| [2020] FWCFB 18 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
DDP Electrical Services Pty Ltd T/A DDP Electrical Services
(C2019/5471)
DEPUTY PRESIDENT GOSTENCNIK |
MELBOURNE, 6 JANUARY 2020 |
Appeal against decision [2019] FWCA 4999 of Deputy President Cross at Sydney on 20 August 2019 in matter number AG2018/5112 – whether employer took all reasonable steps to explain the terms of the Agreement and the effect of those terms to employees – whether Agreement passed the better off overall test – undertakings – permission to appeal granted – appeal upheld – approval decision quashed – application to approve the Agreement remitted for redetermination.
[1] DDP Electrical Services Pty Ltd (DDP) applied on 11 September 2018 under s.185 of the Fair Work Act 2009 (Act) for the approval of an enterprise agreement titled the DDP Electrical Services Pty Ltd Sydney Construction Enterprise Agreement 2018 (Agreement).
[2] On 13 August 2018, DDP initiated bargaining for a proposed agreement and gave to its employees employed at the time who would be covered by the proposed agreement a Notice of Employee Representational Rights. 1 On 28 August 2018, employees were provided with a copy of the proposed agreement and a notice titled “How and When for Approval Notice”, which was said to contain information about the time, place and method of the vote to approve the Agreement.2 On 5 September 2018, at 1:30pm a meeting was held with employees for the purpose of explaining the terms of the Agreement, at which an opportunity was provided to employees to ask questions about the terms of the Agreement. At that meeting a copy of the Agreement and a document described as a “summary sheet” said to outline clauses which had changed from the enterprise agreement that then covered the employees was given to relevant employees.3
[3] Voting for the Agreement commenced and concluded on 5 September 2018. 4 The Agreement was made on that day when 40 valid votes were cast and 39 of the employees who cast a valid vote, voted to approve the Agreement.5 At the time the Agreement was made, it is uncontroversial that the DDP Electrical Services Pty Ltd Union Enterprise Agreement 2012 (2012 Agreement) applied to the relevant employees. The underpinning Modern Award which covers these employees, and against which the Agreement was assessed for the purposes of determining whether the Agreement passed the better off overall test (BOOT) in s.193 of the Act, was the Electrical, Electronic and Communications Contracting Award 2010 (Award).
[4] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) maintained that it was a bargaining representative for the Agreement. 6 In that capacity, the CEPU opposed the approval of the Agreement on several grounds. It also made clear in a statutory declaration made by Mr Allen Hicks, the CEPU NSW Divisional Secretary, and filed with the Commission, its opposition and that it was not giving notice under s.183 of the Act that it wanted to be covered by the Agreement.7 The application for the approval of the Agreement was allocated to Deputy President Cross.
[5] At a directions hearing held by telephone on 22 March 2019, the Deputy President made directions for the purpose of dealing with the application for approval of the Agreement. 8 Some of the dates for compliance with the directions were subsequently amended.9 Pursuant to the directions, the CEPU filed and served its outline of submissions and a statement of Mr Antony Stegic, a CEPU Organiser, on 29 March 2019.10 On 2 April 2019, correspondence from the Commission was sent to the parties requesting submissions addressing, inter alia, the steps taken to explain the terms and effects of the Agreement, whether all employees were present at the meeting on 5 September 2018 and, if not, what steps were taken to communicate with those not present.11 The correspondence also identified a number of concerns relevant to assessing whether the Agreement passed the BOOT. On 12 April 2019, DDP filed its outline of submissions and the statement of Mr Darren Stevens, a Director of DDP.12 The CEPU filed its submissions in reply on 18 April 2019.13 The Deputy President proceeded to determine the application on the papers without holding a hearing consistent with the agreed position of the parties communicated to the Deputy President at the earlier mentioned directions hearing.14
[6] By a decision issued on 20 August 2019 15 (Decision), the Deputy President approved the Agreement with undertakings and noted in the Decision, contrary to the position set out in Mr Hicks’ statutory declaration, that the Agreement covers the CEPU.16
[7] The Agreement is a single-enterprise agreement which covers electrical workers employed by DDP who fall within the classifications for which provision is made whenever a relevant employee performs construction work in the County of Cumberland in New South Wales. 17
[8] The CEPU has applied under s.604 of the Act for permission to appeal, and if granted, appeals against the Decision.
[9] The Deputy President commences by setting out some of the procedural background to the application at [1]-[5] of the Decision. At [6]-[7] of the Decision the Deputy President outlines the bases on which the CEPU contend the Agreement should not be approved. These were that:
• the Agreement has not been genuinely agreed to by the employees covered by the Agreement;
• the terms of the Agreement contravene s.55 of the Act;
• the Agreement did not pass the BOOT; and
• DDP had not bargained in good faith.
[10] The Deputy President deals with the first basis of objection at [8]-[19] of the Decision. In summary, the Deputy President:
• set out that the CEPU’s contention that the Agreement was not genuinely agreed to by the employees covered by the Agreement was concerned with the adequacy of the explanation given by DDP to the employees about the terms of the Agreement and the effect of those terms; 18
• set out Mr Stegic’s evidence; 19
• concluded that:
◦ in light of Mr Stegic’s evidence, the CEPU would have readily available members who could provide statements contradicting the evidence and submissions of the Applicant;
◦ such statements were not filed;
◦ consequently, the best, and only, evidence before the Commission was the statutory declaration of Mr Stevens filed in support of the application to approve and his statement filed along with DDP’s submissions; 20
• set out passages of the statutory declaration relevant to the explanation given to employees; 21
• set out the circumstances in which an earlier application for the approval of an agreement made by DDP had been discontinued and the explanation given to employees about that agreement as follows:
“[13] It was a material fact in the matter that a previous Agreement had been made on or about 4 April, 2018, however the application for approval of that agreement was apparently withdrawn as the Notice of Employee Representational Rights was defective. The Applicant relied upon the facts surrounding that withdrawn agreement to assert employee familiarity with the subject matter of the Agreement, and seemingly that prior explanation had been given as to the nature of changes from the existing agreement in place prior to the meeting on 5 September, 2018. Mr Stevens’ evidence regarding that meeting was the following:
“On 4 April 2018, a discussion meeting was held to explain the terms of the agreement. I explained to the employees that this Agreement was largely modelled on the Union based agreement which had covered DDP for approximately 15 years. Where there were changes from the (sic.) these were outlined in a summary document. This document is attached to this statement and marked "B". Where there were changes between the current EBA and the proposed EBA, I read out the clause, explained the nature of the change and clarified the clause in answer to any questions. During the meeting, each employee had a copy of the agreement during the discussion. When I read out and explained the changes to the EBA, the employees followed by going to the relevant clause.”” 22 [Endnote omitted]
• summarised the CEPU’s contentions and concluded as follows:
“[14] The CEPU did not take issue that explanation that occurred in the meeting on 4 April, 2018, and the provision of Annexure B, had related to a previous abandoned agreement. Regarding that evidence, the CEPU submitted:
“As evidenced in the Applicant’s submissions, in particular attachment B of Mr Darren Stevens’ Statement, employees were provided with a summary document, which only outlines the clauses in the Agreement that were changing from the previous 2012 Agreement. The Applicant’s document does not provide an explanation as to the effects of these changes on employees’ current terms and conditions.”
