1
Fair Work Act 2009
s.604 - Appeal of decisions
Construction, Forestry, Maritime, Mining and Energy Union and others
v
Specialist People Pty Ltd
(C2019/3597, C2019/3600, C2019/3601)
Manufacturing and associated industries
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT COLMAN
COMMISSIONER LEE SYDNEY, 20 NOVEMBER 2019
Application for approval of an enterprise agreement under s 185 on rehearing
Introduction
[1] This decision concerns an application made by Specialist People Pty Ltd (Specialist
People) under s 185 of the Fair Work Act 2009 (FW Act) for the Commission to approve the
Specialist People Enterprise Agreement 2018 (Agreement) upon rehearing of the application.
The background is as follows.
[2] The application was initially approved by Deputy President Beaumont in a decision
issued on 22 May 2019.1 The Deputy President concluded that the Agreement met the various
approval requirements in the FW Act, including that it passed the “better off overall test”
(BOOT), and approved the Agreement subject to twelve undertakings.
[3] Appeals from this decision were brought by the Construction, Forestry, Maritime,
Mining and Energy Union (CFMMEU), the Australian Workers’ Union (AWU), the
Australian Manufacturing Workers’ Union (AMWU) and the Communications, Electrical,
Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
(CEPU).
[4] The appellant unions contended that the Deputy President did not properly assess
whether the Agreement passed the BOOT because she compared its terms only with the
Manufacturing and Associated Industries and Occupations Award 2010 (Manufacturing
Award), which the company had contended was the only relevant award. The unions
submitted that the Deputy President failed to consider whether the Agreement passed the
1 [2019] FWCA 3535
[2019] FWCFB 7919
DECISION
E AUSTRALIA FairWork Commission
[2019] FWCFB 7919
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BOOT against other relevant awards, namely the Building and Construction General On-Site
Award 2010 (Building and Construction Award), the Hydrocarbons Industry (Upstream)
Award 2010 (Hydrocarbons Award), and the Electrical, Electronic and Communications
Contracting Award 2010 (Electrical Contracting Award) (the additional awards). This appeal
ground proceeded on the basis of the unions’ interpretation of the scope of the Agreement,
which they said was not confined to work covered by the Manufacturing Award, as the
company had contended, but extended to work covered by the additional awards.
[5] A second appeal ground was that the Deputy President could not have been satisfied
that Specialist People took all reasonable steps to explain the terms of the Agreement and
their effect as required by s 180(5), with the result that the Agreement was not genuinely
agreed to as required by s 186(2)(a). In this respect, the appellant unions submitted that the
company’s explanation of the terms was contained in a single table summarising the import of
some clauses, and that it did not address the range of classifications that the Agreement
covers, the roster patterns that would be worked, or the range of modern awards that would
otherwise cover the work in question and the relevant benefits that would be provided under
the Agreement.
[6] The competing contentions concerning the scope of the Agreement focused on clause
2, which states that the Agreement applies to employees of the company employed to perform
work in Australia, onshore or offshore, “including but not limited to” twenty-nine listed types
or areas of work, among which are civil and concrete works, fabrication, construction,
maintenance, assembly, repairs and associated work. The company contended that the only
award that was relevant for the purposes of the BOOT was the Manufacturing Award because
the company’s business is “in the manufacturing industry”, and it is therefore covered by the
Manufacturing Award and not the additional awards, including by virtue of various “carve
out” provisions in those awards. The unions submitted that the work covered by the
Agreement falls within the coverage of the other awards and is not excluded by any “carve
out” provisions or otherwise.
[7] On 11 September 2019, we granted permission to appeal, upheld the appeal and
quashed the decision (appeal decision).2 We considered that the plain words of clause 2 of the
Agreement gave it the broader scope contended for by the unions, rather than one confined to
work covered by the Manufacturing Award, and that each of the additional awards was a
relevant modern award for the purpose of assessing whether the Agreement passed the
BOOT. We concluded that the Agreement was therefore, in the terms in which it was made,
incapable of satisfying the approval requirement in s 186(2)(d), because it was not in dispute
that the Agreement did not pass the better off overall test against the additional awards.
