1
Fair Work Act 2009
s.604 - Appeal of decisions
BGC Contracting Pty Ltd
v
Automotive, Food, Metals, Engineering, Printing and Kindred Industries
Union, Australian Workers’ Union & Construction, Forestry, Mining and
Energy Union
(C2017/1513)
VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT CLANCY
COMMISSIONER JOHNS
SYDNEY, 5 JULY 2017
Appeal against decision [2017] FWC 852 of Deputy President Binet at Perth on 28 February
2017 in matter number AG2016/3592.
[1] On 28 February 2017, Deputy President Binet issued a Decision,1 which found that the
Mining Enterprise Agreement 2016 (“the Proposed Agreement”) was not genuinely agreed to
by the employees covered by the Proposed Agreement in accordance with section 186(2)(a) of
the Fair Work Act 2009 (Cth) (“the Act”) and/or that the Proposed Agreement passed the
Better Off Overall Test (“BOOT”) as required by section 186(2)(d) and/or that its deficiencies
could be corrected by undertakings. As such, the Deputy President dismissed BGC
Contracting Pty Ltd’s (“the Appellant”) application for approval of the Proposed Agreement.
[2] On 21 March 2017, the Appellant lodged a Notice of Appeal, appealing the Decision
of Deputy President Binet. The Appellant subsequently lodged an amended Notice of Appeal
on 15 May 2017 and a further amended Notice of Appeal on 16 May 2017. We heard the
appeal on 16 May 2017 and reserved our Decision. At the hearing, Mr R. Dalton, of Counsel,
and Mr A. Pollock, of Counsel, appeared for the Appellant and Mr R. Reitano, of Counsel,
appeared for the AMWU, the AWU and the CFMEU (“the Respondents”). Given the
complexity of the matter and having regard to section 596 of the Act, permission was granted
to both parties to be represented.
The Decision at First Instance
[3] In relation to section 186(2)(a) of the Act, the Deputy President found that the
Proposed Agreement was not genuinely agreed to by the employees covered by the Proposed
Agreement. Further, in relation to section 180(2) of the Act, the Deputy President was not
satisfied that the Appellant took all reasonable steps to comply with its obligations to ensure
1 [2017] FWC 852.
[2017] FWCFB 2741
DECISION
E AUSTRALIA FairWork Commission
[2017] FWCFB 2741
2
that during the access period the employees were given a copy of, or given access to,
materials incorporated by reference into the Proposed Agreement. Additionally, the Deputy
President was satisfied there were reasonable grounds for concluding that the Appellant acted
in breach of section 180(5) of the Act in that it did not take all reasonable steps in the
circumstances to ensure that the effect of the terms of the Proposed Agreement were
explained to employees in an appropriate manner.
[4] We summarise the Deputy President’s findings in relation to section 188(c) of the Act
as follows.
[5] The Deputy President held she was not satisfied that the employees had a sufficient
“stake” in the Proposed Agreement to give the necessary “authenticity” to their approval of
the Proposed Agreement. Further, the Deputy President held that employees did not have
sufficient knowledge or experience of the black coal industry to be in a position to genuinely
agree to provisions of the Proposed Agreement which are intended to apply to coal mining.
Moreover, the Deputy President found that the Proposed Agreement contained provisions that
were so uncertain or confusing that employees could not have understood the provisions and,
therefore, could not have genuinely agreed to them. Additionally, the Deputy President found
the Appellant breached the good faith bargaining obligations and this conduct caused
employees to approve the Proposed Agreement without genuinely agreeing to its terms.
Finally, the Deputy President held she was not satisfied that the Appellant circumvented the
objects of the Act in relation to collective bargaining.
[6] For the above reasons, the Deputy President dismissed the Appellant’s application for
approval of the Proposed Agreement.
The Appeal
[7] At the heart of the appeal is whether the Deputy President correctly applied and
construed the various sections of the Act in dismissing the application for approval of the
Proposed Agreement.
Appellant’s Submissions
[8] The Appellant outlined four main grounds of appeal, which we summarise as follows.
[9] First, the Appellant contended the Commission could be satisfied it had met the
requirement in section 180(2)(b) to the extent that either of the relevant awards were
incorporated into the Proposed Agreement, as the awards were publicly available documents.
In rejecting this contention, the Appellant asserted the Deputy President erred as follows:
1. The Appellant’s contention was consistent with the analysis in Re McDonald’s
Australia Pty Ltd2 (hereafter “McDonald’s”) and there were no particular
characteristics of the workforce that justified a departure from McDonald’s;
2. The Deputy President mistook a material fact when she found that the task of locating
the reference awards via the links in the reference document was “not
straightforward”; and
2 (2010) 196 IR 155.