[15] The issue taken by the CEPU was not whether a comparison of clauses in the Agreement occurred, but that the point of comparison was wrong. That submission, however, is contrary to the evidence. Mr Stevens’ unchallenged evidence was:
“The agreement which currently applies is the DDP Electrical Services Pty Ltd Union Enterprise Agreement 2012.”
[16] The CEPU submitted that the Applicant had failed to substantiate that it had taken all reasonable steps to notify the employees of the time and place at which voting was to occur and the voting method, because failed to take additional steps to confirm with the employees as to whether they had received the relevant material. I do not consider that additional step is necessary.
[17] The CEPU submitted that the Applicant had failed to take all reasonable steps to explain the terms of the Agreement to employees by relying on the Applicant’s response to Part 2.4 of the Form F17 which states that employees were only provided with a copy of the Agreement. The CEPU further relied on the Full Court Decision of One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union (“One Key”), and submitted that “a bare statement by an employer that an explanation has been given is an inadequate foundation upon which to reach a state of satisfaction”.
[18] I do not accept that it is appropriate to characterise the Applicant’s explanation to its employees as a bare statement. Using a comparison document, Mr Stevens read out each clause where there were changes between the 2012 Agreement and the Agreement, and explained the nature of the change. He also clarified clauses in answer to any questions.
[19] I am also satisfied that further material and/or information to explain the terms and effects of the Agreement was provided, particularly by way of the document titled “How and When for Approval – Enterprise Agreements”, that less beneficial terms were identified, as they were at the Form F17, and that the Applicant took into account the circumstances and needs of employees.” 23 [Endnotes omitted]
[11] As to the second basis, the Deputy President deals with that issue at [20] of the Decision as follows:
“[20] The CEPU has asserted that Clause 57 of the Agreement is inconsistent with s.202(1) of the Act. The Applicant has indicated it is willing to provide an undertaking to clarify the compliance by any flexibility arrangements with s.203 of the Act. I require the provision of such undertaking, together with an undertaking as to apply the Casual Conversion Clause of the Award.” 24
[12] The Deputy President deals with the BOOT issues at [21]-[25] of the Decision. In summary, the Deputy President:
• sets out the matters which the CEPU identifies as raising concerns whether the Agreement passed the BOOT; 25
• sets out the manner in which the question whether the Agreement passed the BOOT is to be assessed; 26
• concludes as follows:
“[24] Such an overall assessment in this matter results in an assessment that all employees, but for First Year Apprentices, would be better off under the Agreement. That is principally because the rates of pay are significantly higher than the Award rates. For example, Grade 1 under the Agreement is 39.89% higher than the EW1 classification under the Award, and Grade 4 under the Agreement is 40.34% higher than the EW4 classification under the Award. The hourly rate for First Year Apprentices is 2.86% less than the Award.
[25] The Agreement would pass the BOOT if the Applicant provided an undertaking to pay First Year Apprentices an hourly rate of 5% above the Award.” 27
[13] The final basis of opposition is dealt with by the Deputy President as follows:
“[26] The CEPU submitted in reply that the Applicant, by distributing to its employees a letter on 15 December, 2017, that provided employees with the option to elect to have a Union or Non-Union Agreement, the Applicant purported to discourage it employees from engaging in collective bargaining for a Union Enterprise Agreement.
[27] The CEPU particularly referred to that part of the letter that opined that should the CEPU be successful in negotiating an Enterprise Agreement, that the employees would be out of a job, working in labour hire, and that the company will be closed within six months. The CEPU submitted that the Applicant’s conduct failed to meet the obligation under the Act, at s.228(1)(e) to “[refrain] from capricious or unfair conduct that undermines freedom of association or collective bargaining”.
[28] Paragraph [951] of the Explanatory Memorandum to the Fair Work Bill 2008 gave the following examples of capricious or unfair conduct by an employer which may fall within s.228(1)(e) of the Act:
“The good faith bargaining requirements are generally self-explanatory. The last requirement, ‘refraining from capricious or unfair conduct…’ is intended to cover a broad range of conduct. For example, conduct may be capricious or unfair conduct if an employer:
• fails to recognise a bargaining representative;
• does not permit an employee who is a bargaining representative to attend meetings or discuss matters relating to the terms of the proposed agreement with fellow employees;
• dismisses or engages in detrimental conduct towards an employee because the employee is a bargaining representative or is participating in bargaining; or
• prevents an employee from appointing his or her own representative.”
[29] I do not consider the conduct of the Applicant amounted to capricious or unfair conduct. The Applicant clearly made a forceful expression of their choice of participants in the Agreement, but nonetheless they presented their employees with a choice of a union or non-union agreement. I am satisfied that that the Applicants actions have not undermined the good faith bargaining requirements of the Act.” 28
[14] As already noted, the Deputy President approved the Agreement with undertakings. 29
[15] In essence, the CEPU’s amended notice of appeal contains three appeal grounds.
[16] The first contends that the Deputy President erred by acting upon a wrong principle. It contends the Deputy President erred by failing to apply One Key Workforce Pty Ltd v CFMEU 30 to his consideration whether the Agreement was genuinely agreed to by the employees in accordance with s.188 of the Act. In doing so, the Deputy President is said to have failed to have regard to, or reach a state of satisfaction as to:
• whether, in accordance with s.180(5) of the Act, the employer took all reasonable steps to ensure that:
◦ the terms of the Agreement, and the effect of those terms, were explained to the relevant employees; and
◦ the explanation was provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees; and/or
• whether, in accordance with s.188(1)(c) of the Act, there were no other reasonable grounds for believing that the Agreement had not been genuinely agreed to by the employees.
[17] The second contends that the Deputy President erred by failing to reach a state of satisfaction that the Agreement passes the BOOT as required by s.186(2)(d) of the Act.
[18] The third contends that the Deputy President erred in his application of s.190 of the Act in accepting the undertakings proffered by DDP.
[19] We consider these ground in turn below.
Ground 1 – Genuinely agreed
[20] In furtherance of this ground of appeal, the CEPU contends that the Deputy President did not have a sufficient basis to form the requisite state of satisfaction that DDP had taken reasonable steps to explain the terms of the Agreement and the effect of those terms for the purposes of s.180(5) of the Act. We take this to mean for the purposes of s.188(1)(a)(i) and consequently s.186(2)(a).
[21] The CEPU contends that DDP did not comply with s.180(5) of the Act and the Deputy President was wrong to be satisfied otherwise because:
• the Deputy President accepted without thorough analysis, bald assertions in Mr Stevens’ statutory declaration and DDP’s outline of submissions that the terms and effect of the Agreement had been explained to employees;
• section 180(5) of the Act required DDP to explain where the Agreement departed from the Award and this did not occur; and
• DDP’s purported explanation took place 45 minutes before the vote opened and closed.
