Fair Work Act 2009
s.604 - Appeal of decisions

Appeal against decision [2017] FWC 852 of Deputy President Binet at Perth on 28 February 2017 in matter number AG2016/3592.

[1] On 28 February 2017, Deputy President Binet issued a Decision, 1 which found that the Mining Enterprise Agreement 2016 (“the Proposed Agreement”) was not genuinely agreed to by the employees covered by the Proposed Agreement in accordance with section 186(2)(a) of the Fair Work Act 2009 (Cth) (“the Act”) and/or that the Proposed Agreement passed the Better Off Overall Test (“BOOT”) as required by section 186(2)(d) and/or that its deficiencies could be corrected by undertakings. As such, the Deputy President dismissed BGC Contracting Pty Ltd’s (“the Appellant”) application for approval of the Proposed Agreement.

[2] On 21 March 2017, the Appellant lodged a Notice of Appeal, appealing the Decision of Deputy President Binet. The Appellant subsequently lodged an amended Notice of Appeal on 15 May 2017 and a further amended Notice of Appeal on 16 May 2017. We heard the appeal on 16 May 2017 and reserved our Decision. At the hearing, Mr R. Dalton, of Counsel, and Mr A. Pollock, of Counsel, appeared for the Appellant and Mr R. Reitano, of Counsel, appeared for the AMWU, the AWU and the CFMEU (“the Respondents”). Given the complexity of the matter and having regard to section 596 of the Act, permission was granted to both parties to be represented.

The Decision at First Instance

[3] In relation to section 186(2)(a) of the Act, the Deputy President found that the Proposed Agreement was not genuinely agreed to by the employees covered by the Proposed Agreement. Further, in relation to section 180(2) of the Act, the Deputy President was not satisfied that the Appellant took all reasonable steps to comply with its obligations to ensure that during the access period the employees were given a copy of, or given access to, materials incorporated by reference into the Proposed Agreement. Additionally, the Deputy President was satisfied there were reasonable grounds for concluding that the Appellant acted in breach of section 180(5) of the Act in that it did not take all reasonable steps in the circumstances to ensure that the effect of the terms of the Proposed Agreement were explained to employees in an appropriate manner.

[4] We summarise the Deputy President’s findings in relation to section 188(c) of the Act as follows.

[5] The Deputy President held she was not satisfied that the employees had a sufficient “stake” in the Proposed Agreement to give the necessary “authenticity” to their approval of the Proposed Agreement. Further, the Deputy President held that employees did not have sufficient knowledge or experience of the black coal industry to be in a position to genuinely agree to provisions of the Proposed Agreement which are intended to apply to coal mining. Moreover, the Deputy President found that the Proposed Agreement contained provisions that were so uncertain or confusing that employees could not have understood the provisions and, therefore, could not have genuinely agreed to them. Additionally, the Deputy President found the Appellant breached the good faith bargaining obligations and this conduct caused employees to approve the Proposed Agreement without genuinely agreeing to its terms. Finally, the Deputy President held she was not satisfied that the Appellant circumvented the objects of the Act in relation to collective bargaining.

[6] For the above reasons, the Deputy President dismissed the Appellant’s application for approval of the Proposed Agreement.

The Appeal

[7] At the heart of the appeal is whether the Deputy President correctly applied and construed the various sections of the Act in dismissing the application for approval of the Proposed Agreement.

Appellant’s Submissions

[8] The Appellant outlined four main grounds of appeal, which we summarise as follows.

[9] First, the Appellant contended the Commission could be satisfied it had met the requirement in section 180(2)(b) to the extent that either of the relevant awards were incorporated into the Proposed Agreement, as the awards were publicly available documents. In rejecting this contention, the Appellant asserted the Deputy President erred as follows:

1. The Appellant’s contention was consistent with the analysis in Re McDonald’s Australia Pty Ltd 2 (hereafter “McDonald’s”) and there were no particular characteristics of the workforce that justified a departure from McDonald’s;

2. The Deputy President mistook a material fact when she found that the task of locating the reference awards via the links in the reference document was “not straightforward”; and
3. The Deputy President mistook the nature of the “all reasonable steps” inquiry in section 180(2).

