to establish
contained in its statutory declaration which, as disclosed above, was the “commencement of
new civil construction projects”. Moreover, that which was involved in the commencement of
new civil construction projects was not explained. Accordingly, the Deputy President could
not have been satisfied on the basis of the contradictory material that the Agreement related to
a genuine new enterprise. Moreover, the contradictory information should, according to the
CFMEU, be treated with even greater circumspection given the assertions made about the
Agreement in relation to the NES and the Agreement in relation to the better off overall test.
[19] We are not persuaded that the answers to questions given in the statutory declarations
are contradictory or that they cannot be reconciled. Firstly, the answers given in the statutory
declarations to which the CFMEU points are responsive to different questions. The answer in
the AWU statutory declaration is given in response to the request that the employee
organisation that made the Greenfields agreement “provide details of how the approval of the
agreement would be in the public interest”. The declarant is not there being asked to provide
information about the genuine new enterprise in relation to which the agreement is made. The
answers given in one document prepared by one person to a question about public interest
therefore cannot, and should not, fairly be compared to answers given in another document
prepared by another person in answer to a different question.
[20] Secondly, it is not apparent to us that there is any inconsistency or irreconcilable
difference between the two answers. The words or phrases used in the AWU’s statutory
declaration, to which the CFMEU has drawn our attention, are not inconsistent nor
irreconcilable with the description of the genuine new enterprise contained in TCQ’s statutory
declaration. This is particularly the case when TCQ’s answer is understood having regard to
that which we apprehend as not controversial - namely, that TCQ’s business is the provision
of labour to contractors engaged in civil construction on projects in the Sydney metropolitan
area. So understood, the words or phrases “greenfields project”, “the location of the work”
and “the site to which it relates” sit comfortably with the new enterprise that was relevantly
being established by TCQ and which was described in its statutory declaration as “the
commencement of the new civil construction projects in Sydney Metro”.
[21] In our view it follows that, although the Deputy President did not expressly engage
with the CFMEU’s argument or give reasons for its rejection, the omission was not fatal. This
is because we are not persuaded that the descriptions, so called, of the genuine new enterprise
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by the AWU on the one hand and TCQ on the other are conflicting, contradictory or
irreconcilable, and so in our view the issue was not material.
[22] The second limb under this theme relates to the adequacy of reasons given for the
Deputy President’s finding that it was in the public interest to approve Agreement. The
CFMEU contended that the statutory declaration filed by TCQ contained “untrue
information” or “incorrect assertions” about the NES and the better off overall test, which
when combined with the “incongruent statements” about the nature of the new enterprise,
provided a basis for the Deputy President to refuse to approve the Agreement on public
interest grounds.
[23] Although we are here dealing with the CFMEU’s adequacy of reasons ground, it will
be necessary to traverse into areas raised by other appeal grounds with which we also deal
later in this decision.
[24] The Deputy President dealt with the public interest consideration at [40] – [42] of the
Decision as follows:
“Public Interest
[40] Booth C in Abigroup provides a useful summary of the public interest matters to
be considered in dealing with greenfield agreements:
“[55] The use of the public interest test in approval of a Greenfields agreement
can be contrasted to the requirements of agreement making where employees
vote on the agreement following significant consultation. Importing a public
interest test where an agreement can be approved for future employees requires
FWA not only to ensure that the procedural steps are met to approve an
enterprise agreement but that the additional requirements of the public interest
are also considered. . . .
[67] Whether approval of the Agreement is in the public interest is a
discretionary decision, and my judgement of it is informed by consideration of
the following matters.
Approval of the Agreement is consistent with the object of the Act set
out in section 3, especially section 3(f) and the objects of Part 2-4 about
enterprise agreements set out in s.171.
The Agreement is consistent with the Greenfields agreement made for
the other part of the construction with another corporation, minimising
the potential for industrial disputation.
The Agreement provides equal or better terms and conditions that the
relevant modern award and wages are significantly higher than the
award.
