1
Fair Work Act 2009
s.185—Enterprise agreement
CQ Industries Pty Ltd T/A CQ Field Mining Services
(AG2017/1659)
DEPUTY PRESIDENT ASBURY BRISBANE, 3 NOVEMBER 2017
Application for approval of the CQFMS Enterprise Agreement 2017 – Notice of employee
representational rights on company letterhead – Not invalid – Whether employees provided
with incorporated material during access period – Failure to comply with s.180(2) of the Act
– Application of Black Coal Mining Industry Award 2010 – Black Coal Award relevant to
better off overall test – Agreement does not pass better off overall test when compared to
Black Coal Award.
BACKGROUND
[1] This Decision concerns an application under s. 185 of the Fair Work Act 2009 (the
Act) by CQ Industries Pty Ltd T/A CQ Field Mining Services (CQFMS/the Company) for the
approval of the CQFMS Enterprise Agreement 2017 (the Agreement). The Construction,
Forestry, Mining and Energy Union (CFMEU) is a bargaining representative for the
Agreement and opposes its approval on a number of grounds, which can be summarised as
follows:
There has been non-compliance with the requirements of s. 174(1A) of the Act for
issuing a valid Notice of Employee Representational Rights (NERR) on the basis
that the NERR issued by CQFMS was on Company letter head;
CQFMS has not taken all reasonable steps as required by s. 180(2) of the Act to
ensure that during the access period employees had a copy of, or access to, material
incorporated in the Agreement by reference;
CQFMS has not taken all reasonable steps as required by s. 180(5) of the Act to
ensure that the terms of the Agreement and their effect are explained to employees;
The Agreement does not pass the better off overall test (BOOT) with respect to some
employees or prospective employees of CQFMS who are or would be covered by the
Black Coal Mining Industry Award 2010 (the Black Coal Award) and not the
Manufacturing and Associated Industries and Occupations Award 2010 (the
Manufacturing Award); and
The Agreement contains a term that does not pertain to the employment relationship
and a term that is objectionable, on the ground that it is discriminatory.
[2] It was necessary to conduct two hearings. At the first hearing, the Company was not in
a position to respond properly to the issues raised by the CFMEU and was given a further
opportunity to do so by filing any material upon which it sought to rely to establish that the
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DECISION
E AUSTRALIA FairWork Commission
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provisions of the Act relevant to approval had been satisfied. The Company filed additional
material and a further hearing was held. At the further hearing evidence for CQFMS was
given by Mr Dean Scott, General Manager. Evidence for the CFMEU was given by Mr
Steven Pierce, Vice-President of the Queensland District of the Mining and Energy Division
of the Union. The CFMEU provided a submission appended to a Form F18 filed by the
Union; a further document entitled “Observations” in relation to the Agreement; made a
further submission in response to those of the employer; and made oral submissions at the
hearing. The Company provided written submissions and also made oral submissions at the
hearing. As previously noted, Mr Scott gave evidence, but did not provide a witness
statement. All of the evidence and submissions in relation to each of the matters raised by the
CFMEU and the Company’s responses have been considered.
EVIDENCE
[3] Mr Pierce gave evidence in opposition to the approval of the Agreement. Mr Pierce
provided a written statement1 and was available for cross-examination. Mr Pierce’s evidence
is that maintenance of plant and equipment at a coal mine site is a common activity and may
be conducted within the mine itself or at a mine based workshop. Maintenance may be
planned or scheduled. Maintenance work requires a range of skills and there are
classifications in the Black Coal Award which provide for that work. Employees of the mine
operator may undertake the work or it may be performed under a contract between the mine
operator and another company whereby the other company brings its employees onto the mine
site to undertake the work. Where this occurs, the CFMEU seeks to put in place an enterprise
agreement built on top of coal mining terms and conditions of employment.
[4] In May 2017, Mr Pierce became aware that CQFMS had made an application for
approval of an enterprise agreement. The CFMEU has members employed by CQFMS but
was not involved in the negotiation of the Agreement. The CFMEU has resolved to oppose
the approval of the Agreement because it undermines coal mining terms and conditions of
employment. Mr Pierce has made inquiries about the involvement of CQFMS in the coal
industry including talking to an employee of the Company who advised Mr Pierce that he
works only on coal mine sites; undertakes maintenance on plant and equipment in the field
and the workshop; undertakes planned and unplanned maintenance on trucks and loaders; has
undertaken work on shutdowns; generally works across crews rather than being designated to
a particular crew; has undertaken shift relief for employees of mine operators; is provided
with daily supervision by the management of the mine; has never been to CQFMS’ workshop
in Mackay; and is bound by the terms of the Coal Mining Safety and Health Act 1999 when
working on coal mining sites.
[5] Mr Pierce asserts that employees of CQFMS when performing work on coal mine sites
undertake essentially the same work as employees of the mine operator at the relevant coal
mine. Mr Pierce further asserts that the Company provides leave relief to coal mine operators
involving employees working the same roster as the employee to whom the leave relief is
being provided. Mr Pierce also tendered an email to employees from CQFMS’ Diesel
Division Manager stating that a site visit to Glencore, Collinsville and Newlands had been
conducted and the reports were positive with sites ramping up utilising the services of
CQFMS employees. Appended to Mr Pierce’s statement was a list of clients from CQFMS’
website including the following coal mine operators: Anglo – Moranbah North; Anglo Coal
(Capcoal Management) Pty Ltd; BMA – Blackwater Caval Ridge, CQ Office and Housing,
Daunia, Goonyella-Riverside, Gregory, Hay Point, Norwich Park, Peak Downs, Saraji,
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Poitrel, South Walker Creek; Carborough Downs Coal Management; CC Pty Ltd; Collinsville
Coal Company (Glencore); Downer EDI – Daunia, Goonyella-Riverside, Peak Downs;
Foxleigh Management; Hail Creek; Jellinbah; John Holland – Capcoal, Isaac Plains, Jellinbah
Plains; Macmahons Contractors; Newlands (Glencore); Rio Tinto; Rolleston Coal; Stanwell
Corporation; Thiess – Collinsville, South Walker; Valley Longwall; and Wesfarmers. Mr
Pierce also referred to the Form F17 filed by CQFMS which refers to toolbox talks conducted
at Moranbah Workers Club to cover site based employees.