[22] DDP contends there is no foundation for the CEPU’s contentions. It says that a careful reading of the Decision indicates that the Deputy President took an orthodox and methodical approach to determining whether the requirements of s.180(5) had been satisfied. It points to the fact that the Deputy President:
• noted that the Agreement had been modelled on a union agreement which had covered DDP for 15 years; 31
• referred to the fact that DDP had provided the relevant employees with an explanation of the terms of the Agreement on 4 April 2018 before an application for approval was withdrawn due to the Notice of Employee Representational Rights being defective; 32
• noted that during that explanation Mr Stevens:
◦ provided a summary document which outlined the changes between the Agreement and the previous enterprise agreement known as the 2012 Agreement, namely, rostered days off, productivity allowance, employee tool kit, the removal of site and multi-storey allowance, sick leave and severance pay (described as MERT); 33 and
◦ had read out the different clauses in the Agreement, explained the nature of the changes between the Agreement and the 2012 Agreement and clarified the operation of the clauses in answer to questions; 34
• took into account Mr Stevens’ statutory declaration in which he declared that:
◦ DDP had provided each relevant employee with a copy of the Agreement on 28 August 2018 by email and in person;
◦ DDP had provided each relevant employee with a document entitled a “How and When for Approval Notice” which set out the time and place of the vote and the method of the vote;
◦ a meeting took place at 1.30pm on 5 September 2018 between Mr Stevens and the affected employees to explain the terms of the Agreement and provided an opportunity for employees to ask questions on the terms of the Agreement;
◦ all employees were fluent in written and spoken English and did not have special needs which required accommodation by way of further explanation; 35 and
• found that the CEPU had members employed by DDP and would have readily available members who could have provided statements contradicting DDP’s submissions and evidence which it did not do. 36
[23] DDP contends that the circumstances in which the Agreement was approved by employees did not require a comparison to be made between the Agreement and the Award in order for DDP to comply with s.180(5) of the Act. It says that as the Deputy President found at the time of the bargaining and vote that the 2012 Agreement applied to the affected employees, the Deputy President correctly rejected the CEPU’s assertion that the “summary document” made an incorrect comparison between the 2012 Agreement and the Agreement rather than between the Agreement and the Award. It says that in the instant case the relevant employees had their existing terms and conditions governed under an enterprise agreement which is to be replaced by another enterprise agreement. Accordingly, the main practical focus in ensuring that all reasonable steps have been taken to explain the terms and effect of the Agreement to employees involves highlighting the differences between the employees’ current terms and conditions of employment and the proposed changes.
[24] DDP contends that although the BOOT is applied against the Award, for all practical purposes for employees at the workplace level, their main interest will be a comparison between their current terms and the proposed terms of employment.
[25] DDP also contends the CEPU’s contention that the timing of the explanation before the vote is indicative that the explanation given was deficient also lacks merit. It says the CEPU has not provided any basis to support the assertion that DDP spent insufficient time explaining the Agreement to the affected employees. The CEPU does not say how the time spent going through the Agreement undermined the quality of the explanation given so that it could be said that DDP had not taken all reasonable steps as required by s.180(5) of the Act. It contends that the contention also overlooks the Deputy President’s finding that an explanation was also provided on an earlier occasion on 4 April 2018.
[26] In reaching the requisite satisfaction, the Deputy President was required to evaluate whether in all the circumstances, DDP has taken all reasonable steps to ensure that the terms of the Agreement, and the effect of those terms, were explained to the relevant employees in a manner appropriate, taking into account the particular circumstances and need of the relevant employees. As s.188(1) makes clear, DDP’s compliance with s.180(5) of the Act need only be established to the satisfaction of the decision-maker. Actual compliance with s.180(5) is not a jurisdictional fact. Its objective existence is not a precondition to the Commission’s power to approve the Agreement. 37
[27] Nevertheless, that the Deputy President reached the requisite state of satisfaction as to, inter alia, compliance with s.180(5), is a jurisdictional fact. In reaching the requisite state of satisfaction, there must be material available to the Deputy President to support reaching that state. An evaluative assessment of no or insufficient information in reaching a state of satisfaction is no assessment at all and will not provide a sufficient foundation for being satisfied as to the requisite compliance.
[28] Arriving at a state of satisfaction as to whether an employer has complied with the obligations in s.180(5) depends on the circumstances of the case. The focus of the enquiry involves considering and evaluating the steps taken to comply, and then assessing whether the steps taken were reasonable in the circumstances and whether these were all the reasonable steps that should have been taken in the circumstances.
[29] As a Full Bench of the Commission in The Australian Workers' Union v Rigforce Pty Ltd 38 recently stated:
“[35]. . . The nature of the requirement in s 180(5) was analysed in detail by the Federal Court (Flick J) in CFMEU v One Key Workforce Pty Ltd. We adopt the summary of that analysis set out in CFMMEU v Ditchfield Mining Services Pty Limited, which reduced it to the following four propositions:
(1) whether an employer has complied with the obligation in s 180(5) depends on the circumstances of the case;
(2) the focus of the enquiry whether an employer has complied with s 180(5) is first on the steps taken to comply, and then to consider whether:
• the steps taken were reasonable in the circumstances; and
• these were all the reasonable steps that should have been taken in the circumstances;
(3) the object of the reasonable steps that are to be taken is to ensure that the terms of the agreement, and their effect, are explained to relevant employees in a manner that considers their particular circumstances and needs. This requires attention to the content of the explanation given; and
(4) an employer does not fall short of complying with the obligation in s 180(5) of the FW Act merely because an employee does not understand the explanation provided.
[36] Additionally, we also adopt the analysis of Gostencnik DP in BGC Contracting Pty Ltd concerning the nature of a statutory obligation to take “all reasonable steps” as follows (footnote omitted):
“[43] A requirement or obligation to take “all reasonable steps” seems to me to require the identification of the steps a reasonable person would regard as reasonable in the circumstances that apply. Whether particular steps are reasonable will depend on the particular circumstances existing at the time the obligation arises. A requirement to take all reasonable steps does not extend to all steps that are reasonably open in some literal or theoretical sense…” 39 [Endnotes omitted]
[30] As paragraph (3) of the summary in Ditchfield Mining 40 reproduced above makes clear, an assessment whether an employer took all reasonable steps to explain to relevant employees the terms of an agreement and the effect of those terms necessarily requires an examination of the content of the explanation given by the employer. That the content of the explanation given is an important consideration in determining whether the Commission is satisfied that an employer has complied with s.180(5) is also made clear by the Full Court of the Federal Court in One Key Workforce Pty Ltd v CFMEU.41 So much is evident from the following passages from the Full Court’s judgment:
“[i]n order to reach the requisite state of satisfaction that s.180(5) had been complied with, the Commission was required to consider the content of the explanation and the terms in which it was conveyed, having regard to all the circumstances and needs of the employees and the nature of the changes made by the Agreement.
. . .