It is positively in the public interest for the parties to the Agreement to
eliminate lost time or productivity arising out of disputes or grievances
during the construction under the agreement.
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It is positively in the public interest for the Agreement to be approved
to assist completion of the project within its time and financial targets.
No substantive arguments were raised in opposition to the approval of
the Agreement being in the public interest even though the CFMEU
asserts such.”
[41] This Agreement is made with the union, the AWU, which has uncontested
coverage of the work covered by it. It provides wages and conditions which are well in
excess of that provided in the Award. It is in the public interest for agreements to be
made for construction projects which provide stability of wages and conditions and
completion of projects within time and financial targets.
[42] Accordingly, I am satisfied that approval of the Agreement is in the public
interest.”17
[25] It seems evident from the above that the Deputy President did not expressly engage
with the argument advanced by the CFMEU and there are no apparent reasons given in the
Decision for rejecting the argument. But as we have earlier indicted, it does not follow that
the evident failure by the Deputy President to engage with the argument advanced must result
in the setting aside of the Decision.
[26] We have already set out our views as to the description of the genuine new enterprise
point raised by the CFMEU, which we need not repeat. As to the argument that TCQ’s
statutory declaration contained “untruthful information” or “incorrect assertions” about the
NES and the better off overall test, for the reasons that follow that argument is also rejected.
The NES point
[27] Turning first to the NES point, TCQ’s statutory declaration deals with the
Agreement’s interaction with the NES at questions 2.8- 2.10. Relevantly, the statutory
declaration states that none of the terms of the Agreement exclude in whole or in part the NES
and none of the terms of the Agreement are detrimental to an employee in any respect when
compared to the NES. It appears to be asserted that because the statutory declaration did not
disclose that the Agreement does not contain a provision which deals with community service
leave and that therefore the corresponding NES provision was excluded, the statutory
declaration contained untruthful information or incorrect assertions.
[28] The CFMEU submitted that the Agreement impermissibly excluded the NES insofar
as it provided for an entitlement to be absent for engaging in eligible community service. It
submitted that the expression in s.55(1) of the FW Act “must not exclude” captures
agreements that do not provide (in whole or in part) for benefits stipulated by the NES. The
CFMEU suggested that this last proposition is an application of paragraph [36] of the decision
in Canavan Building Pty Ltd (Canavan).18
17 The Australian Workers’ Union [2016] FWCA 9249
18 [2014] FWCFB 3202
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[29] Canavan stands for the proposition that an agreement may exclude the operation of the
NES in express terms or if in its operation it results in an outcome whereby an employee does
not receive “in full or at all” a benefit provided for by the NES.19 That an agreement makes no
provision for community service leave as provided for in the NES neither results in an express
exclusion nor an exclusion by the operation of the agreement. That an enterprise agreement
need not include any term for which provision is made in the NES is underscored by the
permissive language in s.55(5) of the FW Act. That subsection provides that an enterprise
agreement may include terms that have the same effect (or substantially the same) effect as
provisions of the NES, whether or not ancillary or supplementary terms are included.
[30] The CFMEU further submitted that the Agreement, which does not incorporate the
NES, provides lesser entitlements than those prescribed by the NES in respect of community
service leave. For this proposition it pointed to paragraph [209] of the Explanatory
Memorandum to the Fair Work Bill 2009.20 That paragraph and the one preceding it provide
as follows:
“208. The intent of the NES is that it provides enforceable minimum entitlements for
all eligible employees. This is reflected in subclause 55 (1), which provides that a
modern award or enterprise agreement may not exclude the NES, or any part of it.21
209. This prohibition extends both to statements that purport to exclude the operation
of the NES or a part of it, and to provisions that purport to provide lesser entitlements
than those provided by the NES. For example, a clause in an enterprise agreement that
purported to provide three weeks’ annual leave would be contrary to subclause 55 (1).