[2017] FWCFB 2741
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3. The Deputy President mistook the nature of the “all reasonable steps” inquiry in
section 180(2).
[10] Second, the Appellant contended the Deputy President erred in three ways in finding
that there were “reasonable grounds for concluding” that the Appellant did not take all
reasonable steps to ensure that the effect of the Proposed Agreement’s terms were explained
to employees in an appropriate manner as required by section 180(5) of the Act. These were
said to be:
1. In expressing her satisfaction by reference to “reasonable grounds for concluding”, the
Deputy President did not form a satisfaction as to whether the Appellant had met the
requirement in section 180(5) of the Act;
2. In finding that particular terms within the Proposed Agreement were uncertain, the
Deputy President directed herself to an extraneous issue not relevant to the steps taken
by the Appellant; and
3. The reasoning of the Deputy President is premised upon a misplaced assumption that
an employer has an obligation under section 180(5) of the Act to identify and explain
to employees any detriments in an enterprise agreement, as compared to the reference
award when the text of the section requires an explanation of the meaning and effect
of the terms themselves. In importing this BOOT type analysis into section 180(5), the
Deputy President took into account an irrelevant consideration.
[11] Third, the Appellant submitted that the Commissioner erred in various aspects in
relation her findings regarding section 188(c) of the Act. In particular, the Appellant
contended that the Commissioner erred by finding that employees did not have a “sufficient
stake” in the Proposed Agreement and that employees did not have “sufficient knowledge or
experience of the black coal mining industry to be in a position to genuinely agree to
provisions of the Proposed Agreement which are intended to apply to black coal mining.” The
Appellant outlined three errors in relation to these findings, which were, in broad terms:
1. The Deputy President misconstrued and elevated the analysis in KCL Industries Ltd3
(hereafter “KCL”) to a “decision rule” to be applied to section 188(c) of the Act;
2. The Deputy President misdirected herself to individual terms of the Proposed
Agreement, whereas section 188(c) is directed to the entire Agreement; and
3. To the extent that KCL stands for the proposition that lack of a “sufficient stake” in a
proposed agreement, and/or lack of “sufficient knowledge or experience” about other
work covered by the proposed agreement is a reasonable ground for believing that the
agreement was not genuinely agreed to for section 188(c) purposes, then it is plainly
wrong and should not be followed.
[12] The Appellant also noted the Deputy President’s finding that the effect of particular
terms impugned by the unions was “so confusing and/or uncertain that the Appellant could
not have explained to the employees in an appropriate manner the effect of those terms.” In
3 [2016] FWCFB 3048.
[2017] FWCFB 2741
4
relation to this finding, the Appellant stipulated three examples in which the Deputy President
erred:
1. The Deputy President asked herself the wrong question regarding the inquiry required
by section 188(c) of the Act;
2. The Deputy President construed the Proposed Agreement by reference to assumed
subjective understandings and beliefs of employees; and
3. The Deputy President failed to take into account the “vote no” campaign.
[13] Further, the Appellant posited that, in finding the impugned statements were
misleading and concluding this constituted a reasonable ground for believing that the
Proposed Agreement was not genuinely agreed, the Deputy President erred in accordance
with House v The King4 in two ways:
1. The finding with respect to each of the impugned statements adopts a strained
interpretation of the words used and fails to take proper account of the context in
which the statements were made; and
2. The Deputy President did not address how those misleading statements impacted upon
her assessment of whether there were reasonable grounds for believing that the
Proposed Agreement was not genuinely agreed.
[14] The Appellant also contended the Deputy President’s finding that employees were
“intimidated” into approving the Proposed Agreement and, therefore, did not genuinely agree
to its terms cannot be accepted for three reasons, which included that this was not a live
ground of objection by the time the Deputy President received final submissions.
Additionally, the Appellant submitted the Deputy President’s finding that the Appellant
bargained in a manner that led employees to approve the Proposed Agreement without
genuinely agreeing to its terms could not stand for four reasons, which also included that it
was not being pressed by the Respondents in final submissions.
[15] Fourth, the Appellant asserted that the Deputy President failed to allow the Appellant
an opportunity to provide undertakings that specifically addressed her BOOT findings, despite
the fact that this was the course expressly contemplated by the parties. Moreover, in failing to
allow the Appellant to provide undertakings that addressed the BOOT findings and in
concluding that she was not satisfied that the undertakings “address all the financial and non-
financial detriments”, the Appellant submitted the Deputy President applied the wrong test.
[16] By its Amended Notice of Appeal dated 15 May 2017 and further amended Notice of
Appeal dated 16 May 2017, the Appellant pressed additional grounds of appeal relating to
procedural fairness, which we outline below at [40] – [42].