[10] Second, the Appellant contended the Deputy President erred in three ways in finding that there were “reasonable grounds for concluding” that the Appellant did not take all reasonable steps to ensure that the effect of the Proposed Agreement’s terms were explained to employees in an appropriate manner as required by section 180(5) of the Act. These were said to be:

1. In expressing her satisfaction by reference to “reasonable grounds for concluding”, the Deputy President did not form a satisfaction as to whether the Appellant had met the requirement in section 180(5) of the Act;

2. In finding that particular terms within the Proposed Agreement were uncertain, the Deputy President directed herself to an extraneous issue not relevant to the steps taken by the Appellant; and

3. The reasoning of the Deputy President is premised upon a misplaced assumption that an employer has an obligation under section 180(5) of the Act to identify and explain to employees any detriments in an enterprise agreement, as compared to the reference award when the text of the section requires an explanation of the meaning and effect of the terms themselves. In importing this BOOT type analysis into section 180(5), the Deputy President took into account an irrelevant consideration.

[11] Third, the Appellant submitted that the Commissioner erred in various aspects in relation her findings regarding section 188(c) of the Act. In particular, the Appellant contended that the Commissioner erred by finding that employees did not have a “sufficient stake” in the Proposed Agreement and that employees did not have “sufficient knowledge or experience of the black coal mining industry to be in a position to genuinely agree to provisions of the Proposed Agreement which are intended to apply to black coal mining.” The Appellant outlined three errors in relation to these findings, which were, in broad terms:

1. The Deputy President misconstrued and elevated the analysis in KCL Industries Ltd 3 (hereafter “KCL”) to a “decision rule” to be applied to section 188(c) of the Act;

2. The Deputy President misdirected herself to individual terms of the Proposed Agreement, whereas section 188(c) is directed to the entire Agreement; and

3. To the extent that KCL stands for the proposition that lack of a “sufficient stake” in a proposed agreement, and/or lack of “sufficient knowledge or experience” about other work covered by the proposed agreement is a reasonable ground for believing that the agreement was not genuinely agreed to for section 188(c) purposes, then it is plainly wrong and should not be followed.

[12] The Appellant also noted the Deputy President’s finding that the effect of particular terms impugned by the unions was “so confusing and/or uncertain that the Appellant could not have explained to the employees in an appropriate manner the effect of those terms.” In relation to this finding, the Appellant stipulated three examples in which the Deputy President erred:

1. The Deputy President asked herself the wrong question regarding the inquiry required by section 188(c) of the Act;

2. The Deputy President construed the Proposed Agreement by reference to assumed subjective understandings and beliefs of employees; and

3. The Deputy President failed to take into account the “vote no” campaign.

[13] Further, the Appellant posited that, in finding the impugned statements were misleading and concluding this constituted a reasonable ground for believing that the Proposed Agreement was not genuinely agreed, the Deputy President erred in accordance with House v The King 4 in two ways:

1. The finding with respect to each of the impugned statements adopts a strained interpretation of the words used and fails to take proper account of the context in which the statements were made; and

2. The Deputy President did not address how those misleading statements impacted upon her assessment of whether there were reasonable grounds for believing that the Proposed Agreement was not genuinely agreed.

[14] The Appellant also contended the Deputy President’s finding that employees were “intimidated” into approving the Proposed Agreement and, therefore, did not genuinely agree to its terms cannot be accepted for three reasons, which included that this was not a live ground of objection by the time the Deputy President received final submissions. Additionally, the Appellant submitted the Deputy President’s finding that the Appellant bargained in a manner that led employees to approve the Proposed Agreement without genuinely agreeing to its terms could not stand for four reasons, which also included that it was not being pressed by the Respondents in final submissions.

[15] Fourth, the Appellant asserted that the Deputy President failed to allow the Appellant an opportunity to provide undertakings that specifically addressed her BOOT findings, despite the fact that this was the course expressly contemplated by the parties. Moreover, in failing to allow the Appellant to provide undertakings that addressed the BOOT findings and in concluding that she was not satisfied that the undertakings “address all the financial and non-financial detriments”, the Appellant submitted the Deputy President applied the wrong test.

[16] By its Amended Notice of Appeal dated 15 May 2017 and further amended Notice of Appeal dated 16 May 2017, the Appellant pressed additional grounds of appeal relating to procedural fairness, which we outline below at [40] – [42].

[17] For the above reasons, together with reasons related to the additional grounds relating to procedural fairness, the Appellant contended that the Deputy President’s Decision is affected by appealable error. As such, the Appellant submitted that permission to appeal should be granted, the appeal should be upheld and the Decision quashed.

