[2016] FWC 251
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

WorkPac Mining Pty Ltd
(AG2015/5584)

DEPUTY PRESIDENT ASBURY

BRISBANE, 14 JANUARY 2016

Application for approval of the Traineeship and Mining Services Enterprise Agreement 2015 - application for approval refused.

[1] WorkPac Mining Pty Ltd (WorkPac) applies in accordance with Part 2-4 of the Fair Work Act 2009 (the Act) for approval of the Traineeship and Mining Services Enterprise Agreement 2015 (the Agreement). The parties to the Agreement are WorkPac and employees described in the Agreement as “Field Team Members” or “FTMs”, for whom classifications and rates of pay are prescribed by the Agreement. The Agreement applies to the exclusion of all Awards and other Agreements. The nominal expiry date is expressed to be four years after the date on which the Commission may approve the Agreement.

[2] After considering the application for approval, the terms of the Agreement and the Form F17 Employer’s statutory declaration in support of an application for approval of an enterprise agreement, I had concerns about:

[3] On 23 September 2015, Mr Andrew Thomas, National Industrial Officer of the Construction, Forestry, Mining and Energy Union Mining & Energy Division (the CFMEU) corresponded with the Commission advising that the CFMEU had a large number of members employed by WorkPac in NSW and Queensland and is a party to another Agreement with another company in the WorkPac Group. Mr Thomas stated that the CFMEU was concerned that the Agreement left employees worse off than if they were employed under the relevant Award and further, that the Agreement had not been genuinely agreed to. The CFMEU foreshadowed that should WorkPac be unwilling to provide the CFMEU with the Form F16 Application for approval of an enterprise agreement and Form F17 Employer statutory declaration in support of approval of enterprise agreement filed with the Agreement the CFMEU would seek that the Commission provide it with those documents.

[4] On 30 September 2015, the CFMEU again wrote to the Commission to advise that WorkPac had neither agreed nor refused to provide the Application for approval and the Employer Statutory Declaration and sought that the Commission provide those documents. The CFMEU said that it required the documents to properly make submissions to the Commission in opposition to the application for approval of the Agreement. The CFMEU submitted that the Commission had in the past provided such documents and the documents would ultimately be publicly available in any event.

[5] On 2 October 2015, I declined the request to provide the Form F16 and Form 17 to the CFMEU. I also directed the CFMEU to provide an outline of submissions setting out the Union’s concerns regarding the application for approval of the Agreement. On 15 October 2015, the CFMEU filed a 25 page submission, comprising 62 paragraphs, setting out its concerns.

[6] I listed the application for approval of the Agreement for Hearing on 30 October 2015. WorkPac did not object to the CFMEU being given permission to be heard in relation to whether the Agreement passes the BOOT. I decided to grant the CFMEU permission to be heard generally, on the basis that, as provided in s. 590 of the Act, I considered it appropriate to hear from the CFMEU in order to inform myself about the questions that arose in the application for approval of the Agreement. 1

[7] Further submissions from the parties were received following the Hearing. On 24 November 2015, WorkPac corresponded with the Commission and advised that the Company was happy for the Commission to “close out” the file on the basis of the submissions made by the Company and that did not “see the value” in another formal Hearing.

[8] For the reasons set out below I have concluded that WorkPac has not given employees a NERR in the prescribed form and that the application for approval of the Agreement must be refused. In the event that WorkPac makes a further application for the approval of the Agreement, I have also dealt with the issues of whether, on the basis of the information set out in the form F17 Statutory declaration, WorkPac has taken reasonable steps to explain to employees the terms of the Agreement and the effect of those terms as well as whether the Agreement passes the BOOT.

[9] My concerns about whether the provisions of the Act in relation to giving the NERR to employees have been complied with arise from the contents of the Form F17 – Employer’s statutory declaration in support of an application for approval of an enterprise agreement. The Form F17 Statutory Declaration was completed by Mr Howard Powell, National Employee Relations Manager of WorkPac, and filed with the application for approval of the Agreement. The Form F17 is in question and answer form and requires an applicant for approval of an enterprise agreement to provide information about various matters including steps taken to comply with pre-approval processes in Chapter 2, Part 2-4 of the Act.

[10] In relation to steps taken by WorkPac to give notice to employees of their right to be represented by a bargaining representative, Mr Powell declared in response to question 2.3 that communications were sent to employees by SMS and email. The text of the SMS message and the email were set out in item 2.3 of the Statutory Declaration. The Statutory Declaration at item 2.3 does not include any information about the date that the SMS message and the email were sent to employees. According to Mr Powell’s declaration, the SMS informed FTMs that they could to go to a nominated website for “docs relating to proposed agreement.” The first paragraph of the email said to have been sent to employees is as follows:

[11] The text of the email goes on to set out some, but not all, of the terms of the NERR prescribed in Regulation 2.1 (the first paragraph of the prescribed form of the notice is omitted) and then a paragraph follows which states:

[12] The list of “web links” set out below this paragraph includes one entitled “Representational Rights Notification”. After the list of “web links” the text of the email goes on to set out the complete NERR specified in Regulation 2.1. Below the text of the NERR the following paragraph appears:

[13] As previously noted, the date on which this email was sent is not stated. There is also a copy of an NERR in the required form attached to the Statutory Declaration and marked “Attachment 1”. It is not clear whether that document was attached to the email or whether it was contained in a web link included in the email. I also note that the complete version of the NERR embedded in the text of the email and the version that is Attachment 1 to the Statutory Declaration, state that WorkPac Mining Pty Ltd and its subsidiaries give notice that it is bargaining in relation to an enterprise agreement and that it is proposed to cover employees in the black coal mining industry. This statement is at odds with clause 1.2 of the Agreement which states that the WorkPac Mining Pty Ltd is party to the Agreement and to clause 1.4 which states that the Agreement is binding in respect of employees engaged in mining both Coal and Non-Coal.