[17] For the above reasons, together with reasons related to the additional grounds relating
to procedural fairness, the Appellant contended that the Deputy President’s Decision is
affected by appealable error. As such, the Appellant submitted that permission to appeal
should be granted, the appeal should be upheld and the Decision quashed.
4 (1936) 55 CLR 499.
[2017] FWCFB 2741
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Respondents’ Submissions
[18] The Respondents noted the Appellant’s assertion that the Deputy President departed
from the “reasonable assumption” that all of its employees had ready access to computers and
mobile phones. In this regard, the Respondents contended the Deputy President was well
within the bounds of reason in holding that she could not be satisfied about that “material
fact”. Further, the Appellant noted the proposition in McDonald’s that, because something is a
“law of the land” and accessible via the internet means an employer need take no action to
discharge its obligation under section 180(2), is not universally true and probably wrong.5
[19] Further, the Respondents contended the Deputy President’s finding that requiring
employees to type in the hyperlink to the Commission’s modern award page and locate
relevant awards and award clauses was not straightforward. In this regard, the Respondent
asserted this finding was open where the only step the Appellant took to ensure its blue-collar
employees had access to the Coal Award (an Award relating to an industry in which the
appellant performed no work) was a piece of paper with a hyperlink on it.
[20] Additionally, the Respondents asserted the Deputy President correctly identified that
she needed to be satisfied that the Appellant had taken all reasonable steps to ensure its
employees had access to the Coal Award during the access period, as the Appellant had not
given employees the written text of the Coal Award. Moreover, the Respondents submitted
the Deputy President correctly recounted that the employees were blue-collar workers without
ready access on site to computers and that the Appellant had proffered no evidence of its
employees’ capacity to access material online. They submitted that, given the state of the
evidence, it was unremarkable that the Deputy President was not satisfied why it was not
reasonable for the Appellant to have done more than simply provide employees a link to the
Commission’s website on a piece of paper.6
[21] Additionally, the Respondents contended the Deputy President correctly understood
the obligation imposed on employers by section 180(5) of the Act to take all reasonable steps
to explain the terms of an agreement and their effect7 and she correctly directed herself to the
analysis of Deputy President Asbury in Falcon Mining Pty Ltd8 about matters that bear on the
extent of the obligation to take all reasonable steps.9 Further, the Respondents contended that
the Appellant’s complaint concerning the Deputy President’s findings on uncertain terms of
the Proposed Agreement is misguided.
[22] Moreover, the Respondents submitted that the Appellant took no steps whatsoever to
explain the effect of the Proposed Agreement vis-à-vis the reference awards. In this regard,
the Respondents asserted that employees could not have understood the effect of the Proposed
Agreement without being informed about detrimental terms it contained compared to the
Awards. In these circumstances, the Respondents posited that a finding that it did not take all
reasonable steps to explain the terms of the Proposed Agreement and their effect was again
both open and correct.
5 Construction, Forestry, Mining and Energy Union v Sparta Mining [2016] FWCFB 7057, [22].
6 [2017] FWC 852, [59]; [2016] FWCFB 7057, [23].
7 [2017] FWC 852, [61].
8 [2016] FWC 5315.
9 [2017] FWC 852, [69]-[77].
[2017] FWCFB 2741
6
[23] The Respondents also contended that the conclusion by the Deputy President that the
Proposed Agreement would have little or no relevant to, or impact on, the employees who
voted for it and that these employees had little stake in its approval was entirely
unexceptional. In this regard, the Respondents asserted that the people who voted on the
Proposed Agreement were not genuinely agreeing to anything with which the Proposed
Agreement was concerned. Moreover, the Respondents submitted that a genuine agreement
would be made by people who had some stake in that agreement by way of making gains or
incurring obligations, however, neither element was present. As such, the Respondents
posited that the Deputy President’s conclusion that the Proposed Agreement had not been
genuinely agreed was ineluctable.
[24] Additionally, the Respondents contended the Deputy President correctly observed that
no evidence was adduced by the Appellant to satisfy the Commission that its employees had
knowledge or experience in the black coal mining industry, so as to be able to give informed
consent to the rates and conditions prescribed by the agreement for that industry. As such, the
Respondents submitted that no appealable error is demonstrated in the conclusion of the
Deputy President that the employees who voted on the Proposed Agreement gave their
informed consent to provisions concerning an industry in which they did not work.
[25] The Respondents posited that the Appellant suggested that KCL should be overturned
if it stands for a decision rule (perhaps principle) that agreements roping in industries in which
an employer does not operate or which contain rates that are not to apply to the employees
who voted on the agreement can never be genuinely agreed. The Respondents asserted this
submission fails because KCL prescribes no decision rule or principle at all. Rather, that it
simply lays down a number of factors that could, in the circumstances of a particular case,
result in the Commission determining there are reasonable grounds for a belief that an
agreement was not genuinely agreed. Thus, the Respondents submitted that none of the
grounds relied on by the Appellant compel the conclusion that the reasoning in KCL is
incorrect and should be overruled.