[6] Under cross-examination, Mr Pierce said that the evidence about an employee stating
that he had never been to the Company’s Mackay workshop was that the employee had never
worked there. Mr Pierce agreed that any person going onto a coal mine site is bound by the
Coal Mining Safety and Health Act 1999. Mr Pierce also agreed that the companies he had
nominated from CQFMS’ client list may equal around 10% of its total clients but maintained
that if a labour hire company is supplying labour to those companies then the employees of
the labour hire company are in the black coal industry.
[7] Mr Scott gave evidence in support of the application for approval of the Agreement.
Mr Scott said that the Company has a workshop in Mackay with an area of around 3000 m2
where there is a range of engineering and manufacturing equipment including lathes, tooling,
plasma cutters and welders. There are eight full time employees including apprentices and in
addition there is casual labour on an ad hoc basis to support whatever projects are being
undertaken. The Mackay workshop undertakes fabrication for jacking plates, fabrication for
builds of dragline and shovel tubs and stainless steel pipe work. The Company also has a
workshop in Cloncurry, which services the Eloise Mine (Copper) and Ernest Henry Mine
(Copper and Gold) and supplies services to the Cloncurry Shire Council. The Cloncurry
workshop also sells safety consumables. There will be six tradespeople at the Cloncurry
workshop with additional ad hoc labour as required. The Cloncurry workshop has also
contracted CQFMS to design bins for underground work.
[8] In response to a question from the Commission, Mr Scott said that work on coal mine
sites could involve discrete projects or employees of CQFMS integrating with employees of
the mine operator, including in a labour hire situation but for a particular project or task such
as overhauling a piece of equipment. There is a purchase order for the project and there may
be multiple contractors undertaking that project.
[9] Under cross-examination, Mr Scott agreed that CQFMS provides leave coverage for
coal mine companies. In relation to whether CQFMS employees working on coal mine sites
came under the supervision and control of the supervisors and managerial staff of the mine,
Mr Scott said that everyone on a mine site reports to the SSE and that sometimes day to day
supervision is undertaken by the mine operators. Mr Scott also said that employees of
CQFMS do not use equipment owned by the mine operator but have Company vehicles and
tools. Sometimes CQFMS employees work in workshops at mines and at other times they
work elsewhere on the mine site.
CFMEU OBJECTIONS TO APPROVAL OF AGREEMENT
NERR Issue
[10] By virtue of s. 173 of the Act an employer that will be covered by a proposed
enterprise agreement that is not a greenfields agreement must take all reasonable steps to give
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notice of the right to be represented by a bargaining representative to each employee who will
be covered by the agreement and is employed at the notification time. Section 174(1A) of the
Act provides that the notice must:
a) Contain the content required by the Regulations;
b) Not contain any other content; and
c) Be in the form prescribed by the Regulations.
[11] The form prescribed by the Regulations is in Schedule 2.1 of the Fair Work
Regulations 2009. It is not in issue that the NERR given by CQFMS contains all of the
content required by the Regulations and that is set out in Schedule 2.1. However, the NERR
was set out on Company letterhead and the CFMEU asserts that as a result, it is not in the
form required by the Regulations. In support of this contention, the CFMEU refers to a
Decision of Commissioner Cambridge2 which held that setting out a NERR on company
letterhead had the effect of altering the character of the document so that it departed from the
requirements with respect to form and content set out in the Act and Regulations.
Incorporated material issue
[12] Section 180(2) of the Act provides that the employer must take all reasonable steps to
ensure that during the access period, employees who will be covered by a proposed agreement
are provided with copies of or access to, the written text of the agreement and any other
written material incorporated by reference in the agreement.
[13] The CFMEU points to a number of provisions of the Agreement which it contends
incorporate written material by reference and which the Union asserts were not provided to or
made accessible to employees during the access period:
The Agreement states that it displaces any other Award or agreement unless
specifically noted3 and then goes on to refer in a number of places to “the applicable
award”,4 the “industrial instrument”,5 “the award which would otherwise apply” and
the “appropriate award”6 and accordingly imports by reference the terms of at least
the Clerks Private Sector Award 2010; the Manufacturing and Associated Industries
and Occupations Award 2010; and the Black Coal Industry Award 2010.
At Part II a) dot point 3, the Agreement provides that employees agree to abide by
various company policies and procedures.
At Part II e) dot point 1, the Agreement states that the employer agrees to comply
with State and Commonwealth Occupational Health & Safety laws and any relevant
industry codes of practice.
At Part II e) dot point 2, the Agreement states that employees agree to carry out any
instructions, policies and decisions made to promote and maintain a safe workplace
required by relevant Occupational Health and Safety legislation including any
further requirements specific to the employer’s industry and workplace – even if not
specified in the legislation.
[14] In response to the issues raised by the CFMEU, the Company submits that all
employees are inducted into the Company and at that point, are provided with an Induction
Pack that includes policies and procedures relevant to them in their employment. The
induction process also includes testing of employees in relation to the policies and procedures
to ensure understanding. According to CQFMS, there is no requirement that the Company
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again provide documents to employees which they already possess, and are available in the
workplace. The Company further submitted that the availability of such documents in the
workplace is communicated to employees at the time they are inducted and on an ongoing
basis throughout their employment. CQFMS also submitted that policies are subject to change
and to supply them in the form they were in at the time the Agreement was negotiated would
infer that they are locked in for the term of the Agreement, which is not the case.