[t]he absence of that information meant that the Commission was not in a position to form the requisite state of satisfaction. Put differently, without knowing the content of the explanation, it was not open to the Commission to be satisfied that all reasonable steps had been taken to ensure that the terms and their effect had been explained to the employees who voted on the Agreement or that they had genuinely agreed to the Agreement.” 42
[31] The Full Bench in Ditchfield Mining also dealt with the issue of the extent to which an explanation involving a comparison between an agreement and an award covering relevant employees needs to be given:
“[71] Compliance with s.180(5) will not always require an employer to identify detriments in an agreement vis-à-vis the reference instrument, or for the employer to provide an analysis between the agreement and the relevant reference instrument, particularly in circumstances where an existing enterprise agreement, not a reference instrument, applies to the employees in their employment with the employer. The question of compliance with s.180(5) is to be judged against the circumstances that pertain at the time at which compliance was required. Section 57 of the Act makes clear that a modern award does not apply to an employee in relation to particular employment at a time when an enterprise agreement applies to the employee in relation to that employment. In the present case, when the explanations were given, no enterprise agreement applied to the employees and the Award did apply. An explanation of the effect of the terms of the Agreement vis-à-vis the Award was therefore capable of being relevant to the evaluative assessment of whether all reasonable steps were taken to explain the terms of the Agreement and the effect of those terms.
[72] The obligation under s.180(5) to take all reasonable steps to explain to relevant employees the terms of an enterprise agreement and the effect of those terms is an important function of the agreement-making scheme established by Part 2-4 of the Act. Its evident purpose, taking into account its role in assessing whether the employees who were asked to vote to approve an agreement genuinely agreed to the agreement, is to ensure that employees are as fully informed as practicable about the terms and effect of the terms of a proposed enterprise agreement before voting on whether to approve it. An employer’s discharge of its obligation under s.180(5) is intended to enable employees to know what they are being asked to agree to, and to understand how their wages and working conditions might be affected by voting in favour of an agreement.” 43 [Endnotes omitted]
[32] We accept that the Deputy President took into account the matters set out in DDP’s submissions which we summarised at [22]. We also accept that except in the case of apprentice wages, a comparison between the Agreement and the Award was not required in order that there be satisfaction that DDP complied with s.180(5) of the Act. This is because in the circumstances of this case the relevant employees:
• had their existing terms covered by the 2012 Agreement; and
• the changes that would be made by the Agreement to employees’ existing terms and conditions under the 2012 Agreement concerned fewer than 10 clauses in an agreement spanning some 58 clauses and 6 Schedules.
[33] The relevant comparison required in order that the employees could make an informed choice whether to approve the Agreement was in this case as between the 2012 Agreement and the Agreement.
[34] We also accept that the duration of the meeting, whilst relevant, without more is not an indicator in this case as to the adequacy of the explanation, given the number of alterations that were to be made by the Agreement to the existing terms and conditions of the affected employees.
[35] The difficulty however, is that the material attached to Mr Stevens’ statement which was used by him to explain the terms of an earlier agreement which had been withdrawn and this Agreement, and on which DDP and the Deputy President relied as in part satisfying the requirement in s.180(5), is itself inaccurate or incomplete. DDP relied on this material, as noted by the Deputy President at [13] of the Decision, as establishing familiarity with the relevant employees with the Agreement and the changes to the terms and conditions of their employment that would be made by the Agreement. Neither Mr Stevens’ statement nor the summary document adequately disclose the content of the explanation of the differences in the terms of the 2012 Agreement and the Agreement. In many cases only the subject matter is disclosed. The documents do not go into sufficient detail about the actual differences in the terms that were explained to the employees. Neither the documents nor Mr Stevens’ statement disclose adequately, or in some cases at all, the content of the explanation given about the effect of the terms of the Agreement. For example, the documents disclose “Productivity Allowance – Page 21 – Clause 26” as being raised, but not what is said about the term. 44 Mr Stevens’ statement does not tell us what was said about the term.
[36] In a document appearing as an attachment to Mr Stevens’ statement and marked “A” 45 there appears the following:
“Pay increases will be via productivity allowance.
No one will be worse off whatever rate you are on now will either remain or increase.” [Emphasis in original]
[37] Neither of these statements on their face is correct. The alteration to the productivity allowance that is brought about by the Agreement compared to the 2012 Agreement is significant. It alters from a mandatory hourly payment paid to employees covered by the 2012 Agreement for the duration of that agreement 46 to a payment which is wholly discretionary and which need not be made at all.47 Moreover, as the productivity allowance is wholly discretionary and may, as the clause makes clear, be withdrawn for any reason after it is given, it cannot be said that pay rises will be given via the productivity allowance. At best, the effect of the productivity allowance provision in the Agreement is that pay might increase if DDP in its sole discretion determines to award it but that it might also be withdrawn at any time for any reason. This is the effect of the Agreement and there is nothing in the material before the Deputy President which discloses that this was explained to employees. When the effect of the term is compared to the first statement reproduced above, there is a real question whether, when Mr Stevens’ said that at the 5 September 2018 meeting “[A]s I did on 4 April 2018, where there were changes between the current EBA and the proposed EBA, I read out the clause and explained the effect of the changes to the Agreement to the employees” - he explained that productivity allowance payments were mandatory under the 2012 Agreement, but under the Agreement these would be discretionary and could be removed for any reason. The documents say nothing about this.
[38] Such an explanation was even more essential because the document marked “A” to Mr Stevens’ statement, and specifically option 1 thereof, which contains the erroneous statements, was said by him to have been overwhelmingly approved by employees on 15 December 2017. 48
[39] Nothing in the material discloses that the effect of the productivity allowance clause was explained to employees or that the position set out in option 1 would be altered by the Agreement.
[40] Similarly, the words appearing at [36] above in bold would reasonably have been understood by an employee that so far as that employee’s interests are concerned that employee will not be worse off in terms of wages under the Agreement compared to the 2012 Agreement. This is also inaccurate since the mandatory requirement to pay a productivity allowance under the 2012 Agreement is removed under the Agreement and wage rates for existing employees otherwise remain the same. Thus, if a productivity allowance is not granted to an employee, that employee will be worse off contrary to the explanation given. Moreover, if DDP intended that this be the operation of the Agreement, there is nothing on the face of the Agreement which guarantees that this is the outcome. There is also nothing in the material concerning the explanation of the terms of the Agreement and the effect of those terms which shows that this effect was explained to relevant employees, or that the position endorsed in option 1 was to change under the Agreement.
[41] A third issue is the position of employees who are apprentices. It is uncontroversial that the rates for certain employees set out in the Agreement were less than the Award. There is nothing in the material which explains this. Since this was the effect of the Agreement so far as some apprentices were concerned, this plainly required the employer to make the comparison in the circumstances between the rates of pay under the Agreement and the corresponding rates of pay under the Award. It is uncontroversial that DDP did not explain that some apprentices would, under the Agreement, receive less pay than under the Award.
[42] These three matters alone demonstrate that DDP did not take all reasonable steps to explain the terms of the Agreement or the effect of those terms. At the very least they show that there was an insufficient basis upon which to found the requisite state of satisfaction as to DDP’s compliance with s.180(5) of the Act. This is because the material does not adequately, and in some cases does not at all, disclose the content of the explanation about the effect of the terms of the Agreement. This was evident on the face of the material before the Deputy President and it is not apparent to us from the Decision that he took these matters into account. Had he done so we do not consider that it was open for the Deputy President to be satisfied that DDP had complied with s.180(5) of the Act. Even if we are wrong about this, we consider in the circumstances that the inaccurate or incomplete material, provides reasonable grounds for believing that the employees may not have genuinely agreed to the Agreement. Consequently, it was not open to the Deputy President to be satisfied the Agreement has been genuinely agreed to by the employees covered by the Agreement as required by s.186(2)(a).