[26] The Respondents contended that it was open to the Deputy President to find that
employees could not genuinely agree to the Proposed Agreement in circumstances where they
did not know and could not have known the rates of pay that were to apply to coal mining
employees under the Proposed Agreement.
[27] In relation to the Appellant’s contention that the impugned statements were
misleading, the Respondents asserted that the findings at [149] and [153] of the Decision are
self-evidently correct. In this regard, the Respondents suggested the Appellant’s contention
that the Deputy President gave the words a “strained interpretation” is curious because the
words were given their ordinary grammatical meaning and were to be read as any reasonable
person would read them.
[28] In relation to the Deputy President’s finding that the Appellant breached its good faith
bargaining obligations, the Respondents submitted that the reasons given by the Deputy
President for her findings in this regard were correct and that the matters raised by the
Appellant would appear to be no more than an attempt to have an appeal bench arrive at a
different conclusion.
[2017] FWCFB 2741
7
[29] The Respondents contended the Deputy President addressed the issue of whether the
Commission should accept undertakings and referred to the decision in Re AKN Pty Ltd.10
The Respondents submitted the Deputy President identified the correct test, namely, whether
the acceptance of any undertakings so as to allow the Agreement to pass the BOOT would
result in a substantial change to the Agreement. In the circumstances of the Proposed
Agreement, the Respondents noted the Deputy President concluded that the sheer number of
undertakings needed meant that substantial changes would result. The Respondents asserted
that the decision to permit an applicant for approval to remedy deficiencies in an agreement
is, in any event, discretionary and there was no error disclosed by the refusal to exercise any
discretion in favour of the Appellant.
[30] For the above reasons, and on the basis there is nothing in the public interest in this
matter that warrants granting permission to appeal, the Respondents contended permission to
appeal should be refused and the appeal should be dismissed.
Consideration – Permission to Appeal
[31] The Commission will grant permission to appeal if it is in the public interest to do
so.11 The test of assessing whether a matter is in the public interest is discretionary and
involves a broad value judgement.12 In GlaxoSmithKline Australia Pty Ltd v Colin Makin,13
the Full Bench summarised the test for determining the public interest as follows:
“[26] Appeals have lain on the ground that it is in the public interest that leave should
be granted in the predecessors to the Act for decades. It has not been considered useful
or appropriate to define the concept in other than the most general terms and we do not
intend to do so. The expression ‘in the public interest’, when used in a statute,
classically imports a discretionary value judgment to be made by reference to
undefined factual matters, confined only by the objects of the legislation in question.
[Comalco v O’Connor (1995) 131 AR 657 at p.681 per Wilcox CJ & Keely J, citing
O’Sullivan v Farrer (1989) 168 CLR 210]
[27] Although the public interest might be attracted where a matter raises issues of
importance and general application, or where there is a diversity of decisions at first
instance so that guidance from an appellate court is required, or where the decision at
first instance manifests an injustice, or the result is counter intuitive, or that the legal
principles applied appear disharmonious when compared with other recent decisions
dealing with similar matters, it seems to us that none of those elements is present in
this case.”
[32] Alternately, the second ground for granting permission to appeal is that the decision is
attended with sufficient doubt to warrant its reconsideration or that substantial injustice may
result if leave is refused.14
10 [2015] FWCFB 1833.
11 Fair Work Act 2009 (Cth) s 604(2).
12 Esso Australia Pty Ltd v AMWU; CEPU; AWU [2015] FWCFB 210, [6].
13 [2010] FWAFB 5343, [27].
14 Esso Australia Pty Ltd v AMWU; CEPU; AWU [2015] FWCFB 210, [7].
[2017] FWCFB 2741
8
[33] In determining whether permission to appeal should be granted, we have reviewed and
considered all material filed by the parties including all submissions, correspondence and
relevant authorities.
[34] We find that permission to appeal should be granted in this matter. We are of the view
that the appeal raises important questions concerning section 186 of the Act in circumstances
where the Deputy President’s discretion to determine whether the Proposed Agreement passed
the BOOT is an issue in the dispute. We consider this to be an important matter regarding the
Deputy President’s approach in making such a determination and, therefore, the dispute
arising in this case is a matter of public interest. It is on this basis that permission to appeal is
granted.