BOOT and related issues
[15] The CFMEU’s assertion that the Agreement does not pass the BOOT centres on the
appropriate reference Award for the purpose of the application of the test. The CFMEU
contends that the appropriate Award is the Black Coal Mining Industry Award 2010 (the
Black Coal Award). The CFMEU submits that to the extent that CQFMS employs employees
“in the field” at black coal mines, the employees are performing work in the black coal
mining industry where the minimum terms and conditions of employment are governed by the
Black Coal Award. In this regard, the CFMEU points to the definition of coal mining
employees in clause 4.1 of the Black Coal Award and submits that employees of CQFMS
come within its scope.
[16] The CFMEU contends that the Agreement contains provisions that make it clear that
employees under the Agreement may work in coal mines. In the fourth dot point in Part III a)
a specific reference is made to a 35 hour week, which is a feature of work under the Black
Coal Award as opposed to the Manufacturing Award or the Clerks Award which provide for a
38 hour week. The Agreement also refers to site or project work which can include work in
the coal industry. Further, in paragraph 2.6 of the Form F17 lodged with the Agreement, it is
stated that CQFMS held meetings at Moranbah to cover site based employees. From this is
said to follow that employees based on site work away from the Company’s Mackay
operation and are working on site at coal mines.
[17] The CFMEU also points to the fact that on its website, CQFMS lists among its clients
a number of companies engaged in coal mining in Queensland including: BMA Coal; Xstrata
Coal, Downer EDI Mining, Anglo Coal, Ensham Resources and Thiess. There is no exclusion
of coal mining in the Agreement and in a current enterprise agreement that is in operation and
covers the relevant employees – CQFMS Enterprise Agreement 20147– there is a table of
classifications and wage rates for Mineworkers at a variety of levels under a heading “Coal
Mining Rates July 2014”. That table does not appear in the Agreement subject of these
proceedings which simply provides two tables with classifications and wage rates headed
“Clerk’s Private Sector” and “Manufacturing”. The CFMEU submits that by removing a table
from the current agreement and a reference to Coal Mining Rates, the coverage of the
Agreement and its application to the black coal mining industry, is not changed.
[18] The CFMEU also submits that the present case can be distinguished from the
circumstances in Transfield Services (Australia Pty Ltd)8 on the basis that employees of
CQFMS come under the day to day supervision of the coal mine operator. Similarly, in
contrast to the factual situation in The King v Central Reference Board and Others Ex parte
Thiess Repairs Pty Ltd9 the work undertaken by CQFMS is performed on a mine site and not
at a workshop that is off the mining lease. Further, the CFMEU submits that the decision in
Brown and Grant v Broadspectrum (Australia) Pty Ltd10 relied on by CQFMS in its
submission has no relevance as it deals with the Coal Mining (Long Service Leave)
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Administration Act 1992, and does not determine the question of whether the employees
subject of that decision were covered by the Black Coal Award.
[19] The CFMEU points to a range of provisions where the Agreement provides for less
beneficial terms than the Black Coal Award including:
The Black Coal Award provides for 35 ordinary working hours per week while the
Agreement provides for 38 ordinary working hours per week;
Shift work provisions with respect to shift allowances and overtime are higher under
the Black Coal Award than they are under the Agreement;
Personal leave entitlements are greater under the Black Coal Award than they are
under the Agreement;
Public holiday rates and overtime provisions on public holidays are greater under the
Black Coal Award than they are under the Agreement;
Reimbursement of training costs is provided for in the Black Coal Award and not in
the Agreement;
Employees are required to give greater amounts of notice to terminate their
employment under the Agreement than they would be required to give under the
Black Coal Award;
The Agreement does not provide for payout of personal leave to retrenched
employees as is the case under the Black Coal Award;
The Agreement does not provide for the industry based redundancy scale as is
provided for under the Black Coal Award and which exceeds the NES entitlements;
Provisions in relation to alternative employment in the event of an employee being
made redundant are more favourable under the Black Coal Award than they are
under the Agreement;
The Agreement provides for casual employment and the Black Coal Award does not;
and
The Agreement provides confidentiality terms and places obligations on employees
and exposes them to prosecution for breach of the Agreement while the Award does
not contain such obligations.
[20] In summary, the CFMEU states that on the ordinary hours issue alone, the gap of three
hours overtime – which for a seven day shift worker would be an extra six hours pay per week
– if the employee works 38 hours per week, would result in a difference of $142.50 per week
for a Level 3 Mineworker, without consideration of overtime, shift rates, leave, termination of
employment entitlements, redundancy entitlements, public holiday entitlements and other
entitlements identified by the CFMEU in its submissions. Accordingly, it follows that the
Agreement cannot pass the BOOT.
[21] The CFMEU also points to provisions of the Agreement to the effect that at Part III c)
dot point 2, it provides that an employee engaged to undertake work which is not covered by
the tables provided, is to be paid above the rate provided in the classification levels of “an
appropriate award and their total remuneration must be superior to that total remuneration
to which they would be entitled under that award.” At Part III b) dot point 2 the Agreement
states that “Project or site work will generally be subject to higher rates of pay than apply to
town work and where it becomes necessary to negotiate a separate rate for such a location, it
will be agreed in advance and will not be lower than the town rate.” The Agreement also
provides for salaried positions and individual arrangements to be negotiated. The CFMEU
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asserts that it is not possible to determine a rate for onsite coal mine workers under the
Agreement and that the enforcement of its terms at law would be problematic.