[43] For these reasons we would uphold this ground of appeal.
Ground 2 – Better off overall test
[44] By its second appeal ground, the CEPU contends the Deputy President erred by failing to reach a state of satisfaction that the Agreement passes the BOOT as required by s.186(2)(d) of the Act. Specifically, the CEPU contends the Deputy President raised in correspondence to the parties on 2 April 2019, concerns about several provisions of the Agreement either failing the BOOT or rendering a proper assessment of the BOOT impossible. 49 The CEPU contends that DDP had an opportunity to make submissions in respect of the identified BOOT issues, and it did so on 12 April 2019.
[45] The CEPU contends that those submissions failed to address some of the concerns raised by the Deputy President and that DDP’s responses to others was inadequate in order to enable the Deputy President to reach the requisite satisfaction as to the BOOT.
[46] We take these contentions as meaning that the Deputy President did not have a sufficient basis on which to conclude that he was satisfied, subject to the undertaking proffered, that the Agreement passed the BOOT, because as DDP points out, the Deputy President was in fact so satisfied.
[47] DDP contends that the CEPU’s analysis proceeds on the erroneous premise that the Deputy President cannot be satisfied that the Agreement has passed the BOOT unless the Agreement provides for the same or more favourable terms and conditions of employment compared to the Award in respect of each term and condition of employment. It says, correctly, the application of the BOOT does not require a line-by-line analysis of the Agreement against the Award. Rather, the BOOT is a global test requiring consideration of advantages and disadvantages to award covered employees and prospective award covered employees.
[48] DDP contends that in the instant case, the Deputy President applied an orthodox approach to assessing whether the Agreement passed the BOOT. Specifically, DDP points to the fact that the Deputy President:
• identified the relevant terms which are less beneficial than the Award including non-monetary entitlements; 50
• identified the relevant terms which are more beneficial than the Award, chiefly the significantly higher rates of pay up to more than 40% (other than first year apprentices); 51 and
• then made an overall assessment that all employees, other than first year apprentices, would be better off under the Agreement compared to the Award. 52
[49] DDP contends that it is clear from the Decision the Deputy President made an evaluative assessment that the significantly higher rates of pay under the Agreement were overall more beneficial than the detriments under the Agreement relative to the Award. It says that nothing in the CEPU’s submissions has identified that the Deputy President acted upon a wrong principle or made an error in the decision-making process in the exercise of his discretion. Rather, the CEPU has advanced a line-by-line analysis of the Award and Agreement and identified “potential failings against the BOOT”.
[50] From previous Full Bench decisions of the Commission, three well-established propositions about the application of the BOOT may be discerned. The first, which is in essence a restatement of s.193(1), is that the BOOT requires a finding that each award covered employee and prospective employee would be better off under the agreement than under the relevant modern award.53 The requirement that “each” such employee and prospective employee be better off overall is a rigorous one. The ordinary meaning of “each” is “every, of two or more considered individually or one by one”.54 Thus, every award covered employee or prospective employee must be better off overall, with the corollary that if any such employee is not better off overall, the relevant enterprise agreement does not pass the BOOT.
[51] The second proposition is that satisfaction that an employee is better off overall under the agreement than under the award requires an evaluative assessment after considering the provisions of the award and the agreement that may have been more beneficial to employees and those that may have been less beneficial. 55 This assessment was recently described by the High Court of Australia in ALDI Foods Pty Limited v Shop, Distributive & Allied Employees Association56 as follows:
“. . . This assessment is a matter of the kind which has been described in other contexts as:
"a question, not of principle or of positive findings of fact or law, but of proportion, of balance and relative emphasis, and of weighing different considerations. It involves an individual choice or discretion, as to which there may well be differences of opinion by different minds."” 57
[52] The third proposition is that the application of the BOOT requires an overall assessment to be made. This requires the identification of terms which are more beneficial for an employee, terms which are less beneficial, and an overall assessment of whether an employee would be better off under the agreement.58
[53] Except for agreements covering small enterprises, the examination of the circumstances of each individual employee to reach a state of satisfaction that the BOOT is passed would be an exhaustive task. Section 193(7) substantially relieves the Commission of this burden by permitting it to assume, if a class of employees to which a particular employee belongs would be better off under the agreement than under the relevant modern award, that employees would be better off overall in the absence of evidence to the contrary.
[54] We would firstly observe that we have found the CEPU’s submissions as to this ground unhelpful. The CEPU merely set out the concerns identified by the Deputy President and submit that inadequate or no responses were received. No effort is made to say how it is that any one or more of those concerns, if they be detriments, are to be weighed against the benefits for which the Agreement makes provision and how this in an overall sense results in any award covered employee or prospective award covered employee at test time being or not being better off overall if the Agreement applied than if the Award applied.
[55] Nevertheless, we deal with these matters below.
[56] The first relevant concern raised by the Deputy President is as to the operation of clauses 13(g) and 15(c)(ii) of the Agreement, and specifically how the operation of those provisions which may facilitate an alteration to hours of work, the spread of hours and shift work, according to the needs of a project, is to be assessed for the purposes of the BOOT.
[57] The CEPU provides no answer to this, perhaps unsurprisingly, since clause 13(g) of the Agreement is a mirror image of clause 13.7 of the 2012 Agreement (including the errant semicolon) while clause 15(c)(ii) of the Agreement is in substantially the same form as clause 15(c)(i) of the 2012 Agreement. The CEPU was a bargaining representative for that Agreement, supported its approval and gave notice under s.183 of the Act that it wanted to be covered by that agreement.
[58] The Award makes provision for the alteration of starting and finishing times within the spread of hours by an individual or by a majority of employees concerned (clause 24.3(a)). The same is true as to an alteration to the spread of hours (clause 24.3(b)).
[59] As to shift work, the Award contains some restrictions on the averaging of ordinary hours, length of a shift and crib breaks in respect of continuous shiftworkers (clause 24.10) but otherwise provides that “continuous shift workers must work at such times as the employer may require” (clause 24.10(c)). As to shiftworkers who do not work on continuous work, the Award makes provision for shift cycles to not exceed the specified number of hours in a week, a fortnight, a period of 21 calendar days or a 4 week period (clause 24.11(b)). Provision is also made requiring shiftworkers to work at such times subject to particular conditions (clause 24.11(c)). A flexibility term is included in the conditions which allows by agreement between the employer and an employee or a majority of employees concerned for a shift length to be up to 12 hours.
[60] Clause 24.12 of the Award makes provision for rosters to specify the commencing and finishing times for ordinary working hours of shifts. Clause 8A of the Award makes provision for the employer to consult any employees affected by a proposed change to the regular rosters or ordinary hours of work of an employee.
[61] The major difference between the collective provisions of the Award compared to the provisions at issue of the Agreement appears to be the capacity of the employer to give notice of a change. Subject to the limitations identified above, the Award provides the capacity for change either through the requirement of shiftworkers to work at such times as the employer may require or to alter rosters after consultation.