Consideration – The Appeal
[35] We note the following extract from transcript dated 19 October 2016 at PN113-130:
“MR FLETCHER: … So I wanted to address is do you expect an undertaking to be
made at the completion of the objector's case, or should we provide an undertaking
post haste based on being put on notice? I mean I appreciate that we have been given a
document which I haven't had a chance to review in detail at this stage which has got
what appear to be three further alleged better off overall test issues. My question,
Deputy President, is do we need to - if we are going to respond with an undertaking -
do we need to do it mid-hearing or is it appropriate to give it, after having considered
what the objectors have to say, and prior to putting our case? Or can we put it at the
end of our case, having heard a preliminary view from you?
THE DEPUTY PRESIDENT: I'll give you my preliminary view and then you can - it
might save you having to speak.
MR BONCARDO: I think that's exactly - yes. Yes.
THE DEPUTY PRESIDENT: What I think makes sense is that you make it after the
applicants have finished putting their case so that you can address - endeavour to
address any things that they now - that they continue to press or that aren't resolved as
a result of their witness evidence but you do it before you put your case so that they
have an opportunity to make any submissions at the end of your - at the final end of
the hearing - if they say it doesn't address - still doesn't address - - -
MR BONCARDO: Your Honour, can I just say something about that?
THE DEPUTY PRESIDENT: Yes.
MR BONCARDO: I think jurisdictionally your Honour needs to form the view that an
agreement does not satisfy the boot test. Only then does the capacity arise for an
employer to give undertakings. So far as we are concerned it seems to us that your
Honour ought hear all the evidence and all the submissions, make a determination and
if your Honour is of the view that the agreement does not pass the boot test and it is
open to you to request undertakings then and for my friend to put undertakings for
then it seems to me that my friend's boxing at shadows and providing undertakings - -
-
[2017] FWCFB 2741
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MR FLETCHER: I'm happy to agree that I'm boxing at shadows and it's out of an
abundance of caution and if the course of action that Mr Boncardo is proposing - if the
deputy President - if you're happy with that deputy President then I don't have any
objection. I just don't want to fall foul of some procedural - I'm extremely sensitive
about - in light of some of the decisions on unrelated issues such as notices of
employee representational rights I'm extremely sensitive about making sure that I do
not miss the opportunity. But if what Mr Boncardo is proposing is that you hear
everything, you decide that there is a better off overall test issue and then we be
given an opportunity to satisfy that with an undertaking then I don't have any
objection to that approach.
MR BONCARDO: Your Honour I have no intention of being kind or charitable to my
friend. I'm simply - I'm basing my proposition on section 190(1) of the Fair Work Act
which requires explicitly that your Honour needs to have a concern that an agreement
doesn't meet the boot test prior to approving it or not approving it with undertakings
and therefore seeking undertakings firstly from the applicant employer.
THE DEPUTY PRESIDENT: My approach to industrial matters is that agreed
outcomes are always the most effective and what might - why I had proposed to do it
at the point it was is so that if it was the case that the parties could reach an
undertaking that satisfied them then that is better than Mr Fletcher guessing it what
undertaking might satisfy the parties. What I am conscious of is giving you sufficient
time to review the undertakings so that you can make an informed decision about
whether they - whether you're satisfied they meet your concerns about the boot
because ultimately it's your members that are going to be bound by the agreement.
So I am happy to leave it to the end of the hearing but it doesn't give you or your
colleagues at the Bar table the opportunity to have discussions with Mr Fletcher about
any modifications to the undertaking he proposes which might then satisfy your
concerns.
MR BONCARDO: I understand what your Honour is saying.
THE DEPUTY PRESIDENT: Okay. So what's your preference? Because I'm only
doing it to facilitate you the opportunity to have something put into the undertakings.
MR BONCARDO: Your Honour has perhaps some more optimism than I do about
whether or not any undertakings are going to be acceptable to the union parties but I
don't want a situation to arise where we or your Honour engages in a process which
doesn't conform strictly to section 190. In terms of us having input in respect to any
proposed undertakings that so far as I am concerned is something that can be done on
the papers. It doesn't need to be done today and tomorrow.
If your Honour reaches a conclusion in your Honour's decision that the agreement can
be approved with undertakings my friend offers those undertakings we then can be
heard on them - - -
THE DEPUTY PRESIDENT: Separately.
[2017] FWCFB 2741
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MR BONCARDO: Separately. And your Honour may well reach the view that the
undertakings provided or required to be provided are far too elaborate to fall with
section 193 which may make it otiose as to whether or not undertakings need to be
commented on by parties anyway.