[14] At the Hearing I questioned Mr Powell about the information set out in the Statutory Declaration in relation to the NERR. I put to Mr Powell that it was not clear from the information provided how the NERR was given and, in particular, whether it was embedded in an email to employees or attached to an email or whether employees had to access the NERR by way of a web link. I also put to Mr Powell that the information contained in the Employer declaration seemed to indicate that the NERR was embedded in an email that also had other content.

[15] In response to my questions, Mr Powell said that the NERR was given personally to all employees and was also attached to an email rather than being embedded in an email. 2 When I put to Mr Powell that this assertion was inconsistent with the statement made in the Statutory Declaration, Mr Powell said that the NERR was set out in an email and also attached to the email and in addition employees were provided with a web link to the NERR. Mr Powell said in relation to this matter:

[16] Mr Powell also said that WorkPac would provide a further Statutory Declaration clarifying the fact that the NERR was attached to the email sent to employees.

[17] On 10 November 2015, WorkPac provided further submissions and material in respect of the application for approval. This included a statutory declaration made by Ms Nicole Thompson, Senior Industrial Relations Advisor for the WorkPac Group of Companies. Ms Thompson states that she was responsible for the process of giving the NERR to eligible employees of WorkPac. On 2 July 2015, Ms Thompson directed WorkPac’s Head of Information, Communication and Technology to send an email to relevant employees. The email was sent on 3 July 2015 and was annexed to Ms Thompson’s statutory declaration. The annexed email contains the same text as set out in item 2.3 of the Employer Statutory Declaration. In particular it confirms that the email contained two versions of the NERR – the first commencing at paragraph 2 of the email is not complete and the second is sandwiched between other content.

[18] According to Ms Thompson, the email of 3 July 2015 contained a hyperlink to a website on WorkPac’s intranet site dedicated to the Agreement. That intranet site contained another hyperlink to the NERR. A copy of the NERR that was available at the hyperlink was also attached to Ms Thompson’s statutory declaration. That version of the NERR is in the prescribed form and is identical to the document appended to the Form F17. It also contains the same reference to WorkPac Mining Pty Ltd and its subsidiaries and states that the Agreement is proposed to cover employees that are engaged in the black coal mining industry.

[19] Also on 2 July 2015, Ms Thompson directed WorkPac’s Head of Information, Communication and Technology to send an SMS to relevant employees. That SMS was sent on 3 July 2015 and included a request that employees go to a particular website by clicking on a link in the SMS for “docs relating to proposed Agreement”. The link set out in the SMS was a link to the same website set out in the email to employees. There was no evidence of the NERR being given personally to employees.

[20] In further written submissions, WorkPac submitted that the Act does not specifically require the Commission to consider the content of a purported NERR and further that the Full Bench Decision in Peabody Moorvale Pty Ltd v CFMEU 4 does not provide an analysis of its conclusion in respect of this issue at [45] where the Full Bench said:

[21] WorkPac instead submitted that the Commission is “arguably” only indirectly required to have regard to the NERR as a result of the operation of ss.181(2) and 188(1)(a)(ii) of the Act. WorkPac submitted that s.181(2) of the Act does not require that an NERR be given to employees “let alone in any strict form”. What WorkPac submits to be the case is that the Act requires that employees not be requested to approve a proposed agreement until at least 21 days after the last NERR is given to employees.

[22] WorkPac relied upon its Statutory Declaration filed at the time of the originating application, the additional declaration of Ms Thompson and its submission that the NERR was given in a manner consistent with the Regulations. WorkPac submits that the primary method of distribution of the NERR to employees – by email – was consistent with r 2.04(5) of the Regulations. The alternative or “secondary” method of distribution was via SMS, which was said to be consistent with r 2.04(8).

[23] The CFMEU submitted that WorkPac has not complied with r 2.04(5) because there is no evidence that the email addresses used were either the employees email address “at work”, as required by r 2.04(5), or evidence that it was sent to another email address nominated by the employee, as required by r 2.04(5). Further, the CFMEU submitted that even if r 2.04(5) had been complied with in respect of the email address used, WorkPac has still failed to comply because the email address does not contain a link that “take(s) the employee directly to a copy of the notice on the employer’s intranet” as required by the Regulation.

[24] The CFMEU also submitted that the link in the emails was not a link to WorkPac’s intranet but rather to a publicly available website, which is uncharacteristic of a company’s intranet. Similar issues are said to arise in respect of the SMS of 3 July 2015. In respect of the SMS of 3 July 2015, the CFMEU submits that the SMS makes no reference to the NERR, in any way. This meant that an employee receiving the SMS had no idea what documents were contained on the link or the purpose of those documents.

[25] The CFMEU submitted that apart from the method of giving the NERR, the NERR was deficient in its content. The NERR was “buried” amongst a large number of documents within a webpage. The CFMEU submitted that this scenario was analogous to that in Peabody where the Full Bench considered that the NERR in that matter was invalid because it had been given collectively with other documents that were found to constitute the NERR. The CFMEU accepted that Peabody made clear that an employer is not prevented from given additional documents at the same time of giving the NERR, and what is part of the NERR is a matter of fact.

[26] The CFMEU also submitted that whether additional material is “misleading or intimidatory” is of relevance to whether the agreement has been genuinely agreed. That the NERR was listed among 14 separate documents, which included the proposed agreement and documents regarding the voting process, was said to be misleading. The CFMEU submitted that the Commission should conclude that employees were misled into believing that regardless of the NERR the proposed agreement was already finalised and being voted on; that is, it was not open to bargaining.

[27] In submissions in reply, WorkPac said that the email addresses used for employees were “an employee email address that each individual employee has nominated as its preferred means of email communication with the Company and is the usual means of email communication between the Company and the Employee”. WorkPac submitted that there was no evidence to the contrary.

[28] WorkPac disputes the CFMEU’s characterisation of the link to its intranet website and submits that the link directs employees to a website dedicated to the Agreement and that it is not in dispute that that website contained the NERR. WorkPac submits that any distinction between an ‘internet’ and ‘intranet’ site is an irrelevant distinction. WorkPac maintained its submission that the NERR available on the intranet link was a valid notice in respect of its content and form. WorkPac made no reply submissions about the fact that the NERR was copied twice into the body of the email. WorkPac also disputed the CFMEU’s submission that the fact that the NERR was contained in a number of other links had the effect of being misleading. WorkPac submitted that no employee was misled and that there was no evidence before the Commission to the contrary.

