[2018] FWCFB 3825
The attached document replaces the document previously issued with the above code on 28
June 2018.
The title ‘Lightning Brick Pavers t/a Lightning Brick Pavers’ is amended to ‘Lightning Brick
Pavers Pty Ltd t/a Lightning Brick Pavers’
Mathew Dean
Associate (a/g) to Vice President Hatcher
Dated 18 July 2018
1
Fair Work Act 2009
s.604 - Appeal of decisions
Construction, Forestry, Maritime, Mining and Energy Union
v
Lightning Brick Pavers Pty Ltd t/a Lightning Brick Pavers
(C2017/6899)
VICE PRESIDENT HATCHER
VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT GOSTENCNIK
COMMISSIONER LEE
COMMISSIONER HARPER-GREENWELL
SYDNEY, 28 JUNE 2018
Appeal against decision [2017] FWCA 6196 of Deputy President Kovacic at Melbourne on
23 November 2017 in matter number AG2017/2706.
Introduction
[1] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) has
lodged an appeal, for which permission to appeal is required, against a decision issued by
Deputy President Kovacic on 23 November 20171 (Decision). In the Decision, the Deputy
President approved the Lightning Brick Pavers Enterprise Agreement 2017-2021
(Agreement). The CFMMEU contends that the Commissioner erred in approving the
Agreement because it did not pass the better off overall test as required by s 186(2)(d) of the
Fair Work Act 2009 (FW Act), the Deputy President’s approval was based on the acceptance
of undertakings which resulted in substantial changes to the Agreement contrary to s 190(3)
of the FW Act, and the Agreement was not genuinely agreed to by the employees covered by
it as required by s 186(2)(a) because the requirement in s 180(3) concerning the notification to
employees of the time, place and method of the vote upon the Agreement was not complied
with.
Relevant features of the Agreement
[2] The relevant features of the Agreement are as follows:
(1) The Agreement is binding upon Lightning Brick Pavers Pty Ltd (Lightning
Brick Pavers) and its employees engaged in civil construction activities within
the classification structure in “Schedule 1” [sic] of the Agreement (cl 3).
1 [2017] FWCA 6196
[2018] FWCFB 3825
DECISION
E AUSTRALIA FairWork Commission
[2018] FWCFB 3825
2
(2) The Agreement is stated to have a “Commencement Date” of “2017” and an
“Expiration Date” of “2021” (cl 4).
(3) “Ordinary Time Rate” is defined to mean the base rate of pay for ordinary
hours and included “a loading in respect of any entitlements that may
ordinarily have been due under any relevant award that are not otherwise
specified in this Agreement” (cl 2.13).
(4) The NES and the Agreement contain the minimum wages and working
conditions of employment for the employer and all employees covered by the
Agreement (cl 5.1).
(5) Employees agree to be bound by Company policies as created and varied from
time to time (cl 7.1).
(6) “Subject to the necessary equipment being provided and sufficient time
allowed, each Employee is responsible for keeping the workplace, equipment
and Company vehicles in a clean and safe condition, including reporting any
unsafe equipment or unsafe Company vehicles” (cl 9.3, underlining added).
(7) Redundancy is defined as meaning “a situation where an Employee ceases to
be employed, other than for reasons of misconduct or refusal of duty”, and the
scale of redundancy payments in that eventuality is the same as that prescribed
in s 119 of the FW Act (cl 17.1), provided that an employee with less than one
year’s continuous service is entitled to a redundancy payment of 1.75 hours per
week of employment where the termination is initiated by the employer other
than for reasons of misconduct or refusal of duty (cl 17.2).
(8) The classifications and minimum wages are as set out in Schedule A,
Classifications and Wages of the Agreement, and will be “reviewed annually
by the relevant Employer” provided that the rates of pay will not be reduced
and will be increased to ensure at a minimum that employees remain better
paid under the Agreement than under the Award (cl 18).