[62] Such greater flexibility as the Agreement provides to the employer when compared to the Award and the ensuring detriment that might occur in respect of an employee is a matter to be assessed on an overall basis taking into account the tangible benefits that the Agreement contains and which the Award does not. Save for very limited examples to which we will return, when rates of pay are compared as between the Award and the Agreement, the rates of pay are between 31% and 69% higher under the Agreement than under the Award.
[63] The second of the Deputy President’s concerns relates to clause 41 of the Agreement which is said to make reference to trainees and is said to appear to allow trainees to be employed under the Agreement but the Agreement makes no provision for rates of pay for trainees. The first observation we would make is that apart from the reference in the heading to the clause, there is no reference in the operative provisions of the clause to trainees. Secondly, the clause is concerned with group training schemes and the benefits thereof. Thirdly, the clause is concerned in part, with the hosting of apprentices and to the extent that there is any suggestion of employment, it is for DDP to “sources (sic) them”, that is apprentices, from established and credible group training companies. We do not consider on a proper construction of clause 41 that it permits or contemplates the employment of trainees. As such, the concern raised by the Deputy President is moot.
[64] The third of the Deputy President’s concerns was about the time in lieu of overtime provision in clause 16(f) of the Agreement. This concern centred on the fact that unlike the corresponding provision in the Award, clause 16(f) of the Agreement did not make provision for the payment of any accrued time off in lieu of overtime to be paid out on termination of employment. This is correct but again this detriment is a factor that is to be weighed in the overall assessment taking into account, amongst other things, the substantially more beneficial provisions as to wages in the Agreement than in the Award.
[65] Fourthly, the Deputy President was concerned about casual employees’ overtime entitlement because this was unclear under clauses 9 and 16 of the Agreement. Clause 9 of the Agreement deals with the engagement of employees and specifically provides that employees may be engaged in the Agreement as full-time, part-time, casual or temporary fixed term/project employees. As to casual employees, clause 9 provides a definition of a casual employee then sets out the entitlement to a 20% loading on their base hourly rate and excludes certain entitlements from those employees. Payment of overtime is not excluded. Clause 16 of the Agreement deals with reasonable additional hours and overtime. It sets out the circumstances in which overtime might be worked and the appropriate penalty payments for overtime. Casual employees are not excluded from the operation of clause 16. It seems to us on a proper construction of the Agreement, a casual employee will be entitled to overtime in the same circumstances as any other employee working overtime pursuant to clause 16. We do not consider the position to be unclear. The concern identified is moot.
[66] The fifth concern related to clause 13 of the Agreement and specifically whether a day worker is paid penalty rates on weekends under clause 13. The answer is to be found in clause 13(c) of the Agreement which provides that “[A]ny Employee engaged on a Saturday, Sunday or Public Holiday shall receive a minimum 4 hour payment at the appropriate penalty rate.” Penalty rates for shiftworkers working on these days are set out in clauses 15(e) and (f). While not being entirely clear, we consider that on a proper construction of the Agreement, clause 13(c) envisages the payment for day workers is to be at the “appropriate penalty rate”. The only penalty rates to be found in the Agreement are those contained in clauses 15(e) and (f). Since clause 13 self-evidently applies to day workers, having regard to the definition of shift work to construe the provisions of clause 13(c) otherwise would render the words “appropriate penalty rate” otiose. Consequently, we consider on a proper construction of the Agreement read as a whole, those rates to be the appropriate penalty rate mentioned in clause 13. In the result we do not consider the concern raised by the Deputy President to be material.
[67] The penultimate concern raised by the Deputy President was that employees performing distant work under clause 29(a) who volunteer for that work would not receive a living away from home entitlement whereas the Award provided for no such limitation. A number of things may be said about this issue. First, “Distant Work” is defined in the Agreement as involving travelling to work at such a place as it may reasonably be necessary that the employee should leave and sleep at some other place than his or her usual place of residence. As a guide this will generally occur when the work location is both greater than 100 km from the employee’s normal place of residence and 50 km from the head office of the company.
[68] Secondly, the Agreement has a confined operation. It is as clause 5(a) states, confined to the performance of work anywhere in the “County of Cumberland”. A map of the County of Cumberland is set out in Schedule F to the Agreement.
[69] Thirdly, DDP’s premises is located in Seven Hills. Taking into account the various suburbs which make up the County of Cumberland, it is plain that save and except for travel to the extremities of the Sutherland Shire or to Pittwater, the distance between Seven Hills and any other place of likely work in the County of Cumberland is less than 50 kms.
[70] Fourthly, any employee whose usual place of residence is in the County of Cumberland would not travel more than 100 kms. Taking the most southern point and the most northern point in the County of Cumberland as a measure discloses that the distance is not more than about 80 kms.
[71] Though it is theoretically possible that an employee (in relation to which there was no evidence) or a prospective employee might reside more than 100 kms from a place where work might be performed under the Agreement, it is more than reasonable to observe that in the circumstances such an occurrence would be remote and or at least infrequent. Moreover, it would require the employee’s consent through volunteering for distant work in order that the provision not apply and on the few remote occasions that such an occurrence might eventuate, that detriment is to be assessed against what has already been observed as the tangible weekly and hourly benefits for which provision is made in the Agreement of substantially higher wage rates.
[72] Although the Deputy President does not expressly deal with any of these matters in the Decision, it seems to us plain from the analysis above that a number of the issues are not concerns at all and those that are, when measured against the beneficial provisions in the Agreement, are not so deleterious as to result in a conclusion that, employees, other than some apprentices, and prospective employees other than some prospective apprentices, are not better off overall as at test time if the Agreement applied to their employment than if the Award so applied.
[73] The final concern was about the rates of pay for some apprentices. It is clear that the rates for some apprentices under the Agreement were less than the corresponding rates of pay under the Award. The Deputy President purported to accept an undertaking which had the effect of lifting the wage rates for these apprentices by 5% above the corresponding Award rate. The CEPU contends that the undertaking was not sufficient for these employees and prospective employees to be better off overall under the Agreement compared to the Award. Principally, this is said to be because of the absence of particular allowances and lower penalty payments, the absence of paid meal breaks for shiftworkers in the absence of overtime in excess of agreed hours for part-time employees.
[74] Firstly, to state the obvious, the allowances identified by the CEPU cannot all be paid at the same time because they concern particular circumstances. For example, a tree clearing allowance is not likely to be payable in conjunction with a multi-storey allowance which itself is not likely to be payable in conjunction with the towers allowance. The circumstances in which these allowances are to be paid shows that only one allowance will be paid at any given time and then only if the circumstances warranting a particular allowance arise.
[75] Secondly, DDP maintained before the Deputy President that it “never (or rarely)” engaged in work that would qualify employees for the payment of either a multi-storey or a towers allowance. Although plainly the Agreement is not so confined, this is a relevant factor in assessing in an overall way what, if any, significance is to be placed on the absence of such allowances.