[22] Other issues identified by the CFMEU are that the Agreement contains confidentiality
provisions that continue after employment ends and for termination of employment “for any
reason, without explanation and without any legal obligations, other than the giving of the
required period of notice” which is discriminatory and allows for dismissals on grounds that
may constitute adverse action. The CFMEU asserts that failure on the part of CQFMS to
identify the less beneficial terms as required by the questions in the declarations filed in
support of the Agreement, results in the Commission not being able to be satisfied that an
explanation of the terms of the Agreement and their effect has been given to employees as
required by s. 180(5) of the Act.
[23] In relation to the BOOT issues raised by the CFMEU, the Company contends that it is
not engaged in the black coal industry. In this regard, it is submitted that CQFMS is engaged
in the manufacturing and maintenance services industry and has a substantial workshop,
depot, stores and administrative complex in Mackay. The Company provides services to all
manner of clients including within the sugar industry, export terminals, and to mines of
various kinds including coal, phosphate, gold and to quarries as well as the gas and
petrochemical industries. CQFMS submits that consistent with the Decision of the
Commission in Transfield Services Australia Pty Ltd11 it is not in the black coal industry and
the Black Coal Award has no relevance for the application of the BOOT to the Agreement.
[24] CQFMS also submits that the CFMEU treats the Black Coal Award as being superior
to all other awards and has practice of seeking to interfere with employers accessing coal sites
if those employers do not have an agreement including black coal provisions, regardless of
whether the employer would be covered by the Black Coal Award or not. It is not sufficient to
invoke the Black Coal Award on the basis that that there is a mention in the documentation
filed by the Company in support of the approval of the Agreement, that site based employees
are working in Moranbah.
[25] According to CQFMS it has been the practice of Companies to include Black Coal
Award provisions in their enterprise agreements not through legal necessity, but to avoid the
loss of potential work and to assure employees that their entitlements would satisfy the
BOOT. An ancillary consideration was that those employees may at some point actually
become engaged in the black coal industry such that they would then be covered by the Black
Coal Award, but equally, those employees could be engaged in any other industry.
[26] Notwithstanding its submissions about the Black Coal Award, CQFMS also contends
that part III c) of the Agreement at dot point two provides that where an employee is engaged
to undertake work which is not covered by the tables in the Agreement, they are to be paid at
a rate above the rate provided in the classification levels of an appropriate award and their
total remuneration must by superior to the total remuneration to which they would have been
entitled under the Award. The Company submits that this provision ensures that the
Agreement passes the BOOT even if the Black Coal Award does apply. In this regard, the
Company submits that:
“…this provision refers to ‘total remuneration under the Award’ and therefore includes
provision for absolutely every entitlement whatever Award may have applied might
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have provided, including additional annual leave, additional leave loading, industry
specific redundancy provisions and so on.”12
CONSIDERATION
Was a valid NERR issued by CQFMS as required by s. 174(1A)?
[27] In relation to the NERR issue, I am unable to accept the proposition that a NERR
given on Company letterhead is invalid on that basis. In my view the fact that a NERR is set
out on Company letterhead is not a matter that goes to the form or the content of the notice.
The Decision of the Full Bench in Peabody Moorvale Pty Ltd v Construction, Forestry,
Mining and Energy Union13 is not authority for such a proposition. In Peabody the Full Bench
held that a failure to comply with s. 174(1A) of the Act goes to invalidity.14 The issue
associated with the NERR in that case was that it included other content, by virtue of the fact
that the employer provided additional documents with the notice but stated that the additional
documents were part of the NERR. Accordingly the NERR was not valid. The Full Bench
also held that:
“[84] We wish to make it clear that the finding we have made in this case as to what
constitutes the notice turns on the particular facts in this matter. We repeat our earlier
observation (at paragraphs [68] to [70] that s.174(1A) is not to be construed so as to
preclude an employer from providing additional material to its employees at the same
time as the Notice is given to them. Where additional material accompanies a
document which complies with the form and content of the prescribed Notice the issue
to be determined is what purports to be the Notice. This issue will turn on the evidence
and particular circumstances of each case.”15
[28] In the present case, the NERR given by CQFMS contains all of the required content. I
do not accept that the Company letterhead is additional content. Even if the letterhead is
additional content, it is not content purported to be part of the Notice. The obligation to take
all reasonable steps to give the Notice to relevant employees is placed on the employer. It is
difficult to envisage how a Notice containing all of the required content and set out on an
employer’s letterhead in a form identical to that set out in Schedule 2.1 of the Regulations,
could mislead employees in circumstances where only the employer can give the Notice. In
any event, there is no evidence in the present case that any employee was misled with respect
to their rights and obligations as set out in the Notice. For these reasons, I do not accept that
the NERR given by CQFMS is invalid. There is no basis for refusing to approve the
Agreement on this ground.
Has CQFMS complied with the requirements of s. 180(2) in relation to incorporated
material?
[29] Section 180(2) of the Act provides that the employer must take all reasonable steps
during the access period to ensure that employees employed at the time who will be covered
by the proposed agreement, are given a copy of the written text of the agreement and any
other material incorporated by reference in the Agreement or have access to a copy of those
materials. As a Full Bench of the Commission observed in CFMEU v Sparta Mining Services
Pty Ltd16 compliance with s. 180(2) is mandatory and by virtue of s. 186(1) and s. 188(a)(i) of
the Act where those requirements have not been complied with the Commission has no power
to approve an agreement other than in exceptional circumstances, if the Agreement does not
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meet the BOOT, and by accepting an undertaking in relation to a BOOT issue.17 An
undertaking cannot cure a failure to comply with s. 180(2) of the Act.
[30] The CFMEU’s objection to approval of the agreement in the present case is based on
the proposition that a number of clauses in the Agreement incorporate by reference certain
documents external to the Agreement. These clauses are in the following terms:
Part I c) dot point 1
“This agreement will therefore displace any other industrial instrument or provision
including any award unless specifically noted otherwise within this agreement.”