[29] In relation to the point at which various pre-approval steps were taken, at item 2.5 of the Statutory Declaration, it is stated that on 1 May 2015, an SMS was sent to all employees directing employees to a website address for information relating to the Agreement vote. This SMS message is different to the one referred to in item 2.3 of the Statutory Declaration. The Statutory Declaration goes on at item 2.5 to state that an email was sent to all employees on 9 September headed “Voting information” and stating that:

[30] In item 2.8 of the Statutory Declaration, it is stated that the employer initiated bargaining and gave the last notice of employee representational rights on 3 July 2014 and that the voting commenced, and the Agreement was made, on 18 September 2014. In relation to the steps that WorkPac took to explain the terms of the Agreement, and the effect of those terms, to the relevant employees, as required in s. 180(5) of the Act, the Employer declaration at item 2.6 states:

[31] An identical response is provided at item 2.7 in response to a question about what WorkPac did to take into account the particular circumstances and needs of employees in providing an explanation about the terms of the Agreement. The language translator document referred to in these responses states that:

[32] The document sets out that paragraph in Spanish, Dutch, French, German, Greek, Italian, Portuguese, Vietnamese, Indonesian, Malay, Thai and Filipino.

[33] The Employer Statutory Declaration also indicates that employees were provided with access to a dedicated website which contained a copy of the Agreement and “explanatory information”. The Employer Statutory Declaration further states that the website contained “frequently asked questions” which are said to be Attachment 2 to the Statutory Declaration. That attachment is in fact a document entitled: “FTM Briefing: Traineeship and Mining Services Enterprise Agreement 2015” and makes no reference to “Frequently Asked Questions”. The Briefing document contains the following statements:

[34] The briefing document then goes on to list the clauses in the Agreement by subject matter and in some cases includes brief descriptions of the contents of the clauses or statements to the effect that some of the clauses are consistent with the Act or the National Employment Standards. The briefing document contains contact information and website details for employees who are seeking further information. This document also states that the “access period” will commence on Wednesday, 9 September 2015 and that a final copy of the Agreement will be emailed to employees.

[35] In response to the question at item 2.5 in the Statutory Declaration about when employees were notified of the date and place at which the vote for the Agreement would occur, the text of an email said to have been sent to employees on 9 September 2015 is set out. The text of the email states that a copy of the proposed “document” is attached and that it can also be accessed on a website, at an address set out in the email. It is possible that the address is a hyperlink although this is not apparent from the Statutory Declaration. The email text also states that voting for or against the Agreement opens at 6.00 am on Friday, 18 September 2015 and closes at 9.00 pm on Friday, 18 May 2015 (obviously this date is an error).

[36] In relation to whether the Agreement has been genuinely agreed to by employees the CFMEU submits that terms in the Agreement are “either confusing to the extent that the employees could not have understood their meaning and impact or the term establishes consequences that are not apparent on their face to a person with little understanding of the legal implications of agreements”. The CFMEU submits that in the particular circumstances of these employees it is reasonable to conclude that they could not have been expected to understand the nuances of particular terms and it was the employer’s onus to establish that it has taken reasonable steps to explain the agreement.

[37] Specifically, the CFMEU relied upon three clauses of the Agreement it said gives rise to a concern about genuine agreement; Clause 1.5 –Scope and Intent of Agreement; Clause 8.1.4 – requiring that outcomes or decisions of the Commission under the disputes procedure are consistent with the Victorian Building Code, the Building Code 2013 (Cth) and the Fair and lawful Building Sites Code 2014 (Cth) (the Building Codes); and Schedule 3 of Annexure A – Flat Rates.

[38] In respect of Clause 1.5, the CFMEU submits that the clause obliges an employee to comply with WorkPac policies and procedures as well as those of the host or client employer at which the employee is working. A breach of a relevant policy by an employee may expose the employee to civil penalties under the Act for breach of an Agreement. The CFMEU’s concern is that this may occur in circumstances where employees cannot be aware of the terms of the host or client’s policies and procedures or those of WorkPac. These polices are also subject to unilateral change by the relevant employer. Further, the CFMEU submits that there is no evidence that the effect of this clause was explained to employees.

[39] Clause 8.1.4 of the Agreement provides, essentially, that disputes must be dealt with or resolved in a manner consistent with the various Building Codes. The CFMEU submits that in the absence of a full explanation of each of the Building Codes, the employees could not be expected to have understood their impact. The CFMEU also submits that the clause does not deal with a situation of inconsistency between the Building Codes, and that the Building Codes are subject to unilateral amendment by a third party, outside the scope of the Agreement. The provision is said to be confusing and the consequences of the clause are not apparent or capable of being easily known by a person working in a coal mine.

[40] Annexure A of the Agreement sets the minimum rates of pay and other conditions, applicable under the Agreement to employees working in the coal mining industry. Schedule 3 of Annexure A is a large table setting out flat rates payable to employees in the coal mining industry. The clause contains 648 separate wages rates. The CFMEU submits that whilst the table does provide the factors that lead a person to identify the applicable minimum flat rate, the flat rate is an all up rate and it is not clear how that rate was calculated. Without an indication as to how the all up rates were reached, the CFMEU submits that employees could not have genuinely agreed to those rates.

[41] The CFMEU submits that the broader context in which the WorkPac group of companies operate is relevant to considering whether the Agreement has been genuinely agreed to. The CFMEU is currently a party to the WorkPac Pty Ltd Mining (Coal) Industry Enterprise Agreement 2012 (the 2012 Agreement). The CFMEU submits that the 2012 Agreement covers the same classifications, work and geographical area as the Agreement subject of these proceedings. The 2012 Agreement nominally expires on 27 June 2016. The minimum rates of pay under the 2012 Agreement are in excess of those contained in the Agreement by as much as $2 per hour in some cases.

[42] The CFMEU states that because of these matters it cannot be said that the consent of the employees was informed and that there was an absence of coercion so that the Commission could be satisfied that the employees have genuinely agreed to the Agreement.