(9) The employment categories under the Agreement are full-time, part-time and
casual (cl 20).
(10) Ordinary hours are an average of 38 per week Monday to Friday to a
maximum of 8 hours per day, with the span of ordinary hours being between
6.00am and 6.00pm unless otherwise agreed between the majority of
employees in the area or areas concerned and the employer and subject to cl
23, Shift Work (cls 21.1 and 21.2).
(11) Overtime hours are defined as work in excess of an average of 38 per week for
full-time employees, agreed hours for part-time employees, or outside the span
of hours, and is payable at 150% for the first 4 hours and then 200% on
weekdays and Saturdays, and at 200% on Sundays and public holidays (cls
21.4 and 21.6). Instead of being paid for overtime, the employer and employee
may agree to the employee taking time off in lieu, at a mutually agreed time
and at the ordinary wage rate (cl 21.5).
[2018] FWCFB 3825
3
(12) Provision is made for shift work, including afternoon shift work, night shift
work and permanent night shift work, and an allowance of 30% is payable for
permanent night shift work only (cl 23).
(13) The allowances payable are remote project allowance (cl 25.1) and daily travel
allowance (cl 25.2).
(14) Employees are entitled to annual leave in accordance with the FW Act, and
employees will accrue 4 weeks’ annual leave per year (cl 29.1).
(15) Employees except casual employees are entitled to 2 days’ unpaid
personal/carer’s leave for care and support of a member of the employee’s
immediate family or household because of illness or injury or an unexpected
emergency (cl30.6).
(16) Employees except casual employees are entitled to compassionate leave in
accordance with the FW Act (cl 31).
(17) Schedule A provides for the following rates of pay:
Level Job Base Rate ($ hour)
L7 Site Supervisor 35.00
L6 Shift Supervisor 32.00
L5 Leading Hand 29.50
L4 Experienced Brick Paver 27.50
L3 Brick Paver 25.50
L2 General Hand/General Labourer 23.00
L1 Entry-Level General Hand/
Entry-Level General Labourer 21.50
The proceedings before the Deputy President and the Decision
[3] The application for approval of the Agreement filed on 23 June 2017, was
accompanied by a statutory declaration in standard form (Form F17) made by Paul Claxton,
the Managing Director of Lightning Brick Pavers. That declaration relevantly stated the
following:
the nominal expiry date (NED) of the Agreement was “2021”;
in response to the question at 2.4 inquiring about what steps were taken by the
employer and on what date were they taken to ensure that the relevant employees were
given a copy of the written text of the agreement and any other material incorporated
[2018] FWCFB 3825
4
by reference into the agreement, or had access to these materials, it was stated that a
“hard copy of the Agreement was provided to employees at the meeting conducted at
Lightning Brick Pavers premises” and “Copies of the Agreement were made available
at Lightning Brick Pavers premises”;
on 16 June 2017 a letter was sent out to all employees covered by the proposed
Agreement notifying them of the date the voting would take place and the voting
method to be used;
voting for the Agreement commenced on 23 June 2017;
the Agreement did not provide an additional week of annual leave for shift workers;
the reference instrument for the purpose of the BOOT was the Building and
Construction General On-site Award 2010 (Award); and
the Agreement did not contain any terms that were less beneficial than the equivalent
terms and conditions in the reference instrument.
[4] On 21 July 2017 the CFMMEU wrote to the Commission stating that it opposed the
approval of the Agreement on the basis that it did not pass the BOOT and requested a hearing
before the Commission to allows its view in this respect to be considered.