Part II a) dot point 2
“The employee agrees to abide by the various company policies and procedures in
order to ensure a safe, efficient, harmonious and fair workplace.”
Part II e) dot points 1 and 2
“Health and safety in the workplace (OH&S)
The employer agrees to comply with State and Commonwealth Occupational Health &
Safety Laws and any relevant industry codes of practice.
The employee agrees to carry out any instructions, policies and decisions made to
promote and maintain a safe workplace required by relevant Occupational Health and
Safety legislation including any further requirements specific to the employer’s
industry and workplace – even if not specified in the legislation.”
[31] I note that the clauses in relation to health and safety in the workplace are in virtually
identical terms to those that were in the agreement considered by the Full Bench in Sparta at
clauses 6.1 and 6.2. In relation to the clause dealing with employees carrying out instructions,
policies and decisions in relation to occupational health and safety laws and industry codes of
practice, the Full Bench in Sparta held that it is expressed in terms of an obligation agreed to
by employees and the content of that obligation could only be understood by reference to the
external documents referred to. The Full Bench further held that while the clause referred to
instructions and decisions which may include those made from time to time in the future, the
reference to policies of a specific nature is clearly intended to import obligations of those
policies into the agreement including those extant at the time the agreement was made.
[32] The Full Bench went on to hold that it is not necessary for a clause to be regarded as
incorporating material by reference for the purposes of s. 180(2), or that the material must be
specifically described in the clause. What is necessary for a clause incorporating entitlements
or obligations from an external document to be legally effective is that the document is
described in a way which permits it to be identified. There is no rule as to how this is to be
done and nor is there any rule against incorporation where the external document is referred to
by general description.18
[33] The Full Bench in Sparta also dealt with an argument to the effect that employees
would have received policies referred to in provisions of the agreement in that case, when
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they were inducted to work on mine sites and that the policies would have remained
accessible on the intranet. The evidence in support of this submission was found by the Full
Bench not to be a complete answer to the question of whether there had been compliance with
s. 180(2)(b) of the Act, because it did not specifically address whether the polices were
accessible to employees during the access period as required by s. 180(2)(b) of the Act nor
whether any access to the policies constituted a step taken by the Company.19
[34] In order to determine whether CQFMS has failed to comply with the requirement in s.
180(2) of the Act it is necessary to consider whether any of the clauses in the Agreement
incorporate by reference, an external document. I do not accept that the terms of Part I c) of
the Agreement have the effect of incorporating Awards that the Agreement purports to
displace. I also do not accept that Part II a) dot point 2 refers to external documents with
sufficient particularity to place obligations on employees. However, consistent with the
decision of the Full Bench in Sparta which considered a virtually identical term, I am of the
view that the terms of Part II e) in the second dot point prescribe policies with sufficient
particularity for an obligation to comply with them to be legally enforceable. Accordingly,
consideration as to compliance with s. 180(2) is required.
[35] The Form F17 Employer declaration in support of the approval of the Agreement asks
what steps were taken by the employer, and on what date they were taken, to ensure that the
relevant employees were either given a written copy of the text of the Agreement and any
other material incorporated in it contains the following statement:
Memo 043 sent out 4th April notifying employees of voting dates (24 April – 1 May
2017)
Memo 044 sent out to employee representatives and managers for distribution 13
April 2017 CQFMS Draft EA
Weekly email correspondence to employees 7 April and 13 April respectively.
[36] That material was provided to the Commission as appendices to the submissions made
by CQFMS in support of the application for approval of the Agreement. There is nothing in
the material to indicate that copies of instructions, policies and decisions referred to in Part II
e) dot point 2 were provided to employees or that they were informed where they could obtain
copies, during the access period for the Agreement. Consistent with the Full Bench decision
in Sparta I do not accept that the fact that employees may have been informed about the
relevant instructions, policies and decisions in site inductions, is sufficient to meet the
requirements in s. 180(2) of the Act. Accordingly, I am not satisfied that CQFMS has
complied with s. 180(2) of the Act.
Does the Agreement pass the BOOT as required by s. 186(2)(d) and s. 193?
Relevant Award for the BOOT
[37] One of the general requirements for approval of an agreement as specified in s.
186(2)(d) of the Act, is that it passes the BOOT. By virtue of s. 193(1) an enterprise
agreement that is not a greenfields agreement, passes the BOOT if the Commission is
satisfied at the test time, that each award covered employee and each prospective award
covered employee for the agreement would be better off overall if the agreement applied to
the employee than if the relevant modern award applied to the employee. The CFMEU’s
assertion that the Agreement does not pass the BOOT, is based on the proposition that the
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Black Coal Award applies to some of the employees who are or will be covered by the
Agreement.
[38] If one or more employees or prospective employees to whom the Agreement applies
or would apply are covered by the Black Coal Award, then the Commission is required to
take that Award into account in deciding whether the Agreement passes the BOOT. In relation
to coverage, the Black Coal Award provides that:
4.1 This award covers:
(a) employers of coal mining employees as defined in clause 4.1(b);
and
(b) coal mining employees.
Coal mining employees are:
(i) employees who are employed in the black coal mining industry
by an employer engaged in the black coal mining industry, whose
duties are directly connected with the day to day operation of a
black coal mine and who are employed in a classification or class
of work in Schedule A—Production and Engineering Employees
or Schedule B—Staff Employees of this award;
(ii) employees who are employed in the black coal mining
industry, whose duties are carried out at or about a place where
black coal is mined and are directly connected with the day to
day operation of a black coal mine and who are employed in a
classification or class of work in Schedule A—Production and
Engineering Employees or Schedule B—Staff Employees of this
award; and
(iii) employees employed by a mines rescue service.