Respondents’ Submissions

[18] The Respondents noted the Appellant’s assertion that the Deputy President departed from the “reasonable assumption” that all of its employees had ready access to computers and mobile phones. In this regard, the Respondents contended the Deputy President was well within the bounds of reason in holding that she could not be satisfied about that “material fact”. Further, the Appellant noted the proposition in McDonald’s that, because something is a “law of the land” and accessible via the internet means an employer need take no action to discharge its obligation under section 180(2), is not universally true and probably wrong. 5

[19] Further, the Respondents contended the Deputy President’s finding that requiring employees to type in the hyperlink to the Commission’s modern award page and locate relevant awards and award clauses was not straightforward. In this regard, the Respondent asserted this finding was open where the only step the Appellant took to ensure its blue-collar employees had access to the Coal Award (an Award relating to an industry in which the appellant performed no work) was a piece of paper with a hyperlink on it.

[20] Additionally, the Respondents asserted the Deputy President correctly identified that she needed to be satisfied that the Appellant had taken all reasonable steps to ensure its employees had access to the Coal Award during the access period, as the Appellant had not given employees the written text of the Coal Award. Moreover, the Respondents submitted the Deputy President correctly recounted that the employees were blue-collar workers without ready access on site to computers and that the Appellant had proffered no evidence of its employees’ capacity to access material online. They submitted that, given the state of the evidence, it was unremarkable that the Deputy President was not satisfied why it was not reasonable for the Appellant to have done more than simply provide employees a link to the Commission’s website on a piece of paper. 6

[21] Additionally, the Respondents contended the Deputy President correctly understood the obligation imposed on employers by section 180(5) of the Act to take all reasonable steps to explain the terms of an agreement and their effect 7 and she correctly directed herself to the analysis of Deputy President Asbury in Falcon Mining Pty Ltd8 about matters that bear on the extent of the obligation to take all reasonable steps.9 Further, the Respondents contended that the Appellant’s complaint concerning the Deputy President’s findings on uncertain terms of the Proposed Agreement is misguided.

[22] Moreover, the Respondents submitted that the Appellant took no steps whatsoever to explain the effect of the Proposed Agreement vis-à-vis the reference awards. In this regard, the Respondents asserted that employees could not have understood the effect of the Proposed Agreement without being informed about detrimental terms it contained compared to the Awards. In these circumstances, the Respondents posited that a finding that it did not take all reasonable steps to explain the terms of the Proposed Agreement and their effect was again both open and correct.

[23] The Respondents also contended that the conclusion by the Deputy President that the Proposed Agreement would have little or no relevant to, or impact on, the employees who voted for it and that these employees had little stake in its approval was entirely unexceptional. In this regard, the Respondents asserted that the people who voted on the Proposed Agreement were not genuinely agreeing to anything with which the Proposed Agreement was concerned. Moreover, the Respondents submitted that a genuine agreement would be made by people who had some stake in that agreement by way of making gains or incurring obligations, however, neither element was present. As such, the Respondents posited that the Deputy President’s conclusion that the Proposed Agreement had not been genuinely agreed was ineluctable.

[24] Additionally, the Respondents contended the Deputy President correctly observed that no evidence was adduced by the Appellant to satisfy the Commission that its employees had knowledge or experience in the black coal mining industry, so as to be able to give informed consent to the rates and conditions prescribed by the agreement for that industry. As such, the Respondents submitted that no appealable error is demonstrated in the conclusion of the Deputy President that the employees who voted on the Proposed Agreement gave their informed consent to provisions concerning an industry in which they did not work.

[25] The Respondents posited that the Appellant suggested that KCL should be overturned if it stands for a decision rule (perhaps principle) that agreements roping in industries in which an employer does not operate or which contain rates that are not to apply to the employees who voted on the agreement can never be genuinely agreed. The Respondents asserted this submission fails because KCL prescribes no decision rule or principle at all. Rather, that it simply lays down a number of factors that could, in the circumstances of a particular case, result in the Commission determining there are reasonable grounds for a belief that an agreement was not genuinely agreed. Thus, the Respondents submitted that none of the grounds relied on by the Appellant compel the conclusion that the reasoning in KCL is incorrect and should be overruled.

[26] The Respondents contended that it was open to the Deputy President to find that employees could not genuinely agree to the Proposed Agreement in circumstances where they did not know and could not have known the rates of pay that were to apply to coal mining employees under the Proposed Agreement.