[5] On 11 September 2017, the Deputy President’s chambers sent an email to Lightning
Brick Pavers indicating that the application for approval of the Agreement would be listed for
hearing, at which Lightning Brick Pavers would have the opportunity to provide submissions
on a number of identified concerns, which relevantly included the following:
the Deputy President noted that the declaration stated that there were no less beneficial
terms in the Agreement, and invited Lightning Brick Pavers to “reflect” on this and
confirm that this was correct having regard to the issues which were identified in the
email;
it was unclear from the declaration how employees were notified of the place of the
vote upon the proposed Agreement;
clause 9.12 of the Agreement referred to company policy, but it was unclear whether
this or any other material incorporated by reference was made available to employees
during the access period;
no nominal expiry date for the Agreement was specified as required by s 186(5) of the
FW Act;
clause 23 provided for shift work but did not define shift workers for the purpose of
the NES, and clause 29 did not provide for an extra week of annual leave for shift
workers, noting that s 87(1)(b) of the FW Act provides for 5 weeks of annual leave if
an enterprise agreement applied and defined or described the employee as a
shiftworker for the purpose of the NES;
[2018] FWCFB 3825
5
clause 30 indicated that casual employees were not entitled to the 2 days’ unpaid
carer’s leave, when no such exclusion was provided for in the FW Act, and clause
31.1 excluded casual employees from compassionate leave contrary to s 106 of the
FW Act;
in relation to the BOOT, the redundancy pay for employees with less than 4 years’
service was less than that provided for in clause 17 .3 of the Award;
the pay rates in the Agreement were inclusive of the annual leave loading and any
entitlements ordinarily due under the Award, which excluded relevant Award benefits
such as the overtime meal allowance, hot work allowance, refractory bricklayer
allowance, crib time worked, bricklaying cutting machine allowance and first aid
allowance, meaning that employees may not be better off when working a 50 hour
week;
the Award provided for loadings of 150% for night or afternoon shifts and 125% for
morning and early afternoon shifts, but the Agreement did not, meaning that
employees who worked in circumstances which might attract such loadings under the
Award might not be better off overall, and that employees classified as L1-L5 might
not be better off overall if they worked more than 8 hours on a permanent night shift;
the public holiday penalty rate was 200% under the Agreement but 250% under the
Award;
the overtime rate was lower under the Agreement than under the Award, leading to a
concern that employees at the lowest classification would not be better off overall.
[6] On 9 October 2017 the CFMMEU was informed in writing that, having failed to
respond to the Commission’s request for the CFMMEU to identify whether it had any
members employed by Lightning Brick Pavers and, if so, to give their names, it would not be
given an opportunity to be heard in the matter.
[7] The foreshadowed hearing was conducted, by telephone, on 16 October 2017. The
hearing was attended by Mr Claxton, and he was also represented at the hearing by a paid
agent. A number of issues were raised at the hearing, including whether employees had been
notified of the place of the vote and whether they had been provided with copies of policies
incorporated into the Agreement. In respect of the latter matter, it was submitted by Lightning
Brick Pavers that the existing drug and alcohol policy had always been available to employees
at the office to be viewed, but there had been no specific identification of this at the time the
Agreement was distributed to employees.2
[8] On 8 November 2017 Lightning Brick Pavers provided the Commission with two
documents:
(1) A letter containing a series of undertakings.
(2) A copy of the minutes of the monthly toolbox meeting held on 16 June 2017,
starting at “3.30/4 PM” and finishing at “4.30/5 PM” which among other
2 Transcript 16 October 2017 PNs 100-111
[2018] FWCFB 3825
6
things recorded that the employees were told, in relation to the proposed
Agreement, that “Voting will be on 23rd June at Yard (next BBQ)”.
[9] On 13 November 2017 the Deputy President sent an email to Lightning Brick Pavers’
representative raising two issues with the proposed undertakings. On 17 November 2017
revised undertakings were sent to the Deputy President in response. On 20 November 2017
the Deputy President’s chambers advised that the revised undertakings were acceptable and
that the Agreement would be approved once a signed version of the undertakings was
received. The signed undertakings were subsequently provided, and the Decision was issued
on 23 November 2017, as earlier stated. The Decision was as follows:
“[1] An application has been made for approval of an enterprise agreement known as
the Lightning Brick Pavers Enterprise Agreement 2017 – 2021 (the Agreement). The
application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) by
Lightning Brick Pavers T/A Lightning Brick Pavers (the Applicant). The Agreement
is a single enterprise agreement.
