1
Fair Work Act 2009
s.604 - Appeal of decisions
Construction, Forestry, Mining and Energy Union
v
Concrete Constructions (WA) Pty Ltd
(C2017/2539)
VICE PRESIDENT HATCHER
SENIOR DEPUTY PRESIDENT HAMBERGER
COMMISSIONER SIMPSON SYDNEY, 9 AUGUST 2017
Appeal against decision [2017] FWCA 2262 of Commissioner Gregory at Melbourne on 24
April 2017 in matter number AG2017/687.
[1] The Construction, Forestry, Mining and Energy Union (CFMEU) has, pursuant to
s.604 of the Fair Work Act 2009 (FW Act), lodged an appeal, for which permission to appeal
is required, against a decision Commissioner Gregory issued on 24 April 20171 (Decision) in
which he approved the Concrete Constructions Enterprise Agreement 2017 (Agreement). The
Decision in its entirety was as follows:
“[1] An application has been made for approval of an enterprise agreement known as
the Concrete Constructions Enterprise Agreement 2017 (the Agreement). The
application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has
been made by Concrete Constructions (WA) Pty Ltd. The Agreement is a single
enterprise agreement.
[2] The Applicant has provided written undertakings. A copy of the undertakings is
attached in Annexure A. I am satisfied that the undertakings will not cause financial
detriment to any employee covered by the Agreement and that the undertakings will
not result in substantial changes to the Agreement.
[3] Subject to the undertakings referred to above, I am satisfied that each of the
requirements of ss.186, 187, 188 and 190 as are relevant to this application for
approval have been met.
[4] The Agreement is approved and, in accordance with s.54 of the Act, will operate
from 1 May 2017. The nominal expiry date of the Agreement is 23 April 2021.”
[2] The CFMEU was not a bargaining representative for the Agreement. Nonetheless,
having become aware of the application made by Concrete Constructions (WA) Pty Ltd
1 [2017] FWCA 2262
[2017] FWCFB 3912
DECISION
E AUSTRALIA FairWork Commission
[2017] FWCFB 3912
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(Concrete Constructions) for approval of the Agreement, it made a number of objections to
approval of the Agreement in correspondence to the Commission dated 14 March 2017 and
31 March 2017. The objections included that the Agreement did not pass the Better Off
Overall Test (BOOT) as required by s.186(2)(d) of the FW Act. The Commissioner obtained
the response of Concrete Constructions to those objections, and having done so caused the
following correspondence to be sent to the CFMEU on 19 April 2017 (formal parts omitted):
“The Commissioner has received the submissions sent by the CFMEU on the 14th, 22nd
and 31st of March 2017 and has taken such into account. The Commissioner has put
several issues raised by the CFMEU to the Applicant and requested a response in
relation to such. The Commission thanks the CFMEU for their submissions and
having now received submissions from the Applicant, the Commissioner will consider
the application for approval.”
[3] It may be seen that neither the Decision nor the above correspondence specifically
addressed any of the issues raised by the CFMEU.
[4] The CFMEU’s notice of appeal identified four grounds of appeal which were
elaborated upon in its written and oral submissions. Before we turn to the grounds of appeal,
it is necessary to deal with a challenge by Concrete Constructions to the competency of the
CFMEU’s appeal. Concrete Constructions submitted that because the CFMEU was not a
bargaining agent for the Agreement, it was not a “person who is aggrieved by a decision”
under s.604(1) and therefore did not have standing to bring the appeal. We reject that
submission. It was not in dispute that the CFMEU’s rules permitted it to enrol as members
employees of Concrete Constructions covered by the Agreement, and we consider that there is
a likelihood that members of the CFMEU will be engaged by Concrete Constructions in the
future and will be covered by the Agreement. That is sufficient to confer standing on the
CFMEU to appeal the Decision: CEPU v Main People Pty Ltd2; MUA v Toll Energy Logistics
Pty Ltd3; CFMEU v MGI Piling (NSW) Pty Ltd4; TWU v ALDI Foods Pty Limited5; CFMEU v
CSRP Pty Ltd6.
[5] The CFMEU’s first challenge to the Decision was that the Commission could not
properly have been satisfied that the Agreement was genuinely agreed to, as required by
s.186(2)(a) of the FW Act. The elements of this argument were as follows:
s.188(b) provides that an element of the requirement for genuine agreement is that, in
the case of a single-enterprise non-greenfields agreement, the agreement has to have
been “made” in accordance with s.182(1);
s.182(1) requires that an agreement is “made” when a majority of those employees
who would be covered by it cast a valid vote to approve it;
Concrete Construction’s Form F17 statutory declaration contained no response to the
standard-form questions “How many employees will be covered by the agreement?”,
2 [2014] FWCFB 8429 at [5]-[7]
3 [2015] FWCFB 7272; 254 IR 353 at [95]-[98]
4 [2016] FWCFB 2654; 260 IR 244 at [4]
5 [2016] FWCFB 91; 255 IR 248 at [22]-[23]
6 [2017] FWCFB 2101 at [8]-[13]
[2017] FWCFB 3912
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“How many employees have cast a valid vote?” and “How many employees voted to
approve the agreement?”;
there was therefore no basis upon which the Commissioner could have concluded that
the Agreement was genuinely agreed.