[27] In relation to the Appellant’s contention that the impugned statements were misleading, the Respondents asserted that the findings at [149] and [153] of the Decision are self-evidently correct. In this regard, the Respondents suggested the Appellant’s contention that the Deputy President gave the words a “strained interpretation” is curious because the words were given their ordinary grammatical meaning and were to be read as any reasonable person would read them.

[28] In relation to the Deputy President’s finding that the Appellant breached its good faith bargaining obligations, the Respondents submitted that the reasons given by the Deputy President for her findings in this regard were correct and that the matters raised by the Appellant would appear to be no more than an attempt to have an appeal bench arrive at a different conclusion.

[29] The Respondents contended the Deputy President addressed the issue of whether the Commission should accept undertakings and referred to the decision in Re AKN Pty Ltd. 10 The Respondents submitted the Deputy President identified the correct test, namely, whether the acceptance of any undertakings so as to allow the Agreement to pass the BOOT would result in a substantial change to the Agreement. In the circumstances of the Proposed Agreement, the Respondents noted the Deputy President concluded that the sheer number of undertakings needed meant that substantial changes would result. The Respondents asserted that the decision to permit an applicant for approval to remedy deficiencies in an agreement is, in any event, discretionary and there was no error disclosed by the refusal to exercise any discretion in favour of the Appellant.

[30] For the above reasons, and on the basis there is nothing in the public interest in this matter that warrants granting permission to appeal, the Respondents contended permission to appeal should be refused and the appeal should be dismissed.

Consideration – Permission to Appeal

[31] The Commission will grant permission to appeal if it is in the public interest to do so. 11 The test of assessing whether a matter is in the public interest is discretionary and involves a broad value judgement.12 In GlaxoSmithKline Australia Pty Ltd v Colin Makin,13 the Full Bench summarised the test for determining the public interest as follows:

“[26] Appeals have lain on the ground that it is in the public interest that leave should be granted in the predecessors to the Act for decades. It has not been considered useful or appropriate to define the concept in other than the most general terms and we do not intend to do so. The expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only by the objects of the legislation in question. [Comalco v O’Connor (1995) 131 AR 657 at p.681 per Wilcox CJ & Keely J, citing O’Sullivan v Farrer (1989) 168 CLR 210]

[27] Although the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters, it seems to us that none of those elements is present in this case.”

[32] Alternately, the second ground for granting permission to appeal is that the decision is attended with sufficient doubt to warrant its reconsideration or that substantial injustice may result if leave is refused. 14

[33] In determining whether permission to appeal should be granted, we have reviewed and considered all material filed by the parties including all submissions, correspondence and relevant authorities.

[34] We find that permission to appeal should be granted in this matter. We are of the view that the appeal raises important questions concerning section 186 of the Act in circumstances where the Deputy President’s discretion to determine whether the Proposed Agreement passed the BOOT is an issue in the dispute. We consider this to be an important matter regarding the Deputy President’s approach in making such a determination and, therefore, the dispute arising in this case is a matter of public interest. It is on this basis that permission to appeal is granted.

Consideration – The Appeal

[35] We note the following extract from transcript dated 19 October 2016 at PN113-130:

“MR FLETCHER: … So I wanted to address is do you expect an undertaking to be made at the completion of the objector's case, or should we provide an undertaking post haste based on being put on notice?  I mean I appreciate that we have been given a document which I haven't had a chance to review in detail at this stage which has got what appear to be three further alleged better off overall test issues.  My question, Deputy President, is do we need to - if we are going to respond with an undertaking - do we need to do it mid-hearing or is it appropriate to give it, after having considered what the objectors have to say, and prior to putting our case?  Or can we put it at the end of our case, having heard a preliminary view from you?

THE DEPUTY PRESIDENT: I'll give you my preliminary view and then you can - it might save you having to speak.

MR BONCARDO: I think that's exactly - yes.  Yes.

THE DEPUTY PRESIDENT: What I think makes sense is that you make it after the applicants have finished putting their case so that you can address - endeavour to address any things that they now - that they continue to press or that aren't resolved as a result of their witness evidence but you do it before you put your case so that they have an opportunity to make any submissions at the end of your - at the final end of the hearing - if they say it doesn't address - still doesn't address - - -

MR BONCARDO: Your Honour, can I just say something about that?

THE DEPUTY PRESIDENT: Yes.