[2] Subject to concerns that have been addressed by way of undertakings, I am
satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant
to this application for approval have been met.
[3] As noted, pursuant to s.190(3), I have accepted undertakings from the Applicant.
In accordance with s.191(1) of the Act the undertakings are taken to be a term of the
Agreement. A copy of the undertakings is attached to this decision at annexure A.
[4] The Agreement is approved and, in accordance with s.54 of the Act, will operate
from 30 November 2017. The nominal expiry date of the Agreement is 23 November
2021.”
[10] There were a total of 14 undertakings attached to the Decision which were accepted by
the Deputy President, expressed as concerning the following topics: Permanent night shift,
consultation of changes in hours, definition of a shiftworker, shiftworker – annual leave,
employer requesting annual leave, personal/carers leave for casual employees, compassionate
leave for casual employees, redundancy, travel allowance, allowances, shift work, overtime
for shiftworkers, overtime, and base rate. A number of these require description in some
detail. Under the last undertaking, the table of base rates in Schedule A of the Agreement was
to be replaced by the following rates table:
[2018] FWCFB 3825
7
[11] This undertaking stated that the new base rates were “inclusive of annual leave
loading, leading hand allowance, first aid allowance and cutting machine allowances”. In
conjunction with this undertaking, which significantly reduced the base rates, the ninth
undertaking introduced a new flat daily travelling allowance and the tenth undertaking
introduced the Award allowances for crib time, overtime meals and living away from home -
distance work. In addition, the thirteenth undertaking increased the overtime rates, so that for
overtime on Monday-Saturday, the rate was 150% for the first two hours (not four hours) and
200% thereafter, and for public holidays it was 250% (not 200%).
[12] The eighth undertaking replaced the table of redundancy payments in cl 17.1 with the
following new table (which reflects the scale of redundancy payments in cl 17, Industry
specific redundancy scheme of the Award):
[13] It can be seen that the new redundancy scale provides for employees with from one to
approximately 2½ years’ service with a lesser payment than that provided for in the scale in
clause 17.1 of the Agreement, as earlier set out.
Level Job Base Rate ($ per hour) Level 7 (CW/ECW7) Site Supervisor 32.70 Level 6 (CW/ECW 6) Shift Supervisor 29.70 Level 5 (CW/ECW 5) Bricklayer special class Leading Hand 27.48 All other Level 4 (CW/ECW 4) Experienced Brick Paver 25.20
Level 3 (CW/ECW 3) Bricklayer Brick Paver 24.22 General Hand / General 22.17 All other Level 2 (CW/ECW 2) Labourer Entry-Level General Hand / 20.68 All other Level 1 (CW/ECW 1) (level a) Entry-Level General Labourer
Period of Continuous Service Redundancy pay At least 1 year, but less than 2 years 2.4 weeks' pay plus for all service in excess of 1 year, 1.75 hours pay per completed week of service up to a maximum of 4.8 weeks` pay At least 2 years, but less than 3 years 4.8 weeks' pay plus, for all service in excess of 2 years, 1.6 hours pay per completed week of service up to a maxim of 7
weeks' pay At least 3 years, but less than 4 years 7 weeks' pay plus, for all service in excess of 3 years, 0.73 hours pay per completed week of service up to a maximum of 8 weeks' pay Over 4 years 8 weeks
[2018] FWCFB 3825
8
Appeal grounds and submissions
[14] As originally filed, the CFMMEU’s notice of appeal contended that the Deputy
President erred in approving the Agreement in two respects: first, in being satisfied that the
Agreement together with the undertakings passed the BOOT and, second, in accepting
undertakings which resulted in substantial changes to the Agreement. The CFMMEU
subsequently sought to amend its notice of appeal to add a third contention of error, namely
that the Deputy President erred in finding that the Agreement had been genuinely agreed to by
the employees covered by it.