Such a clause would be inoperative (clause 56).”22
[31] The paragraphs reproduced above simply do not support a proposition that a failure to
incorporate the NES or a particular NES benefit, in this case community service leave, has the
result for which the CFMEU contends. The first sentence in paragraph [209] reproduced
above is dealt with in Canavan. It does not support a proposition that absence from an
agreement of an NES like entitlement excludes the NES entitlement. The second sentence
provides an example of a reduced NES like entitlement which would be contrary to s.55(1) of
the FW Act. The example does not lend support to the CFMEU’s contention. The mere
absence of a term in the Agreement dealing with community service leave is not on any view
a statement or term of an agreement that purports to provide a lesser benefit than those
provided by the NES. Nor would the mere absence from the Agreement have the effect of
excluding the NES entitlement whereby an eligible employee would not receive in whole or
in part the full entitlement.
[32] In any event, by clause 3 of the Agreement, the relevant modern award (that being the
Building and Construction General On-site Award 2010 (Award)) is wholly incorporated into
the Agreement.23 Clause 40 of that Award provides that “community service leave is provided
for in the NES”.24
19 Ibid
20 Explanatory Memorandum, Fair Work Bill 2009
21 Ibid at [208]
22 Ibid at [209]
23 See Agreement clause 3 (specifically, “Scope and Application”)
24 Building and Construction General On-site Award 2010 at clause [40]
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[33] The CFMEU also pointed to the following matter relating to the interaction between
the Agreement and the NES as a basis for its assertion that the information in TCQ’s statutory
declaration as it relates to the NES was untruthful or incorrect.
[34] Clause 18(b) of the Agreement provides that an employee will not be entitled to
payment for a public holiday in circumstances where the employee has not worked as
required by the employer on an ordinary working day immediately before or immediately
after the public holiday. There is little doubt that this provision has the effect of excluding part
of the NES or at the least, providing for an entitlement which is detrimental compared to the
NES. Although the Deputy President did not deal with the argument advanced by the CFMEU
in his Decision, it is apparent that the he dealt with the NES issue identified. The Deputy
President did so by accepting an undertaking that TCQ would not apply the impugned passage
of clause 18(b) of the Agreement. Therefore, although the information in TCQ’s statutory
declaration was in this respect incorrect, it is apparent that the Deputy President was not
misled. Moreover, it cannot be suggested, nor is there any evidence that the information
contained in the statutory declaration was deliberately incorrect. We do not consider that mere
inadvertence by a declarant in the provision of information in a statutory declaration provides
a proper basis for concluding that it is not in the public interest to approve a greenfields
agreement.
The BOOT point
[35] Turning then to the better off overall test information in TCQ’s statutory declaration
(which the CFMEU said contained incorrect assertions) the CFMEU identified three matters
in relation to which it said the Agreement is less beneficial than the Award.
[36] First, it said that the Agreement does not make provision for a job search entitlement
where an employer has given notice of termination, as provided by clause 16.3 of the Award.
This submission overlooks clause 3 of the Agreement which provides, inter alia, that the
Agreement “wholly incorporates the Building and Construction General On-Site Award
2010”.25
[37] Secondly, the CFMEU pointed to the fact that the spread of ordinary hours provisions
under the Agreement are greater by one hour (6:00 am compared to 7:00 am) when compared
to the Award. This is doubtless a detriment and should have been identified in TCQ’s
statutory declaration. But again it cannot be suggested, nor is there any evidence that, the
omission was deliberate. Moreover, on a proper application of the better off overall test in
relation to the Agreement, it is a detriment that would not result in the Agreement not passing
the test.
[38] Thirdly, the CFMEU pointed to a lesser shift allowance being payable under the
Agreement because of the utilisation of alternative times for shifts under clause 14.2 of the
Agreement compared to clause 34 of the Award. This is doubtless a detriment and should
have been identified in TCQ’s statutory declaration. However the argument ignores the
impact of the substantially higher hourly rates provided for in the Agreement compared to the
Award, and shows the flaws in conducting a line by line assessment in determining whether
an agreement passes the better off overall test. The minimum hourly rates of pay under the
25 See Agreement clause 3 (specifically, “Scope and Application”)
[2017] FWCFB 2296
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Agreement are between 17% and 32% higher when compared to the corresponding minimum
hourly rates in the Award. It is one thing to point to a detriment, it is another to make an
assessment as to whether the identified detriment has the result that the Agreement does not
pass the better off overall test, taking into account the overall benefits provided for in the
Agreement when compared to the Award.