MR BONCARDO: I think jurisdictionally your Honour needs to form the view that an agreement does not satisfy the boot test.  Only then does the capacity arise for an employer to give undertakings.  So far as we are concerned it seems to us that your Honour ought hear all the evidence and all the submissions, make a determination and if your Honour is of the view that the agreement does not pass the boot test and it is open to you to request undertakings then and for my friend to put undertakings for then it seems to me that my friend's boxing at shadows and providing undertakings - - -

MR FLETCHER:  I'm happy to agree that I'm boxing at shadows and it's out of an abundance of caution and if the course of action that Mr Boncardo is proposing - if the deputy President - if you're happy with that deputy President then I don't have any objection.  I just don't want to fall foul of some procedural - I'm extremely sensitive about - in light of some of the decisions on unrelated issues such as notices of employee representational rights I'm extremely sensitive about making sure that I do not miss the opportunity.  But if what Mr Boncardo is proposing is that you hear everything, you decide that there is a better off overall test issue and then we be given an opportunity to satisfy that with an undertaking then I don't have any objection to that approach.

MR BONCARDO: Your Honour I have no intention of being kind or charitable to my friend.  I'm simply - I'm basing my proposition on section 190(1) of the Fair Work Act which requires explicitly that your Honour needs to have a concern that an agreement doesn't meet the boot test prior to approving it or not approving it with undertakings and therefore seeking undertakings firstly from the applicant employer.

THE DEPUTY PRESIDENT: My approach to industrial matters is that agreed outcomes are always the most effective and what might - why I had proposed to do it at the point it was is so that if it was the case that the parties could reach an undertaking that satisfied them then that is better than Mr Fletcher guessing it what undertaking might satisfy the parties.  What I am conscious of is giving you sufficient time to review the undertakings so that you can make an informed decision about whether they - whether you're satisfied they meet your concerns about the boot because ultimately it's your members that are going to be bound by the agreement.

So I am happy to leave it to the end of the hearing but it doesn't give you or your colleagues at the Bar table the opportunity to have discussions with Mr Fletcher about any modifications to the undertaking he proposes which might then satisfy your concerns.

MR BONCARDO: I understand what your Honour is saying.

THE DEPUTY PRESIDENT: Okay. So what's your preference?  Because I'm only doing it to facilitate you the opportunity to have something put into the undertakings.

MR BONCARDO: Your Honour has perhaps some more optimism than I do about whether or not any undertakings are going to be acceptable to the union parties but I don't want a situation to arise where we or your Honour engages in a process which doesn't conform strictly to section 190.  In terms of us having input in respect to any proposed undertakings that so far as I am concerned is something that can be done on the papers.  It doesn't need to be done today and tomorrow.

If your Honour reaches a conclusion in your Honour's decision that the agreement can be approved with undertakings my friend offers those undertakings we then can be heard on them - - -

THE DEPUTY PRESIDENT: Separately.

MR BONCARDO: Separately. And your Honour may well reach the view that the undertakings provided or required to be provided are far too elaborate to fall with section 193 which may make it otiose as to whether or not undertakings need to be commented on by parties anyway.

THE DEPUTY PRESIDENT: I'm just conscious of the period of time in which this agreement has taken approval.  If we adopt that course of action you need to wait till a decision is written and then make submissions in relation to the undertaking.  So I would be keen to try and get that sorted out while we've got all the parties.” (our emphasis)

[36] In summarising the above extract, we note it is clear the parties were under the impression that, if the Deputy President was to issue a Decision finding that the Proposed Agreement did not pass the BOOT, submissions would subsequently be provided to the Commission regarding undertakings that could enable the Proposed Agreement to pass the BOOT.

[37] This is confirmed in the following extract from transcript dated 20 October 2016 at the conclusion of the hearing at PN3275-3305:

“THE DEPUTY PRESIDENT: Okay. What's the parties’ views about giving BGC the opportunity to make undertakings following - either before the submissions are filed or in response to the submissions?

MR BONCARDO: I think our position is what it was yesterday, which is that your Honour has to have a concern first before it is appropriate for BGC to be asked to give undertakings.  If your Honour has - - -

THE DEPUTY PRESIDENT: We routinely give requests for undertakings coming out of triage team so - - -

MR BONCARDO: Certainly.

THE DEPUTY PRESIDENT: Yes.

MR BONCARDO: Certainly, but those undertakings occur after the commission has expressed a concern, and that’s - - -

THE DEPUTY PRESIDENT: Well, that's how this has got to a listing, because the commission has a concern.