[15] In relation to the first ground of appeal, the CFMMEU advanced four modelled
comparisons of remuneration between the Agreement and Award, based on a CW3-classified
daily hire employee working 50 hours per week Monday-Friday starting at 6.00am, to
demonstrate that employees would be worse off than under the Award. The CFMMEU also
provided a table comparing the terms and conditions of the Agreement as compared to those
of Award, and submitted that this demonstrated that in 67 respects the Agreement was less
beneficial than the Award. For these reasons, it submitted, it was not open for the Deputy
President to conclude that the Agreement as amended by the undertakings passed the BOOT.
[16] In relation to the second ground of appeal, the CFMMEU submitted that the Deputy
President could not have been satisfied that the undertakings would not result in substantial
changes to the Agreement, since they significantly altered the entire remuneration structure
which was contained in the Agreement as voted upon.
[17] In relation to the third contention of error which the CFMMEU sought to add to its
notice of appeal by way of an amendment, it was submitted that the element of genuine
agreement required by s 188(a)(i) could not be satisfied because Lightning Brick Pavers had
not complied with the pre-approval step requirement in s 180(3). Section 180(3) required that
the employer take all reasonable steps to notify employees of the time, place and method of
the vote upon a proposed agreement by the start of the “access period”. The access period, as
defined in s 180(4), was the 7-day period ending immediately before the commencement of
the voting process, and the CFMMEU submitted that this period consisted of the seven full
calendar days immediately prior to the day on which the voting process commenced. Because,
on the material provided by Lightning Brick Pavers, employees were notified of the time,
place and method of the vote on 16 June 2017 and the vote took place on 23 June 2017, this
requirement was not complied with. Notification was required on 15 June 2017 or earlier.
[18] Lightning Brick Pavers submitted:
the modelling undertaken by the CFMMEU was flawed because it was based on a
form of employment (daily hire employment) which was not permitted by the
Agreement, used the incorrect classification for the comparison, incorrectly calculated
penalty rates, did not include the travel allowance for which clause 25 of the
Agreement provided, and incorrectly excluded the value of crib time, meal and travel
allowances;
a proper global comparison demonstrated that employees were better off under the
Agreement than under the Award;
[2018] FWCFB 3825
9
the undertakings were permissible because they merely clarified the application of
certain benefits or provided more beneficial entitlements;
the fourteenth undertaking, while it reduced the ordinary rates of pay, only “unrolled”
those rates so that previously absorbed allowances were separated out to allow a
proper BOOT comparison to be undertaken, and the comparison material provided by
Lightning Brick Pavers to the Deputy President demonstrated that the Agreement with
the undertakings passed the BOOT;
as for the s 180(3) requirement, the day of the vote was to be counted for the purpose
of the access period as well as the day of the notification, so that the requirement was
satisfied in this case consistent with the Full Bench decision in CFMEU v Australian
Mining Supplies Company Pty Ltd.3
[19] Lightning Brick Pavers submitted that no error in the Decision had been identified,
and that permission to appeal should be refused or, if granted, the appeal should be dismissed.
Consideration
[20] It is only strictly necessary for us to determine the CFMMEU’s second contention of
error, namely that the Deputy President erred by accepting Lightning Brick Pavers’
undertakings in circumstances where those undertakings resulted in substantial changes to the
Agreement.
[21] The provisions of the FW Act relevant to this contention may briefly be described.
Sections 186 and 187 set out a number of matters about which the Commission must be
satisfied in order for an enterprise agreement that has been made to be approved and take
effect under the FW Act. One of those requirements, in s 186(2)(d), is that the agreement
passes the BOOT. The requirements of the BOOT are set out in s 193.