[6] We do not consider that the CFMEU submission on this point has any merit. It is
apparent that the initial version of the Form F17 filed by Concrete Constructions erroneously
omitted the required answers to a number of questions. This was pointed out by the
Commission’s staff in an email dated 21 March 2017, and on the same day Concrete
Constructions filed a revised Form F17. Among other things, this identified that six
employees would be covered by the Agreement and had cast valid votes to approve it. The
Commissioner was plainly entitled to rely upon the revised Form F17.7 We refuse permission
to appeal with respect to the first ground of appeal.
[7] The second ground of appeal was that the Agreement had not genuinely been agreed to
because Concrete Constructions had not complied with the requirement in s.188(a)(i) to
comply with s.180(5), which required the employer to take all reasonable steps to explain the
terms of the Agreement and the effect of those terms to the relevant employees. The CFMEU
submitted that there was “no evidence before the Commissioner” that Concrete Constructions
had drawn to the employees’ attention the effect of clauses 5.1(c), 9.2, 16, 24.7 and 27.7,
which it characterised as being disadvantageous compared to the corresponding provisions of
the reference instrument for the BOOT, the Building and Construction General On-site
Award 2010 (Award). Again, we consider this submission is without merit. The Form F17
filed by Concrete Constructions, in both its original and revised form, in response to the
question “What steps were taken by the employer to explain the terms of the agreement, and
the effect of those terms, to the relevant employees?”, gave the answer “Discussions were held
with employees, went through the agreement clause by clause explaining each clause asking
for questions and resolving any issues, making employees aware of what each of the clauses
meant and answering there questions [sic]”. It was open to the Commissioner, based on this
statement in the statutory declaration, to conclude that s.180(5) had been complied with.
Further, additional evidence adduced by Concrete Constructions in the appeal, which was not
objected to or contradicted, confirmed that the terms of the Agreement were explained to the
employees. Permission to appeal in relation to the second ground of appeal is also refused.
[8] The third ground of appeal was that the Agreement did not pass the BOOT, and the
Commissioner erred in concluding otherwise. The CFMEU pointed out that the Agreement
did not contain a number of allowances that were contained in the Award, including the
underground allowance, the laser operation allowance, the carpenter-diver allowance and the
refractory bricklayer allowance. We do not consider that the fact that an enterprise agreement
does not contain specialist allowances which may have no relevance to the employer’s
operations necessarily demonstrates that the BOOT has not been passed. The CFMEU also
pointed out that the rates in the Agreement were to be increased at Concrete Constructions’
discretion and not in accordance with the Commission’s annual wage reviews. However, the
7 The additional evidence adduced by Concrete Constructions at the appeal hearing indicated that the revised Form F17
statutory declaration had not been properly made, in that the page containing the jurat from the original declaration made on
27 February 2017 had simply been attached to the rest of the revised declaration rather than having the whole document re-
declared. This was clearly highly irregular, but it does not cause us to alter our conclusion that the Commissioner was entitled
to rely on the information contained in the revised Form F17, particularly in circumstances where that information was not
relevantly contradicted.
[2017] FWCFB 3912
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BOOT is only concerned with the position applying at “test time” (that is, the time the
application for approval of the relevant agreement was made8), not what happens after that
time. More persuasively, the CFMEU provided a comparative pay analysis of a weekly-hire
employee working in the CW3 classification (which appears in both the Award and the
Agreement) who worked 50 hours per week which demonstrated that the employee would be
$18.66 worse off under the Agreement compared to the Award. A copy of this analysis
appears in the annexure to this decision. In that analysis a shortfall arises because, even
though the Agreement provides for a higher base rate of pay, that base rate is expressed as
absorbing all allowances (unless otherwise specified) and does not adequately compensate for
the non-payment of meal allowance, crib time payments and “pro-rata redundancy”.