[43] The CFMEU submitted that on an overall consideration, the Commission could not be satisfied that the Agreement passed the BOOT. Given the number of clauses put in issue by the CFMEU it is convenient to deal with them each in turn and the responses provided by WorkPac in relation to those issues. The CFMEU has considered the application of the BOOT only in respect of its coverage, being within the coal mining industry. The relevant Modern Award is the Black Coal Mining Industry Award 2010 (the Award). The CFMEU’s submissions in relation to the BOOT and the responses to those submissions by WorkPac are as follows.

[44] Clause 1.5 – Scope and Intent of the Agreement: In addition to dealing with this clause as giving rise to a reasonable belief that employees had not genuinely agreed to the Agreement, the CFMEU also submitted that it was a relevant BOOT consideration. The CFMEU submits that this clause leaves employees worse off because it is a matter that is not provided for in the Award, it allows for policies and procedures outside of the Agreement to be unilaterally varied at any time and will to that extent be binding upon employees. As previously noted, the clause states that policies and procedures do not form part of the Agreement, but requires that employees will comply with any WorkPac policies and procedures that the Company may implement and in addition will comply with specific client policies and procedures relevant to the employee’s assignment. The clause also states that to the extent that policies and procedures place obligations on WorkPac they are guides only and are not contractual terms, representations or conditions upon which employees may rely.

[45] WorkPac submits that clause 1.5 of the Agreement expressly states that the procedures and policies of the company do not form a part of the Agreement but that in any event the policies and procedures referred to in clause 1.5 were available to employees during the access period for the Agreement. WorkPac further submits that in considering an application for approval of an Agreement it is not the Commission’s role to consider the future enforceability of a clause.

[46] Clause 3 – Individual Flexibility: The CFMEU submitted that Clause 7 of the Award – “Award Flexibility” – contains a number of provisions that are not in the Agreement as follows:

[47] The CFMEU submitted that these clauses are in the Award for the protection of employees and their absence leaves an employee worse off under the Agreement. This submission was advanced notwithstanding that the Agreement contains the model flexibility term required by s. 202(1) and s. 203 of the Act.

[48] WorkPac submits that it is a matter for the Commission whether it will incorporate the model flexibility term from the Award into any decision to approve the Agreement. WorkPac submits that the CFMEU’s submission is without merit as a flexibility agreement under the Agreement can only be made with an employee already covered by the Agreement. Further, the Act stipulates that the flexibility term require that an employee be better off overall under a flexibility agreement in any event.

[49] Clause 6 – No Extra Claims: The Award does not contain any prohibition on employees pursuing extra claims during the life of the Agreement, Clause 6 prohibits extra claims. The CFMEU submits that this is a detriment to employees.

[50] WorkPac accepts that the Award does not contain a prohibition against extra claims. WorkPac submits however that this is not a matter for the BOOT and the clause will not prevent the parties from varying the Agreement in accordance with the Act but rather, prevents employees from engaging in unlawful industrial action within the nominal expiry date of the Agreement.

[51] Clause 7.4 – Part-Time [Employees]: Under the Award a part-time employee is an employee who works less than 35 hours per week. The Agreement provides that a part-time employee is one who works on average less than 35 hours per week; the Agreement does not define over what period the hours are to be averaged. Further, the Award provides that part-time employees are entitlement to be paid at overtime rates for all time worked in excess of their agreed hours. The Agreement does not provide for overtime in such a case.

[52] To address this issue WorkPac offered an undertaking that, in respect of part-time employees in the black coal industry, clause 10.3 of the Award will apply.

[53] Clause 7.5 – Casual Employment: The Award does not provide for casual employment for employees engaged in production and engineering classifications. The CFMEU submits that an employee engaged in production and engineering under the Award would have to be full-time or part-time. The CFMEU further submits that the casual loading payable under the Agreement does not compensate for the reduced job security inherent in casual employment. Casual employees are not entitled to notice of termination, redundancy or, in some cases, to make a claim for unfair dismissal. Further, the CFMEU submits that where casual employment is found in agreements in the black coal mining industry, those agreements pass the BOOT in contrast with the Agreement in the present case.

[54] WorkPac submits that the Award does not prohibit casual employment as submitted by the CFMEU and further that it is not uncommon for casual employees to be engaged in such classifications. The casual loading payable under the Agreement is the same as that under the Award.

[55] Clause 7.6 – Termination of Employment: The CFMEU submits that the termination of employment provisions in the Agreement are less beneficial than the Award in a number of respects. They are:

[56] WorkPac has offered an undertaking in respect of termination of employment and notice of termination of employment in circumstances of redundancy.

[57] WorkPac otherwise submits that the CFMEU’s concerns regarding termination of employment are not matters relevant to the BOOT. WorkPac submits that the definition of serious misconduct in the Agreement are instances of what may constitute serious misconduct as opposed to what will amount to serious misconduct.

[58] Clause 8 – Disputes Settlement Procedure: This issue overlaps to some disagree with the issue identified by the CFMEU in respect of genuine agreement. The CFMEU submitted that clause 8 of the Agreement requires that any outcome of dispute resolution before the Commission must be consistent with the Building Codes. The Award dispute clause does not require this consistency. The CFMEU referred to the Full Bench Decision in CFMEU v CSR Limited t/a Viridian New World Glass 5 (Viridian) to support the proposition such a term would not produce sufficient certainty to satisfy the BOOT. WorkPac submitted that the issue identified by the CFMEU in respect of the disputes settlement procedure was not relevant to the BOOT.

[59] Clause 9 – Classifications: Clause 9.1 provides that at the commencement of an assignment, the employee will be notified of their classification level. The CFMEU submits that this amounts to a unilateral right in WorkPac to alter an employee’s classification and, therefore, rate of pay. There is no provision in the Award to this effect.

[60] WorkPac submitted that it is a national labour hire supplier that provides employees for fixed task or project specific arrangements. Each assignment is therefore at a particular classification for the duration of that assignment. WorkPac submits that it is not its intention to alter an employee’s classification during a fixed assignment to the employee’s detriment or without consultation.