[8] We were not able to form a concluded view in the appeal decision as to whether the
company’s explanation of the terms of the Agreement and its effects had complied with s
180(5) having regard to the conclusion we had reached concerning the coverage issue. We
said:
“[53] We note that the three employees who voted on the Agreement were provided
with an information sheet on 19 November 2018 summarising key terms of the
2 [2019] FWCFB 6307
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Agreement. Based on the information in the F17s, it appears evident that the
employees were actively engaged in bargaining. They were also provided with copies
of enterprise agreements of various competitors, to enable them to understand the
conditions in the Agreement in a market context. That would normally provide a
substantial basis to conclude that the requirement in s 180(5) had been complied with.
[54] However, a question arises as to how the explanation of the terms of the
Agreement could have been adequate if the employer proceeded on the basis that there
was only one relevant award, namely the Manufacturing Award. Mr Prendergast’s
affidavit indicates that the employees who voted on the Agreement were employed in
work that was covered by that award, but it does not appear to have been explained to
employees that they might undertake work covered by the other awards. This issue
was not explored in an evidentiary sense at first instance, nor did the company address
us on the significance of this matter in the appeal as its primary contention was that the
other awards did not apply. Further, had the issue been raised at first instance, the
company would have had the opportunity to advance a case that any deficiency in its
explanation of the Agreement in this respect was a minor technical or procedural error
to which s 188(2) applied. For these reasons, we do not consider that we are in a
position to simply uphold this appeal ground and dismiss the application for the
approval of the Agreement. It is a matter which the company may (and will need to)
address at a re-hearing of the application.”
[9] As to the remaining appeal grounds, a third, which had concerned s 180(2)(b), was
abandoned, and we rejected a fourth ground, which had contended that the undertakings
accepted by the Deputy President constituted “substantial change” contrary to s 190(3).
[10] We now address the further written submissions of the parties and the rehearing of the
application for approval of the Agreement.
Specialist People’s further submissions
[11] Specialist People’s further written submissions attached an undertaking which the
company said would ensure that the Agreement passed the BOOT against the additional
awards. The proposed undertaking, which is attached to this decision, states that “…where
the company engages or directs an employee to perform work which would otherwise be
covered by [the additional awards] the company will pay the employee, for the performance
of such work, the greater of the following amounts: the rates of pay in clause 5.2 of the
Agreement; or an amount comprising the base rate of pay in the relevant award plus 20%,
and any applicable allowances and penalties as provided for in [the relevant award].”
[12] Specialist People contended that this undertaking, if accepted, would remove any
concern that the Agreement did not pass the BOOT. There would be no circumstance under
which an employee covered by the Agreement would not be better off overall under the
Agreement than under the relevant award. It further contended that the undertaking was
compliant with s 190(3), as it seeks only to increase rates of pay for certain types of work and
therefore does not involve financial detriment to employees or ‘substantial change’.
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[13] In relation to the question of whether the company had complied with s 180(5),
Specialist People submitted the following:
Although the company did not explain to the three employees who voted on the
Agreement that it covered work falling within the coverage of the additional awards,
or that the Agreement displaced the operation of those awards, this was an
unintentional and innocent omission, and did not mean that the company had not
complied with s 180(5).
The purpose of s 180(5) is to ensure that employees cast an informed vote and that
occurred in this case. The section does not require a detailed explanation of every term
of an agreement. An explanation may not be perfect, but still satisfy the requirement in
section 180(5). Employers cannot be expected to be totally objective and
knowledgeable, and mistakes and omissions will occur.
The omission concerned a single theoretical aspect of the additional scope of the
Agreement, and there was nothing to suggest that the company would transfer
employees into these additional areas.
The company took all reasonable steps to explain the terms and effect of the
Agreement. Each employee engaged in interactive discussions about the terms and
effect of the Agreement and was invited to ask further questions about their operation.
In this context the omission did not have any operative significance or effect.
The questions asked by each of the employees during the explanation process reveal
the aspects of the Agreement’s effect with which they were principally concerned,
namely how the rates of pay compared with those of the company’s key competitors.
The explanation of the Agreement dealt with that issue.
All employees were involved in bargaining for the Agreement, having appointed
themselves as bargaining representatives, and therefore had a deeper understanding of
the Agreement than would otherwise have been the case.
An explanation concerning the theoretical displacement of the additional awards –
whilst a conceivable step in hindsight – was not a “reasonable step” in the relevant
context. The employees gave informed and genuine consent to the Agreement’s terms
and effect, and the Full Bench’s ‘subsequent identification’ of possible coverage of
other awards to the work covered by the agreement did not affect that consent,
especially as the company has no intention of engaging in such work.