MR BONCARDO: I understand.

THE DEPUTY PRESIDENT: So it has to have had a concern to get to this point.

MR BONCARDO: I’m not sure whether your Honour is able to give us an indication of what those specific concerns are now or during the - - -

THE DEPUTY PRESIDENT: Isn’t that one of the documents that were tendered?

MR BONCARDO: That was done prior to us putting on our submissions about the BOOT. The concerns we have about the BOOT are far more extensive than the concerns identified by Member Assist.

THE DEPUTY PRESIDENT: So those concerns are now on the record for BGC to potentially respond to as an undertaking.

MR FLETCHER: As long as there’s no prejudice to BGC in the process that Mr Boncardo’s proposing, because I don't want to be trapped into a situation where procedurally Mr Boncardo proposes a course of action that then makes the agreement appellable.  If we’re all on the same page that you need to decide first whether the other issues, the other requirements, have been met, and then let the parties know that there’s an issue as you see it that requires an undertaking, I think the much cleaner approach is the one that Mr Boncardo is proposing, and as long as that doesn't prejudice BGC then I'm quite happy to go with that plan.

THE DEPUTY PRESIDENT: That will just push the process out a bit longer.  I was just trying to - - -

MR FLETCHER: Which I'm not - which BGC is not - - -

THE DEPUTY PRESIDENT: Yes.

MR FLETCHER: We are in a hurry, but we're not in that much of a hurry.  We want to get it right.

THE DEPUTY PRESIDENT: Okay.

MR BONCARDO: I think that is eminently sensible and assuage my friend again, I'm not attempting to lead him into some sort of trap.  We are trying as best we can to ensure that what occurs strictly conforms with section 190(1).

THE DEPUTY PRESIDENT: So you propose that I issue a decision in relation to the hearing - - -

MR BONCARDO: Yes.

THE DEPUTY PRESIDENT: - - - and then invite the party - invite BGC to make an undertaking which addresses those concerns.

MR BONCARDO: Yes.

MR FLETCHER: Any concerns you have.

THE DEPUTY PRESIDENT: And would you want to be heard in relation - would there be any need for any parties to be heard?

MR BONCARDO: Yes.

MR FLETCHER: Yes.

MR BONCARDO: Yes, very briefly, your Honour, very briefly.  It depends on the scope of the undertakings.  If your Honour is in agreement with some of our contentions in respect to the argument it will become entirely academic in respect to genuine agreements and the other points that we have raised.  So it may not be an issue that arises.  I’m hopeful that it doesn't.

MR FLETCHER: Yes, and as long as it happens on the papers we're not concerned.

MR BONCARDO: I have no issue with it happening on the papers. I think that’s eminently sensible.”

[38] The Deputy President reached the conclusion that the Proposed Agreement did not pass the BOOT at [305] of her Decision and she held that:

“I am not satisfied that the Undertakings proposed address all of the financial and nonfinancial detriments identified in this Decision or in fact that undertakings could be given, which would enable the Proposed Agreement to satisfy the BOOT but would not result in substantial changes to the Proposed Agreement as prohibited by section 190 of the FW Act.”

[39] However, in reaching this conclusion, the Deputy President did not provide the Appellant with an opportunity to file further submissions in relation to undertakings after the Decision was handed down. As there was no indication that there would be a departure from the intentions of the Deputy President to allow submissions regarding undertakings after handing down the Decision, we are of the view that the Appellant was denied procedural fairness.

[40] Further, on 15 May 2017 and 16 May 2017, the Appellant lodged an amended Notice of Appeal and a further amended Notice of Appeal, which outlined further grounds of appeal relating to denial of procedural fairness. In particular, the further amended Notice of Appeal outlined three ways in which it contended the Deputy President erred in making her finding at [210] of the Decision, which states:

“For the reasons articulated above, I am satisfied that the following grounds identified by the Unions, if not individually then in combination, are reasonable grounds for believing that the Proposed Agreement was not genuinely agreed to by the employees.

● Employees did not have a sufficient stake in the Proposed Agreement to have genuinely agreed to its terms.

● Employees did not have sufficient knowledge or experience of the black coal mining industry to be in a position to genuinely agree to provisions of the Proposed Agreement which are intended to apply to black coal mining.

● The Proposed Agreement contains provisions that were so uncertain or confusing that employees could not have understood the provisions and therefore could not genuinely have agreed to them.