[22] Section 190 provides an avenue for the approval of an enterprise agreement
notwithstanding that it may not meet all the requirements of ss 186 and 187, including the
requirement that it pass the BOOT. Section 190 provides:
190 FWC may approve an enterprise agreement with undertakings
Application of this section
(1) This section applies if:
(a) an application for the approval of an enterprise agreement has been made
under subsection 182(4) or section 185; and
(b) the FWC has a concern that the agreement does not meet the requirements
set out in sections 186 and 187.
Approval of agreement with undertakings
3 [2017] FWCFB 2236
[2018] FWCFB 3825
10
(2) The FWC may approve the agreement under section 186 if the FWC is satisfied
that an undertaking accepted by the FWC under subsection (3) of this section meets
the concern.
Undertakings
(3) The FWC may only accept a written undertaking from one or more employers
covered by the agreement if the FWC is satisfied that the effect of accepting the
undertaking is not likely to:
(a) cause financial detriment to any employee covered by the agreement; or
(b) result in substantial changes to the agreement.
FWC must seek views of bargaining representatives
(4) The FWC must not accept an undertaking under subsection (3) unless the FWC
has sought the views of each person who the FWC knows is a bargaining
representative for the agreement.
Signature requirements
(5) The undertaking must meet any requirements relating to the signing of
undertakings that are prescribed by the regulations.
[23] In summary, where the Commission has a concern that an enterprise agreement for
which approval is sought does not pass the BOOT, the Commission may accept an
undertaking that addresses that concern provided that the undertaking is not likely to cause
financial detriment to any employees covered by the agreement or result in substantial
changes to the agreement. Consideration of whether those conditions are met in any given
case will require an evaluative judgment to be made in the nature of an exercise of a
discretion.
[24] In this case, the scale and nature of the undertakings proposed by Lightning Brick
Pavers necessarily gave rise to a serious question as to whether the conditions for the
acceptance of undertakings in s 190(3) were capable of satisfaction. Those undertakings,
which ran to almost five pages of text, were extensive in scope and altered a range of
conditions in the Agreement in an extensive way. It may be accepted that some of the
undertakings were relatively minor and were entirely beneficial to employees: for example,
the unpaid personal/carer’s leave and compassionate leave entitlements were altered to make
clear they applied to casual employees. However at least in two respects the alterations
effected by the undertakings are much more significant. First, the remuneration structure has
been reshaped entirely. The Agreement itself contains a loaded rate structure, in which the
ordinary hourly rates are significantly higher than those in the Award in compensation for the
elimination of nearly all allowances that would be payable under the Award and a lower rate
of overtime. That was changed to a different structure which involved significantly lower
ordinary rates of remuneration, a restoration of some of the Award allowances and a higher
rate of overtime. Second, the scale of redundancy payments was changed in a way which, as
earlier explained, reduced them for employees with from one to about 2½ years’ service.
Clause 17.1 of the Agreement already contained the broad definition of redundancy found in
[2018] FWCFB 3825
11
clause 17.2 of the Award, so there was no countervailing benefit from the change from the
existing scale (which replicated the NES scale in s 119) to the new scale (which was the same
as that in clause 17.3 of the Award) for employees with these levels of service. This
constituted a straight out reduction in the redundancy entitlement.
[25] In those circumstances, it was necessary for detailed consideration to be given as to
whether the s 190(3) requirements for the acceptance of undertakings were satisfied. Beyond
noting that the undertakings had been accepted pursuant to s 190(3), the Decision does not
explain on what basis it was considered that the significant changes effected by the
undertakings which we have identified did not amount to “substantial changes to the
agreement” for the purpose of s 190(3)(b). We consider that in this respect the Decision was
attended by appealable error in one of two alternative respects. The first is that the Deputy
President simply failed to consider whether the changes to the remuneration structure and the
redundancy payment scale amounted to substantial changes to the agreement, and thereby did
not take into account a relevant consideration. The alternative is that the Deputy President did
consider these matters, and reached a conclusion which was not reasonably open to him,
namely that they did not amount to substantial changes for the purpose of s 190(3)(b). Those
changes were plainly substantial, for the reasons to which we have adverted. The new
remuneration structure and redundancy scale introduced by the undertakings were radically
different to those which the employees covered by the Agreement voted upon. As stated by
the Full Bench in CFMEU v Kaefer Integrated Services Pty Ltd, s 190(3) “does not permit
undertakings that result in the wholesale reshaping of the agreement, such that it bears no
resemblance to the pre-undertaking agreement that was approved by the employees”.4 On
either view the exercise of the discretion required by s 190(3)(b) miscarried.