THE DEPUTY PRESIDENT: I'm just conscious of the period of time in which this
agreement has taken approval. If we adopt that course of action you need to wait till a
decision is written and then make submissions in relation to the undertaking. So I
would be keen to try and get that sorted out while we've got all the parties.” (our
emphasis)
[36] In summarising the above extract, we note it is clear the parties were under the
impression that, if the Deputy President was to issue a Decision finding that the Proposed
Agreement did not pass the BOOT, submissions would subsequently be provided to the
Commission regarding undertakings that could enable the Proposed Agreement to pass the
BOOT.
[37] This is confirmed in the following extract from transcript dated 20 October 2016 at the
conclusion of the hearing at PN3275-3305:
“THE DEPUTY PRESIDENT: Okay. What's the parties’ views about giving BGC the
opportunity to make undertakings following - either before the submissions are filed or
in response to the submissions?
MR BONCARDO: I think our position is what it was yesterday, which is that
your Honour has to have a concern first before it is appropriate for BGC to be asked to
give undertakings. If your Honour has - - -
THE DEPUTY PRESIDENT: We routinely give requests for undertakings coming out
of triage team so - - -
MR BONCARDO: Certainly.
THE DEPUTY PRESIDENT: Yes.
MR BONCARDO: Certainly, but those undertakings occur after the commission has
expressed a concern, and that’s - - -
THE DEPUTY PRESIDENT: Well, that's how this has got to a listing, because the
commission has a concern.
MR BONCARDO: I understand.
THE DEPUTY PRESIDENT: So it has to have had a concern to get to this point.
MR BONCARDO: I’m not sure whether your Honour is able to give us an indication
of what those specific concerns are now or during the - - -
THE DEPUTY PRESIDENT: Isn’t that one of the documents that were tendered?
[2017] FWCFB 2741
11
MR BONCARDO: That was done prior to us putting on our submissions about the
BOOT. The concerns we have about the BOOT are far more extensive than the
concerns identified by Member Assist.
THE DEPUTY PRESIDENT: So those concerns are now on the record for BGC to
potentially respond to as an undertaking.
MR FLETCHER: As long as there’s no prejudice to BGC in the process that
Mr Boncardo’s proposing, because I don't want to be trapped into a situation where
procedurally Mr Boncardo proposes a course of action that then makes the agreement
appellable. If we’re all on the same page that you need to decide first whether the
other issues, the other requirements, have been met, and then let the parties know that
there’s an issue as you see it that requires an undertaking, I think the much cleaner
approach is the one that Mr Boncardo is proposing, and as long as that doesn't
prejudice BGC then I'm quite happy to go with that plan.
THE DEPUTY PRESIDENT: That will just push the process out a bit longer. I was
just trying to - - -
MR FLETCHER: Which I'm not - which BGC is not - - -
THE DEPUTY PRESIDENT: Yes.
MR FLETCHER: We are in a hurry, but we're not in that much of a hurry. We want
to get it right.
THE DEPUTY PRESIDENT: Okay.
MR BONCARDO: I think that is eminently sensible and assuage my friend again, I'm
not attempting to lead him into some sort of trap. We are trying as best we can to
ensure that what occurs strictly conforms with section 190(1).
THE DEPUTY PRESIDENT: So you propose that I issue a decision in relation to the
hearing - - -
MR BONCARDO: Yes.
THE DEPUTY PRESIDENT: - - - and then invite the party - invite BGC to make an
undertaking which addresses those concerns.
MR BONCARDO: Yes.
MR FLETCHER: Any concerns you have.
THE DEPUTY PRESIDENT: And would you want to be heard in relation - would
there be any need for any parties to be heard?
MR BONCARDO: Yes.
MR FLETCHER: Yes.
[2017] FWCFB 2741
12
MR BONCARDO: Yes, very briefly, your Honour, very briefly. It depends on the
scope of the undertakings. If your Honour is in agreement with some of our
contentions in respect to the argument it will become entirely academic in respect to
genuine agreements and the other points that we have raised. So it may not be an issue
that arises. I’m hopeful that it doesn't.
MR FLETCHER: Yes, and as long as it happens on the papers we're not concerned.
MR BONCARDO: I have no issue with it happening on the papers. I think that’s
eminently sensible.”
[38] The Deputy President reached the conclusion that the Proposed Agreement did not
pass the BOOT at [305] of her Decision and she held that:
“I am not satisfied that the Undertakings proposed address all of the financial and
nonfinancial detriments identified in this Decision or in fact that undertakings could be
given, which would enable the Proposed Agreement to satisfy the BOOT but would
not result in substantial changes to the Proposed Agreement as prohibited by section
190 of the FW Act.”
[39] However, in reaching this conclusion, the Deputy President did not provide the
Appellant with an opportunity to file further submissions in relation to undertakings after the
Decision was handed down. As there was no indication that there would be a departure from
the intentions of the Deputy President to allow submissions regarding undertakings after
handing down the Decision, we are of the view that the Appellant was denied procedural
fairness.