[39] It is difficult therefore to discern any basis for concluding that the information in
TCQ’s statutory declaration, as it relates to the better off overall test, although incorrect in the
two respects noted above, was deliberately so. Although a person making a declaration in
support of the approval of an enterprise agreement must take care to ensure that the
information provided is accurate and truthful, it is not uncommon for such declarations to
contain inaccurate or incomplete information. That statutory declarations filed in support of
agreement approval applications may frequently contain inaccurate or incomplete information
is a matter to which the Deputy President was alive, as is evident from the following extract
from the transcript:
“. . . I mean the other point I would make, Mr Boncardo, is that I accept what you say,
of statutory declaration, although dealing with these agreements over a few years until
the last six months or so, you know, very often these documents are filled in with not
as much precision as you would like. That applies to both employers and the
unions”.26
[40] Ultimately in our view, the Agreement passed the better off overall test. Moreover the
CFMEU did not challenge on appeal the Deputy President’s conclusion that the Agreement
passed the better off overall test.
[41] It follows therefore that, although the Deputy President did not expressly engage with
the CFMEU’s argument nor give reasons for its rejection, the omission is not in our view fatal
because we are not persuaded that the information in TCQ’s statutory declaration as it related
to the better off overall test was deliberately untruthful or incorrect, and in any event it is not
suggested that the Agreement did not pass the better off overall test. Moreover, as is clear
from the above transcript extract, the Deputy President accepted that there were inaccuracies
in the statutory declaration lodged with the application. As we have earlier indicated,
inadvertent inaccuracies in TCQ’s statutory declarations without more would not provide a
basis for doubting that it was in the public interest to approve the Agreement.
Failure to take account of relevant considerations
[42] Under this theme the CFMEU contended that the Deputy President did not consider
the inherent inconsistent evidence contained in the statutory declarations to which earlier
reference has been made. It maintained that the contradictory evidence was incapable of
rationalisation and that the Deputy President was obliged to take it into account when
assessing whether he was satisfied that there was a new enterprise and that it was a genuine
one.
[43] For the reasons given earlier we are not persuaded that there is any inconsistency in
the statutory declarations. As we have already pointed out, the answers which the CFMEU
highlight are responsive to different questions. In any event, for the reasons earlier given, the
26 Transcript, 25 November 2016 at PN149
[2017] FWCFB 2296
14
answers to which reference is made are readily reconcilable. It follows that this matter was
not a material consideration that the Deputy President was required to take into account.
[44] The second aspect to which this theme relates, namely, the information contained in
TCQ’s statutory declaration about the interaction between the Agreement and the NES and
about the better off overall test is also rejected.
[45] For the reasons given above, the first matter concerning the NES (community service
leave) is simply not made out. The second matter concerning public holidays was plainly
taken into account by the Deputy President as he accepted an undertaking dealing specifically
with it. Moreover as we have earlier observed, the Deputy President was alive to the issue that
statutory declarations filed in support of agreement approval applications might not always
contain accurate or sufficient information.
[46] It follows that no error in this regard has been established.
[47] Turning to the absence of information about the detrimental provisions in the
Agreement compared to the Award, as we have already observed, the first identified detriment
is simply not made out. The second and third identified detriments should have been
disclosed, but in no material way can it be said that those detriments could have affected the
outcome of the better off overall test assessment. Moreover, it is not the case that the Deputy
President did not take into account these inaccuracies. As we have observed he was alive to
the issue generally, and the CFMEU pointed out these matters specifically. It appears to us
that in the context of an agreement clearly passing the better off overall test, the Deputy
President gave these inaccuracies little or no weight, as he was entitled to do.
[48] It follows that no error in this regard has been established.