[14] The company then submitted that, even if it had not complied with s 180(5), the
Commission’s acceptance of the proposed undertaking would neutralise any notional harm
done. Section 190(1)(b) is referrable to each of the approval requirements in ss 186 and 187,
including s 186(2)(a), which requires the Commission to be satisfied that an agreement was
genuinely agreed to by employees, which in turn brings into consideration the explanation
requirement in s 180(5) – see s 188(a)(i).
[2019] FWCFB 7919
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[15] Alternatively, the company submitted that any non-compliance with s 180(5) should,
particularly in light of the undertaking offered, be regarded as an error of a “minor procedural
or technical” nature for the purpose of s 188(2) which did not prevent the Commission being
satisfied that the Agreement was genuinely agreed to. It said that any harm connected to the
omission would be comprehensively remedied if the proposed undertaking were accepted.
The unions’ further submissions
[16] The unions conceded that, if the proposed undertaking were accepted by the
Commission, they would address and resolve the Full Bench’s finding that the Agreement
failed the BOOT. They noted however that the Commission must, before accepting an
undertaking, seek the views of persons who it knows are bargaining representatives for the
agreement, in accordance with s 190(4) of the Act, and that to the best of the unions’
knowledge, this had not occurred.
[17] In relation to the question of whether the company had satisfied the requirement in s
180(5), the unions made the following submissions:
The Full Bench had in its appeal decision invited the company to adduce any further
evidence in support of its contention that, despite the apparent failure to meet the
requirement in s 180(5), the Agreement was capable of approval by the Commission.
However, no further evidence was filed, and the Full Bench is entitled to infer that any
further evidence would not have assisted the company’s position.
The omission in the company’s explanation of the terms of the Agreement to
employees cannot be dismissed as theoretical, as it went to the capacity of the
employees to ‘genuinely agree’ to an instrument that would exclude a number of
otherwise applicable modern awards from operation in respect of their employment
and that of prospective employees.
The ‘interactive discussions’ referred to by the company fall well short of
demonstrating that appropriate explanations took place and establish no more than that
there were various occasions during which relevant explanations might have taken
place.
The company’s assertion as to what matters were of ‘principal concern’ to employees
cannot be taken at face value and those matters would not in any event of themselves
demonstrate that an objectively reasonable explanation of the terms of the Agreement
and the effect of its terms had taken place.
The fact that employees were said to have been closely involved in bargaining and had
appointed themselves as bargaining representatives does not mean that they received
an adequate explanation of the Agreement and the effect of its terms, nor does it affect
the analysis of whether the explanation was reasonable.
Further, the fact that the omission in the employer’s explanation of the terms of the
Agreement and its relevant effect might have been unintentional is of no consequence
[2019] FWCFB 7919
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and does not affect the question of whether an adequate explanation has been provided
for the purpose of s 180(5).
[18] The unions contended that the Commission should reject the company’s alternative
contention that any non-compliance with s 180(5) could be regarded as a “minor procedural
error” for the purpose of s 188(2). They submitted that on any view the omission could not be
regarded as minor, as it went to the coverage of the Agreement and whether employees would
remain better off overall as against relevant reference instruments. The fact that the company
had belatedly offered an undertaking addressing the Commission’s BOOT concern did not
alter the fact the explanation was deficient and that the agreement of the employees at the
time could not be regarded as genuine.
Consideration
[19] Specialist People’s concession that the Agreement does not pass the BOOT in respect
of the Building and Construction Award, the Hydrocarbons Award and the Electrical
Contracting Award obviously gives rise to a concern on our part as to compliance with the
approval requirement in s 186 (2)(d). Its proposed undertaking would, if accepted, address our
concern in that respect. It would ensure that at all relevant times, including when work is
performed that falls within the coverage of the additional awards, each current and
prospective award covered employee for the Agreement will be better off under the
Agreement than if any of the awards applied to the employee’s employment.
[20] This brings us to the question of whether the company’s explanation to employees of
the Agreement and the effect of its terms complied with s 180(5). The relevant principles
applicable to s 180(5) were summarised in paragraphs [35]-[36] of the Full Bench decision in
AWU v Rigforce Pty Ltd,3 and we apply those principles here.
[21] The company’s revised F17 statutory declaration dated 30 April 2019 described the
various steps it took to explain the Agreement (which we do not repeat here) and appended
the explanatory document that the company provided to employees. The explanatory
document, we consider, gave an adequate and accurate explanation of the relevant terms of
the Agreement, including a description of the classes of work that the Agreement covered and
a proper characterisation of the rate structure. The fact that the document did this in brief and
summary terms does not, in our view, mean that s 180(5) was not complied with. The
informed consent of employees, with which s 180(5) is evidently concerned, might be more
readily achieved through a concise, relevant and readily comprehensible explanation than an
excessively detailed one.