4.2 For the purposes of this award, black coal mining industry has the
meaning applied by the courts and industrial tribunals, including the Coal
Industry Tribunal. Subject to the foregoing, the black coal mining industry
includes:
(a) the extraction or mining of black coal on a coal mining lease by
means of underground or surface mining methods;
(b) the processing of black coal at a coal handling or coal processing
plant on or adjacent to a coal mining lease;
(c) the transportation of black coal on a coal mining lease; and
[2017] FWC 5667
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(d) other work on a coal mining lease directly connected with the
extraction, mining and processing of black coal.
4.3 The black coal mining industry does not include:
(a) the mining of brown coal in conjunction with the operation of a
power station;
(b) the work of employees employed in head offices or corporate
administration offices (but excluding work in town offices associated
with the day-to-day operation of a local mine or mines) of employers
engaged in the black coal mining industry;
(c) the operation of a coal export terminal;
(d) construction work on or adjacent to a coal mine site;
(e) catering and other domestic services;
(f) haulage of coal off a coal mining lease (unless such haulage is to a
wash plant or char plant in the vicinity of the mine); or
(g) the supply of shotfiring or other explosive services by an employer
not otherwise engaged in the black coal mining industry.
NOTE: The coverage clause is intended to reflect the status quo which existed under key pre-
modern awards in relation to the kinds of employers and employees to whom those awards
applied and the extent to which the awards applied to such employers and employees.
An example of the types of issues and some of the case law to be considered
when addressing coverage matters can be found in Australian Collieries Staff
Association and Queensland Coal Owners Association – No. 20 of 1980, 22
February 1982 {Print CR2297} and in the Court decisions cited in this
decision.
4.8 Subject to clauses 4.1 and 4.2, where an employer is covered by more than
one award, an employee of that employer is covered by the award classification
which is most appropriate to the work performed by the employee and to the
environment in which the employee normally performs the work.
NOTE: Where there is no classification for a particular employee in this award it is possible that
the employer and that employee are covered by an award with occupational coverage.
[2017] FWC 5667
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[39] Australian Collieries Staff Association and Queensland Coal Owners Association20
and the decisions cited in that Case, establish the principles in relation to determining whether
employers and employees are covered by the Black Coal Award and its predecessors
including:
Whether an employer is engaged in the black coal mining industry depends on the
substantial character of the industrial enterprise in which the employer and the
employee are concerned.21
The supply of goods or services to companies in a particular industry is not sufficient
to identify that the supplier is in the industry to which the goods and services are
supplied.22
The fact that an activity is carried out at a coal mine is not the sole determinant of
the issue. The difference depends on circumstances, the chief of which must be
separateness of establishments in point of control, organisation, place, interest,
personnel and equipment, and is a matter of degree.23
The fact that two industries are carried on at the same place does not abolish the
distinction between them.24
The relationship of employer and employee must have some connection with the
activity of mining of coal.25
[40] The judgements of the majority in the decision of the High Court in The King v
Central Reference Board; Ex parte Thiess (Repairs) Pty Ltd (Thiess) cited in the Australian
Collieries Staff Association case contain a number of observations relevant in the present
case. In Thiess the majority considered that a dismissed employee was not employed in the
coal mining industry, in circumstances where the employer carried out repairs to mining
machinery at a facility located off a mine lease (although within relatively close proximity),
notwithstanding that a related company with common management employed persons on the
mine lease to mine coal and to conduct running repairs on mining machinery at a workshop
on the mine lease.
[41] In reaching this conclusion, Latham CJ observed that “coal mining industry” is not a
technical term, and it is a question of fact depending on all of the circumstances of the case,
whether a particular employer or employee is engaged in the coal mining industry. His
Honour also further observed that one industry may be entirely concerned with the service of
another industry and yet may not be part of that other industry.26 Further, his Honour noted
that the fact that operations of one enterprise are carried out in proximity to those of another
cannot itself show that the enterprises are part of the same industry and that a single employer
may conduct two or more separate enterprises in two or more industries. The central question
to be asked is: “What is the substantial character of the industrial enterprise in which the
employer and the employee are concerned?” 27
[42] Latham CJ concluded that the employer was not engaged in the coal mining industry,
on the basis that:
It was not under the control of the mine owner or its own related entity that
conducted mining operations for the mine owner; and
Its operations were separate to and different in kind from the operations carried on at
the open cut.28
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[43] Rich J reaching the same conclusion, also observed that the ambit of the coal mining
industry is a question of fact and degree and that necessarily differences of opinion may occur
in arriving at a decision. Starke J observed that if an employer set up a workshop at the open
cut wherein its workers effected major and minor repairs to equipment and plant used in
connection with its mining operations, then the finding that the company and its employees
were engaged in the coal mining industry may have a basis of fact to support it and the work
might be regarded as ancillary to and part of the mining operations. Conversely, if the work
was sent to and effected by persons carrying on an independent engineering business, then the
fact that the equipment and plant was used in connection with mining operations, would not
support a finding that those persons would be engaged in the coal mining industry. They
would be engaged in the engineering business or industry. Starke J concluded that the fact that
the employer divided its activities between two independent companies, one a mining
company and one a repair company, does not support a finding that the repair company is
engaged in the coal mining industry, because it repairs coal mining equipment and machinery.