Genuine new enterprise
[49] Under this theme, the CFMEU contended that the Deputy President was wrong to
conclude, in light of the inherently contradictory evidence filed by the AWU and TCQ, that
the Agreement related to a genuine new enterprise. It said that the conclusion was simply not
open on the measly and defective evidence.
[50] As we have already stated, we do not accept that the material in the statutory
declarations filed by the AWU and TCQ was contradictory.
[51] Apart from the material in the statutory declarations, the Deputy President had before
him the uncontradicted submission of counsel for TCQ that TCQ was setting up a business
with the ability to tender for projects within the Sydney metropolitan area.27 From the terms
of the Agreement the Deputy President will have known that the work relevant to the projects
was civil construction work. And it seems uncontroversial that the reference to tender for
projects is a reference to TCQ tendering for contracts for the supply of labour. Moreover, the
CFMEU did not put on a positive case that TCQ was not establishing a genuine new
enterprise.
27 Transcript, 25 November 2016 at PN91
[2017] FWCFB 2296
15
[52] We are not persuaded that the Deputy President erred in the manner contended by the
CFMEU and we consider that there was sufficient material before the Deputy President from
which he could be satisfied that the Agreement related to a genuine new enterprise.
Exclusion of the NES
[53] Under this theme the CFMEU pointed to the absence of any provision in the
Agreement concerning an entitlement to community service leave. As we have already
pointed out, the Agreement incorporates the Award and clause 40 of that Award provides that
community service leave is provided for in the NES. For the reasons earlier given we do not
accept that the Agreement excluded the NES in relation to community service leave.
Undertakings
[54] Under this theme the CFMEU contended that the undertakings accepted by the Deputy
President in paragraphs numbered 1 and 6 were not undertakings that were capable of
acceptance.
[55] Section 190 of the FW Act allows for an agreement to be approved with undertakings.
It provides:
“190 FWC may approve an enterprise agreement with undertakings
Application of this section
(1) This section applies if:
(a) an application for the approval of an enterprise agreement has been
made under section 185; and
(b) the FWC has a concern that the agreement does not meet the
requirements set out in sections 186 and 187.
Approval of agreement with undertakings
(2) The FWC may approve the agreement under section 186 if the FWC is
satisfied that an undertaking accepted by the FWC under subsection (3) of this section
meets the concern.
Undertakings
(3) The FWC may only accept a written undertaking from one or more employers
covered by the agreement if the FWC is satisfied that the effect of accepting the
undertaking is not likely to:
(a) cause financial detriment to any employee covered by the agreement;
or
(b) result in substantial changes to the agreement.
[2017] FWCFB 2296
16
FWC must seek views of bargaining representatives
(4) The FWC must not accept an undertaking under subsection (3) unless the FWC
has sought the views of each person who the FWC knows is a bargaining
representative for the agreement.
Signature requirements
(5) The undertaking must meet any requirements relating to the signing of
undertakings that are prescribed by the regulations.”
[56] Section 191(1) of the FW Act identifies the legal effect of an undertaking given in
relation to a single-employer enterprise agreement as follows:
(1) If:
(a) the FWC approves an enterprise agreement after accepting an undertaking
under subsection 190(3) in relation to the agreement; and
(b) the agreement covers a single employer;
the undertaking is taken to be a term of the agreement, as the agreement applies to the
employer.
[57] As is apparent from the above, the power to approve an agreement with undertakings
is enlivened only if the Commission has a concern that an agreement does not meet the
requirements set out in ss.186 and 187 of the FW Act. The concerns must relate to the
requirements of those sections.
[58] The two paragraphs of the undertaking with which issue is taken are expressed as
follows:
“1.Coverage – the Agreement is only to apply to new projects.