[22] We do nonetheless have a concern about compliance with s 180(5) arising from our
conclusion about the coverage of the Agreement. Our concern is not that the explanatory
document incorrectly described the coverage of the Agreement; as earlier stated we consider
on the contrary that it accurately set out, albeit in a summary way, the classes of work that
were covered. However what the document omitted to do was to explain the differences
between the rates and conditions of employment provided for in the Agreement as compared
to those under the four awards the Agreement was intended to displace in their application to
3 [2019] FWCFB 6960
[2019] FWCFB 7919
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Specialist People’s employees. That step was one reasonably necessary to be taken at least in
respect of the Building and Construction Award, the Hydrocarbons Award and the Electrical
Contracting Award because, as Specialist People has conceded, employees would not be
better off overall under the Agreement than under those awards when applicable. That was
something the employees obviously needed to know before they were asked to vote to
approve the Agreement.
[23] The undertaking proposed by Specialist People to address our BOOT concern would
also address our concern about compliance with s 180(5). That is because, by ensuring that
employees are better off overall under the Agreement by a significant margin when
performing work covered by the Building and Construction Award, the Hydrocarbons Award
and the Electrical Contracting Award, it effectively renders moot the omission we have
identified in that the detriment which required explanation would no longer exist. Acceptance
of the undertaking would therefore allow us to be satisfied that s 180(5) was complied with.
[24] We do not consider that acceptance of the undertaking would be likely to cause
financial detriment to any employee covered by the Agreement or result in substantial
changes to the Agreement. Pursuant to s 190(4) we have sought the views of the bargaining
representatives, but have received no response. In those circumstances we accept the proposed
undertaking.
[25] Given our conclusion that the undertaking will address our concern about the
requirement in s 186(2)(a), it is not necessary for us to consider the company’s submission
that the omission in its explanation of the Agreement to employees was a minor procedural or
technical error for the purpose of s 188(2).
[26] We have examined the other undertakings that were accepted by Deputy President
Beaumont in her decision to approve the Agreement. We share the concerns that were raised
by the Deputy President and consider that the undertakings offered by the company
adequately address those concerns. We therefore accept the undertakings, which remain
before the Commission in connection with the application for approval of the Agreement, as
well as the new undertaking that has been offered in the redetermination of the application.
None of the undertakings cause financial detriment to any employee covered by the
Agreement, and the undertakings do not result, individually or collectively, in substantial
changes to the agreement.
[27] The undertakings are attached to this decision as Annexure A.
Conclusion
[28] Subject to the undertakings referred to above, and on the basis of the material
contained in the application and the accompanying statutory declaration, as well as the
submissions of the company and the affidavit of Mr Kelly, we are satisfied that each of the
requirements of ss 186, 187, 188 and 190 as are relevant to this application for approval have
been met.
[2019] FWCFB 7919
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[29] The Agreement is approved as at the date of this decision and, in accordance with s 54,
will operate from 27 November 2019. The nominal expiry date of the Agreement is 20
November 2023.