Rather as a question of fact, the employer and its employees in that case, were not engaged in
the coal mining industry but in an industry which effected repairs to coal mining and other
equipment and plant.29
[44] In a dissenting judgment, Dixon J relevantly observed that the function or activity with
which the case was concerned, was the repair and overhaul of earthmoving and excavating
equipment used in removing the over-burden and winning coal from the open cut. Such work
could be carried out as an integral part of the operations of open-cut mining so as to form an
indivisible element in the undertaking, or may be relegated to separate and independent
engineering operations outside the undertaking. Whether they are part of the industry of coal
mining or not, depends upon the circumstances “chief of which must be separateness of
establishments in point of control, organisation, place, interest, personnel and equipment. It
must in the end come down to a matter of degree.” His Honour held that the employer had not
established that the major repair and overhaul of the equipment was conducted otherwise than
as an integral part of the mining undertaking because:
The operations in question, although carried on by a distinct company, were under
one control and management with the mining operations;
The distinct company was a subsidiary;
The works were situated close to the open cut (three-quarters of a mile away) and the
site was chosen for that reason;
The site at which the work was carried out was variously described as “upon the
open cut”, “adjacent to but outside the area of the open cut” and “upon the mine
owner’s land but outside the fence”;
Although other work had been done, the repair and overhaul was the purpose of
setting up the engineering shop, and substantially it had no other present purpose;
and
There was an interchange of tools between the workshop in question and another
workshop established for minor adjustments established at the open cut.30
[45] In Transfield Services (Australia) Pty Ltd31 I decided that the Black Coal Award did
not apply to the Company in circumstances where it sought approval of an enterprise
agreement to apply to employees engaged to perform maintenance and/or miscellaneous
surface work at any surface mining site in Queensland where the Company had a contract to
perform such work. The basis of that conclusion was that Transfield is an engineering
company carrying out general work. In carrying out that work Transfield was not under the
[2017] FWC 5667
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control of a mine owner or a contractor conducting mining operations. Transfield conducts
maintenance, project and shutdown work and did not undertake any mining activity with
respect to employees covered by the agreement. Employees were performing work including
mechanical fitting, electrical and rigging and were supervised by Transfield’s supervisory
employees. Employees covered by the agreement were not embedded in or supplementary to
the work force of the mines at which they performed work and worked different rosters.
[46] I accept that in the present case, CQFMS undertakes manufacturing and engineering
work, both on a range of sites including coal mines and in its workshops, and that employees
performing such work are covered by the Manufacturing Award. Similarly, where CQFMS is
undertaking a project or a discreet package of work it has contracted to perform such as shut
down work on plant and equipment, the Manufacturing Award applies even where such work
is undertaken at a coal mine. However, that is not the end of the matter. It is necessary for the
purposes of the application of the BOOT to consider whether at the test time any current or
prospective employees are or will likely be covered by the Black Coal Award.
[47] On the evidence before me I am satisfied that CQFMS employs or will employ during
the term of the Agreement, employees who are covered by the Black Coal Award. I have
reached this conclusion for the following reasons. The Black Coal Award has application to
employers who employ persons in the black coal industry and does not exclude employers
who employ persons in other industries even where the majority of employees may be in
other industries. This is apparent from clause 4.1(a) and (b)(ii), which read together, make it
clear that it is not necessary that an employer of an employee in the black coal mining
industry is also in that industry, or substantially or principally within that industry.
[48] An employee may be in the black coal industry regardless of the industry of his or her
employer, in circumstances where the employee meets the definition in clause 4.1(b)(ii) of the
Black Coal Award. The coverage clause of the Black Coal Award recognises that an employer
may be in more than one industry and by virtue of clause 4.8 of the Black Coal Award, where
this is so, employees are covered by the award classification most appropriate to the work the
employee performs. While the cases referred to in the Note to clause 4.2 contain principles
that are relevant to the construction of the coverage provisions of the Black Coal Award, it is
important to note that those cases dealt with “all or nothing arguments” where an employer
was either in the coal mining industry or not, consistent with the exclusions in clause 4.3 (a) –
(g). The cases did not deal with companies who supply labour to coal mines in a labour hire
type of arrangement where employees integrate with the employees of the mine operator or
replace those employees temporarily.
[49] Consistent with the case law, employees in the workshops operated by CQFMS are not
covered by the Black Coal Award, notwithstanding that they are working on equipment that is
used to mine black coal. Mr Scott’s evidence establishes that employees of CQFMS go on to
black coal mine sites to perform project work such as maintenance shut downs or installation
of new equipment where CQFMS contracts to perform a particular package of work or
project. Such employees will also not be in the black coal industry by virtue of performing
such work, regardless of whether they work alongside the mine workforce.
[50] CQFMS hires employees to coal mine operators for leave coverage. In my view, these
employees are or will be covered by the Black Coal Award, notwithstanding that such
employees use tools and equipment provided by CQFMS, including vehicles. Where CQFMS
employees are on hire to a coal mine operator, and integrate into the workforce of the coal
[2017] FWC 5667
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mine operator or replace employees of the mine operator to perform work at a black coal
mine, they are covered by the Black Coal Award where:
The work is directly connected to the day to day operations of such a mine;
Employees are employed on work within a classification in the Black Coal Award;
and
They are supervised by the coal mine operator.
[51] On the basis of the evidence before me, I am satisfied and find that some employees of
CQFMS who will be covered by the Agreement are doing work within the definition of coal
mining employees in clause 4.1(b)(ii) of the Black Coal Award and that there will be
prospective employees doing that work. Such employees are undertaking temporary
placements at coal mine sites where they are replacing employees on leave and are integrated
into the mine workforce, working the same rosters and subject to the same supervision as
direct employees of the mine who are also covered by the Black Coal Award. This is so even
if the same employees work on other occasions at another location after the placement such as
CQFMS’ workshop or another site that is not a black coal mine.
[52] There is no provision in the Agreement that restricts its coverage, or which excludes
employees who are or would be covered by the Black Coal Award. To the contrary, the
Agreement contemplates that Awards other than the Manufacturing and Clerical Awards may
apply to employees under the Agreement.