[76] The other matters identified by the CEPU are also circumstantial. Given the training needs of an apprentice, the prospect that an electrical apprentice might work as a continuous shiftworker or shift work on a regular basis in the circumstances in which the Agreement operates, is in our view minimal. Overtime in excess of agreed hours for part-time employees is also circumstantial. It need not, nor should it be assumed that such overtime would occur every day or even every week or month.
[77] Thus, the likely frequency within which the identified allowances and the other circumstantial payments might arise is a factor that is relevant in assessing whether the rates of pay to the apprentices at issue pursuant to the undertaking (had it been procured) has the result that the relevant employees or relevant prospective employees as at test time are better off overall if the Agreement applied than if the Award applied to their employment. The increased rates procured by the purported undertaking would operate for each hour the apprentice works. We consider the Deputy President plainly made an evaluative judgement about the level of pay that would be required to be given to the affected apprentices in order that the Agreement might pass the BOOT. It is to be remembered that it was the Deputy President who had suggested 5% above the Award rate.
[78] Having regard to the matters we have identified above, we consider that the Deputy President would have been entitled to conclude (had an undertaking been given), that the rate which would apply to apprentices taking into account the undertaking, was sufficient for the purposes of apprentices as a class of employees to be better off overall if the Agreement applied to their employment than if the Award did so. Since there was no evidence to the contrary in respect of any individual apprentice or prospective apprentice, we do not consider, had the undertaking been given, the Deputy President would have erred.
[79] As to the other concerns earlier discussed, we consider for the reasons stated therein the Deputy President was entitled to conclude that the Agreement (save for apprentices) passed the BOOT. Thus, taken together with the undertaking concerning apprentices (if given), we consider that it would have been open for the Deputy President to conclude that he was satisfied that the Agreement subject to the undertaking passed the BOOT.
[80] Nevertheless, as will be apparent from that which follows below, the Deputy President did not have a written undertaking at the time that he approved the Agreement. Consequently, the Agreement plainly failed to pass the BOOT so far as some apprentices were concerned and it was not open to the Deputy President to find that the Agreement passed the BOOT. For that reason, this ground of appeal must also succeed.
Ground 3 – Undertakings
[81] The CEPU makes two points in respect of the undertaking.
[82] First, the Decision to approve the Agreement was made before a written and signed undertaking had been given by DDP.
[83] Secondly, the CEPU as a known bargaining representative was not consulted about the undertaking before it was accepted.
[84] DDP contends that the Deputy President undertook a process which involved directing outlines of submissions, corresponding with the parties to raise concerns about whether particular requirements set out in ss.186 and 187 of the Act were met and receiving submissions. It contends that DDP’s submissions indicated a preparedness to give undertakings, inter alia, to increase the hourly rate for first year apprentices, to include a casual conversion clause and to clarify the operation of a flexibility term so that it would comply with s.203 of the Act.
[85] DDP contends that given the process, the Deputy President was satisfied that, subject to the provision of specified undertakings, the relevant approval requirements had been met. It points out that the relevant undertakings were as follows: to clarify the compliance of the flexibility arrangements with s.203 of the Act; that DDP will comply with the casual conversion clause in the Award; and that DDP pay first year apprentices an hourly rate above the Award. DDP says that these undertakings were sought by the Commission and proffered by DDP in the usual manner.
[86] The contention that the undertakings were proffered in the usual manner is unsustainable given that DDP did not provide any written undertakings until well after the Deputy President purported to approve the Agreement.
[87] DDP seems to misunderstand the gravamen of the first contention of the CEPU noted above. The submission is in essence the corollary of the Deputy President’s example at [25] of the Decision that the Agreement would pass the better off overall test if an undertaking of the kind described were given. If no undertaking is given, the Agreement would not pass the BOOT. Consequently, when the Deputy President made the decision at [32] to approve the Agreement he did so without an undertaking at a time in circumstances where he was not then satisfied the Agreement passed the BOOT. That being the case, the Deputy President was not empowered to approve the Agreement.
[88] It seems to us that this is plainly correct.
[89] In Metropolitan Fire and Emergency Services Board, 59 Gostencnik DP discussed and explained the operation of the provisions concerning the approval of enterprise agreements with undertakings in s.190 of the Act and follows and which we adopt:
“[6] The capacity of the Commission to accept an undertaking in relation to the approval of an enterprise agreement is dealt with in s.190 of the Act. Section 190 is engaged relevantly if an application for approval of an agreement has been made under s.185 and the Commission has a concern that the agreement does not meet the requirements set out in ss.186 and 187. It is uncontroversial in relation to the Agreement that there is an application for its approval under s.185 and that I have concerns that the Agreement does not meet, inter alia, the requirement in s.186(2)(c) of the Act.
[7] Section 190(2) confers discretion on the Commission to approve an agreement under s.186 if satisfied that acceptance of the undertaking, subject to the fetters in s.190(3), meets the concern. It is clear, therefore, that the undertaking proffered must meet the concern that the agreement does not meet one or more of the identified requirements set out in ss.186 and 187 of the Act. The relevant requirement here, about which there is a concern, is the requirement that the terms of the Agreement do not contravene s.55 of the Act.
[8] By s.190(3), the Commission may only accept a written undertaking if satisfied that the effect of accepting the undertaking is not likely to cause financial detriment to any employee covered by the agreement or result in a substantial change of the agreement. Section 190(4) prevents the Commission from accepting an undertaking unless it has sought the views of each person who the Commission knows is a bargaining representative for the agreement. Finally, an undertaking that is proffered must meet the signing requirements prescribed by regulations.
[9] The process for proffering, accepting undertakings, assessing whether an accepted undertaking meets the requisite concern, and considering whether to approve an enterprise agreement may be summarised, chronologically as follows.
[10] First, there must be made an application for approval of an enterprise agreement.
[11] Secondly, the Commission must have a concern that the agreement does not meet one or more of the requirements set out in ss.186 and 187 of the Act. It should go without saying that the relevant concern needs to be identified by the Commission and communicated to the applicant for the approval of the agreement, and where the applicant is a bargaining representative for the agreement which is not the employer, also communicated to the employer or employers covered by the agreement. Only an employer or employers covered by an agreement can give an undertaking.
[12] Thirdly, there must be a written undertaking from one or more of the employers covered by the agreement and that undertaking must meet the signing requirements.
[13] Fourthly, the Commission must assess and be satisfied that the effect of accepting the undertaking is not likely to cause financial detriment to any employee covered by the agreement or result in substantial changes to the agreement.
[14] Fifthly, before accepting an undertaking the Commission must seek the views of known bargaining representatives for the agreement.
[15] Sixthly, if the undertaking is accepted the Commission must be satisfied that the accepted undertaking meets its concern before it may approve the agreement.
[16] Seventhly, there is a residual discretion to be exercised whether to approve the agreement with the undertaking that has been accepted and that meets the identified concern.” 60 [Endnotes omitted]
[90] The decision to approve the Agreement was made on 20 August 2019. 61 As a consequence, the Agreement commenced to operate 7 days thereafter (27 August 2019). At the time that the Agreement was approved and when it commenced operation there was no written undertaking signed by DDP in accordance with the signing requirements. There was no written undertaking at all. There had only been expressed in submissions a willingness to provide some undertakings.