[26] The CFMMEU’s appeal might have, but did not, raise the associated question of
whether the undertakings complied with the condition in s 190(3)(a), namely whether they
were likely to “cause financial detriment to any employees covered by the agreement”. The
financial detriment referred to in the provision is one that occurs by comparison with the
terms of the agreement as voted upon by the employees (in the case of a non-greenfields
agreement). There are strong grounds, we consider, for the conclusion that the undertakings
were very likely to cause financial detriment. We have already identified the way in which the
redundancy payment entitlements were reduced for employees with one to about 2½ years’
service. In respect of the remuneration structure, as we have earlier explained, the
undertakings reduced the ordinary base rate of pay in return for the addition of some
allowances and an increase to the overtime rates of pay. In circumstances where an employee
works little or no overtime and does not perform work of a nature that would attract the
payment of the allowances provided for in the undertakings, those undertakings may well lead
to an employee earning less under the remuneration structure in the undertakings than under
the Agreement that was voted upon. However, since this issue was not the subject of
argument we will take it no further.
[27] It is apparent that the acceptance of the undertakings was critical to the Deputy
President’s determination to approve the Agreement. In circumstances where those
undertakings could not have been accepted because they were incapable of satisfying the
condition in s 190(3)(b), the Deputy President erred in approving the Agreement. We consider
that permission to appeal should be granted because this amounted to a significant
jurisdictional error and, because of the extent to which the undertakings altered the terms of
4 [2017] FWCFB 5630 at [41]
[2018] FWCFB 3825
12
the Agreement, operated to subvert that which the employees voted to approve. The appeal is
upheld on the basis of the error identified, and the Decision is quashed.
[28] It is unnecessary in those circumstances for us to determine the CFMMEU’s second
contention of error, which was based on the assumption that the Agreement was to be
assessed for the BOOT as if the undertakings were operative. For the reasons stated, the
BOOT could not be applied in that way because the undertakings were incapable of
acceptance. We would simply add that the CFMMEU’s modelling of financial disadvantage
was not of assistance at least because it was based on a comparison of daily hire employment.
The Agreement does not provide for daily hire as a mode of employment, so the comparison
undertaken by the CFMMEU could not be relevant to the BOOT.
[29] It is also strictly unnecessary to determine whether to allow the notice of appeal to be
amended to raise the third contention of error. However it will be necessary for us to return to
the issue raised by the CFMMEU in that respect, as will be explained shortly.
[30] Having quashed the Decision on the basis we have set out above, it is necessary for the
application for approval of the Agreement to be re-determined. We will undertake that task
ourselves based on the material before us.
[31] We consider that the Agreement is incapable of approval for three reasons. First, it
does not pass the BOOT. The correspondence caused to be sent by the Deputy President on
11 September 2017 identified a range of concerns about the Agreement which we consider are
demonstrative of the proposition that the Agreement did not pass the BOOT. There are other
BOOT issues with the Agreement that were not identified in that correspondence, not the least
of which is that clause 9.3 would as earlier set out impose upon employees the extremely
onerous obligation of being responsible for keeping the workplace, equipment and company
vehicles in a safe condition - an obligation that does not appear in the Award. It was not
contended by Lightning Brick Pavers that the Agreement, absent the undertakings, passed the
BOOT.