● Employees were provided with misleading information in relation to the effect of the Proposed Agreement and its relationship with the Preserved Conditions.

● Contract and therefore they could not have genuinely agreed to the Proposed Agreement.

● Employees were intimidated into approving the Proposed Agreement and therefore they did not genuinely agree to its terms.

● BGC bargained in a manner which led Employees to approve the Proposed Agreement without genuinely agreeing to its terms.”

[41] In particular, the Appellant contended in its further amended Notice of Appeal that the Deputy President erred in finding at [210] of her Decision that:

1. The Appellant provided misleading information to employees about the effect of the Proposed Agreement and its relationship with the Preserved Conditions Contract;

2. Employees were “intimidated” into approving the Proposed Agreement and, therefore, did not genuinely agree to its terms; and

3. The manner in which the Appellant bargained led the employees to approve the Proposed Agreement without genuinely agreeing to its terms.

[42] The Appellant contended that, in reaching these findings at [210] of the Decision, the Deputy President failed to afford the Appellant procedural fairness as these matters were no longer live grounds of objection between the parties and were no longer pressed by the Respondent. In this regard, we note, in particular, the Deputy President’s finding at [210] of the Decision that employees were provided with misleading information in relation to the effect of the Proposed Agreement and its relationship with the Preserved Conditions.

[43] At the hearing before Deputy President Binet on 19 October 2016, the Respondent made the following concessions at PN16 of the transcript dated same:

“MR BONCARDO:  Yes, your Honour … After perusing the material produced under the notices to produce by the applicant I am no longer relying on a significant chunk of misleading/misinformation case. And if I can perhaps give the Commission some paragraph references to my submissions which were filed, I think on the 2 September.

I am no longer pressing paragraphs 15, 16, and 17.  Paragraphs 20, 21 and 22, 23, 24, 25, 26, 27, 28, the conclusionary and introductory paragraphs your Honour will no doubt read those in light of the concessions that I have made in terms of the balance of the written submissions on the misleading misinformation case.  I am also no longer pressing my contentions in respect to the application the better-off overall test being now instead of when the agreement was made.  So to that effect I am no longer pressing paragraphs 35, 36 and 37 of the written submissions.”

[44] We note that, at paragraph 16 of the Appellant’s final submissions dated 4 November 2016, the Appellant had particular regard to these concessions, stating:

“The Unions have also submitted that the Agreement has not been genuinely agreed by the employees for a number of reasons (that will be addressed further below). Certain genuine agreement points raised by the CFMEU are no longer being pressed including its assertions that BGC Contracting misled or misrepresented certain answers it gave in Frequently Asked Questions (FAQ) documents distributed to employees during the bargaining process.”

[45] On this basis, the Deputy President was not required to make findings regarding what the Respondent initially contended was misleading information provided by the Appellant to its employees as it was no longer a live ground of objection between the parties. However, the Deputy President did, in fact, make such findings at [210] of her Decision by concluding that employees were provided with misleading information in relation to the effect of the Proposed Agreement and its relationship with the Preserved Conditions. Moreover, at [212] of the Decision, the Deputy President held:

“BGC chose not to call as witnesses any employees who voted in favour of the Proposed Agreement. Nor did BGC make submissions or tender other evidence to persuade me that the grounds listed in paragraph [210] of this Decision are not singularly or in combination, reasonable grounds for believing that the Proposed Agreement was not genuinely agreed to by the employees.”

[46] Thus, the Deputy President found that the Appellant did not make submissions in relation to the provision of misleading information, which may have persuaded her that the grounds listed in her Decision at [210] were not reasonable to conclude that the Proposed Agreement was not genuinely agreed. However, as noted above, this ground was no longer pressed by the Respondent. This was acknowledged by the Appellant in its submissions dated 4 November 2016 and the Appellant did not make submissions regarding this matter as it was no longer a live ground of objection before the Commission. In making such findings without providing the Appellant an opportunity to make submissions in relation to this issue, the Deputy President denied the Appellant procedural fairness.