[40] Further, on 15 May 2017 and 16 May 2017, the Appellant lodged an amended Notice
of Appeal and a further amended Notice of Appeal, which outlined further grounds of appeal
relating to denial of procedural fairness. In particular, the further amended Notice of Appeal
outlined three ways in which it contended the Deputy President erred in making her finding at
[210] of the Decision, which states:
“For the reasons articulated above, I am satisfied that the following grounds identified
by the Unions, if not individually then in combination, are reasonable grounds for
believing that the Proposed Agreement was not genuinely agreed to by the employees.
Employees did not have a sufficient stake in the Proposed Agreement to have
genuinely agreed to its terms.
Employees did not have sufficient knowledge or experience of the black coal
mining industry to be in a position to genuinely agree to provisions of the
Proposed Agreement which are intended to apply to black coal mining.
The Proposed Agreement contains provisions that were so uncertain or
confusing that employees could not have understood the provisions and
therefore could not genuinely have agreed to them.
Employees were provided with misleading information in relation to the effect
of the Proposed Agreement and its relationship with the Preserved Conditions.
[2017] FWCFB 2741
13
Contract and therefore they could not have genuinely agreed to the Proposed
Agreement.
Employees were intimidated into approving the Proposed Agreement and
therefore they did not genuinely agree to its terms.
BGC bargained in a manner which led Employees to approve the Proposed
Agreement without genuinely agreeing to its terms.”
[41] In particular, the Appellant contended in its further amended Notice of Appeal that the
Deputy President erred in finding at [210] of her Decision that:
1. The Appellant provided misleading information to employees about the effect of the
Proposed Agreement and its relationship with the Preserved Conditions Contract;
2. Employees were “intimidated” into approving the Proposed Agreement and, therefore,
did not genuinely agree to its terms; and
3. The manner in which the Appellant bargained led the employees to approve the
Proposed Agreement without genuinely agreeing to its terms.
[42] The Appellant contended that, in reaching these findings at [210] of the Decision, the
Deputy President failed to afford the Appellant procedural fairness as these matters were no
longer live grounds of objection between the parties and were no longer pressed by the
Respondent. In this regard, we note, in particular, the Deputy President’s finding at [210] of
the Decision that employees were provided with misleading information in relation to the
effect of the Proposed Agreement and its relationship with the Preserved Conditions.
[43] At the hearing before Deputy President Binet on 19 October 2016, the Respondent
made the following concessions at PN16 of the transcript dated same:
“MR BONCARDO: Yes, your Honour … After perusing the material produced under
the notices to produce by the applicant I am no longer relying on a significant chunk of
misleading/misinformation case. And if I can perhaps give the Commission some
paragraph references to my submissions which were filed, I think on the 2 September.
I am no longer pressing paragraphs 15, 16, and 17. Paragraphs 20, 21 and 22, 23, 24,
25, 26, 27, 28, the conclusionary and introductory paragraphs your Honour will no
doubt read those in light of the concessions that I have made in terms of the balance of
the written submissions on the misleading misinformation case. I am also no longer
pressing my contentions in respect to the application the better-off overall test being
now instead of when the agreement was made. So to that effect I am no longer
pressing paragraphs 35, 36 and 37 of the written submissions.”
[44] We note that, at paragraph 16 of the Appellant’s final submissions dated 4 November
2016, the Appellant had particular regard to these concessions, stating:
“The Unions have also submitted that the Agreement has not been genuinely agreed by
the employees for a number of reasons (that will be addressed further below). Certain
genuine agreement points raised by the CFMEU are no longer being pressed including
[2017] FWCFB 2741
14
its assertions that BGC Contracting misled or misrepresented certain answers it gave in
Frequently Asked Questions (FAQ) documents distributed to employees during the
bargaining process.”
[45] On this basis, the Deputy President was not required to make findings regarding what
the Respondent initially contended was misleading information provided by the Appellant to
its employees as it was no longer a live ground of objection between the parties. However, the
Deputy President did, in fact, make such findings at [210] of her Decision by concluding that
employees were provided with misleading information in relation to the effect of the Proposed
Agreement and its relationship with the Preserved Conditions. Moreover, at [212] of the
Decision, the Deputy President held:
“BGC chose not to call as witnesses any employees who voted in favour of the
Proposed Agreement. Nor did BGC make submissions or tender other evidence to
persuade me that the grounds listed in paragraph [210] of this Decision are not
singularly or in combination, reasonable grounds for believing that the Proposed
Agreement was not genuinely agreed to by the employees.”