…
6.No employee, at the time of certification working under the Telum Civil Projects
(NSW) Pty Limited/AWU NorthConnex Project Civil Construction Greenfields
Agreement 2015 can work under this Agreement without their consent.” 28
[59] In relation to the first paragraph, the CFMEU contended that the concern to which this
undertaking related was not dealt with anywhere in the Decision. This contention appeared to
flow from the CFMEU’s argument that the Agreement did not apply to a genuine new
enterprise as required by s.172(2)(b) of the FW Act. To the extent that the undertaking
addressed that issue, it was not a concern that the Agreement did not meet the requirements
28 [2016] FWCA 9249 at Annexure A
[2017] FWCFB 2296
17
set out in ss.186 or 187 of the FW Act.29 The acceptance of the undertaking, it was said, was
therefore beyond power.
[60] TCQ submitted that the undertaking dealt with a concern about whether it was in the
public interest to approve the Agreement and as such was a concern about whether the
agreement met the requirement in s. 187(5)(b).
[61] The Deputy President dealt with this paragraph of the undertaking in the Decision as
follows:30
“[33] It is not uncommon or improper for employers in contracting industries, in
particular, to have different corporate entities to be used for different purposes. There
is no evidence that this is not legitimate in this case. I have no reason to doubt the
assurance given that neither Telum Contract Labour Pty Limited nor TCQ Labour Pty
Limited have any employees. Moreover, an undertaking was given that the proposed
agreement would only apply to new projects.
[34] Accordingly, I am satisfied that the Agreement relates to a genuine new enterprise
as provided for in s.172(b)”.
[62] It is not apparent on the face of the Decision that the Deputy President expressed any
particular concern about the Agreement not meeting the requirements in either ss.186 or 187
of the FW Act to which the undertaking at issue was responsive. This in and of itself is not
fatal.
[63] As a Full Bench of the Commission recently observed in Shop, Distributive and Allied
Employees Association v Beechworth Bakery Employee Co Pty Ltd:31
“. . . Raising or identifying a concern that an agreement does not meet the requirements
set out in ss.186 and 187 of the FW Act need not only be raised in the decision dealing
with an application to approve an agreement. Such a concern may be expressed by a
Member dealing with an application during the conduct of a hearing or through an
exchange of correspondence while an application for approval of an enterprise
agreement is being considered. Indeed, this will usually be the case. To raise a concern
only in the final decision determining an application would deprive an applicant of the
opportunity to proffer an undertaking, thereby leading to the real possibility of
error”.32
[64] In the instant case, the transcript discloses33 that at the conclusion of the hearing the
Deputy President adjourned into conference with TCQ and the AWU. The issue of
undertakings was discussed. The Deputy President’s concerns might well have been raised
during the conference. There is no record of the conference but the undertakings ultimately
accepted by the Deputy President were given after the conference on 5 December 2016. We
29 Ibid at [26]
30 [2016] FWCA 9249
31 [2017] FWCFB 1664
32 Ibid at [30]
33 Transcript, 25 November 2016 at PN273 – PN280
[2017] FWCFB 2296
18
therefore do not know whether the Deputy President raised a concern, or if he did, whether
the concern related to the requirements in ss.186 or 187 of the FW Act.
[65] We do not accept TCQ’s submission that the undertaking dealt with a concern about
whether it was in the public interest to approve the Agreement, a requirement in s.187(5)(b) of
the FW Act. That submission is plainly contrary to the Deputy President’s dealing with that
undertaking in the context of his discussion about whether the Agreement related to a genuine
new enterprise and his satisfaction concerning that issue after taking into account the
undertaking given. Plainly, the undertaking was accepted by the Deputy President to assuage
any suggestion that the Agreement did not relate to a genuine new enterprise.
[66] It follows that the undertaking was not one capable of being accepted by the Deputy
President under s.190 of the FW Act.
[67] Although not argued, it might be suggested that in accepting an undertaking which
appears to deal with concerns about a genuine new enterprise, the Deputy President took into
account an irrelevant consideration. However, when the passages from the Decision
reproduced earlier are read in context, we think that it is clear that the Deputy President was
already satisfied that the Agreement related to a genuine new enterprise. The reference to the
undertaking was in the manner of “belts and braces” rather than material.