[32] We do not consider that the BOOT deficiency can be remedied by the provision of
undertakings that are capable of acceptance under s 190(3). As the chronology which we have
earlier set out demonstrates, the Deputy President afforded Lightning Brick Pavers an
extensive opportunity to address the BOOT concerns which he had identified. The
undertakings which were advanced as necessary to address those concerns were incapable of
acceptance under s 190(3) for the reasons we have explained. We cannot envisage that any
alternative set of undertakings could be proposed to address those concerns which would not
likewise involve substantial changes to the Agreement.
[33] Second, the Agreement did not, as required by s 186(5)(a), specify a date as its
nominal expiry date, but merely identified the year 2021. Although theoretically an
undertaking could be provided which specified a nominal expiry date, we consider given the
absence of a nominal expiry date in the Agreement the subsequent nomination by the
employer of a date in the year 2021 would necessarily result in a substantial change to the
Agreement so as to render it incapable of acceptance under s 190(3)(b). The nominal expiry
date is of significance to the scheme of enterprise bargaining under the FW Act, particularly
in relation to the capacity of parties to seek the termination of an agreement and of employees
to take protected industrial action. To simply add a date of the employer’s choosing to an
[2018] FWCFB 3825
13
agreement which employees never had the opportunity to consider when voting would be a
change of considerable significance.
[34] Third, the Agreement was not genuinely agreed to by the relevant employees as
required by s 186(2)(a) for the reasons explained in the CFMMEU’s submissions. Section 188
sets out the circumstances in which an agreement has been genuinely agreed to by the
employees covered by it for the purpose of s 186(2)(a), and it includes (in s 188(a)(i))
compliance with s 180(3). Section 180(3) requires the employer to take all reasonable steps to
notify the relevant employees of the time and place at which the vote upon an agreement will
occur, and the voting method to be used, “by the start of the access period for the agreement”.
The “access period” for a proposed enterprise agreement is defined in s 180(4) to mean “the
7-day period ending immediately before the start of the voting process referred to
in subsection 181(1)”.
[35] The meaning of s 180(4) was recently considered in detail in the Full Bench decision
in CFMMEU v CBI Constructors Pty Ltd.5 In that decision the Full Bench determined that the
access period for which s 180(4) provided consisted of the seven clear calendar days ending
immediately prior to the day on which the voting process commenced.6 That decision was
consistent with the approach taken in the earlier Commission/FWA decisions in Hydro
Electric Corporation7 and McKechnie Iron Foundry.8
[36] In this case the voting process commenced on 23 June 2017. The access period was
the period of seven calendar days consisting of the whole of 16–22 June 2017. The employer
was required to take reasonable steps to effect the notification under s 180(3) by the start of
this period, that is on 15 June 2017 or earlier. The notification in fact occurred during 16 June
2017, after the access period commenced, and there is no evidence that any other reasonable
steps to effect the notification occurred prior to 16 June 2017. Accordingly the Agreement
was not “genuinely agreed” as required by s 186(2)(a) in accordance with the definition of
that expression in s 188.
[37] For these reasons, the application for approval of the Agreement is dismissed.
Orders
[38] We order as follows:
(1) Permission to appeal is granted.
(2) The appeal is upheld.
(3) The Decision ([2017] FWCA 6196) is quashed.
(4) The application for the approval of the Agreement (AG2017/2706) is
dismissed.
5 [2018] FWCFB 2732
6 Ibid at [42]
7 [2014] FWC 4169
8 [2010] FWA 3171
[2018] FWCFB 3825
14
VICE PRESIDENT
Appearances:
K. Singh on behalf of the Construction, Forestry, Mining, Maritime and Energy Union.
R. Miller, solicitor on behalf of Lightning Brick Pavers.
Hearing details:
2018.
Melbourne:
1 March.
Printed by authority of the Commonwealth Government Printer
PR608534
OF THE FAIR WORK MISSION THE