[46] Thus, the Deputy President found that the Appellant did not make submissions in
relation to the provision of misleading information, which may have persuaded her that the
grounds listed in her Decision at [210] were not reasonable to conclude that the Proposed
Agreement was not genuinely agreed. However, as noted above, this ground was no longer
pressed by the Respondent. This was acknowledged by the Appellant in its submissions dated
4 November 2016 and the Appellant did not make submissions regarding this matter as it was
no longer a live ground of objection before the Commission. In making such findings without
providing the Appellant an opportunity to make submissions in relation to this issue, the
Deputy President denied the Appellant procedural fairness.
[47] Further, we note the Respondent contended that, as was found in KCL, the employees
of the Appellant did not have a “stake” in the Proposed Agreement. We do not disagree with
the proposition elicited in KCL. However, we are of the view that KCL is distinguishable from
the matter before us on the facts. In particular, KCL was concerned with only two employees
and the Full Bench held that the lack of authenticity of the agreement meant these employees
had no “stake” in that agreement. In particular, at [36] of that Decision, the Full Bench found
that:
“In summary, the position is that the Agreement covers a wide range of classifications
most of which have no relevance to the work performed by KCL’s three existing
employees, encompasses industries in which KCL does not currently operate, and
contains rates of pay which, even in respect of those classifications relevant to the
current employees, are not to apply to those employees. In those circumstances we do
not consider that any authenticity could attach to the agreement of the two employees
to the rates and conditions in the Agreement. The employees had no ‘stake’ in the
Agreement’s rates of pay, since they were assured that their existing, higher rates of
pay would remain in place (subject to ‘operational needs and satisfactory
performance’), and they could not have given informed consent in relation to
occupation and industries in which they did not work and presumably had no
experience.”
[2017] FWCFB 2741
15
[48] Moreover, there was no evidence in KCL to suggest that the employer was faced with
challenges in the market due to an industry downturn, as is the case in the matter before us. In
this regard, the Appellant outlined this issue to its employees and this is demonstrated, in
particular, at paragraphs 11 to 20 of Mr Tariro Ruwiza’s witness statement. The
distinguishing factor between these two matters is that there is no lack of authenticity in the
case before us. As such, we are not satisfied that KCL is applicable to the present matter in
determining whether the parties had a “stake” in the Proposed Agreement.
[49] In determining whether the employees do, in fact, have a stake in the Proposed
Agreement, we refer to Question 7 of the Frequently Asked Questions (“FAQs”),15 which
states as follows:
“What are the key changes under the new Mining Agreement that could impact on me?”
[50] The table displayed under this question outlines various benefits and detriments
between the Proposed Agreement and the 2012 agreement and, for example, one of the
benefits outlined in this table included increased penalty rates for employees on public
holidays and overtime.
[51] Additionally, Question 8 of the FAQs16 states:
“Why should I support the new Mining Agreement, what does it actually give me?”
[52] The response provided to this question informed existing employees that supporting
the Proposed Agreement will affect their interests as it would enable the Appellant to cope
with competitive market pressures, sustain its operations, expand into new industries and win
work.
[53] Question 10 of the FAQs17 addressed the possible reduction of labour costs as an
alternative to reducing employee numbers and further, Question 11 of the FAQs18 states:
“Why can’t we have the same terms and conditions that we currently have in our
Agreements?”
[54] In the response to this question, it was stated that some of the rates and conditions
were implemented during a booming mining industry and record iron ore prices, but were no
longer sustainable in today’s market. It was said that if the Appellant did not change, its
ability to win work would be severely limited, as would its ability to sustain its current
operations.
[55] Noting the FAQs specifically outline the benefits of supporting the Proposed
Agreement and how employees’ interests are affected, and as the matter before us can be
distinguished from KCL, we are not satisfied that the employees had no “stake” in the
Proposed Agreement.
15 Appeal Book, p 489.
16 Appeal Book, p 490.
17 Appeal Book, p 490.
18 Appeal Book, p 491.
[2017] FWCFB 2741
16
[56] Moreover, as KCL is distinguishable from the matter before us, the denial of
procedural fairness to the Appellant remains a live issue. In order to overcome this denial of
procedural fairness, we are of the view the appeal must be upheld and the Decision of Deputy
President Binet must be quashed.
Conclusion
[57] Permission to appeal is granted.
[58] The appeal is upheld.
[59] The Decision of Deputy President Binet is quashed.
[60] The matter is referred to Deputy President Gostencnik for rehearing.
VICE PRESIDENT
Appearances:
R. Dalton, of Counsel, and A. Pollock, of Counsel, for the Appellant.
R. Reitano, of Counsel, for the Respondent.
Hearing details:
2017
Melbourne:
16 May.
Printed by authority of the Commonwealth Government Printer
Price code C, PR593038
OMMISSION CO THE SEAA THE FAIR WORK