[61] Clause 11 – Allowances: The CFMEU submits that the allowances provided for in the Agreement are less than, or marginally above, the equivalent allowances provided for in the Award. The Agreement also provides that allowances will not be increased for the life of the Agreement whereas some allowances in the Award automatically increase in accordance with calculations provided for in the Award.

[62] WorkPac proposed an undertaking in relation to allowances to the effect that the meal allowance in Annexure A to the Agreement will be increased to meet the Award rate plus an additional 1%, and that all allowances will be maintained at 1% above the Award entitlement.

[63] Clause 13 – Redundancy: The CFMEU submits that the redundancy provisions in the Award are significantly better than the redundancy provisions in the Agreement.

[64] WorkPac submits that the relevant reference for consideration of redundancy is the Act, rather than the Award. WorkPac submits that a number of Agreements in the industry prescribe the NES as being the basis for entitlements to redundancy. However, WorkPac has offered an undertaking in respect of redundancy that clause 13.2 of the Agreement will only apply to Annexure B employees – being employees engaged in non-coal mining. WorkPac further undertakes that employees under Annexure A of the Agreement, being those engaged in coal mining, will received their entitlement to redundancy from clauses 14.3 and 14.4 of the Award.

[65] Clause 15, and 8 of Annexure A – Public Holidays: The CFMEU submits that the penalty rates payable to an employee under the Agreement are worse than an employee would enjoy under the Award. Under the Award an employee would be entitled to receive the public holiday penalty in addition to any other penalty that may be payable for that particular shift (eg afternoon shift penalty). Under the Agreement the public holiday penalty is payable on the ordinary rate of pay, that is, without any other penalty that may be applicable.

[66] In addition, the Award prescribes that where shifts are greater than 8.5 ordinary hours, an employee can expect not to work at least 2 public holidays per year. The Agreement does not contain such a term.

[67] WorkPac submits that the effect of clauses 15 and 8 of Annexure A of the Agreement apply in the same way as the Award. Base rate employees working ordinary hours on public holidays are entitled under the Agreement to be paid double time at the ordinary rate of pay, which is the applicable base rate plus loadings. WorkPac did not address the additional item identified by the CFMEU being the entitlement to at least 2 public holidays a year off roster.
[68] Clause 16 – Consultation: The CFMEU submits that the consultation term in the Agreement provides for an employee to appoint a representative but does not give that representative any part in the consultation process. The Award obliges an employer to involve an employee representative in consultation by the provision of information and discussing the change with the representative. The Award also requires consultation in relation to regular rosters and ordinary hours of work.

[69] WorkPac submits that it has incorporated the model term prescribed by the Regulations into the Agreement. WorkPac submits that this clause should be compared with the Act and that it is the Commission’s discretion to “apply” the “model clause from the Award” into the Agreement.

[70] Overtime – Clause 4.3 of Annexure A and clause 10.1 – Flat Rate: In relation to overtime, the CFMEU submits that the Award provides for additional circumstances and classes of employees where overtime is paid for at the rate of double time to those in the Agreement – namely Employees who work a roster which requires ordinary shifts on public holidays and not less than 272 hours in a year on Sunday, and those who work a roster requiring ordinary shifts on the Saturday or Sunday where the majority of rostered hours on the Saturday and Sunday shifts fall between midnight Friday and midnight Sunday. The CFMEU also submits that the Agreement provisions for payment of double time on Sundays do not apply to “base rate FTMs” where an RDO system is in place, in contrast with the Award where an employee working on Sunday under the Award would be entitled to be paid for such work at the rate of double time.

[71] The CFMEU also submits that meal breaks prior to and during overtime are not provided for in the Agreement and are provided for in the Award. Further, the CFMEU submits that the flat hourly rate for overtime set out in the Agreement does not enable determination of the overtime component and that rate is in many instances, less than the overtime rate for an equivalent base rate employee.

[72] WorkPac submits that the CFMEU’s objection in relation to the Sunday overtime rate for base rate employees working an RDO system is dealt with in clause 4.5.3 of Annexure A to the Agreement. In relation to meal breaks WorkPac submits that the intent is that the meal break provided for in non-rostered overtime will be without loss of pay and this is reinforced in Annexure A to the Agreement.

[73] Personal Carer’s Leave: The CFMEU submits that under the Award, an employee’s personal carer’s leave entitlement of 105 hours accrues on commencement of employment and is credited to the employee on each anniversary of the commencement of employment. The Agreement provides that the personal carer’s leave entitlement accrues progressively. As a result, employees under the Award have access to their personal carer’s leave entitlements earlier than employees under the Agreement.

[74] In relation to personal carer’s leave, WorkPac proposes that the reference to progressive accruals is “removed and replaced with the words ‘The FTM shall be entitled to 105 hours of personal/carers leave on commencement and on each anniversary of commencement’ ”.

[75] Rostered Days off: The Agreement provides for employees who work on a rostered day off to be paid at the ordinary flat rate. Under the Award an employee working on a rostered day off would be entitled to be paid for that day and to have another day off in lieu or to be paid for work on the rostered day off at overtime rates. The Agreement also does not contain the Award provision entitling employees to another day off when an RDO falls on a public holiday.

[76] WorkPac submits that the CFMEU submission calculates the RDO as an isolated day worked and does not take into account the uplift in the rates under the Agreement across the entire roster cycle.

[77] Accident Pay: The Agreement does not contain any provision for accident pay in contrast with the Award, which provides for accident pay of up to 78 weeks. Taking into account the Queensland Workers’ Compensation system, an employee would be worse off under the Agreement.

[78] In relation to Accident Pay, WorkPac proposed an undertaking that it will apply the Award provisions to employees under Appendix A of the Agreement.