[9] Concrete Constructions contended that the CFMEU’s analysis was incorrect only in
limited respects, which we deal with later. Additionally, it sought to rely upon an affidavit
sworn by Mr Ivan Gojak, the Operations Manager of Concrete Constructions, on 14 June
2017 in which he stated (among other things) that the business was prepared to provide
additional undertakings “in order to satisfy the Commission”. The proposed undertakings are
set out in an annexure to his affidavit. However, to the extent that the CFMEU’s analysis
identified a BOOT deficiency, its appeal cannot be deflected by the offer of further
undertakings. Under s.190 of the FW Act, the Commission may approve an agreement where
(relevantly) an application has been made for approval of an enterprise agreement, the
Commission has a concern that the approval requirement in ss.187 and 187 are not met, and
an undertaking offered by the employer meets the concern. Under s.191, an undertaking is
taken to be a term of an agreement if the Commission approves an agreement after accepting
an undertaking. The FW Act only contemplates the Commission receiving and acting upon
undertakings prior to approving agreements, and an undertaking accepted after an agreement
has been approved is not given any legal effect by the FW Act. Therefore consideration could
only be given to the proposed further undertakings if we upheld the appeal and quashed the
Decision approving the Agreement.9 That makes it necessary to consider the CFMEU
analysis.
[10] The CFMEU’s analysis was modelled on a work pattern of 50 hours per week. We
accept that that is a common work pattern in the construction industry. The first shortfall
identified was that the Agreement did not provide for payment of crib time. Under clause
35.3(b) of the Award, an employee required to work two or more hours of overtime is entitled
to a crib break, without deduction of pay, of 20 minutes after the normal finishing time.
Where the break is not taken, the clause provides that the employee is regarded as having
worked 20 minutes more than the actual time worked and is paid accordingly (which
effectively makes the 20 minutes payable at double time). The CFMEU submitted that the
crib break is commonly paid out this way in the construction industry, and we accept this is
the case at least outside the house building sector. Accordingly we accept that the non-
provision of crib time in the Agreement, for the CW3 classification, leads to a shortfall of
about $14.24 per day.10
[11] The second claimed shortfall concerns the meal allowance of $14.78 which, under
clause 20.2(a) of the Award, is payable whenever an employee is required to work overtime
8 FW Act, s.193(5)
9 See ALDI Foods Pty Ltd v Transport Workers' Union of Australia [2012] FWAFB 9398 at [29]
10 The CFMEU’s calculations were based on the Award rate of pay for the CW3 classification as it was at the date of the
Decision, inclusive of the special and industry allowances provided for in clauses 21.1 and 21.2 of the Award.
[2017] FWCFB 3912
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for at least one and a half hours. As Concrete Constructions pointed out, clause 7.3 of the
Agreement provides for a meal allowance of the same amount as the Award. However it adds
the condition that, for the meal allowance to be payable, the employee must not have had
prior notification of the overtime on the day before. That condition is not contained in the
Award. The CFMEU pointed out that under a regular 50 hour per week work pattern, the
employer would always be in a position to notify the employee of the overtime in advance
and thus, under the Agreement, would be able to avoid payment of the allowance. We accept
that the Agreement permits this to occur.
[12] The third claimed shortfall concerns redundancy. Clause 17 of the Award contains an
industry-specific redundancy scheme. Unusually, clause 17.2 of the Award defines
“redundancy” for the purpose of the operation of the scheme as follows:
“For the purposes of this clause, redundancy means a situation where an employee
ceases to be employed by an employer to whom this award applies, other than for
reasons of misconduct or refusal of duty. Redundant has a corresponding meaning.”
[13] This clause does not require a dismissal, and so would apply when the employment of
an employee engaged for a fixed-term or a specified task comes to an end. The CFMEU
submitted that the Agreement, unlike the Award, specifically allows for employment of this
nature (in clause 5.9), and clause 27.7(a) of the Agreement provides that such employees are
not eligible for redundancy pay. The CFMEU further submitted that fixed-term or specified-
task employment was highly suitable for the construction industry because of its project-based
nature. It valued the redundancy at $37.77 or 1.75 hours pay per week. Its methodology in this
respect was derived from clause 17.3(b) of the Award, which provides:
“(b) Provided that an employee employed for less than 12 months will be entitled to a
redundancy/severance payment of 1.75 hours per week of service if, and only if,
redundancy is occasioned otherwise than by the employee.”
[14] We accept that the Agreement allows for the postulated detriment to occur, and the
scenario under which it might occur is realistic and not fanciful. Concrete Constructions
submitted, correctly, that a weekly employee who is not engaged for a fixed term or a
specified task would not be subject this detriment, but that is not an answer to the loss of
redundancy pay that would be suffered by an employee who is engaged for a fixed term or a
specified task.
[15] The three identified shortfalls amount to a weekly shortfall of over $18 per week under
the Agreement compared to the Award, even taking into account that the Agreement provides
for higher base rates of pay. We cannot identify any other benefit, monetary or otherwise, in
the Agreement which would compensate for this shortfall, and none was suggested by
Concrete Constructions. Accordingly we accept the CFMEU’s submission that the Agreement
did not pass the BOOT. We think it appropriate in the circumstances to grant permission to
appeal with respect to the CFMEU’s third ground of appeal, to uphold the appeal on that
ground, and to quash the Decision.