[47] Further, we note the Respondent contended that, as was found in KCL, the employees of the Appellant did not have a “stake” in the Proposed Agreement. We do not disagree with the proposition elicited in KCL. However, we are of the view that KCL is distinguishable from the matter before us on the facts. In particular, KCL was concerned with only two employees and the Full Bench held that the lack of authenticity of the agreement meant these employees had no “stake” in that agreement. In particular, at [36] of that Decision, the Full Bench found that:

“In summary, the position is that the Agreement covers a wide range of classifications most of which have no relevance to the work performed by KCL’s three existing employees, encompasses industries in which KCL does not currently operate, and contains rates of pay which, even in respect of those classifications relevant to the current employees, are not to apply to those employees. In those circumstances we do not consider that any authenticity could attach to the agreement of the two employees to the rates and conditions in the Agreement. The employees had no ‘stake’ in the Agreement’s rates of pay, since they were assured that their existing, higher rates of pay would remain in place (subject to ‘operational needs and satisfactory performance’), and they could not have given informed consent in relation to occupation and industries in which they did not work and presumably had no experience.”

[48] Moreover, there was no evidence in KCL to suggest that the employer was faced with challenges in the market due to an industry downturn, as is the case in the matter before us. In this regard, the Appellant outlined this issue to its employees and this is demonstrated, in particular, at paragraphs 11 to 20 of Mr Tariro Ruwiza’s witness statement. The distinguishing factor between these two matters is that there is no lack of authenticity in the case before us. As such, we are not satisfied that KCL is applicable to the present matter in determining whether the parties had a “stake” in the Proposed Agreement.

[49] In determining whether the employees do, in fact, have a stake in the Proposed Agreement, we refer to Question 7 of the Frequently Asked Questions (“FAQs”), 15 which states as follows:

“What are the key changes under the new Mining Agreement that could impact on me?”

[50] The table displayed under this question outlines various benefits and detriments between the Proposed Agreement and the 2012 agreement and, for example, one of the benefits outlined in this table included increased penalty rates for employees on public holidays and overtime.

[51] Additionally, Question 8 of the FAQs 16 states:

“Why should I support the new Mining Agreement, what does it actually give me?”

[52] The response provided to this question informed existing employees that supporting the Proposed Agreement will affect their interests as it would enable the Appellant to cope with competitive market pressures, sustain its operations, expand into new industries and win work.

[53] Question 10 of the FAQs 17 addressed the possible reduction of labour costs as an alternative to reducing employee numbers and further, Question 11 of the FAQs18 states:

“Why can’t we have the same terms and conditions that we currently have in our Agreements?”

[54] In the response to this question, it was stated that some of the rates and conditions were implemented during a booming mining industry and record iron ore prices, but were no longer sustainable in today’s market. It was said that if the Appellant did not change, its ability to win work would be severely limited, as would its ability to sustain its current operations.

[55] Noting the FAQs specifically outline the benefits of supporting the Proposed Agreement and how employees’ interests are affected, and as the matter before us can be distinguished from KCL, we are not satisfied that the employees had no “stake” in the Proposed Agreement.

[56] Moreover, as KCL is distinguishable from the matter before us, the denial of procedural fairness to the Appellant remains a live issue. In order to overcome this denial of procedural fairness, we are of the view the appeal must be upheld and the Decision of Deputy President Binet must be quashed.

Conclusion

[57] Permission to appeal is granted.

[58] The appeal is upheld.

[59] The Decision of Deputy President Binet is quashed.

[60] The matter is referred to Deputy President Gostencnik for rehearing.

VICE PRESIDENT

Appearances:

R. Dalton, of Counsel, and A. Pollock, of Counsel, for the Appellant.
R. Reitano, of Counsel, for the Respondent.

Hearing details:

2017
Melbourne:
16 May.

 1   [2017] FWC 852.

 2   (2010) 196 IR 155.

 3   [2016] FWCFB 3048.

 4   (1936) 55 CLR 499.

 5   Construction, Forestry, Mining and Energy Union v Sparta Mining [2016] FWCFB 7057, [22].

 6   [2017] FWC 852, [59]; [2016] FWCFB 7057, [23].

 7   [2017] FWC 852, [61].

 8   [2016] FWC 5315.

 9   [2017] FWC 852, [69]-[77].

 10   [2015] FWCFB 1833.

 11   Fair Work Act 2009 (Cth) s 604(2).

 12   Esso Australia Pty Ltd v AMWU; CEPU; AWU [2015] FWCFB 210, [6].

 13   [2010] FWAFB 5343, [27].

 14   Esso Australia Pty Ltd v AMWU; CEPU; AWU [2015] FWCFB 210, [7].

 15   Appeal Book, p 489.

 16   Appeal Book, p 490.

 17   Appeal Book, p 490.

 18   Appeal Book, p 491.

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