[79] Wage Rates: The Agreement provides for alternative methods of payment for employees – a base rate with additional allowances/penalties or a flat rate – at the discretion of the employer. CFMEU submits that the base rates in the Agreement are approximately 1% above those in the Award. With respect to the flat rates in the Agreement there are a large number of such rates based on a number of combinations of hours per week, shift work (rotating or non-rotating), weekend or weekday work and whether employees are casual or permanent employees. The flat rates also compensate for annual leave loading. There is no explanation in the Agreement about how the myriad of rates has been determined. It is submitted that the Commission cannot be satisfied that the rates would satisfy the BOOT due to the lack of explanation about the calculation of the rates. It is also submitted that there are a range of circumstances in which employees will be paid less than they would receive under the Award for working a certain number of hours per week. In relation to Trainee rates it is submitted that they are in some cases, less than the rates for Trainees under the Award.

[80] WorkPac submitted a number of calculations described as flat rate scenarios said to demonstrate that employees under the Agreement will be paid more than they would be paid under the Award. In relation to Trainee rates, WorkPac submitted that the CFMEU calculations were based on a divisor of 35 working hours when Schedule D of the Award provides that Trainee rates are based on a 38 ordinary hour working week.

[81] The provisions of the Act relating to the NERR requirements are as follows:

[82] In relation to how notices may be given, r.2.04 of the Regulations prescribes:

“2.04 Notice of employee representational rights—how notice is given

[83] Section 174 of the Act deals with the content and form of the NERR and provides:

[84] The effect of these provisions is that the NERR must be in the form prescribed by the Regulations and contain only the prescribed content. In Peabody Moorvale Pty Ltd v CFMEU 6 a five member Full Bench of the Commission considered the content requirements of the Act with respect to a valid NERR and the consequences of failure of an employer to comply with those requirements, holding that that:

[85] The Full Bench in that case considered the effect of additional material accompanying a document that complied with the form and content of Schedule 2.1, stating that in those circumstances, a question arises as to how to distinguish between the material accompanying a NERR and material that alters the content of the NERR. The Full Bench held that:

[86] The Full Bench in Peabody went on to hold that:

[87] The information in the Form F17 Statutory Declaration in relation to this matter is confusing and the evidence seeking to clarify the information in the Form F17 Statutory Declaration, given orally by Mr Powell and in the further Statutory Declaration made by Ms Thompson has done little to clarify the situation.

[88] It appears from the information provided in the Employer’s Statutory Declaration, at item 2.3, that two versions of the NERR were embedded within the text of an email. The question – as identified by the Full Bench in Peabody – is what purports to be the notice. In the present case, there are a number of versions, each purporting to be the notice. The email sent to employees on 3 July (according to Ms Thompson) contained two versions of the NERR. The version at the beginning of the email is incomplete and is accordingly not in the required form. The second version, embedded in the email, has content above and below it so that it is not clear what is part of the notice and what is additional content. It is also the case that the introductory paragraph of the email sent to employees states that it provides employees with adequate information relating to the negotiation of the Agreement. The email stands alone. There is no indication that it contains a Notice which WorkPac is required to give to employees. Contrary to Mr Powell’s submission, there was no other version of the NERR attached to the email. Accordingly, I am unable to accept that the email sent to employees on 3 July 2015 contained a NERR in the required form.

[89] It is also necessary to decide whether WorkPac met its obligation to give an NERR to employees in the required form by virtue of the document contained in the weblink set out in the email of 3 July 2015 and the SMS message. The version contained in the weblink document is in the prescribed form. As previously noted, Regulation 2.04 prescribes a number of ways in which a NERR may be given and these include sending it to an email address or emailing the employee an electronic link that takes the employee directly to the NERR. The Regulation also provides that the employer is not prevented from using another method to give the Notice to an employee, and I accept that the Regulation would permit sending employees an SMS message containing a weblink that takes them directly to the NERR. However the Regulation simply permits electronic media to be used to fulfil the requirement to “give the notice”. The term “give” connotes some positive action on the part of the employer.

[90] I do not accept that an employer can comply with the requirements to give the NERR in the required form to employees, by simply sending them an email or an SMS that includes a weblink to the NERR. At very least, the employer is required to give the NERR by emailing or otherwise sending the employee the weblink in a way that identifies that the purpose of the communication is to give the NERR and to identify how the notice can be accessed – for example: “We are required to give you a Notice of Employee Representational Rights. It is attached to this email/SMS message in the form of a weblink.” As a matter of prudence an email or SMS message attaching a NERR or containing a weblink to it should give an alternative method for an employee to obtain the document if the attachment will not open on the device the employee is using or the weblink does not operate. If the email or SMS message contains weblinks to other documents, then the employer runs the risk of creating confusion about which document is the NERR.

[91] In the present case, the weblink to the NERR was included in a list of other weblinks, set out in a lengthy and confusing email which made no specific mention of the requirement that WorkPac give the NERR to employees and did not direct their attention to either of the versions of the NERR in the email or the weblink containing yet another version. To add to the confusion the email contained two versions of the NERR, one incomplete and both sandwiched in with other information that was not part of the prescribed content for a NERR. It is probable that employees, having read a lengthy and confusing email containing two different versions of the NERR, would not have opened the weblink to the third version. This is particularly so given that the email makes no reference to direct the attention of employees to the weblink, which is one in a list of other links.

[92] There is no indication to employees that one of the weblinks set out in the email is a link to a notice which is required to be given to them. Instead the text above the list of weblinks suggests that they are links to documents that are merely “supporting paperwork”, the printing of which “would require the destruction of a small rain forest”. The reference to the weblink documents implies that they are of little consequence. The SMS message sent to employees suffers from the same deficiencies as the email – it does not alert employees to the fact that they are being given the NERR. The SMS message simply directs employees to a website and informs them that they will find “docs relating to proposed agreement”. The SMS messages does not take employees directly to a copy of the NERR and it does not direct the attention of employees to the NERR.

[93] While environmental consciousness is admirable, it is not an excuse which can overcome the invalidity resulting from the failure to give a NERR in the prescribed form to employees. I doubt that printing a single page that comprises the NERR and physically giving it to thirty employees who were to be covered by the Agreement would have had any impact on the environment. However, if WorkPac wanted to use electronic media to give the Notice, all the Company had to do was send an SMS or email with a direct link to the NERR stating that the weblink in the SMS message or the email is a link to a Notice of Employee Representational Rights, which WorkPac is required to give to employees, and to inform them of an alternative source of the NERR if the weblink did not work. If the Company was concerned that the weblink might not work, or employees may not be able to open an email attachment, then a NERR in the prescribed form could have been included in the body of an email in a way that clearly delineated it from other content.