[16] The CFMEU identified other bases upon which it contended that the Agreement did
not pass the BOOT. Given the conclusion we have reached concerning the CMFEU’s BOOT
analysis for the CW3 classification, we do not consider it necessary to form a view about
these. The CFMEU’s fourth ground of appeal was that the Commissioner erred in
[2017] FWCFB 3912
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disregarding the “false” statement in Concrete Constructions’ Form F17 statutory declaration
to the effect that the Agreement did not contain any terms that were less beneficial than the
equivalent terms and conditions in the Award. Again, given the conclusion we have reached
on the BOOT ground, we consider it unnecessary to determine this ground of appeal.
Permission to appeal in relation to the fourth ground is therefore refused.
[17] Concrete Constructions’ application for approval of the Agreement will need to be re-
determined. We consider that the application should be referred to a member of this Full
Bench for this purpose. Concrete Constructions will have an opportunity to offer further
undertakings to rectify any BOOT deficiencies, including the specific deficiencies identified
in this decision, at the rehearing.
[18] We make the following orders:
(1) Permission to appeal is granted in relation to the CFMEU’s third ground of
appeal. Permission to appeal is otherwise refused.
(2) The appeal is upheld in relation to the CFMEU’s third ground of appeal.
(3) The Decision ([2017] FWCA 2262) is quashed.
(4) Concrete Constructions’ application for approval of the Agreement
(AG2017/687) is referred to Commissioner Simpson for re-determination.
VICE PRESIDENT
Appearances:
K Sneddon and K Singh on behalf of the CFMEU.
H Millar of counsel with J Alilovic on behalf of Concrete Constructions (WA) Pty Ltd.
Hearing details:
2017.
Sydney:
16 June.
Printed by authority of the Commonwealth Government Printer
Price code C, PR594841
OF THE FAIR WORK MISSION THE
[2017] FWCFB 3912
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ANNEXURE A:
Comparison between Award and Concrete Construction EA 2017 - CW3 - 10 Hour Days - Monday to Friday Award Rates CW3 Double Fare ordinary time and Double time and meal allowance Fares Pro-Rata hour's a half time Monday amount amount amount a half amount crib time amount allowance amount total hours Multi-storey to be paid allowance Redncy Total $172.64 $64.74 50.00 $0.00 - $14.54 10 $0.00 Tuesday $14,24 $17,43 - $7.55 $291.15 $64.74 - - - Wednesday $172.64 $0.00 $0.00 $14.24 $14.54 $0.00 $17,43 $7.55 $172.64 $291.15 2 $64.74 Thursday $0.00 $0.00 - $14.24 $14.54 10 $0.00 $17,43 $7.55 $291.15 $172.64 $64.74 - Friday $0.00 $0.00 $14.24 $14,54 10 $0.00 $17,43 $7.55 $291.15 $129.48 $64.74 $86.32 $0.00 $14.24 $14.54 10 $0.00 $17,43 $7.55 $334.31 Hours worked Saturday $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 Hours worked Sunday $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Hours worked $0.00 Public holiday $0.00 $0.00 $0.00 4 $0.00 Total $0.00 35 $820.04 10 $323.70 $0.00 2 586.32 50.00 5 $71.21 $72.70 50 50.00 5 $87.15 $37.77 $1,498.89 Concrete Construction Enterprise Agreement 2017 - CW3 Double ordinary time and are Double time and meal Fares Pro-Rata hours allowance amount a half amount time Monday amount a half amount crib time amount allowance amount $195.52 total hours Multi-storey to be paid allowance Tuesday $73.32 Redney Total $0.00 $0.00 $0.00 $.00 10 30.00 $17.43 - $0.00 286.27 8 $195.52 2 Wednesday $73.32 $195.52 $0.00 $0.00 $0.00 10 50.00 - 8 Thursday $73,32 $17.43 $0.00 $0.00 286.27 $0.00 $0.00 $195.52 10 $0.00 $17.43 $73.32 $0.00 286.27 $0.00 Friday $0.00 $0.00 0 $0.00 10 $0.00 $17.43 - $146,64 $73.32 $97.76 $0.00 $0.00 286.27 $0.00 $0.00 $0.00 $17.43 $0.00 335.15 Hours worked Saturday $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Hours worked Sunday $0.00 $0.00 $0.00 $0.00 $0.00 Hours worked Public holiday $0.00 Total $0.00 38 $0.00 $928.72 10 $366.60 $0.00 2 $97.76 $0.00 $0.00 50.00 $0.00 5 Amount Owed $87.15 1480.23 -$108.68 -$42.90 50.00 Notes $11.44 $71.21 $72.70 $0.00 $18.66 Employee is employed as CW3 (Formwork Carpenter) Emloyee works 10 hour day, Monday to Friday Employee takes one morning crib break and a lunch break Employees are provided 24 hours notice of requirement to work 1.5 hours overtime