VICE PRESIDENT
Final written submissions:
Specialist People: 1 October 2019
CFMMEU and other: 28 October 2019
Printed by authority of the Commonwealth Government Printer
AE506165 PR714460
OF THE FAIR WORK MISSION THE
[2019] FWCFB 7919
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Annexure A
IN THE FAIR WORK COMMISSION FWC Matter No .:
AG2010/0002 Applicant: Specialist People Pty Ltd Undertaking-section 190 I, Matt Prendergast, Executive General Manager Business Services of Specialist People Pty Ltd, give the following undertakings with respect to the Specialist People Agreement 2018
(Agreement): 1. I have the authority given to me by Specialist People Pty Ltd to provide this undertaking in relation to this application before the Fair Work Commission. 2. National Employment Standards Precedence Clause This Agreement will be read and interpreted in conjunction with the National Employment Standards (NES). Where there is an inconsistency between the
Agreement and the NES, and the NES provides a greater benefit, the NES provision will apply to the extent of the inconsistency. 3. Specialist Project Work The Company confirms that it does not seek to rely on clause 9 of the Agreement. 4. Definition of shiftworker For the purposes of 10.7 of the Agreement, a shiftworker is a seven day shiftworker
who is regularly rostered to work on Sundays and public holidays. 5. Abandonment of employment For the purposes of clause 17.9 of the Agreement, in the event an employee abandons their employment, the employment will be terminated pursuant to the termination provisions set out at clauses 17.1 to 17.8 of the Agreement. 6. Casual conversion
The casual conversion clause set out at clause 14.4 of the Manufacturing and Associated Industries and Occupations Award 2010 is taken to be a term of the Agreement. 7. Redundancy For the purposes of clause 18.3(b), the circumstances in which redundancy pay will not be payable is where the employee is redeployed. Accordingly, references to "suitable alternative employment" in clause 18.3(b) of the Agreement shall be
understood as referring to "redeployment". 1
[2019] FWCFB 7919
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8. Deductions (a) For the purposes of clause 4.3, where an employee fails to give the required notice, the Company may withhold from any monies due to the employee on
termination pursuant to the Agreement, an amount not exceeding the amount the employee would have been paid under the Agreement, in respect of the period of notice required by this clause less any period of notice actually given by the employee. (b) For the purposes of clause 4.11, any subsequent tests will be at the Company's expense. (c) The Company confirms that it does not seek to rely on clause 17.8 of the
(d) For the purposes of clause 17.10, the Company confirms that it will not withhold any final payments, but confirms that employees must return all Company property in the event of termination. 9. Tool allowance and protective equipment (a) In the event an employee is required to supply and maintain their own tools the Company will pay a tool allowance of $15.29 per week.
(b) £ The Company will supply all protective equipment and clothing to employees. 10. Ordinary hours of work and shift length For the purposes of the Agreement, the ordinary hours of work will be an average of 38 hours per week inclusive of meal breaks and must not exceed 152 hours in 28 days.
ofillt lengths Tours per day and all fours EXCESS ordinary hours of work will be paid in accordance with the Additional Hours of Work provisions in the Agreement. Part time employees will be engaged to work a regular pattern of hours which average less than 38 ordinary hours per week, provided that a part time employee is engaged and paid for a minimum of 4 consecutive hours per day or shift. 11. Minimum engagement for casuals and casual work arrangements
For the purposes of the Agreement, on each occasion a casual is required to attend work casual employees will be paid a minimum of four consecutive hours' work. Casual shift will be arranged so that a casual employee has at least 10 hours off duty between the work of successive days. 12. Irregular night shift employees The Company will ensure that an employee engaged to work on night shift in
circumstances described by clause 37.3(b) of the Manufacturing and Associated Industries and Occupations Award 2010 is paid more than the applicable amounts 2
[2019] FWCFB 7919
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prescribed by the Manufacturing and Associated Industries and Occupations Award 2010.
Employer name: AGC Industries Pty Ltd Authority to sign: Executive General Manager Business Services
Date: 30/4/19
3
[2019] FWCFB 7919
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IN THE FA FWC Matte C2019/359 C2019/360 C2019/360 Responden Specialist P I, Matthew Pty Ltd (Co Agreement 1. | ha unde 2. Whe othe . T . (colle the C the f th . 0 O Employer n Authority to Signature: Date:
R WORK CO Nos .: - eople Pty Ltd Un Prendergast, E mpany), give 2018 (Agreen e the autho rtaking in rela e the Compa wise be cover uilding and C ydrocarbons lectrical, Elec ctively, the Ot ompany will Ilowing amou e rates of pa n amount con the applica any applica ame: Spec sign: Exec Math 1 Oc
MMISSION dertakin xecutive Gen the following ent): ity given to ion to the Ag ny engages o ed by the terr onstruction G ndustry (Ups tronic, and Co her Awards) ay an employ nts: set out in cl prising: ole base rate ble allowance alist People tive General ew Prenderga ober 2019
g- sectio eral Manager undertaking me by Spec eement curre r directs an e ns of any of th eneral On-Site ream) Award mmunication ee, for the pe use 5.2 of the of pay set out s and penalti ty Ltd Manager Bus Ist
n 190 Business Ser with respect alist People ntly before the mployee to p e following av Award 2010 2010; or Contracting rformance of Agreement; in the Other A es as provided Iness Service
ices of Speci to the Specia Pty Ltd top Fair Work C erform work w ards: Award 2010, such work, th or wards, plus 2 for in the Otl
alist People list People rovide this ommission. which would e greater of 0%; and er Awards.