[94] The submission made by WorkPac in relation to the Full Bench Decision in Peabody is wrong and misunderstands that Decision. There is nothing indirect about the provisions of the Act in relation to the requirement to give an NERR in the prescribed form and the Decision in Peabody could not be clearer in its articulation of those requirements and the repercussions of failure to comply with them. The manner in which WorkPac purported to give employees the NERR was a debacle and in my view the confusion surrounding the entire exercise leads to a conclusion that an NERR in the prescribed form has not been given to employees as required by the Act. As a result the Agreement has not been validly made and cannot be approved.

[95] Even if the NERR was validly given, it is also the case that the two versions of the NERR which contain all of the required content – the NERR embedded in the email amongst the other material, and the Notice in the weblink – also contain factually incorrect information. Both of these Notices refer to WorkPac Mining Pty Ltd and its subsidiaries seeking to negotiate the Agreement when the employer party is WorkPac Mining Pty Ltd and there is no reference in the Agreement to any subsidiaries. Further, both versions of the NERR incorrectly state that the Agreement is proposed to cover employees in the black coal industry in circumstances where the Agreement proposes to cover, and appears to have always proposed to cover, employees in the mining (Coal) and mining (non-coal) industries.

[96] I am also of the view that the Agreement was not genuinely agreed to and if I was satisfied that an NERR in the required form had been given to employees, I would not approve the Agreement on the basis of the information contained in the Form F17 Employer Statutory Declaration. My reasons for this conclusion are set out below.

[97] For the purposes of being satisfied that employees have genuinely agreed to an enterprise agreement, the Commission must consider the requirements set out in s. 188 of the Act. Section 188 of the Act is in the following terms:

[98] Section 180(5) of the Act relevantly provides:

[99] In relation to the explanation of the terms of a proposed enterprise agreement to employees, a Full Bench of the Commission, in McDonald Australia Pty Ltd v Shop Distributive and Allied Employees’ Association 9, held that there is no absolute requirement to ensure that particular outcomes are achieved, and that the section requires only that the employer take reasonable steps to ensure the terms and conditions are explained to all employees. Further, the Full Bench held that there is no requirement that there be a full explanation of the terms of an agreement, but rather that the employer takes reasonable steps to ensure that an explanation is provided.

[100] In the present case, there is insufficient information in the Form F17 Employer Statutory Declaration upon which I could be satisfied that the employer has taken any steps to explain the terms of the Agreement to employees, much less whether those steps are reasonable. It appears that the extent of the explanation provided by WorkPac about the terms of the Agreement and their effect, is that employees were provided with a series of weblinks including a link to the Agreement and a link to a briefing document.

[101] The briefing document is little more than a list of clauses in the Agreement with no explanation about the effect of those clauses. There is a web link to “Frequently Asked Questions” and that document is said to be appended to the Form F17 Statutory Declaration. The only document appended to the Form F17, which in any way meets the description of “Frequently Asked Questions” relates to the ballot process rather than to the terms of the Agreement. The translation document said to have been provided to employees whose first language is not English, simply invites them to request a translator if they need assistance to understand attached information, which I assume (in the absence of any information) was the briefing document. The Statutory Declaration also states that employees under the age of 21, through the NERR, were invited to have a parent or guardian involved in the negotiation. I can see no reference to such an invitation in any of the versions of the NERR set out in the Form F17 or in the appended NERR, and such an addition would have rendered the NERR in any event.

[102] I do not accept that the obligation to explain the terms of the Agreement and the effect of those terms has been met in circumstances where employees were provided with little more than a web link to a copy of the proposed Agreement and a range of other documents, none of which constitute an explanation of the Agreement or the effect of its terms. Had I been satisfied that an NERR in the prescribed form had been given to employees, I would have required more information about how WorkPac explained the terms of the Agreement and the effect of those terms.

[103] The fact that employees work at remote locations does not remove the obligation of an employer to take reasonable steps to explain to them the terms of a proposed agreement. The explanation may be by way of face to face meeting, telephone conference or other electronic means. If an explanation is given in writing then it should comprise more than a list of clauses in an agreement and a number of documents the relevance of which is not explained to employees who may access them.

[104] I also have concerns that the evidence in this matter, while not entirely clear, indicates that bargaining was commenced by the provision of the NERR (in the email and SMS of 3 July 2015) and that at the same time employees were provided with a proposed agreement and advised, in the “briefing document” said to have been available on the weblink in the email and SMS, as follows:

[105] The email of 3 July 2015 also refers to a document titled “Voting Instructions”. This document was not in evidence before me but the provision of information regarding a proposed vote for an enterprise agreement at the same time as the NERR and the proposed Agreement is given to employees, may be indicative of a lack of genuine agreement and of an employer simply going through the motions to present what is in effect an “agreement” that is a fait accompli.

[106] Notwithstanding the submissions made by WorkPac in respect of the BOOT, I continue to have concerns about whether the Agreement passes the BOOT. There have been numerous Decisions of the Commission, including Full Bench Decisions, where the consistent view has been expressed that in applying the BOOT test – and previously the no disadvantage test (NDT) – consideration is given to a comparison between the terms of the relevant award and the terms of the proposed agreement.10

[107] The BOOT (as with the NDT before it) is applied on a global basis rather than line by line. A provision of a proposed agreement that when considered alone, may be less beneficial than a corresponding provision in a relevant modern award, will not result in the proposed agreement failing the BOOT if there are other more beneficial provisions in the proposed agreement which offset the less beneficial provision such that employees are better of overall. For example, a modern award that is a reference instrument for the purposes of applying the BOOT to a proposed agreement may provide that overtime is payable at the rate of time and a-half for the first three hours and double time thereafter. The proposed agreement may provide that a flat hourly rate that is less than the overtime rates in the relevant modern award, is payable for all hours worked including those that would be ordinary hours and those that would be treated as overtime hours under the modern award.