[68] As to paragraph 6 of the undertaking at issue, the CFMEU contended that the terms of
the undertaking were ambiguous, nonsensical and uncertain. In addition, it contended that the
undertaking was not responsive to any concern that the Agreement did not meet the
requirements of ss.186 or 187 of the FW Act, and its acceptance by the Deputy President was
beyond power.
[69] There is no identified concern raised by the Deputy President in the Decision to which
this paragraph of the undertaking is responsive. As we have already indicated, by itself that is
not fatal. In considering whether an undertaking should be accepted as satisfying a concern
that an agreement does not meet one or more of the requirements in ss.186 and 187 of the FW
Act, it is necessary to analyse the undertaking so as to ensure that it is expressed in a way
which will allow it to be enforced as a term of the agreement. An undertaking that is
uncertain, ambiguous, aspirational or perhaps conditional in its expression, with the result that
it will not create an enforceable entitlement as a term of the agreement, is unlikely to meet the
concern that an agreement does not meet the requirements in ss.186 or 187 of the FW Act.34
[70] We consider that there are a number of difficulties with paragraph 6 of the
undertaking. First, it seems to apply to persons who are not covered by the Agreement and to
whom the Agreement does not apply. The undertaking applies to persons who are employees
of another entity. Secondly, the undertaking is circular in that it is difficult to see how an
employee employed by another entity could commence employment with TCQ and perform
work under the Agreement, without that employee’s consent. Thirdly, it is difficult to see by
what authority TCQ could give an undertaking in respect of the treatment of persons who are
not its employees and not covered by the Agreement. Finally, it is not evident on the face of
the undertaking nor the Decision the particular concern that the Agreement does not meet the
requirements of ss. 186 or 187 of the FW Act to which the undertaking is responsive.
34 CEPU and AMWU v Main People Pty Ltd [2015] FWCFB 4467 at [38]; Shop, Distributive and Allied Employees
Association v Beechworth Bakery Employee Co Pty Ltd [2017] FWCFB 1664 at [44]
[2017] FWCFB 2296
19
[71] For these reasons we uphold the CFMEU grounds of appeal concerning these
paragraphs of the undertaking.
Disposition
[72] As is apparent from our reasons above we have concluded that the CFMEU has made
good its ground of appeal concerning the undertaking. We are persuaded that permission to
appeal should be granted because error in the Decision has been established and the nature of
the error identified raises for consideration the proper administration of the Commission’s
power to accept undertakings during the agreement approval process. The erroneous
acceptance of the impugned paragraphs of the undertaking is jurisdictional in nature in that a
precondition to the exercise of power to accept an undertaking had not been met.
[73] For the reasons given we would uphold the appeal on that ground.
[74] However, given the nature of the error identified, we do not consider that we need to
set aside the Decision to approve the Agreement. Section 607 of the FW Act relevantly
provides that the Commission may in relation to an appeal, vary the Decision.
[75] As paragraphs 1 and 6 of the undertaking were not capable of being accepted because
they did not respond to any concern that the Agreement did not meet any particular
requirement in ss.186 or 187 of the FW Act, removal of those paragraphs from the
undertaking will not have a bearing on the validity of the decision to approve the Agreement
together with paragraphs 2 to 5 of the undertaking. We therefore propose to exercise our
power to vary the Decision by removing the impugned paragraphs from the undertaking.
Order
[76] We order that:
(a) permission to appeal is granted;
(b) the appeal is upheld on the ground identified in paragraph 7 of the grounds of appeal
in the amended notice of appeal; and
(c) the decision in [2016] FWCA 9249 is varied by deleting from the undertaking set out
in Annexure A thereof the paragraphs numbered 1 and 6.
VICE PRESIDENT
Appearances:
Mr R Reitano, Counsel for the CFMEU.
OF THE FAIR WORK MISSION THE
[2017] FWCFB 2296
20
Mr S Crawford, Solicitor for the AWU.
Mr B Cross, Counsel for TCQ Labour Pty Limited.
Hearing details:
2017.
Melbourne:
24 February.
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