[53] I have also had regard to the fact that the enterprise agreement currently applicable to
employees of CQFMS who will be covered by the Agreement subject of the present
proceedings, contains a table including classifications and wage rates for coal mining. There
does not appear to have been any relevant change in the operations of CQFMS and the fact
that these classifications and rates do not appear in the Agreement subject of these
proceedings, was not adequately explained by the submissions or the evidence of Mr Scott for
CQFMS, who essentially asserted that coal industry rates and classifications were put into the
current agreement in circumstances where they were not required.
The BOOT in relation to the Black Coal Award
[54] I am of the view that when the Agreement is compared to the Black Coal Award, it
does not pass the BOOT. In this regard I accept the submissions of the CFMEU that when
ordinary working hours, overtime, shift work, annual leave, personal leave, pubic holidays,
training, notice of termination of employment and other relevant provisions of the Black Coal
Award are considered against the Agreement, employees are not better off overall than they
would be if the Black Coal Award applied.
[55] I also do not accept that there are provisions in the Agreement which address the
BOOT issues. Part I d) relied on by CQFMS provides as follows:
“Better off overall test Guarantee
This Agreement provides a safety new approach of minimum levels of pay, penalty
rates, loadings and overtime provisions. It is open to the employer to provide
additional remuneration or bonuses etc at the employer’s discretion, and the
payment of such additional amounts to one employee shall not create an entitlement
[2017] FWC 5667
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to payment to any other employee. Such payments will not constitute an additional
obligations or automatic entitlement, and will not permit any employee to pursue
any additional claim during the life of this agreement, nor will employees pursue
additional claims for any other reason during the life of this agreement.
The agreement also provides other options including flat rates. This Enterprise
Agreement further provides that an employee on any alternative arrangement must
receive at least same pay as would apply if that employee undertook the same work
and was paid penalty rates and other entitlements under the agreement. This is a
further guarantee that even if employed on an alternative arrangement such as a flat
rate, employees will receive higher remuneration under this agreement than they
would have received under an applicable award, including entitlements relating to
termination of employment. For the avoidance of doubt, where some other clause
provides that it may operate despite other clauses in the agreement, this guarantee
will always prevail regardless.”
[56] Those provisions do not operate to guarantee an employee will be better off overall
under the Agreement regardless of which Award applies to the employee. In my view the
provisions are uncertain, aspirational and unenforceable. I do not accept that in circumstances
where CQFMS asserts on the one hand that the Black Coal Award does not apply to
employees covered by the Agreement, it can argue on the other hand that the Agreement gives
employees who might be covered by the Black Coal Award, the right to receive total
remuneration that is better than that Award. An employee seeking to enforce an entitlement to
be paid remuneration better than that provided by the Black Coal Award would face some
difficulty in circumstances where the employer does not accept that the Black Coal Award
applies to any employee.
[57] Further, I am of the view that in circumstances where CQFMS maintains before the
Commission that the Black Coal Award does not apply to employees and has failed to
identify a number of terms of the Agreement that are detrimental when compared to that
Award, the Company cannot have given employees a proper explanation of the terms of the
Agreement and their effect, as required by s. 180(5) of the Act.
CONCLUSION
[58] For the reasons set out above I am not satisfied that CQFMS has complied with s.
180(2) of the Act on the basis that the Company did not ensure that during the access period,
each employee had a copy of or access to, material incorporated into the Agreement by
reference. Further I am not satisfied that the Company took reasonable steps to provide an
explanation of the Agreement and its terms, given the deficiencies identified above in respect
of the BOOT. Accordingly, I am not satisfied as required by s. 188(a)(i) of the Act that the
Agreement has been genuinely approved. Further, I am not satisfied that the Agreement
passes the BOOT. Given that I must not approve the Agreement unless I am satisfied that the
requirements for concluding that it has been genuinely approved are met, it is not necessary to
consider whether my concerns about the BOOT issues could be addressed by the employer
providing undertakings.
[59] The application for the approval of the CQFMS Enterprise Agreement 2017 is refused
and an Order to that effect and dismissing that application will issue with this Decision.
[2017] FWC 5667
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DEPUTY PRESIDENT
Appearances:
Mr D. Scott on behalf of the Applicant.
Mr A. Thomas on behalf of the CFMEU.
Hearing details:
Brisbane.
20 July & 14 September.
2017.
Printed by authority of the Commonwealth Government Printer
Price code C, PR597276
1 Exhibit 1 – Witness Statement of Steven Allan Pierce.
2 DP World Melbourne Limited [2016] FWC 386.
3 Part I(c) dot point 1.
4 Part I(d) dot point 2.
5 Part I(d) dot point 5.
6 Part III (c) dot point 2.
7 [2014] FWCA 8996.
8 [2014] FWC 5368.
9 (1948) 77 CLR 123.
10 [2016] FWC 3770.
11 [2014] FWC 5368.
12 Applicant Submission in Response to CFMEU Objections.
13 [2014] FWCFB 2042.
14 Ibid at [11].
15 Ibid at [84].
16 [2016] FWCFB 7057.
17 Ibid at [2] – [6].
18 Ibid at [18] – [19].
19 Ibid at [19].
20 No. 20 of 1980, 22 February 1982 {Print CR2297}.
21 The King v Central Reference Board; Ex Parte Thiess (Repairs) Pty Ltd (1948) 77 CLR 123 at 135.
AL OF THE FAIR WORK COMMISSION THE
[2017] FWC 5667
19
22 Ibid at 135.
23 Ibid at 130.
24 The King v Drake Brockman; Ex parte National Oil Pty Ltd (1943) 68 CLR 51 at 57.
25 Australian Collieries Staff Association and Queensland Coal Owners Association No. 20 of 1980, 22 February 1982 and
[CR2297].
26 Thiess op cit at 130-131.
27 Ibid at 135.
28 Ibid at 135.
29 Ibid at 139.
30 Ibid at 141.
31 [2014] FWC 5368.