[108] In this scenario, employees may be better off overall if they are paid the loaded rate for all time worked and if their total remuneration is more than it would have been if the award rates, including overtime and other penalty payments or loadings, had applied. It may also be relevant to a consideration of whether a proposed agreement passes the BOOT in those circumstances that the flat hourly rate feeds into other entitlements under the proposed agreement such as the rate at which employees are paid for leave. Employees may volunteer to work overtime in this scenario and be paid a flat hourly rate for such overtime, and be better off overall than they would have been under the relevant award.

[109] It may also be relevant for an analysis of whether an Agreement passes the BOOT that the Agreement contains provisions imposing a right or obligation, or giving and entitlement not found in a relevant Award. An additional right or entitlement may be considered to be a benefit, while an obligation or a restriction not found in a relevant Award may be a detriment.

[110] In the present case, the base rates in the Agreement are approximately 1% in excess of those in the Award. There is little margin to offset removal of Award entitlements or to impose additional obligations on employees not provided for in an Award. The following provisions of the Agreement when compared to the Award, in my view, cause the Agreement not to pass the BOOT:

[111] I leave for another occasion the very real issue that the undertakings that would be required to address these matters may result in significant changes to the Agreement, contrary to the requirement in s. 190(3)(b).

[112] In respect of the other BOOT issues raised by the CFMEU, I do not accept that inclusion of the model flexibility term prescribed by the Act and Regulations is a detriment to employees simply because a relevant award provides for a different flexibility term. A “no extra claims commitment” simply reflects the fact that the agreement sets wages and conditions of employment for a specified term and that in return for that certainty, employees will not make claims for matters not provided for in the Agreement. The inclusion of a casual employment provision will not of itself cause an agreement to fail the BOOT and there are many agreements in the Coal industry which provide for casual employment which have been held to pass the BOOT. The Agreement includes the model consultation term prescribed by the Act and the Regulations, and I do not accept that it is appropriate to compare that term with the consultation term in the Award for the purposes of the BOOT.

[113] I do not accept the CFMEU submissions about the dispute settlement procedure. The clause in question in this matter is distinguishable from that before the Full Bench in Veridian. 11 The clause in the Agreement in the present case simply provides that any outcome or decision of the Commission under the dispute settlement procedure must be consistent with any relevant building code. The Commission would be unlikely to issue a Decision or Recommendation under a dispute settlement procedure that would put an employer in breach of a statutory or other obligation that would cause loss or damage to the employer. In contrast with the clause considered in Veridian, the clause in the present case does not provide for the terms of the Agreement as it operates in the future, to be altered. I accept that the employer provides employees on hire and that employees accept positions at the levels offered. The Agreement does not give the employer any right in this regard that the employer would not have under the Award.

[114] A mandatory template for a valid NERR is provided in Schedule 2.1 of the Fair Work Regulations 2009. The template makes clear that it cannot be modified other than as set out in the template, which provides for some information to be added (such as the name of the employer, the name of the proposed agreement and its proposed coverage) and allows for some content to be deleted where it is not relevant to the employer.

[115] The template is available on the Fair Work Commission website at www.fwc.gov.au in both word and PDF formats. The Commission also publishes a Guide to the NERR emphasising the need for conformity with the template and providing information about how to complete the NERR including information that should be added to it and an explanation of the circumstances in which content that is not relevant to the particular employer or employees may be deleted.

[116] A number of Full Bench Decisions have emphasised that failure to give a notice complying with the requirements of the Act and Regulations in relation to form and content, goes to validity. In short, where the requirements have not been met the Commission cannot approve an agreement.

[117] It should be a simple matter for employers to download the template NERR from the Commission's website, include the required information in the introductory paragraph, delete the content that is not relevant, and give it to employees. The Regulations provide for a variety of mechanisms in which the NERR can be given, which range from physically handing it to employees to providing it electronically. It is difficult to conceive of how the process of giving the NERR to employees could be simpler or how the implications of failure to comply with the requirements to give employees a NERR in the required form could be clearer.

[118] The WorkPac Group of companies is large and has human resource management expertise. I can only wonder at why, knowing that the giving of a valid notice is an essential step in the approval of an enterprise agreement, WorkPac turned what should have been a simple exercise into the debacle that it became. It is particularly surprising given that another Company in the WorkPac Group had an application for approval of an enterprise agreement refused in circumstances where the method of giving a NERR to employees was to send them an SMS message stating that they should go to a website to “view some important documents”. In that case Commissioner Raefelli refused to approve an agreement because the text message did not refer to the fact that the documents related to the agreement. 12 Notwithstanding that the email and the SMS message in the present case indicated that the weblinked documents related to the Agreement, as a matter of prudence, an essential document such as a NERR should not be provided by way of a generic SMS message or email that also refers to other documents.

[119] Once again I am in the position of being required to refuse to approve an agreement on the basis of what should be a simple administrative matter. The application for approval of the Agreement is dismissed and an Order to that effect will issue with this Decision.

C seal- Asbury DP.jpg

DEPUTY PRESIDENT

 1   CFMEU v Collinsville Coal Operations Pty Limited [2014] FWCFB 7940.

 2   Transcript of proceedings PN10 and PN14.

 3   PN22.

 4   [2014] FWCFB 2042.

 5   [2015] FWCFB 3889.

 6   [2014] FWCFB 2042.

 7   Ibid at [40] to [47].

 8   Ibid.

 9   (2010) FWAFB 4602.

10 Re MSA Security Officers Certified Agreement 2003 PR937654; BUPA Care Services Pty Ltd [2010] FWAFB 2762; Mondex Group Pty Ltd [2015] FWC 1148; Agri Labour Australia Pty Ltd [2015] FEC 5332; MP Resources Pty Ltd [2015] FWC 6820; Samphie Pty Ltd t/a Black Crow Organics [2010] FWAA5060; Top End Consulting Pty Ltd [2010] FWA 6442.

 11   [2015] FWCFB 3889.

 12   [2010] FWA 4247.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR576084>