[91] An undertaking by DDP was signed on 28 August 2019 but was not sent to the Deputy President until 9 September 2019. That the undertakings became attached to the Agreement as published on the Commission’s webpage and that a note was placed on the Agreement as to the undertaking is irrelevant and does not cure the erroneous approval of an agreement without written undertakings having been proffered.
[92] As there was no written undertaking as required before the Deputy President at or before the time that he approved the Agreement, the position at the time that he approved the Agreement was that the Agreement did not pass the BOOT. The Deputy President was not empowered to approve the Agreement in anticipation of an undertaking being given in the future. Consequently, the Deputy President erred in approving the Agreement which did not meet the BOOT requirements in s.186(2)(d) of the Act. Put another way, on the material before the Deputy President at the time that he approved the Agreement, he could not be satisfied absent the undertaking that the Agreement passed the BOOT.
[93] The second aspect of this ground of appeal must also be upheld. The Deputy President accepted as is evident from [2] and [30] of the Decision that the CEPU was a bargaining representative for the Agreement. Thus, it was a known bargaining representative. Written undertakings cannot be accepted unless the Commission has sought the views of the known bargaining representatives. 62 At the time the Agreement was approved, there were no written undertakings and it is not controversial that once the written undertakings were proffered, the views of the CEPU were not sought.
[94] For the forgoing reasons, this ground of appeal also succeeds.
[95] We need to make some further observations about the undertakings and the CEPU being noted as covered by the Agreement as these matters may need to be addressed on any reconsideration of the application.
Flexibility term undertaking
[96] The written undertaking given after approval deals with a concern that the flexibility term of the Agreement did not comply with the content requirements in s.203 of the Act. That undertaking, even if it had been given before approval, is not an undertaking capable of being accepted. This is because it does not relate to a concern about whether on or more of the requirements in ss.186 or 187 had been met. The proper course would have been for the Deputy President to note in the Decision that the model flexibility term will be taken to be a term of the Agreement.
Shiftworkers and the NES
[97] In the correspondence from the Deputy President to the parties of 2 April 2019, the Deputy President noted that the Agreement did not define a shiftworker for the purposes of the NES as required by s.196 of the Act.
[98] This issue does not appear to have been addressed in the Decision and was a matter that we raised with DDP on appeal. We invited the parties to make further submissions, the details of which we need not repeat. It is sufficient to note that DDP proffered an undertaking in writing which is dated 12 December 2019. Given that we have upheld each of the grounds of appeal there will consequently be a setting aside of the Decision and a need to reconsider the application for the approval of the Agreement. The undertaking which is sought to address the requirements in s.196 of the Act can be considered in the context of any reconsideration.
Note that CEPU covered by Agreement
[99] There is no basis for the Deputy President’s note at [30] of the Decision because it is contrary to the position of the CEPU as set out in Mr Hicks’ statutory declaration.
[100] Taking into account the analysis above, we are persuaded that it is in the public interest to grant permission to the CEPU to appeal because the CEPU has identified appealable error, and because there is public interest in ensuring that the requirements of which the Commission must be satisfied when approving an enterprise agreement together with the proffering of undertakings are properly considered, administered and applied.
[101] For the reasons stated above, we uphold each of the grounds of appeal and propose to quash the Decision to approve the Agreement. We therefore order as follows:
a. permission to appeal is granted;
b. the appeal is upheld on each of grounds identified in our decision;
c. the Decision to approve the DDP Electrical Services Pty Ltd Sydney Construction Enterprise Agreement 2018 in [2019] FWCA 4999 is quashed; and
d. the application to approve the DDP Electrical Services Pty Ltd Sydney Construction Enterprise Agreement 2018 is remitted to Deputy President Millhouse for redetermination.
DEPUTY PRESIDENT
Appearances:
A Heffernan for the Appellant.
M Seck of Counsel for the Respondent.
Hearing details:
2019.
Melbourne and Sydney (by video):
October 17.
Final written submissions:
Appellant, 7 November 2019.
Respondent, 31 October and 12 November 2019.
Printed by authority of the Commonwealth Government Printer
<PR715678>
1 Appeal Book, p.127, answer to Q2.3; p.129, answer to Q2.8; and p.143
2 Ibid, pp.127-128, answer to Q2.4 and Q2.5; The said notice is not in the Appeal Book
3 Ibid, p.92 at [11] (noting that the summary sheet therein described is not in the Appeal Book) and p.128, answer to Q2.6
4 Ibid, p.129, answer to Q2.8
5 Ibid, p.129, answers to Q2.8 and Q2.10
6 Ibid, p.123, answer to Q3
7 Ibid, p.124, answer to Q6
8 [2019] FWCA 4999 at [3]; Also see Appeal Book, p.121
9 Appeal Book, p.97
10 [2019] FWCA 4999 at [4]
11 Appeal Book, p.100
12 [2019] FWCA 4999 at [4], although the reference to “of same date” is incorrect as the DDP submissions are recorded as having been filed on 12 April 2019
13 Ibid, although the reference to “29 March, 2019” is incorrect as the CEPU reply submission are dated 18 April 2019 and recorded as having been filed on that date
14 Ibid at [5]
16 Ibid at [30]-[33]
17 Appeal Book, p.30 at clause 5
18 [2019] FWCA 4999 at [8]-[9]
19 Ibid at [10]
20 Ibid at [11]
21 Ibid at [12]
22 Ibid at [13]
23 Ibid at [14]-[19]
24 Ibid at [20]
25 Ibid at [21]
26 Ibid at [22]-[23]
27 Ibid at [24]-[25]
28 Ibid at [26]-[29]
29 Ibid at [30]-[32]
30 [2018] FCAFC 77
31 [2019 FWCA 4999 at [13]
32 Ibid
33 Ibid
34 Ibid
35 Ibid at [11]-[12]
36 Ibid at [10]-[11]
37 One Key Workforce Pty Ltd v CFMEU [2018] FCAFC 77 at [103]
39 Ibid at [35]-[36]
41 (2018) 356 ALR 535 at [115]
42 Ibid at [112]-[113]
43 [2019] FWCFB 4022 at [71]-[72]
44 Appeal Book, p.95
45 Ibid, p.94
46 See clause 25 of the 2012 Agreement
47 See clause 26 of the Agreement
48 Appeal Book, p.91 at [5]
49 Ibid, pp.100-102
50 [2019] FWCA 4999 at [21]
51 Ibid at [24]
52 Ibid at [23]-[25]
53 Solar Systems Pty Ltd [2012] FWAFB 6397 at [11]; Hart v Coles Supermarkets Australia Pty Ltd [2016] FWCFB 2887 at [6], [15]; Shop, Distributive and Allied Employees Association v Beechworth Bakery [2017] FWCFB 1664 at [11]
54 Macquarie Online Dictionary
55 Re Armacell Australia Pty Ltd (2010) 202 IR 38 at 49 at [41]
56 [2017] HCA 53
57 Ibid at [99]
58 Ibid at [92]; Armacell Australia Pty Ltd [2010] FWAFB 9985 at [41]
60 Ibid at [6]-[16]
61 [2019] FWCA 4999 at [32]
62 Fair Work Act 2009 (Cth), s.190(4)